Interim Results

Leeds Group PLC
10 May 2006


Issued on behalf of Leeds Group plc
Date: Wednesday, 10 May 2006
                                                               Embargoed: 7.30am
                                Leeds Group plc
            Interim Results for the six months ended 31st March 2006


STATEMENT BY THE GROUP CHAIRMAN, VIN MURRIA

Group Results
I am pleased to report that the Group's profit before tax and exceptional items
for the six months ended 31 March 2006 was £514,000, an improvement of 65% over
the corresponding period last year. It should be noted that these results
contain only one month of trading for our former subsidiary Leeds Leasing prior
to its sale on 31 October 2005.

Profit before tax and exceptional items in the continuing operations was
significantly higher than the comparative period last year, up from £63,000 to
£493,000, and compares favourably with the £338,000 reported for the 2005
financial year as a whole.

Cost reductions and the interest earned on the proceeds of the sale of Leeds
Leasing led to a reduction of £86,000 in Central costs; however the principal
cause of the improvement in profitability can be attributed to Hemmers-Itex, our
German operation, where following a strong recovery in the second half of our
last financial year, further progress has been achieved to record a pre-tax
profit of £511,000 in the first half of this year (2005: £167,000). This
reflects both improved trading conditions generally, and also the success of
Hemmers' strategy to directly target manufacturers of ready-made items in
addition to our traditional customer base of fabric retailers.

The sale of Leeds Leasing gave rise to an exceptional loss, inclusive of
disposal costs, of £837,000. The Group's tax charge increased in line with the
profitability of Hemmers-Itex, and the overall loss after tax amounted to
£561,000 (2005: profit £240,000).

In the six months ended 31 March 2006, the Group purchased through its buy-back
programme 800,000 ordinary shares at a cost of £161,000, bringing the total
number of shares held in treasury to 1,250,000 or 3.4% of the total shares in
issue.

Strategy & Outlook
We remain confident about the prospects of our continuing operations, where the
order book continues to run at record levels. Following a movement in net debt
in the period of £19.7 million, most of which related to the sale of Leeds
Leasing, the Group's balance sheet is strong with net funds exceeding £3.3
million, equivalent to 9.2 pence per share. The Board continues to explore
opportunities to re-invest these funds wisely; in the meantime we will continue
our policy of buying in Group shares to be held in treasury when this is
considered to be in the best interests of shareholders.

Dividend
Although at this stage in the Group's development there is no interim dividend
being paid, the Directors will give further consideration to dividend policy
later this year taking into account the results for the year as a whole and the
possible acquisition opportunities that by then may have been identified.

Enquiries:
Vin Murria / Ewen Wigley                     Fiona Tooley
Leeds Group plc                              Citigate Dewe Rogerson Ltd
Tel: [phone]           Tel: [phone]
                                             Mobile: [phone]

                                      -2-

                                Leeds Group plc
                                Interim Results
                      Consolidated Profit and Loss Account

               Unaudited - six months to 31 March 2006   Unaudited - six months to 31 March 2005
                    Continuing   Discontinued    Total   Continuing   Discontinued    Total
                    operations     operations     £000   operations     operations     £000
                          £000           £000                  £000           £000

Turnover                 8,755            255    9,010        6,548          1,506    8,054
Cost of sales           (6,569)           (24)  (6,593)      (4,886)          (135)  (5,021)
                        ------------------------------------------------------------------------
Gross profit             2,186            231    2,417        1,662          1,371    3,033

Distribution
costs                     (468)             -     (468)        (402)             -     (402)

Administrative
expenses                (1,253)          (125)  (1,378)      (1,188)          (671)  (1,859)
                        ------------------------------------------------------------------------
Operating
profit                     465            106      571           72            700      772

Exceptional
loss on sale
of a business
operation                 (837)             -     (837)           -              -        -
                        -----------------------------------------------------------------------

(Loss)/profit
before
interest                  (372)           106     (266)          72            700      772
                        -----------------------              -----------------------
Net interest
payable                                            (57)                                (460)
                                                --------                              -------

(Loss)/profit
on ordinary
activities
before
taxation                                          (323)                                 312

Taxation on
(loss)/profit
on ordinary
activities                                        (238)                                 (72)
                                                --------                              -------

(Loss)/profit
for the period                                    (561)                                 240
                                                --------                              -------
Basic and diluted (loss)/earnings per share

before exceptional items                            0.7p                                 0.7p
exceptional items                                 (2.3)p                                   -
                                                --------                              -------
after exceptional items                           (1.6)p                                0.7p
                                                --------                              -------



Consolidated statement of total recognised gains and losses

(Loss)/profit for the period                       (561)                                240

Foreign currency translation differences            124                                  26
                                                 --------                             -------
Total recognised gains and losses for the period   (437)                                266
                                                 --------                             -------

                                      -3-

                                Leeds Group plc
                                Interim Results
                      Consolidated Profit and Loss Account

               Unaudited - six months to 31 March 2006   Audited - year to 30 September 2005
                    Continuing   Discontinued    Total   Continuing   Discontinued     Total
                    operations     operations     £000   operations     operations      £000
                          £000           £000                  £000           £000

Turnover                 8,755            255    9,010       14,113          3,075    17,188

Cost of sales           (6,569)           (24)  (6,593)     (10,483)          (287)  (10,770)
                        ---------------------------------------------------------------------
Gross profit             2,186            231    2,417        3,630          2,788     6,418

Distribution
costs                     (468)             -     (468)        (937)             -      (937)

Administrative
expenses                (1,253)          (125)  (1,378)      (2,327)        (1,402)   (3,729)
                        ---------------------------------------------------------------------
Operating
profit                     465            106      571          366          1,386     1,752

Exceptional
(loss)/profit
on sale of a
business
operation                 (837)             -     (837)         135              -       135
                        ---------------------------------------------------------------------

(Loss)/profit
before
interest                  (372)           106     (266)         501          1,386     1,887
                        ------------------------            ------------------------
Net interest
payable                                            (57)                                 (952)
                                                --------                               -------

(Loss)/profit
on ordinary
activities
before
taxation                                          (323)                                  935

Taxation on
(loss)/profit
on ordinary
activities                                        (238)                                 (236)
                                                --------                               -------
(Loss)/profit
for the period                                    (561)                                  699
                                                --------                               -------

Basic and diluted (loss)/earnings per share

before exceptional items                            0.7p                                  1.5p
exceptional items                                 (2.3)p                                 0.4p
                                                --------                               -------
after exceptional items                           (1.6)p                                 1.9p
                                                --------                               -------



Consolidated statement of total recognised gains and losses

(Loss)/profit for the period                       (561)                                 699
Foreign currency translation differences            124                                  (25)
                                                --------                               -------
Total recognised gains and losses for the period   (437)                                 674
                                                ========                               =======

                                      -4-

                                Leeds Group plc
                                Interim Results
                           Consolidated Balance Sheet

                              Unaudited         Unaudited              Audited
                                  As at             As at                As at
                             31st March        31st March       30th September
                                   2006              2005                 2005
                                   £000              £000                 £000
Fixed assets

Intangible
assets                              825               909                  853

Tangible
assets                              303               451                  449
                               ----------        ----------          -----------
                                  1,128             1,360                1,302

Current assets

Stock                             4,297             3,616                4,170
                               ----------        ----------          -----------
Debtors                           3,646             3,963                5,062

Deferred
taxation                             52               875                  875

Finance lease
debtors                               -            19,110               20,606
                               ----------        ----------          -----------
Total debtors                     3,698            23,948               26,543

Cash at bank
and in hand                       4,878               812                  756
                               ----------        ----------          -----------
                                 12,873            28,376               31,469

Creditors:
amounts
falling due
within one
year                             (2,955)          (11,851)             (13,676)
                               ----------        ----------          -----------
Net current
assets                            9,918            16,525               17,793

Of which:
                               ----------        ----------          -----------
  due within one year             9,866             4,510                4,708
  due after more
  than one year                      52            12,015               13,085
                               ----------        ----------          -----------
                               ----------        ----------          -----------
Total assets
less current
liabilities                      11,046            17,885               19,095

Creditors:
amounts
falling due
after more
than one year                         -            (6,588)              (7,451)
                               ----------        ----------          -----------
Net assets                       11,046            11,297               11,644
                               ==========        ==========          ===========

Share capital and
reserves

Called up
equity share
capital                           4,392             4,392                4,392

Profit and
loss account                      6,654             6,905                7,252
                               ----------        ----------          -----------
Equity
shareholders'
funds                            11,046            11,297               11,644
                               ==========        ==========          ===========

Reconciliation of movements in equity shareholders' funds

(Loss)/profit
for the period                     (561)              240                  699

Purchase of
own shares                         (161)                -                  (61)

Foreign currency
translation
differences                         124                26                  (25)
                               ----------        ----------          -----------

Net transfer
(from)/to
equity
shareholders'
funds                              (598)              266                  613

Equity
shareholders'
funds at
beginning of
the period                       11,644            11,031               11,031
                               ----------        ----------          -----------

Equity
shareholders'
funds at end
of the period                    11,046            11,297               11,644
                               ==========        ==========          ===========

                                      -5-

                                Leeds Group plc
                                Interim Results
                        Consolidated Cash Flow Statement

                       Unaudited            Unaudited                  Audited
                   Six months to        Six months to         Twelve months to
                 31st March 2006      31st March 2005      30th September 2005
                            £000                 £000                     £000

Cash
inflow/(outflow) from
operating
activities                   818                1,005                     (626)

Returns on
investments
and servicing
of finance                   (57)                (460)                    (952)

Taxation                    (361)                (263)                    (266)

Capital
expenditure
and financial
investment                   (23)                 (11)                    (129)

Acquisitions
and disposals              4,847                    -                      135
                        ----------           ----------              -----------

Net cash
inflow/(outflow) before
financing                  5,224                  271                   (1,838)

Financing                   (939)                (437)                   1,279
                        ----------           ----------              -----------

Increase/(decrease) in cash
in the period              4,285                 (166)                    (559)
                        ==========           ==========              ===========

Reconciliation of net cash flow to movement in net debt

Increase/(decr
ease) in cash
in the period              4,285                 (166)                    (559)

Net
decrease/(increase)
      in loans               778                  437                   (1,340)
                        ----------           ----------              -----------

Change in net
debt resulting
from cash
flows                      5,063                  271                   (1,899)

Net debt
disposed of
with
subsidiary                14,726                    -                        -

Foreign
currency
translation
differences                  (56)                 (12)                      11
                        ----------           ----------              -----------

Movement in
net debt in
the period                19,733                  259                   (1,888)

Net debt at
the beginning
of the period            (16,382)             (14,494)                 (14,494)
                        ----------           ----------              -----------
Net
funds/(debt)
at the end of
the period                 3,351              (14,235)                 (16,382)
                        ==========           ==========              ==========

Reconciliation of operating profit to net cash
inflow/(outflow) from operating activities

Operating
profit                       571                  772                    1,752

Depreciation
of fixed
assets                        55                  122                      235

Amortisation
of goodwill                   48                   47                       93

Loss on sale
of tangible
fixed assets                   -                    1                        4

(Increase)/decrease in
stocks                       (30)                 272                     (321)

Decrease/(increase) in
debtors                      600                  921                     (215)

(Decrease)/increase in
creditors                   (396)                (348)                     104

Increase in
finance lease
debtors                      (30)                (782)                  (2,278)
                        ----------           ----------              -----------
Net cash
inflow/(outflow) from
operating
activities                   818                1,005                     (626)
                        ==========           ==========              ===========

                                      -6-

                                Leeds Group plc
                                        
                                Interim Results

                             Notes to the accounts

1.      The financial information in this report does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
interim accounts for the six months ended 31st March 2006 and 31st March 2005
are unaudited. The comparative figures for the financial year ended 30th
September 2005 are not the Group's statutory accounts, but have been extracted
from those accounts, which have been filed with the Registrar of Companies and
on which the Group's auditor gave an unqualified report that did not contain
statements under Section 237 (2) or (3) of the Companies Act 1985. The interim
accounts have been prepared on the basis of the accounting policies set out in
the 2005 Annual Report.

2. Earnings per share have been calculated on an average of 36,061,790 (2005:
36,598,603) ordinary shares of 12 pence each in issue during the period.

3. The table below sets out a segmental analysis of the Group's operations.

                               Turnover             Profit before taxation
                   Six       Six      Twelve       Six       Six      Twelve
                months    months   months to    months    months   months to
                    to        to                    to        to
                  31st      31st        30th      31st      31st        30th
                 March     March   September     March     March   September
                  2006      2005        2005      2006      2005        2005
                  £000      £000        £000      £000      £000        £000

Hemmers-Itex     8,755     6,548      14,113       612       247         741

Central              -         -           -      (147)     (175)       (375)
costs          ----------------------------------------------------------------

Continuing       8,755     6,548      14,113       465        72         366
operations

Leeds              255     1,506       3,075       106       700       1,386
Leasing        ----------------------------------------------------------------
                 9,010     8,054      17,188       571       772       1,752
               ==============================

Exceptional
(loss)/profit
on sale of a
business
operation                                         (837)        -         135
                                               ---------------------------------
(Loss)/profit
before
interest                                          (266)      772       1,887

Interest
                                               --------------------------------
Hemmers-Itex                                      (101)      (80)       (168)

Holding
companies                                          129        71         140

Leeds Leasing                                      (85)     (451)       (924)
                                               --------------------------------

Net interest
payable                                            (57)     (460)       (952)
                                               --------------------------------

(Loss)/profit
before
taxation                                          (323)      312         935
                                               ================================




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