The Group reported a net operating surplus for the year of $35.1M (2020: $18.3M deficit). Included in the net surplus are significant one off items of 1) $8.7M fair value adjustment to the St Vincent de Paul Housing properties. 2) $24.6M in Federal Government Covid‐19 Assistance under the Jobkeeper Program.
The Group also provided bushfire assistance of $1.2M from its own funds with an additional $4.1M of bushfire assistance provided with federal government funding. The bushfire assistance programs will continue in the FY2022 Financial year. As part of the approval of the 2021‐2022 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
The second wave of the COVID‐19 pandemic that started in late June 2021 is having a significant impact on our revenue streams including fundraising, retail and investments and the Group has implemented a number of strategies to reduce our expenditure during this period including:
- establishing our eligibility for Jobsaver 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 Group is fortunate to be in a sound financial position with net assets at 30 June 2021 of $400M. The main components of this are property assets of $477.2M, also cash assets of $75.0M and strategic and other deposits of $42.6M.
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. 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 2021‐22 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 5%. Over the same time operating expenses have increased by 6% on average.
The ratio of service delivery costs as a percentage of total costs is in line with the 5 year average of around 84%.
The ratio of fundraising and administration costs as a percentage of total costs is in line with the 5 yr. average, ratio is 17.5% and 5 yr. average is 15.6%. 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 34% (2020: 24%). As observed in the wider retail sector which our shops operate, there were challenging market conditions including significant COVID‐19 restrictions which has seen the closure of all our retail outlets in early July 2021.This will significantly impact our results for FY2022.
Government funding decreased during the year to $72.4M, however representing a significant contribution to total revenues and other income at 32%. The decrease was mainly due to the conclusion of the NDIS Local Area Coordination Program which saw funding decrease by $45.3m.This was partially compensated by the Federal Government Jobkeeper assistance initiative which included increased funding of approximately $13.5M from the previous Financial Year. 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 $95.2M 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 (2020: 11%).The 2021 CEO Sleepout raised approximately $3.2M for crisis accommodation and specialised services for those experiencing homelessness.
Bequests performed strongly generating $10.1M (2020: $13.4M) and accounted for 5% (2020: 6%) 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 on investments was down on prior year at $1.6M (2020: $1.8M). The performance of the Strategic and Employee Entitlement Reserves and Term Deposits was impacted by the lower than budgeted rates of return as a result of the Covid‐19 pandemic.