DOROTHY House achieved a solid financial performance in 2003/04, mainly due to good legacy income. The statement of financial activities shows an operating surplus of £842,306. After adding realised and unrealised gains of £71,054 on the value of investments there was an overall increase in funds of £913.360 for the year.

Total income for the year, excluding investment gains, increased by more than 18 per cent to £3,933,446. The increase in income from NHS contracts and grants included £362,000 as part of an additional £50 million allocated nationally by the Government for specialist palliative care. It should be noted that £772,871 of the total NHS contracts and grants income figure of £1,421,287 relates to expenditure which the NHS fully funded. This is the cost of services that the NHS has specifically asked Dorothy House to provide. Increased competition for donations has led to a reduction of 9 per cent in voluntary donations. This was the offset by an increase of more than 11 per cent in income from legacies, comprising amounts received during the year, augmented by an increase in the accrual for amounts due. The charity is conscious, however, that this income stream is volatile and continues to be unpredictable. The Dorothy House shops continue to perform well, with a near 25 per cent rise in net profit. Investment income rose to £115,814, an increase of 30 per cent.

 Total expenditure increased by 24 per cent to £3,091,140. Expenditure on patient services rose to £2,110,326, reflecting the local expansion of specialist palliative care services funded by the Government's national iniative. Fundraising and publicity costs represent 12.3 per cent of the total income raised from voluntary donations and legacies. The cost of management and administration, at £532,047, accounted for 17.2 per cent of total expenditure. The exceptional project costs of £63,995 relate to fees for the proposed new buildproject to extend the Winsley site.

During the year, balance sheet net assets
increased to £6,138,774. Tangible fixed assets, at £3,325,927, represent 54 per cent of net assets. A formal valuation of the charity's properties at 31 March 2004 indicated a surplus over book cost of £1,158,000. This uplift in value has not been incorporated in the financial statements. Investments, which are made within the confines of an investment policy designed to safeguard the charity's resources, totalled £2,454,070 at the year end. The capital gain on investments of £71,054 was made during another year of volatile, but improving, stock market conditions.

A key aim of the charity continues to be the
maintenance of adequate cash and investment reserves, particularly during the period of the new build project.