This is the sixth year of the Broadwalk Services Awards to recognise outstanding achievements by quoted companies and their management teams in the broadly defined business services sectors. As usual, competition was fierce with a strong array of contenders – highlighted by the impressive short lists. The broadly defined business services sectors are one of the less well known success stories of the economy and are amongst the largest private sector employers. As the Financial Times recently commented, very successful businessmen in Europe are often only celebrities to the fund managers. However they achieve much more widespread acclaim in the US and this trend will hopefully continue to rise in Europe. These awards are another step towards raising their and the sector’s profile.
The awards have had the significant benefit of views from:
Jarrod Castle, Super sector head of business services, leisure and transport, UBS *
Vasco Litchfield, Managing Director, Lazard *
Jane Sparrow, Director Mid&Small Cap Support Services Research, Barclays *
Stuart Vincent, Managing Director, Rothschild
*Jarrod Castle (UBS), Vasco Litchfield (Lazard) and Jane Sparrow (Barclays) did not participate in discussions relating to the IPO of the year award 2013
Broadwalk Asset Management LLP
Broadwalk Asset Management was founded in 2007 by Charlie Cottam, previously an equity analyst with Panmure Gordon and Cazenove (now J.P.Morgan Cazenove). The investment team includes Mark Shepperd (32 years at UBS) and Simon Strong (over 20 years experience particularly in technology). It manages the Broadwalk Select Services Fund, Europe’s first absolute return fund to focus on the broadly defined business services sectors. The fund has risen almost 158% since its inception in June 2008, compared to the FTSE All Share which on a total return basis is up 41%.
The strategy set by CEO since 2003, Adrian Ringrose to strengthen the core UK businesses while expanding internationally is working extremely well. It has become a very significant player in the UK outsourcing arena with a future workload of £5.4bn. Significant cash has been recycled from the legacy PFI investments in a number of bolt on acquisitions in UK frontline services and the oil and gas services business in the Middle East. Large new contracts such as the BBC and the University of Sussex have also been won recently. Cash conversion has remained strong enabling the group to invest in further growth opportunities.
Shortlisted
BBA
BBA, under CEO Simon Pryce, has outperformed the overall flat to down market by driving organic growth from BBA’s market leading Flight support business Signature. This has been aided by acquisitions and expansion through new legacy product support licences, reaching $141m of committed spend this year so far. The balance sheet remains strong and there is considerable opportunity for further growth in expenditure.
Euromoney
Under Chairman Richard Ensor, Euromoney has continued to focus on organic growth, which has impressively been maintained at consistent levels through the very challenging markets of the financial crisis. Growth has been driven through investing in data, research and editorial, migrating print to online and expanding into emerging markets. The group has an excellent track record of deriving synergies from acquisitions and from widening the customer base. Tight cost control has also helped maintain high operating margins of 30%. This margin level has also been consistent despite the inevitable impact of the recession.
Hays
Hays is emerging from the downturn in good shape. CEO Alistair Cox has appointed new management in Australia which is suffering from the resources downturn. The cost cutting in the UK has been sufficiently strategic that as the market begins to recover Hays is well positioned to grow profitability. The international strategy remains robust with the German business continuing to grow strongly in its still immature staffing market. The company also recently explained the benefits of its very effective IT platform.
IAG
IAG, under CEO Willie Walsh, held firm on supplier negotiations in Spain earlier this year and combined with recovering expectations for the Spanish economy the Iberia merger is looking a lot more promising. The acquisition of the majority stake in low cost airline Vueling is also helpful in expanding into growth markets and areas of reduced capacity. British Airways is also outperforming expectations. The company recently raised its targeted 2015 earnings target and a commitment to produce returns above its Weighted Average Cost of Capital which has not been easy for legacy carriers.
Broadwalk Services CEO and executive team of the year[top]
Capita CEO Paul Pindar and executive team
Capita CEO Paul Pindar and Charlie Cottam
Paul Pindar joined Capita in 1987, and became Chief Executive in 1999. He transformed the Company into a contract winning powerhouse. He has grown segments such as justice and emergency services and health into substantial new businesses. The Company’s extensive bolt on acquisition strategy has been enormously successful, and led to the creation of further significant business lines such as asset services and customer management. Paul, together with Capita’s executive team, has steered the business through the ongoing challenging economic conditions in the UK and continued to deliver an unbroken track record of year-on-year earnings growth. Over the 10 years to 31 December 2012, Capita delivered shareholder returns of more than 200% compared to the FTSE 100 average of 113%. Paul will be succeeded in February by Andy Parker.
Shortlisted
Atkins CEO Prof Dr Uwe Krueger and executive team
Professor Krueger was appointed in mid 2011 from TPG. The recent results have really shown the success of the team’s strategy since 2011. The portfolio has been aligned to the core engineering and consulting skills, with the riskier services businesses being sold. Good growth has been generated from the focus areas of Energy and Asia Pacific, as well as a recovering UK business. Cash generation has been strong which will enable further growth organically and through acquisitions.
Berendsen CEO Peter Ventress and executive team
Berensden has continued to deliver solid returns for its shareholders. Investors have warmed to the steadily improving progress that the company has made both in its top line and in improving it margins, while its cash flow continues to be remarkably strong. CEO Peter Ventress was appointed in January 2010 from the office products distribution industry. He and his team’s strategy of moving to a business line structure, rather than geographic divisions, is showing through in better transfer of best practice and incremental margin improvement.
Howdens CEO Matthew Ingle and executive team
Howdens under CEO Matthew Ingle has continued to grow its depot network despite the very difficult retail environment. Ingle and his team’s impressive strategy has been consistent in focusing on supplying the small builder with high quality locally stocked kitchens and joinery at very competitive prices. It is on course to open a further 30 depots in 2013 bringing the total to 560. The target of 700 depots in the UK continues to look achievable.
Workspace CEO Jamie Hopkins and executive team
Since his appointment as CEO in April 2012, and aided by his able executive team, Hopkins has sharpened Workspace’s focus on maximising value from its well located portfolio of 100 properties in London. Extra effort has been deployed in its redevelopment programme to add value from planning applications which add residential space while improving its existing commercial space. In addition communication has been clearer. There has been greater emphasis on improving the customers experience and increasing the value they derive from being a Workspace customer, including the rollout of Club Workspace.
John Connolly is chairman of G4S and Amec. He joined G4S shortly after its aborted merger with ISS in 2012. Since then he has had to contend with the problems ensuing from the London Olympics contract, profit short falls, and an investigation into the company's UK Justice contract. This led to the resignation of the group's CEO. In response he has hired well regarded new CEO, Ashley Almanza, a new Finance director and several new non executives. In August the company successfully raised £350m of new equity to shore up the balance sheet. The group is now much better positioned to focus on its higher value added sectors and grow particularly in developing markets.
Shortlisted
Michael Harper, Chairman BBA
Harper joined BBA as a non executive in 2005 before becoming interim CEO in 2006. As interim CEO he focused the group on its core Aviation Services activities and oversaw the demerger of non-woven subsidiary Fiberweb. Harper appointed Simon Pryce CEO in 2007 and has overseen a number of acquisitions to bolster Signature's industry leading Fixed Base Operations network for aircraft operators. He is to be succeeded replaced by Sir Nigel Rudd.
Bob Benton, Chairman of Clarkson until August
Benton joined the board of shipbroker Clarkson in 2005 and became Chairman in August 2008 at the height of the financial crisis. The share price fell 60% in four months but despite an inevitable revenue decline, the impact was mitigated by Benton and CEO Andi Case's tight cost control. At the same time, the company continued to grow market share in its core markets and expand into related areas. It's a tribute to Benton's skill in managing a broking business with strong personalities that the shares were up over 100% during his tenure. His replacement as Chairman was Philip Green.
John Dodds, Chairman Severfield-Rowen
Dodds became Chairman in September 2011 and in January the following year assumed the role of Executive Chairman after the announcement of further material cost overruns. In February he succeeded in raising £48m via a rights issue and negotiated revised banking facilities with the company’s lenders. This returned the company to a sound financial footing. The UK business was reorganised with a 10% reduction in capacity to align the business with market conditions. In September he appointed Ian Lawson as CEO, and stepped back to non executive Chairman.
Invensys acquisition by Schneider Electric for £3.4bn in July
Invensys CEO Wayne Edmunds and
Charlie Cottam (taken in 2012)
After the commendable sale of the Rail division (Broadwalk deal of the year 2012) last year to Siemens Invensys CEO Wayne Edmunds negotiated the sale of the core business to Schneider Electric. The price was a 14% premium to the closing price and a 27% premium to the prior three month average price. The offer presented a value over 500p a share, which is a very impressive achievement when compared to a price of around 220p when Edmunds was appointed CEO in June 2009.
Shortlisted
APR Energy acquisition of GE’s power rental business for $314m in October
APR bought GE’s remaining power rental business encompassing 20 turbines and 5 ongoing contracts with 520MW of generating capacity. This increased APR’s capacity by over 30%. 80% of the purchase price was financed with APR equity, with GE taking a 16.5% stake in the company. This significantly diversified APR’s global contract and revenue base, and was earnings enhancing. It also increased APR’s exposure to energy from natural gas which is the fastest growing technology in the industry which is ideally suited to large urban contracts.
Experian acquisition of Passport Health Communications for $850m in November
This trebles Experian’s health business and makes it the US market leader covering 3,000 hospitals. Passport is a software as a service subscription business with 84% of 2014 revenues already on the books and is based on a very strong technology platform. Despite the rich acquisition multiple, with revenue and cost synergies, the deal will be immediately earnings enhancing. It is forecast to make double digit returns within Experian’s five year target.
Essentra (previously Filtrona) acquisition of Contego Healthcare for £160m in March
The deal further expands Essentra’s product offering in the faster growing pharmaceutical and healthcare markets. The price of 11.5x EBIT looks reasonable value when the opportunities for cost synergies and cross selling revenue benefits are factored in. CEO Colin Day has extensive experience of making and then integrating this type of acquisition. The transaction was funded by a c.£143m placing enabling Essentra to retain its strong balance sheet and make further bolt-on acquisitions going forward.
Kier acquisition of May Gurney in May for £297m
Kier won a bidding war against Costain for May Gurney with a bid where the equity component was 85% was financed by Kier shares. This enabled the balance sheet to remain strong with no recourse to existing Kier shareholders. The deal achieved Kier’s ambition of growing its services offering from 21% of sales to 41%. There should be multiple cross selling opportunities to the 65 local authorities the combined group serves, as well as £20m of cost synergies.
£2bn raised in October at 330p. Goldman Sachs International and UBS Limited were Joint Global Co-ordinators and Joint Bookrunners, Barclays Bank PLC was Joint Bookrunner and Sponsor, BofA Merrill Lynch was Joint Bookrunner and Investec Bank plc, Nomura International plc and RBC Europe Limited were Co-Lead Managers.
The flotation will enable Royal Mail to become more flexible and responsive in the UK’s postal market, which is arguably the most competitive in the world. Under CEO Moya Greene the company has undergone a significant transformation process and has a clear strategy built around growing the parcels business, managing the decline in letters and being customer focused. The recent interim results showed the business is trading as expected and is well poised for the crucial Christmas trading period. The flotation included 10% of the company being allocated for free to the company’s 150,000 eligible UK based employees.
Shortlisted
Fusionex,
Raised £12m in December 2012 at 150p. Panmure Gordon were Nominated Adviser.
FusionEx has been a star performer since its IPO in December last year. Its share price has more than doubled since listing, partly in anticipation of the company’s big data product, Giant. FusionEx should benefit from the anticipated strong growth rate in online analytics and the extent of the share price rise typifies how much growth stocks are in demand.
Bpost,
€812m raised in June at €14.5. J.P. Morgan, Nomura and BNP Paribas Fortis were joint global coordinators. Joint international bookrunners: J.P. Morgan, Nomura, Morgan Stanley and UBS. JointBelgian bookrunners BNP Paribas Fortis, KBC and ING.
Bpost is Belgium’s dominant postal operator. CEO Johnny Thijs has a strategy to continue to increase productivity and grow parcel volumes in Belgium and abroad. He has also focussed on major customers who will benefit from e-commerce growth. This will offset the inevitable decline in transactional mail volumes, while a strong cost focus generates industry leading margins. It has stated its intention to pay a minimum of 85% of its annual net profits as a dividend.
Countrywide,
£224m raised in March at 350p. Joint sponsors Goldman Sachs and Jefferies, Joint global co-ordinator Credit Suisse.
Under CEO Grenville Turner Countrywide has transformed from a collective network of estate agencies into the UK’s leading property services group. The IPO allowed Oaktree, Apollo and Alchemy to reduce their holdings in the company and in August the former two sold a further 17% of the company. In September the company announced the acquisition of commercial property consultant Lambert Smith Hampton for £34m, increasing its offering to corporate customers.
Foxtons,
£429m raised in September at 230p. Joint sponsors Credit Suisse and Numis, co-Lead Manager Canaccord
The IPO left the group debt free after a buyout at around the peak of the last residential market cycle. Under CEO Michael Brown since 2007 Foxtons has maintained its reputation for a very strong marketing approach, as well as customer orientated services such as longer open hours. It is well placed to continue its branch expansion programme throughout London, funded by internal cash generation and is not dependent on an increase in the number of London housing transactions. The IPO enabled Foxton’s private equity owners to reduce their stake to just 22%.
Broadwalk Services Small and Midcap Company of the Year[top]
KBC Advanced Technologies
KBC Finance Director Caroline Brown and
Charlie Cottam
KBC Advanced Technologies has transitioned from a consulting led model into a company with a strong software focus. The company’s consulting and technology offering helps the hydrocarbon processing industry maximise profitability. The new senior management team under Ian Godden, who became Executive Chairman in the autumn of 2012, has made good progress over the last year restructuring the operations, growing revenues and profitability, increasing the focus on technology and positioning the business for continued growth.
Shortlisted
Matchtech
Matchtech has emerged as the most one of the successful Specialist, or White Collar staffing companies in the UK. Under CEO Adrian Gunn, its strategic office locations and cost culture has seen strong underlying growth in it core discipline - the recruitment of Engineering staff. Profitability has also improved and it is now one of the most efficient staffing firms. The company achieved a major coup in September when it announced that Brian Wilkinson, former main Board Director of Randstad, Vedior and Select Appointments would become Chairman.
Staffline
Staffline has shown that despite operating at the lower end of the skill market, it is possible to run a very successful and profitable business. The business enjoys one of the highest operating margins in the industry, and has a very good record in bolting on small acquisitions. Under CEO Andy Hogarth the company has successfully diversified into the Work Programme where it is top ranked for performance.
Wincanton
Contract logistics operator Wincanton has recovered from an overly indebted position heading into the financial crisis. Net debt has fallen from £160m in March 2011 to £87m at the latest interim results, primarily through internally generated cash flow. CEO Eric Born has done a very good job in sharpening the division’s focus on cost control, cross selling and higher margin technology supported contracts.
Xchanging
Ken Lever became acting CEO in February 2011, having only joined four months earlier as finance director. It was a difficult start as the company had to issue a severe profit warning and the departure of the founder. Lever acted quickly to implement a recovery plan and restore confidence. The business has been considerably simplified with a focus on its strong position in Insurance. The strategy of serving a larger number of customers and offering high value added services was recently enhanced by the acquisition of bolt on MarketMaker4.
Mark Dixon founded Regus in Brussels in 1989 when he saw how many businessmen needed to work in hotels or cafés for lack of a more professional environment. He opened the first business centre and started persuading companies to outsource their work place requirements to a specialist operator. A global network of flexible workplaces was established, and in 2000 the company floated on the London Stock Exchange. After a very difficult period of trading during the subsequent recession the group was refinanced, which allowed for two significant US acquisitions, making the company by far the largest US operator. Regus was much better placed to cope with the next recession in 2008 with a more diversified customer base by sector, a wider suite of products and services and a higher proportion of flexible rental deals. As the global economy recovered the aggressive centre rollout continued, responding to the growth in flexible working. As a result the company is currently opening one new location a day, and has a network of some 1,700 business centres in 100 countries. Dixon recently announced plans to accelerate new openings in 2013 and the target of 2,000 centres looks achievable, as more organisations want more flexible working environments for their employees.
Advisory Panel
All the firms represented on the advisory panel, Barclays Capital, Lazard, Rothschild and UBS Limited, an affiliate of UBS AG, have corporate relationships with companies in these awards. Their inclusion is not in any way an investment recommendation to buy or sell shares in these companies. The inclusion of these companies do not necessarily represent the views of these firms and should not be attributed to them.
Broadwalk Asset Management LLP
This document is issued by Broadwalk Asset Management LLP should not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorised. Broadwalk Select Services Fund Limited (the Fund) is not a recognised scheme under s.264 of the Financial Services and Markets Act. The Fund may hold positions in any of the companies mentioned above. Most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in the Fund. The Fund is not traded on an exchange or recognised market. This document should not be distributed to any third party without the express approval of Broadwalk Asset Management LLP.
Broadwalk Asset Management LLP is Authorised and Regulated by the FSA.
This is the fifth year of the Broadwalk Services Awards to recognise outstanding achievements by quoted companies and their management teams in the broadly defined business services sectors. Similar to the London Olympics, competition was fierce with a strong array of contenders – highlighted by the impressive short lists. The broadly defined business services sectors are one of the less well known success stories of the economy, and these awards are another step towards raising their profile.
The awards have had the significant benefit of views from:
Jarrod Castle, Co Head of Transport Research, UBS
Vasco Litchfield, Managing Director, Lazard
Jane Sparrow Director Mid&Small Cap Support Services Research,
Barclays Capital
Stuart Vincent, Managing Director, Rothschild
Broadwalk Asset Management LLP
Broadwalk Asset Management was founded in 2007 by Charlie Cottam, previously an equity analyst with Panmure Gordon and Cazenove (now J.P.Morgan Cazenove). It manages the Broadwalk Select Services Fund, Europe's first absolute return fund to focus on the broadly defined business services sectors. The fund has risen almost 90% since its inception in June 2008, compared to the FTSE All Share which on a total return basis is up 17%.
While the European macro environment has not been helpful, easyJet has done an outstanding job in winning market share by exploiting its wide European network, low cost advantage and strong financial position. CEO Carolyn McCall has laid out very clear targets to ensure the capital structure remains robust while also efficient. Cost discipline is also very tight which will help mitigate uncontrollable increases in fuel, foreign exchange and airport charges.
Shortlisted
Howdens Joinery
Under highly experienced CEO Matthew Ingle, Howdens has successfully negotiated extremely demanding conditions in the UK kitchens market, with a very tight focus on its operations. This includes price and margin discipline, new kitchen ranges incorporating the demand for more complex functionality, and a continued depot opening plan, bringing the total to 530. The balance sheet has also been much improved with the legacy property liabilities much diminished and a new arrangement negotiated with the pension trustees.
Intertek
CEO Wolfhart Hauser has continued to exploit the structural growth opportunities driven by customers' demands for quality and safety. A number of bolt on acquisitions have widened the range of services offered. The latest report reiterated the company's confidence in growing organic revenue in the high single digit range despite the uncertain economic environment.
Travis Perkins
Travis Perkins, under CEO Geoff Cooper, has insulated itself from fragile trading conditions through continued tight management of costs and efficient gains from self help projects. There has been a focus on cash generation to bring group indebtedness down further with the group on track to be at around £450m for the full year. Travis has continued to consolidate the industry with the acquisition of Toolstation fro £107m, and its further small step overseas into the Dutch market.
Wolseley
CEO Ian Meakins has successfully executed on his strategy since becoming CEO in July 2009. The less strategically well placed businesses have been sold, and the balance sheet significantly strengthened. The businesses now look well set to increase their already leading market shares despite the still potentially difficult market backdrop. Bolt on acquisitions are likely to help this, as well as a commitment to grow the dividend and return any excess cash to shareholders.
Broadwalk Services CEO and executive team of the year[top]
Miles Roberts CEO and executive team, DS Smith
DS Smith Finance Director Steve Dryden, CEO Miles Roberts, and Charlie Cottam
Roberts joined DS Smith as CEO in May 2010. Since then the company has been transformed. In 2010 corrugated packaging company Otor of France was bought for €247m. In 2011 Spicers the wholesaling business, was sold for £200m. In January the company announced the purchase of SCA Packaging for €1.6bn, partly funded by a skilfully handled £466m rights issue. DS Smith became the leading corrugated packaging company in Europe and was strongly earnings enhancing. In October Roberts and Finance Director Steve Dryden announced the integration is ahead of expectations with higher synergies and a faster debt reduction schedule.
Shortlisted
Greg Fitzgerald, CEO and executive team, Galliford Try
Fitzgerald was one of the fastest housebuilders to reduce inventory as the credit crunch hit the housing sector. He led a £125m rights issue in June 2009 and used the proceeds to buy land in a difficult market, which is now yielding sales at attractive margins. The construction business is operating in extremely difficult conditions but has only bid work which can achieve an acceptable return. Fitzgerald's transformational three year plan can certainly be seen as a success.
Gavin Slark, CEO and executive team, Grafton
Slark was appointed CEO of Grafton in mid 2011, having been CEO of BSS. The Irish construction markets remain extremely difficult, and the UK which now accounts for 76% of sales has suffered after a further recession. Slark has introduced a disciplined focus on "self help" measures and taken some tough decisions on restructuring. This has resulted in a rise in shareholder value as confidence in the company returned.
André Lacroix, CEO and executive team, Inchcape
Lacroix became CEO of Inchcape in 2006 and had to guide the business through very difficult trading in the financial crisis. The distribution element accounts for 65% of the group's profits helped by its focus on the premium brand partners. The retail operation has an intense focus on customer service and has been successfully expanding in emerging markets, in particular Russia and China.
Mark Allan, CEO and executive team, Unite
The UK's leading developer and manager of student accommodation under CEO Mark Allan has coped well with government funding changes during the year, and a series of disposals has strengthened the balance sheet. Allan's strategy to focus on London and strongest university cities has worked well with occupancy for the current academic year still at 96% or fourty-two thousand students (42,000) across the 130 property portfolio.
Sir Ian Wood, Chairman, Wood Group (retired November)
Sir Ian Wood
Sir Ian joined the business in 1964 and as Chief Executive since 1967 pioneered the group's move into oil and gas engineering and support services as reserves were discovered in the North Sea in the 1970s. Sir Ian build a global energy services group with 42,000 employees in 50 countries. This included well integrated acquisitions of JP Kenny, Mustang and PSN, as well as the $2.8bn disposal of the well support business in 2011. CEO Allister Langlands has taken over as Chairman, with Bob Keiller becoming CEO.
Shortlisted
Sir Patrick Brown, Chairman, Go-Ahead
Sir Patrick became non-executive Chairman in 2002 having been permanent secretary of the Department of Transport. Over the 10 years of his Chairmanship rail and bus operator Go-Ahead has grown considerably, and become a large player in the UK rail market. With a robust balance sheet it successfully negotiated the difficult economic conditions which caused significant problems for other competitors. He will be succeeded as Chairman by Andrew Allner with David Brown continuing as CEO.
Kevin Loosemore, Executive Chairman, Micro Focus
Loosemore took over as Executive Chairman of Micro Focus in April 2011. He has strongly focused the group on cash generation, enabling the return of £82m in October, having returned £84m in December 2011, having previously spent £66m buying back 10% of the outstanding equity base. There has also been a renewed focus on new products for the legacy COBOL division which may bring further opportunities.
Glen Moreno, Chairman, Pearson
Moreno since his appointment in 2005 has overseen the continued transformation of Pearson to become the world's leading learning company, with a stronger focus on digital content and services. In October Moreno appointed John Fallon to succeed Marjorie Scardino as CEO from January 2013. Fallon has planned and led the very strong growth in Pearson's international education business over the last decade.
Leslie Van de Walle, Chairman, SIG
Van de Walle became Chairman in early 2011 and has overseen the strengthening of the group through difficult trading conditions in the UK and Continental Europe. This has involved restructuring to refocus the group on its core activities. In November he announced the appointment of Stuart Mitchell as CEO designate from Wilkinson Hardware Stores. Mitchell will take over in March from current CEO Chris Davies who is retiring after 19 years with the company to focus on non-executive roles.
Invensys sale of Rail to Siemens in November for £1.7bn
Invensys CEO Wayne Edmunds and Charlie Cottam
With a single transaction CEO Wayne Edmunds has effectively neutralised the pension fund issue and focused Invensys on its core industrial software and systems businesses. The price of £1.7bn was good representing 15x historic EBIT. After two £625m returns to shareholders and to the pension fund, it allows for £400m of bolt on acquisitions without going into debt. Invensys is now very well positioned to act as a consolidator in the fragmented industrial software market in particular.
Shortlisted
Misys bid from Vista Equity Partners in March for £1.3bn
Despite very difficult end markets and the departure of well respected Misys CEO Mike Lawrie, the Misys board under Chairman Sir James Crosby achieved a cash bid at a 32% premium to the share price before bid talks were announced. Misys had seen its Q3 sales fall 12% and its order intake fall by 5%, though an element of this reduction might have related to the uncertainty over Misys's ownership.
Aegis acquisition by Dentsu in July for £3.1bn
Aegis announced a £3.1bn cash offer at 240p per share from Dentsu of Japan, which represented a 48% premium to the share price. This was a vindication of CEO Jerry Buhlmann strategy having been appointed in May 2010. He sharply focused the business on media and digital communications, selling the market research business Synovate for £525m in late 2011. Organic revenue growth significantly outperformed the sector at 10% in 2011, with operating margins rising 130bp to 17.4%.
CGI acquisition of Logica in May £1.7bn
The cash bid at a 60% premium to Logica's closing price. The deal gave Canadian CGI and its CEO Michael Roach immediate critical mass in the European IT Services market. Logica's exit price earnings ratio was less than 10x. CGI announced the deal was c30% earnings enhancing. While the market sentiment was depressed by Euro area uncertainty, Logica had stated just three weeks earlier it was trading in line with expectations.
Experian acquisition of 29.6% stake in Serasa, Brazil for $1.5bn
Experian under CEO Don Robert initially acquired a 65% stake in Brazil's largest credit bureau, Serasa in 2007. Since then Serasa has EBIT on average by 28% a year. The transaction importantly also included an extension of existing agreements for the banks to both provide data, and extend minimum purchase guarantees. The transaction was earnings enhancing for the year to March 2013. Post the cash funded transaction Experian's leverage of around two times net debt to EBITDA is still comfortable.
CHF 903m (£600m) raised in March at CHF48. Joint Global Coordinators: UBS, Deutsche Bank. Joint Bookrunners: Berenberg Bank, Credit Suisse.
Charlie Cottam and DKSH CEO Dr.Joerg Wolle
Zurich based DKSH is the leading market expansion services group focused on Asia with over 24,000 staff and sales of CHF 7.1bn. It distributes products in the consumer goods, healthcare, performance material and technology sectors. Chairman Adrian Keller and CEO Dr.Joerg Wolle have overseen the doubling of net sales and the quadrupling of profits since the merger of two 150 year old Swiss trading houses in 2002. The maiden interim results as a listed company in the summer showed 16% growth in sales, and 24% rise in net profit.
Shortlisted
NMC Health,
£117m raised in March at 210p Deutsche Bank Sole Global Co-ordinator, Sole Sponsor and Sole Bookrunner. Numis and SHUAA Capital Joint Lead Managers.
NMC, the Abu Dhabi based operates hospitals in the UAE, where it is the largest healthcare provider. It used the proceeds to buy Healthcare Suites in Dubai and build a maternity hospital in Abu Dhabi. The company was founded by CEO Dr. B.R.Shetty 37 years ago. It was the first Abu Dhabi company to list on the London market. In November NMC announced the award of a five year contract to operate and manage the new Sheikh Khalifa General Hospital in the UAE.
Clinigen,
£55m raised in September at 165p by Numis Securities
Clinigen is a fast growing company providing sourcing and distribution of comparator drugs for clinical trials on a global basis as well as acquiring niche drugs for further commercialisation. CEO Peter George joined in 2010 to consolidating the businesses that form the current group and start the products division following the acquisition of Foscavir. Founder Andrew Leaver continues to own 31% of the shares.
WANdisco,
£15m raised at 180p in June by Panmure Gordon.
Sheffield based WANdisco is a leading provider of global collaboration software to the software development industry. Chairman & CEO David Richards founded the company in 2005 with COO Jim Capilgli and Chief Scientist Yeturu Aahlad. In October the company announced Q3 subscription bookings had risen 86% to $2m with a number of new blue chip customers announced. The shares have risen to 450p, a 150% increase on the flotation price. While this was a small flotation it is good to see new UK listed technology companies emerging after a large number of the larger operators in the sector have been bought.
Broadwalk Services Small and Midcap Company of the Year[top]
Vp
Vp CEO Neil Stothard and Charlie Cottam
Under founder Chairman Jeremy Pilkington and Managing Director Neil Stothard capital discipline has been impressive, with a tender for 7% of the outstanding share capital undertaken in February. The specialist focus on Vp's rental fleet has enabled it to grow despite a continued difficult operating environment. Strong cash flow has continued to ensure a strong balance sheet that supports re-investment in the fleet, share buybacks and further bolt on acquisitions.
Shortlisted
Anite
Anite has seen strong demand for its 4G testing software. CEO Christopher Humphrey Anite has positioned the business to be a major beneficiary of the shift to 4G LTE networks, demonstrated by 351 operators globally that are currently investing in LTE. The company is exposed to an increasingly wide market from new variants, and new product areas such as Voice over LTE.
Kewill
Kewill, the supply chain software supplier under CEO Paul Nichols 2012 saw a competitive bid situation that resulted in a 40% premium to the share price before the first bid announcement. Kewill's high quality Software-as-a-Service logistics and shipping software was valued at almost 12x 2012 EV/NOPAT on exit. Nichols joined Kewill as CEO a decade ago when the shares were trading at 7.5p, compared to the eventual bid price of 110p.
Tribal
CEO Keith Evans has focused Tribal on its market leading technology products and services to the education and training market. In March the mission was outlined with a target to more than double earnings per share in the next three years. Both elements of the business are achieving success in selling internationally with technology particularly successful in Australia.
Lavendon
Don Kenny has been CEO of Lavendon since October 2011, joining from Carillion. His initiatives to improve operational and capital performance have enhanced the results in mixed market conditions. Pricing discipline has been maintained in the largest territory, the UK and the fleet has been successfully expanded in the rapidly growing Middle Eastern markets.
Chris Cole, CEO WSP Group (now Executive Chairman, GENIVAR)
Cole and his fellow partners founded WSP in 1969. He floated the company in 1972 with sales of £1.9m and 50 people. Through organic growth and well integrated acquisitions WSP grew to 9,000 employees in over 30 countries generating £717m of annual revenue. The company was particularly strong in high rise building, Rail, Bridges and the environmental sector. In June Canadian GENIVAR paid a 67% premium to WSP's closing price with a £343m cash bid. The 435p per share bid represented around 13x current year earnings forecasts which was a very good price given the depressed stock market conditions.
Cole remains Chairman of equipment rental operator Ashtead which has also performed very strongly. Cole commented "The achievements of WSP are a reflection of my vision and the enormous support and hard work from so many people, without whom I would not have received this recognition."
Advisory Panel
All the firms represented on the advisory panel, Barclays Capital, Lazard, Rothschild and UBS Limited, an affiliate of UBS AG, have corporate relationships with companies in these awards. Their inclusion is not in any way an investment recommendation to buy or sell shares in these companies. The inclusion of these companies do not necessarily represent the views of these firms and should not be attributed to them.
Broadwalk Asset Management LLP
This document is issued by Broadwalk Asset Management LLP should not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorised. Broadwalk Select Services Fund Limited (the Fund) is not a recognised scheme under s.264 of the Financial Services and Markets Act. The Fund may hold positions in any of the companies mentioned above. Most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in the Fund. The Fund is not traded on an exchange or recognised market. This document should not be distributed to any third party without the express approval of Broadwalk Asset Management LLP.
Broadwalk Asset Management LLP is Authorised and Regulated by the FSA.
This is the fourth year of the Broadwalk Business Services Awards to recognise outstanding achievements by quoted companies and their management teams in the broadly defined business services sectors. The UK has many world leading companies in business services and is a major employer. It is one of the less well known success stories of the economy, and these awards are another step towards raising its profile.
The awards have had the significant benefit of views from:
Jarrod Castle, Co Head of Transport Research, UBS
Vasco Litchfield, Director, Lazard
Jane Sparrow Director Mid&Small Cap Support Services Research,
Barclays Capital
Stuart Vincent, Managing Director, Rothschild
Broadwalk Asset Management LLP
Broadwalk Asset Management LLP was founded in 2007 by Charlie Cottam, previously an equity analyst with Panmure Gordon and Cazenove (now J.P.Morgan Cazenove). It manages the Broadwalk Select Services Fund, Europe’s first absolute return fund to focus on the broadly defined business services sectors. The fund has risen over 50% since its inception in June 2008, compared to the FTSE All Share which on a total return basis is up 5%.
Broadwalk Business Services Company of the Year[top]
Ashtead
Ashtead led by CEO Geoff Drabble announced plans to start increasing the US equipment rental fleet in mid 2010, having refinanced the business with very limited covenants until 2015. Despite continuing declines in US construction markets this incremental equipment has been very successfully placed on rent, as the group continues to win market share. Recent interim earnings showed very strong growth driven by a larger fleet and yield improvement.
Charlie Cottam presenting the award to Ashtead’s Finance Director Ian Robson.
Shortlisted
Aggreko
2011 has been another very strong year for Aggreko, run by CEO Rupert Soames. Revenues have increased by over 20% in the International Power Projects division and momentum looks to continue to be strong. The Local business benefited from the FIFA World Cup but even without that, has achieved very respectable growth in a difficult economic environment. The high cash generation and conservative balance sheet enabled a £148m return of capital in July.
Bunzl
Bunzl, under CEO Michael Roney, has demonstrated an impressive level of stability in a demanding year, as it remains focused on the distribution of essential products. Bolt on acquisitions remain a key part of the growth strategy, and so far this year Bunzl has spent over £145m on 10 purchases, with the pipeline continuing to look promising. Cash generation has also been strong.
Interserve
Under CEO Adrian Ringrose Interserve has successfully reversed margin declines in its Support Services division and won £600m of new business since June alone. The Middle Eastern operations have continued to expand with a focus on the rapidly growing Qatar market. Strong cashflow has enabled the continuation of good dividend payments.
Kentz
The company has continued to deliver market share gains as it capitalises on its strength in the technology distribution industry. CEO Harriet Green has reinvigorated the business since her appointment in mid 2006, with a strategy to drive profitable growth particularly through the web, and further internationalising the business. Recent results show the strong momentum is continuing.
Broadwalk Business Services CEO and executive team of the year
Peter Rogers CEO Babcock
Rogers was appointed CEO in 2003 and has taken the group from EBIT of £23m to £287m last year. Building on the strong platform in Marine Services he and his team have overseen a number of successfully integrated acquisitions including Peterhouse for £97m in 2004 Devonport Management Limited for £350m in 2007 and VT Group for £1.3bn in 2010. Despite a demanding trading environment Babcock has continued to grow organically and has an order book of £12bn with a bid pipeline of a further £10bn.
Charlie Cottam presents Babcock CEO Peter Rogers with the CEO and executive team of the year award.
Shortlisted
Tim Cobbold, CEO De La Rue
Cobbold joined De La Rue in January this year after production problems with its largest customer, and a rejected takeover approach. He has implemented an Improvement plan with a target of making £100m of operating profit in the year to March 2014, up from £40m in the year to March 2011. In November he reported this plan was making excellent progress and cashflow has been particularly strong.
Colin Day, CEO Filtrona
Day was appointed CEO in April, having been CFO of Reckitt Benckiser since 2000. The business was already in good shape. Day however has brought new expertise in sales and marketing which will be a beneficial stabilising factor if the economy deteriorates. The recent acquisition of Richco for $110m, valued at 11.5x EBIT looks a good fit, and provides access to the faster growing consumer electronics market.
Michael Tobin, CEO Telecity
Tobin led the merger of Telecity and Redbus in 2003, and then the acquisition of Globix before successfully completing the company’s IPO in 2007 at 220p, since when the shares have risen c180%. Tobin has capitalised on the very highly connected hub in London’s Docklands while expanding around Europe. Growth has been both organic and well timed acquisitions. Given strong demand Tobin and Telecity looks well set to almost double capacity to 116MW in the next four years.
Ed Williams, CEO Rightmove
Williams joined Rightmove at its inception in 2000 and has built the UK’s largest property portal. The company has a dominant market share of property website impressions. Having floated at 335p in 2006 the shares are now up 250% having paid 45p of dividends. Williams has had to overcome the dramatic fall in residential transaction volumes since the 2008-9 recession, and the unexpected change in Home Information Packs requirements. The company is highly cash generative and has maintained tight capital discipline, buying back 16% of its shares since 2007.
Broadwalk Business Services Chairman of the Year[top]
Sir Peter Ellwood, Chairman Rexam
Sir Peter was appointed Chairman of Rexam in mid 2008 just before the recession, having previously been Chairman of ICI, Chairman of Visa International and Group CEO of Lloyds TSB. To protect the credit rating in mid 2009 his board took the decision to raise £351m in a rights issue, and oversaw a restructuring to save £75m of cost. In 2010 he appointed Graham Chipchase as CEO who had been on the board since 2003. In September he oversaw the sale of the closures business for $360m. He recently announced his decision to retire as Chairman in February 2012 and will be succeeded by Stuart Chambers.
Charlie Cottam presents Rexam Chairman Sir Peter Ellwood with the Chairman of the year award.
Shortlisted
John Standen, Chairman Lavendon
In June Standen became Executive Chairman on the CEO’s retirement after a strategic review, and in October Standen appointed Don Kenny as CEO. Kenny looks a strong candidate having previously been Group Managing Director of Carillion’s Business Services which generated £1.2bn of revenue with 15,000 employees. In January the Lavendon board under Standen announced that the 115p per share takeover bid for the company was opportunistic, and significantly undervalued Lavendon.
Antonio Vázquez Romero, Chairman IAG
Vázquez Romero was appointed Chairman and CEO of Iberia in June 2008 having been on the board since 2007. He has overseen the combined British Airways / Iberia business since its inception in January. While the economic environment has been unhelpful with higher fuel prices and weaker customer demand, the merger has progressed smoothly. He looks to have established a good relationship with CEO Willie Walsh. Further acquisitions look to follow BMI and the company is on track to meet its five year target of €400m of revenue and cost synergy benefits.
Robert Webb QC, Chairman Autonomy
Webb was appointed Chairman of Autonomy in May 2009 having been General Counsel at British Airways since 1998. His detailed expertise in litigation, regulation and compliance was useful to Autonomy’s new business focus. It is often not an easy balance to find as Chairman working with the dominant founder as CEO. The completion of the exceptional sale of the company to Hewlett-Packard demonstrated Webb very successfully found the correct balance.
This deal was completed at a stunning 78% premium in a stock market where sentiment was extremely adverse, causing Autonomy’s shares to be down 8% the day before the announcement. Autonomy CEO Dr.Mike Lynch founded the company in 1996 and built it into a highly attractive entity, becoming a world leading software company in the rapidly growing unstructured data market. (see below for photo of Dr.Lynch for Entrepreneur of the year 2011)
Shortlisted
Avis Europe acquisition by Avis Budget Group for £1.2bn
In June Avis Budget Group announced the acquisition of Avis Europe for a 60% premium over the closing price. CEO Pascal Bazin was appointed in January 2008 and had to deal with sharp volume and price declines due to the recession. He reduced costs by £150m including £30m of fixed costs while sensibly increasing the presence in China. Avis Europe was 60% owned by D’Ieteren of France.
Forth Ports acquisition by Arcus for £1bn
In March after long running on/off negotiations Forth Ports agreed to an offer by Arcus at a 21% premium to the closing price at the start of the year, and around a 50% premium to when the bid was first mooted in March 2010. Arcus already owned 22% of the company. CEO Charles Hammond was appointed in 1999, having been responsible for doubling the size of the company when he bought Tilbury port in 1995. He grew volumes at both Tilbury and Leith ports, while developing value added real estate and renewable energy opportunities.
Intertek acquisition of Moody for $730m
Intertek under CEO Wolfhart Hauser had been tracking well regarded Moody and approached its owners when they saw the industrial cycle beginning to turn in their own business. The price at 13.4x 2010 EBIT looks high but Moody’s earnings should recover significantly as the oil capital spending cycle recovers. Including synergies of $10m the 2013 multiple may well be less than 10x EBIT. The acquisition gives Intertek the full suite of services to the oil industry including the capital cycle, and importantly also gives the business global scale.
Wood Group acquisition of PSN for $995m*
The disposal of the Well Support division for $2.8bn to GE, and subsequent acquisition of PSN, is the execution of Wood Group’s CEO Allister Langlands strategy of focusing on its core engineering, operations and maintenance activities. The PSN purchase also maintains a good balance between Wood’s oil and gas development operations and its later cycle production support business. The pre synergy EBITDA multiple of 9.5x looked attractive. The deal internationalises Wood’s production business with the North Sea now accounting for 40% of its revenues, compared to 54% in 2010.*This transaction was announced on 14 December 2010, the day before the 2010 Broadwalk Business Services Awards were released.
Broadwalk Business Services European IPO of the Year[top]
Aker Drilling
Aker Drilling, raised NOK3.6bn ($635m) at NOK19. Arctic Securities, DnB NOR Markets, Pareto Securities and RS Platou Market acted as advisers.
Aker Drilling is a Norwegian drilling rig operator. It was spun off from Aker Solutions in February and operates two harsh-environment, ultra-deepwater semi-submersible rigs and is expected to take delivery in 2013 of two drillships. In August the world’s largest drilling contractor, Transocean agreed to buy the company for NOK 26.5 ($1.4bn), a 39% premium to its flotation price six months earlier. Aker Solutions had continued to own 41% of the company after the spin off.
Shortlisted
APR Energy,
relisting after the APR acquisition with a market capitalisation of c£860m. Numis acted for the company
Hugh Osmond’s Horizon Acquisition company bought 60% of APR in June and relisted the company on the London Stock Exchange in September. Under CEO John Campion APR has grown its revenues from $37m in 2007 to $126m in 2010, generating very high returns on capital. The company is very well placed to take advantage of the global structural imbalance between supply and demand for electricity which is forecast to grow at 50MW a year to 500MW by 2015. Since relisting the company has signed a global framework agreement to partner with Caterpillar in globally pursuing temporary power solutions.
Circle Healthcare,
£45m raised at 152p. Numis acted as bookrunner with Investec as lead manager.
Circle was co founded by CEO Ali Parsa and CMO Massoud Fouladi to take part in transforming the value offering for patients and the taxpayer in the UK healthcare arena. In November Circle signed the contract to run Hitchingbrooke Healthcare Trust for £1bn over 10 years. When the contract commences in February 2012 Circle will be the first ever non-state provider to deliver a full range of NHS district general hospital services.
HMS Hydraulic Machines & Systems Group,
raised $360m at $8.25 in GDRs. Joint Global Coordinators and Joint Bookrunners J.P.Morgan, Morgan Stanley and Renaissance Capital
HMS is the leading pump manufacturer and provider of flow control solutions and related services in Russia and the CIS. In the first half of 2011 the company reported hitting its goals set for the year, and with two acquisitions, has strengthened its position in its most profitable market segments including its oil and gas project and design segment.
Broadwalk Business Services Small and Midcap Company of the Year[top]
Hogg Robinson
Under CEO David Radcliffe faced very demanding trading conditions in the recession. However the focus on a differentiated technology led offering combined with impressive service levels has delivered high client retention rates and good new client wins from the 50% of the market that currently does not use an agent to manage their corporate travel spend. Recent results confirmed HRG is continuing to make good progress and strong cash flow has reduced the debt burden.
Charlie Cottam presents Hogg Robinson CEO David Radcliffe with the Small and Midcap Company of the year award.
Shortlisted
Impellam Group
The group formed in 2008 by the merger of The Corporate Services Group and the Carlisle Group is a recruitment firm operating in a number of disciplines in the UK and US, and also provides BPO services. Executive Chairman Cheryl Jones has implemented efficiency and revenue quality initiatives which have significantly improved profitability, while considerably reducing net debt. The company is 58% owned by a trust related to Lord Ashcroft.
iomart
CEO and co-founder Angus MacSween has built a business due to generate sales of over £30m and is growing rapidly. Most of the growth has come from hosting revenue as the company increasingly moves its customers into the “cloud.” This provides an excellent recurring revenue stream with very high retention rates using the iomart’s five state of the art datacentres. Recent results reported that demand continues to be strong as more and more organisations take advantage of the benefits of outsourcing their IT infrastructure requirements.
Monitise
Monitise looks very well placed to become a world leader in the Mobile Money arena. CEO and co-founder Alastair Lukies has wisely concentrated on establishing strong relationships with the banks in building the business, including one bank which took three and a half years and 279 meetings to convince. 10m mobile banking transactions are processed each month from the 4.5m registered customers. Visa Europe recently increased its stake to almost 9% in a £25m capital raising, and bought out its US joint venture partner.
Paypoint
CEO Dominic Taylor has overseen considerable growth at the company since his appointment in 1998. The UK retail network won the highly significant tender to be the Department of Work and Pensions replacement for giro-cheques in March. 292m transactions were processed in the six months to September, an increase of 9%. The Romanian operation is positioned to move into profitability and other developing businesses are also strong.
Broadwalk Business Services Entrepreneur of the Year[top]
Dr.Mike Lynch, Founder of Autonomy
Dr.Mike Lynch founded the company in 1996 to focus on overcoming the problems presented by unstructured data. He oversaw the acquisition and successful integrations of Verity, Zantaz, Interwoven and Iron Mountain Digital to build on Autonomy’s market leading search algorithms. Lynch has successfully proved his vision for Autonomy against some inevitable critics. His resilience was demonstrated by the collapse of the “tech bubble” in 2001when the shares fell 98% from the peak, and yet he continued to impressively build the company. At only 45 he has a lot more to offer, including at his new position at Hewlett-Packard where he aims to further his vision to make computers fit to the way humans communicate.
Charlie Cottam presenting the Entrepreneur of the year award to Dr.Mike Lynch
Advisory Panel
All the firms represented on the advisory panel, Barclays Capital, Lazard, Rothschild and UBS Limited, an affiliate of UBS AG, have corporate relationships with companies in these awards. Their inclusion is not in any way an investment recommendation to buy or sell shares in these companies. The inclusion of these companies do not necessarily represent the views of these firms and should not be attributed to them.
Broadwalk Asset Management LLP
This document is issued by Broadwalk Asset Management LLP should not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorised. Broadwalk Select Services Fund Limited (the Fund) is not a recognised scheme under s.264 of the Financial Services and Markets Act. The Fund may hold positions in any of the companies mentioned above. Most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in the Fund. The Fund is not traded on an exchange or recognised market. This document should not be distributed to any third party without the express approval of Broadwalk Asset Management LLP.
This is the third year of the Broadwalk Business Services Awards to recognise outstanding achievements by quoted companies and their management teams in the broadly defined business services sectors. The UK has many world leading companies in business services and is a major employer. It is one of the less well known success stories of the economy, and these awards are another step towards raising its profile.
Broadwalk Business Services Company of the Year[top]
Intertek
CEO Wolfhart Hauser has sharply focused Intertek on the trade testing segment which has led to a strong recovery from the global downturn with recent results showing organic growth of 6.5%. Environmental regulations, renewable energy industries and consumer’s concerns over health and safety all look set to continue strong growth. The company also has a very good record of integrating bolt on acquisitions to further enhance growth.
Charlie Cottam presents Intertek CEO Wolfhart Hauser with the Company of the Year award.
Shortlisted
Aveva
Under CEO Richard Longdon has further established itself as the world leader in design software to the Oil and Gas, Power and Marine markets. The extreme focus of the business has led to the development of excellent products, which combined with longstanding customer relationships, has contributed to building a world class business. Strong recurring revenues and growth from developing economies has mitigated the slower recovery of advanced economies.
Compass
The business has been transformed under Richard Cousins (Broadwalk Business Services CEO of the year 2008). Recently reported organic growth was 3.2% in a hostile economic climate, and margins were increased a further 40 basis points to 6.9%. This has led to impressive cash generation with net debt at only £620m, the group was able to raise the dividend by 33%, and is likely to make further acquisitions in both food and support services.
Electrocomponents
With 70% of sales now coming from outside the UK, CEO Ian Mason has focused on international markets, developed the maintenance offers, and exploited eCommerce while maintaining profitability in its UK stronghold. eCommerce sales now represent 48% of group sales, and the company states it is on course to hit its target of 70%. Cashflow has been consistently high at Electrocomponents and the dividend record, although reduced, has been impressive over time.
Premier Farnell
The company has continued to deliver market share gains as it capitalises on its strength in the technology distribution industry. CEO Harriet Green has reinvigorated the business since her appointment in mid 2006, with a strategy to drive profitable growth particularly through the web, and further internationalising the business. Recent results show the strong momentum is continuing.
This has been an excellent year for Walsh despite adverse conditions. During the unprecedented volcanic ash cloud in April, Walsh successfully urged the UK government to lift the air space ban, and showed exceptional leadership by example when he personally piloted an aircraft through the closed area. Walsh has successfully negotiated a transformational merger with Iberia, and made good progress with an Atlantic joint venture with American Airlines. He also took decisive action on both the pension fund and negotiations with the unions.
Shortlisted
Keith Clarke, Atkins
Clarke was appointed CEO in 2004 during a difficult time for Atkins. He considerably sharpened the group's focus on the company's three core divisions, and significantly grew the engineering and design skills. Atkins saw the UK government spending cuts coming, and Clarke went on record in June to say they would not be a reason for further reductions in forecasts. In August he completed Atkins's largest deal, buying employee owned PBSJ of the US for £178m, which balanced Atkins's geographic exposure at an attractive price.
David Martin, Arriva (Bought by Deutsche Bahn for £1.6bn in August)
Arriva’s strategy, under Martin, of building out a Pan-European bus and rail network was very well rewarded by the bid from Deutsche Bahn, completed in August at a 56% premium to its three month average share price. Martin joined the group on its acquisition of British Bus in 1996, and joined the Board in 1998 with specific responsibility for developing the international operations, becoming Group CEO in 2006.
Ian Meakins, Wolseley
After his appointment in July 2009, Meakins comprehensively reviewed the strategy, and made senior board changes. The focus has been firmly placed on growing the strongest franchises organically with a systematic approach to measuring service levels, and a much tighter focus on resource allocation. The 19 problem businesses have been addressed. Full year results released in September show the strategy is working despite challenging end markets.
Christoph Mueller, Aer Lingus
Mueller was appointed CEO in September 2009 and lost little time making his mark in a challenging situation with the airline strongly cash flow negative. Uneconomic routes were cut and yields improved to staunch the cash flow losses. Cost saving measures were then executed which should deliver over €50m of benefit this year. While the Irish economic backdrop is still not helpful, Mueller is now in a position to concentrate on the airline’s market position.
Broadwalk Business Services Chairman of the Year[top]
Sir Moir Lockhead, First Group, CEO & Deputy Chairman (1995 to 2010)
Sir Moir led the employee buy-out of GRT Bus Group Plc in 1985 and became CEO and Deputy Chairman on the formation of FirstBus in 1995. He oversaw significant consolidation in the UK bus market and took the group into the rail market in 1998. In 2007 he completed the transformational Laidlaw acquisition for $3.7bn, entering the North America market. When he retired in September the group had become one of the world's leading transport operators with revenues of over £6bn, employing 130,000 staff, and transporting 2.5bn passengers a year in the UK and North America. He handed over to very well regarded US and UK experienced CEO Tim O’Toole.
Shortlisted
Nicholas Brookes, De La Rue
To have a major break down in controls in the main business is not a situation any Chairman wants to preside over. Brookes acted decisively to take control of the situation. The CEO resigned four weeks later, new operational management were appointed, processes were upgraded and new certification for paper supplies was introduced. Customers have been kept fully informed. The company continues to face demand uncertainty and has had a bid approach. Brookes has just appointed well respected CEO Tim Cobbold, previously of Chloride. Overall this was an example of good crisis management.
Bob Lawson, Hays (2001 to November 2010)
Lawson oversaw the complex restructuring of the group from a logistics/mail/recruitment conglomerate after a series of profit warnings. The decision to focus on recruitment has worked well, with the resilience of its contractors and temporary employee model enabling it to be the only major staffing company to maintain its dividend throughout the recession. He also ensured the smooth transition from Dennis Waxman after 38 years as CEO of Hays Recruitment, to Alistair Cox in 2007. He remains Chairman of Barratt Developments.
Jamie Pike, Lupus and RPC
Pike was appointed Chairman of RPC in mid 2008 and conducted a strategic review. Significant operational and commercial improvements were identified with a target of improving ROCE by at least 4 percentage points. This worked well and allowed the group to now focus on organic growth despite a still weak trading environment. The board structure was also simplified. Pike was appointed Chairman of Lupus in November 2009 and first had to oversee a hostile EGM. He was then able to secure the services of the well regarded Louis Eperjesi from Kingspan, as CEO in February.
Sir Michael Rake, Easyjet
Sir Michael joined the company as Deputy Chairman in June 2009 and became Chairman in December 2009. He oversaw the appointment of a new Finance Director, and then in March appointed Carolyn McCall from Guardian Media Group as CEO, succeeding Andy Harrison. The volcanic ash disruption followed swiftly after in April. Finally, in October, Sir Michael oversaw the settlement of the long running dispute between founder Sir Stelios Haji-Ioannou and Easyjet. This resulted in much greater clarity over the brand licence agreement and the founder’s rights in return for an annual royalty payment.
Misys sale of Allscripts realising a value of c$1.5bn
Misys under CEO Mike Lawrie bought its majority stake in clinical software provider Allscripts in 2008 for $760m. The company doubled its money when it sold the vast majority of the stake in August for c$1.5bn, showing a profit of c$760m. This transaction enabled a £670m cash return to shareholders and the €435m acquisition of Sophis, another capital markets software vendor with very good synergy opportunities with Misys’s remaining business.
Shortlisted
British Airways merger with Iberia
This was a transformational deal for British Airways, giving it 408 aircraft carrying 57m passengers a year. Operationally it increases the destination points to 250 and frees up some BA capacity. Synergies are forecast to reach €400m by year five of the merger. It also strengthens BA’s balance sheet which is important for the likely further consolidation to come.
Dimension Data acquisition by NTT for £2.1bn
Under Executive Chairman Jeremy Ord, Dimension Data has built up the global leader in the provision and management of IT infrastructure solutions, and as a systems integrator which when combined with NTT’s global assets will provide an end to end, global one-stop-shop.
Travis Perkins purchase of BSS for £642m
The acquisition creates the largest plumbing and heating trade and retail distribution business in the UK, with around a 20% market share. The timing of the acquisition at the beginning of June was good. With uncertainty on the UK economy and specifically the housing market meaning a really full price was not required. The £25m synergy target looks understandably cautious given the macro environment. The price was 11.7x BSS’s trailing EBIT, or 8.0x EBIT including synergies. 40% of the purchase price was in Travis Perkins equity which ensures it has flexibility for further consolidating deals going forward.
VT purchase by Babcock for £1.3bn
Having first started discussions in 2004, this deal was finally consummated in March 2010. The price at over 11x current year EBIT before synergies was fair given the uncertainties over defence spending. Cost synergies were initially estimated at £50m, with the combined business becoming the leading outsourcing supplier to the UK Ministry of Defence. The deal was around 10% earnings enhancing to Babcock, and due to financing by way of a 50:50 split between new debt and Babcock equity, its balance sheet remains in reasonable shape.
Broadwalk Business Services European IPO of the Year[top]
Amadeus
€1.7bn raised at €11 per share in April. Joint Global Co-ordinators Goldman Sachs, J.P. Morgan and Morgan Stanley. Rothschild acted as financial advisor to Amadeus in connection with the offering.
The IPO was the largest in Europe since 2007 having been oversubscribed by three times. Madrid based Amadeus is the global market leader in distributing air bookings with a 37% market share. In addition its IT Solutions business is the leading provider to airlines of Passenger Service Solutions including reservations, inventory management and departure control. Despite the global downturn, under CEO David Jones the business has grown annual revenues by 35% from 2004 to 2009. A further 10% representing €617m of the company was placed at €13.50 with investors in October ahead of the pre-agreed lock in, which was likely to reflect strong institutional demand.
Shortlisted
Brenntag €748m raised at €50. Global Co-ordinators Deutsche Bank and Goldman Sachs, Joint bookrunners Bank of America Merrill Lynch and J.P. Morgan.
Brenntag is the world's largest chemical distributor benefitting from being a full line distributor with over 10,000 products offering a one stop shop solution, which creates significant efficiencies for its 150,000 customers. CEO Stephen Clark has been with the company for 30 years and has overseen a number of substantial acquisitions to establish the global leadership position. The company joined the market in March, as the second largest German IPO since 2007. The offer was "multiple times" oversubscribed, despite volatile conditions. In June it acquired EAC Industrial establishing a fully-fledged Asia Pacific platform. In October a further €668m shares were sold by BC Partners increasing the free float to 50%.
CPP Group £150m raised at 235p, Joint Global Co-ordinators J.P. Morgan Cazenove and UBS.
CPP floated in March as the fast growing international life assistance business with 10m policies in 14 countries. Founder Hamish Ogston retained a 62% stake in the company. As well as raising the profile of the group, the IPO will assist in retaining and incentivising employees. Under CEO Eric Woolley since 2003, it will provide the additional flexibility to finance growth through acquisitions. A recent trading update showed the company was on track with 11% underlying sales growth.
Flybe £60m raised at 295p, Sole Sponsor, Global Co-ordinator and Bookrunner BofA Merrill Lynch, Joint Lead Manager Investec, Co-Lead Manager Execution Noble.
Flybe floated in December with half the net proceeds being used to fund its aircraft fleet expansion programme, and half to provide strategic growth opportunities as they arise. Jim French became CEO in 2002 and developed the plan which transformed Flybe into Europe’s largest regional airline, including the 2007 acquisition of the former regional airline business of British Airways.
Broadwalk Business Services Small and Midcap Company of the Year[top]
Cape
CEO Martin May first task on his appointment in 2002 was to bottom out legacy liabilities, before dramatically growing the operations. The strategy has been to focus on non mechanical industrial services to the energy sector, with a powerful bundled services offering. Underlying profits have increased nearly fourfold as the company has expanded internationally, with the Far East operation growing particularly rapidly. The group looks well set on the route to its target to double EPS in the next 5 years.
Charlie Cottam presents Cape CEO Martin May with the Small and Midcap Company of the year award.
Shortlisted
Acal
Nick Jefferies was appointed CEO in January 2009 and in June that year announced the new specialisation strategy to differentiate the company's product offering and raise margins. Operating costs have been reduced by a further 12% this year. The BFi Optilas bolt on acquisition has integrated well. It increased the electronics exposure, and also bolstered the presence in Continental Europe where the group has considerable historic tax losses.
Hyder Consulting
CEO Ivor Catto who was appointed in 2008 has done an excellent job improving the consistency of the performance, and growing the international side of the business which now represents 85% of profits. The company has been made more efficient with a 7% headcount reduction in the first half which has helped considerably in growing the EBIT margin to over 8%.
Robert Walters
Under CEO Robert Walters the company has developed an extremely strong Asia Pacific business which has maintained strong momentum, and been very helpful given the economic uncertainty in the UK and Europe. The group has maintained a net cash position throughout the downturn which has provided a significant stability advantage compared to some of its peers.
Scott Wilson (bought by URS for £223m in June)
The day before the bid was announced Scott Wilson’s shares were trading at 87p. The winning bid by URS, after a bidding war, was 290p, a 233% premium and reportedly the second largest premium paid for a UK company in the last decade. The company floated in 2006 and went on to make 10 engineering consultancy acquisitions under CEO Hugh Blackwood, building on a strong UK presence with international offices in four regions.
Broadwalk Business Services Entrepreneur of the Year[top]
Richard Harpin, CEO of Homeserve
Harpin established Homeserve in 1993 as a joint venture with South Staffordshire Water. He has built up a very strong team that has in many ways created the home emergency insurance industry, particularly for plumbing. The business has grown to providing over 10m policies to 4.6m customers in five countries, generating £100m of profit before tax. This year saw a doubling of the US footprint to 20m potential customers in what is an exciting market with a high level of insurance consciousness. The exit from Emergency Services was completed without disrupting good growth in the core business.
Advisory Panel
All the firms represented on the advisory panel, Lazard, Rothschild, Royal Bank of Scotland Group plc and UBS Limited, an affiliate of UBS AG, have corporate relationships with companies in these awards lists. Their inclusion is not in any way an investment recommendation to buy or sell shares in these companies. The inclusion of these companies do not necessarily represent the views of these firms and should in no circumstances be attributed to them.
Broadwalk Asset Management LLP
This document is issued by Broadwalk Asset Management LLP should not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorised. Broadwalk Select Services Fund Limited (the Fund) is not a recognised scheme under s.264 of the Financial Services and Markets Act. The Fund may hold positions in any of the companies mentioned above. Most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in the Fund. The Fund is not traded on an exchange or recognised market. This document should not be distributed to any third party without the express approval of Broadwalk Asset Management LLP.
This is the second year of the Broadwalk Business Services awards to recognise outstanding achievements by quoted companies in the business services sectors. The UK often leads the world in business services and is a major employer. It is one of the less well known success stories of the economy, and these awards are another step towards raising its profile. Competition for awards this year was extremely fierce with many very strong performances, despite the demanding economic environment.
Broadwalk Business Services Company of the Year[top]
Aggreko
Aggreko’s International Power Projects division has continued to grow very strongly combined with rising margins. The company under CEO Rupert Soames has superbly executed the strategy of aggressively exploiting the opportunities for temporary power in emerging markets, while containing the downturn in the more cyclical Local business. Despite being a capital intensive business, the balance sheet has been kept very strong, aided by excellent cash generation.
Charlie Cottam presents Aggreko’s Finance Director Angus Cockburn with the Company of the Year award.
Shortlisted
Amec
Amec under CEO Samir Brikho has continued to improve under the Operational Excellence programme and recently announced a target to increase earnings per share by 130% by 2015, representing compound annual growth of 12.6%. The £700m of cash is likely to be deployed in what should be a well timed acquisition.
Babcock
The company under CEO Peter Rogers, has been transformed into a Support Services powerhouse with a very strong share in the UK defence outsourcing market, and marine in particular. The company has also quickly become a force in the nuclear services market.
Davis Service Group
Trading has been resilient with strong cash flow generation from Europe’s leading textile maintenance company. The company has used its network density to great effect to maintain margins and grow most areas of the business in demanding circumstances.
Michael Page
Permanent recruitment has unsurprisingly seen the most dramatic revenue reductions of any sub sector. Michael Page’s headcount has been reduced on a meritocratic basis from over 5,000 to 3,500, but the group has remained profitable in each quarter of 2009. CEO Steve Ingham’s strategy of independently focusing on organic international expansion has positioned the company extremely well for when the global economy recovers.
Buckles was a prime mover as CEO in the Securicor merger with Group 4 in 2004, and has been the combined company’s CEO since 2005. He has firmly established G4S as the global market leader in security. The 2007 £355m acquisition of GSL was well timed to increase the group’s exposure to the public sector. In addition the strategy of moving up the value chain to a fully outsourced protection solution has produced organic growth, and improved margins, despite the challenging market conditions.
Shortlisted
Alan Brown, Rentokil Initial
Since his appointment in April 2008 Brown has sharply focused attention on service and cost levels. Two previous management teams have not succeeded in halting profit decline, and Brown looks to have made an excellent start, with no help from the economy.
Geoff Cooper, Travis Perkins
Cooper joined Travis in February 2005, three months after the £950m Wickes acquisition had been announced. Cooper has tightly focused the company on profitable cash generation and has withstood the significant decline in construction and DIY spending, better than certain other competitors. The successful £300m rights issue completed in June was therefore undertaken from a position of relative strength.
Mark Dixon, Regus
Dixon has built Regus into the world’s dominant serviced office provider with offices in 450 countries. Regus was early to offer “recession busting” services and its focus on maximising cash flow has worked extremely well despite the economic downturn.
Wolfhart Hauser, Intertek
Hauser has sharply focused Intertek on trade testing which has resulted in a resilient performance this year despite the challenge of reduced global trade. The potential acquisition of Det Norske Veritas’s Business Assurance Division also looks like an excellent new growth opportunity.
Broadwalk Business Services Chairman of the year[top]
John Peace, Experian
Peace co-founded the predecessor to Experian, CCN Systems in 1980 in Nottingham as part of GUS. He has been a key driver in building the company from a few employees into the global market leader with $4bn of sales and 12,000 employees. In July he announced he was standing down following his appointment as Chairman of Standard Chartered.
Shortlisted
Kevin Beeston, Serco
Beeston joined Serco in 1985 and has played a key part in its impressive development to a FTSE 100 company including positions as Finance Director, Chief Executive and Executive Chairman, and Non-Executive Chairman since mid 2007.
John Devaney, National Express
Devaney joined the board in April at a very difficult time for company, as it was negotiating with the government on the loss making East Coast franchise. He was then faced with an ultimately unsuccessful bid from executive management, a merger approach from Stagecoach and finally a £360m rights issue.
Philip Rogerson, Aggreko, Bunzl, Carillion
Rogerson remains one of the most widely experienced Chairman in the sector. In October he was appointed chairman of Bunzl from March 2010, and is therefore relinquishing his chairmanship of Northgate and board position at Davis Service Group.
Jeremy Ord, Dimension Data
Ord has been with the group since 1983, and its Chairman since 1987. With CEO Brett Dawson the continued focus on the services has worked extremely well. Despite a very difficult trading environment services revenues rose 13% in the last fiscal year, with managed services including the Uptime brand increasing by 21%.
Balfour Beatty: purchase of Parsons Brinkerhoff for £380m
The acquisition was consistent with Balfour’s strategy set out in 2006 to grow its professional services offering. This deal creates a similar capability set in the US, to the very successful UK model. The company conducted six months intensive due diligence and it looks to be an excellent cultural fit. The price of 5.8x EBIT pre stock option charges represents excellent value, and was very sensibly funded by a rights issue, to maintain Balfour’s strong balance sheet.
Shortlisted
BPP: sale for £420m
The deal was announced in April, only a month after the stock market low, at a 70% premium to the closing share price. For a business with late cycle characteristics this represented an excellent exit price.
MicroFocus: Borland and Compuware Testing for £125m
The acquisitions were announced simultaneously in May, six weeks after the stock market bottomed. They were integrated rapidly with a view to achieving substantially higher margins, as a new leading player in the Testing market. The deals look to be working very well, and were a significant contributor to the earnings upgrades in November and December.
Mitie: purchase of Dalkia Technical FM for £130m
The deal provides good synergies from combining two technical FM businesses, and provides an entry into the fast growing energy consulting market. It is a business MITIE have coveted for some time and where they knew the management well. Earnings in the first full year were enhanced by c9%, and a 6% equity placing led to the balance sheet continuing to have very low leverage.
VT Group: sale of shipbuilding for £303m
VT agreed this deal in mid 2007 but exercised the put option at the first available opportunity. This was an excellent price as the carrier programme looks under increased threat, and enables VT to become a pure Support Services operator.
Broadwalk Business Services Small Company of the Year[top]
Hargreaves Services
Since its flotation in November 2005, under CEO Gordon Banham, the company has had a compound annual growth rate of an astonishing 52%. This has come through excellent execution and a strong focus on becoming a fully integrated supplier of services to the bulk minerals industry.
Shortlisted
Educational Development
CEO Nigel Snook has done an excellent job turning the company into a focused leader in accredited qualifications. While acquisitions and higher government spending have helped growth, the majority has come from growing market share through providing a wider range of services combined with very high level service levels.
office2office
CEO Simon Moate joined in July 2007 just after the company announced it had not retained its largest contract, to supply the MoD. Since then the company has cut costs, won significant new contracts and moved into potentially attractive new service areas. It is well positioned to gain market share as the public sector reduces its number of suppliers after the election.
Alterian
The company consolidated its already strong position in the fast growing web content management market in the year. It successfully cross sold to customer’s of last year’s Mediasurface acquisition, and enhanced its position in the Social media monitoring software space with the purchase of Techrigy. CEO David Eldridge who has been with the company since 1997 looks to have positioned the company very well for further growth.
Smiths News
Under CEO Mark Cashmore the company has had a transformational year with contract wins worth £460m a year as Dawson exited the newspaper and magazine wholesale market. It continues to be the clear market leader and also took the first step to diversify the group with the £12m acquisition of Bertrams.
Advisory Panel
All the firms represented on the advisory panel, Lazard, Rothschild, Royal Bank of Scotland Group plc and UBS Limited, an affiliate of UBS AG, have corporate relationships with companies in these awards lists. Their inclusion is not in any way an investment recommendation to buy or sell shares in these companies. The inclusion of these companies do not necessarily represent the views of these firms and should in no circumstances be attributed to them.
Broadwalk Asset Management LLP
This document is issued by Broadwalk Asset Management LLP should not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorised. Broadwalk Select Services Fund Limited (the Fund) is not a recognised scheme under s.264 of the Financial Services and Markets Act. The Fund may hold positions in any of the companies mentioned above. Most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in the Fund. The Fund is not traded on an exchange or recognised market. This document should not be distributed to any third party without the express approval of Broadwalk Asset Management LLP.
This is the first year of the Broadwalk annual awards and shortlist to recognise outstanding achievements by UK quoted companies in the business services sectors. The UK often leads the world in business services and is a major employer. It is one of the less well known success stories of the UK economy, and these awards are another step towards raising its profile.
The macro environment is increasingly challenging for many service companies at present. However Business Services is also often part of the solution through the provision of outsourced services for less money using more efficient processes and practices. While we have singled out individuals, these outstanding achievements also reflect the very strong teams built up behind them.
Broadwalk Business Services Company of the Year[top]
Capita
Capita, under CEO Paul Pindar, has continued to grow organically at impressive double digit rates while maintaining an entrepreneurial culture despite being one of the largest companies in the UK. It is the undisputed leader in UK BPO (Business Process Outsourcing) market, and its rapid move to become a dominant force in the Life and Pensions arena has been remarkable. The company also continues to make strategic bolt-on acquisitions, and is highly cash generative.
Shortlisted
Connaught Excellent execution to maintain its leadership in the fast growing Social Housing repair and maintenance market.
Intertek The increasingly sharp focus on the “trade testing” markets is both differentiated and higher growth.
Serco Strong double digit growth has continued, while the company has made innovative international acquisitions. The company was recently promoted to the FTSE 100.
Xchanging Has grown rapidly in the Insurance and Financial markets BPO arenas, and in October announced a ground breaking Indian acquisition.
Since being appointed CEO in June 2006 from BPB, Richard Cousins has done a fantastic job improving the management and performance of Compass. He has delivered substantial shareholder value through disposals, country exits, restructuring and most importantly implementing a new management framework across the business. The cash generated has also enabled a significant share buyback. It is now seen as one of the world’s best food service companies as well as being the largest.
Shortlisted
Samir Brikho, Amec Amec under Brikho has been transformed into a much more focused services business with an extremely strong balance sheet, ready for a transforming acquisition.
Harriet Green, Premier Farnell Green has re-energised Premier Farnell and the focus on the faster growth R&D engineers market, plus an enhanced web offering is driving outperformance.
Paul Lester, VT Group Lester has completed the shipbuilding joint venture on excellent terms, while growing organically and through nuclear and waste acquisitions.
Rupert Soames, Aggreko Soames has transformed and enhanced Aggreko’s operations and market leadership in temporary power, and aggressively exploited the opportunities in emerging markets.
Broadwalk Business Services Chairman of the year[top]
Anthony Habgood, Bunzl
Since joining Bunzl in 1991 Habgood has managed the transformation of Bunzl into a world class specialist distribution company. The intentional focus on essential products reduces the cyclical element of the business which is particularly attractive in the current climate. Under Habgood, and from 2005 CEO Michael Roney, the company has also developed a well honed bolt on acquisition strategy which enhances organic growth.
Shortlisted
Sir Roy Gardner, Compass Sir Roy as Chairman-elect appointed Richard Cousins as CEO and has overseen the transformation of Compass.
John Hamer, Fidessa Hamer has overseen the exclusive focus on and rapid growth of Fidessa, working with CEO Chris Aspinwall.
Philip Rogerson, Carillion, Aggreko and Northgate, and non executive director of Davis Service Rogerson is one of the most widely experienced Chairman in the sector. At Carillion he has overseen the successful acquisitions of Mowlem and McAlpine, and its transformation into a higher quality support services operation. Aggreko’s achievements have already been discussed.
Peter Warry, BSS Warry appointed Gavin Slark as CEO in 2006 and while making bolt on acquisitions, has ensured its continued focus on specialist trades and crucially maintained a strong balance sheet.
De La Rue CEO Leo Quinn accelerated the sale process of Cash Systems as it looked as though economic conditions would worsen. It was a very good price for the business under the circumstances in mid June, and enabled a £460m cash return to shareholders in November.
Shortlisted
Sale of TDG for £228m An excellent price for the logistics company.
Sale of Axon Group for £441m An auction developed for the business even as the demand for SAP solutions looked to be weakening.
Sale of Biffa for £1,200m The largest deal in the sector, and after a demanding experience with private sector waste contracts.
Sale of Detica for £538m At a 57% premium to the share price pre bid speculation this was a very good price.
Broadwalk Business Services Small Company of the Year[top]
Mears
Mears, under CEO Bob Holt, has very successfully grown to be one of the largest operators in the Social Housing repair and maintenance market. This continues to be a strong growth market as Local Authorities are attracted to the substantial efficiency savings provided by the best private sector suppliers. Mears has also entered the fragmented domiciliary care market in the UK, which has many similar characteristics to social housing.
Shortlisted
Diploma The company has been developed to have high resilience having assembled a collection of niche businesses which distribute opex rather than capex related products.
Harvey Nash Tight management and an emerging outsourcing service positions this executive IT recruitment business very well for the downturn.
Costain Now positioned as a focused leader in the more resilient UK Civils market with a strong balance sheet.
Keller Keller is a world leader in ground engineering with a wide geographical spread. Despite the slowdown it has continued to generate very good organic and acquisition related growth.
Broadwalk Business Services Lifetime Achievement Award[top]
Gordon Campbell, Chairman, Babcock International (2000 to 2008)
When Campbell became Chairman of Babcock it was a small struggling engineering company. Through a series of successful acquisitions, and strong organic growth the company has grown into one of the UK’s largest and most respected Support Services businesses. To oversee growth in market capitalisation from £186m to £1.1bn was a truly impressive achievement.
Advisory Panel
All the firms represented on the advisory panel, Lazard, Rothschild, Royal Bank of Scotland Group plc and UBS Limited, an affiliate of UBS AG, have corporate relationships with companies in these awards lists. Their inclusion is not in any way an investment recommendation to buy or sell shares in these companies. The inclusion of these companies do not necessarily represent the views of these firms and should in no circumstances be attributed to them.
Broadwalk Asset Management LLP
This document is issued by Broadwalk Asset Management LLP should not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or unauthorised. Broadwalk Select Services Fund Limited (the Fund) is not a recognised scheme under s.264 of the Financial Services and Markets Act. The Fund may hold positions in any of the companies mentioned above. Most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in the Fund. The Fund is not traded on an exchange or recognised market. This document should not be distributed to any third party without the express approval of Broadwalk Asset Management LLP.
