The figure was achieved in a challenging financial environment from which the WRU Group has emerged with a positive underlying trend.
During the year, the Group paid across a record £14.9m to its regions, semi-professional and community members to develop rugby at all levels from elite to grass roots across Wales. This is in addition to the £3.9m invested by the Group in elite and community rugby directly.
During the year to 31 May 2007, more than £11.0m was paid directly to the four Regions, £1.0m to the Premiership clubs and almost £3.0m to grass roots rugby around Wales. The distribution figure signals a pledge by the Group to ensure that the sustainability and development of rugby as the national sport of Wales is enshrined as our core mission. The commitment of the Group to allocate this record amount during a challenging year is profound evidence of the confidence the Group has in a strong financial future.
During the year, the Group decided to confront head on the need for change and prioritise financial issues which required closure. This led to exceptional costs, most of which had been in the financial system for some time, which led to the overall results of the year for the Group amounting to a loss before tax of some £2.3m.
The Annual Report explains that at the core of the exceptional costs were large debts owed to the Group which had little prospect of being collected and have been provided against in the ongoing accounts. This was one of the moves aimed at streamlining and regulating the accounts to give a fully accurate reflection of the Group's financial framework.
Other factors during the year included the departure of major football which principally saw the inevitable move of the FA Cup Final back to Wembley. The 2006/2007 financial year also covered a turnaround Six Nations season in which only two home internationals were played at the Millennium Stadium. These events led to a reduction in the Group's turnover. The Annual Report shows that the WRU achieved an income of almost £44.0m, despite the challenging factors within the year, compared with just over £46.0m the previous year.
The next financial year will yield Rugby World Cup income plus one home Autumn international, three Six Nations home matches and the return of the Heineken Cup Final to Wales in a move brokered by the Group. Clearly, the Autumn programme will not see the traditional three or four-match series.
The strategy on deal-making for matches and events within the remit of the Group has been realigned and modernised to ensure the best available and fairest terms are achieved at all times. This is being seen as a proper reflection of the current need to adapt and change to the developing market scene.
Research carried out by the WRU shows that from 1999 to 2006, the Millennium Stadium generated a colossal £750m for the Welsh economy principally in and around Cardiff.
To capitalise on the potential of the business, the Group Chief Executive, Roger Lewis, oversaw the recruitment of a broadly new senior management team to fully reflect the aims and objectives of the Group going forward. Those changes were achieved either by staff replacement or recognising the financial value of removing the need for major outsourced spends on items such as legal fees.
The Group is now fully confident that all systems and procedures are robust enough to enable dynamic growth and decision-making going forward. To confirm that vision, the Group is now close to the announcement of a new Elite Performance Director charged with taking the game forward onto a new level with world class standards across our game.
Another sign of the financial strength underpinning the Group going forward was the decision, realised just after the end of the financial year, to purchase a pitch lighting rig system to improve the quality of the pitch by encouraging root growth. That decision followed a winter investigation of the product which proved successful and showed how fewer pitches will be needed annually in future and therefore stadium running costs will be saved.
The Group Chief Executive of the WRU, Roger Lewis, said "We have taken some tough decisions during the year and we were able to take them because we are extremely confident of our assured success going forward. The underlying trends within the business are now incredibly healthy and the plans already in place for next year and subsequent years will deliver that success.
"We know what our real assets are and we have a precise vision of how to achieve the full potential of those assets going forward. Over the past year a tremendous amount of work has been done to examine our accounts in a near forensic detail. In effect, we have carried out a spring-clean of our financial cupboard to make sure we have a totally accurate picture of where we are right now and how we must go forward.
"To live by the creed of transparency we want to achieve going forward, we have had to make sure we know exactly where we stand today. For instance we have taken the view that some money the Group has been owed for years is unlikely to be paid so we will not go from year to year assuming the cash will suddenly appear. We have now taken the painful decision to accept some of that money as a loss in our accounts.
"I am proud that within all this change and in a tough environment we have still been able to distribute more money into the game of rugby in Wales than the Group has ever been able to before. We have put in place managerial and procedural change, which will help the Group flourish in the years ahead for the benefit of our game and our nation. We will truly take Wales to the world through our rugby, bring the world to Wales at our magnificent Millennium Stadium and ensure that our sport defines our Nation."
He explained that the focus going forward will now be to build on the Group's income through a proper marketing strategy underpinned by robust and transparent financial control and geared through dynamic management and planning.
Mr Lewis added, "The WRU and the Millennium Stadium boast exceptionally talented and hard working staff who deserve to see their efforts reflected in long term success. In the previous year's Annual Report, a tough year ahead was predicted but I believe we have emerged with a huge degree of success from within that challenging environment.
"I am certainly looking forward with energy and focus to ensuring we continue to take Wales to the world through our rugby, attract the world to Wales at our unique stadium and ensure our game continues to define our nation."
For further information please visit www.wru.co.uk/annualreport.