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.

ADVISORY PANEL

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 Asset Management LLP is Authorised and Regulated by the FSA.

Important disclosures can be found at the end of this section.

AWARDS AND SHORTLIST

Broadwalk Business Services Company of the Year[top]

Ashtead

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

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

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.

Broadwalk Business Services Deal of the Year[top]

Autonomy sale to Hewlett-Packard for £7.1bn

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

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

 

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.

ADVISORY PANEL

The awards have had the significant benefit of views from:

• Jarrod Castle, Co Head of Transport Research, UBS
• Vasco Litchfield, Director, Lazard
• Jane Sparrow, Support Services and Electronics analyst, RBS
• Stuart Vincent, Managing Director, Rothschild

Important disclosures can be found at the end of this section.

AWARDS AND SHORTLIST

Broadwalk Business Services Company of the Year[top]

Intertek

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.

Broadwalk Business Services CEO of the Year[top]

Willie Walsh, British Airways

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.

Broadwalk Business Services Deal of the Year[top]

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

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.

Richard Harpin, CEO of Homeserve

 

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.

ADVISORY PANEL

The awards have had the significant benefit of views from:

• Jarrod Castle, Co Head of Transport Research, UBS
• Vasco Litchfield, Director, Lazard
• Jane Sparrow, Support Services and Electronics analyst, RBS
• Stuart Vincent, Managing Director, Rothschild

Important disclosures can be found at the end of this section.

AWARDS AND SHORTLIST

Broadwalk Business Services Company of the Year[top]

Aggreko

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.

Broadwalk Business Services CEO of the Year[top]

Nick Buckles, G4S

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%.

Broadwalk Business Services Deal of the Year[top]

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.

 

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.

Company of the year	Capita
CEO of the year	Richard Cousins, Compass
Chairman of the year	Anthony Habgood, Bunzl
Deal of the year	Sale of De La Rue’s Cash Systems
Small company of the year	Mears
Lifetime Achievement Award	Gordon Campbell, Babcock Intl.

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.

Important disclosures can be found at the end of this section.

AWARDS AND SHORTLIST

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.

Broadwalk Business Services CEO of the Year[top]

Richard Cousins, Compass

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.

Broadwalk Business Services Deal of the Year[top]

De La Rue’s sale of Cash Systems for £360m

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.