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Market conditions

The Asian Pest Control and Hygiene markets were challenging in the first half of 2010 but recovered well in the second half of the year as growth initiatives gained traction. Asia had significant growth momentum in the second half with strong performances from India, China and Vietnam. The growth bounce-back was less marked in Pacific and remains fragile but positive.

 
  Fourth quarter   Full year
£m 2010 2009 Change   2010 2009 Change
At 2009 constant
exchange rates:
             
Revenue 49.0 48.9 0.2%   192.2 202.1 (4.9%)
Adjusted operating profit (before amortisation and impairment of intangible assets1 and one-off items) 6.7 1.7 294.1%   25.4 21.1 20.4%
At actual exchange rates:              
Adjusted operating profit (before amortisation and impairment of intangible assets1 and one-off items) 8.2 2.1 290.5%   29.6 21.1 40.3%
 

1 Excluding computer software

Asia Pacific revenue declined by 4.9%, impacted by the exit in 2009 of the low-margin Hong Kong Government contract. Underlying revenue growth was broadly flat year on year with Asia growing by 1.4% and the Pacific declining by 1.1%. Asia showed solid revenue growth momentum in its established markets of Indonesia (up 9.6%) and Thailand (up 4.5%), while the emerging businesses in Vietnam, India and Brunei delivered greater than double digit growth of 42.5%, 15.7% and 14.2% respectively. Throughout the year China decreased its dependency on Government sales, developing a fast-growing commercial business. In the Pacific region New Zealand performed well but prior year contract losses in Australia Hygiene and Ambius and weaker residential job work in Australia Pest resulted in overall revenue decline of 1.1%.

Profit grew by 20.4%, supported by strong cost control and fewer asset write-offs. Both 2009 and 2010 had adjustments, mostly related to acquisitions made prior to 2008.

2011 preview

Asia and Pacific are expected to continue the growth momentum established in the second half of 2010 as the sales capability initiatives develop further. Both regions expect to show positive growth with Asia expected to show close to double digit growth performance by the year end.