Barclays 2007 Annual Report Download - page 13

1
Business review
Barclays PLC Annual Report 2007 11
Dividends per share
We aim to grow our dividend broadly in line with the rate of growth in
underlying earnings over time.
The 2007 dividend of 34p per share represents an increase of 10%
on 2006. Over the three years to 2007 we have increased our dividend
by a compound annual rate of 13% per annum.
Return on average shareholder equity
This ratio shows the return we are making on the money our shareholders’
have invested in us and is calculated as the profit after tax and minority
interests divided by the average shareholders’ funds. Investment decisions
are made within strict return criteria in the knowledge that investors have
a choice of where to invest.
In 2007 our return on average shareholders equity was 20.3% compared to
24.7% in 2006. Over the past three years the average return has been 22%.
Profit diversification
The diversification of profit both by geography and by business line are
strategic priorities for Barclays with the aim of increasing the proportion
of our business conducted outside our UK Banking franchise. In 2007 two
thirds of profits were made outside UK Banking businesses which is a result
of the transformation of the Group over recent years.
2008 to 2011 goal period
Barclays has established a new set of four year performance goals for the
period from 2008 to 2011 inclusive. The primary goal is to achieve compound
annual growth in economic profit in the range of 5% to 10% (£9.3bn to
£10.6bn of cumulative economic profit) over the 2008 to 2011 goal period.
We believe that if we achieve the upper end of the economic profit range,
we will also achieve our goal of top quartile TSR relative to our peer group
of financial services companies.
Profit before tax
Profit before tax is a key indicator of financial performance to the majority
of our stakeholders.
From 2005 to 2007 profit before tax grew at a compound rate of 16% per
annum. 2006 included £323m of profit relating to business disposals;
profit before disposals increased 3% in 2007.
Earnings per share
Earnings per share (EPS) is a key indicator of performance for our
shareholders. EPS is measured as the profit attributable to shareholders
after tax and minority interests divided by the weighted average number
of shares.
In 2007, basic EPS decreased to 68.9p. Over the three years to 2007 the
compound annual growth rate was 13% per annum.
06 0705
7,136
7,076
5,280
Profit before tax £m
06 0705
71.9
68.9
54.4
Earnings per share pence
06 0705
31.0
34.0
26.6
Dividend per share pence
06 0705
24.7
20.3
21.1
Return on average shareholders’
equity %
05
Non
UK
Non
UK
Profit diversification by geographic region %
60%40% 50%
50% 57%43%
06 07
UK
Non
UK
UK
UK
05
Profit diversification by business %a
40%
60% 34% 66% 35% 65%
06 07
UK
Banking
Other
UK
Banking
Other
UK
Banking
Other
Note
aHead office functions and other operations segment has been excluded.