Morning all, welcome to the Serco Full Year Results Presentation. I just want to introduce Mark Irwin. Many of you will have seen him last year, but it's our habit of bringing along a regional CEO to these events. It also makes the point that one of the distinguishing features about Serco is our international footprint. Interestingly enough, Australia is almost a proxy for Serco in terms of the journey that it's been on, and it's also had a particularly busy year this last year. I thought it'd be useful for Mark to come along again and give you an update. For the results themselves, well, they're pretty as a picture, really. Very strong trading and financial performance. Revenue up 13%, of which 8% was organic.
I think that this move into organic revenue growth really is quite significant and marks a real change in mood in the company. That's also been accompanied by record order intake. If you'd ever said to me, any time in the last five or six years that we might have a book-to-bill ratio of 170%, GBP 5.4 billion worth of order intake is astonishing. I just hasten to add, we don't think we'll repeat it for a good while. 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 book now stands at GBP 14.1 billion. It would be helpful if I move the slide on, I suppose. GBP 14.1 billion, which compared to revenues of GBP 3.2 billion, gives us a strong order book cover.
This was the year we did the NSBU acquisition, which has added materially to the scale and capability of our U.S. defense business, but also more important is our defense business as a whole. It's taken us up a step and given us some very core capability. We've ended the year with a robust balance sheet. For those who know, the net debt has ended up significantly lower than we thought it would, and our covenant leverage is now 1.17x , and the underlying leverage 1.3x , which is a comfortable place to be, and also gives us the capability to have some ammunition if we want to do any more acquisitions. The 2020 guidance is for further and continued growth both in revenue and in profit. Praise the Lord, finally, we get to announce a dividend, and what a pleasure that is.
Just to put the results into context. This is a typical what you might call hockey stick recovery, and we all know that over a period of time, companies tend to revert to market. This is clearly in a market that's growing at 2%- 3%, to get this sort of revenue growth is exceptional, but we're also enjoying margin expansion at the same time. There are not many companies in our sector who, over a three-year period, are going to deliver nearly 28% compound annual growth in profits as we expect to go from GBP 69 million in 2017 and expect to be around about GBP 145 million in 2020. That is very strong progression, as I say, partly through revenue growth and partly through margin expansion.
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, "Stabilize, transform, and grow." The grow phase was to run from 2018 to 2020. More or less that's what's happened, which is obviously pleasing in itself. 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 so much, Rupert. Good morning, everybody. We will now go through the financial review. Let's start with the income statement. Revenue of GBP 3.2 billion is up 14.5% on a reported currency basis, 13% in constant currency, comprising 8% organic growth and 5% from acquisitions. The favorable currency impacts of GBP 42 million on revenue and GBP 3.7 million on underlying trading profit, or UTP, arose primarily from the weakening of sterling. You'll find all the rates and the sensitivities in the appendix. Like last year, UTP of GBP 120.2 million is lower than trading profit of GBP 133.4 million, reflecting the exclusion from underlying of GBP 3.6 million of contract and balance sheet review benefits and the one-off defense and fire rescue services settlement deferral of GBP 9.6 million. 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&A costs as the revenue line grows. Going forward, our focus will be in managing contract costs more effectively through the rollout of workforce management, continuing to embed operational excellence, and optimizing contract procurement whilst keeping a lid on overheads. The 13% constant currency revenue growth, as I said, consists of 8% acquisitions, 4.8% from acquisitions, organic 8%. Our NSBU acquisition, which completed in August, contributed 4% of this inorganic growth. The balance came from the Carillion Health contracts that transferred individually to Serco last summer. Organic growth was largely driven by the Americas and ASPAC, where organic revenue grew by 19% and 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 citizens 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 AASC 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 MELABS defense contract on rebid. UTP for the group of GBP 120 million represents headline growth of 29% and 25% in constant currency. UTP margin improved by 40 basis points to 3.7%. The outstanding performer was the Americas, where UTP grew by 70% in constant currency terms to GBP 82 million.
This includes a five-month contribution of GBP 8.6 million from the NSBU acquisition. This was slightly ahead of our 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. While we are performing some additional variable work currently, this is short-term, we expect activity levels and profitability to be lower going forward. Beyond NSBU 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 a GBP 2.9 million 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&E fell slightly year-on-year to GBP 38 million. This includes a reduction in profit of GBP 2.2 million 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 from the Carillion Health contracts. This was offset by a decline in the profit contribution from joint ventures and associates, largely as a result of the start of a new three-year pricing period at AWE and a weaker-than-expected performance in our leisure business. Reported trading margin at 2.8% was slightly lower than 2018, but with the AASC transition complete, we expect the margin to improve significantly in 2020. UTP and ASPAC increased by 20% in constant currency terms to GBP 31.3 million.
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 GBP 1.2 million positive benefit to group UTP in 2019. This is lower than our original expectation of circa GBP 5 million, due principally to the in-year losses on the Caledonian Sleeper contract following the rolling stock asset impairment.
Turning to the bottom of the income statement, the increase in the finance costs of GBP 8 million was largely due to a GBP 7 million increase in lease cost caused by IFRS 16, with the balance being the repayment of the Intelenet loan in October 2018, resulting in no accrued interest income or discount unwind in the year. The blended average cost of our debt in 2019 was slightly lower at 4.51% as compared to 4.66% in 2018. Average daily net debt of GBP 231 million was a little higher than the GBP 219 million of the prior year. The underlying tax rate was 25%, 1 percentage point lower than in 2018.
This rate reflects the effective tax rate in overseas profits, which blend to a rate of just below 30%. 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 U.K. 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 GBP 760 million of off-balance-sheet losses in the U.K. Underlying diluted earnings per share grew by 18%, from GBP 0.0521- GBP 0.0616.
The weighted average number of shares increased from GBP 1.1 billion in 2018 to GBP 1.2 billion in 2019, largely as a result of the approximate seven-month effect of the May share placing of 111.2 million ordinary shares to finance the NSBU acquisition. Statutory reported earnings per share on a diluted basis, which reflects non-underlying items and exceptionals, was GBP 0.0421, as compared to GBP 0.0599 in the prior year, which reflects the lower level of non-underlying profit arising from the contract 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 GBP 26 million in 2019 as compared to GBP 22 million 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 Serco companies, as originally announced in 2013.
Following the DPA approval, total payments of GBP 22.9 million were made to the SFO, consisting of a fine of GBP 19.2 million and costs of GBP 3.7 million. Restructuring costs arising from transformation were GBP 13 million, down from GBP 32 million in 2018. We have largely completed the transformation stage of the strategy implementation, bringing to an end transformation costs charged to exceptionals. We will continue to improve our systems, processes, and structures, we expect the costs associated with this to be charged to trading profit. Our focus is now on 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 belts, and 3,471, exactly, yellow belts that we have trained on our Operational Excellence Program.
Offsetting these items was an exceptional credit of GBP 19 million 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 was GBP 49 million, which was GBP 23 million higher than the exceptional charge, with GBP 19 million of this difference being due to legal provision release, which was non-cash. Turning to a word not heard for several years at Serco, namely dividend. I have stood here for the last five 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 weight dividends approximately one third, two-thirds between interim and final payments. The recommendation of the board is to pay a final dividend of GBP 0.01 per share, which equates to an underlying EPS cover of around four times or a payout ratio of circa 25%. The cash outflow from this dividend, if approved, will be GBP 12 million. 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 Serco 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.
A major headline in 2019 was a strong free cash flow performance, which was better than expected. Free cash flow generation improved from GBP 16 million in 2018 to GBP 62 million 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 U.K., which had a strong year of collections and benefited from the one-off GBP 10 million defense and fire rescue services settlement, we continue to have zero receivables or payables financing in place. Our billed receivable days are 28, one day higher than in 2018. Whilst our trade purchases days increased by 6- 36 due to North America returning to near its historical norm after an unusually low number last year.
U.K. trade payable days improved from 30- 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 GBP 50 million 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 GBP 215 million, up from GBP 173 million at the end of 2018. Daily average net debt, GBP 231 compared to GBP 219 in 2018, with peak net debt of GBP 357 million. These numbers included the impact of the NSBU acquisition cost of GBP 184 million, and the related net placings proceeds of GBP 139 million.
Adjusted net debt excludes all lease liabilities, consisting primarily of GBP 370 million of IFRS 16 liabilities, which are materially higher than the half year due to the transition of the AASC contract. Including this GBP 370 million of lease debt, reported net debt was GBP 584 million. Covenant net debt excludes the new IFRS 16 lease liabilities, and at the end of 2019 was 1.2x as compared to 1.1x in 2018. Excluding the non-underlying trading items, underlying leverage was 1.3x compared to 1.2 x in 2018, and therefore in the lower half of our 1:2 guidance in terms of leverage. In 2019, we arranged a GBP 45 million facility to support the acquisition of NSBU with four of our key lending banks.
Combined with our five-year, GBP 250 million revolving credit facility that we put in place at the end of 2018, we have committed bank facilities of GBP 295 million, as well as our GBP 213 million 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 has parallels with this OCP history slide. The OCP provision from the contract and balance sheet review started life with a balance of GBP 447 million, and by the end of 2019, it is reduced to GBP 17 million.
Remarkably, over the five 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 Serco 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 GBP 600 million.
By the end of 2019, this number has fallen to less than GBP 100 million, 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 Sleeper contract no longer is an OCP, as the leased 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 2022, 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 odd OCP, but the governance and risk-focused 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 GBP 3.4 billion-GBP 3.5 billion, which represents total growth of 6%-8%, comprising circa 4% organic growth, around 5%-6% growth from the seven-month contribution from NSBU, and based on current rates, a negative 2%-3% impact from adverse Forex. In terms of underlying trading profit, we continue to expect a number in the range of GBP 145 million, in line with the guidance we gave in December. This number is held by the annualization of NSBU, 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 PECS transition costs of GBP 4 million and a currency headwind of around GBP 5 million. 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 ASPAC business. However, we always need to bear in mind the broad range of potential outcomes, particularly given the early stage of the year. The sensitivity of profit to even small percentage changes in revenues or costs. We expect net finance costs to be around GBP 5 million higher than 2019, with the increase on the GBP 22 million being primarily due to the full year impact of the AASC leases.
We expect closing adjusted net debt, which excludes leases, consistent with how our lenders look at our covenants, to be around GBP 200 million, with covenant leverage at the lower end of our target range of one to two times. The annualization of last year's placing means that we expect a weighted average number of shares of around 1.25 billion, as compared to 1.2 billion in 2019. The rest of the guidance is there for reference. I'll now hand you back to Rupert.
Thank you, Angus. We will start the operational view with our traditional highlights and lowlights. 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. As far as the OCPs are concerned, I'm minded about. Do you remember those things called spot the ball competitions? They always said, "Using your skill and judgment, say where the ball is." 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 is.
It's been an enormous number, and yes, it has been portfolio, at the end of the day, their skill and judgment put the ball into the right place. Looking at the highlights first of the year, clearly getting back into growth, organic revenue growth. It's not just the headline growth, it's the fact that actually on an underlying basis on we had organic growth of 8%. As I said, that we're on track to increase the profits between 2017 and 2020, at a compound rate of 28%. The acquisition of NSBU marked another milestone, the ability to do a proper grown-up acquisition in the U.S. Again, underlying our international footprint was important. We've spoken about the record order intake, 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 U.K. with the AASC, equally strong relative to the size of their business in Australia with the Garrison Health contract and Adelaide Remand Center. Also strong order intake in the U.S. with the U.S. Pension Benefit Guaranty Corporation and the U.S. Air Force TRIRIGA contract, and large numbers of task orders from FEMA and from the U.S. Navy. 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. Whilst I think that on the one hand, Serco can sometimes be seen as a particularly unruly herd of cats in terms of all these contracts, actually there is an underlying system. There are strong underlying processes. We spend a lot of time paying attention to and investing in these systems.
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 Southern Queensland Correctional Centre, like the new regions on AASC, like we will have to do on PECS. On the whole, these mobilizations have gone really well. We find that those muscles still exist. On the people side, when Angus and I joined Serco, I was knocked over in the rush by people leaving. We now have a situation where a million people applied to work for Serco last year. For 14 graduate jobs in the U.K., we had over a thousand 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 few companies do this. They drag along with old versions of SAP. We're now up in the cloud. We're on the current version. That gives us a good platform. We've now got nearly 13,000 employees on workforce management at various stages of development. 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, David Eveleigh is over there, our Group General Counsel, a huge achievement in resolving satisfactorily the SFO investigation and also the dispute that we had with the Ministry of Defence on the DFRMO contract.
Looking across at the lowlights, it appears about half the people who travel on the Caledonian Sleeper have my personal email address and telephone number. They were not short of using it has to be said. Calls like saying, "Rupert, I've been stuck outside Milton Keynes for the last two hours. I'd thought you'd want to know." Well, what do you want me to do? Push? We had a very torrid time with the Caledonian Sleeper in the middle of the year. It was like in terms of technology, going from a Bakelite telephone to an iPhone over a weekend, and that combined with a whole lot of Network Rail problems. The good news is that we are through this now. We are in the middle of February. We would be expecting to have occupancy on the sleeper of somewhere around about sort of 30% midweek.
We're now running at 60%-70% and sometimes 80% occupancy in the middle of February. It's a much stronger numbers than we thought. The service is running much more reliably, so we think we're through the worst of that. Those of you who lived anywhere near Glasgow would have seen the torrid time that we've had with respect to asylum seeker overstayers. I actually believe that we've done the best we could with a very difficult public relations hand on that. Mark hopes to deliver his new icebreaker to Australia sometime whilst there's still ice in Antarctica. It's a few weeks late, but we're hoping to catch some of that up. Of course, we have the challenge of replenishing our pipeline, which has been denuded, exactly in the right way. We're impatient about contract productivity and efficiency.
It seems to be a dial that's hard to push, which is why we're putting so much emphasis on workforce management. We've taken out hundreds of millions of pounds out of our central cost. Getting the productivity out of the contracts is a new and important challenge. One of the people helping us do that is Anthony Kirby, our Group HR Director, and he is responsible for, I think, one of the sort of part of the turnaround in our reputation as far as people service is concerned. He has brought, I believe, some booklets at the back which are aimed to talk about our people experience in Serco, which I commend to you as a rattling good read. Well, that might be slightly overstating it, but it's worth looking at. Also 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. In terms of the U.K., it remains a tough market. 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 resetting it. It's arguably not additional volume growth. The Government is extremely still obviously involved and focused on Brexit. There is progress being made. I think that the new outsourcing playbook is a real advance, and there is much more. There is real goodwill, I think both between suppliers and Government now is both having looked mutually assured destruction in the eyes, actually coming to the conclusion that we both need each other.
That is a much better place to be. I just want to spend a few slides talking about the way that we work. One of the outstanding things that has happened over the last three or four 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. I think that that's largely as a result of the Oxford Management program that we run. Actually, we got huge momentum, whether it's tug masters from Australia coming over to the U.K. to get trained, whether it's the U.K. 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.
It is remarkable how much activity there is going on and sharing across the business completely undirected by Angus or me. It's just going on. 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. Typically, this is a slide in the Ford style of making you really squint to be able to see it. If you use a magnifying glass, all the words are true and wonderful. You will be aware that we have a pipeline that we report, the new business pipeline that we report that goes and excludes any contract, any opportunity below GBP 10 million. Those have now got with particularly the Metz acquisition and the NSBU acquisition, and the increase of our framework contracts. We're getting more and more work that is smaller than GBP 10 million.
We are including that now, and we will be reporting on our total new business pipeline in the future, and the difference is about GBP 1.6 billion. On the previous basis, the pipeline is GBP 4.9 billion. On the basis including opportunities below GBP 10 million, it is GBP 6.5 billion. There you can see very interesting, the shape of the progress that has been going on in the order book, which is clearly very chuffing, and we got a heightened pipeline that whilst it might be small, it has got some important opportunities. We are leading the Skynet bid for the government's secure communications contract. We have been a subcontractor to Airbus, and we have broken away from that and are leading a consortium with Lockheed Martin and Inmarsat and CGI and others to provide government with secure satellite communications.
Wellingborough Prison is in the pipeline. We are also bidding for DIO, which is the Ministry of Defence FM contracts. Overseas, we've got Justice Health that Mark is going to be bidding for a major opportunity for training air traffic controllers in the U.S. and other marine opportunities. Although the pipeline is smaller than we would like, it's 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. Every year, we do a viewpoint survey. It is done on a massive scale. In 2019, we had 27,000 employees participating in the survey. We gave them the opportunity to do free text comments this year, which we haven't done before. We expected to get one or two.
If anybody was under any question or doubt about how passionate and feisty Serco employees are, there were 50,000 comments came back. How do we go and give feedback on that? It's impossible. What we're doing is we've taken a thousand of them at random, and they're going to go onto our website so people can go and see. They genuinely are random, except those that relate to my body mass index. That people can see what people within the business are saying. If you actually look at these, this is engagement score, which is a new word for what we used to call morale. It's really interesting. If 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 was a wildly different experience between the leaders of the business and the people within it. The leaders were, broadly speaking, okay. The people within it were pretty unhappy. There's an old adage that says the customer experience will never exceed the employee experience. I think there's some truth in that. 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. To get a leadership where their morale is lower than the employees as a whole is a remarkable and bad thing. You see since 2014, it improving quite steadily. What is remarkable about this is to see how closely it is aligned. You don't often see that in large businesses.
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. The UK and Europe had 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 will see for Gatwick. Revenue was up 5%, margin was down a little or broadly flat. They've got a decent pipeline now of DIO. I mentioned Wellingborough and Skynet.
I would mention the fact that in all the hurrah about Caledonian Sleeper, our joint venture with Abellio running Merseyrail was rated the top performing rail franchise in the U.K. 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 dustbins, and the former Prime Minister's, Mrs. May's dustbins, having won Windsor and Maidenhead for our environmental services business. The business benefited from the acquisition of Carillion. That's given us additional of health businesses. That's given us extra scale and helped the margin in that business. Moving on to the Americas, astonishing year. I mean, astonishing year. 35% revenue growth, of which 19% was organic. This really is a huge achievement, and again, is better than a lot of our peers in the sector. The profit, 70% profit growth.
A lot of that came from the CMS contract, and we don't think that that will recur this year. The falling away of the CMS profits, they were really very high last year, is being partly offset by the NSBU acquisition. They've done very well on the integration of that. NSBU is running to plan. They had GBP 110 million of revenues in the second half of 2019 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 amount of billions of dollars worth of assets we're managing for the U.S. Air Force. We've got some big bids coming up to do all the air traffic control training for the FAA. We've also got re-bids and extensions for Goose Bay and Force Protection coming up.
ASPAC, I'm going to leave Mark to talk about that, suffice to say that they had a strong year, too, with revenue up 16% and underlying trading profit up 20%. The profits have gone backwards in the Middle East, we knew that was going to happen, though they had a highly profitable contract, which is MELABS, providing services to the Australian Armed Forces in the Middle East. Actually, they did better than we thought, both in terms of the margins they're getting on the new contract and on other contracts.
They are in the midst of a re-bid for Dubai Metro, but they've also won a highly strategic contract called Mashroat in Saudi Arabia, where Serco has been asked to go and create, as it were, the playbook, the book of process and procedures, which will be used by every government department in the kingdom to go and regulate how they manage their assets. That's not only a great privilege, but it also gets us engaged with nearly all the major government departments of state. They have just won a large contract with Dubai Airport to provide greetings services. That's worth about GBP 70 million over the next five to six years and is a major step forward. They've got a real spring in their step now, the Middle East. 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. Good morning to everyone. In the next few minutes, I just want to give a brief update. Over the last 12 months, the progress in our business from what I shared with you a year ago when I was here. As Rupert indicated, the ASPAC business really is a microcosm of the group. The journey that we've been on over the last four or five 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 contract delivery remains front and center in the minds of our people.
We spoke a year ago about FY 2018 being that point of inflection and looking forward to 2019 being the year of growth. You will see in our headlines that that is what we have delivered. Revenue growth up 16%. It says on the slide UTP 19% or 20% in terms of that rounding. 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. Most notably, the addition of more than 1,400 health and allied care staff in our garrison health contract has meant my team has now grown to almost 11,000.
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 two years, as well as the contract to operate and manage the Southern Queensland Correctional Centre, that also going out two years. We were able to successfully rebid 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. Those contracts have grown organically during the year.
As always, we have a number of key rebids that we actively work on. In 2020, that will see the Acacia Prison contract. While the Fiona 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. Generally, when you look across our revenues by sector, our pursuit of diversified growth is now starting to move the needle a little bit. You can see that while our Justice and Immigration business has grown, the growth of other parts of our portfolio means that J&I now is about 45%, whereas historically, that's always been well over 50% in terms of representation in our revenue.
Finally, when we look at the portfolio, as indicated by Angus, we exited 2019 with no onerous contracts at all in the ASPAC portfolio. Just a quick look at a couple of our key contracts. In our love of acronyms, ASRV is the Antarctic Supply and Research Vessel, AKA icebreaker, referenced before. Rupert spoke about the fact that the project overall is delayed by a number of weeks. I did want to highlight the fact that we've put significant effort during the design and build phase, the first four years, to ensure that Nuyina, 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.
Nuyina will enable Australia's Antarctic program for the next 20 years. Commensurate with that, we will have the responsibility to operate and maintain her through that life cycle through a 10-year contract, and a contract that also affords two, five-year extensions, so really covering that 20-year life cycle. Our expectation now is that 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. This new prison is now about six weeks away from construction completion. The center will commence operations in July this year and will accommodate 300 female and up to 1,400 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. 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 industries, 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. Then you'll see we will migrate across to the minimum male security area. That is what you see there now on the screen. 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, a massive development for us. We've deployed the latest technology in 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. 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 on the remaining contracts. The health services contract. For us, this has meant over a four-month period of mobilization, deploying more than 1,470 health and allied care staff across 30 disciplines to 58 Defense Force bases.
That has been, as Angus said, really good in terms of its implementation, better than we planned in terms of the original timeline. 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. 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 Fiona Stanley Hospital recently celebrated five 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. A lot of focus on effective transition, effective operational delivery for my team, as well as the preparation for the operationalization of our new contracts in 2020. We've spoken about the numbers before, really good conversion rates still, both for new business and our rebid rates, which sees us on track to meet our five-year business plan. From a people perspective, Rupert referred to the work done in our people plan, led 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 a fantastic health in terms of the organization. We promoted 400 of our people internally.
Like the U.K., we started a graduate program which saw almost 1,300 applications externally for just eight graduate roles. Really, a terrific attraction to the business. From a market perspective, just a couple of things to point out here. Both in country and regional geopolitical matters driving policy, unsurprisingly by government. For us, par for the course in our business, but really highlighting the need for us to continue to stay close to customer and 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.
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 private sector to deal with issues such as service and infrastructure deficits. We see that opportunity still evolving over the next couple of years. 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.
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 healthcare system here in the U.K., and bringing that to bear in our markets to solve problems that our customers has, I think gives Serco equally a very good competitive edge in that regard, from scale and also from an ability to deal with that complexity. 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. About half of the 13,000 people on workforce management currently are in the Asia Pacific business. We will continue to develop that platform for simplification and efficiency in how we manage our business. Diversified growth, we have to continue expansion. We're looking at adjacencies within our core sectors, also beginning to explore geographic expansion now beyond Australia, New Zealand, and Hong Kong, where our business has historically operated. 16% growth last year. We expect around 10%, so maintaining double digits in the division, into 2020.
That also means that as we drive effective 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. I'm privileged to work with some really capable and talented people. 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, it's a very strong trading and financial performance in 2019, and also a strong outlook for 2020 of further growth as we go through this stage of revenues are 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 might have liked at the end of the year, it's 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 million. 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 GBP 200 million contract for Gatwick Immigration Removal Centre. I mentioned in Dubai Airport, we won a contract for GBP 70 million. Who knows? We might even get by the end of Q1, 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 suppliers are paid on time. Our pensions are in good order. All of which is a good background to allow Camilla Soames to sleep soundly at night, knowing that the dividend has been restated. Thank you. Let's do Q&A. James. At the front here, please, Cathy. Thank you.
Hi, James Rosenthal from Barclays. Two 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? Secondly, you touched on, in the ASPAC 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?
I'll do the pipeline. Sure. On the pipeline, you've got GBP 6.5 billion of total opportunities at what we call gate two, which is at the point at which they are pretty well developed, and we are either about to put in a tender or have done. That's pretty well developed. If you take our total pipeline of opportunities is nearly GBP 10 billion. It's bigger than that. We don't always talk about that number because it's quite difficult to pin it down. We've got a decent pipeline of things behind the ones that are developed to gate two. They are well spread across the business, which is, again, the encouraging thing. Also now what we've got, I think particularly in the U.S., we've got things like FEMA and CANES and the work that the NSBU business do.
A lot of that is framework contracts where work comes in and out during the year. We'll be seeing more of that. Sorry, the other question was?
What we're seeing in APAC in terms of the consolidation.
The supply base, yeah.
Maybe we could do globally just after Mark talks about APAC.
From an ASPAC 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. That's happened now over a couple of years, and we believe that that consolidation is probably coming to an end now. We have not seen that in other regional markets as yet. As I said earlier, our response to that is clear. We're partnering effectively internally to leverage Serco globally because this consolidation is happening within the markets of 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. As I said, we haven't seen that certainly through the rest of the Asia Pacific geography at this time.
It's worth noting that Australia, we used to have two or three companies that were in the public markets who were in our space. They've all been swallowed up and have disappeared from the public markets. What is really not happening is where you see this pattern of consolidation, it's been particularly strong in the U.S. in the defense field. It's all within their own territories. It's consolidating players within. What we've not so much seen is companies able to consolidate across a border. One thing, James, in terms of pipeline, then we'll come to Sylvia behind. The pipeline definition is very strict and very clear. If it's less than GBP 10 million 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 NSBU, we're seeing more and more task orders, which tend to be less than GBP 10 million. We'll give you both numbers. We'll give you the above GBP 10 million, and we'll give you the below GBP 10 billion. If you look at it this year, we're somewhere about GBP 6.5 billion. An extra sort of GBP 1.2 billion-GBP 1.3 billion above our historic pipeline number, but we'll give you both numbers for the next few. Sylvia?
Thank you very much. Sylvia Barker from J.P. Morgan. Three please. Firstly, on growth in North America in 2019, could you talk about the organic growth of NSBU and Defense overall within that? Secondly, on M&A, could you maybe update us on your thinking around kind of Defense versus Justice, what does the pipeline look like? Finally, it seems like, I guess in ASPAC, we've probably seen that in the U.K., 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? To what extent you might need to work with partners around that as well? Thank you.
Let me start with the U.S. or the Americas in terms of last year. Defense business was the outstanding performer, even excluding NSBU. It had growth of just under 40%. We saw a lot of ship shore modernization work and generally right through it, everything 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 NSBU, we hit the numbers, we were marginally ahead of what we said. If you look at revenue for the five months in 2019, GBP 110 million, UTP including the synergy is about GBP 8.6 million.
In terms of 2020, we said at the time of the acquisition somewhere about GBP 20 million for UTP, and we'd expect revenue somewhere in the GBP 260 million-GBP 285 million 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. Very pleased with NSBU and its performance so far, and very excited about what it will bring us over the next few years.
In terms of M&A, I think it's a mistake to believe that our strategy is so defined that we just want to do defense. We love all of our children equally in our sectors. What you have to see is available. Defense is a priority because long term we want to invest in our defense business. Those would have a priority. If acquisitions came up in other sectors, we wouldn't say no that we won't look at them. 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. You have to be present because you can't force companies.
If you try and force companies to be for sale, they nearly always become too expensive. I think what we would say is that yes, we like Defense, but we like J&I, and we have to be driven by what opportunities there are out there. The same goes for which territories. 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 in the justice space on the basis that is this a marketplace where it is the lowest bidder gets or actually, no. If you look at the specification of what the customer wants at Wellingborough, 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, my jaw hit the ground. It was the first time I'd been round a prison and there is not a single bar. Why? Glass now is tough enough. You go into these cells that have full size windows that are glass. It's a completely different feel. That means that the prisons and all the technology around the 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. I don't think that this idea saying, are we faced by mean customers when it comes to technology?
We're actually faced by customers who are thirsting for new and innovative ways to go and bear down on the crushing rates of prisoner violence in U.K. prisons in particular. We got this Serco Institute now, 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 U.K. than they are in Australia, in part to learn the lessons so we can stop that violence in Australia. We'll talk more about that, but it's an interest.
David, we'll come to Joe.
Good morning. It's David Brockton from Numis. Can I ask two fairly broad questions? Firstly, in respect of the U.K. outsourcing environment, there have been some recent reports of a renewed focus on reducing waste generally across the market. I just want to understand whether you foresee any risk in respect of existing activity and really how the nature of the sort of conversations evolving with government. That's the first. The second question relates to ESG. There's clearly now a very strong 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 of that? Thank you.
Can I take this. In terms of outsourcing in the U.K. and the situation in the marketplace, the government has gone and said to departments they want to see 5% efficiency cuts because they want this part of the leveling up. They want to take 5% from central departments and send them on to the North. I think that the problem, dare I say, government is going to find is the bits that it ring-fenced, and this is exactly what happened when the Cameron-Osborne government going in and they went and ring-fenced education, they went and ring-fenced health, they went and ring-fenced social security, and then say, "We need 5% cuts, so everybody has to take 40%." We've been down the remains continued pressure on government for extra efficiency and cost saving.
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. I have to tell you go and talk to senior people in the government, they are absolutely, under no shadow of a doubt, they cannot achieve what they need to achieve without massive help from the private sector. In particular, what I call the national insourcing of regulation. Having outsourced it to Europe, it has now been insourced back to the U.K. That is going to be the principal focus of civil 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.
Yes, there is pressure on spend as there should be. No doubt 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 of efficiency. The fact that somebody's pushing and asking questions is actually something that is good. On the issue of ESG, I commend to you our statement and our CSR report, and there's a bit at the end of my statement where we talk about it. The fact is that we have a relatively low environmental footprint. Our biggest producer of CO2 across the business are the Northern Isles ferries, which we don't actually run. We don't own them. We just crew them.
On the environmental side, we have the most important things for us are the social and the governance, and we think that we should score highly on those. 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 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. 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 intensity of focus now is on one particular part of it, which is on CO2 emissions, which is slightly for us, which is less important to us than the S and the G.
Joe?
Good morning. Joe Brent at Liberum. Three questions, if I may. Maybe just one at a time it'd be easier. Firstly, on the contingent liability notes, you talk about tagging. Could you just tell us what you see as the risks there and how we get comfortable with those risks?
In terms of the lawsuit. Did you say tagging?
It is on tagging, I think, isn't it? The contingent liability note.
Well, it relates to 2013 and a potential class action about the share price fall. It's in as a contingent liability. It is very early stage. We feel we've got a very robust defense and answer to it, but it will take its time as it goes through, and we'll keep you updated.
Second 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 mid-teens 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 regret, 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 GBP 20 million-GBP 25 million outflow in working capital in 2020.
Thank you. Finally, on the OCPs, I suspect this is my lack of understanding. Historically, you had a longer tail on those OCPs. It seems that they're ending materially in 2020.
We'll-
Caledonian seems to have come out.
Because of IFRS 16, the biggest tail was Caledonian. Because of the IFRS 16 accounting rules. We impaired the assets to bring it to breakeven. It's kind of sitting out now over there, and not as an OCP. That's what happened to the tail. The contract is still there. We're still doing battle with it. In terms of the biggest OCP in that GBP 17 million balance is PECS, and clearly come August, we start a new contract there. They're largely wound down, but we will keep a very close eye on Caledonian still going forward.
In our forecast, presumably zero in 2021 onwards for OCP utilization.
Yes. A tiny bit, but it's not material.
Thank you.
Kean. We'll come to the peer review.
Morning. It's Kean Marden 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&A? Obviously, you touched on geographical expansion as well, but it wasn't clear to me entirely which territories that you were referring to. A couple of quick ones elsewhere. Could you just help us understand the phasing of the workforce management rollout? Angus, I think you mentioned 16,000 employees currently using the system. Maybe a good way of referencing how that scales over the next one to two years. Finally on NSBU, is there any reason why the margin should fall 50 basis points year-on-year in fiscal 2020?
Why don't we start with Angus?
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. 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. We are moving carefully to make sure that we don't look at those purely in terms of geographic markets, but quite specifically in terms of where we can go on a risk-assessed basis and actually create value for our customers, and an adequate return for the company. 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.
In terms of WFM, we've got 13,000 people using it, but there's a wide disparity between the complexity and thoroughness of the implementation. We've got a lot of people, we've got probably about 7,000, who are basically using it as a log-on, log-off time management system. There are then at the other end, there are several thousand who we are using as a complete shift planning, rostering, linked to payroll system. 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 PECS contract in the U.K. Certainly in PECS, it's having some unexpected benefits. On the one hand, it's told us that we needed more people because we were working more overtime than we needed.
That looks as if it's a cost, but actually what's happened is that our KPIs performance has got much better, so we are not getting dinged by the customer so much. Take that as a saving, and it comes to quite an impressive improvement in the margin of the contract. It's a mixed picture at the moment. It's going to become less mixed in the year ahead. Angus, NSBU. NSBU, if you look at the bold numbers I gave you, 7.8% margin. As I said, we had some pull forward of work. There was an acceleration of work in Canada that came from 2020 into 2019. Do we know what the revenue's going to be? No, we don't at this point. We reckon the margin somewhere just a touch north of 7% is not a bad number to go with just now.
We'll see how it develops. It comes down a bit, but that's acceleration of some work in Canada. Ed, then Chris, we'll come to you after that.
Thank you. Ed Steele from Citi, two please. First of all, is the 25% dividend payout a formal policy? If not, when do you think you'll have a formal policy in place, please? Second question, you've adjusted the pipeline by GBP 1.6 billion. You sort of talked about a greater exposure to smaller ticket items within your new conduct wins. Could you talk about, firstly, roughly how much NSBU represents of that GBP 1.6 billion? 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?
First of all, in terms of dividend, we consciously haven't put a defined policy out there. We've talked about, in terms of opportunities with some bolt-on, we've talked about the need for a prudent balance sheet. The board will look at the dividend every six months, and we will decide what the recommended dividend will be based on what we find the market conditions to be. 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, you may be able to give us what the NSBU part of it is.
On the pipeline, as it says on slide 20, is that it's GBP 4.9 billion is the old def. Sorry, the current definition of which excludes, caps everything at a billion and cuts everything out at GBP 10 billion. The difference between that and the wider pipeline, which includes everything in front of gate two that is new business, is the difference between GBP 4.9 billion and GBP 6.5 billion. Stuart can probably give you how that has progressed. We do expect that to become bigger because governments, both here in the U.K., in Australia, and in the U.S., are going more for these framework contracts. If you go and take, for instance, FEMA, where it's basically a contract with zero value until a storm hits, at which point they go and issue you 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 our overall pipeline.
If we look at NSBU, what we said at the time of acquisition, about half a billion GBP. Point two of that makes our own pipeline definition. Point three of that is option years. 99 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 AASC, what was the actual experience to date so far against the expectations, particularly with regard to securing appropriate properties, the cost of those properties and volumes? Thank you.
On AASC, 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 region. The numbers are steadily increasing, and as I say, we're now at 20,700. 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 bid. It's running fine. It's mobilized well, and it's just about settling down into BAU now. Your first question was?
The strains that puts on.
Sorry, say it again.
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 manage those.
Well, one of the things that I put in the lowlights of this year was pointing out that the U.S. business has been pretty stretched. It's something that we keep an eye on, quite a tight eye on. When their business was shrinking for so long, it was getting down and down and down. 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 NSBU acquisition. They do run thin. 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. As a piece of elastic, it's been 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 Serco to the point where it can pay a dividend, Stuart Ford, has been tempted by a rather larger business to go and become the head of investor relations. He's going to go to InterContinental. He'll do that at the end of March. Replacing the irreplaceable is very challenging, but we think we're very close to getting someone. We'll have a dinner for all the analysts to say thank you to Stuart and wish him the best and introduce new head of IR later in the spring. I think it remains to be seen. Working with Stuart has been an absolute privilege. He is one of the most professional people I've ever come across.
His knowledge of the business, his understanding of what the analysts need, what the investors need is second to none. He goes with our absolute best wishes, and we wish you every success for this Stuart in the future. Thank you for all you've done.
I want to add to that, Stuart, that when I arrived, you'd had the most bloody awful time. Because you'd been through hell and back, but never ever did anybody ever suggest to me on the analysts or investor side that you played it anything other than a completely straight bat. You have huge integrity which sometimes drives me up the wall. It is a fault on the right side. Thank you for all you've done for us