Shareholder Executive

Ordnance Survey

Purpose

Ordnance Survey is Great Britain’s national mapping agency, providing the most accurate and up-to-date geographic data, relied on by Government, businesses and individuals.

Legal Status and Ownership

Ordnance Survey’s objective is to deliver its public task. The Shareholder Executive is in the process of reviewing Ordnance Survey’s public task to ensure it reflects the new business strategy, but the current version can be summarised as to:

• collect and maintain nationally consistent geographic datasets of Great Britain
• maintain a definitive three-dimensional, satellite-based geodetic reference framework to enable correct positioning of mapping and other data against the National Grid
• ensure that its data is capable of supporting the principles underlying the Digital National Framework, to allow integration and association with other geospatial information
• make the content of its datasets widely available in forms that are accessible to all customers for wider benefit, and charge its customers for the licensing and use of its products
• conducts its activities efficiently and effectively to maximise the broader economic value of its data, while complying with trading fund requirements and creating long-term shareholder value.

Financial Performance

£m	2009	2008	2007
Turnover	117	119	116
Operating Profit	16	23	7
Profit/(Loss) for the year	17	24	7
Cash flow before financing and liquid resources	(5)	17	4
Net Operating Assets	71	61	56
RONA	23.0%	36.9%	11.8%
ROCE	19.5%	31.3%	10.2%
Shareholders' Funds	79	76	55
Dividends	5	4	5

Dividend policy

Ordnance Survey pays a dividend each year calculated on a return on average capital employed for the year when combined with interest paid on Government loans. The return target for the financial year to 31 March 2009 was 6.0%.The target will increase to 6.5% for the financial year to 31 March 2010.

Performance targets

Ordnance Survey measures and reports to Parliament performance against a set of Agency Performance Measures. In 2008-09, these covered financial performance, data currency, data supply, carbon emissions and internet business.

Commentary

The Shareholder Executive assumed an executive role for Ordnance Survey in January 2008 and now advises CLG Ministers directly on shareholding and financial issues.The Shareholder Executive attends the Ordnance Survey Strategy Board as shareholder representative, but does not have a seat at the Board.

In August 2008, Iain Wright, Minister for Ordnance Survey, appointed Sir Rob Margetts as the first Chair of Ordnance Survey.This modern governance structure, with a strengthened Board and Non-Executive Chair, is Shareholder Executive best practice and brings Ordnance Survey in line with other Trading Funds such as the Met Office and the UK Hydrographic Office.

Over the year, the Shareholder Executive has been working with the Ordnance Survey Board and others in Government on a comprehensive review of Ordnance Survey’s strategy.The market for geospatial information is changing rapidly as technology converges and drives new applications.This is a huge opportunity, but Ordnance Survey must adapt if it is to remain sustainable in this environment. In addition, there have been calls for wider access to Ordnance Survey data to foster innovation and also follow-up from the 2005 OFT Commercial Uses of Public Sector Information Market Study.

The Government announced the new strategy for Ordnance Survey in the Budget of April 2009. Ordnance Survey will remain self-funded and earn revenue by licensing its data, but it will reform to improve access to its high-quality geospatial information.The Shareholder Executive is working closely with Ordnance Survey’s Board over the coming 12 months to implement the strategy and will ensure that it is fully integrated into the HM Treasury Operational Efficiency Programme.

In 2008-09 Ordnance Survey achieved a surplus on ordinary activities before interest and dividend payable of £16.3m.Turnover has held up reasonably strongly despite sharp downturns in key markets, and the new strategy aims to identify further opportunities to grow revenue and reduce costs.