Gentlemen, thank you for standing by. Welcome to today's Serco Group Plc 2020 Full Year Results Presentation. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, Thursday, February 25, 2021.
I would now like to hand the conference over to your speaker today, Rupert Soames. Please go ahead, sir.
Good morning, everybody. Rupert here. I'm Starting on Slide 5, which is the opening slide, I'm joined by Nigel Crossley and also by Angus Cobham. By way of introduction, 2020 has obviously been a very strong performance. And pleasingly, we see Continued growth in 2021.
Revenue up 20% at constant currency, 16% organic. And all that Some organic obviously quite a lot was related to COVID. So ex COVID the organic was about 4% And it's about 5% from the impact of the NSB New acquisition in the U. S. Online trading profit up 37% in constant currency and the margin increased from 3.7% to 4.2 Very strong free cash flow, doubles to €135,000,000 and that's brought the adjusted net debt down by €157,000,000 to €58,000,000 and £7,000,000 to £58,000,000 and leaves us with 0.5 times leverage.
Couple of points to point out would be that This now means that about 75% of our trading profit now comes from outside the U. K. And that's the point that we'll be Returning to in terms of the geographic balance of our flow of profits. I'd also like to highlight that ROIC now post tax ROIC has now hit 15% on an underlying after tax basis. COVID itself, Whilst it had a significant impact on revenues, it had only marginal net impact on profits, less than £2,000,000 And that was because we replayed all the furlough.
It was because we have had businesses in our Portfolios such as leisure, doing leisure centers for councils and transport and air traffic control Have had basically they've had almost a shot. And then we've had other businesses like Health that have had significant costs. We paid out £5,000,000 to 50,000 employees as an ex gratia payment. And the net impact of that is from about €400,000,000 of revenue. We've actually generated net about €2,000,000 of profits less than 1% of our total profits.
And of the £43,000,000 increase in underlying trading profit year on year, £41,000,000 the bit came from It's been a very strong operational performance. I'll talk more about that. But The business has responded really, really fast to new opportunities and to the sort of disruption that we've all faced whilst maintaining discipline and control. Solid order intake EUR 3,100,000,000 Lot slower in the second half. It seems to be that the second lockdown has slowed up, had a much bigger impact on slowing up Tender Adjudications in the U.
S. Alone, there's €2,800,000,000 of outstanding tender Adjudications. And we've got large ones in the UK as well. And that's had the impact of increasing our pipeline, but our book to bill was 80% for the year, which compares to 160% the previous year. So we're still ahead across the 2 years.
We are The reasons why we might not have proposed the dividend have now all fallen away and we are proposing a dividend of 1.4p, which is about a 25% payout. And we are continuing with our 40,000,000 share buyback program, but we are confirming that about 20,000,000 of those shares will actually be canceled. In terms of 2021, we've increased our guidance from up to 175 €1,000,000 which will give us on a constant currency basis about 10% growth in UTP. And the reason for that really is that we've had a very strong start to the year. Moving on to the next That is Slide 6.
Just to put this sort of profit growth into context, between FY 2017 and FY 2020, we delivered compound annual growth of 33% And the margin has gone from 2.3% to 4.2%. If we extend that to a full year CAGR to out to 2021, It's still a 26% CAGR. And this is, of course, all without the impact of WBB, an acquisition that we announced just over a week ago. And we will update guidance to reflect that when we have completed. But the fact is that the revenue growth and the Profit growth indicates that we are outperforming, we think, the market by a meaningful degree and we are delivering on our promise of taking our margins up towards 5%.
I will now hand over to Angus who will Going through the first part of the financial report. Angus?
Thank you, Rupert. Good morning, everybody. I'll now take you through a brief review of the 2020 financials before handing over to Nigel, who'll talk about debt, capital allocation, dividends and the outlook. Let's start with the income statement on Slide 8. Revenue of €3,900,000,000 is up 20% on both the reported and constant currency basis, With organic revenue growth of 16% being boosted by the full year impact of the NSBU acquisition, The net unfavorable currency impacts of $24,000,000 in revenue and $1,400,000 in underlying trading profit arose primarily from the weakening of sterling against the U.
S. Dollar. All the rates are in the appendix. UTP was up 36 percent to $163,000,000 Like last year, UTP is lower than the namely the benefit of commercial settlements in the Caledonian sleeper contract and a couple of OCP provision releases on our points to 4.2%. This ongoing improvement assisted to some extent in 2020 by reduced travel costs has been generated by keeping a tight lid in SG and E costs as the revenue line has grown.
The overhead leverage That our business model now delivers is illustrated by the fact that in a year when revenue grew by 20%, our administration expenses grew by less than 3%. The 20% constant currency revenue growth on Slide 9 consists of organic growth 16% with the NSBU acquisition contributing 5%. ForEx reduced revenue growth by 1%. Approximately 12% of that organic growth was COVID related. UKE and Aspach were the key drivers with organic growth growing by 31% 18% respectively.
In UKE, the net estimated impact in revenue from COVID was around $400,000,000 and supplemented by the full year impact of the AASC contract as well as the PEX and Gatwick Immigration Removal Center mobilizations. These increases were offset partially by sharp COVID related falls in demand in our Northern Isles ferries and directly managed leisure trust. Growth in Aztec was largely due to recent contract wins, including our AHSC, Garrison Healthcare contract, which commenced in 2019 and the Adelaide Ramanda Clarence Correctional Centers, which came online during the year. Revenue in ASPAC was also by additional demand in immigration services as well as COVID related work for Services Australia. Organic revenue growth in the Americas was muted at 1% with strong first half growth in our FEMA and U.
S. Pension Benefit Guarantee Corporation contracts being offset later in the year by the loss of the Georgia Department of Transport contract as well as a significant reduction in the ship and shore modernization business during the second half, where activity levels had previously been very high. Organic revenue in the Middle East fell by 7%, mainly reflecting the impact of COVID on our airport services work in Dubai and air traffic control contracts in UAE in Iraq. These transport losses were compounded by a COVID related reduction in revenue on our Saudi rail contract as well as the loss of a hospital FM contract in UAE. As Slide 10 shows, UTP dividend of 163,000,000 represents headline growth of 37% in constant currency.
Underlying trading margin improved by 50 basis points to 4.2%. This means that over the last 3 years, Serco has grown its underlying trading profit at a compound rate of 33% and added 90 basis The net positive impact from COVID-nineteen was around £2,000,000 or 1% with some large quarterly impacts. All four divisions increased their underlying trading profit in 2020. The outstanding performance for UKE and the Americas, where constant currency UTP grew by 48% 24%, respectively. Despite the strong growth in UKE, this division still contributes only around a quarter of Serco's profits, reflecting the higher margins earned overseas and illustrating the growing importance of Serco's international business.
The early January acquisition of Facilities First in Australia and once regulatory approval has been obtained the recently announced acquisition of WBB Inc. In the U. S. Further underlying the growing importance to the group, which serves the international footprint. UKE had some big profit swings, most notably the contrasting impact of COVID in different businesses.
Our immigration contract AASC benefited from no longer having the transition costs of 2019. Citizen Services delivered a very strong performance in large part due to additional COVID toll center and testing and tracing work. In transport, low ridership took a previously profitable Mersey rail contract into loss, whilst our health business was impacted by COVID related absence and additional costs. In addition, our leisure business sustained a significant loss due to the closure of leisure facilities. Overall, however, UKE performed very well, growing its UTP by 48% to 57,000,000 and its margin by 40 basis points to 3.2%.
UTP in North America grew by 24% in to £101,000,000 with margin improvement by 50 basis points to 9.5%. Around half of this growth came from the NSBEU acquisition. The rest of this growth came from across the contract base with notable contributions from the Pension Guarantee Corporation, FEMA and our Garrison Support contract in Bouffier, Canada. This growth was offset by the reduced volume of ship modernization work, the loss of the transport contract in Georgia and the anticipated second half impact of the completion of the additional CMS volume in early summer. Going forward, the completion of the higher margin WBB acquisition will help offset the full year margin impact from the end of the temporary uplift in CMS margins and the lower margin that recently secured ATFP bid.
Also impacting margin are higher insurance costs, which have been served across the group, but most notably in our U. S. Air traffic control business. UTP and ASPAC increased by 5% in constant currency terms to 33,000,000 This increase reflects continuing strong performance in the Citizens Services business, in part due to COVID related work for Services Australia as well as the full year impact of the AHSC Garrison Healthcare contract. Our Justice and Immigration business also performed well with higher volumes in immigration caused in part by COVID and the end of the mobilization of the Adelaide Roman Centre contract.
Reported UTP margin reduced by 50 basis points to 4.5 percent due to the start up of Clarence Correctional Center and delays on the icebreaker given schedule slippage in part caused by COVID. Despite the fall in revenue, UTD and constant currency in the Middle East increased by 2% to $14,000,000 reflecting strong growth in our citizen services business, notably our Mashro contract in Saudi, offset by profit falls in health, compounded by the COVID impact in transport profits in Iraq and UAE. Turning to the bottom of the income statement on Slide 11. The increase in finance costs of CAD 4,000,000 to CAD 26,000,000 was largely due to a CAD 3,000,000 Increase in IFRS 16 lease interest caused by the growth in properties rented for the ASC contract together with increased utilization of the RCF in the early part of the year and a reduction in pension interest. The blended average cost of our debt in 2020 was 50 basis points lower at 4.01% as compared to 4.51% in 2019.
The underlying tax rate of 20.6 percent is 2 percentage points lower than in 2019. Underlying profit before tax generated from our overseas operations accounted for more than 80% in total underlying profits in 2020, thereby pushing up the effective rate relative to the U. K. Statutory rate. Offsetting this, we have been able to use some of our historic U.
K. Losses and deductions against U. K. Profits in 2020, which reduces our underlying tax rate. Over the medium term, we expect the underlying effective rate to be around 25% with the cash tax rate a little lower due to the benefit of goodwill amortization in the U.
S. Cash tax will also benefit in the longer term from the $560,000,000 of U. K. Unrecognized deferred tax assets with a current tax value of $105,000,000 that we expect to bring onto our balance sheet as U. K.
Profitability continues to improve. Underlying diluted earnings per share grew by 37% from 6.16p to 8.43p. The weighted average number of shares increased from 1,199,000,000 in 2019 to 1,254,000,000 in 2020, largely as a result of the full year effect of the May 2019 share placing relating to the NSBU acquisition. Statutory reported earnings per share on a diluted basis, which reflects non underlying items and exceptionals was 10.67p as compared to 4.21p in the prior year, which mainly reflects the strong growth in underlying profitability together with the credit arising from non underlying items and an exceptional profit in respect to the disposal of our joint Via Pass joint venture. Nigel will talk about the dividend later.
Turning to slide 12. Exceptional items We're at £8,000,000,000 profit in 2020 as compared to £26,000,000 loss in the prior year. The biggest expense of cost in the prior year was issued to the 3rd property agreement with the Sirius Fraud Office. We said this time last year, there will be no exceptional restructuring costs in 2020, and we are true to our word with the costs relating to improving our HR processes running through UTP in 2020. The exceptional cash inflow was 12,000,000 as compared to the exceptional cash outflow of $49,000,000 in 2019, which reflects in both the SFO settlement and a significant restructuring cash cost.
With both OCTs and restructuring behind us, the naturally strong free cash flow generation of Serco's business model will be fully reflected in net debt as the historic leakage from loss making contracts and restructuring is now well behind us. Slide 13 has the usual detailed cash flow and net debt and cash flow. Now you can pick up more detail in the appendices on both net debt and cash flow. Here I'll just pick out a few headlines. 2020 has delivered excellent free cash flow performance, which was significantly better than expected.
Free cash flow generation improved from 62,000,000 in 20 19 to 135,000,000 this year, which represents 127% conversion of underlying profit after tax compared to 84% last year with around 21 percentage points or £12,000,000 of benefit coming from COVID related tax deferrals in the U. S, for which there is no early repayment mechanism in place and which will consequently be repaid in 2021 2022. All other COVID related tax deferrals were fully repaid during 2020. The increase in free cash flow was largely driven by higher and strong cash collections in North America, notably the catch up with FEMA. In addition, the end of the Cash costs associated with our loss making contract portfolio had a big positive impact on cash generation.
We continue to have 0 receivables or payables financing in place. Our billed receivable days were 23, a 6 day improvement compared to 29 days of 2019, reflecting strong cash collection efforts, particularly in North America and the Middle East and the continuing support provided by our government customers during COVID in terms of paying their bills in a timely fashion despite all the disruption. Our trade payable days decreased by 5 to 20 days, reflecting our focus on paying suppliers promptly and passing on the benefit of the prompt payment of our customers during COVID. Just before I hand over to Nigel, let me say a huge personal thanks to both the analysts, some of whom have had to suffer my chat for more than 20 years and our shareholders for your support over the last six and a half years. I will miss Circle and my colleagues enormously when the time comes, particularly Rupert, who it has been one of life's great privileges to work with.
But I'm delighted to hand you over to my successor, Nigel Crossley, whose appointment ensures that Circle finally has a proper CFO in place. Having worked closely with Nigel during my time at Circle, I know that the company is in a very capable and safe pair of hands. Nigel?
Thank you, Anders, and thank you for his kind words and good morning to everybody. First, I want to turn to net debt and leverage, which is slide 14. In 2020, adjusted net debt closed at £58,000,000 which represents a reduction of more than £150 from the start of the year. This is largely driven by strong cash flow performance that Angus has already explained and to a lesser extent the proceeds from the sale of our ViaPath joint venture along with some positive foreign exchange movements on our U. S.
Dollar debt. The average adjusted net debt during the year was £209,000,000 which compared to the closing net debt is higher than we would normally expect. This is due to stronger cash collection performance across all divisions, which helped reduce our average net debt in the second half to only £137,000,000 Our adjusted net debt excludes all IFRS 16 liabilities, which were £403,000,000 at the end of December. And as we've explained previously, a significant proportion of these lease liabilities directly relate to delivering our contracts, The cost of which are covered by our contract revenue and the leases have been structured to end including all lease liabilities was £460,000,000 As a result of the strong cash performance during the year, the December covenant leverage ratio was just under 0.5 times net debt to EBITDA. So now turning to funding and capital allocation on Slide 15.
We ended 2020 with a very strong balance sheet and available liquidity of £582,000,000 which has enabled the 2 acquisitions we have recently announced to be funded from existing facilities. In October, we successfully raised $200,000,000 from the U. S. Placement market to refinance upcoming debt maturities. The new loan notes are spread over 5, 7, 10 12 year terms with the cost of new debt lower than our existing debt.
This will be the first time that Serco has been able to investment grade financing since 2013 and reflects the progress made in terms of financial performance and the strength of our balance sheet. In addition, we have recently secured a £75,000,000 3 year loan term with our relationship banks. We will draw this at the time of the WBB acquisition closure and we expect to be we expect to be in quarter 2 and this will ensure that we maintain strong liquidity. The group revolving credit facility, which is currently undrawn, is also forecasted to materially undrawn. Overall, our debt facilities have a broad maturity profile and we have come to the level of liquidity and financial flexibility that they provide to the business.
As we consider the reinstatement of the dividend, we thought it'd be helpful to remind everybody about Circa's priorities for capital allocation. Circa's performance over the last 2 years has proven that it's now a cash generative business. The cash drag of onerous contracts is behind us And low levels of capital investment are required by the business, with the most significant internal investment related to working capital to support revenue growth. But we expect the group's trading cash conversion to be in the region of 80% to 90% over time. As we have previously set out, the group's target leverage is to be between 1 to 2 times debt to EBITDA.
While in December 2020, leverage is less than 0.5 times, we expect this to increase to around 1.6 times by June after the acquisition of Facilities First Australia and WBB in North America, which will still be well within our range and also as we have completed the share buyback program. However, we expect profits generated by these acquisitions and the business as a whole will result in leverage being towards the bottom end of the target range by the close of 2022. The group's capital allocation priorities are laid out in the slide. And the first priority is to ensure that we have the liquidity exists to fund all costs associated with operating the business and the investment required for organic profitable growth. We also plan to be able to fund built on acquisitions to strengthen and broaden Circa's position in markets it competes at the same time as paying an annual dividend to shareholders.
If surplus cash builds up and leverage stays below one times for an extended period of time, with no immediate investments or acquisitions opportunities available, We will consider returning surplus cash to shareholders. So turning to dividends on slide 16. In April 2020, when the scale of the COVID pandemic was becoming apparent, Serco like many other companies withdrew their recommended dividend. And this was for two reasons. First, we thought it was inappropriate to pay dividends whilst in receipt of government support.
And second, we're understandably cautious at the start of COVID-nineteen about the potential impact it might have on the financial performance and the liquidity of the group. During 2020, as we've heard, surplus performed well and our balance sheet and liquidity remains strong. In addition, all government support has been repaid, including £38,000,000 of U. K. VAT, which was repaid early.
The one exception is the U. S. Payroll taxes of $12,000,000 for which there was no facility to repay early. SURF has also paid a £100 expiration bonus payment to each of its 50,000 frontline workers in recognition of their commitment to performance will work in challenging environments. On this basis, the Serco Board is recommending a final dividend should be paid for 2020 of 1.4p per share.
This represents a 25% payout ratio assuming a 1 third, 2 third split between the interim and final dividend. We're also planning to cancel around £20,000,000 worth of treasury shares purchased through the share buyback program announced in December, which is a similar value to a final dividend for 2019 and an interim dividend for 2020. The Board will keep the dividend policy including the payout ratio under review as we continue to implement the growth phase of our strategy. It will be mindful of the requirement to maintain a prudent level of dividend cover and the need to maintain a strong balance sheet, which is critical for Serco's long term. So finally, I'll turn to the guidance for 2021 on Slide 17.
You'll see that we've increased guidance compared to the initial view we gave in December with UTP anticipated to be £175,000,000 and revenue around £4,200,000,000 This reflects a strong start to the year with performance on or above expectation in all divisions particularly in the U. K, which has benefited from higher levels of activity on COVID-nineteen related services. The new guidance accounts for recent foreign exchange movements, which has an approximate negative £40,000,000 impact on revenue and a £3,000,000 to £4,000,000 impact on underlying trading profits compared to 2020. On a constant currency basis, organic revenue growth is expected 4% and underlying trading profit is expected to increase by 10%. The guidance includes the acquisition of Facilities First Australia, which are expected to add around £6,000,000 of underlying trading profit, But does not include the acquisition of WBB, which is still subject to regulatory clearance.
We'll update guidance in quarter 2 to include WBB once we have We expect performance in the first half of twenty twenty one to be stronger than the second half with volumes on COVID-nineteen related contracts forecast to drop off as the year progresses. The second half will also see the end of the AWE contract, But we do anticipate seeing improved demand returning on our leisure and transport businesses. The guidance for finance costs, tax rates, Free cash flow and net debt remain unchanged from the guidance we provided in December. But on that point, I'm going to hand back to Rupert.
Thank you, Nigel. And moving to Slide 19, highlights and lowlights. Well, Perhaps the most important highlight and low light for the year for me was the low light when Angus came and said that he'd like to retire, Which was obviously a low light, but the highlight is how well and he's managed that process and Thus he took the precaution of hiring an incredibly talented successor in the form of Nigel Costly way back in 2014. And Nigel and I have been working together for a very long time. I have Worked with Angus on and off not well, almost continuously since 2003 With a brief 6 month gap when I jumped ship from Aggreko and Kayne to Serco.
Whilst with Aggreko, the share price, While we were there together went from £1.30 to £17 when we left It's in the FTSE 100. And during that time, as at cycle, we have seen both triumph and disaster Coming back time and again, it's been a wonderful fantastic journey. And Angus, as I say, in the There are not many stock exchange announcements that have a reference to the CEO being firmly what I believe that you are a prince amongst men and a giant amongst CEOs. And we will Miss you. It's also, I think, your 42nd results presentation.
So that will be that must be getting on for a record. Moving on to our The highlights and lowlights of the years of the year, well, clearly a strong operational performance, And we'll talk a little bit more about that. On the people front, 21,500 people recruited 10,000 net new jobs increased. And perhaps best of all is that during COVID engagement increased and we'll talk about that in a moment. In terms of we talked about the financial performance, the Angus will be stepping down In the year in which we go and pay our first dividend since 2014 and also when the Underlying post tax rate, which was something that we all followed incredibly Casey at Allegreco is over 15%.
I mentioned earlier on the importance of this idea that the growth in 2020 was broadly based. It wasn't just COVID. The COVID impact was relatively small, but the ongoing underlying business Did really, really well as well. And the year has started out, yes, strongly because COVID Test and Trace is running Very hot, but also the whole business across the world is actually doing pretty well in January. The fact that we're managing after 33% compound growth for the last 3 years to still continue to grow in 2021, we were I'm certain whether that would be the case, but last year, but the fact is that we're going to be growing about 10% compound sorry, the 10% in constant currency in 2021.
We've had some key wins mainly in the first half, But I would like to point to Acacia Prison in Australia, which was a sort of as a foundational contract for the Australian business and it's a long term contract. I think one of the reasons for the book and bill Being a silos, most of our revenues are made up of long term contracts. So when you renew them, you get 5 years' worth of revenue into the order book. But particularly the test and trace, this is stuff that's coming in and out of the into the order book through revenue and out the other side Without building the order book, but the order book still remains very healthy. But the consequence of A lot of decisions slowing up in the first in the second half has been that we have got a very strong pipeline coming into 2021.
And it's one of the reasons why we think that we're going to be able to maintain and resist headwinds through the years that we've got a strong pipeline of opportunities. We have during this process, we've also managed to successfully integrate NSBU and do 2 acquisitions, which And I think also another highlight would be the successful refinancing of our long term debt. There are precious Few companies in our sector who find this as an easy process. We went back to the USPP market and we've got been offered tenors out to 12 years out, that's all done. We've just gone and raised another €75,000,000 yesterday to give us added financial So we have masses of liquidity.
In terms of the flow lights, you have to start with the dreadful impact that COVID Had on the lives of welfare of many tens of thousands of colleagues we think of, I think particularly the people listening to this call, the Main experience would have been the perils of working from home. But 90% of our staff, Their office is a prison. It's a hospital. It's a train. It's an air traffic control site.
They have to turn up and the bravery, the courage, the resilience of people turning up to work. And it has been my challenge to be able to come to terms with the fact that I mean I have got out of the bag Just COVID environments and they do it and have done it really well through the year. In terms of bid losses, Firepath, which was a joint venture to do services for Not forensic, what's it called, pathology services. Air traffic control training in the U. S.
Wedding Brook Prison we lost. We are pretty certain that we lost Dubai Metro And we lost a bid for a new Air Force base in Canada. AWE being taken back in house in November, I think took Everybody by surprise. It was a it was not a surprise that they We're considering taking it back in house because we know they've looked at this every 2 or 3 years they look at it. What took us by surprise was The speed at which they're doing it in May will take over control at the end of June.
So that will be about an £8,000,000 hit in the second half and then a full year effect in 2021. Not only has a lot of tender adjudication slipped, particularly there's a huge one in the UK, which is DIO, which we would I hope to hear in the next few weeks something, but also in the U. S. There have been a lot of bid protests. And you will know that We were kind of publicly number 1 on Test and Trace in the middle part of last year.
And the fact is that Test and Trace has been a huge success. I've been talking about it on radio for today and explaining that you've got these 2 major programs, one's vaccination And the other is testament to trace. And actually now they are both running really, really well. The difference being is that vaccination is something that the NHS Does every year for about 14,000,000 flu jabs. And they've had 9 months to plan before they have to put a single injection into anybody's arms.
Chestnut Trace, the government had to stand up on 4 weeks notice, nothing of this scale has ever been put together by any country on the scale of this sort of test and trace. About 2,500,000 people being tested every week. There were 1,000,000 people traced in the 1st week of July. And it is interesting that the level of angst and volume of that test has almost dropped away because it is now an Incredibly good service, but it's taken some time to get established. Now I think investors were some investors were a bit unnerved by the Scale of the Vitu Puraition, but that's part of our job.
And the important thing is that the government has continued to give us And extend our contracts and we think that they're very pleased with us. Prisons and hospitals, it's all been challenging to run, And in recent weeks, we had a cyber attack. I think nearly every company in this sector has had a serious cyber attack. It was on the weakest part of our network that is actually completely separated from what we might call our secure central network in Europe, I'm glad to say that All systems are recovered. We've got all our data.
Quite a lot of data was stolen, but it wasn't destroyed. We still have it on our systems and our backups, and it's had immaterial impact on service delivery. And our Cybersecurity teams have done an absolutely remarkable job of recovering that situation. Moving on To the next slide, Slide 20. I think that operationally, one of the things that we did was I mean, I do think that the organization has risen to the level of events.
And that's partly because right from the get go, we set Our priorities and we did not say as most companies did that our priority is the safety of our staff. We said from the get go that our Priority in this crisis is to support the delivery of essential public services and within that context To protect everybody. And this actually has resonated really well within the business because it gave people a sense of purpose. They knew it wasn't that we didn't care about our people, but it made the res that the work that we were doing was of national importance. And I think that both culturally and organizationally, three things have enabled us To navigate our way through this crisis, the first is what we call our loose type management, where We give operational responsibility for delivering contracts, but that is close to the customer as possible.
But people have very strict guardrails. There's very strict a control around bidding and risk management and the like. And we actually looked it up between the 1st April and the End of December, the Investment Committee, which is basically Angus and Nigel and I and some the Group General Counsel and Other group people, we meet to look to review bids. And it met 85 times between April and December. So all the controls and the process that we put in worked really well in terms of maintaining a control through the process.
Culture was really important at the moment in the engagement But we also built a highly scalable operating platform as a result of investment in IT systems and process. And this has broadly speaking enabled us to significantly scale up the business, add 50 basis points to our margin and 20% to our revenues. And as we say in the text, for a very large Business, it's proved to be a surprisingly agile business for business that looks like a collection of lots of different contracts. We've been able to Operate with common purpose and systems. And the for a business of Any size, it's proved to be remarkably resilient.
Onto the next slide. Talking a little 2 slides about people, Managing businesses, this is the absence rates from the U. K. In March 2020, they peaked at nearly 28% absence rate in 1st lockdown. And in January, they were back up to 20%.
Managing, as you imagine, a hospital where from day to day, you don't know how many people are going to turn up is extremely testing. But with the expansion of things like the COVID, the Test and Trace work, we've actually had to recruit 21,500 1,000 people in the last year and have created 10,000 net new jobs. Tragically, we've had 25 deaths among Start on 3,000 COVID cases. Those statistics are terrible, but they are not Unsurprising in the business that employs 55,000 people. Onto the next slide please that will be Slide 20 I think perhaps everybody knows I am much attached to our engagement scores and our viewpoint This is a big person that I am proudest about of the year in a year that has been absolutely a horrific experience for So many of our colleagues, the engagement score actually, I thought it was going to go down.
I couldn't imagine it wouldn't go down. And it actually went up. It went up from 71 to 73 amongst all employees and from 73 to 75 amongst managers. And the things that I cleave to here is that the experience of the managers of the business is very similar to the experience of the employees, Colleagues, I think that's so important. And these are not trivial surveys, isn't it?
There's not every year in September. There were 30,000 respondents who made 65,000 comments. And if any of you want to go and see just how rude People can be about the company that they work for. There are 1000 random lists of selected Comments available on sirco.com for people to go and have a look at. But we're not embarrassed that we Have a very feisty and long colleagues who care deeply about the company.
We've also had to deal with some very complex succession planning during this process. So Kevin Craven retiring from the U. K. So Mark Owen He was running as fact companies come to the U. K.
We promoted Peter Welling to the Manager of Aspect. Anthony Kirby has Being promoted to Chief Operating Officer. And with Angus Coven retiring, Nigel Skate becoming the CFO, this is a non trivial amount of senior management movement in a I think it's been incredibly stable, the senior management team, but It has worked to do that in the middle of COVID. It has all worked quite smoothly. On to the next slide, I'm not going to read out anyone.
This is just examples of the sort of remarkable things that the business has done in Clarence prison between July December mobilizing that we went from naught to 1,000 prisoners between July December. We mobilized Christmas Island, which is a detention center about 7.5 flight from Perth in the middle of the Pacific Ocean. And the customer asked us to remobilize. So we've got to mobilize on 6 days notice. NHS Test and Trace mobilized 10,500 tracing staff in 4 weeks, 8,800 testing staff.
We recruited delivering 5,500,000 tests in asylum seeker contract. We've taken on 3,500 So units are now looking after 25,000 people. And as you can imagine, the protocols for dealing that in a COVID environment are really complex. So the business has performed out of its socks in an operational sense. Moving on to the next slide.
I just mentioned that not only has done that, but we were able to do 2 important acquisitions, both of the very different I think the point that it showed that even with all the disruption of COVID, we were able to do this WBB announced on the 16th February, we hope it to close sometime in the second quarter. And facilities first in Australia and that's in December, that's already closed. One is a low margin, but large scale FM business in Australia and it's just What the Australian business needs is not acquisition that we would have necessarily done elsewhere, but it was Right for their business and WBB gives us now $1,100,000,000 defense business in the U. S. And gives us real heft in that market.
Moving on to the Divisional slides, I'm just going to chop through these quickly. We can spend more time if any of you want more detail. But in terms of Americas, now 49% of our UTP Divisional UTP is in North America. It's got the highest margins in the group. The NSBU acquisition has settled in really well.
There's been not a single senior management departure from NSBU since we A portion is performing in line with our expectations. So we're pleased with that. The in terms of the Organic revenue the revenue growth was 16%. It was only 1% organic, but you'll be careful with that because there's quite a lot of revenue in the U. S.
That refers is related to this Canes contract where we are making large amounts of Basically, it's racks of communications equipment. We go and assemble it for ships. And it's very low margin business, but a larger amount of kit going through. And actually, we've just gone and won a New Keynes contract intends to bring a lot of revenue through with it. So that dropped off, but you'll see that that's why the organic revenue growth was only 1%, but the UTP growth was 13% was in part because the Canes contracts don't contribute a lot to profit.
FEMA, which is a new contract, we stood up 2,000 people to provide services to the Federal Emergency a management agency. And I would just say in passing that Texas is one of the areas that we look after for where we saw some chapters of FEMA. CMS has run well. The margins are stable. Volumes are going to be a bit lower this year.
And in terms of contract wins, a Ground based electrical optical deep space surveillance system, it's a called telescope to you and me. But we've got the contract And there's $3,000,000,000 of bids awaiting award. And the other thing is that lots These bids now are being protested, but the business is in root shape, doing well and started the year well. Go on to the UK. The UK has seen this tremendous growth, 31% organic growth, substantially all of that was COVID-nineteen, About €350,000,000 of Test and Trace revenues, but then offset by The letter into profit terms by leisure and transport, but leisure and transport most of the revenue doesn't come through the our own revenue line as it's in associates The growth has been in UTP largely delivered by See the comms contract as we mobilized the new contract and last now after 10 years of losing money, it's now making money.
And also our PEX Escorting contract has mobilized successfully. Big contract wins with the Northern Isles Ferry And then the NHS test and trace, which we've heard the story, I mean, amazing achievement standing up that. The biggest element in the pipeline is the DIO defensive Infrastructure bid, but we're also bidding for the Skynet Athena consortium along with Inmarsat and Lockheed Martin and CGI. We have a the FPMS, which is The tug and shipping of services to the Navy coming along was a big pipeline there, nearly €8,000,000,000 on the wider Next slide please. Aspac, 16% revenue growth, actually 18% on an organic basis.
There was a 2% of FX headwinds, they're doing very well, the AHSC defense Garrison, healthcare contract, which is providing Medical staff to the Australian military bases doing very well and profitable. And the business has done very well through COVID. They've got big contracts providing call centers for the Australian Tax Office and for The Department of Human Services and Services Australia. And they've had A good year with some good orders of Fiona Stanley extension worth €370,000,000 and Acacia worth $250,000,000 for its first phase. Finally, the Middle East.
Middle East, It's our management conference today and I went on to say it is next slide please. It is the Smallest of our regions, but nonetheless valuable. It's been very difficult running that business, but they've risen to the occasion. It represents about 7% of our UTP, but it's Important part of the math and important platform for future growth. We are pretty certain that they've lost the Dubai Metro, which is On the one hand, it was an iconic contract.
On the other hand, it was a barely profitable and very, very Complex to do so. We are not shedding a disproportionate number of shares about that. And it will help the revenues the margin percentage margin of the overall group. Moving on then to the Summary and the outlook that is on Slide 30. Well, I mean, Strong operational financial performance and we expect continued growth in 2021.
The pandemic has tested our mettle And it's proved us, I think, to be an agile, resilient and a highly capable business, capable of standing up Huge resources very quickly in response to government need. Our investment in culture, The time that we spend talking about TrusCare, innovation and pride has paid dividends, as have The instinct for transparency and rigorous reporting, the acquisitions of FFA and WBB Show that we can continue to advance our strategy even in the midst of the sort of disruption that you get in a pandemic. And I think that our decision to be an international business, but a highly focused business, The supplier of government services has worked really well. We've got international footprint With 50% of our divisional UTP now coming from North America, 30% from the U. K.
And longer term, the outlook It's the 4 forces that we talked about in our strategy in 2015 of growing costs of Healthcare demographics, the need now for more resilient public services, rising expectations of choice and Service quality, the quality of public services coming more to the front of people's minds. But equally now the whole Financial situation that governments find themselves in is really going to be that pressure is going to be all the greater. And basically, people's memories will be short and they won't want to pay a lot more tax. So it's going to remain the fierce Pressure that is the driver of demand in our business to provide to deliver more services of higher quality For better value, what we call more and better for less. So we think that will be intact.
We're going to do a Capital Markets Day in H2 where we see the What the fog begins to clear on COVID. But in the meantime, we're still holding to our medium term Aspiration of 5% revenue growth and 5% margins over the With that, I'm going to say thank you and open this up to questions.
Thank Your first question today comes from Sylvia Barker from JPMorgan. Please go ahead. Your line is open. Thank you. Hi, good morning everyone.
A couple of questions on NSBU. It seems like you have had again a strong year. Could you maybe Talk about what growth you've seen in that business and if we can extrapolate to there will be at all. Obviously, you've got some reasonable assumptions for its 1st year, but how did NSB developed kind of after you bought it in terms of the revenue trends. And then secondly, just on central costs, could you maybe just remind us Why I guess what the temporary savings are within that line?
And what maybe the more
So I will take NSBU and Nigel will take some full cost. So NSBU, remember it's got 2 parts of it. 1 is the
U. S.
Business and the other is a Canadian business. The Canadian business did particularly well, had a very, very strong year. I would say revenues on that unit overall have been slightly lower than we thought because We had a particular class of landing craft that had to go and get reworked. But in terms of its contribution overall with the synergies that we got were ahead of our Cost of capital and it is performing pretty much where we would hope that it albeit that the profits are a bit higher and the Revenue is a bit lower. They've got they have been they have got a lot of protests out On bids that we that they have won, but have subsequently been protested.
So in terms of the growth that we can get out of that business, it is going to be very largely Depending on the outcome of this in the short term on the outcomes of this projects, but we were happy that they've got A decent a strong pipeline with a lot of work that they want that happens to be on the protest at the moment. But basically speaking, we are Delighted with that acquisition. It's given us a very strong position in Navy and then it's given us this platform from which we've now expanded with WBB. Nigel, central costs.
Yes. Sylvia, central costs, they came in at £41,000,000 this year, a little bit lower than we were last year. We've had travel savings as everybody's been grounded. And there's just been less project work. But we can always expect corporate costs to move up and down a little I think our guidance would be a number of somewhere around the mid-40s is what we'd expect our corporate cost to be going forward.
Thank you very much. Thank you. And your next question comes from the line of Alan Wells, Exane. Please go ahead. Your line is open.
Hey, good morning guys.
Just a few from me please. Can I just ask, I guess as we think about 20 'twenty one and that's the phasing into 'twenty two as well? Could you just maybe talk a little bit about the assumptions behind or how you guys are thinking about the pathway Recovery in the likes of Mersey, Raul and Leisure. I guess maybe more broadly, do you expect them to get back towards sort of 2019 levels? Or do you think that This is impossible now given I guess kind of changing attitudes in over 2021 2022.
Following on from that, I guess one of the other key areas obviously Could you just remind us where we are in terms of visibility on this Contracts. I think I read that you now almost certainly will have those contracts through to the half year. But how are you thinking about the rebids And how that carries on beyond as vaccines are rolled out, sorry. And then finally, as
I guess I think about sort
of the pipeline and rebids and you kind of alluded DIO ends up being quite a big opportunity that comes up this year. Could you maybe remind us How you guys are looking at the sort of the bull and bear case here on DII, what that could mean for numbers as we look forward if you're successful? Thank you.
So, Alan, I'll take in terms of the 2021 phasing. And I think if I understand, we are assuming revenues on test and trait to be pretty much the same this year in 2021 as they were in 2020, but just phased differently. So we had a much stronger second half and a weaker first half in 2020, and we expect that to reverse this year. So we do we are assuming some ongoing business beyond the into Q2, but at a much lower rates. In terms of the phase of the contract, There is an RFP in the market from a testing side of the business, which probably would mean that the successful bidders will start picking up somewhere in June July.
So As you rightly say, we'd be reasonably hopeful that we keep the testing business that we have got in some Formal mix through to the half year and then if we win part of the extension that may continue. Nobody knows, Who knows what it's going to be like when life returns to normal, how whether there will still be the need For test sites for people to turn up and get testing or will they all be absorbed into other local authority facilities? They will probably need to maintain some form of central tracing capability because they want to jump, be ready to jump on any outbreaks that occur or new Variance, but one of the things that we've proven to government is that we complex this incredibly fast. So we started at 10,000. We went down to 5,000 in September, traces.
They then increased it to 9,500 again for December and January. And I think we'll be down to 5,000 again in March. And this ability to flex the scale of the tracing, I think given the government a lot
of confidence that they don't need to keep
such a large So they don't need to keep such a large standing army. So I I think you're right. We've got pretty good visibility on test and trace through the first half, very little for the second half, but we're assuming that We'll still do revenues of that in the second half. As for the pickup of Merseyrail and Leisure, I kind of take the same view as you, which is I think it's unlikely to get back to where it was in 2019. Merseyrail may, but I think Mersey rail is basically a commuter rail and if more people are working from home, presumably the rail will be less pressure on the rail.
So I think it will come back. I mean it was between health, Extra costs in health, leisure and Mercer Rail, the hit was about €35,000,000 And I don't know how much of that's going to come back Or how long it's going to take, but that gives you some sort of it's a lot of there's quite a lot of headroom to come back, but I didn't know how much is going to come back from, but I guess and it will take some time into 2022 to come back. I'm not on DIO, I'm not going to go into the all the different configurations. There are Endless different regions, we could either win nothing, we could win very big or we could win a bit. But it is what you know what everybody knows is it is a huge contract to provide services to the at MOD and is one of a number of very large opportunities that we have in the pipeline.
Thank you. And your next question comes from the line of Paul Sullivan from Barclays. Please go ahead. Your line is open.
Yes. Good morning, everyone. Firstly, I mean, the win rate appeared to be higher than usual. I mean, other than you being very good, what do we read into that? And Or are you being more selective in terms of what you bid for?
And then just sort of following on from that, is the pipeline now at a stage? And is it fluid enough to sustain your 5% long term growth target in its current form. And then I don't know whether you can provide a bit more color on the 4% organic guidance by division. And then just finally, free cash flow guidance is unchanged versus the higher profits. What's driving that?
Thank you.
So Nigel, will you take the win rate and the free cash flow? Why that's changed? I'll talk about the scale of the pipeline.
Sorry, let me go first, sorry.
So the win rate?
So our win rate for the year was 35% on new business and it was 90% of our rebid business If we exclude the BiPAP joint venture that we've bid for which was previously a loss making business for us. So our win rates are strong. 35% is a little bit higher on our new bid win rate than we've seen in recent years. But we are consistently getting a re bid win rate in those 85%, ninety And that's important because it keeps our base strong so that the new business that we win is largely implemented to that base. So I would say we are pretty happy with those kind of win rates, re bid win rates that we have at the moment.
Well, There's a lot of movement in and out of the pipeline. We would say that that we feel confident that the size of the pipeline would support the growth that we're looking forward to.
And you might like to think and come back to whether the how the 4% organic growth splits by division. I'm not sure that we've got that. Paul, this issue about the you will be aware that I've made a complete idiot of myself over the years when talking about pipeline. My learned Colleague Ed Casey when he was COO used to say, we need a pipeline of 10,000,000,000 or else will be in the 6th cycle will help. It turns out that we don't.
The other thing is, it's a definition of what is in that pipeline. It is only new business. And As a definition, it's becoming increasingly is one that we're likely to go away from because we've always done it, but it's Increasing the question, how valuable it is because so much of our work now is rebids. So I think that we have last year, I think we had 160% book to bill, But we went into the year at something like sort of €4,500,000,000 or €5,000,000,000 of A pipeline, I'll have to get the exact number, Jamie will send it to you. But it produced an enormous amount of of order book increase because there were some very big rebids that never appeared in the pipeline.
So I know that the pipeline has got Bigger, but that's actually a function of decisions that would have happened in the second half going into the first half. If you know the way of measuring a pipeline that is particularly useful, we'd like to hear from you, but we don't think it's particularly predictive. And that you're better off on the whole just looking at the rebids we've got coming up applying roughly Somewhere around 85% that will tell you what the new business is going to buy roughly 25% of that. And sometimes It hits well and sometimes it doesn't. But at the state, I don't look at 6 €900,000,000 of pipeline and say, what's €400,000,000 pipeline and say that is always not enough to sustain 5% growth We believe that we can sustain that 5% growth in the long term and that will But it is dependent on us being able to win a lot of our rebids.
It's really the rebid rate that is as significant as the new business. And Rupert? Yes. Yes. I'll just add
a couple of numbers for Paul. We came into the year With $4,900,000,000 is what we call the investor pipeline, we come out of it at $6,400,000 And on top of that, we also have smaller bids Less than £10,000,000 in the annual value, which at the end of 2019, it was £4,900,000,000 of the big bids And then add on $1,600,000,000 you get to $6,500,000,000 And then the 2020 $6,400,000,000 plus 1.7 1,000,000,000 which is $8,100,000,000 So improvement in pipeline in part reflecting the movement to the right towards the end of the year in terms of the COVID impact. And also worth noting that 28% of the U. S. Pipeline is NSBU.
Sorry, Rupert, back to you.
Well, in terms of the 4% growth rate, I can say that we've got 4% growth rate organic. If we look across our 4 regions, we're slightly above that rate in the UK and in North America, Slightly below in ASPAC, but pretty clustered around the 4%. But one outlier we're going to have is the Middle East, obviously, as our As with MOSFI Metro, which was a much bigger revenue contributor than it was profit contributor.
Right. That call will be done.
Just that was free cash flow.
There's a couple of things. I think the question will Why is that
going to be John?
Yes. I'm wondering if you could. So the reason why 2020 I left that 2020 was strong because there's some one offs in there. We did not we issued shares rather than bought shares for our LTIP schemes. We've got about £12,000,000 of U.
S. Tax benefit that we can't pay back early. And we had some big catch up On receivables in the U. S. Around the FEMA contract and also in the Middle East, they did a great job of Catching up on some of our receivables.
So we think that 120% cash conversion rate that we saw in 2020 is not repeatable. 2021 has got cash conversion rate of about 80%, which is more in our range. We've got to pay some of that tax back early in the U. S. And then why did we change our guidance?
I think there's just more inaccuracy around cash because there's big dollops of cash can come in on the 3rd December or the second effect. So we've given some guidance there of €75,000,000 and we just didn't feel that there was enough evidence that we should move that number.
That's smashing. Just to follow-up. I mean, Angus, what can I say? Thank you for everything. It's been an absolute pleasure working with you.
I'm sure everybody in Sako will miss you. And I know we will too. Thank you very much.
Thank you, Paul.
Thank you. And your next question comes from the line of Keay Marden from Jefferies. Please go ahead. Your line is open.
Good morning all. I've got 3 very quick ones, if I can. If the unsuccessful bidders The NSBU awards don't block, so are basically unable To block the awards, what sort of revenue growth would that support for an SBU in the fiscal 2021 year? Secondly, your one liner report about FEMA and Texas caught my eye because that contract can be very lumpy. So Are you generating reasonable revenues currently from that area?
And have you included that in your 4% organic revenue growth guidance for the full year. And then finally, just going back to the Dubai Metro contract and I guess just sort of Casting the eye back a bit further in time. Are there systemic headwinds to margins in Middle East transport contracts and therefore the achievable margin in that area might not be as attractive now as you might have thought 5 years ago?
So as far as NSBU is concerned, I'm not going to give we're not going to give organic growth forecast By individual business units within I can tell you that there is about $250,000,000 worth of awards So, I think, subject to protests at the moment in that business. As far as FEMA is concerned, yes, we've had a great year of it. We mobilized the contract. We've been successful in doing work for FEMA. And no, nothing yet has come through from Texas.
And no, it's not in our mix of business. But in our We don't it was not they had a budget for FEMA, but they didn't have a line that said Texas. They had a line that said that we've got to go and fill up And we're doing pretty well on filling up that pipeline of FEMA work. And as I said, I just note that With Texas being declared a federal emergency area would be tend to be net positive for That contract, the margins on that are not huge. It's a lot of but it's quite a lot of direct labor.
On the metro, yes, I would say that these margins are For the amount of work and complexity on the margins, it's a lot of work, but not a lot of money. But We've had it for 12, 14 years. It's been a hugely successful contract. For us, we'll be sad to So, but I don't think that it goes and reflects. I mean, we've got some the margins that we make on other Contracts in the Middle East in other areas like I don't know what air traffic control and the Some of the other military contracts that we've got make very attractive margins.
So I don't think there's anything that Would dissuade us that the Middle East is good to have a business in the Middle East and we want to try and we think that having a diversified Geographically diversified business because part of the thing is that we want to be able to be nimble and agile and follow the And there's a lot of money out there in that region going into public services and we want to be Ready to take advantage if something falls our way. So we're in no way down about the Middle East at the moment. Thank you very much.
Thank you. And your next question comes from the line of David Brockton from Numis. Please go ahead. Your line is open.
Good morning. Can I ask a few please? Firstly, on the guidance, going back Earlier question about extrapolating the guidance to future years. Are you able to say how much COVID has played a part in the 6% increase in guidance? I guess there's a danger that sort of consensus extrapolated into actual years.
So any thoughts around that would be welcome. Secondly, just in terms of the U. K. Tendering environment, I'm just wondering if you're picking up anything in respect to the post Brexit tendering environment. I appreciate there's a green paper out there that looks to perhaps accelerate and simplify procurement.
Any thoughts there again? Welcome.
So I'll take the green paper. Actually, I think what the green paper shows is How little room there is for maneuver that the government that wishes to leave to WTO procurement rules As between EU purchasing and rules and WTO, Essentially, the principles are obviously, there's got to be free open and nondiscriminatory tendering of all tenders over of the size of about £250,000 a year. So I think that government will find itself disappointed in its ability to go and change the whole dynamic of purchasing in the In the other way public services report in the UK. And they I'm not wanting to go and do a wholesale reengineering. Obviously, there are So, I mean, it's one of the few documents I have actually read from front to back and where you get to on that is saying, well, They're very keen on the social value.
And social value is now kicking in quite hard as part of Adjudication of some of the typically it's about 10% of the that will have an impact. But In terms of making life easier or more difficult for people to bid, I don't think it's going to have a huge amount of impact. And I certainly don't think it will be very difficult for the government to go and even if it wanted to, to go and To discriminate against people. On guidance?
Yes, David. The £10,000,000 increase that we've had is largely off a strong start in the year. COVID has provided some of that strong start. There's only some of We've seen a strong start across other parts of our business as well. And then you think how does that play into future years?
We've guided a little bit We've referenced in the statement that we look at our U. K. Businesses, they've been hit the main business has been hit by about £35,000,000 of profit in the year. That means we broadly have $35,000,000 $40,000,000 going in the opposite direction. So it's just really a case of how do those as far as future years is concerned It's how does that business has been hit really start to recover as the COVID specific work starts to unwind.
And that's the kind of The timing of that is less clear and Gordie you talked on the question earlier about how quickly does Mersey or leisure come back.
Thanks. Can I ask, sorry, one more question just being greedy? I absolutely second your comments about Angus being a prince amongst men and a giant amongst CFOs. So best wishes, Angus. Nobody expects sort of management teams to be around forever.
But Rupert, I'm just wondering if you can give any reassurance to investors with respect to your ongoing commitment to the business in the near term. Thanks.
Well, I'm ongoingly committed to the business in the Story of the chicken and the egg being the egg the egg and the bacon, the chickens involved, but the pig is committed and fully picked up. And it is one of the most fascinating businesses to Be involved in the well, but as you say, nobody goes on forever. But as far as I'm concerned, I'm as I say, it's Philippe.
Thank you.
Thank you. And your last question for today comes from the line of Joe Brent from Liberum.
Three questions, if I may. Firstly, could you give some indication of the order book by geography just to help us understand that organic growth that we're expecting by division? Secondly, you talk about margin target of up towards 5%. Is my memory playing tricks that historically you might have said 5% to 6%? And in any event, does not WBB, which is a double digit margin and NSBU, which I think is a 7% margin business, start to drag that margin up?
And then finally, a few people have sort of danced around the subject of COVID in 2021. But am I right in thinking that the Test and Trace will be similar to 2020, but there should be some improvement on some of the areas hit. And I think, Rupert, you mentioned a figure of €35,000,000 Could you just elaborate what that €35,000,000 relates to and how that might come back?
Right. Nigel, will you do order book by geography? And I will do the margin question and Absolutely right. But back in 2015, we said margins of 5% to 6% and we'd still like to hedge more. So what we're doing Now you can see the bottom of my last page, we've got a squiggle in front of the 5%.
So as far as we're concerned, We're saying margins around 5%, which may well be near a 6%. But I think that so we're not Changing our medium term aspiration, because we think that we can't get to 5%, But it will take some time to get there. You are correct. WBB will add, I think about a basis points to the U. S.
Margin, but then we also got to bear in mind when we think about that is that we got Very high margins being delivered on CMS and that may not last forever. And so I think So we're progressing on towards we've gone from 2.3. We've got to was it 4.2. And we want to get to 5 and hopefully above it, but we're not I'm not I guess I'm not trying to I'm just using a different squiggle in front of the 5. And likewise about growth, I mean we are Clearly, we have grown far faster than 5.
And I think that the Organic growth rate for next year is about 4. And that's before we've got WBV obviously coming in as an inorganic growth. So I think We're not trying to self really reduce expectations. I think what we might be doing is So it's taking quite a long time to get there, but directionally we're still headed to the same place. In terms of COVID in 2021, if you look in the report, we say, I think from memory that there's about $35,000,000 of hit that has come from a combination of leisure, Merseyrail and extra costs in specifically health.
And we then got a £5,000,000 bonus to all staff, which is which people know about. And there have also been some write offs in leisure. And so somewhere you would say At least GBP 40,000,000 has been sort of kind of offset by the net effect of the track and trace contracts has landed us with a £2,000,000 net out of that, But all of that mess of posits, so I think that gives you a fairly good indication of the sort of materiality of the contribution of Those test and trace contracts. But so as they go away, we would Expect some of that 35 to mitigate to start coming back. But it is very much a question Of the speed at which those two things happen and there is risk in our forecast, but also some opportunity as to the speed of those relative movements in the second half.
And we are going to have one of the lines that we want to put in And here is we do not we hope people are not going to get overexcited by a very strong first half, which is going to be, But then the second half is going to be quite a lot weaker, because there are some headwinds, but there are also going to be some tailwinds in the form we hope of WBB, but that's not in the forecast, but that will be an overlay on top of that. And also some of the Pipeline that we've got April converting some of that into new business and we've had a strong January. Does that kind of help you on that question?
That's extremely helpful. Thank you.
Order book by geography, Nigel? Order book, Joe. We're looking about 60% of the order book is in the UK and 25% in Aspac, and that tends to be the regions where we have By far the longest contract, so they have the biggest impact on order book. The Middle East, obviously, a small business has a lesser share. And some of the U.
S. Has a relatively short small part
of the order book.
And that's because a lot of those contracts have option years and our definition of order book is we don't include option years. So there's about £1,000,000,000 of option years that are included in our order book. And also there's a lot of task order work that they need to go out and win in year. So We always expect to see a smaller order book in the North America business.
I suppose if you look year on year, are there any sort of major Changes in those order books, which obviously compares apples with apples for each geography?
Nothing material. Fantastic. Thank you.
Thank you. I will now hand the call back for closing remarks.
Well, closing remarks, say, other than blood being in tears because of Angus and Harari, because of Nigel, thank you all very much indeed. And of course,