Ulster Rugby Annual Report

HONORARY TREASURER’S REPORT 2018/19 ꢃꢀ_- ;ꢀrѴ;-v u;ꢀbmꢀru;v;mঞm]ꢀ|_;ꢀ-mm -Ѵꢀ-11o m|vꢀo=ꢀ|_;ꢀꢃ!ꢄ&ꢀ&Ѵv|;uꢀꢅu-m1_ꢀ=ouꢀ|_;ꢀ Cm-m1b-Ѵꢀ ;-uꢀƑƏƐѶņƐƖĺ 14 MONTH ACCOUNTING PERIOD

May and June produced £0.5m additional income with £250k coming from grants and £170k coming from professional match income. This additional income related to additional grant income detailed below and additional income from the league playoff games in May at home to Connacht and away to Glasgow. Grants for the 14 month period increased by £0.3m in total to £2.4m. IRFU grants increased by £0.2m with the main increases in salary grants. These additional salary grants relate to the domestic game grants for the service level agreement for rugby development covering the additional two months. Sponsorship increased by almost £0.2m to almost £2.9m while professional match income reduced by £0.1m to £3.2m. The vast majority of sponsors have proved to be loyal supporters of rugby in Ulster and we aim to strengthen these relationships in the coming months and seasons. Sponsorship and match income provide a large proportion of the Branch’s revenues. We have seen average attendances fall by 300 to 13,900. We also had only 10 regular home league games this season, compared to 11 in 2017/18. The number of season ticket sold reduced by 1,200 to 8,600. However, it was encouraging that despite the reduction in season tickets we witnessed on average 900 more people attend matches on a game by game basis. Professional game income had been forecast to fall back during the 2018/19 season due to inconsistency of performances on the pitch as a consequence of off- field issues and disruptions to coaching continuity. It is encouraging that the average attendances increased as the season progressed and performances showed more consistency than in recent seasons. Average attendances had been below 12,000 for the first couple of home games of the season but picked up significantly after Christmas. 2019/20 will have its challenges regarding match attendances with the Rugby World Cup coinciding with the first six weeks of the season. Hospitality at Kingspan Stadium continues to be popular. Premium seats in the Corporate Stand continue to sell well resulting in corporate stand income remaining stable at just under £1.0m. Merchandising income has reduced by over 73% in 2018/19 to just over £23k. 2017/18 included two years of income as we had been accounting on a cash basis for this as opposed to an accruals basis. The adjustment during 2017/18 was required to correct this. Merchandising income relates to bar and food royalties from match nights. All other incomes lines (Affiliation and match fees, domestic match income and other income) remained at similar levels to 2017/18. Over 50% of other income related to bar and catering concessions as well as backdated rebate on ticket administration charges from Ticketmaster.

During the 2018/19 season it became apparent that a year end of April was no longer appropriate for the Branch, which incorporates both the professional game as well as the domestic game in the Province, for a professional rugby season that has been ending in May in recent years and will end in June 2020 with the likelihood of June season ends continuing thereafter. With this in mind, I proposed to Management Committee an extension of two months for the accounting period to June 2019. This was then brought to Branch Committee where the 14 month accounting period to 30th June 2019 and was duly approved. The main benefit of moving the accounting period end date is to better align sponsorship contracts, match income and players’ contracts to the new season dates for the professional game for 2019/20 and beyond. An accounting period running from 1st July to 30th June will continue to fully encompass the complete domestic season. Two of the other Provinces have already moved their year end dates to June, Munster and Connacht. ACTUAL PERFORMANCE AGAINST BUDGET Changing the accounting end date to June had a significant negative impact on the results for 2018/19. The additional two months attracted little income but normal cost levels continued. The budget at the beginning of 2018/19 had been approved by the IRFU Ulster Branch Committee at breakeven for the year to 30th April 2019. However, significant negative variances resulted in a deficit of £0.4m at the end of April 2019. These variances were in relation to severance costs, budgeted income from the PRO14 league not materialising as the league expected and season tickets performing poorly. These negative variances were offset by better than budgeted commercial income from sponsorship and income from the playoff games, particularly the EPRC quarter final away to Leinster. The additional two months of trading in the 14 month accounting period produced £0.5m income and £1.5m of additional costs, resulting in a deficit for the period 2018/19 period of £1.4m. INCOME & EXPENDITURE Total revenues increased by £0.4m to £10.6m for the 14 month period when compared to the year to April 2018. The 12 months to April 2019 saw total revenues reduce by £0.1m to £10.1m. Looking at the direct comparison of revenues for the year to April 2019 and the year to April 2018 shows that professional match income (ticket sales) was £100k lower in the current year at £3.2m. This was offset by £180k additional income in the most recent year for sponsorship income.

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