We entered last financial year amid a global pandemic: preparing to launch multi-mode teaching; continuing to deliver our world-class research; expecting our staff to work remotely where possible. The future was extremely uncertain; the emphasis was all on flexibility. We had to deliver.
We left the financial year having delivered, so far. At the same time as we enrolled a record number of students; we moved up 80 places in the NSS rankings making us the highest ranked Russell Group university. At the same time as our academics were playing a leading role in helping the world respond to the crisis, our research volumes were returning to pre-pandemic levels. At the same time as our staff were doing an amazing job running a world-class university remotely, we were accelerating the process and IT changes needed for the future.
Our financial results reflect this. Income is back to pre-pandemic levels. Cash from operations is significantly higher than last year. However, removing the pensions provision, our operating surplus is still at a lower level than before the pandemic. The question now is sustainability of financial performance. Can we continue to deliver in the post-pandemic world? This will not be easy.
This financial performance has been driven by a rapid growth in student numbers, we are now at levels we expected to achieve in 2024. We have achieved this simultaneous increase in student numbers and satisfaction by investing. Investing in new technology, investing in teaching support. We have managed to maintain margins and cash flow despite this through deferral of expenditure and increases in research working capital. Neither of these are sustainable in the long-term and we now need to switch our attention to our growing cost base.
We also have to manage the pressures on our capital expenditure. We plan to grow academic numbers. This will all require more space. We have the land at our White City Campus to accommodate the growth, but we do not have the cash flows to fund the construction. Our Sustainability Strategy launched earlier this year to support the government’s transition to net zero carbon by 2050 will add initial cost. At the same time, eighteen months of hybrid working means that we think about space utilisation very differently than we used to.
Our staff’s resilience and hard work has helped us manage the challenges of this year. This is the reason we gave above sector pay rises both this year and last and why our total remuneration package compares so well against our national competitors. However, we also need to recognise that staff costs are growing as a percentage of our total cost base and we need to keep focused on the slow and steady work to redesign and standardise the way in which our professional and operational staff work.
We should all feel proud of how much Imperial has delivered whilst recognising that difficult choices lie ahead.
Mr Muir Sanderson
Chief Financial Officer