Growth strategy in action
The value of a business is the present value of the future cash ﬂows that can be generated by the assets and other capitals owned or controlled. Accordingly, the only true measure of growth for our business over time is the growth in cash ﬂow.
The capitals that generate these cash ﬂows include physical assets such as property, plant and equipment and employees as well as intangible capitals such as licences, brands, trademarks, technology and systems, supported by adequate financial capital to pursue growth opportunities and underpinned by quality relationships with key stakeholders. Execution of a robust strategy informed by and responding to material risks and opportunities will lead to optimal utilisation of capitals and generation of cash flows and ultimately value.
Growth in cash ﬂow over time is generated through the optimal operation of the group’s capitals or organic growth and building the tangible and intangible asset base of the group through developing and acquiring new businesses or inorganic growth.
While the use of cash ﬂow as the primary measure of growth may appear mercenary, it is only with sustainable and growing cash ﬂows that a business can hope to create value for the organisation, its stakeholders and society and thereby achieve a multitude of additional beneﬁts such as increased levels of employment and meaningful social contributions.