There is no doubt that 2017 was a successful year as reflected in our sales, profits and cash flow, which, I am pleased to say, has supported an increase in your dividend for the year to 21.8pence per share.
Most importantly, it was a year in which the leadership baton was smoothly and efficiently passed over to Charles as Chief Executive of the Group. More from Charles later.
The order bedrock was also strengthened as commitments for submarines, surface ships, US land vehicles programmes and military aircraft were converted into contracts underpinning the long-term prospects of the business.
Following Charles’s appointment, management changes were also made to ensure our structure is simplified and aligned with the demands of the business today.
These changes acknowledge the increasing requirement for in-country production by our customers, the need to continuously hone our competitive edge in all markets and the emphasis that must be placed on efficient execution of a strong order book.
I am confident that these changes will bear fruit in areas of improved cost control, swifter decision making and great innovation.
All of this, of course, has taken place during a period of considerable global turbulence and tension.
In these circumstances, strong relationships with governments in our principal markets in America, the UK, the Gulf and Australia, are of vital importance, supplying our military forces with high-quality equipment, advanced technology and reliable support in a rapidly changing world.
It is in this context that I am particularly appreciative of the continued welcome at the highest levels that I and my colleagues receive when we visit these countries and proud of what our fine company does in contributing to their important mission, in preserving our safety and prosperity.
I am also clear that some of you here today may not share my views and have genuine reservations about what we do and where we do it.
It is my hope however, that the evidence of the increasing need to defend ourselves, the requirement to deter others from aggression and the influence we and our governments have in effecting positive change in the practices of our partners, will underline the importance of the role we play in society and, together with our commitment to ethical and responsible behaviour, may provide some comfort to the real concerns you may have.
As always, there will be an opportunity to put questions to the Board a little later this morning and I and my team will seek to respond clearly, honestly and courteously.
I would ask that you reciprocate in the same spirit, for the benefit of all other shareholders here today.
Whilst we may not always agree, I am certain that mutual respect and good manners will always produce the most valuable exchanges.
This year, in spite of a large order book, short-term customer delivery schedules make our ambitions for sales and profit growth more challenging than usual.
I am pleased to say nonetheless, that management has committed to address these temporary headwinds and deliver earnings in 2018 that are in keeping with 2017, providing a solid foundation for medium-term growth.
Looking back on the year, for my part as Chairman, I have been pleased to witness the company’s ability to manage both structural and leadership change at a time of considerable turbulence in geopolitics.
It has been made clear to me by customers, shareholders and employees, that all have valued the preservation of seasoned executive experience with the introduction of fresh thinking and new vitality. It is proving to be a powerful combination.
Change has also taken place in the non-executive area, with the appointment of Revathi Advaithi – a woman with a strong international business pedigree, senior operational experience, valuable engineering and digital credentials, extending both the diversity and skillset of our board. She is a great addition to a terrific team.
In a year of change, I am pleased to confirm that some things have remained the same.
Our defence customers are approved by government and products are exported under strict regulations.
We continue to have pride in what we do, a commitment to excellence in the technology we develop and the talent we build.
Our beliefs drive our behaviour, to place safety above profit, people above process and ethics above outcomes, all in a workplace culture that rewards merit and values diversity.
Our customers are our lifeblood. We work in the spirit of partnership and strive to go to the extra mile – in the products we make and the service we offer.
At the heart of our business we recognise we are entitled to nothing and must earn everything – and most importantly, as a result of all our efforts, it is not simply how much money we make but how we make money that counts.
It is with this sense of purpose and strong commitment to values that management embark on their mission in 2018 under Charles’s leadership; enthusiastic and focussed on delivering for all our stakeholders.
In a few minutes I will hand over to Charles who will bring you up to date on the company’s performance in 2017 and the year to date.
Then I’ll deal with the formal resolutions detailed in the Notice of Meeting. Finally, I’ll take questions you may have on the business of the meeting.
I will aim to finish the meeting by no later than one o’clock, when lunch will be available.
I’ll now introduce the members of the Board.
Our Chief Executive, Charles Woodburn, is sitting immediately to my right – next to him is Peter Lynas, Group Finance Director – next to Peter is Nick Rose, who is our Senior Independent Director and also the Chairman of the Audit Committee.
Next to him are three non-executive directors – Elizabeth Corley – Ian Tyler – who is chairman of the Board’s Corporate Responsibility Committee – and finally Harriet Green.
Turning to my left, we have the Company Secretary, David Parkes – then Jerry DeMuro – the President and CEO of our US business.
Next to Jerry is Paula Rosput Reynolds – a non-executive director who chairs the Remuneration Committee – then Chris Grigg – and Revathi Advaithi, both of whom are non-executive directors.
I will now hand over to Charles before commencing the formal business of this meeting.