Welsh Rugby Union net debt rises to £114.4m due to Covid-19 impact

The Welsh Rugby Union (WRU) has reported a net bank debt of £22.9million for the year up to June 30, 2021, while net debt has increased by around 50 per cent to £114.4m.

The new net debt figure represents an increase of £38.8m, a substantial spike from the £75.6m the union owed up to June 2020.

That's despite the group recording a pre-tax profit of £400,000 for the financial year, with the effects of the coronavirus pandemic still having a hefty impact in sport.

The WRU recently published its annual report for the most recent financial year, highlighting the union's desperate situation as it awaits the return of fans at capacity in the coming autumn internationals.

A major factor behind the debt increase is the £18m loan obtained through the Coronavirus Large Business Interruption Loan Scheme (CLBILS), which was used to support Welsh regional clubs during the pandemic.

Net debt is defined as "bank loans, debenture loans and finance lease obligations, less cash balances."

The finance lease almost doubled year-on-year to £42.3m, which is due to the union's investment concerning the redevelopment of the Parkgate Hotel on Westgate Street in Cardiff.

The project was intended as a means for the WRU to attain long-term financial stability, but the opening of the hotel has been delayed since early 2021 as a result of the pandemic.

Wales were crowned 2021 Six Nations champions and just missed out on the Grand Slam, but the trophy was won after Wayne Pivac's side impressed in empty venues.

Do you think Wales will retain their Six Nations crown in 2022? Let us know who's your pick to win in the comments section.

WRU income fell from £40.3 to £27.2m in the 12 months leading up to June 30, while turnover was just £58.1m, a significant decrease from the £79.9m posted one year prior.

The WRU finance director, Tim Moss, said it was "an achievement in itself" that the group had managed to record even a £400,000 profit considering the Covid-19 impact.

Chief executive Steve Phillips, meanwhile, used the latest report to underline just how crucial fan attendance is for the long-term viability of the national team.

"From the players who sacrificed their home lives to join bubbles, to volunteers in the community game who diligently followed the published pathways to returning to play and the supporters themselves – who were pioneers in the summer as they returned to Principality Stadium in their limited numbers – everyone has played their part in getting us to this stage, together," he said in a statement.

"We have weathered what was thrown our way during YE21 and we have emerged in a place where we are comfortable to move on and rebuild our future.

"It will not be easy and, for such a rebuild to be successful, we are extremely reliant on our ability to host international matches with capacity attendances at our stadium.

"This is the key economic driver which fuels the wider game and we must also have a level playing field against our colleagues and competitors within the tournaments in which our professional teams participate."

Wales recently confirmed their upcoming October 30 Test against New Zealand at the Principality Stadium was sold out six weeks before the All Blacks come to Cardiff.

Pivac's men will also take on world champions South Africa, Fiji and Australia across three consecutive weekends in November, each of which will be expected to draw big crowds.

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