Driver : Annual Reports & Accounts 2022

Steven Norris

Non-Executive

Chairman

22 February 2023

OVERVIEW

As I reported in our 2022 interim results, Driver Group's key focus this year has been to take significant early action to address underperforming areas in our global business, mitigate commercial risk, improve operational resilience, and implement systems to enhance profitability and margin performance.

The year was defined by the long-tail legacy effects of the COVID-19 pandemic across the markets in which Driver operates. These post-pandemic issues have been conflated by global energy and supply chain uncertainties, rising interest rates, and the inflationary pressures caused by the conflict in Ukraine. I believe that we have managed these external challenges well for our shareholders and clients, whilst executing our reorganisation strategy in a decisive and effective way. In spite of this difficult global trading environment the measures we have taken have put the business on a strong and sustainable footing which leaves the business well placed to capitalise on future opportunities. Europe and the Americas continue to be our best performing regions and are a central focus of our growth plans in 2023. The Driver Project Services team based in the UK and our Driver Trett team both made a significant contribution to the results, and our US team continues to develop organically into a valuable asset, building out our bridgehead into the highly profitable markets of Central and South America.

A major strategic aim this year has been a policy of risk- reduction across the whole business. We have tackled major legacy issues in the Middle East, streamlining our presence and disposing of loss-making operations and assets. Although reducing our operations in the region has crystallised a charge in the 2022-23 financial year, we are confident that as a result of this reorganisation our presence in the UAE, KSA, Qatar and Oman will now deliver more consistent profitability within the region.

I am pleased to report that we have also executed significant internal administrative changes to improve our performance this coming financial year and beyond. We expect the successful implementation of our new accounting software at the start of the second half of FY22 to have a positive impact on future periods performance, improving visibility over utilisation levels, supporting the collection of outstanding debts, and providing us with cutting edge tools to maximise control over our cashflow. Taken together these measures are expected to have a positive impact on future business efficiency and productivity levels.

TRADING PERFORMANCE

While these changes leave us well-placed for growth, our mission to de-risk and improve the efficiency of our business continues. It is in the nature of a professional services business such as ours that predicting revenue beyond a rolling six-week window has always been difficult. We continue our focus on controlling overhead costs and delivering client servicing more efficiently to enhance our ability to be consistently profitable.

The cost of implementing these risk reduction strategies has been significant but we have ended the year with a healthy cash balance of £4.9m and no debt, reflecting our careful and prudent stewardship.

DIVIDEND

I am pleased to confirm that in spite of a challenging year the Directors have recommended a final dividend of 0.75p (2021: 0.75p per share) in addition to the interim dividend declared at the half year, demonstrating the Directors confidence in the business.

BOARD

The financial year has seen several changes at board level. Our CEO Mark Wheeler continues to guide our strategy and has been greatly assisted by our CFO Charlotte Parsons who has done a first class job since joining us permanently in July 2022. She will continue to provide insightful stewardship over the coming year. Finally, I want to express my thanks to Tom Comerford who has stepped up to the COO role in order to support Mark. These changes have already significantly enhanced our ability to improve our business in the face of global pressures.

On a personal note, having served as your Chairman for over eight years, I will be handing the stewardship of the Group to Shaun Smith who will join the Board and become the Group's new Non Executive Chair following my retirement at the conclusion of the forthcoming AGM on 23rd March. It has been an enormous privilege to lead Driver Group over this period and I am confident that Shaun will continue to drive the business forward.

OUTLOOK

The 2022 financial year has been a period of dynamic change and transition for us all and, for Driver Group, it has been no different. As the world has adjusted to the post- Covid settlement, one characterised by supply chain pressures and rapidly rising inflation across many of our

key markets, Driver Group has taken a considered and commercial view about how to get the business on the front foot and ready to take advantage of the opportunities ahead of us.

It is no coincidence that over the last many years Driver Group has sustained a global reputation for competitive performance and professionalism. We have done so directly as a consequence of the loyalty, ingenuity and teamwork of our brilliant staff around the world. I would like to take this opportunity to send every one of them my thanks and best wishes.

I want to express my gratitude to Mark and the executive team and to my non-executive board colleagues for making my role such a rewarding one to fulfil. I am confident that Driver Group will go from strength to strength under my successor and trust he will find his time at the helm as satisfying as I have.

The Board expects to deliver a return to profitability for FY23 and I shall continue to watch Driver Group's fortunes with great affection and interest.