Shareholder Executive

Ordnance Survey

Purpose

Ordnance Survey exists to collect, portray and distribute the definitive record of Great Britain's natural, built and planned environment.

Legal Status and Ownership

Ordnance Survey is a Government Department and Executive Agency with trading fund status, responsible to the Secretary of State for Communities and Local Government.

Objectives

Ordnance Survey's objective is to deliver its public task. This can be summarised as to:

• collect and maintain uniform geographic datasets with national coverage, and provide nationally-consistent mapping
• maintain a definitive three-dimensional satellite-based geodetic reference framework to enable correct positioning of mapping and other data against the National Grid
• ensure that its data is capable of supporting the principles underlying the Digital National Framework, to allow integration and association with other geospatial information
• make the content of its datasets widely available in forms that are accessible to all customers for wider benefit, and charge its customers for the licensing and use of its products
• conduct its activities efficiently and effectively to maximise the broader economic value of its data, while complying with trading fund requirements and creating long-term shareholder value.

Financial Performance

£m	2008	2007	2006
Turnover	119	116	118
Operating Profit	23	7	8
Profit/(Loss) for the year	24	7	8
Cash flow before financing and liquid resources	17	4	(0)
Net Operating Assets	61	56	57
RONA	36.9%	11.8%	13.7%
ROCE	31.3%	10.2%	13.9%
Shareholders' Funds	76	55	42
Dividends	4	5	3

Commentary

Ordnance Survey's headline results show an upturn from 2006-07, reflecting continued strong underlying business performance.

Turnover was up 2.2% to £118.7m, due to an increase in revenues from the private sector partner channel, notably in the personal navigation and land and property markets, growth in the utilities sector and increased paper map sales. This was partially offset by a reduction in sales to central Government, reflecting continued pressure across Government to reduce public spending. Operating costs reduced significantly from £109.7m to £96.1m, though the previous year's figure was affected by an £11.3m exceptional charge. The underlying figure has reduced by £2.3m.

Overall, Ordnance Survey's annual post-exceptional profit rose from £6.7m to £23.8m. Taking into account the exceptional charge that affected the 2006-07 figure, the underlying improvement in operating profit before interest and dividends was £5m. Ordnance Survey paid a £3.7m dividend to the Department for Communities and Local Government. Ordnance Survey also significantly exceeded its financial objective, recording a 31.3% return on capital employed against a target of 5.5%.

Ordnance Survey continues to monitor ongoing debates about the role of public sector information in the economy. The Government has announced an examination of the information held by trading funds to distinguish more clearly what was required for public tasks and ensure it is made available as widely as possible for use in actual and potential downstream markets. The underlying principle is that information collected for public purposes will be made available at a price that balances the need for access while ensuring customers pay a fair contribution to the cost of collecting this information in the long term. Additionally, Ordnance Survey is continuing discussions with the Office of Fair Trading on issues raised in its December 2006 market study into the commercial use of public information.

Bob Goodrich joined the Board as Director of Information Systems in October 2007. Mark Alexander was appointed Finance Director in January 2008, replacing Alastair Matthews who left in August 2007. Duncan Shiell retired as Strategy Director in May 2007. Brian Hadfi eld stood down as a nonexecutive director in December 2007. After the year-end a new non-executive Chair, Sir Rob Margetts, was appointed on 1 August 2008. Katherine Innes Ker stood down as a non-executive Director on 31 July 2008.