Interim Results

Eleco PLC
05 March 2003

5 March 2003

                                   ELECO PLC

                     INTERIM RESULTS FOR THE SIX MONTHS TO
                                31 DECEMBER 2002

                       Good progress in difficult markets
                            Profit before tax up 52%


Enquiries to:
John Ketteley, Executive Chairman               Tel: [phone]
Eleco plc                                       [e-mail]

David Dannhauser, Finance Director              Tel: [phone]
Eleco plc                                       [e-mail]

Tarquin Edwards/Simon Rothschild                Tel: [phone]
Holborn                                         [e-mail]
                                                [e-mail]


                            Change            6 months ended    6 months ended
                                             31 December 2002   31 December 2001

Turnover                    Up 28 %                £18.17m           £14.21m
Profit Before Tax           Up 52 %                 £0.87m           £0.57m
Earnings per Share          Up 31%                  1.37p            1.04p
Dividend per Share          Up 7%                   0.375p           0.35p
Dividend Cover                                      3.5x             3.0x

  • Strong cash generation continues and net cash at 31 December 2002 was
    £0.74m, compared with net borrowings at 31 December 2001 of £1.51m

Executive Chairman, John Ketteley, said:

'In the six months ended 31 December 2002, we continued to offer high quality,
innovative products to the building industry together with excellent
construction software programs and state-of-the-art internet solutions. We also
made selective investments in new products and facilities, while having regard
to the need to maintain a sound financial base.'

'The recent acquisition of Consultec has given us critical mass in the
construction software market and strengthened the management of our software
interests. These actions have enabled us to make progress in these difficult
market conditions and we will continue to adopt the same approach to our
business in the months ahead.'


CHAIRMAN'S STATEMENT

Profits before tax in the six months ended 31 December 2002 at £871,000 were 52
per cent. higher than those of the first half last year and cash flow was again
strong.

Turnover in the six months ended 31 December 2002 amounted to £18,167,000 (2001:
£14,210,000) an increase of 29 per cent.  Turnover of Eleco Building Systems was
£17,659,000 (2001: £13,566,000), an increase of 30 per cent., while turnover of
Eleco Software Systems was lower at £508,000 (2001: £644,000).

Operating profits amounted to £937,000 (2001: £653,000). Eleco Building Systems
contributed £1,487,000 (2001: £896,000), 66 per cent. ahead of the same period
last year. Eleco Software Systems incurred a loss of £160,000 (2001: loss
£17,000).

Interest charges were further reduced to £29,000 (2001: £81,000) and profits on
ordinary activities before tax for the six months were £871,000 (2001:
£572,000). Profits after tax amounted to £572,000 (2001: £428,000), giving
earnings per share equivalent to 1.37p (2001: 1.04p per share).

As a result of the strong operating cash flow, net cash balances increased
during the period by £278,000 despite expenditure on tangible and intangible
assets and other investments in the period amounting to £1,271,000. Net cash at
31 December 2002 amounted to £742,000 (2001: net borrowings £1,509,000).

The Board has declared an interim dividend of 0.375p per share (2001: 0.35p),
which will be payable on 4 April 2003 to shareholders on the Register on 24
March 2003. The interim dividend is covered 3.5 times by earnings.

Eleco Building Systems

Structural Precast Concrete

Bell & Webster Concrete successfully completed the contract, which was well
advanced at the last financial year-end, for the provision of 1,601 Fastbuild(R)
rooms for student accommodation to the University of Hertfordshire. Good
progress was made on the contract for the supply of student accommodation to the
University of Essex. Further opportunities are currently being progressed for
the supply of Fastbuild(R) rooms for projects in the higher education sector and
for the Ministry of Defence.

Considerable interest was generated by Bell & Webster Concrete in its new
precast railway platform products at the Railtex Exhibition in November 2002 and
I am pleased to report that it has subsequently received an order for
approximately £750,000.  Demand for retaining walls and ground beams were
somewhat lower and orders for terracing were affected by the financial problems
currently being experienced by some football clubs. However, overall Bell &
Webster Concrete achieved an increase of 110% on sales in the same period last
year.

A further expansion of product storage facilities at the Grantham site was also
completed in the period.

Roofing, Cladding and Panels

Although SpeedDeck Building Systems processed a similar number of roofing orders
in the period, the lack of larger orders, reflecting activity in the commercial
and industrial building sector, resulted in turnover from roofing being 26%
below that of the corresponding period last year and in significantly reduced
profits. This shortfall was partially offset by increased sales of Vitesse(R)
composite wall panels and the number of projects for which Vitesse(R) was
specified showed an encouraging increase in the period.

During the period under review, an additional mobile rollformer was purchased to
produce SpeedZip(R), a new standing seam roofing profile to complement the
existing SpeedDeck(R) secret-fix product. I am pleased to report that the first
SpeedZip(R) orders have already been delivered. The introduction of SpeedZip(R)
into the product range should improve SpeedDeck Building Systems' ability to
generate business in the continuing difficult conditions in the roofing market.

I am pleased to report that Downer Cladding Systems made an excellent
contribution in the period under review and continues the good progress made
following its acquisition in May 2002.

The restructuring of the Stramit Industries has delivered the benefits
anticipated in my last statement and Stramit Industries returned to profit in
the period and at a higher level than the corresponding period last year,
despite a small decline in sales.

Timber Engineering

Gang-Nail Systems produced an excellent performance in the first six months. The
Gang-Nail Roof and Truss software is now being used by an increasing proportion
of customers and is currently being evaluated by an increasing number of
prospective customers.

Ecojoist(R) continues to make excellent progress, increasing the number of
customers using the system and record sales were achieved in the period.

Gang-Nail Systems continued to benefit from the manufacture of connector plates
supplied to customers of Eleco Bauprodukte, although the results of the latter
itself continued to be adversely affected by intense competition in the
depressed German market.

International Truss Systems made an excellent contribution against the
background of a generally buoyant South African market. The move to larger, more
modern facilities with its own warehousing has been an important factor in
enabling International Truss Systems to service an increase in sales of 45% over
the corresponding period last year.

Eleco Software Systems

Construction Software

MBA Computing experienced difficult trading conditions and incurred an increased
loss, following the decision of a potential major overseas customer not to place
an order due to its uncertainties about software developments in the US market.
However, software solutions provided by MBA Computing to Bell & Webster Concrete
and Gang-Nail Systems contributed to their success.

At the beginning of February 2003, Consultec became part of the Group. I
consider that the prospects for MBA Computing's business will improve as it
gains access to Consultec's construction software portfolio in the months ahead.

Internet Solutions

Forma Communications also produced disappointing results. A number of
significant projects came to an end and replacements were not started. However,
careful control of costs contained its loss. A notable success was the winning
of a mandate from the Ford Motor Company to develop the website for its Centre
for Manufacturing and Engineering Excellence, against stiff competition.

In February 2003, the Group acquired Leonardo Internet, a provider of integrated
web and print solutions. I anticipate that the prospects for both businesses
will be enhanced by the exploitation of the synergies between them.

Outlook

We continue to offer high quality, innovative products to the building industry
together with excellent construction software programs and state-of-the-art
internet solutions. We have also made selective investments in new products and
facilities, while having regard to the need in these difficult markets to
maintain a sound financial base.

The recent acquisition of Consultec has added critical mass in the construction
software market and strengthened the management of our software interests. These
actions have enabled us to make progress during the first six months of this
financial year and we will continue to adopt the same approach to our business
in the months ahead.


John Ketteley
Executive Chairman




                                     Eleco plc
                    Consolidated profit and loss account

                                                    (Unaudited)      (Audited)   
                                                Half year ended    Year ended  
                                                  31 December         30 June     
                                                 2002      2001          2002 
                                                £'000     £'000         £'000 
  Turnover                                                                    

    Continuing operations                      18,167    14,210        32,873  
                                                                   
  Operating profit                                                            
                                                                              
    Continuing operations                         937       653         1,878  
                                                                    
  Loss on disposal of tangible assets             (37)        -             -  
                                                                              
  Profit on ordinary activities                   900       653         1,878  
  before interest                                                             

  Net interest payable                            (29)      (81)         (142) 

  Profit on ordinary activities                   871       572         1,736  
  before tax                                                                  

  Tax on ordinary activities                     (299)     (144)         (497) 

  Profit on ordinary activities after             572       428         1,239  
  tax                                                                         
                                                                              
  Dividend on ordinary shares (Note              (163)     (142)         (477) 
  2)                                                                          

  Retained profit                                 409       286           762  
  Dividends per share                          0.375p     0.35p         1.00p  
                                                                              
  Earnings per share (Note 3)                    1.4p      1.0p          3.0p  
  Diluted earnings per share (Note 4)            1.4p      1.0p          3.0p  


    Notes

1.            The interim results have been prepared on the basis of the accounting policies adopted for the year
              ended 30 June 2002, as set out in the Company's Annual Report and Accounts.  The interim results do not
              comprise statutory accounts within the meaning of section 240 of the Companies Act 1985.

2.            The dividend will be payable on 4 April 2003 to shareholders on the register on 24 March 2003.

3.            Based on the profit attributable to shareholders and a weighted average of 41,828,190 ordinary shares
              (Dec 2001 - 41,080,957 and Jun 2002 - 41,195,519).

4.            Based on the profit attributable to shareholders and a diluted weighted average of 42,017,296 ordinary
              shares (Dec 2001 - 41,712,205 and Jun 2002 - 41,769,703). The dilution is caused by outstanding share
              options.

5.            Post Balance Sheet Events
              On 3 February 2003, the company acquired the entire issued share capital of Consultec Group AB for a
              consideration of SEK 33,648,000 paid in cash and the issue of 5,705,660 ordinary shares credited as
              fully paid and ranking pari passu with existing ordinary shares except that they will not rank for the
              interim dividend.

              On 7 February 2003, the company acquired the entire issued share capital of Leonardo Internet Limited
              for a consideration of £200,000 paid in cash.

6.            The comparative figures for the year ended 30 June 2002 have been taken from but do not constitute the
              Company's statutory accounts for that financial year. Those accounts have been reported on by the
              Company's auditors and delivered to the Registrar of Companies.  The report of the auditors was
              unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.

7.            Copies of this interim statement and results, which were approved by the Board on 5 March 2003, are
              available from the registered office of the Company, which is at Eleco House, 15 Gentlemen's Field,
              Westmill Road, Ware, Herts  SG12 0EF.


                           Statement of Total Recognised Gains and Losses

                                                    (Unaudited)    (Audited)   
                                                 Half year ended   Year ended  
                                                  31 December         30 June     
                                                 2002      2001          2002 

                                                £'000     £'000         £'000 

  Profit for the period                           572       428         1,239  
                                                                        
  Currency translation differences on              68      (159)         (115) 
  foreign currency net investments                                         
                                                              
  Total recognised gains for the period           640       269         1,124  
                                                                
                                                                       
                                                                              
                     Reconciliation of movement in equity shareholders' funds                    

                                                     (Unaudited)    (Audited)   
                                                  Half year ended  Year ended  
                                                   31 December        30 June     
                                                 2002      2001          2002 

                                                £'000     £'000         £'000 

  Profit for the period                           572       428         1,239  
                                                                              
  Dividends                                      (163)     (142)         (477) 

  Other recognised gains/(losses)                  68      (159)         (115) 
                                                                
  Proceeds from issue of ordinary shares           45         2             5  
                                                                     
  Issue of ordinary shares on acquisition           -         -            50  
  of subsidiary undertakings                                                            
                                                                  
  Net increase in equity shareholders' funds      522       129           702  
                                                                       
  Opening equity shareholders' funds            9,247     8,561         8,545  
                                                               
  Closing equity shareholders' funds            9,769     8,690         9,247  
                                                               
                                                                         

                                                                              
                                     Eleco plc                                                                   
                      Summarised consolidated balance sheet                                       
                                                                              
                                                   (Unaudited)       (Audited)  
                                                   31 December        30 June    
                                                2002       2001         2002 

                                               £'000      £'000        £'000 
                                                                              
  Fixed assets                                 9,562      8,539        8,808  
                                                                              
  Current assets                                                              
    Stocks                                     1,886      2,218        1,838  
    Debtors                                    6,175      5,688        7,026  
    Cash and bank balances                     3,924        368        3,333  
                                                                              
                                              11,985      8,274       12,197  

  Creditors falling due within one                                            
  year                                                                        
     Bank loans and overdrafts                (1,663)      (456)      (1,073) 
     Obligations under finance leases           (155)      (221)        (195) 
     Other creditors                          (8,323)    (5,878)      (8,606) 
                                                                              
  Net current assets                           1,844      1,719        2,323  
                                                                              
  Creditors falling due after more                                            
  than one year                                                               
     Bank loans                               (1,262)    (1,038)      (1,488) 
     Obligations under finance leases           (102)      (162)        (113) 
                                                                              
                                              (1,364)    (1,200)      (1,601) 
                                                                              
     Provisions for liabilities and charges     (273)      (368)        (283) 
                                                                              
  Net assets                                   9,769      8,690        9,247  
                                                                              
  Capital and reserves                                                        
     Called up share capital                   4,309      4,260        4,282  
     Share premium account                     5,098      5,049        5,080  
     Merger reserve                              367        367          367  
                                                                              
     Profit and loss account                      (5)      (986)        (482) 
                                                                                  
  Equity shareholders' funds                   9,769      8,690        9,247  
 
 
                                                                              
                                          Eleco plc                                                                   
                           Consolidated cash flow statement                                            

                                                                             
                                                       (Unaudited)   (Audited)  
                                                   Half year ended Year ended 
                                                    31 December       30 June    
                                                   2002     2001         2002 

                                                  £'000    £'000        £'000 
                                                                              
  Net cash inflow from operating                  1,891      844        4,191  
  activities                                                                  
                                                                              
  Returns on investment and servicing of                                      
  finance                                                                     
     Net interest paid                             (29)     (81)        (142) 
                                                                              
  Net cash outflow from returns on                 (29)     (81)        (142) 
  investment and servicing of finance                                         
                                                                              
  Taxation                                          25       28           (6) 
                                                                              
  Capital expenditure and financial                                           
  investment                                                                  
     Increase in loans to Employee Share           (39)     (60)         (60) 
     Ownership Trust                                        
     Purchase of fixed assets                   (1,271)    (311)        (914) 
     Sale of tangible fixed assets                   7        3           65  
                                                                  
  Net cash outflow from capital expenditure                                               
  and financial investment                      (1,303)    (368)        (909) 
                                                                              
  Acquisitions and disposals                                                  
     Purchase of subsidiary                         (6)       -         (538) 
     undertakings net of cash acquired                                                               
     Sale of subsidiary undertaking's operations    10      767          770  
  Net cash inflow from acquisitions and              4      767          232  
  disposals                                                                   
                                                                              
  Equity dividends paid                           (339)    (267)        (412) 
                                                                              
  Net cash inflow before financing                 249      923        2,954  
                                                                              
  Financing                                                                   
     New bank loans                                  -        -          750  
     Repayment of principal under                 (115)    (118)        (282) 
     finance leases                                                          
     Repayment of bank loans                      (226)    (151)        (301) 
     Issue of ordinary shares                       45        2            5  
                                                                       
  Net cash (outflow)/inflow from                  (296)    (267)         172  
  financing                                                                   
                                                                              
  (Decrease)/increase in cash in the               (47)     656        3,126  
  period                                                                      
 
 

                                                                              
                                     Eleco plc                                                                   
              Consolidated cash flow statement - reconciliations                          
                                                                              
                                                   (Unaudited)         (Audited)  
                                                 Half year ended      Year ended 
                                                   31 December          30 June    
                                                 2002       2001         2002 
                                                £'000      £'000        £'000 
                                                                              
  Reconciliation of operating profit to                                       
  net cash flow from operating                                                              
  activities                                                
   Operating profit                               937        653        1,878  
   Depreciation charge                            530        552        1,182  
   Amortisation of intangible assets               44         38           94  
   Amortisation of LTIP Awards                     41         72           84  
   Profit on sale of tangible fixed assets         (7)        (2)          (9) 
   Working capital decrease/(increase)            346       (469)         962  
                                                           
   Net cash inflow from operating activities    1,891        844        4,191  
                                                                
                                                                              
  Reconciliation of net cash flow to                                          
  movement in net debt                                                        
   (Decrease)/increase in cash in the period      (47)       656        3,126  
   Cash outflow/(inflow)from decrease in          341        269         (167) 
   debt and lease financing                                           
                                                                     
   Decrease in net debt resulting from            294        925        2,959  
   cash flows                                                
   New finance leases                             (64)       (73)        (162) 
                                                                              
   Effects of changes in foreign exchange          48       (115)         (87) 
   rates                                                     
   Decrease in net debt                           278        737        2,710  
                                                                          
   Opening net cash/(debt)                        464     (2,246)      (2,246) 
                                                                   
   Closing net cash/(debt)                        742     (1,509)         464  
                                                                   
 
                                                                             
  Segmental analysis                                                          
                                                                              
  Group turnover and profits were attributable as follows             
                                                                              
                                           External sales                        Profit/(loss)               
                                  (Unaudited)       (Audited)           (Unaudited)        (Audited)
                                Half year ended   Year ended         Half year ended     Year ended     
                                 31 December         30 June           31 December          30 June 
                               2002      2001           2002          2002      2001           2002
 
                              £'000     £'000          £'000         £'000     £'000          £'000 
                                                                              
  Continuing activities                                                          
  Building systems           17,659    13,566         31,523         1,487       896          2,610  
  Software systems              508       644          1,350          (160)      (17)            12  
  Corporate                       -         -              -          (390)     (226)          (744) 
  Total continuing           18,167    14,210         32,873           937       653          1,878  
                                                                  
  Exceptional losses                                                   (37)        -              -  
                                                                              
  Profit before interest                                               900       653          1,878  
                                                                       
                                                                      
 

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