Profits at the Chartered Institute of Personnel and Development’s (CIPD) commercial arm halved last year as the impact of the recession took its toll.
Figures in the institute’s 2008-09 annual report revealed that operating profit at CIPD Enterprises, which runs the institute’s courses and conferences programme, publishing operations and consultancy services, fell by 51%.
The company made a profit of £1.41m in the year ending 30 June 2009, compared to £2.87m in 2008. All of its profit is assigned to the institute under a deed of covenant.
Turnover dropped from £20.3m to £17.7m in 2009. According to the CIPD, the decline of recruitment advertising in its membership magazine People Management accounted for a major part in the decline of overall commercial revenues and “the resultant short-term pressure on our finances”. This drop in revenue led to the CIPD making significant cost-savings, including making 41 staff redundant earlier this year, as well as freezing pay and cutting benefits.
Overall, income from membership subscriptions, branches and commercial activities fell by £2m. Net losses on investment assets were £4.1m – mainly arising from fund holdings in equities, commodities and property. The market value on these assets held was £16.1m, compared to £20.1m in 2008.
The report shows the CIPD continues to take action to tackle the deficit in its final salary pension scheme – put at almost £6m on 30 June. A lump sum of £1m was paid in September, with a further £1.2m expected to be pumped in by June 2010.
Chief executive Jackie Orme announced last month this scheme would close to new members in January 2010, and existing members in 2012, with staff switched to a defined contribution scheme to avoid future unplanned cash injections.
The CIPD’s controversial £3m acquisition of Bridge Partnership did not feature in this year’s annual report as the deal was completed in October.
Other figures in the report included:
Staff training spend fell back. The CIPD spent 1.9% of staff payroll on training, compared to 2.7% the previous year, with staff spending 640 days on formal off-the-job training (2008: 941 days).
Membership numbers in June 2009 stood at 135,500, up from 133,000 the previous year. Chartered members increased slightly to reach 52,500. The CIPD has set itself a target of 150,000 members by 2010.
At the end of the year, the CIPD employed 297 staff (2008: 340).