I am very pleased to report that our target to double profits within two years has been beaten. This has been an exceptional year for BBC Worldwide - not only is the focus on profits delivering real value to the BBC, but we are now also clearer in our role and remit as we complete the second year of the implementation of the strategic review.

In 2003/04 the company produced a profit of £37m. In 2004/5 this rose 50% to £55m. This year it exceeds £89m - a 144% increase from two years ago and 62% up on last year. Across the business the return on sales was 10% in the year and the EBITDA margin was 22%.

The underlying profit, excluding one-offs, disposals, restructuring and legal costs, is £92.1m, up from £53.3m in 2004/05, and an increase of 73% in the year. This figure has also doubled over two years. The profit increase over these two years has been achieved by a combination of trading and efficiency improvements spread across the business and by tackling areas that were in loss such as books, learning, children's and multimedia.

The Board of BBC Worldwide believes that performance can be further improved in 2006/07 - the last year of the review implementation.

Overall, the review led to a repositioning of BBC Worldwide and the formulation of our new strategic direction; it resulted in three recommendations that we continue to implement:

1. Clarify the scope of the company

Since the review, the remit of the magazines business has been tightened to focus on key BBC programme titles and genres where the BBC has recognised expertise, such as gardening, history, science and children's.

The woman's glossy Eve was sold in 2004/05 and the non-BBC Origin magazines were sold

in April 2006, just after the year end. Editorial panels have been set up for all the magazines and on-air trailing of magazines ceased in December 2004.

The White Paper and draft BBC Charter published in March 2006 proposed four criteria that in the future will bound the activities of BBC Worldwide:

• Must fit with the BBC's public purpose activities - activities must support or relate to the BBC's public service mission
• Must not jeopardise the good reputation of the BBC or the value of the BBC brand - activities must not undermine the BBC's brand values
• Must exhibit commercial efficiency - BBC ownership should provide an effective economic route to exploit an asset
• Must comply with Fair Trading guidelines and in particular avoid distorting the market - BBC Worldwide can and should have a market impact but must not receive any unfair advantage or subsidy.

2. Improve governance and transparency

On 31 January Etienne de Villiers joined the Board as non-executive Chairman. His wealth of experience gained as President and Managing Director, Walt Disney International EMEA, among other posts, has already been invaluable and he has struck a welcome new tone in Board decision-making. Also, three BBC senior executives joined as non-executive Directors: Jana Bennett, Director of Television; Nicholas Eldred, General Counsel; and Zarin Patel, Group Finance Director. Two further independent non-executive Directors are being recruited to the Board now.

This is the second year of the new-style annual reviews, aimed at improving transparency. Their purpose is to explain in plain terms the performance of each business, whether good or bad. They are not intended to be plc-style annual reports. The BBC publishes its own plc-style Annual Report & Accounts in July.