17 May 2005

I am pleased to report that the Group has started the year well. Current trading is in line with expectations, showing good progress over the same period last year.

In 2004 Interserve was successful in winning a number of significant, new, long-term revenue streams, achieving a 14 per cent increase in our future workload which stood at a record £4.9 billion at the turn of the year. So far in 2005 we have announced new contracts and framework agreements through which the value of services to be performed by Interserve totals over £800 million. The most recent of these, for the Newcastle-upon-Tyne NHS Trust, will provide revenues to the Group until 2043.

Over the past few years a number of changes to the Board have been made in line with our succession plans. Following nine years as Chairman, and some 41 years' service with the Group, I have now decided that a suitable time is approaching for me to stand down. Steps are being taken to recruit a new Chairman and I am sure that my successor will enjoy the opportunity to work with the many talented people in the Group as much as I have done. This is therefore likely to be my last Interserve AGM.