Group underlying results /
| £m | 2011 | 2010 | Change % |
Constant currency % |
|---|---|---|---|---|
| Turnover | 11,854.7 | 10,047.4 | 18.0 | 17.4 |
| Revenue | 1,135.0 | 941.0 | 20.6 | 19.6 |
| Gross profit | 1,107.6 | 916.7 | 20.8 | 20.1 |
| Operating expenses | (910.2) | (765.6) | (18.9) | (18.2) |
| Operating profit | 197.4 | 151.1 | 30.6 | 29.4 |
| Associates | 4.0 | 4.0 | – | (2.4) |
| Profit before interest and tax | 201.4 | 155.1 | 29.9 | 28.6 |
| Net financial items | (39.6) | (32.8) | (20.7) | (20.7) |
| Profit before tax | 161.8 | 122.3 | 32.3 | 30.7 |
| Diluted eps | 10.1p | 7.8p | 29.5 | 27.8 |
| Pro forma diluted eps* | 10.7p | 8.6p | 24.4 | 23.0 |
| Operating margin | 17.4% | 16.1% | 130 bps | 130 bps |
- *
- Incorporates a full year’s impact on the diluted number of shares in issue of the share consolidation completed in the fourth quarter of 2011
Throughout this review, the Group's underlying results are presented on a Retained Group basis, excluding Synovate, in both years to facilitate more meaningful comparison. The Retained Group comprises Aegis Media, Aztec and the Corporate centre. The impact of changes in foreign currency exchange rates on year-on-year performance is adjusted for in the constant currency percentage variances shown throughout this report.
Financial headlines /
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- Revenue growth of 20.6%, or 19.6% at constant currency, to £1,135.0m (2010: £941.0m), driven by improved performances across our businesses and supported by acquisitions
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- Underlying operating profit increased 30.6%, or 29.4% at constant currency, to £197.4m (2010: £151.1m) and underlying pre-tax profit increased 32.3%, or 30.7% at constant currency, to £161.8m (2010: £122.3m), due to the Retained Group’s improved performance during the year, a meaningful contribution from acquisitions made in 2011 and the full year effect of the Mitchell acquisition, made towards the end of 2010
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- Group margin improved 130 basis points at both reported rates and at constant currency, to 17.4% (2010: 16.1%)
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- Pro forma diluted eps increased by 24.4% at reported rates, and 23.0% at constant currency, to 10.7p (2010: 8.6p), ahead of the Total Group eps of 10.1p reported in 2010
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- Net debt fell to £128.4m at the end of 2011, from £393.3m at the end of the first half, mainly due to the receipt of cash proceeds from the Synovate sale in fourth quarter of 2011
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- Covenant positions remain comfortable, with undrawn available facilities of £450.0m at end of 2011.
Currency /
The average exchange rates in the year saw sterling strengthen against the US dollar and weaken against the euro. The US dollar average rate for 2011 was £1:$1.6039 (2010 was £1:$1.5457) and the euro average rate was £1:€1.1525 (2010 was £1:€1.1663). On this basis the average US dollar rate weakened versus sterling by 3.6% and the euro strengthened versus sterling by 1.2%. Currency movements in other markets offset this effect so that reported results reflect a positive currency impact of 0.8% on reported revenue.
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