2. Controlling and measuring growth

We concentrate on generating steady, controlled growth

To deliver our long term contracts successfully and fuel future growth, we need strong leadership and clear business practices. These are essential to creating a financially stable organisation capable of supporting sustained growth and delivering healthy investor returns.

Our growth is underpinned by the following disciplines and these remain our priorities for 2008:

Maintaining strong structure and control through robust management and operating structure.
Focusing on clear financial key performance indicators (KPIs) with strong financial controls and effective governance.
Maintaining careful risk management consistently throughout the Group.

Financial KPIs for 2007

KPI	Aim	Progress 2007	2006
Operating margins	Maintain and strengthen margins	13.1%	12.9%
Free cash flow	Maintain strong free cash flow	£184m	£154m
Return on capital employed(ROCE)	Achieve steadily increasing ROCE which exceeds our cost of capital	19.6%	18.5%
Economic profit	Achieve steadily increasing economic profit	£110m	£89m
Gearing – interest cover	Maintain a conservative and efficient capital structure, with relatively low gearing	8x	9x
Capital expenditure	Keep capital expenditure at or below 4% of revenue	3.5%	3.6%