CPL Annual Report 2011/12 - Cerebral Palsy League

Discussion and Analysis
The Cerebral Palsy League again experienced
significant and sustained growth in the financial
year ended 30 June 2012. The result for the year
was an audited deficit of $0.986M (2011 a deficit
of $1.615M).
The Cerebral Palsy League continued to expand
its service activities particularly in the area
of lifestyle packages for individual adults and
employment services. Government grants to fund
the provision of services to children and adults
increased from $52.922M to $56.510M. Revenue
from sales, manufacture and modifications
of specialised equipment and technical aids
decreased from $3.631M to $3.078M.
Charitable donations and fundraising activities
helped fund service provision by producing a net
income of $0.445M as compared with $0.856M
last year. Whilst art union ticket sales showed a
modest increase donations increased only from
$1.365M to $1.375M due to the ever increasing
competition for donations. Bequests in the
current year were only $0.269M which was down
from $0.775M last year.
All service regions are required to operate under
a balanced budget. Fundraising income is also
applied to service delivery.
The Cerebral Palsy League at year-end owed its
bankers $3.294M ($3.546M in 2011) in respect of
vehicles purchased and $1.300M in respect of the
refurbishment of its Toowoomba property.
In addition, the Cerebral Palsy League had a
secured overdraft of $2.200M ($1.659M in 2011)
in place which is used as a come and go facility
for cash flow requirements. Total secured debt
at year-end was $4.667M ($6.505M in 2011). It
should be noted that the Cerebral Palsy League
has a policy of gaining revaluations every three
years of all of its property holdings on the
basis of open market value for existing use, but
the Cerebral Palsy League does not book the
revaluations. In the current year such revaluations
were not carried out. At the time when the
valuations were carried out the market value
of Cerebral Palsy League’s land and buildings
totalled $24.626M. These will be completed again
in the 2013 financial year.
page
58
While the Cerebral Palsy League again
experienced significant growth in the service
delivery area in the current financial year, the
prevailing economic conditions of previous years
which had a significant negative impact on the
Cerebral Palsy League’s commercial division were
not experienced in the current year to the same
degree. Overall however, the commercial division
had reduced profitability for the current financial
year.
Overall, revenue increased by 6.05% to $69.468M
while expenses increased by 4.97% to $70.454M.
Depreciation and amortisation for the year was in
excess of $2.000M.
During the current financial year, the Cerebral
Palsy League was fortunate to sell the remaining
blocks of land from its Fig Tree Pocket
development. These funds were primarily used
to commence a cash buffer to protect working
capital for the future.
The Cerebral Palsy League is an outbound service
provider to over 5,000 clients with cerebral palsy
and other related physical disabilities. As such the
largest cost is related to staff and their associated
remuneration. This absorbed $53.586M compared
to $50.741M last year.
Highlights from the Cerebral Palsy League’s cash
flow for the current year were that the Cerebral
Palsy League generated cash from operations
of $3.920M compared to having used cash in
operations last year of $0.736M. This amount
generated from operations plus cash generated
from investing activities was used for repayments
of borrowings.
The Cerebral Palsy League has requested an
extension and had approved on 7 July 2012,
a business overdraft of $2,200,000 which is
subject to an annual review by the Cerebral Palsy
League bankers and is repayable on demand. This
facility expires on 31 May 2013. In addition the
Cerebral Palsy League has negotiated that it will
commence repayment of its facility of $1,300,000
over five years with the final payment due on 31
July, 2017. Repayments are $24,703 per month
and are a combination of principal and interest.
Other than the matters discussed above, the
Directors advise that there has not arisen, in the
interval between the end of the financial year
and the date of this report, any item, transaction
or event of a material and unusual nature likely,
in the opinion of the Directors, to affect the
operations or state of affairs of the Cerebral Palsy
League.