Revenue up 229% for Wasps but Ricoh move proves a burden to the business
WASPS rugby club has seen revenue increase by more than 200% following its relocation to Coventry’s Ricoh Arena.
However, the cost of purchasing the facility together with the relocation have seen the business make a loss, albeit an exceptional one.
In the latest set of results for the full year to June 30, 2015, the club said revenue had increased 229% to £21.4m, with EBITDA rising by £2.3m. The operating loss before exceptional items and profit allocation improved by £1.6m but it still incurred a loss of £2.4m.
However, it maintains a cash balance in excess of £12m and its attraction as an investment option was underlined by the fact it succeeded in raising £35m through its sister company, Wasps Finance, in the form of a 6.5% secured bond issue – which exceeded target by £10m.
The bond issue was made as the club looked to finance the purchase of the Coventry facility.
However, the move looks to have been profitable in the long-term with the arena now being valued at £48.5m, an uplift of £29.3m.
The results are slightly misleading as for the first five months of the last financial year the club was playing at its former home at Adams Park, High Wycombe.
On the playing front, the move to the Ricoh saw the club twice break its attendance record for e home Premiership fixture and attendances are now an average 19,168 – up 116% on the previous year.
It has also agreed new sponsorships with Land Rover, kit supplier Under Armour, shirt sponsor EMC and others.
Ticket income is up 42% since the move and has benefited from increased hospitality sales.
It has also been able to use the proceeds of a new TV deal with BT Sport to boost investment in the playing squad and support staff.
Plans are also progressing on a new training facility for the team, the club has said.
So far as the Arena itself is concerned, the venue has benefited from increased conference and exhibition bookings and new hospitality partnerships with Purity Real Ales and Majestic Wines.
The in-house hotel is also being converted to a DoubleTree by Hilton.
On the playing side, a new Xtragrass pitch has been installed which benefit both the rugby club and Coventry City FC.
David Armstrong, Group Chief Executive said: “We are pleased to publish this first set of results which reflect the positive impact acquiring and moving to the Ricoh Arena has had on our club.
“This has been the busiest year in the club’s history and the successes we have had have exceeded our own expectations, from the record breaking home crowds to the new partners that have joined us in the past year, which include Jaguar Land Rover, EMC, Under Armour, Heineken and Hilton.
“Revenue and EBITDA are in line with expectations and the performance in the nine months since we acquired the Arena demonstrates the combined benefits of bringing together Wasps and ACL and gives us confidence for the future of the club.”
He said Wasps was now owner of the one of the UK’s leading multi-purpose venues for sport, business, and entertainment and the Arena was a venue that supported both the club’s rugby and commercial ambitions.
