Interim Results

Dickinson Legg Group PLC
25 February 2004


For Immediate Release                                           25 February 2004


                            DICKINSON LEGG GROUP PLC
           Interim Results for the Six Months ended 31 December 2003


Dickinson Legg Group is a specialist engineering group, incorporating Dickinson
Legg and Spooner Industries. Dickinson Legg Limited is a world leader in the
manufacturing and installation of primary tobacco processing equipment and
Spooner Industries Limited is a specialist air drying equipment manufacturer for
the paper, converting, metals and food industries.

Highlights

  • Trading pattern similar to last year with revenues weighted to second
    half;

  • Dickinson Legg commenced the year with a lower order book, but orders
    secured will result in significantly improved second half;

  • Spooner Industries has benefited from a strong order bank at the start of
    the year but recent order intake has been disappointing;

Financials

  • Turnover £18.499 million (2002: £21.805 million);

  • Profit before tax £0.092 million (2002: loss £0.035 million);

  • Basic earnings per share 0.10p (2002: loss 0.12p);

  • Dividend 0.5p (2002: nil);

  • Net funds £1.562 million, an improvement of £1.962 million.

Commenting on the results, Barry Stevenson, Chairman said:

'Dickinson Legg Group continues to operate in difficult market conditions, as
reflected in our results. Due to the pattern of revenues showing similarities to
last year, we are confident that the second half of the year will show a
substantial improvement in trading which is reflected in the payment of the first
interim dividend.'

For further information please contact:

Dickinson Legg Group plc                                   Today - 020 7466 5000
Barry Stevenson, Chairman                                thereafter 01962 841788
Tom Mackie, Chief Executive
David Heath, Group Finance Director

Buchanan Communications                                            020 7466 5000
Richard Darby
Ben Willey


OPERATING REVIEW

In the 2003 Annual Report trading conditions were reported to be difficult and
this has continued throughout the period. In the first half of the year, the
Dickinson Legg Group reported revenues of £18.499 million and an operating
profit of £0.116 million. The trading pattern of the current year is
demonstrating similarities to last year with revenues weighted to the second
half, reflecting the current order book position.

Dickinson Legg, the primary tobacco processing equipment business, entered this
financial year with a lower order book than the previous year, which is
reflected in turnover of £11.254 million (2002: £16.744 million) and operating
profit of £0.302 million (2002: £0.675 million).  The nature of the Group is
such that order intake tends to be lumpy. A number of orders were secured in the
period, which will result in a significantly improved financial performance in
the second half of the year relative to the first half.  Against the background
of an overall slowing in demand for primary tobacco processing equipment, which
will put pressure on margins, Dickinson Legg continues to exploit opportunities
for its leading products which has resulted in new orders being placed for the
Expanded Stem System (ESS), High Expansion Drying (HXD) and high speed cutters
RC5 and RC6 in the period.

Activity levels for spares and wear parts were lower due to a combination of
reduced demand from customers and fewer spares packages associated with lower
volumes of new machines.  Nevertheless, the USA spare parts business held up
well.  The Indian Joint Venture, Dickinson Fowler, had a similar slow start to
the year as Dickinson Legg, but will benefit in the second half year from
recently won orders for both local and overseas customers.

Spooner Industries, the specialist air drying equipment manufacturer, has
benefited from the strong order bank at the start of the financial year,
increasing turnover to £7.245 million (2002: £5.061 million) and an operating
profit of £0.146 million (2002: £0.098 million). Order intake however, has been
disappointing recently with few orders secured and the order backlog is
considerably lower than at the same time last year.  There has been a recent
improvement in the number and quality of enquiries but our markets remain
fiercely competitive, keeping pressure on margins.

Results

Group turnover at £18.499 million was 15% lower than the previous year and
operating profit before exceptional items was down to £0.116 million from £0.647
 million.  The reduction in sales and profits was entirely attributable to the
tobacco-related business, with Spooner showing improvement as a result of its
strong order book going into the period.  There has been a tight control
exercised of overheads, which were 7% lower than last year.

Basic earnings per share were 0.10p (2002: (0.12)p).

Net funds at the half year were £1.562 million which is an improvement of £1.962
million in the period.  Cash flow benefited from the receipt of the final
payment of £1.4 million on the exceptionally large contract with Samsung.

The Group interest charge was reduced from £0.133 million to £0.065 million in
the comparative period.

Taxation

The estimated effective tax rate for the current period is 60% (Dec 2002: 25%)
which amounts to a tax charge of £0.055 million (Dec 2002: £0.009 million). This
reflects a potential impairment of ACT previously recognised as an asset on the
balance sheet.

The Group's normalised effective tax rate is 30%.

Dividend

It has been decided to pay a first interim dividend of 0.5p (2002: nil) with
payment deferred until 1 July 2004 in order to optimise the use of advanced
corporation tax.  Although not covered by the earnings in the period, the
decision has been taken as an indication of the confidence of the prospects for
the year as a whole and that the ACT impairment will not have a cash impact this
year. As indicated in the 2003 Annual Report, subject to satisfactory
performance, the interim dividend will represent approximately one third of the
year's total.

Prospects

The current order book at Dickinson Legg should result in a substantial
improvement in trading profits in the second half but Spooner Industries is
expected to make little advance. The Group performance is likely to be slightly
below the current market expectations.  There is no evidence of an improvement
in the markets we serve for the coming year.

We continue to search for acquisition opportunities which would enhance
shareholder value.

Dickinson Legg Group plc
Group profit and loss account (unaudited)
for the six months ended 31 December 2003

                                           Notes      Six months to 31      Six months to      Year ended
                                                         December 2003        31 December         30 June
                                                                                     2002            2003
                                                                  £000               £000            £000


Turnover including share of joint venture    1                  18,689             22,163          49,714

Less: Share of joint venture                 2                   (190)              (358)           (529)
Group turnover                                                  18,499             21,805          49,185


Operating profit                             1                     116                647           3,085
Operating exceptional items                  3                       -              (572)           (634)
Operating profit after exceptional items                           116                 75           2,451

Share of operating profit in joint           2                      32                119             129
venture

Operating profit including joint venture    1,3                    148                194           2,580

Exceptional items                            3                       -              (101)           (144)

Profit on ordinary activities before                               148                 93           2,436
interest

Net interest (payable)/receivable
Group                                                             (65)              (133)           (233)
Joint venture                                                        9                  5              21

Profit / (loss) on ordinary activities
 before taxation                                                    92               (35)           2,224

Tax on profit / (loss) on ordinary           4                    (55)                (9)           (320)
activities

Profit / (loss) on ordinary activities
after taxation                                                      37               (44)           1,904

Dividends                                    5                   (182)           (14,421)        (14,963)

Retained (loss) for the period                                   (145)           (14,465)        (13,059)

Basic earnings / (loss)  per 20p share                           0.10p            (0.12)p           5.20p               
  

All results relate to continuing activities.


Dickinson Legg Group plc
Group balance sheet (unaudited)
as at 31 December 2003

                                                           31 December      31 December      30 June
                                                                  2003             2002         2003
                                            Notes                 £000             £000         £000

Fixed assets

Intangible assets                                                3,398            3,648        3,529
Tangible assets                                                  1,008            1,238        1,132
Investments
          Interests in joint venture:
          Share of gross assets                                    911              998          825
          Share of gross liabilities                             (389)            (472)        (340)
          Share of net assets                                      522              526          485

                                                                 4,928            5,412        5,146
Current assets

Stock                                                            2,190            2,123        1,340
Debtors                                                         10,375           12,407       17,807
Investments                                                          -            1,500            -
Cash at bank and in hand                                         1,564              218          283

                                                                14,129           16,248       19,430
Current liabilities

Creditors- amounts falling due within one                     (12,626)         (16,490)     (17,343)
year

Net current assets / (liabilities)                               1,503            (242)        2,087

Total assets less current liabilities                            6,431            5,170        7,233

Creditors- amounts falling due after more
than one year                                                        -                -        (545)

Provisions for liabilities and charges                         (1,403)          (1,362)      (1,420)

Total net assets                                                 5,028            3,808        5,268



Capital and reserves
Called up share capital                                          7,271            7,271        7,271
Merger reserve                                                  45,234           45,234       45,234
Other reserves                                                  39,496           40,155       39,496
Profit and loss account                                       (86,973)         (88,852)     (86,733)

Equity shareholders' funds                    6                  5,028            3,808        5,268



Dickinson Legg Group plc
Group statement of cashflows (unaudited)
for the six months ended 31 December 2003

                                                             Six months to                 Six months to     Year to
                                                               31 December                   31 December     30 June
                                                                      2003                          2002        2003
                                                                      £000                          £000        £000

Net cash inflow from operating activities                            2,245                         3,791       3,636

Dividends received from joint venture                                    -                             -          85

Returns on investments and
servicing of finance
Net interest paid                                                     (56)                         (133)       (215)

Taxation                                                             (134)                         (253)       (400)

Capital expenditure
Purchase of fixed assets                                              (78)                          (59)       (158)

Equity dividends paid pre-demerger                                       -                       (1,682)     (1,679)

Cash inflow before financing                                         1,977                         1,664       1,269

Management of liquid resources
Disposal of current asset investments                                    -                             -       1,500

Financing
Group demerger and formation costs                                       -                             -       (144)
Increase in Brunel Holdings plc invested                                 -                           659         708
capital
Net capital element of finance lease rentals                          (11)                          (66)        (99)
Reduction in bank loans and loan notes                                   -                         (883)       (883)

Increase in cash                                                     1,966                         1,374       2,351


Reconciliation of net cashflows to movement
in net funds / (debt)
Increase in cash                                                     1,966                         1,374       2,351
Repayment of long term loans/loan notes                                  -                           883         883
Net repayment of capital element of finance                             11                            66          99
leases
Sale of current asset investments                                        -                             -     (1,500)

Change in net funds from cashflows                                   1,977                         2,323       1,833
Shares in Guinness Peat Group plc received                               -                         1,500       1,500
on demerger
Currency translation differences                                      (15)                            10        (49)
Movement in net funds in the period                                  1,962                         3,833       3,284
Net (debt) at beginning of period                                    (400)                       (3,684)     (3,684)
Net funds / (debt) at end of period                                  1,562                           149       (400)



Dickinson Legg Group plc
Notes to the Interim Statements
     
1    Segmental analysis                                Six months to  Six months to      Year to
                                                         31 December    31 December      30 June
     By business segment                                        2003           2002         2003
                                                                £000           £000         £000

    Turnover:
    Tobacco processing equipment
             Group                                            11,254         16,744       37,623
             Joint venture                                       190            358          529

    Air drying equipment                                       7,245          5,061       11,562
                                                                              
    Continuing operations                                     18,689         22,163       49,714



    Operating profit/(loss):
    Tobacco processing equipment
             Group                                               302            675        3,176
             Joint venture                                        32            119          129

    Air drying equipment                                         146             98          430
    Other activities                                           (332)          (126)        (521)
    Exceptional items                                              -          (572)        (634)

    Continuing operations                                        148            194        2,580


     
2    Joint venture

     The Group has a 50% investment in Dickinson Fowler Limited, a company in 
     India which manufactures tobacco processing equipment.

     Analysis of the financial results for the  six month period to 31 December 
     2003:


                                       Turnover                      Operating profit

                                 Six months to                     Six months to
                                  31 December                       31 December
                                 2003    2002   Year to 30      2003         2002   Year to 30 
                                                 June 2003                           June 2003
                                £'000   £'000        £'000     £'000        £'000        £'000

Trade with Dickinson Legg         371     752        1,157        62          292          283             
Ltd                                                                           

Trade with third parties          379     716        1,057        63          238          259             
                                                                              
Total                             750   1,468        2,214       125          530          542             
                                                                              
Group share of trade with
third parties                     190     358          529        32          119          129             
                                                                              


Dickinson Legg Group plc
Notes to the Interim Statements
     
3    Exceptional items

                                                                                      Year to
                                                 Notes  Six months to 31 December     30 June
                                                                2003        2002         2003
                                                                £000        £000         £000

Exceptional items within operating profit:
Group demerger and formation costs                 i               -       (232)        (232)
Restructuring costs                                ii              -       (340)        (340)
Pensions advice                                                    -           -         (62)
                                                                   -       (572)        (634)
Other exceptional items
Group demerger and formation costs                 i               -       (101)        (144)

                                                                   -       (673)        (778)
     
i.   Included in these comparative sums are the costs borne by the group for
     listing on the AIM market. The costs included in arriving at operating 
     profit represent a recharge from the former parent company, Brunel Holdings 
     plc, for the management time expended in negotiating the demerger.  The 
     costs included after operating profit include the advisors  and printing 
     costs related to the admission of the group on AIM.
     
ii.  The comparative amounts relate to redundancy programmes within the Tobacco      
     processing equipment business.
     
4    Taxation

     The estimated effective tax rate for the current period is 60% (Dec 2002: 
     25%) which amounts to a tax charge of £0.055 million (Dec 2002 : £0.009 
     million).

     This reflects a potential impairment of ACT previously recognised as an 
     asset on the balance sheet. The Group's normalised effective tax rate is 
     30%.
          
5    Dividends

     The dividend shown represents an interim dividend of 0.5 pence per ordinary
     share, this will be paid on 1 July 2004 to shareholders on the register on 
     28 May 2004.
     
6    Reconciliation of movement in  equity shareholders' funds


                            Called up     Merger     Other   Profit and    Total equity
                                share   reserves  reserves loss account   shareholders'                       
                              capital                                             funds
                                £'000       £000      £000     £000                £000

At 1 July 2003                  7,271     45,234    39,496     (86,733)           5,268

Retained loss                       -          -         -        (145)           (145)

Currency translation
differences                         -          -         -         (95)            (95)

At 31 December 2003             7,271     45,234    39,496     (86,973)           5,028
     
7    Accounts

     The Group results for the six months ended 31 December 2003 and 31 December 
     2002 are neither audited  nor reviewed by independent auditors. The results 
     for the year ended 30 June 2003 set out above are an abridged version of 
     the Group's full accounts for that year and do not constitute statutory 
     accounts. Statutory accounts for the year ended 30 June 2003 for the United 
     Kingdom subsidiary companies have been delivered  to the Registrar of 
     Companies and included the auditors' report, in accordance with section 235 
     of the Companies Act 1985,which were unqualified and did not  contain a 
     statement under either section 237(2) or section 237(3) of the Companies 
     Act 1985.

     Accounting policies have been consistently applied on the basis set out in 
     the Group's financial statements for the year ended 30 June 2003.


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