Firstly, can you take us through the key numbers, and in particular
Sales growth was pretty good again in 2007. We saw 6% overall underlying
sales growth. And breaking that down a little bit into the businesses, in the
School business we saw 6% growth there. That was actually towards the top end of
Higher Education as well, good growth in digital products there, which we saw
drive our growth to 5%. Professional had a great year in both technology
publishing and also in the Vue professional testing businesses and that grew 9%.
At the FT Group both IDC and FT Publishing were well up and delivered jointly
10% growth. And Penguin too had a very good year, 3% growth with particular
strength in the United States.
And what about the other key numbers?
Margins were very strong too. They went to 15% and that’s the target that we
were keen to get to.
That’s not the end of the process but we certainly wanted to get to 15%, and
that was something that we achieved in 2007.
Working capital was good as well. We saw our working capital to sales ratio
improve by 0.7%. And those two things, margin and working capital control, are
really what’s helping our return on invested capital.
Cash was strong it’s always nice to see strong cash. We did 108% cash
conversion in 2007 and that means we have averaged cash conversions now of well
over 100% across the last four years.
When you look at the cash on the balance sheet, what are you going to
do with your cash?
The key requirement we have is to continue to invest organically back in the
business. So last year we spent £230m on new content in our Education
businesses’ pre-publication spend. We continue to top up that spend. It grew 8%
That’s probably about the right level. So organic reinvestment, whether it’s
in Education, making sure that we’ve got great content in Penguin, or
rejuvenating FT.com are all areas that we will continue to reinvest cash back
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