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Performance

Difference

Reach, relevance and resources

I knew if I put in my best effort for three years I’d be rewarded.

Lisa Cosgrave Accountant and ACCA global prize winner, Asple & Co, Ireland

It's estimated that more than 90% of the world’s businesses are small and medium-sized enterprises – and they rely on professional accountants as their most trusted advisers.

With nearly 240,000 SMEs in Ireland alone, practices like Asple & Co. help the sector compete and grow. 

Lisa Cosgrave, a trainee accountant with the firm, based in Wexford, is part of this support mechanism. 'Asple & Co is an ACCA Approved Employer, so they provided experience and mentoring', she explains.

'The flexibility ACCA offers was one of the main attractions – I could sit an exam when it suited me and as many exams in one year as I liked.'

'My study was also very flexible – I used e-learning through Griffiths College, a Platinum Approved Learning Provider, completing lectures online and completing assignments provided by an e-learning tutor.'

ACCA's global reach was also really important to Lisa. 'You can see perspectives from students in lots of other countries,' she says. 'Their viewpoints have helped me to think about topics in different way, broadening my entire accountancy knowledge.'

Lisa completed her exams in March 2017, gaining the top mark globally in the P7 Advanced Audit and Assurance paper. 'Balancing full-time employment with study and still trying to have some "downtime" was a struggle,' she admits. 'But I knew if I put in my best effort for three years I’d be rewarded – and here I am with a global award!'

'Long-term, I hope to gain my ACCA practising certificate and really progress my career in public practice.'

Revenue (£ million)

Year Income (£ million)
2013 151.7
2014 159.0
2015 163.9
2016 176.1
2017 182.1
  • What this means in practice:

    That we invest in ACCA’s unique combination of reach, relevance and resources, as our differentiator in the profession and our greatest source of competitive advantage, now and into the future.

  • Strategic measure applied:

    Net operating surplus.

  • Why we use this measure: 

    This is our financial surplus after accounting for the costs of strategic investment and is an indicator of our financial strength i.e. how much of our annual operating income is available to build our balance sheet reserves so that we have the long-term financial resources required to fulfil our strategic ambition.

    This KPI measure is consistent with the operating surplus reported in our statutory accounts, net of finance costs.

Financial performance in 2016-17

On a like-for-like basis, our financial performance was slightly ahead of expectations for the year, and after accounting for the one-off costs associated with the cementing of our strategic alliance with Chartered Accountants Australia and New Zealand (CA-ANZ), we delivered a net operating deficit of £6.0m.

We have experienced another year of revenue growth, which ended the year at £182.1m, representing a 3.4% increase on the prior year. This was achieved by a combination of continued growth in our student and member population and with the full introduction of two additional exam sessions.

Despite an increasingly competitive marketplace which has seen new market entrants and new product offerings, our continued focus on strategic pricing initiatives and commercial relationships in key markets has ensured that our offering remains competitive and affordable. 

Our Strategy to 2020 has identified the scale of the opportunity for future growth and we expect our revenue to continue to deliver sustainable growth, although at a lower rate than previously anticipated.        

Obtaining value for money from investment of our members’ funds remains a key objective, whether to support our growing global footprint, or in the continued development of our exam offering. We adopt close monitoring to ensure that costs remain tightly controlled and maximum value achieved; this is demonstrated in our ability to deliver a like-for-like operating deficit which was ahead of expectations despite a scaling back in our top-line growth.

Operating Expenditure (£ million)

Year Million
2013 129.3
2014 133.1
2015 147.8
2016 161.5
2017 168.8

The rate of increase of 4.5% in operating expenditure exceeded the growth in revenue during 2016-17. Much of that increase was due to investment in strategic initiatives, primarily in our exam portfolio and the roll-out of four exam sessions to ensure that we continue to lead the profession in terms of content and method of delivery. Focused investment on strategic initiatives, including the on-going improvement to our core infrastructure, will ensure that we are well positioned to maximise opportunities in future years. 

Going forward, our Budget for 2017-18, which was approved by Council in March, contains specific efficiency targets that will ensure that we maintain our cost focus and obtain value for money from our resource utilisation.   

Our expenditure on strategic investment expenditure, including the exam portfolio and IT infrastructure, amounted to £16.9m. This affirms that we are well positioned to successfully manage our growth ambitions. We have several key multi-year projects in progress that seek to transform the way we do our business in a digital environment, improving the customer experience and ensuring our fundamental building blocks are robust and have the agility to support our business model.  

Our programme of strategic investment expenditure is planned to continue as we implement our strategy.

The main variances from target for the key components of net operating deficit are summarised below:

Net operating deficit (£ million)

Category £ million
Target -4.9
Fees & Subs -1.2
Operating Income -7.9
Operating Expenditure +10.6
Strategic Investment (incl. CAANZ) -2.6
Actual -6.0

Although our income growth was slightly less than target, our ongoing strong cost control enabled operating expenditure, including budgeted contingency, to be released into net operating deficit.

Other financial information

There are a range of transactions that arise after net operating deficit is accounted for, including investment income and other comprehensive income.

Our total comprehensive result for the year to March 2017 amounted to a deficit of £11.6m.

Total comprehensive result (£ million)

Category £ millions
Net operating deficit -6.0
Investment income +1.6
Pension costs -0.4
Tax -1.8
Actuarial losses -16.9
Other comp. income +12.0
Total OCI -11.6

Our investment income was ahead of target due to the additional £25m that was invested in our portfolio, and represents the dividends received on our investment portfolio together with interest on cash deposits.

The value of our investment portfolio at March 2017 was £98.5m, an increase of £15.7m, and demonstrates another year of strong performance.

During the year 29 Lincoln's Inn Fields was sold for £14m; the realised gain has been recycled to the accumulated fund from fair value reserves.

We operate defined benefit pension schemes in the UK and Ireland, both of which are closed to future accrual. These schemes are valued each year-end and actuarial gains or losses are taken to comprehensive income. This year, the actuarial losses amounted to £16.9m, driven by the effect of low bond yields on the discount rate used to value the pension liabilities.

The balance sheet remains very strong despite the deficit reported for the year.

Funds and reserves (£ million)

Year £ million
2013 40.8
2014 59.6
2015 68.3
2016 74.0
2017 62.0

Council has a long-term target to build the Accumulated Fund to 60 days of operating expenditure. At March 2017, the Accumulated Fund represented 62 days of operating expenditure before actuarial pension adjustments.

Council also monitors balance sheet liquidity, measured as the number of days of operating expenditure held in liquid assets (investments and net current assets). At March 2017, the liquidity measure was 182 days compared to a long-term target of 120 days.

Total assets have grown from £189m to £202.2m. At March 2017, our investment portfolio including short-term cash funds was £123.5m and our cash balances were £19.5m.  

More detailed financial information is available in our ACCA Consolidated Financial Statements.