CFO's report
George Kapitelli FCPA
CFO
CPA Australia’s focus remains on ensuring a financially sustainable professional membership organisation, so that we can continue to invest to improve member outcomes. This requires reasonable profits and a strong balance sheet to support the continued investment in our operations, processes, and systems.
This sustainability enables CPA Australia to provide high quality services and positive outcomes and value for members and, ultimately supports the achievement of our goals and priorities established in our 2022 to 2027 strategy.
As CFO, it is my privilege to share my insights into our financial performance and strategic initiatives.
I am pleased to present CPA Australia’s financial results for 2024. I believe that we can again look back on a successful year where we improved our overall financial position. A high-level overview of results is provided in Table 1 and full details can be found in the Financial statements and associated notes on pages 116 to 160 of the full report.
Financial highlights
The below comments are generally taken from the overview of financial results on page 116 of the full report.
Revenue growth
We have seen a positive $8.5 million year-on-year gain in total revenue growth. This has resulted from pricing, strong membership growth, professional development with a successful in-person CPA Congress held in Canberra in October 2024 and increased member events along with a renewed focus on remaining revenue streams.
Cost focus
We continued to maintain a strong focus on our cost base flowing from the structural operating cost reductions in 2023. However, it is worth noting that some expense categories have experienced year-on-year increases and are reflective of additional activities that provide opportunities for members to connect with each other, along with support for our "CPA – Three Letters to Limitless" brand campaign.
Profitability
The combined focus on revenue growth and targeted cost management has improved financial performance:
- a net operating surplus of $11.0 million (after depreciation and finance costs), of which $10.4 million was invested in strategic initiatives focused on creating a long-term sustainable business model to deliver on the 2022 to 27 strategy and deliver greater value and services to members
- total comprehensive net income has improved from $0.8 million in 2023 to a surplus of $8.1 million in 2024 due to strong investment fund valuation gains and foreign exchange translation gains.
Strategic initiatives
During 2024, CPA Australia broadened its investment plans to ensure a continued member and education focus. Key priorities included:
- commencement of the Learning Evolution Program
- commencement of the Member Mobile app development
- the "CPA – Three Letters to Limitless" campaign to strengthen the recognition of members and CPA Australia
- further development of Responsive Membership Pathways
- investing in our cyber security program.
Financial sustainability
The 2024 operating surplus before strategic project expenditure of $11.0 million is a positive result that enabled investment in strategic initiatives. When combined with strong cash balances of $88.1 million and an investment fund of $93.1 million, this confirms that CPA Australia has a strong base to support continued levels of significant future strategic investment spend.
Table 1: overview of financial results
| 2024 ($'000s) |
2023 ($'000s) |
Variance ($'000s) |
|
|---|---|---|---|
| Total revenue | 186,753 | 178,235 | 8,518 |
| Total expenses (including depreciation and finance costs) | (175,712) | (168,791) | (6,921) |
| Net surplus/(deficit) excluding strategic project investment | 11,041 | 9,444 | 1,597 |
| Strategic project expenditure | (10,402) | (14,898) | 4,496 |
| Net surplus/(deficit) before income tax, FX and investment-mark to market | 639 | (5,454) | 6,093 |
| Other income (income tax, FX, investment-mark to market) | 7,426 | 6,278 | 1,148 |
| Total comprehensive Income/(loss) for the year | 8,065 | 824 | 7,241 |
Geographical performance
Table 2 (Financial performance by location) highlights the importance of all global regions to the overall sustainability of CPA Australia. In 2024, the surplus before tax improved for most regions.
The 2024 total expenses reflects both direct in market costs for each region such as local staff, events and facility leasing costs as well as an allocation of central corporate costs allocated to each region on an activity-based approach.
Each region generates a reasonable direct margin (revenue less direct cost) that makes a positive contribution to central corporate costs and contributes to overall CPA Australia sustainability.
Table 2: financial performance by location 1
| Location | 2024 total revenue ($'000s) | 2024 total expenses ($'000s) 2 |
2024 surplus/deficit before tax ($'000) | 2023 surplus/deficit before tax ($'000) |
|---|---|---|---|---|
| Australia | 124,563 | 112,089 | 12,474 | 6,401 |
| New Zealand | 3,997 | 4,174 | (177) | (467) |
| Europe | 1,509 | 1,892 | (383) | (746) |
| ASEAN group 3 | 19,782 | 24,138 | (4,356) | (3,761) |
| Greater China (including Hong Kong SAR) | 29,707 | 29,425 | 282 | (960) |
| Other overseas | 7,195 | 7,103 | 92 | (113) |
| Total 4 | 186,753 | 178,821 | 7,932 | 354 |
1 In 2024, we refined the overall allocation methodology, resulting in an update for the 2023 financial results. Geographical financial reporting for 2023 and 2024 is now on the same allocation basis.
2 Total expenses includes operating expenses, depreciation and finance costs, strategic project expenditure, FX and revaluation of investments, in line with the Overview of financial results on page 116.
3 ASEAN group consists of Indonesia, Malaysia, Singapore and Vietnam.
4 Due to rounding totals may not equal.
The team's focus is to ensure that CPA Australia remains financially sustainable while we continue to invest to service members and continually improve our value proposition.
I thank the CPA Australia team for their efforts in creating this improved financial position. I also offer my sincere thanks to CPA Australia’s members and hope that you continue to be proud of our designation.