Fiscal 2005 was another successful year for Amstrad by any measure, as we continued to outdistance the competition and solidify our leadership in each of our major businesses. Customers around the world continue to benefit from our innovations, while our development of new technologies will position the company for future growth. With healthy demand across all our customer segments and channels, 2005 revenue increased above i?? 45 million to a record i?? 102,513 000.

Operating income increased by 84 percent from i?? 15,152,000 in 2004 to 17,904,000 in 2005. Meanwhile, Sales have almost doubled this year but the gross margin reduced reflecting our competitive pricing to secure large volume orders. We reported a profit before tax of i?? 19. 1m (2004: i?? 15. 6m) on sales of i?? 102. 5m (2004: i?? 57. 4m). The earnings per share were 16. 9p (2004: 14. 6p) We increased our annual investment in research and development by 96 percent from 2004 (2432m) to 2005 (2513m)

As is customary in the consumer electronics industry, there is consistent demand for price reduction as existing models mature. Our experienced team continue to focus on cost reduction through re engineering, component price and manufacturing cost reductions. Our overhead base remains tightly controlled which is evidenced by the fact that our costs as a percentage of sales have reduced to 7. 9 % from 11. 7% a year ago.

The Board of Directors recommend an increased final dividend of 4. 5p (2004: 3.5p) per ordinary share to be paid on 6 December 2005 to shareholders on the register on 30 September 2005 which together with the interim dividend of 2. 0p (2004: 1. 5p) paid on 6 April 2005, makes a total distribution of 6. 5p (2004: 5. 0p) per ordinary share in respect of the year ended 30 June 2005. The dividend per share improved by 69% from 2. 50 pence in 2004 to 4. 22 pence in 2005 and dividend yield increased from 2. 30 percent in 2004 to 4. 64 percent in 2005. Again our earnings per share increased from 7. 28 pence in 2004 to 10.97 pence in 2005, a rise of 3. 7 pence.

The Company’s earnings per share have grown by an average of more than 2% per annum over the rate of inflation, as measured by the retail prices index, over a three year period. Net assets increased by 26 % during the year to i?? 41. 0m (2004: i?? 32. 5m). The Group was strongly cash generative in the year with net cash increasing by i?? 17. 6m to i?? 39. 4m (2004: i?? 21. 8m). Our future prospects are strong. Before the end of calendar year 2005, several important new products will emerge from our pipeline.

We will introduce a new generation of E-mailer On-Screen Advertising, Integra and 10 CD changer Micro HI – Fi systems. Next year, Next year, we will gather even more momentum with HDTV PVR (DRX200) a higher definition digital satellite receiver which will vastly improve the picture quality, clarity and colour definition, our next-generation satellite receiver, and among many other new products and services (www. amstrad. co. uk) Among business customers, our work to deliver greater business value through our products has brought wider recognition of the advantages of Amstrad technologies.

In the past year, research reports from more than a dozen independent analyst firms concluded that the BSkyB Sky+ is superior to cable TVs in many important ways. Multiple studies found that BSkyB Sky+ has lower total cost of ownership, is more secure and reliable, and includes the industry’s most comprehensive customer indemnification protection. As a result, many enterprises are choosing BSkyB Sky+ over other alternatives, We continue to invest development resource in alternative delivery platforms such as internet protocol television (IPTV).

We were able to enter this field from experience gained in developing the E3. Apart from IPTV, the broadcast industry is moving into new technological ways to broadcast and high definition television (HDTV) is the future direction that most broadcasters will go. We have started designs for our customers based on new advanced technical solutions to provide HDTV set top boxes and HDTV PVR boxes in the future. Existing standard definition technology will remain until the price of HDTV boxes nears levels seen on standard definition boxes at which time they will become the mainstream core product required by broadcasters.

Apart from our HDTV and IPTV development, on 19 September 2005 we announced that we had agreed with BSkyB to develop and supply a new PVR set top box. As part of this agreement we will sell significant volumes of this new product in the financial year to 30 June 2007. (www. amstrad. co. uk) On 20 September 2005 we moved into a new consumer product category in the health care market and launched a new product, the Integra face care system, and at the same time introduced a new exciting way of selling directly to consumers. The product will be sold on-line through a dedicated website.

This new but controlled venture takes the Group into the growing consumer electronic healthcare market, one which dependent on the success of this venture has a lot of potential for the introduction of other products. The product has been designed and produced to take into account other World markets. Dependent on the success of the UK launch, we plan to roll the product out to other European and World markets. (www. amstrad. co. uk) Amstrad accomplished a great deal during its 21st year. Our people understand that and are justifiably proud. However; we see fiscal 2005 as simply the first of our next 20 years.

We see our obligation to clients growing every day. And we see extraordinary opportunity for Amstrad and its stakeholders, through existing and new customers, products and services. The future holds great challenge and promise for Amstrad. While we approach our future respectfully, we also do so confidently. It’s a view we like very much. And our intention is to fully realize what it offers over time. So we begin 2006 with confidence that we can build our future on a foundation of strength and also have developed leaders that will take us into a future of boundless possibilities.

It is challenging, but it is exciting. And we are up to the challenge. In conclusion, as outlined above, this year has seen very significant sales of standard and PVR set top boxes. We have a good order book for our current financial year and encouragingly orders beyond that into the financial year to 30 June 2007 when we also expect to sell PVR products in other markets. In view of the transition from standard definition to HDTV, sales in the current financial year will be made up mainly of existing mature models that as is customary, are under price pressure.

Although we anticipate a good performance in the current financial year, shareholders should not expect the same level of result as we have reported for the year to 30 June 2005. However, the subsequent financial year looks positive and we are excited by the potential of the new orders and new range of products which should underpin prospects for future financial yearsWe are more enthusiastic than ever about Amstrad opportunities to change the world for the better. We can pursue these opportunities because of your continued support. Thank you.