As Peckham Levels approaches its second birthday, we’re publishing our first set of accounts since we officially opened the doors to the project.
With our commitment to transparency, we thought we’d write a blog post to explain the technical jargon and let you know how our first years trading went. You can access the accounts here.
The accounts cover our first 13th months of operation, from 1st December 2017 to 31st December 2018. Overall they show our first year performed as expected, with the project generating £1,599,000 in revenue. It cost us £1,104,000 to operate the project over that period, giving an operating profit of £495,000 (all figures are rounded to the nearest £1,000).
From the operating profit, we then have to take into account the cost of building & funding the space. We spread the cost of building the project over its lifetime, and account for £276,000 of depreciation costs in this period. We also had to borrow money for the build and pay interest on this until we pay it back. This cost the project a further £441,000 in finance costs over the period on the £4.66M we borrowed to fund the project.
All this means, that when we take the depreciation and finance costs from the operating profit, we made a net loss of £223,000… but that’s OK, as we weren’t expecting to make a net-profit for the first few years.
Our main source of income was earned through the rents and operating charge the local enterprises pay for their space in the project, generating £1,528,000 in the period. In addition, our food, drink and retail members pay a revenue share when they perform well, with £13,000 generated in revenue share and a further £27,000 through member services and other income.
Additional revenues come from our events, with £31,000 being generated over the period. Alongside our commercial events, the project provides free event space for local community groups to use. Over 100 hours of free space were provided in the last quarter supporting groups such as Peckham platform, Leaders of tomorrow and Tempo Run Club.
Our operating costs for the period totalled £1,104,000. £528,000 was spent on venue operations including security, cleaning, utilities and waste and where possible we use independent local suppliers such as Unisec for our security and Jane Jefferson for our cleaning, keeping spend in the local area.
We spent a further £97,000 on marketing, placemaking and event costs, driving footfall to the site. This resulted in our food and drinks member enterprises generating £3,895,000.
A further £302,000 was spent on staffing for the project over the period, with the site employing 7 members of full time staff on average. Along with our contract staff and our member enterprises, Peckham Levels now employs over 240 people, of which 134 jobs are full-time positions, creating meaningful jobs for local people.
Additional costs incurred totalled £177,000 which include our office overhead and commercial costs of £165,000 primarily driven by business rates, insurance, legal and professional fees, in addition to £12,000 of membership events.
Since opening in December 2017, we’re incredibly proud of what we’ve achieved so far.
We currently support over 80 member businesses, with a further 51 businesses based in The Ramp co-working space. 70% of our members come from Southwark, 41.3% reside in Peckham, 45% are led by women and 38% are led by BAME members. Our aim has been to keep our pricing as affordable as possible, providing space to local enterprises who wouldn’t otherwise be able to afford the premises they need to grow. Peckham Levels provides 20% of studios with heavily subsidised rent and space to 12 member enterprises at 35% of market rates, ensuring Southwark enterprises at the start of their journey, such as InXanitXy and Evah Kale Jewellery, or those providing tangible social impact, such as Movement Factory receive the additional support they need.
As we look forward to 2020, there is still much that Peckham Levels is working on in order to fulfil its vision to improve opportunities for local people in and around Peckham. We’ve recently welcomed new members to the project including Mentivity offering 1-2-1 mental health mentoring for Southwark young people, and we continue to expand our social Impact through increasing the number of supported spaces, most recently working with the Roundhouse to bring 5 new young entrepreneurs from Southwark into the project with affordable space and focused business support. We also recently launched Peckham’s first youth market with the Make Shift Foundation in August supporting, 16 young people from Southwark with their first trading experience. The Foundation works with 16-25 year olds in Peckham, providing access to employment and enterprise opportunities.
As part of its agreement with Southwark Council, Peckham Levels is on track to deliver 10% of net profits into a community fund within the five years initially predicted. In the meantime, above the commitments of its bid Make, Shift has so far funded over £50,000 into resourcing the social action programmes at Peckham Levels.
We look forward to an exciting year ahead and continuing to help local people create thriving enterprises.