Interim Results

Oxford Instruments PLC
13 November 2001



13 November 2001



Oxford Instruments plc

Announcement of interim results for 2001/02

Oxford Instruments plc, the advanced instrumentation group, today announced
consolidated interim results for the half year to September 2001.


  * Orders for the wholly-owned businesses increased by 2% on the first half
    last year to £94 million.

  * Turnover for the wholly-owned businesses up by 35% to £104 million.

  * Operating profit for the wholly-owned businesses increased to £2.4
    million, compared with a loss of £1.4 million for the first half last
    year.

  * Pre-tax profits increased to £6.1 million (2000 £0.5 million) including
    £2.7 million from the share of the OMT joint venture operating profit and
    £1.8 million from the sale of a surplus property.

  * Net borrowings were £11.3 million, a net £3 million outflow during the
    period.

  * Interim dividend is held at 2.4 pence.

Andrew Mackintosh, Chief Executive said: ' I am pleased to be able to report a
further substantial improvement in our financial performance over the past six
months as forecast. This reflects material progress in the operational
efficiency of our businesses as a result of major reorganisation over the past
two years. We are approaching the future with confidence, given that our
technical strength allied to increasingly effective execution will enable us
to compete successfully in our markets.'


Enquiries: Oxford Instruments plc           Tel: [phone] Fax: [phone]

           Nigel Keen, Chairman

           Andrew Mackintosh, Chief Executive

           Martin Lamaison, Financial Director
           

           Citigate Dewe Rogerson          Tel: [phone] Fax: [phone]
                                                          
           Chris Barrie



No. of pages:     12

For further copies of this Interim Results announcement please contact
Vinnetta Hutchings at the Company's registered office at Old Station Way,
Eynsham, Witney Oxon OX29 4TL (email: [e-mail]).



Chairman's Statement

Nigel Keen, Chairman of Oxford Instruments plc, said today:

'The encouraging financial results for the last 6 months have been achieved
following the restructuring programme carried out over the past two years.

Orders for the period of £94 million (2000 £92 million) from the wholly-owned
businesses held up well, increasing by 2% over the same period last year.
Orders from the markets for research products were particularly strong,
counteracting weakness in the semiconductor and other industrial segments.

Turnover of £104 million for the period was 35% higher (2000 £77 million),
reflecting further material progress in reducing the high order backlog and
improving operational efficiency.

Pre-tax profits before exceptional items increased to £4.3 million (2000 £0.9
million). This comprised a £3.8 million improvement in operating profit of the
wholly-owned businesses to £2.4 million (2000 £1.4 million loss), with a
contribution of £2.7 million (2000 £2.5 million) from the share of the
operating profits of Oxford Magnet Technology (OMT), our joint venture with
Siemens. Interest payable was £0.8 million. In total, pre-tax profits for the
period were £6.1 million (2000 £0.5 million), which included an exceptional
profit of £1.8 million from the sale of a surplus property following the
restructuring.

Net borrowings at the half-year were £11.3 million, reflecting a net cash
outflow of £3.0 million in the period. This included an increase in working
capital as a result of higher turnover offset by the receipt of £3.0 million
from the sale of the property.

The Directors have recommended an interim dividend of 2.4p, unchanged from
last year.

Operational review

Analytical

Turnover for the period increased by 58% to £44 million (2000 £28 million),
reflecting the delivery to customers of a substantial proportion of the record
orders received in the second half of last year. Operating profits moved
forward strongly to £4.1 million (2000 £0.4 million). However, as forecast,
the rate of receipt of new orders in the period is 18% down on the average for
last year, reflecting the slowdown in orders from the semiconductor industry
and a continuing general weakness in the American market.

We have recently launched a major new hardware platform for our market-leading
'INCA' chemical analysis product. The reduced size and modern design of this
unit is easier to manufacture and allows more effective integration with our
customers' equipment.

We announced on 29 October 2001 the acquisition of the assets of USA-based CMI
International for $2.2 million, a market-leader in the measurement of thin
metallic coatings for a range of industrial applications. This business
complements our existing product lines serving industrial quality control
markets.

Medical

Despite stable orders and increased turnover of £19 million (2000 £17
million), losses of £0.8 million (2000 £0.9 million loss) were incurred in the
period. As a result of this, changes to the management and structure of
operations have been made to improve capacity and efficiency going forward.

Investment in the future continues both through new products and the creation
of new alliances to broaden our range of products and sales channels. We
recently brought to market in record time a significant new software product
which aids the diagnosis of the health of a baby during late pregnancy. This
will contribute to our growing instrument sales into the obstetrics sector,
supporting our new 'FM800' fetal monitor, which is now selling well.

Superconductivity

Turnover grew by 27% on the same period last year to £41 million (2000 £32
million), reflecting continuing good progress in increasing capacity and
successfully completing a number of technically demanding but low-margin
projects.

We have made further encouraging progress with the limited number of 'legacy
contracts' which continue to slow down the recovery of this business. One key
project has been delivered successfully during the period, while good
technical and commercial progress has been made on two others. There remains
however substantial technical risk in these projects until they are complete.

Our US-based wire and MRI magnet service business continues to perform well,
supplying increased volumes of wire to MRI magnet businesses. Customers have
recently used our unique wire product to produce the world's most intense
magnetic field in a magnet which could be used in significant volumes by the
next generation of particle accelerators.

The loss for the period of £0.9 million (2000 £0.9 million loss) was in line
with internal recovery forecasts, reinforcing our confidence that investment
over the past two years in project management and other process improvement is
paying off. Trading is expected to improve in the second half of the year as
we commence deliveries to customers of our world-leading 'Discovery' magnets
used for drug development.

Oxford Magnet Technology

The 49% share of OMT, our joint venture with Siemens, generated operating
profits for the period of £2.7 million (2000 £2.5 million) on turnover up 18%
on the equivalent period last year. Pricing pressure is likely in the future
to be intensified by recent consolidation in the customer base for OMT's
products.

Discussions continue with Siemens over the future of OMT beyond the initial
term of the joint venture which ends in September 2004. Siemens, who is also
the principal customer of the business, expects to increase its shareholding
in OMT under any future arrangement. We have not yet been able to agree a
revised financial structure for the relationship after 2004 which reflects the
interests of our shareholders.

Board change

Richard Wakeling decided to step down from the Board in September 2001 after 6
years as a non-executive director. He has provided valuable advice and support
to the Company during the major changes over the past few years. We wish him
well with his future plans.

Prospects

The priority for the business remains to achieve further improvement in
operational efficiency and we expect additional material progress over the
next few months. We continue to focus on initiatives that improve the standard
of our service to customers through the timely delivery of high quality
products.

Turnover in the second half of the year is expected to remain at current
levels as increased shipments from the high order backlog in our Medical and
Superconductivity businesses offset the expected reduction in turnover from
our Analytical business. Our objective moving into next year is to ensure that
all businesses are operating with reduced delivery times to customers so that
we can compete aggressively for increased shares of the markets we serve.'

Group Profit and Loss Account

Half year ended 30 September 2001 - unaudited

                                              Half year to 30 September 2001

                                                Continuing Exceptional    Total
                                                operations       items
                                     Notes            £000        £000     £000
Turnover
Group and share of joint venture         1         126,751           -  126,751
turnover
Less share of joint venture turnover     3        (22,692)           - (22,692)

Group turnover                           2         104,059           -  104,059
Cost of sales                                     (72,613)           - (72,613)

Gross profit                                        31,446           -   31,446
Net operating expenses                            (29,016)           - (29,016)

Group operating profit                   2           2,430           -    2,430
Share of operating profit of joint       3           2,657           -    2,657
venture

Total operating profit
Group and share of joint venture                     5,087           -    5,087
Profit on disposal of property                           -       1,826    1,826

Profit before interest                               5,087       1,826    6,913
Total net interest payable                           (784)           -    (784)

Profit on ordinary activities before                 4,303       1,826    6,129
tax
Tax on profit on ordinary activities     6         (1,597)           -  (1,597)

Profit for the period attributable       7           2,706       1,826    4,532
to shareholders

Dividends                                8                              (1,126)

Retained profit for the period                                            3,406

                                                     pence       Pence    pence
Earnings per share - basic and           7             5.8         3.9      9.7
diluted


Group Profit and Loss Account

Half year ended 30 September 2000 - unaudited

                              Half year to 30 September 2000       Year to
                                        As restated                     31      
                                                                     March
                   Continuing Exceptional  Discontinue   Total        2001
                   operations       items   operations                          
                                                                        As
                                                                  restated
             Notes       £000        £000         £000    £000        £000
Turnover

Group and        1     96,535           -        1,511  98,046     221,910
share of
joint
venture
turnover

Less share       3    (19,525)          -            - (19,525)    (36,775)
of joint
venture
turnover

Group            2     77,010           -        1,511  78,521     185,135
turnover

Cost of               (54,524)       (157)      (1,427)(56,108)   (133,845)
sales

Gross profit           22,486        (157)          84  22,413      51,290
/(loss)

Net                   (23,838)       (607)        (740)(25,185)    (52,642)
operating
expenses

Group            2     (1,352)       (764)        (656) (2,772)     (1,352)
operating
loss

Share of         3      2,483           -            -   2,483       4,350
operating
profit of
joint
venture

Total
operating
profit/
(loss)

Group and               1,131        (764)        (656)   (289)       2,998
share of
joint
venture

Profit on        5          -           -        1,010   1,010          599
sale of
discontinued
business

Profit/                 1,131        (764)         354     721        3,597
(loss)
before
interest

Total net                (184)          -            -    (184)        (792)
interest
payable

Profit/                   947        (764)         354     537        2,805
(loss) on
ordinary
activities
before tax

Tax on           6       (220)         22           24    (174)      (2,869)
profit/
(loss) on
ordinary
activities

Profit/          7        727        (742)         378      363         (64)
(loss) for
the period
attributable
to
shareholders

Dividends        8                                       (1,131)     (3,942)

Retained                                                   (768)     (4,006)
loss for the
period

                        pence       pence         pence    pence       pence
Earnings/        7        1.6       (1.6)           0.8      0.8       (0.1)
(losses) per
share -
basic and
diluted




Group Statement of Total Recognised Gains and Losses

Half year ended 30 September 2001 - unaudited
                                                         Half     Half     Year 
                                                      year to  year to       to
                                                       30 Sep   30 Sep   31 Mar
                                                         2001     2000     2001
                                                                    As       As
                                                              restated restated
                                               Notes     £000     £000     £000

Profit/(loss) for the period                            4,532      363     (64)
Exchange differences on foreign currency net          (1,172)    2,335    3,656
investments of the Group

Total recognised gains and losses relating to           3,360    2,698    3,592
the period
Prior year adjustments                             1    2,841
Total gains and losses recognised since last
Annual Report
                                                        6,201



Group Balance Sheet

Half year ended 30 September 2001 - unaudited
                                                    As        As             As 
                                                    at        at             at
                                                30 Sep    30 Sep         31 Mar
                                                  2001      2000           2001
                                                              As             As 
                                                        restated       restated
                                       Notes      £000      £000           £000
Fixed assets
Goodwill                                         4,927     2,581          5,341
Negative goodwill                                (664)   (1,195)          (930)
Intangible assets                                4,263     1,386          4,411
Tangible assets                                 42,221    40,388         43,731
Investments
Share of gross assets of joint venture          16,350    14,599         15,937
Share of gross liabilities of joint           (11,926)   (9,278)       (13,176)
venture
Net investment in joint venture                  4,424     5,321          2,761
Other investments                                2,154     1,247          2,260
Total investments                                6,578     6,568          5,021
Total fixed assets                              53,062    48,342         53,163
Current assets
Stocks                                          48,631    42,653         43,696
Debtors                                         64,007    64,803         69,338
Cash at bank and in hand                         3,776     3,000          1,643
                                               116,414   110,456        114,677
Creditors: amounts falling due within
one year
Bank loans and overdrafts                     (15,079)   (8,466)        (9,959)
Other creditors                               (56,317)  (51,839)       (61,933)
                                              (71,396)  (60,305)       (71,892)
Net current assets                              45,018    50,151         42,785
Total assets less current liabilities           98,080    98,493         95,948
Provisions for liabilities and charges         (6,076)   (6,806)        (6,178)
Net assets employed                             92,004    91,687         89,770
Capital and reserves
Called up share capital                          2,392     2,392          2,392
Share premium account                           18,656    18,656         18,656
Other reserves                                  15,930    15,930         15,930
Profit and loss account                         55,026    54,709         52,792
Equity shareholders' funds                 9    92,004    91,687         89,770



Group Cash Flow Statement

Half year ended 30 September 2001 - unaudited
                                                        Half     Half     Year 
                                                     year to  year to       to
                                                      30 Sep   30 Sep   31 Mar
                                                        2001     2000     2001
                                              Notes     £000     £000     £000
                                                                  
Net cash outflow from operating activities       10  (3,085)  (9,350)  (1,925)
Dividend from joint venture                                -        -    3,691
Returns on investments and servicing of          10    (546)     (54)    (432)
finance
Taxation                                                 426    1,914    (250)
Capital expenditure and financial investment     10      284  (1,990)  (6,229)
Acquisitions                                               -        -  (3,911)
Disposals                                                  -    1,356    1,983
Equity dividends paid                                      -        -  (3,953)
Cash outflow before management of liquid             (2,921)  (8,124) (11,026)
resources and financing
Management of liquid resources                   10    2,000    4,997    9,500
Decrease in cash in the period                         (921)  (3,127)  (1,526)



Reconciliation of Net Cash Flow to Movement in Net Debt

Half year ended 30 September 2001 - unaudited

                                         Half year      Half year          Year 
                                                to             to            to
                                            30 Sep         30 Sep        31 Mar
                                              2001           2000          2001
                              Notes           £000           £000          £000
Decrease in cash in the                      (921)        (3,127)       (1,526)
period
Change in liquid resources                 (2,000)        (4,997)       (9,500)
Translation difference                        (66)             54           106
Movement in net funds in the               (2,987)        (8,070)      (10,920)
period
Opening net (debt)/funds                   (8,316)          2,604         2,604
Closing net debt                 11       (11,303)        (5,466)       (8,316)



Notes on the Interim Financial Statements

Half year ended 30 September 2001 - unaudited

1.     Basis of presentation of accounts

The Group profit and loss account and balance sheet for the half years ended
30 September 2001 and 30 September 2000 have been prepared on a basis
consistent with the accounting policies disclosed in the Group's Report and
Accounts 2001, subject to the application of FRS 19 as discussed below.
Discontinued operations include the cathodoluminescence and accessories
business sold in June 2000, together with the operations of the Accelerator
Technology Group including the beamlines business sold in January 2001.

The Group has adopted FRS 19 'Deferred Tax' in the period, resulting in the
restatement of prior periods' profit and loss accounts, balance sheets and
statements of recognised gains and losses. Application of the standard has
resulted in the creation of a deferred tax asset of £2.8 million (£3.0 million
at 30 September 2000 and 31 March 2001) in respect of timing differences and
has required the restatement of goodwill on the recognition of deferred tax
assets in an acquired company.

The principal exchange rates used to translate the Group's overseas results
were as follows:
                  Half year to             Half year to                 Year to
                   30 Sep 2001             30 Sep 2000              31 Mar 2001

               Average      Period End  Average  Period End Average  Period End
US Dollar         1.43            1.47     1.52        1.48    1.48        1.42
Euro              1.62            1.61     1.64        1.68    1.64        1.61
Yen                175             175      162         160     164         178


        2.     Results by business group for continuing operations

                                  Turnover             Operating profit/(loss)
                        Half year to   Half year to  Half year to Half year to

                         30 Sep 2001    30 Sep 2000   30 Sep 2001  30 Sep 2000
                                £000           £000          £000         £000
Analytical                    43,534         27,581         4,142          381
Medical                       19,169         16,934         (849)        (874)
Superconductivity             41,356         32,495         (863)        (859)

                             104,059         77,010         2,430      (1,352)
Share of OMT jv (49%)         22,692         19,525         2,657        2,483

                             126,751         96,535         5,087        1,131



Notes on the Interim Financial Statements (Continued)

3.     Joint venture

The Group owns 49% of the issued share capital of Oxford Magnet Technology
Limited (OMT). It is engaged in advanced instrumentation and is registered and
operates in England. The Group has accounted for its interest in OMT as a
joint venture.

The Group's share of the joint venture turnover as shown in the Group profit
and loss account has been derived after adjusting for trading between the
Group and OMT as follows:
                                                  Half year to     Half year to

                                                   30 Sep 2001      30 Sep 2000
                                                          £000             £000
49% of joint venture turnover                           29,027           24,494
Less 49% of sales by OMT to Group                      (3,468)          (2,193)
Less 49% of sales by Group to OMT                      (2,867)          (2,776)

Group share of joint venture turnover                   22,692           19,525

4.     Exceptional Items

Exceptional items for the period to 30 September 2000 related to continuing
activities and included the costs incurred in connection with the
reorganisation of the Group's UK based businesses.

5.     Disposal of businesses

In the period to 30 September 2000 the Group sold its cathodoluminescence and
accessories business for a cash consideration of £1.4 million. There was a net
profit on disposal of £1.0 million. There were no disposals in the period to
30 September 2001.

6.     Taxation

The tax charge for the half year ended 30 September 2001 has been based on the
estimated effective rate applicable to each significant category of income for
the full year.

7.     Earnings per share

Earnings per share (EPS) has been calculated using profits of £4,532,000 (2000
£363,000) and weighted average shares of 46,929,456 (2000 47,109,456) for
basic EPS and 46,972,248 (2000 47,113,498) for diluted EPS respectively.

8.     Dividends per share

An interim dividend of 2.4p (2000 2.4p) will be paid on 22 March 2002 to
shareholders registered at the close of business on 22 February 2002, the
record date. The shares will be marked 'ex-dividend' on 20 February 2002.



Notes on the Interim Financial Statements (Continued)

9.      Movements in Equity Shareholders' Funds
                                                      Half  Half year      Year 
                                                   year to         to        to
                                                    30 Sep     30 Sep    31 Mar
                                                      2001       2000      2001
                                                                   As        As
                                                             restated  restated
                                                      £000       £000      £000
Profit/(loss) for the period                         4,532        363      (64)
Dividends paid and proposed                        (1,126)    (1,131)   (3,942)
Retained profit/(loss) for the period                3,406      (768)   (4,006)
Exchange differences on foreign currency net       (1,172)      2,335     3,656
investments
Net increase/(reduction) in equity                   2,234      1,567     (350)
shareholders' funds
Opening equity shareholders' funds                  89,770     90,120    90,120
Closing equity shareholders' funds                  92,004     91,687    89,770

10.     Cash flows netted in the cash flow statement
                                                      Half       Half    Year 
                                                   year to    year to      to
                                                        30         30  31 Mar
                                                  Sep 2001   Sep 2000    2001
                                                                   As    As
                                                             restated restated
                                                      £000       £000   £000
Group operating profit/(loss)                        2,430    (2,772)  (1,352)
Depreciation charges                                 2,990      2,689    5,510
Amortisation of goodwill                               149       (48)      100
Net profit on disposal of fixed assets                  16         89    (324)
Change in stocks                                   (5,278)    (5,976)  (9,556)
Change in debtors                                    4,179        863  (3,731)
Change in creditors                                (7,396)    (3,697)   10,048
Change in provisions                                 (175)      (498)  (2,620)
Net cash outflow from operating activities         (3,085)    (9,350)  (1,925)
Interest received                                       11        118      176
Interest paid                                        (557)      (172)    (608)
Net cash outflow from the servicing of finance       (546)       (54)    (432)

Purchase of fixed assets                           (2,704)    (2,400)  (6,413)
Sale of fixed assets                                 2,988        410      527
Investments acquired                                     -          -    (343)
Net cash inflow/(outflow) from capital                 284    (1,990)  (6,229)
expenditure and financial investment

Decrease in term deposits                                -      1,500    1,500
Increase in term loans                               2,000      3,497    8,000
Net cash inflow from management of liquid            2,000      4,997    9,500
resources



Notes on the Interim Financial Statements (Continued)

11.     Movement in Net Debt
                      As at             Exchange Rate  Cash movement      As at
                     30 Sep 2001               Effect      in period         31
                                                                       Mar 2001
                            £000                 £000           £000       £000
Cash at bank               3,776                 (45)          2,178      1,643
and in hand
Bank overdrafts          (4,223)                  (5)        (3,099)    (1,119)
Net cash                   (447)                 (50)          (921)        524
Debt due within         (10,856)                 (16)        (2,000)    (8,840)
one year
Net debt                (11,303)                 (66)        (2,921)    (8,316)

12.     Report and Accounts 2001

The comparative figures for the financial year ended 31 March 2001 are
extracted from the company's statutory accounts for that financial year. Those
accounts have been reported on by the company's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified and did not
contain a statement under section 237 (2) or (3) of the Companies Act 1985.
Copies of the Report and Accounts 2001 are available from the Company's
registered office by applying to the Company Secretary, Oxford Instruments
plc, Old Station Way, Eynsham, Witney, Oxon, OX29 4TL. The Company is
registered in England Number 775598.