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Financial Statements 2011-12 7


Results for the Year


The surplus on continuing operations before joint ventures of £2.696m includes staff severance costs of £497k and a pensions accounting credit of £1.590m. Discounting these results is an underlying surplus from University operations of £1.6m (£2.1m in 2010-11):


2011-12 2010-11 £000


Surplus on continuing operations 2,696 497


(excluding joint ventures) add back staff severance costs


(excluding joint ventures) less credit arising from pensions (1,590) accounting (FRS17)


Underlying Surplus for the year 1,603


from University operations % of total turnover


1.1%


£000 815


2,748


(1,477) 2,086


1.4%


Turnover for the year grew by 4% to stand at £152m, an increase driven by:


Subsidiary Undertakings and Joint Ventures


University Campus Suffolk Ltd (UCS) is a joint venture with the University of East Anglia (UEA) delivering a range of higher education activity. UCS is a company limited by guarantee and an exempt charity with the University exercising joint control with UEA. Total income for the year was £38.782m, up 4% over the prior year and its surplus of £1.822m (£2.3m in 2010-11) represented 5% of turnover. The University has provided loan guarantees of £8m, with the University of East Anglia underwriting a similar amount to fund capital projects undertaken by UCS. Half of the reported UCS performance for 2011-12 is reflected in these group financial statements.


Income earning activities are located in the Campus Services Section which comprises a company (University of Essex Campus Services Ltd), Student Accommodation and the Sports Centre. The Company operates campus conference, catering, day nursery, printing and laundrette activities which contributed an operating loss of £65k (£579k profit in 2010-11).


Following completion of a £10 million refurbishment programme, Wivenhoe House Hotel officially reopened in September 2012 as a four-star quality hotel which is also the home of the Edge Hotel School, a high-end education facility for the hospitality industry, funded by the Edge Foundation and the University and operated by Kaplan Open Learning. The University has leased the building to a newly created and wholly owned subsidiary company, Wivenhoe House Hotel Ltd, which operates the hotel. The hotel has benefited from generous funding by the Edge Foundation (£5m) and sponsorship by prestigious hotel chains that are interested in recruiting the school’s graduates. This is one example of the innovative ways in which the University is looking to provide programmes.


University of Essex Enterprises Ltd (previously Wivenhoe Technology Ltd) is responsible for technology transfer, registering patents and spin-out companies on behalf of the University. The company recorded a pre-tax profit for the year of £25k (£92k profit in 2010-11).


Universal Accommodation Group Ltd is a special purpose vehicle acquired by the University in 2003, holding the freehold of University Quays, a 770 bed student accommodation facility. The company charges the University a lease rental for the property and in return the University levies loan charges to the company. The accommodation itself is operated by the University. A pre- tax profit for the year of £268k (£410k profit in 2010-11) was recorded.


The University’s Knowledge Gateway project, involving the development of land on the Colchester Campus for a variety of uses, is being developed by two wholly owned subsidiary companies: University of Essex Knowledge Gateway (Holdings) Ltd, which owns the freehold land on the site, and University of Essex Knowledge Gateway Ltd, which will develop commercial tenancies. Knowledge Gateway Ltd has incurred bank fees for a £1.7m performance bond issued by Lloyds TSB in February 2011 in favour of Essex County Council (ECC) as highway authority. Ninety per cent of the bond is scheduled for release once ECC has confirmed its satisfaction with the infrastructure work and the remainder one year later provided that such work has not been found to be defective.


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