Final Results

Brown (N.) Group PLC
15 May 2003


15 May 2003

                               N Brown Group plc

                        PRELIMINARY RESULTS ANNOUNCEMENT
                            YEAR ENDED 1 MARCH 2003


N Brown Group plc, the Manchester based direct home shopping, fulfilment and
financial services company, today announces its preliminary results for the 52
weeks to 1 March 2003.


Highlights:

  • Group sales up 3% for the first 10 weeks of the new financial year
  • Catalogue ranges expanded and marketing re-focused to continue to drive
    growth in sales and market share
  • Turnover up 1.9% to £457.3m (2002: £449.0m)
  • Total dividend per share for the year up 1.6% to 5.84p (2002: 5.75p)
  • Earnings per share 13.2p (2002: 14.5p)
  • Profit before tax* £54.8m (2002: £59.0m)

*Pre-amortisation of goodwill (see note 4)



Sir David Alliance CBE, Chairman, said:

'Although the overall profit performance is disappointing, against the
background of a difficult trading environment for both the sector and the group,
this is a creditable set of results. N Brown gained market share in the home
shopping sector over the year.

'The group delivered strong sales from electrical and household products, as
well as from our growing financial services division, door to door selling
channel and internet sites. Looking ahead, the group is now well placed to
compete against its High Street rivals.'

Alan White, Chief Executive, added:

'Following my appointment last September, I have reviewed the strategy for the
group and begun to implement changes to position N Brown as the UK's leading
home shopping company in the over 35 market.

'We have addressed issues within the core home shopping product ranges and
re-focused marketing in order to drive new customer recruitment. Trading remains
challenging but so far our efforts have resulted in an increase in sales in the
first 10 weeks of the new financial year of 3%.

'The retail environment continues to be very competitive, but I am confident of
the prospects for the group in the medium term.'



                                     -Ends-



For further information please contact:


N Brown Group plc
Sir David Alliance CBE, Chairman                     On the day:  0207 554 1400
Alan White, Chief Executive                          Thereafter:  0161 236 8256
Tim Kowalski, Finance Director

Gavin Anderson & Company
Neil Bennett / Charlotte Stone                       Tel: [phone]

Website : www.nbrown.co.uk




Chairman's Statement

Group turnover for the year ended 1st March 2003 increased by 1.9% to £457.3m
but profit before tax and goodwill amortisation was 7.0% down on the previous
year at £54.8m - the first profit setback for the group for more than a decade.
The result is disappointing but our share of the home shopping market has still
increased and, given the difficult trading conditions in our sector, the overall
outcome was creditable. We are confident that, given the group's strong market
position and core strengths, and the active steps we are taking, we will
continue to deliver growth over the medium term.

Group sales in the first ten weeks of the new financial year are 3% ahead of
last year and we expect our performance to strengthen as the year goes on.
Confidence in the group's prospects is reflected in the Board's recommendation
of an unchanged final dividend of 4.10 pence, making a total of 5.84 pence for
the year which is an increase of 1.6% and is covered 2.3 times.



Home Shopping

Operating profit before goodwill amortisation for the year in our core division
was £57.2m, against  £63.3m last year, on turnover of £439.7m, up by 1.0%.  The
principal reasons for the profit reduction were a lower than anticipated
response to some of our catalogues and an increase in costs, particularly in
marketing, where extra spending was incurred in an attempt to stimulate further
sales demand from customers.  Our most loyal customers responded well with
average spend per customer 4% higher.  However, the number of customers fell by
3%, partly reflecting a reduction in the range of products offered in our main
catalogues and marketing campaigns.  The reversal of this and  much greater
focus on the range of merchandise offered to the customer will be seen in both
the catalogues and recruitment campaigns this year with the aim of restoring
the customer base.

Over 90% of consumer expenditure is spent in the High Street and, inevitably, it
is against this sector that comparisons need to be made rather than just against
other catalogue competitors.  The High Street is undoubtedly the best it has
been for many years with regular product changes, incorporating the latest
fashion trends, providing the consumer with plenty of choice.  We believe that N
Brown, of all the home shopping companies, is well placed to compete against
High Street rivals by creating an exciting and dynamic shopping experience in
our catalogues and leaflets.

To achieve this, we are now rolling out some new initiatives, which we
successfully tested last year. Over half of our home shopping turnover comes
from monthly leaflets and specialogues which are designed to reflect changing
seasonal demand for products. These will include a growing proportion of new
products which, together with other creative changes, will help stimulate a
greater response from our customers.

Recruitment of new customers last year fell below expected levels and the cost
of recruitment, which was above previous years, contributed to a reduction in
operating margins.  The situation has improved since Christmas and there should
be further gains as the product range is extended, which we expect will lead to
greater customer loyalty.

In addition to our focus on monthly leaflets and specialogues we have two
comparatively new sales channels which have made some very useful gains this
year.  Firstly, House of Stirling, our door to door sales organisation which
specialises in the sale of our goods and services via 350 sales staff who visit
customers in their own homes, has extended its selling territories and has now
reached a turnover of £26m.  Secondly, all of our principal catalogues are
supported by fully integrated and transactional internet sites, turnover from
which was £15m, up 30%, representing 3.4% of group turnover.

I remain confident that the blend of a wide portfolio of catalogues with strong
unique selling propositions operating through various channels to market will
support our future growth prospects.



Fulfilment

Zendor offers a totally integrated fulfilment service and consultancy to clients
operating distance shopping businesses.  The logistical resources for Zendor are
normally drawn from N Brown's home shopping division but a growing proportion of
Zendor's infrastructure is now derived from third party sources.

We are pleased with Zendor's performance this year having moved from a pre
goodwill amortisation loss of  £1.1m last year to a profit of £0.3m.



Financial Services

I am delighted with the progress made by First Financial this year in reaching a
record operating profit of £2.7m, which is ahead of last year by 32%.  The
division offers a wide range of financial products, such as unsecured loans, to
our home shopping customers who we have selected through our highly developed
database management and marketing skills.  First Financial also acts as an
intermediary with solid, well established insurance and other financial service
companies and is now looking to develop other offers which we believe our
customers will find attractive.



Outlook

2002 was a challenging year for the home shopping sector but having taken a
number of initiatives in our business to address the changing retail environment
I am confident we can make good progress this year.    Encouragingly womenswear
has recovered and electrical goods are also performing well so far this year,
but more work remains to be done to our menswear and footwear ranges.

Our new chief executive, Alan White, has completed his strategic review.  The
details of this are set out in his report, and the effects of it are already
beginning to be seen. Our plan to refresh the appeal of product ranges should
position us better for the medium term.

The fundamentals of the business remain strong and on behalf of shareholders I
would like to thank all staff for their valuable contribution to the business.


Sir David Alliance, CBE
15 May 2003



CHIEF EXECUTIVE'S REVIEW

N Brown Group has continued to increase its share of the home shopping market,
in what has been a difficult year for the sector.  Consequently, despite a
disappointing dip in financial performance in the year to 1st March 2003, the
business has an excellent market position and a number of core strengths which,
together with the steps we are taking, leave me confident that we will deliver
growth over the medium term.

I rejoined the Group in September 2002, succeeding Jim Martin who, after 18 very
successful years as Chief Executive, has stepped up to the role of Non-Executive
Deputy Chairman.  I have reviewed all of our businesses and catalogues to ensure
that we are making the most efficient use of our resources and we have
implemented some changes to execute our strategy more effectively.

Our target is to be the leading home shopping company for the over 35 market in
the UK. We already have a strong position, particularly in the 50 plus sector,
through our long established catalogues, based on key selling propositions of
appropriate products by age category, larger sizes and specialist clothing and
footwear fittings.    These propositions are supplemented by a growing household
and electrical range and they are all supported by flexible credit systems,
which are essential to the majority of our target market.

In addition to sales from the catalogues, which account for about half our
turnover, there is a regular monthly programme of special interest leaflets
targeted at the customer database, utilising sophisticated data modelling
techniques.

As well as direct home shopping activities the group has growing businesses in
fulfilment and financial services.



Financial Performance

Group sales were up 1.9% at £457m but overall profit before tax and goodwill
amortisation was down to  £54.8m from £59.0m in the previous year. Operating
margins remained strong at 13.0%. The dividend for the year is up 1.6% at 5.84p,
covered 2.3 times. The group has a strong balance sheet with net assets of £245
m, up 11.3%, equating to 83p per share.



Home Shopping

Summary

Home shopping operating profits before goodwill amortisation fell by 9.6% in the
year to £57.2m. This resulted from disappointing sales in the second half,
despite investing extra marketing expenditure, and a less profitable mix of both
products and customers, which reduced gross margins and increased bad debts.



Sales

Total home shopping sales were £440m, 1% up on the previous year. The number of
customers fell by 3% but their average spend rose by 4%. This reflects
continuing good performance from our most loyal customers, but disappointing
recruitment campaigns and a reduction in the product options which impacted the
appeal of our core product categories more than we had anticipated, combined to
depress overall response.

The average selling price during the year rose by 4%, due to an expansion in
sales of higher priced household and electrical products. Within womenswear the
average selling price fell by 2%, as we focused on hitting certain key price
points. From Autumn 2003 we will be seeking to widen the price architecture by
introducing more mid-priced products.

Returns rates have fallen by 1.3% in the year. This is partly due to the product
mix favouring low returning product categories, but 0.7% of the reduction is the
result of specific initiatives to bring down returns rates.



Gross Profit

Gross margins were down by 0.9%. This reflected the product mix favouring lower
margin home and electrical goods rather than higher margin clothing and
footwear.   We also took a higher level of markdown in the second half to ensure
our stocks were cleared.



Customer Recruitment

During the year the response to our recruitment campaigns has been
disappointing, resulting in a shortfall in new customers. The loss of their
sales reduced the total home shopping turnover by 2%, and will have some impact
on future seasons. The results from direct response television advertisements
and mini catalogues inserted with magazines were lower than anticipated, and the
sales from our predominant method of recruitment, merchandise advertising in
newspapers, were also below par.

In response to the poor Autumn/Winter campaign we have adopted a more
promotional style to the Spring campaign, which is now delivering to our
expectations.



Merchandise Categories

The core merchandise sold to our customer base, which is over 90% female, is
women's clothing and footwear, menswear and household and electrical goods.
With the exception of the latter category, which has continued to exhibit strong
growth, sales for the year were down.

In addition to the increased competitive threat from both the recovering High
Street retailers and the value retailers, including the supermarkets, there are
two other factors which have played a part.

Firstly, one of the strengths of our business is the offer of womenswear to size
26 in all cases and up to size 40 in appropriate styles, which means we have
30,000 stock options per season. In an attempt to improve profitability we cut
out a number of unprofitable options or ranges, but with hindsight we
underestimated the cumulative impact they had on the look and feel of the
catalogues. We managed to offset some of the shortfall from the catalogues by
making further marketing investment into our leaflet programme, such that it
showed a growth of 6% year on year.  Going forward, the performance of the
catalogues themselves has to be improved in the core product categories. To this
end we will be expanding the size of the catalogues to provide more choice for
our customers in all key product areas.

Secondly, we underestimated the increasing speed with which our customers are
adopting the latest fashion trends. Our customers, whose average age is in their
50's, want many elements of the latest trends worn by the younger generation in
their clothing, and we must satisfy this demand.

We have reacted to this trend in two ways. In the past we have been able to
choose the range at the start of the season and then merely represent the same
merchandise and photography through seasonal monthly leaflets. This is no longer
sufficient for current customer needs. The midseason mailings of the younger and
midlife Autumn/Winter catalogues contained new and more fashionable merchandise
sourced during the season. The sales of this new merchandise were strong and
vindicated our decision to refresh monthly leaflets and mid-season catalogues
with new lines. Increasingly we will source more of these special buys from
markets closer to the UK to speed up lead times.

We have also recognised that our product ranges need to be even more tailored to
their target customer. There will, therefore, be more unique lines in the
younger catalogues instead of some of the product currently sourced from the
midlife ones.

None of this implies we are changing our target customer base, it merely
recognises that there is a wider range of fashion attitudes within our chosen
market than we are adequately catering for. These changes will be introduced in
the Autumn/Winter 2003 catalogue and be rolled out in Spring/Summer 2004.

Home and electrical products have continued to sell well, up 10% for the year,
with electricals particularly strong at 36% ahead. This is proving that there is
latent demand for product ranges not previously offered to our customers.
Consequently we will be further increasing the catalogue space allocated to home
and electrical products in Autumn/Winter 2003.



Customer Groups

Our customer database, allied with advanced analytical processes, is a core
asset of the business. As we have captured every transaction by every customer
for many years we have millions of records on our files. We have the ability to
scan these records to identify spending patterns, product preferences, age, size
and predisposition to promotional activity amongst other variables. The key to
our success is to allocate our marketing expenditure, our largest overhead by
far, to deliver the most sales and profit.

Our segmentation system was augmented during the year to include behavioural
characteristics as well as the customer's propensity to purchase. We use a
variety of marketing and promotional techniques to influence those spending
habits, ranging from low-level stimuli to aggressive discounts. This new system
is anticipated to improve the efficiency of our marketing spend in 2003/4 and
offset some of the increased catalogue costs for the expanded product ranges.

We have continued to see the strongest growth from the younger catalogues, up 4%
in total. Within this, Simply Be, which targets larger, more fashion conscious
female customers in their 30's, is proving very successful with sales now of
£18m, up 21%.

The core midlife brands, J. D. Williams, Ambrose Wilson, Oxendales and Fifty
Plus, are targeted at the 45 - 65 age bracket through a common catalogue and
leaflet programme. Sales to this group totalled £286m, 2% down on last year,
representing 65% of home shopping turnover.

Spending by this midlife customer group has been stagnant in the retail sector
as a whole in 2003. However, the absolute number of consumers in this age
bracket will increase by 8% by 2006 so there continues to be a real growth
opportunity.  We are confident that we can gain market share with our improved
and expanded product ranges, and we have also produced some new publications
which target specific sections of this customer group to improve sales
penetration.



Emerging Channels

We aim to maximise the commercial opportunity every time we communicate with our
customers.

During the year we relocated our call centre to a purpose built facility in
Manchester with 1100 terminals. This has enabled us to both reduce the number of
calls outsourced and expand the outbound telemarketing team. The revenue from
outbound calls yielded net sales of over £18m, up 20% on last year.

Upselling at the time of order has also increased sales by 15% to £13m. This has
been achieved by a combination of improving selling techniques coupled with
innovative product offers.

Sales through the internet continue to expand, growing 30% to £15m and now
representing over 3% of total home shopping sales. This varies significantly by
customer group with penetration in our youngest brand, Simply Be, hitting 15%.
We have recently made further improvements to our web-based systems which are
driving more new customer demand to the internet and outbound e-mails continue
to improve their penetration and cost-efficiency.

House of Stirling, our door to door selling channel, has had a strong year with
sales up by 73% at £26m, now accounting for 6% of home shopping sales. This
growth has been driven by an expansion of the geographical coverage, with over
350 business managers covering from Scotland to the North Midlands, together
with strong customer recruitment and a 15% increase in the average spend per
customer. The product ranges which most appeal to this customer group are home
furnishings and electrical appliances, where the weekly collected credit offer
is essential to facilitate the purchase. There is scope for further significant
growth in this channel, by extending our geographical coverage and the product
ranges on offer.



Service

We regard excellence in customer service as a key differentiating factor within
our sector and we aim to deliver year on year improvements in service standards.
The move to the new call centre has enabled improved training of customer
service advisors, which is now starting to help staff retention and in turn the
quality and consistency of service.

Efficient delivery of parcels to customers is also a vital service component. We
have now linked our 1100 strong courier network to Securicor Omega's depot and
van delivery network. Couriers are now managed through the 92 depots enabling
much closer monitoring of delivery performance. This is already producing cost
savings,  quicker return of goods to stock and improved customer satisfaction.
The partnership is also now undertaking parcel deliveries for major third party
retailers and a useful profit contribution is anticipated in future years.



Credit and Financial Services

Group trade debtors were up by 17% to £305m, comprising core home shopping
debtors of £286m, up by 14%, with the balance attributable to the activities of
First Financial.

Home shopping debtors comprise 1.6m accounts owing an average of £195. We have
increased the average balance, despite the low sales growth, through extended
credit terms and payment holidays to selected customers. We now offer a variety
of credit offers dependent on the customer group or product set. The success of
Home Essentials, for example, our higher priced furniture and electrical
catalogue, is partially driven by interest-free credit. We are now developing a
new behavioural scoring system to improve the assessment of credit limit risk by
customer, although the impact will not be felt until 2004.

First Financial markets pure financial products to our customer base, largely
though outbound telemarketing. The core products are personal loans, warranties
and insurance. The operating profits from this division rose from £2.1m to
£2.7m, despite the initial losses from the in-sourcing of personal loans from a
commission basis to being financed on our own balance sheet. Net lending by
First Financial during the year was £15m, with year end debtors of £19m, up 98%.
We are also looking to expand our activities in secured lending and credit card
issuance, utilising the skills of our dedicated financial services team allied
with the credit history of our home shopping customers.



Fulfilment Services

Zendor and Eunite now operate as one business providing end to end services to
distance shopping companies.   Services range from web-site design to call
handling and product delivery, and were provided to over 20 different clients
during the year.   Growth in revenues by 5% to £9.6m and reduced operating costs
resulted in an operating profit before goodwill of £0.3m against a loss of £1.1m
last year.

There is a strong demand in the market place for the services provided and a
fragmented competitor set. However, surplus capacity within our home shopping
infrastructure has been largely utilised and we are now incorporating third
party facilities. We are also considering strategic partnerships to accelerate
growth.



Pension Fund

In common with most other major employers we have a final salary scheme, which,
with the demise of equity values and increasing liabilities, is now under-funded
by £18m on an FRS 17 basis.  The scheme was closed to new entrants in January
2002, but, pending the 2003 actuarial valuation of the fund, the Company has
agreed to contribute up to £1m p.a. extra to meet its pension commitments, as
previously announced.



Outlook

Group sales in the first ten weeks of the new financial year are up by 3%.  Home
shopping sales are up by 2% and, encouragingly, the sales per home shopping
customer are up by 5%. We have also seen a good recovery in our sales of
womenswear which, across all customer groups, is up by 5%.  Home and electrical
product sales continue to grow.  With tougher sales comparatives and some cost
pressures in the first half it will be the Autumn/Winter season when I expect to
see the most forward momentum.

I remain confident for the future of direct home shopping, especially with the
growing penetration of the internet, but in a fiercely competitive retail
environment we must significantly improve our product offering, the way we
promote those products to our customers, and the service we provide. I believe
the improvements we will deliver in each of these areas will drive the growth
our stakeholders rightly expect.


Alan White
15 May 2003






GROUP PROFIT AND LOSS ACCOUNT
for the 52 weeks ended 1 March 2003


                                                               Unaudited           Audited
                                                                52 weeks          52 weeks                %
                                                                   ended             ended         Increase
                                                            1 March 2003      2 March 2002
                                                   Note            £'000             £'000

Turnover                                           1             457,327           449,002             1.9%

Operating profit before goodwill amortisation      2              60,263            64,244            -6.2%
Goodwill amortisation                                              (757)             (481)

Operating profit                                   3              59,506            63,763            -6.7%
Loss on disposal of associated undertaking                             -              (28)
Income from listed investments                                        44                44
Net interest payable and similar charges                         (5,473)           (5,302)             3.2%

Profit on ordinary activities before taxation      4              54,077            58,477            -7.5%
Taxation on profit on ordinary activities                       (15,412)          (16,790)            -8.2%

Profit on ordinary activities after taxation                      38,665            41,687            -7.2%
Equity minority interests                                          (162)               567

Profit for the financial year                                     38,503            42,254            -8.9%
Dividends                                          6            (17,102)          (16,789)             1.9%

Retained profit for the year                                      21,401            25,465           -16.0%

Earnings per share                                 7              13.16p            14.50p            -9.2%

Diluted earnings per share                         7              13.10p            14.44p            -9.3%

Dividends per share                                6               5.84p             5.75p             1.6%





GROUP BALANCE SHEET
as at 1 March 2003
                                                                       Unaudited                 Audited
                                                                            2003                    2002
                                                                           £'000                   £'000
Fixed assets
Intangible assets                                                         10,028                  10,096
Tangible assets                                                           77,599                  76,324
Investments                                                                3,903                   2,870
                                                                          91,530                  89,290

Current assets
Stocks                                                                    41,678                  38,960
Debtors                                                                  326,805                 282,166
Cash at bank and in hand                                                  24,046                   8,558

Creditors
Amounts falling due within one year                                     (96,107)               (108,826)

Net current assets                                                       296,422                 220,858

Total assets less current liabilities                                    387,952                 310,148

Creditors
Amounts falling due after more than one year                           (137,110)                (84,656)

Provisions for liabilities and charges                                   (5,417)                 (5,009)

Net assets                                                               245,425                 220,483

Capital and reserves
Called-up share capital                                                   29,504                  29,369
Share premium account                                                      8,744                   6,796
Revaluation reserve                                                        1,651                   1,630
Profit and loss account                                                  206,098                 183,683

Equity shareholders' funds                                               245,997                 221,478
Equity minority interests                                                  (572)                   (995)

Capital employed                                                         245,425                 220,483

Gearing                                                                      47%                     42%






GROUP CASH FLOW STATEMENT for the 52 weeks ended 1 March 2003

                                                                  Unaudited                 Audited
                                                          2003         2003        2002        2002
                                              Note       £'000        £'000       £'000       £'000

Net cash inflow from operating activities        5                   30,932                  37,644

Returns on investments and servicing of
finance
Interest paid                                          (5,427)                  (5,203)
Interest element of finance lease payments               (130)                    (174)
Dividends received from investments                         44                       44

Net cash outflow from returns on
investments and servicing of finance                                (5,513)                 (5,333)

Taxation paid                                                      (16,670)                (15,233)

Capital expenditure and financial
investment
Purchase of tangible fixed assets                     (15,347)                 (16,223)
Purchase of intangible fixed assets                       (63)                        -
Sale of tangible fixed assets                              131                       59
Decrease in own shares held in trust                       788                       56

Net cash outflow from capital expenditure
and financial investment                                           (14,491)                (16,108)

Acquisitions and disposals
Purchase of subsidiary undertakings                      (116)                    (442)
Disposal of investment in associated                                                575
undertaking                                                  -

Net cash (outflow) inflow from acquisitions
and disposals                                                         (116)                     133

Equity dividends paid                                              (17,072)                (15,727)

Cash outflow before financing                                      (22,930)                (14,624)

Financing
Issue of ordinary share capital                            317                      875
New loans                                              136,000                   19,000
Loan repayments                                       (98,223)                        -
Capital element of finance leases                        (544)                    (811)

Net cash inflow from financing                                       37,550                  19,064

Increase in cash in the year                                         14,620                   4,440


Reconciliation of net cash flow to movement
in net debt
Increase in cash in the year                                         14,620                   4,440
Cash inflow from increase in loans                                (136,000)                (19,000)
Repayment of loans                                                   98,223                       -
Repayment of capital element of finance
leases                                                                  544                     811
Changes in net debt resulting from cash
flows                                                              (22,613)                (13,749)
Other non cash movements                                              (232)                   (776)
Movement in net debt in the year                                   (22,845)                (14,525)

Net debt at 2 March 2002                                           (92,633)                (78,108)

Net debt at 1 March 2003                                          (115,478)                (92,633)





NOTES TO THE FINANCIAL INFORMATION


1   Analysis of turnover                                  Unaudited             Audited             %
                                                               2003                2002      Increase
                                                              £'000               £'000

    Home shopping                                           439,737             435,176           1.0
    Fulfilment                                                9,591               9,178           4.5
    Financial services                                        7,999               4,648          72.1

                                                            457,327             449,002           1.9


2   Analysis of operating profit before goodwill          Unaudited             Audited             %
                                                               2003                2002      Increase
                                                             £'000                £'000

    Home shopping                                            57,224              63,333          -9.6
    Fulfilment                                                  326             (1,139)         128.6
    Financial services                                        2,713               2,050          32.3

                                                             60,263              64,244          -6.2



3   Analysis of operating profit                          Unaudited             Audited             %
                                                               2003                2002      Increase
                                                             £'000                £'000

    Home shopping                                            56,887              63,190         -10.0
    Fulfilment                                                 (94)             (1,477)          93.6
    Financial services                                        2,713               2,050          32.3
                                                             59,506              63,763          -6.7



4   Profit on ordinary activities before taxation         Unaudited        Audited 2002             %
                                                               2003               £'000      Increase
                                                              £'000

    Profit on ordinary activities before taxation
    and goodwill amortisation                                54,834              58,958          -7.0

    Goodwill amortisation                                     (757)               (481)          57.4
    Profit on ordinary activities before taxation           54,077               58,477          -7.5



5   Reconciliation of operating profit to operating cash flows             Unaudited         Audited
                                                                                2003            2002
                                                                               £'000           £'000

    Operating profit                                                          59,506          63,763
    Increase in stocks                                                       (2,718)         (1,146)
    Increase in creditors                                                      4,100           1,085
    Increase in debtors                                                     (44,386)        (39,789)
    Depreciation (net of profit/loss) on disposals)                           13,616          13,193
    Amortisation of goodwill and other intangible fixed assets                   814             538
    Net cash inflow from operating activities                                 30,932          37,644




6. An interim dividend of 1.74p per ordinary share was paid on 6 January 2003 to
shareholders on the register at the close of business on 29 November 2002. A
final dividend of 4.10p per ordinary share is proposed to be paid on 18 July
2003 to shareholders on the register at the close of business on 20 June 2003.


7. The calculation of earnings per share is based on the profit for the
financial year and the weighted average number of shares in issue during the
year of 292,471,000 (2002: 291,315,000). For diluted earnings per share, the
weighted average number of shares of 293,989,000 (2002: 292,688,000) has been
calculated after adjusting for the potential dilution of outstanding share
options.


8. The financial information set out above does not constitute the Group's
statutory financial statements for the 52 weeks ended 1 March 2003 or the 52
weeks ended 2 March 2002 but is derived from those financial statements.
Statutory financial statements for the 52 weeks ended 2 March 2002 have been
delivered to the Register of Companies and those for the 52 weeks ended 1 March
2003 will be delivered following the company's annual general meeting. The
auditors have reported on the financial statements for the 52 weeks ended 2
March 2002; their report was unqualified and did not contain any statement under
Section 237(2) or (3) of the Companies Act 1985.

The financial information set out above has been prepared under the same
accounting policies as the 2002 financial statements.

The auditors have not reported on financial statements for the 52 weeks ended 1
March 2003, nor have any such financial statements been delivered to the
Registrar of Companies.

This report was approved by the Board of Directors on 15 May 2003.

It is expected that the full Annual Report and Accounts for the 52 weeks ended 1
March 2003 will be posted to shareholders on 30 May 2003.


                      This information is provided by RNS
            The company news service from the London Stock Exchange     
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