Grass Roots reports on a challenging year
5 November 2009
Mixed fortunes for the Hertfordshire headquartered business services group
The year ending June 2009 has been a challenging one for the Grass Roots Group, its global footprint producing mixed fortunes. A major force in the performance improvement market, the group offers services in communication, education, measurement, rewards and events.
Its core businesses within the UK turned in good performances, despite the economic downturn. Its companies in Spain, Switzerland and India, showed good returns, while tougher conditions affected performance in the rest of Europe and the USA. The businesses in APAC (Singapore, China and Australia) are relatively new ventures and all made good progress.
Overall the group turnover fell by 7% to £266 million ($438m). Income (gross profits) fell by 2% to £66 million ($109m). Certain conditions beyond corporate control, such as the fall in sterling and dramatic client insolvencies, contributed significantly to an increase in operating costs of 7%, as did the group’s determination to continue its global expansion and service investment strategy. As a consequence, profits before tax fell by 66% to £3.5 million ($5.7m).
“This has been a very tough year, but through hard work and diligence the Grass Roots family around the globe has ensured we continue to make progress despite the conditions,” commented David Evans, Chairman & CEO. “Our UK businesses have been a rock and a lighthouse for the group, maintaining an amazing stability in the fastest global downturn in peace time economic history.”
“Grass Roots has always maintained a long term vision and we have been determined to stay as close to that vision as we can, keeping the basic human assets focused on doing good work for our clients nearly all of whom were in equally difficult times”, Evans added.
Grass Roots is approaching the 30th Anniversary since the business was founded and enters that point with very strong financials – zero gearing and significant cash balances. The view is that economic upturn will be slow and that clients remain cautious about their ability to leverage the upturn in primary markets. Grass Roots investments in global service propositions, with local delivery, will matter more than any short term blips, in what has been a decade of financial progress.
The company’s reputation continues to march on, listed for three consecutive years in the Sunday Times Best Companies to work for and the Sunday Times top 100 Fast Track list. “Our reputation as an excellent employer and our work for others in the community is part of the glue that binds the teams and this binding makes difficult times less traumatic than they might otherwise be,” David Evans states.
The company has seen significant growth in multi market programs and can see a clear trend in large corporations placing their needs with strong long term players.
