CHIEF EXECUTIVE’S STRATEGIC REPORT
BUSINESS REVIEW
As forecast, we achieved breakeven for 2019-20 (before pension valuation adjustments), despite the investment of almost £400,000 in the first phase of our digital transformation project. Overall results were largely stable, with income up just over £10,000, 63% of which was generated from RYA activity independent of the grant funding we receive from UK Sport and Sport England. Careful management of our working capital has seen stock and debtors decrease further and we reduced our administrative overheads. As a result Members Funds stood at £8.3m as at 31st March 2020.
The Board instigated a special task group in response to the pandemic, comprising both executive and non-executive directors and key senior staff. This group has developed scenario plans which stress test the Association’s ability to survive the immediate reduction we have seen in our income, as well as longer-term impacts. The analysis undertaken has informed and confirmed the Board’s assessment that the RYA remains a strong going concern. We are fortunate to have ended this financial year with substantial reserves at the top end of our target holdings, including un-mortgaged commercial properties and a significant cash balance. This will enable us to accommodate the trading loss that we will inevitably make in the coming year.
We are extremely proud of our team’s response to the pandemic. Swift and decisive action was taken to protect colleagues and leverage financial assistance, and guidance to individual members, clubs and training centres has been provided throughout, in an effort to support members and affiliates and minimise the impact on them.
PRINCIPAL RISKS AND UNCERTAINTIES
We have already seen substantial falls in each of our commercial income streams since March, and the high level of both economic and political uncertainty continues to pose a risk to our revenue-generating capability and overall operations for the remainder of the year. Four major risks have been identified:
By far the greatest risk faced by all businesses in the coming year is the impact of the Coronavirus. It has already affected membership numbers, training and publications income, the recruitment of new participants, and our ability to run events and development programmes. The duration of restrictive containment measures, the possibility of a second wave, and the depth of the wider economic impact are all uncertainties which are next to impossible to quantify.
Secondly, uncertainty remains over the exact nature of the UK’s exit from the EU in December; and consequently over any impact on our business model and wider stakeholder network.
Thirdly, we embarked on a major digital transformation project at the end of 2019. This essential part of our strategy followed a careful evaluation of our current digital estate, the software options available, and the most suitable delivery partner to lead this project. With an overall budget of over £1m, and a direct impact on all RYA transactions and stakeholders, the successful delivery of this project must be considered a risk. Diligent project management and close budget scrutiny will be applied to complete this upgrade on time and within budget.
Finally, a triennial review of the Final Salary Pension scheme is scheduled with the trustees over the coming months, with an effective date of 1st April 2020. Whilst we fully expect to reach agreement within 15 months of the effective date on any necessary recovery plan, continued stock market volatility may require the RYA to make a greater level of additional contribution than we have seen in recent years.
5 ANNUAL REPORT AND ACCOUNTS 2020 111,322 INDIVIDUAL MEMBERS £21m TOTAL INCOME £8.3m MEMBERS FUNDS 3m WEBSITE VISITS 25,202 INSTRUCTORS
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