Serco Group plc

Good morning, everyone, and thank you for joining us for the presentation of Serco's 2024 full year results, both to the people who have joined us here in person at RBC, as well as the participants who have joined us via the live stream. I'm Mark Irwin, the Serco Group Chief Executive. I'm joined today by our Group Chief Financial Officer, Nigel Crossley, and Anthony Kirby, who currently leads our UK and Europe Division, and as we announced in January, has been appointed by the Serco Board as my successor to lead the Group from the 1st of March. I would also like to acknowledge two members of our Serco Board who have joined us today, our Chairman, John Rishton, and the Chair of the Board Risk Committee, Ian O'Mockadam. In terms of our agenda, I will provide an overview of our 2024 performance and an update on the execution of our enterprise growth strategy. Nigel will take you through the detailed financials for the operating period before handing to Anthony, who will cover progress in our UK and Europe division. We will then wrap up the presentation part of the agenda and move to Q&A. Our 2024 results reflect another strong year of operational and financial performance across the group and continued progress against our long-term strategy. As reported in our pre-closed trading update, we accelerated trading momentum through the second half of 2024. This allowed us to achieve full-year revenue in line with our guidance, deliver a 30 percent increase in second-half profitability when compared to the same period in the prior year, and an increase of 10 percent overall in our underlying operating profit on a full-year basis. We delivered a meaningful improvement in margins, which has taken us well into the 5 to 6 percent target range we set. And we've had a very strong close for cash for the year. This strong financial performance enabled us to deliver on every element of our capital allocation framework, which Nigel will speak to in more detail shortly. These results are the consequence of driving execution through getting below the headlines to optimize our portfolio performance. It's about growing beyond the year by developing and converting a high-quality pipeline and by being deliberate in the allocation of resources and capital for the benefit of the enterprise. Our people strategy to ensure that we have the right people in the right place doing the right thing has seen vacancy rates down 62 percent over the past two years. And we've maintained the trust of our customers through credible and consistent operational delivery while keeping our colleagues safer. We achieved a 22 percent reduction in lost time injuries, resulting in 4,459 fewer lost working days last year alone. From the mobilisation of our health assessment services contract in the UK through to the rapid deployment of a number of new fire and rescue contracts in the Middle East to meet growing demand in the region, our operational approach has been to mobilise, stabilise and then optimise in order to strengthen our customer relationships and support the continued strong retention rates in the business. Our retention in our two largest geographies last year was more than 95 percent. By way of example, one key REBA to call out is the 200 million U.S. dollar veterans transition program, which following the successful award in September has already increased in scope and value as the customer recognized that we can bring better outcomes to an increased number of veterans in the U.S. A focus on in-contract productivity and efficiency has delivered a 60 basis point improvement in margins. And we continue to explore ways for technology to work to support the effectiveness of our processes and the productivity of our colleagues. And on growth, we entered the year with a robust pipeline of new business opportunities and a clear focus on conversion. We built momentum as we went through the year with an improving trend in both organic revenue and strengthened order intake. Despite the disappointing outcome of the Australian immigration rebid, we ended the year with 4.9 billion pounds of order intake, over 40 percent of which came from our U.S. business. The book-to-bill of 82 percent, which we reported at the end of the first half, improved to 102 percent on a full-year basis. And our order book now sits at above 13 billion pounds, excluding US extensions and our share of joint venture revenues. And we ended the year with a decade-high pipeline of good quality opportunities to fuel ongoing growth. We continue to actively manage our portfolio, both in terms of underlying performance as well as across the world to ensure that the prioritization and resources of capital go to higher growth, higher value areas. As we continue to see, including in recent days, geopolitical risk is driving governments across the world to significantly increase investment in defense and national security. The two areas have been prioritized in our portfolio to look at where we can grow in defense services and geographically, a very clear focus on North America. And we've already begun to see the benefits of aligning this prioritization to our pipeline and our acquisition activity. With 40 percent of the order intake coming from the defense sector, we expect our defense services business to be around 2 billion pounds of the group's revenue by the end of this year, and we continue to see more demand from long-term structural drivers. More broadly, we believe the U.S., as a geographic market, continues to offer significant opportunity for profitable growth. In recent years, we've doubled the revenue and trebled the profit of our U.S. business to a $2 billion portfolio, delivering 10 percent margins, and we estimate that we still only have just over 1 percent market share. We therefore believe that there is further opportunity at a time when the U.S. government clearly has a renewed emphasis on increasing government efficiency. I'd like to spend just a few minutes to touch on the program we've been executing for organic growth in relation to people services in the defense sector. Serco has a track record of training the next generation Australian Navy officers at HMAS Watson's Bay. of providing unbased clinical workforce to the Australian Defence Force, of providing psychological support services to the US Navy Bureau of Medicine and Surgery, of supporting thousands of US military veterans as they transition back to civilian life, of delivering flying training support to the Royal Navy Air Sessions, Yeovilton and Cold Rose. So we are building on this longstanding support for the military by broadening our capabilities in the services which we believe are mission focused, tech led and people enabled. This value proposition has supported the win of H2F, which we announced in January, a $250 million contract to support 45 US Army brigades to enhance physical and non-physical performance. and our mission to bring together the right people, the right technology and the right partners was crucial to the recently announced award of more than £1 billion for the UK Armed Forces Recruitment Service Contract. The technology stack that sits behind this cutting-edge contract demonstrates our increased confidence with digital and technology-based solutioning to deliver, in this case, a candidate-led, data-driven and cost-effective service in partnership with the MOD. And as mentioned, we see targeted and disciplined M&A as an important part of our overall growth strategy. The $327 million acquisition of Northrop Grumman's mission training and satellite ground systems business is expected to complete around mid-2025 and will further strengthen our position in military training and ground satellite markets. The deal is near-term accretive from a value perspective and over the medium term increases our growth potential in both our US platform as well as our international defence sector. To give you a sense of the asset, I'll briefly touch on two key contracts in the MTNS portfolio. The first is Dimon. This recently awarded 10-year contract has a ceiling value of US$800 million. And through this, we will own, operate, and maintain the network across more than 100 U.S. Air Force sites, enabling multiple aircraft simulation platforms and locations to conduct training and mission readiness exercises simultaneously without incurring the cost of actual flight hours. The second contract is the Mission Command Training Program, which delivers a combination of live, virtual and constructive training to US Army commanders. MCTP simulates combat environments for advanced tactics, testing and training in an operationally and economically efficient delivery model. The MTNS portfolio is around 40% Army, about 30% Air Force, and 10% US Space Force, building on the already strong position we have with US Navy. Now, I spoke earlier this year at our half-year results about the key capability areas that we are building in our defence portfolio. And as you can see, the recent organic wins, as well as the MTNS acquisition, reinforces our position across the strategic areas that we've been focusing on. And just before I leave the slide, I wanted to highlight that it's not just about adding more capability, but leveraging synergy across capability areas, as we have done, for example, by applying next generation technologies to our naval design capability. Working with the US Defense Research Projects Agency, DARPA, Serco's next-gen design is a first-in-class, long-endurance, medium unmanned surface vessel, which will allow the ship to operate at sea fully unmanned for a 12-month period. I had the opportunity in Seattle last week to do a walkthrough of Defiant just ahead of her sea trials coming up in a few weeks. Everything from the pioneering automated ATSI refuelling system to DSX, which is a platform through which we can generate millions of potential designs of alternative capability sets to meet mission and performance requirements, tells us that this is not a shipbuilding program that uses technology. but a technology program that has delivered a ship with improved endurance, flexible mission payloads and reduced cost per hour to operate. I'm confident that this focused, deliberate approach to targeting attractive high-value sectors and markets will continue to see Serco succeed. More broadly, we continue to believe that the structural drivers of demand continue to create intense pressures on government to partner with the private sector for support. We've talked previously about the four forces that drive demand. We believe that these are further bolstered by new and evolving challenges. Hastened by deglobalisation and ongoing conflicts, managing geopolitical risk not only encourages defence spending, but creates a broader need for wider resilience and enhanced sovereign capability. We know the global race for talent continues and the enduring technological revolution now accelerated by the rapid development of AI has not left public services untouched. Our value proposition to help governments to do more and better with less is arguably stronger today than it's ever been. So we believe that with an addressable market of around £870 billion in the areas where we have capability and in our four geographies, there remains plenty of opportunity for us to grow. I would like to conclude my comments this morning with this slide, which shows that the last five years have been transformational for Serco, for our shareholders and for our colleagues. Over the period, the business has delivered 8.4 percent growth CAGR, more than doubled our pipeline for future growth. Our profit has increased from 120 million to 274 million pounds. And importantly, we've converted that profit to cash and generated over one billion pounds of free cash flow. I'm incredibly proud of what we've achieved. It's been a privilege for me to be a part of the team that's taken this business through its turnaround under Rupert's leadership, and then to go on myself to lead the group in recent years to its next phase of growth. I'm confident that the platform that we've created will mean that the next five years will be equally strong in terms of its performance under Anthony's leadership. And with that, I will now hand over to Nigel to take us through the detail of our 2024 financials.

Thank you, Mark, and good morning to everybody. I will start off with an overview of the group's financial performance in 2024. And Mark's already covered the highlights of these strong results. However, there are a few points I'd like to pull out. And the first relates to the strong performance we delivered in the second half of the year, when the underlying operating profit increased by 30% compared to the same period in 2023. And the second half free cash flow was £150 million, and the order intake was £3 billion. And while organic revenue growth for the full year was minus 3%, this does not tell the full story. Organic growth was flat in the second half, offsetting a 5% headwind from expected lower volumes on the UK immigration contract. And this was also an improvement from the 5% decline we saw in the first half of the year. The second point relates to the European immigration business, EHC, that we acquired earlier this year, and that has performed strongly. And while revenues are broadly in line with our expectations, the profitability of the contracts has been stronger. And in the last three years, through a combination of organic and inorganic growth, The European business has grown from around 100 million pounds in 2021 to over half a billion pounds last year. And the EHC acquisition has established a strong base in Germany for future organic growth. And then finally on this slide, underlying operating profit margin improved by 60 basis points in 2024. And encouragingly, this is high-quality margin performance, as it's all been derived from gross profit. And this has been achieved through a combination of improvements on underperforming contracts, increased contract productivity, agreeing new terms with customers, and on-contract organic revenue growth, offsetting some higher in-year mobilization costs. and pleasingly we've seen these margins improve in all four of our divisions which reflects the efficiency and productivity program of work that we kicked off this year and we are confident there are further opportunities to improve the efficiency and productivity of our business so going through the divisional performance reviews i'm going to start with north america And for the full year, organic revenue was up 1% from new business wins, offsetting the impact of exiting several lower margin contracts and the reduced CMS revenues. In the second half of the year, we've seen a step up in revenue, reporting organic growth of 5%, with the defense business leading the way on growth. An underlying operating profit margin was 10.3%, up slightly on last year, which is particularly pleasing in light of this including the first full year of new terms for both the CMS and the FEMA contracts. And this margin has been achieved by improving contract performance and productivity, as well as delivering efficiency in the indirect cost base. An order intake for the full year was 2.2 billion pounds, which has delivered a very strong book-to-bill outturn. Over half of that order intake was for new business, with the defence accounting for the majority of the new wins. And equally important for growth is the retention of existing business, which was very strong with rebid win rates at 96%. The order intake, coupled with a second half revenue growth, provides good momentum as we move into 2025. And the order intake of £1.4 billion in the second half of the year has resulted in a smaller pipeline than was reported in June. This, however, remains a healthy at £2.1 billion of new business opportunities, with three-quarters of those opportunities in defence. And towards the middle of the year, the pipeline will be supplemented further by the acquisition of MT&S, whose capabilities will broaden the range of new business opportunities we can bid for. Next up, Anthony is going to take us through a deeper dive on the UK and Europe business. So I will not dwell on this slide other than just to point out we've had a good year and made particularly good progress with 100 margin points of improvement on profit margin in the UK in 2024. So moving on to Asia Pacific. As you'll all be aware, we lost the immigration rebid at the end of last year, which was significant for this region. That said, we remain confident that we have a good base business in the region that can be further developed. We are pleased with the progress made towards a turnaround during 2024, the first full year under new management. There's been material improvement in some underperforming contracts, and we have worked to right-size the cost structure of the organisation. And while there's further work to do in 2025, and to build out the pipeline of new business opportunities, which we always knew that this part of the recovery would have the longest lead time to return to long-term profitable growth. The loss of the immigration business did, however, require us to revisit our balance sheet valuation of goodwill. And while we have plans to further improve the performance of the business, to be compliant with accounting standards, we cannot take credit for these future plans. And consequently, for accounting purposes only, we have booked a non-cash exceptional impairment charge of £115 million against the Asia-Pacific goodwill asset. Encouragingly, in the second half of the year, organic revenue grew 6 percent, largely from higher volumes on our defense health services contract. And profit has increased around 50 percent as the transformation and cost-saving investments we made in the first half year delivered benefits in the second half of the year. And exiting 2024, our pipeline for new work stands at 1.7 billion pounds, which includes 1 billion pounds relating to defense-based services. will continue to qualify and bid for new business opportunities. And we expect to have a higher quality pipeline by the end of 2025. Turn to the Middle East region, which has revenues down 2% on a constant currency basis due to the loss of some lower margin contracts and reduced scope of work on a defense contract due to the Australian step down in presence in the Middle East. This was partially offset by some good winds in transport relating to fire and rescue services. Margin improved 65 basis points due to the exit of low margin work and a good focus on efficiency and productivity. And there's a strong pipeline of new opportunities that stands at a billion pounds, up 25% on last year. And these are spread between larger service contracts, predominately in the UAE, and some smaller, more advisory opportunities in KSA. So moving now on to cash flow, and cash generation in the year was very strong, continuing our trend of the last five years, where on average we've been converting over 100% of our trading profit into cash. This has been achieved through disciplined processes to produce timely and accurate sales invoices. that enable customers to pay us promptly. And since 2019, we've reduced the number of days sales outstanding by around 20 days, which has contributed to £250 million of improved cash through lower receivables on the balance sheet. And adjusted net debt at the end of the year is marginally lower than the previous year at £100 million. And this is after completing a £140 million share buyback programme and closing the EHC and climatised acquisitions during the year. Overall, this has resulted in groups' leverage at the year end being 0.3 times EBITDA, which is well below our target range of 1 to 2 times EBITDA. We did announce the agreement in January to acquire the MT&S business from Northrop Grumman for $327 million, and our leverage on a pro forma basis, including the acquisition, increases to 1.2 times EBITDA. This is still at the lower end of our target leverage range and leaves us with a strong balance sheet and the capacity to make further investments in 2025. So on that note, we'll turn on to capital allocation. And in 2024, we delivered against all four of our capital allocation priorities, enabled by strong cash flows and a strong balance sheet. Our first and most important priority is to invest in organic growth. And during the year, we've invested in our capacity to build and execute the largest pipeline of new business opportunities in more than a decade, as well as mobilising some large new contracts in the UK. And regarding our second priority, today we announced our final dividend for 2024, which resulted in a full-year dividend of 4.16p per share, which is a 22% increase on last year. And relating to our third priority, M&A, we closed the acquisitions of European home care and climatised business in the Middle East in early 2024. And in addition, as Mark has already referenced, we are excited to have announced the acquisition of MT&S. All these acquisitions bring new capabilities and access to new customers and markets, which will provide opportunities for increased organic growth in the future. And our final capital priority is to return surplus capital to shareholders promptly, which we executed in 2024 with a share buyback of £140 million. And during the last four years, we've returned £340 million of surplus capital to investors in the form of share buybacks. We've defined surplus capital being when leverage is below one times EBITDA. And at the end of 2024, our leverage on a pro forma basis, including the acquisition of MT&S, is 1.2 times EBITDA. And although we're not currently in a position of surplus capital, we are only modestly above the threshold and have established a track record of strong cash flow reducing our leverage. And we will review our capital priorities at the half year. And finally, turn to guidance, which is a strong outlook in the light of known revenue and cost headwinds. Our guidance for 2025 is larger than change from the pre-closed statement. The outlook for 2025 anticipates revenue will be similar to 2024, with underlying organic growth of 7% driven by the, sorry, offsetting 7% revenue reduction from the UK and Australian immigration contracts. Underlying operating profit will reduce only slightly, despite previously advised cost pressures, including the increase in UK national insurance and the effect of the Australian and UK immigration contracts, mostly offset by our continued effort to improve efficiency and productivity across the portfolio and profits from new business and ramp-ups of businesses mobilised in 2024. We expect cash flow to be in line with our medium-term goal to have at least 80% of profit converting to cash, and this will be achieved after a number of years of exceptional cash conversion. And today, we've updated our guidance for net debt for the end of 2025, reflecting our cash flow at the end of 2024 and the corresponding balance sheet closing stronger than we had anticipated. We now expect net debt at the end of 2025 to be just 10 million pounds, an improvement of 50 million pounds from the previous guidance. And the guidance on this slide does not include the impact of the acquisition of MT&S. Once we know the closing date for the transaction, which we expect to be around the middle of the year, we will update our guidance to include a part year of MT&S's financials. And on that note, I will now hand over to Anthony.

Nigel, thank you, and good morning, everybody. I'm delighted to be here as the next chief executive of what I think is one of the best companies in the world, one that I'm proud to have been part of for over seven years, most notably as the group chief operating officer where I worked with my colleagues around the world, and latterly, and until Saturday, as the UK and ECEO running what is the biggest part of the organization. And over the next few slides, I want to talk about the progress that my team have made over the last two and a half years across the geographies that we lead here in the UK and the very exciting and rapidly growing European business. In 2024, revenue was stable around 2.4 billion, representing around half of the group's revenues, following a 16% growth in FY23. This followed the exit of some contracts in 23 that were less strategically important in our portfolio, several of which had margins below the level that we see as appropriate for the work that we were doing. And you can clearly see that these playing out in terms of exit in the revenue change across our transport, health and FM and citizen services businesses over the last two years. The small organic decline we saw from those exits were offset, as Nigel said, by the strong trading from our European home care business, which we acquired at the end of Q1 last year, and is a leading provider of immigration services across many states in Germany. Justice and immigration as a sector saw growth for the second year running, as did our defence business. both sectors are and will remain central to the division and the group strategy moving forward and our medium-term success. Year on year, we grew operating profits by 22% to £148 million in 2024, building on an increase of 68% in FY23. And this growth was also reflected in our margin with a 280 basis point improvement since 2022, taking our overall margin to 6% in 2024. This profit growth has been driven by significant on contract operational and margin improvement and the increase from our acquisitions in our European business. It also absorbs some significant mobilization costs relating to what was a challenging ramp up of electronic monitoring. We did deliver £1.9 billion of order intake this year, and I'm particularly proud of our 98% customer retention rate, the best it's ever been in our UK and Europe business. Our business win rate, though, was softer than I would have liked, although this was in part due to some decisions being delayed due to the period following the run-up to and following the UK general election. But we are already seeing some of those decisions land early in 2025, most notably, as Mark was proud to mention, the Armed Forces Recruitment Service contract valued at £1 billion, raising to £1.5 billion if all extension periods are exercised. We also want a new contract to provide technical solutions and Earth observation support to the European Space Agency, as well as the flagship contract to continue to operate the Cabinet Office's UK Emergency Planning College here in the UK. Even following the AFRS bid win, our pipeline looks very strong still at around 5 billion and is critically aligned to our growth-focused sectors moving forward. As you know, our financial performance is an outcome of the inputs that 34,000 great people in my team put in day in, day out, 24-7, 365 days of the year. So when Mark, myself, and the rest of the group executive team refreshed the strategy, I was absolutely clear that we needed to be focused on fewer but better quality capabilities in the most attractive markets. This is an area where we've made good progress over the last couple of years, rebuilding our pipeline, now better weighted to where we see stronger capabilities and where we have a greater right to win. This clarity has been coupled with a deliberate plan for execution that's focused on operational excellence, competitiveness and growth, which have all contributed to our performance. We want those three priorities to be mutually reinforcing. So operational excellence builds the trust that wins us new business with our current and future new customers. Competitiveness underpins our ability to win and create the headroom we need to invest in our people, technology, and future capabilities. And growth fuels the investment in operational excellence and innovation. So a virtual circle, if you will. In terms of operational excellence, it is absolutely at our core. It's delivering the best possible outcomes for our customers, our colleagues and the communities where we work. And you can see how that's been reflected in our performance. Over the last few years, we've mobilised some very deeply complex operations with some excellent outcomes. A couple of examples just to share is the HMP Foss Way prison, which we brought online ahead of time to help our customer relieve pressure in the prison estate. And our health assessment contract supporting our DWP customer has seen us welcome around 1,000 colleagues to that new service, delivering over 140,000 assessments since we mobilised that contract in September last year. And through innovation and global best practice sharing, we've driven efficiency and improved our margins. As an example, our health and facilities management business, where the team have improved the margin from 1.5% at the end of 2022 to 4.5% at the end of 2024. largely driven through a disciplined focus on operational excellence. And first and foremost, we've done this with the safety of our colleagues at the forefront of our mind. And that's a personal passion that Mark and I share and one which we will continue to work on. Competitiveness. When I talk about competitiveness, what I'm really talking about is a business with one of the most competitive cost bases in the sectors where we choose to operate, but importantly, complemented by leading edge systems, agile processes, which really do increase our win and retention rates with our customers. Over the last few years, myself and the team have taken targeted and deliberate action to improve those outcomes. Over the period, we've removed duplication where we could, we've increased automation, and we've addressed some unproductive costs across the organisation, allowing investment into the things that really matter to help improve growth and our improvement in our IT solutions. But I'm very clear that there is still more to do. In 23, we launched our contract margin improvement plans, driving marginal enhancement gains across the organisation, combining in around a £15 million benefit to the organisation. Things like better procurement, enhanced commercial negotiations and the removal of waste from some processes. Likewise, really strong cash generation is an important component of our business. And I'm pleased that the division has been able to contribute so significantly to the group's performance year on year, as you can see on the screen now. And then growth. In the last two years, we have focused on strengthening our base. We've seen, as I said earlier, a contract retention rate of 98%, re-securing some very important strategic contract capabilities for us. In 24, the most notable of some of those contract extensions was our restart programme with a DWP worth around £160 million of revenue, a two-year extension on the Northlink ferries, which is a lifeline that connects the Northern Isles, and the retention of HMP Ashfield, a £200 million 10-year contract extension. Our joint ventures can sometimes often remain in the shadows, but I'm exceptionally proud of the performance we've seen since 22, with a 111% improvement in revenue growth across our JV portfolio. And finally on growth, just turning to our European business. Five years ago, Nigel mentioned our business comprised of around 900 people, delivering a revenue of just over £100 million. The end of 24, our revenues was around 540 million with a workforce of over 5,000. We've grown that business both organically and inorganically very deliberately to be able to build our capabilities across our European countries. Europe is another example of where we've invested deliberately to build platforms for future growth, one of which being immigration. So we've operated UK immigration now for many years, supporting governments to deliver challenging services to individuals at the most vulnerable parts of their lives. The structural drivers for immigration and migration are clear. From climate change to geopolitical uncertainty, there will be, and probably remain for many decades to come, high levels of migration in certain parts of the world. And this is particularly difficult for governments at a time when fiscal pressures are high. We now have a genuine international immigration platform across our division. Our scale, expertise and capability afford us the opportunity to grow in the large markets where we already have a presence, identify adjacencies where we have the capability, and expand to work with other governments who are faced with similar challenges around the world. So that was just a quick update on the work that my team have been doing over the last two and a half years across the UK and Europe. And for all of their contributions and commitment, I am and will remain incredibly grateful. So just turning to the global business for a moment. As we all know, and Mark alluded to earlier, we are living in a time where geopolitical uncertainty continues to dominate and value for money is at the forefront of our customers' minds. We do and will continue to operate in sectors that support governments during these difficult and uncertain times. We have a resilient international platform with a good strategy that's working, customers that we know with long-term contracts, and less churn expected in the coming years. Typically, we operate in critical, non-discretionary sectors that governments globally will continue to prioritise despite the pressures they face. And when our customers are seeking efficiency and value for money, I do as the rest of the executive team feel we are superbly placed to help them. Our capabilities continue to improve and we're investing in technical infrastructure and AI developments as we seek to bring that innovation to our bids. As Mark and Nigel have noted, we have entered 2025 with strong momentum following a very strong end to 2024 in the second half. So this, combined with getting out of the blocks early in the year with our agreement to acquire MT&S in the US, the important and very proud appointment of us to the AFRS program here in the UK, as well as a strong pipeline aligned to our capabilities, gives me the confidence that this business is on a sound footing and has everything to play for in 2025, as demonstrated by our guidance. I really do believe that Serco is one of the best businesses in the world and my job and that of my team moving forward is to continue to prove that by maintaining strong financial performance, superb operational delivery and ensuring that our colleagues are safer and more engaged than ever before. Well, finally, before I move to questions and answers, I'd just like to take this opportunity on behalf of the entire board, the chairman and everybody else at Serco to thank Mark for his leadership, his contribution over the past 12 years and significantly and in particularly his time during the last two and a half years being the group chief executive. So, Mark, thank you on behalf of everybody here at Serco. I look forward to talking to you all later in the year. But for now, I think we're going to move to questions and answers. And Nigel is going to share that for us. Thank you, Nigel.