Don't panic! Dragons move to allay fears over debt (From South Wales Argus)

Don't panic! Dragons move to allay fears over debt

6:20am Tuesday 10th July 2012 in Dragons By David Deans, Reporter

GREAT FACILITY: But the Bisley Stand at Rodney Parade led to a large debt for the Dragons

NEWPORT Gwent Dragons chief executive Chris Brown has moved to reassure fans the region is not in danger of going under.

It emerged yesterday that auditors have expressed concerns over whether the region can continue as a going concern.

In the year ending May, 2011, auditors Arthur Gait and Company report that Dragons Rugby Ltd had debts of £2.4 million and incurred a net loss of £272,141.

The auditor said there was “the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.”

But Brown told the Argus: “When you look at those accounts another year has gone by and it [the Dragons going out of business] didn’t happen. New directors were brought in, a new chief executive, myself, was brought in.”

Brown, who has signed a new six-month contract from June, said that when he joined the company in March he had thought its financial state “was difficult”, but could be resolved.

The company is still not breaking even, however, and he said there will be losses for the year up to May, 2012.

“We have a business plan that takes us into the black in the year to come,” he said.

He added that the business had under performed in sponsorship and advertising and that the main solution was to boost income, including selling more season tickets. “At this point in the year, Dragons season ticket sales are up 80 per cent, and by a large percentage for Newport as well, so there’s optimism in terms of where we think we’re going to be next season,” he said.

He said Newport County coming to Rodney Parade could contribute a ten or 15 per cent increase in income, with extra use of the business lounge in the Bisley Stand.

He said the Dragons were focusing on the commercial aspect of games “match by match”.

He said: “If we play Munster we look to have an Irish theme to it. We look to appeal to people who would want to come and watch a big brand like Munster.”

He suggested that marketing for matches may have been poor in the past. “I don’t believe there was the analysis done match by match in terms of how to attract people.

“Then after the match in terms of a bit of a wash up to see actually what’s gone on,” he said.

He said Rodney Parade was holding around two weddings a month, and that the ground was looking to attract conferences and parties in the Bisley Stand, and even music events in Rodney Hall.

He said almost all of the debt within the club’s three businesses – Newport RFC Ltd, Rodney Parade Ltd and Dragons Rugby Ltd – concerned the building of the Bisley stand.

“All the debts are dealt with in so far as they are being paid back and will be paid back over the next 20 years,” he said.

He added that he didn’t think simplifying the structure of the outfit – with Newport RFC acting as a parent company to Rodney Parade Ltd and Dragons Rugby Ltd – would help. The structure is “not that complicated,” he said.