TRUSTEES' REPORT AND ACCOUNTS 2022 33
Investments
The RSPCA holds investments to support fluctuations in its
cash flow, to fund structural growth and as a continuity reserve.
The value of the RSPCA's investments at 31 December 2022 was
£133.4 million (2021: £115.2 million). Net losses of £9.6 million are
reported in the group Statement of Financial Activity (SOFA) for
2022 (2021: gains of £8.0 million). The Board has delegated overall
responsibility for the RSPCA's investment strategy to the Investment
Committee, which continues to refine this. The Investment
Committee consults with investment professionals to help
maximise the overall return within acceptable risk parameters,
while ensuring that the strategy remains fit for purpose.
Investment strategy review
Thanks to strong performance and the sale of property assets
in 2022, it was possible to invest an additional £25 million in the
portfolio in July 2022.
Market overview
A number of ongoing pressures were applied to stock markets
in 2022.
l Concerns surrounding the Russian invasion of Ukraine
exacerbated inflationary pressures.
l European stocks suffered inflationary pressures, which
were at the forefront of policy decision-making, heightened
by geopolitical risks resulting in a sharp rise in the price of
oil and gas.
l The Asian stock market had a difficult year driven by the
Omicron variant, which spread largely unmitigated across
Designated funds to support the long-term strategic investment
in the organisation have been reviewed as follows.
l It was agreed that the £30 million contingency fund against
market fluctuations would be re-designated for initiatives
underpinning the long-term sustainability of the RSPCA. This
is broken down into £15 million to support the organisational
transformation programme and a new £15 million fund to
upgrade our estate of clinics, hospitals, animal, wildlife and
equine centres. Both programmes are expected to span over
the next five years.
l A further £5 million will also be designated for the investment
in growing our income over the next three years and two
new designated funds were also created - a £10 million fund
to support branches, through a match-funded development
opportunity, and a £5 million fund to finance our 'perfect storm'
response (for example contributions to food bank schemes
and increase in boarding and rehoming capacity) to a
combination of external factors, including an increase in
abandonment of animals, shortage of veterinary provision
and cost increases, and internal challenges, which together
are creating a very real animal welfare crisis.
The new allocation is summarised in the table below.
31 December
2022
£m
31 December
2021
£m
Transformation programme 30 15
Engagement and income generation 25 20
Improvements of our estate of
clinics, hospitals, animal, wildlife and
equine centres
15 -
Branch development fund 10 -
Perfect storm programme 5 -
Funds to support transfer to PDSA 1 -
Contingency fund against market
fluctuations
- 30
Total designated funds to support
the long-term strategic investment
86 65
The Board reviews this policy annually.
At 31 December 2022, the charity's free reserves stood at
£110.2 million (2021: £95.3 million), which is slightly above the top
end of our target range. Given the current economic uncertainty
and long-term nature of the RSPCA's transformation journey,
we believe this is the more prudent approach at this stage.
Young puppy Reggie was found in a rucksack
abandoned in woods. Here he's back visiting RSPCA
Millbrook Animal Centre with his new owner.