The company behind the Guinness Pro-14 rugby tournament put a book value £281.37m (€333.8 million) on the business when selling it on to a newly formed joint venture, according to new accounts.
The sale took place ahead of the rebranding of the Pro-14 to the United Rugby Championship after the introduction of four new South African teams into the championship.
A note attached to the newly lodged 2020 accounts for Celtic Rugby DAC concerning the £281.37 million sale of its Pro-14 tournament operations on December 23rd, 2019 to a newly formed joint venture, Pro Rugby Championship DAC stated that an investment of the same amount has been made in the business’s new joint venture for the United Rugby Championship.
The new venture is held jointly between Celtic Rugby DAC and a third party.
The directors state that following the sale, the main activity of Celtic Rugby DAC is that of an investment holding company.
Underscoring the impact of Covid-19 and the company re-organisation on the financial performance of Celtic Rugby DAC last year, revenues more than halved from £26.39 million in the 12 months to the end of June 2019 to £12.15 million in the 12 months to the end of June 2020.
The directors state that the rugby season from March 12th, 2020 was overshadowed by the Covid-19 pandemic.
The directors state that the pandemic-induced lockdowns led to the temporary suspension of the Pro-14 rugby tournament on a number of occasions.
The directors state that this precluded the company’s investee from performing on certain contracts and impacted revenues.
The four shareholders of Celtic Rugby DAC are the rugby unions of the participating countries — Ireland, Wales, Scotland and Italy.
Celtic Rugby DAC was able to book a pre-tax profit of £261.7 million in the 12 months to the end of June last chiefly from the £276.8 million profit from the sale of its business. The sale involved transaction costs of £3.9 million.
Celtic Rugby DAC also paid out a dividend of £21.97 million to its four shareholders during the year.
As a result of the sale, Celtic Rugby DAC’s shareholder funds at the end of June 2020 stood at £246.6 million.
Joint venture investment
The Celtic Rugby DAC directors state that they are confident, through its joint venture investment, that it has adequate financial resources to enable it to continue as a going concern.
The accounts state that the company disposed of a 9.4 per cent equity share in Pro Rugby Championship DAC to its third party venture partner for £25.87 million on May 20th, 2020.
A note states that the third party in the joint venture is to invest in the joint venture over a five-year period and reduce Celtic Rugby DAC’s equity interest accordingly.
The deal allows for a further £20 million to be paid only when certain future performance conditions are met.