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