Financial review
Taxation
The taxation charge for the year was £19.7 million (2007: £15.0 million) which represents an underlying effective rate of 28.0% (2007: 29.9%). We expect the Group’s effective rate of taxation to remain at around 28.0% in 2009. Further analysis of the tax charge is included in note 5 to the financial statements.
Shareholder returns
Earnings per share
Earnings per share (‘EPS’) increased by 44.5% to 19.73 pence. An analysis of EPS by market is set out below.
| 2008 pence |
2007* pence |
|
|---|---|---|
| Central Europe | 29.74 | 21.95 |
| UK – central costs | (3.70) | (3.40) |
| Established businesses | 26.04 | 18.55 |
| Mexico | (2.44) | (3.62) |
| Romania | (2.19) | (1.14) |
| Russia | (1.68) | (0.14) |
| EPS | 19.73 | 13.65 |
*On a pro forma basis.
Return on equity
The Group increased its return on equity in 2008 from 19.8% to 21.9% with the return on equity of established markets increasing from 28.7% to 31.7% offset by additional investment into our developing markets. For this calculation equity, which represents over 45% of receivables, is allocated between established markets and developing markets on the basis of receivables, with central costs being allocated to Central European receivables.
Dividend
The directors are recommending a final dividend of 3.40 pence per share which will bring the full year dividend to 5.70 pence, an increase of 19.3% compared to 2007. Further details of the dividend payable are given in note 7 to the financial statements and in the information for shareholders section of this report.