«REGISTERED COMPANY NUMBER: IP27793R (England and Wales) REGISTERED CHARITY NUMBER: XR 43398 i CONTENTS Report of the Committee of Management ...»
The 6,000 capacity Copper Box Arena was opened to the public in July, the first venue on the Queen Elizabeth Olympic Park to open after the Games A 10 year new partnership was signed with Rugby Borough Council to operate the new Queens Diamond Jubilee Centre A 7 year partnership was signed with Cambridge City Council for the operation of five leisure facilities A 25 year partnership was signed for the operation of the Oasis Leisure Centre in Swindon GLL was selected as the preferred partner for the operation of the £16m new build and refurbished Poplar Baths in London Borough of Tower Hamlets.
FINANCIAL REVIEWThe results for the year 2013 (January 1st - December 31st) are set out within the financial statements.
Overall GLL overachieved on its financial targets. Turnover grew by 8.5% in 2013 compared with 2012 to £133.5m.
The net trading surplus from operating activities was £4 million for the year representing a 3.1% margin (ahead of our corporate target of 2.5%).
Other key performance indicators:
Total staff cost to income was 51.5% (2008 – 55.7%; 2009 – 52.8%; 2010 – 53.5%; 2011 – 52.1%; 2012 – 52.1%).
The Balance Sheet shows a positive liquidity ratio and low gearing.
Reserves Policy and Social funds:
The Board has considered the risks and opportunities and reviewed the level of cash reserves which it deems prudent to maintain. The funds held are considered adequate for the coming year.
A strategy to increase the Company’s cash reserves and asset portfolio over the coming years has been adopted by the Board to support investment plans and protect the organisation against future risks. GLL will evaluate all opportunities as they arise with an aim to build our asset portfolio over time.
At 31 December 2013, the Society had accumulated cash reserves of £18.3m (2012 - £17.7m).
The Society is in a relatively favourable cash flow position because we receive some of our income in advance of expenditure.
The Committee of Management recognise the need for a level of financial reserves that will:
1. Allow for planned investment and other similar purposes;
2. Allow for cyclical maintenance expenditure which the Society has an obligation to incur under various property leases; and
3. Shield the Society from the possibility of adverse unforeseen circumstances.
These unforeseen circumstances include a number of specific events that have been identified in the Society’s Risk Register.
Social Bond Issue During the year, GLL with sustainable bank Triodos successfully raised £5 million of capital funds through a social bond issue.
The bond will help GLL to further develop our sport and social legacy strategy, which includes two London 2012 Olympic venues on the Queen Elizabeth Olympic Park – the Copper Box Arena, which launched in July 2013 and the London Aquatic Centre which re-opens to the public in March 2014. The investment will ensure that the facilities are available both to elite sportsmen and women but also local residents and community groups. The bond will also contribute to the on-going restoration and expansion of the historic Charlton Lido and Lifestyle Club, which offers affordable swimming and fitness facilities to Londoners.
The five-year bond will pay 5% gross fixed interest per year. Investors were split evenly between retail (54%) and institutional investors (46%) with support from the City of London Corporation Social Investment Fund, Rathbone Ethical Bond Fund and the Bank Workers Charity. The minimum investment was £2,000 or £200 for GLL employees.
The bond issue was made possible with support from the Investment and Contract Readiness Fund (ICRF) that offers grants to high growth social enterprises like GLL to bring in corporate finance expertise.
Commenting on the successful issue, GLL Managing Director Mark Sesnan said: “We are delighted that the bond has been fully subscribed. The funding will help us to continue our social mission – providing access to quality community leisure and fitness facilities at a price everyone can afford while offering investors a decent return and the chance to make a social impact.” Dan Hird, head of Corporate Finance at Triodos Bank added: “We’re really pleased with the successful outcome of the bond issue. It is clear that more and more investors are becoming motivated by the prospect of doing something socially useful with part of their investment portfolio whilst also receiving a reasonable financial return.” Jonathan Jenkins, Chief Executive of the Social Investment Business Group said: “We have seen an unprecedented demand for our investment readiness grants in the past few months indicating that the Fund is becoming vital to the investment journey of high-growth social ventures. Investment readiness is critical to creating a vibrant social investment market in the UK and GLL’s success shows that the right support can really deliver results to help social ventures access new forms of finance to grow.” Minister for Civil Society, Nick Hurd said: “It is hugely encouraging to see such a positive deal secured through the Investment and Contract Readiness Fund. In this particular case, for every £1 government gave, GLL was able to raise £39 in private investment. This shows the power of smart grant funding to ambitious social ventures.” “Thanks to this investment, GLL can make world-class sports facilities accessible to local communities. This is exactly why social enterprises should be supported to grow and scale.” As part of the bond issue and to provide comfort to investors, 2 financial covenants were put in place. We are
pleased to report against these below:
Net Asset Covenant The Bonds incorporates a Net Asset Covenant which is designed to ensure that the Bond liability is covered at least two times by the unrestricted net asset value of the Society. The rationale for the Net Asset Covenant is to provide comfort to Bondholders by ensuring that GLL retains sufficient ability to liquidate or re-finance its assets to repay the Bonds at any time if necessary.
As at the 31st December, the bond liability was covered 3.3 times by the unrestricted net asset value of the Society. This comfortably exceeds the covenant target.
Bond Interest Cover Covenant The Bonds also include a Bond Interest Cover Covenant which is designed to ensure that the annual Bond interest payable is covered at least five times by available surpluses.
The surplus declared for 2013 covers the annual bond interest by more than 16 times and thus comfortably exceeds the covenant target.
SOCIAL IMPACT AND PUBLIC BENEFITGLL is the UK’s largest leisure and cultural charitable social enterprise, operating over 140 facilities with a diverse workforce of over 6,500. Our inherent social ethos, linked to our charitable objectives, ensures that accessibility, affordability and equality are at the heart of our community provision.
GLL, as part of our core service, provides:
Affordable sport, leisure activity and cultural opportunities A network of accessible local leisure centres and cultural facilities Continuous reinvestment of all financial surpluses to ensure high quality services Good Local Jobs and training for people to get into these jobs In 2013, GLL welcomed in excess of 39 million visits from users and spectators participating in a wide range of activities.
GLL continues to strive to be the best at delivering social impact across all our partnerships. This social delivery is a key ethos of the organisation and a reflection of our commitment to the communities we serve.
Outlined in this section of the business review are highlights of the programmes delivered in 2013 as well as some key performance indicators.
In addition to day to day delivery of community programmes through the local staff teams of each facility we operate, GLL has a large dedicated team of Community Service Officers whose purpose is to reach out into the communities we serve and deliver targeted specific programmes. They form the Sport and Community Engagement (SCE) team from which we operate a three tiered participation growth pathway which provides a
clear framework for delivery:
Engage and Participate: delivering targeted interventions and activities that maximise and promote the wider benefits of sport and physical activity.
Inspire and Sustain: developing, promoting and delivering engaging and inspirational participation programmes, campaigns and events for all.
Nurture and Excel: Developing inclusive sporting pathways from grassroots to excellence.
Engage and Participate Highlights and facts:
• We attended/delivered 204 events in 2013, examples include; community festivals, Country Shows, delivering community Play Days, school fetes & inclusive open days.
• We delivered 20 Be Inspired events engaging over 2500 participants. Families took part in a range of challenges in athletics, football, gymnastics, basketball, badminton and swimming.
• We worked with over 100 local partners to help engage with communities and break down initial barriers. Partners include; Pro Actives and County Sports Partnerships, Interactive, Local Authorities, Public Health, Mencap, Age UK and London Youth.
• We launched the Better Inclusive membership in 2013, with 1,567 members enrolled by December. The membership was set up to encourage children and adults with disabilities to participate in a variety of sporting activities.
• We delivered the 8th Annual Club Games for the those aged over 55. This was held on Friday 18th October at Brixton Recreation Centre. In attendance were over 500 participants from 15 GLL Partnerships. Activities included Table Tennis, bowls, darts, badminton and dominoes. The winning team was Epsom and Ewell.
• Once again, GLL supported the Swimathon. Established in 1986, the Swimathon is a nationwide swimming challenge that encourages swimmers up and down the UK to swim a variety of challenge distances at their local pool and raise money for charity.
• GLL was ranked top with 2,101 entries and raising £235,302 across the GLL estate in 2013. This represents an increase of 231 entries or 12.4%.
• The London Fields Lido was the top recruiting pool in the UK with 291 entries
• We were successful in gaining £247,000 funding to deliver 40 projects for women and girls, children and young people, low income families & older people. A great number of these people were not previously engaged in sport or physical activity and had never set foot in a leisure centre.
Inspire and Sustain Highlights and facts:
• We continued to develop and grow a range of attractive and high quality leisure centre based sports lessons & courses including Swimming, Athletics, Gymnastics, Basketball, Football and Racquets with nearly 70,000 participants receiving high quality coaching from beginner, improver and performance level every week.
• We reviewed lessons & courses programmes, developed sports club links and rolled out the state-of-theart CoursePro technology solutions. 800 Teachers & Coaches were trained to use iPods to track ongoing pupil attainment levels in each of our Lessons & Courses core sports which parents can access via a home portal.
• A constant challenge for leisure operators is to maintain a quality coaching workforce that meets demands and delivers a quality product to customers. In 2013 we trained, supported and recruited 242 coaches across 27 partnerships and 24 sports.
• We carried out nearly 1,000 non-technical audits across all our Lessons & Courses. Additionally 135 of our Swim School programmes have completed a Quality Compliance Audit to ensure safe, effective and good quality swimming lesson programme is achieved against expected standards. This level of quality assurance ensures our customers receive the best service and coaching on our Lessons & Courses.
• Since the London 2012 Olympic & Paralympic Games the sport of Gymnastics has proved especially popular. We have seen a 33% growth since this period with nearly 5,000 participants receiving weekly coached sessions in Gymnastics and Trampolining at 33 GLL-operated leisure centres. Similarly we have seen a growth of 19% in squad/club level gymnastics with nearly 600 participants in 7 centres delivering to club level. The Sports Unit deliver an annual Better Gymnastics Competition at Thomas Tallis School which provides a competition pathway for over 500 of our gymnasts. We also supported the Mini Games and the Barnet Festival.
• GLL is committed to actively promote and deliver Water Safety Lessons to all pupils who access our school swimming programme. During RLSS Drowning Prevention Week 22nd-30th June 2013, we delivered lessons to over 40,000 pupils in primary and secondary schools.
• GLL have developed a partnership with Reach & Teach to jointly increase the awareness, participation and sporting pathways of Basketball across the Capital with over 145 young people now taking part in weekly coached sessions.