Financial Performance summary
Dr Ross Beever, Fellow of the APPS
The accounts (for Parent and Consolidated Group) and audit report are in Part Two of our Annual Report and also available in full on our website. Part One and Part Two together constitute our statutory annual reporting responsibilities.
- Annual Report 2010 Part 1
- Annual Report 2010 Part 2: Consolidated Financial Statements and Other Statutory Requirements
Summary table of group financial performance indicators
| 2008 | 2009 | 2010 1,2 | 2010 2 | 2011 2 | ||
|---|---|---|---|---|---|---|
| Achieved | Achieved | Target | Achieved | Target | ||
| Revenue, $m | 56.07 | 60.25 | 62.26 | 61.66 | 64.29 | |
| Net revenue, $m | 49.52 | 53.13 | 55.07 | 54.82 | 57.57 | |
| EBIT, $m | 1.43 | 2.36 | 2.28 | 2.19 | 3.05 | |
| EBIT margin | 2.5% | 3.9% | 3.7% | 3.6% | 4.7% | |
| Total assets, $m | 44.58 | 48.35 | 45.98 | 50.31 | 49.24 | |
| Return on equity 3 | 2.5% | 5.3% | 6.4% | 6.4% | 7.0% | |
| Equity ratio 3 | 60% | 58% | 62% | 58% | 61% | |
| Dividend $m | 0.1 | 0.1 | 0.5 | 0.5 | 0.7 | |
| Gearing | 13% | 13% | 6% | 0% | 0% | |
| Interest cover | 3.4 | 7.2 | 9.7 | 11.1 | 10.2 |
1 Target as per 2009/10 Statement of Corporate Intent (SCI).
2 2010 and 2011, gearing is calculated based on net debt and return on equity excludes extraordinary restructuring costs.
3 Return on equity and the equity ratio exclude the impact of 0% building depreciation announced in the Government’s 2010 Budget, $3.7m for 2010. The return on equity and the equity ratio adjusted for the depreciation impact are –6.9% and 51% respectively.
Revenue:
Includes science research, contract work for government and commercial clients, royalties, licence fees etc., plus income from the sale of product and the lease of assets. It excludes income from interest on investments and from finance leases, $0.3m for 2010.
EBIT:
Earnings before interest and tax, and after committed business development expenditure and commercialisation expenditure. It excludes restructuring costs.
Return on equity:
NPAT ÷ average shareholders’ funds, expressed as a percentage. NPAT is net profit after tax. Shareholders’ funds include share capital and retained earnings.
Equity ratio:
Average shareholders’ funds ÷ average total assets.
Gearing:
Financial debt includes all interest–bearing liabilities. Gearing = financial debt ÷ financial debt plus shareholders’ funds, expressed as a percentage. (The Minister of Finance and the Minister of Research, Science and Technology each hold 50% of the shares on behalf of the public.)
Interest cover:
Interest is the cost of debt and financial leases. Interest cover = EBIT ÷ interest.
Met 6.4% Return on Equity target
Excluding the impact of 0% building depreciation announced in the Government’s May 2010 Budget
Where our revenue comes from
- Foundation for Research, Science and Technology (FRST) 45% – contestably funded research programmes, negotiated funding and long–term OBIs
- Universities 2% – contracted services, some paid lecturing by our staff, and rentals for university staff located in our buildings
- Private & business sector 9% – principally contracted work for businesses and private organisations
- International 2% – development projects funded by donor agencies, international consultancy projects
- CRIs 6% – research subcontracted to us in collaborative programmes
- Central government 14% – services contracted by government departments including DOC, MfE and MAF
- Local government 3% – contracted work for regional, district and city councils
- Sirtrack 8% – wholly owned subsidiary, which develops and produces telemetry equipment for tracking wildlife
- MW Press & sundry 2% – Manaaki Whenua Press is our natural history and science book publishing and retailing business centre
- Capability Fund 9% – MoRST funding used to maintain existing and develop new science & technology capability
Where our revenue goes
- Employee remuneration 50% – includes staff in management, science, support roles, commercial business and Sirtrack
- Travel & vehicles 6% – all vehicle and air travel by our staff, including the cost of leased vehicles. Landcare Research runs a mixed fleet of vehicles including 4WD and quad bikes for fieldwork, and cars and vans for road use
- Other operating costs 20% – includes electricity, carbon credits, software licences, insurance, consumables, and lease costs
- Staff training 1% – includes conferences, training courses and support for postgraduate study (2.2% of the total payroll)
- Depreciation 6% – includes accounting depreciation on buildings, science equipment and computers
- Investment 1% – support for technologies and services including those advancing through our commercialisation pipeline
- Subcontracts 11% – research subcontracted to other research providers, including CRIs and universities in collaborative research programmes
- Interest & non–operating costs 1%