Interim Results

Mulberry Group PLC
12 December 2002


MULBERRY GROUP PLC
12 DECEMBER 2002 - EMBARGOED FOR 7AM



                MULBERRY GROUP PLC ('Mulberry' or the 'Company')
            INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2002


CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW

This is my first report to shareholders as Chairman and CEO following the
departure of Roger Saul to become President and a non-executive director.

The Board has addressed the issues that face the Group. In the last two weeks, a
programme of cost reduction has been completed totalling £0.8 million, which
will benefit next year. Our priority is to bring increased financial discipline
to bear throughout the company in order to bring us back to profitability as
soon as possible and to consolidate the base for the next phase of development.
The recruitment of a new chief executive which was announced previously has been
deferred.


RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2002

Trading conditions continued to be demanding in the six months to 30 September
2002 and despite some significant achievements, the financial performance of the
Group has been held back by a range of factors.

Sales increased during the period by 10% to £13.3 million (2001: £12.1 million).
Sales through the off price business increased by £0.6 million mainly due to the
outlet in Bicester village, which opened in August 2001. The balance of the
increase was higher wholesale sales of accessories.

Despite this increase in sales, the Group made a loss of £1.05 million before
tax (2001: £0.96 million). Gross profit reduced by £0.7 million with the gross
margin falling from 54.2% to 44.1%. This reflected the higher proportion of
sales made through the off price business and discounting to reduce stocks,
which have been reduced by £1.2 million compared to the prior year.

The result for the period includes the trading loss of the Tokyo store, which
closed on 20 June 2002, of £0.2 million (2001: £0.2 million). The closure cost
was provided for in the previous year.


THE MULBERRY BRAND

Our marketing and public relations activities have achieved exceptional coverage
in the media and I believe the Mulberry brand has been significantly
strengthened throughout the period.

The new store in Copenhagen, which opened in April 2002, has shown strong sales
growth and the next new style shop in Europe opens in The Hague on 12 December.
The first of the new franchised stores in Russia has opened in St Petersburg.
The next opening is planned for Moscow in the first half of 2003.


ACCESSORIES

Accessories are our core business and account for 70% of group sales.   Autumn/
Winter 2002 sales of accessories to department stores and independent retailers
in the UK have increased by 12% and they are reporting strong sales growth of
the Mulberry products. The recession in fashion retail in Northern Europe and
Scandinavia, which has been widely reported, has resulted in a sales reduction
of 13% in our export business in the region.


MEN'S AND WOMEN'S CLOTHING

The menswear business has made steady progress in the first six months of the
year. The womenswear business has retrenched in a period of transition and has
suffered from late deliveries. Spring/Summer 2003 is the final collection under
the old design regime. The Autumn/Winter 2003 collection, the first range
designed by Nicholas Knightly, the new design director, will arrive in the
showrooms in January.


HOME COLLECTION

Our licence relationship with Kravet Lee Jofa, who produce and sell our Home
furnishings collection, continues to develop satisfactorily.

Two new licence agreements have been signed; the Mulberry bath towel collection
with Christy UK Limited and the Mulberry bed linen collection with Peter Reed
Limited. The first sales are expected in Spring 2003.


RETAIL

Retail trading in London where most of the Group's own shops are based remains
tough and continues to be affected by the lack of tourists. It is not possible
to produce reliable like for like sales statistics for the period because of the
extended closure of our Bond Street flagship store for 16 weeks last year.


OUTLOOK

Sales in our full price shops for the 8 weeks to 7 December 2002 are 2% higher
than last year. The outlook for the second half of the year will become clearer
when we see the results of the key Christmas trading period.  Early indications
for the Spring/Summer 2003 season are satisfactory for accessories but
disappointing for clothing, particularly womenswear, where sales of the final
collections developed by the old design regime will be below expectations. In
addition, the costs of the recent shareholder dispute and extraordinary general
meeting requisition together with the subsequent management changes and
recruitment costs are estimated to be £0.9 million. These factors will adversely
affect the financial results for the full year.


BORROWINGS

Net debt of £7.9m is in line with the normal seasonal pattern. The higher levels
of debt compared to the previous year are due to the completion of the
refurbishment of the Bond Street shop in the second half of the last financial
year.


DIVIDENDS

In view of the current losses and in the absence of distributable reserves, the
Board is not recommending the payment of a dividend on the ordinary or
preference shares.


EXTRAORDINARY GENERAL MEETING

As you all know, the events of late November when our largest external
shareholder Challice Limited requisitioned an EGM to remove Roger Saul as a
director of the company, was resolved when Roger agreed to resign as Chairman
and CEO. He remains a non-executive director and I am delighted we will still
have the advice and support of the company's founder available to us.


STAFF

I would like to say a particularly heartfelt thank you to all our staff who have
had to cope with exceptional circumstances this year whilst at the same time
driving the brand forward with optimism and commitment.


GODFREY DAVIS
CHAIRMAN AND CHIEF EXECUTIVE
12 December 2002



ENQUIRIES:

For further information, please contact Alex Glover WMC Communications
Telephone: [phone]


CONSOLIDATED PROFIT & LOSS ACCOUNT 
for the six months to 30 September 2002 
 
 

                                                                              
                                   Unaudited        Unaudited         Audited 
                                 6 months to      6 months to    12 months to 
                                30 September     30 September        31 March  
                                        2002             2001            2002 
                                       £'000            £'000           £'000 
                                                                              
  TURNOVER                            13,263           12,060          27,817  
                                                                        
  Cost of sales                       (7,409)          (5,521)        (13,873) 
                                                                       
                                                                              
  GROSS PROFIT                         5,854            6,539          13,944  
                                                                         
  Other operating expenses            (6,676)          (7,159)        (14,757) 
  (net)                                                                
                                                                              
  OPERATING LOSS                        (822)            (620)           (813) 
                                                                              
  Loss on disposal of fixed                -             (200)           (593) 
  assets                                                                      
  Group share of profit of                 -                -               1  
  associated company                                                         
  Interest payable and                  (229)            (139)           (343) 
  similar charges                                                             
                                                                              
  Loss on ordinary                    (1,051)            (959)         (1,748) 
  activities before                                                           
  taxation                                                                    
                                                                              
  Tax on loss on ordinary                  -                -              (6) 
  activities (note 2)                                                        
                                                                              
  LOSS FOR THE PERIOD                 (1,051)            (959)         (1,754) 
  Preference dividends                   (99)             (99)           (199) 
                                                                              
  ACCUMULATED LOSS                    (1,150)          (1,058)         (1,953) 
                                                                      
                                                                              
  Loss per share                       (3.18)           (2.93)          (5.40) 
                                                                              
                                                                              
  Dividend per ordinary            Nil pence        Nil pence       Nil pence  
  share                                                             
 


CONSOLIDATED BALANCE SHEET 
at 30 September 2002 
                                                                              
                               Unaudited          Unaudited          Audited 
                       30 September 2002       30 September    31 March 2002 
                                                       2001                  
                                   £'000              £'000            £'000 
                                                                              
  FIXED ASSETS                     6,900              6,636            7,027  
                                                                              
  CURRENT ASSETS                                                              
  Stocks                           8,472              9,652            9,096  
  Debtors                          5,707              5,155            3,938  
  Cash                                 1                 13              151  
                                  14,180             14,820           13,185  
                                                                              
  CREDITORS: Amounts             (12,658)            (9,526)          (8,623) 
  falling due within one year                                                         
                                                                              
  NET CURRENT ASSETS               1,522              5,294            4,562  
                                                                              
  TOTAL ASSETS LESS                8,422             11,930           11,589  
  CURRENT LIABILITIES                                                                 
                                                                              
  CREDITORS: Amounts                (538)            (2,071)          (2,654) 
  falling due after                                                           
  one year                                                                    
                                                                              
                                                                              
  NET ASSETS                       7,884              9,859            8,935  
                                                                              
  CAPITAL AND RESERVES                                                                    
                                                                              
  Called up share                  2,457              2,457            2,457  
  capital                                                                     
                                                                              
  Reserves                         5,427              7,402            6,478  
                                                                              
                                   7,884              9,859            8,935  


CONSOLIDATED CASH FLOW 
for the six months to 30 September 2002 
                                                                              
                                   Unaudited        Unaudited         Audited 
                                 6 months to      6 months to    12 months to 
                                30 September     30 September        31 March  
                                        2002             2001            2002 
                                       £'000            £'000           £'000 
                                                                              
  Operating loss                        (822)            (620)           (813) 
  Depreciation                           430              566             818 
  Decrease /(increase) in                624           (2,274)         (1,718) 
  stocks                                                                      
  Increase in debtors                 (1,769)          (1,232)            (14) 
  Increase /(decrease) in                826              157            (521) 
  creditors                                                                   
                                                                              
  NET CASH FLOW FROM                    (711)          (3,403)         (2,248) 
  OPERATIONS                                                                  
                                                                              
  Interest                              (229)            (139)           (320) 
  Taxation                                 -                -              (6) 
  Capital expenditure                   (180)          (1,278)         (2,146) 
  Preference dividends paid                -             (156)           (259) 
                                                                              
  NET CASH FLOW BEFORE                (1,120)          (4,976)         (4,979) 
  FINANCING                                                                   
                                                                              
  Financing                             (138)             952             829 
                                                                              
  DECREASE IN CASH IN THE             (1,258)          (4,024)         (4,150) 
  PERIOD                                                                      
                                                                              
  RECONCILIATION OF NET                                                       
  CASHFLOW TO MOVEMENT IN NET DEBT                                                                    
                                                                              
  Decrease in cash in the             (1,258)          (4,024)         (4,150) 
  year                                                                        
  Cash outflow/(inflow)                                                       
  from decrease/(increase)                                                    
  in debt and lease finance              138             (952)           (829) 
                                                                              
                                      (1,120)          (4,976)         (4,979) 

  Inception of finance                   (41)             (75)           (997) 
  leases                                                                      
                                                                              
  Movement in net debt                (1,161)          (5,051)         (5,976) 
                                                                              
  NET DEBT, BEGINNING OF              (6,751)            (775)           (775) 
  PERIOD                                                                      
                                                                              
  NET DEBT, END OF PERIOD             (7,912)          (5,826)         (6,751) 
 


NOTES

1.      ACCOUNTING POLICIES

The interim results contained in this report, which have not been reviewed or
audited, have been prepared using accounting policies consistent with those used
in the preparation of the annual report and accounts for the year ended 31 March
2002.


2.      TAXATION

The corporation tax charge for the period is based on the effective rate which
it is estimated will apply for the full year.


3.      COMPARATIVE FIGURES

The comparative figures for the year ended 31 March 2002, which do not
constitute statutory accounts, are abridged from the company's statutory
accounts which have been filed with the Registrar of Companies. The report of
the auditors, Arthur Andersen, on these accounts was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.


4.      APPROVAL AND DISTRIBUTION

This report was approved by the Board of Directors on 11 December 2002 and is
being sent to all shareholders.  Additional copies are available from the
Company Secretary at the Registered Office Kilver Court, Shepton Mallet, Bath,
BA4 5NF.



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