3. Address financial performance

The company has now been focusing on profits - the normal measure of financial performance - since 2004/05 and businesses that were subscale or low margin have been sold, partnered or turned around. The only remaining exception to this is Children's. This business still incurred a small loss of £0.9m this year, but this was down from an £11.1m loss in 2003/04. The Board expects this improvement to continue.

Business highlights
In 2004/05, BBC Worldwide was restructured into six businesses and this year we added a seventh - Content & Production.

Global Channels

BBC Worldwide is the UK's number-one international TV channel broadcaster, with 18 wholly or partly owned channels across the globe, and ten in the UK held in joint venture with Flextech. We now serve 288 million unique homes around the world and in the US the BBC America channel hit its target of reaching 45 million homes.

During the year Darren Childs was recruited from Sony Pictures Television International as Managing Director of the channels business and completed a top-to-bottom review of the portfolio. We lost BBC Japan but launched BBC Prime in South Korea.

On sales of £165m (up from £141m last year) profits are still modest at £6.9m, up from £4.0m last year, but this reflects the nature of the joint-venture agreements under which several of the channels are held. I expect strong profit growth from this business in 2006/07, enabling us to invest for further growth.

Global TV Sales

In February 2006 we celebrated the 30th year of BBC Showcase, the annual event in Brighton where we show our catalogue of programmes to buyers from around the world. It's a shop

window for some 40,000 hours of complete programmes from the BBC and Independents producing for BBC, ITV, Channel 4 and Five.

This year the team has focused on securing future growth in emerging markets, and several new relationships are developing in countries as diverse as India, China, Argentina, Brazil, Poland and South Korea. These are the territories where we expect significant growth in future, but the business is already very healthy with sales of £173m and PBIT of £31.7m.

One other development was our pitch for FM radio licences in India's recent spectrum auction. We were successful in seven of the major cities with our partner Mid Day Multimedia Limited, and the new radio channels will begin to launch later this year.

Content & Production

This business secures all the programming for BBC Worldwide and identifies and exploits format opportunities around the globe. We have created a steady stream of format successes in recent years but now the Board has committed to format exploitation and local production as a key area of growth in the future. Wayne Garvie joined in January from BBC Entertainment to head up this new business. A production office was opened in Los Angeles in 2005. The huge phenomenon that is Strictly Come Dancing (aka Dancing with the Stars) enchanted audiences in 27 countries and won numerous awards.

The business includes our Indie Unit which looks after relationships with the Independent sector. It was a great accolade for the company to be voted Distributor of Choice by UK Independent producers in a Broadcast magazine survey during the year.

After the success of the box office movie Deep Blue, work is well advanced on the movie Earth, due for release in summer 2007.
Overall sales were £36m and profit £3.2m.