Final Results - Year Ended 31 December 1999

Dinkie Heel PLC
3 April 2000


                               DINKIE HEEL PLC                                

   PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999    

Extract from the Chairman's Statement:

Financial results

I am disappointed to have to report a loss on ordinary activities before
taxation for the year of £427,000 (1998, profit £217,000). No tax charge or
credit is due for the year (1998, credit £30,000). Losses per share were 2.89p
(1998, earnings 1.84p). Gearing at the balance sheet date was 59.8% (1998,
42.4%).

Review of the year

For the toe cap and rubber moulding businesses the year was one of enormous
change and difficulty. Integration of the FCE toe cap business acquired in
October 1998 took longer and was more costly than anticipated. That
integration also required the removal to Phillips Rubber of the rubber
moulding business being carried out in Warmley. That removal, whilst difficult
in itself, also co-incided with a sharp decline in the market for those
products and Phillips had to make large stock provisions in direct
consequence.

By contrast the Company's two operations in Northampton, together known as
Davies Odell, continued their rapid diversification away from the footwear
trade. Sales of EVA flooring products for the equestrian and dairy industries
grew substantially as did sales of products for impact protective clothing and
accessories for sports applications (PPE equipment). The acquisition in May
1999 of the business of Sports Protection Ltd provided new opportunities in
PPE equipment.

Exports now represent 40% of Company turnover, a full 10% increase in the
year. Export sales are increasingly important to the Company and the
detrimental effect of the weak euro on sales opportunities and prices
considerably outweighs the beneficial effect that it has in restraining raw
material buying prices. The loss before tax in the second half of the year was
£210,000 (first half year £217,000).

The toe cap business, trading as Dinkie-FCE, included a full year of sales
from the FCE business acquired in October 1998. Sales volume was 37% higher
than in 1998 and second half year sales were 15% higher than in the first
half. The increased volume derived entirely from extra export sales. Average
selling prices fell by 8% over the year but the rate of fall in the second
half year slowed to just 1% below those of the first half. As mentioned above,
integration problems with FCE caused considerable disruption during the year
and it was towards the year end before these were finally resolved. Orders
were at satisfactory levels throughout the year and the increased ability to
satisfy them is demonstrated in the increased sales in the second half.

Sales of lightweight EVA flooring products to the equestrian and dairy
industries and of products for impact protection in protective clothing
increased by 80% and 46% respectively compared with 1998. These products
together formed 19% of total Company sales for the year (1998, 12%). Sales of
footwear products at Davies Odell fell by 17.5%. The profit of the combined
operation increased by 60% by comparison with 1998.

Following the re-organisation, Phillips Rubber produces all of the Company's
moulded rubber production for footwear repairers and manufacturers. However a
20% fall in sales to the repair trade, particularly overseas, and the absence
of sales overseas to certain footwear manufacturers resulted in turnover for
the total business falling 35% from 1998. Stock provisions totalling £58,000
were made in 1999 in direct consequence.

The Company generated net cash inflow from operating activities of £70,000
(1998, £699,000). Capital expenditure was £261,000 and the interest cost of
borrowings £164,000. Net debt increased by £447,000 to £2,158,000 representing
gearing at the balance sheet date of 59.8%.

Dividends

Given the need to conserve cash and in the light of the loss for the year the
board has considered that it cannot recommend a dividend for the year (1998,
total dividend for the year 1.2p per share). 

Prospects

For the last fifteen years the Company has been consolidating various parts of
the UK footwear components industry in order to increase market share and
retain profitability in a continually declining market. The wide product range
has also enabled significant export business to be developed. The relative
strength of sterling has put both export margins and volumes under pressure in
our two main manufacturing areas - rubber components and steel toe caps.
Although decline of the UK footwear industry has been continual it is only
recently that the safety footwear market, the Company's largest market sector,
has been affected. In just four years the import penetration of safety
footwear has increased from 10% of consumption to over 50% in 1999. The medium
term implications of these developments are being actively considered by your
Board.
 
The Dinkie-FCE toe cap business has begun the year with sales orders lower
than in 1999 and a consistent pick up is still awaited. Some running-down of
stocks built up by our customers ahead of the new millennium and the effect of
an extended New Year holiday may be partly to blame. The decline in sales
prices has slowed and margins are being helped by the effect of exchange rates
on prices of raw materials. Production has overcome the difficulties of 1999
and is nearing the planned level of efficiency.

Davies Odell has begun the year satisfactorily and sales of lightweight EVA
flooring products and PPE equipment are continuing to grow. 

Phillips Rubber has recovered some of the sales accounts with manufacturers
that it lacked in 1999 and has obtained additional export business.
Integration of production of the more diverse range of products is now
complete and operating satisfactorily.   

David M Parkes
Chairman


PROFIT AND LOSS ACCOUNT 
for the year ended 31 December 1999
                                                           1999         1998
                                                          £'000        £'000
Turnover                               
Continuing operations                                    10,718       10,224
Cost of sales                                           (10,163)      (9,190)
                                                         ------       ------
Gross profit                                                555        1,034
Net operating expenses                                     (818)        (725)
                                                         ------       ------
Operating (loss)/profit 
Continuing operations                                      (263)         309
Interest payable                                           (164)         (92)
                                                         ------       ------
(Loss)/profit on ordinary activities before taxation       (427)         217
Taxation                                                      -           30
                                                         ------       ------
(Loss)/profit for the financial year                       (427)         247
Dividends                                                     -         (177)
                                                         ------       ------
(Loss)/profit for the year set against reserves            (427)          70
                                                         ------       ------
(Loss)/earnings per share, basic and diluted              (2.89)p       1.84p
                                                         ------       ------


BALANCE SHEET
at 31 December 1999
                                                           1999         1998
                                                          £'000        £'000
Net assets employed

Fixed assets:
Intangible assets                                           496          474
Tangible assets                                           3,312        3,375
                                                          -----        -----
                                                          3,808        3,849
                                                          -----        -----
Current assets:
Stocks                                                    1,570        1,865
Debtors                                                   2,069        2,032
Cash at bank and in hand                                     18           25
                                                          -----        -----
                                                          3,657        3,922

Creditors: amounts falling due within one year           (2,965)      (2,751)
                                                          -----        -----
Net current assets                                          692        1,171
                                                          -----        -----
Total assets less current liabilities                     4,500        5,020
Creditors: amounts falling due after more than one year    (828)        (986)
Provisions for liabilities and charges                      (65)           -
                                                          -----        -----
                                                          3,607        4,034
                                                          -----        -----
Capital and reserves
Called up share capital                                     738          738
Share premium                                               715          715
Revaluation reserve                                         536          544
Profit and loss account                                   1,618        2,037
                                                          -----        -----
Total equity shareholders' funds                          3,607        4,034
                                                          -----        -----


CASH FLOW STATEMENT
for the year ended 31 December 1999 
                                                           1999         1998
                                                          £'000        £'000
Reconciliation of operating profit to net cash
inflow from operating activities

Operating (loss)/profit                                    (263)         309
Depreciation charges                                        401          287
Re-organisation costs paid                                    -         (205)
Decrease in stocks                                          326          156
Increase in debtors                                        (121)        (101)
(Decrease)/increase in creditors                           (273)         253
                                                          -----        -----
Net cash inflow from operating activities                    70          699
                                                          -----        -----

Cash Flow Statement
Net cash inflow from operating activities                    70          699
Returns on investments and servicing of finance            (164)         (92)
Taxation                                                     62          (31)
Capital expenditure                                        (261)        (481)
Acquisitions                                                (65)      (1,521)
Equity dividends paid                                       (89)        (215)
                                                          -----        -----
                                                           (447)      (1,641)
Financing                                                   (55)       1,259
                                                          -----        -----
Decrease in cash                                           (502)        (382)
                                                          -----        -----

Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period                             (502)        (382)
Cash reduction/(increase) from change in debt                55         (869)
                                                          -----        -----
Change in net debt                                         (447)      (1,251)
Net debt at 1 January 1999                               (1,711)        (460)
                                                          -----        -----
Net debt at 31 December 1999                             (2,158)      (1,711)
                                                          -----        -----


Notes:
1.  The Annual Report and Financial Statements will be sent to all
    shareholders. Further copies will be available to the public from the
    Company Secretary at the Company's registered office, St Ivel Way,
    Warmley, Bristol BS30 8TY.

2.  The calculation of (loss)/earnings per share is based on losses of
    £427,000 (1998, earnings £247,000) and on 14,770,000 (1998, 13,436,666)
    ordinary shares being the weighted average number in issue during the
    year.

3.  The abridged Accounts for the year ended 31 December 1999 and 1998 do not
    constitute statutory accounts and are an extract from the Company's
    statutory accounts on which the auditors give an unqualified opinion.


For further information contact:

Geoff Martin, Dinkie Heel, Tel: [phone]
Ken Rees, Winningtons, Tel: [phone] / Mobile [phone]
John Wakefield, Rowan Dartington, Tel: [phone]