Cape Town - SA Rugby on Friday announced a “very satisfactory” operating result for the year ended December 31, 2015, with a group pre-tax surplus of R33.3 million, significantly higher than the R2.9 million achieved in the previous financial year.

The result was due to a combination of improved revenues and a measure of cost savings, said Jurie Roux, Chief Executive Officer.

“In a very difficult economic environment, we consider this a very satisfactory operating result, which was well above budget,” said Roux. “Group revenue rose to close to R1bn (R967m), 18% up from the 2014 level (R820m), due mainly to our share of the new revenue stream from SA Rugby Travel.

“That operation did mean an increase in group expenditure but it was a net positive outcome for the business.”

A taxation charge of R16.5 million resulted in a group post-tax profit of R16.7 million (2014: R1.9 million loss).

SA Rugby invested R105m of its income into grassroots development and women’s rugby as well as another R30m in elite player development at junior level in 2015. Member unions were allocated R177m from broadcast revenues while the cost of running professional competitions was R106m with another R125m going on the delivery of sponsorship rights. Costs associated with the Springboks, Springbok Sevens and Junior Springboks accounted for another R197m.

Roux said that 2016 marked the beginning of a new five-year cycle for all broadcasting rights agreements and most sponsorships.

“While all major broadcasting rights deals have been finalised at significantly higher values, the renewal or replacement of sponsorships has been extremely challenging,” he said.

“As a result the increase in sponsorship revenues is likely to be relatively modest over the next few years.

“On the expenditure side, the allocation of broadcasting rights payable to member unions will increase significantly, in line with the increase in revenue. The investment in players will increase, partly because of a new contracting model and partly due to a new collective rights agreement relating to the use of player imagery.

“A substantial increase in competitions costs will also be evident, mainly because of the expansion of Vodacom Super Rugby. We’re making every effort to contain increases in all other operating expenses to around inflation levels.

“The net result will be a greater emphasis on efficiency and positive financial results, in order to steadily improve the level of cash reserves over the next few years.”

The results are scheduled to be approved at the SA Rugby Annual General Meeting in Cape Town on April 1.