I hope you have had a great weekend and are enjoying the brighter days and lighter evenings. I write to you today with some positive news about the financial performance of the Group and its impacts.
You all know that Covid had a substantial impact on our income for the year (loss of £19m from £129m) and together we had to take difficult early actions, including a six month salary reduction and the use of the furlough scheme, to seek to manage what was then, and has been, a very unpredictable period to retain our financial viability.
Your participation and your reaction in these changes, as I have said before, has been humbling and similarly your collective effort in responding to the delivery challenges, brought by Covid, has made a huge positive impact on our clients and now on our financial performance.
Some of you may be aware we began to see an improvement in our financial performance in mid-Autumn, tentative at first but then continuous. More recently this has been helped by commissioners’ decisions to revert to performance models over cost recovery and, given your performance, this has also positively impacted our bottom line.
I am therefore pleased to let you know that, bar some new extreme unforeseen event, we will now make a net profit this year, which means we are able to fulfil our commitment to review and make good, at least part of, the salary sacrifice you made.
You may recall from the Group Webinar just before Christmas that I advised we will have to wait until after June when our accounts have been consolidated, and all final accounting adjustments have been made, to establish a confirmed amount of profit. I also stated there are a number of primary demands that need to be met first, including the need to demonstrate to commissioners improved financial performance over time, improve our balance sheet and, therefore, ensure our financial sustainability.
That said, however, we now believe we will still be in a position to reimburse, at least partially, the salary sacrifice you made this year. If following full repayment of salary sacrifice and the resulting financial outturn allows, we also intend to make some payment to colleagues who were placed on furlough.
I am very sorry we cannot state the actual amounts at this time and I feel a little like we are delivering a half message, but hopefully you will appreciate knowing the financial performance of the Group has improved, our ability to make good on the in-principle commitment, understand why this is the case and welcome early heads-up of this good news.
After the accounts have been consolidated, I will be able to communicate with you further about the amount of payment. If you do have questions, please email them direct to the HR Service Desk although please do bear in mind that we will not be able to respond until the consolidated accounts position is known.
Once again, I, SMT and the Board thank you all for your incredible work and commitment over the past year.