2016/17 FINANCIAL REPORT

SUMMARY

I am pleased to report that the BCI achieved another substantial operating surplus for the year ending 31 March 2017. The overall surplus of £271.0k represented a 10.9% return on sales compared with a 10.6% return for the year ending 31 March 2016.

Reserves showed a significant increase for the third successive financial period, rising by 44% from £614k to £885k, a solid base for the BCI to invest in products and services for the future.

Summaries of the trading position drawn from the audited accounts for the year ending 31st March 2017 and for the year ending 31st March 2016 are shown in the tables below. The 2017/18 budget targets, approved by the BCI Board in June 2017, are also shown.

The (unaudited) results for the first half of the 2017/18 financial year will be presented at the AGM in November 2017. The BCI Board will be reviewing the 2017/18 budget targets in the light of the half year results to see if revised targets should be set for the full year.

The 2016/17 Directors’ Report and Financial Statements for the year from 1st April 2016 to 31st March 2017 were approved by the BCI board on 28th June 2017 and the audit report was signed on 17th August 2017. A .pdf version of the signed accounts is available in the members’ area of the BCI website.

The trading position drawn from the audited accounts for the year ending 31st March 2017 is summarised below, together with the 2017/18 budget figures and the comparatives for the year ending 31st March 2016.

GROUP ACCOUNTS SUMMARY

Budget 2017-18 / Actual year for 2016-17 / Actual year for 2015-16
£k / £k / £k
Turnover / 2,636.9 / 2,491.0 / 2,304.5
Cost of Sales / 963.0 / 774.5 / 713.8
Net income before overheads / 1,673.9 / 1,716.5 / 1,590.7
Overheads / 1,609.9 / 1,446.1 / 1,346.5
Net operating income before taxation / 64.0 / 270.4 / 244.2
Interest income / 0.0 / 0.6 / 0.2
Net income before / after taxation / 64.0 / 271.0 / 244.4
Net income as a % of sales / 2.4% / 10.9% / 10.6%

The turnover analysis by income streams is as follows:

TURNOVER

Budget 2017-18 / Actual year for 2016-17 / Actual year for 2015-16
£k / £k / £k
Individual membership / 617.3 / 617.6 / 605.4
Partnership and Research / 403.3 / 299.2 / 268.3
Education and Learning / 1,062.9 / 1,088.8 / 936.0
Events / 516.1 / 454.3 / 467.0
Other (including Publications) / 37.3 / 31.1 / 27.8
Total income / 2,636.9 / 2,491.0 / 2,304.5
Increase over the previous period / 145.9 / 186.5 / 77.0
% increase / 5.9% / 8.1% / 3.5%

Overall income growth for the year to 31st March 2017 was 8.1% above the previous year. The main growth in the year was in Education and Learning which increased 16.3% over last year. All other income streams increased except Events. However, Events income was exceptional in 2015/16, so this income is still strong for the year.

The 2017/18 budget shows an income growth target of 5.9% with planned increases in Partnership and Research and Events (both further sponsorship opportunities).

The trading position drawn from the audited accounts for the year ending 31st March 2017 is summarised below, together with the 2017/18 budget figures and comparatives for the year ending 31st March 2016.

NET INCOME BEFORE OVERHEADS

Budget 2017-18 / Actual year for 2016-17 / Actual year for 2015-16
£k / £k / £k
Individual membership / 432.5 / 463.1 / 441.6
Partnership and Research / 384.4 / 274.5 / 251.2
Education and Learning / 903.6 / 927.9 / 799.2
Events / 158.9 / 139.7 / 160.6
Other (including Publications) * / (35.2) / (22.6) / (24.2)
Marketing / (170.3) / (66.1) / (37.7)
1,673.9 / 1,716.5 / 1,590.7
(Decrease) / Increase over the previous year / (42.6) / 125.8 / 171.1
% (Decrease) / increase / (2.5%) / 7.9% / 12.0%

* Note: Includes the net cost of producing Continuity Magazine.

Net income increased by 7.9% in the year, the main driver for this was the increase in sales, offset by additional costs required to service the extra sales. Net income is budgeted to decrease by 2.5% in 2017/18. Despite the increase in sales expected, this is a transitional year where additional investment is needed to achieve the sales targets. Marketing expenditure will also be significant in this year to promote the new projects and initiatives.

The trading position drawn from the audited accounts for the year ending 31st March 2017 is summarised belowtogether with the 2017/18 budget figures and comparatives for the year ending 31st March 2016.

OVERHEADS

Budget 2017-18 / Actual year for 2016-17 / Actual year for 2015-16
£k / £k / £k
Overheads / 1,609.9 / 1,446.1 / 1,346.5
Increase over the previous year / 163.8 / 99.6 / 158.2
% increase / 11.3% / 7.4% / 13.3%

FURTHER ANALYSIS OF OVERHEADS IS AS FOLLOWS:

Budget 2017-18 / Actual year for 2016-17 / Actual year for 2015-16
£k / £k / £k
Salaries, NICs, Benefits / 1,184.0 / 1,103.6 / 984.3
Occupancy costs / 75.2 / 70.7 / 71.3
General office overheads / 171.2 / 165.7 / 111.9
Governance costs / 44.2 / 44.1 / 31.1
Other organizational costs / 0.0 / 6.1 / 32.2
Legal, Technical and Professional / 43.2 / 45.3 / 38.3
Finance costs / 36.0 / (48.9) / 25.6
Irrecoverable VAT / 12.0 / 18.4 / 12.4
Depreciation / 44.1 / 41.1 / 39.4
1,609.9 / 1,446.1 / 1,346.5

Overhead costs increased by 7.4% mainly due to staff resources requiredto support the CRM project and change in senior management positions.Additional costs were also incurred in travel, computer expenses and recruitment. Savings were made withthe closure of the US office and the institute benefitted significantly in exchange rates with the fall in value of sterling. Overheads are budgeted to increase by 11.3% in 2017/18 which is due to additional staffing requirements identified and losing the exchange rate benefits gained in the current year.

The trading position drawn from the audited accounts for the year ended 31st March 2017 and the previous year to 31st March 2016 are summarised below.

BALANCE SHEET

Actual at 31.03.17 / Actual at 31.03.16
£k / £k
Fixed Assets
Total Net Fixed Assets / 195.3 / 68.6
Current Assets
Stock of publications / 3.0 / 0.2
Debtors / 569.8 / 656.4
Cash at bank / 719.5 / 540.3
1,292.3 / 1,196.9
Current Liabilities
Creditors falling due within one year / (602.6) / (651.5)
Net current assets / 689.7 / 545.4
Total assets less current liabilities / 885.0 / 614.0
Surplus carried forward
Profit and loss account (Members Funds) / 885.0 / 614.0
885.0 / 614.0

The consolidated balance sheet reserves figure increased by £271.0k, reflecting the 2016/17 surplus. Fixed assets included significant investment in a new CRM system due to go live in 2017/18. The Debtors balance at 31.03.17 included £64k of accrued training income and £97k of prepayments. The Creditors balance at 31.03.17 included £234K deferred income for events, products and services billed in advance.

Note: The Business Continuity Institute Ltd (The BCI Ltd). Is a wholly-owned trading subsidiary of the BCI, was dormant throughout the 2016/17 financial period. The abbreviated accounts for The BCI Ltd are available to members on request by email: . The balance sheet value at 31.03.17 was £4.

Belinda Burchell F.C.C.A

Head of Finance