PRESENTATION
20/06/2017
The Financial Plan for the merger of TLS and Faith
Subject to approval by:
Tanunda Lutheran
Faith Lutheran College
LSA Finance Committee and Council
The details of the plan are:
1.
TLS and Faith merge at the beginning of 2018
2.
There is a new $1,200,000 cash flow loan repayable over 5 years $280,000 pa
3.
TLS will reduce current salary bill (excluding on costs) by $210,000
4.
LSA to make full principle and interest repayments on the existing loans from
2016 to 2020
3 financial must haves to be
considered to be a school
performing at an
acceptable financial level
1. Good Operating Efficiency
2. Good Sustainability
3. Good Solvency
1. Profitability
EBIDA = earnings before interest
depreciation and amortisation
EBIDA should be a minimum 8% of
recurrent income for a primary school
TLS Operating Efficiency
10%
8%
6%
4%
2%
0%
-0.13%
-0.17%
-0.48%
-2%
-3.50%
-4%
-6%
-8%
-9.54%
-10%
-12%
2012
2013
2014
2015
2016
2. Sustainability =
Manageable debt level
given the level of
profitability
Debt level should be a maximum of 5
times EBIDA and no greater than
$7,200 per student for a primary
school (or EBIDA should be greater
than 20% of debt level)
TLS Sustainability
$800,000
$600,000
$400,000
$200,000
$0
$(4,432)
$(13,389)
$(6,268)
$(110,091)
-$200,000
$(368,586)
-$400,000
-$600,000
2012
EBIDA
2013
2014
2015
EBIDA at % of Debt
2016
3. Solvency (level of all cash
reserves) should be greater
than 15% of recurrent income
TLS Cash Position
$800,000
$600,000
$400,000
$200,000
$104,650
$0
-$200,000
-$400,000
$(195,768)
$(372,236)
$(592,129)
-$600,000
-$800,000
-$1,000,000
$(928,276)
2012
2013
Cash Position
2014
2015
Target Cash
2016
Score / 10
Variance - Actual from LSA Targets
Cash
Profit/Sustain
Debt
Preferred
Debt
2012
0.0
($788,444)
($377,739)
($434,394)
$
1,821,752
2013
0.0
($1,064,232)
($551,396)
($632,848)
$
2,206,523
2014
0.4
($410,300)
($487,383)
($698,256)
$
2,414,754
2015
0.0
($752,030)
($509,047)
($659,686)
$
2,513,893
2016
0.0
($1,507,687)
($967,181) ($1,061,605)
$
2,992,975
The Financial Plan for the merger of TLS and Faith
Subject to approval by:
Tanunda Lutheran
Faith Lutheran College
LSA Finance Committee and Council
The details of the plan are:
1.
TLS and Faith merge at the beginning of 2018
2.
There is a new $1,200,000 cash flow loan repayable over 5 years $280,000 pa
3.
TLS will reduce current salary bill (excluding on costs) by $210,000
4.
LSA to make full principle and interest repayments on the existing loans from
2016 to 2020
TLS Operating Efficiency
20%
17.02%
15%
13.49%
11.03%
10%
5%
3.09%
0%
-0.13%
-0.48%
-0.17%
-3.50%
-5%
-9.54%
-10%
-15%
2012
2013
2014
2015
Operating Efficiency
2016
2017
2018
Target %
2019
2020
TLS Sustainability
$800,000
$652,333
$526,644
$600,000
$405,651
$400,000
$200,000
$107,418
-$4,432
-$6,268
$0
-$13,389
-$110,091
-$200,000
-$368,586
-$400,000
-$600,000
2012
2013
2014
EBIDA
2015
2016
2017
2018
EBIDA at % of Debt
2019
2020
TLS Cash Position
$900,000
$671,422
$700,000
$463,937
$500,000
$499,076
$300,000
$230,474
$100,000
$104,650
-$100,000
-$300,000
-$195,768
-$372,236
-$592,129
-$500,000
-$700,000
-$900,000
-$1,100,000
2012
2013
2014
2015
Cash Position
-$928,276
2016
2017
2018
Target Cash
2019
2020
TLS Student Numbers excluding mid year in take
279
280
272
263
260
263
259
256
253
248
240
222
220
200
2012
2013
2014
2015
2016
2017
2018
2019
2020
TLS Teacher Student Ratio
19.00
18.5
18.0
18.00
17.4
17.00
16.00
16.0
15.7
15.2
15.00
15.2
15.0
14.2
14.00
13.00
12.00
11.00
10.00
2012
2013
2014
2015
Maximum
2016
2017
2018
Minimum
2019
2020
Score / 10
Variance Actual from LSA Targets
Preferred
Cash
Profit/Sustain
Debt
Debt
2012
0.0
($788,444)
($377,739)
($434,394) $ 1,821,752
2013
0.0
($1,064,232)
($551,396)
($632,848) $ 2,206,523
2014
0.4
($410,300)
($487,383)
($698,256) $ 2,414,754
2015
0.0
($752,030)
($509,047)
($659,686) $ 2,513,893
2016
0.0
($1,507,687)
($967,181)
($1,061,605) $ 2,992,975
2017
2.3
($279,920)
($505,508)
($1,363,316) $ 3,064,628
2018
9.6
($98,845)
$109,854
($836,455) $ 2,712,396
2019
8.6
($41,305)
($73,827)
($596,120) $ 2,397,390
2020
10.0
$97,665
$110,960
($165,898) $ 2,078,421
The details of the plan are:
1.
TLS and Faith merge at the beginning of 2018
2.
TLS applies now for a $1,200,000 cash flow loan to be drawn down in July 2017 to repay the LSA – quarterly repayments will be $70,000 – first repayment due 31 March 2017 – final repayment will be 31 March 2022
3.
TLS will reduce current salary bill (excluding on costs) by $210,000 – these redundancies to be in place by 31/12/17 – that redundancies are declared by end of term 3 at the latest
4.
LSA to make full principle and interest repayments on the existing loans from 2016 to 2020 – 2016 $218,868, 2017 $218,868, 2018 $164,512, 2019 $152,868, 2020 $152,868 – a total of $907,784. This is subject to confirmation of 3. been in place by 31/7/17
5.
That any borrowings for the new middle school to be over 20 years (to build in flexibility)
6.
That TLS provide the LSA with a monthly finance report for the rest of 2017.
7.
That the new merged TLS and Faith school submit an annual budget to the LSA Finance committee by 31 August each year for approval - this to occur while the LSA is providing financial support.
8.
That the new merged TLS and Faith school provide the LSA with a quarterly finance report while the LSA is providing financial support
The details of the plan are:
1.
TLS and Faith merge at the beginning of 2018
2.
TLS applies now for a $1,200,000 cash flow loan to be drawn down in July 2017
to repay the LSA – quarterly repayments will be $70,000 – first repayment due
31 March 2018 – final repayment will be 31 March 2022.
3.
TLS will reduce current salary bill (excluding on costs) by $210,000 and comply
with LSA set staffing ratios – these redundancies to be finalised by 31/12/17 –
that means these redundancies are declared by end of term 3 at the latest.
4.
LSA to make full principle and interest repayments on the existing loans from
2016 to 2020 – 2016 $218,868, 2017 $218,868, 2018 $164,512, 2019 $152,868,
2020 $152,868 – a total of $907,784. This is subject to confirmation of 3. been in
place by 31/7/17.
The details of the plan are: (cont.)
5.
That any borrowings for the new middle school to be over 20 years
(to build in flexibility).
6.
That TLS provide the LSA with a monthly finance report for the rest of
2017 which includes enrolment and staffing information.
7.
That the new merged TLS and Faith school submit an annual budget
to the LSA Finance committee by 31 August each year for approval this to occur while the LSA is providing financial support.
8.
That the new merged TLS and Faith school provide the LSA with a
quarterly finance report while the LSA is providing financial support.