Cranfield University Financial Statements

By | 16th May 2017

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Cranfield University Financial Statements

FINANCIAL STATEMENTS

for the year ended 31st July, 2016

FOR THE YEAR ENDED 31ST JULY, 2016

The activities of the University include teaching, research, design and development work in the themes of Aerospace, Defence and Security, Energy and Power, Environment and Agrifood, Manufacturing, Transport Systems, Water and Management. Operations are primarily carried out on campuses at Cranfield in Bedfordshire and Shrivenham in Oxfordshire. The University is an exempt charity subject to the Charities Act 2011.

The financial statements comprise the consolidated results of the University and its subsidiaries. Subsidiary companies undertake activities which, for legal and commercial reasons, are more appropriately channelled through a limited company and include the development of activities emanating from Cranfield University. This is the first year that the University has produced its statutory accounts in accordance with the Financial Reporting Standard 102 and the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education 2015. This has required the 2015 accounts to be restated as though they had been prepared under the same basis. A full reconciliation between the original 2015 accounts and the restated 2015 accounts can be found in note 25.

Results for the year and position at year end

The consolidated results for the year ended 31st July, 2016 are summarised below:-

  2016 2015
    Restated
  £’000 £’000
Income 176,243 167,989
Expenditure (176,135) (162,866)
     
Operating surplus for the year 108 5,123
     

 

INCOME 2016

Donations and

investment

income

Funding Council

5.3%

grants 12.9%

Other income 20.1%

Tuition fees and education contracts

39.5%

Research grants and contracts

22.2%

CRANFIELD UNIVERSITY

OPERATING AND FINANCIAL REVIEW

FOR THE YEAR ENDED 31ST JULY, 2016

Results for the year and position at year end (continued…)

EXPENDITURE 2016

Interest payable  Depreciation 1.9%

5.9%

Staff costs 47.7%

Other operating expenses 44.5%

Income was 4.9% higher compared to the previous year. Although research and other income increased in the year, tuition fees and education contracts declined slightly. The total comprehensive income for the year retained in unrestricted reserves was £2,163,000 (2015 Restated loss £3,876,000).

Capital expenditure in the year amounted to £30,042,000 (2015 – £19,400,000). This starts to reflect Cranfield’s success in winning a number of key infrastructure projects, including the Aircraft Integration Research Centre and the Autonomous Vehicle teaching facility which have continued to be developed during the year and will become operational between December 2016 and March 2017. The Centre for Atmospheric Informatics and Emissions was completed in May and is now operational. These projects are over 70% funded by external parties. In addition, the University has received the second contractual payment amounting to £2,000,000 (2015 – £2,000,000) relating to a reorganisation of the use of the airport during the year as detailed in Note 3.

The statement of consolidated cash flow shows a decrease in cash of £26,663,000. Net cash outflows from operating activities were £9,485,000. This was generated by changes in the working capital profile with reduced professional development income leading to a fall in deferred income and increases in research leading to an increase in work in progress.

Consolidated total reserves increased by £1,865,000 (2015 – decrease by £4,900,000) as explained in the statement of changes in reserves on page 22. Included in arriving at this figure, there is a decrease of £8,783,000 relating to the movement on the University defined benefit pension schemes (Universities Superannuation Scheme and Bedfordshire County Council pension fund) as shown in Note 16. This is offset by a £10,624,000 increase in land valuation following a tri-annual valuation by Gerald Eve LLP at 31 July 2016.

Principal risks and uncertainties

The University receives a smaller proportion of its income from HEFCE, which was 12.9% for the 2015/16 year, than the majority of the sector. This reflects the distinctive mission of Cranfield as a wholly postgraduate University. However, it also receives a significant amount of income from other organisations that are directly or indirectly impacted by the general state of public finances and the economy.