Page 28 - RFU Annual Report 2018

2 FINANCIAL REVIEW

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Loss on fair value and impairment Cash flow Tangible fixed assets, which
of fixed asset investments Net cash flow for the year was broadly primarily comprise our investment in
Fair value of investments reduced by flat at £(0.2)m. Net cash flow from Twickenham Stadium and Artificial
£1.2m. Significant uncertainty over operating activities was £16.6m aided Grass Pitches in community clubs,
its future cash flows led to a £1.3m particularly by a significant reduction increased by £40.5m from £234.8m to
impairment of the Group’s shareholding in debtors, as sponsorship which was £275.3m.
in Rugby International Marketing, overdue at last year end was received on
an organisation set up to exploit the time in 2018. Two of the 12 residential investment
commercial rights of USA Rugby, the properties owned by the RFU
majority shareholder. Investments held Total capital expenditure of £56.7m and located within the vicinity of
by the Injured Players Foundation (IPF) in the year included ongoing works Twickenham Stadium were sold during
were valued at £7.8m at 30 June 2018, an on the East Stand Project (£40.9m), the year. The fair value of the remaining
increase of £0.1m year on year. construction of additional Artificial properties, which are strategically
Grass Pitches (£10m) and the important as they are located alongside
Net result construction of the new World Rugby the West Fan Village, at year end was
After taking account of taxation and Museum (£1.7m). This investment £6.5m, following a reduction of £0.3m in
after adjusting for minority interests, was funded out of operating cash flow, value consistent with the local property
the loss for the year was £30.9m. A loss debenture proceeds (£6.2m) and an market.
was expected as our expenditure level additional £10m draw down of our
was determined taking into account the borrowing facilities. Debtors and prepayments due within
£31.6m cash gain relating to the RFU’s one year decreased by £18.2m, from
holding in TEL. Under FRS 102, this Balance sheet and cash flow £49.1m to £30.9m almost entirely due
cash is not reflected as income in the Consolidated capital employed fell to the earlier settlement of significant
P&L account but rather is recognised by £20.8m to £194.4m. This reduction sponsorship and broadcasting invoices
directly in the P&L reserve. The cash reflects the increase in the current value in comparison to last year.
investment going out of the RFU of the contractual obligation to buy back
into the game is, however, shown as Compass Group PLC’s 40% share in TEL Creditors falling due within one year
operating expenditure and therefore in 2028, which was partially offset by increased by £6.1m, from £40.6m to
recognised directly through the profit the sale of debentures (£6.2m) and an £46.7m, £3.7m of which is due to an
and loss account. improvement (£5.5m) in the position of increase in deferred income following
our defined benefit pension fund which the advance sale of new East Stand
is now in surplus. Hospitality Packages. Trade creditors
increased by £2.4m as the balance
Fixed assets increased by £37.8m to returned to a more normal level
£301.6m. following action taken last year to
facilitate the migration to a new
Intangible fixed assets consisting of finance system.
software and website development
costs increased by £0.1m and there
was a £2.1m transfer from assets under
construction, relating mainly to a new
Enterprise Resource Planning system
and improvements to other back office
systems that went live during the year.

Annual
Report
2018