annual report and a ccounts
2009
“good for you good for us good for everyone” “office2office plc o2o has been transformed
into a leading managed services business focused
on managed procurement and business critical
services our aim is to deliver a sustainable first
rate service to all our customers ”
s r moate
chief executive
introduction 
financial highlights 1
chairman’s statement 23
chief executive’s review 411
business and financial review 1213
corporate social responsibility statement 1416
board of directors 17
directors’ report 1821
corporate governance statement 2225
nomination committee report 26
audit committee report 2627
directors’ remuneration report 2832
independent auditors’ report to the members of
office2office plcs 33
contents
consolidated income statement 34
consolidated statement of comprehensive income 35
consolidated and company balance sheets 36
consolidated statement of changes in equity 37
company statement of changes in equity 38
consolidated and company cash flow statements 39
significant accounting policies 4047
notes to the financial statements 4880
five y ear summary 81
shareholder information 82
company details 83 o2o plc report and accounts 2009 1
financial highlights
2009 2008
revenue £1875m £1810m
profit before tax £81m £96m
basic earnings per share 172p 185p
underlying profit before tax
1
£131m £121m
underlying earnings per share
2
271p 241p
net debt £278m £297m
final dividend proposed – £28m £27m
payable 21 may 2010
78p per share 75p per share
£41m £40m
total dividend for the year
114p per share 110p per share
1 profit before tax exceptional and nonrecurring costs of £36m 2008 £18m £04m share option charges 2008 £nil and amortisation of
intangibles relating to acquisitions of £10m 2008 £06m refer to the consolidated income statement on page 34
2 profit after tax before the after tax effect of exceptional and nonrecurring costs share option charges and amortisation of intangibles
relating to acquisitions divided by the weighted average number of ordinary shares in issue refer to note 11 to the financial statements chairmans statement
d j callear chairman
i am pleased to report group results in line with market
expectations  
underlying pretax profit improved despite ongoing product cost
inflation and some softening of sales particularly in the private
sector we achieved this result by increasing our market share
through new business wins retaining all significant contract
customers effectively managing product cost increases and
accelerating efficiency improvements across the enlarged group
o2o plc report and accounts 2009 2 o2o plc report and accounts 2009 3
the external sales environment
remained tough throughout 2009
management focus was directed
both to maximise our sales
performance in this environment
and internally  to improve business
operations further planned
efficiency and centralisation
improvements were accelerated
and we believe that all key aspects
of the business are now operating
more efficiently than ever before 
results
group revenue in 2009 increased to
£1875m 2008 £1810m  underlying
profit before tax rose by 88 to £131m
2008 £121m before exceptional and
nonrecurring costs of £36m 2008
£18m share option charges of £04m
2008 £nil and amortisation of
intangibles of £10m 2008 £06m
profit before tax after all such charges
was £81m 2008 £96m and profit after
tax was £63m 2008 £66m  basic
earnings per share were 172p 2008
185p the reduction being caused by
nonrecurring costs underlying earnings
per share were 271p 2008 241p
cash and net debt
cash generated from operations
increased to £117m 2008 £56m  net
debt  after payment of the 2008 final
dividend of £27m 2008 £24m the
2009 interim dividend of £13m 2008
£13m income tax of £28m 2008
£20m and capital expenditure of £21m
2008 £03m was reduced to £278m
at 31 december 2009 2008 £297m 
our borrowing facilities remain
unchanged at £450m  the facilities
which are committed until april 2013
comprise a term loan of £250m and an
invoice discounting arrangement of up
to £200m on which we are charged
interest at 11 over libor and 09
over bank base rate respectively
the first repayment of £25m on the
term loan is due in april 2010 and will
be repaid out of operating cashflows
the second repayment is due in april
2011  financial covenants are applied
to the committed facilities and the
group has continued to comply with
these with significant headroom 
dividends
the board recommends a final
dividend of 78p per share 2008
75p which if approved at the annual
general meeting agm will be paid on
21 may 2010 to shareholders on the
register at the close of business on 23
april 2010  combined with the interim
dividend paid in november 2009 this
makes a total dividend per share of
114p 2008 110p and amounts to a
distribution of £41m 2008 £40m
the total dividend paid and payable
for the year is covered by earnings 15
times 2008 17 times
review of operations 
markets remained challenging during
2009 with continued product cost
inflation combining with both volume
and sales price pressures despite this
both group sales and underlying profit
grew in the period reflecting the mix of
new sales wins contract retentions and
improved efficiencies across the group
in addition to our sales focus we
concentrated our efforts on streamlining
the group’s operations to reflect the
underlying market conditions and on
integrating all business areas with
central operations and back office
support functions
a full review of group operations is
included in the chief executive’s review
employees
this was a challenging year and our
employees have had to work hard to
deliver the results outlined above  they
continue to show commitment to the
group despite the necessary pay freeze
implemented in 2009 and i would like to
thank them
acquisitions 
on 18 february 2010 we announced
the acquisition of the trade and certain
assets relating to the business process
outsourcing bpo division of the print
factory london 1991 limited in
administration and the dsr group
limited in administration these
assets include two leasehold
properties certain employees of the
bpo business and a wide range of
customer relationships and contracts
recently generating approximately
£20m annualised turnover this
business will be amalgamated with our
own bpo activity which operates as
accessplus further details are
provided on page 8 in the chief
executive’s review
on 1 february 2010 we acquired the
trade and assets of the newbury branch
of office supplies dealer martin luck
limited this business has been
integrated with the group’s mid market
managed procurement activity
we shall continue to seek further earnings
enhancing acquisition opportunities 
outlook
trading for the first quarter of 2010 is
in line with management expectations
having recovered from the adverse
weather conditions at the beginning of
the year
the group now has the right infrastructure
and distribution footprint relative to its
size and we are in better operational shape
than we have been previously   our aim in
2010 is to capitalise on this efficient
operating structure and focus on growth
we will strive competitively to deliver the
best available products and services in our
sector as we further develop our emphasis
on the business services portfolio
the general economic outlook for 2010
remains uncertain in particular it
appears inevitable that efficiencies and
cuts in public sector spending will be
made  this however represents as
much an opportunity to the group as a
threat we are offering an expanding
range of government compliant office
products and services to both existing
and new customer departments and our
contract model and environmental focus
position us well to benefit from our
inclusion as a supplier on the new pan
government collaborative framework
agm
the agm will be held at the company’s
head office st crispins duke street
norwich on 18 may 2010 at 1100 am
notice of the agm together with the
proxy forms for use at the agm will be
circulated with the financial statements
d j callear
chairman
24 march 2010 o2o plc report and accounts 2009 4
chief executive’s review
simon moate chief executive
in common with many businesses o2o was impacted by the
severe economic downturn in 2009 we responded by right
sizing our business to deliver the lowest cost to serve ratio in
the group’s history and to secure a number of important
contracts as a result we have improved the group’s underlying
profitability yearonyear in 2010 we are focused on achieving
profitable growth by crossselling our business services
portfolio to our existing clients o2o plc report and accounts 2009 5
o2o group  managed procurement  business critical services
executive summary
we began 2009 with the challenge of
renewing longstanding contractual
relationships with both nhs supply
chain and barclays these contracts
represent a material proportion of the
group’s revenues and both were
renewed successfully albeit as
anticipated at reduced margins 
soon afterwards banner business
services bbs won a contract with the
ministry of justice from a key
competitor this prestigious new
account demonstrated the
competitiveness of our proposition in
the public sector and a number of other
new contracts were secured during the
course of the year 
despite these successes o2o was not
immune to the effects of the downturn
although all areas of the business made
a positive contribution to group
profitability  the unprecedented
product cost inflation that we
experienced in 2008 continued driven
by a combination of manufacturer
pricing policies and adverse exchange
rates in particular substantial cost
increases were incurred in proprietary
branded printer consumables which
represent a significant proportion of the
bbs and accord office supplies
accord businesses
the economic conditions prompted
many customers to focus their
purchasing on lower priced “contract”
products which contributed to the
reduction in our overall gross margin to
307 2008 314 customers’
discretionary marketing expenditure
declined substantially which resulted in
a corresponding fall in the accessplus
noncontracted print volumes although
this impact has in part been mitigated
by growth in its contracted business
process outsourcing service  
finally underlying volumes inevitably
suffered as the recession continued into
the second half of 2009 whilst bbs
held up well the impact on accord
which is focused on the mid market and
sme sectors was significant
managing the impacts of this difficult
commercial environment was a key
focus across the group
firm foundations
in last year’s review i explained how the
group had been restructured following
our strategic decision to withdraw from
the ministry of defence office supplies
contract in 2007 that decision resulted
in a material loss of revenue but was the
catalyst for change within our business
for o2o it meant that the recession and
the work needed to offset its impact
effectively started a year early
since that time the group has been
transformed and we are now business
services focused and well placed to
exploit the opportunities that will
emerge as economic conditions
improve under the four brands bbs
accord accessplus and banner
document services bds we offer
managed procurement and business
critical services
managed procurement
managed procurement helps our
customers to reduce their expenditure
on office and business products
ethically and sustainably bbs is a
market leader in the larger corporate
and public sectors while accord is one
of the largest dealers in the uk mid
market sector
business critical services –
communications and document
destruction services
accessplus provides communication
services through creative design print
management fulfilment and response
handling services enabling customers
to outsource these requirements from a
single provider and thereby reduce
costs bds provides its customers with
both onsite and offsite document
destruction services meeting a growing
requirement to ensure that the disposal
of obsolete documents and materials is
achieved securely and responsibly
whilst ensuring that as much of the
waste material as possible is recycled
we are encouraged by our success in
crossselling these services into the
group’s client base building on this
opportunity lies at the heart of our
strategy for 2010 and beyond o2o plc report and accounts 2009 6
bbs is a market leader in the large
contract supply of business
products and services bbs
delivers value by helping its
customers manage their
procurement effectively and
thereby reduce their expenditure
whilst ensuring the highest
standards of business ethics and
environmental sustainability
bbs enjoyed an excellent start to 2009
retaining significant contracts with nhs
supply chain and barclays subsequently 
the ministry of justice contract was
secured which delivered an important
new business win in the year other new
business contracts followed and no
material existing contracts were lost 
“banner” is strong in the corporate and
public sectors where the name enjoys
considerable recognition and trust
leveraging this will play a key role in
the group’s strategy to crosssell its
portfolio of business services in 2010
bds demonstrates the potential of
this approach
chief executive’s review continued
managed procurement  bbs
to date bbs has weathered the
recession well albeit volumes in the
private sector did soften during the
second half of 2009 product cost
inflation continued to impact the
business but this has been largely
mitigated by working closely with
customers to minimise its impact
a key issue has been the trend towards
lower cost contracted products at the
expense of more profitable non
contracted items bbs has responded to
this by promoting the introduction of
“open book” contracts transparent
commercial mechanisms that are
designed to benefit both customer and
supplier in delivering savings  
social and environmental issues are
increasingly important to bbs’s
corporate and public sector customers
the group offers over 1000
environmentally preferred products
under the globe  tick™ brand and
publishes a “green guide” of sustainable
products and services it also provides
customers with the green optimisa™
system to measure the environmental
impacts of their purchases
shortly after the year end we
announced that bbs had been
successful in its bid to secure a place
on the new pangovernment
collaborative framework this
framework provides public sector
customers with a supply route for a
wide range of products and services
including secure shredding services as
sold by bds  it presents us with a
compliant mechanism to defend our
existing contractual relationships
within the public sector whilst
presenting an important route to
consolidate and grow our share of 
this market
to better capitalise on these and other
sales opportunities bbs changed its
sales territories in the final quarter of
2009 to improve sales team
productivity and develop closer
relationships with customers at a local
level we are already beginning to see
the benefits of this  o2o plc report and accounts 2009 7
accord is our mid market sector
managed procurement brand it is
one of the largest dealers in the
uk and provides customers with a
wide range of office and business
products excellent service and
strong local support   
managed procurement  accord
the strength of accord’s proposition
lies in its excellent service local sales
representation and competitive prices
since acquisition in 2008 accord has
enjoyed the benefits of the group’s
purchasing power however customers
have continued to seek competitive
pricing and there has been an
increasing trend towards competitive
tendering in addition underlying
volumes were impacted by the
recession although these stabilised
later in the year and have since shown
some signs of recovery
like bbs accord also suffered from
increases in product costs driven by
inflation and weakness in sterling but
has been largely successful in mitigating
these impacts the business is now fully
integrated into the group’s logistics
purchasing and back office functions
recently  the difficult economic
conditions have resulted in a number of
independent office products dealers
facing financial difficulties  on 1 february
2010 the trade and assets of the
newbury branch of office supplies dealer
martin luck limited were acquired by the
group and have since been integrated
with accord all further opportunities will
be considered on their merits
whilst trading conditions in 2010
remain uncertain accord is well
positioned to take advantage of any
economic recovery   o2o plc report and accounts 2009 8
accessplus specialises in the
provision of business
communication services its
proposition spans the process
from creative design to
fulfilment and response handling
enabling customers to outsource
any or all of these services to a
trusted provider
chief executive’s review continued
business critical services  accessplus
accessplus offers a complete solution
for creative design data solutions
logistics campaign delivery and print
management services it has suffered
from the impact of the economic
downturn more than any other part of
the o2o group a large proportion of
its business is based on discretionary
marketing spend where demand
reduced throughout the ensuing
downturn in total noncontracted
print volumes fell substantially year
onyear this has been partly offset by
an encouraging growth in sales of
contracted bpo services
to mitigate the reduction in volume
accessplus has been reorganised to
deliver maximum synergies with the
group’s back office and operational
functions in addition selling these
services into bbs and accord
customers is key to its growth and a
number of successes have been
achieved in this respect despite the
difficult prevailing economic conditions
notable examples of new customers
taking advantage of the group’s
enlarged service offering include the
nhs and g4s the accessplus sales
team has recently been restructured to
provide local specialist support to the
bbs and accord businesses
since the year end accessplus has
expanded its position in the bpo sector
following the acquisition of the trade and
certain assets relating to the bpo division
of the print factory london 1991
limited in administration and the dsr
group limited in administration on 17
february 2010 this development which
broadens our customer base and
increases our market coverage underpins
our confidence that this business will
deliver increasing value as economic
conditions improve o2o plc report and accounts 2009 9
bds is the group’s brand in the
secure document destruction
market and is a partnership
arrangement with shred easy
limited o2o owns 60 of the
issued share capital of bds and
has the option to acquire either
shred easy limited or the minority
interest in the partnership
business critical services  bds
bds began trading in january 2009 and
its performance met all management
expectations in this its first year by the
end of the year bds was providing a
national service through its ukwide
infrastructure to many of the group’s
large public sector customers including
most of the hmrc property estate and
increasingly  to the ministry of justice in
addition bds services many nhs
locations through its secure offsite
service  bds has not been greatly
impacted by the recession as its business
is driven largely by legislation and the
threat to customers of security risks
the business offers customers a variety
of disposal services with a key focus on
environmental sustainability and
recycling the core of its business is the
provision of onsite destruction
services utilising specialist vehicles
that incorporate large shredders off
site destruction services are also
provided to customers for where an on
site solution is inappropriate
this is a fast growing and attractive
market a particular opportunity exists in
the public sector where awareness of
the importance of secure disposal has
grown following a number of high profile
lapses the public sector is also
attracted to the comprehensive audit
trail that bds is able to provide from
destruction to recycling 
critically the new pangovernment
collaborative framework on which bbs
has secured a place includes the
provision of secure disposal services
growing its business in this sector will
be a key focus for bds in 2010 o2o plc report and accounts 2009 10
delivering our operating
strategy
the group has responded to business
challenges by rightsizing to fit the
new commercial and economic reality
we completed our organisational
restructuring based on the four
customerfacing brands referred to
above supported by a more efficient
centralised operations and back
office function
the consolidation of our warehousing
logistics and procurement functions
under group management was
materially completed by the end of
the third quarter without disruption
to customer services the
centralisation of back office services
including hr payroll finance
payables and management accounts
has also been completed
as well as rationalising the
organisation we have made
appropriate investments to improve
efficiency a new fleet management
system has improved the efficiency of
our delivery vehicles whilst new “track
 trace” technology enables us to
as part of the bds secure paper
collection destruction and
disposal service shredded and
declassified materials are taken
to secure facilities where they
are recycled for manufacture into
low grade paper products being
one of the largest distributors of
copier paper in the uk o2o is
taking this service a step further
with its “close the loop” initiative
having supplied the customer
with copier paper and in due
course collected and securely
shredded the used paper the
waste material is then sent to
o2o’s specialist mill partner to be
turned into copier paper for
resale back to the customer
production trials have been
completed and the quality of the
recycled paper has exceeded
expectations it is intended to roll
out this initiative during 2010
chief executive’s review continued
 “close the loop” initiative
manage the fulfilment process more
effectively these activities have
enabled us to achieve the lowest
warehouse and distribution cost to
sales ratio in the group’s history and
has been crucial to maintaining
profitability in 2009
“banner”
the recognised value of the “banner”
office products brand will be employed
more fully in the future it already enjoys
strong recognition in the contract
market and in particular the public
sector where significant trust has been
built on the basis of a long established
trading history 
the brand opportunity was further
strengthened at the end of 2009
when it was announced that bbs has
secured a place on the new pan
government collaborative framework
for the supply of office products and
services this framework enables us
to offer public sector bodies a
compliant supply mechanism for both
managed procurement and secure
disposal services o2o plc report and accounts 2009 11
corporate social responsibility
csr – ‘good for you good for
us good for everyone’
we believe that we are differentiated by
our csr proposition csr is increasingly
important to the group and its large
managed contract customers in both
the public and private sector
in 2009 the group introduced a new
trading ethic ‘good for you good for us
good for everyone’  that reflected our
determination to make real progress in
this area the words have been matched
by our actions 
our investment in a new fleet
management system has reduced the
fuel consumption and noise pollution of
our delivery fleet which enabled o2o
to secure the british office supplies
and services boss federation
industry award for the environment in
2009 we have transformed our
national distribution centre ndc in
manchester by introducing
comprehensive recycling facilities and
many other new initiatives
recommended by the environment
agency our accreditation to the
iso14001 environmental management
standard has been extended to include
our basingstoke operation and further
sites will follow in 2010 following the
successful trials in producing recycled
copier paper from our customers’
waste paper we intend to roll out and
further develop our new “close the
loop” initiative
these and many other csr
achievements will be described more
fully in the group’s csr review which is
published under separate cover we are
committed to delivering further
initiatives from every perspective
commercial and ethical it is the right
thing for us to do
management and employees
in 2009 o2o completed the integration
of the back office functions of accord
and accessplus with those of the group
as a result the brand managers are now
focused solely on sales commercial
management and customer service
whilst enjoying the improved efficiency
of consolidated group functions
we have sought to develop an open and
approachable management style and i
have been encouraged by the improved
communication and relationships across
the group at all levels i would like to
take this opportunity to thank our
employees for their continued support
during a difficult year despite the
commercial necessity of maintaining a
salary freeze they remain our greatest
asset and we highly value their
experience expertise and loyalty
outlook
whilst trading conditions in 2009 have
been difficult the group has
successfully improved the level of
underlying profit before tax yearon
year this achievement reflects both
the underlying strength of our business
and our ability to implement essential
management decisions quickly and
effectively having taken the necessary
steps to reshape the business from as
early as 2007 we are confident that
our cost base is now appropriate to our
business strategy and prevailing
market conditions 
as we move into 2010 our focus is on
business growth and in particular on
maximising the opportunity to cross
sell the group’s portfolio of business
services into its established client base
we recognise that the expectation of
public sector expenditure cuts creates
some uncertainty nonetheless our
success in securing a position on the
pangovernment collaborative
framework provides us with a
significant opportunity to both grow
our secure disposal services business
and strengthen our position in the
public sector 
o2o continues to monitor the market for
acquisition opportunities that will
enhance its strategy to grow the
business 
i believe that we are well placed to
weather the challenges of 2010
s r moate
chief executive
24 march 2010 o2o plc report and accounts 2009 12
partially offset by expenses not
deductable for tax purposes
shareholders’ return
basic earnings per share were 172p
2008 185p with underlying earnings
per share of 271p 2008 241p  the
total dividend paid and payable for the
year of 114p per share 2008 110p
including the 36p interim dividend 2008
35p paid on 13 november 2009 is
covered 15 times by earnings 2008 17
times shareholders’ equity at the end of
the year was £226m 2008 £202m
the middlemarket quotation of the
company’s ordinary shares at the end of
the financial year was 1455p with a
market capitalisation of £528m including
shares held by the employee benefit trust
cash flow
as set out on page 39 the group
generated net cash from operating
activities of £80m 2008 £21m at 31
december 2009 net debt incurred as a
consequence of the acquisition activity in
2008 amounted to £278m a decrease
of £19m compared to net debt of
£297m at the start of the year   
the net debt of £278m is supported by
committed borrowing facilities of
£450m which are in place until april
2013 the facilities comprise a term loan
£250m which is repayable over 5 years
with the first instalment of £25m due in
april 2010 and an invoice discounting
arrangement up to £200m on which we
are charged interest at 11 over libor
and 09 over bank base rate
respectively  financial covenants are
applied to the committed facilities and
the group has continued to comply with
these with significant headroom
key contractual arrangements
the group has always had a number of
large customers  with our major
customers our approach is to seek long
term strategic relationships based on
managed services and shared interests
the term for a typical supply arrangement
is between 3 to 5 years and we have a
record of successful contract retention
a key aim for the group has been to
enlarge and diversify the customer base
this has been achieved both organically
and by taking advantage of suitable
revenue and profit
t otal revenue increased by £65m 36
to £1875m 2008 £1810m £82m of
the increase came from a full year’s
trading of the businesses acquired in
2008 partially offset by a decrease in
revenues of £17m elsewhere as a result
of the wider economic conditions
experienced in 2009 underlying profit
before tax was £131m 2008 £121m
before exceptional and nonrecurring
costs of £36m 2008 £18m
amortisation of intangibles relating to
acquisitions of £10m 2008 £06m and
share option charges of £04m 2008
£nil operating profit before such costs
was £140m 2008 £134m and
operating profit after such costs was
£90m 2008 £110m profit before tax
after such costs was £81m 2008
£96m and profit after tax was £63m
2008 £66m the underlying profit
margin increased to 70 2008 67
exceptional and nonrecurring costs are
those significant items that are
separately disclosed by virtue of their size
or incidence to enable a full understanding
of the group’s operating performance
t ransactions which may give rise to
exceptional and nonrecurring costs are
principally restructuring related charges
and costs in respect of key management
changes a full analysis of the exceptional
and nonrecurring costs is set out in
note 5 to the financial statements
tax
a full analysis of the tax charge for the
year is set out in note 9 to the financial
statements
the group’s effective tax rate in 2009
was 220 2008 312  the reduction
in the effective tax rate reflected the
utilisation of previously unrecognised
brought forward trading losses and the
unwinding of the deferred tax liability
arising in respect of the fair value
adjustments to the intangible fixed assets
in respect of the acquisitions in 2008
the amount of corporation tax payable
for the year is £22m 2008 £26m
the effective tax rate in the near future
is anticipated to continue to be slightly
less than the standard rate due to
releases of deferred tax liabilities
arising on business combinations
business and financial review
acquisition opportunities  as a
consequence when compared to previous
years the group’s reliance on any one
individual customer has been reduced
the group has a wide range of suppliers
and it is possible that the challenging
economic conditions could impact some
however the group has limited
exposure to the failure of any single
supplier as the nature of the majority of
products purchased is such that other
options are normally readily available
the group maintains flexibility with its
suppliers by typically not making
contractual volume commitments
it is the group’s policy to negotiate with
each of its principal suppliers terms of
trade appropriate to the business and to
operate within those terms once agreed
with a wide range of suppliers the
terms of trade operated by the group
are diverse with no standard
characteristics prevailing
the group works in partnership with
suppliers to ensure as far as reasonably
practicable that its sourcing of products
meets recognised standards of
corporate social responsibility   the csr
statement on page 14 gives a description
of the approach o2o takes in this regard
principal risks and uncertainties
the principal risks and uncertainties
facing the group are set out below


Summary:
 chairmans statement
d j callear chairman
i am pleased to report group results in line with market
expectations  
underlying pretax profit improved despite ongoing product cost
inflation and some softening of sales particularly in the private
sector we achieved this result by increasing our market share
through new business wins retaining all significant contract
customers effectively managing product cost increases and
accelerating efficiency improvements across the enlarged group
o2o plc report and accounts 2009 2 o2o plc report and accounts 2009 3
the external sales environment
remained tough throughout 2009
management focus was directed
both to maximise our sales
performance in this environment
and internally  to improve business
operations further planned
efficiency and centralisation
improvements were accelerated
and we believe that all key aspects
of the business are now operating
more efficiently than ever before 
results
group revenue in 2009 increased to
£1875m 2008 £1810m  underlying
profit before tax rose by 88 to £131m
2008 £121m before exceptional and
nonrecurring costs of £36m 2008
£18m share option charges of £04m
2008 £nil and amortisation of
intangibles of £10m 2008 £06m
profit before tax after all such charges
was £81m 2008 £96m and profit after
tax was £63m 2008 £66m  basic
earnings per share were 172p 2008
185p the reduction being caused by
nonrecurring costs underlying earnings
per share were 271p 2008 241p
cash and net debt
cash generated from operations
increased to £117m 2008 £56m  net
debt  after payment of the 2008 final
dividend of £27m 2008 £24m the
2009 interim dividend of £13m 2008
£13m income tax of £28m 2008
£20m and capital expenditure of £21m
2008 £03m was reduced to £278m
at 31 december 2009 2008 £297m 
our borrowing facilities remain
unchanged at £450m  the facilities
which are committed until april 2013
comprise a term loan of £250m and an
invoice discounting arrangement of up
to £200m on which we are charged
interest at 11 over libor and 09
over bank base rate respectively
the first repayment of £25m on the
term loan is due in april 2010 and will
be repaid out of operating cashflows
the second repayment is due in april
2011  financial covenants are applied
to the committed facilities and the
group has continued to comply with
these with significant headroom 
dividends
the board recommends a final
dividend of 78p per share 2008
75p which if approved at the annual
general meeting agm will be paid on
21 may 2010 to shareholders on the
register at the close of business on 23
april 2010  combined with the interim
dividend paid in november 2009 this
makes a total dividend per share of
114p 2008 110p and amounts to a
distribution of £41m 2008 £40m
the total dividend paid and payable
for the year is covered by earnings 15
times 2008 17 times
review of operations 
markets remained challenging during
2009 with continued product cost
inflation combining with both volume
and sales price pressures despite this
both group sales and underlying profit
grew in the period reflecting the mix of
new sales wins contract retentions and
improved efficiencies across the group
in addition to our sales focus we
concentrated our efforts on streamlining
the group’s operations to reflect the
underlying market conditions and on
integrating all business areas with
central operations and back office
support functions
a full review of group operations is
included in the chief executive’s review
employees
this was a challenging year and our
employees have had to work hard to
deliver the results outlined above  they
continue to show commitment to the
group despite the necessary pay freeze
implemented in 2009 and i would like to
thank them
acquisitions 
on 18 february 2010 we announced
the acquisition of the trade and certain
assets relating to the business process
outsourcing bpo division of the print
factory london 1991 limited in
administration and the dsr group
limited in administration these
assets include two leasehold
properties certain employees of the
bpo business and a wide range of
customer relationships and contracts
recently generating approximately
£20m annualised turnover this
business will be amalgamated with our
own bpo activity which operates as
accessplus further details are
provided on page 8 in the chief
executive’s review
on 1 february 2010 we acquired the
trade and assets of the newbury branch
of office supplies dealer martin luck
limited this business has been
integrated with the group’s mid market
managed procurement activity
we shall continue to seek further earnings
enhancing acquisition opportunities 
outlook
trading for the first quarter of 2010 is
in line with management expectations
having recovered from the adverse
weather conditions at the beginning of
the year
the group now has the right infrastructure
and distribution footprint relative to its
size and we are in better operational shape
than we have been previously   our aim in
2010 is to capitalise on this efficient
operating structure and focus on growth
we will strive competitively to deliver the
best available products and services in our
sector as we further develop our emphasis
on the business services portfolio
the general economic outlook for 2010
remains uncertain in particular it
appears inevitable that efficiencies and
cuts in public sector spending will be
made  this however represents as
much an opportunity to the group as a
threat we are offering an expanding
range of government compliant office
products and services to both existing
and new customer departments and our
contract model and environmental focus
position us well to benefit from our
inclusion as a supplier on the new pan
government collaborative framework
agm
the agm will be held at the company’s
head office st crispins duke street
norwich on 18 may 2010 at 1100 am
notice of the agm together with the
proxy forms for use at the agm will be
circulated with the financial statements
d j callear
chairman
24 march 2010