Final Results

Actif Group PLC
19 October 2005

                                                                 19 October 2005



                                Actif Group plc

              Preliminary results for the year ended 30 July 2005

Summary

•         Turnover down 6.1% to £25.9m (2004: £27.6m)

•         Composite gross margins have decreased to 40.5% from 41.6%

•         Total operating costs decreased by 4.3% to £10.8m (2004: £11.3m)

•         Operating loss of £336,000 (2004: profit of £189,000)

•         Loss before tax of £460,000 (2004: profit of £85,000)

•         Basic earnings per share of -0.73p (2004: 0.10p)

•         Closing stock reduced by 24% to £2.9m (2004: £3.8m)

•         Net debt increased by 46.7% to £1.99m (2004: £1.36m)

•         New store opening programme continued




Commenting on these results, David Brock, Chairman said:

'Clearly it is very disappointing to report on a loss-making year. However, in a
tough market environment, we have taken quick and decisive action to implement a
business reorganisation plan to ensure the Group is in a strong position to ride
out this consumer downturn. Our core product offer, focusing on Elle's heritage
as a stylish, casual brand, continues to have broad market appeal and a
well-established distribution network. Our improving strength in design and
sourcing will enable us to further differentiate our offer, which we believe is
key to the continued appeal of the Elle brand in a very competitive UK clothing
market.

We will seek further opportunities to reduce our cost base without compromising
these core strengths, and in so doing will ensure we are positioned to take
advantage of any improvement in market conditions through 2006'.

Enquiries:
           Actif Group plc (020 7436 0222)                           Hudson Sandler (020 7796 4133)
           Mark Evans, Chief Executive (m: 07977 018007)             Wendy Baker






Chairman's statement


The results for the twelve month period to 30 July 2005 reflect a difficult year
for the Group, during which we have experienced a worsening retail environment
characterised by weak demand and rising property costs.

As we reported in our interim statement in April, we saw an encouraging first
half with positive like for like sales growth in our prime Elle retail stores
and further growth in our wholesale Elle business. The second half was much
tougher, with weak demand driving retail sales down by 14% in this period and
wholesale customers being cautious about placing orders for the autumn / winter
2005 season.

These trading results have masked some of the improvements the Company has made
in the product offer under the leadership of our new Commercial Director,
Catherine Scorey. In the current climate it will take some time for these
improvements to show through in the trading performance and we are therefore
taking prudent actions to reduce the cost base and manage stock levels tightly
during this period.

Results

In the twelve months to 30 July 2005, total Group turnover decreased by 6.1% to
£25.9m (2004: £27.6m).  Composite gross margins have decreased to 40.5% from
41.6% and costs have decreased by 4.3% to £10.8m, representing 41.8% of sales
(2004: 40.9% of sales).  The net result was a loss before tax of £460,000 (2004:
profit before tax of £85,000) and the basic loss per share was 0.73p (2004:
earnings per share of 0.1p). The Group saw a net cash outflow from operating
activities of £0.09m, and net debt rose to £1.99m (2004: £1.36m) following net
capital expenditure of £0.4m (2004: £0.6m).

Elle Retail

Total retail sales in the period decreased by 9.7% to £13.9 m (2004: £15.4 m),
which is down by 6.5% like-for-like on an underlying basis. Retail gross margins
are slightly below the comparative period at 57.5% (2004: 58.0%), reflecting an
increased need for promotional activity to drive sales and the impact of
reducing terminal stocks from prior seasons.

Two new Elle stores opened in the period under review, and one loss-making store
was closed. We also opened three new concessions within the House of Fraser
department store group and, following the collapse of the Allders Department
Store group, closed three Elle concessions.

Elle Wholesale

Wholesale revenues from our Elle collections in the period have increased by
5.7% to £7.6 m (2004: £7.2m) with the sales mix by category being broadly
similar to last year.  Wholesale gross profit margins have decreased to 28.8%
(2004: 30.9%) mainly as a result of clearing unsold stock from Spring / Summer
2004. Our wholesale customers are clearly not immune to the tougher trading
environment and both large buying groups and smaller independent retailers are
showing a greater degree of caution in placing orders for future seasons.

Costs

Operating costs have decreased by 4.3% to £10.8m (2004: £11.3m), which
represents 41.8% of sales (2004: 40.9% of sales). Retail operating costs
decreased by 7.5% to £7.3m (2004: £7.9m), equating to 52.5% of retail sales
(2004: 51.3%). This adverse movement on the ratio to sales is reflective of the
decrease in retail sales, compounded by the addition of new retail space, where
we have yet to see mature revenues. Total central overhead increased by 5.9% to
£3.6m (2004: £3.4m) or 13.9% of total sales (2004: 12.3%).

As we outlined in our trading update in early September, the Board has developed
plans to realign the Group's cost base to reflect the tougher trading
environment. These plans have largely been implemented, which will lead to
savings in the region of £600k in the new financial year and a further £150k of
savings in the subsequent year.

Cash flow

There was a net cash outflow from operating activities of  £0.09m (2004: inflow
of £0.6m).

Net capital expenditure decreased to £0.4m (2004: £0.6m) as a result of the
scaling back of the prime store opening programme. Projects completed in the
year include the new stores in Croydon and Livingston; 3 new concessions; and
the refit of the York store, following the completion of a new lease.

Total working capital increased by 1.8% to £3.74m (2004: £3.67m). This increase
in working capital is a combination of the following: a 24.4% decrease in stock
levels to £2.9m (2004: £3.8m), reflecting tighter stock purchasing and actions
taken to clear historic terminal stocks; a 13.6% decrease in debtors to £3.8m
(2004: £4.4m) and an 35.0% decrease in trade and other creditors to £3.0m (2004:
£4.5m), mainly due to the decrease in stock levels and an increase in sourcing
from Portugal to take advantage of shorter leadtimes and reduce the uncertainty
of supply from China in light of quota changes.

As a result of the movements outlined above, net debt has increased by 46.7% to
£1.99m (2004: £1.36m), resulting in a gearing ratio at the year end of 52%
(2004: 32%).

Our People

On behalf of the Board I would like to thank the Actif Group team. This has been
a very challenging year and the recent business reorganisation was a difficult
and unsettling time for everyone. The team is demonstrating its resilience
together with clear enthusiasm for the Elle brand and real determination to make
the business a success.

Board Changes

Catherine Scorey, who joined the company as commercial director in December
2004, was appointed to the Board on 1st August 2005. The Board is pleased by the
progress Catherine is making in revitalising the Elle ranges.

Current trading and prospects

Trading since the start of the new financial year has continued on a similar
trend to that experienced in the second half of last year with no apparent
improvement in consumer demand and warm weather suppressing demand for Autumn
ranges.

September saw the opening of our latest Elle store in the new Chapelfield centre
in Norwich. We are committed to opening a further store at the McArthur Glen
Designer Outlet Centre in Ashford, Kent in October and are considering further
opportunities. We are also committed to expanding the number of Elle concessions
during the year.

In this tough market we have taken quick and decisive action to implement a
business reorganisation plan to ensure the Group is in a strong position to ride
out the consumer downturn. We will seek further opportunities to reduce our cost
base without compromising our core strengths and in so doing will ensure we are
positioned to take advantage of any improvement in market conditions through
2006.

David Brock
Chairman

19 October 2005






Group profit and loss account
For the year ended 30 July 2005

                                                                                                Audited         Audited
                                                      Notes                                        2005            2004
                                                                                                  £'000           £'000
Turnover                                                2                                       25,941          27,643
Cost of sales                                                                                  (15,441)        (16,135)
                                                                                             __________       _________
Gross profit                                                                                    10,500          11,508
Other operating expenses                                                                       (10,836)        (11,319)
                                                                                             __________       _________

Operating (loss) / profit                                                                         (336)            189

Interest payable and similar charges                                                              (124)           (104)
                                                                                             __________       _________
(Loss) / profit on ordinary activities before                                                     (460)             85
taxation
Taxation                                                                                           (22)            (22)
                                                                                             __________       _________
(Loss) / profit for the financial year                                                            (482)             63
                                                                                             __________       _________

Earnings per share                                      3

Basic earnings per share                                                                        (0.73p)           0.10p
                                                                                             __________       _________
Diluted earnings per share                                                                      (0.73p)           0.09p
                                                                                             __________       _________



All amounts relate to continuing activities.



Group balance sheet
As at 30 July 2005


                                                                                                Audited         Audited
                                                                                                   2005            2004
                                                                                                  £'000           £'000
Fixed assets
Intangible assets                                                                                   39              42
Tangible assets                                                                                  2,014           1,896
                                                                                             __________       _________
                                                                                                 2,053           1,938
Current assets
Stocks                                                                                           2,902           3,840
Debtors                                                                                          3,780           4,374
Cash at bank and in hand                                                                             6               6
                                                                                             __________       _________
                                                                                                 6,688           8,220
Creditors: amounts falling due within one year                                                  (4,442)         (5,270)
                                                                                             __________       _________
Net current assets                                                                               2,246           2,950
                                                                                             __________       _________
Total assets less current liabilities                                                            4,299           4,888
Creditors: amounts falling due after more than one year                                           (503)           (610)
                                                                                             __________       _________
Net assets                                                                                       3,796           4,278
                                                                                             __________       _________
Capital and reserves
Called up share capital                                                                            666             666
Share premium account                                                                            4,326           4,326
Other reserves                                                                                      89              89
Profit and loss account                                                                         (1,285)           (803)
                                                                                              _________       _________
Shareholders' funds - all equity                                                                 3,796           4,278
                                                                                             __________       _________



Group cash flow statement
For the year ended 30 July 2005

                                                                                               Audited          Audited
                                                                            Notes                 2005             2004
                                                                                                 £'000            £'000
Net cash (outflow) / inflow from operating activities                         4                   (89)             554
Returns on investments and servicing of finance                                                  (124)            (104)
Capital expenditure and financial investment                                                     (420)            (646)
                                                                                            __________       __________
Net cash outflow before financing                                                                (633)            (196)
Financing                                                                                        (215)             645
                                                                                            __________       __________
(Decrease) / increase in cash in the year                                     5                  (848)             449
                                                                                            __________       __________



Notes:

1.      Basis of preparation

This summary financial information comprises that of Actif Group plc and its
subsidiaries for the year ended 30 July 2005. The preliminary announcement,
which does not constitute statutory accounts within the meaning of Section 240
of the Companies Act 1985, is an extract from the Group statutory accounts for
the year ended 30 July 2005, which will be delivered to the Registrar of
Companies in due course. The auditors have issued an unqualified opinion on the
financial statements for the year ended 30 July 2005, and the year ended 31 July
2004 have been extracted from the statutory accounts for that period, which have
been delivered to the Registrar of Companies.

2.      Segment information

The turnover and profit before taxation are attributable to the Group's
principal activity, being the design, contracted manufacture, wholesale and
retail of high quality fashion clothing.

a)         Analysis of turnover by destination:
                                                                                               Audited         Audited
                                                                                                  2005            2004
                                                                                                 £'000           £'000
United Kingdom                                                                                  25,227          26,430
Overseas - European community                                                                      687           1,075
Overseas - Non European community                                                                   27             138
                                                                                            __________      __________
                                                                                                25,941          27,643
                                                                                            __________      __________


b)         Classes of business


Year ended 30 July 2005                           Retail            Wholesale Third party Sourcing                Group
                                                       £                    £                    £                    £
                                                   £'000                £'000                £'000                £'000
Turnover                                         13,871                7,610                4,460               25,941
Cost of sales                                    (5,894)              (5,417)              (4,130)             (15,441)
                                              __________           __________           __________           __________
Gross profit                                      7,977                2,193                  330               10,500
                                              __________           __________           __________           __________
Distribution costs - retail                                                                (7,440)              (7,440)
Common costs                                                                                                    (3,396)
                                                                                                             __________
Operating loss                                                                                                    (336)
Net interest payable                                                                                              (124)
                                                                                                             __________
Loss before taxation                                                                                              (460)
                                                                                                             __________




Year ended 31 July 2004                           Retail            Wholesale         Third party                 Group
                                                                                         Sourcing
                                                       £                    £                   £                     £
                                                   £'000                £'000               £'000                 £'000
Turnover                                         15,368                7,202               5,073                27,643
Cost of sales                                    (6,460)              (4,978)             (4,697)              (16,135)
                                              __________           __________          __________            __________
Gross profit                                      8,908                2,224                 376                11,508
                                              __________           __________          __________            __________
Distribution costs - retail                                                               (8,499)               (8,499)
Common costs                                                                                                    (2,820)
                                                                                                             __________
Operating profit                                                                                                   189
Net interest payable                                                                                              (104)
                                                                                                             __________
Profit before taxation                                                                                              85
                                                                                                             __________
All other common costs have not been apportioned as this would be misleading.


3.      Earnings per ordinary share

The calculations of earnings per share is based on the earnings for the
financial period attributable to equity shareholders and the weighted average
number of ordinary shares as follows:


Weighted average number of shares:                                                                 2005            2004

                                                                                                 Number          Number
For basic earnings per share                                                                 66,171,471      65,602,836
                                                                                             __________      __________
For diluted earnings per share                                                               67,624,651      69,304,719
                                                                                             __________      __________



There is no potential dilution in the year under review.


                                                                                                Basic/diluted
                                                                                                  2005            2004
                                                                                                 £'000           £'000
(Loss) / profit for the financial year                                                           (460)             85
Less taxation                                                                                     (22)            (22)
                                                                                            __________      __________
                                                                                                 (482)             63
                                                                                            __________      __________

4.      Reconciliation of operating profit to operating cash flows


                                                                                               Audited         Audited
                                                                                                  2005            2004
                                                                                                 £'000           £'000
Operating (loss) / profit                                                                        (336)            189
Depreciation charges                                                                              475             697
Amortisation of goodwill                                                                            3               3
Profit on disposal of assets                                                                     (172)             (4)
Decrease/(increase) in stock                                                                      938            (455)
Decrease/(increase) in debtors                                                                    571            (587)
(Decrease)/increase in creditors                                                               (1,568)            711
                                                                                            __________      __________
Net cash (outflow) / inflow from operating activities                                             (89)            554
                                                                                            __________      __________


5.      Reconciliation of net cash flow to net debt


                                                                                              Audited          Audited
                                                                                                 2005             2004
                                                                                                £'000            £'000
(Decrease) / increase in cash in the year                                                       (848)             449
Cash outflow/(inflow) from decrease/(increase) in debt and lease financing                       215             (745)
                                                                                           __________       __________
Change in net debt resulting from cash flows                                                    (633)            (296)
New finance leases                                                                                 -               56
                                                                                           __________       __________
Movement in net debt in year                                                                    (633)            (240)
Net debt at 1 August 2004                                                                     (1,356)          (1,116)
                                                                                           __________       __________
Net debt at 30 July 2005                                                                      (1,989)          (1,356)
                                                                                           __________       __________





6.      Annual General Meeting

The Annual General Meeting will be held at 29 Cloth Fair, London EC1A 7NN on 20
December 2005 at 12 noon.



7.      Report and Accounts

The annual report and accounts for the year ended 30 July 2005 is being sent to
shareholders and will be available, free of charge, from the registered office
of the Company at 20 Little Portland Street, London W1W 8AA.


                      This information is provided by RNS
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