3.1 Delivering shareholder value

By maintaining a strong structure and controls, focusing on clear financial KPIs and applying consistent, careful risk management, we create sustainable growth and deliver healthy investor returns.

After investing in the business, we use surplus cash to deliver further shareholder value in 3 main ways – through acquisitions, dividends and share buybacks.

£900m has been returned to shareholders over the past 5 years – £446m through share buybacks, £155m in special dividends and £299m in ordinary dividends.

I. Funding acquisitions to add value

In 2008, we invested £147.4m in 12 acquisitions and investments and our pipeline of potential target acquisitions remains healthy. While continuing to be extremely selective, we anticipate a good volume of opportunities in 2009.

II. Distribution to shareholders through dividends

The Group dividend strategy is to return surplus cash to shareholders through a combination of progressive dividends and, when appropriate, capital returns.

A key element in the creation of shareholder value is a progressive dividend policy. Over the 5 years to
31 December 2008 we grew our dividend at a compound annual rate of 29%. Our confidence in the strength and resilience of our business model has allowed us to reduce annual dividend cover gradually. For 2008 we continued this trend, reducing cover to 2.31 times (2007: 2.35 times).

* Before 25p special dividend

III. Share buybacks

We have continued to undertake share buybacks opportunistically, when market conditions allow, to maintain an efficient capital structure and minimise our long term cost of capital.

In the period to 31 December 2008, we repurchased 10.4m shares (representing 1.7% of the issued share capital) at an average price of 659p.