A review of discretionary costs combined with a disciplined alignment to a rolling five-year strategic and financial plan have been singled out as factors for the continuing success of the organisation. The plan was reviewed and updated during the financial period by the senior management team reporting to Group CEO Roger Lewis.
Profits achieved in the past financial year helped the Group provide the levels of investment in the game in Wales which continued an impressive trend for growth across the whole of the past five years.
This corporate discipline has helped the Group deliver growth over the medium term which can now be measured with turnover up 24% since 2007 and investment back into Welsh rugby up a massive 30% in the same timeframe.
In YE11, the Group allocated £19.3m into the elite and community game across Wales against a challenging backdrop in the wider economy of the UK and beyond.
The highlights for the year included:
* a profit before interest, tax, depreciation and allocations of £26.2m
* the £19.3m re-invested into the elite and community games
* a reduction in net repayable bank debt to its lowest ever figure of £26.2m
* a decrease in our bank interest charge from £2.6m to £0.8m
* a raft of new and renegotiated sponsorship and broadcast deals
* a renegotiated international player payment deal for five more years
* a Group turnover of £54.3m
Budget adjustments were made within the year as the Group reacted to the wider economic challenges and put in place an operational roadmap which has helped ensure that forecasts for the year ahead are also positive.
Within the year, the Group maintained a focus on its core priorities with investment in new staff within the National Squad coaching and management team and a drive forward within the community game.
Yet another positive sign for the future sustainability of the game in Wales was confirmation that the number of youth teams operatingin Welsh rugby is now 167, compared to 132 seven years ago.
The Annual Report also reveals how the strategic planning within the Group was expressed with a number of key investments, initiatives and core projects.
Some of the highlights were:
*a £3.0m investment in audio and video equipment in the Millennium Stadium
* the announced reform of the Principality Premiership Division
* a series of stadium events which attracted 800,000 paying visitors
* the signing of a new four year contract with Wales Head Coach Warren Gatland until the 2015 Rugby World Cup
* the announcement of Admiral as jersey sponsors of the National Team
* the renewed broadcast contracts with BBC Network, BBC Wales and S4C
* the launch of the myWRU website
The reform of the Premiership Division involved a consultation process with all stakeholders before the WRU Board approved the announcement of a proposed reduction of the league from 14 clubs to 10 and the introduction of a new National Championship below the Premiership.
These changes will be introduced for season 2012/13 with the aim of improving the standard of rugby in the semi-professional league and increasing the funding available to enhance the sustainability and development of the 10 clubs.
Alongside this development, a review was launched during the year of the elite pathway structure overseen by the WRU rugby department.
The Heineken Cup Final was held in Cardiff at the Millennium Stadium for the sixth time and registered a sell-out game. The Amlin Challenge Cup Final also took place in the capital at the home of the Cardiff Blues on a weekend when the city hosted both major finals.
The Millennium Stadium also saw Wales host England in the Euro 2012 soccer international and was the venue for the Ryder Cup Welcome to Wales Concert.
In commercial terms the year was marked with new broadcast and jersey sponsor contracts plus new or renewed deals with Under Armour, the Principality Building Society, SWALEC, Thomas Cook, Guinness, SEAT, Ticketmaster, Trinity Mirror and DHL.
The jersey sponsorship contract with Admiral entwined the WRU with the Cardiff based insurance services giant which is the only Wales-based company named within the FTSE 100 UK companies.
Another important initiative launched within the year was the Official Hospitality Operator scheme which ensures that hospitality packages offered for Welsh rugby events are fully licensed and therefore controlled by the WRU to guarantee their ability to include valid match tickets.
This scheme will ensure that the level of hospitality offered within the packages can be controlled and the WRU will achieve a direct financial benefit from the activity which can then be returned to the game in Wales.
On the field the SWALEC Cup, Plate and Bowl formula continued to build and prosper creating a Millennium Stadium showcase day for the community and semi-professional game in Wales.
The stadium also hosted the Varsity match between Cardiff and Swansea Universities attracting live TV coverage on S4C for an event which could now become a staple of the Welsh sporting calendar in the city.
The Group continued to pursue a policy of seeking to consolidate the land ownership around the Millennium Stadium with help and guidance on a pro bono basis from property adviser David Goldstone.
WRU Group Chief Executive, Roger Lewis, said: “I am delighted we have been able to maintain our financial and operational course through a financial year marked by turbulence in the wider economy.
“The reforms, structures and senior staff recruitments brokered in the last few years are now paying off with the WRU enjoying a growing reputation as an organisation capable of sound and strategically robust management.
“While taking account of the challenging marketplace we still managed to achieve our core aims and maintain the advances and improvements of the past few years.
“We currently have the financial stability necessary to plan properly for the future and we will stay focused on our priorities of supporting our national teams, working closely with our four Regions, the Premiership clubs and sustaining and developing the community game.
“Our capacity to generate income is vital in achieving those goals and we have the level of fixtures and events, both in place and pending, which will help us sustain the levels of cash flow we need to fulfil the demands on our revenue.
“The excellent growth we have achieved since 2007 has helped us develop the National Squad, unveil the WRU National Centre of Excellenceand achieve major improvements within the Millennium Stadium.
“Now I am determined to push forward with initiatives and strategies which will help sustain and develop the community game, the real foundation stone of our national sport.
“We have the rugby and event future mapped out to a large degree and the WRU now has the people in place to maintain our forward momentum.
“Next year the Group will help bring the Olympic Games to Wales at the Millennium Stadium, so the huge range of diversity we now represent will truly be established and confirmed.
“I want to thank my Executive, the WRU Board and the close support and friendship I enjoy with our Chairman David Pickering for helping me to deliver these results and work to a vision for the future.
“Particular thanks must go to my Group Finance Director, Steve Phillips, and his team for giving us the operational tenacity and guidance to achieve these results.
“I know the Group is in good shape and I can reassure the Welsh rugby public that we are ready to meet the challenges of the future with energy, focus and good management.”
The WRU Group Finance Director, Steve Phillips, added: “I am delighted that through prudent and careful management and reacting to circumstances around us we have been able to report a strong performance despite tough trading conditions.
“Although our turnover, as anticipated, has reduced on the previous year we have posted an end of year surplus by carefully managing our costs and being disciplined and sensible with our spending plans in line with our income.
“Operating to a rolling five year strategic and financial plan has clearly helped us understand the trends at work within the business and we have been able to react quickly to any issues we have identified.
“There is no doubt that the wider economic climate remains challenging but our year-end figures show that we are in good shape going forward.
“We will continue to closely monitor all aspects of our operation while, as we have always done, staying focused on our need to deliver levels of funding which can sustain and develop Welsh rugby in line with our income projections.”
