The outlook for independent investment research firms, especially in the international equity space, appears to be bright: recent regulatory changes, including the introduction of Commission Sharing Agreements (CSA's), are widely accepted to be a very positive driver for independents; whilst the successful IPO earlier this month of Japaninvest Group, a UK research firm, on the Tokyo Stock Exchange indicates that investors are recognising the opportunities that exist.

Global currency research

In Peoples Republic of China, the sales cycle for our Pronet FX currency advisory service (which includes G-mail web-based email) has proven to be longer than originally anticipated but I am pleased to report the first contracted sale of our Pronet FX currency advisory service to a major Chinese domestic institution has been completed, and a second is expected during the next two weeks. These are in addition to steady growth in revenues generated from the retail sector, and are a significant indication of live demand for the service in a market that we have identified as having strong potential.

Global equity research

Both the universe of research coverage and the sales pipeline of the Group are growing strongly, which bode well for sales revenues next year. The sales pipeline comprises both sell-side institutions (banks and brokerages) who will re-distribute the Group's research; and buy-side institutions (traditional asset managers and hedge funds) who will consume it directly. The Group expects to have more than 300 international companies under research coverage by the start of the next financial year. As expected, the Group recently appointed a second sales professional onto its London team (as Head of Sales) and is now seeking to make a first sales appointment in New York.

Impact on revenues and operating profits

I am pleased to announce that the total value of business with new clients together with further orders from existing clients will increase substantially with effect from January 2007. Based on orders placed, and excluding any impact from new revenues generated from the pipeline, described above, over the next fourteen months, we are now expecting revenue and operating profits to surpass current market expectations for the year ending February 28 2008. The major component of these new orders is access to our existing research library, and most of the remaining work required can be accomplished using our current resources. In view of the operational gearing of the business the impact upon operating results will therefore also be significant.