Interim Results

Associated British Engineering PLC
11 November 2002


                                     A B E

                       ASSOCIATED BRITISH ENGINEERING PLC

                              INTERIM REPORT 2002


                                     A B E


                     C H A I R M A N ' S  S T A T E M E N T


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The Group made a pre-tax loss of £101,000 in the six months to 30 September 2002
compared with a loss of £190,000 in the same period last year. The trading
position in British Polar Engines, the remaining operating subsidiary, has not
been good enough to cover the group's costs and we have continued to make
savings where possible.

In my statement in the annual report for the year ended 31 March 2002 I drew
shareholders attention to the FRS 17 valuation of the assets and liabilities of
the Pension Fund at 1 April 2002 which resulted in a deficit of £1,763,000.
Initial indications of the MFR and actuarial valuations of the pension fund as
at 1 April 2002 show significant deficits and the Board with its pensions
advisers is evaluating the liability, its timing and the impact on the current
group. In addition we are now aiming to hold the continuing employer
contributions at the current level.

The Board has also agreed that the non-executive director's fees should be
reduced to £5,000 per annum each from 1 October 2002, other than the Chairman. I
will not be continuing as a director or Chairman and David Brown will become
Chairman at his current fee level. I through my associated interests will remain
as a substantial shareholder.

The property at St Helens, Lancashire, which is held as a current asset, has
been on the market and we now have a cash offer at above the book figure of
£120,000. Once contracts have been exchanged shareholder approval will be sought
and hopefully that circular will be with you shortly.

As reported in my statement in the annual report for the year ended 31 March
2002, the Board has been looking to a possible disposal of British Polar
Engines. Two parties made conditional offers but the higher one decided not to
proceed. The other offer is from an MBO team which involves all the directors of
British Polar Engines including myself. We are now finalising arrangements to
acquire the business on terms which are acceptable to the Board. This will be
the subject of a circular and shareholder approval in due course.

The rationalisation and reduction of the cost base in the group will have
been largely completed following the sale of the British Polar Engines business.
I therefore have pleasure in handing over the Chairmanship to David Brown.




                                                                 RA Pearce Gould

                                                                        Chairman

11 November 2002

63 Church Street

Harston

Cambridge

CB2 5NP






                                     A.B.E


                      UNAUDITED RESULTS FOR THE SIX MONTHS

                              TO 30 SEPTEMBER 2002
    Audited year                                                                6 months to       6 months to
      to 31.3.02                                                                  30.9.2002         30.9.2001
           £000s                                                                      £000s             £000s
           3,007    Turnover                      - Continuing operations             1,241             1,586
             580                                  - Discontinued operations               0               336
           3,587                                                                      1,241             1,922
           (344)    Operating loss                - Continuing operations             (119)              (63)
           (176)                                  - Discontinued operations               0              (82)
           (520)                                                                      (119)             (145)
           (340)    Loss arising on closure of trading division                           0              (74)
                    Loss on ordinary activities before finance costs
           (344)                                  - Continuing operations             (119)              (63)
           (516)                                  - Discontinued operations               0             (156)
           (860)                                                                      (119)             (219)
              48    Net finance income            - Continuing operations                18                29
               0                                  - Discontinued operations               0                 0
              48                                                                         18                29
                    Loss on ordinary activities before taxation
           (296)                                  - Continuing operations             (101)              (34)
           (516)                                  - Discontinued operations               0             (156)
           (812)                                                                      (101)             (190)
               0    Taxation                                                              5                 0
           (812)    Loss on ordinary activities after taxation                         (96)             (190)
            (51)    Non-equity dividends                                               (26)              (26)
           (863)    Retained loss                                                     (122)             (216)
                    Loss per ordinary share
            (26) p                                - Continuing operations               (9) p             (4) p
            (66) p                                - Basic                               (9) p            (16) p
                    Dividends per share accrued but not paid
             7.0 p  7% preference                                                       3.5 p             3.5 p
             8.0 p  8% preference                                                       4.0 p             4.0 p
               -    Ordinary                                                              -                 -



                                     A.B.E


                         UNAUDITED GROUP BALANCE SHEET

                            AS AT 30 SEPTEMBER 2002
    Audited year
       31.3.2002                                                                  30.9.2002     30.9.2001
           £000s                                                                      £000s     £000s
                       FIXED ASSETS
             553       Tangible assets                                                  492             724
                       CURRENT ASSETS
           1,400       Stock                                                          1,285           1,638
             116       Properties held for sale                                         120
             621       Debtors - amounts falling due within one year                    696             925
           1,518       Cash at bank and in hand                                       1,285           1,578
           3,655                                                                      3,386           4,141
                       CURRENT LIABILITIES
             991       Creditors - amounts falling due within one year                  762           1,015
           2,664       Net current assets                                             2,624           3,126
           3,217       Total assets less current liabilities                          3,116           3,850
              15       Creditors - amounts falling due after one year                    13              23
              27       Provisions for liabilities and charges                            24              29
           3,175       Net assets                                                     3,079           3,798
                       CAPITAL AND RESERVES
           3,339       Called up share capital                                        3,339           3,339
           5,038       Share premium account                                          5,038           5,038
              11       Other reserves                                                    11              11
         (5,213)       Profit and loss account                                      (5,309)         (4,590)
           3,175       Total shareholders' funds                                      3,079           3,798
           2,361       Equity shareholders' funds                                     2,239           3,009
             814       Non-equity shareholders' funds                                   840             789
           3,175       Total shareholders' funds                                      3,079           3,798





                                     A.B.E


                       UNAUDITED GROUP CASHFLOW STATEMENT

                    FOR THE SIX MONTHS TO 30 SEPTEMBER 2002
  Audited year                                                                             6 months to       6 months to
    to 30.3.02                                                                                 30.9.02           30.9.01
         £000s                                                                                   £000s             £000s
               OPERATING ACTIVITIES
         (314) Cash outflow from operating activities                                            (109)             (275)
               RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
            52 Finance income received                                                              18                30
           (3) Finance costs paid                                                                    -                 -
           (1) Finance cost element of finance lease rental payments                                 -               (1)
            48 Net cash inflow from returns on investments and servicing of finance                 18                29
               TAXATION
           (5) UK Taxation recovered/(paid)                                                          5               (5)
               CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
          (42) Purchase of tangible fixed assets                                                     -              (31)
             3 Net proceeds on sale of tangible fixed assets                                        16                 -
          (39) Net cash inflow/ (outflow) from capital expenditure and financial                    16              (31)
               investment
               ACQUISITIONS AND DISPOSALS
         (148) Acquisition of Kelvin Diesels                                                         -             (148)
          (74) Discontinued ABE Diesels operation                                                (102)                 -
             - Properties held for sale                                                            (4)                 -
         (222) Net cash outflow from acquisition and disposals                                   (106)             (148)

         (532) Cash outflow before financing                                                     (176)             (430)
               FINANCING
          (12) Repayment of debt                                                                   (6)               (5)
           (6) Capital element of finance lease repayments                                         (2)               (6)
          (18) Net cash outflow from financing                                                     (8)              (11)
         (550) Decrease in cash in the period                                                    (184)             (441)



                                     A.B.E


                      UNAUDITED RESULTS FOR THE SIX MONTHS

                              TO 30 SEPTEMBER 2002


The calculation of loss per ordinary share is based on:

                                                   2002                                         2001
                                       Loss  Weighted average    Per shares         Loss Weighted average     Per shares
                                             number of shares  amount pence              number of shares   amount pence
                                      £'000                                        £'000
       Basic loss per share           (122)         1,313,427           (9)        (216)        1,313,427           (16)

       Discontinued activities            -         1,313,427             -        (156)        1,313,427           (12)

       Loss per share on              (122)         1,313,427           (9)         (60)        1,313,427            (4)
       continuing operations


 1. The comparative figures for the year to 31 March 2002 are abridged from the
    accounts for that year and do not constitute full accounts within the
    meaning of Section 240 of the Companies Act 1985 (as amended). Statutory
    accounts for that period, on which the Auditors gave an unqualified opinion,
    have been delivered to the Registrar of Companies.
 2. This interim report has been prepared in accordance with the accounting
    policies adopted in the latest published accounts. This interim report has
    neither been audited nor reviewed by our auditors.
 3. As required by Financial Reporting Standard 4 the non-equity dividends have
    been charged to the profit and loss account and then added back to reserves
    because the company does not have sufficient reserves to make this payment.
    The cumulative amount of preference dividends unpaid at 30 September 2002
    was £128,000.



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