FINANCIALS – FOR THE YEAR ENDED 30 JUNE 2020

CONSOLIDATED FINANCIAL OVERVIEW FOR THE YEAR ENDED 30 JUNE 2020

We present the consolidated financial report for the year ending 30 June 2020, which includes The Trustees of the Society of St Vincent de Paul (NSW), St Vincent de Paul Society NSW and St Vincent de Paul Housing.

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KEY FINANCIAL RESULTS INCLUDE:

  • Consolidated net operating deficit excluding net gains on sale of fixed assets and one offs as per below $14.1M (2019: Deficit $14.1M).
  • Total revenues and other income of $232.7M (2019: $235.3M), this is a decrease of $3.1M or 1% on prior year.
  • Total expenditure of $249.8M (2019: $260.6M), this is a decrease of $10.8M or 4% on prior year.
  • Government funding increased by $2.9M or 3% on last year to $106.8M. This included in the main federal government Jobkeeper funding and additional relief assistance due to the global COVID-19 pandemic.
  • Vinnies Centres sales decreased by $11.9M or 17% on last year to $57.1M and is mainly due to all of our retail centres closing around mid April 2020 with centres gradually opening as restrictions were eased with 70% open by end of June 2020 and by end of August 2020 93% of centres were open.
  • In 2019-20, the Society spent $150.5M (2019: $158M) directly in the areas of people in need, homelessness and mental health, disability and capacity building services.

An overview of the financial results is presented below:

Review of operations

2020
Actual
$’000
2020
Budget
$’000
2019
Actual
$’000
2020
vs.
2019
2020 Actual
vs. Budget
5 year
average %
Revenue 226,217 217,600 230,180 -2% 4% 9%
Expenditure (239,119) (235,471) (242,462) -1% 2% 13%
Operating (deficit) / surplus (12,902) (17,871) (12,282)
Transfers to related entities (1,216) (1,829)
Net operating (deficit) / surplus (14,118) (17,871) (14,109)
Significant one-off items
Net gains on sale 6,362 1,963
Amelie Housing Profit (Loss) Share
(FY2019 8 mths Nov 18 to Jun 19)
(303) 2,375
Amelie Housing Deconsolidation from
1st November 2019
(13,202)
Donation Transfer of Properties to
Amelie Housing
(4,908)
Revaluation Gains/(Impairment Losses)
on Fixed Assets
(10,325) 787
Net deficit (18,384) (27,095)

Revenue and other income
2019–20

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Use of funds
2019–20

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Five-year financial results summary

2015-16 2016-17 2017-18 2018-19 2019-20 Average
Change (%)
Revenue & other income (‘$000)
Donations & appeals 14,506 14,337 15,337 17,375 26,459
Bequests 14,536 6,202 6,926 17,874 13,393
Sale of goods & other 68,196 68,694 67,963 69,045 57,181
Government funding 47,125 77,143 98,953 103,810 106,715
Client contributions 3,695 3,503 5,321 8,700 10,074
Gains on sale of assets 8,947 4,351 4,225 2,398 6,442
Other 9,589 9,329 9,564 16,103 12,395
Total revenue & other income 166,593 183,559 208,289 235,305 232,661
Year-on-year change (%) * 4.2% 11.9% 13.7% 14.1% -1.1% 8.5%
Use of funds ($’000)
Fundraising costs 3,559 3,768 4,023 3,919 4,339
Costs for centres of charity and other 43,159 47,096 49,079 52,170 50,549
People in need 25,581 29,738 23,940 40,387 29,264
Homeless, mental health and housing 40,205 41,558 50,424 55,178 65,953
Disability Services 16,286 43,932 73,546 62,319 55,312
Other costs 19,825 21,715 21,866 46,164 33,766
Impairment and losses on assets 53 6 3,536 435 10,645
Total expenditure 148,667 187,811 226,414 260,572 249,829
Year-on-year change (%) * 8.3% 26.3% 20.6% 15.1% -4.1% 13.2%
Transfers to related entities 1,172 1,143 1,178 1,708 1,216
Net surplus / (deficit) 16,754 (5,395) (19,303) (26,975) (18,384)
Services % of total costs* 84.3% 86.4% 88.4% 80.7% 84.1% 84.8%
Services % of total income* 75.7% 88.4% 94.6% 89.3% 86.4%
Fundraising costs % of total costs* 2.4% 2.0% 1.8% 1.5% 1.8%
Fundraising & admin % of total costs* 15.7% 13.6% 11.6% 19.3% 15.9% 15.2%
Fundraising costs to donations & bequests* 12.3% 18.3% 18.1% 11.1% 10.9%

* Net gains on sale, impairment losses and restructuring provisions have been excluded from ratios as they are one-offs.

CONSOLIDATED FINANCIAL OVERVIEW FOR THE YEAR ENDED 30 JUNE 2020

Operating position

The Society reported a net deficit for the year of $18.4M (2019: $27.1M deficit). Included in the net deficit is a significant one off item of $10.3M fair value adjustment to the St Vincent de Paul Housing properties.

The Society also contributed an additional $1.4M (2019: $0.8M) for the assistance of drought affected farmers over and above the government funding of approximately $7.7M provided by government in FY2019. The Society also provided bushfire assistance of $5.6M from its own funds with an additional $2.6M of bushfire assistance provided with federal government funding. Both drought and bushfire assistance programs will continue in the FY2021 Financial year The Society has been fortunate in the past to build sufficient reserves to be in a strong financial position to sustain this planned deficit in the short-term. As part of the approval of the 2020-21 budget, the Board endorsed the budget as well as the continuing of the strategic initiatives to be progressed including further development of the Retail and Fundraising Strategies, Property Strategy and Support Services review.

COVID-19 impact and measures in place

COVID-19 pandemic is having a significant impact on our revenue streams including fundraising, retail and investments and the Society has implemented a number of strategies to reduce our expenditure during this period including:

  • establishing our eligibility for JobKeeper and commencing the rollout of this scheme;
  • standing down staff in areas where operations have ceased or been significantly reduced;
  • ceasing the use of casuals where possible to support the retention of permanent staff;
  • implementing a recruitment freeze across the organisation (unless deemed business critical);
  • planning for reducing operational expenditure as well as identifying opportunities for increased revenue across each Directorate; and
  • reducing excess annual and long service leave.

We are continuously monitoring our financial position with robust and timely forecasting of key financial information to assess and put additional measures in place as appropriate.

Cash and Financial position

The Society is fortunate to be in a sound financial position with net assets at 30 June 2020 of $365M. The main components of this are property assets of $427.4M, also cash assets of $67.8M and strategic and other deposits of $41.3M.

As mentioned above the Society has developed its new three year Strategic Plan commencing 2020. The result of this process will be a three year financial plan which places the people we serve at the centre, surrounded by our mission, vision, values and spirituality thus ensuring the Society’s resources are allocated to priority service delivery areas which have been identified by the Board.

The objective of the Society’s Strategic Reserves are primarily to safeguard against the risk of major unforeseen events, ensuring the long-term sustainability of the Society and its activities to support those most in need. An example in 2019-20 is a pledge of $2.2M in client assistance to Drought affected farmers across the State with spending this year totalling $1.4M with a further $800K allocated for the FY2021 year. Furthermore, these funds are utilised to fund major strategic initiatives presented to the Board, subsequent to review by the Audit and Finance (AF) Committee. The Society’s plan for 2020-21 will be fine tuning and consolidating new ways of working organisational model and continuation of major transformation projects that will further build organisational capability to ultimately support service delivery to clients.

Trends and ratio analysis

Over the last five years, operating revenues have increased on average by 9%. Over the same time operating expenses have increased by 13% on average. In 2019-2020 a significant uplift in expenditure was seen in People in Need and this was due to increased demand as a result of the prolonged drought in rural NSW as well as the devastating bushfires in FY2019.

The ratio of service delivery costs as a percentage of total costs is in line with the 5 year average of around 85%.

The ratio of fundraising and administration costs as a percentage of total costs is in line with the 5 yr. average. It should be noted that FY2019 costs includes $7M in remediation costs incurred for properties transferred to St Vincent de Paul Housing as part of the Social and Affordable Housing (SAHF) project with no further costs expected.

Analysis of results

Sales of goods from Vinnies Centres represent a significant contribution to total revenues at 25% (2019: 29%). As observed in the wider retail sector which our shops operate, there were challenging market conditions including significant COVID-19 restrictions which impacted trading. As a result Centre sales of $57.1M were down on last year by a significant $11.9M (17%).

Government funding increased during the year to $106.7M, representing the largest contribution to total revenues and other income at 46%. The increase was mainly due to the Federal Government Jobkeeper assistance initiative which included funding of approximately $11.4M. This funding assisted by offsetting the loss in rental revenue and along with other cost reduction measures helped maintain delivery of our core services with a higher demand for Society assistance during the COVID-19 pandemic. The Society is fortunate to receive significant funding from the Government, however many of our services are co-funded by the Society, as can be seen by our spending of $150.5M in areas of people in need, homeless and mental health services, disability, capacity building and housing services. As such these shortfalls are sustained by surpluses generated from Vinnies Centres, donations, client contributions and cash reserves.

Donations and appeals contributed 11% to total revenues and other income (2019: 7%). Donations were approximately $9M more than the previous year and is largely due to a targeted Bushfire Appeal as well as major gifts and performance of other appeals including Winter and Christmas. The 2020 CEO Sleepout raised approximately $2.1M for crisis accommodation and specialised services for those experiencing homelessness.

Bequests performed very strongly generating $13.4M (2019: $17.9M) and accounted for 6% (2019: 8%) of total revenues and other income. The Society is very appreciative of these valued gifts which are applied directly as per the instructions of the Estate. Bequests are unpredictable in nature, as such for budget purposes the Society applies a five year historical average with an appropriate growth target.

Investment income which is comprised of interest and dividends and fair value gains investments was down on prior year at $1.8M (2019: $4.6M). The performance of the Strategic and Employee Entitlement Reserves was down on last year including $0.2M of fair value losses ($1.8M gain in FY2019) and lower than budgeted interest rates in the current economic downturn as a result of the COVID-19 pandemic.

Jack de Groot

Chief Executive Officer
Dated this 28th day of October 2020

Jean-Baptiste (JB) Naudet

Chief Financial Officer

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020

2020
$
2019
$
Revenue and other income
Income from fundraising:
Donations and appeals 26,458,987 17,374,699
Bequests 13,393,386 17,874,541
Sale of goods – Vinnies Centres 56,269,215 68,080,294
Sale of goods – other 912,138 964,242
Government funding 106,715,250 103,810,646
Client contributions 10,074,369 8,699,549
Rental income 3,177,566 1,018,849
Other income 15,659,882 17,481,910
Revenue and other income 232,660,793 235,304,730
Fundraising costs (4,339,375) (3,917,659)
Costs for Vinnies Centres (50,357,713) (51,870,483)
Costs for sales – other (191,076) (300,015)
People in need services (29,264,382) (40,386,761)
Homeless & mental health services (62,376,700) (55,178,321)
Disability services and capacity building (55,312,175) (62,319,123)
Housing services (3,576,133) (3,546,994)
Support and enabling function costs (32,179,773) (24,507,985)
Fair value loss on investment properties (10,325,247)
Loss on disposal of Amelie Housing (13,201,598)
Fair value loss on financial assets (238,170)
Loss on disposal of fixed assets (81,939) (434,988)
Finance costs (1,586,509)
Donations to related entity (4,907,693)
Expenditure (249,829,192) (260,571,620)
Deficit for the year (17,168,399) (25,266,890)
Transfers to related entities (1,215,964) (1,828,650)
Net deficit for the year (18,384,363) (27,095,540)
Other comprehensive Income
Net changes in fair value of available-for-sale financial assets
Revaluation of land and buildings on recategorisation to investment property
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (18,384,363) (27,095,540)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020

2020
$
2019
$
ASSETS
Current
Cash and cash equivalents 67,817,997 66,576,899
Trade and other receivables 1,749,364 1,975,638
Other financial assets 13,100,000
Inventories 343,537 874,344
Other assets 5,937,532 1,379,460
Assets held for sale 1,832,987
Current assets 75,848,430 85,739,328
Non-current
Trade and other receivables 391,534 384,836
Other financial assets 43,329,990 42,842,630
Right-of-use 30,693,314
Property, plant and equipment 258,209,294 263,043,187
Investment properties 169,211,427 121,473,300
Intangible assets 4,514,671 6,218,092
Non-current assets 506,350,230 433,962,045
TOTAL ASSETS 582,198,660 519,701,373
LIABILITIES
Current
Trade and other payables 11,621,191 26,167,086
Other liabilities 22,156,005 18,432,225
Borrowings 391,534 384,836
Lease liabilities 6,552,167
Provisions 11,421,072 12,568,296
Current liabilities 52,141,969 57,552,443
Non-current
Borrowings 136,165,139 76,300,002
Lease liabilities 24,626,436
Provisions 3,932,427 2,131,876
Non-current liabilities 164,724,002 78,431,878
TOTAL LIABILITIES 216,865,971 135,984,321
NET ASSETS 365,332,689 383,717,052
FUNDS
Funds for social programs 338,400,177 356,784,540
Property revaluation reserve 13,581,975 13,581,975
Equity contribution 13,350,537 13,350,537
TOTAL FUNDS 365,332,689 383,717,052

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020

2020
$
2019
$
OPERATING ACTIVITIES
Receipts from:
  Donations and appeals 26,458,987 17,374,699
  Bequests 13,393,386 17,874,541
  Government grants 121,110,554 114,191,711
  Client contributions 10,074,369 8,699,549
  Sale of goods 57,181,353 69,044,536
  Dividend income 353,737 351,345
  Interest income 1,480,189 2,448,201
  Rental income 3,177,566 1,018,849
  Other income 7,839,404 6,539,354
Interest paid (1,586,509) 0
Distributions from related entities (1,215,964) 0
Payments to clients, suppliers and employees (242,748,648) (241,093,024)
Net cash used in by operating activities (4,481,576) (3,550,239)
INVESTING ACTIVITIES
Purchase of property, plant and equipment (6,612,861) (8,210,985)
Payments for capital expenditure work in progress (63,147,546) (67,777,859)
Payments for intangible assets (40,250)
Proceeds from disposals of property, plant and equipment 10,596,817 9,265,755
Proceeds from long-term deposits 13,100,000 11,114,751
Purchase of investments 2,279,283
Proceeds from disposals of investments (2,547,837)
Receipt of cash on acquisition
Cash from loss of control of Amelie Housing (596,655)
Net cash used in investing activities (46,103,840) (56,473,547)
FINANCING ACTIVITIES
Loans received 59,490,703 71,496,043
Loans paid (351,096)
Repayment of lease liabilities (7,319,791)
Net cash provided by financing activities 51,819,815 71,496,043
Net change in cash and cash equivalents 1,234,400 11,472,257
Cash and cash equivalents, beginning of year 66,192,063 54,719,806
CASH AND CASH EQUIVALENTS, END OF YEAR 67,426,463 66,192,063

DECLARATION BY THE NSW STATE COUNCIL FOR THE YEAR ENDED 30 JUNE 2020

1. In the opinion of the State Council of The Trustees of the Society of St Vincent de Paul (NSW);

a) The summary consolidated financial statements and notes of The Trustees of the Society of St Vincent de Paul(NSW) are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, including:

i) Giving a true and fair view of its financial position as at 30 June 2020 and of its performance for the financialyear ended on that date; and

ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) andthe Australian Charities and Not-for-profits Commission Regulation 2013, and

b) There are reasonable grounds to believe that The Trustees of the Society of St Vincent de Paul (NSW) will beable to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Responsible Entities:

Peter McNamara

President, NSW State Coucil
St Vincent de Paul Society NSW

28 October 2020

INDEPENDENT AUDITORS REPORT

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