AVESCOGROUPPLC ANNUAL REPORT 2009 03
www.avesco.com
Chief Executive’s Review
Ian Martin
OVERALL COMMENT required to reduce the Group’s headcount by 10 The last twelve months have not been easy but
The results for the year ended 30 September per cent. Our staff have also supported reductions we are currently seeing signs of some stability
2009 reflect a period of acute economic in pay and benefits enabling us to retain key skills returning, with customers talking more positively
downturn, which to varying degrees has and experience while reducing payroll costs. about their future plans than for some time.
impacted all of our businesses. After a Together with the elimination of much of our
disappointing first half of the year when discretionary spend, one small office closure and
The Group will benefit from a number of major
compared to our original expectations, we then the prospect of falling depreciation charges, we
global events in 2010, including the Winter
experienced a quieter than anticipated end to have removed around £5m from our cost base on
Olympics in Vancouver, the FIFA World Cup in
the summer with two large events moving into an annualised basis. We expect the full benefits of
South Africa and the World Expo in Shanghai,
the next financial year. As a result, the effect of these cost reductions to flow through into the
where we have already contracted a considerable
the recession on the Group’s profitability in the financial results for the coming year.
amount of broadcast projects work. These events
period has been severe.
together with our lower cost base should help to
Increasing cash generation: We improved our underpin the financial results.
Although we do not report our financial numbers cash generation by reducing capital expenditure,
by customer type, as a group we service three disposing of older or less-utilised equipment and
Much has been learnt over the last twelve
markets: (1) corporate events including maintaining a tight control over working capital.
months. Several of our competitors have suffered
conferences, exhibitions and presentations, (2) In the last six months of the financial year, we
as the flow of business has reduced and their
sports and entertainment events and (3) broadcast were strongly cash generative, enabling us to
supply of cheap and easy finance has ended.
services which include the provision of equipment make a significant reduction in the Group’s net
The Avesco Group has been built to offer a first
and studio facilities. Creative Technology and our debt. We intend to maintain our focus in this area
class service to our customers while applying
Full Service businesses, which have a greater and expect to produce further reductions in net
strong financial disciplines. Those fundamentals
exposure to the corporate market, saw a debt in the coming year.
will hold us in good stead as we move forward.
substantial decline in revenue from that sector.
The year ahead will undoubtedly bring its own
Entertainment and sport fared somewhat better
Increasing our market share: We remained challenges but it may be that the worst is now
although the absence of any major sporting events
highly competitive on pricing and determined both behind us.
in the year limited the opportunities for Presteigne
to retain our customer base and to win further
Charter to grow its revenues in the broadcast
market share. In spite of the strong pressure on
IAN MARTIN
sector. The downturn in our markets generally has
pricing, our improved operational performance
CHIEF EXECUTIVE
meant that we have faced strong competition on
has enabled us to hold margins at the gross
14 January 2010
pricing and, in turn, on margins.
contribution level. The fall in annual revenues
masks the fact that we have successfully won
Our objective during these difficult times was not many new customers, which should stand us in
just to weather the economic headwinds that we good stead when markets recover.
were facing but also to ensure that we retain the
full operational capability of the Group and that
we emerge as a stronger business. Our strategy
focused on:
Getting the cost structure right: People costs are
one of our major overheads. As a result of the
downturn in business, action was unfortunately
Ian Martin CHIEF EXECUTIVE:
The Avesco Group has been built to offer a first class
services to our customers while applying strong
financial disciplines. These fundamentals will hold us
in good stead as we move forward.
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