Getting better value from public sector research ... - CentreForum

Getting better value from Public Sector Research Establishments
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capabilities developed to provide services to government
and industry, whether in the form of technical advice or
‘intelligent customer’ interpretation of trials data, for
example. Spin-offs in 2007 had a valuation at the time
of £40m. In 2010/11 QinetiQ collected royalties of £7m.
QinetiQ claims to have saved MOD £180m in the first 7
years since it was set up, on top of the £700m savings
which are built into the LTPA over 25 years.
We have limited information on TUV NEL, but clearly
the continuation of the BIS contract for TUV NEL’s
participation in the National Measurement System seems
to indicate that BIS is satisfied with the quality and value
for money it is receiving.
Financial Performance
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AEA Technology revenues in 2011 were £114m (over half
from the USA), showing no growth on 2010 (although with
a significant reduction in European revenues balanced by
increase in USA), with an operating loss of £6m. When
the loss is adjusted for the one off costs of restructuring
(including redundancies in Europe), acquisitions and
other adjustments the accounts show an adjusted profit
of £9m. Share performance since privatisation, initially
strong, has been very poor over the past 10 years. The
shares floated in 1996 at 280p and rose steadily to reach
860p in 1999. Since then there has been a steady and
steep decline, and in August 2011 the share price hit a
new low of 2p.
LGC's turnover rose significantly following privatisation,
growing by nearly 800% to £124m in 2010, an increase
of 80% in the revenue per employee since privatisation.
Profitability grew slowly at first, with low margins in the
early years, and £1m profit on £23m turnover in 2000, £6m
on £60m in 2005 and £14m on £124m turnover in 2010.
Profitable growth has been achieved through a strategy of
expansion through acquisition and organic growth. LGC
has invested in areas with potentially broad commercial
value, and leveraged the capital of its shareholders to
make small, strategic acquisitions to bolster capability.
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