University Records Best Ever Financial Position
29 November 2007
Pro Vice-Chancellor and Finance Director Hari Punchihewa.
The performance confirms that we are on course to deliver our financial strategy to enable the ambitions of the University to be realised.
”Hari Punchihewa
There has been a multi-million pound transformation in the financial fortunes of the University of Derby over the last six years – turning around a £2.1m deficit into a £2.6m operating profit.
That’s the headline conclusion from the University’s Annual Accounts, which are published this week.
Robust financial planning, stable growth and an increase in student numbers have all played their part in generating today’s healthy financial position.
As a result of the solid financial footing, enhancement projects in the pipeline for the University in the coming months include:
- £11m refurbishment of the Kedleston Road tower blocks, with a ‘green theme’ to improve energy efficiency
- improvements to our sports facilities in Derby and at Buxton
- major upgrade of our Britannia Mill site.
In 2001, the University recorded an annual deficit of £2.1m – its worst ever Operating Result (revenue minus expense). In the same year the overall statutory result was a deficit of £4.3m. Exceptional costs such as redundancies and an institutional restructure were contributing factors in this result.
Just six years later, with its financial performance improving steadily year on year, the University has just posted an annual Operating Result of a surplus for 2007 of £2.6m.
The man who has overseen this turnaround in performance is Pro Vice-Chancellor and Finance Director Hari Punchihewa, who joined the University from the Mercedes company in 2002.
He said: "A record surplus of £2.6m from operating activities and the increased turnover reported by the University Group this year demonstrated a continuing ability to build on a solid financial foundation.
"The performance confirms that we are on course to deliver our financial strategy to enable the ambitions of the University to be realised.
"The Financial Strategy, which underpins the University Strategic Plan, entails continuing surpluses each year in line with HEFCE (Higher Education Funding Council for England) guidelines, to increase the University’s reserves and improve long term financial stability."
The fundamental turnaround in financial performance coincides with a strong commitment by the University to enhance the quality of its Estates Portfolio. In the last two years, there have been two major developments: the opening of the Devonshire Campus in Buxton, and the official opening of our Markeaton Street site by Sir Richard Branson, on November 2.
Both were £20m plus projects. Funding came from both internal expenditure and a range of successful grant bids to funding bodies.
The changing face of the University’s Estates Portfolio in this same time period has seen the closure of the Harpur Hill site (Buxton), the Mickleover Campus, and Green Lane.
In 2001, there were a series of redundancies at the University during a restructure of the academic framework of the University, moving from eight schools to just four. The Operating Result that year was a deficit of £2,165,000.
The Operating Result has since become a surplus and has increased each year as follows:
- 2002 + £9,000
- 2003 + £421,000
- 2004 + £938,000
- 2005 + £1,404,000
- 2006 + £2,103,000
- 2007 + £2,632,000
The University is now part way through its financial business strategy from 2004-2011, which is underpinned by risk assessments for new project ideas and robust business plans.
Hari said: "The number of students we have welcomed has increased each year, and there has been growth in our income from business to business activities.
"It is a continuing testament to our business approach to have planning supported by an effective financial management and control framework.
"We are in a good position, but it does not mean we can rest on our laurels and will not stop doing the things we do. We have a long term objective to continue to see the University build on its solid foundations, going forward.
"In the University sector, HEFCE has said it is determined that all institutions in the higher education sector must have a strong correlation between expenditure and income, which is something else we try to strive for."
On the national scene, Hari is also a Chartered Director and holds a number of non-executive director positions, and sits on a number of significant committees for BUFDG (the British Universities Finance Directors Group) exploring the financial situation in the higher education sector, including sustainability.
BUFDG provides a strategic financial perspective on all higher education activities, is a communications channel between finance directors, academic colleagues and funding councils, and promotes high standards and best practice.
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For more information about this news release, contact Simon Butt, Press and PR Officer, on 01332 591891 or 07748 920023, or email: s.butt@derby.ac.uk
This press release was written by Deputy Head of Press and PR Simon Redfern on 01332 591942.
