SARU announce pre-tax profit
March 20, 2012
SARU chief executive Jurie Roux was pleased with the results of cost-cutting measures © Getty Images
The South Africa Rugby Union has announced pre-tax profits of £1.9million for 2011.
The SARU said the news was better than expected for a year in which participation in the Rugby World Cup increased costs and decreased the governing body's earning potential. The result was due to an 18% increase in earnings along with "cost containments in operating expenditure, excluding allocations to provinces".
SARU chief executive Jurie Roux: "It was a year of severe cost cutting, during which we restructured the operational side of SARU to be more streamlined and efficient.
"We converted 16 different divisions into seven new departments, more effectively aligned to deliver on our mission to provide outstanding strategic leadership for the business of rugby. That we were able to do it while containing costs was doubly pleasing."
The increase in revenue was largely to increased funds from the broadcasting rights at the start of a new five-year contract, while sponsorship income also grew.
"We had forecast a reasonable profit for 2011 and the eventual outcome was ahead of our expectations," said chief financial officer Basil Haddad. "Given that the new broadcasting agreements and a number of new sponsorship agreements, which commenced in 2011, are essentially fixed until 2015, and that operating cost containment continues to be an operational priority, it is likely that that a reasonable profit will be achieved in 2012."
"We have set ourselves an annual profit target of not less than 5% of annual operating costs, excluding rights allocations to provinces," said Haddad. "The aim is to build up sufficient cash reserves in order to weather unforeseen growth in expenses beyond inflation."
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