Delivering shareholder value
Aim: to create sustainable growth and deliver healthy investor
returns. We maintain a strong structure and controls, focus on clear financial KPIs
and apply consistent, thorough risk management.See
Controlling and measuring growth.
After investing in the business, we use surplus cash to deliver further shareholder
value in 3 main ways: through acquisitions, dividends and share buybacks.
Progress: Including the proposed 2009 final dividend, £929m
has been returned to shareholders in respect of the last 5 years – £367m
in ordinary dividends, £155m in special dividends and £407m through
share buybacks.
I. Funding acquisitions to add value
In 2009, we spent £177.5m on 12 acquisitions. There is a good volume of opportunities
valued at attractive levels and we expect this to continue through 2010. We will
continue to be selective and disciplined when assessing opportunities.See
Aquisitions - stimulating growth.
II. Distribution to shareholders through dividends
The Group dividend strategy is to return surplus cash to shareholders through a
combination of progressive dividends and, when appropriate, capital returns.
A key element in the creation of shareholder value is a progressive dividend policy.
Over the 5 years to 31 December 2009 we grew our dividend at a compound annual rate
of 25%. Dividend cover for 2009 remains at 2.31 times (2008: 2.31 times).
III. Share buybacks
Opportunistic share buybacks help us to maintain an efficient capital structure
and minimise our long term cost of capital. In 2009, the Group did not buy back
any shares as we have focused our capital on the flow of attractive acquisition
opportunities. We will however continue to buy back shares if opportunities arise
and market conditions allow.
|
Dividend per share
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
Interim dividend (p)
|
5.60
|
4.80
|
4.00
|
2.70
|
2.10
|
1.75
|
|
Final dividend (p)
|
11.20
|
9.60
|
8.00
|
6.30
|
4.90
|
3.60
|
|
Total ordinary dividend (p)
|
16.80
|
14.40
|
12.00
|
9.00
|
7.00
|
5.35
|
|
Special dividend (p)
|
–
|
–
|
25.00
|
–
|
–
|
–
|
|
Total dividend (p)
|
16.80
|
14.40
|
37.00
|
9.00
|
7.00
|
5.35
|
|
Dividend cover (excluding special dividend)
|
2.31x
|
2.31x
|
2.34x
|
2.57x
|
2.66x
|
2.85x
|
|
Totals
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
Interim dividend (£m)
|
34
|
29
|
25
|
17
|
14
|
12
|
|
Final dividend (£m)
|
69
|
59
|
49
|
39
|
32
|
24
|
|
Total ordinary dividend (£m)
|
103
|
88
|
74
|
56
|
46
|
35
|
|
Special dividend (£m)
|
–
|
–
|
155
|
–
|
–
|
–
|
|
Total dividend (£m)
|
103
|
88
|
74
|
56
|
46
|
35
|
|
Share buybacks
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
% of share capital authorised to repurchase
|
10
|
10
|
10
|
10
|
10
|
10
|
|
% of share capital repurchased
|
–
|
1.7
|
1.1
|
7.9
|
1.9
|
1.3
|
|
Issued share capital at year end(£m)
|
617
|
611
|
609
|
617
|
671
|
671
|
|
No. of shares repurchased (£m)
|
–
|
10.4
|
6.6
|
52.9
|
13.3
|
8.9
|
|
Average price (p)
|
–
|
659
|
665
|
465
|
375
|
315
|
|
Total cost (£m)
|
–
|
68
|
44
|
245
|
50
|
28
|
|
Shareholder returns
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
Total return to shareholders (£m)
|
103
|
156
|
273
|
301
|
96
|
63
|