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Financial Highlights 2012/13
RCSI reported a strong financial
performance in the year ended 30
September 2013 with over 2% growth in
income reported on a turnover of
129m.
This was achieved mainly through strong
student recruitment levels, new initiatives
including an accreditation project in Qatar
and an improvement in the endowment
portfolio earnings. Despite the marginal
decrease in research income as a
percentage of total income in the year,
grant awards were in excess of
24m.
Effective management of the cost base
continued with a planned increase of 5%
arising from the commencement of the
investment programme as outlined in the
strategic plan.
The key investment as a higher education
institution service provider, was in the
majority, in new staff involved in student
focused activities. The College employed
circa 850 full time equivalent staff,
an increase of 5% over the prior
year.
Each year we obtain annual
independent valuations of the
investment property and pension
portfolios. In the year, there was
no impairment of the property
portfolio (2011/12:
3m). given
the prime location of these
properties, we expect no further
fall in their value with an eventual
recovery in the medium to long
term. An increase in bond yields
contributed significantly to a
reduction in the pension scheme
deficit, resulting in an unrealised
gain in the year of
11m (2011/12
9m loss). The volatility due to
external factors in the scheme is
evident with a swing of
20m in
12 months despite the restructure
in 2012.
Taking account of these independent
valuations, an overall gain of
38m in
the year is reported, an improvement
over the prior year result of
17m. This
strong performance saw a continued
strengthening in the net asset value of
the organisation to
88m from 50m
at 30 September 2012. The College
continued its capital investment
programme which was focused around
improving the educational infrastructure.
In 2012, we undertook significant
investment in student residences and
library facilities at a cost of
5m. In 2013,
expenditure of
4m was incurred with the
focus on improving laboratory facilities, IT
infrastructure to enhance organisational
capabilities and initial works for the new
education building on York Street.
Free cash flow was just over 10% of
revenue after meeting commitments
relating to loan servicing and the
capital programme. Cash management
continues to be a key priority for the
organisation together with a policy of
diversification of surplus cash holdings
over that needed for working capital.
Conclusion
My role as Director of Finance is to
oversee disciplined financial stewardship
of an international organisation and to
deliver a financial strategy that is capable
of supporting the organisational strategy.
2012/13 was another strong year
financially for the College. The results
delivered allow continued support of
the investment strategy as set down in
the roadmap for the organisation under
RCSI's strategic plan growth & Excellence
2013-2017. We recognise the progress
made over the last number of years in
strengthening the financial operating
model. It provides a firm foundation for
future growth notwithstanding that plans
need to be delivered to address the
challenges faced around debt, pension
and property.
The key priorities for the year ahead
include:
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continuing to deliver a financial
performance in line with strategic plans;
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development of the New Academic
Education Building on the Irish Campus
on time and on budget;
>

further development of plans for the
property endowment portfolio;
>

compliance with banking covenants;
>

retaining the pension funding proposal
on track; and
>

developing reporting systems to
deal with changes in the regulatory
environment relating to accounting
standards and charity regulation.
We continue to monitor
the business risks of market
competition, interest rate and
currency risks, inflationary
pressures and ensuring
regulatory compliance.
We work to reduce where
possible the volatilities in
the funding model and build
contingencies to guard
against uncertainties in the
external environment. We
must retain a level of flexibility
in our planning to be able
to continually adapt to a
changing environment.
I would like to extend to Ms
Mary Alexander, who previously
held the role of Director of
Finance, best wishes on her
recent retirement from the
College.
I would like to acknowledge the support
of my senior management colleagues
and finance team in their commitment to
delivering the common objectives set. The
progress we have made to date positions
us well to face the challenges and
opportunities as we continue to grow and
build our reputation as an international
education institution. We confidently look
forward to an exciting 2014/15.
the results delivered
allow continued support
of the investment
strategy as set down
in the roadmap for the
organisation under
rcsi's strategic plan.
FINANCE