Rugby

Scarlets expect big losses after £35k profit in last financial year

Nigel Short, pictured here, has made way for Simon Muderack as Scarlets chairman

Scarlets made a £35,000 profit for the last financial year, but have warned of “significant” losses in their next accounts.

Former chairman Nigel Short says the Covid-19 pandemic’s impact brought about “real sacrifices” for players, management and staff.

He thanked them for that, but stated: “Next year’s finances will show us making a significant loss.”

Scarlets’ latest accounts are for the financial year ending 30 June, 2020.

The Llanelli-based region’s finances underline the precarious nature of professional rugby in Wales.

Dragons, Ospreys, Scarlets and Cardiff Blues are battling to recover financially from the Covid-19 pandemic and currently will have to start paying back a loan on 1 July.

The Welsh Rugby Union (WRU) negotiated a loan of £20m for the regions with NatWest bank to help avoid the financial collapse during the coronavirus pandemic.

The repayments are the liability of the regions with the first instalment due in July, 2021 unless the WRU successfully renegotiates the terms of the loan.

The four regions and WRU have each been given a Welsh Government grant of £2.7m in January 2021.

In his final annual report as chairman, Short said: “We have reduced our direct headcount by 21 in response to Covid-19.

“The fast action that we took in response to Covid-19, coupled with strong fiscal and financial management, means that for the second year in succession Scarlets made a profit of £35k (2019 £166K), although next year’s finances will show us making a significant loss.

“The board have put into place the necessary steps that will ensure Scarlets get through the 2020-21 season, albeit heavily loss-making as central revenues from the Welsh Rugby Union fell significantly as a direct result of Covid-19 from a collective £26m for the 2020-21 season, to just £3m.

“This means that Scarlets have had to take out a loan via NatWest of £5.5m to cover the WRU deficit.”

Simon Muderack gained a degree in Business Administration from Bath University before his career in the technology sector
Simon Muderack will make the next Scarlets financial report as chairman

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