Final Results

Swallowfield PLC
11 September 2003


                              Swallowfield plc
 Preliminary announcement of final results for the 12 months ended 30 June 2003



Chairman's Statement

This is the second report and accounts I have presented since changing our
year-end to 30 June.  For consistency and clarity, my report compares the
results for the 12 months to 30 June 2003 with those for the 12 months to 30
June 2002.  For statutory purposes the prior year comparatives in the report and
accounts are for the 18 month period to 30 June 2002.


Results

We are disappointed by the results of the last 12 months, more especially,
since, at the time of writing the last annual report, we had high volume order
books and a significantly increased Autumn/Winter gift programme.  We were,
however, unable to convert this increase in volume into a satisfactory level of
profit.  Turnover increased by 26% to £54.7 million, but profit before tax
decreased from £2.3 million to £1.0 million.

Turnover in the Aerosols business increased by 28 % from £31.8 million to £40.8
million and operating profit decreased by 18% to £2.2 million.  The Cosmetics
business made an operating loss of £0.8 million compared with a loss of £0.1
million last year, on a 20% increase in turnover from £11.5 million to £13.8
million.

During the year we invested £3.6 million in fixed assets and this, together with
increased working capital, resulted in net debt increasing from £4.9 million to
£8.8 million.

This time last year, I was cautious about the high demand we were experiencing
and the strain that this would place on the business.  This was confirmed since
the rapid build-up in customer demand severely stretched our ability to obtain
quality labour and effectively utilise our available plant capacity.  As
explained in my report of 27 February 2003, the poor profitability in the first
half of the year was a result of these short-term capacity constraints combined
with externally driven cost increases and price pressures.  An action plan to
improve profitability was initiated during the second half of the year, and
there are early signs that this is starting to have an impact.  Profit before
tax in the second half of the year was £150,000 higher than in the same period
last year.


Corporate Governance

Recently, there have been a number of official reports and regulations aimed at
strengthening corporate governance structures within the UK.  These include the
Higgs Report and the Directors' Remuneration Report Regulations 2002.  We have
updated the Directors' Remuneration Report in accordance with these new
regulations.  An advisory resolution concerning Directors' remuneration, will be
proposed at the Annual General Meeting.

We are pleased with the sensible amendments proposed to the Higgs Report and
continue to strengthen our approach to corporate governance.  Following the
recent resignation of Jennifer Bryant-Pearson, we undertook a rigorous
recruitment process to appoint a new non-executive Director with the necessary
financial experience to chair the audit committee.  We were pleased to announce
the appointment of Shena Winning and welcomed her to the Board of Swallowfield
plc from 21 May 2003.


Strategic Update

We are currently undertaking a strategic review of the business in order to
confirm our current vision and long-term thinking, and we expect this to be
complete by the end of the first quarter of the next calendar year.  We believe
that we have the necessary skills, technologies and market positioning to grow
the business solidly over the medium-term, but recognise that these results have
slowed the progress of our five year plan.


Looking Forward

Product innovation is a central element to the long-term success of the Group,
and we emphasise this throughout the business.  Innovation is one of our core
strengths and we use our skills to invest in new products as a means of
developing the business and adding value in order to improve operating margins.

During the last two years, we have made significant new investments at our
Wellington site.  We have expanded the factory to provide space for future
business, and invested in plant, equipment and improved technologies.  Whilst we
need to continue to invest in plant and equipment for the future, we expect a
much lower level of capital expenditure over the next 12 months.

Consumer confidence and the general economic background are still weak in the
major markets in which we operate and this situation is unlikely to change over
the next 12 months.  We anticipate that because of these factors we will remain
under some pricing pressure, although the recent favorable movement in the
Sterling/Euro exchange rate will help.

Over the last few months we have focused on increasing our margins, improving
operating efficiencies and reducing overhead costs.  In the fourth quarter of
the 2003 financial year, we reduced the annual overhead cost in the Cosmetics
business by £500,000 at a cost of around £100,000.  We do not intend to incur
last year's one-off costs, such as stock write-offs and labour inefficiencies
which resulted from the unprecedented levels of order intake.

As anticipated, sales in the first two months have been slow but we expect a
pick up in the run-up to Christmas.  In the first six months of the current
financial year, following the actions taken, whilst turnover will decrease, we
expect an improvement in operating margins compared with the same period of last
year.

We expect the first and second halves of the current financial year to be more
balanced than in previous years and anticipate the business returning to
profitable sales growth from January 2004.  Overall we remain positive for the
future prospects of the Group.


Dividend

This positive view, taken together with the higher dividend cover maintained
over the previous three years, gives the Board confidence to keep the dividend
at the same level as last year.  The board is proposing to pay a final dividend
of 2.0p making a total dividend of 4.8p for the year.  If approved at the Annual
General Meeting, the final dividend will be paid on 30 October 2003 to
shareholders on the register on 17 October 2003.  The shares will go ex-dividend
on 15 October 2003.

On behalf of the Board, I would like to thank our employees for their continued
commitment and support over the past year.  This has been a challenging and
demanding period and we recognise the great efforts that have been made to
maintain customer service levels.


Chairman
J S Espey
11 September 2003




Group Profit and Loss Account
for the 12 months ended 30 June 2003
                                                                                      12 months          18 months
                                                                                          ended              ended
                                                                                        30 June            30 June
                                                                                           2003               2002
                                                                                          £'000              £'000

Turnover                                                                                 54,663             62,458
Cost of sales                                                                          (46,701)           (50,155)
Gross profit                                                                              7,962             12,303
Net operating expenses                                                                  (6,543)            (9,168)
Operating profit                                                                          1,419              3,135
Interest receivable                                                                          10                148
Interest payable                                                                          (454)              (589)
Profit on ordinary activities before taxation                                               975              2,694
Tax on profit on ordinary activities                                                      (257)              (749)
Profit attributable to shareholders                                                         718              1,945
Dividends                                                                                 (541)              (732)
Transferred to reserves                                                                     177              1,213
Earnings per share
- basic                                                                                    6.4p              17.3p
- diluted                                                                                  6.4p              17.2p






Group Statement of Total Recognised Gains and Losses
for the 12 months ended 30 June 2003
                                                                                      12 months          18 months
                                                                                          ended              ended
                                                                                        30 June            30 June
                                                                                           2003               2002
                                                                                          £'000              £'000

Profit for the financial period                                                             718              1,945
Translation gain on overseas investment                                                       -                  6
Total recognised gains and (losses) relating to the period                                  718              1,951







Group and Company Balance Sheets
as at 30 June 2003
                                                                        Group                        Company
                                                                 2003           2002           2003           2002
                                                                £'000          £'000          £'000          £'000

Fixed assets
Tangible assets                                                13,174         11,142              -              -
Investments                                                         -              -          6,072          6,072
Current assets
Stocks                                                          7,616          8,626              -              -
Debtors                                                         9,267          8,488          8,255          7,790
Cash at bank and in hand                                           21          1,306            608             18
                                                               16,904         18,420          8,863          7,808

Creditors: amounts falling due within one year               (11,032)       (11,993)        (3,928)        (3,880)
Net current assets                                              5,872          6,427          4,935          3,928
Total assets less current liabilities                          19,046         17,569         11,007         10,000

Creditors: amounts falling due after more than one year       (6,413)        (5,187)        (5,400)        (4,500)
Provisions for liabilities and charges                          (844)          (770)              -              -
                                                               11,789         11,612          5,607          5,500

Capital and reserves
Called up share capital                                           563            563            563            563
Share premium                                                   3,796          3,796          3,796          3,796
Revaluation reserve                                               138            152              -              -
Capital reserve                                                     -              -            467            467
Profit and loss account                                         7,292          7,101            781            674
Equity shareholders' funds                                     11,789         11,612          5,607          5,500





Group Statement of Cash Flows
for the 12 months ended 30 June 2003
                                                                                      12 months          18 months
                                                                                          ended              ended
                                                                                        30 June            30 June
                                                                                           2003               2002
                                                                                          £'000              £'000

Net cash inflow from operating activities                                                 1,069              3,670

Returns on investments and servicing of finance
Interest received                                                                            10                148
Interest paid                                                                             (404)              (512)
Interest element of finance lease rentals                                                  (50)               (77)
                                                                                          (444)              (441)

Corporation tax paid                                                                      (534)              (823)
Capital expenditure
Purchase of tangible fixed assets                                                       (2,740)            (2,463)
Sale of tangible fixed assets                                                                53                 77
                                                                                        (2,687)            (2,386)
Equity dividends paid                                                                     (541)              (788)
Net cash outflow before financing                                                       (3,137)              (768)
Financing
New loans                                                                                   900              6,000
Repayment of loans                                                                         (97)            (5,863)
Capital element of finance lease rentals                                                  (406)              (482)
                                                                                            397              (345)
Decrease in cash                                                                        (2,740)            (1,113)





Reconciliation of Net Cash Flow to Movement in Net Debt
                                                                                      12 months          18 months
                                                                                          ended              ended
                                                                                        30 June            30 June
                                                                                           2003               2002
                                                                                          £'000              £'000

Decrease in cash                                                                        (2,740)            (1,113)
Cash (inflow)/outflow from changes in debt and lease financing                            (397)                345
Change in net debt resulting from cash flows                                            (3,137)              (768)
New finance leases                                                                        (820)              (723)
Movement in net debt in the year                                                        (3,957)            (1,491)
Net debt at 1 July / 1 January                                                          (4,877)            (3,386)
Net debt at 30 June                                                                     (8,834)            (4,877)





NOTES

1.  Five year summary

The following five year summary has been produced to allow improved comparisons
to be made between the current result and those of prior years.

                        Notes            audited         unaudited       unaudited       unaudited       unaudited
                                       Financial         Financial       Financial       Financial       Financial
                                            Year              Year            Year            Year            Year
                                            2003              2002            2001            2000            1999
                                           £'000             £'000           £'000           £'000           £'000

First day of financial   (a)         1 July 2002      17 June 2001    18 June 2000    20 June 1999    21 June 1998
year
Last day of the          (a)        30 June 2003      30 June 2002    16 June 2001    17 June 2000    19 June 1999
financial year
Number of weeks in       (b)
financial year                                52                54              52              52              52

Profit and Loss Account
Turnover                                  54,663            44,404          40,425          37,600          39,731
Adjustment to 52 week    (b)                   
basis                                          -           (1,088)               -               -               -
Adjusted turnover                         54,663            43,316          40,425          37,600          39,731

Operating profit                           1,419             2,628           2,177           2,205             917
Fundamental                                    -                 -              20              54         (3,302)
restructuring
Interest                                   (444)             (296)           (354)           (454)           (503)
Profit/(loss) before                         975             2,332           1,843           1,805         (2,888)
taxation
Taxation                                   (257)             (645)           (444)           (501)           (325)
Profit attributable to
shareholders                                 718             1,687           1,399           1,304         (3,213)
Dividends                                  (541)             (541)           (472)           (394)           (113)
Retained earnings                            177             1,146             927             910         (3,326)

Balance Sheet
Fixed assets                              13,174            11,142          10,228          10,516          11,972
Net current assets                         5,872             6,427           6,610           5,146           (421)
Total assets less
current liabilities                       19,046            17,569          16,838          15,662          11,551
Long-term creditors:
Loans and lease finance                  (6,413)           (5,187)         (5,669)         (5,243)         (1,211)
Deferred tax                               (844)             (770)           (716)           (720)           (667)
Provision for                                  -                 -               -           (146)           (950)
liabilities
Equity                                    11,789            11,612          10,453           9,553           8,723
Net debt                                   8,834             4,877           4,777           5,825           6,285

Segmental Analysis
Aerosol products:
Turnover                                  40,835            31,783          28,880          25,041          21,671
Operating profit                           2,223             2,710           2,400           2,470           1,734
Cosmetic products:
Turnover                                  13,828            11,533          11,545          12,559          18,060
Operating profit                           (804)              (82)           (223)           (265)           (817)

Statistics
Weighted average number
of shares in issue                    11,256,416        11,256,416      11,256,416      11,256,416      11,256,416
Undiluted earnings per
share                                       6.4p             15.0p           12.4p           11.6p         (28.5)p
Earnings per share
excluding fundamental
restructuring                               6.4p             15.0p           11.7p           11.1p          (0.8)p
Gearing                                      75%               42%             46%             61%             72%
Dividends per share                         4.8p              4.8p            4.2p            3.5p            1.0p





Notes

(a)  For 2002 and prior years the five year summary is based on previously
reported interim and full year reports as adjusted for the retrospective
implementation of FRS19, Deferred Tax.  The results for each of these financial
years comprised the interim results for the first half of the calendar year in
which the financial year ended, together with the second half of the previous
calendar year.  The balance sheet and net debt numbers are those reported at the
last day of the financial year.

(b)  Except for turnover, where the relevant adjustment has been shown above, no
material changes would be required to the profit and loss account to adjust the
financial year 2002 numbers to a 52 week basis.



2.  Turnover and Segmental Analysis

                                       12 months ended 30 June 2003         18 months ended 30 June 2002
                                                     Profit         Net                   Profit        Net
                                     Turnover    before tax      assets    Turnover       before     assets
                                                                                             tax
                  Class of              £'000         £'000       £'000       £'000        £'000      £'000
                  business

                  Aerosol              40,835         2,223      13,923      45,615        3,430     11,004
                  products
                  Cosmetic             13,828         (804)       6,780      16,843        (295)      6,667
                  products

                                       54,663                    20,703      62,458                  17,671

Operating  profit                                     1,419                                3,135

Net interest payable                                  (444)                                (441)

Profit before tax                                       975                                2,694

Unallocated
net liabilities                                                 (8,914)                             (6,059)

Group net assets                                                 11,789                              11,612


Geographic
segment

By destination:
UK                                     40,410                                47,546
Continental Europe                     12,043                                10,766
North America                             980                                 1,223
Far East                                  872                                 2,336
Other                                     358                                   587

                                       54,663                                62,458


Unallocated net liabilities comprise bank loans, finance leases, taxation,
proposed dividend and certain other holding company assets.



3.  Earnings per Share

                                                                                          12 months      18 months
                                                                                              ended          ended
                                                                                            30 June        30 June
                                                                                               2003           2002
(a)  Basic
Profit on ordinary activities after taxation                                               £718,000     £1,945,000
Weighted average number of ordinary shares in issue during the year                      11,256,416     11,256,416
Earnings per share                                                                             6.4p          17.3p


(b)  Diluted
Profit on ordinary activities after taxation                                               £718,000     £1,945,000
Basic weighted average number of ordinary shares in issue during the year                11,256,416     11,256,416
Dilutive potential ordinary shares:
executive share options                                                                      11,424         26,838
                                                                                         11,267,840     11,283,254

Earnings per share                                                                             6.4p          17.2p




4.  Statutory Accounts

The financial information does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985, but has been extracted from the statutory
accounts for the year ended 30 June 2003, on which an unqualified audit report
has been issued and which will be delivered to the Registrar following their
adoption at the Annual General Meeting.  The statutory accounts for the
financial period ended 30 June 2002 have been delivered to the Registrar of
Companies with an unqualified audit report thereon.  The restated five year
summary in Note 1 above which has been produced to allow comparisons to be made
between the current results and those of prior years, is unaudited.



5.  Annual General Meeting

The Annual General Meeting will be held on Thursday 14 October 2003 at the
Castle Hotel, Taunton, Somerset at 12.00 noon.




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