2013 agm finance presentation

8/12/2019 2013 AGM Finance Presentation

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1. Directors report and Financial Statements have been approved by the directors and available

on website and at AGM. They will be filed with Companies House after the AGM.

2. The accounts have received an unqualified audit report and prior to sign off were subject to

scrutiny by the Audit & Assurance Committee, which includes Chair Mike Heath and Nigel

Rowe, both NEDs, and Peter Crawshaw

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1. Overriding objective is to break even hence low surpluses in each of the two years

Headlines:

1. 12% reduction in grants

2. 9% growth in income from other sources

3. 7% less income matched by 7% lowering of costs

4. Decline in interest receivable due to significant, anticipated, fall in cash balance and low

interest rates

5. Mix of expenditure changes across activities and staff is due largely to employment of

activators for LonRun! and Run England funded by LA grants and other third parties

6. Average payroll costs per employee have been reduced by 4%

7. Tax is only payable on our interest income not on our activities as businesses usually are

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1. Grants down by 796k which is almost entirely due to Whole Sport Plan funding from Sport

England in accord with the phasing of the 2009 to 2013 WSP. SE WSP grants down 794k

year on year

2. Elsewhere in grants: Cessation of McCain grant - 100k and lower funding from RRL - 91k

offset by successful bids for three one off awards from Sport England Compact facilities

project at Stoke Newington - 100k; London 2012 equipment distribution and storage - 64k

and for recreational running research - 45k

3. Membership and affiliation fees are up by 55k due to rise in membership numbers 132,000

registered athletes at March 2013 paying 5 each plus almost 1,500 clubs and organisations

being members of England Athletics

4. Growth of 122k for Education courses. This includes Coaching courses which at 414k are

up 83k on the prior year and LiRF courses which have increased by 49k to 277k

5. Success of LonRun! recognised by additional income of 36k compared to prior year

6. Disability development income down as Playground to Podium funding is wound down

7. Income from entry fees and admissions for Competitions continue to make a 1% contribution

to our income

8. Other income of 394k includes Coaching conferences and masterclasses - 81k; Run

England - 79k; Marketing - 61k; Ring fenced awards for specific activities - 39k plus

individual income streams between 10k and 30k for sponsorship; schools; athlete

development and the on-line shop

9. Evolving shape of our income profile is illustrated on the following slide

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1. Grants continue to be our most substantial source of income but we are moving slowly to

being less dependant on grants from a 75% share to 71%

2. Membership has risen from an 8% share to 9%

3. Likewise growth in Education courses income which moves up from 7% of our income to 9%

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1. Core Activities which will be detailed in a coming slide continue to account for 84% of our

expenditure.

2. Communications and Marketing Increase of 29k is exceeded by rise of 37k in related

income

3. Governance costs continue to represent 10% of our total costs but have been reduced by 4%

4. Irrecoverable VAT continues to be a burden on a NGB but at least we have reduced our tax

bill by 55k which involved the results of successful project by our Finance Manager, Kate

Liggins

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1. Annual staffing increase of 8 is mainly driven by incremental income streams for example

LA grants to Run England and LonRun!.

2. The staffing increase includes 7 in Core Activities of which 2 is a consequence of moving

Membership Services from UKA to England Athletics in December 2011

3. The appointment of a part time PA to the CEO, in late 2011-12 is the notable cause of the

increase of 0.7 in Governance. Although it should be noted that she is no longer with us as

part of a staff restructure

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1. Club Development; Coaching and Education & Membership Support remain at the forefront of

our cost base and in aggregate represent almost 60% of our total cost base in both years. I

will give further details on each in a few moments

2. Schools and Youth Development includes our grants to Quadkids - 203k; ESAA - 170k and

Sportshall - 102k

3. Competitions costs were lower in 2012-13 primarily because of lower costs for Area Outdoor

Championships and economies made in the organisation of events.

4. The agreements between Run England and a higher number of LAs are the most notable

contributor to the rise in costs for Run England. This rise also included a contribution towards

website developments

5. The increase in LonRun! costs is also a consequence of more extensive activities driven by

the success of the scheme and the engagement of more LAs

6. Disability Development costs decrease in line with the lower income received as referred to

earlier

7. Expenditure on Athlete Development is down as less was spent on Commonwealth Games

(The Commonwealth Youth Games took place in the prior financial year) and lower funding of

England teams in Walking Events

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1. The initial plan for Athletics Networks was to invest over a three year cycle to enable

Networks to become self sustaining. The bulk of costs in the 2013 financial year were for the

third year of funding for most Networks and the reduction in costs from 1.2m to 0.6m was in

line with our plans

2. The notable rise of 215k in Other Club Development costs is directly related to the three

grant awards referred to earlier namely: Compact facilities project at Stoke Newington -

100k; London 2012 equipment distribution and storage - 64k and for recreational running

research - 45k

3. The costs of Local Coach Support Packages represents half the total costs of these awards

with the other half being accounted for within Coaching

4. Operating costs includes two senior managers responsible for Club Development plus half the

costs of the Area Teams including Team Leaders and CCSOs. The bulk of these costs are for

payroll and travel

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1. Total expenditure on Coaching was reduced by 75k which represents 4% of 2012 costs.

There was a change in the mix of activities, as recognised by lower costs for the NCDP, part

of which was due to the deferral of certain activities into 2013-14

2. Operating costs include the payroll and travel costs for the central Coaching team and half of

the Areas Team as noted in my previous comments on Club Development

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1. The direct costs for Education Courses have been lowered as we have been more effective in

planning courses and in cost management across courses. The mix of courses, notably more

LiRF courses, has also contributed to this favourable situation

2. As a consequence of the above the gross deficit on Education Courses in 2013 is 42k which

compares to a gross deficit of 189k in 2012.

3. Membership Support costs in 2013 include 114k for postage and printing; 80k contribution

towards the insurance premium for Combined Liability policies and 61k for staffing

4. The creation of the Road Race Organiser website cost 115k which has been fully accounted

for in 2013 this is a significant investment in a system which we believe will be of substantial

benefit to road race organisers and participants. It also has the potential to become an income

stream in future years as we have entered into a royalties agreement with the developer of the

website

5. Welfare costs, which support the whole England Athletics community, have fallen in 2013 due

to lower demands on the service and the deferral of certain actions into 2013-14

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1. Board, Council and Finance costs of 199k include payroll costs for executive directors, fees

for NEDs and England Council members and the payroll costs for the finance team. You will

note the 32k reduction compared to the prior year as we did not have a permanent CEO

from May 2012 to mid-March 2013. During this period Chris Jones, whose costs were borneby Club Development, was Acting CEO prior to his appointment as CEO

2. UKA Support Services include shares of the joint services for IT; Payroll and Procurement,

inclusive of staffing and some joint IT operations

3. HR Support and Activities include the services provided by members of the UKA HR team

and HR activities include training and development of our staff

4. Legal and Professional fees, including audit and taxation services and the use of consultants.

The year on year increase is due to the costs of legal proceedings and settlements, legal

advice on the Articles of Association plus consultants appointed for the Recreational Running

Research project and a Special Projects Officer in partnership with Nova

5. Other staff costs for 2013 include central staff related costs for example the premium for

death in service assurance, NI on non-payroll items and the annual pay award for a number ofstaff which was held centrally until payment in May 2013. This pay award, for which there was

no equivalent in 2012, and a redundancy payment are responsible for the year on year

increase

6. Head Office Operations in 2013 include bank charges; equipment maintenance; postage;

printing; telephones; internet access; meetings etc. The substantial reduction of 96k since

2012 is primarily due to savings in occupancy costs as we accepted the offer of UKA to move

into rent free offices at the Alexander Stadium. This also reduced our utilities and internet

access charges.

7. Insurance costs included within Governance cover a small element of the Combined Liabilities

policies and policies for travel; personal accident and sports governance plus a share of the

brokers fee.

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In summary.

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1. The depreciation charge for computer equipment is the primary cause for reducing the Net

Book Value of Fixed assets to 9k

2. As anticipated in our planning, our cash at bank balance is down by 1m largely as a

consequence of the budgeted release of Deferred Income into our Income & Expenditure

Account for 2013

3. The reduction in debtors is due to lowering trade debtors and prepayments

4. Stock includes team kit; medals; Athletics 365 materials and on-line merchandise

5. The movement in Deferred Income is the most notable on the Balance sheet. This was

anticipated in our planning as we had received substantial cash sums in advance of funding

activities. These advances included funding from Sport England; Road Race Licensing; UKA

for ESAA; and a number of Local Authorities

6. Other creditors include accruals - 647k; trade creditors - 149k and payroll taxes - 76k

7. Our net assets which equate to our reserves are 1.2m

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1. The cash flow explains in headline terms why our cash is down by 1m over the course of the

financial year

2. Minimal outlays on capital expenditure for computer equipment

3. Cash inflow of 0.3m as we have reduced our debtors

4. The release of Deferred Income as referred to in comments on the Balance Sheet underpin

the outflow of 1.4m related to creditors

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That completes the commentary on the 2013 accounts

We now move on to an overview of the 2013-14 Annual Budget

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1. The notable features of the 2013-14 budget in comparison to actual figures for 2012-13 are annotated

on this slide

2. Sport England income will be 4,869k if all goes in accordance with the Whole Sport Plan

3. The budget for Membership & Affiliation is based on 128,000 registered athletes at 10 each; 25,000members of the Under 11s scheme and 1,500 member organisations including around 1,200 clubs

paying fees of 50 each

4. The growth in Education course income is to be driven by growth in LiRF and Coaching courses

5. Overall income is budgeted at a 5% rise over the previous financial year

6. Core Activities are budgeted at 171k more than the actual costs for 2012-13. This change is driven by

the outcomes required by Sport England in return for their funding and our plans for Education Courses

and Schools & Youth development

7. Over half our budget for Core Activities will be expended on Community Participation - 3.6m.

8. Communications and Marketing is budgeted at 93k more than in 2012-13 as we are budgeting to

invest 75k to enhance our website in response to feedback from members and our Online Content andDevelopment Officer has been transferred here from the LonRun! team

9. Governance costs have also increased due to the transfer of a member of staff from Core Activities

in this case the CEO who was previously in Club Development as he operated as Acting CEO. The risein Governance also includes Developments of the Trinity systems to improve our services to members -

40k plus higher maintenance costs for the overall Trinity systems

10. The Income and Expenditure Account for 2013-14 is effectively balanced by Interest Receivable net ofrelated corporation tax - 24k

11. Grants are budgeted to represent 60% of our income compared to 71% in the prior year as we move

towards less reliance on Sport England funding which was a major factor behind the decision toincrease membership fees

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1. We will continue to support around 50 Athletics Networks in 2014. As noted earlier the initial plan was

for Networks to become self sustaining and thus this is a significant move towards this during the

current financial year.

2. We are pleased that Sport England have agreed to provide specific funding for capital projects withinthe Whole Sport Plan so there is 150k available this year to build on the success of the Compact

Facilities scheme at Stoke Newington. This is to be followed by 200k per annum until 2017

3. Our evolved structure includes Community Participation which encompasses Club Development and

Support through our 4 Area teams, LonRun!, Run England and our inclusive Disability Development

activities. Delivery at local and regional levels is essential for the success of athletics and to fulfil the

requirements of Sport England under the terms of their award. These factors underpin the annualincrease of 468k in costs despite income from Local Authorities for running activities being budgeted at

levels lower than the prior year

4. The increase in Education and Membership Support costs is a consequence of the introduction of theUnder 11s scheme (which is budgeted to contribute a gross surplus of 120k) and the planned increase

in Education courses, recognised by income growth of 221k, mainly for LiRF and Coach Education

along with Officials courses

5. Coaching costs, beyond Community Participation, are down by 413k as a number of roles and theirrelated programmes are now managed by Peter Stanley within UKA as both organisations work

together to enhance the success of this vital aspect of athletics

6. Competition costs are higher in 2013-14 as we will be giving more support to Areas and Counties than

in 2012-13

7. The significant reduction in Schools and Youth Development is because we can no longer afford towork with Quadkids and Sportshall

8. In 2013-14 we are now reporting for the gross income and direct costs of Road Race Licensing. These

were previously accounted for within UKA. It should be noted that due to the new fees structure for roadraces under which clubs now pay a standard fee of 25 per race rather than fees on a sliding scale

based on the number of participants, the annual income for road races will be around 100k down and

this is reflected in our budgeted income

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2013 agm finance presentation

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