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CGMA Management Level Case Study > Pre seen/ Industry Analysis > Flashcards

Pre seen/ Industry Analysis Flashcards

Pre seen / industry revision

1
Q

Describe FLATTHALLS revenue ?

A

735 million in 2023, up 15.6% from 636 million in 2022.

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2
Q

What happened to FLATHALL Groups direct costs in 2023

A

Grew by 34%. Reason not clear but possible reasons could be high material inflation along with supporting revenue growth. (However, revenues only grew by 15.6%)

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3
Q

What happened to FLATTHALL’s operating expenses in 2023 ?

A

FLATHALL managed to reduce operating expenses by 38%, leading to EBIT growth, reason unclear.

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4
Q

What happened to FLATHALL’s profit for the year?

A

FLATTHALL managed to see growth of 19.5% and an increase in net margin by 3.3%

FLATTHALL Groups management were able to reduce operating expenses to reduce the impact of increased direct costs. DUVETT where unable to do the same, this is only 1 KPI however, staff turnover would be interesting to compare.

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5
Q

Describe FLATTHALL’s financial position?

A

Leverage at 27.6 % in 2023, up 17.4% ? from 23.5% in 2022.
Additional 0.6m on loan balance assumed to fund construction works.
Interest cover is strong at 2.5 times
Large amount of PPE relative to debt indicating good security for future funding.
PPE to long term debt ratio of 28%
Positive NAV growth of 8.54% having also issued annual dividend.
Div payout ratio of 37% indicating plenty of retained earnings for future investment
Strong Div cover of 2.7
27million cash position

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6
Q

What is FLATTHALL Groups ROCE

A

5.53%, up from 4.90% in 2022

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7
Q

What is FLATTHALL Groups Div payout ratio and Div cover

A

37% payout ratio
2.72% Div cover

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8
Q

What is FLATTALLs current liquidity position in reference to current ratio / interest cover

A

0.43 current ratio
0.17 cash ratio
2.5% Interest cover

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9
Q

What is FLATTHALL Groups current cash position / NAV

A

Cash - 27.3 million
NAV - 10301 million with net asset growth of 8.54% from 2022

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10
Q

Industry KPI’s ?

A

Accounting return
EPRA NTA per share
Occupancy rates
Loan to value ratio (rather than D/E)

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11
Q

Describe FLATHALL’s Gross margin ?

A

Fell 2% from 86% to 84%

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12
Q

Describe FLATHALL’s Operating Margin?

A

Grew 4% to 76% up from 72% last year

Due to operating costs decreasing 38%?

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13
Q

Describe FLATTHALL’s working capital position?

A

Current and quick ratio’s of less < 1 doesn’t show the true picture due to timings and frequency of income and large construction work. Ie small amount of rental invoices due at month end compared with large construction bills.

The working capital cycle is overall negative indicating good liquidity. check working capital cycle ?

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14
Q

Flathall strategy

A

Strategy is what keeps the business model relevent to the current ecosystem.
That’s the connection
CGMA business model framework integrates strategic and operating models

The businesses model should be able to respond to changes in the ecosystem?

Examples for Flathall?

Room timeshare model
Increased regulation
Student mental health ?
Society .. LGBTQ?
Travel habits inline with green/ sustainability targets .. public transport
Tenant law, leasehold reform etc ..
accommodation build targets & supply / demand equilibrium
Advanced technology…. App development for operations
Student demand … cinemas / deliveroos etc / gyms

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15
Q

What is Flathall’s mission/ vision statement ?

A

A commitment to quality enables Flathall to maintain a strong brand that attracts students and enables the company to develop relationships with academic institutions.

Flathall aims to grow steadily through the acquisition of new buildings that will enable it to remain the market leader in PBSA in Towland.

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16
Q

Approximately, how many home country students still live in parental homes ?

A

840,000 = 2.1m *.40

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17
Q

What percentage of the PBSA market do FLATTHALL currently house?

A

78,000/ 297,600 = 26%

(PBSA = 16% of total market)

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18
Q

How many students currently occupy PBSA in TOWLAND ?

A

2.1 - 840,000 = 1.26m, + .6m *.16 = 297,600

Circa 300,000

19
Q

How many students are there in the private rented sector (HMO,s)?

A

1.86m * .51% = 948,600

Circa 950,000

20
Q

How many students currently occupy halls of residents ?

A

1.86m *.33% = 613,800

Circa 614,000

21
Q

How many students do leading competitor Duvet house?

A

59,000

22
Q

How old is Flatthall ?

A

Founded 30 years ago

23
Q

Describe DUVETT Groups revenue ?

A

Grew 19%

547 million in 2023, up 19.06% from 459 million in 2022

24
Q

How many students can Flatthall
properties accommodate and how
many students needed
accommodation in the 2022-23
year?

A

78k

&

1.86 million

25
Q

Which team at Flatthall has most
responsibility for ensuring
buildings adhere to safety
regulations?

A

Property portfolio management team

26
Q

Which head office teams deal with
the concierges?

A

Concierges & cleaners report to, and are supervised by operations. However, they work closely with Customer service as it’s here they report more serious issues

27
Q

Who is responsible for the Flatthall
website?

A

IT department

CS responsible for content

No marketing team

28
Q

What opportunities exist for Flathall?

A
  • New market developments (luxury rentals, overseas market, postgrad rentals.
  • Development in new technology (smart heating etc) / tenant app
  • Development in building materials (EPC)
  • Expansion via acquisition, construction firm
  • Scope for increased rental ie summer
  • Scope for multifunction accommodation / Cinema, Gyms, supermarkets
  • Improvements in
    Risk management
    governance
    change management
    decision making techniques
    budgeting / cost control
29
Q

What are key threats to flathall?

A

failure to control rising costs
failing institutions
reliance on economic stability for revenue
increased online learning
change in preference / en-suites etc
Security / data breaches

30
Q

How could Flathall improve ESG?

A

Partner with a leading consultant that specialises in a sustainability strategy service.

31
Q

How could Flathall improve yields and optimise voids?

A

Via a flex rental strategy due to evolving property management software, allowing them to adjust to high and low periods of demand ie summer months.. would need a change in planning law however.

Or offer short term rentals for other students to holiday?

32
Q

How could Flathall mitigate rising costs of utilities and improve energy use?

A

Via centralised heating controls or a building energy management system designed specifically for student accommodation.

It’s important not to restrict the heat available but to avoid unnecessary energy consumption.

33
Q

How might Flathall improve the efficiency of buildings?

A

via sustainability features including triple glazed windows, high levels of insulation, air tight buildings and a mechanical ventilation system. As a fossil fuel-free development, any heating required will be generated by air-source heat pumps and electricity from solar panels.

Partner with low energy accreditor (passivhaus)

34
Q

How might Flathall improve data security?

A

PCI DSS

Payment card industry data security standard

35
Q

How could Flathall mitigate cyber security risk?

A
  • outsourcing to cyber security firm
  • Increased budget
  • Increased training via professional development
  • Warnings of scams (phishing/ deepfakes)
36
Q

What things could impact student design preferences?

A

socio demographic determinants such as

income
age
education
nationality

37
Q

What amenities does recent research suggest students prefer?

A

Wifi
Laundry
utilities
furniture
parking
study facilities
dishwasher

38
Q

What partnership oppertunities exist for Flathall?

A

Unlimited in the sense that anything that applies to life

Mental health support
Wellbeing
Fitness
Groceries
Social events
Transport perks or initiatives
hygiene good practice / products
Food services .. takeways
Meal prep suppliers

39
Q

Whose heads operations for Flathall?

A

Dai Linlin

40
Q

Who do you report to ?

A

Susanna - senior finance manager

41
Q

Who is Flathall’s finance director ?

A

Marina Delgado

42
Q

Who Is head of customer service at Flathall ?

A

Hamid Abbasi

43
Q

Who is the property portfolio director ?

A

Taisha Abbot

CGMA Management Level Case Study (8 decks)

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