Final Results

Paragon Group Of Companies PLC
21 November 2000

             PARAGON AGAIN ANNOUNCES DOUBLE DIGIT PROFITS GROWTH

The Paragon Group of Companies PLC ('Paragon'), one of the UK's largest
specialist lenders offering first mortgages, unsecured and secured loans,
vehicle and retail finance, today announces its Preliminary Results for the
year ended 30 September 2000.

Highlights include:


  * Operating profit up 13.4% to £35.5m (1999: £31.3m)

  * Total dividend up 11.7% to 3.8p per share (1999: 3.4p)

  * Operating expenses down 1.3% to £30.6m (1999: £31m)

  * Cost to income ratio down to 40% (1999: 45%)

  * New lending up 22% to £510m (1999: £419.7m)

  * Growth increasingly towards consumer finance

  * Acquisition of Colonial Finance post year end

Commenting on the results, Jonathan Perry, Executive Chairman of Paragon,
said:

'All of the new businesses now contribute increasingly to profits with the
personal finance business taking an increasingly dominant role. Paragon's
emphasis will continue to move towards consumer finance both in volume and
contribution in the future.

'The past year saw strong organic growth, both in terms of business written
and in profits, followed in October by an important acquisition, Colonial
Finance, which we expect to be earnings enhancing in the current financial
year. This not only increases our asset base significantly, but also gives us
access to an important new product and distribution channel.'

For further information, please contact:
The Paragon Group of Companies PLC          The Wriglesworth Consultancy
Nigel Terrington, Chief Executive           John Wriglesworth
Nick Keen, Finance Director                 Michelle James
Tel: [phone]                          Tel: [phone]
                                            Mobile: [phone]




CHAIRMAN'S STATEMENT

Results and Final Dividend Proposal

I am pleased to report that the Group continued its strong growth, both in
terms of profitability and in terms of business volumes, during the year ended
30 September 2000. Operating profit increased by over 13%, new lending
increased by 22% and, shortly after the year end, we acquired Colonial Finance
(UK) Limited which not only increases our asset base significantly but, more
importantly, gives us access to an important new product and distribution
channel through which to expand our consumer finance business.

Profit before tax for the year ended 30 September 2000 was £35.5 million
(1999:£31.3 million before a £2.5 million profit on sale of property), an
underlying increase of 13.4%. After a corporation tax charge of £7 million
(1999:£3.5 million) the profit after tax was £28.5 million (1999:£30.3
million). Earnings per share were 25.1p, compared to 26.1p for the previous
year, the reduction from last year being attributable to the increased
corporation tax charge and to the impact of the profit on sale of property;
excepting these items this figure would have increased by 16%.

In view of these strong results the Board is pleased to propose, subject to
approval at the Annual General Meeting, the payment on 2 February 2001 of an
increased final dividend of 2.1p per share which, when added to the interim
dividend of 1.7p paid in July 1999, gives a total dividend of 3.8p per share
for the year, an increase of 11.7% on last year's dividend of 3.4p.

Progress Review and Future Strategy

My statement this year is intended to emphasise for existing and potential
shareholders the enormous progress which has been achieved in meeting the
strategy outlined to shareholders in previous statements.

Since re-entering the lending markets in 1995, Paragon has created a niche
mortgage business attracting proper margins and has generated further loan
assets with the addition of consumer finance businesses all supported by
Paragon's core skills in underwriting and collections, underpinned by cost
effective funding through securitisation of its assets.

Paragon's plan to create three new business streams, both to replace the run
down of NHL's book and to create a platform for future growth, has been
achieved. All of these businesses now contribute to profits and have strong
growth potential.

Paragon Mortgages loan portfolio now totals £790.8 million having grown by 25%
in the past year. Arrears are minimal and Paragon's strong position in the Buy
to Let market will ensure continuing growth. These are high quality earnings.

Paragon Personal Finance comprises both unsecured and secured personal loan
businesses, and includes our own organic growth since the start up in 1997,
the 1998 acquisition of Universal Credit and the post balance sheet
acquisition of Colonial Finance UK. Total loan assets at 30 September 2000
equalled £352.4 million, an increase of 38.4% over the previous year.
Subsequently, Colonial has added approximately £174 million of balances and an
established retail 'point of sale' business to complement our affinity, broker
and timeshare sourcing. We plan for strong growth of the Paragon Personal
Finance business.

Paragon Car Finance commenced operations in 1997 and had £128.4 million of
loans outstanding at 30 September 2000, an increase of 81% in the year. Again,
this business has arrears below the industry average and in a fragmented
market has the potential to grow strongly.

In contrast, the old NHL book has declined to £398.1 million, representing
only 23.8% of total loan assets at 30 September 2000.

Securitisation continues to provide both a discipline and cost effective
matched funding for all Paragon assets. Overall, funding is in place to
provide for our ambitious organic growth plans. Further acquisitions in the
areas of our core skills will be made where value can be added.

Paragon's business has been transformed from the old NHL. All of the new
businesses now contribute increasingly to profits with the personal finance
business taking an increasingly dominant role. Paragon's emphasis will
continue to move towards consumer finance both in volume and contribution in
the future. The three new legs to the stool are in robust good health and
leading the drive for profits growth. We believe that these factors together
with Paragon's inherent strengths will be reflected before long in the market
value accorded to Paragon.

Business Review

Financial

During the year, new lending increased by 22% to £510 million from £419.7
million in 1999 resulting in net growth in loan assets of 12.6% to £1.7
billion. Of the new originations, £285.9 million were in the second half of
the year and in each of the last three months of the year over £50 million was
advanced. The rising interest rate environment resulted in a steeply positive
yield curve during the year, with a consequent impact on the cost of
three-month LIBOR compared to base rates on our variable rate business, and on
the apparent competitiveness of fixed rate offerings compared to variable rate
alternatives. Despite these negative factors Paragon's average margins
increased during the year, from 4.4% to 4.7%. The prevailing view is that we
have reached the top of the interest rate cycle with the helpful consequence
that the yield curve has now flattened.

Other income, at £14 million, was 10% higher than the £12.7 million for 1999.
However, after excluding net rental income relating to the Group's freehold
property in Solihull, which was sold in April 1999, other operating income for
1999 was £11.9 million, the effective increase being 17.6 % on a comparable
basis.

Our continuing focus on maximising operating efficiencies has resulted in a
reduction in operating expenses from £31 million to £30.6 million, a
considerable achievement when set against the significant growth in business
volumes. The cost to income ratio of 40% compares with 45% in 1999. We
anticipate that operating expenses may rise in the current year as we
integrate the business of Colonial Finance (UK) Limited but we expect the
downward trend in the cost to income ratio to continue next year.

The provisions charge of £10.2 million was in line with our expectations and
compares with £5.8 million in 1999. The increase reflects the increased
proportion of our lending book attributed to personal finance, where arrears
performance is generally higher than that for first mortgages. Our arrears
performance across all of our business areas continues to compare favourably
with our competitors as a result of our careful credit policy.

The corporation tax charge of £7 million represents an effective tax rate of
20%. We anticipate a similar rate for 2001.

Personal Finance

Reflecting Paragon's emphasis on its consumer finance activities, Paragon
Personal Finance advanced £165.9 million in new lending during the year, a
growth rate of 73.5% from the level of £95.6 million achieved for 1999. At the
year end, there were 59,393 accounts under management with an aggregate value
of £352.4 million.

Particularly pleasing has been the growth of volume of the secured personal
finance product, which completed £71.7 million in the year, up from £7.3
million in 1999 following its launch in July last year. The volume of
unsecured lending grew to £94.2 million from £88.3 million. Within this, the
volume of timeshare lending was disappointing, as a result of a generally
subdued level of activity in that market. However, there were signs of a
significant improvement towards the end of the financial year, on the back of
Summer sales activity and the higher volumes have continued beyond the year
end.

The interim report noted our intention to move the originations area of the
unsecured lending business from its location in Victoria to new office space
in Solihull. This move was successfully completed in September without any
disruption to our business activities.

During the year there were high levels of growth in the personal finance
markets and we see many interesting opportunities to broaden and expand our
activities in this dynamic area of business.

Following the year-end, on 16 October 2000, we were pleased to announce the
acquisition of Colonial Finance (UK) Limited from Commonwealth Bank of
Australia Group. This acquisition added some £174 million of net loan balances
to the Group, together with over 100,000 customers. Colonial has a direct
marketing arm, which will provide additional distribution to Paragon's
existing business activities in this area when fully integrated. Additionally,
the entry into the retail 'point of sale' finance market afforded by the
transaction is an important step for the Group in the growth of the personal
finance business.

The discount negotiated to net assets and the financing structure used to fund
the loan assets acquired has resulted in negligible utilisation of the Group's
cash resources and we expect the acquisition to be earnings enhancing in the
current financial year. A plan is now being implemented to integrate the
operations of Colonial Finance within the Paragon Group.

Car Finance

During the year Paragon Car Finance advanced £100.3 million, an increase of
57% from last year's level of £63.8 million. This is an impressive growth
rate, particularly against the backdrop of very depressed conditions in the
car market. By 30 September 2000, there were 22,118 accounts under management
with a value of £128.4 million.

It is clearly evident that it has been a most difficult year for the car
market, with downward pressure on car prices. The vast majority of our
business, however, relates to hire purchase agreements with individuals and
our stance on establishing a customer base of high credit quality means the
incidence of repossessions is relatively low. We are particularly pleased at
the arrears performance on the Paragon Car Finance book, which we believe to
be better than market average.

Business development has been actively managed by carefully selecting the
dealers we work with, rolling out pilot schemes to a number of the larger
dealership groups and by maintaining tight control of credit quality. The
result of these measures has been to sustain the writing of planned volumes of
business at improved credit quality and with a lower unit cost of processing.
Considerable headway has also been made in delivering fee income from
ancillary insurance, contract hire and sub-prime brokerage activity and in
customer retention.

Despite implementation by the Government of measures aimed at reducing new car
pricing, there is little indication that buyers' confidence has been restored.
This is mainly attributable to the Government giving a three month deferral
for the equalisation of discounts and we believe it to be unlikely that there
will be any signs of a significant return of confidence before the new
calendar year. Nevertheless given our strong dealer distribution base and our
products, we are confident about the prospects for further growth in our
business volumes in the coming year.

First Mortgages

Average year on year property price inflation peaked, according to the
Halifax's figures, at 16% in January, falling thereafter, following a
combination of monetary and fiscal tightening in the Autumn of 1999 and in the
Spring of the current year. By late Spring the London market was running out
of steam and by the Summer commentators were downgrading their predictions for
the rate of house price inflation across the country. Expectations now are for
house prices to continue to increase, but at a slower, more sustainable rate.

Through much of the first half of the financial year housing transactions were
on a plateau and there is clear evidence that the market turned down in the
late Spring, contributing to the disappointing business levels experienced by
most lenders in the first quarter. Volumes of business advanced by Paragon
Mortgages recovered strongly in the second half, however, with the result that
advances for the year were £243.8 million (1999: £259.8 million), and first
half advances of £110 million compared with £133 million in the second half.

As part of the focus on cost efficiency, close attention has been successfully
given to improving the conversion ratio from applications to completions
without compromising on quality. We are encouraged by the increased volumes of
further advances to existing borrowers. Our status as a specialist lender,
particularly to the private rented sector, our competitive pricing structure
and high standards of customer service have all contributed to the growth of
the portfolio and to the low redemption rate.

We are currently working on a number of new business initiatives to underpin
the achievement of the challenging targets we have set ourselves for the new
financial year. Inter alia, these include the e-Commerce Landlord portal on
which I reported in my interim report, which we expect to launch in the near
future, together with an extension of our private rented sector mortgage
activity to service the needs of our customers for commercial as well as for
residential investment finance. We believe that conditions in the housing
market are likely to support demand for rented property in the foreseeable
future, which should lead to future growth in this business.

At 30 September, the Paragon Mortgages book was £790.8 million, representing
17,377 accounts, an increase in balances of 25% over the year. At that date,
balances on the 'old book' NHL portfolio were £398.1 million, the natural
redemption rate being 22% for the year. Our continuing emphasis on collections
activity resulted in cash receipts from NHL customers in arrears improving in
the year to 103.6% of the amounts contractually due, from 96% in 1999.

Funding

As reported in our interim statement, during the year the Group successfully
completed a £185 million securitisation issue, the thirty-third public
securitisation by the Group. We have continued to be active in the
securitisation market and we are currently in the process of completing our
thirty-fourth, being a £195 million securitisation of car and secured personal
loans through a subsidiary company, Paragon Auto and Secured Finance (No 1)
PLC. This transaction will be our first to include a tranche of notes
denominated in euros.

During the first half of the year we replaced our corporate banking facility
with a new five year £140 million facility in order to provide the funding
required to support planned asset growth in each of our businesses. Following
the acquisition of Colonial Finance (UK), we have increased this facility by a
further £20 million to £160 million in order to ensure that we can take
advantage of opportunities to grow this business in a similar fashion. In
addition, we have increased the capacity of our warehouse funding line through
which we finance all newly originated assets prior to securitisation, by £100
million to £400 million. Together these give us the funding to support our
planned asset growth.

Conclusion

The past year saw strong organic growth, both in terms of business written and
in profits, followed in October by an important acquisition which we expect to
be earnings enhancing in the current financial year. We have in place the
spread of business lines and the asset base to deliver continuing strong
growth for shareholders.

Overall, Paragon's opportunities increase daily as our strength develops. On
the assumpton of reasonably benign economic circumstances, which we
anticipate, Paragon can accelerate further. We move into the current financial
year with considerable optimism.



CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the year to 30 September 2000 (Unaudited)
                                                              2000     1999
                                                                £m      £m
Interest receivable                                          186.4     167.6
Interest payable and similar charges                        (124.1)   (112.2)

Net interest income                                           62.3      55.4
Other operating income                                        14.0      12.7

Total operating income                                        76.3      68.1
Operating expenses                                           (30.6)    (31.0)
Provisions for losses                                        (10.2)     (5.8)

Operating profit                                              35.5      31.3
Profit on sale of fixed assets                                   -       2.5

Profit on ordinary activities before taxation                 35.5      33.8
Tax charge on profit on ordinary activities                   (7.0)     (3.5)

Profit on ordinary activities after taxation for the          28.5      30.3
financial year
Equity dividend                                               (4.4)     (4.0)

Retained profit                                               24.1      26.3


Dividend - Rate per share                                      3.8p      3.4p
Basic earnings per share                                      25.1p     26.1p
Diluted earnings per share                                    24.9p     25.8p


There have been no recognised gains or losses other than the profit for the
current and preceding years.

The results for the current and preceding years relate entirely to continuing
operations.

CONSOLIDATED BALANCE SHEET

30 September 2000 (Unaudited)
                                                     2000           1999

                                                                 (restated)
                                                 £m      £m      £m     £m
Assets employed
Fixed assets
Tangible assets                                    3.6            3.6
Loans to customers                             1,669.7        1,482.5
Investment in own shares                           4.8            2.8

                                                       1,678.1        1,488.9
Current assets
Stocks                                            11.5           14.5
Debtors falling due within one year               36.4           22.8
Investments                                       50.2           44.1
Cash at bank and in hand                          95.1          103.1

                                                          193.2         184.5

                                                        1,871.3       1,673.4

Financed by
Equity shareholders' funds
Called up share capital                           11.6           11.6
Reserves                                         126.1          101.9

                                                         137.7          113.5

Provisions for liabilities and charges                     3.7

                                                                          4.2
Creditors
Amounts falling due within one year              30.5           27.0
Amounts falling due after more than one       1,699.4        1,528.7
year

                                                       1,729.9        1,555.7

                                                       1,871.3        1,673.4


The preliminary financial information was approved by the Board of Directors
on 21 November 2000.



CONSOLIDATED CASH FLOW STATEMENT

For the year to 30 September 2000 (Unaudited)


                                                          2000         1999
                                                           £m           £m
Net cash inflow from operating activities                    32.4         33.2
Taxation                                                     (1.3)        (1.3)
Capital expenditure and financial investment               (200.6)       (90.4)
Equity dividends paid                                        (4.2)        (3.8)


                                                           (173.7)       (62.3)

Management of liquid resources                               (9.9)        23.7
Financing                                                   171.5         45.2

(Decrease ) / increase in cash in the year                  (12.1)         6.6




(a)     Reconciliation of operating profit to net cash flows from operating
activities
                                                         2000         1999
                                                          £m           £m
                                                             35.5         31.3
    Operating profit

                                                             10.2          5.8
    Provision for losses

                                                              1.3          1.6
    Depreciation

                                                              0.8          1.1
    Decrease in stock

                                                            (12.9)        (6.9)
    Increase in debtors

                                                             (2.5)         0.3
    (Decrease) / increase in creditors


Net cash inflow from operating activities                    32.4         33.2


(b)     Analysis of cash flows for headings netted in the cash flow statement

                                                              2000      1999
                                                               £m        £m
Capital expenditure and financial investment

Net increase in loans to customers                            (197.3)   (109.5)
Other                                                           (3.3)     19.1

                                                              (200.6)    (90.4)


(c)     Reconciliation of net cash flow to movement in net debt

                                                           2000        1999
                                                            £m          £m
(Decrease) / increase in cash in year                         (12.1)       6.6
Cash inflow from increase in debt                            (171.4)     (44.8)
Cash movement from change in liquid resources                   9.9      (23.7)

                                                             
    Movement in net debt in year                             (173.6)     (61.9)

                                                           
    Net debt at 1 October 1999                             (1,374.3)  (1,312.4)


Net debt at 30 September 2000                              (1,547.9)  (1,374.3)


NOTES TO THE FINANCIAL INFORMATION

For the year to 30 September 2000 (Unaudited)


 1. The financial information set out in this preliminary announcement has not
    been audited.

 2. The financial information has been prepared using the same accounting
    policies as were used in preparing the statutory accounts of the Company
    for the year to 30 September 1999, with the exception that short-term
    deposits with banks with maturities of not more than 90 and more than 7
    days are shown as 'Investments'. These balances were previously included
    within 'Cash at bank and in hand' and comparative figures have been
    restated accordingly.

 3. A final dividend of 2.1p per share is proposed, payable on 2 February 2001
    with a record date of 3 January 2001.

 4. The basic earnings per share figures have been calculated by dividing the
    profit attributable to shareholders (being the profit on ordinary
    activities after taxation) by the weighted average number of ordinary
    shares outstanding during the period. For the year to 30 September 2000
    the weighted average number of ordinary shares outstanding was 113.3
    million (1999: 116.0 million).

 5. The diluted earnings per share figures have been calculated by adjusting
    the weighted average number of shares outstanding for the effects of all
    dilutive potential ordinary shares. For the year to 30 September 2000 the
    adjusted weighted average number of ordinary shares outstanding was 114.6
    million, (1999: 117.0 million).

 6. The financial information set out in the announcement does not constitute
    the Company's statutory accounts for the years to 30 September 1999 or
    2000. The financial information for the year to 30 September 1999 is
    derived from the statutory accounts for that year. These statutory
    accounts have been delivered to the Registrar of Companies, contained an
    unqualified audit report and did not contain an adverse statement under
    sections 237 (2) or 237 (3) of the Companies Act 1985. The statutory
    accounts for the year to 30 September 2000 will be finalised on the basis
    of the financial information presented by the Directors in this
    preliminary announcement and will be delivered to the Registrar of
    Companies following the Company's Annual General Meeting.

 7. A copy of the Annual Report and Accounts for the year to 30 September 2000
    will be posted to shareholders in due course. Copies of this announcement
    can be obtained from The Paragon Group of Companies PLC, St. Catherine's
    Court, Herbert Road, Solihull, West Midlands, B91 3QE.