You will hear the Chief Executive of a steel company talking to shareholders about the company’s performance over the last year.

Woman: Ladies and gentlemen, it has been, in general, a good year for the company. Although overall profits are down compared with last year, they are, I am pleased to be able to announce, higher than we expected at this time last year: this year’s figure is three hundred and fifty-four million pounds compared with last year’s figure of four hundred and fifty-one million pounds. The Board is recommending a final dividend of seven pence per share, which makes a total dividend for the year of ten p per share, identical to last year.
The profit is mainly thanks to the company’s UK plants, which again put in very strong performances, setting a significant number of production records.
Deliveries to markets outside Europe were twelve per cent up on the previous year, largely due to economic conditions outside our control. Operating costs, we are pleased to report, were two per cent lower than in the previous year, due mainly to reduced employment costs, as the workforce was cut from fifty-two thousand to fifty thousand.
Now to the less good news: there have been difficulties with our export trade over the last year. The main culprit here has been the strong pound, which has reduced profits by approximately five hundred million pounds. Secondly, S. B. Steel, our fifty-one-per-cent-owned German stainless-steel subsidiary, continued to be badly affected by depressed selling prices. Then Huntingdon’s, our twenty-five-per-cent-owned joint venture in the USA, encountered technical problems during the year, which mean that it is unlikely to resume operating at capacity again until late this year.
Now, faced with these problems, your Board has taken a number of measures, which we believe will be effective within a short timeframe: firstly, we have established a target for all our businesses of achieving fifteen-per-cent return on assets. We are streamlining the organisation structures to make them flatter and more responsive to changing needs.
We have also established a team to look at our working practices with the aim of improving productivity. We are creating a considerably more reliable supplier base; and lastly, we are using information technology more creatively.
To turn now to the general outlook in the UK and abroad: the situation is complex. The UK economy is forecast to slow down next year. For the economy as a whole, a recession is not expected but, for the manufacturing sectors, there are predictions of, shall we say, unfavourable conditions.
Globally, however, demand for steel may well strengthen over the next year, because of improving business confidence. In the US, for instance, analysts think that consumer spending will be maintained at high levels. Although we can never be one-hundred-per-cent sure how the markets will develop, we do feel confident that the Middle East offers profitable prospects and we expect some growth opportunities in steel or steel-related businesses in this region.
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Now listen to the recording again.
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That is the end of Part One. You now have 20 seconds to check your answers.