16013 240609 proof 7
intelligent infrastructure
annual report and accounts
for the year ended 31 march 2009
annual report and accounts for the year ended 31 march 2009 pheonix it group plc
phoenix it group plc
technology house hunsbury hill avenue
northampton nn4 8qs
t 44 0 1604 769000
f 44 0 1604 764323
wwwphoenixitgroupcom
about us
phoenix it group companies provide
managed it infrastructure support
services including systems management
communications remote telephone
support hightouch ﬁeld services project
and consultancy services business
continuity and business availability services
what we do
the group operates its partner services 
business under the brand phoenix it 
services and its midmarket and business 
continuity operations under the 
respective brands of servo and icm
our mission
to be the most professional trustworthy
and innovative company providing
managed it infrastructure support services
our opportunities
 all of our businesses have longterm
revenue visibility a good cash ﬂ ow and
operate in market niches with excellent 
growth prospects often driven by 
regulatory change
intelligent infrastructure
16013phoenixcvrindd   1 26062009   1041 16013 240609 proof 7
intelligent infrastructure
annual report and accounts
for the year ended 31 march 2009
annual report and accounts for the year ended 31 march 2009 pheonix it group plc
phoenix it group plc
technology house hunsbury hill avenue
northampton nn4 8qs
t 44 0 1604 769000
f 44 0 1604 764323
wwwphoenixitgroupcom
about us
phoenix it group companies provide
managed it infrastructure support
services including systems management
communications remote telephone
support hightouch ﬁeld services project
and consultancy services business
continuity and business availability services
what we do
the group operates its partner services 
business under the brand phoenix it 
services and its midmarket and business 
continuity operations under the 
respective brands of servo and icm
our mission
to be the most professional trustworthy
and innovative company providing
managed it infrastructure support services
our opportunities
 all of our businesses have longterm
revenue visibility a good cash ﬂ ow and
operate in market niches with excellent 
growth prospects often driven by 
regulatory change
intelligent infrastructure
16013phoenixcvrindd   1 26062009   1041 16013 240609 proof 7
stock exchange code pnx wwwphoenixitgroupcom
£156m
 2008 £155m
 106
 to £283m
 2008 £255m
 142p
 2008 146p
– £145m
 to £884m
 2008 £1029m
 263p
 2008 241p
annual report and accounts phoenix it group plc 
financial
highlights
 97
 to £2532m
 2008 £2308m
£230m
 2008 £234m
 80
 to £357m
 2008 £330m
revenues 
proﬁ t from
operations 
proﬁ t from
operations
1
proﬁ t before tax
proﬁ t before tax
2
diluted 
earning per share
total dividend
net debt 
including ﬁ nance leases
diluted 
earnings per share
3
intelligent infrastructure
business review
operating  financial review
corporate governance
financial statements
shareholder information
financial calendar
annual general meeting 31 july 2009
ex dividend date 16 september 2009
record date for dividend 18 september 2009
dividend payment date 9 october 2009
 phoenix it group plc
registered in england 03476115
registered ofﬁ ce
technology house hunsbury hill avenue
northampton nn4 8qs
financial advisers  stockbrokers 
ubs limited
1 finsbury avenue london ec2m 2pp
auditor
deloitte llp
2 new street square
london ec4a 3bz
registrars
equiniti limited
aspect house spencer road lancing
west sussex bn99 6zl
principal bankers
royal bank of scotland plc
152 silbury boulevard milton keynes mk9 1lt
solicitors
eversheds llp
115 colmore row birmingham b3 3al
financial public relations
financial dynamics limited 
holborn gate 26 southampton buildings
london wc2a 1pb
remuneration consultants
hewitt new bridge street consultants llp 
6 more london place london se1 2da
advisers
 £516m 
2008 £496m
representing 1447 
of proﬁ t from operations 
2008 1501
cash generated 
by nonrecurring 
cash ﬂ ows
4
phoenix it group growth £m
 2005 2006 2007 2008 2009
n 
revenue
 
n proﬁ t from operations before amortisation 
 of acquired intangibles and nonrecurring cost
1
 adjusted for nonrecurring items and 
amortisation of acquired intangibles
2
 proﬁ t before tax of £156m 2008 
£155m plus amortisation of acquired 
intangibles £34m 2008 £36m and 
nonrecurring items £93m 
2008 £46m
3
 see note 13
4
 cash generated by operations of 
£458m 2008 £453m plus 
nonrecurring cash ﬂ ows of £58m 
2008 £43m
300
250
200
150
100
50
0
 15
 proposed ﬁ nal 
dividend of 42p
giving a total 
dividend for 
year of 63p
 2008 548p
16013phoenixcvrindd   2 26062009   1041 16013 240609 proof 7
stock exchange code pnx wwwphoenixitgroupcom
£156m
 2008 £155m
 106
 to £283m
 2008 £255m
 142p
 2008 146p
– £145m
 to £884m
 2008 £1029m
 263p
 2008 241p
annual report and accounts phoenix it group plc 
financial
highlights
 97
 to £2532m
 2008 £2308m
£230m
 2008 £234m
 80
 to £357m
 2008 £330m
revenues 
proﬁ t from
operations 
proﬁ t from
operations
1
proﬁ t before tax
proﬁ t before tax
2
diluted 
earning per share
total dividend
net debt 
including ﬁ nance leases
diluted 
earnings per share
3
intelligent infrastructure
business review
operating  financial review
corporate governance
financial statements
shareholder information
financial calendar
annual general meeting 31 july 2009
ex dividend date 16 september 2009
record date for dividend 18 september 2009
dividend payment date 9 october 2009
 phoenix it group plc
registered in england 03476115
registered ofﬁ ce
technology house hunsbury hill avenue
northampton nn4 8qs
financial advisers  stockbrokers 
ubs limited
1 finsbury avenue london ec2m 2pp
auditor
deloitte llp
2 new street square
london ec4a 3bz
registrars
equiniti limited
aspect house spencer road lancing
west sussex bn99 6zl
principal bankers
royal bank of scotland plc
152 silbury boulevard milton keynes mk9 1lt
solicitors
eversheds llp
115 colmore row birmingham b3 3al
financial public relations
financial dynamics limited 
holborn gate 26 southampton buildings
london wc2a 1pb
remuneration consultants
hewitt new bridge street consultants llp 
6 more london place london se1 2da
advisers
 £516m 
2008 £496m
representing 1447 
of proﬁ t from operations 
2008 1501
cash generated 
by nonrecurring 
cash ﬂ ows
4
phoenix it group growth £m
 2005 2006 2007 2008 2009
n 
revenue
 
n proﬁ t from operations before amortisation 
 of acquired intangibles and nonrecurring cost
1
 adjusted for nonrecurring items and 
amortisation of acquired intangibles
2
 proﬁ t before tax of £156m 2008 
£155m plus amortisation of acquired 
intangibles £34m 2008 £36m and 
nonrecurring items £93m 
2008 £46m
3
 see note 13
4
 cash generated by operations of 
£458m 2008 £453m plus 
nonrecurring cash ﬂ ows of £58m 
2008 £43m
300
250
200
150
100
50
0
 15
 proposed ﬁ nal 
dividend of 42p
giving a total 
dividend for 
year of 63p
 2008 548p
16013phoenixcvrindd   2 26062009   1041 stock exchange code pnx wwwphoenixitgroupcom
our business
our performance
corporate governance
financial statements
shareholder information
01
16013 240609 proof 6
our business
financial highlights 
operational highlights 01
phoenix at a glance 02
our performance
corporate governance
financial statements
shareholder information
chairman’s statement 08
chief executive’s review 09
financial review 14
board of directors 20
directors’ report 22
corporate governance 25
corporate social responsibility 28
directors’ responsibilities statement 29
audit committee report 30
directors’ remuneration report 31
independent auditor’s report
on the group financial statements 36
consolidated statement of income 37
consolidated statement of recognised 
income and expense 38
consolidated balance sheet 39
consolidated cash flow statement 40
notes to the consolidated
financial statements 41
independent auditor’s report
on the company financial statements 76
company balance sheet 77
notes to the company
financial statements 78
five year summary 83
notice of annual general meeting 84
advisers and financial calendar ibc
operational
highlights
l group integration plan completed
l continued investment in hosting centres 
and business continuity facilities
l french operations divested improving 
focus and reducing business risk
l forward order book provides continued good 
forward visibility and resilience
l continuing high demand for hosting services
16013pheonixindd   01 26062009   1038 annual report and accounts phoenix it group plc 
02
16013 240609 proof 6
our services portfolio
phoenix it services offers a range of services to its
partners all of which can be procured on either
a subcontract managed or outsourced basis our
service portfolio is underpinned by an exceptional
parts and logistics capability which supports the
entire information technology spectrum
desktop services – we deliver ﬁ eldbased or sitebased support
throughout the lifecycle of the desktop environment
network services – supporting a diverse range of lan wan data 
voice and video technologies we offer a high level of technical skill 
supported by leading manufacturer accreditations
high availability services – delivering a comprehensive multi
vendor support service to the enterprise data centre environment 
we offer multitiered slas to reﬂ ect business priorities
phoenix it services
delivers it infrastructure
services exclusively
through a network of
partners comprising
the leading names in
the it services market
we provide a comprehensive range of
services to and through our partners and 
have a number of key contracts spanning 
both the public and private sectors and all 
key vertical segments
we are committed to delivering service of
the highest quality and the longevity of 
our key partnerships is testament to our 
success we are certiﬁ ed in all it service
industry related quality standards and 
have recently been awarded iso 14000 for 
environmental management
we strive to preserve and develop our
relationships with partners through
innovations in both service development 
and service delivery
16013pheonixindd   02 26062009   1038 stock exchange code pnx wwwphoenixitgroupcom
our business
our performance
corporate governance
financial statements
shareholder information
03
16013 240609 proof 6
ipt services – with dedicated specialist resource we can address 
the whole spectrum of ipt support requirements including 
deployment maintenance and user support
specialist support services – comprising highly skilled technical 
developers experienced project managers and dedicated project 
resource we are able to deliver high quality bespoke services and 
large and small scale project services to our partners across a wide 
range of technologies 
service desk – we offer a ﬁ rst second and third line service desk
across our range of services to support our partners in delivering 
an excellent user experience
remote management – delivered through our own inhouse 
tool onestream we are able to offer a range of solutions for 
server network and environmental monitoring and management
working in partnership
with atos origin
building on the success of the ﬁ eld engineering resource initiative in
place since 2007 atos origin selected phoenix it services to deliver their 
onsite engineering requirements to support a wide range of their end 
user customers
by combining both ﬁ eld and onsite engineering requirements under a single
partnership atos origin are able to drive efﬁ ciencies in service delivery and
preserve their excellent customer relations through improved customer 
experience 
ongoing efﬁ ciency beneﬁts are derived from phoenix it services’ expertise
in increasing the volume of remote ﬁ xes across the range of incidents raised
this helps atos origin to reduce the costs associated with onsite resource to
ensure that this does not adversely affect the customer’s overall quality of 
service experience atos origin and phoenix it services have identiﬁ ed areas
where engineers can be cross trained to maximise availability of technical skills 
and opportunities for utilising the phoenix extensive ﬁ eld resource during
periods of increased call volumes 
phoenix it services has been supporting atos origin across a number of 
service areas for more than 6 years this longterm relationship has enabled 
the two companies to develop an integrated approach to service delivery 
the dedicated phoenix it services call centre team led by the partner services 
manager delivers ﬁ rst line support across all services to atos origin and
provides management information to help drive a continuous improvement 
approach
this close working relationship between phoenix it services and atos origin on
both an operational and account management level enables both organisations
to drive proﬁtable business growth without compromising the high quality
service delivery expected by atos origin’s customers
16013pheonixindd   03 26062009   1038 annual report and accounts phoenix it group plc 
04
16013 240609 proof 6
icm offer an evolving range of
services providing customers
with the right recovery solution
delivered at the right price point
for the unique requirement of each
business
icm business continuity winner of the cir
service provider of the year award in 2008
has further strengthened its position as a
leading uk business continuity provider
over the last year
the combination of this high level of
service delivery and wide range of solutions
delivered from 18 regional facilities
underpins the support of more than 2200
clients of all sizes and across all business
sectors throughout the uk
as businesses continue to adopt new
technology and infrastructure to improve
efficiencies and deliver 24x7 availability icm
are increasingly working with customers
to provide proactive continuous business
solutions to complement the more reactive
recovery services traditionally associated
with disaster recovery
our services include
continuity planning advice working with customers our
consultants create bespoke yet concise continuity plans that cover 
not only it but the entire business
ship to site it replacement the rapid dispatch of replacement 
technology to site along with experienced icm technicians in the 
event of a system failure
16013pheonixindd   04 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
our business
our performance
corporate governance
financial statements
shareholder information
05
16013 240609 proof 6
mobile data centres the provision of a preconﬁ gured data
centre environment including generator ups and airconditioning 
to a customer’s site
work area recovery delivered from 15 uk centres icm have 
over 7500 fully equipped workarea recovery positions icm offer 
customers a choice of ofﬁ ce call centre and dealing workarea
replacement solutions both on a syndicated and dedicated basis
data hosting providing a selection of offsite secure data back
up online data replication and second site datacentre provision 
for high availability and recovery of servers applications and 
critical data
melton borough council
waking up to ﬁnd head ofﬁce devastated overnight by ﬁre
dealing with the aftermath of a ﬁre is a daunting and stressful time for any business or
organisation when you have nearly 50000 customers relying on you daily for essential
services the potential for disaster is even worse for melton borough council waking up
to ﬁnd their head ofﬁce gutted by an early morning ﬁre it was essential that they could
operate ‘business as normal’ as quickly and efﬁciently as possible – and with icm continuity
services they achieved exactly that
essential planning
luckily for the residents of melton mowbray melton borough council was quick to 
turn to its business continuity supplier icm to organise alternative accommodation 
for key staff and ensure downtime for the council would be as minimal as possible
“as events unfolded throughout the morning we were in contact with the council and were
able to invoke the previously agreed business continuity strategy” explained john mills
service director icm “we had previously agreed with ofﬁcials at the council on the level of
resource they would need – things such as workstations networked phone lines internet access
and suchlike what was also essential was our ability to provide a toplevel facility – a factor
that paid dividends for the council as staff quickly found our east midlands business continuity
centre provided a home from home experience”
for lynn aisbett chief executive for the council this forward planning proved essential “i
don’t want to think what we would have done should we not have planned for an eventuality
like this when you are faced with suddenly losing your ofﬁces you have so many things to
do and people to organise you need the help of someone like icm to absorb a huge part of
the stress – trusting them completely to have a new working premises ready for you straight
away”
moving on
with the building now repaired the council is moving back home “events such as these
really do bring home to us all the value of those business continuity planning strategy
meetings which at the time can seem too hypothetical” says lynn “to anyone who doubts
the value of business continuity strategies or thinks events like a ﬁre will never happen to them
you need to think again – without planning and a partner like icm to be there the moment you
need them the potential for a drama turning into a business fatal crisis is just too risky”
16013pheonixindd   05 26062009   1039 annual report and accounts phoenix it group plc 
06
16013 240609 proof 6
servo’s focus is to
work with our clients to
understand their business
and become an integral
part of enabling their
strategy we strive to
work with our customers
to optimise their total it
expenditure to facilitate
improved business
information to drive
revenue reduce cost
mitigate risk and improve
overall business efﬁciency
our services portfolio
servo people have a passion to deliver real business beneﬁ t to
our customers providing a signiﬁ cant differentiator in a
competitive market place
by adopting a consultative approach we are able to ensure that we 
fully understand our customers’ core objectives in collaboration 
with them we can design build and then implement solutions 
that support their key business drivers from the initial supply of 
hardware and implementation services through to equipment 
disposal servo works with the customer every step of the way
16013pheonixindd   06 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
our business
our performance
corporate governance
financial statements
shareholder information
07
16013 240609 proof 6
baxi group
a major european player in heating solutions
baxi group is a leading manufacturer and supplier of domestic and commercial water
and space heating systems and services employing more than 5000 people and with a
turnover of £12 billion the group owns some of europe’s leading brands in a market
worth over £55 billion a year
in 2007 baxi standardised its brand presentation both in its national markets and in its use
of the internet as a marketing channel until this point web usage had been fragmented
among different technologies and standards since baxi’s emarketing strategy is focused
on customer relationships the group needed to raise its proﬁle and underpin its status as a
major player in delivering energyefﬁcient and environmentally friendly heating solutions
to achieve its online goals baxi decided to host its entire uk and european web services on
a single platform acknowledging that its inhouse team could not costeffectively match
the quality of a specialist provider the group approached longterm it partner servo for a
hosting solution
a committed strategic partnership
as baxi’s strategic it partner in the uk since 2002 servo has provided a wide range of
hardware software and networking solutions the company is committed to a desktop
replacement programme every three years with full ongoing support for its client’s entire
uk array of desktops laptops servers peripherals switches and routers
complex relationships brought rapidly to fruition
implemented within a fortnight of placing the order the new hosting project involved
four key parties baxi group servo reddot and freestyle integral to success was
servo’s tenacity in navigating the complex relationships between all parties using the
shared platform servo provisioned virtual servers in the hosting environment and
provided secure network access to all project partners advanced virtualisation features
guaranteed high availability through dynamic workload balancing and automated
resilience ensuring continual adherence to a 24x7x365 sla
the result was a highly available resilient and fully managed server platform for the reddot
web content management system and baxi’s publicfacing web servers hosted at servo’s
data centre in leeds
thebenefitsforbaxiarecomprehensiveincludingagreatercohesivenessingroupbrand
identityfasterandmorecosteffectivewebsitedevelopmenthighserveravailabilityand
reducedcostsviatheconsolidationofallgroupwebsitesintoasinglehostedenvironment
longterm commitment
“it was servo’s ﬂexibility and commitment that ensured we launched our ﬁrst site on
schedule” commented baxi’s it development manager luke vanhegan it is this unfailing
responsiveness that differentiates a midmarket supplier such as servo from larger players
servo understands the needs and goals of smaller enterprises and builds longterm client
partnerships to support their ongoing demands
servo has the capability to manage and run systems either on 
client premises or provide a managed hosted solution on a national 
basis with t3 compliant data centres in leeds birmingham and 
farnborough whether running systems on or off our customers’ 
premises servo has a 24x7 help desk capability and a network 
monitoring team that provides extensive and ﬂ exible levels of
tailored support
servo’s scale and geographic coverage enables us to address clients 
across the uk in both the private and public sectors with solutions 
tailored to their individual requirements 
16013pheonixindd   07 26062009   1039 annual report and accounts phoenix it group plc 
08
16013 240609 proof 6
“the group remains well placed
in each of its chosen markets
and enters the new financial
year with a robust order book
and strong sales pipeline”
chairman’s statement
review of the year
i am pleased to be able to report that phoenix it group plc has 
continued to make good progress over the past year despite 
challenging trading conditions and a backdrop of economic 
slowdown the group has grown revenue and proﬁ t and this
combined with improvements in working capital and cash 
management has provided the base for further increases in 
shareholder value 
results
group revenues increased by 97 to £2532m 2008 £2308m
and operating proﬁ t before nonrecurring items and
amortisation of acquired intangibles increased by 80 to 
£357m 2008 £330m on a likeforlike basis adjusting for
the effect of the timing of the icm acquisition revenue and 
operating proﬁ t increased by 38 and 31 respectively
excluding nonrecurring items and amortisation of acquired 
intangible assets adjusted diluted earnings per share increased 
to 263p 2008 241p and diluted earning per share were
142p 2008 146p proﬁ t from operations after amortisation
of acquired intangibles decreased by 18 to £230m
2008 £234m the group has continued to be cash generative 
during the year reducing its net debt including ﬁ nance leases
by £145m to £884m 2008 £1029m  
dividend
the board recommends a proposed ﬁ nal dividend of 42p per
share 2008 365p which if approved at the annual general 
meeting will be paid on 9 october 2009 to shareholders on the 
register at 18 september 2009 combined with the interim 
dividend of 21p per share paid on 6 april 2009 this would make 
a total dividend per share of 63p 2008 548p an increase of 
15 it is the board’s current intention to increase future 
dividends broadly in line with earnings
board changes
john sussens who joined the board in 2004 as a nonexecutive 
director wished to cut back on his commitments and therefore 
stepped down from his role on 14 august 2008 jeremy stafford 
stepped down from the board on 21 november 2008 and nick 
robinson returned to the role of chief executive i would like to 
reiterate our thanks to john and jeremy and we are grateful for 
their contributions to the group 
in addition to these changes we have appointed two new 
nonexecutive directors to the board david garman joined the 
board on 1 december 2008 and brings extensive listed 
company experience including associated british foods plc 
tdg plc and carillion plc david warnock joined the board on 
23 january 2009 he has long experience of the investment 
management industry latterly at aberforth partners llp 
i am conﬁ dent that the experienced board combined with a
strong and focused management team will continue to drive 
our business forward and further enhance our position in our 
chosen markets 
employees
this has been another year of good performance by the group 
and these results have been delivered by our staff in a year 
overshadowed by a challenging economic environment on 
behalf of the board and the shareholders i would like to thank 
all our staff for their hard work and support during the year and 
for delivering this successful performance
annual general meeting
the annual general meeting will be held at the group’s 
registered ofﬁ ce technology house hunsbury hill avenue
northampton on friday 31 july 2009 at 1030 am
summary
the strategy of the group has not changed and we continue
to focus on delivering proﬁ table organic growth supported
by excellent service and a strong customer focus with the 
integration programme now completed and ﬁ rmly behind
us the group remains well placed in each of its chosen markets 
and enters the new ﬁ nancial year with a robust order book
and strong sales pipeline our close relationships with our 
customers will allow the group to gauge market conditions
and to take advantage of and gain new business where 
possible management remain focused on being able to 
respond to changing market conditions and being able
to reduce operational gearing in response to weakened 
economic conditions 
peter bertram
chairman
29 may 2009
16013pheonixindd   08 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
09
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
chief executive’s review
 “the group continues to have
good forward visibility from its
order book and high levels of 
recurring revenues from a
diversified customer base”
overview
i am pleased to report that in the past year phoenix it group has 
developed into a larger more resilient and competitive business
with three operating divisions focused on speciﬁ c sectors of
the uk it services market the integration of the group’s most 
recent acquisition icm together with our earlier acquisitions 
servo and ndr was completed in the year and returns on our 
investment in additional business recovery and hosting facilities 
have underpinned our organic revenue growth and positioned 
the group for future growth
we have had a successful year ﬁnancially for the year ended
31 march 2009 group proﬁ t before tax before nonrecurring
items and amortisation of acquired intangibles grew by 106 
to £283m
1
 2008 £255m on group revenues of £2532m 
2008 £2308m an increase of 97 cash generation was also 
strong enabling a reduction in net debt including ﬁ nance
leases of £145m to £884m 2008 £1029m
factors helping to drive this growth and operational 
performance include our ﬂ exibility and responsiveness to the
particular needs of our customers operational precision and 
quality of service the introduction of new and innovative 
services and tight cost controls that help us quote competitively 
for new business in the markets in which we operate
strategy 
the group’s strategy for increasing shareholder value and 
accelerating growth by entering into it outsourcing contracts 
and through the development of niche it services particularly 
business continuity and hosting remains unchanged we are 
conﬁ dent that we have the right strategy in place to deliver
value to our customers and shareholders each of our three 
operating divisions beneﬁ ts directly from being part of the
wider group leveraging our centres of excellence as well as 
giving opportunities to crosssell between divisions and to sell
a wider portfolio of services to existing and prospective 
customers in addition as we plan for the longerterm growth
of the group we have established a strong modular structure 
which can be readily expanded with the addition of service lines 
and potential further acquisitions which meet our strict criteria 
the board believes that a continuing focus on the uk will 
maximise the performance of the group for the foreseeable 
future and enhance shareholder value through securing 
proﬁ table cash generative growth
the markets the group serves
with effect from 1 april 2008 the group moved from ﬁ ve
operating businesses to three customerfacing divisions icm 
continuous business business continuity serving the business 
continuity and disaster recovery market phoenix it services 
partner services providing a full range of it support services
to large partner organisations and servo midmarket which 
serves the uk corporate and public sector midmarket where it 
is most costeffective to do so these divisions are supported by 
shared activities operated as centres of excellence by the 
division best equipped to provide that function to the other 
operating divisions in the group
phoenix continues to be well positioned in each of its chosen 
markets and has good forward visibility and resilience from its 
forward order book our spread of customers and penetration 
of more defensive sectors such as the public sector results in
a high level of recurring revenue derived from a diversiﬁ ed
customer base in the year no contract was larger than 4 
2008 4 of group revenue as at 31 march 2009 the group’s 
annualised contract value was £1799m 2008 £1820m and
the values by sector were
annualised contract value at 31 march 2009 
vertical sector £m 
other commercial 690 383
public sector 374 208
financial services 349 194
telecommunications 117 65
utilities oil and gas 78 44
systems integrators 77 43
retail 58 32
travel  leisure 42 23
construction 14 08
total 1799 1000
1  
proﬁ t before tax of £156m 2008 £155m plus amortisation of
acquired intangibles £34m 2008 £36m and nonrecurring 
items £93m 2008 £64m
16013pheonixindd   09 26062009   1039 annual report and accounts phoenix it group plc 
10
16013 240609 proof 6
integration process
as anticipated we completed our integration programme 
during the year the combination of the phoenix businesses
and icm resulted in a number of cost synergies together with 
cost savings arising from the increased buying power of the 
enlarged group we are also beginning to beneﬁ t from
crossselling and collaborative working across the three 
customer facing divisions in addition the combination of 
phoenix and icm’s operations into larger units throughout the 
uk is providing improved operating efﬁ ciency from the greater
density of geographical coverage
changes to the economic background
the recession is affecting the markets in which we operate and 
the speed and scale of the general economic downturn has 
been greater than envisaged by some commentators as a 
result 2009 is likely to be a tough year for some participants in 
the it sector however having taken early action including a 
review of our cost base the group is well positioned to be able 
to withstand the recession and whilst the shortterm outlook 
remains sensitive to recessionary inﬂ uences the mediumterm
prospects for growth in our markets are positive 
there is an ongoing need for our customers to invest in
it services particularly the outsourcing of it functions to 
maintain and improve their competitive positions the 
investments we have made during the year combined with the 
removal of duplicated activities through the integration means 
we are well positioned in the more difﬁ cult economic climate
each of our three customerfacing divisions is appropriately 
structured and resourced for the less favourable market 
conditions anticipated for the remainder of 2009 and beyond 
actions have been taken to cut costs and maximise cash 
generation in order to mitigate any further downturn and 
protect the group’s capital position whilst safeguarding the 
group’s core strengths the key actions we have taken to 
reduce costs and improve our working capital efﬁ ciency are
cost reduction 
action has been taken to reduce discretionary expenditure and 
to streamline ﬁ xed elements of cost such as central functions
and management structures regrettable but necessary 
decisions have been taken to reduce headcount across the 
group and to cancel the group’s annual salary review for 2009
i have been encouraged by the positive way that our staff have 
adapted to these changes in addition we have imposed a 
disciplined approach to the use of subcontractors we now have 
our cost base at the appropriate level for the current market 
though we will continue to drive best value from our supplier 
relationships and through continuous improvement of our 
processes and productivity we are also ready to take any 
additional action that becomes necessary in individual business 
units should demand conditions weaken further
working capital efﬁciency
we saw pressure on our working capital efﬁciency ratios during
the year as both suppliers and customers sought to conserve 
cash however net working capital reduced by £48m 
compared with 31 march 2008 which was largely due to a 
reduction in days sales outstanding to 54 days 2008 60 days 
the actions we have taken to improve the efﬁ ciency of cash
collections from our customers are expected to have an 
enduring beneﬁ t to the group’s working capital position
cash ﬂ ow and capital expenditure
the improvement in net debt was achieved despite signiﬁ cant
cash ﬂ ow pressures on some of our customers during the year
the group continues to be highly cash generative and
i am pleased to report that the group’s net debt position
was reduced by £145m to £884m 2008 £1029m this was 
after continued signiﬁ cant investment in the asset base of
the group to support future growth and nonrecurring 
integration cash costs of £58m the group also repaid
£110m of the principal ﬁ ve year term loan in september 2008
and £33m drawn on the 364 day facility in february 2009 
resulting in the cancellation of these elements of the
banking facilities
capital expenditure in the year was £155m 2008 £214m
with signiﬁ cant investment in our hosting centres at the
existing birstall and farnborough sites and business continuity 
facilities at our aston ofﬁ ces there was also further investment
during the second half of the year to increase business 
chief executive’s review
continued
16013pheonixindd   10 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
11
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
continuity and hosting capacity at our wapping site following 
our investment programme in business recovery and hosting 
facilities the group now has sufﬁ cient capacity to support
anticipated growth in these two key growth areas for the 
current ﬁ nancial year consequently planned capital
expenditure can be reduced in the new ﬁ nancial year and is
expected to be broadly sustainable at this reduced level for one 
to two years as we continue to invest selectively in capital 
projects on a salesled basis where satisfactory investment 
returns can be achieved
icm continuous business business continuity
year ended year ended
31 march 31 march
2009 2008  change
revenues £512m £420m 220
proﬁ t from operations £130m £89m 471
operating margin 254 211
the formation of the business continuity division has created
a critical mass business providing a national network of 18 
business recovery centres geographically well placed in relation 
to our target customer groups with each centre equipped to 
meet the speciﬁ c needs of our customers the icm acquisition
and integration has further strengthened the group’s position 
in the uk business continuity services market making the group 
one of only four signiﬁ cant providers of these services in the uk
combining the icm and ndr customer bases has given us the 
intended extensive penetration of both the large enterprise and 
sme sectors providing us with a solid platform for growth and the 
knowledge and expertise to accelerate business progress this is 
reﬂ ected in the strong growth of both revenues and operating
proﬁ t during the year
revenues for the year were £512m 2008 £420m and operating 
proﬁ t £130m 2008 £89m on a pro forma basis assuming that
icm had been acquired on the ﬁ rst day of the comparative
period revenues have increased by 125 and operating proﬁ t
by 375 
despite the impact of an increase in electricity costs during
the second half of the 2009 ﬁ nancial year operating margins
have continued to improve as the division has increased the 
utilisation of its syndicated seats and expanded its hosting 
capacity the utilisation rate for syndicated seats increased to 
47 at 31 march 2009 31 march 2008 42
during the year our contract with a large investment bank
was terminated when that bank ceased trading following the 
acquisition of the uk operations of the failed bank by another 
bank the contract continued on amended terms with the new 
owner a testimony to our responsiveness and the quality of 
service we provide 
the business continuity order book increased by 62
to £988m 2008 £931m at 31 march 2009 representing
almost two years’ annual revenues and the division has a
strong pipeline of new business opportunities as a result
of the economic downturn contract renewal rates by value 
marginally decreased to 87 2008 89 including the
net impact of the contract termination and replacement in 
respect of the large investment bank relationship referred
to earlier
during the year further investment has been made to develop 
the hosting and business continuity facilities at the aston 
ofﬁ ces where the division is headquartered to complete the
ﬁtout of the farnborough business continuity and hosting sites
and to provide additional hosting and business continuity 
capacity at our wapping ofﬁ ces
16013pheonixindd   11 26062009   1039 annual report and accounts phoenix it group plc 
12
16013 240609 proof 6
phoenix it services partner services
year ended year ended
31 march 31 march
2009 2008  change
revenue £1055m £1029m 25
proﬁ t from operations £161m £176m 91
operating margin 153 172
the partner services business provides services to large 
commercial and public sector end users through ‘tier 1’ it 
services companies partners 
the strategy pursued in our partner services business is to 
provide a comprehensive range of it services to partner 
organisations to support their typically multiyear contracts 
with their end user customers this approach is increasingly 
important in these changeable markets and the partner model 
continues to have tremendous value with our customer base 
particularly in an industry which is consolidating and becoming 
increasingly commoditised
against a market background of increased competition and 
commoditisation and the shortterm disruption resulting from 
the integration process revenues for the year were £1055m 
2008 £1029m and operating proﬁ t £161m 2008 £176m
operating margin for the year was 153 2008 172 
on a pro forma basis excluding the revenues and operating 
proﬁ t of the group’s french business the partner services
division’s results were 
 year ended year ended
31 march 31 march
2009
2
 2008
2
  change
revenue £1039m £1004m 35
proﬁ t from operations £159m £174m 86
operating margin 153 173
2  
excluding revenues and proﬁ t of french operation disposed of during
the year
management believe the division’s margin is broadly sustainable
at this level it is pleasing to note that the actions taken within the
division increased the operating margin in the second half of the
year to 154 compared to the weaker performance in the ﬁrst
six months when the margin was 152
the performance of the division and in particular the decline
in operating margin reﬂ ects not only difﬁcult market
conditions but also some additional costs incurred in relation
to the group’s integration these were necessary to ensure 
appropriate service levels to customers through the post
integration period following the integration service quality 
remains high and we continue to meet overall customer service 
level agreements 
in the competitive market in which phoenix it services operates 
in the year there have been fewer largescale multimillion 
pound multiyear contract opportunities and consequently 
new business wins have been increasingly of a smaller size
the uncertainty resulting from the economic downturn has
also increased the average time new customers are taking to 
reach purchasing decisions and has resulted in certain 
partners committing to shorter periods of minimum 
contracted revenues on contract renewals contributing to a 
reduction in the division’s contract renewal rate by value to 
66 2008 86 these factors have held back growth in the 
order book which reduced by £281m to £1422m at 31 march 
2009 2008 £1703m 
however there continues to be a good pipeline of opportunities
and the depth of the recession should provide further business 
opportunities with partners whose end user customers are 
seeking reductions in their cost bases to improve their 
competitive positions 
during the year we sold our small french operation which 
delivered services to french it industry partners by seeking to 
replicate the uk partner model revenues and operating proﬁ t
of the french business for the year ended 31 march 2009 were 
£16m 2008 £25m and £02m 2008 £02m respectively this 
divestment improves our focus and reduces business risk whilst 
uk centric the group will continue to offer european services as 
an adjunct to uk business using third party providers
chief executive’s review
continued
16013pheonixindd   12 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
13
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
servo midmarket services 
year ended year ended
31 march 31 march
2009 2008  change
revenue £965m £859m 123
proﬁ t from operations £100m £90m 121
operating margin 104 104
this division sells a broad range of it services and it products to 
the midmarket providing customers with a complementary 
and extensive range of services on a ukwide basis yearon
year operating margins have been maintained with the division 
achieving increased margins of 107 in the second half of the 
year compared to 101 in the ﬁ rst half this reﬂects an
improvement in servo’s business mix healthy new business 
generation and an increase in hosting revenues a key objective 
for the servo division is to extend its presence further in the 
midmarket business sector as this represents a signiﬁ cant
growth opportunity for the group
hosting revenues increased by 933 to £61m 2008 £31m
of the annual contract value of £74m 2008 £42m at
31 march 2009 73 is derived from managed hosting these 
high quality annuity contracts improve the visibility of future 
revenues and earnings within this division investment in 
hosting capacity has been made with further signiﬁ cant data
centre space commissioned during the latter part of 2008
in response to strong market demand for these services
revenues for the year were £965m 2008 £859m and 
operating proﬁ t was £100m 2008 £90m on a pro forma basis
assuming that icm had been acquired on the ﬁ rst day of the
comparative period revenues have increased by 11 and 
operating proﬁ t by 13
the servo order book decreased by 14 to £459m 2008 
£465m at 31 march 2009 reﬂ ecting the increase in time being
taken by some new customers to reach purchasing decisions 
and a decrease in the contract renewal rate to 87 2008 92 
by value which is a reﬂ ection of the current economic
background and some disruption during the integration to
a small number of customers 
outlook
with the continued deterioration of the uk economic climate 
this will be a challenging year for the sector we are conﬁ dent
that we have taken the necessary steps including a review of 
our cost base to be ready for these challenges the group 
continues to have good forward visibility from its order book 
and high levels of recurring revenues from a diversiﬁ ed
customer base 
we have achieved good momentum into the new ﬁnancial
year and remain well positioned in each of our chosen
markets in spite of continuing macroeconomic uncertainties 
we remain positive about the outlook for the current year and 
beyond and are well placed to capture further opportunities 
and market share 
nick robinson
chief executive
29 may 2009
16013pheonixindd   13 26062009   1039 annual report and accounts phoenix it group plc 
14
16013 240609 proof 6
“the group has had a positive year
with continuing revenue and
profit growth”
financial review
summary of results
the group has had a positive year with continuing revenue and 
proﬁ t growth this was achieved during a period of signiﬁcant
change as the group transitioned from ﬁ ve principal uk
operating companies to three customer facing divisions and 
during a period of economic uncertainty and recession
the key ﬁ nancial highlights are as follows
change 2009 2008
  £m £m £m
revenue 97 2532 2308
proﬁ t from operations
1
 80 357 330
proﬁ t before tax
2
 106 283 255
proﬁ t after tax 21 110 107
net debt
including ﬁ nance leases –145m 884 1029
diluted earnings per share –27 142p 146p
adjusted diluted earning
per share
3
 91 263p 241p
dividend p 150 630p 548p
revenues and proﬁ ts
revenues increased by 97 to £2532m 2008 £2308m on a 
pro forma basis assuming icm had been acquired on the ﬁ rst
day of the comparative period group revenues grew by 38 
revenues in all divisions increased in the year with our business 
continuity division icm performing particularly strongly with a 
pro forma 125 increase in revenues and a 375 increase in 
proﬁ t from operations
1

proﬁ t from operations before nonrecurring items and
amortisation of acquired intangibles increased by 80 to 
£357m
1
 2008 £330m despite the uk economy entering a 
period of recession the economic downturn has led to some 
customers reducing or delaying their purchasing decisions and 
continuing margin pressure in the market for partner services 
on a pro forma basis assuming icm had been acquired on the 
ﬁrst day of the comparative period proﬁt from operations
before nonrecurring items and amortisation of acquired 
intangibles increased by 31
proﬁ t before tax before nonrecurring items and amortisation
of acquired intangibles increased in the year by 106 to 
£283m
2
 2008 £255m and proﬁ t before tax increased by
06 to £156m 2008 £155m
earnings and dividend
adjusted diluted earnings per share excluding nonrecurring 
items and amortisation of acquired intangible assets were 
263p
3
 2008 241p diluted earnings per share were 142p 
2008 146p comparable basic earnings per share were 147p 
2008 150p a full analysis of the earnings per share calculation 
is set out in note 13
a ﬁnal dividend of 420p per share is being recommended by
the board making a total of 630p per share for the year 2008 
548p an increase of 150 the total dividend for the year is 
covered 23 2008 27 times by basic earnings per share and 
shareholders’ funds at the end of the ﬁ nancial year were
£1264m 2008 £1203m if approved by shareholders at the 
forthcoming annual general meeting the ﬁ nal dividend will
be paid on 9 october 2009 to shareholders on the register on
18 september 2009
investment income and finance costs
net ﬁ nancing costs were £74m 2008 £79m and net interest
cover was 67 2008 63 times
the group’s bank term debt carries a variable rate of interest 
linked to prevailing libor rates in order to provide a degree of 
certainty over the interest rate exposure on a proportion of the 
total debt the group entered into a 3 year interest rate swap on 
28 september 2007 at an interest rate of 578 plus applicable 
margin as at 31 march 2009 £518m of debt carried this ﬁ xed
rate of interest this will reduce to £420m for the period from 
1 october 2009 until 30 september 2010 the interest rate swap 
applies to 75 of the amortising balance of the principal term 
loan and the balance of the group’s bank debt is unhedged
1
 before nonrecurring items and amortisation of acquired
intangibles
2
 proﬁt before tax of £156m 2008 £155m plus amortisation of
acquired intangibles £34m 2008 £36m and nonrecurring
items £93m 2008 £64m
3
 see note 13
16013pheonixindd   14 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
15
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
nonrecurring items
including further impairment losses in respect of freehold 
properties held for resale £93m 2008 £64m of nonrecurring 
items were incurred during the year of which £57m relate to 
expenses arising from the integration of acquired businesses in 
total the group has incurred £112m of integration costs since 
the acquisition of icm on 29 may 2007 whilst the physical 
integration plan was completed during the autumn of 2008 
additional costs were incurred in the second half of the year to 
ensure appropriate customer service levels were maintained 
during the immediate postintegration period and to ensure 
that divisional management structures remain fully aligned to 
business needs
in response to the economic downturn in the uk the group has 
undertaken a restructuring of some of its activities together 
with a programme of headcount reduction the total cost 
associated with these actions was £14m
nonrecurring costs also include losses arising on the disposal of 
two noncore trading companies as detailed further below 
which in total amounted to £08m and a further £14m of 
impairment losses in respect of freehold properties held for
resale at 31 march 2009 of the total nonrecurring costs £58m 
of cash expenditure was incurred during the year
the group currently does not anticipate any further non
recurring costs arising in the next ﬁ nancial year
a full analysis of the nonrecurring items is set out in note 7
taxation
the taxation charge was £46m 2008 £48m the effective tax 
rate was 295 down from 306 in the prior year as 
anticipated due to a change in the uk corporation tax rate from 
30 to 28 as of 1 april 2008 a full analysis of the tax charge 
for the year is set out in note 12
16013pheonixindd   15 26062009   1039 annual report and accounts phoenix it group plc 
16
16013 240609 proof 6
financial review
continued
disposals
on 10 april 2008 the group disposed of 100 of the ordinary 
share capital of icm business solutions limited to r atherton 
and a wilkinson £05m of gross assets were disposed of and the 
transaction resulted in a loss on disposal of £04m in addition 
100 of the ordinary share capital of the group’s french 
business phoenix holding sa and its wholly owned subsidiary 
phoenix it services sa was sold on 28 november 2008 to
p sansade £18m of gross assets were disposed of and the 
transaction resulted in a loss on disposal of £04m the 
combined loss on disposal of £08m has been shown as a 
nonrecurring cost details of which are set out in note 7 
divesting of these businesses has improved the risk proﬁ le of
the group and improved our core business focus in the uk
cash flow
the group has continued to be highly cash generative 
yearend net debt including ﬁnance leases of £160m
2008 £130m decreased to £884m 2008 £1029m cash ﬂ ow
from operations was £458m 2008 £453m and the group 
remains conﬁ dent that it will continue to be a proﬁtable cash
generator and will continue to reduce net debt tight controls 
are exercised over the group’s working capital and conversion 
of proﬁ t to cash cash generated by operations before £58m of
cash cost incurred in the year in respect of nonrecurring items 
was £516m
4
 2008 £496m representing 1447 of proﬁ t from
operations before nonrecurring items and amortisation of 
intangible assets 2008 1501
capital expenditure
capital expenditure during the year totalled £155m
2008 £214m which included further investment in hosting 
centres and the completion of the ﬁ tout of the farnborough
business continuity and hosting facility capital investments are 
subject to stringent levels of authorisation and clearly deﬁ ned
authority levels are in place throughout the group whilst the 
nature of business continuity and the group’s hosting activities 
are signiﬁ cantly more capital intensive than the other areas of
activity additional capital expenditure is only incurred with 
clear visibility of the demand for the services that the group can 
then provide following the signiﬁ cant capital investment of the
last two years the group is well invested we will continue to 
invest in new facilities particularly in hosting and business 
continuity where there is salesled demand and where 
appropriate proﬁ t margins can be achieved the level of
planned capital expenditure will further reduce in the new 
ﬁnancial year
borrowing facilities and liquidity
the group has longterm bank borrowing facilities comprising a 
£990m syndicated credit facility provided by a group of core 
relationship banks in the form of a term loan £690m and a 
revolving credit facility £300m in addition the group has 
access to overdraft facilities of £100m giving total facilities of 
£1090m at 31 march 2009 the term loan amortises over the 
next four ﬁ nancial years through to expiry on 27 may 2012 as
follows £130m on 30 september 2009 £160m on 30 september 
2010 £160m on 30 september 2011 and with the balance of 
£24m being repayable on 27 may 2012 the revolving credit 
facility is available to the group until 27 may 2012
as at 31 march 2009 the group had total bank borrowings 
excluding ﬁ nance leases of £724m consisting of the term loan
of £683m net of unamortised loan issue costs £100m drawn 
down on the revolving credit facility and £59m of cash and 
cash equivalents this gave £366m of headroom against the 
group’s banking facilities of £109m this headroom together 
with the proven cash generating capability of the group gives 
assurance that the operating cash requirements of the group 
will continue to be met for the foreseeable future
the group’s borrowings are subject to usual general and 
ﬁnancial covenants and potential events of default set by the
lenders covenant compliance is measured semiannually using 
ﬁnancial results prepared under international financial
reporting standards issued andor adopted by the 
international accounting standards board during the
12 month period to 31 march 2009 there were no breaches of 
covenants and the group comfortably achieved compliance 
with each ﬁ nancial covenant
4
 cash generated by operations of £458m 2008 £453m plus
nonrecurring cash ﬂ ows of £58m 2008 £43m
16013pheonixindd   16 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
17
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
treasury
the group operates within policies and guidelines approved by 
the board using conventional ﬁ nancial instruments and
speciﬁ ed derivatives
it is the board’s preference to manage market risks without the 
use of derivatives but they are used where necessary and 
appropriate to reduce the levels of volatility to both income and 
equity the use of derivatives is strictly controlled and they are 
not permitted to be used for speculative or trading purposes
the group’s main treasury risks relate to the availability of 
funds to meet its future requirements the group’s policy with 
respect to facilities is to ensure that these are sufﬁ cient to cover
the expected needs of the group having reﬂ ected the inherent
uncertainty of projections and forecasts whist the group 
maintains uncommitted facilities to maintain shortterm 
ﬂexibility its principal debt funding comprises committed bank
facilities which are detailed above
going concern
from november 2008 the financial reporting council in the light
of the current economic conditions has required all of the
disclosures regarding going concern and liquidity risk in
companies’ annual reports and accounts to be brought together
into a single section or to be crossreferenced by way of a note
the group’s business activities together with the factors likely 
to affect its future development performance and position are 
set out in the chief executive’s review the ﬁ nancial position
of the group its cash ﬂ ows liquidity position and borrowing
facilities are described above in addition notes 18 and 19 to
the ﬁ nancial statements include the group’s objectives
policies and processes for managing its capital its ﬁ nancial
risk management objectives details of its ﬁ nancial
instruments and hedging activities and its exposure to credit 
and liquidity risk
the directors are currently of the opinion that the group’s 
forecast and projections taking account of reasonably possible 
changes in trading performance show that the group should 
be able to operate within its current borrowing facilities and 
comply with its banking covenants a breach of one or more of 
the covenants could result in the group’s debt becoming 
immediately repayable should a covenant breach become 
likely there are several mitigating actions that the group could 
take including deferral of capital expenditure seeking cost 
reductions and entering into negotiations with debt providers 
which could result in higher ﬁ nancing costs the group has not
been required to seek any commitment from its banks to waive 
or amend any existing covenants and is not aware of any 
reason why its banking group would refuse to support such a 
request subject to acceptable terms were one to be made
the group is subject to a number of risks and uncertainties 
which arise as a result of the current economic environment in 
determining that the group is a going concern these risks the 
most signiﬁ cant of which are listed below have been
considered by the directors who have determined that 
currently they do not represent a signiﬁ cant threat to the
group the most signiﬁ cant are
l whilst the directors have considered reasonable changes in 
market conditions and competitive pressures in the current 
environment a further signiﬁ cant downturn could impact
group revenues and margins to a greater extent than they 
have currently envisaged
l liquidity risks are greater because of the difﬁ culties within
the banking sector however the group currently has 
£109m of facilities subject to periodic amortisation until 
2012 that provide it with sufﬁ cient headroom for the
foreseeable future
l interest rate movements present a risk to the group 
although they are signiﬁ cantly reduced through the use of
an interest rate swap
l credit risk is heightened as a result of difﬁ culties that might
be faced by some of the group’s customers in the current 
climate and also because of credit risks associated with 
other counterparties such as banks with which the group 
has dealings
l following the acquisition of icm the group has a deﬁned
beneﬁt pension scheme for certain former icm employees
which is now closed to new members the scheme has an
accounting deﬁcit at 31 march 2009 of £11m 2008 £11m
deterioration in the scheme’s funding position together with
a requirement to make good a material deﬁcit in a short
timescale could adversely impact the group’s liquidity
16013pheonixindd   17 26062009   1039 annual report and accounts phoenix it group plc 
18
16013 240609 proof 6
financial review
continued
competition from low cost outsourcing centres including 
offshore centres and new or existing niche market participants 
whose costs may be lower increased competition could lead to 
the loss of market share loss of material contracts 
renegotiation of price levels or a general reduction in revenues 
of the group
key performance indicators “kpis”
proﬁ tability
the group’s principal proﬁ tability kpis are proﬁt from
operations before nonrecurring items and amortisation of 
acquired intangibles
1
and adjusted diluted earnings per share
3

these measures increased in the year by 80 and 91 
respectively to £357m and 263p 2008 £330m and 241p
operating margin
this represents the group’s proﬁ t from operations before
nonrecurring items and amortisation of acquired intangibles 
divided by group revenues for the year ended 31 march 2009 
group operating proﬁ t margin was 141 2008 143
cash generated from operations
strong control is exercised over the group’s working capital 
and conversion of proﬁ t into cash for the year ended
31 march 2009 cash generated from operations was £458m 
2008 £453m cash generated by operations before
nonrecurring cash ﬂ ows were £516m
4
 2008 £496m 
representing 1447 of proﬁ t from operations before
nonrecurring items and amortisation of intangible assets
2008 1501
order book
the order book reduced in the year by 79 to £2869m
2008 £3115m volatility in the order book is to be expected 
due to the timing of large contract wins and contract renewals 
however there has been a relative scarcity over the year of 
multimillion pound multiyear opportunities particularly in the 
partner services market and in response to the increased 
economic uncertainty some partners have responded by 
committing to minimum contracted forward orders for shorter 
periods the economic uncertainty and downturn has also led 
to a general increase in the decision making timescale for new 
customers and a decrease in the contract renewal rate by value 
in each division both of which have contributed to the decrease 
in the order book assuming that the french business had been 
disposed of at the start of the comparative period the pro 
forma order book decreased to £2869m 2008 £3099m a 
decrease of 74 of the total order book at 31 march 2009 
£1403m 489 is expected to be recognised in revenues in
the new ﬁ nancial year
the directors have reviewed the group’s future cash forecasts 
and revenue projections which they believe are based on 
prudent market data and past experience and have formed a 
judgement that at the time of approving these ﬁ nancial
statements based on those forecasts and projections there is a 
reasonable expectation that the group has adequate resources 
to continue in operational existence for the foreseeable future 
for this reason the directors continue to adopt the going 
concern basis in preparing the ﬁ nancial statements
principal risks and uncertainties
as a result of the contracted revenues in the order book the 
group has a high degree of forward visibility of its revenues 
over the next twelve months nonetheless there are a number 
of potential risks and uncertainties in addition to those noted 
above which could have a material impact on the group’s 
performance over the next ﬁ nancial year and which could
cause the group’s actual results to materially deviate from 
historical and expected results
macroeconomic risk
whilst the group has not seen a downturn in activity a 
prolonged period of recession for the uk economy increases 
the risk of this occurring this risk has increased signiﬁ cantly
during 2008 and early 2009 and is likely to cause an increasing 
number of business failures in the uk and a lengthening of the 
decisionmaking cycle between prospect and contract for 
phoenix this risk is mitigated by the high proportion of 
longterm contracted annuity business and stringent 
management of working capital and cash
competitor risk
the it services industry is highly competitive several 
competitors including in some cases phoenix’s partners have 
longer operating histories higher brand recognition and 
greater ﬁ nancial technical marketing personnel and other
resources than the group the group’s competitors have and 
other potential competitors may have wellestablished 
relationships with current and potential customers of the 
group as a result these competitors may be able to respond 
more quickly to new or emerging technology and changes in 
customer requirements or to devote greater resources to the 
development promotion and sale of their services than the 
group in addition the group may experience increased 
1
 before nonrecurring items and amortisation of acquired
intangibles
3
 see note 13
4
 cash generated by operations of £458m 2008 £453m plus
nonrecurring cash ﬂ ows of £58m 2008 £43m
16013pheonixindd   18 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
19
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
annual contract value
primarily due to the effect of the disposal of the french business 
the group’s annualised contract value acv which is a key 
measure of the proportion of high quality recurring revenue 
annuity based contracts declined by £21m to £1799m
2008 £1820m on a pro forma basis excluding the effect of 
disposals during the year group acv was stable year on year at 
£1799m 2008 £1802m with the phoenix it services division’s 
acv increasing to £854m 2008 £848m icm continuous 
business’s acv increasing to £515m 2008 £503m and 
servo’s acv reducing to £430m 2008 £451m reﬂ ecting an
increase in the contract attrition rate in this division 
david simpson
chief financial ofﬁ cer
29 may 2009
16013pheonixindd   19 26062009   1039 annual report and accounts phoenix it group plc 
20
16013 240609 proof 6
peter bertram age 55
executive chairman
 
peter became executive chairman on
22 november 2007 after serving as 
nonexecutive chairman since 
21 october 2004 peter was chief 
executive of azlan group plc from 
1998 until its takeover in 2003 and was 
previously the nonexecutive chairman 
of attentiv systems group plc he is the 
nonexecutive chairman of alphameric 
plc and a nonexecutive director of anite 
plc and microgen plc he is a fellow of 
the institute of chartered accountants in 
england and wales
david simpson age 48
chief financial officer
david joined phoenix in november 2001 
as group financial controller and has 
held his current position since april 
2006 prior to joining phoenix he was a 
divisional finance director for qinetiq 
plc between 1990 and 2000 he held a 
number of senior ﬁ nancial positions at
misys plc he is a member of the institute 
of chartered accountants in england and 
wales
nick robinson age 49
deputy chairman and
chief executive
nick became chief executive on 
21 november 2008 having been non
executive deputy chairman since 
1 january 2008 after serving as chief 
executive ofﬁ cer of phoenix since
december 1997 nick was previously 
sales director of phoenix then phoenix 
computers limited when he bought 
into the business in 1993 before joining 
phoenix nick spent 6 years at digital 
computer services limited as sales 
director
board of directors
16013pheonixindd   20 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
21
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
david garman age 57
nonexecutive director
david joined phoenix as a nonexecutive 
director on 1 december 2008 david is 
the senior nonexecutive director of 
carillion plc and a director of oakwood 
partnership limited david was until 
october 2008 group chief executive of 
tdg plc which he joined in 1999 from 
associated british foods plc where 
he was an executive director having 
previously held senior positions in a 
number of leading uk food companies 
david is chairman of the remuneration 
committee and a member of the audit 
and nomination committees 
brian sellwood age 61
nonexecutive director
brian joined phoenix as a nonexecutive 
director on 1 april 2006 after a career 
of over 30 years with ibm where he held 
a variety of senior positions and was 
instrumental in establishing ibm’s global 
services business in europe brian is 
chairman of the audit committee and 
is a member of the remuneration and 
nomination committees 
david warnock age 51
nonexecutive director
david joined phoenix as a nonexecutive 
director on 23 january 2009  david co
founded aberforth partners llp and was 
a partner for 19 years until 2008 prior to 
which he was with ivory  sime plc for 4 
years and before that with 3i plc for 
7 years  he is a nonexecutive director 
of standard life european private equity 
trust plc and city health clinic group
ltd  david is chairman of the nomination 
committee and a member of the audit 
and remuneration committees
 
16013pheonixindd   21 26062009   1039 annual report and accounts phoenix it group plc 
22
16013 240609 proof 6
directors’ report
the directors present their report together with the audited 
ﬁnancial statements for the group and the company for the
year ended 31 march 2009
principal activity and review of the business
the group’s principal activity is the provision of information 
technology and business continuity services a review of the 
group’s performance and future prospects is provided in the 
chief executive’s review and the financial review
principal risks and uncertainties
the group’s operations expose it to a variety of ﬁ nancial and
other risks a review of which is provided in the financial review 
and note 19 to the consolidated ﬁ nancial statements
dividends
the directors propose a ﬁ nal dividend of 42p per ordinary
share which subject to approval at the annual general meeting 
will be paid on 9 october 2009 to shareholders on the register 
at 18 september 2009 the shares will go ex dividend on 
16 september 2009 the ﬁ nal dividend together with the interim
dividend of 21p per ordinary share paid in april 2009 makes 
a total dividend per ordinary share of 63p 2008 548p an 
increase of 15
capital structure
details of the authorised and issued share capital together with 
details of the movements in the company’s issued share capital 
during the year are shown in note 30 the company has one 
class of ordinary shares which carry no right to ﬁ xed income
each share carries the right to one vote at the general meetings 
of the company
there are no speciﬁ c restrictions on the size of a holding nor
on the transfer of shares which are both governed by the 
company’s articles of association and prevailing legislation
the directors are not aware of any agreements between 
holders of the company’s shares that may result in restrictions 
on the transfer of securities or on voting rights
details of employees share schemes are set out in note 39
shares held by the employee beneﬁ t trust do not attract any
payment of dividends nor do they have any voting rights 
attached to them
no person has any special rights of control over the company’s 
share capital and all issued shares are fully paid
the directors have authority to allot the company’s unissued 
ordinary shares within the meaning of section 80 companies 
act 1985 up to an aggregate nominal amount of £249965 
being approximately onethird of the company’s issued share 
capital at 14 may 2008 and the power to disapply preemption 
rights in respect of the allotment of shares under section 
95 companies act 1985 up to an aggregate nominal value 
of £37495 representing 5 of the company’s issued share 
capital at 14 may 2008 in addition the directors have authority 
on behalf of the company to make market purchases of up to 
3749478 ordinary shares of the company representing
5 of the company’s issued share capital at 14 may 2008 
these authorities were conferred by approval of separate 
resolutions at the company’s last annual general meeting
and are due to expire at the end of the forthcoming annual 
general meeting separate resolutions to renew these 
authorities will be proposed at the annual general meeting on 
31 july 2009 details of these resolutions are set out in the notice 
of annual general meeting which is shown on pages 84 to 87 
resolutions 10 11 and 12 
directors
the following directors served during the year and up to the 
date of this report unless otherwise stated
peter bertram
executive chairman
jeremy stafford
chief executive until 21 november 2008
david simpson
chief financial ofﬁ cer
nick robinson
deputy chairman and chief executive
ceo since 21 november 2008 having previously been a non
executive director
john sussens
nonexecutive director until 14 august 2008
brian sellwood
nonexecutive director
david garman
nonexecutive director since 1 december 2008
david warnock
nonexecutive director since 23 january 2009
biographies of the directors are set out on pages 20 to 21 
details of the directors’ remuneration interests in the shares of 
the company and their share options are given in the directors’ 
remuneration report on pages 31 to 35 brian sellwood david 
garman and david warnock have letters of appointment for 
an initial term of 3 years unless terminated by either party on 
3 months’ notice copies of their letters of appointment are 
available on request
brian sellwood david simpson david garman and david 
warnock offer themselves for reappointment to the board at
the forthcoming annual general meeting and the directors 
recommend their reappointment on the grounds of the 
considerable experience and knowledge that each brings 
to the company
16013pheonixindd   22 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
23
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
directors’ indemnities
the company has made qualifying third party indemnity 
provisions for the beneﬁ t of its directors which remain in force
at the date of this report
substantial shareholders
as at 29 may 2009 the company had been notiﬁ ed that the
following shareholders had an interest of 3 or more in the 
issued ordinary share capital of the company
 ordinary shares  of issued
of 1p each share capital
aberforth partners llp 9419380 1270
axa investment management  8607870 1145
nrobinson 4714702 627
artemis investment management  4686127 624
f  c asset management  4600107 612
legal  general group plc  4525569 602
montanaro group  2481602 330
employment policy
as a progressive service organisation employees at every 
level are critical to the group and its future management and 
professional and technical expertise are the group’s major 
assets investment in developing and retaining such skills is 
ongoing and well established and is supported by use of in
house and external training programmes
the board recognises the value of effective communication
and consultation with all employees and informing them of
the progress and policies of the group this is achieved
through formal and informal meetings brieﬁ ng groups and
internal newsletters
it is the group’s policy to encourage the recruitment training 
and development of disabled persons on the basis of their 
aptitude and ability and the retention and retraining of 
employees who become disabled
consistent with the group’s human resources policies the 
board encourages staff to identify with the ﬁ nancial success
of the business through the opportunity to acquire ordinary 
shares in the capital of the company staff can participate in 
the ﬁ nancial prosperity of the group through share ownership
employee incentive arrangements include a performance share 
plan and share incentive plan
payments to suppliers
the group’s operating companies determine terms and 
conditions of payment for the supply of capital and revenue 
items by agreement with suppliers payment is then made on 
these terms subject to the terms and conditions being met by 
the suppliers as at 31 march 2009 trade creditors of the group 
were equivalent to 38 days 2008 48 days restated and in the 
company 41 days 2008 18 restated
charitable donations
the total amount of charitable donations made during the year 
was £12318 2008 £31994 the group has a policy that it does 
not make political donations to or incur political expenditure 
on behalf of political parties or political organisations
going concern
the directors have considered detailed proﬁ t and cash ﬂow
forecasts and have a reasonable expectation that the group has 
adequate resources to continue as an operational business for 
the foreseeable future the ﬁ nancial statements have therefore
been prepared on a going concern basis
auditors
an ordinary resolution to reappoint deloitte llp as auditors 
of the company is to be submitted to the forthcoming annual 
general meeting
annual general meeting
the notice of the annual general meeting to be held on 31 july 
2009 together with explanatory notes is sent to shareholders 
with this annual report the special business of the meeting 
includes the following resolutions
authority to allot shares resolution 10
the directors are seeking authority under section 80 of 
the companies act 1985 ‘the act’ to allot shares up to an 
aggregate nominal value of £250490 this amount represents 
approximately onethird of the total ordinary share capital 
as at 29 may 2009 the authority will be in substitution for the 
previous authority taken at last year’s annual general meeting 
and will expire on the earlier of the conclusion of the next 
annual general meeting or 31 october 2010
the directors have no present intention to make any such issue 
of shares other than in respect of shares that may be issued 
pursuant to the company’s share option schemes but 
consider it is desirable for them to be given this opportunity 
by shareholders
as at 29 may 2009 the company held no treasury shares
disapplication of preemptive rights resolution 11
the directors are seeking authority from shareholders to allot 
ordinary shares for cash other than on a preemptive basis
as required by section 89 of the act in limited circumstances 
the directors recommend that section 89 of the act should 
not apply to any allotment of shares in connection with a 
rights issue open offer or other preemptive offer in favour of 
shareholders in accordance with normal practice in the uk nor 
to an issue for cash of shares up to an aggregate nominal value 
of £37573 which is equivalent to 5 of the company’s issued 
share capital as at 29 may 2009 the authority sought will expire 
on the earlier of the conclusion of the next annual general 
meeting or 31 october 2010
16013pheonixindd   23 26062009   1039 annual report and accounts phoenix it group plc 
24
16013 240609 proof 6
directors’ report
continued
authority to make market purchases of shares resolution 12
the directors are seeking authority to make market purchases 
pursuant to section 166 of the act of shares up to 3757356 
ordinary shares which is equivalent to 5 of the company’s 
issued share capital as at 29 may 2009 on such terms and in 
such manner as the directors may determine provided that 
the amount paid for each share exclusive of expenses will not 
be more than 5 above the average middle market quotation 
for ordinary shares as derived from the daily ofﬁ cial list of the
london stock exchange plc for the ﬁ ve business days before the
date on which the contract for the purchase is made and in any 
event not less than 1p per ordinary share the authority sought 
will expire on the earlier of the conclusion of the next annual 
general meeting or 31 october 2010
the directors have no present intention to make any such 
market purchases but consider it is desirable for them to be 
given this opportunity by shareholders the authority will only 
be exercised if to do so would result in an increase in earnings 
per share and is in the best interests of shareholders generally
as at 1 june 2009 there were a total of 2562901 options to 
subscribe for equity shares in the company outstanding 
representing 34 of the company’s issued share capital if the 
full authority sought by this resolution is used this number of 
outstanding options would represent 32 of the company’s 
issued share capital
authority to adopt new articles of association resolution 13
the directors are seeking authority to adopt new articles of 
association which will update the company’s existing articles 
of association primarily to take account of changes in company 
law brought about by the companies act 2006 the “2006 
act” the proposed new articles of association incorporate 
amendments to reﬂ ect the changes brought about by the
2006 act which are either already in force or which are to come 
into effect on or before 1 october 2008 as the 2006 act will 
not be fully in force until october 2009 it is not yet possible to 
fully reﬂ ect the 2006 act changes as such it is anticipated that
shareholders will be asked to approve further changes to the 
articles of association at the annual general meeting of the 
company in 2009
an explanation of the effect of the proposed amendments is 
set out in note 14 to the enclosed notice of annual general 
meeting the proposed new articles of association marked 
to show the changes to the existing articles of association 
proposed by resolution 13 are available for inspection as set out 
in note 13 to the enclosed notice of annual general meeting
notice of general meetings resolution 14
it is proposed that the shareholders should approve the 
continued ability of the company to hold general meetings 
other than the annual general meeting on 14 clear days’ 
notice this resolution is required to reﬂ ect the proposed
implementation in august 2009 of the eu shareholder rights 
directive 200736ec the regulation implementing this 
directive will increase the notice period for general meetings of 
a company to 21 days unless the company has approval from 
its shareholders by resolution in general meeting to call such 
meetings on 14 days’ notice
the resolution is valid up to the next annual general meeting of 
the company and so will need to be renewed annually
the board of the company recommends that shareholders 
vote in favour of the resolutions to be proposed at the annual 
general meeting and is of the opinion that they are in the best 
interests of security holders as a whole
by order of the board
w t martin
company secretary
29 may 2009
16013pheonixindd   24 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
25
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
the board is committed to high standards of corporate 
governance and has sought to comply with the main and 
supporting principles of the combined code on corporate 
governance the “combined code” with due regard to the size 
and needs of the company and with reference to best practice 
the application of the principles of the combined code in the 
composition and operation of the board the remuneration of 
the directors relations with shareholders and procedures for 
ﬁnancial reporting and internal control are described below
statement of compliance
the directors consider that throughout the year ended
31 march 2009 the company has complied with the principles 
set out in section 1 of the combined code with the exception 
that for a period of time the three board committees were
not quorate 
the board of directors
the group is controlled by a board of directors which meets 
regularly and currently comprises 3 executive directors 
including the executive chairman and 3 nonexecutive 
directors the nonexecutive directors are brian sellwood who 
is the senior independent director david garman and david 
warnock all the nonexecutive directors are considered by
the board to be independent of management and free from 
any business or other relationship which could materially 
interfere with the exercise of their independent judgement
the nonexecutive directors regularly meet independently
of management
the chairman’s other main commitments are disclosed on 
page 20 the chairman is responsible for leadership of the 
board ensuring its effectiveness and setting its agenda
in advance of each meeting the directors are provided with 
or have full and timely access to information in relation to the 
matters to be discussed
at board meetings the directors receive presentations from 
the senior executives on the implementation of the company’s 
strategies and the board receives regular updates on changes 
to the business and legislative and regulatory environments
the board is responsible to the shareholders for the proper 
management of the group and for its system of corporate 
governance it receives information on a monthly basis to 
enable it to review trading performance forecasts and strategy 
and it has a schedule of matters speciﬁ cally reserved for its
decision the most signiﬁ cant of these are
l changes to the structure size and composition of the board
l consideration of the independence of nonexecutive 
directors
l review of management structure and senior management 
responsibilities
l with the assistance of the remuneration committee 
approval of remuneration policies across the group
l approval of strategic plans proﬁ t plans and budgets and
any material changes to them
l oversight of the group’s operations ensuring competent 
and prudent management sound planning an adequate 
system of internal control and adequate accounting and 
other records
l final approval of annual accounts and accounting policies 
l approval of the dividend policy
l approval of the acquisition or disposal of subsidiaries and 
major investments and capital projects
l delegation of the board’s powers and authorities including 
the division of responsibilities between the chairman and 
the chief executive and other executive directors and
l receiving reports on the views of the company’s 
shareholders
operational management of the group is delegated to the 
executive chairman the chief executive and the chief
financial ofﬁ cer
the board receives a regular ﬂ ow of information to enable it
to discharge its duties including a monthly report detailing 
current and forecasted trading results and treasury positions 
it also receives regular updates on shareholders’ views as 
part of the monthly report and more formal brieﬁ ngs on
shareholders’ views are given to the board following the 
presentation of the company’s interim and annual results 
board papers are generally distributed not less than 5 days in 
advance of the relevant meeting to allow the directors fully to 
prepare for meetings and minutes of committee meetings are 
circulated the board is kept fully informed of developments 
within the company’s businesses through regular presentations 
by divisional management induction programmes for newly 
appointed directors are devised to ensure that directors spend 
time with divisional management and can visit operational sites 
procedures exist to allow the directors to seek independent 
legal advice in respect of their duties at the company’s expense 
where the circumstances are appropriate all directors have 
access to the company secretary who is a qualiﬁ ed solicitor
all directors are required to submit themselves for reelection at 
regular intervals and at least every three years
during the year the board undertook an evaluation of its 
performance and that of its committees detailed 
questionnaires were used for the performance evaluation 
process the board concluded that overall the board and its 
committees operated effectively the performance of each of 
the directors was evaluated while the senior independent 
director evaluated the performance of the chairman the board 
considered that the evaluation process was satisfactory and that 
the use of an external third party to assist in such evaluation was 
not necessary
corporate governance
16013pheonixindd   25 26062009   1039 annual report and accounts phoenix it group plc 
26
16013 240609 proof 6
committees of the board
the following formally constituted committees deal with 
speciﬁ c aspects of the group’s affairs in accordance with their
written terms of reference which have been reviewed in the 
light of the combined code and are available on request and 
on the group’s website the company secretary also acts as 
secretary to each committee
the audit committee’s purpose is to assist the board in the 
discharge of its responsibilities for ﬁ nancial reporting and
corporate control and to provide a forum for reporting by the 
external auditors the committee chaired by brian sellwood 
who the board consider to have recent and relevant ﬁ nancial
experience comprises the independent nonexecutive directors 
and meets at least three times a year
a report on its activities is given on page 30
the remuneration committee which is chaired by david 
garman and comprises the independent nonexecutive 
directors meets at least twice a year and additionally as 
required it is responsible for reviewing remuneration 
arrangements for members of the board and all senior 
reports of the chief executive and chief financial ofﬁ cer for
providing general guidance on aspects of remuneration policy 
throughout the group and for the group’s share incentive 
plans hewitt new bridge street consultants have been 
appointed by the group to assist and advise the remuneration 
committee in the performance of its duties hewitt new bridge 
street consultants do not provide any other service to the 
group and are independent of the group’s auditors
a report on its activities is given on pages 31 to 35
the nominations committee is chaired by david warnock 
and comprises the nonexecutive directors the committee 
is responsible for effective succession planning and proposes 
candidates to the board having regard to the balance and 
structure of the board the committee determines the terms of 
reference of new appointments and uses external advisers to 
identify suitable candidates the process is for the committee 
to interview each candidate with a view to preparing a shortlist 
for the board for further interviews to take place as appropriate 
and for the chairman to consult with the chief executive 
and any external advisers before any appointment is made 
independent recruitment consultants were retained leading to 
the appointment of david garman and david warnock
attendance at meetings
the number of board meetings and committee meetings attended by each director in the year to 31 march 2009 was as follows
 board audit committee remuneration nominations
committee committee
held attended held attended held attended held attended
chairman
p bertram  11 11
executive directors 
j stafford  11 8
n robinson † 11 9 4 3 3 1 2 1
d simpson  11 11
nonexecutive directors 
b sellwood   11 10 4 4 3 3 2 2
j sussens ‡ 11 3 4 1 3 1 2 0
d garman § 11 3 4 1 3 1 2 1
d warnock ¶ 11 3 4 1 3 1 2 1
 jeremy stafford left the board on 21 november 2008
† nick robinson became ceo on 21 november 2008 and accordingly stepped down from the three board committees 
‡ john sussens left the board on 14 august 2008
§ david garman joined the board on 1 december 2008 and has attended all board and committee meetings since then
¶ david warnock joined the board on 23 january 2009 and has attended all board and committee meetings since then
corporate governance
continued
16013pheonixindd   26 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
27
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
internal control
the board is responsible for establishing and maintaining the 
group’s system of internal control internal control systems are 
designed to meet the particular needs of the group and the 
risks to which it is exposed by their nature however internal 
control systems are designed to manage rather than eliminate 
the risk of failure to achieve business objectives and can provide 
only reasonable and not absolute assurance against material 
misstatement or loss
key elements of the internal control system are described
below these have all been in place throughout the year and 
up to the date of this report and are considered and monitored 
regularly by the board and once during the year
l ongoing procedures to identify evaluate and manage 
signiﬁ cant risks faced by the business in accordance
with the guidance of the turnbull committee on internal 
controls and procedures to monitor the control systems in 
place to reduce these risks to an acceptable level
l clearly deﬁ ned management structure and delegation
of authority to committees of the board and the
executive directors
l clearly documented internal procedures set out in the 
group’s iso 9001 accredited quality manual
l high recruitment standards and formal career 
development and training to ensure the integrity and 
competence of staff
l regular and comprehensive information provided to 
management covering ﬁ nancial performance and key
performance indicators including nonﬁ nancial measures
l a detailed budgeting process covering budgets for the 
coming year which are approved by the board
l procedures for the approval of capital expenditure 
investments and acquisitions
l monthly monitoring and reforecasting of results 
against budget with major variances followed up and 
management action taken where appropriate
l regular internal audits of key processes and procedures 
under the group’s iso 9001 accredited quality assurance 
process and
l formal consideration of progress made against signiﬁ cant
business risks at monthly operating board meetings with 
quarterly brieﬁ ngs to the board
the board with the assistance of the audit committee is 
responsible for reviewing the effectiveness of the group’s 
systems of internal control during the year the board has 
reviewed the effectiveness of the systems of internal control 
and risk management based on a review of signiﬁ cant risks
identiﬁ ed and the results of quality and other reports from
management following the review the board concluded 
that the systems were satisfactory and in accordance with 
the turnbull guidance the board seeks to ensure that steps 
continue to be taken to try to embed internal control and 
risk management further into the operations of the group’s 
business and to deal with any areas of improvement which 
come to its attention
whistleblowing the group’s whistleblowing policy allows 
employees in conﬁ dence to raise concerns about possible
improprieties including in ﬁ nancial reporting other
operational matters or inappropriate personal behaviour in
the workplace 
the internal audit function is described in the audit
committee report
auditor independence
the company has a formal policy designed to ensure that 
the auditor’s independence is not compromised by their 
undertaking inappropriate nonaudit work all signiﬁ cant non
audit work commissioned from the external auditor requires 
the audit committee’s formal approval the external auditor 
is only selected to undertake nonaudit work where the nature 
of the advice makes it more timely and costeffective to select 
advisers who already have a good understanding of the group
the audit committee has undertaken a review of the nature 
and amount of nonaudit work undertaken by the external 
auditors to satisfy itself that there is no effect on their 
independence the split between audit and nonaudit fees is 
shown in note 8 to the consolidated ﬁ nancial statements
going concern
the directors are satisﬁ ed that the group has adequate
resources to continue in operational existence for the 
foreseeable future a period of not less than 12 months from the 
date of this report for this reason they continue to adopt the 
going concern basis in preparing the ﬁ nancial statements
16013pheonixindd   27 26062009   1039 annual report and accounts phoenix it group plc 
28
16013 240609 proof 6
corporate governance
continued
corporate social responsibility
communication with shareholders
the company values the views of its shareholders and 
recognises their interests in the group’s strategy and 
performance it holds brieﬁ ngs with institutional fund
managers analysts and other investors primarily following 
the announcement of interim and preliminary results as 
well as at other times during the year as may be appropriate 
the company’s programme of investor relations activities is 
designed to ensure that the investing community receives a 
balanced and consistent view of the group’s performance 
all shareholders are welcome to attend the annual general 
meeting at which the board of directors will be available to 
answer questions from shareholders
provision d11 of the combined code requires the senior non
executive director to meet with major shareholders during the 
year this requirement has been undertaken by the chairman 
who has met with a range of major shareholders to discuss 
governance and strategy the senior nonexecutive director 
has been available for all such meetings if requested the views 
of major shareholders are communicated to the board as a 
whole by the chairman in addition the board receives reports 
from the company’s broker twice a year that communicate 
feedback from major shareholders the board also reviews 
analyst coverage of the company every month
approved by the board and signed on its behalf
w t martin
company secretary
29 may 2009
the board of directors recognises the importance of high 
standards of corporate social responsibility considers the social 
environmental and ethical implications of the group’s activities 
and seeks continually to improve the policies and practices in 
place to meet its responsibilities in all such matters
health and safety
the group strives to provide and maintain a safe environment 
for all employees customers and visitors to its premises and to 
comply with relevant health and safety legislation in addition 
the group aims to protect the health of employees with suitable 
speciﬁ c workbased strategies seeking to minimise the risk
of injury from group activity and ensuring that systems are 
in place to address health and safety matters the group 
also encourages the involvement of employees and aims for 
continual improvement in health and safety matters through a 
formal structure with a reporting and review process
employees
the welfare and safety of employees is a key priority and 
the group actively encourages staff involvement in the 
development of the group’s business activities employees 
are treated with fairness and respect and are encouraged and 
supported in the development of their careers and the group 
continues to share its success with them
the environment
the group recognises that it is part of a wider community of 
employees shareholders customers suppliers and others 
and recognises that group companies have a responsibility to 
act in a way that respects the environment the group seeks 
to encourage staff to act in an environmentally responsible 
manner particularly in the development of recycling and 
energy conservation policies to ensure that ﬁ nite resources are
not depleted 
16013pheonixindd   28 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
29
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
directors’ responsibilities statement
the directors are responsible for preparing the annual report 
and the financial statements in accordance with applicable law 
and regulations
company law requires the directors to prepare financial 
statements for each financial year under that law the directors 
are required to prepare the group financial statements in 
accordance with international financial reporting standards 
ifrss as adopted by the european union and article 4 of 
the ias regulation and have elected to prepare the parent 
company financial statements in accordance with united 
kingdom generally accepted accounting practice united 
kingdom accounting standards and applicable law under 
company law the directors must not approve the accounts 
unless they are satisfied that they give a true and fair view of the 
state of affairs of the company and of the profit or loss of the 
company for that period 
in preparing the group financial statements international 
accounting standard 1 requires that directors
l properly select and apply accounting policies
l present information including accounting policies in a 
manner that provides relevant reliable comparable and 
understandable information 
l provide additional disclosures when compliance with the 
specific requirements in ifrss are insufficient to enable 
users to understand the impact of particular transactions 
other events and conditions on the entity’s financial 
position and financial performance and
l make an assessment of the company’s ability to continue as 
a going concern
in preparing the parent company financial statements the 
directors are required to
l select suitable accounting policies and then apply them 
consistently
l make judgements and accounting estimates that are 
reasonable and prudent
l state whether applicable uk accounting standards have 
been followed subject to any material departures disclosed 
and explained in the financial statements and
l prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the company will 
continue in business
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any 
time the financial position of the company and enable them to 
ensure that the financial statements comply with the companies 
act 1985 they are also responsible for safeguarding the assets 
of the company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and 
integrity of the corporate and financial information included 
on the company’s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions
responsibility statement 
we confirm that to the best of our knowledge
l the financial statements prepared in accordance with 
international financial reporting standards give a true and 
fair view of the assets liabilities financial position and profit 
or loss of the company and the undertakings included in 
the consolidation taken as a whole and
l the management report which is incorporated into the 
directors’ report includes a fair review of the development 
and performance of the business and the position of 
the company and the undertakings included in the 
consolidation taken as a whole together with a description 
of the principal risks and uncertainties that they face
by order of the board
nick robinson david simpson 
chief executive chief financial officer
29 may 2009
16013pheonixindd   29 26062009   1039 annual report and accounts phoenix it group plc 
30
16013 240609 proof 6
audit committee report
role of the audit committee
the audit committee is a subcommittee of the board whose 
responsibilities include
l reviewing the interim and full year ﬁ nancial statements
and results announcements of the company and any other 
formal announcement relating to the group’s ﬁ nancial
performance and recommending them to the board
for approval
l reviewing the group’s systems for internal ﬁ nancial control
and risk management
l the internal audit function
l considering the appointment of the external auditor 
overseeing the process for their selection and making 
recommendations to the board in relation to their 
appointment reappointment or removal
l monitoring and reviewing the effectiveness and 
independence of the external auditor agreeing the 
nature and scope of their audit their remuneration 
and considering their reports on the group’s ﬁ nancial
statements and systems of internal ﬁ nancial control and
risk management 
l reviewing and implementing the policy on using the 
auditor’s services for nonaudit advice and
l monitoring and reviewing the ‘whistleblowing’ policy
composition of the audit committee
the audit committee comprises the independent non
executive directors biographical details of the independent 
directors are set out on page 21 and their remuneration is 
set out on page 34 the chairman of the audit committee is 
brian sellwood the committee invites others including the 
company’s external auditor and the chief financial ofﬁ cer to
attend as appropriate at least once each year representatives 
of the company’s external auditor meet the audit committee 
without any executive directors present
main activities of the audit committee
during the year the audit committee has met 3 times 
the committee reviewed the halfyear interim results and 
presentation of results to investors and received reports from 
the external auditor on their review and subsequently met 
in february to receive a presentation by the external auditor 
setting out their audit approach and procedures including 
matters relating to scope auditor independence and audit fees
the audit committee keeps under review the relationship with 
external auditor including
l the qualiﬁ cation expertise and resources of the external
auditor the effectiveness of the audit process including the 
external auditor’s quality control procedures
l the independence and objectivity of the external auditors 
taking into account relevant uk professional and regulatory 
requirements and the relationship with the audit ﬁ rm as a
whole including the provision of nonaudit services and
l reviewing and implementing the policy on audit fees and 
fees for other nonaudit services
internal audit function
the audit committee is required to assist the board to fulﬁ l its
responsibilities relating to the adequacy of the resourcing and 
plans of the internal audit department to fulﬁ l these duties the
committee reviewed
l internal audit’s terms of reference reporting lines and 
access to the audit committee and all members of the 
board 
l internal audit’s plans and its achievement of the planned 
activity
l the results of key audits and other signiﬁ cant ﬁndings the
adequacy of management’s response and the timeliness
of resolution
l the statistics on staff numbers qualiﬁ cations and
experience and timeliness of reporting and
l the level and nature of nonaudit activity performed by 
internal audit
brian sellwood
chairman audit committee
29 may 2009
16013pheonixindd   30 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
31
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
compliance with directors’ remuneration report 
regulations
the directors remuneration report has been prepared 
by the remuneration committee and approved by the 
board it has been prepared in accordance with schedule 
7a to the companies act 1985 and also meets the relevant 
requirements of the listing rules of the financial services 
authority and describes how the board has applied the 
principals relating to directors’ remuneration in the 
combined code 
a resolution to approve the report will be proposed at 
the annual general meeting of the company at which the 
ﬁnancial statements will be approved
remuneration committee
the remuneration committee members are appointed by 
the board during the year john sussens nick robinson 
brian sellwood david garman and david warnock all 
served on the remuneration committee 
on 14 august 2008 john sussens stepped down as a 
nonexecutive director of the company and thus as 
chairman of the remuneration committee and was 
temporarily replaced as chairman by brian sellwood 
since 1 december 2008 david garman has held the role 
of remuneration committee chairman on 21 november 
2008 nick robinson resigned from the committee on his 
appointment to chief executive and on 23 january 2009 
david warnock became a member of the committee
the committee is responsible for determining the 
framework and broad policy for the remuneration of the 
executive directors including the executive chairman 
and their senior direct reports as designated and makes 
recommendations thereon to the board within agreed 
terms of reference the terms of reference of the 
remuneration committee are available on request from 
the company secretary 
the remuneration committee is able to obtain independent 
professional advice from remuneration and other consultants 
in order to carry out its duties during the year executive 
remuneration advice was received from hewitt new bridge 
street who did not provide any other services to the company 
during the course of the year 
remuneration policy
the group’s remuneration policy on executive directors’ 
remuneration is to provide appropriate incentives to encourage 
enhanced performance and to reward contributions to the 
success of the group in a fair and responsible manner
in order to achieve this remuneration packages comprise 
a ﬁxed element made up of basic salary beneﬁts in kind
and pensions and a variable “at risk” element which reﬂ ects
group performance and individual achievement made up 
of annual performance related bonus and participation in a 
performance share plan the performance related element
forms a signiﬁ cant proportion of the total executive directors’
remuneration packages
the group’s remuneration policy in relation to nonexecutive 
directors is to pay annual fees to reﬂ ect responsibilities and
duties which are determined by the executive directors of the 
board 
directors are not involved in decisions about their own 
remuneration
in determining the remuneration of executive directors 
and other senior executives the committee also takes into 
account the general level of remuneration and pay awards to 
employees of the group
directors’ contracts
it is the group’s policy that executive directors’ service contract 
notice periods should not normally exceed 12 months the 
company can pay salary contractual beneﬁ ts and bonus in lieu
of notice nonexecutive directors have 3 month notice periods
directors’ remuneration report
16013pheonixindd   31 26062009   1039 annual report and accounts phoenix it group plc 
32
16013 240609 proof 6
jeremy stafford is entitled to 12 month’s notice of termination 
of his contract of employment which will expire on 20 november
2009 during this period of notice he remains entitled to salary 
and contractual beneﬁ ts
individual components of remuneration packages are discussed 
below
basic salary 
salaries are reviewed annually with changes effected from
1 april the current base salaries of the executive directors as at 
1 april 2009 are
peter bertram £250000
nick robinson £275000
david simpson £225000
basic salaries are determined taking account of advice received 
from independent sources on the rates of salary for similar roles 
in selected groups of comparable companies and reﬂ ecting
the individual’s experience and role within the business the 
committee’s policy is to pay salaries at around the market 
median level against other comparable companies
basic salary only is pensionable
beneﬁ ts in kind
in addition to basic salary the executive directors receive 
certain beneﬁ ts such as a company car or equivalent
allowance life assurance and private medical insurance
pension arrangements
the executive directors are entitled to receive personal pension 
contributions of 20 of basic salary or salary in lieu
annual bonuses
two executive directors david simpson and jeremy stafford
participated in the group’s annual bonus scheme during the 
year to 31 march 2009 
the annual bonus performance targets are set and approved 
annually by the remuneration committee and are designed to 
be challenging and aligned to company goals and objectives 
for the year ended 31 march 2009 bonus entitlements were 
calculated by reference to stretching performance targets set in 
relation to proﬁ tability
the maximum potential bonus level for the year ended
31 march 2009 was capped at 75 of basic salary for david 
simpson and 100 for jeremy stafford no bonuses were 
achieved in the year 
for the forthcoming year there will be no changes to the policy 
or in the key performance metric used the maximum potential 
bonus level for the year ending 31 march 2010 is capped at 
75 of basic salary for david simpson peter bertram and nick 
robinson will not participate in the scheme for the year ending 
31 march 2010 
the details of the directors’ service contracts are set out below
 contract
commencement notice
date period
executive directors
peter bertram february 2008 6 months
nick robinson november 2008 12 months
david simpson a may 2006 12 months
nonexecutive directors
brian sellwood a april 2006 3 months
david garman december 2008 3 months
david warnock january 2009 3 months
former directors
jeremy stafford b april 2007 12 months
john sussens c october 2004 3 months
a david simpson and brian sellwood retire by rotation and offer themselves for reappointment to the board at the forthcoming 
annual general meeting 
b jeremy stafford ceased to be a director on 21 november 2008
c john sussens ceased to be a director on 14 august 2008 and consequently his contract was terminated
directors’ remuneration report
continued
16013pheonixindd   32 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
33
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
performance share plan
the group’s policy is to award share incentives under the 
performance share plan to executive directors and senior
management in order to align their interests with those of 
the group’s shareholders of the executive directors only 
david simpson and jeremy stafford have participated in the 
performance share plan during the ﬁnancial year
the plan rules allow for awards of up to 175 of salary 
per annum to be made and 400 of salary per annum in 
exceptional circumstances the actual granted awards for the 
year ended 31 march 2009 were over 171429 shares 150 of 
salary for jeremy stafford and 66939 shares 100 of salary 
for david simpson 
for awards made in 2008 these will vest fully if the group’s 
average annual earnings per share growth over the
3 years from grant measured by reference to eps in the year 
immediately prior to grant exceeds 20 per annum and the 
executive is still employed by the group if the average annual 
growth is 5 per annum the award will vest as to 20 of the 
maximum if average annual earnings per share grow between 
5 and 20 then the award will vest on a progressive scale 
the award will not vest at all if average earnings per share 
growth is less than 5 per annum
the committee is considering the award levels and vesting 
criteria for the 2009 awards in the context of phoenix’s 
circumstances and is in consultation with major investors in 
relation to future awards and criteria  
share incentive plan sip
the company operated a share incentive plan in the year 
under the sip employees including executive directors are 
able to buy shares by deduction of up to £1500 from their
pretax salary in each tax year or if less 10 of salary
performance graph
the graph below shows phoenix’s total shareholder return 
performance compared to the ftse small cap index of which 
phoenix is a constituent the graph covers the period from the 
date of ﬂ otation to 31 march 2009 and the values show the share
price growth plus reinvested dividends from a hypothetical 
£100 holding of ordinary shares in phoenix and in the index at 
the start of the period
the ftse small cap index has been selected as a comparator 
because the group believes it is the most meaningful market 
index of which the company is a member
total shareholder return
source datastream
phoenix
ftse small cap
31 march 06 31 march 05
this graph looks at the value by 31 march 2009 of £100 invested in phoenix it group on 16 november 2004 compared with the value 
of £100 invested in the ftse small cap index the other points plotted are the values at intervening ﬁ nancial yearends
16 nov 04 31 march 07 31 march 08 31 march 09
value £
180
160
140
120
100
80
60
40
20
0
16013pheonixindd   33 26062009   1039 annual report and accounts phoenix it group plc 
34
16013 240609 proof 6
directors’ interests
directors had the following beneﬁ cial and family interests in the issued share capital of the company as at 31 march 2009 there have
been no changes between the end of the ﬁ nancial year and the date of this report other than as indicated
2009 2008
 ordinary shares ordinary shares
 of 1p each of 1p each
peter bertram 20000 20000
nick robinson 4714702 4654174
david simpson – 19261
brian sellwood  4932 4932
david garman 10000 –
david warnock 20000 –
audited section
directors’ emoluments 
the remuneration of the directors for the year to 31 march 2009 is comprised as follows
 2009 2009 2009 2009 2009 2009 2008
 gain on
 salaryfees bonus beneﬁts options pensions total total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
executive directors 
peter bertram i 223 – 25 – 40 288 183
nick robinson 158 – 32 205 32 427 892
david simpson 218 – 28 115 46 407 488
nonexecutive directors
brian sellwood 39 – – – – 39 32
david garman 14 – – – – 14 –
david warnock 7 – – – – 7 –
former directors 
jeremy stafford ii 233 – 42 – 33 308 560
john sussens 17 – – – – 17 40
i peter bertram is the nonexecutive chairman of alphameric plc and a nonexecutive director of anite plc and microgen plc and
retains the fees paid in respect of those positions
ii jeremy stafford ceased to be a director on 21 november 2008 his salary and beneﬁ ts reﬂect the time he served as chief
executive until november 2008 
directors’ remuneration report
continued
16013pheonixindd   34 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
35
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
share awards 
the interests of the directors in awards over ordinary shares under the performance share plan were as follows there have been no 
changes between the end of the ﬁ nancial year and the date of this report
lapsed
options held granted exercised surrendered options held share price earliest 
at 31 march  during  during during at 31 march exercise at date exercise expiry
 2008 year year the year 2009 price of grant date date
 nick robinson
191606 – 60528 131078 – nil p 274p 052008 052015
184211 – – – 184211 nil p 285p 052009 052016
375817 – 60528 131078 184211 
david simpson
32847 – 10376 22471 – nil p 274p 052008 052015
61404 – – – 61404 nil p 285p 052009 052016
55351 – – – 55351 nil p 401p 082010 082017
– 66939 – – 66939 nil p 293p 062011 062018
25000 – 25000 – – 200 p i 092007 082011
174602 66939 35376 22471 183694 
jeremy stafford
 121080 – – – 121080 nil p 401p 082010 082017
– 171429 – – 171429 nil p 293p 062011 062018
121080 171429 – – 292509 
i in common with all options granted by the company prior to its ﬂotation these options had no performance conditions attached
the psp awards are subject to achieving a performance condition related to average annual growth in earnings per share over 
a threeyear period of between 5 and 20 per annum this results in an award of between 20 and 100 with performance 
between these points being on a progressive scale
during the year to 31 march 2009 the company’s share price varied between 1290p and 3465p and ended the year at 1450p
david garman
chairman remuneration committee
29 may 2009
16013pheonixindd   35 26062009   1039 annual report and accounts phoenix it group plc 
36
16013 240609 proof 6
independent auditor’s report to the members of phoenix it group plc
we have audited the group ﬁnancial statements of phoenix it
group plc for the year ended 31 march 2009 which comprise 
the consolidated statement of income the consolidated 
statement of recognised income and expense the consolidated 
balance sheet the consolidated cash ﬂ ow statement and
the related notes 1 to 40 these group ﬁ nancial statements
have been prepared under the accounting policies set out 
therein we have also audited the information in the directors’ 
remuneration report that is described as having been audited
we have reported separately on the parent company
ﬁnancial statements of phoenix it group plc for the year ended
31 march 2009
this report is made solely to the company’s members as 
a body in accordance with section 235 of the companies 
act 1985 our audit work has been undertaken so that we 
might state to the company’s members those matters we are 
required to state to them in an auditors’ report and for no 
other purpose to the fullest extent permitted by law we do 
not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit 
work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
the directors’ responsibilities for preparing the annual report
the directors’ remuneration report and the group ﬁnancial
statements in accordance with applicable law and international
financial reporting standards ifrss as adopted by the european
union are set out in the statement of directors’ responsibilities
our responsibility is to audit the group ﬁ nancial statements in
accordance with relevant legal and regulatory requirements 
and international standards on auditing uk and ireland
we report to you our opinion as to whether the group
ﬁnancial statements give a true and fair view whether the
group ﬁ nancial statements have been properly prepared
in accordance with the companies act 1985 and article 4 of 
the ias regulation and whether the part of the directors’ 
remuneration report described as having been audited has 
been properly prepared in accordance with the companies 
act 1985 we also report to you whether in our opinion the 
information given in the directors’ report is consistent with the 
group ﬁ nancial statements
in addition we report to you if in our opinion we have not 
received all the information and explanations we require 
for our audit or if information speciﬁ ed by law regarding
directors’ remuneration and other transactions is not disclosed
we review whether the corporate governance statement
reﬂ ects the company’s compliance with the nine provisions of
the 2006 combined code speciﬁ ed for our review by the listing
rules of the financial services authority and we report if it 
does not we are not required to consider whether the board’s 
statements on internal control cover all risks and controls or 
form an opinion on the effectiveness of the group’s corporate 
governance procedures or its risk and control procedures
we read the other information contained in the annual report
as described in the contents section and consider whether it 
is consistent with the audited group ﬁ nancial statements we
consider the implications for our report if we become aware of 
any apparent misstatements or material inconsistencies with 
the group ﬁ nancial statements our responsibilities do not
extend to any further information outside the annual report
basis of audit opinion
we conducted our audit in accordance with international
standards on auditing uk and ireland issued by the auditing
practices board an audit includes examination on a test basis of
evidence relevant to the amounts and disclosures in the group
ﬁnancial statements and the part of the directors’ remuneration
report to be audited it also includes an assessment of the
signiﬁcant estimates and judgements made by the directors
in the preparation of the group ﬁnancial statements and of
whether the accounting policies are appropriate to the group’s
circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in 
order to provide us with sufﬁ cient evidence to give reasonable
assurance that the group ﬁ nancial statements and the part
of the directors’ remuneration report to be audited are free 
from material misstatement whether caused by fraud or other 
irregularity or error in forming our opinion we also evaluated 
the overall adequacy of the presentation of information in 
the group ﬁ nancial statements and the part of the directors’
remuneration report to be audited
opinion
in our opinion
l the group ﬁ nancial statements give a true and fair view in
accordance with ifrss as adopted by the european union 
of the state of the group’s affairs as at 31 march 2009 and of 
its proﬁ t for the year then ended
l the group ﬁ nancial statements have been properly
prepared in accordance with the companies act 1985 and 
article 4 of the ias regulation 
l the part of the directors’ remuneration report described 
as having been audited has been properly prepared in 
accordance with the companies act 1985 and
l the information given in the directors’ report is consistent 
with the group ﬁ nancial statements
separate opinion in relation to ifrss
as explained in note 3 to the group ﬁ nancial statements the
group in addition to complying with its legal obligation to 
comply with ifrss as adopted by the european union has 
also complied with the ifrss as issued by the international 
accounting standards board
in our opinion the group ﬁnancial statements give a true and fair
view in accordance with ifrss of the state of the group’s affairs
as at 31 march 2009 and of its proﬁt for the year then ended
deloitte llp
chartered accountants and registered auditors 
london
united kingdom
29 may 2009
16013pheonixindd   36 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
37
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
consolidated statement of income
for the year ended 31 march 2009
2009 2008 restated note 2
 non non
before recurring before non recurring
 nonrecurring items recurring items
 items note 7 total items note 7 total
note £m £m £m £m £m £m
continuing operations
revenue 5 2532 — 2532 2308 — 2308
proﬁ t from operations before
amortisation of acquired intangibles 357 93 264 330 60 270
amortisation of acquired intangibles 16 34 — 34 36 — 36
proﬁ t from operations 8 323 93 230 294 60 234
investment income 511 09 — 09 09 — 09
finance costs 11 83 — 83 84 04 88
proﬁ t before tax 249 93 156 219 64 155
tax 12 70 24 46 67 19 48
proﬁ t for the period 34 179 69 110 152 45 107
earnings per share
basic 13 239p  147p 213p 150p
diluted 13 231p  142p 206p 146p
16013pheonixindd   37 26062009   1039 annual report and accounts phoenix it group plc 
38
16013 240609 proof 6
consolidated statement of recognised income and expense
for the year ended 31 march 2009
2009 2008
 note £m £m
exchange differences on translation of foreign operations  01 01
losses taken to equity in respect of cash ﬂ ow hedges 18 18 10
actuarial lossesgains on deﬁ ned beneﬁt pension schemes 10 08 06
tax on items taken directly to equity 12 07 01
net expense recognised directly in equity 20 02
proﬁ t for the period 34 110 107
total recognised income and expense for the period 90 105
16013pheonixindd   38 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
39
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
consolidated balance sheet 
as at 31 march 2009
2009 2008
 restated note 2
note £m £m
noncurrent assets
goodwill 15 1788 1746
intangible assets 16 188 222
property plant and equipment 17 682 715
other receivables 23 10 51
2668 2734
current assets
inventories 22 111 111
trade and other receivables 23 547 578
cash and cash equivalents 24 59 123
717 812
noncurrent assets held for sale 20 34 45
751 857
total assets 3419 3591
current liabilities
trade and other payables 26 408 433
current tax liabilities  36 25
obligations under ﬁ nance leases and hire purchase contracts 27 49 42
bank loans 25 127 140
provisions 28 05 02
deferred revenue  529 515
1154 1157
net current liabilities 403 300
noncurrent liabilities
obligations under ﬁ nance leases and hire purchase contracts 27 111 88
bank loans 25 656 882
provisions 28 41 44
deferred tax liabilities 29 70 108
derivative ﬁ nancial instruments 18 28 10
deferred revenue  08 09
other noncurrent liabilities 26 76 79
retirement beneﬁ t obligations 10 11 11
1001 1231
total liabilities 2155 2388
net assets 1264 1203
equity
share capital 30 08 07
share premium account 31 374 374
merger reserve 32 575 575
other reserves 33 13 10
retained earnings 34 320 237
total equity 1264 1203
the ﬁ nancial statements were approved by the board of directors and authorised for issue on 29 may 2009 they were signed on its
behalf by
david simpson
chief financial ofﬁ cer
16013pheonixindd   39 26062009   1039 annual report and accounts phoenix it group plc 
40
16013 240609 proof 6
consolidated cash flow statement
for the year ended 31 march 2009
2009 2008
 note £m £m
net cash from operating activities 36 339 299
investing activities
purchases of property plant and equipment  155 214
proceeds on disposal of property plant and equipment  01 01
acquisition of subsidiary undertaking
— cash consideration  – 618
— costs of acquisition  – 36
— cash and cash equivalents acquired  – 08
disposal of subsidiary undertaking  09 –
net cash used in investing activities 163 859
financing activities
dividends paid  27 33
repayments of borrowings  243 532
increase in net obligations under ﬁ nance leases and hire purchase contracts 30 58
new bank loans raised  – 1138
issue of share capital  – 02
net cash used infrom ﬁ nancing activities 240 633
net decreaseincrease in cash and cash equivalents 64 73
cash and cash equivalents at beginning of period 123 50
cash and cash equivalents at end of period 59 123
16013pheonixindd   40 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
41
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
notes to the consolidated financial statements
for the year ended 31 march 2009
1 general information
phoenix it group plc is a company incorporated in the united kingdom under the companies act 1985 the address of the 
registered ofﬁ ce is given on the inside back cover the nature of the group’s operations and its principal activities are set out in
note 6 and in the chief executive’s review and ﬁ nancial review on pages 9 to 19
these ﬁ nancial statements are presented in pounds sterling because that is the currency of the primary economic environment in
which the group operates foreign operations are included in accordance with the policies set out in note 3
2 adoption of new and revised standards and restatements
the accounting policies adopted are consistent with those of the annual ﬁ nancial statements for the year ended 31 march 2008
except for the presentation of the income statement which has been changed to show operating expenses by nature in a note to 
the ﬁ nancial statements rather than by function as the directors believe this presentation more appropriately reﬂects the costs of
the business the effect of this restatement is presentational and does not impact revenue proﬁ t from operations proﬁt before tax
or proﬁ t for the period in the restated period the operating expenses breakdown is included in note 8
lease incentive balances are being released to the income statement over the duration of the lease therefore an element of each
balance has been classiﬁ ed as amounts due in more than one year under the heading “other noncurrent liabilities” the
comparatives at march 2008 have been reclassiﬁ ed to reﬂect this presentation to ensure consistency with the march 2009
incentives this has resulted in a reclassiﬁ cation of £79m from trade and other payables due within one year at march 2008 this
reclassiﬁ cation has no impact on the income statement
the following interpretations issued by the international financial reporting interpretation committee ifric are effective for the 
ﬁrst time in the current ﬁnancial year and have been adopted by the group with no signiﬁcant impact on its consolidated results or 
ﬁnancial position
l ifric12 — service concession agreements effective for annual accounting periods beginning on or after 1 january 2008
l ifric14 — ias19 — the limit on a deﬁ ned beneﬁt asset minimum funding requirements and their interaction effective for
annual accounting periods beginning on or after 1 january 2008
in addition the group has elected to adopt ias23 revised borrowing costs in advance of its effective date for accounting periods 
beginning on or after 1 january 2009 the principal change to the standard which was to eliminate the previously available option
to expense all borrowing costs as incurred has meant that the group has capitalised £02m 2008 £01m of borrowing costs in 
accordance with the policies set out in note 3 that would have previously been expensed through the income statement during
the year
at the date of authorisation of these ﬁ nancial statements the following standards and interpretations which have not been applied
in these ﬁ nancial statements were in issue but not yet effective
l ifrs1 ‘first time adoption of ifrs’ amended — effective for annual periods beginning on or after 1 january 2009
l ifrs2 ‘sharebased payments’ amended — effective for accounting periods beginning on or after 1 january 2009
l ifrs3 ‘business combinations’ revised — effective for accounting periods beginning on or after 1 july 2009
l ifrs5 ‘noncurrent assets held for sale and discontinued operations’ amended — effective for accounting periods beginning 
on or after 1 july 2009
l ifrs7 ‘financial instruments disclosures’ amended — effective for accounting periods beginning on or after 1 january 2009
16013pheonixindd   41 26062009   1039 annual report and accounts phoenix it group plc 
42
16013 240609 proof 6
2 adoption of new and revised standards and restatements continued
l ifrs8 ‘operating segments’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias1 ‘presentation of ﬁ nancial statements’ amendedrevised — effective for accounting periods beginning on or after
1 january 2009
l ias16 ‘property plant and equipment’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias19 ‘employee beneﬁ ts’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias20 ‘government grants and disclosure of government assistance’ amended — effective for accounting periods beginning 
on or after 1 january 2009
l ias27 ‘consolidated and separate ﬁ nancial statement’ amended — effective for accounting periods beginning on or after
1 january 2009
l ias28 ‘investments in associates’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias29 ‘financial reporting in hyperinﬂ ationary economies’ amended — effective for accounting periods beginning on or
after 1 january 2009
l ias31 ‘interests in joint ventures’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias32 ‘financial instruments presentation’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias36 ‘impairment of assets’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias38 ‘intangible assets’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias39 ‘financial instruments recognition and measurement’ amended — effective for accounting periods beginning on or 
after 1 january 2009
l ias40 ‘investment property’ amended — effective for accounting periods beginning on or after 1 january 2009
l ias41 ‘agriculture’ amended — effective for accounting periods beginning on or after 1 january 2009
l ifric13 ‘customer loyalty programmes’ — effective for accounting periods beginning on or after 1 july 2008
l ifric15 ‘agreements for the construction of real estate’ — effective for accounting periods beginning on or after 1 january 2009
l ifric16 ‘hedges of a net investment in a foreign operation’ — effective for accounting periods beginning on or after
1 october 2008
l ifric17 ‘distributions of noncash assets to owners’ — effective for accounting periods beginning on or after 1 july 2009
l ifric18 ‘transfers of assets from customers’ — transfers received on or after 1 july 2009
the amendment to ifrs3 will have the effect of expensing all future acquisition costs to the income statement rather than 
capitalising them the directors anticipate that the adoption of the remainder of these standards and interpretations in future
periods will have no material impact on the ﬁ nancial statements of the group except for additional disclosures required relating to
ifrs8 and ias1
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   42 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
43
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
3 significant accounting policies
basis of accounting
the ﬁ nancial statements have been prepared in accordance with international financial reporting standards ifrss the ﬁnancial
statements have also been prepared in accordance with ifrss adopted by the european union and therefore the group ﬁ nancial
statements comply with article 4 of the eu ias regulation
the ﬁ nancial statements have been prepared on the historical cost basis except where stated below the principal accounting
policies adopted are set out below
basis of consolidation
the consolidated ﬁ nancial statements incorporate the ﬁnancial statements of the company and entities controlled by the
company its subsidiaries made up to 31 march each year control is achieved where the company has the power to govern the 
ﬁnancial and operating policies of an investee entity so as to obtain beneﬁts from its activities
on acquisition the assets including identiﬁ able intangible assets excluding goodwill and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition any excess of the cost of acquisition over the fair values of the 
identiﬁ able net assets acquired is recognised as goodwill the results of subsidiaries acquired or disposed of during the year are
included from the effective date of acquisition or up to the effective date of disposal as appropriate
all intragroup transactions balances income and expenses are eliminated on consolidation
discontinued operations and assets held for sale
cash ﬂ ows and operations that relate to a major component of the business or geographical region that has been sold or is
classiﬁ ed as held for sale are shown separately from continuing operations
assets and businesses classiﬁ ed as held for sale are measured at the lower of carrying value and fair value less costs to sell no
depreciation is charged on assets and businesses classiﬁ ed as held for sale
assets are classiﬁ ed as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use this condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale
in its present condition management must be committed to the sale which should be expected to qualify for recognition as a 
completed sale within one year from the date of classiﬁ cation
where an asset held for sale has not sold within one year the asset may remain classiﬁ ed as held for sale provided that the delay is
caused by events or circumstances beyond the group’s control and management are still committed to the sale and the above 
criteria are still met
goodwill
goodwill arising on consolidation represents the excess of the cost of acquisition over the group’s interest in the fair value of the 
identiﬁ able assets and liabilities of a subsidiary at the date of acquisition
goodwill is recognised as an asset and reviewed for impairment at least annually with cash generating units assessed by segment
see note 15 any impairment is recognised immediately in proﬁ t for the period and is not subsequently reversed
on disposal of a subsidiary the attributable amount of goodwill is included in the determination of the proﬁ t or loss on disposal
goodwill arising on acquisitions before the date of transition to ifrs as adopted by the european union has been retained at the
previous uk gaap amounts subject to being tested for impairment at that date goodwill written off to reserves under uk gaap in
the year ended 31 march 1999 and earlier periods has not been reinstated and is not included in determining any subsequent 
proﬁ t or loss on disposal
16013pheonixindd   43 26062009   1039 annual report and accounts phoenix it group plc 
44
16013 240609 proof 6
3 significant accounting policies continued
revenue recognition
revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and
services provided in the normal course of business net of discounts vat and other salesrelated taxes
product
revenue is recognised when the signiﬁ cant risks and rewards of ownership of the goods have passed to the buyer usually on
delivery of goods
maintenance contracts
for ﬁ xedfee maintenance contracts the revenue arising is spread evenly over the term of the contract costs incurred under these
contracts are charged to the income statement as they arise typically these contracts are annual and costs arise evenly over the
contract term if circumstances arise such that costs do not reasonably reﬂ ect performance appropriate adjustments are made
other contract revenues
other contract revenues are recorded according to the stage of completion of the contract by reference to the value of work 
performed
the amount by which revenue differs from payments on account is shown under receivables as accrued income or under payables 
as deferred revenue as appropriate
provision is made for all anticipated contract losses as soon as they are identiﬁ ed
where a contract contains several service elements the individual elements are accounted for separately at fair value
interest income
interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable 
which is the rate that exactly discounts estimated future cash receipts through the expected life of the ﬁ nancial asset to that asset’s
net carrying amount
dividend income
dividend income from investments is recognised when the shareholders’ rights to receive payment have been established 
leasing
assets held under ﬁ nance leases and hire purchase contracts are recognised as assets of the group at their fair value or if lower at
the present value of the minimum lease payments each determined at the inception of the lease the corresponding liability to the 
lessor is included in the balance sheet as a ﬁ nance lease obligation lease payments are apportioned between ﬁnance charges and
reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability finance charges 
are charged directly against income
rentals payable under operating leases are charged to income on a straightline basis over the term of the relevant lease
beneﬁ ts received and receivable as an incentive to enter into an operating lease are also spread on a straightline basis over the lease 
term and discounted where material
foreign currencies 
transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the
transactions at each balance sheet date monetary assets and liabilities that are denominated in foreign currencies are retranslated 
at the rates prevailing on the balance sheet date nonmonetary assets and liabilities carried at fair value that are denominated in
foreign currencies are translated at the rate prevailing at the date when the fair value was determined gains and losses arising on
retranslation are included in net proﬁ t or loss for the period
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   44 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
45
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
3 significant accounting policies continued
on consolidation the assets and liabilities of the group’s overseas operations are translated at exchange rates prevailing on the 
balance sheet date income and expense items are translated at the average exchange rates for the period exchange differences 
arising if any are classiﬁ ed as equity and transferred to the group’s proﬁt and loss reserve such translation differences will be
recognised as income or as expenses in the period in which the operation is disposed of
borrowing costs
borrowing costs directly attributable to the acquisition construction or production of qualifying assets which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets until
such time as the assets are substantially ready for their intended use or sale
all other borrowing costs are recognised in the income statement in the period in which they are incurred
retirement beneﬁ t costs
deﬁ ned contribution pension schemes
the principal subsidiary undertakings contribute to a number of group personal pension plans in respect of certain employees 
these plans are deﬁ ned contribution plans and the annual charge to the income statement is the contributions payable in the year
differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments 
in the balance sheet
deﬁ ned beneﬁt pension scheme
the group operates a deﬁ ned beneﬁt funded pension scheme
the costs of providing pensions under the deﬁ ned beneﬁt funded pension scheme are estimated on the basis of independent
actuarial advice with full actuarial valuations carried out on a triennial basis and updated at each balance sheet date
the operating and ﬁ nance costs of the scheme are recognised separately within the statement of income actuarial gains and
losses are recognised in full in the period in which they occur and are presented in the statement of recognised income and 
expense 
the retirement beneﬁ t obligation recognised in the balance sheet represents the present value of the deﬁned beneﬁt obligation as
adjusted for unrecognised past service costs and as reduced by the fair value of scheme assets
shortterm employee beneﬁ ts
the cost of shortterm accumulating balances is charged to the income statement over the period during which the entitlement is
earned at an average pay rate plus social security costs differences between the entitlement earned and the entitlement actually 
paid is shown as either accruals or prepayments in the balance sheet
taxation
the tax currently payable is based on taxable proﬁ t for the year taxable proﬁt differs from net proﬁt as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items 
that are never taxable or deductible the group’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date
deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities 
in the ﬁ nancial statements and the corresponding tax bases used in the computation of taxable proﬁt and is accounted for using
the balance sheet liability method deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable proﬁ ts will be available against which deductible
temporary differences can be utilised such assets and liabilities are not recognised if the temporary difference arises from goodwill 
or from the initial recognition other than in a business combination of other assets and liabilities in a transaction that affects 
neither the tax proﬁ t nor the accounting proﬁt
16013pheonixindd   45 26062009   1039 annual report and accounts phoenix it group plc 
46
16013 240609 proof 6
3 significant accounting policies continued
deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the
group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in 
the foreseeable future
the carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufﬁ cient taxable proﬁts will be available to allow all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised 
deferred tax is charged or credited in the income statement except when it relates to items charged or credited directly to equity 
in which case the deferred tax is also dealt with in equity
investments
investments are included at cost less provisions for impairment
property plant and equipment 
land and buildings ﬁ xtures and equipment are stated at cost less accumulated depreciation and recognised impairment
depreciation is charged so as to write off the cost of assets other than freehold land over their estimated useful lives using the 
straightline method on the following bases
freehold buildings 50 years
leasehold property period of lease
fixtures and equipment 2 to 5 years
motor vehicles 4 years
assets held under ﬁ nance leases are depreciated over their expected useful lives on the same basis as owned assets or where
shorter over the term of the relevant lease
the gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the 
carrying amount of the asset and is recognised in income
intangible assets
intangible assets are measured initially at fair value and are amortised on a systematic basis over their estimated useful lives on the 
following bases
value of trade name 15 years
customer contracts and relationships 6 to 10 years
impairment policy
at each balance sheet date the group reviews the carrying amounts of its tangible and intangible assets to determine whether 
there is any indication that those assets have suffered an impairment loss if any such indication exists the recoverable amount of 
the asset is estimated in order to determine the extent of the impairment loss if any where the asset does not generate cash ﬂows
that are independent from other assets the group estimates the recoverable amount of the cash generating unit to which the asset 
belongs an intangible asset with an indeﬁ nite useful life is tested for impairment annually and whenever there is an indication that
the asset may be impaired
recoverable amount is the higher of fair value less costs to sell and value in use in assessing value in use the estimated future cash 
ﬂows are discounted to their present value using a pretax discount rate that reﬂects current market assessments of the time value 
of money and the risks speciﬁ c to the asset for which the estimates of future cash ﬂows have not been adjusted
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   46 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
47
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
3 significant accounting policies continued
if the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount the carrying 
amount of the asset or cash generating unit is reduced to its recoverable amount an impairment loss is immediately recognised
as an expense
where an impairment loss on assets other than goodwill subsequently reverses the carrying amount of the asset or cash 
generating unit is increased to the revised estimate of its recoverable amount but so that the increased carrying amount does not 
exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash 
generating unit in prior years a reversal of an impairment loss is immediately recognised as income
research and development
all expenditure on research and development activities is recognised as an expense in the period in which it is incurred
inventories
inventories are stated at the lower of cost and net realisable value
service stocks other than consumable stocks are systematically amortised over four years so as to reduce their value to nil at the 
end of the period consumable stocks are expensed as they are purchased
financial instruments
financial assets and ﬁ nancial liabilities are recognised on the group’s balance sheet when the group becomes a party to the
contractual provisions of the instrument
financial assets
trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts estimated irrecoverable amounts are based on the ageing of the receivable balances and 
historical experience individual trade receivables are written off when management deems them not to be collectable
cash and cash equivalents comprise cash on hand and demand deposits other shortterm highly liquid investments that are 
readily convertible to a known amount of cash and are subject to an insigniﬁ cant risk of changes in value
financial liabilities and equity
financial liabilities and equity instruments are classiﬁ ed according to the substance of the contractual arrangements entered into
trade payables are noninterest bearing and are stated at their nominal value
borrowings are recorded at the proceeds received net of direct issue costs finance charges including premiums payable on 
settlement or redemption and direct issue costs are accounted for on an accrual basis to the income statement using the effective 
interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in
which they arise
equity instruments are any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities 
equity instruments issued by the company are recorded at the proceeds received net of direct issue costs 
derivative ﬁ nancial instruments and hedge accounting
the group uses derivative ﬁ nancial instruments such as interest rate swaps to hedge risks associated with interest rate ﬂuctuations
such derivative ﬁ nancial instruments are stated at fair value the fair values of interest rate swaps are determined by reference to
market rates for similar instruments
in order to qualify for hedge accounting the group is required to document from inception the relationship between the item 
being hedged and the hedging instrument the group is also required to document and demonstrate an assessment of the 
relationship between the hedged item and the hedging instrument which shows that the hedge will be highly effective on an 
ongoing basis this effectiveness testing is performed at each period end to ensure that the hedge remains highly effective
16013pheonixindd   47 26062009   1039 annual report and accounts phoenix it group plc 
48
16013 240609 proof 6
3 significant accounting policies continued
hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised or no longer qualiﬁ es
for hedge accounting at that time any cumulative gain or loss on the hedging instrument recognised in equity is retained in 
equity until the highly probable forecast transaction occurs if a hedged transaction is no longer expected to occur the net 
cumulative gain or loss recognised in equity is transferred to the consolidated statement of income for the period
cash ﬂ ow hedges
changes in the effective portion of the fair value of derivative ﬁ nancial instruments that are designated as hedges of future cash
ﬂows are recognised directly in equity and the ineffective portion is recognised immediately in the statement of income where
relevant if the cash ﬂ ow hedge of a ﬁrm commitment or forecast transaction results in the recognition of a nonﬁnancial asset or
liability then at the time it is recognised the associated gains or losses on the derivative that had previously been recognised in 
equity are included in the initial measurement for hedges that result in the recognition of a ﬁ nancial asset or liability amounts
deferred in equity are recognised in the statement of income in the same period in which the hedged item affects net proﬁ t or loss
provisions
provisions relate to the obligation to reinstate certain properties to their former condition at the end of their leases provisions are 
measured at management’s best estimate of the expenditure required to settle the obligation at the balance sheet date and are 
discounted to present value where the effect is material
nonrecurring items
nonrecurring items are items of income or expenditure that in management’s judgement should be disclosed separately on the 
basis that they are material either by their nature or their size such items are included within the income statement caption to 
which they relate and are separately disclosed either in the notes to the consolidated ﬁ nancial statements or on the face of the
consolidated income statement
sharebased payments
the group has applied the requirements of ifrs2 sharebased payments in accordance with the transitional provisions ifrs2 has
been applied to all grants of equity instruments after 7 november 2002 that were unvested as of 1 january 2005
the group issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are measured at 
fair value at the date of grant the fair value determined at the grant date of the equitysettled sharebased payments is expensed 
on a straightline basis over the vesting period based on the group’s estimate of options that will eventually vest
fair value is measured by use of a black–scholes model the expected life used in the model has been adjusted based on 
management’s best estimate for the effects of nontransferability exercise restrictions and behavioural considerations 
shares purchased through the employee beneﬁ t trust ebt are held at cost and are deducted from shareholders’ equity the right
to a dividend on these shares has been waived 
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   48 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
49
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
4 critical accounting judgements and key sources of estimation uncertainty
the preparation of the ﬁ nancial statements requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses 
during the reporting period actual results could differ from these estimates information about such judgements and estimation is
contained in the accounting policies or the notes to the accounts and the key areas are summarised below
areas of judgement that have the most signiﬁ cant effect on the amounts recognised in the ﬁnancial statements are
nonrecurring items
nonrecurring items are items of income or expenditure that in management’s judgement should be disclosed separately on
the basis that they are material either by their nature or their size to an understanding of the group’s ﬁnancial performance and
signiﬁcantly distort the comparability of ﬁnancial performance between periods items of income or expense that are considered
by management for designation as nonrecurring items include such items as signiﬁcant restructuring impairments of assets
integration of acquired businesses and gains and losses on disposals of noncurrent assets details of nonrecurring items are included
in note 7
assets held for sale
assets are classiﬁ ed as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use this condition is regarded as met only when the sale is highly probable and the asset is available for immediate
sale in its present condition management must be committed to the sale which should be expected to qualify for recognition as a
completed sale within one year from the date of classiﬁ cation however an asset may remain in this categorisation for longer than
one year if it remains unsold due to events or circumstances beyond the group’s control in making this judgement impairment 
losses of £14m 2008 £05m have been reﬂ ected in the income statement as nonrecurring items details of the losses are
disclosed in note 20
valuation of intangible assets and useful life
the group has made assumptions in relation to the potential future cash ﬂ ows to be determined from separable intangible assets
acquired as part of business combinations this assessment involves assumptions relating to potential future revenues appropriate 
discount rates and the useful life of such assets these assumptions impact the income statement over the useful life of the 
intangible asset these assumptions are discussed further below 
key sources of estimation uncertainty that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets 
and liabilities within the next ﬁ nancial year are
retirement beneﬁ ts
the group operates a deﬁ ned beneﬁt pension scheme which has been accounted for in accordance with ias19 — employee
beneﬁ ts application of ias19 requires the exercise of judgement in relation to various assumptions including future pay rises in
excess of inﬂ ation employer and pensioner demographics and the future expected returns on assets phoenix it group determines
the assumptions to be adopted in discussion with its actuaries and believes these assumptions to be in line with uk practice 
generally but the application of different assumptions could have a signiﬁ cant effect on the amounts reﬂected in the ﬁnancial
statements further details can be found in note 10
impairment of goodwill and intangible assets
determining whether goodwill and intangible assets have been impaired requires an estimation of the value in use of the cash 
generating units to which they have been allocated the value in use calculation requires the entity to estimate the future cash
ﬂows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value details of the 
carrying amount of goodwill and intangible assets are shown in notes 15 and 16 respectively
sharebased payments
in valuing the sharebased payments realised in the group’s accounts the company has used the black–scholes calculation model
which makes various assumptions on factors outside the group’s control such as share price volatility and riskfree interest rates 
details of the options and assumptions used in deriving the sharebased payments are disclosed in note 39
dilapidation provisions
dilapidation provisions have been derived on the basis of the most recent assessment of likely cost many of these obligations will
not arise for a number of years and the costs are difﬁ cult to predict accurately in making these assessments the group has sought
the aid of independent experts where appropriate the total provisions are disclosed in note 28
16013pheonixindd   49 26062009   1039 annual report and accounts phoenix it group plc 
50
16013 240609 proof 6
5 revenue
an analysis of the group’s revenue is as follows
 2009 2008
 £m £m
revenue — continuing operations 2532 2308
investment income 09 09
2541 2317
6 segmental reporting
the board has determined that the primary segmental reporting format is by business line based on the group’s management 
and internal reporting structure the group’s operations are based entirely in the uk
principal activities are as follows
partner services business provision of information technology services networking support and infrastructure services
business continuity provision of business continuity and it disaster recovery services
sme it services provision of information technology services and systems
segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis 
corporate costs relate to central group costs including ﬁ nance legal and employee costs that are not directly attributable to the
operating segments 
intersegment turnover has been eliminated
 partner
services business sme it
business continuity services corporate total
year ended 31 march 2009 £m £m £m £m £m
revenue 1055 512 965 – 2532
proﬁ t from operations before amortisation of
acquired intangibles and nonrecurring items 161 130 100 34 357
amortisation of intangibles  34
nonrecurring items  93
proﬁ t from operations 230
capital expenditure on segment assets 05 104 46 – 155
depreciation and amortisation in period 09 108 52 – 169
impairment losses recognised in period – 01 13 – 14
balance sheet
segment assets 584 1477 1357 01 3419
total assets 3419
segment liabilities 347 580 307 04 1238
unallocated liabilities  917
total liabilities 2155
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   50 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
51
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
6 segmental reporting continued
 partner
services business sme it
business continuity services corporate total
year ended 31 march 2008 £m £m £m £m £m
revenue 1029 420 859 – 2308
proﬁ t from operations before amortisation of
acquired intangibles and nonrecurring items 176 89 90 25 330
amortisation of intangibles  36
nonrecurring items  60
proﬁ t from operations 234
capital expenditure on segment assets 13 185 20 – 218
depreciation and amortisation in period 10 92 42 – 144
impairment losses recognised in period – 05 – – 05
balance sheet
segment assets restated 593 1794 1204 – 3591
total assets 3591
segment liabilities 352 675 320 12 1359
unallocated liabilities  1029
total liabilities 2388
the analysis of total assets and liabilities excludes interbusiness balances unallocated total liabilities comprise bank loans and
overdrafts taxation and derivative ﬁ nancial liabilities
segmental assets have been restated to include goodwill which was previously unallocated
7 nonrecurring items
 2009 2008
 £m £m
costs of reorganisation of newly acquired subsidiaries a 57 55
loss on disposal of subsidiaries b 08 –
writeoff of unamortised loan costs and loan break costs following arrangement
of new bank facilities – 04
impairment loss on property held for sale note 20 14 05
redundancy costs c 14 –
93 64
a costs of reorganisation relate to expenses incurred in relation to the restructuring that has taken place in the business since the 
acquisition of icm computer group on 29 may 2007 
b on 10 april 2008 icm business solutions limited was sold to r atherton and a wilkinson the gross assets disposed of were 
£05m and the transaction gave rise to a loss on disposal of £04m on 28 november 2008 100 of the ordinary share capital of 
phoenix holding sa and its wholly owned subsidiary phoenix it services sa was sold to p sansade the gross assets disposed of 
were £18m and the transaction gave rise to a loss on disposal of £04m
c in response to the economic downturn in the uk the group has undertaken a restructuring of some of its activities together 
with a programme of headcount reduction
16013pheonixindd   51 26062009   1039 annual report and accounts phoenix it group plc 
52
16013 240609 proof 6
8 profit from operations
 2009 2008
 £m £m
revenue 2532 2308
raw materials and consumables 66 51
staff costs 1009 924
depreciation of property plant and equipment 135 108
amortisation of acquired intangibles 34 36
other operating charges 1058 955
230 234
the analysis of auditors’ remuneration is as follows
 2009 2008
 £m £m
fees payable to deloitte llp for the company’s annual ﬁ nancial statements – –
fees payable to deloitte llp for other services to the group
 audit of the company’s subsidiaries pursuant to legislation 02 02
02 02
other services pursuant to legislation – –
tax services 01 01
corporate ﬁ nance services – 01
01 02
03 04
amounts payable to deloitte llp and their associates by the company and its subsidiary undertakings in respect of nonaudit services
included above which have not been charged to the income statement were £nil 2008 £01m 
9 staff costs
2009 2008
 £m £m
their aggregate remuneration comprised
wages and salaries 889 805
social security costs 100 92
other pension costs see note 10 23 17
sharebased payments 03 10
1009 924
the average monthly number of employees including directors was
 number number
partner services 2096 1345
business continuity 192 167
sme it services 484 822
central administration 18 15
2790 2349
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of
the categories speciﬁ ed in ias 24 related party disclosures further information about the remuneration of individual directors is
provided in the audited part of the directors’ remuneration report on pages 31 to 35
 2009 2008
 £m £m
shortterm employee beneﬁ ts 13 20
postemployment beneﬁts 02 02
15 22
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   52 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
53
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
10 retirement benefit schemes
deﬁ ned contribution scheme
the group operates a deﬁ ned contribution retirement beneﬁt scheme the assets of this scheme are held separately from those of
the group
pension costs for deﬁned contribution schemes are as follows
2009 2008
 £m £m
deﬁ ned contribution scheme 18 17
deﬁ ned beneﬁt scheme
the group operates a deﬁ ned beneﬁt scheme for certain of its employees under the scheme the employees are entitled to
retirement beneﬁ ts varying between 125 and 167 of ﬁnal salary multiplied by number of years of pensionable service on
attainment of a retirement age of 65 no other postretirement beneﬁ ts are provided the scheme is a funded scheme
the most recent full actuarial valuation of the scheme’s deﬁ ned beneﬁt obligation was carried out at 6 april 2006 and updated to
31 march 2009 by a qualiﬁ ed independent actuary for ias19 purposes the projected unit method was used in all valuations and
assets were taken into account using market values
the major assumptions used by the actuary were
 2009 2008
  
discount rate 670 640
expected return on equities bonds and cash 643 680
expected rate of salary increases 375 425
future pension increases 300 330
inﬂ ation 310 360
mortality tables used pxa92yobmc pxa92yobmc
the current life expectancies postretirement in years underlying the value of the accrued liabilities for deﬁ ned beneﬁt pension
scheme are
 2009 2008
 male female male female
member currently age 65 221 250 219 247
member currently age 40 233 261 232 260
amounts recognised in income in respect of the deﬁ ned beneﬁt scheme are as follows
2009 2008
 £m £m
current service cost 05 04
interest cost 09 07
expected return on scheme assets 09 06
05 05
the current service cost for the period has been included in staff costs actuarial losses of £08m 2008 £06m gain have been
reported in the consolidated statement of recognised income and expense
the amount included in the balance sheet arising from the group’s obligations in respect of its deﬁ ned beneﬁt retirement beneﬁt
scheme is as follows
 2009 2008
 £m £m
present value of deﬁ ned beneﬁt obligations 126 132
fair value of scheme assets 115 121
deﬁ cit in scheme and liability recognised in the balance sheet 11 11
16013pheonixindd   53 26062009   1039 annual report and accounts phoenix it group plc 
54
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
10 retirement benefit schemes continued
movements in the present value of deﬁ ned beneﬁt obligations were as follows
2009
£m
at 1 april 2008 132
current service cost 05
interest cost 09
beneﬁ ts paid 02
members’ contributions 04
actuarial gains on deﬁ ned beneﬁt obligation 22
at 31 march 2009 126
movements in the fair value of scheme assets were as follows
 2009
£m
at 1 april 2008 121
expected return on scheme assets 09
contributions by employer 13
members’ contributions 04
beneﬁ ts paid 02
actuarial losses on scheme assets 30
at 31 march 2009 115
the fair value of the scheme assets at the balance sheet date is analysed as follows
 2009 2008
 £m £m
equities 70 74
bonds 43 47
cash 02 –
115 121
the scheme assets do not include any of the group’s own ﬁ nancial instruments nor any property occupied or other assets used by
the group
the expected rate of return on the equities was determined by reference to longterm historic outperformance of this asset class
over bonds so a view was taken that it was appropriate to take a future return rate on equities of 720 2008 75 pa the 
investment return in relation to these assets is variable and as such they are considered riskier investments this results in ‘the 
equity risk premium’ which is included in the yield on the equity investment and compensates investors for the additional risk 
of holding this type of investment there is signiﬁ cant uncertainty about the expected size of this risk premium and this risk is
managed by holding assets which are less risky in nature but have a corresponding lower return
the expected rate of return on bonds was determined by taking a blend between the gross redemption yields on corporate and 
government bonds which were the two types of bonds held within the scheme at 31 march 2009 resulting in a return rate on 
bonds of 540 2008 570 the risk of default on these assets is considered to be small 
the expected rate of return on cash was determined by reference to the level of bank base rate of 05 2008 525 pa
the overall expected rate of return is calculated by weighting the individual rates in accordance with how the plan assets are 
invested
the actual return on scheme assets was a loss of £21m 2008 £04m
16013pheonixindd   54 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
55
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
10 retirement benefit schemes continued
the history of the scheme for the current period is as follows
 2009 2008
 £m £m
present value of deﬁ ned beneﬁt obligation 126 132
fair value of scheme assets 115 121
deﬁ cit 11 11
experience adjustments on scheme liabilities – –
percentage of scheme liabilities 0 0
experience adjustments on scheme assets 30 10
percentage of scheme assets 259 795
the estimated amounts of contributions expected to be paid to the scheme during the next ﬁ nancial year is £12m which includes
payments to eliminate the pension deﬁ cit of £07m the employer’s ordinary contribution rate is 89 of pensionable salaries the
group has agreed with the trustees that it will aim to eliminate the deﬁ cit over a 3 year period
the sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below
assumption change in assumption impact on scheme liabilities £m
discount rate decrease by 05 ppts increase by 15
rate of salary growth increase by 025 ppts increase by 03
inﬂ ation increase by 025 ppts increase by 07
mortality improved life expectancy by using lower cohort with 1 ﬂ oor increase by 06
instead of medium cohort
11 finance costs and investment income
 2009 2008
 £m £m
finance costs
interest on bank overdrafts and loans 63 68
interest on obligations under ﬁ nance leases and hire purchase contracts 08 05
amortisation of loan issue costs 04 03
other interest 01 02
interest cost on deﬁ ned beneﬁt scheme 09 07
nonrecurring ﬁ nance costs – 04
total interest expense 85 89
less amounts included in the cost of qualifying assets 02 01
83 88
investment income
expected return on deﬁ ned beneﬁt pension scheme assets 08 07
interest on bank deposits 01 02
09 09
net ﬁ nance costs 74 79
borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are calculated
by applying a capitalisation rate of 7098 2008 7621 to expenditure on such assets
16013pheonixindd   55 26062009   1039 annual report and accounts phoenix it group plc 
56
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
12 taxation
the tax charge on proﬁ t from operations for the year was as follows
2009 2008
 £m £m
current tax
uk corporation tax 59 50
adjustment in respect of prior periods 01 01
foreign tax 01 01
61 50
deferred tax note 29
current year 09 03
adjustment in respect of prior periods 06 05
impact of change in united kingdom tax rate – –
46 48
corporation tax is calculated at 28 2008 30 of the estimated assessable proﬁ t for the year the change from the previous year
is due to a change in uk government legislation that came into force on 1 april 2008
taxation for jurisdictions other than the uk is calculated at the rates prevailing in the respective jurisdictions
the charge for the year can be reconciled to the proﬁ t per the income statement as follows
2009 2008
 £m  £m 
proﬁ t before tax 156 155
tax at the uk corporation tax rate of 28 2008 30 44 280 47 300
effects of
expenses that are not deductible in determining taxable proﬁ t 06 37 08 50
tax adjustments relating to share options 01 06 01 06
adjustments in respect of prior periods 05 28 06 38
tax expense and effective tax rate for the year 46 295 48 306
in addition to the amount charged to the income statement the following amounts have been chargedcredited directly to 
equity
 2009 2008
 £m £m
current tax
tax on sharebased payments – 01
– 01
deferred tax note 29
tax on actuarial lossesgains 02 02
tax on cash ﬂow hedge 05 03
tax on sharebased payments – 01
07 01
16013pheonixindd   56 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
57
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
13 earnings per share
 2009 2008
adjusted earnings per share excluding amortisation of acquired intangibles and nonrecurring items
basic  271p 248p
diluted 263p 241p
the calculation of the basic and diluted earnings per share is based on the following data
earnings
 2009 2008
 £m £m
earnings for the purposes of basic earnings per share and diluted earnings per share being
net proﬁ t attributable to equity holders of the parent 110 107
amortisation of acquired intangibles 34 36
nonrecurring items 93 64
tax on amortisation of acquired intangibles and nonrecurring items 33 30
earnings for the purposes of adjusted earnings per share being net proﬁ t attributable to equity
holders of the parent excluding amortisation of acquired intangibles and nonrecurring items 204 177
number of shares
 2009 2008
 ‘m ‘m
weighted average number of ordinary shares for the purposes of basic earnings per share 751 718
effect of dilutive potential ordinary shares
share options 24 22
weighted average number of ordinary shares for the purposes of diluted earnings per share 775 740
14 dividends
 2009 2008
 £m £m
amounts recognised as distributions to shareholders in the year
second interim dividend for the year ended 31 march 2008 of nil 2007 3174p per share – 19
final dividend for the year ended 31 march 2008 of 365p 2007 nil per share 27 –
interim dividend for the year ended 31 march 2008 of 183p per share – 14
27 33
proposed interim dividend for the year ended 31 march 2009 of 210p per share 16 –
proposed ﬁ nal dividend for the year ended 31 march 2009 of 420p 2008 365p per share 32 27
the proposed interim dividend was recommended by the board on 19 november 2008 and was paid on 6 april 2009
the proposed ﬁ nal dividend was recommended by the board on 27 may 2009 and will be paid on 9 october 2009
these dividends are subject to approval by shareholders at the annual general meeting and accordingly they have not been 
included as a liability in these ﬁ nancial statements
16013pheonixindd   57 26062009   1039 annual report and accounts phoenix it group plc 
58
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
15 goodwill
 £m
cost and carrying amount
at 1 april 2007 840
additions 906
at 1 april 2008 1746
additions arising from revisions to provisional fair values note 35 42
at 31 march 2009 1788
goodwill acquired in a business combination is allocated at acquisition to the cash generating units cgus that are expected to 
beneﬁ t from that business combination before recognition of impairment losses the carrying amount of goodwill has been
allocated as follows
 2009 2008
 £m £m
partner services business 217 217
business continuity 799 828
sme it services 772 701
1788 1746
the movement in allocation of goodwill to the cgus is due to the revision of the provisional fair values in relation to the icm
acquisition
impairment
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired the 
recoverable amounts of the cgus are determined from value in use calculations and from time to time the group may also obtain 
independent appraisals of fair values to determine recoverable amounts
the recoverable amounts of the cgus are determined from value in use calculations based on 3 year ﬁ nancial forecasts approved
by the directors with year 1 extracted from a detailed ﬁ nancial budget and years 2–3 from the strategic plan the main
assumptions within the forecast operating cash ﬂ ows include the directors’ conservative estimates of revenue growth future
proﬁ tability and ongoing levels of working capital and capital expenditure to support growth
the key assumptions used in determining the valueinuse calculations are set out below and these assumptions have been revised
in the year in light of the current economic environment which has resulted in more conservative estimates about the future 
cash ﬂ ow projections
the group prepares riskadjusted cash ﬂ ow forecasts derived from the most recent annual ﬁnancial budgets and 3 year business
plans approved by the directors with an extrapolation of these cash ﬂ ows beyond a 3 year horizon to perpetuity applying an
assumed annual growth rate of 225 
discount rate
the directors have used discount rates ranging from 10 to 12 2008 10 to 13 which represents the group pretax weighted 
average cost of capital adjusted for the risk proﬁ les of the individual cgus
16013pheonixindd   58 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
59
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
15 goodwill continued
growth rates
growth rates are determined with reference to current market conditions external forecasts and historical trends for the group’s 
key end markets cash ﬂ ow growth rates are derived from the directors’ latest estimates of forecast revenues taking into
consideration past experience of operating margins achieved in the cgu historically such forecasts have been reasonably 
accurate to forecast beyond 3 years a longterm average growth rate of 225 has been used to calculate a terminal value
the directors have made the judgement that this longterm growth rate does not exceed the longterm average growth rate
for the industry the terminal value represents the value of cash ﬂ ows beyond the third year to perpetuity in the shortterm
up to 3 years growth rates of between 0 and 123 have been used
in assessing goodwill for impairment as at 31 march 2009 the directors made use of the most recent detailed calculations of the
recoverable amount of the group’s cgus prepared at 31 march 2009 those calculations resulted in recoverable amounts 
exceeded the carrying values for each of the group’s 3 cgus despite the weaker markets currently being experienced
 
sensitivity to changes in assumptions 
whilst the directors consider that their assumptions are realistic it is possible that an impairment would be identiﬁ ed if any of the
above key assumptions were changed signiﬁ cantly the group’s impairment review is sensitive to a change in the key assumptions
used most notably the discount rates based on the group’s sensitivity analysis an increase in the discount rate in any of the cgus 
of 18 or a decrease in forecast cash ﬂ ows of 169 in isolation would not lead to an impairment
using a discounted cash ﬂ ow methodology necessarily involves making numerous estimates and assumptions regarding revenue
growth operating margins tax rates appropriate discount rates capital expenditure levels and working capital requirements 
these estimates will likely differ from future actual results of operations and cash ﬂ ows and it is possible that these differences
could be material in addition judgements are applied by the directors in determining the level of cash generating units identiﬁed
for impairment testing and the criteria used to determine which assets should be aggregated a difference in testing levels could 
affect whether an impairment is recorded and the extent of impairment loss 
changes in business activities or structure may also result in changes to the level of testing in future periods further future events 
could cause the group to conclude that impairment indicators exist and that the asset values associated with a given operation 
have become impaired any resulting impairment loss could have a material impact on the group’s ﬁ nancial condition and results
of operations 
16 intangible assets
 £m
cost
at 1 april 2007  111
additions  187
at 1 april 2008 and 31 march 2009  298
accumulated amortisation
at 1 april 2007  40
charge for the year  36
at 1 april 2008  76
charge for the year  34
at 31 march 2009  110
net book value
at 31 march 2009  188
at 31 march 2008  222
intangible assets arose on the acquisition of ndr holdings limited servo computer services limited and icm computer group plc
and relate to the valuation of brand name and the acquired customer relationships expected to endure beyond the minimum 
contracted order terms
16013pheonixindd   59 26062009   1039 annual report and accounts phoenix it group plc 
60
16013 240609 proof 6
17 property plant and equipment
 short fixtures
freehold leasehold and motor
property properties equipment vehicles total
£m £m £m £m £m
cost
at 1 april 2007 23 33 173 06 235
acquired with subsidiary undertaking note 35 279 23 206 09 517
additions 03 22 192 01 218
reclassiﬁ ed as held for sale 50 – – – 50
disposals – – 33 – 33
at 1 april 2008 255 78 538 16 887
reclassiﬁ cations 08 16 04 01 03
at 1 april 2008 restated 263 62 542 17 884
adjustments to provisional fair values note 35 48 – – – 48
additions – 16 139 – 155
reclassiﬁ ed as held for sale – – 03 – 03
disposals – – 05 02 07
at 31 march 2009 215 78 673 15 981
accumulated depreciation
at 1 april 2007 02 09 85 01 97
charge for the year 03 10 89 06 108
impairment loss 05 – – – 05
reclassiﬁ ed as held for sale 05 – – – 05
disposals – – 33 – 33
at 1 april 2008 05 19 141 07 172
reclassiﬁ cations – 03 – – 03
at 1 april 2008 restated 05 16 141 07 169
charge for the year 07 07 116 05 135
disposals – – 03 02 05
at 31 march 2009 12 23 254 10 299
net book value
at 31 march 2009 203 55 419 05 682
at 31 march 2008 250 59 397 09 715
the reclassiﬁ cations to cost and depreciation are to reallocate the assets acquired with icm computer group
the impairment loss on freehold property in 2008 relates to properties reclassiﬁ ed as held for sale during that year and reﬂected
the difference between their carrying value and fair value in the market
included in the above is land at cost of £58m 2008 £58m which is not depreciated
the net book value of ﬁ xed assets includes £154m 2008 £135m in respect of assets held under ﬁnance leases and hire purchase
contracts
at 31 march 2009 the group had entered into contractual commitments for the redevelopment of property amounting to £01m 
2008 £20m
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   60 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
61
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
18 derivative financial instruments
2009 2008
 liability liability
 fair value notional fair value notional
 £m £m £m £m
cash flow hedges
interest rate swaps 28 518 10 800
the group has entered into an interest rate swap to hedge risks associated with interest rate ﬂ uctuations on variable rate
borrowings the main terms of the interest rate swap are disclosed in note 19 the derivative ﬁ nancial instrument matures on
30 september 2010
19 financial risk management
the group’s activities expose it to a variety of ﬁ nancial risks market risk including currency risk and interest rate risk credit risk
and liquidity risk
funding and treasury risk management is carried out under a framework of policies and guidelines approved by the board the 
board is responsible for regular review and monitoring of treasury activity and for approval of speciﬁ c transactions the authority
of which may be delegated the group accounting function provides regular update reports of treasury activity to the board of 
directors 
the group does not enter into or trade ﬁ nancial instruments including derivative ﬁnancial instruments for speculative purposes
capital risk management
the group seeks to match longterm assets with longterm funding and shortterm assets with shortterm funding 
equity retained proﬁ ts and long term ﬁxed interest debt are used primarily to ﬁnance intangible assets and ﬁxed assets
shortterm borrowings are required primarily to ﬁ nance current assets
the group capitalisation policy seeks to maintain a strong credit rating and an appropriate funding structure whilst safeguarding 
group ability to continue as a going concern
market risk
a foreign exchange risk
the group publishes its consolidated ﬁ nancial statements in sterling but also conducts some business in foreign currencies mainly
the us dollar and euro as a result it is subject to foreign exchange currency risk due to exchange rate movements which will
affect the group’s transaction costs all foreign operations were disposed of during the year
the board periodically reviews the net exchange risk and implements strategies as appropriate due to the relative stability of the 
foreign currencies in which the group deal and size of the foreign exchange transactions the group does not hedge the foreign 
exchange risk as the potential exposure is considered not to be material to the group’s results
the carrying amounts of the group’s foreign currency denominated monetary assets and liabilities at the reporting date are as 
follows
 assets liabilities
2009 2008 2009 2008
 £m £m £m £m
us dollar 09 03 01 01
euro – 25 – 16
norwegian krone 01 01 – –
10 29 01 17
16013pheonixindd   61 26062009   1039 annual report and accounts phoenix it group plc 
62
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
19 financial risk management continued
b interest rate risk
the group is exposed to interest rate risk as entities in the group borrow funds at both ﬁ xed and ﬂoating interest rates the risk is
managed by the group by maintaining an appropriate mix between ﬁ xed and ﬂoating rate borrowings and by the use of interest
rate swap contracts these practices serve to reduce the volatility of the group’s reported ﬁ nancial performance
all borrowings before interest rate swaps are at variable rates the table below sets out the carrying amount of borrowings that are 
exposed to interest rate risk after taking into account interest rate swaps
 2009 2008
 £m £m
fixed interest rate borrowings note 25 518 800
floating interest rate borrowings note 25 272 233
total borrowings 790 1033
the contractual maturity of these borrowings can be found in the relevant notes shown above
the group holds an interest rate swap to hedge risks associated with interest rate ﬂ uctuations on variable rate the £518m term
loan note 18 which matures on 30 september 2010 the interest rate swap settles on a quarterly basis the rate was ﬁ xed at
578 based on 3 months libor the group will settle the difference between the ﬁ xed and ﬂoating interest rate on a net basis
the interest swap has been designated as a cash ﬂ ow hedge in order to reduce the group’s cash ﬂow exposure resulting from the
variable interest rate on the term loan the interest rate swaps and the interest payments on the loan occur simultaneously and the 
amount deferred in equity is recognised in proﬁ t or loss over the period that the ﬂoating rate interest payments on debt impact
proﬁ t or loss
the quantitative disclosures relating to derivative ﬁ nancial instruments can be found in note 18
credit risk
credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in ﬁ nancial loss to the group
the group monitors its credit exposures to its counterparties via their credit rating where applicable or through other publicly 
available ﬁ nancial information and its own trading records
the group does not have any signiﬁ cant credit risk exposure to any single counterparty or group of counterparties having similar
characteristics the group deﬁ nes counterparties as having similar characteristics if they are connected entities concentration
of credit risk with respect to trade receivables is limited due to the group’s customer base being large and unrelated the credit 
risk on liquid funds and derivative ﬁ nancial instruments is limited because the counterparties are banks with high credit rating
assigned by international credit rating agencies
the carrying amounts of ﬁ nancial assets recorded in the ﬁnancial statements which is net of impairment losses represents the
group’s maximum exposure to credit risk
liquidity risk
the group manages its liquidity requirements by maintaining adequate reserves banking facilities and reserve borrowing facilities
by continuously monitoring forecast and actual cash ﬂ ows all borrowing is agreed and monitored by the board of directors the
group’s undrawn committed borrowing facilities are shown in note 25 the group has a policy of pooling group cash ﬂ ows in order
to maximise the return on surplus cash and also utilise cash within the group surplus cash is placed on shortterm deposits
the following is an analysis of the contractual undiscounted cash ﬂ ows payable under ﬁnancial liabilities and derivative ﬁnancial
instruments as at the balance sheet date the table includes both interest and principal cash ﬂ ows
16013pheonixindd   62 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
63
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
19 financial risk management continued
 due between due between due in
due within 1 and 2 and over 3
1 year 2 years 3 years years total
£m £m £m £m £m
non derivative financial liabilities
bank loans 130 160 160 340 790
finance lease liabilities 55 49 42 27 173
other non interestbearing liabilities 309 – – – 309
494 209 202 367 1272
derivative financial instruments
net settled interest rate swaps 19 09 – – 28
total as at 31 march 2009 513 218 202 367 1300
non derivative financial liabilities
bank loans 143 130 160 600 1033
finance lease liabilities 49 36 31 29 145
other non interestbearing liabilities 337 01 – – 338
529 167 191 629 1516
derivative ﬁ nancial instruments
net settled interest rate swaps 02 06 02 – 10
total as at 31 march 2008 531 173 193 629 1526
floating rate interest has been estimated using a future interest rate curve as at 31 march the cash ﬂ ow movements on the interest
rate swap are expected to affect the statement of income in the same period in which they occur 
sensitivity analysis
financial instruments affected by market risk include borrowings deposits and derivative ﬁ nancial instruments the following
analysis required by ifrs7 is intended to illustrate the sensitivity to changes in market variables being uk interest rates and the us 
dollar and euro to sterling exchange rate on the group’s ﬁ nancial instruments
the analysis excludes the impact of movements in market variables on the carrying value of pension and other postretirement 
beneﬁ ts obligations provisions and on the nonﬁnancial assets and liabilities of the overseas subsidiary
the sensitivity analysis has been prepared on the basis that the amount of net debt the ratio of ﬁ xed to ﬂoating interest rates of the
debt and the derivative portfolio and the proportion of ﬁ nancial instruments in foreign currencies are all constant and on the basis
of the hedge designations in place at 31 march 2009 and 31 march 2008 respectively 
the following table shows the illustrative effect on the income statement and items that are recognised directly in equity that
would result from reasonably possible movements in changes in uk interest rates and in the us dollar and euro to sterling 
exchange rate before the effects of tax
 2009 2008
 income income 
 statement equity statement equity
 – £m – £m – £m – £m
uk interest rates – 050ppts 01 – 01 –
us dollar exchange rate – 10 01 – – –
euro exchange rate – 10 – – – –
16013pheonixindd   63 26062009   1039 annual report and accounts phoenix it group plc 
64
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
20 noncurrent assets held for sale
assets held for sale of £34m 2008 £45m consist of properties held in the business continuity segment £nil 2008 £41m and the 
sme it services segment £34m 2008 £04m 
these assets were classed as held for sale at 31 march 2008 however due to market conditions outside of the group’s control they 
remained unsold at 31 march 2009 management are still committed to the sale of these assets are actively marketing them and 
hope the sale will occur in the next ﬁ nancial year ended 31 march 2010
an impairment loss of £14m has been recognised in the year on properties held for sale and reﬂ ects the difference between their
carrying value and their estimated fair value in the market less costs of sale 
21 subsidiaries
a list of the signiﬁ cant subsidiaries included within the group accounts including the name country of incorporation and
proportion of ownership interest is given in note 4 to the individual company ﬁ nancial statements on page 79
22 inventories
 2009 2008
 £m £m
service stocks 111 111
23 trade and other receivables
trade and other receivables at the balance sheet date comprise
2009 2008
 £m £m
included within noncurrent assets
prepayments and accrued income 10 51
included within current assets
trade debtors 424 476
other debtors 43 02
prepayments and accrued income 80 100
547 578
the group’s trade receivables are stated after allowances for bad and doubtful debts based on management’s assessment of 
creditworthiness an analysis of which is as follows
 2009 2008
 £m £m
balance at the beginning of the period 03 01
increase in provision 12 05
amounts utilised 07 03
balance at the end of the period 08 03
as at 31 march 2009 trade receivables of £64m 2008 £25m were past due but not impaired the ageing of these trade receivables
from due date is as follows
 2009 2008
 £m £m
under 30 days 33 17
30–60 days 09 04
60–90 days 11 01
90–120 days 05 03
over 120 days 06 –
total 64 25
concentration of credit risk with respect to trade receivables is limited due to the group’s customer base being large and 
unrelated due to this the directors believe there is no further credit risk provision required in excess of the allowance for bad and 
doubtful debts
the directors consider that the carrying amount of trade and other receivables approximates to their fair value due to their
short maturities
16013pheonixindd   64 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
65
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
24 cash and cash equivalents
 2009 2008
 £m £m
cash and cash equivalents 59 123
cash and cash equivalents comprise cash held by the group and shortterm bank deposits with an original maturity of three 
months or less the carrying amount of these assets approximates their fair value 
net cash and cash equivalents are held in the following currencies those held in currencies other than sterling have been 
converted into sterling at yearend exchange rates
 2009 2008
 £m £m
sterling 54 114
euro – 05
us dollar 04 03
norwegian krone 01 01
59 123
25 bank loans
the following table analyses bank borrowings excluding bank overdrafts 
 2009 2008
 £m £m
current
bank loans 127 140
noncurrent
bank loans 656 882
total borrowings 783 1022
total borrowings are repayable as follows
2009 2008
 £m £m
within one year 127 140
in more than one year but not more than two years 157 127
in more than two years but not more than ﬁ ve years 499 755
783 1022
all bank borrowings are denominated in sterling
the other principal features of the group’s borrowings are as follows
l a loan of £69m repayments are annual in september and the loan expires in may 2012 the company and certain subsidiaries 
as guarantor have entered into a composite guarantee in favour of royal bank of scotland on account of the company and 
certain subsidiaries as principal the loan carries an interest rate of 1262 above libor the hedging terms relating to the
loan are discussed in note 19
l a revolving credit facility of £30m the facility is due for repayment in full in may 2012 the company and certain subsidiaries
as guarantor have entered into a composite guarantee in favour of royal bank of scotland on account of the company and 
certain subsidiaries as principal the loan carries an interest rate of 1262 above libor
the directors estimate the fair value of the group’s bank borrowings to be equivalent to its book value at 31 march 2009 of
the total committed borrowing facilities of £990m 2008 £1395m the group had available £200m 2008 £362m of
undrawn facilities
16013pheonixindd   65 26062009   1039 annual report and accounts phoenix it group plc 
66
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
26 trade and other payables
trade and other payables principally comprise the following amounts
2009 2008
 £m £m
included within noncurrent liabilities
other creditors 76 79
included within current liabilities
trade creditors 161 193
other creditors 43 19
social security and other taxes 87 102
accruals 117 119
408 433
as at 31 march 2009 trade creditors of the group were equivalent to 38 days 2008 48 days restated
the directors consider that the carrying amount of trade payables approximates their fair value
27 obligations under finance leases and hire purchase contracts
 minimum lease present value of
payments minimum lease payments
2009 2008 2009 2008
 £m £m £m £m
amounts payable under ﬁnance leases and hire purchase contracts
within one year 55 49 49 42
in the second to ﬁ fth years inclusive 118 96 111 88
173 145 160 130
less future ﬁ nance charges 13 15
present value of lease obligations 160 130
less amounts due for settlement within 12 months 49 42
amounts due for settlement after 12 months 111 88
it is the group’s policy to lease certain of its ﬁ xtures ﬁttings and equipment under ﬁnance leases and hire purchase contracts the
average term is 5 years interest rates are ﬁ xed at the contract date all leases are on a ﬁxed repayment basis and no arrangements
have been entered into for contingent rental payments 
all lease and hire purchase obligations are denominated in sterling
there is no material difference between the minimum lease payments and the present value of the minimum lease payments
the fair value of the group’s lease and hire purchase obligations approximates their carrying amount
the group’s obligations under ﬁ nance leases and hire purchase contracts are secured by the lessors’ charges over the
leased assets
16013pheonixindd   66 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
67
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
28 provisions
 2009 2008
 £m £m
balance at the start of the period 46 15
additional provision in the year 06 09
utilisation of provision 06 –
adjustment to fair values of subsidiary undertaking note 35 – 22
balance at the end of the period 46 46
included in current liabilities 05 02
included in noncurrent liabilities 41 44
46 46
the provision relates to the obligation to reinstate certain properties to their former condition at the end of their leases which end 
between 2009 and 2020
29 deferred tax
the following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current
and prior year
 accelerated share retirement
intangible tax option beneﬁt
hedging assets depreciation costs provisions obligations total
£m £m £m £m £m £m £m
at 1 april 2007 – 21 02 06 09 – 08
acquisition of subsidiary note 35 – 52 70 – 12 08 102
charge to income – 10 – – 05 03 02
charge to equity 03 – – 01 – 02 –
change to rate of tax – 01 – – 01 – –
at 1 april 2008 03 62 72 05 15 03 108
adjustments to fair values note 35 – – 13 – 03 – 16
charge to income – 10 15 04 04 02 15
charge to equity 05 – – – – 02 07
at 31 march 2009 08 52 44 01 14 03 70
16013pheonixindd   67 26062009   1039 annual report and accounts phoenix it group plc 
68
16013 240609 proof 6
30 share capital
authorised allotted and fully paid
number £m number £m
ordinary shares of 1p each
at 1 april 2007 100000000 10 60269985 06
exercise of share options – – 410636 –
shares transferred to the employee beneﬁ t trust – – 261750 –
new shares issued on acquisition – – 14047184 01
at 1 april 2008 100000000 10 74989555 07
exercise of share options – – 32000 –
shares transferred to the employee beneﬁ t trust – – 119579 01
at 31 march 2009 100000000 10 75141134 08
during the year options were exercised on 32000 ordinary shares at prices varying from 378p to 200p and that number of shares
was issued for a total gross consideration of £54367 comprising £54047 of share premium and £320 of capital 
a total of 129941 ordinary shares are held by the employee beneﬁ t trust 2008 261750 for which the right to receive dividends
has been waived
the company has one class of ordinary share capital which carries no right to ﬁ xed income
31 share premium account
 £m
at 1 april 2007 371
premium on issue of shares 03
at 1 april 2008 374
premium on issue of shares –
at 31 march 2009 374
32 merger reserve 
 £m
at 1 april 2007 22
premium on issue of shares 553
at 1 april 2008 and 31 march 2009 575
in accordance with section 131 of the companies act 1985 the premium on ordinary shares issued in relation to acquisitions is 
recorded as a merger reserve the reserve is not distributable but can be used to make a bonus issue on fully paid shares or to make
a transfer to the proﬁ t and loss reserve an amount equal to the amount that has become realised on either the disposal or write
down of the related investment
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   68 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
69
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
33 other reserves
total
hedging translation shares to other
reserve reserve be issued reserves
£m £m £m £m
at 1 april 2007 – – 15 15
exchange difference arising on the restatement of net assets of
overseas subsidiaries – 01 – 01
ifrs2 share option expense – – 09 09
transfer to retained earnings on exercise of share options – – 08 08
loss recognised on cash ﬂ ow hedges 07 – – 07
at 1 april 2008 07 01 16 10
disposal of subsidiary – 01 – 01
ifrs2 share option expense – – 03 03
transfer to retained earnings on exercise of share options – – 06 06
loss recognised on cash ﬂ ow hedges 13 – – 13
at 31 march 2009 20 – 07 13
other reserves are shown net of taxation as appropriate
hedge reserve
the hedging reserve represents hedging gains and losses recognised on the effective portion of cash ﬂ ow hedges the cumulative
deferred gain or loss on the hedge is recognised in proﬁ t or loss when the hedged transaction impacts the proﬁt or loss or is
included as a basis adjustment to the nonﬁ nancial hedged item consistent with the applicable accounting policy
translation reserve
the translation reserve represents exchange differences relating to the translation of net assets of the group’s foreign operations
from their functional currency to the parent’s functional currency 
shares to be issued
shares to be issued represents amounts expensed in the income statement in connection with awards made under the group’s 
share option scheme less any exercises or lapses of such awards
34 retained earnings
 £m
at 1 april 2007 151
sharebased payment transaction deferred tax reserve 01
sharebased payment transaction corporation tax reserve 01
movement on pension deﬁ cit 06
deferred tax on pension reserve 02
exercise of ifrs2 options 08
retained proﬁ t for the year 107
dividends 33
at 1 april 2008 237
movement on pension deﬁ cit 08
deferred tax on pension reserve 02
exercise of ifrs2 options 06
retained proﬁ t for the year 110
dividends 27
at 31 march 2009 320
16013pheonixindd   69 26062009   1039 annual report and accounts phoenix it group plc 
70
16013 240609 proof 6
35 acquisition of subsidiary undertaking
on 29 may 2007 the group acquired control of icm computer group limited icm as at 31 march 2008 the fair values assigned to 
the assets and liabilities acquired were provisional during the year ended 31 march 2009 these have been reviewed and adjusted as
necessary and these adjustments are set out in the following table
 provisional revised
fair value fair value
to group revaluation to group
£m £m £m
fixed assets
property plant and equipment 517 48 469
intangible asset arising on acquisition 187 – 187
current assets
inventories 37 09 28
trade and other receivables 149 – 149
cash and cash equivalents 08 – 08
total assets 898 57 841
liabilities
bank loans 158 – 158
trade and other payables 121 01 122
provisions 22 – 22
current tax liabilities 06 – 06
deferred tax liabilities 102 16 86
retirement beneﬁ t obligations 28 – 28
deferred revenue 159 – 159
total liabilities 596 15 581
net assets 302 42 260
goodwill 906 42 948
 1208 – 1208
satisﬁ ed by
cash 618 – 618
shares 554 – 554
cash – costs of acquisition 36 – 36
 1208 – 1208
details of the amendments to the provisional fair values of the acquired identiﬁ able assets and liabilities are as follows
a property plant and equipment’s value was revised in order to reﬂ ect their fair value to the group
b inventories were adjusted to reﬂ ect the valuation on the date of acquisition
c other creditors were adjusted to take account of additional liabilities identiﬁ ed on the date of acquisition
d deferred tax liabilities were revalued to take account of the deferred tax that arises from the other fair value adjustments
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   70 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
71
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
36 notes to the cash flow statement
2009 2008
 restated
 £m £m
proﬁ t from operations 230 234
adjustments for
depreciation of property plant and equipment 135 108
impairment of property 14 05
lossproﬁ t on disposal of property plant and equipment 01 01
amortisation of acquired intangibles 34 36
share option costs 03 09
loss on disposal of subsidiaries 07 –
retirement beneﬁ t – difference between contribution and amounts charged 08 07
exchange difference – 01
operating cash ﬂ ows before movements in working capital 410 385
increase in stocks 14 10
decreaseincrease in receivables 61 151
decreaseincrease in payables 23 118
increase in deferred income 24 111
cash generated by operations 458 453
income taxes paid 50 64
interest received 01 03
interest paid 70 93
net cash from operating activities 339 299
additions to ﬁ xtures and equipment during the year amounting to £70m 2008 £88m were ﬁnanced by new ﬁnance leases
16013pheonixindd   71 26062009   1039 annual report and accounts phoenix it group plc 
72
16013 240609 proof 6
notes to the consolidated financial statements
for the year ended 31 march 2009
37 reconciliation of net borrowings
 2009 2008
 £m £m
decreaseincrease in cash and cash equivalents during the period 64 73
movement in borrowings 209 661
borrowings of business acquired – 164
movement in net borrowings during the period 145 752
net borrowings brought forward 1029 277
net borrowings carried forward 884 1029
cash and cash equivalents 59 123
other current borrowings 176 182
noncurrent borrowings 767 970
net borrowings carried forward 884 1029
38 operating lease arrangements
the group as lessee
 2009 2008
 £m £m
minimum lease payments under operating leases recognised in income for the year 85 32
at the balance sheet date the group had outstanding commitments for future minimum lease payments under noncancellable 
operating leases which fall due as follows
 2009 2008
 £m £m
within one year 73 74
in the second to ﬁ fth years inclusive 236 224
after ﬁ ve years 119 168
428 466
operating lease payments represent rentals payable by the group for land and buildings ﬁ xtures and ﬁttings equipment and
motor vehicles
16013pheonixindd   72 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
73
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
39 sharebased payments
equitysettled share option plans
the company has operated the following equitysettled share option plans during the period
employee share plan esp
enterprise management incentive plan emi
performance share plan psp
postﬂotation no further awards will be made under the esp or the emi plan
the general terms and conditions of each plan are as follows
 esp emi psp
exercise price agreed market price of the all grants under the emi plan all awards made under the psp
company’s shares at date of grant were made at prices higher than have a nil exercise price the
the agreed market price of the number of options granted to
company’s shares at the date of eligible group employees is
grant the grant prices reﬂected determined as a proportion of
the grant prices of option rights base salary using the average of
under the esp waived by option the middle market quotes for the
holders prior to the adoption of company’s shares for the three
the emi plan days immediately prior to grant
vesting period generally 3 years from the vesting of all emi plan options three years from the date of grant
date of grant was conditional upon the ﬂotation
of the company consequently
all the emi plan options vested
in november 2004
lapse date generally options granted under all emi plan options automatically psp options lapse if they remain
the esp automatically lapse if they lapse if they remain unexercised unexercised after a period of
remain unexercised after a period after a period of 10 years from 10 years from the date of grant
of 7 years from the date of grant the date of grant furthermore furthermore options are
furthermore generally options options are forfeited if the option forfeited if the option holder
granted under the esp are holder ceases to be a group ceases to be a group employee
forfeited if the option holder employee before exercising before exercising the option
ceases to be a group employee the option
before exercising the option
performance none none the psp awards are subject to
conditions achieving a performance
condition related to average
annual growth in either eps or
proﬁt growth over a 3year
period of between 5 and 20
per annum this results in
between 20 and 100 of the
options granted vesting
performance between these
points is on a progressive scale
16013pheonixindd   73 26062009   1039 annual report and accounts phoenix it group plc 
74
16013 240609 proof 6
39 sharebased payments continued
esp 2009 2008
 weighted weighted
average average
 exercise exercise
 options price options price
balance at the start of the period 132500 197p 303500 165p
granted during the period – – – –
exercised during the period 25000 200p 155500 139p
forfeited during the period – – 15500 151p
outstanding at the end of the period 107500 197p 132500 197p
exercisable at the end of the period 107500 197p 132500 197p
emi 2009 2008
 weighted weighted
average average
 exercise exercise
 options price options price
balance at the start of the period 125500 80p 143000 78p
granted during the period – – – –
exercised during the period 7000 62p 16500 69p
forfeited during the period 500 96p 1000 96p
outstanding at the end of the period 118000 81p 125500 80p
exercisable at the end of the period 118000 81p 125500 80p
psp 2009 2008
 weighted weighted
average average
 exercise exercise
 options price options price
balance at the start of the period 2221811 – 1817655 –
granted during the period 877004 – 860607 –
exercised during the period 238295 – 251727 –
forfeited during the period 71014 – 204724 –
expired during the period 419639 – – –
outstanding at the end of the period 2369867 – 2221811 –
exercisable at the end of the period 131749 – 248659 –
the weighted average share price at the date of exercise for share options exercised during the period was
esp 321p
emi 331p
psp 318p
the options outstanding at 31 march 2009 had a weighted average exercise price of 12p and a weighted average remaining 
contractual life of 8 years in 2008 options were granted on 22 august 2007 and 13 september 2007 the aggregate of the estimated 
fair values of the options granted on those dates is £3m in 2009 options were granted on 20 june 2008 the aggregate of the 
estimated fair values of the options granted on those dates is £2m
notes to the consolidated financial statements
for the year ended 31 march 2009
16013pheonixindd   74 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
75
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
39 sharebased payments continued
the inputs into the black–scholes model are as follows
 2009 2008
weighted average share price £293 £401
weighted average exercise price nil nil
expected volatility 30 30
expected life 4 years 4 years
weighted average riskfree rate 522 531
weighted average dividend yield 187 119
expected volatility was determined by calculating the historical volatility of the group’s share price over the previous 6 months and 
by comparison with comparable companies the expected life used in the model has been adjusted based on management’s best 
estimate for the effects of nontransferability exercise restrictions and behavioural considerations
other sharebased plans
the company introduced a share incentive plan on ﬂ otation all employees were entitled to apply for free shares up to a value of
£1250 depending on their period of service the company issued 259558 shares in connection with this award
in addition employees are able to buy shares by deduction from their pretax salary under the current sip legislation this is
restricted to a maximum of £1500 in each tax year or if less 10 of salary
the group recognised total income of £03m relating to equitysettled sharebased payment transactions in 2009 2008 expense
of £10m
40  related party transactions
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are
disclosed in note 16 to the individual company ﬁ nancial statements transactions with directors are disclosed in the remuneration
report
16013pheonixindd   75 26062009   1039 annual report and accounts phoenix it group plc 
76
16013 240609 proof 6
independent auditor’s report to the members of phoenix it group plc
we have audited the parent company ﬁnancial statements of
phoenix it group plc for the year ended 31 march 2009 which 
comprise the balance sheet and the related notes 1 to 16 these 
parent company ﬁ nancial statements have been prepared
under the accounting policies set out therein
we have reported separately on the group ﬁnancial statements
of phoenix it group plc for the year ended 31 march 2009 and 
on the information in the directors’ remuneration report that is 
described as having been audited
this report is made solely to the company’s members as a 
body in accordance with section 235 of the companies act 
1985 our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditors’ report and for no other 
purpose to the fullest extent permitted by law we do not 
accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit 
work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual
report and the parent company ﬁ nancial statements in
accordance with applicable law and united kingdom 
accounting standards united kingdom generally
accepted accounting practice are set out in the statement
of directors’ responsibilities
our responsibility is to audit the parent company ﬁ nancial
statements in accordance with relevant legal and regulatory 
requirements and international standards on auditing
uk and ireland
we report to you our opinion as to whether the parent
company ﬁ nancial statements give a true and fair view
and whether the parent company ﬁ nancial statements have
been properly prepared in accordance with the companies act 
1985 we also report to you whether in our opinion the 
directors’ report is consistent with the parent company 
ﬁnancial statements
in addition we report to you if in our opinion the company has 
not kept proper accounting records if we have not received all 
the information and explanations we require for our audit or if 
information speciﬁ ed by law regarding directors’ remuneration
and other transactions is not disclosed
we read the other information contained in the annual report as
described in the contents section and consider whether it is
consistent with the audited parent company ﬁnancial
statements we consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the parent company ﬁnancial statements
our responsibilities do not extend to any further information
outside the annual report
basis of audit opinion
we conducted our audit in accordance with international
standards on auditing uk and ireland issued by the auditing 
practices board an audit includes examination on a test basis 
of evidence relevant to the amounts and disclosures in the 
parent company ﬁ nancial statements it also includes an
assessment of the signiﬁ cant estimates and judgements made
by the directors in the preparation of the parent company 
ﬁnancial statements and of whether the accounting policies are
appropriate to the company’s circumstances consistently 
applied and adequately disclosed
we planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in 
order to provide us with sufﬁ cient evidence to give reasonable
assurance that the parent company ﬁ nancial statements are
free from material misstatement whether caused by fraud or 
other irregularity or error in forming our opinion we also 
evaluated the overall adequacy of the presentation of 
information in the parent company ﬁ nancial statements
opinion
in our opinion
l the parent company ﬁ nancial statements give a true and
fair view in accordance with united kingdom generally 
accepted accounting practice of the state of the 
company’s affairs as at 31 march 2009
l the parent company ﬁ nancial statements have been
properly prepared in accordance with the companies act 
1985 and
l the information given in the directors’ report is consistent 
with the parent company ﬁ nancial statements
deloitte llp
chartered accountants and registered auditors 
london
united kingdom
29 may 2009
16013pheonixindd   76 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
77
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
company balance sheet
as at 31 march 2009
2009 2008
 note £m £m
fixed assets
investments 4 1997 2306
current assets
debtors 5 524 255
cash  01 –
525 255
creditors amounts falling due in one year 6 702 554
net current liabilities 177 299
total assets less current liabilities 1820 2007
creditors amounts falling due after more than one year 7 684 892
net assets 1136 1115
capital and reserves
share capital 8 08 07
share premium account 9 374 374
merger reserve 10 575 575
hedging reserve 11 28 10
shares to be issued reserve 12 07 16
proﬁ t and loss account 13 200 153
shareholders’ funds 14 1136 1115
the ﬁ nancial statements were approved by the board of directors and authorised for issue on 29 may 2009 they were signed on its
behalf by
david simpson
chief financial ofﬁ cer
16013pheonixindd   77 26062009   1040 annual report and accounts phoenix it group plc 
78
16013 240609 proof 6
notes to the company financial statements
for the year ended 31 march 2009
1 accounting policies
accounting convention
the ﬁ nancial statements are prepared under the historical cost convention and have been prepared in accordance with the
applicable united kingdom accounting standards as permitted by the companies act 1985 the company has not presented its 
own proﬁ t and loss account
the principal accounting policies adopted are set out below they have all been applied consistently throughout the year and the
preceding year
foreign currencies
assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date 
transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction exchange 
differences are taken into account in arriving at the operating result 
group undertakings
investments are included in the balance sheet at cost less any provision for permanent diminution in value
financial liabilities and equity
financial liabilities and equity instruments are classiﬁ ed according to the substance of the contractual arrangements entered into
an equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities
bank borrowings
interestbearing bank loans are recorded at the proceeds received less any direct issue costs finance charges and direct issue
costs are accounted for on an accruals basis in proﬁ t and loss using the effective interest method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period in which they arise
sharebased payments
the company has applied the requirements of frs20 ‘sharebased payments’ in accordance with the transitional provisions frs20 
has been applied to all grants of equity instruments after 7 november 2002 that were unvested as of 1 january 2005
the company issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are 
measured at fair value at the date of grant the fair value is expensed on a straightline basis over the vesting period based on the 
estimate of shares that will eventually vest
derivative ﬁ nancial instruments and hedge accounting
the company uses derivative ﬁ nancial instruments to reduce exposure to interest rate movements the company does not hold or
issue derivative ﬁ nancial instruments for speculative purposes
for an interest rate swap to be treated as a hedge the instrument must be related to actual assets or liabilities or a probable
commitment and must change the nature of the interest rate by converting variable rate to ﬁ xed rate or vice versa interest
differentials under these swaps are recognised by adjusting new interest payable over the period of the contracts
if an instrument ceases to be a hedge for example because the underlying hedged position is eliminated the instrument is marked 
to market and any resulting proﬁ t or loss recognised at that time
2 staff costs
the directors were the only employees during the period and they received all of their remuneration as disclosed in the directors’ 
remuneration report on page 34 from phoenix it services limited a subsidiary entity
3 profit of parent company
as permitted by section 230 of the companies act 1985 the proﬁ t and loss account of the parent company is not presented as part
of these accounts the parent company’s proﬁ t after tax for the ﬁnancial year amounted to £62m 2008 £10m
16013pheonixindd   78 26062009   1040 stock exchange code pnx wwwphoenixitgroupcom
79
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
4 investments
 shares in loans to
group group
undertakings undertakings total
£m £m £m
cost
at 1 april 2008 2096 220 2316
additions 02 – 02
disposals 309 – 309
at 31 march 2009 1789 220 2009
accumulated impairment
at 1 april 2008 10 – 10
additions 02 – 02
at 31 march 2009 12 – 12
net book value
at 31 march 2009 1777 220 1997
at 31 march 2008 2086 220 2306
on 1 october 2008 the company transferred its investment in servo computer services limited to servo limited a fellow group 
undertaking the investment was transferred for consideration of £309m satisﬁ ed by intercompany payables the transaction
gave rise to neither a proﬁ t nor a loss
at 31 march 2009 the company held directly or indirectly 100 of the allotted share capital of the following principal undertakings 
which are all included in the consolidation
name of subsidiary country of registration class of share capital held nature of business
phoenix it services limited england and wales ordinary  provision of information
technology services
trend network services england and wales ordinary provision of information
technology networking support 
and infrastructure services
icm business continuity services limited england and wales  ordinary provision of business continuity
and it disaster recovery services
network disaster recovery limited england and wales ordinary  provision of business continuity
and it disaster recovery services
servo limited england and wales ordinary  provision of information
technology services and systems
servo computer services limited england and wales ordinary  provision of information
technology services and systems
5 debtors amounts falling due within one year
 2009 2008
 £m £m
amounts owed by group undertakings note 16 513 255
prepayments 10 –
deferred tax asset 01 –
524 255
the deferred tax asset relates to accelerated capital allowances
16013pheonixindd   79 26062009   1040 annual report and accounts phoenix it group plc 
80
16013 240609 proof 6
notes to the company financial statements
for the year ended 31 march 2009
6 creditors amounts falling due within one year
 2009 2008
 £m £m
amounts owed to group undertakings note 16 559 402
trade creditors 02 01
accruals 13 11
bank loans 127 140
obligations under ﬁ nance lease and hire purchase contracts 01 –
702 554
7 creditors amounts falling due after more than one year
 2009 2008
 £m £m
bank loans 656 882
hedging liability 28 10
684 892
the borrowings are repayable as follows
in more than one year but not more than two years 157 127
in more than two years but not more than ﬁ ve years 499 755
656 882
the derivative ﬁ nancial instrument matures on 30 september 2010
8 share capital
authorised allotted and fully paid
number £m number £m
ordinary shares of 1p each
at 1 april 2008 100000000 10 74989555 07
exercise of share options – – 32000 –
shares transferred to the employee beneﬁ t trust – – 119579 01
at 31 march 2009 100000000 10 75141134 08
9 share premium account
 £m
at 1 april 2008 374
premium on issue of shares –
at 31 march 2009 374
16013pheonixindd   80 26062009   1040 stock exchange code pnx wwwphoenixitgroupcom
81
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
10 merger reserve
 £m
at 1 april 2008 and 31 march 2009 575
11 hedging reserve
 £m
at 1 april 2008 10
loss recognised on cash ﬂ ow hedge 18
at 31 march 2009 28
12 shares to be issued reserve
 £m
at 1 april 2008 16
frs20 share option expense 03
transfer to retained earnings on exercise of share options 06
at 31 march 2009 07
13 profit and loss account
 £m
at 1 april 2007 176
retained proﬁ t for the year 10
dividends 33
at 1 april 2008 153
retained proﬁ t for the year 62
transfer from shares to be issued reserve on exercise of share options 12
dividends 27
at 31 march 2009 200
14 reconciliation of movements in shareholders’ funds
 2009 2008
 £m £m
at 1 april 2008 1115 589
proﬁ t for the ﬁnancial year 62 10
dividends 27 33
1150 566
loss recognised on cash ﬂ ow hedges 18 10
frs20 share option expense 03 02
share capital issue 01 01
premium on issue of shares – 556
closing shareholders’ funds 1136 1115
16013pheonixindd   81 26062009   1040 annual report and accounts phoenix it group plc 
82
16013 240609 proof 6
notes to the company financial statements
for the year ended 31 march 2009
15 sharebased payments
details of share options granted by group companies to employees and that remain outstanding over the company’s shares 
are set out in note 39 to the phoenix it group plc consolidated ﬁ nancial statements on pages 73 to 75 the company recognised a
credit of £02m relating to equitysettled sharebased payment transactions in 2009 2008 £01m charge
16 related party transactions
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are
shown below
 amounts owed amounts owed
by related to related
parties parties
£m £m
phoenix it services limited – 222
trend network services – 03
phoenix systems management limited – 29
phoenix computer group limited – 33
phoenix it services europe limited – 10
phoenix international holdings limited 01 –
knaves beech investments no1 limited 15 –
ndr holdings limited 149 –
icm business continuity services limited – 262
icm computer group limited 155 –
servo limited 193 –
at 31 march 2009 513 559
the transactions with related parties include the receipt of dividends from subsidiaries totalling £176m and loans as above both 
payable by the company to subsidiaries and repayable to the company by subsidiaries which carry no interest and are repayable 
on demand the amounts outstanding are unsecured and will be settled in cash no guarantees have been given or received no 
provisions have been made for doubtful debts in respect of the amounts owed by related parties
16013pheonixindd   82 26062009   1040 stock exchange code pnx wwwphoenixitgroupcom
83
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
five year summary
for the year ended 31 march 2009
2009 2008 2007 2006 2005
 £m £m £m £m £m
results
revenue 2532 2308 1267 1089 883
proﬁ t from operations excluding goodwill
amortisation amortisation of acquired intangibles
and nonrecurring items 357 330 227 214 150
amortisation of acquired intangibles 34 36 20 20 –
nonrecurring items 93 60 – – 20
proﬁ t from operations 230 234 207 194 130
net interest payable 74 79 14 15 19
proﬁ t before tax 156 155 193 179 111
key statistics
earnings per ordinary share 147p 150p 230p 213p 157p
diluted earnings per ordinary share 142p 146p 222p 208p 154p
adjusted earnings per ordinary share 271p 248p 253p 237p 189p
 adjusted earnings per ordinary share excludes the effect of goodwill amortisation amortisation of acquired intangibles and
nonrecurring items
16013pheonixindd   83 26062009   1040 annual report and accounts phoenix it group plc 
84
16013 240609 proof 6
notice of annual general meeting
this document is important and requires your immediate attention if you are in any doubt as to what action you should 
take you should consult your stockbroker bank manager solicitor accountant or other professional adviser if you have sold 
or transferred all your shares in phoenix it group plc please pass this document and the accompanying form of proxy to the 
stockbroker bank or other agent through whom you made the sale or transfer for transmission to the purchaser or transferee
notice is hereby given that the annual general meeting of phoenix it group plc the “company” will be held at
technology house hunsbury hill avenue northampton northamptonshire nn4 8qs on friday
31 july 2009 at 1030 am for the following purposes
ordinary business 
1 to receive and adopt the accounts for the year ended 31 march 2009 together with the directors’ report the auditor’s report
and the auditable part of the remuneration report
2 to declare a ﬁnal dividend for the year ended 31 march 2009 of 42p per ordinary share to be paid on 9 october 2009 to
shareholders on the register at the close of business on 18 september 2009
3 to reappoint deloitte llp as auditors to the company to hold ofﬁce until the conclusion of the next general meeting at which
accounts are laid before the company
4 to authorise the directors to determine the remuneration of the auditors of the company
5 to reelect as a director brian sellwood who retires by rotation in accordance with article 80 of the company’s articles of association
6 to reelect as a director david simpson who retires by rotation in accordance with article 80 of the company’s articles of
association
7 to elect david garman as a director
8 to elect david warnock as a director
9 to approve the directors’ remuneration report for the year ended 31 march 2009
special business
as special business to consider and if thought ﬁ t pass the following resolutions which will be proposed as to resolution 10 as an
ordinary resolution and as to resolutions 11–14 inclusive as special resolutions
10 that subject to and in accordance with article 92 of the company’s articles of association the directors be generally and 
unconditionally authorised in accordance with section 80 of the companies act 1985 in substitution for any existing authority 
to allot relevant securities to exercise all the powers of the company to allot relevant securities within the meaning of 
section 80 of the companies act 1985 up to a maximum nominal amount of £250490 being approximately onethird of the 
company’s issued share capital as at 29 may 2009 provided that such authority shall expire on the conclusion of the annual 
general meeting of the company to be held in 2010 or 31 october 2010 whichever is earlier but so that the company may 
before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such 
expiry and the directors may allot relevant securities in pursuance of such offer or agreement as if the authority conferred by
this resolution had not expired
11 that subject to the passing of resolution 10 as set out in the notice of this meeting and in accordance with article 92 of the 
company’s articles of association the directors be empowered pursuant to section 95 of the companies act 1985 to allot 
equity securities as deﬁ ned in section 94 of the companies act 1985 for cash pursuant to the general authority conferred
by resolution 10 as set out in the notice of this meeting as if section 891 of the companies act 1985 did not apply to such 
allotment provided that this power shall be limited to allotments of equity securities 
a in connection with or pursuant to an offer by way of rights open offer or other preemptive offer to the holders of 
shares in the company and other persons entitled to participate therein in proportion as nearly as practicable to their 
respective holdings subject to such exclusions or other arrangements as the directors may consider necessary or expedient 
to deal with fractional entitlements or legal or practical problems under the laws of any territory or the regulations or 
requirements of any regulatory authority or any stock exchange in any territory 
b otherwise than pursuant to subparagraph a above up to an aggregate nominal amount of £37573 which is equivalent 
to 5 of the company’s issued share capital as at 29 may 2009
and such power shall expire on the conclusion of the annual general meeting of the company to be held in 2010 or on
31 october 2010 whichever is earlier but so that the company may before such expiry make an offer or agreement which 
16013pheonixindd   84 26062009   1040 stock exchange code pnx wwwphoenixitgroupcom
85
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in 
pursuance of such offer or agreement as if the power conferred by this resolution had not expired
12 that the company be generally and unconditionally authorised pursuant to article 6 of the company’s articles of association
and pursuant to section 166 of the companies act 1985 to make market purchases as deﬁned in section 163 of the companies
act 1985 of up to 3757356 ordinary shares of 1p each in the capital of the company being approximately 5 of the company’s
issued share capital as at 29 may 2009 on such terms and in such manner as the directors of the company may from time to time
determine provided that
a the amount paid for each share exclusive of expenses shall not be more than the higher of 1 5 above the average of 
the middle market quotation for the company’s ordinary shares as derived from the daily ofﬁ cial list of london stock
exchange plc for the ﬁ ve business days before the date on which the contract for the purchase is made and 2 an amount
equal to the higher of the price of the last independent trade and current independent bid as derived from the london 
stock exchange trading system and in any event not less than 1p per ordinary share and 
b the authority herein contained shall expire at the conclusion of the annual general meeting of the company to be held in 2010
or on 31 october 2010 whichever is earlier provided that the company may before such expiry make a contract to purchase its
own shares which would or might be executed wholly or partly after such expiry and the company may make a purchase of its
own shares in pursuance of such contract as if the authority conferred by this resolution had not expired
13 that the regulations contained in the printed document produced to the meeting and initialled by the chairman for the 
purposes of identiﬁ cation be and are hereby adopted as the articles of association of the company in substitution for and to
the exclusion of the existing articles of association of the company
14 that subject to the passing of resolution 13 as permitted by the eu shareholders rights directive 200736ec any general meeting
of the company other than the annual general meeting of the company shall be called by notice of at least 14 clear days in
accordance with the provisions of the articles of association of the company provided that the authority of this resolution shall expire
on the conclusion of the annual general meeting of the company to be held in 2010
dated 29 may 2009 
registered ofﬁ ce by order of the board
technology house
hunsbury hill avenue  william martin
northampton company secretary
northamptonshire
nn4 8qs
16013pheonixindd   85 26062009   1040 annual report and accounts phoenix it group plc 
86
16013 240609 proof 6
notice of annual general meeting
continued
notes
1 any member entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies who need not be a member of the 
company to attend and on a poll to vote instead of the member completion and return of a form of proxy will not preclude a member from attending 
and voting at the meeting in person should he subsequently decide to do so a member can appoint more than one proxy in relation to the meeting 
provided that each proxy is appointed to exercise the rights attaching to different shares held by him 
2 your proxy could be the chairman another director of the company or another person who has agreed to attend to represent you your proxy will vote
as you instruct and must attend the meeting for your vote to be counted details of how to appoint the chairman or another person as your proxy using 
the proxy form are set out in the notes to the proxy form
3 in order to be valid any form of proxy and power of attorney or other authority under which it is signed or a notarially certiﬁed or ofﬁce copy of such
power or authority must reach the company’s registrars equiniti ltd aspect house spencer road lancing bn99 6zl not less than 48 hours before the 
time of the meeting or of any adjournment of the meeting 
4 to change your proxy instructions you may return a new proxy appointment using the methods set out above where you have appointed a proxy using 
the hard copy proxy form and would like to change the instructions using another hard copy proxy form please contact the company’s registrar see 
note 3 the deadline for receipt of proxy appointments see above also applies in relation to amended instructions any attempt to terminate or amend 
a proxy appointment received after the relevant deadline will be disregarded where two or more valid separate appointments of proxy are received in 
respect of the same share in respect of the same meeting the one which is last sent shall be treated as replacing and revoking the other or others
5 crest shareholders who wish to appoint a proxy or proxies by utilising the crest electronic proxy appointment service may do so by utilising the 
procedures described in the crest manual crest personal shareholders or other crest sponsored shareholders and those crest shareholders who have 
appointed a voting service providers should refer to their crest sponsor or voting service providers who will be able to take the appropriate action on 
their behalf
6 in order for a proxy appointment made by means of crest to be valid the appropriate crest message a “crest proxy instruction” must be properly 
authenticated in accordance with euroclear uk  ireland’s speciﬁ cations and must contain the information required for such instructions as described in
the crest manual the message regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously 
appointed proxy must in order to be valid be transmitted so as to be received by the issuer’s agent id ra19 by the latest times for receipt of proxy 
appointments speciﬁ ed in the notice of meeting for this purpose the time of receipt will be taken to be the time as determined by the timestamp
applied to the message by the crest applications host from which the issuer’s agent is able to retrieve the message by enquiry to crest in the manner 
prescribed by crest
7 the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of the uncertiﬁ cated securities regulations
2001
8 crest shareholders and where applicable their crest sponsors or voting service providers should note that euroclear uk  ireland does not make available
special procedures in crest for any particular messages normal system timings and limitations will therefore apply in relation to the input of crest proxy
instructions it is the responsibility of the crest member concerned to take or if the crest member is a crest personal member or sponsored member or
has appointed a voting service providers to procure that his crest sponsor or voting service providers takes such action as shall be necessary to ensure
that a message is transmitted by means of the crest system by any particular time in this connection crest shareholders and where applicable their crest
sponsors or voting service providers are referred in particular to those sections of the crest manual concerning practical limitations of the crest system and
timings
9 as permitted by regulation 41 of the uncertiﬁ cated securities regulations 2001 shareholders who hold shares in uncertiﬁcated form must be entered on
the company’s share register at 600 pm on 29 july 2009 in order to be entitled to attend and vote at the annual general meeting such shareholders may 
only cast votes in respect of shares held at such time changes to entries on the relevant register after that time shall be disregarded in determining the 
rights of any person to attend or vote at the meeting
10 in order to facilitate voting by corporate representatives at the meeting arrangements will be put in place at the meeting so that i if a corporate 
shareholder has appointed the chairman of the meeting as its corporate representative with instructions to vote on a poll in accordance with the 
directions of all of the other corporate representatives for that shareholder at the meeting then on a poll those corporate representatives will give voting 
directions to the chairman and the chairman will vote or withhold a vote as corporate representative in accordance with those directions and ii if 
more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has not appointed the 
chairman of the meeting as its corporate representative a designated corporate representative will be nominated from those corporate representatives 
who attend who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative 
corporate shareholders are referred to the guidance issued by the institute of chartered secretaries and administrators on proxies and corporate 
representatives – wwwicsaorguk – for further details of this procedure the guidance includes a sample form of representation letter if the chairman is 
being appointed as described in i above
16013pheonixindd   86 26062009   1040 stock exchange code pnx wwwphoenixitgroupcom
87
16013 240609 proof 6
business review
operating  financial review
corporate governance
financial statements
shareholder information
11 the total number of ordinary shares of £001 in issue as at 26 june 2009 the last practicable day before printing this document was 75 149 139 ordinary 
shares and the total level of voting rights was 75 149 139 none of which were attached to shares held in treasury by the company
12 shareholders satisfying the thresholds in section 527 of the companies act 2006 can require the company to publish a statement on its website setting out 
any matter relating to
121 the audit of the company’s accounts including the auditor’s report and the conduct of the audit that are to be laid before the meeting or
122 any circumstances connected with an auditor of the company ceasing to hold ofﬁ ce since the last annual general meeting that the shareholders
propose to raise at the meeting 
the company cannot require the shareholders requesting the publication to pay its expenses any statement placed on the website must also be sent to 
the company’s auditor no later than the time it makes its statement available on the website
the business which may be dealt with at the meeting includes any statement that the company has been required to publish on its website
13 copies of the service contracts of each of the directors and the new articles of association of the company will be available for inspection at the registered 
ofﬁ ce of the company during usual business hours on any weekday saturdays and public holidays excluded from the date of this notice until the date 
of the annual general meeting and at the place of the annual general meeting from at least 15 minutes prior to and until the conclusion of the annual 
general meeting
14 an explanation of the effect of the proposed amendments to the company’s articles of association is set out below 
article 46 old numbering is being deleted and a new article 46 inserted to provide that any general meeting of the company other than an annual 
general meeting can be called on 14 day’s clear notice and that in relation to the calling of a general meeting at less that 14 day’s notice the meeting 
is deemed to have been properly called if the majority of shareholders holding at least the minimum percentage in nominal value of the shares as 
prescribed by the 2006 act at the time of the meeting agree to the shorter notice all references to “extraordinary general meetings” have been changed 
to “general meetings” 
articles 93–95 old numbering are being deleted and new articles 93–95 inserted to deal with the directors’ conﬂ icts of interest under the 2006 act
from 1 october 2008 a director must avoid a situation where he has or can have a direct or indirect interest that conﬂ ict or may possibly conﬂict with
the company’s interests the requirement is very broad and could apply for example if a director becomes a director of another company or a trustee 
of another organisation the 2006 act allows directors of public companies to authorise conﬂ icts and potential conﬂicts where appropriate where the
articles of association contain a provision to this effect the 2006 act also allows the articles of association to contain other provisions for dealing with 
directors’ conﬂ icts of interest to avoid a breach of duty article 95 is being proposed to give the directors authority to approve such situations and includes 
some conﬂ ict management provisions regarding conﬁdential information and a director’s ability to absent himself from discussions only directors who 
have no interest in the matter being considered will be able to take the decision to authorise a conﬂ ict or potential conﬂict in addition the directors will be
able to impose limits or conditions when giving authorisation if they think this is appropriate
article 96 new numbering is being inserted to provide that a director who is directly or indirectly interested in a contract transaction or arrangement shall
declare his interests if as a consequence of his involvement a conﬂict of interest within the meaning of article 94 has arisen
article 97 new numbering is being inserted to provide that if the company holds shares in any other company and those shares have voting rights 
attaching to them the directors of the company may exercise those voting rights as they see ﬁ t
articles 96–142 are to be renumbered as articles 98–144
15 biographical details of each director who is being proposed for reappointment or reelection by shareholders including their membership of board 
committees are set out on pages 20 to 21 of the 2009 annual report and accounts
16013pheonixindd   87 26062009   1040 annual report and accounts phoenix it group plc 
88
16013 240609 proof 6
shareholder notes
16013pheonixindd   88 26062009   1040 16013 240609 proof 7
stock exchange code pnx wwwphoenixitgroupcom
£156m
 2008 £155m
 106
 to £283m
 2008 £255m
 142p
 2008 146p
– £145m
 to £884m
 2008 £1029m
 263p
 2008 241p
annual report and accounts phoenix it group plc 
financial
highlights
 97
 to £2532m
 2008 £2308m
£230m
 2008 £234m
 80
 to £357m
 2008 £330m
revenues 
proﬁ t from
operations 
proﬁ t from
operations
1
proﬁ t before tax
proﬁ t before tax
2
diluted 
earning per share
total dividend
net debt 
including ﬁ nance leases
diluted 
earnings per share
3
intelligent infrastructure
business review
operating  financial review
corporate governance
financial statements
shareholder information
financial calendar
annual general meeting 31 july 2009
ex dividend date 16 september 2009
record date for dividend 18 september 2009
dividend payment date 9 october 2009
 phoenix it group plc
registered in england 03476115
registered ofﬁ ce
technology house hunsbury hill avenue
northampton nn4 8qs
financial advisers  stockbrokers 
ubs limited
1 finsbury avenue london ec2m 2pp
auditor
deloitte llp
2 new street square
london ec4a 3bz
registrars
equiniti limited
aspect house spencer road lancing
west sussex bn99 6zl
principal bankers
royal bank of scotland plc
152 silbury boulevard milton keynes mk9 1lt
solicitors
eversheds llp
115 colmore row birmingham b3 3al
financial public relations
financial dynamics limited 
holborn gate 26 southampton buildings
london wc2a 1pb
remuneration consultants
hewitt new bridge street consultants llp 
6 more london place london se1 2da
advisers
 £516m 
2008 £496m
representing 1447 
of proﬁ t from operations 
2008 1501
cash generated 
by nonrecurring 
cash ﬂ ows
4
phoenix it group growth £m
 2005 2006 2007 2008 2009
n 
revenue
 
n proﬁ t from operations before amortisation 
 of acquired intangibles and nonrecurring cost
1
 adjusted for nonrecurring items and 
amortisation of acquired intangibles
2
 proﬁ t before tax of £156m 2008 
£155m plus amortisation of acquired 
intangibles £34m 2008 £36m and 
nonrecurring items £93m 
2008 £46m
3
 see note 13
4
 cash generated by operations of 
£458m 2008 £453m plus 
nonrecurring cash ﬂ ows of £58m 
2008 £43m
300
250
200
150
100
50
0
 15
 proposed ﬁ nal 
dividend of 42p
giving a total 
dividend for 
year of 63p
 2008 548p
16013phoenixcvrindd   2 26062009   1041 16013 240609 proof 7
intelligent infrastructure
annual report and accounts
for the year ended 31 march 2009
annual report and accounts for the year ended 31 march 2009 pheonix it group plc
phoenix it group plc
technology house hunsbury hill avenue
northampton nn4 8qs
t 44 0 1604 769000
f 44 0 1604 764323
wwwphoenixitgroupcom
about us
phoenix it group companies provide
managed it infrastructure support
services including systems management
communications remote telephone
support hightouch ﬁeld services project
and consultancy services business
continuity and business availability services
what we do
the group operates its partner services 
business under the brand phoenix it 
services and its midmarket and business 
continuity operations under the 
respective brands of servo and icm
our mission
to be the most professional trustworthy
and innovative company providing
managed it infrastructure support services
our opportunities
 all of our businesses have longterm
revenue visibility a good cash ﬂ ow and
operate in market niches with excellent 
growth prospects often driven by 
regulatory change
intelligent infrastructure
16013phoenixcvrindd   1 26062009   1041


Summary:
 stock exchange code pnx wwwphoenixitgroupcom
09
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
chief executive’s review
 “the group continues to have
good forward visibility from its
order book and high levels of 
recurring revenues from a
diversified customer base”
overview
i am pleased to report that in the past year phoenix it group has 
developed into a larger more resilient and competitive business
with three operating divisions focused on speciﬁ c sectors of
the uk it services market the integration of the group’s most 
recent acquisition icm together with our earlier acquisitions 
servo and ndr was completed in the year and returns on our 
investment in additional business recovery and hosting facilities 
have underpinned our organic revenue growth and positioned 
the group for future growth
we have had a successful year ﬁnancially for the year ended
31 march 2009 group proﬁ t before tax before nonrecurring
items and amortisation of acquired intangibles grew by 106 
to £283m
1
 2008 £255m on group revenues of £2532m 
2008 £2308m an increase of 97 cash generation was also 
strong enabling a reduction in net debt including ﬁ nance
leases of £145m to £884m 2008 £1029m
factors helping to drive this growth and operational 
performance include our ﬂ exibility and responsiveness to the
particular needs of our customers operational precision and 
quality of service the introduction of new and innovative 
services and tight cost controls that help us quote competitively 
for new business in the markets in which we operate
strategy 
the group’s strategy for increasing shareholder value and 
accelerating growth by entering into it outsourcing contracts 
and through the development of niche it services particularly 
business continuity and hosting remains unchanged we are 
conﬁ dent that we have the right strategy in place to deliver
value to our customers and shareholders each of our three 
operating divisions beneﬁ ts directly from being part of the
wider group leveraging our centres of excellence as well as 
giving opportunities to crosssell between divisions and to sell
a wider portfolio of services to existing and prospective 
customers in addition as we plan for the longerterm growth
of the group we have established a strong modular structure 
which can be readily expanded with the addition of service lines 
and potential further acquisitions which meet our strict criteria 
the board believes that a continuing focus on the uk will 
maximise the performance of the group for the foreseeable 
future and enhance shareholder value through securing 
proﬁ table cash generative growth
the markets the group serves
with effect from 1 april 2008 the group moved from ﬁ ve
operating businesses to three customerfacing divisions icm 
continuous business business continuity serving the business 
continuity and disaster recovery market phoenix it services 
partner services providing a full range of it support services
to large partner organisations and servo midmarket which 
serves the uk corporate and public sector midmarket where it 
is most costeffective to do so these divisions are supported by 
shared activities operated as centres of excellence by the 
division best equipped to provide that function to the other 
operating divisions in the group
phoenix continues to be well positioned in each of its chosen 
markets and has good forward visibility and resilience from its 
forward order book our spread of customers and penetration 
of more defensive sectors such as the public sector results in
a high level of recurring revenue derived from a diversiﬁ ed
customer base in the year no contract was larger than 4 
2008 4 of group revenue as at 31 march 2009 the group’s 
annualised contract value was £1799m 2008 £1820m and
the values by sector were
annualised contract value at 31 march 2009 
vertical sector £m 
other commercial 690 383
public sector 374 208
financial services 349 194
telecommunications 117 65
utilities oil and gas 78 44
systems integrators 77 43
retail 58 32
travel  leisure 42 23
construction 14 08
total 1799 1000
1  
proﬁ t before tax of £156m 2008 £155m plus amortisation of
acquired intangibles £34m 2008 £36m and nonrecurring 
items £93m 2008 £64m
16013pheonixindd   09 26062009   1039 annual report and accounts phoenix it group plc 
10
16013 240609 proof 6
integration process
as anticipated we completed our integration programme 
during the year the combination of the phoenix businesses
and icm resulted in a number of cost synergies together with 
cost savings arising from the increased buying power of the 
enlarged group we are also beginning to beneﬁ t from
crossselling and collaborative working across the three 
customer facing divisions in addition the combination of 
phoenix and icm’s operations into larger units throughout the 
uk is providing improved operating efﬁ ciency from the greater
density of geographical coverage
changes to the economic background
the recession is affecting the markets in which we operate and 
the speed and scale of the general economic downturn has 
been greater than envisaged by some commentators as a 
result 2009 is likely to be a tough year for some participants in 
the it sector however having taken early action including a 
review of our cost base the group is well positioned to be able 
to withstand the recession and whilst the shortterm outlook 
remains sensitive to recessionary inﬂ uences the mediumterm
prospects for growth in our markets are positive 
there is an ongoing need for our customers to invest in
it services particularly the outsourcing of it functions to 
maintain and improve their competitive positions the 
investments we have made during the year combined with the 
removal of duplicated activities through the integration means 
we are well positioned in the more difﬁ cult economic climate
each of our three customerfacing divisions is appropriately 
structured and resourced for the less favourable market 
conditions anticipated for the remainder of 2009 and beyond 
actions have been taken to cut costs and maximise cash 
generation in order to mitigate any further downturn and 
protect the group’s capital position whilst safeguarding the 
group’s core strengths the key actions we have taken to 
reduce costs and improve our working capital efﬁ ciency are
cost reduction 
action has been taken to reduce discretionary expenditure and 
to streamline ﬁ xed elements of cost such as central functions
and management structures regrettable but necessary 
decisions have been taken to reduce headcount across the 
group and to cancel the group’s annual salary review for 2009
i have been encouraged by the positive way that our staff have 
adapted to these changes in addition we have imposed a 
disciplined approach to the use of subcontractors we now have 
our cost base at the appropriate level for the current market 
though we will continue to drive best value from our supplier 
relationships and through continuous improvement of our 
processes and productivity we are also ready to take any 
additional action that becomes necessary in individual business 
units should demand conditions weaken further
working capital efﬁciency
we saw pressure on our working capital efﬁciency ratios during
the year as both suppliers and customers sought to conserve 
cash however net working capital reduced by £48m 
compared with 31 march 2008 which was largely due to a 
reduction in days sales outstanding to 54 days 2008 60 days 
the actions we have taken to improve the efﬁ ciency of cash
collections from our customers are expected to have an 
enduring beneﬁ t to the group’s working capital position
cash ﬂ ow and capital expenditure
the improvement in net debt was achieved despite signiﬁ cant
cash ﬂ ow pressures on some of our customers during the year
the group continues to be highly cash generative and
i am pleased to report that the group’s net debt position
was reduced by £145m to £884m 2008 £1029m this was 
after continued signiﬁ cant investment in the asset base of
the group to support future growth and nonrecurring 
integration cash costs of £58m the group also repaid
£110m of the principal ﬁ ve year term loan in september 2008
and £33m drawn on the 364 day facility in february 2009 
resulting in the cancellation of these elements of the
banking facilities
capital expenditure in the year was £155m 2008 £214m
with signiﬁ cant investment in our hosting centres at the
existing birstall and farnborough sites and business continuity 
facilities at our aston ofﬁ ces there was also further investment
during the second half of the year to increase business 
chief executive’s review
continued
16013pheonixindd   10 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
11
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
continuity and hosting capacity at our wapping site following 
our investment programme in business recovery and hosting 
facilities the group now has sufﬁ cient capacity to support
anticipated growth in these two key growth areas for the 
current ﬁ nancial year consequently planned capital
expenditure can be reduced in the new ﬁ nancial year and is
expected to be broadly sustainable at this reduced level for one 
to two years as we continue to invest selectively in capital 
projects on a salesled basis where satisfactory investment 
returns can be achieved
icm continuous business business continuity
year ended year ended
31 march 31 march
2009 2008  change
revenues £512m £420m 220
proﬁ t from operations £130m £89m 471
operating margin 254 211
the formation of the business continuity division has created
a critical mass business providing a national network of 18 
business recovery centres geographically well placed in relation 
to our target customer groups with each centre equipped to 
meet the speciﬁ c needs of our customers the icm acquisition
and integration has further strengthened the group’s position 
in the uk business continuity services market making the group 
one of only four signiﬁ cant providers of these services in the uk
combining the icm and ndr customer bases has given us the 
intended extensive penetration of both the large enterprise and 
sme sectors providing us with a solid platform for growth and the 
knowledge and expertise to accelerate business progress this is 
reﬂ ected in the strong growth of both revenues and operating
proﬁ t during the year
revenues for the year were £512m 2008 £420m and operating 
proﬁ t £130m 2008 £89m on a pro forma basis assuming that
icm had been acquired on the ﬁ rst day of the comparative
period revenues have increased by 125 and operating proﬁ t
by 375 
despite the impact of an increase in electricity costs during
the second half of the 2009 ﬁ nancial year operating margins
have continued to improve as the division has increased the 
utilisation of its syndicated seats and expanded its hosting 
capacity the utilisation rate for syndicated seats increased to 
47 at 31 march 2009 31 march 2008 42
during the year our contract with a large investment bank
was terminated when that bank ceased trading following the 
acquisition of the uk operations of the failed bank by another 
bank the contract continued on amended terms with the new 
owner a testimony to our responsiveness and the quality of 
service we provide 
the business continuity order book increased by 62
to £988m 2008 £931m at 31 march 2009 representing
almost two years’ annual revenues and the division has a
strong pipeline of new business opportunities as a result
of the economic downturn contract renewal rates by value 
marginally decreased to 87 2008 89 including the
net impact of the contract termination and replacement in 
respect of the large investment bank relationship referred
to earlier
during the year further investment has been made to develop 
the hosting and business continuity facilities at the aston 
ofﬁ ces where the division is headquartered to complete the
ﬁtout of the farnborough business continuity and hosting sites
and to provide additional hosting and business continuity 
capacity at our wapping ofﬁ ces
16013pheonixindd   11 26062009   1039 annual report and accounts phoenix it group plc 
12
16013 240609 proof 6
phoenix it services partner services
year ended year ended
31 march 31 march
2009 2008  change
revenue £1055m £1029m 25
proﬁ t from operations £161m £176m 91
operating margin 153 172
the partner services business provides services to large 
commercial and public sector end users through ‘tier 1’ it 
services companies partners 
the strategy pursued in our partner services business is to 
provide a comprehensive range of it services to partner 
organisations to support their typically multiyear contracts 
with their end user customers this approach is increasingly 
important in these changeable markets and the partner model 
continues to have tremendous value with our customer base 
particularly in an industry which is consolidating and becoming 
increasingly commoditised
against a market background of increased competition and 
commoditisation and the shortterm disruption resulting from 
the integration process revenues for the year were £1055m 
2008 £1029m and operating proﬁ t £161m 2008 £176m
operating margin for the year was 153 2008 172 
on a pro forma basis excluding the revenues and operating 
proﬁ t of the group’s french business the partner services
division’s results were 
 year ended year ended
31 march 31 march
2009
2
 2008
2
  change
revenue £1039m £1004m 35
proﬁ t from operations £159m £174m 86
operating margin 153 173
2  
excluding revenues and proﬁ t of french operation disposed of during
the year
management believe the division’s margin is broadly sustainable
at this level it is pleasing to note that the actions taken within the
division increased the operating margin in the second half of the
year to 154 compared to the weaker performance in the ﬁrst
six months when the margin was 152
the performance of the division and in particular the decline
in operating margin reﬂ ects not only difﬁcult market
conditions but also some additional costs incurred in relation
to the group’s integration these were necessary to ensure 
appropriate service levels to customers through the post
integration period following the integration service quality 
remains high and we continue to meet overall customer service 
level agreements 
in the competitive market in which phoenix it services operates 
in the year there have been fewer largescale multimillion 
pound multiyear contract opportunities and consequently 
new business wins have been increasingly of a smaller size
the uncertainty resulting from the economic downturn has
also increased the average time new customers are taking to 
reach purchasing decisions and has resulted in certain 
partners committing to shorter periods of minimum 
contracted revenues on contract renewals contributing to a 
reduction in the division’s contract renewal rate by value to 
66 2008 86 these factors have held back growth in the 
order book which reduced by £281m to £1422m at 31 march 
2009 2008 £1703m 
however there continues to be a good pipeline of opportunities
and the depth of the recession should provide further business 
opportunities with partners whose end user customers are 
seeking reductions in their cost bases to improve their 
competitive positions 
during the year we sold our small french operation which 
delivered services to french it industry partners by seeking to 
replicate the uk partner model revenues and operating proﬁ t
of the french business for the year ended 31 march 2009 were 
£16m 2008 £25m and £02m 2008 £02m respectively this 
divestment improves our focus and reduces business risk whilst 
uk centric the group will continue to offer european services as 
an adjunct to uk business using third party providers
chief executive’s review
continued
16013pheonixindd   12 26062009   1039 stock exchange code pnx wwwphoenixitgroupcom
13
16013 240609 proof 6
our business
our performance
corporate governance
financial statements
shareholder information
servo midmarket services 
year ended year ended
31 march 31 march
2009 2008  change
revenue £965m £859m 123
proﬁ t from operations £100m £90m 121
operating margin 104 104
this division sells a broad range of it services and it products to 
the midmarket providing customers with a complementary 
and extensive range of services on a ukwide basis yearon
year operating margins have been maintained with the division 
achieving increased margins of 107 in the second half of the 
year compared to 101 in the ﬁ rst half this reﬂects an
improvement in servo’s business mix healthy new business 
generation and an increase in hosting revenues a key objective 
for the servo division is to extend its presence further in the 
midmarket business sector as this represents a signiﬁ cant
growth opportunity for the group
hosting revenues increased by 933 to £61m 2008 £31m
of the annual contract value of £74m 2008 £42m at
31 march 2009 73 is derived from managed hosting these 
high quality annuity contracts improve the visibility of future 
revenues and earnings within this division investment in 
hosting capacity has been made with further signiﬁ cant data
centre space commissioned during the latter part of 2008
in response to strong market demand for these services
revenues for the year were £965m 2008 £859m and 
operating proﬁ t was £100m 2008 £90m on a pro forma basis
assuming that icm had been acquired on the ﬁ rst day of the
comparative period revenues have increased by 11 and 
operating proﬁ t by 13
the servo order book decreased by 14 to £459m 2008 
£465m at 31 march 2009 reﬂ ecting the increase in time being
taken by some new customers to reach purchasing decisions 
and a decrease in the contract renewal rate to 87 2008 92 
by value which is a reﬂ ection of the current economic
background and some disruption during the integration to
a small number of customers 
outlook
with the continued deterioration of the uk economic climate 
this will be a challenging year for the sector we are conﬁ dent
that we have taken the necessary steps including a review of 
our cost base to be ready for these challenges the group 
continues to have good forward visibility from its order book 
and high levels of recurring revenues from a diversiﬁ ed
customer base 
we have achieved good momentum into the new ﬁnancial
year and remain well positioned in each of our chosen
markets in spite of continuing macroeconomic uncertainties 
we remain positive about the outlook for the current year and 
beyond and are well placed to capture further opportunities 
and market share 
nick robinson
chief executive
29 may 2009
16013pheonixindd   13 26062009   1039