Business performance ANGLO RESULTS ON 17 FEB 2011
£ million
| 2007 | 2008 | 2009 | 2010 | 2011 | |
|---|---|---|---|---|---|
| Operating profit (£) | 236 | 117 | 63 | 33.4 | (22.5) |
| EBITDA | 365 | 258 | 198 | 123.8 | 65.8 |
| Capital expenditure | 136 | 169 | 55 | 66.7 | 45.2 |
Tarmac reported an operating loss of £22.5 million, compared to a profit of £33.4 million in 2010. On a directly comparable basis, however, taking into consideration the impact of European businesses that were sold in 2010, Tarmac’s operating profit showed a reduction of £36.7 million, and Tarmac’s directly comparable EBITDA performance was only 36% lower.
Tarmac has concentrated on improving profit generation and cash flow, and is achieving strong results on both of these fronts. Despite difficult trading conditions, with reductions in public sector spending, and declining expenditure in some private sector markets, the company increased sales in several product areas. The decrease in EBITDA is reflective of external impacts, such as increases in key costs, particularly bitumen and fuel, as well as exceptional charges relating to pension fund transfers and the sale of Tarmac’s remaining European businesses. Cash flow remains good despite a very difficult trading environment, and Tarmac remains in a good position to drive forward and attain its financial targets in 2012.
Tax contribution
We believe that the overall economic contribution generated as a result of our operations should fairly reflect the balance of the risks and rewards of responsible investment and development. The taxes and other payments collected by governments form an important part of this equation.
On the issue of taxation, our contribution goes significantly beyond the corporate income tax paid by a company on its profits. It is essential to understand a company’s total tax footprint, which will include many taxes from corporate income tax and aggregates levy to payroll taxes and VAT.
The taxes borne by the Group amounted to £105 million in 2011. Taxes collected by the Group and remitted to government, including payroll taxes, VAT and similar taxes, amounted to £112 million, giving a total tax footprint for the year of £217 million.
The distinction made here between the taxes that are borne by the Group and those that are collected and remitted to government is an important one; although only those taxes that are borne are a cost to the Group, and therefore directly impact on the earnings, those that we collect form an important part of the revenues generated by our operations, and are often higher than the taxes borne.
