UK PSI Dividends
The Shareholder Executive has published their annual report for 2008-09. The shareholder Executive portfolio of government owned businesses includes a number of public sector information holders and which includes:
Met Office (pages 42 and 53)
Return on Net Assets = 4.3%
Return on Capital Employed = 3.8%
Turnover increased in year by 4.6%, from £176.6m in 2007-08 to £184.8m. Growth has been in both Government and commercial revenue streams. The upward trend in commercial revenue has continued during 2008-09 rising to £29.4m (2007-08: £27.0m), largely derived from growth in the Health and Marine programmes together with increased telephone sales of core products. A dividend of £17.2m was declared in the period.
Given the increasing pressure on the public purse, the Met Office will continue to seek out new sources of revenue by selling products and services to both Government and non-Government customers.
The Met Office is also part of the Operational Efficiency Review.
Ordnance Survey (page 52 and 53)
Return on Net Assets = 23%
Return on Capital Employed = 19.5%
Over the year, the Shareholder Executive has been working with the Ordnance Survey Board and others in Government on a comprehensive review of Ordnance Survey’s strategy. The market for geospatial information is changing rapidly as technology converges and drives new applications. This is a huge opportunity, but Ordnance Survey must adapt if it is to remain sustainable in this environment. In addition, there have been calls for wider access to Ordnance Survey data to foster innovation and also follow-up from the 2005 OFT Commercial Uses of Public Sector Information Market Study.
The Government announced the new strategy for Ordnance Survey in the Budget of April 2009. Ordnance Survey will remain self-funded and earn revenue by licensing its data, but it will reform to improve access to its high-quality geospatial information. The Shareholder Executive is working closely with Ordnance Survey’s Board over the coming 12 months to implement the strategy and will ensure that it is fully integrated into the HM Treasury Operational Efficiency Programme.
In 2008-09 Ordnance Survey achieved a surplus on ordinary activities before interest and dividend payable of £16.3m. Turnover has held up reasonably strongly despite sharp downturns in key markets, and the new strategy aims to identify further opportunities to grow revenue and reduce costs.
UK Hydrographic Office (page 69)
UKHO’s vision is to remain the world leader in the supply of marine navigational information and services. The products and services supplied to the defence customer (primarily the Royal Navy) are crucial to the conduct of operations globally.
The UKHO plays a central role in support of the Maritime and Coastguard Agency in discharging the UK’s Treaty obligations under the UN Safety of Life at Sea convention. In addition, the UKHO has established a significant commercial business, supplying navigational charts, publications and other services to mariners throughout the world.
The UKHO has enjoyed a successful year. Turnover increased by 14.8% to £108.3m with sales growth achieved in both the commercial and defence sectors. This generated a profit on ordinary activities of £12.9m and a net profit of £7.6m after exceptional charges.
Definitions (page 74)
Return on Capital Employed
Trading funds are required by HM Treasury to meet Return on Capital Employed performance targets. ROCE is therefore shown for trading funds only.
The return is broadly the surplus on ordinary activities measured before interest (both receivable and payable), post fixed asset disposals, post exceptionals and pre dividends payable, expressed as a percentage of average capital employed. Capital employed is the capital (i.e. public dividend capital and loan capital) and reserves, calculated as the average over the year.
Return on Net Assets
Return on Net Assets is the Shareholder Executive’s preferred metric of underlying performance. It is calculated as operating profit over the net operating assets at the end of the year in question.
Ordnance Survey report operating profit of £16.3 million!
OFT considers options post CUPI
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