Camelia Botnar Foundation - less charity, more staff

[ New! An analysis of the 2012 accounts of the Marcela Trust. ]

Hurrah! The long-awaited 2011 accounts of the Camelia Botnar Foundation have appeared on the Charity Commission website. After our analysis of the 2011 accounts of Camelia Botnar Ltd., their commercial partner to which they give a whole load of manpower and loan a whole load of money, let's see what the charity was doing last year.

Main points of the accounts:

• they got 9 trainees to complete their placement and move into employment, down from 15 in 2010;
• the estate continues to suck up a fair amount of money in maintenance;
• they note that "Camelia Botnar Ltd [the subsidiary undertaking] sells horticultural products and crafts generated by the Trainees on the estate as well as other stock items purchased from third parties [...] The undertaking showed an increase in turnover this year on the previous year of 3.65% to £788,447 and a resulting gross profit of £103,109 (2010: £122,819). The profit was not as substantial as the previous year due to an increase in Administrative Expenses." which interests me - they add 30K of sales but lose 20K of profit, so that implies CBL admin expenses went up by around 50K. Which is a whole person's salary.
• Sarasin and partners continue to ensure that the investments underperform: they lost 10% on the investments over the year, compared with a FTSE All-Share Index performance of a 6.69% loss. Nice one, guys. They still trousered £101K in fees for this performance. I'll definitely consider you for my future investment management needs, assuming Dick Fuld isn't available.
• CBF is buying a "leisure investment in a market town" for £1,760,000, aiming to get a yield of 5.12% compared to the 1% that the cash is currently generating. Um. I can't see this going any direction other than horribly wrong. CBF is going way out of their core area in this activity. I wonder if Dawn Pamela Lawson has been advising them on this activity, what this "leisure investment" is and what "market town" is involved. Who sold them this entity and why do CBF think that a leisure investment in the middle of a UK recession is going to pay off?
• CBF took in £3.230mm and spent £3.233mm, a very carefully balanced year, in contrast to 2010 where they spent about 8% more than they brought in.
• They have managed to accumulate an extra £800K of cash, from £4.3mm to £5.1mm, which looks to be from spending £300K less on operating activities and receiving £500K of capital expenditure. I wonder what they're planning to do with this - more investment property acquisition?
• Most charitable activity costs were more or less static (+5%), though "support costs" more than doubled from £45K to £101K.
• Employees rose from 79 to 84, but that masked charitable activities staff jumping from 33 to 48, while actual manufacturing staff dropped from 45 to 35. So they're doing less, with more people.
• They're letting plant and machinery assets drop from £725K to £555K, which implies to me (along with the drop in manufacturing staff) that they're letting the manufacturing side run down.
• They had £7.4mm in investment properties at the start of the year and added the aforementioned £1.7mm leisure investment. After last year's near-£3mm loss on revaluation, one wonders how well this will continue to perform...

I find it significant that this year both CBF and CBL decided to ensure their income and expenditure were balanced within a fraction of a percent, in contrast to previous years. CBF is ramping up on charity staff but apparently letting apprentice numbers and manufacturing staff and plant drop. It seems to be undergoing an attack of bureaucracy, doing less with more. It's putting more money into property investment despite losing substantial amounts of money in past years. Its main investment fund lost 10% courtesy of Sarasin Partners.

The figures suggest that CBF is turning into a business of busily spending what remains of the investment fund on the estate and staffing, and doing less and less of its core work of preparing trainees for the world of employment.