Vaughan: Let's drop the debt
FINANCIAL stability allows Gloucester to fight to stay in the black for the next five years – and wipe out all Kingsholm debt, believes Stephen Vaughan.
Gloucester have recorded their third-straight set of positive accounts – a huge turnaround in the years since Tom Walkinshaw's death.
When Ryan Walkinshaw stepped into his late father's shoes, Gloucester's financial plight looked almost grim. But year-on-year pre-tax profits have risen to £305,336 against an £11.6million turnover – an improvement on the previous year's £284,000 – and CEO Vaughan says the Cherry and Whites can expect more of the same.
Kingsholm boss Vaughan believes a clutch of new sponsors, a rise in season ticket sales and the return of Heineken Cup rugby have contributed to Gloucester's latest strong ledger.
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Gloucester's only outstanding debt remains the loan on the grandstand – but Vaughan revealed even that will be fully paid off in 'the next few years'.
Warning the club face a big battle to stay in the black, Vaughan said all the commercial and financial work at Kingsholm only underpins Gloucester's desire to claim top trophy success.
Vaughan believes Gloucester are bucking the Premiership trend in recording ticket-sales and sponsorship growth. He said: "Season ticket sales are up, general ticket sales are up, hospitality sales have never been better.
"But the missing ingredient now clearly is to bring sustained success on the field.
"It's up to us behind the scenes to do everything we can to produce a robust financial picture that can help the squad chase those top titles.
"Adey are a fantastic fit as main sponsors for the club, given they are such great Gloucester supporters, but their financial commitment is invaluable.
"Also off the back of that we have introduced 11 new sponsors to the club since I've been here. The likes of Olbas, Stowford Press and Stub Hub to name three.
"There's been a financial commitment from the likes of those companies, with of course long-term partners like Mitsubishi and Downton supporting us as strongly as ever.
"We've really bucked the trend there, speaking to other clubs. And the same goes for the season ticket sales.
"The new direct debit scheme has clearly helped, we've got almost a quarter of all of our supporters using that scheme now.
"But on top of that the
performance of the team has had a big bearing too: the return to the Heineken Cup has got people smiling again and excited about going up against the likes of Perpignan and Munster.
"Our only debt is the grandstand, and the banks are very pleased with how that is being handled.
"That debt is being paid off very quickly, and will be paid off in the next few years.
"We're happy with how that's being handled, it's being controlled very well and it's certainly not a burden to us."
Vaughan said registering profit is all the more impressive given greater investment in backroom staff and hefty work to improve the Kingsholm pitch.
He continued: "But we've invested a lot more money this year, in the playing department, in coaching positions like Alex Brown, the new doctor Nigel Jones, and also the pitch, which was the first work on that for a decade.
"All that has been expensive: but hugely worthwhile.
"That investment once again shows that no one here is in this to make huge profits – the money is reinvested to help benefit the club and ultimately the squad.
"Our aim is still to fight for a top-four place with a sustainable financial model, and these latest numbers show that even though we've invested a lot more we're still moving in the right direction.
"New initiatives, like the Gloucester Rugby Lotto help boost revenue, and hopefully I've got a few other plans up my sleeve to help move things forward.
"It is easy to say we crave success on the field above all else, but we cannot just rely on team performance to take us to new financial numbers.
"We've got to be prepared for every eventuality and we want to keep innovating too.
"We can plan for more stability in numbers, we've brought in three new directors who are strong and direct and board meetings are extremely robust and focused now.
"We're looking at three and five-year business plans as to how we want to take things forward, and that comes with financial forecasts too.
"These profit margins are very small, and in any other kind of business they would not be viewed as significant at all.
"The fact we can make money is wonderful, and a huge amount of the thanks for that must go down to sponsors and supporters.
"We've also got to be cautious and aware that the RFU or Premiership Rugby for example could make decisions that would impact on us, and quickly turn a profit into a loss.
"So to a certain extent that small profit gives you flexibility, and that's important."