The story behind the share price29 Jul 2014
Strong leadership, continued investment in people and innovation, and committed corporate citizenship distinguish top performing FTSE 100 firms, writes Alex Evans
While financial results and analysts forecasts have a big impact on the share price they don’t always reflect the unseen activity enabling sustained long term growth.
The QBE FTSE 100 Business of the Year Award was designed to highlight the story behind the share price by focusing on the impact of leadership, staff engagement, customer service, innovation and ethics on growth and financial performance. A two stage judging process includes a filmed interview with the CEO for insights into management culture and growth strategy while information provided in an entry form demonstrates key achievements and milestones.
Last year’s winner, Sainsbury’s, was recognised for 34 consecutive quarters of growth but also for its investment in people and sustainability to support future performance. The finalists shortlisted for the 2014 QBE FTSE 100 Business of the Year have all achieved profitability and growth by enabling innovation and best practice while investing in talent and new IP.
Shareholder value is a key measure of a CEO’s success, and strong leadership has driven transformation in several of this year’s FTSE 100 finalists.
ITV’s transformation, led by CEO Adam Crozier, has delivered a 750% increase in share price in the last five years (70% over the last 12 months) with four consecutive years of double digit profit growth while its market cap has quadrupled to over £8 billion. BT’s transformation from a phone company to a provider of phone, broadband, television and business services, in the UK and overseas, has made it one of the fastest-growing FTSE 100 shares of recent years – with CEO Gavin Patterson taking on Sky in sports broadcasting and preparing to break into the consumer mobile market before the end of the year.
Under the leadership of CEO Carolyn McCall, easyjet is one of two recent entrants to the FTSE 100 that demonstrated excellent potential for growth having laid strong foundations. Promoted to the FTSE 100 in 2013, when it carried over 61 million passengers, easyJet made record pre-tax profits following the introduction of allocated seating and revenues jumped over 10% to £4.3 billion. St. James’s Place also entered the FTSE 100 last year after a major milestone - with Lloyds Banking Group completing the sale of its majority stake in the company. Posting a 42% increase in pre-tax profits last year, investor confidence was further boosted by acquisition plans.
Advertising giant WPP has been shortlisted once again for this prestigious award for investing in sustained growth with over 60 acquisitions in 2013 alone. Integrating talent from acquisitions is always a major challenge but one that WPP has embraced to help achieve its target of paying out 45% of its earnings to shareholders.
Numerous contract wins, partnerships, and acquisitions have not only supported Capita Group’s long term growth but also job creation in Yorkshire, Birmingham, and Northern Ireland to support delivery of a range of services. ARM recently posted a nine percent rise in pre-tax profits thanks to continuing demand for licences for its mobile chip designs, but it’s also investing in sustainable growth with new acquisitions to take its technology into a wide range of new markets – including enterprise networking where there is potential to take significant market share.
Sales of more expensive beer in Africa and Europe helped brewer SABMiller to offset lager volume declines in Latin America and Australia and beat estimates as it reported first-quarter revenue growth. Building on its strong position in fast-growth emerging markets, future growth is supported by ongoing efficiency savings and product innovation.
Galvanising its 16,000 employees in a programme of ‘inclusive growth’, Experian has combined investment in its core information services business with a programme of social innovation that is delivering both community and commercial impact. It’s commitment to social impact has also been recognised in another award category this year, shortlisted for the Santander Corporate Citizenship Award for initiatives like The Rental Exchange in partnership with Big Issue Invest. “Experian harnesses its core assets - people, data and technology - creating a culture of innovation for social purpose across the company,” said Shortlist Judge Caroline Diehl, CEO of The Media Trust.
As CSR and corporate citizenship have become intertwined with employee engagement initiatives, big companies are retaining talent while developing competitive advantage. Sainsbury’s got a Platinum Big Tick on Business in the Community’s Corporate Responsibility Index last year – as did Wates Group, winner of the inaugural Corporate Citizenship Award in 2013. Part of a more embedded and holistic strategy for sustained growth, this is reassuring all stakeholders about the corporate longevity of these organisations - and the results speak for themselves.
But for this good work to have an impact on behaviour and perception, it needs to be recognised – both internally and externally. By telling their story through the National Business Awards - and media partners including the Telegraph - these finalists are helping to educate peers and shareholders about the story behind the share price.
Be among the first to find out who triumphs at the 13th Annual National Business Awards at the Grosvenor House Hotel, Park Lane, where 1,200 business leaders will gather to celebrate and network. To book your places at the ceremony visit www.nationalbusinessawards.co.uk or call Matt Wilson on 0207 560 4225 for information on ticket and table packages.