S.R.U. eases deficit, viability concerns: audit
The Samoa Rugby Union's ongoing financial viability is no longer a concern, an audit has found, after accounts showed its deficit decreased to $538,516 from a peak of $3.1 million in 2013.
The figures are outlined in an unpublished copy of the Union’s latest financial report.
The S.R.U. finances were audited by Lesa ma Penn and conclude there is no longer a cloud over the Union’s ability to continue as a going concern (in accounting terms, an entity able to cover its liabilities within a year).
Its negative working capital is listed as "having had decreased to a manageable amount of $588,000.”
The report is signed by S.R.U.'s Financial Controller Yona Tielu and was presented during the Union’s Annual General Meeting last November. It is an internal document which has never been released publicly.
The report records a significant improvement in the S.R.U.'s indebtedness. Monies $3m in 2014 down to $1m in 2018 and forecast to be $538,000 by the end of 2019.
“This is now the [fifth] annual unqualified audit opinion in a row since 2014 and the S.R.U. has now been granted a seat in the World Rugby Council in 2018 (having 5 years unqualified audited accounts was the original prerequisite to qualify, which was changed by World Rugby in 2017 to three years of unqualified audit opinion for a Union)," the report reads.
According to the report, the annual income for the Union increased from $11.2 million in 2017 to $11.9 million in 2018.
New sponsorship deals include an annual Sevens payment from Bluesky worth $1 million; the Samoa International Finance Authority to the value of $1.2 million; and a new 15s sponsorship deal with Grey Investment $1 million; and Beyond Limits Known $600,000.
“However, the Sevens' participation fee was transferred to [the] High Performance Unit in 2018 which is one of the reasons for increase in H.P.U. income from $2.8 [million] to $3.5 [million] and S.R.U. sponsorship income decreased by [$500,000] which was made up elsewhere.
“Overall sponsorship income has improved with 2017 and 2018 year earning averages of $4.3 [million] compared to the 2013-2015 period averaging about $3 [million] in sponsorship income.”
The report says the expenditure was $11.86 million in 2018 compared to $11.4 million in the previous year.
The major expenses faced by the Union included increased investment in the Manu Samoa 7s team from $2.4 million in 2017 to $2.6 million in 2018 with the new initiative of contracting of players resulting in player allowances increasing from $465,000 in 2017 to $678,000 in 2018.
“The amount spent on the Manu Samoa 15's for S.R.U. decreased from $1.7 [million] in 2017 to $1.4 [million] in 2018 due to H.P.U. covering the majority of airfares and accommodation costs after withholding funding in 2017, H.P.U. costs increased from $2 [million] 2017 to $2.3 [million] in 2018, player allowances remained the same at $500,000 for Manu 15’s.”
Regarding the second Super 9 tournament hosted in 2018 was an additional expense which cost the Union over $400,000 due to lack of sponsorship to cover costs.
“Overall the activities of the Union for 2018 saw a net profit of $31,000 with the S.R.U. posting a loss of $34,000 and H.P.U. portion posting a profit of $65,000.
“On the Balance Sheet, there was an improvement in the negative working capital which decreased to $1 [million] (for S.R.U.) from $2.1 [million] in 2017 with overall (H.P.U. & S.R.U.) decrease from $1.4 [million] in 2017 to $500,000 in 2018 leading to auditors removing emphasis of matter over S.R.U. operating as a going concern.”
Development spending remains the same though possible increase in spending for schools competitions based on sponsorship interest.
The H.P.U. funding in this area has also been increased to incorporate an academy program which covers Under 17 – Under 20 for men and women to run for approx.
The 25 weeks of the year after factoring Under 18s, Under 20s, Manusina and Super 9 campaigns.
The report says administrative costs remain relatively stable, with the H.P.U. General Manager to be appointed for H.P.U.
The Union says it remains committed to the repayment of outstanding debt continues for the Union in order to settle all outstanding debts as soon as possible.
“Overall, the Union has seen a vast improvement in its financial position and growing strength in its commercial opportunities,” the report concludes.
“The Union will continue to explore other ways of increasing revenue streams and to assist with local Super 9 franchises and clubs to also increase its commercial earning capacity.”