Interim Results

Dinkie Heel PLC
21 September 2001



                              Dinkie Heel plc
                      Announcement of Interim Results


Chairman's Statement

Financial results and review of the period


Sales for the first six months were £4,834,000 (2000: £5,011,000) and before
exceptional items the company made an operating profit of £1,000 (2000: loss 
£110,000). After the exceptional items of £60,000 (2000: £50,000) and interest
payable of £110,000 (2000: £95,000) the loss on ordinary activities before
taxation was £169,000 (2000: £255,000). Losses per share were 1.14p (2000:
1.73p).


Davies Odell continued to increase its sales outside the footwear industry.
Development and refinement of the range of products for impact protection in
protective clothing (PPE equipment) played a particular part in improving
sales and margins. Sales of PPE equipment increased 12% by comparison with the
same six months of 2000 although sales of EVA flooring products for the
equestrian and dairy industries were hindered by the problems of the
agricultural industry and increased by just 3%. Together the sales of these
products represented 20% (2000: 19%) of total company sales in the first half
year. Sales by Davies Odell of products to the footwear trade were 3% ahead of
last year's level. For the half year the operating profit of Davies Odell is
92% ahead of 2000.


Sales by the Dinkie-FCE toe cap business for the first half year fell 2% by
volume below those of 2000 but with sales prices continuing to be under
pressure the total sales revenue fell by 4.5%. Production costs and overheads
were considerably reduced. Labour costs were 9% lower and overhead costs
almost 20% lower and reflecting the benefit of the consolidation of warehouse
facilities on the Warmley site carried out in the latter part of 2000. As a
result and despite the fall in sales revenue the loss for the operation was
reduced by comparison with the first half of 2000.


Sales of footwear components manufactured by Phillips Rubber were 18% lower
than in the same period of 2000 reflecting in particular lower sales to the UK
shoe repair industry. Overheads were tightly controlled and the business
recorded only a small operating loss in the period.


In March 2001 the company announced its intention to cease manufacture of
Phillips products in Manchester, to have the products manufactured by a well
established South African partner and to distribute them from the company's
premises in Warmley. It also announced that the toe cap business would begin
the manufacture with an overseas partner of some of its products for export
markets. During this six months the reorganisation costs associated with these
changes amount to £60,000 and are shown as an exceptional item. In the six
months to June 2000 the exceptional item related to lease closure costs
associated with the Warmley warehouse reorganisation.


Net cash outflow from operating activities in the period was £232,000 (2000: 
£42,000) reflecting in particular the stock build to help accommodate the
Phillips move and the seasonal increase in other working capital. Net debt at
30 June 2001 was £2,583,000 (2000: £2,430,000) representing gearing of 87%
(2000: 72.5%).


Dividend


The Board is concentrating on returning the company to healthy profit and
conserving the cash needed to implement its strategy. Accordingly no interim
dividend is recommended for this year (2000: nil).


Prospects


Sales of PPE equipment continue to increase and look set to benefit from our
insistence on the maintenance of quality standards in a market in which other
suppliers have been less stringent. EVA flooring products are traditionally
strong in the second half of the year and sales are expected to continue to
increase.


Overseas production of rubber components has begun and production in
Manchester will cease during the second half year during which time the
Phillips business will be transferred to Bristol. The freehold premises in
Manchester are for sale and it is expected that in due course their sale will
realise a premium over book value.


Market conditions for safety steel toe caps are difficult given the global
economic slow down and increasing competition. Manufacture overseas for export
markets is beginning during the second half of the year and will improve the
company's ability to profitably supply those markets.


Richard Organ
Chairman
21 September 2001




                   2001 Interim Report to Shareholders
                          Profit and Loss Account


                                          Unaudited                  Audited
                                     6 months    6 months          12 months to 
                                           to          to           31 December 
                                      30 June     30 June                  2000
                                         2001        2000
                                        £'000       £'000                 £'000

Turnover
Continuing operations                   4,834       5,011                10,152

Operating profit/(loss) before              1       (110)                 (242)
exceptional items
Exceptional items                        (60)        (50)                  (59)

Operating loss from continuing           (59)       (160)                 (301)
operations
Interest payable                        (110)        (95)                 (174)

Loss on ordinary activities             (169)       (255)                 (475)
before taxation
Taxation                                    -           -                     -

Loss for the period                     (169)       (255)                 (475)
Dividends                                   -           -                     -
Loss set against reserves               (169)       (255)                 (475)

Loss per share (basic and             (1.14p)     (1.73p)               (3.22p)
diluted)



                    2001 Interim Report to Shareholders
                                Balance Sheet

                                                 Unaudited           Audited
                                              As at       As at          As at
                                            30 June     30 June    31 December
                                               2001        2000           2000  
                                              £'000       £'000          £'000

Net assets employed

Fixed Assets                                  3,333       3,660          3,485

Current assets:
Stocks                                        1,521       1,493          1,446
Debtors                                       1,839       1,806          1,751
Cash at bank and in hand                         17          18             17
                                              3,377       3,317          3,214

Creditors: amounts falling due within       (2,938)     (2,857)        (2,850)
one year
Net current assets                              439         460            364

Total assets less current liabilities         3,772       4,120          3,849

Creditors: amounts falling due after          (809)       (768)          (717)
more than one year

Provisions for liabilities and charges            -           -              -

                                              2,963       3,352          3,132

Capital and reserves

Called up share capital                         738         738            738

Share premium                                   715         715            715
Revaluation reserve                             524         532            528
Profit and loss account                         986       1,367          1,151
Total equity shareholders' funds              2,963       3,352          3,132





                     2001 Interim Report to Shareholders 
                             Cash Flow Statement


                                               Unaudited              Audited
                                                 6         6                 12 
                                            months    months             months 
                                                to        to                 to
                                           30 June   30 June       31  December
                                              2001      2000               2000
                                             £'000     £'000              £'000

Reconciliation of operating loss to net
cash flow from operating activities

Operating loss                                (59)     (160)              (301)

Depreciation charges                           215       218                428
(Increase)/decrease in stocks                 (75)        77                124
(Increase)/decrease in debtors                (88)       263                318
Decrease in creditors                        (225)     (440)              (245)
Net cash (outflow)/inflow from operating     (232)      (42)                324
activities


Cash Flow Statement
Net cash (outflow)/inflow from operating     (232)      (42)                324
activities
Returns on investments and servicing of      (110)      (95)              (174)
finance
Taxation                                         -         -                  -
Capital expenditure                           (63)      (70)              (105)
Acquisitions                                     -      (65)               (65)
Equity dividends paid                            -         -                  -
                                             (405)     (272)               (20)


Financing                                     (28)      (58)              (136)
Decrease in cash                             (433)     (330)              (156)

Reconciliation of net cash flow to
movement in net debt
Decrease in cash in the period               (433)     (330)              (156)
Cash reduction from change in debt              28        58                136
Change in net debt                           (405)     (272)               (20)

Net debt at 1 January                      (2,178)   (2,158)            (2,158)
Net debt at period end                     (2,583)   (2,430)            (2,178)



Notes:



1.       The calculation of the loss per share for the six months is based on
14,770,000 (2000: 14,770,000) ordinary shares, being the weighted number in
issue during the period.



2.       The financial information contained in the accounts does not
constitute full accounts within the meaning of the Companies Act 1985. The
results for the half year to 30 June 2001 are unaudited. The abridged profit
and loss account, balance sheet and cash flow statement for the year ended 31
December 2000 were extracted from the published accounts which received an
unqualified audit report and which have been delivered to the Registrar of
Companies.



3.       A copy of the interim report is being sent to shareholders. Further
copies will be available to the public from the Company Secretary at the
Company's registered address, St Ivel Way, Warmley, Bristol BS30 8TY.