Preliminary Results

Anglo-Welsh Group PLC
25 April 2002


                                                                25th April, 2002


                             ANGLO-WELSH GROUP PLC

                        ('Anglo-Welsh' or 'the Company')


           Preliminary Results for the year ended 31st October, 2001


Chairman's Statement

I am pleased to report your Company's results for the year ended 31st October,
2001. The year under review was one of transition for Anglo-Welsh as we
continued with our programme of asset disposals and business restructuring, with
the view of streamlining its operations to make the Company a more attractive
reverse takeover vehicle.



The streamlining programme has inevitably involved cost and in the year under
review the group incurred an operating loss before exceptional items of £822,582
(2000: £1,344,884) on a turnover of £340,849 (2000: £3,591,928).



In considering the operating loss it is important to note the following:-



The re-structuring of the narrowboat business, which included the sale of the
boat hire activities, took place on 4th December, 2000.  The results include
approximately £135,000 of operating losses of the former business prior to the
re-structuring.



The boat building business continued to operate until the 15th February, 2001.
During this period operating losses of approximately £78,000 arose, before
allocating attributable central management costs or overheads.



A review of the carrying value of the narrowboats and expected residual values
was conducted during the year, which resulted in an accelerated depreciation
charge of £375,000. The total depreciation charge for the year was £496,495.



In view of this trading result the directors are not recommending the payment of
a dividend (2000: Nil).



Assets Sales and Discontinued Operations

The refocusing of the Company's activities and the realisation of cash from our
assets has been a lengthy and time consuming process.



In December 2000, the loss making narrowboat hire business was sold to
Aquatravel Limited ('Aquatravel') for an initial cash consideration of £800,000
plus a deferred payment of £92,000 in cash, which has been received. A
non-recurring loss of £39,000 was incurred upon the disposal of this business.



The generally poor economic climate in 2001, which was further depressed by the
events of the 11th September, made almost everyone we had to deal with extremely
cautious and sparing with their cash. This caused delay in situations being
resolved but despite this we have worked hard to progress our strategy.



The Company used to own three commercial vessels, two trip boats and a
restaurant boat, Kyle Blue.  Kyle Blue was sold early in 2001 for a price of
£32,000 and one of the trip boats has been sold after the year end for £26,000
in cash, receivable in monthly instalments until November 2005. The other trip
boat is the subject of a rental contract with an option for the renter to
purchase during the current year.



Shareholders will recall that in August 2000 the Company sold the assets of
Falcon Agricultural Engineering Limited to Falcon Industries (Midland) Limited
for a consideration of £100,000 in cash, the majority of which was on monthly
deferred terms. The failure of Falcon Industries (Midlands) Limited, which is
now in liquidation, has resulted in its inability to complete the schedule of
deferred payments due to us. We estimate that your Company will incur a loss of
approximately £30,000 as a result, although negotiations with the liquidator
continue. In my interim statement, I reported that we had repossessed the land
and buildings which Falcon Industries (Midland) Limited occupied under license,
and placed them on the market.  I am delighted to report that at the end of
April 2002 this industrial site at Great Haywood was sold for £160,000 net of
expenses, resulting in a gain of £40,000 over book value.



The boat building business is now completely closed down and our lease on this
building has been handed back. The losses on disposal of this business were
£89,000.



As a result of the release of 15 boats from our management contract with
Aquatravel in November 2001 and two boats that were released from sponsorship
agreements, 17 boats have been put up for sale. Of these, approximately half
have been sold and it is anticipated that the remainder will be sold over the
next few months. The anticipated sales value for these 17 boats was below the
net asset value shown in the balance sheet. We have conducted a thorough review
of the carrying value of the boats held at the year end which has resulted in
the accelerated depreciation charge of £375,000, referred to above.



On reviewing our budget for 2002, it became apparent that Time Afloat Limited ('
Time Afloat') our timeshare subsidiary, would be unable to generate sufficient
income from maintenance revenue to meet the increased costs of operating The
Watertime Club. We therefore decided to transfer these operations to another
timeshare club, Holiday Owners Club, and give members of The Watertime Club the
option to transfer their membership. This process is progressing and to date
more than half the members of The Watertime Club have transferred to the Holiday
Owners Club. It is anticipated that it will take several more months before the
transfer is complete, at which time we will be able to take a view on what
assets, if any, will revert to Time Afloat. In the meantime, a provision of
£50,000 has been made against the assets of Time Afloat and the costs of closure
of The Watertime Club.



The agreement with Aquatravel for the sale of the boat hire activities provided
for the transfer of the various leases that Anglo-Welsh held in boat yards to
Aquatravel. This has been a long process, but I am pleased to report that the
licenses to transfer these leases are now in the final stages of being
completed.



As you can appreciate, resolution of the matters set out above has consumed a
large proportion of the time of your two executive directors, but the result has
been to reduce our operational activities with a consequential reduction in
overheads. Staff levels have been reduced from 111 to today's 3 employees,
including your executive directors.



Current Trading

The remaining assets in the group are the fleet of 92 boats under management
agreement with Aquatravel and remaining land site at Great Haywood. The group's
principal income arises from the management agreement with Aquatravel.



The boat hiring season is only now just commencing and from our discussions with
Aquatravel we are anticipating a normal year's activity, which will result in a
higher level of income than last year, on significantly reduced overheads.



Discussions have started with regard to the sale of the 92 boats for cash,
although I am not in a position at this stage to indicate a timescale for
resolution.



A review is currently being carried out to understand the best way to achieve
value from the remaining land site at Great Haywood, which has canal frontage
and planning permission for a marina and pub complex.



Strategy

As shareholders are aware, the board's declared strategic intent has been to
dispose of the remaining assets and seek an attractive reverse acquisition. Good
progress has been made in delivering the first part of this strategy, but 2001
was a poor year for equity markets and although we were able to identify a
number of suitable candidates we were unable, in the pervading climate, to
conclude a transaction. Anecdotal evidence and our own experience to date
suggests an improvement in confidence in the current year, which should help us
to realise our ambitions.



Your directors, having substantially completed the disposal programme referred
to above, are now able to focus their efforts on the identification and delivery
of a suitable reverse acquisition. We have identified the professional services
industry as a growth sector and are currently investigating a number of
opportunities in this sector. I hope to be able to report to you further in due
course.



At the time of the sale of the narrowboat business, the Company undertook to
change its name by the 2002 AGM.  The directors had anticipated completing a
reverse acquisition by this time, the name of which would have made the choice
of a new name for the Company self selecting. Since this has not yet been
possible it is proposed to change the name of the Company to AWG Services plc at
the forthcoming AGM.


Stephen Thomson
25th April, 2002


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31st October, 2001


                                                                      Note                   2001           2000
                                                                                                £              £

TURNOVER                                                                                  340,849      3,591,928


Cost of sales                            - normal                                       (288,883)    (2,497,648)
                                         - exceptional                                  (375,000)              -
                                                                                         --------       --------
GROSS (LOSS)/PROFIT                                                                     (323,034)      1,094,280

Operating expenses                                                                      (499,548)    (2,439,164)
                                                                                         --------       --------
OPERATING LOSS                                                             2            (822,582)    (1,344,884)

Loss on the disposal of discontinued operations                                         (158,187)      (136,446)
Loss on disposal of and diminution in value of tangible fixed assets                            -      (258,709)
Provision for loss on operations to be discontinued                                      (49,952)              -
                                                                                         --------       --------
LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST                                           (1,030,721)    (1,740,039)

Interest                                                                                 (73,089)      (285,161)
                                                                                         --------       --------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                                           (1,103,810)    (2,025,200)

Taxation                                                                   3              100,615      (152,109)
                                                                                         --------       --------
RETAINED LOSS FOR THE FINANCIAL YEAR                                                  (1,003,195)    (2,177,309)

                                                                                         ========       ========
BASIC LOSS PER SHARE (IN PENCE)                                            4                (0.7)          (6.9)
                                                                                         ========       ========



There were no recognised gains or losses other than the result for the year as
shown above.



BALANCE SHEETS
As at 31st October
                                                                      Note                   2001            2000
                                                                                                £               £
FIXED ASSETS

Tangible assets                                                            5            2,867,681       4,024,981
Investments                                                                                     -          15,686
                                                                                         --------        --------
                                                                                        2,867,681       4,040,667
CURRENT ASSETS                                                                           --------        --------

Stocks                                                                                     18,000         321,657
Debtors                                                                                   153,222         384,605
Cash at bank and in hand                                                                  309,807          51,372
                                                                                         --------        --------
                                                                                          481,029         757,634

CREDITORS - amounts falling due within one year                                         (736,770)     (3,202,048)
                                                                                         --------        --------
NET CURRENT (LIABILITIES)/ ASSETS
                                                                                        (255,741)     (2,444,414)
                                                                                         --------        --------
TOTAL ASSETS LESS CURRENT LIABILITIES                                                   2,661,940       1,596,253


CREDITORS - amounts falling due after more than one year                                (353,466)       (494,287)

PROVISIONS FOR LIABILITIES AND CHARGES                                                   (42,000)       (143,000)

                                                                                         --------        --------

                                                                                        2,216,474         958,966
CAPITAL AND RESERVES                                                                     ========        ========

Called up share capital                                                                 1,622,718         319,145
Share premium                                                                           2,778,007       1,820,877
Capital redemption reserve                                                                164,667         164,667
Profit and loss account                                                               (2,981,218)     (1,978,023)
Capital reserve                                                                           632,300         632,300
                                                                                         --------        --------


SHAREHOLDERS' FUNDS                                                                     2,216,474         958,966
                                                                                         ========        ========



CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31st October, 2001
                                                                                2001                           2000
                                                                      £            £               £              £


NET CASH OUTFLOW FROM OPERATING ACTIVITIES                                 (904,523)                      (527,241)


RETURNS ON INVESTMENTS AND SERVICING OF FINANCE



Net Interest paid                                                           (73,089)                      (285,161)

TAXATION                                                                       (685)                       (18,749)

CAPITAL EXPENDITURE

Payments to acquire tangible fixed assets                      (19,380)                    (256,932)
Receipts from the sale of tangible fixed assets                  63,126                      297,962
Receipts from the sale of Investments                            13,326                            -
Net receipts from the sale of operations                        699,524                      180,000
                                                               --------                     --------
                                                                             756,596                        221,030

EQUITY DIVIDENDS PAID                                                              -                       (15,707)
                                                                            --------                       --------
CASH OUTFLOW BEFORE FINANCING                                              (221,701)                      (625,828)

FINANCING

Repayment of loans                                          (1,200,008)                  (1,193,092)
New loans                                                             -                    2,180,000
Net proceeds from issue of new shares                         2,260,703                       46,500
                                                               --------                     --------
                                                                           1,060,695                      1,033,408
                                                                            --------                       --------
INCREASE IN CASH                                                             838,994                        407,580
                                                                            ========                       ========



NOTES TO THE FINANCIAL STATEMENTS



1.   ACCOUNTING POLICIES

The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards.



     Basis of consolidation

The consolidated financial statements incorporate the financial statements
of Anglo-Welsh Group PLC and all its subsidiary undertakings made up to 
31st October, 2001.


2.   GROUP REORGANISATION

On 4th December, 2000, the group entered into an agreement with a company known
as Aquatravel Limited ('Aqua'), a company in which Mr D Medlock (a former
director) has a material financial interest.  Under this agreement Aqua acquired
leasehold property, a proportion of the boat fleet and operating stocks.  The
remaining fleet of boats was sold to a subsidiary company, Anglo-Welsh Overseas
Limited.  Aqua now maintains and operates the fleet on behalf of the group and
in return receives a management fee in the first year of 90 per cent. of all
boat hire income. Management fees reduce to 85 per cent. of hire income in the
following two years and 75 per cent. thereafter.  The Company's boat building
operations were sold on 15th February, 2001.



Due to the fundamental changes noted above it is impossible to separately
identify the results of those parts of the group that are continuing as they
were previously so closely integrated with overall group activities.



The loss arising on disposals of discontinued operations in the year ended
31st October, 2001, relates to a net loss of £39,432 on the disposal of the hire
business to Aqua and costs pertaining thereto.  A further loss of £88,755 arose
on the disposal of the group's boat building activities.  A loss of £30,000
arose in respect of the write off of unpaid consideration from the sale of the
agricultural machinery business in the previous year as a consequence of the
subsequent insolvency of the purchaser of that business.



The provision for loss on operations to be discontinued relates to anticipated
losses on the termination of the timeshare activities of Time Afloat Limited.



3.   TAXATION
                                                                                              2001         2000
                                                                                                 £            £

Taxation (credit)/charge is based on the loss for the year and is made up as follows:

Adjustments in respect of prior years                                                          385            -
Deferred taxation                                                                        (101,000)      113,450
Irrecoverable Advance Corporation Tax                                                            -       38,659
                                                                                          --------     --------
                                                                                         (100,615)      152,109
                                                                                          ========     ========



4    LOSS PER SHARE

Basic loss per ordinary share of 0.7 pence (2000: 6.9 pence loss following
sub-division) is calculated using the net basis on the group loss for the year
after tax of £1,003,195 (2000: £2,177,309) and on the weighted average number of
shares in issue of 136,200,300 (2000: 31,581,700 following sub-division).


                                                                                   2001                  2000
                                                                                  pence                 pence

Basic loss per share                                                              (0.7)                 (6.9)
                                                                               ========              ========



The loss per ordinary share has been re-stated for the year ended 31st October,
2000, for the sub-division of the 10 pence ordinary shares into 10 ordinary
shares of 1 pence each.  The sub-division took place on 12th January, 2001.



5    TANGIBLE FIXED ASSETS
                                         Land &  Narrow boats       Plant &            Motor            Total
                                      Buildings             £     Equipment         Vehicles                £

                                              £                           £                £
Cost

At 1st November, 2000                   550,672     4,363,023       684,094           64,957        5,662,746
Additions                                     -        16,533         2,847                -           19,380
Disposals                             (303,964)     (338,186)     (684,094)         (64,957)      (1,391,201)
                                       --------      --------      --------         --------         --------
At 31st October, 2001                   246,708     4,041,370         2,847                -        4,290,925
                                       --------      --------      --------         --------         --------
Depreciation
At 1st November, 2000                   135,650     1,012,257       439,301           50,557        1,637,765
Charge for the period                         -       496,181           314                -          496,495
Disposals                             (135,650)      (85,508)     (439,301)         (50,557)        (711,016)
                                       --------      --------      --------         --------         --------
At 31st October, 2001                         -     1,422,930           314                -        1,423,244
                                       --------      --------      --------        ---------         --------
Net book value
At 31st October, 2001                   246,708     2,618,440         2,533                -        2,867,681
                                       ========      ========      ========         ========         ========


At 31st October, 2000                   415,022     3,350,766       244,793           14,400        4,024,981
                                       ========      ========      ========         ========         ========



The net book value of land and buildings comprises freehold £246,078 (2000:
£246,078) and short leasehold nil (2000: £168,314).



6.   Dividends

The Directors are not proposing the payment of a dividend in respect of the year
ended 31st October, 2001.



7.   Publication of non-statutory accounts

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.



The consolidated balance sheet as at 31st October, 2001, and the consolidated
profit and loss account, consolidated cash flow statement and associated notes
for the year have been extracted from the group's financial statements.  Those
financial statements have not yet been delivered to the Registrar of Companies,
nor have the auditors reported on them.  The 2000 accounts have been delivered
to the Registrar of Companies and the auditors reported on them, their report
was unqualified and did not contain a statement under Section 237(2) or (3) of
the Companies Act 1985.



8.   Copies of accounts will be sent to shareholders shortly and will also be
available at the Company's registered office.



Further enquiries


Anglo-Welsh Group PLC
Stephen Thomson                                                                              Tel:  [phone]

John East & Partners Limited
John East / Simon Clements                                                                   Tel:  [phone]



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