Trading Statement

EPIC Reconstruction PLC
20 May 2005



Trading statement - for immediate release



Following a successful first period of trading, EPIC Reconstruction Plc ('the
Company') expects to announce its results for the period to 31 January 2005 on
27 May 2005.  However, towards the end of the period end trading in one of the
portfolio investments, Adam G Brown, failed to meet expectations, and it became
unable to meet its obligations. The business was placed into liquidation, and
the Company has been working to recover its investment via the charges that it
had over Adam G Brown's assets. It has now become clear that it will not be
recovered in full, and the Company will write off £435,000, which will be
charged in the year to 31 January 2005.



The Company listed in September 2003, having raised £30 million. This charge
therefore amounts to approximately 1.3 per cent of the funds originally raised
by the Company, and does not affect its trading potential, nor its ability to
pay dividends in future.  It will, however, mean that the target dividend payout
of 8 per cent for the period to 31 January 2005 will not be met



Adam G. Brown is a producer of profiled steel sheets, flashings, gutters,
purlins, rails, and ancillary items for the construction and steel fabrication
industries. The Company invested £0.95m in equity, and a further £2.2m in debt
facilities. As a result of difficulties with suppliers, the ongoing cash
requirements of the business made it an unviable investment proposition. Funds
were therefore no longer available to support the business.



The assets of the business have now been sold. Under the terms of the agreement,
the Company will maintain the residual value in the Property and Plant and
Machinery, as well as 19.9 per cent of the equity of the new business. The
Company is therefore writing off the equity investment of £950,000, whilst
retaining the value in the Property and Plant and Machinery of £515,000. No
value has been ascribed to the equity stake, and collection of the debtor book
continues.



The net write off of £435,000 will be reflected as an adjusting post balance
sheet movement. The write-off will reduce the profits for the year to 31 January
2005 by £435,000, and therefore impact the Final Dividend. The Company currently
expects the Final Dividend to be 5.0p, which with the Interim Dividend of 1.7p
already paid will result in Dividends for the year of 6.7p compared with the
full year target of 8.0p.



Up to 31 January 2005 ten investments had been made, of which one has already
been sold, and one (Adam G Brown) has now been liquidated.  The opening three
months of the current year have seen the Company complete two further deals. The
deal pipeline remains strong, and the Company remains confident that it will
continue to yield dividends to shareholders and deliver capital gains during the
life of portfolio investments.



Ends


Contacts:
Numis Securities:          Simon Law                  020 7776 1500
                           Dickie Hall





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