The trustees present their annual report and financial statements for the year ended 30 June 2024.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).
Objectives and aims
Emmaus Preston provides a home, work training and development for people who have been homeless or socially excluded.
People who become homeless do so for a variety of complex reasons. Many of the community members have slept rough. Emmaus offers stability, companionship, support and security for people to rebuild their lives. Accommodation is available for up to 50 people in the two Community Homes in Preston and Burnley.
The Community is fully inclusive. Companions are encouraged to play an active role in the day to day running of the Community.
Public benefit
Emmaus Preston works for the public benefit through its work delivering a range of education, enablement and support services for people who have been homeless or socially excluded.
The Trustees have complied with their duty to note and pay due regard to public benefit guidance published by The Charity Commission. The Trustees are committed to ensuring the Charity remains responsive to, and respectful of, the diverse needs of those they help and the local community, enabling Companions to pursue ordinary lives and achieve their full potential.
Emmaus in Lancashire
No two years in Emmaus are ever the same and this has been a year of highs, lows, change and lots and lots of hard work by the whole Community.
This was a year of Companion success with the most Companions we have moved on positively since we opened but coupled with five months of very high energy costs which we were already aware of in our contract and new shops and changing retail spaces not being able to generate the level of income of the previous shops and spaces, it has been a challenging year financially.
Companions
We have up to 50 ensuite rooms’ available in our two premises in Preston and Burnley for people who were formerly homeless. Companions sign off work-based benefits and support the community by selling items in our shops, collecting and delivering items on our vans, working within the community to keep the building functioning and answering our phones to customers. The income from the shops supports our communities directly and pays towards their support and training, food, energy bills and more. The roles Companions play give them a sense of belonging, training, work experience and most of all structure and a sense of achievement.
This year the Companions and staff have worked harder than ever, not just with the day to day running of their community and shops but moving shops – three times in under a year!
Training has continued to be a big part of daily life in our communities with Companions having driving lessons, gaining City and Guilds qualifications in house as well as external training and even attending College a few days weekly over the year and into the next to do an Electricians course. For some these are the first formal qualifications they have ever had and for others this is the pathway into employment and move on.
This year we have seen lots of positive Companion move on including people who had been with us over two years. Some of these were reunited with family members, or met a new partner, some into their own supported living, some into their own homes and many of those into paid employment. In fact in the twelve months seventeen Companions have moved on into employment and their own home which is fantastic and testament to the work done by the skilled support team in Preston and Burnley headed by Karen Wallis. We had over 200 hours per week of support with five paid staff which meant we could offer far more to our Companions. One Companion moving on who needed extra daily help was supported, in conjunction with Social Services, to get funding and employ a personal assistant to help with some daily tasks allowing her to live independently.
A big part of our support offer is basing our Companion Development Workers within our stores and seeing the work Companions do on a daily basis. Supporting them on the shop floor breaks down barriers and increases trust which can never be gained sat across a desk in an office typing at a computer. The downside, as we have mentioned previously, of moving so many people on is low Companion numbers within the two buildings. This impacts on running stores, income from housing benefit and indeed moral at times when people are covering others roles. The measure of success is not how full you are in your houses but how many you can support positively and see move on wherever possible. Our levels of support were high but at times we were so low on numbers, after moving people on, that we could almost offer seven to ten hours a week direct support to each Companion. Whilst this level support was fantastic and we made a conscious choice to use some financial reserves to sustain this level of support this year, our income levels with new shops not reaching the incomes of previous shops and low occupancy due to success of moving people on thus low housing benefit income, means this level of support will be unsustainable in the long term.
Business
We left our big 47,000 square foot Megastore, former B and Q, in Preston which had been our home since July 2016 at the end of June 2023 and began a new retail story in the former shoe store in Lowthian House Preston alongside Iceland. Unfortunately, as we knew last year it did not match our desires for size, location, and car parking. The issues with the store were compounded when the link alleyway between the main shopping area and Ringway, where the buses stop, was closed for safety reasons. This closure came in a week before we were due to open and meant no access to our side doors for customers and no footfall through the alleyway into town. This closure will be in place until November 2024 and has impacted both ourselves and Iceland’s trading. We had predicted trading to be two thirds of the old B and Q but in fact it has only been a third. We have searched hard for more suitable premises and met with Landlords and Agents but due to various factors we haven’t secured a better deal. We have seen a slight increase in trade in our two other stores in Preston town centre but nowhere near enough to meet the shortfall left from our Megastore.
In Rochdale we had even more work to do and genuinely the team performed miracles! In September we found out that the ground floor of our three floor 63,000 square foot Department Store had been sold and that the escalators between ground and first floor would need to be removed and we would have to vacate. Fortunately, our Landlords in Rochdale, The Martin Property Group, had kindly offered us a single floor former Boots and whilst not the same trading size space, still a very large single trading floor and large warehouse unit. The issue we had is we had just one week to move over and restart in the new store. This meant Companions from both Preston and Burnley getting stuck in daily and nightly till late on two shifts to move a gargantuan amount of furniture, white goods, small electricals, and lots of other items. The move was tough but the new store looked great and we started to trade ok into Christmas, albeit this is always our low trading point as people buy presents not furniture. On return after Christmas at the beginning January 2024, we knew the Rochdale Exchange had once again been sold and our new Landlord gave us notice on this former Boots store, we had just moved into a few months previous. We managed to negotiate a move back into the middle and upper floors of our old Department Store, but with ground floor, warehouse including vehicle access sold off it meant we had to use the upper floor for warehousing and to get our deliveries in and out, to make matters worse the only vehicle we could use was a medium high van which we didn’t have. So once again for the second time in four months and the third time in under a year we had to move an entire huge furniture and white goods store and once again within just a week and buy a suitable van.
Whilst we have lost trading weeks with moves, the largest issue is the reduction in floor trading space as we have moved from 122,000 square feet of trading floor space across all stores in Preston and Rochdale to just 42,000 square feet across all stores. Space means more stock, means more choice and the ability to match customer needs and more chance of a sale. We need to find additional or larger units, look at other income streams and ensure we manage our costs to meet our new level of income.
Finally
A challenging year but one where everyone has given even more to Emmaus. Thanks to my fellow Trustees, the Staff team, our Volunteers, and our Companions who make the two houses across Lancashire one Community.
Thanks to our supporters who support us weekly, as you make a huge difference from fundraising within businesses or individually, to donating food, donating furniture and indeed choosing to buy off us. I hope reading this will let you see just what a change you make to people who are formerly homeless and help to be part of giving people a home. I must especially mention Paul Clarke at Cadent Gas who has fundraised with Cadent in many ways including being on the Turf Sleepout but also brought his team out with us on our Outreach at night supporting rough sleepers and the team to tidy up the rooms and gardens at Emmaus House. We need Businesses to support us now more than ever.
The Companions ARE the community, and whilst we as a Board with the staff have made decisions to reduce our costs, we will always ensure they are at the forefront of our minds in all decision making.
Financial position
Income from the retail outlets has decreased to £440,970 (2023: £687,155).
The furnishing scheme assisted a smaller number of companions, and income decreased to £114,399 (2023: £152,524).
Housing benefit payments increased to £262,490 (2023: £252,414) which reflects both the increase in Companion numbers and an increase in the level of housing benefit.
Grants received totalled £1,812 (2023: £7,160) and donations and gifts received totalled £30,890 (2023: £37,941).
The net movement in funds was a reduction of £188,547 (2023: £178,303), and total funds at 30 June 2024 were £964,689 (2023: £1,153,236).
Reserves policy
The reserve policy is kept under review by trustees.
In line with advice from Emmaus UK we hold at least the equivalent of three months costs in reserves to cover overheads in event of closure.
The free reserves of the charity are £474,402.
Governing document
The Charity was incorporated as a company limited by guarantee on 2 October 1998. The company's Memorandum of Association established its objectives and powers and it is governed under its Articles of Association. The directors of Emmaus Preston are also the Trustees for the purpose of Charity law. In the event of the company being wound up, members are required to contribute an amount not exceeding £1.
Induction and training of new trustees
Each new Trustee is briefed about the Community, their legal responsibilities and ethical responsibilities and an induction programme is in place which includes visiting other communities and attending an Emmaus UK Federation induction day. Periodic appraisals are undertaken of trustee's skills and suitable training is offered.
Related parties
Emmaus Preston is a member of the Emmaus Federation in the UK. Emmaus UK is a federation of all the Emmaus Groups and Communities in the UK.
Emmaus Preston's Chair, a Director and the Community manager participate in Federation peer group meetings where best practice is shared. Emmaus Preston receives support from the Federation staff on recruitment, training, publicity, policy development, best practice and fund raising.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
The trustees' report was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Emmaus Preston (the charity) for the year ended 30 June 2024.
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act). In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
Since the charity’s gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of ICAEW, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
Emmaus Preston is a private company limited by guarantee incorporated in England and Wales. The registered office is The Birches, 165 Ribbleton Lane, Preston, Lancashire, PR1 5ST, United Kingdom.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.
At each reporting end date, the charity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Stocks are stated at the lower of cost and net realisable value.
Stocks are comprised of bought in goods. Donated goods are held at nil value.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity only has financial assets (debtors, cash and bank balances) and liabilities (creditors and accruals) of a kind that qualify as basic financial instruments. They are initially recognised at transaction value and subsequently measured at their settlement value.
The charity is exempt from corporation tax on its charitable activities.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Property, plant and equipment are depreciated over their useful economic lives to their estimated residual values. Both the estimated useful life and the residual value are reviewed at least at each financial period end.
Grants
Unrestricted funds
Unrestricted funds
Emmaus Community - Rents and housing benefits received
Shop and other sundry income
Furnishing scheme
Operating costs
Bad debts
Companion housekeeping and sundries
Companion allowances
Companion move on funds
Maintenance and utility costs
Recruitment expenses
Other overheads
Friends of Fishwick & St Matthews costs
Free Street costs
Depreciation
Loss on disposal of tangible fixed assets
Included within governance costs are indepedent examiner fees of £5,000. In the previous year, governance costs of £8,726 related to auditors remuneration.
The average monthly number of employees during the year was:
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
Preston Property - This relates to the purchase and development of The Birches property which was used to create an Emmaus community in Preston.
Burnley Property - This relates to the Burnley Emmaus House property which was used to create the Emmaus Community in Burnley.
Free Streets - This relates to the homeless outreach project in Burnley.
Rochdale Store - This relates to utility and repairs costs in Rochdale.
Securing premises - This designated fund represents the amount set aside for securing future retail & commercial premises for trade.
Grants received from the Emmaus UK Solidarity Fund between 2001 and 2021 totalled £295,000. These would become repayable in the event that Emmaus Preston ceased to be a member of the Emmaus UK Federation to the extent that donations to Emmaus UK Federation did not equal this sum.
On 30 April 2022 Emmaus Preston and Emmaus Burnley merged. The contingent liability from Burnley of £145,000 was added to the contingent liability of Emmaus Preston, along with the £224,000 loan from Emmaus UK to Burnley.
The total contingent liability in Emmaus Preston now stands at £664,000 (2023: £664,000).
There were no disclosable related party transactions during the year (2023 - none).
The charity had no debt during the year.