Final Results

Stanelco PLC
4 February 2002



                                                          Monday 4 February 2002


STANELCO PLC - PRELIMINARY RESULTS


  • Stanelco, the Rf (radio frequency) applications group, which uses
    high-power radio waves to heat, melt, dry and bond materials together
    rapidly and precisely, reports a 253% increase in pre-tax profit to
    £1,055,000 together with significant progress in its diversification into
    the pharmaceuticals market via its subsidiary, InGel Technologies:


Y/e 31 October                                                     2001        2000          Increase

Turnover (£000)                                                   6,013       3,602             66.9%
Pre-tax profit - before exceptionals (£000)                       1,719         679            153.2%
               - after exceptionals (£000)                        1,055         299            252.8%
Earnings per share - before exceptionals (p)                      0.113       0.037            205.4%
Dividend per share (p)                                             0.01           -               n/a


  • Stanelco joins the dividend list for the first time, reflecting the
    Board's confidence in the progress made in developing Stanelco into a
    valuable technology business.

  • The improved result derives from the supplying of high technology furnaces
    and other equipment and services to the manufacturers of optical fibre,
    primarily for the telecoms market.

  • Stanelco has developed and has patents pending on technology enabling the
    manufacture of capsules from most ingestible polymer materials, permitting
    the encapsulation of pharmaceutical formulations that were incompatible with
    gelatine and the replacement of gelatine as an encapsulation material.

  • In December 2001, R P Scherer Corporation (one of the world's premier drug
    delivery companies, with a leading global position in softgel capsule
    technology) bought 10% of InGel and signed an agreement to license InGel's
    patented capsule-making technology for pharmaceutical applications with an
    option to develop health and nutritional applications.

  • Christopher Mills, Chairman, stated 'The Group has strong prospects,
    despite an anticipated continuing downturn in optical fibre manufacture'.

  • Ian Balchin, Chief Executive, added 'Scherer's expertise in formulating
    pharmaceutical, healthcare and nutritional products for mass production and
    its routes to market complement Stanelco's expertise in Rf and high
    technology equipment.  We expect that successful development will lead to
    substantial royalties for Stanelco and/or the sale of InGel to Scherer'.


Enquiries:

Stanelco PLC
 Ian Balchin (Chief Executive)                                  01489 570991
 Barrie Hozier (Finance Director)                              020-8441 9144

Bankside Consultants Limited
 Charles Ponsonby                                              020-7444 4166



                              CHAIRMAN'S STATEMENT

                       for the year ended 31 October 2001


Results



I am pleased to report strong growth in turnover, profits and cash flow during
the year as set out in this report.

Turnover increased by 67% and pre-tax profit multiplied by 3.5 times.

                                                     Year to 31      Year to 31  
                                                        October         October
                                                           2001            2000
                                                          £'000           £'000

Turnover                                                  6,013           3,602


Trading profit - before exceptional item                  1,809             735
Exceptional research & development expenditure             (664)           (380)
Holding company costs                                      (121)            (72)
Net interest receivable                                      31              16


Profit on ordinary activities before taxation             1,055             299
Taxation                                                   (299)            (55)


Profit after tax                                            756             244
Dividends                                                   (69)              -


Retained profit for the year                                687             244


Prospects

A combination of new management and new products has made a substantial
difference to Stanelco over the past year, during a time of great market
instability. We are anticipating a continuing downturn in optical fibre
manufacture impacting mainly on our sales of consumable items. However, the
Group has strong prospects and an outstanding order book of over £1.3m.

During 2002 we will be endeavouring to grow the new and emerging markets for our
core Rf technologies whilst keeping a sharp focus on cost control. We intend to
maintain a significant research and development activity in support of new and
improved products. As a result of these efforts, Stanelco should become less
dependent upon any one market and be poised to take advantage of any upturn in
optical fibre manufacture.

We established InGel Technologies Limited (InGel) a year ago as a vehicle to
manage the commercial introduction of certain of our patented capsule-making
technology. I am pleased to report that, since the end of the financial year, we
have sold 10% of InGel to R.P. Scherer Corporation (Scherer). InGel has also
concluded a licensing agreement with Scherer concerning the development and
commercial introduction of the capsules for pharmaceutical applications, with an
option to develop health and nutritional applications. We believe that Scherer
is the key route to this market and that our joint relationship through InGel
considerably lowers the business risks for both companies.

The Group continues actively to consider appropriate acquisitions.

Christopher Mills

Chairman                          4th February 2002


                          CHIEF EXECUTIVE'S STATEMENT

                       for the year ended 31 October 2001


Our aim is to continue to develop the Stanelco group into a valuable technology
business...

During the year we have focused on the fundamentals of our business. By helping
our customers to lower their production costs we help ourselves by making our
products more valuable and supplying more of them. This is what lies behind our
improvements in turnover and has enabled us to outpace market growth. We are the
leading independent supplier of high technology furnaces required in the
manufacture of optical fibres.

The nucleus of our business remains the supply of equipment and services to
manufacturers of optical fibre.  We recognise that the market is going through a
downturn, such that during 2002 we could continue to take market share on
reduced revenues. The work we have been doing to generate further growth by
developing new markets and new products, improving efficiency and reducing costs
is feeding through and will help to maintain turnover and profitability during
2002.


RESULTS

I am pleased to report that the Group achieved a turnover of  £6.0m (2000:
£3.6m). After deducting the holding company costs of £121k (2000: £72k) we
achieved a record group operating profit of £1,024k (2000: £283k). We are also
recommending a dividend payment of £69k (0.01p per share). This will be the
first time Stanelco has made a dividend payment. After interest, taxation and
dividend charges there is a retained profit for the group of £687k (2000:
£244k).


PROSPECTS

At this stage in our development we remain focused on ensuring that our core
business is sound and poised to take advantage of the next upturn. We are very
excited by the progress that InGel is making with capsule-forming technology and
of the commercial potential for the capsules and equipment. We are also pursuing
relatively low risk routes towards growing the business; in particular, by
applying our core technology to other markets that management is already
familiar with, such as plastics and waste packaging.

You may also recall that we are targeting three areas in order to improve and
grow the existing business:


•   Diversification into new markets based upon core competencies

Healthcare: We have developed and have patents pending on technology that
enables us to form capsules from most ingestible polymer materials.  We regard
this as a platform technology with many potential applications.  We are pursuing
the development of new dose-forms for pharmaceuticals.  It is now possible to
encapsulate new pharmaceutical formulations that were incompatible with
gelatine.  Our technology also enables gelatine to be replaced as the
encapsulation material.

We can form accurately dosed capsules using Radio frequency (Rf) technology to
join the two halves of the capsule together.  Rf technology is already a
well-accepted process in the pharmaceutical industry - being used to attach
foils to blister packs  - it sterilises as it seals and is compatible with
pharmaceutical Good Manufacturing Practice (GMP). This should help us
considerably in attaining regulatory approvals.

We established InGel last year as a vehicle to develop and commercialise our
capsule making technology. I am pleased to tell you that since my last report in
June 2001 we have entered into contract with Scherer, which has purchased a 10%
interest in InGel. InGel has also licensed Scherer to commercialise the capsule
making technology for pharmaceutical applications with an option to develop
health and nutritional applications. Scherer is one of the world's premier drug
delivery companies and has the leading global position in softgel capsule
technology. Scherer is part of the Pharmaceutical Technologies & Services
division of Cardinal Health, Inc. Cardinal is a leading provider of products and
services supporting the health-care industry. Cardinal Health companies develop,
manufacture, package and market products for patient care; develop drug-delivery
technologies; distribute pharmaceuticals, medical, surgical and laboratory
supplies; and offer consulting and other services that improve quality and
efficiency in health care. The company, which is headquartered in Dublin, Ohio,
employs more than 49,000 people on five continents and produces annual revenues
of more than US$40 billion.

Scherer's expertise in formulating pharmaceutical, health and nutritional
products for mass production and its routes to market complement Stanelco's
expertise in Rf and high technology equipment. We expect that successful
development will lead to substantial royalties for Stanelco and/or the sale of
InGel to Scherer.

Scherer paid £563,365 for the first 5% of InGel and will pay a deferred
consideration for the second 5% of InGel, which varies depending upon the
Stanelco share price. For illustration only, Scherer will pay £566,634 for the
second 5% based upon a Stanelco share price of 2.75 pence. Scherer has also
purchased new shares in Stanelco and currently owns 3% of the Company.

Investment in InGel:  InGel's initial development costs are to be financed
through the recently completed sale of equity in InGel to Scherer and by a loan
from Stanelco. We expect to expense a proportion of InGel's costs during the
development phase to its profit and loss account. InGel will be loss-making
during this phase as it invests in developing commercial equipment and products.
Since InGel's results will be consolidated into Stanelco's accounts this will
depress the profits recorded for the Group, even though InGel and Stanelco have
raised cash to fund its activities. Similarly, if successful, InGel shall
receive the majority of its income through royalties with little additional
costs. These royalties would be material to the Group. We shall therefore be
reporting the Group's figures both before and after these effects.

Plastic welding: We are applying our heating technology to the joining and
sealing of plastics to form high integrity seals for applications where safety
is a prime concern. We expect this area to develop throughout the year.


•    Low risk improvements

We have become the leading independent supplier of both the zirconia and
graphite type furnaces for optical fibre manufacture. Sales of our new graphite
furnaces increased during the year and we are currently working on further
furnace products to help lower the unit cost of fibre production and deliver the
best value solutions to our customers.

We have recently completed our project to optimise factory floor space. This has
given us in excess of 25% more capacity that will be used by both Stanelco Fibre
Optics and InGel. We are currently commissioning a materials requirement and
planning (MRP) system that, in conjunction with our suppliers, will help to
optimise inventory, reduce costs and shorten build times.


•     Start-ups and acquisitions

The Group continues actively to consider appropriate acquisitions.

When the risk, to the Group, from taking on a new business activity is
relatively low compared to the return, we intend to start-up and/or acquire such
new technology businesses. Since the end of the financial year, InGel has become
our first start-up to begin trading. There are a number of other such
opportunities currently being progressed.


R&D work

In 2001 we invested the equivalent of more than 10% of our turnover into
research and development activities. When it makes commercial sense, we seek to
protect our intellectual property through patenting. We have recently filed
patents on improved furnace designs that should enable optical fibre
manufacturers further to reduce their unit costs. We work closely with Accentus
plc, the intellectual property specialist subsidiary of AEA Technology plc, to
protect our intellectual property


Investor Relations

Further information about Stanelco can be found on our main website
(www.stanelcoplc.com) which we will update with announcements and press releases
as they occur.

With effect from January 2002 we have appointed Seymour Pierce Limited as our
stockbroker and Bankside Consultants Limited as our financial PR advisors.


Ian Balchin

Chief Executive     4th February 2002




                            PROFIT AND LOSS ACCOUNT
                       for the year ended 31 October 2001
                                                                                             
                                                        2001      2000
                                                       £'000     £'000

Turnover                                               6,013     3,602

Cost of sales                                        (3,149)   (1,904)

Gross profit                                           2,864     1,698

Distribution costs                                      (69)      (27)
Administrative expenses: research and development      (664)     (380)
                         Other                       (1,107)   (1,008)
                                                     (1,771)   (1,388)

Operating profit                                       1,024       283


Interest receivable and similar income                    32        20
Interest payable and similar charges                     (1)       (4)

Profit on ordinary activities before taxation          1,055       299

Taxation                                               (299)      (55)

Profit on ordinary activities after taxation             756       244

Dividends                                               (69)         -


Retained profit for the year                             687       244

Basic earnings per share - pence                       0.113     0.037

Dividend per share - pence                              0.01         -


All transactions arise from continuing operations.

All recognised gains and losses are included in the profit and loss account.


                           CONSOLIDATED BALANCE SHEET

                               at 31 October 2001

                                                             £'000   £'000     £'000   £'000
Fixed assets                                                                                
Tangible assets                                                        322               242


Current assets                                                                              
Stock                                                          816               442        
Debtors                                                        798               453        
Cash at bank and in hand                                       777               551        
                                                             2,391             1,446        
Creditors: amounts falling due within one year              (1,482)           (1,167)        

Net current assets                                                     909               279

Total assets less current liabilities                                1,231               521

Creditors: amounts falling due after more than one year                  -               (3)

Provisions for liabilities and charges                                (50)              (24)
                                                                     1,181               494
Capital and reserves                                                                        
Called up share capital                                                666               666
Profit and loss account                                                515             (172)
Shareholders' funds                                                  1,181               494



                        CONSOLIDATED CASH FLOW STATEMENT

                       for the year ended 31 October 2001

                                                                             2001    2000
                                                                            £'000   £'000

Net cash inflow from operating activities                                     444     719

Returns on investments and servicing of finance                                      
Interest received                                                              32      20
Interest paid                                                                   -      (1)
Finance lease interest paid                                                    (1)     (3)
Net cash inflow from returns on investments and servicing of finance           31      16

Taxation                                                                             
Corporation tax paid                                                          (68)    (61)

Capital expenditure and financial investment                                         
Sale of tangible fixed assets                                                   3       4
Purchase of tangible fixed assets                                            (177)   (177)
Net cash (outflow) from capital expenditure and financial investment         (174)   (173)

Financing                                                                            
Repayment of borrowing                                                          -     (90)
Capital element of finance lease rentals                                       (7)    (19)

Net cash (outflow) from financing                                              (7)   (109)

Increase in cash                                                              226     392


The Group had net cash of £777,000 at the year-end, an increase of £226,000, and
generated net interest receivable of £31,000.


                                     NOTES

Earnings per share

The calculation of earnings per share is based on the profit after tax for the
year of £756,000 (2000, £244,000) and 666,224,850 ordinary shares in issue.


Dividend

Subject to shareholder approval, the dividend is payable on 1 July 2002 to
shareholders on the register on 31 May 2002.


Report and Financial Statement

The information relating to the year ended 31 October 2001 is unaudited and has
been extracted from draft accounts on which the auditors expect to issue an
unqualified opinion.

The information relating to the year ended 31 October 2000 is extracted from the
audited accounts that have been filed at Companies House and on which the
auditors issued an unqualified opinion.

The above financial information does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985.

--------------------------



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