Financial year 2019 ('FY19') was another successful year for the sustainable, future growth of the ERM business, with strong overall performance 

Despite some geopolitical uncertainty the global economy remained steady and the US economy expanded at a fast pace. Accordingly, client capital and operating expenditure in the resources sectors and other dependent sectors remain robust. Sales in all our focus sectors increased during FY19, with a consequent increase in backlog. The Chemical, Oil & Gas, Power and TMT sectors were particularly strong.

At constant exchange rates, our net consulting revenue increased by 15% during FY19 and our trading profit increased by 26%. We continued to maintain significant investment for medium-term growth in key areas, including growth sectors like Chemical, Oil & Gas and TMT (Technology Media & Telecommunications), and for the development of our client-focused service offerings, as well as our strategic imperatives (Earning Client Loyalty, Client Service Innovation, World Class Delivery, Harnessing Technology & Data, and Building a Leading Brand Position). Our trading profit margin for FY19 was 16.7%, compared to 15.2% for financial year 2018 ('FY18'). We generated strong operating cash flow of $151m (before tax payments) during FY19. After deducting payments for tax, investing and financing activities, there was a net $38m increase in cash. We held $191m of cash at 31 March 2019.

Full-time equivalent ('FTE') employees increased by 630 during FY19. As outlined above, the market was strong during FY19 and we were able to increase our FTEs continuously since FY18 in response to the improving market conditions and as a result of the increase in backlog. FTEs grew by 342 in the first half of FY19 and 288 in the second half of FY19, plus a further 85 via our acquisitions (see below). We ended the year at 5,235 FTEs. The average number of FTEs increased from 4,403 in FY18 to 4,929 in FY19.

All major regions of the world experienced continuous economic growth during FY19. There is some caution amid tariff threats to global trade, with a consequent knock on impact on the wider global economy. In addition, there is increased political uncertainty due to deterioration in relations between the West and Russia, and the continuing uncertainty around Brexit. We do not believe that Brexit will have a material impact on the business. Absent these downside risks, we believe that our major sectors will continue to experience growth with strong opportunities for ERM.

We will continue to invest in our strategy to take advantage of improving economic conditions and growth in our key markets. The financial results for FY19 represent a strong overall performance and are in part due to the investments made in prior years. We continue to maintain significant investment for medium-term growth in key areas, including our growth sectors and for the development of our client-focused service offerings, as well as our strategic imperatives. The build-up in our backlog and growth in our FTEs augurs well for financial year 2020.

Partners: Partners in ERM are our senior management level leaders. During FY19 we hired 35 new Partners and promoted 26 Partners internally from our Path to Partnership program. In addition we welcomed 5 Partners via our acquisitions (see below), to end the year at 581 Partners. Our average number of Partners in FY19 of 563 was 19 above FY18.

Acquisitions: We continued to make strategic in-fill acquisitions. In November 2018, we acquired the 70-person stakeholder engagement and communication consultancy business of Kathy Jones and Associates Pty Ltd, an Australian company with offices in Sydney and Melbourne. In December 2018, we acquired SustainAbility Ltd, a leading think tank and advisory firm that inspires business to lead the way to a sustainable economy, with offices in London (UK), New York and the San Francisco Bay Area (USA).

Our marketplace continues to grow and offer the Group considerable opportunities. We continue with our strategy, which is to grow and build our presence in major markets, through organic growth and targeting specific acquisitions where appropriate to broaden our geographic and service offerings. Our global expansion focuses on building expanded relationships with our clients and servicing their needs in more regions and across more service areas.

In summary, FY19 was another successful year for the sustainable, future growth of the ERM business.