Ulster Rugby Annual Report 2015 - 2016

HONORARY TREASURER’S REPORT

ACTUAL V BUDGET This time last year I was forecasting at deficit of over £500,000 for Ulster Branch for 2015/16. As the year progressed it became apparent that income was trending well ahead of budget and that costs remained well in control. This produced a net surplus of £70,711 (before tax), £650,000 ahead of budget - an excellent result in difficult trading circumstances. Increased sponsorship, merchandising income and grants produced additional income during the year of over £800,000. On the expenditure side, professional rugby expenses were over £300,000 below budget due to prudent management of contract arrangements, while domestic rugby expenditure was over £300,000 ahead of budget in line with additional grant income. Administration and stadium expenses increased by £150,000. INCOME & EXPENDITURE Total revenues increased by £388k to £9.378m. Grants remained at similar levels to 2014/15 (£1.6m) after the IRFU provided a one-off Rugby World Cup grant and increased salary grants in the domestic game. These increased IRFU grants and other smaller grant increases evened out the loss of the DCAL grant at the end of 2014/15. The DCAL grant had amounted to almost £0.5m annually. Sponsorship increased year on year by £0.3m to £2.5m. This mainly resulted from increased pourage sponsorship and additional shirt sponsorships. Sponsorship has seen significant growth in recent years. This growth has not happened by accident but by the hard work of the Commercial Committee, chaired by Denis Templeton, and by the commercial team ably led by Fiona Hampton. Denis is due to retire from chairing the Commercial Committee at the end of the 2015/16 season. The Branch owes much gratitude for the professional manner in which he led the Commercial Committee and produced more sponsorship income year on year. Philip ‘Chipper’ Rainey has been shadowing Denis in recent months and will take the chair of the Commercial Committee after the AGM. Professional Game match income remained at similar levels to the previous year at £3.3m. This was an excellent performance considering the season starting with the Rugby World Cup and the difficulties experienced by the other Provinces with reducing match attendances. The number of season ticket sales remained at around 10,500. This provides the Branch with a high degree of security of income. High season ticket sales limit the supply of tickets for individual matches and it is this scarcity which in turn maintains and even increases the demand for tickets. 28

It is my privilege to present the annual accounts of the IRFU Ulster Branch for the financial year 2015/16.

Hospitality at Kingspan Stadium continues to be popular with all twenty corporate boxes for next season sold with the six which were at the end of their contracts being rolled over again. Waiting lists continue to operate for the premium seats in the Corporate Stand. Corporate stand income remained stable at just under £1.0m. The rate of increase of income streams has slowed considerably highlighting that we are approaching a ceiling. Match income is approaching capacity for most games and many of the sponsorship deals are now in place for the next 2-3 seasons. Expenditure, however, is coming under increasing inflationary pressures due to the additional stadium running costs and professional team cost increases. The team costs are increasing due to the significant cash injections to the game in France and England through improved television deals. These deals are far in excess of television deals for the Guinness Pro12 league. This is an area that we must work with IRFU and the other stakeholders to close the ever-widening gap in television rights of the leagues in Europe. Overall, expenditure increased by £0.5m to £9.3m. The majority of this increase was due to the professional game with higher costs experienced in team management and player costs. Despite the increased costs in the professional game, these were well contained and were well behind budgeted costs through prudent contracting and recruitment. The English and French clubs continue to drive up the player inflation through their substantial television deals. Kingspan Stadium continues to be the place to go on a Friday evening with an average attendance of 16,000 throughout the season. The stadium redevelopment was completed almost two years ago and remains as one of the best rugby stadiums in Europe and further afield due to the facilities and the atmosphere that the Ulster crowd develops. However, a stadium of this quality requires a considerable amount of upkeep, maintenance and management. These costs amounted to £0.7m for the year. NET ASSETS The surplus for this year will leave net assets of around £1.5 million, equating to almost 2 months of normal operating expenditure. This ratio needs to be a minimum of 3-6 months to provide a healthy cushion against potentially financially leaner times in the future. The local economic climate continues to show signs of improvement. However, the future is uncertain with the fallout from the Brexit debate and the EU Referendum as well as the recent Assembly elections and the discussions around the Programme for Government.

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