WELSH Rugby Union chief executive Martyn Phillips says the foundations have been put in place at the Dragons and that this season the region must improve on the pitch and off it by boosting commercial performance.

The governing body’s annual report includes the Rodney Parade region for the first time and states that the takeover of the professional team and the famous ground cost around £5.5million.

There were addition costs of £800,000 and Phillips has stressed that after a challenging first year, which yielded just two wins in the Guinness PRO14, the Dragons have to increase their revenue.

David Buttress came in as chairman after putting in a six-figure sum to become a minority stakeholder and he formed a board with David Reynolds, Ian Jeffery and Steve Phillips with the aim of boosting the regions financial clout.

“The Dragons, now part of the WRU Group albeit run as an independent subsidiary with its own board, started the rebuilding process on and off the pitch at the region,” he writes in his summary.

“The key focus has been to put the right foundations in place, either through coach and squad strengthening or reviewing overall management and infrastructure.

“With this work largely complete, [this] season will be about continued evolution, resulting in improved performance on the pitch and improved commercial performance off it.”

The WRU had a record turnover of £97million, 30 per cent up on the figure reported in 2017, and reinvested £42.8million into rugby in Wales.

Principality Stadium debt is down to £6.2million and Test rugby is the driver of the financial upturn, accounting for £44.9million, up by £9.9million.

Cardiff Blues, the Ospreys and Scarlets received £20.5million – the previous year £21million was shared between the four regions – and a new deal with the regions, called ‘Project Reset’ is close.

Phillips, who has ruled out more takeovers, said: “The purpose of the project is to implement a strategy whereby the five professional entities (Wales and the four regions) work together to ensure that, ‘the whole is greater than the sum of its parts’.

“The key principles are increased collaboration from both a rugby and commercial perspective and to share in order to drive productivity improvements.

“We will collaborate effectively and a find a way to work more closely whilst still preserving the identity and tribalism necessary for competition on the field and co-operation off it.

“The challenge will be to preserve the fundamental elements of our sport which pit us, necessarily, against each other in competition at different times during this collaboration process.

“And we are also very conscious that we need to improve the connection between community and professional rugby at a local level – another key ambition of this project.”