Ladies and gentlemen, thank you for standing by, and welcome to the Circular Group Plc 2020 Half Year Results Presentation. I must advise you that the presentation is being recorded today on Thursday, 6th August, 2020. I shall now hand over to your speakers for today's Core, Rupert, and Angus. Please go ahead.
Good morning, everybody. It's Rupert here. And we will just go rattle through our results in the usual fashion and just through the numbers, and I will, through the operational side. But it's been a extraordinarily strong first half, where a lot of the good things that happened in 2019 came to fruition in 2020. Revenue was up 24% with 15% organic growth and I think it's been many a year before one imagine these businesses to produce 15% organic revenue growth underlying trading profit are up 53% and our margin continuing its journey up to 4.3%.
But I also want to say that whilst the COVID 19 has had actually relatively little impact on our underlying trading profit, in fact, 0, pretty much. It's had quite a big impact on our revenues with 1,000,000 of additional were offset by 1,000,000 of downside where we've lost revenue in contracts. So net of about 80,000,000, but the profit impact has been flat. But underlying that has been enormous operational, performance going on to deliver huge mobilizations. 15,000 people recruited to support governments around the world, 7a half 1000 traces, recruiting and mobilizing a period of 6 weeks.
And, 2 days ago, we performed our half 1,000,000 tests on the drive through mobile testing stations. And the important thing for us is that our people Our processes, our system, and indeed our strategy and our organizational approach, which we described as loose tight, actually responded very well to the challenges. Pleasing was that we in a time when trading customers were concentrating on other things and there was a lot going on for them. We ended up with order intake slightly above revenue. So yet again, 100% book to bill and our order book increased to 14.5 $1,000,000,000.
Our balance sheet is very robust. We ended up with lower net debt than we were actually expecting and Angus will explain, why to you later. And we are reinstating our 2020 guidance, which you'll remember that we came out in late June in long scheduled updates to tell people that we were reinstating guidance. Goes to the next slide. You'll see something of how this journey has been, and if we hit the middle of our guidance range for UGP will represent a 27% compound growth in profits between 2017 and 2020.
So consistent progress on profits. I'm now going to hand over to Angus who will take you through these numbers.
Thank you, Rupert. Good morning, everybody. Let's start with the income statement. Revenue of 1,800,000,000 is up 24% in both reported and constant currency. This comprises 15 in August 2019.
Of the 15 percent organic revenue growth, around 5% or 1,000,000 is COVID-nineteen related, comprising 1,000,000 of new business offset by around 1,000,000 of COVID-nineteen related revenue decline on impacted contracts. The net currency impacts during the first half were minimal and the detail and sensitivities are shown in the slide. UTP grew by 53 percent to GBP 78,000,000. Of the GBP 27,000,000 of UTP growth, 10,000,000 came from the NSBU acquisition in North America, in line with our expectations at the time of the deal. COVID nineteen's impact in UTP was almost net neutral, but as with revenue, there were large swings in different contracts across the business.
Consistent with full year 2019, UTP of 77,600,000 of CAD 80,500,000, reflecting the exclusion from underlying of CAD 2,900,000 of contract and balance sheet review benefits arising from OCP provision releases. This ensures that we continue to give an accurate picture of true underlying performance. Underlying trading margin improved by 90 basis points to 4.3% compared to the 3.4% in the first half of twenty nineteen. The UTP margin improvement came from keeping a tight control on SG and A costs, which grew 4% in the previous period, as compared to revenue growth of 23%. Contract margins also improved by 30 basis points.
As the new large contracts transition from mobilization to trading profitably. On the negative side, joint venture profits were 6,500,000 lower, largely due to the impact of COVID-nineteen on the operations of MercyRail, which equates to a 50 basis point reduction in group margin. Turning to revenue. Organic revenue of 15% was driven by strong performance in our 3 biggest businesses. The headliner was Aspac, where organic revenue grew by 25%, coming mainly from recent contract wins.
Notably, the contract to provide health services to the Australian defense force 1 in 2019, as well as other newly operational contracts. Including the Adelaide Roman Center, a little bit of Clarence Prison and the Department of Human Services. Organic revenue grew by 19% in UKE, with GBP 100,000,000 of growth arising from the impact of COVID 19 related contracts, notably testing centers, test and trace and call center work, supporting NHS 111. And universal credit, partially offset by revenue loss, which occurred mainly on our leisure, rail and ferries contracts. Additional UKE growth was generated in the new AASC asylum seekers contract for volumes also exceeded our expectations.
And to a lesser extent, our recently won Gatwick IRC contract. In North America, organic revenue grew by 8% with strong performance from the FEMA contract, which started in the second half of twenty nineteen and further growth coming from higher CMS volumes offset by lower revenues on our driver examination services contract in Ontario as the driving centers were closed in Q2 due to COVID-nineteen and finally, lower ship and shore modernization revenues. Organic revenue in the Middle East fell by 2% due to the impact of COVID 19 and our air traffic control and airport FM businesses. UTP for the group of GBP 78,000,000 represents both headline and constant currency growth of 53%. Underlying trading margin improved by 90 basis points to 4.3%.
The strongest growth was recorded in UK, where UTP grew by 11000000 or 74% to 27000000. This growth arose from strong performance in our Justice And Immigration And Services businesses, with the biggest contributors being the ASC asylum seekers contract COVID-nineteen testing in trace and COVID-nineteen, that test the mobile testing centers. These latter contracts are at lower than usual margins reflecting the nature of the COVID-nineteen related work. This growth was offset by some negative COVID-nineteen profit impacts across other business units, notably health, transport and laser. Which all experienced disruption, whether through the closure of leisure centers, high rates of absenteeism or reduced passenger and service volumes, on our rail and ferries contracts.
In addition, financial support has been received from some of our customers to ensure the continuation of underutilized services, which has come in the form of emergency measures agreements reimbursing higher contract costs. The furlough benefit is around 5,000,000 in the first half, most of which relate our leisure center workers who were furloughed due to the closure of all our UK leisure centers. Some of our staff were able to be redeployed into other contracts, but in total, we have some 2,500 staff currently furloughed. 39 of our 49 leisure centers have recently reopened and 650 of our Furlough staff have returned to work with many more expected to return the next few weeks, subject to any change in government policy. As staff come back into employment, we are not applying for the GBP 1000 per employee bonus that has been offered for re employing furloughed staff.
Furlough has worked in the way it was intended from our perspective, that has enabled us to keep employees on the payroll that we would otherwise have had to make redundant as we had no revenue stream with the leisure centers, which means that we have qualified and experienced staff to reopen leisure center quickly and safely. Overall, our margin in UK and Europe improved by 110 basis points to 3.4%, in large part due to the transition of our asylum seekers contract moving from mobilization into operating profit. The Americas also performed very well, growing UTP by around 1,000,000 or 40% in constant currency terms to GBP 53,000,000. Around GBP 10,000,000 of this UTP growth came from the NSBU acquisition, which completed in August last year. We're pleased with the progress we're making with NSBU and it remains on plan from a profitability perspective, with the Canadian business to perform particularly well.
During the first half, our CMS health insurance eligibility contract continued to benefit from unusually high volumes of variable work. This work was recently completed and we expect activity levels and profitability to be lower going forward. Beyond NSBU and CMS, the broader Americas business generally performed well with the standout being our recently won FEMA contract where we sector, the Americas continue to have an underlying trading margin around 10%, a level not expected to sustain going forward, in constant currency terms to GBP 13,000,000. This increase was largely the result of the first half contribution from the Australian Defense Force Health contract, which was incurring mobilization costs in the first half of twenty nineteen, as well as the continuing strong performances have been services, which was helped to a small extent by some extra COVID-nineteen work. Reported UTP margin was broadly similar to last year at around 4%.
UTP in constant currency in the Middle East declined by 4% to 7000000 reflecting primarily the disruption caused by COVID-nineteen on air traffic volumes leading to a 20 basis point margin fall to 4.3%. Turning to the bottom of the income statement. Finance costs increased by 2,000,000 to 13,000,000 largely due to the additional lease interests from bringing on balance sheet, the housing leases associated with our AASC asylum seeker contract. The blended average cost of our gross debt in 2020 was lower at 3.91% as compared to 4.51% in 2019. Reflecting the higher utilization of the revolving credit and acquisition facilities, which have lower interest rates than the US private placement debt.
The underlying tax rate was 26%, two percentage points higher than the same period in 2019. This is due to the mix of where profits were made primarily a higher proportion of taxable profits being earned overseas where the blended tax generated from these overseas operations accounted for more than 80% of total underlying profits in 2020 thereby pushing up the effective rate relative to the UK statutory rate. Over the medium term, we expect the underlying effective rate to remain around 25%, with the cash tax rate a little lower due to the benefit of the goodwill amortization in the U. S. Cash tax will also benefit in the longer term from the million of off balance sheet losses in the UK.
Underlying diluted earnings per share grew by 47 percent from 2.62p to 3.86p. The weighted average number of shares increased from 1,150,000,000 in 20.19 to 100 to 1,240,000,000 in 2020. Largely as a result of the annualizing effect of the May 2019 share placing of 111.2 ordinary shares to finance the NSBU acquisition. Statutory earnings per share on a diluted basis, which reflects non underlying terms and exceptionals was 5.66p as compared to a loss per share of 0.15p in the prior period. Which reflects the fact that we've pretty much completed not just the SFO settlement, but also the large historic exceptional restructuring costs.
I'll come back to dividends later. Not only our OCPs conspicuous by their absence from the slide deck, exceptional items barely Meredith mentioned. In fact, during the first half, These were a net $13,000,000 credit in 2020 as compared to a $31,000,000 cost in the prior period, largely arising from our GBP 23,000,000 deferred prosecution agreement with the Sirius fraud office. The exceptional credit arose from the disposal of our share in the Biopath pathology joint venture following the loss of a rebid. We have now completed the transformation stage of the strategy implementation and as promised, there are no exceptional restructuring costs to highlight.
Process improvement, however, continues apace, notably in improving our HR in the benefits of our own speedy boarding process for new employees, which we benefited from during the rapid sourcing and onboarding of fifteen thousand people in a matter of a few weeks for testing and tracing. We will continue to improve our systems, processes and structures, but we expect the costs associated with this to be curement transformation and completing the rollout of workforce management. The benefits of our extensive restructuring and transformation and the new shared service platform was illustrated clearly during the first half, not only from our ability to grow with minimal incremental overhead costs but also from an operational perspective, which allowed us to respond in an agile way to both the opportunities and risks arising from COVID-nineteen. Having said in February that for the first time in 5 years, the board was recommending the payment dividend, who would have imagined that in a matter of a few weeks, we would be withdrawing the dividend resolution to pay a 0 point 0 1p per share final dividend for 2019. This decision reflected our caution vis a vis the impact of COVID-nineteen as we withdrew guidance for the year.
And the fact that it would in our view have been inappropriate to pay a dividend to shareholders, having utilized government liquidity support in the form of 1,000,000 of pounds of VAT deferment. Since then, the business has continued to perform well, We've reinstated guidance for the year and our leverage ratio is below 1, even taking out the benefit of government liquidity support. However, significant uncertainty remains, and there's still a wide range of potential outcomes. And therefore, prudence dictates that we continue to utilize the government tax deferment support probably into the fourth quarter when we hope to repay taxes earlier than required If circumstances allow and we can essentially pay back this liquidity support before the end of the year, the board believes it will then be in a position to consider whether it should distribute all or part of what would have been paid as the final dividend in respect of 2019. Under the same logic, the board has also decided to defer a decision on whether to pay any interim dividend in respect to the first half of twenty twenty until the fourth quarter as well.
As the board considers its position on dividend timing and quantum, it will continue to be mindful of the longer term requirement to maintain a prudent level of dividend cover, the potential to enhance value through bolt on acquisitions and the need to maintain a strong balance sheet, which is key for CIRTO in the long term. I will now pick out some of the key moving parts, cash flow wise, Free cash flow benefited from GBP 49,000,000 of government liquidity support in the form of tax deferment most notably EUR 38,000,000 of UK VAD. Of this, EUR 49,000,000, EUR 45,000,000 is in working capital, with GBP 4,000,000 coming through tax paid. If we exclude this GBP 45,000,000, we had a net working capital outflow of GBP 25,000,000 on a revenue increase of GBP 346,000,000. Free cash flow for the period is GBP 32,000,000 excluded the tax deferment benefits of SEK 49,000,000, which compares to free cash flow of NOK 400,000,000 in the first half of twenty nineteen.
Underlying trading cash flow conversion after excluding the tax deferral benefit is 78%, higher than the 56% of the previous period. In terms of the rest of the cash flow, many elements are self evident. However, a number of requirements will commentary. The increases in depreciation and impairment of leased assets and the capital repayment of lease assets are a result of the new ASC contract being accounted for under IFRS 16, whereas last year at the same time, the predecessor Compass contract was accounted for as an operating lease, as only the few months to run at 1 January 2019, the ADOP date of IFRS 16. CapEx in the first half was EUR 21,000,000, an increase of EUR 9,000,000 in 2019.
Almost all of this increase relates to the timing of the purchase of new vehicles as part of the mobilization of the new prisoner escorting contract in the UK. Which are still under construction and once completed, they will be sold and leased back in the second half. Looking now at net debt and leverage. Adjusted net debt was GBP 143,000,000 as compared to the pro form a June 2019 number of 1,000,000, which excluded the GBP 139,000,000 of equity proceeds, subsequently paid out to complete the NSBU acquisition. However, should be borne in mind that this net debt number benefited from the EUR 49,000,000 of tax deferment as previously discussed Excluding this, adjusted net debt would have been GBP 192,000,000, which is GBP 23,000,000 lower than the GBP 215,000,000 at the end of 2019.
Daley average net debt was GBP 283,000,000 with a peak of GBP 356,000,000. The bigger than usual difference in terms of average to period end net debt was caused by 3 main items: 1st, towards the end of the half year, as I previously referred to, tax payments of EUR 49,000,000 were deferred. Secondly, there was a material catch up in May June in U. S. Receivables, primarily relating to delays in payment in the FEMA contract caused by high activity levels and new billing processes.
Thirdly, there were significant receipts towards right at the end of the period relating to our testing and our test and trace contracts which had been delayed given both the customer and our focus on mobilization and early operation. Adjusted net debt excludes all these liabilities, which were EUR 360,000,000 at the end of June. With these lease liabilities included, reported net debt was 1,000,000. Covenant net debt excludes these IFRS 16 lease liabilities. And at June 20, the leverage ratio was 0.7 times as compared to 1.4 times on a pro form a basis in June 2019.
Excluding the tax deferment benefit of 1,000,000, the underlying ratio was still below 1 at 0.9 times. In terms of our liquidity, we remain in good shape. We have no off balance sheet debt in the form of receivables or payables financing, our pension as an accounting surplus and a very small actuarial deficit The onerous contracts are close to ending. We continue to pay our creditors to government guidelines. Our deferred revenue is trading in nature, and our JVs are purely operational.
On top of that, our available liquidity at the half year was in excess of 1,000,000. Finally, let's look at the outlook and modeling assumptions. There are no changes to the guidance that we gave in June at the pre close update. We expect revenue for 2020 to be around GBP 3,700,000,000, which represents organic growth of circa 9%. In terms of underlying trading profit, we continue to guide to our broader range than normal of 1000000 to 1000000.
Because of the uncertainty associated with COVID 19. Our COVID 19 related contracts are short term in nature with variable volumes, which are difficult to forecast. And similarly, is difficult to predict how the parts of our business, which that have been negatively impacted by COVID-nineteen, will continue to be affected by the virus. In addition, during the second half, we will transition the new PEX contract and ramp up activities in the Clariant's correctional centre in Nasdaq and the Gatwick IRC in the UK. We expect net finance costs to be around reflecting the full impact of ASC on IFRS 16 lease interest.
We expect closing adjusted net debt which excludes leases to be around GBP 200,000,000 with covenant leverage at the lower end of our target range at around one times. The rest of the guidance is there for your reference. And thank you for your attention. I'll now hand you back to Rupert.
Thank you, Magnus. So starting the operational review with the usual highlights and lowlights slide, I'm going to start with the lowlights. And start with the news that, from our workforce, we've had 7 colleagues die, related to COVID-nineteen out of a workforce of about 55,000. And not only is that a strategy for that families and for, then. But I think that it also serves to remind ourselves of the bravery of the people who turned up to work, knowing that some of their colleagues in work in prisons or hospitals have actually died of this carcin disease.
Moving on, bid losses. We lost a big apology bid in our joint venture, via path. But then managed to exit from that joint venture with a gain where we sold our interest to the other shareholders. We lost a big contract to do traffic controller training in the, US for the Federal Aviation Authority, which was obviously a disappointment. More generally, there's some of the very largest tenders have been pushed back.
And we would have to say that a lot of our customers are somewhat distracted at the moment, but That's not necessarily it pays us if we're the incumbent that tends to mean that the contracts will get, extended. The pipeline has got a bit weaker. We're not worried about that. That's the city pipeline. The Grace pipeline, the 1, the wider one is actually still pretty robust.
It's been we want to continuously improve all the processes in our businesses. And particularly as in the contract, it's been difficult to maintain that continuous improvement at the time of lockdown and minimum travel. And the ice delivery of the ice breaker, has been, further delayed by there was an outbreak of COVID-nineteen at the shipyard, which has led to a further delay. And we have actually decided to tow her out of the shipyard and she's now, on her way down to Danie organized to the back sea to bring her to Europe to be finished off. But, I think the customer is very understanding of, what's been going on there.
We've been subject as is the case. You know, we're pretty robust about this, to a lot of negative perhaps press on particularly test and trace. I think that we are actually doing really well now. Of the people who we get to speak to. We are persuading 96% of them, to to isolate themselves, which is very good.
The, and I think that the customer is in no way displeased with what we are doing, but we have a lot of work to do on the PR from there. Health continues to be difficult, not only because we've had to put in a lot of additional resources to, backfill people, who were, absent, but said there's been quite a lot of additional cost in the business. And the government is, quite rightly winding up the efforts on its PFI audition, which always results in a lot of work for us. So those are the, main low lights. Let's move on to the highlights.
I'm going to do a 3 or 4 slides on COVID-nineteen as it might be of interest to you how seeing a little bit of really how it does. Affect a business, like us. But, I think for me, the, highlights has been that our people, our systems, our processes, have proved themselves to be incredibly scalable, and agile. As I say, we stood up fifteen thousand people during the period. And this idea of a highly flexible business model where we can move people from sector to, sector.
And in particular maintaining presence in sectors, the onshore call centers that we had used to be regarded as something of the ugly ducting. And there are endless strategy review cases about saying how we should exit this if if we can't, it turns out, she's developable, and has been enabled us to, serve step up the level of service that we provide to government? Had we not kept that capacity in that presence in the onshore government related call center, market, we might not have been able to do that. We've talked about the very strong financial performance. One wonders where they can never get better than that.
Probably not, but it's very chucking seen both organic and needle and it growth coming together. And 100% book to bill on the order intake in a difficult environment. Key wings being the extension against fierce competition and indeed a procurement challenge for Northern Ireland's Ferris. We not only won the Gatwick Immigration Immigration Removal Center we actually went and, took it live during a period of, lockdown. We've won a very long extension to the Fian Stanley hospital.
GODSS and finding those 2 important deep space contracts. 1, doing electro optical deep space exploration for the, U. S. Government maintaining equipment for that. And the other is the REF, finding those.
I mentioned Gatwick IRC mobilizing that during lockdown, but of course, we also had clearance, which went live in July, started taking prisoners in July. That's been very successful. And in August, we take live the new PECS contracts. So we've been busy on that front. In terms of the U.
S. In NSPU and Mets are performing in accordance with a plan and interestingly enough 40% of the pipeline for the U. S. Business now comes from work for, that unit. Zang's mentioned FEMA is running better.
We've, we've done very well from additional volumes in the CMS contract, which carried over unexpectedly into the 1st few months of this year. On asylum seeker, accommodation, we've looked how to find 2 1700 additional, places for people in, since March, which has been quite a test. And we've also been doing on the management side. We've had a series of new appointments to our exec, which is Kevin Craven retiring from the full time role in the UK business, Mark Irvin, coming from Australia Peter Wedding stepping up to run the Australian business. And at the other end of the scale, for our 40 graduate positions, we've had 7a half 1000 applicants, which I think tells you something about Safo being, a, an employer that has a good reputation.
The other highlight has been the way that, necessity being the mother of invention, we've had to go and, relook at a lot of our is including the interminable process of hiring something into, Sakai that used to take weeks or months. We've now got a new process called speedy boarding. Where literally within weeks we are able to, recruit people. So we're pleased that with the despite all the issues to do with, COVID-nineteen, we have still continued to improve our processes, our central processes and make them run better. So the next slide now, just talk a little bit about COVID-nineteen.
And I, want to start it by saying that from the get go, and I think that this was a very important thing to say to the outside world to our customers, but also to our, colleagues within the business is that it was our priority our top priority, was to support the delivery of essential public services. These are not things that we can walk away And within that context, of course, we would do all we could to protect our our employees and the interests of our shareholders. But throughout this, we have put front and center the need to support and sustain the delivery of public services. And this raised a series of questions, which you might call generic or group level, is how the hell do we manage ourselves in this environment? Would it be the same or different impact by different country?
How many people are going to turn up for work? At what level of attendance do we find that we simply can't operate? How can we supply a scale up the to provide secure IT in people's home, how long's the situation gonna last, will our customer and government be able to function? At all, what would happen to our liquidity and what PPE do we need and how fast do we need it? Now we had the unfortunate, have actually done quite a lot of work on business continuity planning.
And we have regular sort of emergency exercises where people turn up to work and suddenly find that, all the networks have been disconnected or some terrible crisis has happened. So we did quite a lot of, that thing. And the plans, the business continuity plans actually worked, well, slightly to everybody's amazing. The loose tight, devolved structure, worked really well. This is my favorite thing about managing you you devolve.
Management responsibility is close to the customers you can, but it is within tram lines of quite tight developed authorities. And, it's that has worked well because it's given people, contract managers, the ability to go and respond to customer requirements, in the particular way that they need to, but in a way that we can have confidence is not going to cause us, from. 90% of everybody worries about home working, but actually 90% of Circular employees work on the front line. They work in prisons and hospitals and in, call center. So, we had to bear that in mind.
The earthquake that was working from home actually only applied to about 10% of our, people. Government has actually continued to function well. They've been paying their bills. Liquidity has been strong. And one day, we will write a story of all all different wall stories about PPE, including a, a container load of sanitizer and PPE that have been painfully bought from China at vast expense that then what's stolen at the Port of Calais, setting our plans to move.
So, we've had the same sort of issues there. Moving over to just give you an idea of what happened on Absence. I said that, you know, around about 30% the, these people business become really difficult to run. And in March, when it first broke and people were being told to isolate and to shield and everybody was nervous, we were running at about 28 percent absence rate, which was very hard to manage, particularly in our healthcare, business. But that fell very rapidly.
And when I died where we are now, down to about 7.2% of which 2.3% is COVID related. So you say underlying 5%, which in the summer period is is about normal. But it's been very interesting that journey, how how dire it was back in, March. Moving on to each different sector, this was where the loose type comes into the there were very few in very few sectors where the question is exactly the same in the hospitals, it revolves around PPE, how we work gains be able to backfill a lot of the people the absences, how much of the, hospitals they actually wanted to continue services would years to get food in prisons. It was all about, do we go for lockdown?
How are you going to stop it spreading within a prison because there was experience in places like Italy where it spread through prisons incredibly, fast. Would we be able to do driving tests? What about the leisure sensors? And it had some really strikingly different impact. So in our Environmental Services business, which is basically carrying your rubbish bins, we've had a 25% increase in rubbish volume.
Because people have been at home and they're consuming a lot more stuff. They're getting a lot more cardboard boxes, through their driver and test examination in Canada, we had to completely close as we did our leisure sensors. On the other hand, the asylum seekers because the home office stopped, moving people stopped ending people's support, we ended up in a situation where we have a one way valve just people are riding, but nobody, leaving. Call centers, we have customers who, insist that there were he's done on a physical site connected to their networks and not from home, but those call centers now find themselves with capacity reduced by about 70 percent, and now mercifully more and more customers are agreed to, home working. And when you have to shift a nuclear submarine, As you'll translate, how can you be sure that you're going to have a tub available?
The answer is you have to take 2 whole tub club crews and isolate them for 14 days beforehand. The logistics of it become, immense. Our transport business, we've been running at much lower volumes on obviously in mercy rail, kind of Damon sleepers and local ferries going to be by Metro. But also all the airport services businesses may attract a control have also been, hit. So
moved to
the next slide. It's been a huge operational test not only for Sarko, but also for governments. And our reaction when governments have said can you help? The answer has always been yes, of course, we can. And we've helped in really diverse ways from setting up a field hospital in the World Dubai Trade Center, to, looking after about 1300 people, Australian nationals returning abroad in quarantine.
And let me tell you, we're trying to keep 14 100 Aussies just back from the whole holiday in a hotel where they can't drink. Was quite a challenge and the drain pipes were getting quite a lot of usage as people try to climb up and down them. So we did that from the government of Western Australia We've had, increasing numbers of extradition cases where people coming out of prison, foreign national offenders can't be a provided. So we've got extra capacity being put in in Australia to handwall, that. And then the UK, as I mentioned, 500,000 tests that we've done on the drive through mobile, test centers.
We're doing 25 drive through test sets of 64 mobile test centers and 19, prisons. It's a huge, the extent of the mobilization that we have done. Overall, we think that moving to the next slide that COVID 19 will be a net positive for our relationships. With government. We have, formed really close working relationships with people throughout government, on this.
And, I, I, I, I hope it's been a positive experience for a lot of them. I mean, they, I, I have utmost respect for governments here of elsewhere, how they've had to react to situations where the science was moving incredibly rapidly. Today's answer was not yesterday's answer. And, the consequences of taking wrong decisions were manifold. But I think what we put in our statement is a quite a lengthy thoughts about the long term impact of this.
And, our view on this is that the 4 forces that we first introduced as a concept back in 2020, our strategy review 2014 2015 is what drives governments to want to use private companies. Fundamentally, as getting the voices of this Kwa are going to be even lighter. The Kwa that says that we need better health care. We've got demographic issues we have to, public services are a really important part of our life. And we'd set them to be of high quality.
Governments being massively in debt with large deficits and yet, but also, customer citizens not wanting to pay more tax. And all this is going to go and drive, with even fiercer need, the need to deliver more public services of higher quality for less money. And I think that also the response of the private sector has been really strong in ventilator, Dyson, Babcock, McLaren, and Anlon. We've got the Nightingale hospitals being built by MITI into Sao Paulo, BC here, the British Army, and with us for Louisa Jordan in Circo, I mean, fantastically good cooperation and a greater expansion in hospital capacity in the UK, then I think that we've, has been seen almost anywhere in the, world. And as a whole, the public and private sectors have worked really well, together.
Moving now briefly to the to the original summaries, the UK and Europe are 19% organic growth, fantastic performance. Now part of that is about 100,000,000 of that is, carbon related, but we have the new AAC contract splitting from the loss making compass contracts and the mobilization of AAC in the first half of last year flipping to what is now a profitable contract. The Northern Isles ferry, we won the extension, but promptly went into lockdown. So that was a negative, but they've got over £1,000,000,000 of awards in the 1st, 6 months. In terms of pipelines, rebids, and extensions, well, the test and trace contracts are being renewed on a kind of monthly basis.
So that's a job. We've got Harte County Council. The tub contract, the future maritime, systems contract coming up for rebid. And we've also got the SkyNET, bid satellite communications for which we lead the consortium called Athena with Lockheed Martin, and others. And we've got a big bid that we're working on into the joint venture with Angie for the DIO Defense, infrastructure were bidding for new build prisons and also in Europe.
America's summary, they've had a huge year, revenue up 46%, but 36% of that's come from NSPU. This is now on this profitable, business, UTP growing by 42%, quieter on the contracts awards fronts, in the 1st 6 months. But they got a strong pipeline. And as I said, the 40% of pipeline comes from Met's related work. Moving on to, as pack, 19% revenue growth 25% organic was 6% of FX, headwinds.
And the largest contributor of that was the Garrison, Defense Garrison Healthcare Services, what we might call AHSC, which started in the second half of production 'nineteen, getting a full half effect of, of that. And the business has been doing well and mobilizing clearance. They've got a lot of extensions coming up, including the DRPP immigration contract that is the that comes to an end and that's extended at theendofnextyear. So we'll have to see whether they want to extend. They've got the right to another extension.
There are a lot of work in call centers, Department of Human Services. Acacia prison is up for, rebid So they are busy on that. Middle East has had a difficult time. Where a lot of their work is related to transport and clearly that volumes. They just went, they had won just before COVID came along, a large contract to go do work for Dubai, at Fort Effent, which probably closed or but closed.
And the volumes on air traffic control are clearly much reduced and there's not been a lot to replace it. So they're doing really, really well, beating every bush and to try and create new business that it's been quite tough for them. Moving on to the summary and outlook. Frankly, this has been a very strong operational and financial performance, the people, the processes, the strategic positioning of the Loos type has all served us well during COVID-nineteen. We're going to revisit the decisions, around dividend in Q4, both for the withdrawn final and for the interim and that will be also partly being borne by whether we are in a position to repay the deferred taxes in Q4.
Which we hope to be. Short term outlook, there's a wide range of UTP guidance for 2020 due to there being practice significant uncertainties, you can imagine, and that that we think will persist into, 2021. The government contracts that we've got that are generating extra revenue and some extra profit are very short term and quite volatile and could well disappear and we need to get a balance at. We hope that when they do as they will inevitably, disappear that at the same time, the negative drags on our revenue such as the pleasure of leisure and others will will correct themselves at the same time, but it's quite a balancing act to get right. And we've seen these recurring outbreaks, how serious they can be in Australia and the US, and now in the UK that these this is a highly infectious disease.
Long term, we believe that the 4 forces will be stronger than ever. But on the whole within our business, we've said that one of the good things about it, we got that this is not a business that's going to be disintermediated. I am confident that in 2030 years' time, there will still be two people at night on g Wing that we will still have to have people teaming up underneath people's beds and feeding people in hospital. And I think that while a lot will change, our processes will improve further. We'll have more home working and the like, but more will stay the same, then we'll change.
And I remember the saying of Jean Baptiste, who said a year after the French revolution in 1848. Through Stashange, who said 11 shows. And to end, just say, Circa, I used to sign my email saying Circa in private, it might stop doing for some reason, not that I wasn't proud, but it just seemed a little shy. But after this half, we are really rather proud of what Circa has done. Thank you.
And let's move on to, a Q and A. The questions will be taken on the phone line So that we can hear your voices. I have been told quite what that means in English. I don't know. But anyway, let's have your questions, please.
Thank you. Your first question today comes from the line of Sylvia Barker from JP Morgan.
Hi, good morning. Thanks for taking the questions. Firstly, on the short term guidance, and just your thoughts into 2021, So obviously, tenders are probably pushed to the right a little bit and we do understand the mix of short term UK. Government work versus kind of potentially the longer lasting impact of travel and leisure. But maybe can you give some thoughts around the relative importance of these elements within kind of the whole picture of uncertainty.
And again, on 2021, could you maybe remind us what profit uplift we should be expecting from things like pecs, Gatwick, and clearance in 2021 over 2020? And then net debt to net debt was a little bit better. Some of that seems to be timing, but could we maybe hope that the full year's a little bit better as well. Are you in a better position now than perhaps when you set the guidance in June? And then finally, just in terms of the long term and where you are seeing the potential for kind of COVID-nineteen, related, maybe further outsourcing.
Would, is that the UK mainly or would you say that there are other parts of the world where you're seeing a bit of a shift as well?
Me, start first of all, in terms of, we don't want to give out clearly individual profit numbers by contract. But yes, you've identified 3 of the things that will get better next year. So for example, during transition, with IFRS 15, we will incur a small loss in PECS during the second half, we've incurred a bit of a loss in the first half as we've gone through transition. And that contract will move from being loss making in 2020 into profit in 2021, but just remember, so we've not done the budgets yet. The budgets happen in quarter 4.
So the deed so I can give you consent but we're not going to go into the individual contract details. Gatwick will be similar. As Rupert said, they've done an amazing job at getting this contract up and going. But in the early days, we've got transition costs again, we'll get a we should get a very good run at that in 2021. And Clariance, we've been doing transition.
We've had some very low level profit to date will begin, as the prisoner numbers increase, we'll begin to make a little bit more in the second half. But again, there'll be a kick up, next next year in that. But these are the 3 main, new contracts, as you rightly point out, ASC ASC will be lapping up full years as normal. They've been the big drivers in H1. In terms of, net debt.
I'm just trying to get exactly the question. Our track record is not perfect on net debt. I owe not to But it is extremely difficult to pinpoint a number when you've got 350 odd 1,000,000 every month both in sales and in purchases almost. And government will pay at that point in time. So we'll always have a bit of volatility around the year end.
And you just have to look back at our pre close guidance versus where it came out to be able to see that over the last few years. I think the consensus is somewhere sort of 180 ish. We've said 200 give us plus or minus on that and let's see how the second half plays out. But the cash performance in the first half, that last 4 weeks was great because we cash had been disappointed to them, but we finished the half really strong credit to our North American business And also to the UKE business for and the customer for supporting us and getting that paid just before the year at the half year end. In terms of the guidance, the bull, the bull is the crystal ball, the ball is not quite as transparent as it usually is.
We're looking at the macros each day and Rupert was Rupert, I think, during the outlook summed it up well. What the extra revenue, we've got big moving parts, 130 of extra COVID revenue, and then 50,000,000 of revenue decline. How are these two elements going to play? And remember, the decline tends to be at a higher margin than the new revenue, the new revenue that we've got, we've consciously priced it to be supportive of customer and given the circumstances. So it's how these 2 interact and play out that gives us uncertainty as we look, into 2021.
And one thing, sure, it's not going to be a COVID, free year. Rucker, do you want to have a think about the, the longer term around the world, the same dynamics of that?
Yes, I think that the same dynamics do play. I think one of the interesting things you've got there is, a difference between federal struck as a non federal structures in the in Australia where actually we're multiplying the number of customers we have to deal with because each state has its own government and and then there's the federal on jobs. So there are multiple consumers. The same thing of having to rely on and call on private sector quickly to come to the site that has worked well. I would say in the Middle East that the impression we're getting is that, customers are coming to remember that it's quite valuable to have in of having, very low cost operations with, there that actually there is a value to having more resilient operations supporting, use.
I think that that is an and in the North America. I mean, we are, you know, although it's a large part of our business. We've got quite a small player there. But the Navy has just been, in particular, has just been completely robust and saying you get that in that battleship and you go and fix it. And there's a, you know, step to the mission.
So that's what everybody is doing. But I think more generally this issue of large deficits and, the need to have high quality and resilient public services. And the state can't do all that. I think that that's a pretty Worldwide. I think.
Okay, thank you both.
No,
that's great. Thank you.
Thank you very much. Our next question is from James Rose from Barclays. Please go ahead.
I guess the first question is on FY 'twenty one again. I know it's very hard to pinpoint a number for what it might be versus the FY 'twenty range But if you could just give us a bit more detail on what you think the most significant moving parts could be, then obviously the developments within COVID talked about those 3 contracts so far. I mean, is there anything else you'd call out as being particularly variable? And then secondly, on the pipeline, you give us a bit more color on how the pipelines are evolving, perhaps by geography by sector as well? And is there a reason for us to be more cautious on organic growth opportunities in FY 2021, 2022?
Or should we expect no change of what we talked about earlier in the year?
Well, I'll let Angus talk about pipeline, but I would just say we are coming off absolutely extraordinary organic growth rate. So I mean, just to remind everybody, we think that this is a market where the long term growth rate is round about 5%. So, clearly, the organic growth rate is going to come down quite significantly. So I think that the this issue, there are a few enough companies that are giving guidance for 2020. And, it is difficult.
I mean, we are not giving guidance yet for 21 because we haven't done our budgets. But in a normal year, we would be, as it were beginning to to, to give some great clarity back to what you want. But it's really, really hard because nobody can tell when this the disruption to our business is going to and when we are going to get back into offices, the extent to which we get a second wave in winter and have to go back into lockdown. So I think that you know, whilst I know that you'd love to have some hard numbers, on this, all we can say is is that clearly not going to be it, you know, it's not going to be much better, but it's unlikely, highly unlikely to be any better than 2020 might be a bit, up, but even a bit up would be pretty good. But in particular, I want to draw your attention to everybody's attention to a bit of a night edge, which is that in the first half, we, and for the full year.
We are broadly speaking able to say that we're going to make what we thought we would make way back in February when we did that. But the basis on which we get there has, at the top of it, a, a rupees artists shaped like me, or rather tightrobot, walking a tightrope consisting of the balance between the extra margin that we're making on the government extra work from COVID against the profit impact of those parts of our business that have been hit. In some fantastically present world, those 2 will run off at the same time and we will continue at net 0 through to, into 21. However, like being what it is, it is quite possible the government contracts could roll off earlier or produce less a margin And we still be stuck with the negative impacts of the, 50,000,000 of revenue that we've lost and that's falling through to our bottom line with a higher rate. So I'm not saying it's going on, but clearly there is quite a it doesn't take a lot of imagination to say that that could move by easily by 10,000,000 either, either way.
And within what you, guys think of in guidance, you want to have granularity down to a very tight range. So we're just say, we're not giving guidance for 21. We're just saying just don't go, you know, it's clearly not going to be a lot better than 20. And there is this risk there that you get a mismatch of timing between the the the additional revenue coming from government contracts and the hit that we've got. That is as clear as I can couldn't make it.
Angus?
In terms of the investor pipeline, James, it was sitting at $4,900,000,000 at the end of the year at the end of 2019, we're now at 4.1%. And if you look at the total pipeline, the investor pipeline only includes bids with an annual contract value of over 10,000,000. If we look at if we include the less than 10,000,000 then the pipeline is GBP 5,900,000,000. So GBP 4,100,000,000 of the investor pipeline and then GBP 1,800,000,000 of smaller contracts. So GBP 5.9,000,000 versus 6.5 at the end of 2019, 6.6 at the end of 2018.
But let's go back to the investor pipeline. So the split of it geographically, UK is just a touch over half of it. And it's that is stronger as a percentage than it was, albeit around about the same amount than it was at the end of the year. The Aspac pipeline is down a bit. It's about 10% of the total.
We've had very good success in Aspac, of late, and that just reflects the emptying out of it. The Middle East, a lot of their contracts are smaller. So it's only about 5% of the pipeline And then the balance just over a third, North America. And there again, we had a very strong year last year, not quite as much and converting a couple of, losses in the first half. And, but still we're positive in terms of the outlook in the U.
S. The other way of looking at it is in terms of sector, So, you know, health, again, most of these contracts are smaller and so a lot of them will be in the the total pipeline number as part of the smaller ACV annual contract values. CID and Services, enormous success with Andrew and Peter in the UK and Australia. And that should reflect in the fact that pipeline is down a couple 100,000,000 health, about 100,000,000 transport, about $100,000,000. And that's down again, the difference being Northern Northlink ferries, which we won in the 1st half if you compare it back to the investor pipeline at the end of December.
And then the biggest element of it, defense, almost three quarters of pipeline. We've got a good pipeline down in Australia, in the U. S. And as Rupert talked about with Metz, in SBU and also in the UK with the Vivo work. And then the balance being, JNI, clearly we weren't successful on with the Wellingborough.
And that pipeline we won Gatwick. So these are the 2 main moving parts there, about just 15% to 20% of the pipeline being being in J And I. So pipeline is down a bit. Things have moved a little bit to the right. That's helped us in terms of our rebids clearly, but a little bit tougher on the newer front.
But we're still relative in terms of where the pipeline isn't shaping.
Next question.
Our next is from Joe Brent from Liberum.
Guess three questions, if I may. Firstly, Rupert played generalist and recently asked him at times about reputation and relationship with government. Can you talk about the contract tracing contract specifically, how that affects your relationship? What the prospects are for that going forward? And then secondly, you haven't talked a lot about NSPU and the opportunities in U.
S. Defense which I'd say is quite an exciting area. Could you elaborate on that? And finally, could you talk about, whether there are some interesting acquisition opportunities that are emerging given the economic carnage, out in the real world?
Okay. So, I'll take it. Look, in terms of our rep on the tracing, a contract, we've actually got a good story there. We are shoulder to shoulder with the, on this government until the reaction I've had from government that interview I gave on today, a program this morning has been really excellent. And the issue is this.
I will try to sort of put it into a, okay. 96% of the people that we talk to agreed to self isolate. The problem is that the people by 20% of the people that have taken tests and tested positive have sufficient contact details. And when you get to talk to them, They say I've met ten people in the last, 48 hours, but one was a good Sunday sitting on a bus. I don't know who they were, and one of them was, somebody my brother-in-law brought around to the, as I don't know who they are.
So there's about 20% contacts where the index contact has no contact details to do this. So that is what is causing a of deficiency in the number of people we are subsequently being asked to contact. But I can assure you that the system is working well It is getting better, every, time. One of the things you're hearing on storage is large numbers of contract type tracers. With no work to do.
Well, that is on the same genre of why we got 10 Nightingale hospitals lying empty and 30,000 more ventilators than we need. Gotta start somewhere as the government has probably over provided in terms of initial pool of contract tracers and will want to cut the number back. That is something easily, here. But equally, They are having they have an eye on rising levels of infection rate. Higher there are more.
We're getting better at getting the contact details of those people that are wrong or not, available. So volumes into the call centers are increasing. I suspect that what they will do is they will start cutting back the volume, but they want to earn on the side of caution. So we are very robust. We're going to be going around, I think, being more public about our defense of this than 218,000 people who have been told to self isolate.
Period of 8 weeks. And that is a that's a nontrivial, number. When people say that the mathematical models say you've got to get to 80% for it to be effective, that is not a binary number. Is that 75% isn't as good as 80%, but it's better than 70% and 70% is better than north%. It's for every person, you know, that you get to self isolate.
That is a reduced, level of exposure. And if anybody wants a real teach in on all the numbers and the percentages and the numbers we refer up to Tier 1. I'm happy to get it, because I am now a world expert on the this. But if you think that this is causing a problem with our relationships with government, please don't, they are absolutely we are psyched, we are linked at the hip. On this.
In terms of
Can I just follow-up on that? Do you expect that work to therefore continue maybe at a lower rate for the rest of the year and onwards?
The government is the current contract runs out in August. The government, I think, is going to be mining to send it month on month. And they will be there in the numbers. So my expectation is that that's contract will be at a lower run rate post August than it was, in the first half Whether it runs through to October November, I had no idea, but they they will be wanting to flex the numbers up and down. Their priority of the first contract is to get a whole lot of people out and train.
The priorities in the subsequent one is going to have a more flexible model, whether they can flex it up or down. I would be amazed if we did not get any extensions beyond all I don't think it will be a backdrop, but I suspect it will be at a lower rate. I saw this. As time goes on to that, who knows? So as far as NSPU is, a concern, as I said to you, it's 40% of the, U.
S. Pipeline. It is very, because I think we've got, a particular, the trolleys is all that opportunity that's coming with incomprehensible initials. There's a thing for FMS Faults, which is a large contract. To go and support, secondhand military vessels that have been, sold overseas.
Once what there's a contract called GAT CS2, which is again a design and maintenance contract We've got the Goose Bay extension coming up. That's not for, for Metz. And we've got the FAA towers, rebid, coming up. But we are, as I say, I am, we're very happy with the way that is performing in line with our original expectations. And There is a lot of that.
Remember that a lot of the Mets pipeline is task order work where you've got an existing, contract on the platform and you get given task orders. So it doesn't really come in the pipeline or why it goes in the pipeline and exit straight out. Does that do for you, Joe? Thank you.
It does. Thank you. There was a third question. Was there about acquisition opportunities
Oh, sorry. It's not, but, m M and A. M and A. Well, you know, beaten to the draw by Phil Bentley at Maysian in to serve, not. But this is Now, the, it was good.
You know, I, I, I, I think that I was really good. Well, Phil, I did that. There is a degree of, the stress, around, but and everybody knows that we are in the market to do acquisitions. I would say that the situation remains as absolutely normal, which is that that we are on the look. There is a flow of opportunities, inbound.
But who knows what's going to come with it. Our balance sheet is in very good form to be able to do something if we did want, but we're not it's not it's an opportunistic part of our strategy rather than our strategy being dependent on it. And if you have any suggestions, Joe, we're always happy to take your call.
We have another question. It comes from the line of David Brock from Numis.
So most of my questions have been answered, but I do have a few sort of contract questions. Firstly, in respect to the ViaPass JV, I just wanted to understand, did the JV not stack up without Bedford being involved? When would have thought that, that would be a growth market going forward? Secondly, in terms of Wellingborough, I think Angus, you mentioned that you weren't successful there. Any sort of thoughts on where you may have fallen short and what that means for your future prison work And then finally, just on CMS volumes, are those already coming back in declining, which sort of underpins your more cautious outlook for the second half?
So, Shailu, wedding bra, I'll just say that no result has been a nice on that. Yes, there's no further, but we hear rumors that somebody else has 1, and I don't think it's appropriate really, too. We haven't had any feedback yet from the customers to, where our bid was this way, we think it unlikely that we've been successful based on what we read in the BBC. But there's lots of others coming along and there's Glenn Partha and others and there's opportunities also in Australia. And we wouldn't suddenly lose some.
But, so We are disappointed, but not this harden, if that turns out to be the case on, Wellington Brown. On VialPath, The situation there is that Via Park, the Bedford contract was a relatively small part. The overall the main contract was providing apology services to some guy to guys and some Thomas's a hospital in, that we were not successful in that Bio Path was not. We had a 30% shareholding in it, but with guidance and Thomas's and kings who were the the other shareholder who are also the buyers. And they wanted to retain the buyer path JV structure and to perform with a new supplier of the contract under that structure.
So, we said it on farewell. We in JV, and I think on very fair financial, tons. But it now means that we are no longer operating in the biology space. But as you know, we have always said that we prefer not to be near any needles when it comes to health care, we prefer the non clinical, space. For that.
So it's been, you know, Biopath was in a much worse shape than when we first arrived. It owed us quite a lot of money. It had quite a lot of debt. We got it back with our partnership in a position where it was sold. But we've now exited.
As far as CMS is concerned, yes, it's a quite a seasonal business. We expect volumes to decline as they always do. Over this year. We had a particular lift in the, 1st 3 months of the year because there was a particular processing issue they had with inbound, stuff coming into us that involved us having to do a whole lot more paper processing, which we had automated to a very high degree. So the drop through of that into our margin was very strong and we didn't think that this is going to sustain into the second half and it's going to be a very tough area for next year.
And there are no further questions at this time. I will hand back to the speakers for closing remarks.
Thank you all very much indeed and, meet you on the road. No, no doubt. If you have any more questions, please contact either Paul or Angus or Nigel or, in desperation me.
Thank you all.
Thank you very much ladies and gentlemen. That does conclude the call. Thank you all for joining. You may now disconnect.