Annual Report 2022
The impact of COVID-19 on the financial performance for 2021 was the inverse to that assumed at the end of 2020. The assumption had been that 2021 would see a full return to pre-COVID levels of business and events. However, the reality was much different, with events being either cancelled or held virtually, outreach and market engagement activities being severely curtailed, and other areas of business hampered by the inability to travel or engage.
Whilst revenue is up on 2020 levels, the factors set out above mean that the return for the year was down on what was originally planned. Much of the Executive effort has been focused upon negotiations to roll over event venue contracts to mitigate against substantial loss. The success of these negotiations was the principal driver behind overall expenditure being £1.5M down on that originally planned. PMPL continued to have a good year, with revenue up by close to £215K on 2020 returns, and its reserves are now contributing to the overall financial resilience of LBMA.
In 2021, LBMA began the process of investing in new offices! Over the past three years, the evolution of the long-term strategic plan has required LBMA to resource new workstreams and business functions to support key Market Development initiatives and standards. Put simply, the old offices no longer had the space to accommodate the Executive or to provide the meeting space capable of supporting its business needs across the next five to ten years. The project has been the subject of close scrutiny by the Finance Committee and the Board. As a result, LBMA now has offices that are fit for purpose, and capable of hosting small events and offering its Members temporary meeting space in London should they require it.
2022 has also brought with it many unforeseen challenges and new financial risks. The impact of sanctions has understandably had an adverse effect upon membership and GDL Refiner accreditation numbers, and LBMA was facing a potential revenue shortfall of circa £250K in 2023. This, coupled with the energy crisis and surging inflation, is naturally a cause for concern in 2023 and beyond. However, the strength of LBMA reserves, together with judicious contingency planning, mean that LBMA is in a strong position to overcome these challenges. Whilst continuing to resource its strategic plan, LBMA is looking to take balanced decisions, particularly in its approach to setting fees for 2023, with the aim of softening the impact on its Members, Refiners and stakeholders in plans to be announced shortly.