Financial Summary

Financial foreword

Despite sector fragility, we delivered a healthy improvement in net operating cash generation in 2024–25 and made key strategic investments to help secure Imperial’s long-term future.

Imperial’s mission is clear – to maximise our potential as a force for good in the world through our excellence in research and education in science, engineering, medicine and business. This requires continued investment in the key drivers of our success – our outstanding community, facilities and digital infrastructure.

To ensure we continue to attract the world’s best academic staff and students far into the future and have the critical mass needed to deliver our academic mission, we need to provide an environment in which their research and education will thrive. This requires a continual judgement on the balance between short and long-term investment; we cannot afford to neglect either.

Although our finances remain sound, the financial margins we operate on are relatively low. We are identifying ways of improving these by targeting growth in certain areas and improving the effectiveness and efficiency of the services supporting our academic mission.

Our Science for Humanity strategy – now in its first full year of implementation – sets out plans for the development of a thriving ecosystem of innovation assets in West London, with Imperial the engine of the growth. We seized an opportunity early in the year to add to the land we already own at Old Oak through a £116 million investment in a 9.5 acre site. We first developed student accommodation on a neighbouring site in 2015, and this new land gives us flexibility to add to that if we wish to, as well as create new lab and manufacturing spaces for innovative businesses to help us deliver our wider vision.

You can read in other sections more about the development of the first four Imperial Global hubs, which are already having an impact. We are excited by their growing potential, helping to enrich our relationships and broaden our horizons, and allowing more prospective students and potential partners to see what Imperial has to offer.

In last year’s Foreword I referred to there being room for improvement in the way we use our space. During the year we moved around 1,200 of our Professional Services staff from South Kensington to White City into a modern space designed for collaborative working, helping to create new synergies, and enabling us to reconfigure the old office space to provide more high-quality teaching space – including three additional lecture theatres for use in the 2025–26 academic year. It is a win-win, fully aligned with our sustainability ambition of making best use of what we have.

Turning to the key financials, the net operating cash generation of £131 million was a £50 million improvement over the prior year. This was a very good result in a difficult operating environment for the higher education sector in the UK in general. The results were underpinned by lower utilities costs, down by £28 million, and boosted by accelerated commercial rental income receipts. In the first instance we need to ensure we cover the costs of running the university from the operating cash we receive. Staff costs represent 55% of total expenditure and increased by £68 million last year.

Not all the net operating cash is available for discretionary use. Some of this cash has been received for specific purposes, such as research projects or philanthropic donations, for which associated expenditure will be incurred later. We also need to use this cash to meet the interest payments and repayments of principal due on our borrowing. Then we can see what is available to invest in our infrastructure and equipment. We are not delaying essential work on our existing estate for financial reasons, but even with the improved level of net cash generation we are still having to rigorously prioritise the plans we have to enhance our current facilities and keep them at the standard our students and staff expect.

We have spent a lot of the last year planning for the next phase of development, including new academic facilities at our White City Deep Tech Campus, the best way of delivering our carbon net zero ambition, and how we improve student and staff experiences at all our campuses. This time last year, we would have thought we would be further ahead with that planning by now. The amounts of money are large though and we have to be sure we make the right choices and deliver excellent value for money.

We will need sources of funding other than internally generated cash for larger developments. This will involve a mix of borrowing and sales of assets that we are not using for our research work or to deliver teaching. The ratio of each will depend on external market factors at the time we are ready to proceed.

We hope to see philanthropy play an even greater part in our funding too and it was great to see the significant growth in philanthropic income last year, from £36 million to £75 million. We have a growing list of major academic projects aiming to deliver the impact that is central to our Science for Humanity strategy. However, the pace at which we can start these will depend increasingly on the generosity of our donors.

Given all the activity this year with major land acquisitions, asset disposals, and high cash flow volatility, I am delighted that we ended the year with around the same level of cash as at the start, without any additional borrowing. However, as we look ahead, we see continued pressure from inflation, growing risks to our income sources and a difficult economic environment. It is our responsibility to take steps now to secure our continued success and ensure we maintain the critical mass to deliver our academic ambition by growing in targeted areas.

We would not be able to face any of these challenges with confidence without a sound financial underpinning. After another successful year, the latter remains intact.

Dr Tony Lawrence
Chief Financial Officer

Five-year consolidated summary of key statistics

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Overview