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Financial Performance The group has performed well in 2008, with revenue increased substantially and margin maintained. Profit before interest, taxation, amortisation and exceptional items increased by 23%* to £416.4m, whilst turnover was up 22%* to £5,942.9m. Organic growth has increased to 9.5% and group profit margin is 7%. Adjusted earnings per share increased by 26% to 16.7p.
* To show a fair comparison, constant exchange rates are assumed
Developments During the year we have taken a number of strategically important steps. We have made some significant acquisitions, including GSL, ArmorGroup, Touchcom, MJM Investigations, RONCO Consulting and the Rock Steady Group. As a result we have been able to develop the breadth of our offering and move a greater proportion of our business into longer term and higher value services. We have also finalised the disposal of our French and German security services businesses. In May we issued 127m new shares, placing them with institutional investors and generating net proceeds of £276m as a means of maintaining sound financial ratios and helping to fund strategic acquisitions.
Dividend The directors recommend a final dividend of 3.68p or DKK 0.3052 per share, payable on 5 June 2009, which, with the interim dividend of 2.75p or DKK 0.2572 per share paid on 31 October 2008, makes a total dividend of 6.43p or DKK 0.5624 per share for the year ended 31 December 2008. This is an increase of 30% over the total dividend for 2007 and the culmination of the board’s stated aim to reduce the company’s target divided cover to two and a half times normalised earnings. For the future, the board expects to increase dividend broadly in line with normalised earnings.
The Board I am pleased to be able to report that the board continues to perform well. I can say this with some degree of certainty as we engaged consultants who undertook a very thorough review of the performance of the board as a whole, its members and of each of its committees. My own experience of working with this board endorses the conclusions of the reports we have received. The board maintains an excellent blend of experience and skills. We are not complacent however and realise the huge importance of rigorous standards where corporate governance is concerned. We will therefore continue to monitor the way the board functions and to place great emphasis on the controls in operation throughout the group.
Sir Malcolm Williamson retired from our board in May of course and we have announced that, following this year’s AGM, Thorleif Krarup will stand down as chairman of the Audit Committee, with Mark Seligman taking his place.
Our Staff I mentioned that we are living in uncertain times. This presents our group with many opportunities, but it also results in many of our employees (now totalling in excess of 585,000 around the world) carrying out their work in what can sometimes be the most difficult of circumstances. This was brought home to us very hard by the deaths of two of our colleagues during the terrorist attacks on the hotel in Mumbai where they were providing services. I would therefore like to pay tribute not only to them, but also to all our employees who face danger and sometimes risk injury because of the violent world in which we exist.
We have also seen that our employees can have a positive impact on those around them – and not just as a result of the services the group provides. In our Corporate Responsibility Report you will see just a few examples of the tremendous efforts being made by some of our staff and the effects they are having on the environment in which they live.
The importance to our group of its employees cannot be overstated. It is because we recognise our staff as the group’s greatest asset that we have forged an alliance with UNI, the global trades union organisation, by entering into an Ethical Employment Partnership – and by reaching a recognition agreement with the SEIU in the United States. We are determined to do all we can to raise standards for our employees and, we hope, for all who work in our industry.
The Future The economic future is especially difficult to predict. So many businesses seem to be suffering in the current economic climate and it would be foolish to assume that we can be completely immune from the effects of what appears to be a global slow-down. I believe however that the nature of our businesses, our broad geographic spread and our strategy of developing closer, longer-term, more valued relationships with our customers will stand us in good stead for the future. I believe the group is well placed to meet the challenges ahead.
Alf Duch-Pedersen
Chairman
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