Good morning all and welcome to the Circo full year results presentation. I just want to introduce a marker when many of you will have seen him last year, but it's our habit of bringing along a regional CEO to these wishing features about Circa is our international footprint. And interestingly enough, Australia has been, is almost a proxy for Circa in terms of the journey that it's been on and it's also had a particularly busy year, this last year. So I thought it'd be useful for Mark to come along again and give you an update. So for the results themselves, well, they're pretty as a picture, really.
And very strong trading and financial performance, revenue up 13% of which 8 was organic. And I think that this move into organic revenue growth really is quite significant a real change in mood in the company. But that's also been accompanied by record order intake. I mean, if you'd ever said to me any time in the last 5 or 6 years that we might have a book to bill ratio of 170% £5,400,000,000 worth of order intake is astonishing and I'll just hasten to add, we don't think we'll repeat it for a good while. But it has been not only has the order intake been very strong, it's also been widespread both in the U.
K. U. S. And Australia. Our order input, order book now stands at £14,100,000,000.
It would be helpful if I move the slide on. I suppose 14,100,000,000, which compared to revenues of 3 point to gives us a long a strong order book cover. We of course did this was the year. We did the NS BU acquisition, which has added materially to the scale and capability of our U. S.
Defense business, but also more important is our defense businesses are ahold. It's taken us up a step and given us some very, very core capability. And we've ended the year with a robust balance sheet. And, for those of you who know, it's, the net debtors ended up significantly lower than we thought it would and our covenant leverage is now 1.17 times and the underlying leverage 1.3 times, which is a comfortable place to be and also gives us the, capability to, to have some ammunition if we want to do any more acquisitions. The 2020 guidance is for further continued growth both in revenue and in a profit and praise the lord.
Praise the lord. Finally, we get to announce a dividend and what a pleasure that is. Just to put the results into context, I mean, this is typical, what you might call sort of hockey recovery. And we all know that over a period of time, companies tend to revert to market. But this is clearly in a market that's growing at 2% to 3% to get this sort of revenue growth is exceptional, but we're also enjoying margin expansion at the same time.
And there are not many companies in our sector who over a 3 year period are going to deliver nearly 28% compound annual growth in profits as we expect to go from 69,000,000 in 2017 and expect to be around about $145,000,000 in 20, at 20 So that is very strong progression, as I say, partly through revenue growth and partly through margin expansion And the pleasing thing for me is that this is in accordance when we stood in front of you on this very platform. In 2014. We said transform a stabilized transform and grow. And the grow phase was to run from from 2018 to 2020. And we're more or less that's what's happened, which is obviously pleasing in itself.
So I'm now going to hand over to Angus who will take you through the numbers and then I'll do the operational presentation later.
Thanks very much, Rupert. Good morning, everybody. We will now go through the financial review. Let's start with the income statement. Revenue of $3,200,000,000 is up 14.5 percent on a reported currency basis, 13% in constant currency, comprising 8% organic growth and 5% from acquisitions.
The favorable currency impacts of 1,000,000 on revenue and 1,000,000 on underlying trading profit or UTP arose primarily from the weakening of sterling, and you'll find all the rates and the sensitivities in the appendix. Like last year, UTP of $120,200,000 is lower than trading profit of $133,400,000. Reflecting the exclusion from underlying of 3,600,000 of contract and balance sheet review benefits and the 1 off defense and fire rescue services settlement defermal of 9,600,000. This ensures that we give an accurate picture of true underlying performance. UTP margin improved by 40 basis points to 3.7%.
This improvement primarily comes from keeping a tight control on SG and A costs as the revenue line grows. Going forward, our focus will be in managing contract costs more effectively through continuing to embed operational excellence and optimizing contract procurement whilst keeping a lid in overheads. The 13% constant currency revenue growth, as I said, consists of 8% acquisitions, 4% 4.8 percent from acquisitions organic 8 percent, our NSPU acquisition, which completed in August, contributed 4% of this in inorganic growth. The balance came from the Curlian Health contracts that transferred individually to circle last summer. Organic growth was largely driven by the Americas and Nasdaq, where organic revenue grew by 19% 16% respectively.
In the U S, our defense business was particularly busy, notably in ship and shore modernization, and also in our new FEMA contract where activity levels were very high. In ASPAC, as Mark will talk about, continued growth in systems and services combined with our new AHSC Garrison Healthcare contract were the main drivers of the increased revenue Encouragingly, UK and Europe grew by 2% reversing years of decline with AAS C being the biggest contributor. Organic revenue in the Middle East fell by 2% due to a contract loss in Bahrain and the rebasing of the Milab defense contract and rebid. UTP for the group of 1,000,000 represents headline growth of 29% and 25% in constant currency. UTP margin improved by The outstanding performer was the Americas, where UTP grew by 70% in constant currency terms to 1,000,000.
This includes a 5 month contribution of 8,600,000 expectations, largely due to an accelerated workflow in Canada. As we talked about at the half year, our CMS health insurance eligibility contract benefited from unusually high volumes of variable work, particularly during the first half. Whilst we are performing some additional variable work currently, this is short term, and we expect activity levels and profitability to be lower going forward. Beyond NSPU and CMS, the broader Americas business also performed very well. With all business units growing their profits.
The implementation of IFRS 16 also led to £2,900,000 benefit to the division. From a margin perspective, Americas reported margin increase by 190 basis points to 9%, which as we said at the interims, we do not expect to sustain given the one off nature of some of our CMS work. Underlying trading profit in UK fell slightly year on year to 1,000,000, This includes a reduction in profit of $2,200,000 in 2019 from IFRS 16, So excluding that, UTP was up 4%. Profit performance in our health business improved year on year due to the annualization of profits the Curlian Health contracts. This was offset by a decline in the profit contribution from joint ventures and associates largely as a result of the start Reported trading margin at 2.8% was slightly lower than 2018, but with the AASC transition complete, we expect the margin to improve significantly turns to $31,300,000.
This increase reflects continuing strong performance in the citizen services business as well as the AHSC Healthcare contract moving to its full operational stage quicker than anticipated with profitability in the second half more than offsetting the transition costs incurred in the first half. Reported UTP margin improved by 10 basis points to 5%. Overall, the implementation of IFRS 16 had a £1,200,000 positive benefit to group UTP in 2019. This is lower than our original expectation of circa 5,000,000 due principally to the in year losses on the Caledonian sleepers contract following the rolling stock asset impairment. Turning to the bottom of the income statement, the increase in the finance costs of $8,000,000 was largely due to a $7,000,000 increase in lease costs caused by IFRS 16, with the balance being the repayment of the Intelli Net loan in October 2018, resulting in no accrued interest income or discount unwind in the year.
The blended average cost of our debt in 'nineteen was slightly lower at 4.51% as compared to 4.66% in 2018. Average and daily net debt of $231,000,000 was a little higher than the $219,000,000 of the prior year. The underlying tax rate was 25%, 1 percentage point lower than in 2018, This rate reflects the effective tax Underlying profit before tax generated from our overseas operations, accounted for more than 80% of total underlying profits. Thereby pushing up the effective rate relative to the UK statutory rate. Over the medium term, We expect the underlying effective due to the benefit of the goodwill amortization in the U S.
Cash tax will also benefit in the longer term from the 760,000,000 of off balance sheet losses in the UK. Underlying diluted earnings per share grew by 18 percent from £5..21 to 6.16. The weighted average number of shares increased from 1,100,000,000 18 to 1,200,000,000 in 2019, largely as a result of the approximate 7 month effect of the May share placing 111,200,000 ordinary shares to finance the NSPU acquisition. Statutory reported earnings per share on a diluted basis, which reflects non underlying items and exceptionals, was 4.21p as compared to 5.9p, and balance sheet review, together with the increased average number of shares, I'll come back to dividends later. In terms of exceptional items, These were a net $26,000,000 in 2019 as compared to $22,000,000 in the prior year.
The biggest exceptional cost related to the deferred prosecution agreement with the serious fraud office. This ruling concluded the SFO's investigation into circle companies as originally announced in 'thirteen. Following the DPA approval, total payments of $22,900,000 were made to the S SFO consisting of a fine of were 13,000,000, down from 32,000,000 in 2018. We have largely completed the transformation stage of the strategy implementation implementation, bringing to an end transformation cost charged to exceptionals. We will continue to improve our systems processes and structures, but we expect the costs associated with this to be charged to trading profit.
Our focus is now an operational improvement reaping the benefits of our procurement transformation, completing the rollout of workforce management and using the power of the 11 black belts and master black belts. 154 green bells and 3471 exactly yellow bells that we have trained on our operational excellence program. Offsetting these items was an exceptional credit of 1,000,000 from a provision release relating to the settlement of a commercial legal dispute in the U. S, which had originally been provided in 2014. The exceptional cash outflow cash outflow was 1,000,000, which was 1,000,000 higher than the exceptional charge, with 1,000,000 of this difference being due to legal provision release which was non cash.
Turning to a work not heard for several years at Circle, namely dividend I have stood here for 5 for the last 5 years and repeatedly said that the board is committed to resuming dividend payments as soon as it judged it prudent to do so. The combination of improved profitability and cash generation, smaller cash outflow associated with loss making contracts leverage at the lower end of our target range and a positive outlook has led the board to recommend a final dividend in respect of 2019. Our policy going forward is to wait dividends approximately 1 third, 2 thirds between interim and final payments. The recommendation of the board is to pay a final dividend of 1p per share, which equates to an underlying EPS cover of around four times. Or a payout ratio of circa 25 percent.
The cash outflow from this dividend, if approved, will be 1,000,000 The board will keep the dividend, including the payout ratio under review as we continue to implement the growth stage of our strategy. It will be mindful of the 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 circle in the long term. The usual detailed cash flow and net debt slides are shown in the appendix. Here, I'll just pick up a few headlines. And a major headline in 2019 was a strong free cash flow performance, which was better than expected.
Free cash flow generation improved from 1,000,000 in 'eighteen to 1,000,000 this year. Which represents an 84% conversion of profit after tax compared to conversion of 28% last year. The increase in free cash flow was driven by higher UTP and better working capital despite the 14.5% growth in revenue. The UK, which had a strong year of collections and benefited from the 1 off settlement. We continue to have 0 receivables or payables financing in place.
Our billed receivable days were 28, a day one day higher than in 2018, whilst our trade purchases days increased by 6% to 36%. Due to North America returning to near its historical norm after an unusually low number last year. UK trade payable days improved from 30 to 29. Looking ahead to 2020, we expect a similar level of free cash flow with OCP related outflows reducing. This will be offset in part by the reintroduction of share purchases for the employee share ownership trust to satisfy the share awards, which we expect to be around 1,000,000 in 2020.
This approach will reduce free cash flow conversion but we believe that given our stronger financial position, it is preferable to the dripping dilution suffered by shareholders by issuing new shares each year. Adjusted net debt was $215,000,000, up from $173,000,000 at the end of 'eighteen. Daily average net debt, 1,000,000 compared to 20192018 with peak net debt of 1,000,000. These numbers included the impact of the NSBU acquisition cost of 184,000,000 and the related net placings proceeds of 139,000,000 Adjusted net debt excludes all lease liabilities, consisting primarily of steam liabilities, which are materially higher than the half year due to the transition of the AAC contract. Including this 1,000,000 of lease debt, reported net debt was 1,000,000, Covenant net debt excludes the new IFRS 16 lease liabilities and at the end of 2019 was 1.2 times, as compared to 1.1x in 2018.
Excluding the non underlying trading items, underlying leverage was 1.3x compared to 1.2x in 'eighteen. And therefore, in the lower half of our 1 to 2 guidance in terms of leverage. In 2019, we arranged a million facility to support the acquisition of NS BU with 4 of our key lending banks. Combined with our 5 year 250,000,000 revolving credit facility, that we put in place at the end of 2018, we have committed bank facilities to $295,000,000 as well as our $213,000,000 of private placement debt. In terms of liability stack, we remain in good shape.
We have no off balance sheet debt in the form of receivables or payables financing, Our pension has an accounting surplus and a very small actuarial deficit. Our payables days are in line with U. K. Government supplier requirements. Our deferred revenue is trading in nature and our JVs are purely operational.
There's a Robert Burns poem, entitled epitaph to my own friend, which is parallels with this OCP history slide. The OCP provision from the contract and balance sheet review started life with a balance of $447,000,000, and by the end of 'nineteen, it has reduced to 17,000,000. Remarkably, over the 5 years, we're within 2% of the original provision. Rather than basking in the predictive brilliance of Nigel's crystal ball, we need to own up to the fact that this is a triumph of portfolio theory. As those who said, we had taken far too much provision and those that said, we had not taken nearly enough provision were in fact both right but thankfully for us by almost equal amounts.
However, as you know, the OCP journey took many twists and turns and has cost circle an astronomical amount of cash, which had to be funded by our shareholders. At the end of 2014, The OCP contracts had aggregate revenue of around 1,000,000, but by the end of 'nineteen, this number has fallen to less than 1,000,000, With the only material contracts left being caledonian sleeper and pecs where our recent contract win means we expect to be profitable over the term of the new contract. The advent of IFRS 16 means that the Caledonian super contract no longer is an OCP as the least asset has been impaired, which reduces amortization and losses in future years. Any future losses will be shared with the Scottish government from April 2020. And at April 22, we will either exit or adjust the terms to carry on.
The impact of the OCPs has been dire financially, but we've learned the lessons of the past, and our bid governance is much more robust. Is it perfect? Absolutely not. Given that our business is essentially a portfolio of contracts, we will always have the auto CP, but the governance and risk focus culture means that it should not be endemic. Finally, let's look at the outlook and the modeling assumptions.
We expect revenue for 2020 to be in the range of 1,000,000,000 to 1,000,000,000, which represents total growth of 6% to 8% comprising circa 4% organic growth, around 5% to 6% growth from the 7 month contribution from NSPU, And based on current rates, a negative 2% to 3% impact from adverse ForEx. In terms of underlying trading profit, we continue to expect a number in the range of 1,000,000, in line with the guidance we gave in December. This number is held by the annualization of NSPU as well as the AASC and AHSC contract wins. However, as we said last year, we expect CMS profits to be materially lower in the U. S.
As the previous level of one off project work is unlikely to repeat. In addition, we will have PEC's transition costs of 4,000,000 and a currency headwind of around 5,000,000 Amongst the key challenges in the year ahead will be our success in mobilizing and transitioning new contracts, notably icebreaker and Clarence Correctional Center in our Nasdaq business. However, we always need to bear in mind the broad range of potential outcomes particularly given the early stage of the year and the sensitivity of profit to even small percentage changes in revenues or costs. We expect net finance costs to be around 1,000,000 higher than 2019, with the increase from the 1,000,000 being primarily due to the full year impact of the ASC leases. We expect closing adjusted net debt, which excludes leases consistent with our how our lenders look at our covenants to be around 1,000,000 with covenant leverage at the lower end of our target range of 1 to 2 times.
The annualization of last year's placing means that we expect a weighted average number of shares of around 1,250,000,000 as compared to 1,200,000,000 in 2019. The rest of the guidance is there for reference, and I'll now hand you back to Rupa
Thank you, Angus. So we will start the operational review with our traditional highlights and lowlights, but I just want to say that, with these annual results, my own feeling is that we are finally slipping the surly bonds of reputational and financial carnage that we inflicted upon our shareholders, some years ago. And as far as the OCPs are concerned, I minded about, do you remember those things called spot the ball competitions? And they always said using your skill and judgment say where the ball is. And I think that it's important that we don't understate the skill and judgment of Angus and Nigel in spotting that OCP ball and getting it to within 2% of where it's been an enormous number.
And yes, it has been portfolio But at the end of the day, their skill and judgment put the ball into the right place. So looking at the highlights first of the year, clearly getting back into growth, organic revenue growth, it's not just the, the headline growth. It's the fact that actually on an underlying basis on we had organic growth of 8%. And as I said that we're on track to increase the profits between 20172020, but at a compound rate of 28% The acquisition of an SBU marked another milestone, the ability to do a proper grown up acquisition, in the U. S.
Again, underlying our international footprint was important. And we've spoken about the record in order intake, but one of the things that I would draw your attention to is that it was not just in one region. We had really strong order intake in the UK, with the ASC, equally strong, in relative to the size of that business in Australia, with the, the Garrison Health contract and Adelaide, Reman Center, but also strong order intake in the U. S. With the U.
S. Pension Guarantee Corporation and the U. S. Air Force Tririga contract and large numbers of task orders from FEMA and from the Navy. So all those things were widespread.
It was across the business. I also want to talk a little bit about the investment that we've been making in our platform. And whilst I think that on the one hand circle can sometimes be seen, as a particularly unruly herd of cats in terms of all these contracts. Actually, there is an underlying sister and there are underlying strong underlying processes. And we spend a lot of time paying attention to and investing in these systems.
And that's one of the things that as we've transitioned from being a shrinking company to a growing company, we've had to go and start exercising new muscles again, muscles that we had forgotten. And one of those being to go and actually mobilize big new contracts like Clariant's Correctional center, like the new regions on AAC, like the, we will have to do, on PEC with impacts. And on the whole, these mobilizations have gone really well. We've found that those muscles still, exist. On the people side, when Angus and I joined, Circo, we will, I was knocked over in the rush by people leaving.
And we now have a situation where a million people applied to work for Circo last year and for 14 graduate jobs in the UK, we had over 1000 applicants, which I think says something about our attractiveness as an employee. Being as well as CEO, the group CIO, I'm delighted to tell you that we have achieved a rare achievement which is getting our SAP, our core SAP ERP system onto latest version. Very, very few companies do do this. They drag along with old versions of SAP, but we're now up in the cloud. We're on the current version, and that gives us a a good platform.
We've now got nearly 13,000 employees on workforce management at various stages of development. And I really feel that the platform that we've got here is capable of considerable, operational leverage. It's also pleasing to have finally resumed and David Easley is over the Heart Group General Council a huge achievement in resolving satisfactorily the SFO investigation and also the dispute that we had with the Ministry of Defense on the defermo, a contract. Looking across at the lowlights, it appears about half the people who travel on the Caledanian Sleep, I have my personal email address and telephone number. And they were not short of using it.
It has to be said. A call's like saying Rupert I've been stuck outside Milton Keynes for the last 2 hours. I thought you'd want to know. But what do you want me to do? Push?
And we had a very, very torrid time, with the caledaden sleeper, in the middle of the year. It was like in terms of technology gained from a Baker Lite telephone to an iPhone over a a weekend and that combined with a whole lot of network rail problems. And but the good news is, is that we are through this now. And we are in the middle of February. We would be it expecting to have, occupancy on the sleeper of somewhere around about sort of 30% midweek, we're now running at 60 to 70 and sometimes 80% occupancy in the middle of February.
Which is completely it's a much, much, but stronger numbers than we thought. And the service is running much more reliably. So we think we're through the worst of that. Those of you who live there in Glasgow would have seen the torrid time that we've had with respect to, asylum seekers, but I actually believe that from, we've done the best we could with a very difficult, public relations hand on that. We Mark hopes to deliver his new ice breaker to Australia sometime whilst there's still ice in Antarctica.
But is a few weeks late, but we're hoping to catch some of that up. And of course, we have the challenge of replenishing in our pipeline which has been denuded, but exactly in the, in the right way. Were impatient about contract productivity and efficiency. It seems to go it seems to be a dial that's hard to push, which is why we're putting so much emphasis on workforce management. But we've taken out 100 of 1,000,000 of short cost.
And getting the productivity out of the contracts is a new an important challenge. And one of the people helping us do that is Anthony Kirby, our group HR Director and he is responsible for, I think, the one of the sort of part of the turnaround in, our reputation as far as people service is concerned. And he has brought, I believe, some booklets at the back, which I'll aim to talk about our people experience in, in Circo, which I commend to you as a rattling good read. Well, that might be slightly overstating it, but it's a good, worth looking at. Another, so we had some big contract losses in Hong Kong.
It's a small exposed to contract losses and we had a poor year for that. But we now got some big bids in front of us. And in terms of the UK, it remains a tough market. I mean, people see the big order intake on asylum seekers and on pecs. But arguably, this is not actually market growth this is resetting the pricing, on contracts that were losing the supply base money, and replace of resetting it.
So it's arguably not additional volume growth. The government is extremely, still obviously involved and focused on, Brexit. And But there is progress being made. I think that the new outsourcing playbook is a real advance and there is much for those real goodwill. I think both between suppliers and government now is both having looked mutually assured destruction in the in the eyes actually coming to the conclusion that we both need each other.
And that is a much better place to be. I just want to spend a few slides talking about the way that we work. And one of the outstanding things that has happened over the last 3 or 4 years is that the business from going from being a set of disconnected regions fiercely independent herds of cats and all that have actually discovered the joys of working together. And I think that that's largely as a result of the Oxford Management program that we run and actually we've got huge momentum whether it's tugmasters from Australia coming over to the UK to get, a trained whether it's the UK benefiting from help from Australia on the justice and immigration, bids We've got from the U. S, their expertise in artificial intelligence and robotic process automation on major case management contracts, helping Australia do bids.
And it is a it is remarkable how much activity there is of going on and sharing across the business completely undirected by, Angus or me it's just going on, and that's the way that it, should be. I also want to just spend a few moments just talking about the order book and pipeline progress. This is a typically this is a slide in the forward style of making you really squint to be able to see it. But if you use a magnifying glass, all the words are true and, wonderful. So you will be aware that we have a pipeline that we report the new business pipeline that we report that goes and excludes a lot of any contract and the opportunity below 10,000,000 Those have now got with particularly the Metz acquisition and the NSVU acquisition, and the increase of our framework contract we're getting more and more work that's just that is smaller than 10,000,000.
So we're including that now and we will be reporting on our total new business pipeline in the future. And the difference is about 1,600,000,000. So that the, on the previous basis, the pipeline is 4.9 on the basis including opportunities below 10,000,000, it's 6,500,000. But there you can see very interesting, you know, shape of the progress that's been going on in the order book, which is clearly, very chucking and we got a heightened pipeline that whilst it might be small, it's got some important opportunities. We are leading Sky Net bid for the government's yet secure communications, contract.
We have been a subcontractor to Airbus, and we've broken away from that and are leading a consortium with Lockheed Martin and in Marsat, CGI and the others to provide government with secure satellite communications. We are Wedding Reprisen is in the pipeline and we are also bidding for, DIA, which is the Ministry of Defense FM contracts. And overseas, we got Justice Health that Mark is going to be bidding for a major opportunity in for training air traffic controllers in the, U. S. And other marine opportunities.
So we are, although the pipeline is smaller than we would like, is actually got some high quality, opportunities within it. This is the slide that I think that I would be most proud of, over the last few years. It's our every year we do a Viewpoint survey. And it is done on a massive scale. In 2019, we have 27,000 employees participating to participate in the survey.
And we gave them the opportunity to do free text comments, this year, which we haven't done before. We expected to get 1 or 2 Well, if anybody was under any question or doubt about how passionate, feisty, psycho employees are there were 50,000, comments came back. And how do we go and give feedback on that. It's impossible. So what we're doing is we've taken a 1000 of them at random and they're going to go on to our website, so people can go and see and they genuinely are random except those that relate to my body mass index.
But so that people can see what people within the business are saying. But if you actually look at these for cognaccente of, I mean, this is engagement score, which is a new word for what we used to call morale. And it's really interesting you see the lines, the blue line is the leaders, the gray line is people managers and the red line is all employees. The notable thing in 2011 is that there was a wildly different experience between the leaders of the business and the people within it. You know, the leaders were broadly speaking okay, the people within it were pretty unhappy.
And there's an old experience at Adige that says the customer experience will never exceed the employee experience. And I think there's some truth in that. And then you see what happens when we meet our troubles And actually, the employees kind of knew it was not very good anyway, but the leaders morale crashes to a level that's almost unseen. In terms and to get a leadership that is whether morale is lower than the employees hole is a remarkable and bad thing. And then you see since 2014, it, improving quite steadily.
But what is remarkable about this is to see how closely it is aligned. And that is a very rare, you don't often see that in large businesses. There's always quite a dispersion between the leaders of the business who are naturally happier and fatter and catier than the employees. And there's all it tends to be a 10 or 15 points of But here, the experience of people, be they, leaders of the business, people managers or employees is broadly speaking the same. And that is a very proud making, slide.
Moving now to the regions, I'm not going to spend long on each region because it's there to read. But the UK and Europe had a astonishingly good order intake, particularly in Justice immigration. We've had the asylum seekers, order, the pecs, order, and we have just received the orders you were seeing for Gatwick. Revenue was up 5% margin was brought was down a little or broadly, a flat. They've got a decent pipeline now of DIO.
I mentioned Weddingborough and, and Skynet and I would mention the fact that in all the harusia backed caledonian sleeper, our joint venture with Herbellier running, Merseyrail, was rated the top performing Rail franchise in the UK, last year. They've won a lot of work now in for the skills and support for DWP, and we are also now clearing her majesty's dustbin and the former prime ministers Mrs. Mae's dustbin's, having won Windsor and maiden head for our environmental services business. The business benefited from the acquisition of Carillan. That's given us additional of the healthcare health businesses that's given us extra scale and help the margin in that business.
Moving on to the Americas astonishing year, I mean astonishing year, 35% revenue growth, of which 19% was organic. I mean, this really is a huge, achievement and again, is better than a lot of our peers in the sector and the profit, 70% profit growth. Now a lot of that came from the CMS contract, and we don't think that that will recur this year. So the falling away of the CMS problems, they were really, a very high last year. Is being partly offset by the NS BU acquisition.
They've done very well on the integration of that. NSPU is running to plan. They had £110,000,000 of revenues in the second half of twenty nineteen at a 7% margin. They continue to win business. I'm particularly pleased with the Tririga which is a large asset management system where some improbable 1,000,000,000 of dollars worth of assets were managing for the U.
S. Air Force. And we've got some big bids coming up to do all the air traffic control training for the FAA. We've also got rebids and extensions for Goose Bay and force protection coming up. As PAC, I'm going to leave Mark to talk about that, but suffice to say that they had a strong year too with revenue up 16% and underlying trading profit up 20%.
The Middle East has been, the profits have gone backwards in the lease, but we knew that was going to happen though they had a highly profitable contract, which is me labs providing service the Australian armed forces, in the, Middle East. And actually they did better than we thought, both in terms of the margins are getting on the new contract and on other contracts. They are in the midst of the rebid for, Dubai Metro, but they've also won a highly strategic contract called Mashrode inside the Arabia, where circle has been asked to go and create as it were the playbook, the the book of process and procedures, which will be used by every government department in the kingdom. To go and regulate how they manage the assets. And that's not any of great privilege, but it also gets us engaged with nearly all the major government departments of state.
And they have just won a large contract with Dubai Airport to provide greetings, services. That's worth about GBP 70,000,000 over the next 5 to 6 years and is a major step forward. And they got a real spring in their step now, the Middle East. So we're expecting that to grow again next year. At which point I'm going to hand over to Mark, who will talk about the progress in his business in Australia.
Rupert, thank you and good morning to everyone. In the next few minutes, just wanted to give a brief update, over the last 12 the progress in our business from, what I shared with you a year ago when I was here. As Rupert indicated, the Aspect business really is a microcosm of the group. The journey that we've been on over the last 4 or 5 years really mirrors what we've seen across the rest of the company, the hard work put into, the portfolio cleanup strengthening our operational delivery ensuring that our governance is robust and preparing this platform for growth but making sure that as we pursue growth, we remain disciplined and also that compliance in terms of our contact delivery remains front and center in the minds of our people. So we spoke a year ago about FY 'eighteen being that point of infection and looking forward to 2019 being the year of growth.
And you will see in our headlines that, that is what we have delivered. Revenue growth up 16%. It says on the slide, UTP 'nineteen, 19% or 20% in terms of that rounding. And importantly, starting to move margin in the right direction, nudging it up slightly, but reaching that threshold of 5% for us in the year. We also saw significant growth in our employee base.
So most notably, the addition of more than 1400 health and allied care staff in Algarrison Health contract has meant my team has now grown to almost 11,000 And when we look across the contract portfolio, in addition to the wins mentioned by Rupert and Angus, we were also able to secure key extensions, particularly our immigration services contract, which was extended for 2 years as well as the contract to operate and manage the South Queensland Correctional Center, but that also going out 2 years. And we were able to successfully revert other parts of our portfolio like the traffic camera services contract we have with the Ministry of Justice in the State of Victoria. Really pleasingly for us, we were also able to organically grow some of the new contracts that we took on in 2018 like the work that we do with the Department of Human Services And Australia's National Disability Insurance Agency So those contracts have grown organically during the year. Now as always, we have a number of key rebids that we actively work on. And in 2020, that will see the Acacia prison contract.
And while the field in the Stanley contract, our largest health contract still has about 18 months to run. We have already entered dialogue with the state of Western Australia to contemplate the next iteration of that contract. So generally when you look across our revenues by sector, our pursuit of diversified growth is now starting to move the needle a little bit. And you can see that while our Justice And Immigration business has grown, the growth of other parts of our portfolio means that JNI now is about 45%. Whereas historically, that's always been well over 50% in terms of representation in our revenue.
And finally, when we look at the portfolio, as indicated by Angus, we exited 2019 with no onerous contracts at all. In the aspect portfolio. Just a quick look at a couple of our key contracts, in our love of acronyms, ASRV is the ant arctic supply and research vessel, AKA ice breaker referenced before. Ruben spoke about the fact the project overall is delayed by a number of weeks, but I did want to highlight the fact that we've put significant effort during the design and build phase, the 1st 4 years to ensure that Noreena, which is what the ship is called, will not only be the state of the art supply and research vessel that she was envisioned to be but importantly, that we attain the highest quality, standards, the highest safety standards, and also based on the sensitive work that the ship will do, the highest environmental standards as well. Noyena will enable Australia's antarctic program for the next 20 years.
And commensurate with that, we will have the responsibility to operate and maintain through that life cycle through a 10 year contract and have contracted also affords to 5 year extensions, so really covering that 20 year life cycle. Our expectation now is the ship will achieve final acceptance in early September, and then she will begin her maiden voyage to her home port of Hobart in Tasmania. The next contract to highlight there is the Clarence Correctional Facility. So this new prison is now about 6 weeks away. From construction completion, the center will commence operations in July this year and will accommodate 300 female and up to 1400 male prisoners, making it the largest operating prison in Australia, when it is at full capacity.
We have, just about a minute of drone footage just to bring this project to life and to try and help see the scale of it all. So what you see here is the main access road, the car park. This is the male maximum part of the facility. Fully self contained as a precinct with industry's education, health, all of the services contained in this area, we then move across the site to the female facility, which is clearly separated, but within the overall perimeter wall of the maximum security center. And then you'll see we will migrate across to the minimum mail security area, that is what you see there now on the screen.
And that area, again, fully self contained in terms of all of the services. The prison footprint, just the fabric of the prison covers 65 hectares. The total site is 195 hectares, so a massive development for us. We've deployed the latest technology and everything from the core security of the prison all the way through to how we will educate and train the people who will be in our care. The entire design ground up, the operating model is all underpinned by structural, cultural and educational prompts that really support rehabilitation and effective reintegration into community.
So over the 20 year life of that project, we really are excited about the opportunity we have to deliver meaningful economic and social outcomes to the government. Very quickly then on the remaining contracts, the health services contract, for us, this has meant over a 4 month period of mobilization deploying more than 1470 health and all our care staff across 30 disciplines to 58 different sports spaces. That has been, as Angus said, really good in terms of its implementation, better than plan in terms of the original timeline. And what we've developed through that experience is real capability now in terms of recruiting, credentialing, and managing a highly specialized workforce, something that we will apply to our own workforce, but also a platform that we see for further opportunity in the market And then finally, the Fiona Stanley hospital, still a reference for one of the most successful fully integrated health services contracts where we do everything from IT to facility services, to managing non emergency patient transport for the state We've been involved through the entire development of this project and the fee understanding hospital recently celebrated 5 years of successful Healthcare delivery to the state of Western Australia, in partnership with the WA Department of Health.
Just some of the other key highlights for the year. As I said, a lot of focus on effective transition, effective operational delivery for for my team as well as the preparation for the operationalization of our new contracts in 2020. We spoke about the numbers before, but really good conversion rates still both for new business and our rebate rates, which sees us on track to meet our 5 year business plan. And from a people perspective, Rupert referred to the work done in our people plan, led by by Anthony Kirby, our CHRO, really seeing that drive the performance of the business, our support for diversity, inclusion, learning and development. And true engagement with our workforce has really delivered fantastic health in terms of the organization We promoted 400 of our people internally.
And like the U. K, we started a graduate program, which saw almost 1300 applications externally for just eight graduate roles, so really a terrific attraction, to the business. From a market perspective, just a couple of things to point out here, So both in country and regional geopolitical matters driving policy, unsurprisingly by government, And so for us, our path for the course in our business, but really highlighting the need for us to continue to stay close to customer end market so that we can continue to grow. Positively though, the diversity of our geography, sees that we've got governments at almost every point in the outsourcing maturity spectrum. And so we see opportunity there both with mature governments trying to solve really complex problems, at one end and also governments just looking for the first time to engage the public, the private sector to deal with issues such as service and infrastructure deficits.
And so we see that opportunity still evolving over the next couple of years. And then in terms of our competitive landscape, cognizant of the fact that we do see quite a bit of movement there, particularly in the Australian market over recent years with consolidation, creating much bigger players. But for us, the opportunity that Rupert highlighted for us to really leverage our international capability, taking true depth in naval engineering out of the U. S, the experience that we've got in the health care system here in the UK, and bringing that to bear in our markets to solve problems that our customers has, I think, gives Circo equally a very good competitive edge in that regard, from scale and also from an ability to deal with that complexity. And then just finally, looking forward to 2020, an absolute focus for us to maintain our operating standards maintaining high level of delivery in our existing contracts and making sure that the new contracts that we've been preparing for that will come to fruition in 2020 that all of that work is executed well.
We've done a lot of work on our overheads through our shared services framework over the last couple of years, we've moved our focus now to our operational support center and centralizing some of the support for our contracts, including how we manage our workforce. So about half of the thirteen thousand people on workforce management currently our India Asia Pacific business, and we will continue to develop that platform, for simplification and efficiency in how we manage our business, diversify growth, We have to continue expansion. We're looking at adjacencies within our core sectors, but also beginning to explore geographic expansion now beyond Australia, New Zealand and Hong Kong, where our business is historically operated. So 16% growth last year We expect around 10%. So maintaining double digits in the division into 2020, but that also means that as we drive effect conversion, we have to continue to rebuild our pipeline.
Bottom line for us, growth, cost management, particularly through contract productivity, as Rupert mentioned before, and then a real eye and awareness on working capital management, so that our cash conversion can be optimized in the business. Just in closing, we've built a really great team in Asia Pacific and privileged to work with some really capable and talented people. And I'm genuinely excited about the prospects for, our part of the company to do exactly what Rupert said, which is to move further into the growth stage of our longer term plan. Thank you.
Thank you, Mark. Just in summary, So, I mean, it's a very strong trading and financial performance in 2019 and also strong outlook for 2020 of the growth as we go through this stage of revenues beginning to grow and margins still expanding a little. As well as the record order intake and order book, I think we're going to have a very respectable Q1 in terms of order intake. The pipeline may have been, lower than we liked, might have liked at the end of the year, but been pretty productive. You will have seen the announcement that transport Scotland have removed all the objections to awarding us the Northern Isles ferry service.
That's about GBP 450,000,000 and they expect to sign that contract in the first quarter. It may slip a little, but I suspect it'll be there or thereabouts. We've just been awarded a £200,000,000 contract for Gatwick immigration removal center, and I mentioned in Dubai Airport, we won a contract for 17,000,000 So who knows? We might even get by the end of Q1, it'll obviously depend on the timing, but we might even get 100% book to bill in Q1, which will be, great. I also want to emphasize this point is that this is not only a robust balance sheet.
It is a relaxed or well behaved balance sheet. There's no factoring. Our supplies are paid on time and we have, our pensions is in, are in good order. All of which is a good a background to allow Missy Stones to sleep soundly at night, name that the dividend has been restated. Thank you.
Let's do Q and
And then thank you.
Hi, James Rose from Barclays. 2 from me. First is on the pipeline and how we grow it from here. Where do you see the main opportunities could be to refill it over time? And then secondly, I touched on, in the APAC region, a consolidation theme amongst customers.
Is that something you see more globally? How do you think that may affect the competitiveness of bids going forward?
So on the pipeline, as well as so that you've got 6.5 of total opportunities at what we call gate 2. Which is the point at which they are pretty well developed and we are either about to put in a tender or or have done. So that's pretty well developed. If you take our total pipeline of opportunities, there's nearly 10,000,000,000 So it's bigger than that. We don't always talk about that number because it's quite difficult to pin it down, but we've got a decent pipeline of things behind the ones that are developed to gate 2, they are well spread across the business, which is again encouraging a thing and also know what we've got, I think in particularly in the U.
S. We've got things like FEMA and Keynes and the work that the NSBU business do. A lot of that is framework contracts where work comes in and out during the day. We'll be seeing during the year. So we'll be seeing more of that Sorry, the other question was.
What we're seeing in as pack in terms of the consolidation?
The supply base, yes.
And then maybe we could do globally just after Mark talks about as
So from an aspect perspective, we've seen this primarily in the Australian market with infrastructure players buying out service companies. And looking to do sort of full value chain, delivery. And that's happened now over a couple of and we believe that that consolidation is probably coming to an end now. We have not seen that in other regional markets as yet, and as I said earlier, our response to that is clear, we're partnering effectively internally to leverage Circular globally. Because this consolidation is happening within the market.
So these Australian companies, we believe that we can, respond to that by leveraging our international footprint on the one hand, but also by effectively partnering with other companies in industry and in technology, to be able to respond to that. But as I said, we haven't seen that certainly through the rest of the Asia Pacific geography at this time?
I mean, it's worth noting that Australia, we used to have 2 or 3 companies that were in the public market who were in our space. They've all been swallowed up and have disappeared from the public markets, but What is really not happening is where you see this pattern of consolidation has been particularly strong in the U. S. In the defense field It's all within their own territories. It's consolidating players within a and what we've not so much seen is a company is able to consolidate across, a border.
One thing, James, in terms of pipeline, and then we'll come to Sylvia behind is we're going to over time move from our, the pipeline definition is very strict. And very clear. And if it's less than £10,000,000 of annual contract value, it doesn't meet the pipeline. With the change in nature of the business, given the growth of U. S.
Defense, the acquisition of NSPU, we're seeing more and more task orders, which tend to be less than 10,000,000 And so we're going to drop, we'll give you both numbers. We'll give you the above 10,000,000 and we'll give you the, below 10 1,000,000,000. So if you look at it this year, we're somewhere about 1,000,000,000. So an extra sort of 1,200,000,000 dollars, 1,200,000,000 above the our historic pipeline number, but we'll give you both numbers for the next, the next few. Sylvia?
Very much. Sylvia Barker from JPMorgan. 3, please. Firstly, on growth in North America in 2019. Could you talk about the organic growth of NSB and defense overall within that?
And secondly, on M and A, could you maybe update us on your thinking around defense versus justice, and what does the pipeline look like? And then finally, it seems like, I guess in NASDAQ and you've probably seen that in the UK, within the justice contracts, you're using more technology, you're investing more in people and tech. To what extent is the customer willing to finance that? And to what extent you might need to work with partners around that as well. Thank you.
Let me start with, the U. S. Inter or the Americas
in terms
of, last year. So defense business was the outstanding performer, even excluding, in SBU, it had growth of under 40%. So we saw a lot of, Shipshore Modernization work and generally right through it, everything really, really strong. In terms of the business as a whole, I think the really encouraging thing in the U. S.
Was the fact that all the BUs were up versus the previous year. We had growth across the piece In terms of NS BU, we hit the numbers. We were marginally ahead of, what we said. So if you look at, revenue for the 5 months in 1,000,000, GBP including the synergies about 8,600,000 In terms of 20, we said at the time of the acquisition somewhere, somewhere about 20,000,000 for UTP. And we'd expect revenue somewhere in the 26285 sort of range depending on how quickly protests get resolved because that's part of that U.
S. Marketplace in terms of work that you win. But very pleased within SBU and its performance so far and very excited about what will bring us over the next few years.
So in terms of M and A, I think it's a mistake to believe that our strategy is so defined that we just want to do defensible. Just, I mean, a lot of this, you have to, we love all of our children equally. In our sectors. And what you have to see is available. Now defense is a priority because long term, we want to invest in our defense business.
So those would have a priority, but in fact, other acquisitions came up in other sectors. We wouldn't say know that we won't look at them. And, as I've said before, in other contexts that we tend to take the drunken man theory of marketing, which is that you lean up against lots of doors and eventually one opens. But you have to be present because you can't force companies. Well, if you try and force companies to be for sale, they nearly always become too expensive.
So I think what we would say is that we, yes, we like defense, but we like JNI and we have to be driven by by what opportunities there are out there. And the same goes for which territories, I mean, I am ambivalent as to whether we would have an opportunity in Europe or Australia or, the U. S. It's an interesting question about technology. Really interesting question about the technology and the justice space on the basis that is this a marketplace where it's the lowest bidder gets or actually no is that the, that, you know, if you look at the specification, what the customer wants at Wellingborough, I mean, they are very, very determined to get a genuinely new approach and high quality and technology.
They want that in there because this is an investment that they're going to have for the next 20, 30 years. If you go to Grafton, I mean, I was absolutely my jaw hit the rope. It was the first I've been around a prison and there's not a single bar. Why? Because glass now is tough enough.
So you go into these cells that have full size windows that are glass. It's a completely different field. And that means that the prisons and all the technology runs security, you ought to be able to run the prisons with fewer people and less violence, you're more on top of the drugs and stuff like that. So I don't think that this idea is saying, are we faced by mean customers when it comes to technology? Were actually faced by customers who, who are firsting for new and innovative ways to go and bear down on the crushing rates of prisoner violence in U.
K. Prisons in particular. You know, we got this Circular Institute, which is sort of like a think tank. And one of the first bits of work they are doing is trying to do some academic work to work out why the rates of prisoner violence are so much higher in the UK than they are in Australia. In part to learn the lessons so we can stop that violence in Australia.
So we'll talk more about that, but it's some interest.
David, and then we'll come to George.
Good morning. It's David Brockton from Numis. Can I ask two fairly, fairly broad questions? Firstly, in respect of the UK outsourcing environment, there have been some recent reports of a renewed focus on reducing waste generally across the market. Just wanted to understand whether you foresee any risk in respect of existing activities, and really how the nature of that sort of conversations involving with government.
That's the first. The second question relates to ESG. There's clearly now a very strong sort of social and sort of governance ethos within the business I just wanted to understand to what extent is it influencing the potential opportunities that you're looking at and how you are pricing and also leading the customer in respect to that? Thank you.
So can I, I'll take this? In terms of sourcing in the UK and the situation in the marketplace, I mean, the government has gone and said to department, they want to see 5% efficiency, cuts because they want this part of the leveling up and they want to take 5% from the central departments and and send them on to the north. But I think that the problem there I say government is going to find is the bits that it's ring them and this is exactly what happened when the Cameron Osborn and the government came in and they went ring fence education, they went ring fence health they went and ring fenced Social Security and then say, everybody, we would need 5% cuts. So, everybody has to date 40. So we've been found that there remains continued pressure on government for extra and cost saving.
And I think that that is actually an opportunity for us because they need to have services run efficiently and for value for money. And that on the whole favors the continued involvement of the private sector. And I have to tell you you go and talk to senior people in the government, they are absolutely under no shadow of doubt. They cannot achieve what they need to achieve. Without the, without massive help from the private sector, in particular, what I call the national insourcing of regulation.
Having outsourced it to Europe, it's now been in sourced back to the UK. That is going to be the full focus of soil servants for years to come, doing what they are good at, which is policy and regulation and the like and leaving the execution and delivery up to their delivery partners. So, yes, there is pressure on spend. As there should be. And no doubt Mr.
Cummings is going to be, it's there are very real questions to be asked, but nobody's pretending the government procurement over the last 10 years has been a paragon of success or the efficiencies. So the fact that somebody is pushing and asking questions actually something that is good. On the issue of ESG, I commend to you our statement and our CRC report and there's a bit at the end of my statement where we talk about it. I mean, the fact is, is that we have a relatively low environmental footprint Our biggest producer of CO2 across the business are the Northern Isles Ferris, which we don't actually run. We don't own them.
We just crude them. So that so on the environmental side, we have a full where we the most important things for us are the social and the governance. And we think that we score should score highly on this. We've had a strong social purpose ever since we've been running this to provide high quality public services, we have a strong governance regime and we welcome the fact that business that investors are interested in businesses that are going to be sustainable and not suffer the sort of catastrophic events that ours did a few years ago. So we have the scars on our backs to prove what happens when you go wrong on governance.
What I would say is that we slightly feel that the intense of focus now is on one particular part of it, which is on CO2 emissions and which is slightly for us were, which is, which is less important to us than the S and the G.
Sure. Good morning, Joe Brent at Liberum. Three questions, if I may, maybe just one at a time, be easier. Firstly, on the contingent liability notes, you talk about tagging just tell us what do you see as the risks there and how we get comfortable with those risks?
In terms of the lawsuit that, and it's very
do you say tagging?
It is on tagging, I think. Isn't it the contingent liability, mate?
Well, the 2030 it relates to 2013 and a potential class action about the share price fall. It's in as a contingent liability. It's very early stage, we feel we've got a very robust, defense and answer to it, but it's it will take its time as it goes through and we'll keep you updated.
2nd question, very good working capital performance. Could you give us some indication of what working capital might look like going forward?
Well, this year, working capital was flat despite the fact we had very strong midteens revenue growth. Going forward next year, we gave you some revenue guidance as a really broad brush and something I know that I will live to, Greg, I, in my own mind, go 10% on revenue growth is kind of what the working capital is. And if you look, So that would imply somewhere about a 20,000,000 dollars, $25,000,000 outflow in working capital in 20 20.
Thank you. And finally, on the OCPs, and I've said this is my lack of understanding, historically, had a longer tail on those OCPs, but it seems that they're ending materially in 2020.
Yes, because of IFRS 16, the tail was in, was the biggest tail was caledonia, But because of the, IFRS 16 accounting rules, we impaired the assets to bring it to breakeven So it's kind of sitting out now over there and, not as an OCP, but it will it's that's what happened to the tail. So the contract is still there. We're still doing battle with it. But in terms of the biggest OCP in that 17,000,000 balance is PECS and clearly come August, we start a new contract there. So they're largely wound down, but we will keep a very close eye on Caledonia, still going forward.
So in our forecast, presumably 0 in 21 on for OCP utilization? Yes.
A tiny bit, but it's not material. Kian, and then we'll come to the payer view. Good
morning. It's Kian Martin from Jefferies. I had a couple of quick ones first of all for Mark, if I can. The fiscal 2024 targets that you outlined, are those all driven by the business growing organically or have you made any assumptions about, participating in bolt on M And A? And also, you touched on geographical expansion as well, but it wasn't clear to me entirely where which territories that you were referring to.
And then a couple of quick ones elsewhere. Could you just help us understand the phasing of the workforce management rollout? So I guess I think you mentioned 16,000 employees currently using the system, maybe a good way of referencing, how that scales over the next 1 to 2 years? And then finally on NSPU, is there any reason why the margins should fall 50 basis points, year on year in fiscal 2020?
Why do we start with that, Mike?
So in terms of our growth projections, we're assuming organic growth now. We will continue to keep an eye out for, smaller to medium sized acquisitions that we can bolt on, but that is not fundamental to the growth plan for the division In terms of the geographic expansion, we've begun our exercise around due diligence in the Southeast Asian economies. We've done work in Singapore, Indonesia, Malaysia, but we are moving carefully to make sure that we don't look at those are purely in terms of geographic markets, but quite specifically in terms of where we can go on a risk assess basis and actually create value for our customers, and an adequate return for the company. So it's likely to be Southeast Asia in the next couple of years. And then we will assess moving further north based on risk from there.
On in terms of WFM, we've got 13,000 people using but there's a wide disparity between the, the complexity and thoroughness of the implementation. So we've got a lot of people. We've got about probably about 7000 who are basically using it as a time, log on, long haul time management system. There are then at the other end, there are several 1000 who are using it, we are using as a complete, shift planning, rostering, link to payroll, system. And it is to do with the growing maturity of our offering probably the most complex implementations are with Mark in Australia, but also on the PEX contract in of the the UK.
And it is having, I mean, it's something that impacts. It's having some unexpected benefits on the one hand, it's told us that we needed more people. Because we were working more over time than we needed. So that looks as if it's a cost, but actually what's happened is that our KPI's performance has got much better. So we are not getting dinged by the customer so much.
And take that as a saving and it comes to quite an impressive improvement in the margin of the contract. But it's a mixed picture at the moment. It's going to become less mixed in the year ahead. Angus, NSPU.
NSPU, if you look at the bold numbers I gave you, 7.8 percent margin. As I said, we had some pull forward of work. So there was an acceleration of work in Canada that came from 2020 into 2019. And do we know what the revenue is going to be? No, we don't at this point, but we reckon the margin is somewhere just touch north of 7% is not a bad number to go with just now.
We'll see how it develops. So it comes down a bit, but that's acceleration of some work in Canada. Ed, and then Chris will come to you after that.
Thank you. Ed Steele from Citi 2, please. First of all, is the 25 percent dividend payout a formal policy? And if not, when do you think you have a formal policy in place, please? Second question, you've adjusted the pipeline by $1,600,000,000 and you sort of talked about a greater, exposure to smaller ticket items within your new contract wins.
Could you talk about, firstly, roughly how much NSPU represents that one point $1,000,000,000? And secondly, how much the residual, has moved over the last couple of years to give us a feel for how the dynamic is changing for the business, please?
1st of all, in terms of dividend, we consciously have a bit of policy, a defined policy out there, because we've talked about, in terms of opportunities with some bolt on, we've talked about the need for a prudent balance sheet And the board will look at the dividend every 6 months and we will, decide what the recommended dividend will be based on what we find the market conditions to be. So I would have thought over the longer term, you will see cover come down. But we don't want to commit to anything at this point. We will just judge it by where the business is at each time.
On the pipeline, Angus, I don't think you may have appealed because of what the NS BU part of it is, but on the pipeline, as it says on the slide 20 is that it's 4.9 is the old sorry, the current definition of which excludes caps, everything, at a 1,000,000,000 and cuts anything out of 10, the difference between that. And the wider pipeline, which includes everything in front of Gate 2 that is new business is is the difference between 4.96.5. That Stewart can probably give you that, how that has progressed over this, but we do expect that to become bigger because governments both here in the UK and Australia and in the U. S. Are going more for these framework contracts.
And if you go and take, for instance, FEMA, where, it's basically a contract with 0 value until the storm hits, at which point they go and issue with, requirements. There's quite a lot of in and out goes, and I haven't got the precise figures, but it's a growing proportion of that, of that of our overall pipeline.
If we look at NSPU, what we've said at the time of acquisition about 500,000,000, 0.2 of that makes our own pipeline definition. 0.3 of that is option years. And nine times out of 100, the option years are exercised, but we don't include that in the pipeline. So it's still around that same level. Chris.
Couple of areas, if I may, obviously very strong growth in the U. S. Last year. What kind of strains does that put on a people's business and how do you go about managing those? Secondly, regard to AISC, what was the actual experience to date so far against the expectations, particularly with regard to screen appropriate properties, across those properties and volumes?
Thank you.
So on AAC, the the current volumes is we have about 20,700. We started with fewer than we thought that we were going to have, at the beginning of the contract, which was just where the map was drawn on the the region. But the numbers are steadily increasing. And as I say, we're now at 20,007, 700. The in terms of the prices of the property, they are as we expected them, we got most of the property prices pre committed at the time of our, of our bid.
And you know, that's it's running fine. It's mobilized, well and we are, you know, it's just about settling down into BAU now. Your first question was strains up with spot. Sorry, set an icon.
Last year, you saw strong organic growth in the U. S. The kind of strains that puts on a people's business and how you man those?
Well, one of the things that I put in the in the lowlights, I've seen, was, say, we're pointing out that the U. S. Business has been pretty stretched. And it's something that we keep an eye on, but, quite a tight aisle, but they, when their business was shrinking for so long, it was getting down and down and down and and we have encouraged the U. S.
Business to go and invest more in its central functional capability. They did a very good job of integrating the NS BU, acquisition, but they do run thin and we are investing in that. As we speak in strengthening, we've got a new HR, director there. We are strengthening the finance and the IT and the operations bit, but it's a good spot. It's been as a piece of elastic.
It's been quite, quite tightly stretched.
Any other questions? I think just before we finish, there's one other thing, somebody who's played an enormous role in getting Circular to the point where it can pay a dividend Stuart Ford is, has been tempted by a rather larger, business to go and become the head of investor relations, he's going to go to InterContinental. We'll do that at the end of March. Replacing there, replaceable is very challenging, but we think we are very close to getting someone. And we'll have a dinner for all the analysts to say thank you to Stuart wishing the best and introduce new head of IR later in the spring, but I think it remains to be saying, working with Stuart has been an absolute privilege.
She is one of the most professional people I've ever come across. His knowledge of the business is understanding of what the analysts need, what the investors need second to none. And he goes, will our absolute best wishes, and we wish you every success for this year in the future. And thank you for all you've done.
And I want to add to that you that you had, when I arrived, you'd have the most bloody awful time. And, because you've been through, Helen back, but never ever ever did anybody ever suggest to me on the analyst or investor side that you played it anything other than a completely straight bag. You have huge integrity, which sometimes drives me up the wall, but but it is a fault on the right side. And you thank you for all you've done for us.