34 / 66
HONORARY TREASURER’S
REPORT
I have pleasure in presenting the annual accounts of the IRFU Ulster Branch for the
financial year 2016/17.
ACTUAL PERFORMANCE AGAINST
BUDGET
2016/17 was the second year of the three year business
plan. The budget at the beginning of 2016/17 had been
approved by the IRFU Ulster Branch Committee at a
deficit of £1.2m due to plateauing income and rapidly
increasing costs, particularly in the professional game,
in a bid to reduce the competitive gap with the top
English and French clubs.
The intention was always to reduce the expenditure if
additional income could not be sourced. I am pleased to
report that the actual financial performance was £900k
better than budget, resulting in a much smaller deficit of
£295k before tax.
This £900k improvement was produced by
increased funding from the IRFU of £450k, savings
and underspends in the professional playing and
management budgets of £250k, and the write back of
provisions for player costs of £200k.
INCOME & EXPENDITURE
Total revenues increased by £0.4m to £9.8m.
The majority of this increase was due to increased
grant income of £365k to £1.96m, of which grants from
the IRFU increased by £409k to £1.58m while other
grants reduced by £44k to £372k. The IRFU grants
include funding for salary costs of rugby development
officers, professional team management costs and an
Academy grant. This increased funding from the IRFU is
welcomed by Ulster Branch.
Sponsorship remained stable at just over £2.5m while
professional match income increased modestly by £70k
to £3.3m. Stability of sponsorship and match income
are very positive for Ulster rugby particularly when we
see falling crowds at many of the other grounds in the
Pro 12. The number of season ticket sales remained
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.
Professional game income has been in a plateau for the
last couple of years and this is forecast to remain the
case for the foreseeable future.
Hospitality at Kingspan Stadium continues to be
popular with all twenty corporate boxes for next season
sold. Waiting lists continue to operate for the premium
seats in the Corporate Stand. Corporate stand income
remained stable at just under £1.0m. It is imperative that
we investigate ways to increase hospitality spaces at
Kingspan.
Total expenditure increased by over £0.7m to 10.1m.
The largest expenditure item was professional rugby
expenses of £4.8m, an increase of over £650k.
Professional rugby expenses include player costs,
team management costs and medical costs. Despite
the increase on the previous year this was well below
budget and Bryn Cunningham is to be commended for
controlling the inflation in the professional team.
Other development expenses, which include rugby
development officer costs and expenditure in relation to
the Sport NI grants for Performance Focus amounted
to £1.5m. This was in line with other development
expenditure in 2015/16.
Administrative expenses amounted to £1.4m for the
year, an increase of £45k. Administrative expenses
include staff costs for the administration of the domestic
game, finance, HR, IT, as well as sales, marketing and
communications staff. Other significant expenditure
lines include heat and light, telephone costs, legal costs
and IT maintenance.
Professional game match expenses increased by £58k
to just over £1.0m for the year. The cost of home match
expenses reduced by £30k due to efficiency savings
and stewarding savings. Unfortunately, this was more
than offset by the £80k increases in away match costs,
much of which was due to the cost of flights to Italy and
France as a direct result of the impact of the Brexit vote
on exchange rates..
BALANCE SHEET
The deficit for this year reduced net assets to under
£1.2m. Ulster Branch remains only one of two Provinces
with net assets on its balance sheet.
Cash remains important for the Branch. Once again
cash balances remained over £1.5m for most of the
year. Recent negotiations with sponsors has highlighted
that Ulster continues to offer an attractive commercial
proposition for local and regional businesses to support.
Ulster Branch repaid its outstanding debt to the IRFU at
the end of 2015/16 for the loan on the corporate stand.
This leaves the Branch as the only Province with no loan
creditors on its balance sheet..
OUTLOOK
The Professional Game continues to make up over 85%
of the Branch’s income. As such, the financial success
of the Branch is more or less directly related to the
success of the team on the pitch through gate receipts
and sponsorship. Despite a mixed season on the pitch,
season tickets for 2017/18 appear to be holding up
well at this early stage and at similar levels to this time
last year, particularly for areas of scarcity in the seated
stands. Terrace tickets traditionally sell later in the cycle
towards the end of the summer.
During the year considerable time was devoted to
identifying additional sources of income and cost
efficiencies by the senior management team and their
32
32
IRFU ULSTER BRANCH
ANNUAL REPORT & STATEMENT OF ACCOUNTS 2016/17