Having completed my first 12 months as Chairman, I am delighted to be able to report another year of strong progress for the Group.
We have continued to demonstrate the strength of our business model and to create value for shareholders.
Our financial results for 2005 reflect the value of past investment and of the Group's consistent strategy. Underlying profits rose by 49 per cent, earnings per share by 55 per cent and debt levels were significantly reduced. We are therefore proposing an increase in the payment to shareholders.
Rolls-Royce is continuing to invest in new technologies, products and programmes. The long-term nature of these investments and the increasing numbers of our engines in service should enable the Group to generate growth and improving returns over many years.
The Group attaches a particular priority to the environment by investing in technologies which minimise the environmental impact of our operations and products.
We also take seriously our obligations to all our stakeholders as we believe that excellence in corporate responsibility delivers competitive advantage and long-term success.
There have been a number of Board changes over the year. After nearly 40 years with the Group, Mike Howse retired from the Board in June as Director of Engineering and Technology and has been succeeded by Colin Smith. I would like to thank Mike for the outstanding contribution he has made. Colin Smith has been with the Group for over 30 years and brings to the Board a similar wealth of engineering expertise.
We announced in January of this year that Colin Green is to retire from the Group and the Board in April. Again, I would like to thank Colin for the huge contribution he has made to the Company and to the aerospace industry, which was publicly recognised last year when he received a well deserved CBE.
As foreshadowed in last year's report, Iain Conn has joined the Board as a non-executive director and has brought to our discussions his extensive international business experience.
I would like to thank the management and all our employees very much for another successful year. Their commitment has been outstanding. I should also pay tribute to my fellow directors for the considerable contribution they have made in support of the Group.
Our past investments have enabled us to build strong positions in markets which offer long-term growth. Looking forward, we continue to lay the foundations for long-term success and value creation in a demanding international business environment. I expect the Group to continue to make progress in 2006, as the returns from past investments grow while we continue to invest in new technologies and products.
February 8, 2006