We have continued to focus on the MAP programme, which gives us the framework to deliver quality new business and retention as well as control costs and drive greater efficiency. This has enabled us to deliver £44 million, or 10%, of constant currency operating profit growth and increase the operating margin by 50 basis points to 7.0%.
Overall, reported revenue growth for the six months to 31 March 2010 was 2.6%, largely reflecting the strengthening of a number of currencies against Sterling. Constant currency revenue growth was 0.9% and organic revenue growth for the period was 0.4%, reflecting the impact of net new business wins and like for like performance.
Underlying operating profit from continuing operations, including associates but excluding the amortisation of intangibles arising on acquisition and acquisition transaction costs, was £504 million, an increase of 10.8% on a reported basis over the prior period. Underlying operating profit increased by £44 million, or 9.6%, on a constant currency basis. This represents a 50 basis points improvement in margin to 7.0% (2009: 6.5% on a constant currency basis).
Operating profit after the amortisation of intangibles arising on acquisition of £3 million (2009: £2 million) and acquisition transaction costs of £1 million (2009: £nil) was £500 million (2009: £453 million).
Underlying operating profit increased by £44 million, or 9.6%, on a constant currency basis. This represents a 50 basis points improvement in margin to 7.0% (2009: 6.5%).
Additional information on the performance of each region can be found in the regional reviews (North America, Continental Europe, UK & Ireland, Rest of the World).
Unallocated overheads were £28 million (2009: £28 million), reflecting continued good control over costs as the business expands.
Underlying net finance cost, excluding hedge accounting ineffectiveness and the impact of revaluing investments and minority interest put options, was £42 million (2009: £50 million). The decrease largely reflects the lower levels of net debt compared to last year. We expect the underlying net finance cost for the full year to be around £80 to £85 million at current exchange rates.
Other gains and losses include a £1 million credit (2009: £11 million cost) from hedge accounting ineffectiveness and a £nil cost (2009: £5 million cost) of revaluing investments and minority interest put options.
Profit before tax from continuing operations was £459 million (2009: £387 million).
On an underlying basis, profit before tax from continuing operations increased by 14.1% to £462 million (2009: £405 million), excluding the amortisation of intangibles arising on acquisition, acquisition transaction costs, hedge accounting ineffectiveness and the impact of revaluing investments and minority interest put options.
Income tax expense from continuing operations was £125 million (2009: £112 million).
On an underlying basis, excluding the amortisation of intangibles arising on acquisition, acquisition transaction costs, hedge accounting ineffectiveness and the impact of revaluing investments and minority interest put options, the tax charge on continuing operations was £126 million (2009: £117 million), equivalent to an effective tax rate of 27% (2009: 29%). This reduction reflects the benefit of reduced corporate tax rates in some of the major countries we operate in. Based on these current corporate tax rates, we expect the tax rate to average out around the 27% level in the short to medium-term.
The profit after tax from discontinued operations was £nil (2009: £12 million).
Our North American business (which includes our operations in the USA, Canada and Mexico) has delivered another very strong performance. Revenues were £3,094 million (2009: £3,082 million), with organic growth of 2.8%. Operating profit increased by £18 million on a constant currency basis, or 8.0%, to £244 million (2009: £226 million on a constant currency basis). The efficiencies which we generated last year, particularly in the procurement and logistics area, have flowed through to the first half of this year, contributing to a margin improvement of 30 basis points.
Revenue in Continental Europe totalled £1,850 million (2009: £1,769 million) with organic revenue 0.8% lower than last year. Further efficiency gains resulted in an operating profit increase of £6 million on a constant currency basis to £143 million (2009: £137 million on a constant currency basis), an increase of 4.4%, and margin improvement of 30 basis points to 7.7%.
Revenues in the UK & Ireland were £897 million (2009: £939 million). We continue to streamline the back office and improve productivity and this has enabled us to improve margins by 20 basis points in the first half, despite the difficult economic conditions. Operating profit was £54 million (2009: £54 million).
The Rest of the World businesses have delivered revenue of £1,263 million (2009: £1,137 million) and organic revenue growth of 1.4%. Operating profit increased by £20 million, or 30% on a constant currency basis, to £87 million (2009: £67 million on a constant currency basis). The margin has increased by 160 basis points overall on a constant currency basis to 6.9%, and is now broadly in line with the Group average.
