Llanelli Scarlets' fans assured over £5.5m rugby debt
- 4 November 2011
- From the section South West Wales
The Scarlets rugby side have reassured fans they are not in financial danger despite a £5.5m debt.
The Llanelli club's accounts show a loss of almost £3m in the 17 months leading to the end of June 2010, and auditors raised concern for the future.
But new chief executive Mark Davies said the business was on track to start breaking even next season.
He said much of the debt was owed to four club directors who were fully committed to the Scarlets.
Accountants who audited the financial performance of the Llanelli-based regional rugby side said there was "material uncertainty" over its future as a going concern.
But Mr Davies, who has been in place since September, said the club had made huge strides forward in the last year.
"From a technical point of view the auditors have to say that," he told BBC Radio Wales.
"I have spent a fair amount of time with the auditors this year - they were very pleased with our progress... they genuinely believe in our five-year plan and the progress we are making."
The Scarlets borrowed £2.4m from Carmarthenshire council to help finance a move to the Parc y Scarlets Stadium.
But last year the local authority said it could defer interest on the loan for another three years.
In a statement released this week the authority said: "The club continues to meet its obligations both under the terms of the lease of the stadium and of the loan to the council."
Mr Davies said the club stood to lose between £600,000 and £700,000 this year but would then break even.
He said part of their plan was to increase revenue by making greater use of the stadium.
"There is no easy solution to this. It's hard yards off the field just the same as it's hard yards on it but I am totally convinced that we will get there.
"The challenge for this business is that rugby revenue can't cover rugby costs but exploitation of the facilities... whether commercial or sporting is what is making the difference to the sustainability of us going forward."
Former Llanelli, Wales and British Lions player Roy Bergiers stressed the importance of the club to the area.
He said it brought visitors to the town at time when industry had declined.
"I can't see it going out of existence. There's always a few hiccups. We are just in a glitch at the moment," he added.