Final Results

AAF INDUSTRIES PLC
16 August 1999


Preliminary results for the year end 30 June 1999

CHAIRMAN'S REPORT 

Statutory Results

The statutory results cover the 12 month period to the 30 June 1999 and while
the comparative figures in the Annual Report covers an 18 month period, it is
considered more meaningful and of greater benefit to the shareholders for this
report to make comparisons with the previous 12 month period.

Overview
The results for the year to 30 June 1999 reflect a considerable improvement on
those of the previous year and the highlights were:
       
1       Earnings per share increased 74% from 7.80p to 13.62p
2       Turnover increase of 13% to £32.6m.
3       Return on average net assets managed 23.7% (1998 16.8%).

The Group's commitment to delighting the customer through delivering quality
products and service has become the focus of the company and for all its
people.   In order to progress this objective all the processes of the
business were overhauled in order to identify the opportunities for
improvement.   This review covered the computer systems, the sales and
marketing programmes, the factory, quality systems and in short all the
activities of the business.   This will be an ongoing commitment and has
already begun delivering benefits for our customers.

As always, the focus on reducing the cost base of the company continued with
considerable success.   The further re-engineering of the factory has
increased capacity with very little increase in factory fixed costs.   The
above efforts resulted in gross margins to sales recording a further increase
from 29.0% to 30.8%.

The cash flow management continues to receive focus and after adjusting for
the impact on the current years cash flow of an advance payment of £2.0m
received last year, the results were better than expected.   This strong cash
flow enabled £3.1m to be spent on capital expenditure which mainly comprised
additions to the Premier hire fleet, additional scaffolding as well as plant
and computer hardware and software. 

During the year Waco International Limited of South Africa (formerly Forward
Corporation Limited) increased its shareholding from 50.1% to 59.0%.   This is
a welcome move as this illustrates further support from the company's major
shareholder with its global industrial service business.

Results
The results for 1999 represent a further significant annual improvement
compared to the 12 months ended 30 June 1998.   Turnover increased to £32.6m
which was an increase of £3.8m (13%) over 1998, mainly as a result of the
increase in the activities of Premier Modular Building and Formscaff.

Profit before tax increased to £3.2m from £1.8m in 1998.   After interest and
taxation, earnings per share increased from 7.80p to 13.62p, an increase of
74%.

We committed last year to spend on capex in the 1999 year at a similar level
to 1998 (£3.0m) and we ended up spending £3.1m, which includes £0.4m of lease
financed capital expenditure.  It is intended that  capex will exceed this
level in the year 2000, mainly in increasing the size of the hire fleet,
scaffolding and the business infrastructure.

All the operations made a positive contribution to the Group profit, with
Formscaff and Premier performing well, compared to the previous year.

Employees
The achievements of the past year would not have been possible without the
commitment and dedication of all of our people at AAF.   In times of major
change which has challenged all of us, there has been a positive attitude to
seeking out the best way to do things and to acquire new skills.   We will
continue to invest in the welfare of our employees by providing better working
conditions, enhanced facilities and security of employment that goes hand in
hand with delighting our customers.    I would like to thank everyone at AAF
for a job well done and wish them the best for the year ahead.

We are pleased to announce the appointment of Stephen Goodburn as a Director
and Steven Edmund as the Finance Director of the company. 

Andrew Walker and his team have continued their extra-ordinary efforts in
leading the company along the World Class path.  The results achieved in the
current year reflect the success of their efforts.

My fellow directors have offered wise counsel and I thank them for their
invaluable contribution to the Board's deliberations.   I look forward to
continue working with them in the ensuing year.

Dividend
The Board has not recommended a dividend for the year under review as it was
decided to rather apply all financial resources to funding the expected growth
of the company in the coming year.

Funding
The Group ended the year with net cash of £0.1m.   With the improved levels of
profitability and unutilised facilities of £4.0m there are adequate financial
resources to fund the growth of the Group this new year.

Prospects
The Formscaff scaffolding business commences the new year with a reduced but
adequate order book generally at satisfactory margins.   The orders held in
commercial work should enable Formscaff to realise a satisfactory result.

Lab Furnishings, while a small business, commences the year with a very
satisfactory order book and is expected to improve on the previous year.

The Premier Sales, Contracting and Hire businesses should continue to benefit
from the various initiatives referred to above, as well as its very
satisfactory order book.

Interest charges and corporate costs should not differ materially but it is
likely that tax may be paid for the first time as the assessed losses are
utilised.  Despite this the overall earnings per share for the year 2000
should show a further satisfactory improvement.

M J SMITHYMAN 
CHAIRMAN 
 
AAF INDUSTRIES PLC                            
CONSOLIDATED PROFIT AND LOSS ACCOUNT                            
for the 12 months ended 30 June 1999                            
                            
                            
                            
                                                1999                    1998  
                                           (12 months)             (18 months)
                                                £'000                   £'000 
      
Turnover                                      32,646                   42,311 
           
Cost of sales                                (22,594)                 (30,619)
      
                            
Gross profit                                  10,052                   11,692 
      
                            
Net operating expenses                        (6,750)                  (9,938)
      
                            
Profit on ordinary activities before 
interest                                       3,302                    1,754 
      
                            
Net interest payable and similar charges        (148)                    (278)
      
                            
Profit on ordinary activities before 
taxation                                       3,154                    1,476 
      
                            
Tax on profit on ordinary activities              (9)                     (49)
      
                            
Retained profit for the year/period            3,145                    1,427 
      
                            
Earnings per share                            
- Basic                                        13.62p                   6.18p
- fully diluted                                13.62p                   6.18p
                            
All of the results arise from continuing operations

CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the 12 months ended 30 June 1999


                                                          1999           1998
                                                    (12 months)    (18 months)
                                                         £'000          £'000


Profit for the financial year                            3,145          1,427

Exchange profits/(losses) taken to other reserves           67            (17)


Total recognised gains and losses relating to the year   3,212          1,410
                     
CONSOLIDATED BALANCE SHEET                                   
                                   
                                   
                                                 30 June       30 June        
                                                    1999          1998        
                                                    £000          £000        

Fixed Assets                                   
                                   
Tangible assets                                   14,929        14,440        
                                              
Current Assets                                   
                                   
Stocks                                               714           255        
                                          
Debtors                                            6,740         5,841        
                                      
Cash at bank and in hand                             123         1,103        
      
                                                   7,577         7,199        
     
Creditors: amounts falling 
due within one year                               (7,027)      (9,536)        

Net current assets/
(liabilities)                                        550       (2,337)        
   
Total assets less current 
liabilities                                       15,479       12,103         
     
Creditors: amounts falling 
due after more than one year                        (543)        (486)        
                                        
Net Assets                                        14,936       11,617         
                              
Equity Capital and Reserves                                                   
                  
Called up equity share 
capital                                             1,731        1,731        
                             
Share premium account                               4,849        4,849        
                                       
Other reserves                                      6,603        6,536        
         
Profit and loss account                             1,753       (1,499)       
            
Equity shareholders' funds                         14,936       11,617        
      
AAF INDUSTRIES PLC                     
CONSOLIDATED CASH FLOW STATEMENT                     
for the 12 months ended 30 June 1999                     
                     
                                                     1999           1998      
                                               (12 months)    (18 months)     
                                                     £000           £000      
 
                     
Net cash inflow from operating activities           2,039          6,307      
 

Returns on investments and servicing of finance                     
                     
Interest received                                     188            193      
Interest paid                                        (302)          (365)     
 
Interest element of finance lease rentals             (34)          (106)     
                        
Net cash outflow from returns on investments 
and servicing of finance                             (148)          (278)     
                      
Taxation paid                                        (241)           (49)     
 
Net cash outflow from taxation paid                  (241)           (49)     

 
Capital expenditure                     
                     
Proceeds on disposal/closure of operations              0             95      
 
Purchase of tangible fixed assets                  (2,667)        (3,478)     
Sale of tangible fixed assets                         546            519      
  
Net cash outflow from capital expenditure          (2,121)        (2,864)     
 
Net cash (outflow)/inflow before financing           (471)         3,116      
        
Financing                     
                     
Expenses written off against share premium account      0            (10)     
 
Repayment of bank loans                               (78)           (97)     
                      
Capital element of finance leases and hire 
purchase repayments                                  (431)        (1,610)     
                      
Net cash outflow from financing                      (509)        (1,717)     
                      
(Decrease)/increase in cash                          (980)         1,399      
                      
AAF INDUSTRIES PLC                                          
CONSOLIDATED PROFIT AND LOSS ACCOUNT                                          
FIVE YEAR SUMMARY (Unaudited)                                         
                                          
                                          
                                    1995     1996     1997     1998     1999  
                                    £000     £000     £000     £000     £000  
             
                                          
Turnover                          22,590   32,452   28,991   28,875   32,646  
                                     
Cost of sales                    (16,920) (25,801) (21,232) (20,507) (22,594) 
                                 
Gross profit                       5,670    6,651    7,759    8,368   10,052  
                                               
Net operating expenses            (8,926)  (6,362)  (8,766)  (6,402)  (6,750) 
                                          
Operating profit/(loss)           (3,256)     289   (1,007)   1,966    3,302  
                                    
Exceptional items                   (383)    (611)    (398)       0        0  
                                          
Profit/(loss) before interest     (3,639)    (322)  (1,405)   1,966    3,302  
     
                                          
Interest paid                       (342)    (198)    (271)    (162)    (148) 
     
                                          
Profit/(loss) before tax          (3,981)    (520)  (1,676)   1,804    3,154  
     
                                          
Taxation paid                        (91)     (41)    (129)      (4)      (9) 
     
                                          
Profit/(loss) after tax           (4,072)    (561)  (1,805)   1,800    3,145  
     
Basic earnings/(loss) per share 
(pence)                           (17.64)   (2.43)   (7.82)    7.80    13.62  
     
All the figures for periods prior to 30 June 1999 have been restated to 30
June for comparative purposes                                          
                                          
Notes:

1. Basis of Preperation

The preliminary announcement has been prepared on the basis of the accounting
policies as set out in the financial statements for the 18 months ended 30
June 1998, except that FRS12 has been adopted and balance sheet comparatives
restated.

The financial information set out herein does not constitute the company's
statutory financial statements for the 18 months ended 30 June 1998 or the
year ended 30 June 1999. The financial information for the 18 months ended 30
June 1998 is derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors reported on those
financial statements; their report was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.

As at the date of this announcement, the auditors have not reported  on the
statutory accounts for the year ended 30 June 1999, nor have such statutory 
accounts been delivered to the Registrars of Companies. Statutory accounts for
the year ended  30 June 1999 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.