• Letter from the Board
• Board Review
  • Our strategy
  • What we achieved in 2007
    • Fixing the operational problems
    • Improving profitability
    • Reshaping the business portfolio
  • How we measure achievement
  • What we expect to achieve in 2008
  • Summary
  • Illustrative case studies
• Business Review
• Corporate Responsibility
• Board of Directors
• Senior Management
• Financial Statements
• Shareholder Services
• Download Centre

Board Review

What we achieved in 2007

Fixing the operational problems

In Pest Control our operational focus in 2007 has been on improving sales, customer service (thereby benefiting contract retention) and productivity. We have had notable success, improving the organic growth rate from 1.1% in 2006 to 5.7% in 2007. Steps to improve low-season productivity in North America are underway and there is more to achieve in the UK following the reorganisation at the start of 2007.

In Textiles and Washroom Services an important operational focus has been on the UK business. In the UK, we separated the washroom, linen and garment operations and closed the linen and garments activities in 2006. During 2007 we consolidated our washroom facilities into 20 branches and improved the efficiency of our processing. As a result, we have now created an infrastructure which should enable us to be a low cost operator in the marketplace. Away from the UK the focus of operational improvements has been in sales effectiveness in a tough, price competitive market. We have also worked to improve operational efficiency because we are typically unable to pass through cost increases to our customers. We are therefore reliant on annual productivity improvements to protect the bottom line.

In Facilities Services our largest business is Cleaning in the UK, which operates in a highly price-competitive market. We have made improvements to the way in which we manage our smaller customer accounts and have an effective approach to daytime cleaning. These initiatives are improving productivity and will help offset margin pressure. In Catering and Hospital Services we have been shedding unprofitable contracts and improving procurement to drive down food costs.

In Asia Pacific our operational focus has been on improving sales effectiveness to drive organic growth (12.0% in 2007 compared with 5.7% in 2006), whilst improving customer service to boost retention.

With the exception of City Link we have made good progress in improving our operations this year but there remains more to do. Continued focus on sales and service excellence will enable us to improve the group’s organic growth rate and defend or improve margins in our more price-competitive businesses.