Each World Cup year marks the bottom of a four-year financial cycle for the northern hemisphere game.

The RFU had expected to miss out on substantial annual revenue and return a bottom line loss in the year to June 30.

But the surge of interest in the game in England since Sir Clive Woodward's side lifted the trophy led to a boom in the RFU's merchandise sales, which were twice as high as
predicted, while hospitality income also exceeded expectations.

We expected a £9m reduction in revenue but our results our significantly better than that, said finance director Nick Eastwood.

We expected a loss of about £6m but expect now it will be less than that.

It's been an astonishing year in terms of retail, merchandise, licensing and ticket income and for 2004/05 we're predicting a return to a healthy bottom line.

The RFU's strong financial position - debt free with net cash assets of £30m - will underpin the redevelopment of the South Stand at Twickenham that will increase the capacity of the stadium by 8,500. Building work is expected to start in June 2005.