Risks and uncertainties
The Group has a well developed structure and set of processes for identifying and mitigating the key business risks it faces. These are described in detail in the Corporate governance statement and the key risks are summarised in the table below.
| 1. Financing |
The Group has committed facilities of some £400m with average drawn debt of approximately £260m – £300m. The Group has to refinance the majority of these facilities by December 2012. |
Improved cash generation includes the evaluation of disposals, targeting a reduction in the dividend cash cost, operational improvement and a focus on cash conversion and generation. |
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| 2. Operational |
Operational start ups and ongoing contractual KPIs provide a demanding operating environment. |
The Group has developed dedicated project teams specifically targeting start up requirements.
Ongoing operational performance is the core strength of the Group and is supported by all facets of the Group. |
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| 3. Commercial |
We operate in a competitive environment with very sophisticated customers and we have to ensure the returns are adequate especially for the risks we take on. |
The internal processes are set up to focus on the major contractual obligations and to make sure the financial returns are modelled correctly.
As explained more fully elsewhere in this report the desire to change the value proposition to the customer and to improve returns is a major thrust of the Group. |
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| 4. Strategic |
The Group needs to identify areas of business that provide growth and margin enhancement. |
There are sectors within the Group portfolio that can be grown and profits increased with investment and focus. Resolving the balance sheet constraints will enable us to invest in these businesses and capture these opportunities sooner. |
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