By Jon Moynihan, Executive Chairman
PA continues to outperform
In 2007, PA’s work with our clients; the quality of our people; our management processes; and our financial results, all justified our ‘best in global class’ aspirations. We continue to attract great people into PA who share our vision of what makes a great consulting firm and we have extended our reputation for adding value to our clients both in existing markets, and in new areas around the world.
Our year-end share price of £7.27 represents an increase of 14% over the previous year. Taking account of dividends paid, total shareholder return since 1992, when the price was 10p, has been some 8,800% – that is an almost 90-fold increase in shareholder value. As this implies, and the chart on page 37 of this Annual Report shows, PA shares have significantly outperformed the world’s major share indices over that period. Although many have asserted, for many years now, that PA’s share price performance will eventually have to tail off, so far we continue to confound that view by performances such as last year’s. PA’s Board sees it as its duty to seek to continue that outstanding performance.
At the end of 2007, PA’s available cash reserves reached some £252 million. This tangible evidence of our success is also echoed in the quality of our people, our continually increasing client influence, and the ongoing success of our Ventures.
Growing our leadership team
The most high profile change in PA during 2007 was the retirement of Bruce Tindale, and the appointment of Alan Middleton as CEO. Bruce, 30 years with PA and four years as CEO, retains the affection and appreciation of all at PA, and we hope and expect to see him at PA functions in the years to come. Alan’s appointment was greeted with universal approval, and he made his mark on the firm from the moment he assumed the reins: PA’s record performance in 2007 can be directly traced to the great performance of the final months of the year, driven by action taken by Alan as soon as he took charge, and our strong start to 2008 has equally been driven by Alan’s management – both in the decisions he has driven through, and the infectious and enthusiastic style in which he, along with Andrew Hooke, our Chief Operating Officer, has managed.
Equally important to PA was the appointment, on 1 January, of Martin Stapleton as CEO of PA Ventures. Our considerable success in this area before that was despite, not because of, the fact that management of our Ventures had been done on a shoestring and with only part-time staff. During 2007, Martin, working with Chris Haynes, PA Ventures’ CFO, has built a strong team of professionals to run our work in this area. PA Ventures is changing its name to Ipex (derived from IP exploitation), and is focusing on building both existing and nascent Ventures for future success and realisations.
We recruited a large number of high quality consultants, both senior and junior, during 2007 but have become more targeted and demanding in our recruitment, focusing on senior-level recruits and thus seeing industry and service-line experts join the firm. General Sir Mike Jackson, previously the Chief of the General Staff of the British Army, joined PA as a Senior Advisor and Chair of our Defence Advisory Board. Our business team has been strengthened by the arrival of Adrian Gardner as our new Chief Financial Officer. The team running our Corporate Functions is now almost entirely new from mid-2006.
Note: These financial highlights do not contain sufficient information to allow for a full understanding of the results of the group and state of affairs of the company or of the group. For further information, the full annual financial statements, the auditors’ report on those financial statements and the Directors’ Report should be consulted. These financial highlights are not audited and do not constitute statutory financial statements as defined by section 240 of the Companies Act 1985. The financial information included in these financial highlights have been extracted from the PA Holdings Limited financial statements for the year ended 31 December 2007, on which the auditors gave an unqualified opinion, did not include an emphasis of matter reference and did not include a statement under section 237(2) or (3) of the Companies Act 1985. The PA Holdings financial statements for the year ended 31 December 2007 have been filed with the Registrar of Companies.