University of Canterbury (UC) announces half-year result

26 August 2015

University of Canterbury (UC) announces half-year result

The University of Canterbury’s six-monthly result to the end of June shows sound financial performance as it continues to deliver research excellence and high-quality education to students, while managing many diverse issues arising from remediation, recovery and rebuild projects.

“We continue to manage a complex financial position prudently, balancing the need to preserve capability with the need to align spending with sustainable revenue within an appropriate time,” said UC Vice-Chancellor Dr Rod Carr.

UC is the only University that has to prepare six-monthly reports to the NZX and therefore UC’s unaudited financial statements are the first in the tertiary sector to be prepared under the new Public Benefit Entity International Public Sector Accounting Standards (PBE IPSAS), which introduced new accounting and presentation requirements. All other universities will introduce PBE IPSAS when they report at 31 December 2015.

For the six months to 30 June 2015, the University recognised revenue of $172.4 million and operating expenditure of $161.2 million, which included further write-off of damaged property arising from rebuild activity. UC’s $11.2 million surplus represents the result of operations to 30 June 2015, which is not representative of the full year. The majority of earnings are made in the first half of the financial year, and the current projection for the 31 December 2015 Annual Report is for a deficit of $8.4 million compared to a budget deficit of $9.5 million.

Net assets have increased by $12.1 million (1.0%) since 31 December 2014, largely due to capital expenditure, net of depreciation and write-offs.

Total cash holdings reflect the insurance settlement received in January 2015. This settlement was less than the University’s own estimate of the likely costs of repair. Consequently, UC’s commitments to essential earthquake repairs and capital investment will fully expend these holdings over the next two to three years. UC has already spent $244.3 million on its buildings since the beginning of 2011, and is now entering the main building phase of a $452.5 million new build and refurbishment project, with $242.2 million already contractually committed as at 30 June 2015.“Work on the University’s major new construction projects – Canterbury Engineering the Future (CETF) and the Regional Science and Innovation Centre (RSIC) – are both well under way, but there remains potential for further volatility in reported results as more remediation work is carried out and the true extent of damage and costs of remediation are revealed,” said Dr Carr.

The first six months of 2015 saw some significant non-financial milestones. UC retains its position among the top three per cent of the world’s universities, and still has the highest proportion of students completing qualifications of any New Zealand university, according to figures just published by the Tertiary Education Commission (TEC). UC has also formed key partnerships to connect with the wider Canterbury community and boosted its presence in Auckland and Wellington to attract more students from the North Island to study at UC.

By year end, the University is projecting to have increased its equivalent full-time students (EFTS) over 2014 in both domestic and full-fee paying “new to UC” students.

“These achievements demonstrate the continuing and outstanding commitment and resolve of the University’s staff and students, who continue to strive for excellence in challenging financial times,” said Dr Carr.

ENDS

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