Financial Highlights

Chairman's Statement 2006 Annual Report(abbreviated)

We have driven forward with our strategy of increasing the value we offer our customers by better understanding their business and developing additional services.

Seen from my perspective as Chairman at both Pindar and Vision In Print, the year under review has been a particularly difficult one for the print industry.

I am pleased therefore to report that our approach and close attention to processes and costs has enabled us to grow sales to a record £111m. The pre exceptional operating profit increased by 29% to £7.6m, again, the highest in the Company's 170 year history. A year and performance of which all staff can be rightly proud.

In this financial year we celebrated with Yell a twenty-five-year long partnership. Pindar Set, which is responsible for this relationship, had a year of excellent growth, with UK turnover increasing by 5% and the USA by 23%.

AlphaGraphics has had a very successful year growing the network turnover to record levels. The high turnout of franchisees at this year's annual conference is testimony to the positive outlook for business across the network.

We invest in the future through strategic acquisitions, strengthening the business portfolio with skills and services to continue our transition to a multi-channel communications Group with a long term future.

The acquisition of Screen Pages Limited shortly before the year end and the eCommerce services it provides complements our printed work and fits perfectly with our desire to help customer manage and maximise their content.

India represents a great strategic opportunity for us to develop a significant off-shore facility and will provide additional page production and software development capacity to support all parts of the Group.

We believe innovative technology acts as a key differentiator adding value to our customers, improving workflow and reducing costs. The latest release of our Agility software will help to build on our market leading position for catalogue production systems.

Our policy of investment in the future of our print business continues with the purchase of a new perfect binder, new Lithoman press installation, which will generate environmental benefits in addition to the production and quality improvements, and the relocation of our Confidential business re-equipped with new digital presses.

Pindar is a strong believer in being a responsible partner within the communities where it's based. We have been closely involved with Corporate Social Responsibility long before it came to be known by this description.

The support we announced in July 2005 for a UK deprived area school with a three year programme to finance and support "Scary Guy" an Emotional Intelligence expert continues to show great returns for all the pupils and other people involved.

AlphaGraphics Inc in Salt Lake City has been actively involved in the Adoption Exchange, which is a group that works with foster children, adoptions and placements.

We continually strive to reduce the environmental impact of our business. Having invested in an energy reduction programme since 2001 we have demonstrated an impressive 37% energy saving. During this year we have introduced measures to reduce waste and recycle materials which are beginning to show good reductions.

My colleagues and I are proud of our business performance and the part we play in our communities. I look forward to continuing to build on the efforts of our people and welcome the forthcoming year with great anticipation.

G Andrew Pindar DL Chairman