The Group’s strategic focus continues to be on the organic development of its existing core businesses together with appropriate acquisitions.
At the date of this Report, 1,855,854,883 ordinary shares of 10 pence each have been issued, are fully paid up and are quoted on the London Stock Exchange. In addition, the Company has entered into a Level I American Depositary Receipt programme with BNY Mellon, under which the Company’s shares are traded on the over-the-counter market in the form of American Depositary shares.
During the year ended 30 September 2009, options were exercised and awards released pursuant to the Company’s share option schemes and LTIP, resulting in the allotment of 15,856,225 new ordinary shares. A further 2,040,924 new ordinary shares have been allotted under these schemes since the end of the financial year to the date of this Report.
There are no restrictions on the transfer of ordinary shares in the capital of the Company other than certain restrictions which may from time to time be imposed by law, for example, insider trading law. In accordance with the Listing Rules of the Financial Services Authority, certain employees are required to seek the approval of the Company to deal in its shares.
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities and/or voting rights.
The Company’s Articles of Association may only be amended by special resolution at a general meeting of shareholders.
The Company is not aware of any significant agreements to which it is party that take effect, alter or terminate upon a change of control of the Company following a takeover.
More detailed information relating to the rights attaching to the Company’s ordinary shares is set out on pages 24 and 25 of the Annual Report for the year ended 30 September 2007. The Annual Report is published in the Investor Relations section of the Company’s website at www.compass-group.com and is available from the Company on request.
In 2008, the Company announced that it intended to buy back £400 million of ordinary shares in order to maintain an efficient capital structure whilst at the same time retaining the flexibility to fund further infill acquisitions. This followed buy-back programmes in 2007 and 2008 which had taken place following the disposals of Select Service Partner and the Selecta vending business in 2006 and 2007 respectively. During the year ended 30 September 2009 3,975,000 ordinary shares of 10 pence each of the Company (representing 0.216% of the ordinary shares in issue on 1 October 2008) were purchased and cancelled for a consideration of £12.58 million (including expenses), representing all of the ordinary shares purchased to date.
Resolution 12 set out in the Notice of Meeting will be proposed as a Special Resolution to renew the directors’ limited authority last granted in 2009 to repurchase ordinary shares in the market. The authority sets the minimum and maximum prices which may be paid and it will be limited to a maximum of 10% of the Company’s issued ordinary share capital at the date of this Report. This authority will enable your directors to reactivate, if appropriate, the £400 million share buy-back programme announced in 2008. Furthermore, this authority will enable your directors to continue to respond promptly should circumstances arise in which they consider such a purchase would result in an increase in earnings per share and would be in the best interests of the Company.
Any purchases of ordinary shares will be by means of market purchases through the London Stock Exchange and any shares so purchased may be cancelled or may be placed into treasury in accordance with the Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003. The Company currently holds no shares in treasury but the Regulations allow shares repurchased by the Company to be held as treasury shares that may be subsequently cancelled, sold for cash or used for the purpose of employee share schemes. The directors consider it desirable for these general authorisations to be available to provide flexibility in the management of the Company’s capital resources.
The directors propose Resolution 10 set out in the Notice of Meeting to renew the authority granted to them at the Annual General Meeting held in 2009 to allot equity shares up to an aggregate nominal value of £61,800,000 (representing approximately one-third of the ordinary shares issued at the date of this Report) (the ‘section 551 authority’). In addition, in accordance with the Association of British Insurers (‘ABI’) guidelines, the directors propose to extend this by a further £61,800,000 (representing a further one-third of the Company’s issued share capital) provided that such amount shall only be used in connection with a rights issue. If approved at the forthcoming Annual General Meeting, the authority will expire no later than 15 months from the date on which the resolution is passed, or at the conclusion of the Annual General Meeting to be held in 2011, whichever is the sooner.
The limited power granted to the directors at last year’s Annual General Meeting to allot equity shares for cash other than pro rata to existing shareholders expires no later than 4 May 2010. Subject to the terms of the section 551 authority, your directors recommend that this authority should be renewed. Resolution 11 set out in the Notice of Meeting will be proposed as a Special Resolution to give your directors the ability (until the Annual General Meeting to be held in 2011) to issue ordinary shares for cash, other than pro rata to existing shareholders, in connection with a rights issue or up to a limit of 5% of the ordinary share capital issued at the date of this Report. In addition, and in line with best practice, the Company has not issued more than 7.5% of its issued share capital on a non pro rated basis over the last three years. Your directors have no present intention to issue ordinary shares, other than pursuant to the Company’s employee share schemes. The directors recommend that shareholders vote in favour of Resolutions 10 and 11 to maintain the Company’s flexibility in relation to future share issues, including any issues to finance business opportunities should appropriate circumstances arise.
Details of cancellations of existing shares and issues of new shares are set out in note 24 to the Consolidated financial statements, which also contains details of options granted over unissued capital.
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