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Big bonus for SA Rugby MD
19/03/2008 17:44 - (SA)
Cape Town - SA Rugby on Wednesday denied a newspaper report claiming the chairperson of the board of SA Rugby (Pty) Ltd, Mpumelelo Tshume, and the MD Jonathan Stones, "trousered" bonuses of R500 000 each, emanating from a "sweetener" of R30m paid by SuperSport in terms of a R700m broadcasting deal.
The Board of SA Rugby (Pty) Ltd wishes to state the following:
"Mr Tshume has received no bonus payment whatsoever from the Company - any allegations to the contrary are devoid of any truth and are aimed at mischievously discrediting the chairman of the board.
"Mr Stones was awarded a performance bonus of R505 000, following a comprehensive performance review, which was presented to and discussed with the six non-executive members of the Board. "Following said discussions, the Board agreed on Stones's salary increase for 2008, and the quantum of his performance bonus.
"These discussions took place prior to the Board meeting of 31 January 2008, and were subsequently communicated to Stones. He was not present at the discussions, did not solicit any bonus, and did not influence the Board's decision.
"Both Messrs Tshume and Stones reserve their rights to take further action regarding these allegations of impropriety by themselves."
Net profit after tax is R21.2m
The Board of SA Rugby (Pty) Ltd supports the two directors in this statement.
The South African Rugby Union's (Saru) draft audited group annual financial statements for the year ended December31, 2007, which include an unqualified audit report, were also circulated to its members on Wednesday, ahead of the formal consideration and adoption of the financial statements at its Annual General Council Meeting here on March 28.
The group income statement for the year reflects a profit before taxation of R31.5m, after impairment of an amount of R5m against the investment in associates EP Rugby, Border Rugby and Eagles Rugby.
The net profit after tax is R21.2m, which is substantially better than the R7.8m earned in the previous year.
With 2007 being a Rugby World Cup year, SA Rugby faced an operating loss, due mainly to a reduction in broadcasting revenue and an increase in national team costs, both related to participation in the RWC.
The budgeted loss amounted to R19.4m, but, through a combination of additional revenues and net savings on a variety of operating expenses, some arising from the fact that the Springboks were crowned RWC 2007 champions, the loss, before the impairment, was limited to R4.5m.
However, this loss was more than covered by the R41m grant payable by the IRB Trust, arising from the profits earned by RWC 2007 in France.
Broadcasting rights contract
Group reserves totalled R66.5m at 31 December 2007, which included R41.7m in cash and short-term deposits. The improvement in cash reserves is primarily attributable to the R30m advance payment to SA Rugby by SuperSport, on the conclusion of a broadcasting rights contract for domestic competitions and inbound Tests for the period 2011 to 2015, and a R2.8m reduction in amounts receivable from Provincial Unions, whose indebtedness to SA Rugby at balance sheet date totalled R13.5m.
Over the last few years, after-tax profit figures achieved were as follows: 2005 (R6.4), 2006 (R7.8) and 2007 (R21.2).
SA Rugby is well on its way to reaching its medium term objective of having cash reserves of R140m by the end of 2010, with the future showing a budgeted after- tax profit of R15m for 2008, and something well in excess of that for 2009.
This is against the backdrop of the revenue sharing opportunity, for both SA Rugby and the Provinces that will be presented by the British & Irish Lions tour to South Africa next year.
Given the newly introduced distribution model adopted by the International Rugby Board relating to each Rugby World Cup event, it is likely that SA Rugby's reserves will receive a further significant boost following RWC 2011 in New Zealand.
SA Rugby is confident that it is well positioned, through its financial and other resources, to grow, transform and successfully compete in the game of rugby at all levels in the short, medium and long term.
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