Highlights
Resilient operating profit performance due to firm cost control and selective investment approach
- Second half operating profit 8% higher than the first half
UK & Ireland returned to profit; market stable
- £12.1 million improvement in operating profit due to successful delivery of cost reduction programme
- UK returned to year-on-year net fee growth in the second half
Strong 10% net fee growth in Continental Europe & Rest of World where markets remained mixed
- Germany up 13%, France up 1%, Canada up 31% and Russia up 40%
- 13 countries delivered net fee growth of over 10%, 7 countries saw a decline in net fees
Asia Pacific net fees decreased 13%; Australia tough, market conditions in Asia subdued
- Australia down 16%, with material step down in Resources & Mining activity during the year
- Australia broadly sequentially stable in the second half
- Asia up 4% with improved rates of fee growth through the second half
Consultant headcount flat year-on-year reflecting our selective investment approach
Good cash performance, with 109% conversion of operating profit into operating cash flow
Basic EPS down 6%, reflecting lower operating profit, higher net finance charge and higher effective tax rate
Capital structure and dividend
The Board's priorities for our free cash flow are to fund the Group's investment and development, maintain a strong balance sheet and deliver a sustainable dividend at a level which is both affordable and appropriate. We target a dividend cover range of 2.0x to 3.0x(3) earnings and in line with this policy, the Board proposes to pay an unchanged final dividend of 1.67p per share (2012: 1.67p), resulting in a total dividend for the full year of 2.50p per share (2012: 2.50p). Our dividend cover is 2.1x for the year to June 2013.
The Board remains committed to paying a sustainable and progressive dividend. It is our intention to grow the dividend when dividend cover sustainably reaches c.2.5x.
The proposed final dividend payment date will be 15 November 2013 and the final dividend will be paid to shareholders on the register at close of business on 11 October 2013.
Commenting on these results Alistair Cox, Chief Executive, said:
"We have delivered a resilient financial performance against a backdrop of fragile market conditions. This highlights the strength of our diverse business model and our ability to react quickly to fast-changing markets. Our unrivalled sector coverage, mix of contract type and market-leading positions in both mature and structural growth markets set us apart in today's market.
Our focus on controlling costs and driving productivity improvements has returned the UK business to profit. We have invested to drive growth in stronger markets such as Germany and Canada, and we have reacted quickly to reduce costs in more challenging areas, such as Australia, to best defend our financial performance.
Looking ahead to 2014 we expect overall market conditions to remain mixed. While some markets are likely to remain challenging, there are also clear opportunities for growth. We will continue to react quickly to changing market conditions, investing in stronger markets while reducing costs where market conditions or outlook are more challenging. Our focus remains on ensuring the Group is positioned for long-term growth whilst driving our profits along the way."
