Latest news with #R100-million
Daily Maverick
4 days ago
- Business
- Daily Maverick
Saru declares significant loss in 2024 financial report – but 2025 outlook positive
Despite a large deficit, the South African Rugby Union is optimistic about the short-to-medium-term future. The South African Rugby Union (Saru) reported a R93-million loss for the 2024 financial year, which was expected and forecast, despite record earnings, its latest financial statements reveal. On the up side, new sponsorships and becoming a full shareholder of the United Rugby Championship (URC) from next month, has led to a bold prediction of a R100-million surplus in the current financial year. Summary 2024 financial year (reported) Loss: R93-million (expected and already offset in early 2025) Commercial revenue: R1.552-billion (up from R1.44-billion in 2023) Total income (including grants): R1.76-billion World Rugby grant: R186-million Merchandising: Doubled from R30-million to R62-million Expenses: R1.871-billion (up 2.9% from R1.816-billion) World Rugby events: R133-million Player image rights: R148-million (+R24-million) Private equity transaction costs: R13-million URC/northern hemisphere franchises: R446-million National teams including Springboks: R433-million (-R27m from 2023) 2025 outlook Forecast revenue: Above R2-billion Projected surplus: R100-million Drivers: New sponsorships Full URC membership Continued commercial growth According to the financial report, the R93-million deficit had already 'been wiped out' over the first six months of 2025. Overall, in 2024, group commercial revenues exceeded R1.5-billion for the first time (R1.552-billion), up from R1.44-billion in 2023. Total income with the addition of grants (principally from World Rugby of R186-million) took total income to R1.76-billion. Revenues for 2025 are forecast to exceed R2-billion. The 7.8% increase in revenues was attributable to increased broadcast revenues in a non-Rugby World Cup year, competition sponsorships and a strong performance in merchandising receipts, which more than doubled from R30-million to R62-million. Expenses increased from R1.816-billion to R1.871-billion. The 2.9% increase was put down to investment in hosting three World Rugby tournaments (R133-million), a R24-million increase in player image rights (to R148-million), and the costs associated with the mooted private equity transaction (R13-million). Total expenditure attributable to the northern hemisphere international franchise competition was R446-million, while Saru was still able to make a full distribution to member unions. Spending on the No 1 world-ranked team, the Springboks, and other national teams was R433-million, a reduction of R27-million on the Rugby World Cup-winning year of 2023 (R460-million). 'Reporting a loss can never be desirable, but the irony is that we are more than satisfied with our position,' said Saru CEO Rian Oberholzer. 'We had budgeted for a loss in 2024 in the expectation that the members would approve the private equity transaction that they had sought, releasing funds to cover the deficit. 'When that did not happen, we continued with our planned commercial reset, and other revenue generation plans, which have borne fruit. We are in the very rare position among our international peers of continuing to be debt-free and confident of posting a surplus in 2025.' European costs Saru's biggest accumulated cost over the past eight years has been paying to participate in URC (and the Pro14 competition before that). The cost of securing South Africa's place in northern hemisphere rugby, which was accelerated by the collapse of Super Rugby in 2020, has been R2.2-billion. According to the finance notes, Saru currently pays R392-million annually for top club teams to compete in URC and European Professional Club Rugby (EPCR). Without this contribution, the Bulls, Cheetahs, Lions, Sharks and Stormers would have no international competition. Another R54-million is paid to travel and other associated costs for the teams. Saru also paid R347-million to member unions (the 15 provinces) to ensure their existence. Saru president Mark Alexander highlighted a period of significant challenges and growth for the organisation. Despite the unsuccessful private equity transaction, it elevated Saru's profile and led to the exploration of alternative commercial initiatives, including a new commercial app and digital platform to diversify revenue streams. The Saru president acknowledged a financial loss for the period, but emphasised that the R2.2-billion investment was made to secure future participation and full membership in the URC and EPCR by the end of June 2025. He also noted that budgets for 2025-2027 had been secured, ensuring financial stability. Plans include digital transformation and leveraging partnerships for growth beyond 2028. Alexander also praised the Springboks' continued world-class performance, ranking No 1 in 2023 and 2024. Oberholzer said the financial outlook beyond next year was equally healthy, with strong revenues forecast for 2026 with new competition formats in the pipeline. 'The income that SA Rugby generates all goes back into supporting the growth and promotion of rugby in the country,' he said. 'It allows us to fund Springbok campaigns, expand women's rugby programmes and fuel our other national teams. It pays for our members' activities in their communities as well as their professional teams. 'It underwrites our rugby safety programme BokSmart; supports referee and coaching development and our age group competitions as well as development programmes, and allows us in turn on sell-out Test match entertainment and our domestic competitions. 'Ultimately, every rand that we earn goes into powering the game in some shape or form and after a challenging 2024, we have a good news story to tell our South African rugby community as we look ahead.' DM
Daily Maverick
08-05-2025
- Business
- Daily Maverick
Mps demand accountability as nsfas struggles with payments, backlogs, and ICT failures
Members of Parliament described NSFAS as a disappointing institution, citing continual issues of non-payment and unnecessary spending. The National Student Financial Aid Scheme (NSFAS) is battling to repair its information and communication technology (ICT) system. It was allocated R100-million for the repairs, and only R30-million is left, according to NSFAS. The scheme's four solution partners responsible for managing student accommodation have delayed payments, resulting in financial complications for some landlords, some of whom have been forced to evict students. Members of Parliament's committee on higher education have expressed concern and frustration. They described NSFAS as a disappointing institution after continual non-payment issues and unnecessary spending. On Wednesday, 7 May 2025, NSFAS briefed the committee on student appeals, funding, allowances and accommodation matters. Newly appointed acting chief executive officer Waseem Carrim led the presentation, accompanied by new NSFAS board chairperson Dr Karen Stander. More than R16-billion has been disbursed so far this year to universities and technical and vocational education and training (TVET) colleges for tuition fees, accommodation payments and allowances, NSFAS said. The scheme received more than 70,000 student appeals and had finalised 34,645. NSFAS has 5,533 appeals over outstanding documents, and will close 4,023 of these after a 30-day deadline. In August 2024, NSFAS was battling to ease the backlog of student queries and appeals with a designated staff of between 80 and 86. This led to MPs raising concerns and calling for NSFAS to be decentralised. Accommodation payments, landlord issues, student evictions Members of the committee criticised NSFAS's use of four service providers who were meant to conduct the accreditation of properties whose owners had applied scheme's accommodation platform. The committee heard that the service providers received a 5% commission from landlords for every NSFAS transaction. Committee member Sihle Lonzi (EFF) raised issues over student accommodation, referring specifically to the Walter Sisulu University student who died in a protest against housing conditions. Lonzi asked why NSFAS used service providers to pay landlords, and said this should be scrapped. Carrim replied that 'the solution partners receive that fee for the utilisation of their online portal…We and the board find this contract to be problematic. While we may not have signed these laws, we are bound by them, which is why we would have instituted a legal review… the SIU (Special Investigating Unit) has also flagged this complex accommodation process for a review… we are stuck with this process.' Committee member Sihle Ngubane (uMkhonto Wesizwe party) said, 'The institution is in tatters. It's disappointing and these things are made deliberately to be like this, from accommodation to tuition to transport to [the] ICT system, the whole value chain is a mess.' Committee chairperson Tebogo Letsie (ANC) criticised NSFAS for its delays in payments to landlords, saying this had major implications for business owners. Letsie cited the example of a landlord from KwaZulu-Natal who had lost 80 beds due to NSFAS non-payment. 'NSFAS did not pay, and they tried to plead with banks, but the banks wanted their money. This lady then lost 80 beds that she had for about six years,' said Letsie. Karabo Khakhau (DA) and Gaolatlhe Kgabo (ANC) questioned what caused the move to send funds to students, who then paid accommodation providers, which she said was a mistake. Carrim replied, 'The payment made to students for accommodation was not an incorrect payment. Those are students who claimed accommodation, but were not linked to an accommodation provider, and therefore it was necessary. Those students would have slept on the streets if we did not pay that accommodation allowance.' He said NSFAS had told the students that the disbursements had been for accommodation. Carrim confirmed that more than 3,000 accommodation providers had been paid, representing 100,000 students, at a cost of R1-billion. Missing middle funds NSFAS has been capitalised with R3.5-billion over a three-year cycle from 2024-2027 to support students who fall into the 'missing middle' category of R350,000-R600,000 annual household income. This support was introduced by former higher education and training minister Blade Nzimande. In this category, NSFAS received 65,812 loan applications, of which 2,268 were eligible, while 43,261 applications met the bursary criteria and were automatically funded, leaving 20,283 ineligible. NSFAS offices NSFAS spends more than R2-million a month on rent for its upscale Cape Town offices. There have been calls from MPs to relocate because of the cost. Carrim said NSFAS was willing to leave the building, but there were contractual obligations. He said the SIU had also confirmed irregularities in the procurement process. 'The Special Tribunal will impose an equitable outcome; NSFAS cannot, at this stage, be certain of whether the cancellation penalties will form part of that,' said Carrim. He said NSFAS was developing plans for relocation should the court rule for the immediate termination of the lease, so that business operations were not affected. Lonzi suggested that government buildings be used for NSFAS offices. Carrim asked for six months to turn around the struggling scheme. DM
