Saru is playing the money game well

South African rugby has turned a loss of R5.4-million into a R24-million profit within a year.

And that was in spite of the Springboks being eliminated from last October's Rugby World Cup in the quarterfinals, not undertaking a lucrative end-of-year tour to Europe, and playing only two home tests in 2011 instead of the usual six.

The loss of these money-spinners cost SA rugby R41-million, but was partly offset by a R28.4-million payment from the World Cup by the International Rugby Board.

The good financial results were also the result of extensive organisational restructuring that have taken place over the past 18 months.

CE Jurie Roux, who took on the job in late 2010, has overseen significant changes in the way the company is run and has implemented stringent accountability targets in all departments.

Roux still faces challenges, especially with the Super rugby team over the issue of relegation of one of the current five teams at the end of the season.

"It was a year of severe cost cutting, during which we restructured the operational side of Saru to be more streamlined and efficient," Roux said.

"We converted 16 different divisions into seven new departments, more effectively aligned to deliver on our mission to provide outstanding strategic leadership for the business of rugby."

Total operating expenditure increased by 12%, largely because of a 76% increase in broadcasting rights allocations to provinces.

The increase in operating expenditure, however, excluding broadcasting rights allocations to provinces, was contained to only 2%, below the prevailing inflation rate.

Group revenue grew to R597-million (from R505-million in 2010), due mainly to a significant increase in revenue at the start of a new five-year broadcast rights deal. Sponsorship income had also grown by 11%.

The jump in pre-tax profit of nearly R30-million was in line with Saru expectations, according to CFO Basil Haddad.

"Given that the new broadcasting agreements and a number of new sponsorship agreements, which commenced in 2011, are essentially fixed until 2015, and that operating cost containment continues to be an operational priority, it is likely that a reasonable profit will be achieved in 2012."

Saru's full financial statements are due to be presented at its annual meeting in Cape Town on March 30.