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Annual Report 2019 Group at a Glance

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Annual Report 2019 Group at a Glance ANNUAL REPORT www.corservltd.co.uk 2019 Working together to improve the lives of people in Cornwall Financial Highlights Contents Revenue Strategic Report 2019/20 Group at a Glance 4 Chairman’s Statement 6 £151.0m Group Managing Director’s Statement 7 2018/19 £162.3m Overview of the Group 8 Our Mission, Vision and Values 9 Operating Profit Our Strategic Priorities 10 2019/20 Our People 11 £3.66m Corporate Social Responsibility 12 2018/19 £1.16m Our Sustainable Future 13 Health and Safety 14 Group Highlights 15 Profit before Tax Company Spotlight 17 2019/20 £2.79m Governance Report 2018/19 £5.531m Board and Committee Structure 26 Attendance and Activities 27 Audit and Risk Committee 28 Cormac - Highways, EnvironmentExternal and Audit Civil EngineeringReport 49% 29 Cornwall Housing Limited 23% Risk and Assurance 30 Cornwall Airport Limited 7% Remuneration and Nomination Committee 30 Cornwall Development Company 9% Strategic Risk Management 31 Cormac - Facilities Management 5% Evaluation of Board Activities 31 Cormac - Fleet Services 2% Cormac - Community Care Services 5% Finance Report Executive Summary 32 Finance Director’s Statement 32 CormacCormac - Highways, - Highways, Environment Environment and Civil Engineering 49% and Civil Engineering 49% Reconciliation Accounts 34 Cornwall Housing Limited 23% Cornwall Housing Limited 23% Consolidated Income Statement 35 CornwallCornwall Airport Airport Limited Limited 7% 7% Turnover 35 CornwallCornwall Development Development Company Company 9% 9% Statement of Financial Position 36 CormacCormac - Facilities - Facilities Management Management 5% 5% Changes in Equity 37 CormacCormac - Fleet - Flee Servicest Services 2% 2% Cash Return 37 CormacCormac - Community - Community Care Car Servicese Services 5% 5% Chart above shows 2019/20 revenue split % by company Appendix 38 Strategic Report 4 Corserv Annual Report 2019 Group at a Glance Overall a strong performance Highways, however the business was 20% impacted by an £8m reduction in 24% Contracting planned revenue from its main Revenue £82.2m Consultancy & Other Environment client, which was mainly due to Highways & Environment the delayed project start of major 2018/19 £89.5m 22% and Civil Surfacing contracts. 2019/20 was also the 34% first full year of increased labour Operating Engineering following the market realignment 20% for operatives. Overall the 24%Profit £4.5m Contracting business responded positively 2018/19 £5.3m Consultancy & Other removing £1.5m of costs whilst Highways & Environment maintaining an operating margin 22% see page 17 of 5.5%. Surfacing 34% An operating surplus of £0.1m and deficit of -£1.7m 2019/20 9% Housing (-£1.3 2018/19) comes after Capital Income funding the third year of a 41% Transformation and Change Revenue Management Fees £39.4m Other programme, in addition to 50% Rough Sleeper initiatives, from 2018/19 £38.3m accumulated reserves and the 9% return to Cornwall Council. It was Operating a difficult year after management Capital Income fee reductions (totalling £1.5m) Profit 41%-£1.7m Management Fees were agreed during the previous 2018/19 -£1.3m Housing Review and tenant rent Other see page 18 reduction by 1% for four years.50% The Airport was expecting a The Airport record passenger number of 471k and the subsidy was expected 24% Passenger fees to be at its lowest since 2014, Revenue at £1.1m down from £2.8m. £11.5m 42% Ren t However, the impact of Flybe 2018/19 £11.1m Fuel sales 18% going into administration followed Retail, Parking & Other by travel restrictions forced the 16% terminal to close. This left the Operating 24% business with lost revenue and Profit -£1.6m Passenger fees bad debts and a subsidy of £1.6m. 42% Ren t 2018/19 -£1.3m A plane remains in possession Fuel sales at the airport to recover a 18% see page 19 proportion of the bad debts. Retail, Parking & Other 16% Cornwall Development Company Development is delivering an increased portfolio of EU grant funded projects EU Funded totalling £63m match funded 47% by CC and CIoS LEP. Has been Revenue £15.5m 53% UK Funded successfully awarded a further 2018/19 £15.4m £29.5m of EU funding extending delivery activity into 2023. £6.08m of grants paid to Cornish Operating EU Funded businesses which directly levied Profit 47% £0.1m £4.72m of private sector match53% UK Funded 2018/19 £0.1m funding. Made a small operating see page 20 surplus in the year. Corserv Annual Report 2019 5 Becoming a Living Wage Foundation supplier in 2019 Facilities 16% had a positive impact for Facilities Management our employees but a big 35% Management Revenue £7.7m Cleaning impact on the profitability of Depots the Facilities Management 2018/19 £7.1m 35% Property business. It was expected 14% to make a loss in 2019/20 but worked hard to turn this Operating16% around and great efforts Facilities Management report Strategic 35% Profit £ - delivered a small profit, it did Cleaning this by reducing its cost base, 2018/19 -£0.1m renegotiating contracts and Depots see page 21 winning new business. 35% Property 14% Fleet services provide vehicle Fleet and plant maintenance both internally to the Group and 27% externally through commercial Services Fleet contracts. In addition to the Revenue £4.2m Workshops external revenue, it delivered 2018/19 £4.3m over £7m of internal services 73% to the Group, recycling profit back into the Group. 27% Operating Profit £0.2m Fleet 2018/19 £0.1m Workshops see page 22 73% This year the business took Community over its first care home, Trefula House, rescuing it 26% Care from closure. It receives a Steps / Corcare small management fee to run Revenue £8.7m Trefula the care home while other 2018/19 £5.6m 74% Services services are provided at cost. 26%Operating Profit £0.1m Steps / Corcare 2018/19 £ - Trefula see page 23 74% Strategic Report 6 Corserv Annual Report 2019 Chairman’s Statement If I could sum up 2019, it would be as a year of collaboration and diversification. From our ability to stabilise a failing dementia care home, to winning a multi-million pound transport maintenance contract, the Group has highlighted that by aligning the diverse skills that exist within, fantastic outcomes can be achieved. Peter Andrew MBE When I joined as Corserv Chair in However, none of us could have Therefore, and to conclude, a period September 2019 I was immediately foreseen the decline of Flybe at the of unprecedented economic turmoil impressed by the passion and beginning of the year and the impact and volatility lies ahead as a result of enthusiasm that employees across that this would have on Cornwall the coronavirus crisis and the final the Group have for their work, their Airport Newquay's operations. stages of Brexit. divisions and for the residents and Although the longer-term impact of While we have been planning for communities of Cornwall. this remains uncertain, the Group Brexit for almost four years, the is responding in every way it can to This commitment has enabled impact of coronavirus is difficult, if both the financial challenge and the year-on-year margin improvements, not impossible, to predict that all support of our employees. allowing us to maintain our financial businesses will require support of commitment to our shareholder. At In this respect, the Corserv Group varying scale. the same time we have responded has a proud reputation of being a In response, the Group continues to challenges in capital plans and responsible employer and this was to work with our Shareholders to projects. further exemplified by our response revise our operating model to reduce to the coronavirus crisis at the end If I could sum up 2019, it would our dependency on public sector of this financial year. Much of the be as a year of collaboration and financing, and simultaneously build work that was carried out by the diversification. From our ability to on our core strengths. Group’s Health and Safety team to stabilise a failing dementia care ensure safe working practices was home, to winning multi-million shared as a template for many other pound transport maintenance Peter Andrew MBE organisations across the region. contract, the Group has highlighted Chairman that by aligning the diverse skills that Through the strong collaboration of exist within, fantastic outcomes can many teams across the Group, not be achieved. only were we able to maintain all our essential services, we also provided This mix of public and private sector the co-ordination and delivery of the revenue is proving the model that county’s Adult Social Care response was envisaged in 2015, to deliver to the crisis. Throughout this time, additional revenue and financial we provided guidance and care to resilience to the Group, and enable a both employees and residents in our consistent return to our shareholder. communities. Corserv Annual Report 2019 7 Group Managing Director’s Statement The Group continues to win lucrative contracts, which demonstrates our competitive offering in the marketplace. report Strategic In 2020 we will continue to improve and evolve our services, build on our customer portfolio and develop our external brand. Cath Robinson I am pleased to report another • Been awarded a new 10 year Our aim for 2020 is to continue to year of strong performance by the Management Agreement and improve and evolve our services, Group, both financially and through Commissioning Plan for Cornwall build on our external customer a number of successful business Housing portfolio and develop our external development opportunities. This • Secured three external contracts brand. year we are reporting revenue of into our PVCu factory This will involve reviewing and £151m and an operating profit of • Successfully took over the developing our value chain and using £3.6m.
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