Financial Statements 2018/19
Financial Review continued
Net Assets
Net assets for 2018/19 stand at £82.0m, a decrease of £15.2m against the previous year, despite the recording of a £5.8m surplus.
The main reason for the reduction in assets relates to an increase in the net liability of the LGPS pension scheme from £83.5m last year to £110.2m this year. This deterioration of the balance sheet position reflects the revised actuarial assumptions with a significantly lower net discount rate (2.1%) compared to 31 July 2018 (2.8%), this arising primarily from a fall in AA corporate bond yields.
The overall impact of these revised actuarial assumptions are a £20.9m actuarial loss recognised in the Statement of Comprehensive Income and Expenditure.
The LGPS deficit is anticipated to fluctuate year on year given the deficit is estimated using the actuary’s assumptions to value its liabilities, including the discount rate, inflation
Cash Balance £m
120 100 80 60 40 20 0
2015-16 2016-17
This positive cash inflow is generated from the net of operating and financing activities in the year. In addition, cash previously held as security against term loans (£30m) has now been released as a result of a refinancing exercise with Barclays and Lloyds. This figure is now fully included within cash and cash equivalents.
Cash in hand and short term deposit levels fluctuate throughout the year due to the timing of tuition fee and other receipts, operating and capital programme expenditures. The average monthly cash balance of the University in the year
54 Middlesex University 2017-18 2018-19
increased from £74.0m in 2017/18 to £82.9m this year, with the balance ranging from a minimum of £63.1m to a maximum of £111.3m over the year.
These cash in hand levels are in line with our target to maintain a minimum working capital cash level at 2 months of expenditure. The University recognises the importance of continuing to maintain this level of cash and of generating appropriate levels of surplus to meet its bank loan covenant requirements and achieve the positive cash inflows necessary to support capital investment plans.
assumptions and future life expectancies. A further factor contributing to those changes is the schemes assets which are dependent on the performance of equity markets.
Working capital has increased by £9.7m to £67.7m due to the combined effects of increased cash and short term deposit balances. These are offset by smaller increases in creditors and in debt balances that continue to reflect effective credit control measures in the year.
Cash Flow and Treasury Management
The level of group cash in hand and cash equivalents increased by £16.9m at the end of the financial year to £96.7m. Cash equivalents are short term deposit balances held with Lloyds Bank on fixed short term (less than 3 months) deposit and AAA credit rated cash investment funds managed by Royal London Asset Management.
Year ended
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