Interim Results

London Finance & Investment Grp.PLC
7 March 2002



                    London Finance & Investment Group P.L.C.

Directors                                                      Registered office
D.C. Marshall, Chairman                                             25 City Road
R.A. Good                                                       London, EC1Y 1BQ
Dr. F.W.A.A. Lucas
J.M. Robotham, OBE, FCA, MSI                                      7th March 2002



TO THE MEMBERS

The directors are pleased to present the unaudited interim results of the
company for the six months ended 31st December 2001.

Results

Our loss on ordinary activities attributable to shareholders for the six months
was £5,000 compared to a profit of £883,000 for the same period in 2000 and
losses per share were 0.02p (2000 - profit per share of 3.46p).

The operating loss is mainly due to lower profits realised on sales of
investments in the period and provisions made to value General Portfolio
investments at market value, where this is below cost. Last year, dividends
received included a special dividend of £64,000 from our investment in Creston
plc, which has not been repeated this year. Management services income has also
declined due to timing of one off tasks undertaken on behalf of overseas
clients.

The contribution to profits by our associated company, Western Selection P.L.C.,
for its half year to 31st December 2001, includes exceptional profits realised
on the sale of part of Western's strategic investment in The Sanctuary Group PLC
(in both 2000 and 2001), and the receipt in 2000 of an exceptional dividend from
its strategic investment in Creston plc.

As is our practice, we are not paying an interim dividend; the dividend paid in
October 2001 was for the 12 months ended on 30th June 2001. At 31st December
2001 our net asset value per share was 39.25p, a decrease of 28% from 30th June
2001 and 36% from 31st December 2000. The decrease in net asset value is mainly
due to a significant decrease in the market value of our strategic investment in
Marylebone Warwick Balfour Group Plc, which is held as a long term fixed asset.
Excluding MWB, our net asset value per share has declined by 14% over the last
year. This compares with falls in both the FTSE 100, which was down 7.53% over
the last six months and 16.15% over the year, and the FTSE All Share, which fell
7.17% in the last six months and 15.13% over the year.

If we value our investment in Western at net asset value, rather than market
value, our net assets per share at 31st December 2001 were 48p compared to 62p
at 30th June 2001.

Investment policy and management

Our investment policy is to have strategic stakes in a few special situations,
and hold a diversified general portfolio of U.K. and European listed equities.
Strategic investments are minority positions where we seek to exercise influence
over the management of the investment. We are represented on the boards of two
of our strategic investments (Marylebone Warwick Balfour Group Plc and
Megalomedia plc) and, in turn, Western is also represented on the boards of two
of its strategic investments, Creston plc and The Sanctuary Group PLC.

Our general portfolio is managed by two of our non-executive directors, Richard
Good and Michael Robotham. Decisions in relation to both our strategic and
unlisted investments are taken by the board as a whole.

Strategic Investments

Marylebone Warwick Balfour Group Plc ('MWB') consists of a series of highly cash
generative businesses, each of which has property at its core. Operations are
split into 6 areas:


        MWB Business Exchange, which provides 712,081 workstations in 38
        serviced office centres;

        Hotels, most of which have 20-year management agreements with recognised
        operators;

        Retail Stores, which owns the Liberty brand, retail operations and
        properties;

        Fund Management, which has invested £539m out of £650m committed by
        three leisure funds;

        Asset Management, which owns and manages commercial property; and

        Project Management, which covers activities that create one-off profits
        or fees, over a defined time-scale, with clearly contained risk.

MWB announced profits before tax of £7,660,000 for its year ended 30th June 2001
(2000 - £11,418,000) and dividends for the year of 2.8p (2000 - 2.8p) per share.
Earnings per share fell by 25% to 7.3p. At 30th June 2001 the group had net
assets with a book value in excess of £354 million (2000 - 210m), and net assets
per share of 235p (up from 202p at 30th June 2000). The market has marked down
significantly the share price of MWB because of similarities between its mainly
UK based Business Exchange operations and Regus plc's poor performing
international network of serviced offices with heavy exposure in the US. The
share price at 31st December 2001 was 88.0p, compared to 233.5p at 31st December
2000, and was 88.0p on 28th February 2002.

Megalomedia plc has metamorphosed into a clean cash shell with net assets of
£5,141,000 at 30th September 2001 (29.5p per share on a fully diluted basis). It
is looking to invest in a sound, cash generative business with good management
and strong growth prospects. The share price at 31st December 2001 was 26p,
compared to 22p at 31st December 2000, and was 25p at 28th February 2002.

We have taken a 5.1% shareholding in Merrydown plc, producers of Merrydown cider
and Schloer soft drinks. Merrydown has reported increased turnover for the half
year ended 30th September 2001 of £8,054,000 (2000 - £7,331,000) and increased
operating losses of £271,000 (2000 - £170,000) due to higher marketing spend for
the Schloer brand. Advertising and promotional spend in the 6 months was over
£1,000,000 more than in the same period last year. Merrydown's management is
confident that growth in Schloer sales, which have a seasonal peak over
Christmas, will continue to offset declines in cider sales. Our average cost of
investment of 40p compares with net assets per share at 30th September of 49p
and a share price of 42p at 31st December 2001 and 41p at 28th February 2002.

Western Selection P.L.C., our associate strategic investment company, announced
profits after tax for the six months to 31st December 2001 of £417,000 compared
with £1,754,000 for the same period in the previous year. Western expects to at
least maintain its dividend of 0.46p for its current year. The net asset value
of Western, at market values, has fallen to £11,945,500 from £14,720,000 at 31st
December 2000. This equates to 27.4p per share at 31st December 2001, a decrease
of 9% since 30th June 2001. The share price at 31st December 2001 was 14.0p,
compared to 14.75p at 31st December 2000, and was 14.0p at 28th February 2002.

Western has strategic investments in The Sanctuary Group PLC, Creston plc and
Swallowfield plc and has recently reported on them as follows:


    The Sanctuary Group plc is one of the world's leading developers of
    intellectual property rights in the fields of music, television and
    entertainment. It has issued accounts for the twelve months to 30th
    September 2001, reporting an increase in turnover of 87% and operating
    profits before interest and tax of £10,146,000 (2000 - £5,533,000). Earnings
    per share increased 36% to 2.56p from 1.88p last year, and the full year
    dividend is increased from 0.25p to 0.30p. The Sanctuary share price has
    decreased from 74.0p at 30th June 2001 to 67.5p at 31st December 2001 and
    was 60.0p on 28th February 2002.

    Creston plc is the recently transformed holding company of a Marketing
    Services Group with a strategy incorporating acquisitions as well as organic
    growth. The main components of the group are Marketing Sciences Ltd (MSL),
    Mobile Sensory Testing Services Ltd, both acquired in January 2001, and The
    Real Adventure Marketing Communications Ltd (RAMC) which was acquired in
    November 2001. MSL is a broad based market research agency, MSTS provides
    expertise in sensory analysis and profiling of products and RAMC provides a
    comprehensive range of creative and marketing disciplines for clients
    including brand development, direct mail campaigns, eMarketing, customer
    relationship and database management, incentive schemes, advertising and
    design. Interim results for the six months to 30th September 2001 show a
    loss for the six months of £194,000, reflecting the bedding-in of the first
    acquisitions made under the new strategy. The Creston share price was 82.5p
    at 30th June 2001, improved to 88.5p at 31st December 2001 and was 81.5p on
    28th February 2002.

    We have acquired 7.1% of Swallowfield plc, a high value added and innovative
    supplier of quality personal care and other products to branded and own
    label customers. They specialise in formulation and manufacture of aerosol
    and non-aerosol products for retail distributors, the contract filling of
    aerosols and the manufacture of cosmetic pencils and other cosmetic
    products. Results for the year ended 31st December 2001 show turnover up 8%
    and operating profit up 6% to £2,875,000. Earnings per share, excluding
    restructuring, increased 9% on last year. Our average acquisition cost of
    108p per share compares with Swallowfield's share price of 105.5p at 30th
    June 2001, 92.5p at 31st December 2001 and 105.0p on 28th February 2002.

Conclusion

The MWB share price currently stands at a significant discount to MWB's net
asset value and we are supporting management's efforts to eliminate this
discount. We are engaged in the identification of a new business for Megalomedia
and are encouraging the management of our new strategic investment, Merrydown to
investigate ways of increasing shareholder value.

General Portfolio investments are held for the medium to long term, and we
expect that they will provide a reasonable return over time, by way of both
income and capital growth.

We declared a dividend for the year to 30th June 2001 of 1.2p per share, which
was paid in October. As mentioned above, it is not our intention to pay interim
dividends; and, subject to unforeseen circumstances, we expect to at least
maintain our dividend for the year to 30th June 2002, which we anticipate paying
in October 2002.

                                                               David C. Marshall

                                                                        Chairman


Unaudited Consolidated Profit & Loss Account

                                                                                   Half year ended       Year ended
                                                                                    31st December         30th June
                                                                                   2001         2000           2001
                                                                                   £000         £000           £000
Operating Income
  Dividends received                                                                93          174            304
  Interest and sundry income                                                        20           16             34
(Loss)/profit on sales of investments                                             (109)         136            282
                                                                                     4          326            620
Management services income                                                         242          238            425
                                                                                   246          564          1,045
Administrative expenses
  Investment operations                                                           (141)        (137)          (273)
  Management services                                                             (232)        (186)          (416)
Total administrative expenses                                                     (373)        (323)          (689)

Operating (loss)/profit                                                           (127)         241            356
Share of result of associated undertaking - normal                                 (50)         (90)             4
                                        - exceptional                              219          805            805
Interest payable                                                                   (43)         (58)          (105)

(Loss)/profit on ordinary activities before taxation                                (1)         898           1,060
Tax on result of ordinary activities                                                (1)           -            (12)

(Loss)/profit on ordinary activities after taxation                                 (2)          898          1,048
Minority interest                                                                   (3)         (15)            (3)

(Loss)/profit attributable to members of the holding company                        (5)         883          1,045
Proposed dividend                                                                     -            -          (307)

Retained (loss)/profit for the period                                               (5)         883            738

Earnings per share                                                              (0.02)p        3.46p          4.09p
Earnings per share excluding exceptional                                        (0.88)p        0.31p          0.94p
Fully diluted earnings per share                                                    Nil          Nil          3.93p

Dividend per share                                                                  Nil          Nil          1.10p



Unaudited Consolidated Balance Sheet

                                                                                      31st December      30th June
                                                                                    2001         2000         2001
                                                                                    £000         £000         £000
Fixed assets
Tangible assets                                                                     485          509          493
Investments                                                                       7,800        7,199        7,607
                                                                                  8,285        7,708        8,100
Current assets
Listed investments                                                                2,577        3,537        3,443
Unlisted investments                                                                 43           43           43
Debtors                                                                             133          225          157
Cash, bank balances and deposits                                                     46          238           32
                                                                                  2,799        4,043        3,675

Creditors falling due within one year                                            (1,320)      (1,828)      (2,010)
Net Current Assets                                                                1,479        2,215        1,665
Total Assets less Current Liabilities                                             9,764        9,923        9,765

Capital and Reserves
Called up share capital                                                           1,278        1,277        1,277
Share premium account                                                               963          961          962
Reserves                                                                            362          363          361
Profit and loss account                                                           7,103        7,254        7,109
Shareholders funds                                                                9,706        9,855        9,709
Minority equity interests                                                            58           68           56
                                                                                  9,764        9,923        9,765

Notes:-

1.      The results for the half-year are unaudited and have been prepared on the basis of the accounting policies
        adopted in the accounts for the year ended 30th June 2001. The financial information in this interim report 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 2001 have been reported on by the Group's auditors and have
        been delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a
        statement under Section 237(2) or 272(3) of the Companies Act 1985.

2.      Earnings per share are based on the profit after taxation and minorities, and on the average number of shares
        25,551,873 (December 2000 - 25,530,338 and June 2001 - 25,540,767), in issue during the period.


Balance Sheet Analysis taking investments at market value

                                                                               31st December       30 June
                                                                             2001         2000        2001
                                                                             £000         £000        £000
Principal investments at market value:
Marylebone Warwick Balfour Group Plc                                       2,640        7,005       5,160
Megalomedia plc                                                            1,118          902       1,161
Merrydown plc - acquired 27 June 2001                                        567            -         429
Western Selection P.L.C.                                                   2,644        2,841       3,418
Creston plc - sold 30 January 2001                                             -          186           -
                                                                           6,969       10,934      10,168

General equity portfolio (see analysis below)                              3,732        5,557       5,040
Tangible fixed assets                                                        485          509         493
Cash, bank balances and deposits                                              46          238          32
Bank Overdraft                                                            (1,050)      (1,500)       (900)
Other net liabilities                                                        (94)         (61)       (910)
Minority interests                                                           (58)         (68)        (55)
Net assets                                                                10,030       15,609      13,868

Net Assets per share                                                       39.25p       61.11p      54.28p


Consolidated Cash Flow Statement

                                                                              Half year ended      Year ended
                                                                               31st December          30 June
                                                                              2001        2000           2001
                                                                              £000        £000           £000

Cash inflow on operating activities                                           141         304            888
Returns on investments and servicing of finance
Dividend received                                                             182         270            374
Interest paid                                                                 (43)        (58)          (105)
Net cash inflow from returns on investments and servicing of finance          139         212            269
Taxation (paid)/recovered                                                      (1)          5             (6)
Investing activities
Tangible fixed assets - purchased                                              (5)         (5)            (3)
Fixed assets investments - purchased                                         (105)        (56)          (532)
                         - proceeds on disposal                                 -           -            238

Net cash outflow from investment activities                                  (110)        (61)          (297)
Equity dividend paid - Company                                               (307)       (281)          (281)
Financing
Share capital issued                                                            2           6              6
Net drawdown/(repayment) of loan facility                                     150           -           (600)
Net cash inflow from financing                                                152           6           (594)
Increase/(Decrease) in cash                                                    14         185            (21)

Market Value of General Portfolio at 31st December 2001
                                                                                     £000            %
Uti Worldwide Inc                                                                     317          8.5
Unilever                                                                              282          7.6
Nestle                                                                                218          5.9
Diageo                                                                                203          5.5
Barclays Bank                                                                         182          4.9
UBS                                                                                   179          4.8
Lloyds TSB                                                                            164          4.4
AstraZeneca                                                                           155          4.2
ING Groep                                                                             145          3.9
HSBC Holding                                                                          145          3.9
The Shell Transport & Trading Company                                                 142          3.8
GlaxoSmithKline                                                                       138          3.7
BOC Group                                                                             127          3.4
Cadbury Schweppes                                                                     123          3.3
Prudential Corporation                                                                119          3.2
Credit Suisse Group                                                                   117          3.1
Anglo American                                                                        117          3.1
J. Sainsbury                                                                          110          2.9
Fortis NL                                                                             106          2.8
CGNU                                                                                  101          2.7
Novartis                                                                               99          2.7
Roche Holdings                                                                         98          2.6
Zurich Financial                                                                       75          2.0
Reuters Group                                                                          75          2.0
Land Securities                                                                        71          1.9
Boots Company                                                                          70          1.9
Cable & Wireless                                                                       40          1.0

Others (less than 1%)                                                                  14          0.3
                                                                                    3,732        100.0



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