The Welsh Rugby Union (WRU) has posted a loss of £5.3m (€5.9m/$6.9m) for the 2020 financial year and is bracing itself for an even tougher next 12 months as COVID-19 continues to significantly impact revenue.
Following the release of the results, WRU chief executive Steve Phillips revealed that the body had been expected to break even until the COVID-19 outbreak. The WRU said that its “swift response” to the pandemic enabled the organisation to limit retained losses but the wider impact of the crisis is expected to be felt in next year’s results.
The WRU Group turned over £79.9m for the year ending June 30, down from £90.5m in the previous year. The accounts also showed that the postponement of March’s Six Nations match against Scotland at Principality Stadium amounted to a deficit of around £8.1m.
The further cancellation of a planned Rammstein concert at Principality Stadium, as well as the absence of Pro14’s Judgement Day event, also influenced the WRU’s results.
The WRU was able to limit the impact of the pandemic by pausing and alleviating non-essential capital, reducing staff salaries and using the government’s job retention scheme. A further £4.9m in income from its share of CVC Capital Partners’ investment in the Pro14 also helped offset revenue shortfalls.
The WRU Group was also able to reinvest in community clubs, making around £1m available in emergency funds to assist with the impact of both the pandemic and Storm Dennis. Commercial income increased from £14.2m to £15.4m, with last year’s Rugby World Cup in Japan making a big contribution.
Competition income dropped significantly from £11.9m in 2019 to £7.1m in 2020, largely due to the pandemic. Event income also dropped from £2.4m to £1.1m, with hospitality and catering income falling from £14m to £9.3m.
Phillips praised the WRU’s board and commercial partners for limiting the organisation’s losses, although he has warned that the full income of the pandemic will be felt in the coming months.
“We had expected to show a break-even result for the current year and were on track to achieve this up until the business and economic disruption that was caused by the pandemic,” he said.
“Its impact on the Group has meant an unanticipated loss, but we expect to be able to retain profits over the medium term to be able to offset this loss and return net assets to previous levels. The Group has a healthy business, with a strong balance sheet and adequate liquidity. Immediate measures were taken to reduce costs and protect our financial position.
“However, it is too early to quantify the full impact of the COVID-19 pandemic on future financial performance and the Group will continue to closely monitor the developing situation.”
The WRU welcomed 335,000 fans to Principality Stadium during the year, with average attendance per match increasing from 66,000 to 67,000. Average ticket income per attendee for matches at the stadium was £43.
Last month, it was announced that Wales’ rescheduled Six Nations match against Scotland on October 31 will be played at Llanelli’s Parc y Scarlets stadium, home of Pro14 team Scarlets, as Principality Stadium is still being used as a hospital. Parc y Scarlets will also host Wales’ Autumn Nations Cup match against Georgia on November 21.
Phillips had hoped that a limited number of fans would be able to attend the matches but no update on this has been made since last month’s announcement and it appears that the fixtures will go ahead without spectators.
Phillips added: “We are delighted that international rugby will return this autumn but the prospect of playing without spectators has an obvious and directly negative influence on our ability to generate revenue.
“We have contingency plans in place, for example for the prospect of home matches in the 2021 Guinness Six Nations having to be played in front of part-capacity crowds due to social distancing, but no crowds will present severe challenges.
“We have sufficiently robust banking facilities but there is no doubt that YE21 is when the full impact of this pandemic could be felt.
“We can be proud of what we have achieved so far and, under present circumstances, only making a £5.3m loss in YE20 can be viewed in a positive light, but there is also much hard work ahead, just as there is for all in the sports, leisure and entertainment industries as we continue to navigate through the uncertainties arising from the current pandemic.”
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