Final Results

London Finance & Investment Grp.PLC
17 August 2001


                   London Finance & Investment Group P.L.C.



  Preliminary announcement of unaudited results for the year ended 30th June
                                     2001



This year was definitely one of two halves. In the first half growth in net
asset value per share, taking listed investments at market value, was very
strong. Net assets rose from 50.0p per share at 30th June 2000 to 61.1p at
31st December, an increase of 22% in a period in which the FTSE 100 index fell
by 1%. However we were not able to avoid the turbulence in the markets in the
second half of the year and net assets declined to 54.3p per share at 30th
June 2001. This increase in net assets of 9% over the year to £13.9 million
compares to falls in the FTSE 100 and FTSE All Share indices of 11% and 10%
respectively over the same period.

The profit before tax for the year ended 30th June 2001 was £1,060,000 an
increase of 66% from £638,000 reported last year. Earnings per share increased
by 68% from 2.4p last year to 4.1p in the year to 30th June 2001. These
results have been significantly influenced by exceptional profits recorded by
our associated company, Western Selection P.L.C., which are explained below.
Excluding exceptional items, our profit before tax has fallen from £444,000
last year to £255,000 and earnings per share have fallen from 1.67p to 0.94p.
This decrease is mainly due to a reduction in the sale of General Portfolio
investments with correspondingly lower profits.

Your directors propose to raise the dividend this year to 1.2p per share, an
increase of 9% (2000 - 1.1p)

Strategic Investments

Western Selection P.L.C. ('Western')

The Company owns 17,611,745 shares, being 40.48% of the issued share capital,
and 3,238,255 warrants, of Western. On 2nd August 2001 Western announced a
profit after tax and exceptional items of £2 million for its year to 30th June
2001, an increase in earnings to 4.56p from 1.96p, and a 15% increase in
dividend to 0.46p (2000 - 0.40p). Western's net assets at market value were £
13.1 million, equivalent to 30.2p per share, an increase of 2% over the 29.6p
recorded at 30th June 2000.

The market value of the Company's investment in Western at 30th June 2000 was
£3.4 million and the book value was £4.0 million. At market value this
represents 25% of the net assets of the Company. The underlying value of the
Company's investment in Western, valuing Western's own investments at market
value, was £5.3 million (2000- £5.2 million).

I am the Chairman of Western and Mr. Robotham is a non-executive director.
Western has strategic investments in The Sanctuary Group PLC and Creston plc
and has recently committed to make a Strategic Investment in Doctors Direct
plc prior to its introduction to Ofex and has reported on them as follows:


        The Sanctuary Group PLC

        At 30th June 2001, Western owned 4,000,000 shares (1.46% of the issued
        share capital) and 3,131,801 warrants in Sanctuary. The market value
        of Western's holding in shares and warrants on 30th June 2001 was £4.5
        million, being 34% of Western's net assets, and the cost was £593,100.

        On 24th August 2000, Western sold 2,725,000 shares in Sanctuary at a
        price of 73p each realising a profit of £1,575,300. This was Western's
        first sale of Sanctuary shares since its transformation from
        Burlington Group plc in 1998. The cash received of almost £2 million
        has more than recouped the total investment in the company of £1
        million. Since the year end, Western has sold a further 1,131,801
        shares and exercised the holding of 3,131,801 warrants at 25p each and
        now holds 6,000,000 shares representing 2.0% of the issued share
        capital.

        On 5th June 2001 Sanctuary announced its results for the half-year to
        31st March 2001. Turnover increased by 174% over the equivalent period
        in 2000; operating profits before interest, taxation, depreciation and
        amortisation increased by 140%. Profit before tax, after amortisation
        of the catalogues rose 76%. Basic earnings per share were 0.88p for
        the half-year compared with 0.81p for the same period a year earlier,
        an increase of 8%.



        On 19th June 2001 Sanctuary announced agreement in principle to
        acquire the Trojan catalogue of over 10,000 tracks for £10.3 million,
        which will extend its presence in the Reggae segment of the market. In
        addition, Sanctuary announced that it had raised £20.5 million, by a
        placing of 27.35 million shares at 75p each, which will be used to
        finance the acquisition of Trojan, repay some existing debt and
        provide additional working capital.

        Creston plc

        Western owns 1,600,000 shares and 308,264 warrants, being 14% of the
        issued share capital and 16% of the warrants of Creston. The market
        value of Western's holding in Creston on 30th June 2001 was £1.3
        million, being 10% of the Company's net assets, and the book value was
        £1.6 million.

        On 20th December 2000, Creston disposed of its remaining property
        interests and on 29th January 2001 it completed its transformation
        from a UK property company, to a marketing services company by
        acquiring Synergie Consulting Limited and a well established
        quantitative research company with a blue chip client list, Marketing
        Sciences Limited. Synergie Consulting was established by Don Elgie,
        Creston's new Chief Executive, for the purpose of developing a 'buy
        and build' concept within the marketing services sector.

        Doctors Direct plc

        On 31st July 2001, Western entered into an agreement providing for the
        investment of a sum totalling £500,000 in Doctors Direct. Ten per
        cent. of this total will be allocated at cost to a co-investor.
        Western will therefore hold 4.5 million shares and 4.5 million
        warrants (which will be 15% of their issued share capital and 41.7% of
        their issued warrants). These shares will be part of an offer for
        subscription of 10 million new shares being conducted by way of a
        prospectus and admission to trading on Ofex. On completion of the
        offer, assuming maximum subscription, Doctors Direct will have 30
        million shares in issue and be capitalised at £3 million at the offer
        price of 10p. In recognition of Western's significant investment, Mr.
        D.C. Marshall (Chairman of both Western and London Finance) has agreed
        to act as non-executive chairman of Doctors Direct upon completion of
        this fund raising.

        Doctors Direct provides a visiting GP service direct to individuals
        and organisations at their home, hotel or workplace 24 hours a day,
        365 days a year. Visits are made at the patient's request and
        convenience. Doctors can attend patients throughout the central London
        area. The new shares are being issued to raise working capital to
        expand the business both within London and in other areas with
        suitable population densities and profiles.

        Unlike many Ofex stocks, Doctors Direct is an established company that
        is trading profitably and made profits before tax of £126,000 on
        turnover of £683,600 in the nine month period ended 31st March 2001.
        It had annualised earnings per share of 0.8p on a pre-funding basis.

        The company believes it will be able to substantially boost turnover
        over the next few years, as it plans to emulate the success of SOS
        Medecins, which provides a similar service in Paris and has proved
        extremely successful.

Marylebone Warwick Balfour Group Plc ('MWB')

The Company owns 3,000,000 shares in MWB, being 2.59% of the issued share
capital of MWB. The market value of the Company's holding in shares of MWB on
30th June 2001 was £5.2 million and the book value was £2.5 million. At market
value this represents 37% of the net assets of the Company.

MWB has six main operating divisions: serviced business space, hotels, fund
management, asset management, project management and retail operations. The
first four of these are structured as long term businesses producing recurring
income and cash flow, the project management division produces profits and
fees over fixed timetables and the retail operations encompass the Liberty
retail store operations in London. I am the Chairman of MWB and Mr. Robotham
is a non-executive director.

MWB's European serviced business space operations have nearly doubled in
capacity over the last year. The focus is on Europe's major business cities
with London and Paris representing 50% of workstations and operating at 80%
capacity. 75% of the London centres have a relatively low cost base as they
are either owned or have been refurbished by MWB.

The hotels business is underpinned by long term operating and management
agreements with internationally renowned hotel groups. These agreements are
signed before commencing any new development, usually for 20 years and
including a minimum annual income guarantee. Planning consent has recently
been granted to add another two floors to The Howard, a five-star hotel on
London's Victoria Embankment, which will increase the number of rooms by
almost a third. The Malmaison chain was acquired last November and is operated
in conjunction with Scandanavian Airlines System. Construction work continues
on a 157 room luxury hotel on Park Lane, London to be operated by Marriott
International and at Argyll Street, Glasgow which will be operated by Radisson
SAS Hotels.

The first two leisure funds operated by MWB's fund management division are
fully invested and the third fund has invested £110 million of the total
capability of £250 million. The life of the MWB Leisure Fund 1 has been
increased by a further two years until December 2003, providing MWB with
continuing management fees.

On 6th July 2001, MWB announced that approval had been received for its 70%
owned development at the Royal Victoria Docks. This development valued at
approaching £300m will include 750 hotel rooms and detailed planning consent
has been received for two hotels with a total of 413 rooms which are being
constructed on behalf of Accor.

Retail Stores, which owns Liberty, has disposed of surplus property, is
refurbishing the store and has converted part of the space into serviced
offices. It has a new management team to revitalise the Liberty brand and
return the retail operations to profitability.

MWB announced earnings of 5.3p per share for its half-year ended 31st December
2000, up from 4.8p for the half-year ended 31st December 1999, and an interim
dividend of 1.4p per share (1.4p last year). At 31st December 2000 MWB had net
assets £303 million which represent net assets per share of 204p (up from 202p
at 30th June 2000).

Megalomedia plc ('Megalomedia')

At 30th June 2001 the Company owned 4,300,000 shares in Megalomedia,
representing 5.74% of Megalomedia's issued share capital. The market value of
our holding was £1.2 million on 30th June 2001 compared to a cost of £0.6
million.

Megalomedia sold its post production film services business to management in
the year for £12 million and has agreed in principle to sell its recruitment
business to management for £0.4 million. Shareholder and court approval has
been granted for a tender scheme under which Megalomedia has repurchased 77%
of its shares at a price of 29p each on 7 August. We have not tendered any of
our shares and as a result now own 25% of Megalomedia following the share
repurchase. Megalomedia has net assets of £5 million and two other major
shareholders: Landau Enterprises Inc. and Robert Fleming & Co Ltd who own 28%
and 26% of the company respectively. Mr. Barclay is a director of our
associated company Western, and he and I are both non-executive directors of
Megalomedia.

Megalomedia has outsourced all of its day-to-day activities to our management
services subsidiary City Group Ltd who will be working with the board of
Megalomedia to identify suitable businesses for acquisition.

Merrydown plc ('Merrydown')

In June, we acquired 1,100,000 shares in Merrydown plc at a cost of £432,000.
This represents 4.15% of Merrydown's issued share capital.

Merrydown is a leading cider producer and also manufactures the Schloer range
of soft drinks, which is widely distributed through supermarkets. Sales of
Schloer increased by 47% to £8.5 million in the year ended 31st March 2001.
This is almost 50% of the total sales for the year of £17.6 million and
reflects the continuing shift in emphasis of the company from cider to soft
drinks. The Merrydown cider brand maintained its market share in a difficult
year.

Merrydown's profit before tax for the year ended 31st March 2001 was £1.0
million compared to £742,000 for the previous year and earnings per share were
2.9p, up from 1.6p in the previous year. At 31 March 2001, Merrydown had no
borrowings and £2.8 million in cash. It also had £865,000 of property held for
resale. Shareholders funds were 50p per share at 31st March 2001, which
compares favourably with our average purchase price of 39.3p

General Portfolio

The General Portfolio is dominated by three sectors: banking and insurance;
food, beverages and consumer goods; support services, transport and logistics.
These three sectors accounted for 64% of the portfolio by value at 30th June
2001. We believe that the companies in these sectors in which we have invested
have the potential to outperform the market in the medium to long term.

We are taking a cautious view of the stock markets in the short term and the
General Portfolio has therefore been reduced in size over the year from a cost
of £3.7 million to £3.4 million. This has allowed a reduction in bank
borrowings from £1.5 million to £0.9 million and with the bank facility of £2
million gives us flexibility to take advantage of any bargains arising from
the current volatility in world stock markets.

The year ahead

Our long standing strategy is to achieve increasing value for shareholders
from a number of Strategic Investments, which may well be volatile, and a
General Portfolio of leading shares in companies which operate on a global
basis.

Every day the newspapers seem to provide more bad news about the performance
or the outlook for world economies, in view of which we maintain a cautious
view for the shorter term.

Our strategy has been successful in recent years and will enable us to take
advantage, where appropriate, of new opportunities.


                                                                 D.C. MARSHALL

                                                                      Chairman

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Unaudited Consolidated Profit and Loss Account

For the year ended 30th June                               2001       2000
                                                           £000       £000
Operating Income
Investment operations                                       620        660
Management services                                         425        433
Administrative expenses
Investment operations                                      (273)      (271)
Management services                                        (416)      (430)
Operating profit                                            356        392
Share of result of associated undertaking- normal            16        175
                                - exceptional               805        194

Interest payable                                           (117)      (123)
Profit on ordinary activities before taxation             1,060        638
Tax on result of ordinary activities                        (12)       (16)
Profit on ordinary activities after taxation              1,048        622
Minority interest                                            (3)        (1)
Profit attributable to members of the holding company     1,045        621
Proposed dividend                                     1    (307)      (281)
Retained profit for the period                              738        340
Earnings per share                                    2     4.09 p     2.43 p
Earnings per share excluding exceptionals             2     0.94 p     1.67 p
Fully diluted earnings per share                      2     3.93 p     2.35 p



There are no recognised gains or losses other than the above profits and
accordingly no separate statement of recognised gains and losses is shown.

All profits and losses are on continuing activities.

There is no difference in either year between the above profit and the profit
on an historical cost basis.



Unaudited Balance Sheets

at 30th June                                       Group              Company
                                           2001      2000      2001      2000
                                           £000      £000      £000      £000
Fixed Assets
Tangible assets                             493       517       467       477
Investments in Group companies                -         -     6,154     6,087
Investments                               7,607     6,499         -          -
                                          8,100     7,016     6,621     6,564
Current Assets
Listed investments                        3,443     3,710     3,443     3,710
Unlisted investments                         43        55        43        55
Debtors                                     157       146        44        41
Bank balance and deposits                    32        53        17        35
                                          3,675     3,964     3,547     3,841
Current Liabilities
Creditors: falling due within one year   (2,010)   (1,962)   (1,972)   (1,906)
Net Current Assets                        1,665     2,002     1,575     1,935
Total Assets less Current Liabilities     9,765     9,018     8,196     8,499

Capital and Reserves
Called up share capital                   1,277     1,276     1,277     1,276
Share premium account                       962       957       962       957
Reserves                                    361       361       480       480
Profit and loss account                   7,109     6,371     5,477     5,786
Equity shareholders' funds                9,709     8,965     8,196     8,499
Minority equity interests                    56        53         -         -
                                          9,765     9,018     8,196     8,499



Analysis of Net Assets

at 30th June                                                   2001       2000
                                                               £000       £000
Principal investments at market value:
Western Selection P.L.C.                                      3,418      2,604
Megalomedia plc                                               1,161        867
Marylebone Warwick Balfour Group Plc                          5,160      4,830
Creston plc - sold 30 January 2001                                -        238
Merrydown PLC - acquired 27 June 2001                           429          -
                                                             10,168      8,539
General equity portfolio at market value                      5,040      5,479
Tangible fixed assets                                           493        517
Cash, bank balances and deposits                                 32         53
Bank Loan                                                      (900)    (1,500)
Other net liabilities                                          (910)      (261)
Minority interests                                              (55)       (53)
Net assets, including investments at market value            13,868     12,774
Net assets per share, including investments at market          54.28 p   50.05p
values

The market value of net assets is stated before any taxation which may arise
on disposal.





Consolidated Cash Flow Statement

For the year ended 30th June                                      2001    2000
                                                                  £000    £000
Cash outflow on operating activities                               888     (18)
Returns on investments and servicing of finance
Dividends received                                                 374     369
Interest paid                                                     (105)   (104)
Net cash inflow from returns on investments and servicing of       269     265
finance
Taxation                                                            (6)    (10)
Investing activities
Tangible fixed assets - purchased                                   (3)    (31)
Fixed asset investments - purchased                               (532)   (511)
                    - proceeds on disposal                         238     167

Net cash outflow from investment activities                       (297)   (375)
Equity dividend paid - Company                                    (281)   (255)
Financing
Share capital issued                                                 6       1
Net (repayment)/drawdown of loan facility                         (600)    350
Net cash (outflow)/inflow from financing                          (594)    351
Decrease in cash                                                   (21)    (42)



Notes


        1     The dividend for the year of 1.20p per share (2000 - 1.10p) will
        be paid on 12th October 2001 to shareholders on the register on 21st
        September 2001.

        2     Earnings per share are based on the result of ordinary
        activities after taxation and minority interests and on 25,540,767
        (2000 - 25,523,710) being the weighted average of the number of shares
        in issue during the year.

        3     The net assets attributable to shareholders, taking investments
        at market value, are before providing for any tax that may arise on
        realisation


 4. The financial information in this preliminary announcement of unaudited
    group results, which has been reviewed and agreed by the auditors, does
    not constitute statutory accounts within the meaning of section 240(5) of
    the Companies Act 1985. The audited accounts of the group for the year
    ended 30th June 2000 have been reported on with an unqualified audit
    report in accordance with section 235 of the Companies Act 1985 and have
    been delivered to the Registrar of Companies.



General Equity Portfolio



    Anglo American PLC


    AstraZeneca PLC


    Avocet Mining PLC


    BAA PLC


    BOC Group PLC


    Cable & Wireless PLC


    CGNU PLC


    Credit Suisse Group AG


    Diageo PLC


    Fortis (NL) NV


    Fuller, Smith & Turner PLC


    GlaxoSmithKline PLC


    HSBC Holdings plc


    ING Groep NV


    J. Sainsbury plc


    Johnson Matthey PLC


    Lavendon Group PLC


    Lloyds TSB Group PLC


    Marconi PLC


    Nestle SA


    Novartis AG


    Pearson PLC


    Prudential PLC


    Reuters Group PLC


    Roche Holdings AG


    Rolls-Royce PLC


    Schweiz-Ruckversicherungs-G


    The Shell Transport & Trading Company PLC


    Somerfield PLC


    Tibbett & Britten Group PLC


    UBS AG


    Unilever PLC


    UTi Worldwide Inc.


    Vodafone Group PLC


    Wyndeham Press Group PLC


    Zurich Financial Services AG