Having made a loss in the previous financial year, the charity has
successfully raised more money this year, with incoming resources
being £337,000 higher than last year, thanks to the efforts of our
fundraising department. This was mainly due to legacies which
are up £244,000 from last year. Savings in costs of raising funds
were made, mainly due to retail activities where procedures have
been developed to improve cost control and customer service,
and stores can now open longer. Retail increased its gross profit
margin from 85% to 92%, to gift over £85,000 to the hospice.
Charity activity costs increased, mainly because of the need to
cover for absent staff where such temporary costs are higher
those normally incurred. The effect overall within the charity
group, is that net cash income was positive but a loss (£78,000)
was recorded when accounting adjustments such as depreciation
are taken into account.
Reserves stand at £1.1 million, representing approximately half
a year’s expenditure. The trustees consider that at this level it
will be able to continue its activities should there be a sudden
drop in income, with time enough to raise additional funds. These
reserves are held in the form of working capital and investments.
The investments are easily convertible into cash and the gains
they have made so far are greater than would otherwise have
been obtained had they been held in time deposits in a bank.
They do however represent an element of risk, so the trustees
continue to monitor this, in conjunction with the returns they are
receiving and the charities expenditure, to decide on the level of
investment. The financial figures are now reported under new rules
by the accounting profession and required in law. This is Financial
Reporting Standard 102. Readers may therefore detect slight
changes in last year’s comparative accounting figures, reported in
this year’s accounts, and compared to last years reported results.
The main effect of this, is that the investments we have must now
be reported at market value (even though the investments may not
have sold), whereas last year they were reported at cost. Gains or
losses in this value are reported in the income statement.
The trustees are continuing to look for ways to improve the financial
results of the charity.
Financial Review
15
