BY ANY MEASURE THE FINANCIAL RESULTS FOR 2004 WERE IMPRESSIVE – revenues, profits, margins, cash flow and dividends were all well ahead of the previous year. Strong economic growth in the US, UK and Asia all helped, but the successful investment in new products and our push into new markets is delivering steady, sustainable revenue growth.

By any measure the financial results for 2004 were impressive – revenues, profits, margins, cash flow and dividends were all well ahead of the previous year. Strong economic growth in the US, UK and Asia all helped, but the successful investment in new products and our push into new markets is delivering steady, sustainable revenue growth.

The hard work put in over the last few years to improve productivity across the board, to invest in innovation and to offer our clients a greater range of products in print, events or online is boosting our market shares, improving yields and lifting margins. The increasing investment in both acquisitions and organics is delivering an excellent return and providing the group with a more stable and predictable mix of profits. Technology print revenues are still in modest decline, but the 30 per cent growth online is an important pointer to the potential in this sector. Healthcare is now one of our largest sectors and, with signs of a good recovery in continuing medical education in the US, is set to be a key profit driver in the next few years. The growth in our construction and built environment sector in the UK is a text book example of driving for operating excellence, and at the same time investing in and integrating successfully several key acquisitions. PR Newswire has also made important productivity gains in its core business, invested well to launch new products and turned its loss making international business into profit.

These themes continue into 2005. The year has started well, order books are healthy and the pursuit of new growth opportunities through greater investment is being vigorously pursued. Further offshoring and outsourcing will bring useful margin gains over the coming years. In all of our businesses we are seeking to use our financial strength and proven ability to invest and acquire successfully to pursue growth through consolidation and greater product and geographic coverage. Usually this will be pursued within our group, but sometimes, as in the case of NOP, the most compelling consolidation and growth opportunity might lie outside the group and be achieved through a sale on terms which ensure that our shareholders receive the full measure of these combination benefits. If we are successful in achieving this outcome at NOP – a business we have steadily built up over the last 20 years – our shareholders can expect to receive a substantial part of the value released through a return of capital.

Malcolm Wall and I are both bowing out of United after many hugely enjoyable, challenging and generally successful years. We are proud of the business we have helped to build and grateful to our colleagues, customers and shareholders for their support and encouragement. David Levin joins as CEO in April with an illustrious record and a fine reputation. He will lead a fine team, brimful of talent and ideas. The businesses are in great shape and in 2004 demonstrated their ability to deliver outstanding results.

I would like to pay a most heartfelt tribute to all of my colleagues and friends right across the group for your tremendous achievements, not only in 2004 but, in many cases, stretching over decades. I have had the privilege of witnessing at first hand the pride, the determination and the passion you have brought to your business. I have experienced the thrill and the fun of working with you to help to build those businesses. I enjoyed every minute of it and for that I thank you all.