Interim Results

LPA Group PLC
29 June 2001


LPA Group PLC News Release

Financial Highlights


  £000's                    6 months to        6 months to 31         Year to  
                          31 March 2001            March 2000    30 Sept 2000 
                              Unaudited             Unaudited         Audited 

  Turnover                        6,157                 4,810          10,366 

  Operating profit /                 28                   257            (75) 
  (loss)                                                                      

  Net interest payable            (164)                   (6)            (80) 

  (Loss) / profit on              (136)                   251           (155) 
  ordinary activities                                                         
  before taxation                                                             

  (Loss) / Earnings                                                           
  per share                                                                   

  Basic                         (0.90p)                 1.73p         (1.60p) 

  Diluted                       (0.90p)                 1.64p         (1.60p) 

  Dividend per share               Nil                  1.40p           2.80p 


Commenting on the interim results, Michael Rusch, Chairman, said:

'These are disappointing results which reflect the extraordinarily difficult
trading conditions in the rail sector. Our UK based customers have not taken a
significant new order for any of the train types on which the Group is a major
supplier for nearly two years.


The delay in investment by the train operating companies caused by the
re-franchising process and the encouragement given by the Strategic Rail
Authority to overseas suppliers to participate in the UK domestic market is
proving extremely damaging to the UK industrial base. We have responded by
following the work overseas to Europe and elsewhere, but it does put us at a
disadvantage. The absence of a resolution to the future management of London
Underground has also delayed investment in new and refurbished rolling stock.


Given the heavier work load in the second half we expect some improvement in
performance, nevertheless the board consider it prudent not to pay an interim
dividend. As investment in UK rail and London Underground infrastructure and
rolling stock increases over the next few years so the prospects for our
business should improve. As our UK customer base starts to win new business we
will benefit. In the meantime we will continue to expand our efforts overseas
which are already showing positive signs.'

Enquiries:

Peter Pollock          Chief Executive                         01799 512 800

Susan Brinson          Bridgewell Corporate Finance Limited    0207 623 3000

Russell Cook           Teather & Greenwood Limited             0207 426 9000



                                LPA Group PLC
               

                                Interim Report


                        Six Months ended 31 March 2001


LPA Group PLC

Interim Unaudited Group Results for the Six Months ended 31 March 2001

The loss before taxation, for the six months ended 31 March 2001 amounted to £
136,000 compared with a profit of £251,000 in the first half and a loss of £
406,000 in the second half of last year. Sales increased by 28% to £6.157m
(2000: £4.810m). Operating profits showed a fall of 90% to £28,000 (2000: £
257,000). The loss per share amounted to 0.90p (2000: earnings 1.73p). An
interim dividend is not proposed (2000: 1.40p).

Following the £3.4m spent on acquisitions last year together with a heavy
capital expenditure programme in the current period amounting to £907,000 the
Group had net indebtedness of £4.618m on 31 March 2001 against net funds
amounting to £139,000 on 31 March 2000.

LPA Industries incurred a loss in the first half due to poor output and has
continued to experience difficulties since, mainly due to the shortfall of
orders caused by the delay in new contracts for rail vehicles. This delay
arises from the current re-franchising process which has prevented train
operating companies from ordering new trains. This has particularly affected
our UK customers who have not won significant orders for train types where the
Group is a major supplier for nearly two years. However the main manufacturing
phase of projects already secured by LPA Industries (including Virgin West
Coast, Virgin Cross Country and the Australian Fourth Generation Tangarra) is
now underway which provides a base order book into the middle of next year.
Given some recovery in other rail projects the future position should be much
stronger. LPA Industries has continued to invest in and reorganise its
manufacturing processes and has introduced new products in its non-rail
businesses.

Haswell Engineers had a mixed half with excellent performance in the first
quarter followed by disappointment in the second. This was due to the hiatus
in the telecoms market where investment has been deferred for several months.
This shortfall has been replaced with newly won business which should become
incremental when the telecoms business comes back on line. A major capital
expenditure programme has been completed.

Excil Electronics has suffered from the same delays in rail contract orders as
LPA Industries but has benefited in the period from an export rail lighting
project being supplied to Hong Kong via Japan. Excil is now trading
profitably. A major capital expenditure programme and factory reorganisation
has been successfully completed. Jeff Pyne, who formerly held a number of
senior positions with the TT Group Plc was appointed Managing Director of
Excil in February. The prospects for Excil in rail, metro bus and coach and
industrial markets are encouraging.

Channel Electric has continued to report good results. A number of large
long-term contracts have been won but short-term demand has been weak.

Overall the year to 30 September 2001 will be challenging and the prospects
for the future will be hard won. We remain confident however, that we will, in
due course, achieve the progress our shareholders expect.

We will continue to grow the Group organically by expanding the scope of our
supply, improving our position in our traditional markets and developing new
ones through strategic alliances. Recovery in our main rail markets and the
opportunities that will afford us, give your board confidence for the future.



Michael Rusch

Chairman                                                       29 June 2001

LPA Group Plc

Debden Road, Saffron Walden, Essex. CB11 4AN

LPA Group PLC



Interim Unaudited Group Results for the Six Months ended 31 March 2001


CONSOLIDATED PROFIT AND LOSS ACCOUNT

 £000's                         6 months to       6 months to         Year to  
                               31 March 2001    31 March 2000    30 Sept 2000 
                                   Unaudited        Unaudited         Audited 

  Turnover                             6,157            4,810          10,366 

  Operating profit / (loss)               28              257            (75) 

  Net interest payable                 (164)              (6)            (80) 

  (Loss) / profit on                   (136)              251           (155) 
  ordinary activities                                                         
  before taxation                                                             

  Tax on profit on ordinary               41             (75)             (8) 
  activities                                                                  

  (Loss) / profit on                    (95)              176           (163) 
  ordinary activities after                                                   
  taxation                                                                    

  Dividends                              (2)            (142)           (295) 

  Retained (loss) / profit              (97)               34           (458) 

  (Loss) / earnings per                                                       
  share                                                                       

  Basic                              (0.90p)            1.73p         (1.60p) 

  Diluted                            (0.90p)            1.64p         (1.60p) 

  Dividend per share                     Nil            1.40p           2.80p 


 1. The financial information contained in this interim statement does not
    constitute statutory accounts as defined in section 240 of the Companies
    Act 1985. The financial information for the full preceding year is based
    on the statutory accounts for the financial year ended 30 September 2000.
    Those accounts, upon which the auditors issued an unqualified opinion,
    have been delivered to the Registrar of Companies.


 2. The calculation of earnings per share is based on the loss after tax of £
    95,000 (2000: profit after tax of £176,000) and the weighted average
    number of ordinary shares in issue during the period of 10,600,756 (2000:
    10,159,641).


 3. The interim financial information has been prepared on the basis of the
    accounting policies set out in the Group's statutory accounts for the year
    ended 30 September 2000. FRS 18 will be adopted in the accounts to the
    year ended 30 September 2001. It has not had a significant impact upon the
    interim results. FRS 17 and FRS 19 will not be adopted in the current
    year.


 4. All of the tax charge relates to liabilities within the UK.


 5. The current period dividend charge is in respect of shares issued
    subsequent to the announcement, but prior to payment of, the year 2000
    final dividend.


Note: Copies of this Interim Report are being sent to shareholders. Copies are
also available to the public from the Company's Registered Office, PO Box 15,
Tudor Works, Debden Road, Saffron Walden, Essex, CB11 4AN.



LPA Group PLC

Interim Unaudited Group Results for the Six Months ended 31 March 2001



CONSOLIDATED BALANCE SHEET

  £000's                               As at            As at           As at  
                               31 March 2001    31 March 2000    30 Sept 2000 
                                   Unaudited        Unaudited         Audited 
  Fixed assets                                                                
  Intangible assets                    2,076                -           2,129 
  Tangible assets                      3,887            1,877           3,255 
  Investments                              2                -               2 
                                       5,965            1,877           5,386 
  Current assets                                                              
  Stocks                               2,697            2,285           2,305 
  Debtors                              3,008            2,332           3,622 
  Cash at bank and in hand               189              656             246 
                                       5,894            5,273           6,173 
  Creditors: Amounts                 (3,767)          (2,552)         (3,309) 
  falling due within one                                                      
  year                                                                        
  Net current assets                   2,127            2,721           2,864 
  Total assets less current            8,092            4,598           8,250 
  liabilities                                                                 
  Creditors: Amounts                 (3,733)            (100)         (3,784) 
  falling due after more                                                      
  than one year                                                               
  Provisions for                       (154)             (83)           (224) 
  liabilities and charges                                                     
  Net assets                           4,205            4,415           4,242 
  Capital and reserves                                                        
  Called up share capital              1,070            1,016           1,055 
  Share premium account                  194              100             149 
  Revaluation reserve                    346              347             346 
  Merger reserve                         230                -             230 
  Profit and loss account              2,365            2,952           2,462 
  Equity shareholders'                 4,205            4,415           4,242 
  funds                                                                       




LPA Group PLC

Interim Unaudited Group Results for the Six Months ended 31 March 2001



CONSOLIDATED CASH FLOW STATEMENT


  £000's                         6 months to      6 months to         Year to  
                               31 March 2001    31 March 2000    30 Sept 2000 
                                   Unaudited        Unaudited         Audited 
  Net cash inflow from                   544              632             482 
  operating activities                                                        
  Returns on investments               (159)              (6)           (186) 
  and servicing of finance                                                    
  Taxation                              (26)            (100)           (294) 
  Capital expenditure (net)            (907)            (358)           (434) 
  Acquisitions                         (218)                -         (2,323) 
  Equity dividends paid                (150)            (142)           (289) 
  Net cash (outflow) /                 (916)               26         (3,044) 
  inflow before financing                                                     
  Financing                              108              (8)           3,160 
  (Decrease) / increase in             (808)               18             116 
  cash                                                                        

Note: Current period acquisition costs comprise deferred consideration of £
133k and other acquisition costs of £85k accrued at 30 September 2000.



RECONCILIATION OF OPERATING PROFIT TO NET

CASH INFLOW FROM OPERATING ACTIVITIES


  Operating profit                                         28    257    (75) 
  Depreciation and amortisation                           329    143     433 
  Changes in working capital and other non cash items     187    232     124 

  Cash inflow from operating activities                   544    632     482 

RECONCILIATION OF NET CASH FLOW TO

MOVEMENT IN NET DEBT

  (Decrease) / increase in cash in the period         (808)     18        116 
  Cash (inflow)/outflow from (increase)/decrease       (58)      8    (2,993) 
  in debt and lease financing                                                 
  Change in debt arising from cash flows              (866)     26    (2,877) 
  Loans and finance leases acquired with                  -      -      (996) 
  subsidiary                                                                  
  Amortisation of loan costs                              5      -          3 
  Movement in net debt in the period                  (861)     26    (3,870) 
  Opening net (debt) / funds                        (3,757)    113        113 
  Closing net (debt) / funds                        (4,618)    139    (3,757)