ORFU back in black, but position still 'fragile'

Doug Harvie
Doug Harvie
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 the meeting.

Board chairman Doug Harvie said in the annual report that 2012 was a ''tumultuous'' year the board was pleased to put behind it.

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 year ahead.

''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 liquidation.

''Creating sustainable revenue streams for the union is our priority and a number of new initiatives are under way for that.''

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 reasonable.''

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 Otago side.

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.


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