Chairman’s statement

We have seen clear progress in terms of growing customer demand and increased operational effectiveness

Graham Holden

In summary

  • Business continues to progress its transformation
  • New Board appointments bring fresh perspectives and contributions
  • Focus and discussion on strategic milestones and succession planning
  • Continued dividend growth reflects strength of the business

Dear shareholder

The business continues to perform well, progressing its transformation journey to become more tightly focused on the markets in which it operates. While this journey will continue into the coming financial year, we have seen clear progress in terms of growing customer demand and increased operational effectiveness.

Dividend

As a result of this progress and our confidence in the strength of the business, the Board is proposing a final dividend of 3.58 pence per share (2014: 3.25 pence). Subject to shareholder approval at this year’s AGM, the final dividend will be paid on 4 August 2015 to shareholders registered on 26 June 2015. The ex-dividend date is 25 June 2015.

The proposed total dividend of 5.37 pence per share (2014: 4.88 pence) would result in a sixth year of 10 per cent growth in the total dividend. This is consistent with the Board’s previously stated commitment to grow full-year dividends by at least 10 per cent per annum and this commitment remains in place until 31 March 2016.

Strategic focus

As the executive team continues to lead the transformation of the business, a great deal of the Board’s time has been focused on evaluating progress against key strategic milestones. We continue to have an effective Board in place, with debate and constructive challenge on all of the key areas of the business. Given the strong focus on the strategy of the Group, there has been a standing agenda item at each Board meeting to discuss strategy, with contributions from across the Board.

Board appointments

We reported last year that we were seeking an additional Non-Executive Director to join the Board and we were delighted to appoint Peter Smith to the Board in January 2015. Peter brings with him a wealth of experience in assisting businesses across different industries in developing and delivering their strategies.

The executive team continues to lead the transformation of the business

Earlier this year, Martin Towers notified us of his intention to retire from the Board at the AGM in July 2015. In seeking a successor for Martin’s role, we welcomed Liz Barber to the Board in April 2015. She has significant financial experience and expertise and will become Audit Committee Chairman following Martin’s departure.

We believe that both Peter and Liz will bring new perspectives to our Board discussions and will contribute significantly to the ongoing effectiveness of the Board. We used external recruitment consultants who are completely independent of the business for both appointments.

Board effectiveness

We continually consider the effectiveness of the Board and have a formal evaluation annually, which in 2014 was performed by an independent external firm. The conclusion from the evaluation was that we are operating effectively but there were some minor areas for improvement, which are detailed further on the Corporate governance page. We have taken action in all the areas identified as we strive to be as effective as we can be.

We always seek to ensure that we have appropriate succession plans in place both for the Board and for the senior management team of the business and this has been another regular topic of discussion during the year.

Looking ahead

Over the coming year, there are a number of priorities for the Board.

The first is for Peter and Liz to continue to familiarise themselves with the business and spend time with members of the senior management team. We believe that having a clear understanding of how the business operates is key to the Board’s ability to measure progress and contribute to its future success.

As the transformation of the business continues, I anticipate that a great deal of the Board’s time and focus will be on reviewing progress against the key strategic milestones set out by the senior management team.

Given the growing dependency on the strength of our people, the Board will increasingly dedicate time to further discussions around succession planning and to making sure that plans are in place to retain and develop talent.

Good governance and responsible business

We believe that good governance is essential to the Group and we seek to adopt best practice in all areas of governance where it is possible to do so. We also believe it is vital that the Board lives the values according to which the Group conducts itself; those of being open and considerate, team-minded, flexible, inspiring and innovative. I believe that our current Board achieves this and we will seek to continue to demonstrate these values in all that we do.

Those values have been embraced by employees and we continue to have a high level of engagement in community programmes right across the business, and particularly in Hull and East Yorkshire.

At the end of this year, we came to the end of our three-year Charity Partnership with Sparks, during which, through a wide variety of fundraising activities, we were able to raise over £235,000 for the charity. This money will support Sparks’ ongoing work to fund pioneering research into conditions that affect babies, children and mothers-to-be.

At the start of this financial year, we began our new partnership with the Teenage Cancer Trust and I am sure that we will see equally enthusiastic support.

Employees have consistently demonstrated commitment to delivering inspiring customer experiences

Finally, I would like to acknowledge once more the significant contribution made by our employees. An environment of transition and change inevitably results in a level of uncertainty. Since we began this journey in 2008, our employees have consistently demonstrated their commitment to delivering inspiring experiences to our customers and I have every confidence in their ability to rise to the challenges ahead. I thank them for their focus, hard work and commitment.

Graham Holden

Non-Executive Chairman
17 June 2015