The Legal business, now branded LexisNexis, has had a successful year, outperforming the market and making good progress in improving margins. Continued investment has been made in new online services and geographic expansion.

Revenues and adjusted operating profits increased by 5% and 10% respectively at constant exchange rates, or 4% and 11% excluding acquisitions and disposals. LexisNexis North America saw underlying revenue growth of 4%. Outside the US, International sales growth was 3% held back by the difficult conditions in the corporate sector and Latin America. Operating margins were up 1.2 percentage points to 21.3%, with good operational gearing and improving cost efficiency in part offset by additional investment in new online services and development in Courtlink, the fast growing electronic court access and filing company acquired in 2001.

In US Legal markets, revenues grew by 4%. Online revenue growth was 8%, with continued strong growth in online usage and increasing penetration of the small law firm market. Print and CD sales were flat as the market moves online. The legal directories business again performed well with strong renewals and expanded web services. In US Corporate and Federal markets, revenues increased by 5% with strong growth in risk solutions services more than compensating for the impact of the economic slowdown on the corporate business information market. Underlying operating profit growth at LexisNexis North America was 15%.

The LexisNexis International businesses outside North America saw revenues and adjusted operating profits up 3% and 4% respectively. Online sales grew strongly in all major markets, partly offset by the migration from print and CD product. Underlying sales growth of 3% was held back by weakness in demand from corporate customers and in Latin America. Underlying operating profits grew more slowly at 1% reflecting investment in new online services and expansion of the business in Germany. In part this investment has been funded by rationalisation of editorial and production processes within Europe during the second half of the year.

LexisNexis is continuing to expand its content and online services as well as pushing into new markets. In the US, we have progressively expanded our coverage of annotated codes for individual states and are well advanced in developing modern summaries of all federal and state cases. We continue to add to the functionality of our online services, and are expanding the electronic filing and court access services acquired with Courtlink. We also continue to expand internationally through internal development and acquisition, and the building of our global online delivery platform. The acquisition of Quicklaw gave us the leading position in online legal information in Canada, and MBO Verlag provides an important step up in developing our business in Germany.

The outlook for the LexisNexis business is good, despite the pressure of the economic slowdown on legal markets. Product innovation and the gains in customer productivity offered by our growing online services are stimulating continued growth. The focus on increasing operational efficiency is expected to deliver further margin improvement whilst investment levels are maintained.