The Otago Rugby Football Union is back in the black -
recording an operating profit of more than $200,000 - but has
warned its financial position remains fragile.
It is the first profit recorded by the union since 2005, but
it says it is still spending too much on its ITM Cup team.
The union, saddled with debts of more than $2 million,
flirted with liquidation last year, and only stayed afloat
through a rescue package and community support.
A new board was appointed and will present its first annual
report to the union's annual meeting on Monday. The union's
financial results are subject to the approval of the clubs at
Board chairman Doug Harvie said in the annual report that
2012 was a ''tumultuous'' year the board was pleased to put
He described the financial result for 2012 as
''satisfactory''. Operating profit was $217,805 and the
balance sheet recorded positive equity of $134,656. That
compares with a loss last year of $862,213 and negative
equity of $2.25 million.
Debt of $1.68 million was written off when a rescue package
was agreed to keep the union afloat. A further $483,088 was
raised to pay some creditors.
In his report, Mr Harvie sounded a word of warning for the
''One year's satisfactory result, however, does not create a
sound and robust financial position. It is still fragile. It
may be the first year of the new structure will turn out to
be the easiest,'' he said.
There was funding for operations and items last year which
would not be repeated this year. The New Zealand Rugby Union
funded staff and other costs while Otago staved off
''Creating sustainable revenue streams for the union is our
priority and a number of new initiatives are under way for
The purpose of the union was to foster and promote the game
of rugby and, with 7200 registered players in the province,
the board was conscious of the need to put more resources
into grass-roots rugby.
''Our major expense line ... is the ITM Cup campaign. This
absorbed over 50% of our gross revenue, which we believe is
disproportionate to our purpose. One way or the other, we
need to get that ratio more in line with what we think is
The ITM Cup side exceeded expectation last year, winning half
its games and making it to the championship final, where it
lost to Counties-Manukau. It cost $1.33 million to run the
The union is floating the proposal of club affiliation fees
to help fund community rugby. These would impose levies on
every team at clubs from colts level up. Junior teams and
secondary school sides would not be levied. Country clubs
would be charged a set fee.
The fees, to be voted on at the annual meeting, were paid
previously but phased out in 1998.