REPORT & ACCOUNTS CONTENTS
Introduction 3
Chairman’s Statement 4
Highlights 5
Chief Executive’s Review 6
Financial Review 16
Directors and Advisers 20
Corporate Governance 22
Corporate Social Responsibility 26
Remuneration Report 27
Directors’ Report 35
Independent Auditors’ Report 38
Consolidated Income Statement 39
Consolidated Balance Sheet 40
Company Balance Sheet 41
Cash Flow Statements 42
Statements of Changes in Shareholders’ Equity 43
Notes to the Financial Statements 44
Five Year Summary of Results 73
Notice of Meeting 74 Introduction
Business Post is the UK’s largest independent
express delivery company and the leading 
alternative to Royal Mail in the de-regulated market
for mail services
03
The Group is organised into three divisions – Parcel
Services, Mail Services and Specialist Services.
Parcel Services is the largest division, with revenue of
£196m in the year ended 31 March 2006, representing 70%
of the Group total.  Offering primarily next day B2B, B2C and
cross-border collection and delivery services through the
Express, HomeServe and International brands, Parcel
Services operates through a national network of 59 depots
for domestic shipments, and a number of business partners
for international deliveries.  We are the chosen UK partner of
FedEx Express, the world’s leading express delivery
company.
Mail Services, comprising UK Mail, is licenced by
Postcomm, the independent regulator, to offer mail services
throughout the United Kingdom.  It is the Group’s fastest
growing division and from commencement in May 2004,
achieved revenue in the year ended 31 March 2006 of £40m,
representing 15% of the Group total.  Currently offering
services to business customers, UK Mail provides a two-day
time-definite delivery service with full track-and-trace
capabilities.
Specialist Services comprises the Group’s same-day and
palletised goods delivery activities, through the UK Today,
BXTech and UK Pallets brands, with revenue of £42m,
representing 15% of the Group total.  UK Today and BXTech
offer a range of fulfilment services, including ad hoc, contract
and international courier, logistics and technical two-man
deliveries. UK Pallets provides collection and delivery
services for palletised goods through a partnership network
with over 70 independent logistics and distribution
businesses throughout the UK.
Each of the divisions shares a reputation for high-quality
delivery services, using information systems which are at the
forefront of the industry.
Parcel Services represents 70% of the Group revenue
UK Mail represents 15% of the Group revenue
Specialist Services revenue £42m
03 The Board remains confident of the
Group’s long term potential. Prospects for
Mail Services remain excellent.
Chairman’s Statement
Excellent progress has been made in UK Mail and
Specialist Services during the period.  However, it has
been a very challenging year within Parcel Services,
particularly in the second half.  
RESULTS
Revenue increased by 19% to £278.2m (2005: £233.3m).
UK Mail contributed £30.2m of the total revenue increase 
of £44.9m.    
Operating profit before exceptional items reduced to £12.1m
(2005: £19.9m), reflecting a decline in profitability levels
within Parcel Services but benefiting from the reversal of
IFRS charges for share-based incentives. Operating profit
totalled £5.4m (2005: £19.9m).  After net interest payable of
£0.4m (2005: £0.3m), profit before tax and exceptional items
was £11.7m (2005: £19.6m).  After exceptional items, pre-tax
profit totalled £5.0m (2005: £19.6m).  
DIVIDENDS
The Board remains confident of the Group’s long term
potential and the prospects for recovery. Accordingly,
following payment of an unchanged interim dividend of 6.4p,
the Board proposes a final dividend of 10.8p (2005: 12.8p).
The final dividend will be payable on 20 July to shareholders
on the register at the close of business on 30 June 2006.
BUSINESS
Both the progressive decline in revenue growth during the
year and the markedly lower profitability within Parcel Services
can be attributed in large part to the impact of a number of
unsuccessful profit-improvement initiatives introduced during
the year.  Under the new leadership of Guy Buswell, a
comprehensive performance improvement plan has been
developed, and is being rigorously implemented. Encouraging
early progress has been made, particularly in improving
customer service levels, but it will take time for the full benefit
of these actions to show through in the Group results. 
UK Mail enjoyed another excellent year, increasing revenue
four-fold and making an operating profit contribution of £3.2m.
Prospects for Mail Services remain excellent.
Specialist Services made good progress, increasing revenue
by 18% and operating profit before exceptional items by 21%,
rewarding both expanded sales activity and focus on margins.
MANAGEMENT
We announced at the beginning of December the
appointment of Guy Buswell, formerly Managing Director of
UK Mail, as Chief Executive following the resignation of Paul
Carvell.  Since his appointment, Guy has made a number of
significant changes to the management team, designed to
streamline the management of the Group’s activities and
provide greater focus on those areas requiring margin
improvement.  
We also announced on 23 May 2006 that, after more than
seven years as Group Finance Director, Peter Fitzwilliam will
step down from the Board on 2 June 2006.  Peter has made
a substantial contribution to the Group, including assisting
most recently in the current performance improvement
strategy.  We are grateful for all he has done, and wish him
the very best with his future plans.
Peter will be succeeded by Steven Glew with effect from 5
June 2006.  Steven has an excellent record of delivering
successful change programmes within quoted companies,
most notably Mothercare plc and Booker plc, and we are
delighted to welcome him to the Board.
STRATEGY
The Group’s strategy remains to focus on three areas of
business – Parcel Services, Mail Services and Specialist
Services.  The business model of Parcel Services is sound,
and there is significant scope for recovery.  The opportunities
for UK Mail, operating through the Group’s core network,
remain particularly exciting and the Board believes that the
Group can maintain its position as the leading competitor to
Royal Mail for the foreseeable future.  The businesses within
Specialist Services operate outside the core network, and
continue to offer attractive growth opportunities on a stand-
alone basis.
As previously stated, the Board believes that the Group
contains the elements necessary for substantial profitable
growth. 
PROSPECTS
Service levels remain high and the number of customers,
following a period of decline during the year, is now on an
upward trend.  Encouraging progress is being made in
tackling the issues within the franchise network; and
initiatives to rebalance the mix of customers and reduce unit
costs within Parcel Services are in the process of being
implemented.  The Board is confident that these will address
the major underlying issues affecting profitability but, by their
nature, will take time to show through in the financial results
for the Group. The Board expects progress in the underlying
results in the coming year, albeit weighted to the second half.
Peter Kane
Chairman
04 Highlights
Operational
• FedEx Express contract renewed for
further five years
• Comprehensive action plan being 
implemented to improve the 
performance of Parcel Services
• Encouraging early progress, with 
recent service levels amongst the 
highest in the Group’s history
Revenue up by 
19% to £278.2m
UK Mail’s revenue up four-fold, to
£40.4m
Group pre-tax profit was
£5.0m
UK Mail operating profit
contribution of
£3.2m
Financial
UK Mail made further excellent progress, 
reinforcing its position as the market leader in 
downstream access mail
05 Chief Executive’s Review Parcel Services
Parcel Services comprises the
Group’s overnight business-to-
business (Express), business-to-
consumer (HomeServe) 
and cross-border (International) 
parcel delivery activities, using a
national network of 59 parcel depots. 
06 Chief Executive’s Review Parcel Services
The first priority is to ensure that high levels
of customer service are provided on a
consistent and reliable basis.
PARCEL SERVICES
During the year, Parcel Services increased revenue by 5% to
£195.8m, representing 70% of the Group total (2005: 80%). 
After a strong start to the year, with daily volumes well ahead
of the previous year, growth progressively deteriorated, to the
point where in the final quarter they were below those of the
previous year.  Pre-exceptional operating profit declined to
£17.4m (2005: £30.3m). Operating profit was £11.1m (2005:
£30.3m).  
Express revenue declined slightly to £130.8m (2005: £131.3m);
HomeServe increased revenue by 22% to £32.8m (2005: £26.8m),
and International by 12% to £31.6m (2005: £28.1m). 
Both the progressive decline in revenue growth during the
year and the markedly lower profitability can be attributed in
large part to the impact of a number of unsuccessful profit
improvement initiatives introduced during the year.  These
included short-term cost reduction initiatives which adversely
impacted service levels.  These service issues, and a series of
price increases in the summer, in turn affected customer
numbers, particularly SMEs, with the result that the average
selling price declined and operational efficiency reduced.
Furthermore, additional costs were incurred in supporting a
number of under-performing franchises.  
Following my appointment as Group Chief Executive in early
December 2005, I have identified a series of remedial actions
which I am confident will improve levels of profitability within
Parcel Services. The first priority is to ensure that high levels of
customer service are provided on a consistent and reliable
basis.  Under the leadership of a newly-appointed Operations
Director, the results of this focus are already evident, with
service levels in the first three months of 2006 being among
the highest in the Group’s history.   
The chart below illustrates the improvement made across the
period December 2005 to March 2006 when compared with
same period a year earlier, and rebased so that December
2004 equals 100.
This improvement, along with our ability to deliver tailored IT
solutions, was a central factor in the decision of FedEx
Express to renew Business Post’s contract as Global Service
Participant in the UK.  Our existing five year contract will be
replaced with a new five year contract, with effect from 3
September 2006, on similar commercial terms.
The network’s operational efficiency is affected by the balance
of collections and deliveries in individual locations.  In simple
terms, the more equal the balance, the more efficiency is
optimised.  Over time, changes within the customer base have
impacted this balance, and sales activity is now being
targeted on those sites which would benefit most significantly.
Accordingly, sales incentives have been introduced to
encourage new business from smaller customers, both to
increase average selling prices and to enhance utilisation of
collection and delivery vehicles.  
07
Dec 04 Jan 05 Feb 05 Mar 05 Apr 05 May 05 Jun 05 Jul 05 Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 Mar 06
94
96
98
100
102
104
106
108
Rebased Service Levels Chief Executive’s Review Parcel Services
In addition to these site-based initiatives, additional focus is
being placed on Linehaul - the bulk overnight movement of
parcels. Through a renewed focus on capacity utilisation,
opportunities have already been identified to reduce the
number of routes operated, releasing vehicles from the fleet.
The initial impact of this action is evident in the chart of
linehaul costs per parcel below, rebased so that April 2004
equals 100, and will remain one of the key cost reduction
initiatives pursued during the current year.
The impact of the events of the past year has been acute
both within Business Post’s own sites and also its franchise
locations.  The level of profitability within the franchise
network has been poor and, in order to maintain continuity of
service for customers, increased levels of funding were
provided during the year.  The impact on the network has led
both to a reassessment of the recoverability of amounts
previously advanced to franchises and also the future
viability of some individual franchise locations.  
Certain franchise locations were identified where prospects
for improvement were poor.  A number of these have been
converted to Business Post ownership since the start of
2006.  All conversions have been effected without any
detrimental impact on service levels, but have resulted in
one-off costs of transition which have been reported as an
exceptional item. The number of franchises has been
reduced from 42 at its peak to 21 today.
A key element of our strategy going forward is to reduce the
unacceptable level of customer attrition suffered during 2005
and before. For more than two years we have been
developing an educational and training programme that is
designed to improve the quality of the customer experience,
on all those occasions and in those situations when
customers come into contact with our organisation.
It was always anticipated that this would be a long term
project, as it has to reach over 3,500 employees and
associates and, in many cases, inspire changes in their
behaviour. This activity is beginning to yield measurable
results, supported as it is by the parallel development of the
Onyx customer relationship management system, now the
mainstay of our customer service activity.
Responsibility for managing and servicing our large
customer base now falls with the newly created Client
Services Group, under the management of the Client
Services Director. This department creates a bridge between
the Sales and Operations functions and assumes the
responsibility for customer service that they previously
shared. The impact their work is having is already becoming
apparent as a direct result of the focus they now bring to this
vital business activity and is illustrated in the chart below.
08
Increased efficiency in linehaul operations
Operational service at historically high levels
Enhanced customer service standards
85
90
95
100
105
110
115
120
ebased
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2004/05                   2005/06
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Number of accounts trading in 2005/06
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Up to £500          £500 - £4,999          £5,000+
Linehaul costs per parcel
Customer numbers
Rebased 09 Chief Executive’s Review Mail Services
UK Mail is now recognised as the
leading alternative to Royal Mail
10 Less than two years after commencing trading, 
UK Mail had an annualised throughput of 
approximately 700 million items
Chief Executive’s Review Mail Services
Market share approaching 3%
Major new contracts agreed
Encouraging progress for un-sorted service
Highlights
11
MAIL SERVICES
UK Mail enjoyed another excellent year, increasing revenue
four-fold to £40.4m, representing almost 15% of the Group
total, up from 4% last year.  At the year end, less than two
years after commencing trading, UK Mail had an annualised
throughput of approximately 700 million items.  This
represents approaching 3% of the market, is ahead of
schedule and reinforces UK Mail’s position as the market
leader in downstream access. Operating profit of £3.2m
(2005: breakeven) was achieved, and further strong progress
is expected in the current year.
New UK Mail customers signed over the past year include
Carphone Warehouse, O2, Standard Life, and a contract with
First Data International (FDI), a leading mail production
company, to handle significant volumes of mail for one of the
UK’s leading financial institutions. This builds on UK Mail’s
earlier success in the financial services market, adding to the
major contract won in 2005 with the Royal Bank of Scotland
Group.
As well as excellent progress in the market for pre-sorted
mail items, where strong levels of new business wins have
continued, good progress has also been made in the market
for un-sorted mail.  UK Mail’s un-sorted mail service,
introduced progressively throughout the year, has made an
encouraging start and contributed a modest amount to UK
Mail’s operating profit.  Four machines are already in place
and further machines are planned for introduction during the
coming year.  
The Royal Bank of Scotland Group (RBS) has awarded
Approved Supplier status to UK Mail. This is a new scheme
that is designed to further recognise the achievements of
their highest performing suppliers. In addition, UK Mail is
entitled to use the Supplier Excellence mark as a winner in
the RBS Supplier Excellence awards.
RBS are one of the UK’s largest mailers and first awarded
postal business to UK Mail in March 2005. The size of the
contract has continued to grow as UK Mail have
progressively increased their share of the RBS mail output. Chief Executive’s Review Specialist Services
Specialist Services comprises 
UK Pallets, a nationwide palletised
goods delivery service, and same-day
Courier activities, through UK Today
and BXTech.
12 Higher sales activity and business 
development initiatives
UK Pallets network strengthened
UK Today absorbs BXTech
Highlights
Overall, pre-exceptional profit within Specialist Services
increased by 21% against a revenue increase of 18%.  
Chief Executive’s Review Specialist Services
13
SPECIALIST SERVICES
Overall, operating profit before exceptional items within
Specialist Services increased by 21% to £2.3m (2005:
£1.9m) against a revenue increase of 18%. Operating profit
was £2.1m (2005: £1.9m).
UK Pallets
UK Pallets increased revenue by 19% to £27.5m,
representing an unchanged 10% of Group revenue.  This is
an encouraging performance against a background of a
maturing market and reflects the benefits of expanded sales
activity during the year.  With a new Managing Director and
management structure in place a number of new business
development initiatives are being pursued.
The Partner network continues to gather strength and
improve coverage with new appointments being made in key
areas. This adds to the scope and quality of the services
provided by UK Pallets to its customers.
Increased focus is falling within the business on the
fundamentals of safety, accuracy and control in the
presentation and handling of freight shipped through the
system. Success in this task will have a directly beneficial
effect on the retention and development of customers
throughout the network.
Courier
Business Post’s same day Courier activities increased
revenue by 16% to £14.1m, representing 5% of the Group
total.  A focus on profit margins during the year yielded good
results, with a 1.4% increase in operating profit margins.  The
management of the Group’s Courier activities has recently
been restructured, amalgamating BXTech and UK Today into
one business under single management.  This restructuring
is expected to yield further profit improvements in the coming
year.
A recent review of the main business activities of the
combined Courier group has yielded a marketing and
product development plan that is focused on the key
strengths and competencies that it possesses. This has
allowed the development of a targeted plan of sales activity
that is designed to yield new business of good fit and high
margin. Chief Executive’s Review Staff & Associates
Award for training programme
Enhanced communication programme
Foundations laid for the future
Highlights
14
The year 2005/06 has been a difficult year for all our staff
and also our associates working within our franchised
operations and as owner-drivers.  Despite their considerable
efforts, they have not seen their hard work and enthusiasm
rewarded in the financial results for the Group.
As a result, we are working hard to engage all those people
who work for the Group, and particularly those based at our
network sites. We need them to pay greater attention to the
basics of our business – to get it right today so that it
doesn’t become a problem tomorrow. We need to inspire
and motivate them to bring about the fundamental
improvements that are needed and we are dedicating
considerably more time and effort to internal
communications.
The programme includes a new staff magazine, a much
enhanced intranet site, information points at every location
and the installation of PCs in staff amenity areas to support
our learning and development programme.
Creative and relevant training courses will boost staff morale
as well as their knowledge. Our Learning and Development
programme was recognised by a National Training Award in
2005 and we will continue to build on an already excellent
standard.
I strongly believe that Business Post has a great future, and
thank all our staff and associates for their support.
Guy Buswell
Chief Executive 15 Financial Review 
IFRS
These are the first Group results prepared under EU-adopted International Financial Reporting Standards (“IFRS”).  
The principal impact of IFRS on the accounts of the Group has been the requirement to quantify the fair value of share options,
including those issued in prior years, and spread that across the relevant vesting period, and the change to an impairment test
for goodwill, which removed the annual amortisation charge.  Full details of the impact of the implementation of IFRS are
included in note 36 to the financial statements.
REVENUE
2006 2005
Revenue £278.2m £233.3m
The overall revenue increase of 19% reflects the differing characteristics of the markets in which the Group operates,
and the relative successes of the Group’s divisions. Growth of 19% was achieved as follows:
2006 2005 Increase
Parcel Services £195.8m £187.0m 5%
Mail Services £40.4m £10.2m 296%
Specialist Services £41.6m £35.3m 18%
Parcel Services experienced mixed fortunes during the year, with HomeServe and International revenues growing by 22% and
12% respectively, but Express revenues declining slightly.  After a strong start, with daily volumes well ahead of the previous
year, growth progressively deteriorated, to the point where in the final quarter they were below those of the previous year.  
Mail Services, comprising UK Mail, commenced trading in May 2004 and has achieved rapid progress in both the market for
pre-sorted mail items and also in the market for un-sorted mail, in which a new service was introduced progressively
throughout the year.  UK Mail was the first company to offer nationwide mail delivery services as an alternative to Royal Mail
following de-regulation of the mail market in 2000 and remains the market leader in downstream access.  UK Mail contributed
£30.2m of the total revenue increase of £44.9m.
Within Specialist Services, UK Pallets increased revenue by 19% and Courier increased revenue by 16%, representing good
progress and rewarding the expanded sales activity during the year.  
PROFIT
2006 2005
Operating profit before exceptional items £12.1m £19.9m
Pre-tax profit before exceptional items £11.7m £19.6m
Operating profit £5.4m £19.9m
Pre-tax profit £5.0m £19.6m
Operating profit before exceptional items reduced to £12.1m (2005: £19.9m), reflecting a decline in profitability levels within Parcel
Services but benefiting from the reversal of IFRS charges for share-based incentives following the failure of share incentives to meet
their relevant performance conditions.  An IFRS credit of £0.4m compares with a charge of £1.0m in the prior year.  Operating profit
totalled £5.4m (2005: £19.9m).  After net interest payable of £0.4m (2005: £0.3m), profit before tax and exceptional items was
£11.7m (2005: £19.6m).
UK Mail contributed £30.2m of the total 
revenue increase of £44.9m
16 The progressive decline in revenue growth within Parcel Services and
the impact of unsuccessful profit improvement initiatives impacted the
Group’s profits, particularly in the second half of the year as illustrated
in the table adjacent.
Exceptional costs totalled £6.7m (2005: £Nil), comprising £5.9m in
relation to the franchise network and £0.8m for management changes
and restructuring.  
In previous years, Group policy had been to treat advanced funding to
franchisees as debt, with recovery being assessed on a periodic
basis.  For the year to March 2006, all prior period debt was written off
in full, resulting in an exceptional charge of £3.2m. Furthermore,
certain locations were identified where prospects for improvement were poor. A number of these have been converted to Business Post
ownership since the start of 2006.  All conversions have been effected without any detrimental impact on service levels, but have
resulted in one-off costs of transition, expected to amount to around £2.7m and reported as an exceptional item.
Since his appointment as Chief Executive on 5 December 2005, Guy Buswell has made a number of significant changes to the
management team, designed to streamline the management of the Group’s activities and provide greater focus on those areas requiring
margin improvement.  The Executive Group has been reduced from 17 to 11, the management structures within Parcel Services and
Specialist Services have been simplified, and a number of new appointments have been made in key operational areas. The costs
relating to this restructuring, together with those relating to the departure of the previous Chief Executive, amounted to £0.8m, net of
associated IFRS share-related credits.
After exceptional items, pre-tax profit totalled £5.0m (2005: £19.6m). 
EARNINGS
2006 2005
Earnings per share 6.9p 25.6p
Reduced earnings per share reflect the decline in profitability within Parcel Services, marginally offset by a lower tax rate.  The effective tax
rate of 26% (2005: 30%) reflects credits relating to the exercise of share options in the current and prior years.  
DIVIDENDS
2006 2005
Dividends per share - 2005 final paid July 12.8p 12.1p
Dividends per share - 2006 interim paid January 6.4p 6.4p 
Following payment of an unchanged interim dividend of 6.4p per share, a final dividend per share of 10.8p is proposed, payable on 20 July
2006 to shareholders on the register at close of business on 30 June 2006. This compares with a final dividend in respect of 2005 of 12.8p.
19
Financial Review
17
Express revenues £130.8m
HomeServe revenues up by 22% to £32.8m
International revenues up by 12% to £31.6m
£m 2005 2006
H1 H2 Total H1 H2 Total
Parcel Services 15.0 15.3 30.3 10.0 7.4 17.4
Mail Services (0.5) 0.5 0.0 1.1 2.1 3.2
Specialist Services 0.7 1.2 1.9 1.5 0.8 2.3
Central – Like-for-like (6.0) (5.3) (11.3) (5.8) (5.4) (11.2)
– IFRS (0.5) (0.5) (1.0) (0.5) 0.9 0.4
Interest (0.1)(0.2)(0.3)(0.1)(0.3)(0.4)
Pre-exceptional PBT 8.6 11.0 19.6 6.2 5.5 11.7
2005
H1 H2 Total
15.0 15.3 30.3
(0.5) 0.5 0.0
0.7 1.2 1.9
(6.0) (5.3) (11.3)
(0.5) (0.5) (1.0)
(0.1) (0.2) (0.3)
8.6 11.0 19.6
2006
H1 H2 Total
10.0 7.4 17.4
1.1 2.1 3.2
1.5 0.8 2.3
(5.8) (5.4) (11.2)
(0.5) 0.9 0.4
(0.1) (0.3) (0.4)
6.2 5.5 11.7
Divisional split - H1/H2 CASH FLOW
2006 2005
Cash inflow from operating activities £12.8m £15.1m
Net debt £9.6m £5.6m
Net cash inflow from operating activities totalled £12.8m (2005: £15.1m).  Net debt at the year-end of £9.6m compared with
£5.6m last year, a strong working capital position partly offsetting lower levels of profitability.
Gross capital expenditure increased to £8.2m (2005: £6.7m) as a result of the purchase of sorting machines for UK Mail.
£1.2m of this expenditure was lease financed; these lease obligations are included within the net debt reported above.
BALANCE SHEET
2006 2005
Goodwill £9.5m £9.5m
Equity shareholders’ funds £55.8m £62.7m
Gearing 17% 9%
The balance sheet remains strong.  Although the Group’s after-tax return on average net assets declined during the year, gearing
remains low. Operating profit interest cover was 14x, whilst operating profit interest cover before exceptional items was 30x.
RISK
The Board regularly considers the principal risks facing the Group and establishes processes to limit their impact without stifling
entrepreneurial enterprise.
Overall, since the vast majority of the Group’s activities are provided to UK businesses, the fortunes of the Group are linked to the
general health of the UK economy.  The Group’s exposure is limited by being spread across a wide range of industry sectors, with
the most significant being the high tech sector, which generates roughly 20% of Group revenue.  FedEx Express, the world’s
leading express delivery company, accounts for less than 5% of revenue and no other customer accounts for over 4%.
Operating in the transport and services sector, the Group’s principal costs are people and vehicle-related.  Levels of
unemployment affect the availability of staff and drivers but the Group’s expansion is not expected to be constrained by these
factors.  Working hours will increasingly be subject to the European Working Time Directive, which restricts employees’ weekly
hours.  The Group has evaluated the likely impact of this Directive and considers that it will not have a significant impact on its
operations.  Fuel represents an important cost but significant increases can be passed on to customers via a fuel surcharge
mechanism common throughout the industry.
Handling millions of transactions each year, the Group is highly reliant on the availability and smooth running of its operational
computer systems.  Any widescale systems failure would cause significant disruption to the business but disaster recovery
procedures are well established and regularly tested.
EXPOSURE TO FINANCIAL RISK
The Group is not significantly exposed to the effects of fluctuations in exchange rates since all income is in sterling and costs
denominated in foreign currency represent less than 5% of all expenditure.
The Group’s profitability, traditionally strong levels of operating cash flow and low indebtedness mean that it is not significantly
exposed to liquidity risk.
The Group’s exposure to interest risk has been reduced by means of an interest rate cap hedging contract.
TREASURY POLICY
The treasury function is run prudently, with cash invested in low risk cash deposits.  The Group uses an account in euros to hedge
the Group’s limited exposure to purchases denominated in European currency, and gains and losses on the retranslation of the
account offset increases or decreases in the sterling equivalent value of foreign purchases.  At the year end, the balance on this
account was £0.5m.
SHARE PRICE PERFORMANCE
Business Post’s shares underperformed the rising UK stock
market during the year, as expectations of the profit outcome
for the year deteriorated. Expectations stabilised towards the
end of a challenging period in Parcel Services and the share
price began a relative recovery at the end of the year, as the
Group announced progress in tackling the issues in this
division and the renewal of its major long-term contract with
FedEx on similar commercial terms.
Peter Fitzwilliam
Finance Director
200
300
400
500
600
700
800
120
Share price (pence)
Share performance graph
Source: Datastream
Apr 05 May 05 Jun 05 Jul 05 Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 Mar 06
Business Post                                                    FTSE All Share ex. Investment Trust
Financial Review 
18 19 Directors & Advisers
Michael Kane (56) - Non-Executive Director
Joined Business Post in 1974, became
Managing Director in 1984, Chief Executive in
November 1995 and non-executive director in
March 1997. Acted as Chief Operating Officer
from July 2000 until resuming his non-
executive role on 1 April 2001. 
Peter Fitzwilliam (46) - Group Finance Director
Joined the Board on 1 February 1999 from
Rank Group, where he was head of finance 
at Odeon Cinemas. Previously, he was with
PricewaterhouseCoopers. Has announced his
intention to step down from the Board on 
2 June 2006. 
Philip Stephens (64) -
Independent Non-Executive Director
Was appointed a non-executive director on 1
April 2004.  He is non-executive Chairman of
Oakdene Homes and Egdon Resources, and a
non-executive director of Foresight 4 VCT .  Until
his retirement in 2002, he was involved in 
corporate finance and broking for more than 
35 years.
Dennis Clark (62) - 
Non-Executive Director and Senior
Independent Director
Has been the Finance Director of Hunting
since 1989. He was appointed to the Board on
1 October 1998. 
Bill Cockburn CBE, TD (63) - Deputy Chairman
Was Chief Executive of The Post Office from 
1992 to 1995, Chief Executive of WH Smith from
1995 to 1997 and Group Managing Director of 
BT from 1997 to 2001. He was appointed as a
non-executive director on 1 April 2002 and 
advises the Group on mail matters.
Guy Buswell (44) - Chief Executive
Joined Business Post in 1989 and was 
appointed Sales Director in 1992. After a 
period elsewhere in the industry he rejoined the
Company in 1997 and was appointed to the
Board on 12 August 1998. Became Managing
Director of UK Mail from 1 July 2002, and Chief
Executive from 5 December 2005.
20
Peter Kane (59) - Chairman
Founded the Company and, with Michael Kane,
his brother, was responsible for its development
until becoming a non-executive director in 1996.
After a period as Chief Executive from August
1998, he resumed his non-executive role on 1
April 2001, and was appointed Chairman on 10
July 2001. 
Alec Ross (50) - Group Services Director
Joined the Company in June 1997 with 20
years’ experience in systems development in
transport and logistics and was appointed to
the Board as IT Director on 15 September
1998. Became Group Services Director from 
5 December 2005.
Stockbrokers and Financial Advisers Arbuthnot Arbuthnot House 20 Ropemaker Street London EC2Y 9AR
Financial PR Hogarth Partnership No 1 London Bridge London SE1 9BG
Auditors PricewaterhouseCoopers LLP The Atrium 1 Harefield Road Uxbridge UB8 1EX
Solicitors Dechert LLP 2 Serjeants’ Inn London EC4Y 1LT     
Eversheds LLP 115 Colmore Row Birmingham B3 3AL 
Bankers Lloyds TSB 125 Colmore Row Birmingham B3 2DS
Barclays 1 Churchill Place Canary Wharf London E14 5HP
Registrars Computershare Investor Services PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7NH
Registered Office Express House 464 Berkshire Avenue Slough SL1 4PL 21 Corporate Governance
The Listing Rules of the UK Listing Authority require listed companies to disclose how they comply with the principles of good governance and code of best practice
known as the Combined Code. The Code was originally adopted in 1998 and was revised during 2003.  This statement, which incorporates the statement on corporate
social responsibility, explains how the Company has applied the principles of good governance set out in the Code. 
The Board
During the year Business Post maintained a balance of executive and non-executive directors, bringing a wide range of skills and experience to the Board. Biographical
details of the current directors are set out in the Directors and Advisers statement. Of the five non-executive directors, Dennis Clark and Philip Stephens are judged to
be independent according to the guidelines set out in the Combined Code, and Dennis Clark has been appointed by the Board to be the senior independent director.
Michael and Peter Kane are not judged to be independent due to their significant shareholdings, and Bill Cockburn is not judged to be independent due to his 
consultancy contract with UK Mail. Whilst the Company retains two independent non-executive directors, in line with the Code’s requirements for smaller companies,
for part of the year, the Company was a member of the FTSE 350 index, for which the Code’s requirements are more stringent, requiring under provision A.3.2 that at
least half the Board comprise directors judged to be independent.  All the non-executive directors make a significant contribution to the functioning of the Board and its
committees, and no one individual or group dominates the Board’s decision-making process. 
All directors are required by the Company’s Articles of Association to submit themselves for re-election at least every three years. The names of those directors stand-
ing for re-election to the Board this year are set out in the Notice of the forthcoming Annual General Meeting. There are two non-executive directors standing for re-
election at the AGM and the Board strongly supports their re-election for the reasons set out in the Directors’ Report. 
The Board’s focus is on strategy formulation, policy and control. There is a formal schedule of matters reserved for decision by the Board which retains all major opera-
tional and risk management decisions with the Board. These include the approval of major items of expenditure or commitment, including acquisitions; major operational
projects, including new contract wins; financing, including lease/buy decisions and the use of derivatives and insurance; and changes in policy relating to the franchise
network. The Board routinely monitors the various financial, operational and commercial risks facing the Company through reports from management. 
The Chairman is primarily responsible for the working of the Board, and the Chief Executive for the running of the business and implementation of Board strategy and
policy. There is a clear division of responsibilities between the Chairman and the Chief Executive and this has been agreed by the Board.  The Board meets formally at
least 8 times a year, with other meetings as necessary. The Board receives reports in advance of each meeting from the Chief Executive and Finance Director address-
ing the financial performance of the Company and developments since the previous meeting, with further reports on particular issues as appropriate. Reports are also
supplied to directors in months when a Board meeting does not take place. All directors have access to the advice and services of the Company Secretary, and there is
a procedure whereby directors, wishing to do so in the furtherance of their duties, may take independent professional advice at the Company’s expense. 
The Board has a number of committees, the principal ones being the Audit, Remuneration and Nomination committees. Membership of these committees and their prin-
cipal terms of reference are set out in the table below.  
Audit Committee
Dennis Clark (Chairman), 
Peter Kane, Philip Stephens
Assists the Board in fulfilling its responsibili-
ties in respect of:
overseeing the Group’s financial statements,
monitoring the adequacy of internal controls
and risk management processes,
the selection, compensation, independence and
performance of the Group’ s external auditors,
the independence and performance of the
Group’s internal auditor.
Remuneration Committee
Philip Stephens (Chairman), 
Dennis Clark, Peter Kane
Sets remuneration for all executive directors,
including share-based incentives, pensions
and other benefits.
Monitors the level and structure of remunera-
tion for the first layer of management below
Board level.
Approves initial grants and subsequent exercise
of all share-based incentives.
Responsible for appointing remuneration con-
sultants.
Business Post Group plc
Board of directors
Nomination Committee
Peter Kane (Chairman), 
Guy Buswell, Dennis Clark, 
Bill Cockburn, Philip Stephens
Leads the process for, and recommends to the
Board, all appointments to the Board.
Reviews succession planning for the Board.
22   Business Post Group plc Corporate Governance
Peter Kane is a member of the Nomination, Remuneration and Audit committees, resulting in non-compliance with the Combined Code’s provisions A.4.1, B.2.1 and C.3.1
that membership of the Remuneration and Audit committees should comprise entirely independent directors and that the Nomination committee should comprise a majority
of independent directors. However, with over 30 years of in-depth experience of the business, and as a significant shareholder, the Board believes that his membership of
these committees is appropriate and that he brings an invaluable knowledge and experience to their operation. 
The following table shows the attendance of directors at regular Board meetings and at meetings of the Audit, Remuneration and Nomination committees during the year. 
Board Audit Remuneration Nomination
Number held 10 2 3 1
Guy Buswell 10
Paul Carvell (resigned 5 December 2005) 6 2 2
Dennis Clark 8 2 3 1
Bill Cockburn 10 2 3 1
Peter Fitzwilliam 10 2 
Russell Hodgson (resigned 30 September 2005) 4
Michael Kane 9
Peter Kane 9 2 3 1
Alec Ross 10
Philip Stephens 10 2 3 1
Attendance by directors who are not members of the committee was at the request of the Chairman of the committee.  The Nomination committee met once during the
year to consider the appointment of a Chief Executive.  The committee concluded that, in view of the successful development of UK Mail under Guy Buswell’ s leadership,
together with the benefits of his extensive understanding of the Group’s activities, it was not necessary to consider external candidates.
During the year, the directors have again reviewed the effectiveness of the Board as a whole and its committees.  The individual directors initially completed separate
questionnaires, and the results were compiled and analysed by the Company Secretary, who prepared a summary report for the Board.  The areas covered included Board
and committee composition, dynamics and accountability; preparation for and performance at meetings; and induction and professional development. 
In addition to regular Board meetings, the Chairman regularly convenes meetings of the non-executive directors to assess the performance of the Board in the
absence of the executive directors. The performance of the Chairman was considered as part of the questionnaires completed by the directors and discussed
separately by the non-executive directors without the Chairman present. The Board and its committees are satisfied that they are operating effectively. 
Directors’ Remuneration
The Board considers that the Company complies with the main principles of the Combined Code in relation to remuneration, by having a formal and transparent
procedure for developing policy on executive remuneration and for fixing the remuneration packages of directors. No director is involved in deciding his own
remuneration. A significant proportion of remuneration is structured so as to link rewards to corporate and individual performance. The Board believes that levels
of remuneration are sufficient to attract, retain and motivate directors of the quality required to run the Company successfully, but without paying more than is
necessary.  Details of directors’ remuneration are set out in the Remuneration Report. 
Relations with Shareholders
Whilst there is a substantial shareholding represented on the Board, the Company values its dialogue with both institutional and private investors. Two-way
communication with institutional investors, analysts and private investors is actively pursued, and a series of presentations and meetings are held through the year,
carefully recognising statutory constraints concerning the disclosure of information. Feedback from these meetings is collated by the Company’s advisers and circulated
to members of the Board to ensure that they are kept informed concerning the views of shareholders. In addition, the Chairman periodically attends meetings with
shareholders, and non-executive directors are invited to attend results presentations. 
Report & Accounts 23 Corporate Governance
This year’s Annual General Meeting will be held on 11 July 2006 at which time the chairmen of the Audit, Remuneration and Nomination committees will be available
to answer shareholder questions. The Company will continue its practice of proposing individual resolutions, including separate resolutions relating to the Directors’
Report and Accounts and the Remuneration Report, and of reporting the proxy voting in respect of each resolution. 
Accountability and Directors’ Responsibilities
Company law requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the Company and the
Group and of the profit or loss of the Group for that period.
In preparing those financial statements the directors are required to select suitable accounting policies and then apply them consistently; make judgements and
estimates that are reasonable and prudent; state that the financial statements comply with IFRS; and prepare the financial statements on the going concern basis, unless
it is inappropriate to presume that the Group will continue in business. 
The directors confirm that they have complied with the above requirements in preparing the financial statements.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and the
Group and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the
Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The maintenance and integrity of the Business Post Group plc website is the responsibility of the directors; the work carried out by the auditors does not involve
consideration of those matters and accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were
initially presented on the website. 
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 
Internal Controls
The Board of directors has overall responsibility for ensuring that the Group maintains a system of internal control to provide it with reasonable assurance regarding
effective and efficient operations, internal financial control and compliance with laws and regulations. There are inherent limitations in any system of internal control
and, accordingly, even the most effective system can provide only reasonable, and not absolute, assurance.  
The Turnbull report issued by the Institute of Chartered Accountants in England and Wales in September 1999 provided further guidance as to how the Combined Code
principles on internal control should be applied in practice. 
The Board considers that the Company has complied with the Turnbull report throughout the year. There is a formal ongoing process for identifying, managing and
reviewing any changes in the risks faced by the Company. This process operates under the direction of, and is regularly reviewed by, the Board. 
The key features of the internal control system within the Group are: 
• clearly defined delegation of responsibilities, including relevant authorisation levels, 
• clearly documented internal procedures set out in operational and administration manuals, 
• regular compliance audit visits to all owned and franchised locations which monitor compliance with procedures and assess the integrity of financial information, 
• review of financial procedures by the internal auditor, 
• close involvement of executive directors in monitoring and managing the main risk areas of the business, 
• regular information provided to senior management, covering financial performance and key business indicators, and 
• monthly monitoring of results against budget and forecast, with major variances being followed up and management action taken where necessary. 
Details of the Group’s activities in relation to its environmental, employment and health and safety responsibilities are set out in the Corporate Social Responsibility
statement. 
24   Business Post Group plc Corporate Governance
The Board has reviewed the effectiveness of the internal control systems during the period covered by the accounts and up to the date of the approval of the
accounts. This review covered all controls, including financial, operational and compliance controls and risk management. 
Audit Committee and Auditors
The membership and principal terms of reference of the Audit committee are set out above. The committee is chaired by Dennis Clark who, as a qualified
accountant and the finance director of Hunting plc, is considered to have recent and relevant financial experience. 
During the year, the committee met twice to discharge its responsibilities. These responsibilities included: 
• monitoring the integrity of the half year and annual financial statements, by considering reports from the Finance Director and the external auditors setting 
out the basis of preparation of the results and the principal reporting judgements therein; 
• reviewing the Company’s internal controls, by considering reports from both the internal and external auditors during the year and an annual report on the 
effectiveness of internal controls from the Chief Executive and Finance Director; 
• monitoring the scope and effectiveness of the internal auditor, by considering work plans, reports throughout the year and attendance at audit committee 
meetings; 
• monitoring the independence, objectivity and effectiveness of the external auditors, by considering the quality of people and service, the robustness of the 
audit and the quality of delivery, and approving their terms of engagement and remuneration; 
• reviewing the Company’s policy for the engagement of the external auditors to supply non-audit services; and 
• monitoring the Company’s whistleblowing procedures. 
Compliance with the Combined Code
With the exception of the composition of its committees, where the Code requires a greater proportion of members to be non-executive directors judged to be
independent, the Board considers that the Company has complied with the provisions of Section 1 of the Combined Code 2003 throughout the financial year.
Additionally, whilst the Company was a member of the FTSE 350 Index, the Company was not in compliance with provision A.3.2 that at least half the board
comprised directors judged to be independent.
Report & Accounts 25 Corporate Social Responsibility
The Board recognises its environmental and employment responsibilities and
continues to devote significant resources towards improving standards.
Environmental
The Group recognises that it has a responsibility to reduce its impact on the
environment. Responsibility for communicating the Group’s environmental
policy and monitoring compliance rests with the Group Services Director aided
by the Transport Manager, HR Manager and Health & Safety Manager.
Business Post is acutely aware of the impact that transport operations have on
the environment and the Company is committed to reducing this impact. The
key objective is to establish a balance between cost effective solutions and
changes which result in tangible benefits. Business Post is very keen to
introduce initiatives aimed at reducing the effect on the environment. 
The sloping front double decker trailer, designed in conjunction with the
Group’s trailer supplier, Don-Bur Bodies and Trailers, has dramatically reduced
the fuel consumption of the towing vehicle, thus reducing CO2 emissions by up
to 25 tonnes per vehicle per year. The design is easily applied to existing fleet
trailers and material as nearly all components from the original design are re-
used. With 66 of these trailers currently in the fleet, the saving in fuel and CO2
is significant. Based on current route mileages the reduction in CO2 emissions
is around 1,625 tonnes per annum. The work on this design has already
resulted in 2 awards, from Green Fleet and EAST. 
All powered vehicles have bespoke aerodynamic air kits, designed by Eco-Tek,
which have resulted in mpg improvements of between 5%-10%. These
vehicles are on a four year replacement cycle allowing Business Post to keep
pace with technology and ensuring optimum performing vehicles. They are
maintained by manufacturer main dealers further to ensure only quality
components and oils are used for peak performance. Vehicles and trailers are
specified to run on road-friendly air suspension, reducing wear of components,
damage to the road network and noise pollution. All trailers incorporate LED
lighting as opposed to bulbs which removes a waste disposal problem.
The Group has 60 vehicles in its fleet that run on LPG. Bio-diesel, where
available, is used at corporate sites in a 95%: 5% blend. Independent tests
reported improved fuel efficiency and CO2 emission reduction of 1.5%-2.0%,
independent operator trials reported similar improvements and, in addition, no
changes are required to storage or vehicles. The other advantage of bio-diesel
is that the plant from which the oil is extracted takes CO2 from the atmosphere
during its growth.
Health & Safety 
The Group fully embraces the legal obligation to protect the health, safety and
welfare of employees and others who may be affected by our operations.
Robust policies have been developed and are monitored to ensure training, risk
assessment, safe systems of work and accident investigation procedures are
deployed throughout the network. A written Health and Safety report is
provided to each Group Board meeting which is reviewed and discussed.
Health and Safety responsibilities, accident trends and projects are also
discussed at Operating Board meetings. A full audit is carried out each year at
all corporate operating locations. We have commenced the introduction of
new anti-spill kits in all corporate sites and have re-enforced our procedures
for carrying dangerous goods by incorporating a new database on our intranet
site so that sites can validate whether particular goods can be carried and, if
so, in what quantities. 
Employment
The Group has continued to make significant progress in Human Resource
management over the last year. The Employee Consultative Group has been
strengthened to provide a robust platform for all employees to make a
significant contribution to bringing about change in the workplace and to
provide a forum for the exchange of information, opinions and feedback. There
are now 59 site-based representatives, 8 regional and one national
representative. The last is employed on a full time basis and elected by the
employee representatives. An annual employee survey is conducted each May
and continues to provide invaluable feedback on issues affecting our
employees. Our Investors in People accreditation was successfully renewed in
September 2004 and our employee turnover has continued to fall, having now
reduced every year for the last 5 years. The Group continues to coach and train
managers in a wide variety of skill areas including Dispute Resolution,
Performance Management, Accident Investigation and Supervisory Skills. The
Group's training and development activities were recognised with a National
Training Award last September. The Group has adopted both the HCI and
Childcare Voucher Schemes and we have introduced a new Basic Skills
training course aimed at those of our employees needing tuition in English and
Mathematics. To support our staff welfare programme, the Group provides,
through a third party, a 24 hour confidential help line that provides counselling
and advice on a wide range of subjects. The Group continues to ensure all the
requirements of current and future employment and health and safety
legislation are met.
Charitable Support
NCH, the children’s charity, has been the chosen charity partner for Business
Post Group, its employees and its franchisees for eleven years. The Group
donates one penny to NCH for every consignment carried for customers who
pay their accounts by direct debit and, in the last year, this raised £77,067. 
Business Post staff across the whole company rose to the challenge during the
last year and raised over £16,000 for NCH with a wide variety of events,
including a netball tournament, sky diving and parachuting, ‘It’s a Knockout’, 
a golf day, fancy dress and dress down days and a Valentines Ball.
26  Business Post Group plc Remuneration Report
The directors present the Remuneration Report for the year ended 31 March 2006. This report is unaudited except for those parts which are indicated otherwise.
The members of the Remuneration committee during the year were: Philip Stephens (Chairman), Dennis Clark and Peter Kane. During the year and at the request
of the Remuneration committee, the Group’s Chief Executive, Paul Carvell, and Deputy Chairman, Bill Cockburn, gave advice and assistance to the Remuneration
committee.  In addition, as part of its periodic review of best practice, the Remuneration committee sought advice from external remuneration consultants, New
Bridge Street Consultants, concerning the continuing relevance and appropriateness of the Company’s remuneration arrangements.
Remuneration policy
The remuneration policy of the Group, including the policy for executive directors, is determined by the Remuneration committee of the Board, the membership of
which consists entirely of non-executive Board members. The Company’s non-executive Chairman, Peter Kane, is not considered to be independent but his
experience within both the Company and the industry for over 30 years is considered to be invaluable to the committee. 
The remuneration policy for non-executive directors is determined by the Board. 
The objectives of the committee are: 
1. To ensure that directors and senior executives are fairly rewarded for their individual contributions to the Group’s overall performance. 
2. To ensure that the remuneration of the executive directors and senior executives of the Group is set by a committee of Board members who have no personal
interest in the outcome of the decisions and who will give due regard to the interests of shareholders and to the financial and commercial health of the Group. 
The remuneration policy of the Group for 2006 and beyond is to provide competitive remuneration arrangements for executive directors and senior executives which
are commensurate with those of other companies of a similar nature, size and standing and which reflect the Group’s business and financial objectives and the
goals of Corporate Governance. Remuneration arrangements are addressed within the context of the Group’s current performance, its progress towards strategic
objectives and individual executives’ personal performance. 
Elements of the remuneration package of executive directors
Remuneration of executive directors comprises the following elements: 
Base salaries
Base salaries are determined in relation to job responsibilities and sustained level of individual performance, and are reviewed annually. 
Bonuses
The Company operates a bonus scheme for executive directors. The level of bonus payment is dependent upon the Group’s performance evaluated against both
the prior year and annual budget, and also upon each director’s achievement of personal objectives, set out at the beginning of the year. In normal circumstances,
the maximum payment is limited to 50% of annual salary and payments in respect of personal objectives may not exceed payments in respect of the Group’s
financial performance. Because the achieved profits for the year fell short of the targets set out at the beginning of the year, no payments under the bonus scheme
were made. However, due to the exceptional result achieved by UK Mail, the Remuneration committee awarded a discretionary bonus of £75,000 to Guy Buswell
who, until his appointment as the Group’s Chief Executive, was UK Mail’s Managing Director.
Benefits
Health and sickness insurance schemes are provided for executive directors and include private health cover, permanent health insurance and death in service benefits.
Executive directors receive an annual car allowance and contributions of between 12.5% and 15% of each individual director’s base salary into a defined contribution
pension scheme. 
Share-based incentive schemes
The Company utilises a Long Term Incentive Plan and a Share Matching Plan to provide longer term share-based incentives for executive directors.  The schemes
are designed to motivate and reward achievement of a combination of challenging corporate financial targets and enhancement of shareholder value.  Shareholder
approval will also be sought at the AGM for one-off awards to the new Chief Executive and Group Finance Director.  Specific details of the schemes are outlined below.
Report & Accounts 27 Remuneration Report
Long Term Incentive Plan
In order to provide the Remuneration committee with flexibility to offer competitive awards to senior executives, shareholder approval will be sought at the AGM
to increase the maximum potential annual award of shares to an executive from 75% of salary to 100% of salary (with the additional flexibility to grant awards
worth up to 150% of salary in exceptional circumstances, such as on recruitment or in acute retention scenarios).
Shareholder approval will also be sought at the AGM for amendments to the performance conditions that will apply to future awards.
• 40% of the awards will be determined by EPS growth conditions.  For the awards in 2007, 25% will vest for growth of 15% p.a. over the three-
year period from 2006 to 2009, with 100% vesting for growth of 20% p.a. over that period;
• 60% of the awards will be determined by Total Shareholder Return (“TSR”) performance relative to FTSE All-Share companies (excluding 
Investment Trusts), with 25% of awards vesting for median performance over the three-year performance period rising to 100% of awards vesting for upper
quartile performance.
The Remuneration committee believes that this balance of performance conditions will successfully align the interests of directors with shareholders whilst also
rewarding the achievement of challenging growth targets relating to the underlying financial performance of the Company.  EPS will be calculated for all relevant
schemes on a consistent basis during the transition to International Financial Reporting Standards.
Share Matching Plan
Selected executives may be invited to invest a portion of their cash bonus in the acquisition of Company shares worth up to 25% of their pre-tax salary.  Where
such an investment is made, the executives will receive, under the Share Matching Plan (approved by shareholders at the 2004 AGM), a matching award of shares
of equivalent value.  
One-third of the award will vest if EPS growth is at least RPI+4% p.a. over a single three-year performance period, increasing to full vesting for EPS growth of at
least RPI+6% p.a.
One-off Senior Executive Awards
The Remuneration committee has determined that, subject to shareholder approval, Guy Buswell should receive a one-off award comprising an option over
170,000 shares following his appointment as Chief Executive (broadly equivalent in value at the date of his appointment to twice his revised salary), and Steven
Glew should receive a one-off award comprising an option over 50,000 shares provided shareholders approve his election as Group Finance Director (broadly
equivalent in value at the date of this report to one times his salary).  
The committee believes that it is vital that these senior executives should have sufficient equity incentives to motivate, retain and to align their interests with
shareholders at this challenging time for the Company.   
However, the committee also recognises that shareholders’ interests will only be properly addressed by awards designed to incentivise and reward the
achievement of exacting performance criteria, above and beyond those required under the normal LTIP .
Accordingly, the extent to which these awards vest will be determined by the Company’s EPS in 2009 relative to the budgeted EPS for 2007.  The awards will only
begin to vest for growth of 15% p.a. between these two figures with 100% vesting for growth of 20% p.a.  Although the performance period for these awards is
three years, the targets are expressed as growth from the budget figure for 2007 in order to ensure that the targets are more challenging than those under the
LTIP .  As a result, the EPS value required in 2009 for these one-off awards to begin to vest is higher than the EPS value required in that year for the maximum LTIP
award to vest.
Other details relating to these awards are contained in the Directors’ Report.
Other Schemes
The Company can make grants of share options under an existing Executive Share Option Scheme although executive directors have not received option grants
since 2003 and it is currently intended that they would only receive future option grants in exceptional circumstances.  Executive directors are eligible to participate
in the Group’s Sharesave scheme on the same terms as other employees.  
28  Business Post Group plc Remuneration Report
Shareholding Guidelines
On the exercise of awards under any of the Company’s long-term incentive schemes, executive directors are expected to retain at least half of the after-tax profit
in the form of shares until they have a shareholding at least equal to their base salaries.
Composition of Remuneration Package
The targeted composition of each executive director’s remuneration, excluding long-term incentives, is that 75% is non-performance related and 25% is
performance related.  The remuneration of each non-executive director is 100% non-performance related except that, in addition to his director’s and consultancy
fees, Bill Cockburn has a long-term incentive arrangement whereby he is entitled to receive bonuses if the profit of UK Mail exceeds specified targets within a
four year period of the commencement of trading, which was on 10 May 2004.
Directors’ service contracts
It is the Company’s policy that, whilst there should not be a fixed duration in respect of directors’ service contracts, each contract contains notice periods of not
more than one year and contains a clause whereby the contractual termination payments do not exceed the director’s remuneration for the previous calendar year.
Non-executive directors are initially appointed for a three year term. All directors are required by the Company’s Articles of Association to submit themselves for
re-election at least every three years.
Details of directors’ service contracts, including the unexpired term of their contract at 31 March, are:
Initial contract Notice period Unexpired Contractual
date term termination payment
Guy Buswell 31.03.06 12 months 12 months 12 months remuneration
Paul Carvell 21.06.01 12 months n/a 12 months remuneration
Dennis Clark 01.10.01 3 months 18 months None
Bill Cockburn 01.04.02 3 months 24 months None
Peter Fitzwilliam 30.09.99 6 months 6 months 6 months remuneration*
Russell Hodgson 02.01.01 6 months n/a 6 months remuneration
Michael Kane 01.10.01 3 months indefinite None
Peter Kane 01.10.01 12 months indefinite None
Alec Ross 01.02.01 6 months 6 months 6 months remuneration*
Philip Stephens 31.03.04 3 months 12 months None
Russell Hodgson resigned on 30 September 2005. Paul Carvell resigned with effect from 5 December 2005. 
*In the event of termination following a change of control, executive directors are entitled to termination payments of 12 months’ remuneration.
As announced on 23 May 2006, Steven Glew is to join the Board as Group Finance Director with effect from 5 June 2006. Both his contractual notice period and
termination payment will be a period of up to 12 months. Additionally, as discussed in the Directors Report, subject to shareholder approval at the 2006 Annual
General Meeting, Steven will be granted a one-off long term appointment incentive award over 50,000 shares.
Performance graph
The adjacent graph compares the total
shareholder return for an investment in the
shares of Business Post with the return for the
same investment in the FTSE All Share index
(excluding Investment Trusts) over a five year
period commencing on 1 April 2001. In the
opinion of the directors, following the
reclassification of Business Post in early 2006,
the FTSE All Share index, excluding Investment
Trusts, is currently the most appropriate index
against which the total shareholder return of the
Company should be measured.
0
50
100
150
200
250
300
350
Total Return Index
Source: Datastream
Apr 01 Oct 01 Apr 02 Oct 02 Apr 03 Oct 03 Apr 04 Oct 04 Apr 05 Oct 05
Business Post
FTSE All Share ex. Investment Trust - Total Return Index
Report & Accounts 29 Remuneration Report
Directors’ remuneration
(This part of the Remuneration Report is audited information)
Salary Benefits 2006 2005
& Fees in kind Bonus Termination Total Total
£000 £000 £000 £000 £000 £000
Guy Buswell 186 12 75 –– 273 162
Paul Carvell 206 11 –– 312 529 264
(resigned 5 December 2005)
Dennis Clark 27 –– –– –– 27 27
Bill Cockburn* 93 –– 67 –– 160 111
Peter Fitzwilliam 165 12 –– –– 177 157
Russell Hodgson 91 7 –– –– 98 196
(resigned 30 September 2005)
Michael Kane** 43 –– –– –– 43 23
Peter Kane 60 2 –– –– 62 62
Alec Ross 136 12 –– –– 148 125
Phillip Stephens 27 –– –– –– 27 26
Richard Saville (resigned 31 May 2004) –– –– –– –– –– 4
1,034 56 142 312 1,544 1,157
* Included in Bill Cockburn’s remuneration are fees of £40,000 as a non-executive director and payments of £53,004 in respect of consultancy provided to the 
Company’s UK Mail subsidiary. The Company has a separate long term incentive agreement with Bill Cockburn in relation to his consultancy services.  Under 
this, Mr Cockburn will be entitled to receive bonuses if the profit of UK Mail exceeds specified targets within a four year period of the commencement of trading
on 10 May 2004 and £67,000 has been accrued in the financial statements in respect of the anticipated payment in 2008.
** Included in Michael Kane’s remuneration are fees of £22,000 as a non-executive director and payments of £20,800 in respect of consultancy on operational 
matters. Michael Kane’s remuneration was paid to his companies, Beaufield Management Ltd and Beaufield Entertainment Ltd, for the provision of his services
as a director. 
No director waived emoluments in respect of the year ended 31 March 2006. 
Pensions
(This part of the Remuneration Report is audited information)
The following amounts were contributed during the year to the directors’ personal pension schemes, which are defined contribution schemes.
2006 2005
£000 £000
Guy Buswell 22 16
Paul Carvell 22 26
Peter Fitzwilliam 21 18
Russell Hodgson 12 24
Alec Ross 17 14
30   Business Post Group plc Remuneration Report
Interests in share options
(This part of the Remuneration Report is audited information)
Details of the options held by each director are set out below:
Directors’ Executive Share Options
Date of Earliest Expiry Exercise Number at Exercised Lapsed Number at Market Gains on
Grant Exercise Date Price 1 April in year in year 31 March Price on exercise
Date 2005 2006 Exercise £000
Guy Buswell
31.05.02 31.05.05 31.05.12 418p 26,315 26,315 –– –– 637p 58
30.05.03 30.05.06 30.05.13 411p 28,101 –– –– 28,101 –– ––
30.07.03 30.07.06 30.07.13 450p 25,667 –– –– 25,677 –– ––
80,083 26,315 –– 53,768
Paul Carvell
13.07.01 01.12.05 13.07.11 204p 294,117 –– 294,117 –– –– ––
31.05.02 31.05.05 31.05.12 418p 50,239 50,239 –– –– 613p 98
30.05.03 30.05.06 30.05.13 411p 54,744 –– 54,744 –– –– ––
399,100 50,239 348,861 ––
Peter Fitzwilliam
31.05.02 31.05.05 31.05.12 418p 29,904 –– –– 29,904 –– ––
30.05.03 30.05.06 30.05.13 411p 32,846 –– –– 32,846 –– ––
30.07.03 30.07.06 30.07.13 450p 30,000 –– –– 30,000 –– ––
92,750 –– –– 92,750
Russell Hodgson
31.05.02 31.05.05 31.05.12 418p 29,904 29,904 –– –– 613p 58
30.05.03 30.05.06 30.05.13 411p 32,846 –– 32,846 –– –– ––
30.07.03 30.07.06 31.07.13 450p 30,000 –– 30,000 –– –– ––
18.11.03 18.11.06 18.11.13 487p 71,868 –– 71,868 –– –– ––
164,618 29,904 134,714 ––
Alec Ross
31.05.02 31.05.05 31.05.12 418p 24,521 –– –– 24,521 –– ––
30.05.03 30.05.06 30.05.13 411p 26,277 –– –– 26,277 –– ––
30.07.03 30.07.06 31.07.13 450p 24,000 –– –– 24,000 –– ––
74,798 –– –– 74,798
Exercise gains in the above table are calculated at the exercise date, although shares may have been retained. 
No other directors have been granted share options in the shares of the Company or other group entities. None of the terms and conditions of the share options
were varied during the year. 
The exercise of options is subject to the condition that the growth in the Company’s earnings per share shall exceed the increase in the index of retail prices from
the date of grant by more than 3% p.a.
Report & Accounts 31 Remuneration Report
Sharesave scheme
Date of Earliest Expiry Exercise Number at Granted Exercised Lapsed Number at Gains on
Grant Exercise Date Price 1 April in year in year in year 31 March exercise
Date 2005 2006 £000
Guy Buswell
29.06.04 01.08.07 01.02.08 398p 2,368 –– –– –– 2,368 ––
Peter Fitzwilliam
29.06.04 01.08.07 01.02.08 398p 2,368 –– –– –– 2,368 ––
Alec Ross
03.01.02 01.02.05 01.08.05 290p 3,275 –– 3,275 –– –– 11
Exercise gains in the above table are calculated at the exercise date, on which date the market price of the Company’s shares was 633p, although shares may have
been retained. The Sharesave scheme provides a savings plan to purchase shares and has no performance criteria in order to participate.
The market price of the Company’s shares at the end of the year was 383p and the range of prices during the year was between 301p and 687p.
Interests in shares
The interests of the directors in the ordinary shares of 10p each of the Company were as follows: 
31 March 1 April
2006* 2005
Guy Buswell 17,917 12,711
Paul Carvell (resigned 5 December 2005) 38,611 38,886
Dennis Clark 3,500 3,500
Bill Cockburn 12,004 8,000
Peter Fitzwilliam 11,285 9,785
Russell Hodgson (resigned 30 September 2005) 6,945 8,945
Michael Kane 7,001,294 7,001,294
Peter Kane 18,233,801 18,133,801
Alec Ross 12,714 11,214
Philip Stephens 10,000 5,000
* or date of resignation
All directors’ interests are beneficially held save for 3,333,334 ordinary shares which are held by beneficiaries who are persons connected with Peter Kane. There
has been no change in the interests set out above between 31 March and 31 May 2006. 
32   Business Post Group plc Remuneration Report
Long Term Incentive Plan
(This part of the Remuneration Report is audited information)
Directors’ interests in shares held in the Long Term Incentive Plan are as follows
Date of Award Performance Number at Granted Exercised Lapsed Number at
Award Price Period 1 April in year in year in year 31 March
Ending 2005 2006
Guy Buswell
16.11.04 545p 31.03.07 16,063 –– –– –– 16,063
24.05.05 575p 31.03.08 –– 16,847 –– –– 16,847
Paul Carvell
16.11.04 545p 31.03.07 34,422 –– –– 34,422 ––
24.05.05 575p 31.03.08 –– 35,869 –– 35,869 ––
Peter Fitzwilliam
16.11.04 545p 31.03.07 16,637 –– –– –– 16,637
24.05.05 575p 31.03.08 –– 17,934 –– –– 17,934
Russell Hodgson
16.11.04 545p 31.03.07 20,940 –– –– 20,940 ––
Alec Ross
16.11.04 545p 31.03.07 10,372 –– –– –– 10,372
24.05.05 575p 31.03.08 –– 11,130 –– –– 11,130
Awards granted in 2004 and 2005 may be exercised between three and ten years following the date of grant, determined primarily by reference to the Company’s
TSR measured against the TSR of all the other companies in the Support Services sector listed in the FTSE All Share Index at the start of the financial year in which
an Award is granted over a period of three financial years. The proportion of the Award which may be exercised depends upon the ranking of the Company’s TSR,
whereby 10% of shares may be exercised if the Company achieves median ranking, rising pro-rata to 100% if the Company’s ranking falls within the top 10%.  No
shares are exerciseable if the Company’s ranking is below the median. 
The exercise of awards is also subject to the condition that the growth in the Company’s earnings per share shall exceed the increase in the index of retail prices
from the date of grant by more than 3% p.a. 
The average price of the Company’s shares on the five dealing days prior to 24 May 2005 was 575p.
The Company’s Employee Share Ownership Trust holds shares in the Company for subsequent transfer to employees under the Long Term Incentive Plan.  Shares
held by the Trust are not voted at shareholder meetings and do not accrue dividends.  At 31 March 2006, the Trust held a total of 414,252 shares in respect of its
future obligations under the Company’s Long Term Incentive Plan.
Report & Accounts 33 Remuneration Report
Share Matching Plan
(This part of the Remuneration report is audited information). 
Details of shares purchased and matching grants awarded during the year are as follows:
Date of Earliest Number at Granted Lapsed Number at
Grant Exercise Date 1 April in year in year 31 March
2005 2006
Guy Buswell
16.11.04 16.11.07 870 –– –– 870
Paul Carvell
16.11.04 16.11.07 870 –– 870 ––
Peter Fitzwilliam
16.11.04 16.11.07 1,400 –– –– 1,400
Russell Hodgson
16.11.04 16.11.07 870 –– –– 870
Alec Ross
16.11.04 16.11.07 870 –– –– 870
Awards may be exercised between 36 months and 42 months following the date of grant.
Philip Stephens
On behalf of the Board
31 May 2006
34   Business Post Group plc Directors’ Report
The directors present their report and the audited financial statements for the
year ended 31 March 2006. 
Principal Activity and Business Review
Business Post Group plc is a public limited company incorporated and domiciled
in England. It is quoted on the London Stock Exchange (LSE: BPG). The Group’s
principal activity is the provision of express collection and delivery services for
parcels, mail and palletised goods. The information that fulfils the requirements
of the Business Review can be found in the Chairman’s Statement, Chief
Executive’s Review, Financial Review and Corporate Social Responsibility
statement, which are incorporated in this report by reference.
Results and Dividend
The profit for the financial year of £3.7 million is reported in the Consolidated
Income Statement. A final dividend of 12.8p per share in respect of the year
ended 31 March 2005 was paid on 21 July 2005. An unchanged interim dividend
of 6.4p per share in respect of the year ended 31 March 2006 was paid on 3
January 2006 and the directors recommend a final dividend of 10.8p per share,
payable on 20 July 2006 to shareholders on the register on 30 June 2006.
Corporate Governance
A statement on corporate governance and the Group’s compliance with the
Combined Code is set out in the Corporate Governance statement. 
Donations
During the year, the Group made charitable donations of £77,067 (2005: £98,702),
to the National Children’s Home Charity for general charitable purposes. The
Group made no political donations.
Directors
Details of the current directors are shown in the Directors and Advisers statement
together with their biographical details and dates of appointment. Russell
Hodgson retired on 30 September 2005 and Paul Carvell resigned with effect from
5 December 2005.
In accordance with the Articles of Association, Dennis Clark and Peter Kane retire
by rotation at the Annual General Meeting and, being eligible, offer themselves
for re-election. Details of their terms of appointment can be found in the
Remuneration Report. As was announced on 23 May 2006 Peter Fitzwilliam, who
would otherwise have retired by rotation, will retire as a director with effect from
2 June 2006 and Steven Glew has been appointed by the Board as Finance
Director with effect from 5 June 2006. Details of the terms of his appointment
can be found in the Remuneration Report. Mr Glew has held senior finance
positions in Tesco Stores plc, Crown Sports plc, and Booker plc until its merger
with Iceland plc in July 2000.  From 2003 to December 2005, he was Group
Finance Director at Mothercare plc, where he was integrally involved in the
turnaround of the business. In accordance with the Articles of Association,
Steven Glew will retire at the Annual General Meeting and, being eligible, offers
himself for election.  The Board strongly supports the election of Steven Glew and
the re-election of Dennis Clark and Peter Kane and recommends that
shareholders vote in favour. Dennis Clark and Peter Kane are both non-executive
directors.  Dennis Clark, having served as the Finance Director of Hunting plc, a
FTSE 350 company, for over 16 years, brings significant experience of operating
in the plc environment.  His financial background and extensive knowledge of
corporate governance and financial reporting matters are of particular benefit to
the Group in his role as chairman of the Audit committee. Peter Kane founded the
Company in 1971 and, with his brother Michael, was responsible for its
development over 25 years. His comprehensive understanding of the business is
invaluable to the Board.  
The Chairman has undertaken an evaluation of Dennis Clark and the non-
executive directors have undertaken an evaluation of Peter Kane, both of whom
are submitting themselves for re-election.  They confirm that their performance
continues to be effective and that they commit sufficient time to the fulfilment of
their duties as directors and committee members, as appropriate. 
Directors’ Interests
The interests of the directors and their families as appearing in the register
maintained under the provisions of section 325 of the Companies Act 1985 in the
share capital of the Company on 31 March 2006 are set out in the Remuneration
Report. 
Substantial Shareholders
In addition to the interests of Peter Kane (33.4%) and Michael Kane (12.8%), as
at 31 May 2006 the Company had been notified of the following notifiable
interests in its issued share capital:
No. of shares
AEGON UK plc Group of Companies 3,884,447 (7.1%)
Mr John Kane 3,453,333 (6.3%)
Ms Joanna Bailey 3,333,333 (6.1%)
FMR/Fidelity International Limited 1,765,336 (3.2%)
Mr John Kane and Ms Joanna Bailey are the adult children of Peter Kane.
Annual General Meeting - special business
The notice of the Annual General Meeting to be held on 11 July 2006 may be
found at the back of the Report and Accounts. In addition to the routine business
of the meeting, the special business set out below will be transacted. 
On 12 July 2005 resolutions were passed by the Company’s shareholders
whereby the directors were given authority, under Section 80 of the Companies
Act 1985, until the conclusion of the 2006 Annual General Meeting, to allot
shares up to a maximum of the authorised but unissued share capital of the
Company. The directors recommend by Resolution 8 to be proposed at the
forthcoming Annual General Meeting that this authority should be renewed so
that it applies until the conclusion of the next Annual General Meeting of the
Company. 
If Resolution 8 is approved by shareholders the directors will have authority to
allot up to 15,467,014 ordinary shares, representing 28.4% of the ordinary shares
currently in issue of which 1,572,169 (2.9%) of the ordinary shares currently in
Report & Accounts 35 Directors’ Report
issue are currently reserved for issue under the Company’ s share option schemes.
The balance available for allotment is therefore 13,894,845  ordinary shares,
representing 25.5% of the ordinary shares currently in issue. The Company does
not currently have any treasury shares in issue. The directors have no present
intention of exercising the authority except in connection with the issue of shares
under the Company’s share option schemes. 
In addition, the directors were given authority under Section 95 of the Companies
Act 1985 until the conclusion of the 2006 Annual General Meeting to allot equity
securities for cash, other than to existing shareholders in proportion to their
holdings, up to an aggregate nominal amount equal to 5% of the issued ordinary
share capital. The directors recommend by Resolution 9 to be proposed at the
forthcoming Annual General Meeting that this authority should be renewed up to
an aggregate nominal amount of £272,664, being equal to 5% of the ordinary
shares currently in issue, until the conclusion of the 2007 Annual General
Meeting or 11 October 2007, whichever is the earlier. 
The Companies Act 1985 allows shares purchased by the Company to be held as
treasury shares, which may then be cancelled, sold for cash or used to meet the
Company’s obligations under its share option schemes. The requirements to allot
equity securities for cash to existing shareholders in proportion to their holdings
will also apply to the sales by the Company of any shares it holds as treasury
shares. These requirements may be similarly disapplied by shareholders. The
authority sought, and limits set, by Resolution 9 will then apply also to a sale of
treasury shares. However, the directors have no present intention of holding
shares in treasury pursuant to the Companies Act 1985. 
At the 2005 Annual General Meeting the Company was given authority under
Article 9 of its Articles of Association and Section 166 of the Companies Act 1985
until the conclusion of the 2006 Annual General Meeting to make market
purchases of up to 10% of the issued ordinary share capital for cancellation at a
price of not less than 10 pence per ordinary share and not more than 105% of the
average of the mid-market quotations for an ordinary share of the Company (as
derived from the Daily Official List of the London Stock Exchange) for the five
business days prior to the date of purchase. 
The authority sought by Resolution 10, to make market purchases of its own
ordinary shares, is intended to apply equally to shares to be held by the Company
as treasury shares in accordance with the Companies Act. However, as
mentioned above, the directors have no present intention of holding shares in
treasury pursuant to the Companies Act 1985. 
The directors recommend by Resolution 10 to be proposed at the forthcoming
Annual General Meeting that this authority should be renewed until the
conclusion of the 2007 Annual General Meeting. The directors did not exercise
the Company’s power to purchase its own shares in the year ended 31 March
2006 and do not intend to exercise this power other than in circumstances where
they consider this to be in the shareholders’ interests and where this would result
in an increase in earnings per share. 
If they do utilise this authority, the directors will neither be encouraging nor
recommending shareholders to buy or sell shares in the Company nor in any way
suggesting that it is an appropriate time to deal in such shares.
Share Incentive Arrangements
Shareholder approval is being sought at the forthcoming Annual General Meeting
in relation to two proposals recommended by the directors: 
(a) By Resolution 11, alterations to the terms of the Company’s Long Term 
Incentive Plan that would increase the maximum award limit from 75% to
100% of base salary (with the additional flexibility to grant awards 
worth up to 150% of salary in exceptional circumstances), and to apply 
different performance conditions to future awards, based on a mixture 
of EPS and TSR conditions, as set out in the Remuneration Report, and
(b) By Resolution 12, the grant of one-off long term appointment incentive 
awards to two senior executives (“an Award”).
The rationale for these proposals is set out in the Remuneration Report. The Board
strongly believes that these proposals are in the best interests of shareholders and
recommends that shareholders vote in favour of both resolutions. 
The terms of the proposed Awards are summarised below.
General
Subject to shareholder approval at the 2006 Annual General Meeting (“AGM”),
the two proposed Awards will be granted as soon as practicable after the AGM. 
The Awards will relate to 170,000 ordinary shares in the Company in the case of
the Group’s Chief Executive (broadly equivalent in value at the date of his
appointment on 5 December 2005 to twice his salary), and 50,000 ordinary shares
in the Company in the case of the Group’s new Finance Director provided
shareholders approve his election (broadly equivalent in value at the date of this
report to one times his salary).
Structure of the Awards
The Awards will be structured as options, with a four week exercise period after
they vest. No payment will be required for the grant or exercise of the Awards.
An Award will not be transferable (other than to the executives personal
representatives’ in the event of his death).  The Awards will not be pensionable.
Subject to the conditions detailed below, the Awards will normally vest when the
Company’s audited results for 2009 are published.  
Performance condition
Vesting of the Awards will be subject to a performance condition that measures
the growth in the Company’s earnings per share (“EPS”).  The extent to which the
Awards vest will be determined by comparing EPS in 2009 to the budgeted EPS for
2007.  The Awards will only begin to vest for annual EPS growth above 15% p.a.
(32.25% compound EPS growth over the expected period), with 100% vesting for
EPS growth of 20% p.a. (44% EPS growth over the expected performance period).
For intermediate levels of EPS growth, vesting will be on a straight line basis.
Where an Award can be exercised following cessation of employment,
performance will be measured over the normal period. On a change of control of
the Company, the Awards will vest in full.
36   Business Post Group plc Directors’ Report
Ceasing employment
An Award will normally lapse on cessation of employment. However it will
vest at the normal time and subject to the performance condition if, after 31
March 2007, the executive resigns in connection with a breach of his Service
Agreement by the Company or his employment is unfairly terminated or he
leaves through ill health, injury or death.  In such circumstances, if the
cessation occurs on or before 31 March 2008, the Award shall vest in respect
of two thirds of the shares that could otherwise have been acquired. If such
cessation occurs after that date all of those shares will vest.
Corporate events
In the event of a takeover, scheme of arrangement, or winding up of the
Company (not being an internal corporate reorganisation), or if the
Remuneration committee so determines in the event of a demerger, special
dividend or other similar event is proposed, the Awards will vest in full (or to
the extent previously determined on cessation of employment).  In the event of
an internal corporate reorganisation, the Awards will be replaced by
equivalent new awards over shares in a new holding company.
Rights attaching to shares
Any shares allotted on the vesting of the Awards will rank equally with all
other shares then in issue, but will not qualify for dividends or other rights for
which the record date is earlier than the date of their allotment.
Adjustment of Awards
In the event of any variation in the share capital of the Company or a demerger,
the payment of a special dividend or any other event that would affect the
market price of the Company’s shares to a material extent, the Remuneration
committee may make such adjustment as it considers appropriate to the
number of shares subject to an Award.
Alterations
Shareholder approval is required for alterations to an Award that are to the
advantage of the executive where these are to the number of shares that may
be issued (or treasury shares that may be transferred), the basis for
determining an executive’s entitlement to ordinary shares and the terms of
those shares, and adjustments that may be made to the Award on a variation
of capital.  This requirement shall not, however, apply to minor alterations to
benefit the administration of the Award, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for participants or any Business Post Group company.
Employment Policy
The Group’s policy is to maintain, as far as practicable, close consultations
with employees on matters likely to affect their interests and, to this end,
established an Employee Consultative Group in April 2003. The Group is an
equal opportunities employer and holds an Investors in People certificate. 
The Group’s policy and practice is to encourage the recruitment and
subsequent training, career development and promotion of disabled persons
according to their aptitudes and abilities and the retention and retraining of
employees who also become disabled during their employment. 
Further information concerning the Group’s human resource management
activities is set out in the Corporate Social Responsibility statement. 
Directors’ Indemnities
In accordance with the Company’s Articles of Association, directors are
granted an indemnity from the Company to the extent permitted by law in
respect of liabilities incured as a result of their office. The Company maintains
insurance against certain liabilities which could arise from a negligent act or
a breach of duty by its directors and officers in the discharge of their duties. 
Supplier Payment Policy
The Group’s policy concerning the payment of its trade payables is to follow
the CBI’s Prompt Payers’ Code. The Group endeavours to agree standard terms
of payment with its major suppliers at the commencement of business.
Suppliers fulfilling the conditions of supply are paid in accordance with the
agreed standard terms. Other suppliers are paid in accordance with
contractual terms as agreed from time to time. The Company does not have
trade payables and accordingly no trade payable days calculation is presented. 
Environmental Responsibility and Health and Safety
A statement on the steps taken to operate the business in pursuit of good
environmental and health standards is set out in the Corporate Social
Responsibility statement. 
Auditors
So far as the Board is aware, there is no relevant audit information (that is,
information needed by the Group's auditors in connection with preparing their
report) of which the Group's auditors are unaware, and all steps have been
taken to ensure that the Board is aware of any relevant audit information and
to establish that the Group's auditors are aware of that information.
A resolution to reappoint PricewaterhouseCoopers LLP as auditors to the
Group will be proposed at the Annual General Meeting. 
By order of the Board 
Peter Fitzwilliam 
Company Secretary
31 May 2006
Report & Accounts 37 Independent Auditors’ Report
Independent auditors' report to the members of Business Post Group plc
We have audited the group and parent company financial statements (the
‘‘financial statements’’) of Business Post Group plc for the year ended 31 March
2006 which comprise the Consolidated Income Statement, Consolidated and
Company Balance Sheets, Cash Flow Statements, Statements of Changes in
Shareholders’ Equity and the related notes. These financial statements have
been prepared under the accounting policies set out therein. We have also
audited the information in the Directors’ Remuneration Report that is described
as having been audited.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, the Directors’
Remuneration Report and the financial statements in accordance with applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the part of the
Directors’ Remuneration Report to be audited in accordance with relevant
legal and regulatory requirements and International Standards on Auditing (UK
and Ireland). This report, including the opinion, has been prepared for and only
for the company’s members as a body in accordance with Section 235 of the
Companies Act 1985 and for no other purpose.  We do not, in giving this
opinion, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true
and fair view and whether the financial statements and the part of the
Directors’ Remuneration Report to be audited have been properly prepared in
accordance with the Companies Act 1985 and Article 4 of the IAS Regulation.
We report to you whether in our opinion the information given in the Directors'
Report is consistent with the financial statements. We also report to you if, in
our opinion, the company has not kept proper accounting records, if we have
not received all the information and explanations we require for our audit, or
if information specified by law regarding directors’ remuneration and other
transactions is not disclosed.
We review whether the Corporate Governance Statement reflects the
company’s compliance with the nine provisions of the 2003 FRC Combined
Code specified for our review by the Listing Rules of the Financial Services
Authority, and we report if it does not. We are not required to consider
whether the board’s statements on internal control cover all risks and controls,
or form an opinion on the effectiveness of the group’s corporate governance
procedures or its risk and control procedures.
We read other information contained in the Annual Report and consider
whether it is consistent with the audited financial statements. The other
information comprises only the Chairman’s Statement, the Highlights, the
Chief Executive’s Review, the Financial Review, the Directors and Advisers, the
Corporate Governance Statement, the Corporate Social Responsibility
Statement, the unaudited part of the Remuneration Report, the Directors
Report and the Five Year Summary of Results. We consider the implications for
our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements. Our responsibilities do not
extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on
Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements and the part of the Directors’
Remuneration Report to be audited. It also includes an assessment of the
significant estimates and judgments made by the directors in the preparation
of the financial statements, and of whether the accounting policies are
appropriate to the Group’s and Company’s circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
and the part of the Directors’ Remuneration Report to be audited are free from
material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of the
Directors’ Remuneration Report to be audited.
Opinion
In our opinion:
• the Group financial statements give a true and fair view, in accordance with
IFRSs as adopted by the European Union, of the state of the Group’ s affairs as
at 31 March 2006 and of its profit and cash flows for the year then ended;
• the parent company financial statements give a true and fair view, in
accordance with IFRSs as adopted by the European Union as applied in
accordance with the provisions of the Companies Act 1985, of the state of
the parent company’s affairs as at 31 March 2006 and cash flows for the
year then ended;
• the financial statements and the part of the Directors’ Remuneration Report
to be audited have been properly prepared in accordance with the
Companies Act 1985 and Article 4 of the IAS Regulation; and
• the information given in the Directors' Report is consistent with the
financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Uxbridge
31 May 2006
38   Business Post Group plc 2006 2005
Notes £m £m
Revenue 2 278.2 233.3
Cost of sales (231.3) (184.7)
Gross profit 46.9 48.6
Administrative expenses (41.5) (28.7)
Operating profit before exceptional items 12.1 19.9
Exceptional items 3 (6.7) -
Operating profit 5 5.4 19.9
Interest payable 4 (0.8) (0.7)
Interest receivable 4 0.4 0.4
Profit before taxation 5.0 19.6
Taxation 7 (1.3) (5.9)
Profit for the year 3.7 13.7
Basic earnings per share 9 6.9p 25.6p
Diluted earnings per share 9 6.8p 25.2p
The profit for the financial year arises from the Group’s continuing activities, and is wholly attributable to equity holders of the Company.
Consolidated Income Statement
for the year ended 31 March 2006
The related notes numbered 1 to 36 form part of these financial statements.
Report & Accounts 39 Consolidated Balance Sheet
as at 31 March 2006
2006 2005
Notes £m £m
ASSETS
Non-current assets
Goodwill 10 9.5 9.5
Intangible assets 11 0.7 0.6
Investment properties 12 1.1 1.1
Property, plant and equipment 13 35.5 33.1
Trade and other receivables 17 0.4 3.3
Deferred tax assets 21 0.1 1.8
47.3 49.4
Current assets
Inventories 16 0.2 0.2
Trade and other receivables 17 53.3 47.2
Current tax assets 0.2 -
Cash and cash equivalents 18 - 3.4
53.7 50.8
LIABILITIES
Current liabilities
Borrowings 20 (1.6) (1.0)
Trade and other payables 19 (32.7) (23.8)
Current tax liabilities - (2.8)
Provisions 22 (1.3) (0.1)
(35.6) (27.7)
Net current assets 18.1 23.1
Non-current liabilities
Borrowings 20 (8.0) (8.0)
Deferred tax liabilities 21 (1.3) (1.4)
Provisions 22 (0.3) (0.4)
(9.6) (9.8)
Net assets 55.8 62.7
Shareholders’ equity
Ordinary shares 23 5.5 5.4
Share premium 24 14.6 12.2
Retained earnings 25 35.7 45.1
Total shareholders’ equity 55.8 62.7
The financial statements on pages 39 to 72 were approved by the board of directors on 31 May 2006 and were signed on its behalf by:
Peter Kane                                                                                                                                                                                                      Peter Fitzwilliam
Chairman Finance Director
The related notes numbered 1 to 36 form part of these financial statements.
40   Business Post Group plc Company Balance Sheet
2006 2005
Notes £m £m
ASSETS
Non-current assets
Investment in subsidiaries 15 11.7 11.7
Deferred tax assets 21 0.1 1.8
11.8 13.5
Current assets
Trade and other receivables 17 58.1 42.6
Cash and cash equivalents 18 - 0.1
58.1 42.7
LIABILITIES
Current liabilities
Borrowings 20 (4.8) (1.0)
Trade and other payables 19 (10.3) (2.2)
Current tax liabilities - (0.3)
(15.1) (3.5)
Net current assets 43.0 39.2
Non-current liabilities
Borrowings 20 (7.0) (8.0)
Net assets 47.8 44.7
Shareholders’ equity
Ordinary shares 23 5.5 5.4
Share premium 24 14.6 12.2
Retained earnings 25 27.7 27.1
Total shareholders’ equity 47.8 44.7
The financial statements on pages 39 to 72 were approved by the board of directors on 31 May 2006 and were signed on its behalf by:
Peter Kane Peter Fitzwilliam
Chairman Finance Director
as at 31 March 2006
The related notes numbered 39 to 72 form part of these financial statements.
Report & Accounts 41 Group Company
2006 2005 2006 2005
Notes £m £m £m £m
Operating activities
Cash generated from operations 27 17.2 20.6 7.6 6.3
Interest received 0.4 0.4 - -
Interest paid (0.8) (0.7) (0.4) (0.5)
Taxation paid (3.6) (6.1) (0.3) -
Other non cash items (0.4) 0.9 (0.5) 1.0
Net cash inflow from operating activities 12.8 15.1 6.4 6.8
Investing activities
Acquisition of subsidiaries (net of cash acquired) - 0.6 - 0.6
Proceeds from disposal of property, plant and equipment 0.7 0.1 - -
Purchase of property, plant and equipment 13 (7.8) (6.4) - -
Purchase of intangible assets 11 (0.4) (0.3) - -
Net cash (outflow)/inflow from investing activities (7.5) (6.0) - 0.6
Financing activities
Dividends paid to shareholders (10.4) (9.9) (10.4) (9.9)
Proceeds from re-financing under finance leases 1.2 - - -
Net proceeds from issue of ordinary share capital 23, 24 2.4 2.0 2.4 2.0
Purchase of Business Post shares by the ESOT 23 (1.3) (1.2) (1.3) (1.2)
Repayment of borrowings 20 (1.0) (1.0) (1.0) (1.0)
Net cash outflow from financing activities (9.1) (10.1) (10.3) (10.1)
Net decrease in cash and cash equivalents 32 (3.8) (1.0) (3.9) (2.7)
Cash and cash equivalents at 1 April 32 3.4 4.4 0.1 2.8
Cash and cash equivalents at 31 March 32 (0.4) 3.4 (3.8) 0.1
Cash Flow Statements
for the year ended 31 March 2006
The related notes numbered 1 to 36 form part of these financial statements.
42   Business Post Group plc Group Company
2006 2005 2006 2005
Notes £m £m £m £m
Shareholders’ equity at 1 April 62.7 56.0 44.7 39.8
Adoption of IAS 32 and IAS 39 (0.1) - (0.1) -
Dividends paid to shareholders 8 (10.4) (9.8) (10.4) (9.8)
Purchase of Business Post shares by the ESOT 23 (1.3) (1.2) (1.3) (1.2)
Employees’ share option scheme:
-value of employee services (0.5) 1.0 (0.5) 1.0
-proceeds from shares issued 2.5 2.0 2.5 2.0
Tax on items taken directly to equity (0.8) 1.0 (1.5) 1.3
Profit for the year 3.7 13.7 14.4 11.6
Shareholders’ equity at 31 March 55.8 62.7 47.8 44.7
Statements of Changes in 
Shareholders’ Equity
for the year ended 31 March 2006
The related notes numbered 1 to 36 form part of these financial statements.
Report & Accounts 43 Notes to the Financial Statements
1 Principal Accounting Policies
Accounting policies for the year ended 31 March 2006
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These financial statements have been prepared in accordance with EU-
adopted International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations and with those parts of the Companies Act, 1985
applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost
convention as modified by the revaluation of certain financial assets and
financial liabilities held for trading.
The preparation of financial statements in conformity with generally
accepted accounting principles, requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are based
on management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the financial year are the recoverability of trade and franchise receivables
(note 17), goodwill impairment (note 15) and provisions (note 22).
The Group financial statements consolidate the financial statements of
Business Post Group plc and its subsidiary companies for the year ended 31
March 2006. Advantage has been taken of Section 230 of the Companies
Act 1985 not to include the Company's own profit and loss account. The
profit of the Company for the year was £14.4m (2005: £11.6m).
Conversion to IFRS
This is the first year that the Group has produced financial statements
under IFRS. The adoption of IFRS from the transition date of 1 April 2004,
has resulted in a number of adjustments to the previously reported results
and equity shareholders' funds presented under UK generally accepted
accounting principles (UK GAAP). The main changes were in relation to
share-based payments, goodwill, dividends, intangible assets, deferred
taxation and financial instruments.
IFRS 1, ‘First-Time Adoption of International Financial Reporting
Standards’, permits those companies adopting IFRS for the first time to
take certain exemptions from the full requirements of IFRS in the
transition period. The Group has applied the following key exemptions:
* Business combinations: The Group elected not to apply IFRS 3,
'Business Combinations', retrospectively to business combinations
acquired prior to the date of transition.
* Financial instruments: The Group applied the IFRS 1 exemption from
the requirement to restate comparative information for the effects of
adopting IAS 32 ‘Financial Instruments: Disclosure and Presentation’ and
IAS 39 ‘Financial Instruments: Recognition and Measurement’.
Comparative information as at 1 April 2004 and for the year to 31 March
2005 is presented under UK GAAP applicable at that time.
The Group elected to apply IFRS 2, ‘Share-based Payments’,
retrospectively in full to all options granted but not fully vested at the
date of transition.
Note 36, ‘Transition to IFRS’ provides further details.
The Group has not adopted any Standards early.
Consolidation
Subsidiaries are consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date on
which control is transferred out of the Group. On acquisition of a
subsidiary, all the subsidiary's assets and liabilities that exist at the date
of acquisition are recorded at their fair values reflecting their condition at
that date. Changes to those assets and liabilities, and the resulting gains
and losses that arise after the Group has gained control of the subsidiary
are credited or charged to the post acquisition income statement.
The results, assets and liabilities of the franchise network are not
consolidated into the Groups’ results as the Group does not have a
participating share ownership in the franchises, or the ability to direct and
control their activities. Additionally, the Group does not share in the
majority of the risks and rewards.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of identifiable net assets of a subsidiary at the date of acquisition.
Goodwill is measured at cost less impairment losses and is tested for
impairment at least annually.
On the disposal of a business, goodwill relating to that business
remaining on the balance sheet is included in the determination of the
profit or loss on disposal.
Intangible assets
Intangible assets include acquired computer software licences not part of
the operating software acquired with a related piece of hardware. These
are capitalised on the basis of the costs incurred to acquire and bring to
use the specific software. These costs are amortised on a straight line
basis over their estimated useful lives, normally three to four years.
Intangible assets created within the business are not capitalised and
expenditure is charged against profits in the year in which it is incurred.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated
depreciation and any impairment in value. Land is not depreciated.
Depreciation is calculated over the estimated economic useful life of
the asset as follows:
Freehold buildings fifty years on a straight line basis
Short leasehold improvements the period of the lease on a 
straight line basis
Motor vehicles, plant and equipment 10% to 33% annually on a 
reducing balance basis
Computer equipment 14% to 33% annually on a 
straight line basis
44   Business Post Group plc Notes to the Financial Statements
The normal expected useful lives and residual values of the major
categories of property, plant and equipment are reviewed annually.
The carrying value of property, plant and equipment is reviewed at least
annually. Any resultant impairment losses are charged immediately to the
income statement.
Investment properties
Investment properties comprise freehold and leasehold land and
buildings held for long term rental yields that are not occupied by the
Group. 
Investment properties are accounted for under the cost model, at cost
less accumulated depreciation and accumulated impairment losses.
Investments in subsidiaries
Investments in Group subsidiaries are stated at cost less any provision for
impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the first-in-first-out method and net realisable
value is the estimated selling price less costs of disposal in the ordinary
course of business.
Finance and operating leases
Costs in respect of operating leases are charged on a straight line basis
over the term of the lease.
Leasing agreements, which transfer to the Group substantially all the
benefits and risks of ownership of an asset, are treated as if the asset has
been purchased outright. The assets are included in fixed assets and the
capital elements of the leasing commitments are shown as obligations
under finance leases. The lease rentals are treated as consisting of
capital and interest elements. The capital element is applied to reduce
the outstanding obligations and the interest element is charged against
profit so as to give constant periodic rates of charge on the remaining
balance outstanding at each accounting period. Assets held under finance
leases are depreciated over the shorter of the lease term and the useful
lives of equivalent owned assets.
Revenue
Revenue reflects all sales invoiced by Business Post, whether delivered
by network services or a franchisee, as the Group remains the principal in
all transactions. Revenue is recognised in the accounting period in which
consignments are delivered to customers.
Income from the sale of franchises is recognised over the life of the
franchise agreement in proportion to the share of services rendered, by
reference to the proportion of the total services to be provided.
Income from investment properties is recognised on a straight line basis
over the term of the lease, even if the payments are not received on such
a basis.
All revenues are stated net of value added tax.
Deferred taxation
Full provision is made for deferred taxation on all taxable temporary
differences. Deferred tax assets and liabilities are recognised separately
on the balance sheet. Deferred tax assets are recognised only to the
extent that they are expected to be recoverable.
Deferred taxation is recognised in the income statement unless it
relates to taxable transactions taken directly to equity, in which case
the deferred tax is also recognised in equity. The deferred tax is
released to the income statement at the same time as the taxable
transaction is recognised in the income statement.
Pension costs
The Group sponsors employees' personal pension plans. The assets of
the plans are held separately from those of the Group in independently
administered funds. The pension costs charged in the income statement
represent contributions payable by the Group to the plans together with
the administration charges of the plans.
Foreign currencies
Transactions in foreign currencies are recorded in sterling at the rate
ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of
exchange ruling at the balance sheet date. All exchange differences
arising from trading transactions are dealt with in the income
statement.
Share-based payments
The costs of equity-settled share-based payments are recognised in the
income statement with a corresponding increase in equity over the
vesting period as services are provided to the Group. The charge is
based on the fair value of the equity instrument granted and the number
of equity instruments that are expected to vest.
The fair value is measured at grant date and takes account of vesting
conditions that relate to the market price of the Company's shares. In
order to determine the value of the instrument a pricing model relevant
to the type of instrument is used.
The costs of cash-settled share-based payments are recognised in the
income statement with a corresponding increase in equity over the
vesting period as services are provided to the Group. The charge is
based on the fair value of the liability at each reporting date, with any
changes in fair value recognised in the income statement.
Provisions
Provisions are recognised when the Group has a present obligation (legal
or constructive) as a result of a past event, it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Where the Group expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is recognised as
a separate asset but only when the reimbursement is virtually certain. If
the effect of the time value of money is material, provisions are
determined by discounting the expected future cashflows at a pre-tax rate
that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. Where discounting is
used, the increase in the provision due to the passage of time is
recognised as an interest expense.
Report & Accounts 45 Notes to the Financial Statements
Exceptional items
Unusual, non-recurring items of income and expense that are considered
to be material are classified as “exceptional items” on the face of the
income statement and separately disclosed.
Dividends
Dividends are recognised in the financial statements as follows:
Interim dividends are recognised as a distribution from retained earnings
in the period in which they are paid.
Final dividends are recognised as a distribution from retained earnings in
the period in which they are declared at the general meeting.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s
balance sheet when the Group becomes a party to the contractual
provisions of the instrument. Financial assets are de-recognised when the
Group no longer has the rights to cash flows, the risks and rewards of
ownership or control of the asset. Financial liabilities are de-recognised
when the obligation under the liability is discharged, cancelled or expires.
* Trade receivables: These are recognised and carried at the original
invoice amount less an allowance for any non-collectable amounts.
Impairment is made when there is objective evidence that the Group will
not be able to collect the debts. Impairments are written off to the income
statement when identified.
* Franchise receivables: These are recognised and carried at the
original amount owed to the Group less an allowance for any non-
collectable amounts. Impairment is made when there is objective
evidence that the Group will not be able to collect the receivable.
Impairments are charged to the income statement when identified.
* Share capital: Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares are shown in equity
as a deduction from the proceeds received. Own equity instruments that
are reacquired (treasury shares) or shares held in the Employee Share
Ownership Trust (ESOT) are deducted from equity. No gain or loss is
recognised in the income statement on the purchase, sale, issue or
cancellation of the Group’s own equity instruments.
* Cash and cash equivalents: These comprise cash in hand and current
balances with banks and similar institutions, which are readily
convertible to known amounts of cash and which are subject to
insignificant risk of changes in value and have an original maturity of
three months or less.
* Interest rate cap: The fair value of the instrument is re-measured at
fair value at each reporting date, with any gains or losses credited or
charged to the income statement.
* Interest-bearing loans and borrowings: All interest-bearing loans
and borrowings are initially recognised at fair value plus directly
attributable transaction costs. After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortised cost using
the effective interest method. Amortised cost is calculated by taking into
account any issue costs, and any discount or premium.
For the purpose of the cash flow statements, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding
bank overdrafts.
Financial risk management
Foreign exchange risk
The Group is not significantly exposed to the effects of fluctuations in
exchange rates since all income is in sterling and costs denominated in
foreign currency, principally the euro, represent less than 5% of all
expenditure. The Group maintains an account in euros to hedge the
Group's limited exposure to purchases denominated in european
currency, and any gains or losses on the retranslation of this account
offset increases or decreases in the sterling equivalent value of foreign
purchases. At the year end, the balance on this account was £0.5m.
Interest rate risk
The Group has both interest-bearing assets and interest-bearing
liabilities, subject to floating rates.
The Group provides both short and long-term finance to a number of
franchises, accruing interest at a premium to the Bank of England base rate.
Short-term finance is principally obtained from a sterling bank overdraft,
with interest charged at a rate linked to the Bank of England base rate.
The Group has a sterling term loan in place to provide longer term
finance. The interest rate on the term loan is based on a floating rate
linked to the London Inter Bank Offer Rate ("LIBOR").
Additionally, a separate interest rate cap exists to reduce the Group's
exposure to fluctuations in LIBOR on the sterling term loan, based on
the agreed repayment schedule, ensuring that the interest rate exposure
is capped at 6.0% until the contractual expiry date of the agreement in
July 2008. To date, the interest rate cap has not been breached.
Price risk
Fuel represents one of the major costs that the Group faces. Price risk is
minimised as significant increases in the fuel price can be passed onto
customers via a fuel surcharge mechanism common throughout the
express delivery industry.
Credit risk
Trade receivables
The Group has no significant concentrations of credit risk. The Group's
exposure is limited by being spread across a wide range of industry
sectors, with the most significant being the high tech sector, which
generates roughly 20% of Group revenue. FedEx Express, the world's
leading express delivery company, accounts for less than 5% of revenue
and no other customer accounts for over 4%. The Group has
implemented policies that require appropriate credit checks on potential
customers before sales commence.
Franchise receivables
Franchise receivables represent both short and long-term amounts
advanced by the Group, the recoverability of which is dependent on the
trading performance of the individual franchise and that of the Group,
and the economy in general.
Liquidity risk
The Board reviews both the long and short-term financing requirements
of the Group to ensure that there are sufficient available funds both for
the day-to-day operations of the Group and for planned capital
investments.
At the year end, the Group had undrawn borrowing facilities of £10m
under a facility expiring on 31 December 2006.
46   Business Post Group plc 2 Segmental information
The Group's primary segment reporting is by business sector, with geographical reporting being the secondary format. The business segments consist of Parcel
Services (Express, International and HomeServe), Specialist Services (UK Pallets and Courier), Mail Services (UK Mail), and Other (Network Services and
Central Support). Central Support comprises common Group head office functions including HR, Finance and IT. Costs, assets and liabilities are allocated to
specific business segments wherever possible. There are no sales between business segments.
The Group manages its business segments on a national basis, with all its operations in the UK, as are nearly all of the customers. The Group therefore
considers that it operates in one geographic market, the UK.
Primary reporting format - business segments
The business segment results for the year ended 31 March 2006 are as follows
Parcel Mail Specialist
Services Services Services Other Group
£m £m £m £m £m
Revenue 195.8 40.4 41.6 0.4 278.2
Operating profit/(loss) 11.1 3.2 2.1 (11.0) 5.4
Interest payable (0.8)
Interest receivable 0.4
Profit before taxation 5.0
Taxation (1.3)
Net profit attributable to equity shareholders 3.7
Segment assets 63.3 14.9 8.3 14.5 101.0
Segment liabilities 13.7 10.2 4.3 17.0 45.2
Other segment items
Capital expenditure (including acquisitions)
- Property, plant and equipment (note 13) 2.8 1.8 0.1 3.1 7.8
- Intangible assets (note 11) - 0.2 0.1 0.1 0.4
Depreciation - owned assets (note 13) 2.0 0.1 0.3 2.3 4.7
Amortisation of intangible assets (note 11) - 0.1 - 0.2 0.3
Impairment of trade receivables 1.1 - 0.6 - 1.7
Impairment of franchise receivables 7.0 - - - 7.0
The business segment results for the year ended 31 March 2005 are as follows
Parcel Mail Specialist
Services Services Services Other Group
£m £m £m £m £m
Revenue 187.0 10.2 35.3 0.8 233.3
Operating profit/(loss) 30.3 - 1.9 (12.3) 19.9
Interest payable (0.7)
Interest receivable 0.4
Profit before taxation 19.6
Taxation (5.9)
Net profit attributable to equity shareholders 13.7
Segment assets 64.4 8.2 7.9 19.7 100.2
Segment liabilities 10.1 2.7 4.6 20.1 37.5
Other segment items
Capital expenditure (including acquisitions)
- Property, plant and equipment (note 13) 2.7 - 0.2 3.5 6.4
- Intangible assets (note 11) - - 0.1 0.2 0.3
Depreciation - owned assets (note 13) 1.8 - 0.3 2.1 4.2
Depreciation - investment properties (note 12) - - - 0.1 0.1
Amortisation of intangible assets (note 11) - - - 0.2 0.2
Impairment of trade receivables 0.8 - 0.1 - 0.9
Impairment of franchise receivables 0.9 - - - 0.9
Company
The Company's business is to invest in its subsidiaries and, therefore, it operates in a single segment.
Notes to the Financial Statements
Report & Accounts 47 3 Exceptional items
2006 2005
£m £m
Franchise-related costs
- Provision against amounts relating to prior years 3.2 -
- Conversion costs including claims 2.7 -
Management restructuring 0.8 -
Exceptional items 6.7 -
Franchise-related costs represent a provision of £3.2m against amounts owed by certain franchises relating to periods prior to 1 April 2005, together with
further costs of £2.4m to cover converting underperforming franchise sites to corporate sites in the year to 31 March 2006 and £0.3m in relation to claims
from prior franchisees.
Management restructuring costs relate to the departure of Paul Carvell as Chief Executive and a number of significant changes to the management team
following the appointment of Guy Buswell, after deduction of related share-based credits.
4 Finance costs - net
2006 2005
£m £m
Interest payable on:
Bank overdraft (0.3) (0.2)
Term loan (0.5) (0.5)
Interest payable (0.8) (0.7)
Interest receivable on amounts due from franchises 0.4 0.4
Finance costs - net (0.4) (0.3)
5 Operating profit
2006 2005
£m £m
The following items have been charged/(credited) in arriving at operating profit:
Employee benefits expense (note 6) 49.9 44.1
Cost of inventories recognised (included in cost of sales) 7.9 5.8
Depreciation of owned property, plant and equipment (notes 12, 13) 4.7 4.3
Amortisation of intangibles (included in administrative expenses) (note 11) 0.3 0.2
Other operating lease rentals payable
- Plant and machinery 6.9 6.1
- Property 4.1 3.0
Repairs and maintenance expenditure on property, plant and equipment 1.8 1.5
Other operating lease rentals receivable
- Plant and machinery (0.8) (0.8)
- Property (0.5) (0.2)
Trade receivables impairment (included in administrative expenses) 1.7 0.9
Franchise receivables impairment (included in administrative expenses) 7.0 0.9
Services provided by the Group's auditor
2006 2005
£m £m
During the year the Group obtained the following services from the Group's auditor at costs as detailed below:
Audit services - statutory audit * 0.1 0.1
Other assurance services - 0.2
Tax compliance services 0.1 0.1
0.2 0.4
* This includes £12,000 (2005: £10,900) for the audit of the parent company.
Notes to the Financial Statements
48   Business Post Group plc 6 Employees and directors
Employee benefit expense for the Group during the year
2006 2005
£m £m
Wages and salaries 45.7 38.6
Social security costs 4.1 3.9
Other pension costs * 0.7 0.6
Share-based payments (0.6) 1.0
49.9 44.1
* Other pension costs all relate to defined contribution schemes.
Average monthly number of people (including executive directors) employed
2006 2005
£m £m
By business group
Parcel services 1,717 1,505
Mail services 55 27
Specialist services 397 378
Central 144 132
2,313 2,042
The average number of persons employed by the Company was Nil (2005: Nil).
Key management compensation
2006 2005
£000 £000
Salaries and short-term employee benefits 1,076 1,092
Post-employment benefits 94 65
Termination benefits 312 -
Share-based payments (325) 296
1,157 1,453
The key management figures given above include the main board directors, both executive and non-executive.
Details of directors' emoluments are set out in the Remuneration Report.
7 Taxation
Analysis of charge in period
2006 2005
£m £m
Current tax - current year 1.4 6.0
Current tax - adjustment in respect of prior years (0.1) -
Deferred tax (note 21) - current year 0.1 (0.1)
Deferred tax (note 21) - prior years (0.1) -
Taxation 1.3 5.9
Notes to the Financial Statements
Report & Accounts 49 The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before
tax are explained below:
2006 2005
£m £m
Profit on ordinary activities before tax 5.0 19.6
Profit on ordinary activities multiplied by rate of corporation tax in the UK of 30% (2005: 30%) 1.5 5.9
Effects of:
Deferred tax in respect of share options - (0.3)
Expenses not deductible for tax purposes 0.1 0.3
Adjustment in respect of prior years (0.3) -
Total tax charge 1.3 5.9
Additionally, £1.5m of deferred tax has been charged (2005: £1.0m credited) directly to equity in respect of share options. £0.7m of current tax has been
credited (2005 £Nil) directly to equity in respect of share options.
8 Dividends
2006 2005
Group and Company £m £m
Final 2005 paid: 12.80p (2004: 12.05p) per 10p share 6.9 6.5
Interim paid: 6.40p (2005: 6.40p) per 10p share 3.5 3.4
In addition, the directors are proposing a final dividend in respect of the financial year ending 31 March 2006 of 10.8p per share which will absorb an
estimated £5.8 million of shareholders' funds. It will be paid on 20 July 2006 to shareholders who are on the register of members on 30 June 2006.
9 Earnings per Share
Basic earnings per share is calculated by dividing the profit for the year (the "earnings") attributable to ordinary shareholders by the weighted average number
of ordinary shares outstanding during the year, excluding those held in the employee share ownership trust (note 23), which are treated as cancelled.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Group has two classes of dilutive potential ordinary shares: those share options granted to employees where the exercise price is less than the
average market price of the Company's ordinary shares during the year, and the contingently issuable shares under the Group's Long Term Incentive Plan.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
2006 2005
Weighted Weighted
average average Per share
Earnings number of Per share Earnings number of amount
£m shares amount pence £m shares pence
Basic EPS
Earnings attributable to ordinary shareholders 3.7 53,962,493 6.9 13.7 53,586,502 25.6
Effect of dilutive shares
Options - 364,214 (0.1) - 870,480 (0.4)
Long Term Incentive Plan - 243,696 - - 18,429 -
Diluted EPS 3.7 54,570,403 6.8 13.7 54,475,411 25.2
Notes to the Financial Statements
50   Business Post Group plc Notes to the Financial Statements
10 Goodwill
2006 2005
Group £m £m
Cost
At 1 April 9.5 10.8
Adjustment in respect of UK Pallets Ltd - (1.3)
At 31 March 9.5 9.5
Aggregate impairment
At 1 April and 31 March - -
Net book value
At 1 April and 31 March 9.5 9.5
As required under IAS 36 'Impairment of Assets' , goodwill has been allocated to the lowest level of cash-generating unit and has been tested for impairment.
The carrying amounts of goodwill by company are as follows;
2006 2005
£m £m
BXT Ltd 1.6 1.6
UK Pallets Ltd 7.9 7.9
Net book value at 31 March 9.5 9.5
Goodwill is tested for impairment annually at the time the Group prepares its annual budgets. Each impairment review takes account of the recoverable
amount of the cash-generating units which is determined based on a value in use basis. The growth rates used are in the range 7% to 10% p.a. for the first
five years, and 2.25% thereafter, being the long term GDP growth rate of the UK economy. The pre-tax discount rates are in the 6% to 7% range.
Management believes that there will be no structural changes in either the palletised goods or technical courier markets which will affect these forecasts.
11 Intangible assets
2006 2005
Group £m £m
Cost
At 1 April 1.5 1.2
Additions 0.4 0.3
At 31 March 1.9 1.5
Aggregate amortisation
At 1 April 0.9 0.7
Charge for the year 0.3 0.2
At 31 March 1.2 0.9
Net book value at 31 March 0.7 0.6
Net book value at 1 April 0.6 0.5
All amortisation charges in the year have been charged through administrative expenses.
Computer software has a useful economic life of between 3 and 4 years.
Report & Accounts 51 Notes to the Financial Statements
12 Investment properties
2006 2005
Group £m £m
Cost
At 1 April and 31 March 1.7 1.7
Accumulated depreciation
At 1 April 0.6 0.5
Charge for the year - 0.1
At 31 March 0.6 0.6
Net book value at 31 March 1.1 1.1
Net book value at 1 April 1.1 1.2
Investment properties are accounted for under the cost model, at cost less accumulated depreciation and accumulated impairment losses and are
depreciated over fifty years on a straight line basis.
One (2005: One) investment property is held by the Group, located in the West Midlands and is being sublet under an operating lease. The rental income
recognised in the year was £0.2m (2005: £0.2m).
The property was valued by qualified professional valuers working for the company of DTZ Debenham Tie Leung, Chartered Surveyors, acting in the capacity
of External Valuers. All such valuers are Chartered Surveyors, being members of the Royal Institution of Chartered Surveyors ("RICS"). DTZ Debenham Tie
Leung is a wholly owned subsidiary of DTZ Holdings plc (the “DTZ Group"). In the financial year to 30 April 2006, the proportion of total fees payable by the
Group to the total fee income of the DTZ Group was less than 5%.
The property was valued on the basis of Market Value at £3.6m, primarily derived using comparable recent market transactions on arm's length terms. The
valuation was carried out in accordance with the RICS Appraisal and Valuation Standards. DTZ Debenham Tie Leung have not previously carried out
valuations for Business Post Group plc.
The Company does not own any investment properties (2005: Nil).
13 Property, plant and equipment
Motor
Short vehicles
Freehold land leasehold plant and Computer
and buildings improvements equipment equipment Total
Group £m £m £m £m £m
Cost
At 1 April 2005 22.0 0.9 16.7 10.3 49.9
Additions 0.4 0.7 5.0 1.7 7.8
Disposals - - (1.9) - (1.9)
At 31 March 2006 22.4 1.6 19.8 12.0 55.8
Accumulated depreciation
At 1 April 2005 2.1 0.4 8.5 5.8 16.8
Charge for the year 0.3 0.1 2.0 2.3 4.7
Disposals - - (1.2) - (1.2)
At 31 March 2006 2.4 0.5 9.3 8.1 20.3
Net book value at 31 March 2006 20.0 1.1 10.5 3.9 35.5
52   Business Post Group plc Notes to the Financial Statements
Motor
Short vehicles
Freehold land leasehold plant and Computer
and buildings improvements equipment equipment Total
Group £m £m £m £m £m
Cost
At 1 April 2004 21.3 0.8 15.1 7.1 44.3
Additions 0.7 0.1 2.3 3.3 6.4
Disposals - - (0.7) (0.1) (0.8)
At 31 March 2005 22.0 0.9 16.7 10.3 49.9
Accumulated depreciation
At 1 April 2004 1.9 0.3 7.4 3.7 13.3
Charge for the year 0.2 0.1 1.7 2.2 4.2
Disposals - - (0.6) (0.1) (0.7)
At 31 March 2005 2.1 0.4 8.5 5.8 16.8
Net book value at 31 March 2005 19.9 0.5 8.2 4.5 33.1
The Company owned no tangible fixed assets at 31 March 2006 (2005: £Nil).
14 Assets held under finance leases
Assets held under finance leases have the following net book amount:
2006 2005
£m £m
Cost 1.3 -
Aggregate depreciation (0.1) -
Net book value 1.2 -
Included in assets held under finance leases are plant and equipment with a net book value of £1.0m (2005: £Nil) and computer software of £0.2m (2005:
£Nil).
15 Investments
Company
Fixed asset investments 2006 2005
£m £m
Investments in subsidiaries
At 1 April 12.1 14.3
Adjustment in respect of UK Pallets Ltd - (2.2)
At 31 March 12.1 12.1
Aggregate impairment 
At 1 April and 31 March 0.4 0.4
Net book amount as at 31 March 11.7 11.7
Investments in subsidiaries are stated at cost less impairment.
A list of the principal subsidiary undertakings is given in note 35.
Report & Accounts 53 Notes to the Financial Statements
16 Inventories
2006 2005
£m £m
Technical swap outs - 0.1
Fuel stock 0.2 0.1
0.2 0.2
The Group consumed £7.9m (2005: £5.8m) of inventories during the year.
17 Trade and other receivables
Group Company
2006 2005 2006 2005
£m £m £m £m
Trade receivables, net of provisions for impairment 49.1 41.8 - -
Franchise receivables, net of provisions for impairment 1.7 6.0 - -
Amounts due from subsidiary undertakings - - 58.1 42.5
Other debtors 0.3 0.5 - -
Prepayments and accrued income 2.6 2.2 - 0.1
53.7 50.5 58.1 42.6
Less : non-current franchise receivables (0.4) (3.3) - -
53.3 47.2 58.1 42.6
Concentrations of credit risk with respect to trade receivables are limited due to the Group's customer base being large and unrelated, with no one customer
accounting for more than 5% of trade receivables.
Franchise receivables represent both short and long-term amounts advanced by the Group, the recoverability of which is dependent on the trading
performance of the individual franchise and that of the Group, and the economy in general.
The effective interest rate for all non-current franchise receivables is 6.0% (2005: 6.0%), all of which are due within 4 years from the balance sheet date.
18 Cash and cash equivalents
Group Company
2006 2005 2006 2005
£m £m £m £m
Cash at bank and in hand - 3.4 - 0.1
The effective interest rate on the cash and bank balances was approximately 4.6% (2005: 3.7%), accruing on a daily basis.
19 Trade and other payables - current
Group Company
2006 2005 2006 2005
£m £m £m £m
Trade payables 16.7 11.2 - -
Amounts owed to franchises 2.3 2.7 - -
Amounts owed to subsidiary undertakings - - 10.2 2.1
Other taxes and social security payable 6.7 4.7 - -
Accruals 6.8 4.9 0.1 0.1
Deferred income 0.2 0.3 - -
32.7 23.8 10.3 2.2
54   Business Post Group plc Notes to the Financial Statements
20 Borrowings
Group Company
2006 2005 2006 2005
£m £m £m £m
Current
Bank loans and overdrafts due within one year or on demand:
Bank overdrafts 0.4 - 3.8 -
Sterling term loan (unsecured) 1.0 1.0 1.0 1.0
Finance lease obligations 0.2 - - -
1.6 1.0 4.8 1.0
Non-current
Sterling term loan (unsecured) 7.0 8.0 7.0 8.0
Finance lease obligations 1.0 - - -
8.0 8.0 7.0 8.0
The term loan, whilst unsecured, is guaranteed by subsidiaries of Business Post Group plc and is repayable in equal annual instalments of £1m.
Interest on the term loan is reset every quarter. As at 31 March 2006, the effective rate of interest on the term loan was approximately 5.2% (2005: 5.6%)
reviewable on 27 April 2006. The loan is subject to various covenants.
21 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 30% (2005: 30%).
The movement on the deferred tax account is as shown below:
Group Company
2006 2005 2006 2005
Deferred tax account £m £m £m £m
At 1 April 0.4 (0.7) 1.8 0.5
Income statement (charge)/credit (0.1) 0.1 (0.2) 0.3
(Charged)/credited to equity (1.5) 1.0 (1.5) 1.0
At 31 March (1.2) 0.4 0.1 1.8
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.
Group Company
2006 2005 2006 2005
Deferred tax asset £m £m £m £m
At 1 April 1.8 0.5 1.8 0.5
Income statement (charge)/credit (0.2) 0.3 (0.2) 0.3
(Charged)/credited to equity (1.5) 1.0 (1.5) 1.0
At 31 March 0.1 1.8 0.1 1.8
Deferred tax assets on share based payments are calculated on the difference between the market price at the balance sheet date and the option exercise
price. The excess of the deferred tax over the cumulative income statement charge is recognised in equity.
Report & Accounts 55 Notes to the Financial Statements
Deferred tax liabilities
The movement on the deferred tax liability account is as shown below:
Group Company
2006 2005 2006 2005
Deferred tax liability on accelerated capital allowances £m £m £m £m
At 1 April 1.4 1.2 - -
Income statement (credit)/charge (0.1) 0.2 - -
At 31 March 1.3 1.4 - -
Deferred tax liabilities on accelerated capital allowances are calculated on the difference between the accounting net book value of the assets and their
carrying amount for tax purposes.
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.
The deferred income tax (charged)/credited to equity during the year is as follows:
Group Company
2006 2005 2006 2006
£m £m £m £m
Deferred tax on share-based payments (1.5) 1.0 (1.5) 1.0
22 Provisions
Franchise
Properties Claims related costs Totals
£m £m £m £m
At 1 April 2005 0.5 - - 0.5
Charged to the income statement 0.1 0.3 2.4 2.8
Utilised in the year (0.1) - (1.6) (1.7)
At 31 March 2006 0.5 0.3 0.8 1.6
Provisions have been analysed between current and non-current as follows:
2006 2005
£m £m
Current 1.3 0.1
Non-current 0.3 0.4
1.6 0.5
Vacant properties
The Group holds leases over two vacant properties, both of which are on the market with a view to sub-letting. Provision is made for rental during the
anticipated time that these properties will be on the market. In determining this provision, the cash flows have been discounted at the Group's pre-tax
borrowing rate.
Property leases
The provision for property leases relates to dilapidations on properties under leases expiring within 1 year and up to 13 years. The properties have been
inspected by the Group Property Manager, and estimates made for the anticipated dilapidation expenditure to be incurred prior to sub-letting, or reversion
of the lease.
Claims
The provision for claims relates to £0.3m of legal actions from previous franchisees (note 3).
Franchise-related costs
Franchise-related costs represent an exceptional provision of £2.4m to cover the cost of converting underperforming franchise sites to corporate sites in the
year to 31 March 2006 (note 3).
56   Business Post Group plc Notes to the Financial Statements
23 Called up share capital
Group and Company 2006 2005
£m £m
Authorised
70,000,000 (2005: 70,000,000) ordinary shares of 10p each 7.0 7.0
Issued, allotted and fully paid
2006 2005
Ordinary shares of 10p each Shares £m Shares £m
At 1 April 53,924,283 5.4 53,297,614 5.3
Allotted under share option schemes 606,579 0.1 626,669 0.1
At 31 March 54,530,862 5.5 53,924,283 5.4
Potential issues of ordinary shares
Certain employees and franchisees hold options to subscribe for shares in the Company at prices ranging from Nil to 575p under six share option schemes
approved by shareholders between 1993 and 2005, as follows;
Year of Exercise Exercise 2006 2005
Scheme grant price period Numbers Numbers
Employee share option scheme 1995 214p 30.06.98 to 30.06.05 - 12,641
Sharesave scheme 2000-2005 170p-496p 05.01.03 to 01.02.11 306,842 350,210
New executive 2001 share option scheme 2001-2003 204p-487p 05.12.04 to 18.11.13 1,059,180 2,128,197
Franchisee option scheme 2002 2002-2005 380p-575p 12.07.05 to 25.05.15 208,271 329,065
LTIP 2004-2005 Nil 16.11.07 to 24.05.15 524,465 344,975
Share matching plan 2004 Nil 16.11.07 to 16.05.08 4,010 4,880
2,102,768 3,169,968
Employee Share Ownership Trust
The Company's Employee Share Ownership Trust holds shares in the Company for subsequent transfer to employees under the Long Term Incentive Plan.
Shares held by the Trust are not voted at shareholder meetings and do not accrue dividends. At 31 March 2006, the trust held a total of 414,252 shares
(2005: 214,252 shares). All other shares carry voting rights and accrue dividends.
During the year the Trust purchased 200,000 ordinary shares of 10p, at an average cost of £6.45, funded by a cash contribution from the Company.
24 Share premium account
2006 2005
£m £m
Group and Company
At 1 April 12.2 10.3
Premium on shares issued during the year under share option schemes 2.4 1.9
At 31 March 14.6 12.2
Report & Accounts 57 Notes to the Financial Statements
25 Retained earnings
Group Company
2006 2005 2006 2005
£m £m £m £m
At 1 April 45.1 40.4 27.1 24.2
Adoption of IAS 32 and IAS 39 (0.1) - (0.1) -
Retained profit for the year 3.7 13.7 14.4 11.6
Share-based payments
- value of employee services (0.5) 1.0 (0.5) 1.0
Tax on items taken directly to equity (0.8) 1.0 (1.5) 1.3
Purchase of Business Post shares by the ESOT (1.3) (1.2) (1.3) (1.2)
Dividends paid to shareholders (10.4) (9.8) (10.4) (9.8)
At 31 March 35.7 45.1 27.7 27.1
26 Share-based payments
In order to align the interests of employees and franchisees with those of shareholders, share options are awarded to both employees and franchisees under
discretionary share incentive plans, and employees under all-employee share plans, as follows;
Employee Share Option Scheme
Awards under the employee share option scheme were made between 1993 and 2000, exercisable within 3 - 10 years of the grant date. Exercise of an option
is subject to continued employment, with settlement in the form of shares. 
Options granted under the employee share option scheme were exercisable on the third anniversary of the date of grant, subject to the condition that the
growth in the Company's earnings per share exceeded the increase in the index of retail prices from the date of grant .
Sharesave Plan
The Company has offered a sharesave plan since 1996 to eligible employees, including directors. The plan is an Inland Revenue approved all-employee
share plan. The Inland Revenue does not permit performance conditions to be attached to the exercise of options. Under the plan, participants are granted
options over the Company's shares. Each participant may save up to £250 per month to purchase shares in the Company at a discount. For the 2005 grant,
the discount was 20% of the market value at the time the option was granted.
New Executive 2001 Share Option Scheme
Awards were made under an executive share option scheme between 2001 and 2003 to employees at senior management level and above, exercisable
within 3 - 10 years of the grant date. Options were granted with a fixed exercise price equal to the market price of the shares under option at the date of
the grant. 
Options granted under the executive share option scheme are exercisable on the third anniversary of the date of grant, subject to the condition that the
growth in the Company's earnings per share exceeds the increase in the index of retail prices from the date of grant by more than 3% p.a.
Additionally, exercise of an option is subject to continued employment, with settlement in the form of shares.
Franchisee Share Option Scheme
The franchisee share option scheme was introduced in 2002. Under the scheme the Remuneration committee can grant options over shares in the
Company to franchisees of the Company. Options are granted with a fixed exercise price equal to the market price of the shares under option at the date
of the grant. The contractual life of an option is 3 - 10 years. Awards under the scheme are generally reserved for franchisees who have met operational
performance criteria in the year prior to the award and currently there are 24 franchisees participating.
Options granted under the franchisee share option scheme are exercisable on the third anniversary of the date of grant, subject to the condition that the
growth in the Company's earnings per share exceeds the increase in the index of retail prices from the date of grant by more than 3% p.a.
Additionally, exercise of an option is subject to a continued franchisee relationship, with settlement in the form of shares.
Long Term Incentive Plan ("LTIP")
Following a decision by the Remuneration committee an LTIP was introduced in 2004, as a more effective means of incentivising the Company's senior
management than the executive share option scheme. Under the LTIP the Remuneration committee can grant options over shares in the Company to
employees of the Company, with a contractual life of an option being 3 - 10 years.
58   Business Post Group plc Notes to the Financial Statements
Awards may be exercised determined primarily by reference to the Company's Total Shareholder Return ("TSR") performance over a period of 3 years.
Under this condition, the Company's TSR is measured against the TSR of all the other companies in the Support Services sector listed in the FTSE All
Share Index at the start of the financial year in which an award is granted over a period of 3 financial years. The proportion of the award which may be
exercised depends upon the ranking of the Company's TSR, whereby 10% of shares may be exercised if the Company achieves median ranking, rising
pro-rata to 100% if the Company's ranking falls within the top 10%. No shares are exercisable if the Company's ranking is below the median.
The exercise of awards is also subject to the condition that the growth in the Company's earnings per share shall exceed the increase in the index of retail
prices from the date of grant by more than 3% p.a.
Additionally, exercise of an option is subject to continued employment, with settlement in the form of shares.
Share Matching Plan ("SMP")
In 2004 the Remuneration committee introduced a SMP , designed to further align the interests of certain invited executives to long-term shareholders.
Under the rules, selected executives may be invited to invest a proportion of their cash bonus in the acquisition of Company shares, up to 25% of their
pre-tax salary. Where such an investment is made, the executives will receive a grant of a matching award over shares in the Company with an equivalent
value, which may be exercised between 36 and 42 months following the date of grant.
The proportion of the award which may be exercised depends upon the growth in the Company's earnings per share and is subject to a minimum growth of
4% p.a. above the index of retail prices (“RPI”) over the three year performance period. One third of the award may be exercised if growth is in excess of
RPI growth by 12% over the period, two thirds if growth is in excess by between 12% and 15%, and in full if growth exceeds RPI growth by 18% over the
period. The awards lapse if the minimum condition is not achieved at the end of the three year performance period.
Exercise of an option is subject to continued employment, with settlement in the form of shares.
Phantom Share Option Bonus Scheme
The Company has offered a phantom share option bonus scheme to Bill Cockburn to incentivise him in the growth of UK Mail. The bonus payable is
determined primarily by reference to the profit of UK Mail Ltd in its third full financial year of trading i.e. year ending 31 March 2008.
Under the rules, where profit is between £4 million and £10 million there will be a 40% to 100% pro-rata entitlement to the bonus, with no payment
where profits are lower than £4 million. The maximum bonus entitlement will be the higher of £400,000 or a bonus calculated by reference to a notional
holding of 200,000 ordinary shares in the Company acquired at the average middle market price in the five dealing days immediately preceding 12
March 2002, and valued at the average middle market price in the five dealing days immediately following the announcement of the Company's financial
results for the year ended 31 March 2008.
Exercise of an option is subject to continued employment, save for termination either by the Company or due to ill health, incapacity or death. Settlement is
in the form of cash.
Calculation of fair values
For equity-settled share-based transactions, fair values of share options awarded in the financial year are measured at the date of grant of the option using
a share pricing option model. Where the model is dependent on the Company's TSR over a period, the Monte Carlo model is used, in all other
circumstances the Black-Scholes model is used. Non-market conditions, such as the Company meeting earnings per share targets, are not incorporated
into the calculation of fair value at the grant date but are reflected in the amount of compensation expense accrued over the vesting period. The expected
life of options depends on the behaviour of option holders, which is incorporated into the option model consistent with historic observable data.
For cash-settled share-based transactions, fair values of share options awarded in the financial year are measured at each balance sheet date at the fair
value of the liability, with all changes immediately recognised in the Income Statement. Non-market conditions, such as the Company meeting earnings
targets, are not incorporated into the calculation of fair value at the grant date but are reflected in the amount of compensation expense accrued over the
vesting period. The expected life of options is determined by reference to the contractual terms.
Report & Accounts 59 Notes to the Financial Statements
The fair values calculated are inherently subjective and uncertain due to the assumptions made and the limitations of the option-pricing model used. The
significant assumptions used to estimate the fair value of the options granted in the financial year are as follows:
Franchisee
Share
Option SAYE SAYE LTIP
Grant date 20.05.05 27.06.05 27.06.05 24.05.05
Share price at grant date £5.75 £6.32 £6.32 £5.93
Exercise price £5.75 £4.96 £4.96 -
Number of franchisees/employees 19 183 32 167
Number of shares granted 30,434 110,372 27,917 369,362
Vesting period (years) 3353
Expected volatility 20.1% 20.1% 31.8% 20.1%
Option life (years) 10 3 5 10
Expected life (years) 3353
Risk-free interest rate 4.3% 4.1% 4.1% 4.2%
Expected dividends expressed as a dividend yield 3.3% 3.0% 3.0% 3.2%
Possibility of ceasing employment before vesting 33.0% 45.0% 45.0% 40.9%
Expectations of meeting performance criteria N/a N/a N/a 53.2%.
Fair value per option £1.47 £1.61 £2.13 £1.47
The risk-free rate was determined from the UK gilts zero-coupon yield curve. The expected volatility is estimated by considering the Company's historic
average share price volatility over similar periods to the expected life of the option under consideration. In addition, the expected dividend yield was based
at the prevailing rates at each of the grants. A reconciliation of option movements over the year to 31 March 2006 is shown below:
2006 2006 2005 2005
Weighted Weighted
average average
exercise exercise
Number price Number price
Outstanding as at 1 April 3,169,968 £3.51 3,306,181 £3.77
Granted 538,085 £1.60 698,443 £2.09
Lapsed (998,089) £2.79 (208,305) £3.99
Exercised (607,196) £3.99 (626,351) £3.14
Outstanding as at 31 March 2,102,768 £3.22 3,169,968 £3.51
Exercisable at 31 March 229,506 £3.89 88,242 £2.61
Options are exercisable as follows: 2006 2005
Weighted Weighted Weighted Weighted
average average average average
Weighted remaining remaining Weighted remaining remaining
average life life average life life
Range of exercise Number expected contracted exercise Number expected contracted
exercise prices price of shares years years price of shares years years
£0.00 - £0.99 - 528,475 2.7 8.9 - 349,855 2.9 9.5
£1.00 - £1.99 £1.70 8,536 0.5 0.3 £1.70 28,187 - 1.3
£2.00 - £2.99 -- -- £2.10 329,079 2.4 5.7
£3.00 - £3.99 £3.88 262,763 1.3 3.4 £3.83 499,783 1.9 4.8
£4.00 - £4.99 £4.38 1,276,473 0.8 6.8 £4.31 1,963,064 1.5 8.0
£5.00 - £5.99 £5.75 26,521 2.6 9.1 -- - -
The weighted average share price during the year for options exercised was £6.18 (2005: £5.75). The total credit for the year relating to employee share-
based payments was £0.6m (2005: charge £1.0m), £0.5m of which related to equity-settled share-based payment transactions and £0.1m to cash-settled 
share-based transactions. After deferred tax, the net credit was £0.4m (2005  £0.7m).
60   Business Post Group plc Notes to the Financial Statements
27 Reconciliation of profit to net cash flow from operating activities
Included within the net cash inflow from operating activities are the following working capital cashflows :
Group Company
2006 2005 2006 2005
£m £m £m £m
Profit for the year 3.7 13.7 15.0 12.1
Taxation 1.3 5.9 - -
Interest payable 0.8 0.7 - -
Interest receivable (0.4) (0.4) - -
Exceptional items 6.7 - - -
Depreciation and amortisation 5.1 4.5 - -
Increase in inventories - (0.1) - -
Increase in trade and other receivables (9.1) (9.3) (15.5) (7.7)
Increase in trade and other payables 8.0 5.5 8.1 1.9
Increase in provisions 1.1 0.1 - -
Net cash flow from operating activities 17.2 20.6 7.6 6.3
28 Derivatives and other financial instruments
Short term debtors and creditors
Short term debtors and creditors have been excluded.
Interest rate risk profile of financial liabilities
The interest rate risk profile of the Group's financial liabilities at 31 March 2006, after taking account of the interest rate cap used to manage the interest
profile was:
2006 2005
Floating Floating
rate rate
Book value financial Book value financial
total liabilities total liabilities
£m £m £m £m
Term loan 8.0 8.0 9.0 9.0
Bank overdraft 0.4 0.4 --
Finance leases 1.2 1.2 --
9.6 9.6 9.0 9.0
The interest rate on the term loan is based on a floating rate linked to the London Inter Bank Offer Rate ("LIBOR"). A separate interest rate cap exists to
reduce exposure to fluctuations in the LIBOR rate, ensuring that the interest exposure is capped at 6.0%. The loan has been disclosed as a floating rate
financial liability as the interest cap has not been breached. The interest rate on the overdraft is based on a floating rate linked to the Bank of England rate.
All financial liabilities are sterling denominated.
All the Group's creditors falling due within one year (other than bank and other borrowings) are excluded from the above table either due to the exclusion
of short term items or because they do not meet the definition of a financial liability, such as tax balances.
Report & Accounts 61 Notes to the Financial Statements
Maturity profile of financial assets
The maturity profile of the carrying amount of the Group's non-current financial assets at the end of the year was as follows:
2006 2005
Floating Floating
rate rate
£m £m
Between one and two years 0.4 1.5
Between two and five years - 1.0
After five years - 0.8
0.4 3.3
Financial assets comprise loans to franchises. The interest rate is fixed within the loan agreement. Debtors due within one year are excluded from the above
table as they are of a short term nature. 
Maturity profile of financial liabilities
The maturity profile of the carrying amount of the Group's non-current financial liabilities at the end of the year was as follows:
2006 2005
Other financial Other financial
Group debt liabilities Total Group debt liabilities Total
£m £m £m £m £m £m
Between one and two years 1.0 0.2 1.2 1.0 0.2 1.2
Between two and five years 3.0 0.6 3.6 3.0 0.1 3.1
After five years 3.0 0.5 3.5 4.0 0.1 4.1
7.0 1.3 8.3 8.0 0.4 8.4
Other financial liabilities comprise finance leases (note 20) and provisions (note 22). Creditors due within one year are excluded from the above table as they
are of a short term nature.
Borrowing facilities
The Group has undrawn borrowing facilities of £10m (2005: £10m). These facilities are in place until 31 December 2006.
Fair value of financial assets and liabilities
The following table provides a comparison by category of the carrying amounts and fair values of the Group's financial assets and liabilities 31 March 2006
and 2005. Fair value is the amount at which a financial instrument could be exchanged in an arm's length transaction between informed and willing parties,
other than a forced or liquidation sale and excludes accrued interest. Where available, market values have been used to determine fair values. Where market
values are not available, fair values have been calculated by discounting expected cash flows at prevailing interest rates. Set out below is a summary of the
methods and assumptions used for each category of financial instrument.
2006 2005
Book value Fair value Book value Fair value
£m £m £m £m
Primary financial instrument held or issued to
finance the Group's operations:
Short term borrowings (1.4) (1.4) (1.0) (1.0)
Long term borrowings (7.0) (7.0) (8.0) (8.0)
Finance leases (1.2) (1.2) --
Cash at bank and in hand -- 3.4 3.4
Interest earning long term debtors 0.4 0.4 3.3 3.3
Derivative financial instrument held to manage the
interest rate profile:
Interest rate cap -- 0.1 0.1
62   Business Post Group plc Notes to the Financial Statements
An interest rate cap agreement, expiring on 31 July 2008, with interest capped at 6%, was taken out during 2004 to minimise exposure to increases in the
floating rate of interest on the term loan (note 20).
Summary of methods and assumptions
Interest rate cap Fair value is based on the market price of comparable instruments at the balance sheet date.
Long term borrowings The fair value of the bank loan approximates to the value reported in the balance sheet since it 
carries a floating rate where payments are reset to market rates at intervals less than one year.
Finance leases Fair value is based by discounting the cash flows at prevailing interest rates.
Hedges
As explained in the Financial Review section of the Report and Accounts, entitled "Exposure to Financial Risk" the Group's policy is to hedge the interest
rate risk through using an interest rate cap.
There are no unrecognised gains or losses arising from the above hedge which have not been charged to the income statement during the year.
Financial instruments held for trading purposes
The Group does not trade in financial instruments.
Currency analysis of monetary net assets
The only monetary assets or liabilities that are denominated in a foreign currency are euro bank account balances of £0.5m. (2005: £0.6m)
29 Operating lease commitments - minimum lease payments
Group Group
2006 2005
Vehicles, Vehicles,
Land and plant and Land and plant and
buildings equipment buldings equipment
£m £m £m £m
Commitments under non-cancellable operating leases expiring:
Within one year 3.2 6.0 2.3 5.6
Later than one year and less than five years 8.7 8.8 6.3 6.4
After five years 5.6 - 4.3 -
At 31 March 2006 17.5 14.8 12.9 12.0
The Group leases various properties under non-cancellable operating lease agreements. The leases have various terms, escalation clauses and renewal
rights. The Group also leases vehicles and office equipment under non-cancellable operating lease agreements.
The Company had no operating lease commitments during the year (2005: Nil).
30 Contingent liabilities
The Company has guaranteed bank and other borrowings of subsidiary undertakings in a cross-guarantee agreement on an undrawn Group borrowing facility
amounting to £10m (2005: £10m).
31 Capital and other financial commitments
Group
2006 2005
£m £m
Contracts placed for future capital expenditure not provided in the financial statements 0.4 0.4
Report & Accounts 63 Notes to the Financial Statements
32 Analysis of net debt
Group
At 1 April At 1 April At 31 March
2004 Cash Flow Other 2005 Cash Flow Other 2006
£m £m £m £m £m £m £m
Cash at bank and in hand 4.6 (1.2) - 3.4 (3.4) - -
Bank overdrafts (0.2) 0.2 - - (0.4) - (0.4)
4.4 (1.0) - 3.4 (3.8) - (0.4)
Debt due within one year (1.0) 1.0 (1.0) (1.0) 1.0 (1.0) (1.0)
Debt due after one year (9.0) - 1.0 (8.0) - 1.0 (7.0)
Finance leases - - - - - (1.2) (1.2)
(10.0) 1.0 - (9.0) 1.0 (1.2) (9.2)
Net debt (5.6) - - (5.6) (2.8) (1.2) (9.6)
Company
At 1 April At 1 April At 31 March
2004 Cash Flow Other 2005 Cash Flow Other 2006
£m £m £m £m £m £m £m
Cash at bank and in hand 2.8 (2.7) - 0.1 (3.9) 3.8 -
Bank overdrafts - - - - - (3.8) (3.8)
2.8 (2.7) - 0.1 (3.9) - (3.8)
Debt due within one year (1.0) 1.0 (1.0) (1.0) 1.0 (1.0) (1.0)
Debt due after one year (9.0) - 1.0 (8.0) - 1.0 (7.0)
(10.0) 1.0 - (9.0) 1.0 - (8.0)
Net debt (7.2) (1.7) - (8.9) (2.9) - (11.8)
33 Related party transactions
P Kane, a director of the company, and members of his close family and certain family trusts the beneficiaries of which are persons connected with P Kane,
control directly and indirectly 45.9% of the issued share capital of the Company. In addition, his brother M Kane controls a further 12.8% of the issued share
capital of the Company.
Key management compensation is disclosed in note 6.
During the year the Company carried out the following transactions with other Group companies:
2006 2005
£m £m
Dividend income 14.9 12.8
The balances outstanding at 31 March 2006 between the Company and other Group companies were as follows:
2006 2005
£m £m
Current
Amounts due from subsidiary undertakings 58.1 42.5
Amounts owed to subsidiary undertakings (10.2) (2.1)
34 Post balance sheet events
Following the year end, a further five of the Group's underperforming franchise sites have been converted to corporate ownership.
The directors are proposing a final dividend in respect of the financial year ending 31 March 2006 of 10.8p per share which, if approved, will be paid on 
20 July 2006 to shareholders on the register of members on 30 June 2006.
64   Business Post Group plc Notes to the Financial Statements
35 Principal subsidiaries
The Company has the following principal wholly owned trading subsidiaries, all operating within the United Kingdom:
Percentage of
nominal value
of ordinary
Country of shares held by
Subsidiary Nature of Business incorporation the Group
Business Post Ltd Parcel and express mail collection and delivery services England 100%
BXT Limited Technical courier services England 100%
UK Mail Ltd Collection and delivery of business mail England 100%
UK Pallets Ltd Collection and delivery services for palletised goods England 100%
The Company holds 100% of the voting rights of each of the above subsidiaries.
The financial results of all of the subsidiaries listed above are included within the consolidated report and accounts.
36 Transition to IFRS
The Group adopted IFRS on 1 April 2004, with the exception of IAS 32 and IAS 39 which were adopted on 1 April 2005. This note sets out the impact of IFRS
on the Financial Statements.
Group
Consolidated Income Statement Year ended 31 March 2005
Effect of ,
transition
Transition UK GAAP to IFRS IFRS
notes £m £m £m
Revenue 233.3 - 233.3
Cost of sales (184.7) - (184.7)
Gross profit 48.6 - 48.6
Administrative expenses 1,2 (28.3) (0.4) (28.7)
Operating profit 20.3 (0.4) 19.9
Net interest payable (0.3) - (0.3)
Profit before taxation 20.0 (0.4) 19.6
Tax on profit on ordinary activities 2,4 (6.2) 0.3 (5.9)
Profit for the year 13.8 (0.1) 13.7
Basic earnings per share 25.7p 25.6p
Diluted earnings per share 25.3p 25.2p
Report & Accounts 65 Notes to the Financial Statements
Consolidated Balance Sheet
As at 31 March 2005
Effect of
transition
Transition UK GAAP to IFRS IFRS
notes £m £m £m
Assets
Non-current assets
Goodwill 1 9.0 0.5 9.5
Intangible assets 5 - 0.6 0.6
Investment properties 5 - 1.1 1.1
Property, plant and equipment 5 34.8 (1.7) 33.1
Trade and other receivables 3.3 - 3.3
Deferred tax assets 2,4 - 1.8 1.8
47.1 2.3 49.4
Current assets
Inventories 5 - 0.2 0.2
Trade and other receivables 5 47.4 (0.2) 47.2
Cash and cash equivalents 3.4 - 3.4
50.8 - 50.8
Liabilities
Current liabilities
Borrowings (1.0) - (1.0)
Trade and other payables 3 (30.7) 6.9 (23.8)
Current tax liabilities (2.8) - (2.8)
Provisions 5 - (0.1) (0.1)
(34.5) 6.8 (27.7)
Net current assets 16.3 6.8 23.1
Non-current liabilities
Borrowings (8.0) - (8.0)
Deferred tax liabilities (1.4) - (1.4)
Provisions 5 (0.5) 0.1 (0.4)
(9.9) 0.1 (9.8)
Net assets 53.5 9.2 62.7
Shareholders' funds
Share capital 5.4 - 5.4
Share premium 12.2 - 12.2
Retained earnings 1,2,3,4 35.9 9.2 45.1
53.5 9.2 62.7
66   Business Post Group plc Notes to the Financial Statements
Consolidated Balance Sheet at 1 April 2004
(Date of transition to IFRS) At 1 April 2004
Effect of ,
transition
Transition UK GAAP to IFRS IFRS
notes £m £m £m
Assets
Non-current assets
Goodwill 1 10.8 - 10.8
Intangible assets 5 - 0.5 0.5
Investment properties 5 - 1.2 1.2
Property, plant and equipment 5 32.7 (1.7) 31.0
Trade and other receivables 4.8 - 4.8
Deferred tax assets 2,4 - 0.5 0.5
48.3 0.5 48.8
Current assets
Inventories 5 - 0.1 0.1
Trade and other receivables 5 37.4 (0.1) 37.3
Cash and cash equivalents 4.6 - 4.6
42.0 - 42.0
Liabilities
Current liabilities
Borrowings (1.0) - (1.0)
Trade and other payables 3 (26.8) 6.4 (20.4)
Current tax liabilities (2.8) - (2.8)
Provisions 5 - (0.1) (0.1)
(30.6) 6.3 (24.3)
Net current assets 11.4 6.3 17.7
Non-current liabilities
Borrowings (9.0) - (9.0)
Deferred tax liabilities (1.2) - (1.2)
Provisions 5 (0.4) 0.1 (0.3)
(10.6) 0.1 (10.5)
Net assets 49.1 6.9 56.0
Shareholders' funds
Share capital 5.3 - 5.3
Share premium 10.3 - 10.3
Retained earnings 1,2,3,4 33.5 6.9 40.4
49.1 6.9 56.0
Report & Accounts 67 Notes to the Financial Statements
Consolidated Cash Flow Statement
Year ended 31 March 2005
Effect of
transition
UK GAAP to IFRS IFRS
£m £m £m
Operating activities
Operating profit 20.3 (0.4) 19.9
Depreciation of property, plant and equipment 4.5 (0.2) 4.3
Amortisation of goodwill 0.5 (0.5) -
Amortisation of intangibles - 0.2 0.2
Interest received 0.4 - 0.4
Interest paid (0.7) - (0.7)
Taxation paid (6.1) - (6.1)
Other non cash items - 0.9 0.9
Changes in working capital (excluding the effects of
acquisitions and disposal of subsidiaries)
Increase in inventories - (0.1) (0.1)
Increase in receivables (9.4) 0.1 (9.3)
Increase in payables 5.5 - 5.5
Increase in provisions 0.1 - 0.1
Net cash inflow from operating activities 15.1 - 15.1
Investing activities
Purchase of subsidiary undertakings 0.6 - 0.6
Proceeds from disposal of property, plant and equipment 0.1 - 0.1
Purchase of property, plant and equipment (6.7) 0.3 (6.4)
Purchase of intangible assets - (0.3) (0.3)
Net cash outflow from investing activities (6.0) - (6.0)
Financing activities
Equity dividends paid (9.9) - (9.9)
Issue of share capital 2.0 - 2.0
Purchase of Business Post shares by the ESOT (1.2) - (1.2)
Repayment of borrowings (1.0) - (1.0)
Net cash outflow from financing activities (10.1) - (10.1)
Net decrease in cash and cash equivalents (1.0) - (1.0)
Cash and cash equivalents at beginning of period 4.4 - 4.4
Cash and cash equivalents at end of period 3.4 - 3.4
68   Business Post Group plc Notes to the Financial Statements
Company
Company Balance Sheet
At 31 March 2005
Effect of
Transition transition
notes UK GAAP to IFRS IFRS
£m £m £m
Assets
Non-current assets
Investments 11.7 - 11.7
Deferred tax assets 2,4 - 1.8 1.8
11.7 1.8 13.5
Current assets
Trade and other receivables 3 57.5 (14.9) 42.6
Cash and cash equivalents 0.1 - 0.1
57.6 (14.9) 42.7
Liabilities
Current liabilities
Borrowings (1.0) - (1.0)
Trade and other payables 3 (9.1) 6.9 (2.2)
Current tax liabilities (0.3) - (0.3)
(10.4) 6.9 (3.5)
Net current assets 47.2 (8.0) 39.2
Non-current liabilities
Borrowings (8.0) - (8.0)
(8.0) 0.0 (8.0)
Net assets 50.9 (6.2) 44.7
Shareholders’ funds
Share capital 5.4 - 5.4
Share premium 12.2 - 12.2
Retained earnings 2,3,4 33.3 (6.2) 27.1
50.9 (6.2) 44.7
Report & Accounts 69 Notes to the Financial Statements
Company Balance Sheet at April 2004
(Date of transition to IFRS)
At 31 April 2004
Effect of
Transition transition
notes UK GAAP to IFRS IFRS
£m £m £m
Assets
Non-current assets
Investments 13.9 (2.2) 11.7
Deferred tax assets 2,4 - 0.5 0.5
13.9 (1.7) 12.2
Current assets
Trade and other receivables 3 49.2 (14.1) 35.1
Cash and cash equivalents 2.8 - 2.8
52.0 (14.1) 37.9
Liabilities
Current liabilities
Borrowings (1.0) - (1.0)
Trade and other payables 3 (8.8) 8.5 (0.3)
(9.8) 8.5 (1.3)
Net current assets 42.2 (5.6) 36.6
Non-current liabilities
Borrowings (9.0) - (9.0)
(9.0) - (9.0)
Net assets 47.1 (7.3) 39.8
Shareholders’ funds
Share capital 5.3 - 5.3
Share premium 10.3 - 10.3
Retained earnings 2,3,4 31.5 (7.3) 24.2
47.1 (7.3) 39.8
70   Business Post Group plc Notes to the Financial Statements
Company Cash Flow Statement
Year ended 31 March 2005
Effect of
Transition transition
notes UK GAAP to IFRS IFRS
£m £m £m
Operating activities
Operating profit 13.0 (0.9) 12.1
Interest paid (0.5) - (0.5)
Other non cash flow items 0.1 0.9 1.0
Changes in working capital (excluding the effects of acquisitions and disposal
of subsidiaries)
Increase in receivables (7.7) - (7.7)
Increase in payables 1.9 - 1.9
Net cash inflow from operating activities 6.8 - 6.8
Investing activities
Purchase of subsidiary undertakings 0.6 - 0.6
Net cash outflow from investing activities 0.6 - 0.6
Financing activities
Equity dividends paid (9.9) - (9.9)
Issue of share capital 2.0 - 2.0
Purchase of Business Post shares by the ESOT (1.2) - (1.2)
Repayment of borrowings (1.0) - (1.0)
Net cash outflow from financing activities (10.1) - (10.1)
Net decrease in cash and cash equivalents (2.7) - (2.7)
Cash and cash equivalents at beginning of period 2.8 - 2.8
Cash and cash equivalents at end of period 0.1 - 0.1
UK GAAP required cash flows to be presented under seven different headings whereas IAS 7 ‘Cash Flow Statements’ requires cash flows to be presented
under three headings: cash flows from operating, investing and financing activities. Consequently there are a number of reclassifications. There are no
material differences between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP .
Report & Accounts 71 Notes to the Financial Statements
Notes to the IFRS Adjustments
KEY INCOME STATEMENT AND BALANCE SHEET ADJUSTMENTS
1 Business combinations
Goodwill is not amortised under IFRS 3 'Business Combinations', but is subject to an annual impairment review.
The Company has applied the exemption within IFRS 1 'First-time adoption of International Financial Reporting Standards' not to restate its business
combinations prior to the transition date. Consequently, under IFRS, goodwill written of to reserves prior to the transition date has not been reinstated.
2 Share-based payments
UK GAAP required that there was no charge to the income statement for share options where the exercise price was equal to the market price at the grant
date, or for employee sharesave schemes. In accordance with IFRS 2 'Share-based Payments', all share-based payments, including share option costs are
recognised as an expense over the vesting period.
As encouraged by the IFRS transitional provisions, IFRS 2 has been applied to all grants of equity instruments issued that had not fully vested at transitional
date, rather than only those granted after 7 November 2002. The fair values of awards granted prior to 7 November 2002 were published on the Business
Post website on 16 May 2005.
For the year ended 31 March 2005, application of IFRS 2 results in a pre-tax charge to the income statement of £0.9m. The pre-tax effect is offset by a
deferred tax credit of £0.3m, and thus the net effect on post-tax profit for the year ended 31 March 2005 is £0.6m. Deferred tax is calculated on the basis
of the difference between the market price at the balance sheet date and the option exercise price. The excess of the deferred tax over the cumulative
income statement charge is recognised in equity (for the year ended 31 March 2005 this amounted to a credit of £1.0m to retained earnings). The deferred
tax asset recognised as at 31 March 2004 and 31 March 2005 relating to the share option schemes is £0.5m and £1.8m respectively.
3 Dividends
IFRS requires dividends to be recognised within equity in the period in which they are approved. Under UK GAAP, dividends were recognised within the
income statement in the period in which they were declared.
4 Deferred taxation
UK GAAP required deferred taxation to be recognised on timing differences whereas IFRS requires that deferred taxation is provided on all temporary
differences including the revaluation of non-monetary assets to the extent that a tax charge is foreseeable.
Under UK GAAP , deferred tax assets and liabilities were shown on a net basis. IFRS requires separate disclosure of deferred tax assets and liabilities.
Consequently, an additional £1.8m deferred tax asset, as calculated on the difference in the market price of a Business Post Group share at the balance
sheet date and the option exercise price following the application of IFRS 2 'Share-based Payments' has been included within non-current assets as at 31
March 2005.
5 Balance sheet reallocations and other
IFRS significantly widens the definition of investment properties. Investment properties previously disclosed within property, plant and equipment has now
been separately reclassified. The net book value of investment properties reclassified was £1.2m at 1 April 2004 and £1.1m at 31 March 2005.
Under UK GAAP, capitalised computer software was included within property, plant and equipment. In accordance with IFRS, capitalised software not
integral to plant and equipment is classified as an intangible asset. The net book value of computer software reclassified as intangible assets was £0.5m
at 1 April 2004 and £0.6m at 31 March 2005.
Under UK GAAP , Group provisions were not disclosed according to their expected usage date. IFRS requires that provisions should be classified into current
liabilities and non-current liabilities. As a result, £0.1m of provisions have been reclassified as current liabilities in the consolidated balance sheet as at 1
April 2004 and 31 March 2005.
Inventories previously disclosed within other debtors and prepayments have been reclassified.
72   Business Post Group plc Five Year Summary of Results
IFRS IFRS UK GAAP UK GAAP UK GAAP
2006 2005 2004 2003 2002
Notes £m £m £m £m £m
Revenue 278.2 233.3 192.7 156.3 131.7
Cost of sales (231.3) (184.7) (149.6) (122.1) (100.1)
Gross profit 46.9 48.6 43.1 34.2 31.6
Administrative expenses (a) (b) (41.5) (28.7) (24.4) (18.6) (17.0)
Operating profit 5.4 19.9 18.7 15.6 14.6
Net interest payable (0.4) (0.3) - 0.5 0.5
Profit before taxation 5.0 19.6 18.7 16.1 15.1
Taxation (a) (1.3) (5.9) (6.1) (4.9) (4.5)
Profit for the financial year 3.7 13.7 12.6 11.2 10.6
Earnings per share - basic 6.9p 25.6p 23.8p 21.2p 20.0p
Dividends per share (c) 19.2p 18.5p 18.0p 16.9p 16.0p
The calculation of earnings per share for the five years ended 31 March 2006 is based on the following weighted numbers of shares in issue:
31 March 2006 53,962,493
31 March 2005 53,586,502
31 March 2004 53,155,846
31 March 2003 53,048,564
31 March 2002 53,012,798
Notes
The table above presents the results of the Group under IFRS for the years ended 31 March 2006 and 31 March 2005. The results for the three years ended 31
March 2004 have not been restated from UK GAAP existing at that time to IFRS. In order to comply with IFRS, we believe that the principal adjustments that would
be required to restate UK GAAP results to IFRS are:
(a) under IFRS, the costs of all share-based payments including employee sharesave schemes are recognised whereas, under UK GAAP , only awards granted at a
discount to the market were recognised, with sharesave specifically exempted. Additionally, the recognition of an accounting share-based payment cost under IFRS
necessitates the recognition of an associated deferred taxation asset, which is charged to the income statement, or where applicable, directly to equity.
(b) under IFRS, goodwill is not amortised, but is subject to an annual impairment review. The Company has applied the exemption not to restate its business
combinations prior to the transition date, and consequently goodwill previously written off to reserves has not been reinstated.
(c) under IFRS, dividends payable are recognised in the period in which they are approved, rather than the period in which they were declared as was required
under UK GAAP . As a result the above table includes the 12.05p final dividend in respect of the year ended 31 March 2004 in both the year ended 31 March 2004
UK GAAP figures and the year ended 31 March 2005 IFRS figures.
Report & Accounts 73 Notice of Meeting
Notice is hereby given that the Annual General Meeting of Business Post Group plc will be held at Arbuthnot House, 20 Ropemaker Street, London, EC2Y 9AR at
12 noon on 11 July 2006 for the following purposes: 
Ordinary Business
1 To receive the directors’ report and the accounts for the year ended 31 March 2006. Resolution 1
2 To declare a final dividend of 10.8p net per ordinary share for the year ended 31 March 2006, payable to 
shareholders on 20 July 2006 who are on the register on 30 June 2006. Resolution 2
3 To approve the remuneration report of the directors. Resolution 3
4 To re-elect Dennis Clark as a director. Resolution 4
5 To re-elect Peter Kane as a director. Resolution 5
6 To elect Steven Glew as a director. Resolution 6
7 To re-appoint the auditors, PricewaterhouseCoopers LLP , and to authorise the directors to determine the auditors’ remuneration. Resolution 7
Special Business
To consider and, if thought fit, to pass the following resolutions which will be proposed as to Resolutions 8, 11 and 12 as Ordinary Resolutions and as to Resolutions
9 and 10 as Special Resolutions:- 
8 That: 
8.1 the directors be and they are hereby generally and unconditionally authorised for the purposes of section 80 of the Companies Act 1985 (“the Act”) to
exercise all the powers of the Company to allot relevant securities (within the meaning of section 80(2) of the Act) up to a maximum aggregate nominal
amount of £1,546,701 provided that this authority shall (unless previously revoked or varied by the Company in general meeting) expire at the conclusion
of the next Annual General Meeting of the Company after the passing of this resolution save that the Company may before such expiry make an offer or
agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in  pursuance
of such an offer or agreement as if the authority conferred hereby had not expired; and 
8.2 the authority hereby conferred upon the directors replaces the authority conferred upon the directors pursuant to the resolution passed by shareholders of
the Company on 12 July 2005 provided that such replacement shall not have retrospective effect. 
Resolution 8
9 That: 
9.1 the directors be and they are hereby empowered to allot equity securities (within the meaning of section 94 of the Companies Act 1985 (“the Act”))
wholly for cash pursuant to the authority conferred on the directors by resolution 8 contained in the notice of the Annual General Meeting of the
Company of which this resolution forms part as if sub-section (1) of section 89 of the Act did not apply to any such allotment provided that this power
shall be limited to: 
9.1.1 the allotment of equity securities in connection with a rights issue open offer or otherwise in favour of ordinary shareholders where the equity
securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to the respective number of
ordinary shares held by them and for the purposes of this resolution “rights issue” means an offer of equity securities open for acceptance for a
period fixed by the directors to: 
(a) holders on the register on a fixed record date of ordinary shares in proportion to their respective holdings; and 
(b) holders on the register on a fixed record date of other equity securities to the extent expressly required or (if considered appropriate by the
directors) permitted by the rights attached thereto; 
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or
legal or practical problems under the laws of, or the requirements of, any regulatory body or any stock exchange or otherwise in any territory, and
9.1.2 the allotment (otherwise than pursuant to paragraph 9.1.1 above) of equity securities up to an aggregate nominal value of £272,664; 
and shall (unless previously revoked or varied by the Company in general meeting) expire on the earlier of 11 October 2007 or the conclusion of the
next Annual General Meeting of the Company after the passing of this resolution save that the Company may before such expiry make an offer or
agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance
of such offer or agreement as if the power conferred hereby had not expired; and 
9.2 all authorities conferred under section 95 of the Companies Act 1985 prior to the date of this Annual General Meeting be and they are hereby revoked
provided that such revocation shall not have retrospective effect. 
Resolution 9
74   Business Post Group plc Notice of Meeting
10. That pursuant to Article 9 of the Company’s Articles of Association and Section 166 of the Companies Act 1985, the Company be and is hereby authorised
to make market purchases of ordinary shares of 10p each in the capital of the Company provided that: 
10.1 the maximum number of ordinary shares hereby authorised to be purchased is 5,453,298; 
10.2 the minimum price which may be paid for each ordinary share is 10 pence per ordinary share which amount shall be exclusive of expenses; 
10.3 the maximum price which may be paid for each ordinary share is, in respect of an ordinary share contracted to be purchased on any day, an amount
(exclusive of expenses) equal to 105% of the average of the mid-market quotations for an ordinary share of the Company as derived from the Daily Official
List of the London Stock Exchange for the five business days immediately preceding the day on which the ordinary share is contracted to be purchased; 
10.4 the authority hereby conferred shall expire on the earlier of 11 October 2007 or the conclusion of the next Annual General Meeting of the Company
after the date of passing this resolution, unless such authority is renewed prior to such time; and 
10.5 the Company may conclude a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will
or may be exercised wholly or partly after the expiry of such authority and may make a purchase of ordinary shares in pursuance of any such contract
as if the authority hereby conferred had not expired. 
Resolution 10
11. That the directors are hereby authorised to amend the rules of the Business Post Group plc Long Term Incentive Plan (the “LTIP”), as summarised in the 
Directors’ Report for the year ended 31 March 2006.
Resolution 11
12. That the proposed long term appointment incentive awards to two senior executives of the Company, as summarised in the Directors’ Report for the year
ended 31 March 2006, be approved. 
Resolution 12
By order of the Board 
Peter Fitzwilliam 
Company Secretary 
31 May 2006 
Report & Accounts 75 Notice of Meeting
Notes 
1. THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult
your stockbroker, bank manager, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000 immediately.
2. If you have sold or transferred all your ordinary shares in Business Post Group plc, please send this document and the enclosed form of proxy to the stockbroker,
or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee.
3. Explanatory statements relating to special business of the Annual General Meeting are contained in the Directors’ Report under the headings Annual General
Meeting - special business and Share Incentive Arrangements.
4. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote instead of him.
Such proxy or proxies need not be a member of the Company. 
5. A form of proxy is provided. To be effective, a form of proxy must be completed, signed and (together with the original or a notarially certified copy of any
power of attorney or other authority under which it is executed) lodged at the Company’s registrars, Computershare Investor Services plc, PO Box 82, 
The Pavilions, Bridgwater Road, Bristol, BS99 7NH not later than 48 hours before the time of the meeting. Depositing a completed form of proxy will not
preclude a member from attending the meeting and voting in person. 
6. There will be available for inspection at the registered office of the Company on any weekday (except Saturday) during normal business hours from the date
of this notice until the day of the Annual General Meeting and at the place of the Annual General Meeting for a period of 15 minutes prior to and during the
Annual General Meeting copies of contracts of service between directors and the Company, and the register of directors’ interests in shares of the Company
kept in accordance with section 325 of the Act. 
7. The rules of the LTIP, as it is proposed will be amended under resolution 11, and the terms of the long term appointment incentive awards proposed to be
granted pursuant to resolution 12 will be available for inspection at the offices of New Bridge Street Consultants LLP , 20 Little Britain, London EC1A 7DH during
normal business hours on any weekday (excluding Saturdays, Sundays and English public holidays) from the date of this Notice up to and including the date
of the Annual General Meeting and at the place of the meeting for at least 15 minutes prior to the meeting until its conclusion.
8. The Company, pursuant to Regulation 41 of the Uncertified Securities Regulations 2001 specifies that only those shareholders registered in the register of
members of the Company as at 12.00 pm on 9 July 2006 shall be entitled to attend and vote at the aforesaid general meeting in respect of the number of
shares registered in their name at that time. Changes to entries on the relevant register of securities after 12.00 pm on 9 July 2006 shall be disregarded in
determining the right of any person to attend or vote at the meeting. 
76   Business Post Group plc 28 June 2006 Shares become ex dividend
30 June 2006 Record date for dividend
11 July 2006 Annual General Meeting
20 July 2006 Payment of final dividend for the year ended 31 March 2006
November 2006 Announcement of interim results and interim dividend for the year ending 31 March 2007
January 2007 Payment of interim dividend for the year ending 31 March 2007
Financial Calendar
Operations
Express House
Wolseley Drive
Heartlands
Birmingham  B8 2SQ
Tel: 0121 335 1111
Fax: 0121 335 1160
www.businesspost.biz
Finance
Express House
464 Berkshire Avenue
Slough 
Berkshire  SL1 4PL
Tel: 01753 706070
Fax: 01753 706071
www.businesspost.biz
Company Number
02800218
Head Offices
Report & Accounts 77  Designed and Produced by Business Post Marketing
Portrait photography by SO Photo
Operational photography by Harvest Studios
www.businesspost.biz
08451 552 552