Preliminary Results

Porvair PLC
29 January 2008

For immediate release                                            29 January 2008

                                  Porvair plc
            Preliminary results for the year ended 30 November 2007
        Earnings growth, strong cash generation and encouraging progress

Porvair plc ('Porvair'), the specialist filtration and environmental technology
group, today announces its preliminary results for the year ended 30 November
2007.

Highlights

   • Profit before tax up 10% to £3.4m (2006: £3.1m)

   • Earnings per share up 12% to 5.8p (2006: 5.2p)

   • Strong cash generation reducing net borrowings to £7.0m (2006: £8.4m).
     Interest cover was 8 times (2006: 6 times).

   • Recovery at Metals Filtration after restructuring - record sales of
     $38.6m (2006: $36.1m).

   • New Nickel-Cobalt filters launched in April. Production equipment
     capable of $5m in annual sales being commissioned.

   • Customer trials of the first new aluminium filter to be introduced in 25
     years are under way - offers superior performance at a premium price.

   • Manufacturing and sales of our proprietary carbon bipolar plates and
     metallic combustion plates continued throughout 2007.

   • A year of consolidation at the Microfiltration division with sales of
     £26.2m (2006: £26.4m) affected by US dollar weakness.

   • Aviation filtration delivered another strong year with 13% sales growth.
     Contract wins during the year underpin growth projections.

   • Larger manufacturing facilities will be ready by mid 2008.

   • Omnifilter acquired and traded well in its first 10 months with the
     Group.

   • Orders received for gasification filters for delivery early in 2008.
   • Strong order book augurs well for 2008.

   • Exchange rate movements held reported profits back by £0.4m. The weaker
     US dollar, however, is supporting export sales from Metals filtration.


Commenting on the results Ben Stocks, Chief Executive, said:

'Porvair has delivered a solid step forward in the year ended 30 November 2007.
Earnings and profits were up and demonstrable strides were made in our key
growth projects. With order books robust both in the UK and the US, 2008 has
started well.'

For further information please contact:

Porvair plc                                           0207 466 5000      (today)
Ben Stocks, Chief Executive                           01553 765 500 (thereafter)
Chris Tyler, Group Finance Director

Buchanan Communications                               0207 466 5000
Charles Ryland / Ben Willey /
Susanna Gale


                    Chairman and Chief Executive's statement

Performance summary

Porvair has delivered a solid step forward in the year ended 30 November 2007:
profit before tax increased by 10% to £3.4m (2006: £3.1m); and earnings per
share was up 12% to 5.8p (2006: 5.2p). Porvair achieved strong cash generation
reducing net borrowings to £7.0m (2006: £8.4m) and increased interest cover to 8
times (2006: 6 times).

Metals Filtration was restructured early in the year and recovered to produce
record sales of $38.6m (2006: $36.1m). Metals Filtration's key growth projects
made good technical progress and began to contribute sales:

   • A new Nickel-Cobalt filter was launched in April.

   • Customer trials of the first new aluminum filter to be introduced in 25
     years are under way.

   • Manufacturing and sales of our proprietary carbon bipolar plates and
     metallic combustion plates continued throughout 2007.

Microfiltration had a year of consolidation and delivered sales of £26.2m (2006:
£26.4m). Performance was held back by the weak US dollar but good progress was
made in a number of areas:

   • Aviation filtration delivered another strong year with 13% sales growth.

   • Larger manufacturing facilities will be ready by mid 2008.

   • Omnifilter was acquired and traded well in its first 10 months with the
     Group.

   • Orders were received for gasification filters for delivery early in
     2008.

   • A strong order book augurs well for 2008.

Business overview and strategy

Porvair's strategy is to develop and exploit its expertise in specialist
filtration and environmental technologies for the sustainable benefit of its
shareholders, staff and other stakeholders.

Porvair manufactures in the UK and the US. Its sales are global. The UK based
Microfiltration division primarily serves aviation, life science, clean energy
and industrial markets. The US based Metals Filtration division uses ceramic
technology to serve the molten metal handling market worldwide. Metals
Filtration has particular expertise in the filtration of aluminium, but also
serves the iron foundry market and has niche positions in steel, copper and high
value alloys.

Porvair's strategy for the creation of growth and sustainable shareholder value
is to:

   • Develop in filtration and environmental technology markets where
     superior returns can be achieved because products:

   • require specialist design and engineering skills

   • are protected either by regulation, quality accreditation or technical
     know-how

   • are consumable and replaced as part of a maintenance routine

   • have long product lives.

   • Broaden the range of products Porvair delivers to key market segments,
     particularly in aviation and molten aluminium.

   • Acquire specialist filtration and environmental technology businesses
     that meet strict financial and commercial criteria.

   • Maintain an appropriately funded balance sheet and generate sufficient
     cash to sustain a progressive dividend policy.

The Board believes that this strategy will enable Porvair to grow its revenues
and operating profits. For several years the Group has funded key development
projects from its own cash flows. This has had a considerable impact on Group
profits, which the Board has considered a prudent investment in the Company's
future. One feature of the 2007 results is that these investments have started
to generate sales.

Divisional performance

The Group's Metals Filtration division performed well in 2007 following its
restructuring early in the year. The restructuring was carried out to adjust
Selee's cost base and to move Porvair Advanced Materials' ('PAM') focus away
from product development and towards product commercialisation. As a result PAM
has been integrated within Selee and came under Selee's management. The two
businesses are now reported as one segment. The table below splits out the
Special Projects, mainly the former PAM research and development projects, from
the Selee core business:

Year ended 30 November 2007               Selee        Special         Metals
                                                      Projects     Filtration
                                            $000          $000           $000

Revenue                                   37,431         1,211         38,642

Operating profit / (loss) before           2,773        (1,689)         1,084
restructuring
Restructuring costs                         (464)            -           (464)
Operating profit / (loss)                  2,309        (1,689)           620

Year ended 30 November 2006                Selee       Special         Metals
                                                      Projects     Filtration
                                            $000          $000           $000

Revenue                                   34,840         1,247         36,087

Operating profit / (loss)                    646        (2,341)        (1,695)


Sales at Selee rose to $37.4m (2006: $34.8m), a record for the business with all
product lines performing well. Domestic sales of foundry filters continued their
steady growth. Aluminium cast shop filters - in which Selee has a leading market
share - grew through export sales. Engineered Ceramics, the operation that makes
specialist metals handling products, had another year of record sales. Operating
profits, after charging restructuring costs of $0.5m, increased substantially to
$2.3m (2006: $0.6m).

Selected customer trials began of the first new aluminium cast shop filter for
25 years. Using proprietary technology, this product offers superior performance
to the current industry standard and is expected to command a premium price. It
will also better conform to up-to-date materials handling requirements. Customer
trials and qualifications are underway and will continue throughout the year. We
expect commercial sales to begin in 2008 and are excited by the opportunities
this new product offers.

It was a good year for Special Projects.

   • Customer deliveries of new specialist molten Nickel-Cobalt filters began
    in April. These are based on patents licenced from Sandia National
    Laboratories. A multi-year supply contract was signed with one of Selee's
    core customers and sales increased through 2007 as production capacity was
    commissioned. We expect to reach full production capacity during 2008 with
    this product line contributing up to $5m in annual sales revenue once fully
    commissioned and qualified.

   • Bipolar plates were manufactured throughout 2007 and will continue in
    2008 for the current product. We have a good product that is working well in
    what remains a very small market for vehicular fuel cells. We have agreed
    with our principal customer, UTC Power, that we will wait for the market to
    develop before committing further investment to the next generation product.

   • A product that uses very similar technology to bipolar plates has been
    under development throughout 2007 for a very interesting energy storage
    application. This offers good prospects for near term commercialisation. We
    are evaluating final product specifications along with production and supply
    options.

   • Sales of combustion plates continued through the year. Demand for diesel
    emission substrates remains strong, albeit still for product development
    samples, which we supply on a fully-costed basis.

After its excellent year in 2006, the Microfiltration division, which comprises
the Porvair Filtration Group, Omnifilter and Porvair Sciences, was expected to
perform less well in 2007 as major gasification contracts were in place for
deliveries in 2006 and 2008 but not in 2007. Sales for the year were £26.2m
(2006: £26.4m). After taking into account the weakness in the US dollar holding
back profits by an estimated £0.4m, operating profits were in line with
management expectations at £4.4m (2006: £5.5m).

Aviation filtration sales grew 13%, offsetting declines in ink jet filter sales
where a key customer moved production to China. Aviation filtration continues to
be a prominent feature of this business having grown consistently since 2002.
The Group previously announced that it will be supplying new filters for fuel
tank inerting systems to Boeing and Airbus. This project was subject to repeated
customer delays but production did finally start towards the end of 2007 and
sales are now being generated. This, along with several other sizeable contract
wins during the year, persuaded the Board to invest in larger premises for our
aviation manufacturing operation, which is expected to commission during the
first half of 2008.

Early in the year we completed the acquisition of Omnifilter, in the US, which
was immediately earnings accretive and traded well throughout 2007. This
business offers the Microfiltration division a base from which to accelerate its
growth in the US.

The Microfiltration division also manages some of the Group's key growth
projects, which have developed further in 2007:

   • The latest large commercial order for gasification filters was received
    in 2007 and will be delivered in the first half of 2008. Demand for
    engineering and design work in this segment has been robust throughout the
    year and dedicated resources have been recruited. Eleven separate requests
    for product trials of R&D and demonstration scale were received during the
    year, covering clean coal opportunities, carbon dioxide sequestration and
    gas-to-liquid applications. This continues to be a highly promising long
    term development field for Porvair.

   • The division has a number of bioscience projects based on the chemical
    treatment of filtration media. A second product was launched during the year
    in conjunction with a point-of-care diagnostic device company. Third party
    customer trials are under discussion.

Earnings per share and dividend

Earnings per share increased 12% to 5.8p (2006: 5.2p). The Directors recommend a
final dividend of 1.2p (2006: 1.1p) per share for 2007, making a full year
dividend of 2.2p (2006: 2.1p).

Porvair staff

On the Board's behalf we would like to thank all our staff for their hard work
and dedication in 2007. We have made great progress during the year, with
changes undergone at Selee; planning for changes in premises to come at the
Fareham plant of Microfiltration; and a raft of product development projects
coming to fruition. The prospects for 2008 are encouraging and we are grateful
to all Porvair's employees for their efforts.

Outlook

Following progress made in recent years, Porvair is well positioned for
continued growth: operating margins continue to improve; cash generation has
been sufficient to pay down borrowings, support a full capital investment
programme and pay a progressive dividend; and we have embarked on a programme of
bolt-on acquisitions.

Several of Porvair's key growth projects reached early commercial stages and the
associated R&D investment should now begin to decrease rapidly. Growth prospects
from these projects are evident and are starting to show positive results. Long
term customer contracts for new products are in place both in Microfiltration
and Metals Filtration. With order books robust both in the UK and the US, 2008
has started well.

Charles Matthews: Chairman

Ben Stocks: Chief Executive

28 January 2008

                           Finance Director's review

Group operating performance

Group sales were £45.5m (2006: £46.2m) and operating profits were £3.8m (2006:
£3.7m). The operating performance of the Microfiltration and Metals Filtration
Divisions are described in detail in the Chairman and Chief Executive's
statement. The operating loss associated with the Other Unallocated segment was
£0.9m (2006: £0.9m). The Other Unallocated segment mainly comprises Group
corporate costs, some research and development costs, new business development
costs and general financial services. The unallocated loss before tax in 2007
includes provisions written back of £0.4m (2006: £0.3m) related to reduced
expenses arising on the businesses disposed of in 2003 and to the elimination of
an onerous lease cost arising on a building that was refurbished and sublet in
2006 and disposed of in January 2008.

The Microfiltration segment's operating profit includes the effects of the
transactions in connection with the imminent move of the business to new
premises, comprising a contribution towards remedial works received from the
outgoing tenant of the Group's new premises, a provision for future dilapidation
costs on the property to be vacated, and duplicate rent and other operating
costs. The net credit to the income statement from these transactions is less
than £0.1m.

Impact of exchange rate movements on performance

Due to its international nature, relative movements in exchange rates have an
impact on the Group's reported performance. The US dollar weakness in 2007
adversely affects the retranslation of the results of the US operations and
reduces the value of the UK operations' US dollar sales. We estimate that had
the US dollar/Sterling exchange rate remained constant throughout 2006 and 2007,
Group operating profits would have been £0.4m higher.

General trading in our US operations benefits from a weaker US dollar however,
with export sales at Metals Filtration growing quickly through the year.

Key performance indicators

The Group considers its key performance indicators to be: the sales growth and
operating margins of its principal operations; the profit before tax growth;
earnings per share growth; gearing; and return on capital employed. The table
below summarises these indicators:

Key performance indicators                         2007             2006

Sales growth - Selee (in US dollars)                 7%               1%
Sales growth - Microfiltration                      (1)%              4%
Operating margin - Group                             8%               8%
Operating margin - Selee (before restructuring)      7%               2%
Operating margin - Microfiltration                  17%              21%
Profit before tax growth                            10%              12%
Earnings per share growth                           12%              40%
Interest cover                                   8 times          6 times
Gearing                                             20%              27%
ROCE                                                 9%               9%

The Group also considers progress towards commercialisation of its key growth
projects to be a key indicator of performance. These indicators are discussed in
detail throughout the Chairman and Chief Executive's statement and the Finance
Director's review.

Finance costs

Net interest payable reduced by 22% to £0.5m (2006: £0.6m). The Group holds a
significant amount of its borrowings in US dollars ($14.8m at 30 November 2007).
The weaker US dollar has reduced the interest cost and there was a finance
credit in relation to the closed defined benefit pension scheme of £0.1m (2006:
£nil). Interest cover was 8 times (2006: 6 times).

Tax

The Group tax charge of £1.0m (2006: £1.0m) represents an effective tax rate of
30% on profits before tax. The tax charge comprises current tax of £0.5m (2006:
£0.9m) and a deferred tax charge of £0.5m (2006: £0.1m). The Group carries a
deferred tax asset in relation to the past losses in its US operations. This tax
asset is limited to the amount expected to be recovered in the foreseeable
future.

Shareholders' funds

Shareholders' funds at 30 November 2007 were £34.4m (2006: £31.5m), an increase
of 9% over the prior year. Shareholders' funds increased by the profit after tax
of £2.4m plus £0.1m in relation to the reversal of the share based payments
charge in the income statement; actuarial gains net of deferred tax added £1.6m;
and new shares issued on the exercise of options in relation to an SAYE scheme
generated £0.2m. Shareholders' funds were reduced by exchange losses on
retranslation of foreign currencies of £0.5m and dividends paid of £0.9m.

Cash flow

Net cash generated from operations was £5.7m (2006: £2.3m). Profits before
depreciation and amortisation were substantially all turned into cash with
working capital reducing by £0.4m (2006: £3.0m increase). Net interest paid was
£0.6m (2006: £0.7m). The lower interest charge reflects the lower average
borrowings for the year and the impact of the weaker US dollar on the US dollar
borrowings. Lower tax paid of £0.6m (2006: £1.3m) arises as a result of a tax
repayment in the year relating to prior periods.

Capital expenditure increased to £2.0m (2006: £1.0m) principally as a result of
the fit out costs of the new Microfiltration facility and additional
manufacturing capacity installed in Metals Filtration. Omnifilter was acquired
for £1.0m.

At the year end, the Group had net borrowings of £7.0m (2006: £8.4m) comprising
gross borrowings of £9.9m (2006: £10.2m) offset by cash balances of £2.9m (2006:
£1.8m). The Group had unutilised borrowing facilities of £1.4m (2006: £2.0m) and
an unutilised overdraft facility of £3.0m (2006: £3.0m).

The Group's gearing (net debt as a percentage of shareholders' funds) reduced to
20% (2006: 27%).

Finance and treasury policy

The treasury function at Porvair is managed centrally, under Board supervision.
It is not a profit centre and does not undertake speculative transactions. It
seeks to limit the Group's exposure to trading in currencies other than its
operations' local currency and to hedge its investments in currencies other than
Sterling. The Group does not hedge against the impact of exchange rate movements
on the translation of profits and losses of overseas operations.

At the year end, the Group had $14.8m (2006: $14.0m) of US dollar borrowings
exposure which hedged underlying US net tangible assets on the balance sheet of
$22.7m (2006: $18.6m). In addition, the Group has a Euro 1.6m interest bearing
debtor that was fully hedged by borrowings in Euros.

The Group finances its operations by a combination of share capital and retained
profits; and short and long term loans. Borrowings are principally at floating
rate.

Pension schemes

The Group continues to support its defined benefit pension scheme in the UK,
which is closed to new members, and to provide access to a defined contribution
scheme for its US employees and other UK employees.

During the year, a valuation of the assets and liabilities of the closed defined
benefit scheme was completed. As a result of this review the Group and the
Trustees agreed to reduce the employer's contributions from 15% of salary to 8%
of salary. The Group also committed to make additional annual contributions to
cover the past service deficit of £250,000 per annum increasing by 5% per annum
for the next eight years. The first payment was made in December 2007.

The Group recorded a retirement benefit obligation of £1.8m (2006: £4.3m). The
reduction arose from an actuarial gain in the year of £2.4m and a return on
assets in excess of the service charge of £0.1m.

Risks and uncertainties

There are a number of risks and uncertainties, described below, which could have
a material impact on the Group's long term performance and prospects.

Existing market risk

The Group's strategy is to serve the needs of a range of specialist filtration
markets, such that it is not dependent upon any one market. No single market
represents more than 20% of sales. However, three key markets: aluminium
filtration; aviation filtration; and foundry products contribute more than 10%
of the Group's revenue. The Group would be exposed to a significant decline in
any of these markets.

Aluminium is currently in a high demand phase. The production of aluminium is
gradually moving to larger smelters in regions of low cost energy. The Group is
actively engaged in developing its overseas markets for its molten aluminium
filtration business to reduce its reliance on the US market and has
significantly increased its proportion of export business in the course of the
last year.

The Aerospace market has traditionally been a very steady business as the
product cycles are long and the Group offers a broad range of products. There is
unlikely to be such a rapid decline in the aerospace market that the Group could
not manage the consequences over time.

The foundry filter business is being enhanced by product developments and
improved overseas distribution. Both these actions will reduce the business's
reliance on existing products in the US market.

New markets risk

The Group invests significant amounts into the development of new products for
new markets. Many of these new markets are at an early stage of development and
are driven either by environmental influences or legislation. There is a risk
that the products that the Group is developing will either not be adopted as
part of the potential solutions or that the legislation or regulation will not
develop in the way that the Group anticipates.

The Group maintains a portfolio of potential products addressing different
market segments and recognises that not all of its potential products will
become significant revenue generators. The Group maintains a close review of
each of its major developments and is not significantly exposed if the market
for any one product does not develop.

Financing risk

The Group maintains a level of borrowing to finance its operations. Damage to,
or loss of, its banking relationships could have a material impact on the
profitability of the Group. To mitigate this risk, the Group has sufficient
long-term facilities in place for its expected requirements. It maintains a
close relationship with its bankers and carefully monitors the restrictions on
its borrowings.

Treasury and exchange rate risk

The Group has operations in the UK and US and sells its products throughout the
world and as a result, the Group is exposed to fluctuations in exchange rates.
The Group maintains certain borrowings in US dollars to hedge its investments in
the US and enters into forward sales of its principal foreign currency revenues
to reduce the impact of exchange rate movements.

Competitive risk

Porvair operates in competitive global markets. The Group's achievement of its
objectives is reliant on its ability to respond to many competitive factors
including, but not limited to, pricing, technological innovations, product
quality, customer service, manufacturing capabilities and the employment of
qualified personnel. If the Group does not continue to compete in its markets
effectively by developing innovative solutions for its customers, it could lose
them and its results could be adversely affected.

Technological risk

Porvair has a broad portfolio of products delivered to a diverse range of
markets. The Group's business could be affected if it does not:

  • continue to develop new designs for its customers that provide technical
    or cost advantages over its competitors; and

  • develop new technologies and materials that are adopted by its customers
    to provide improved performance.

The Group recognises that certain competitors are larger and have greater
financial resources. This may enable them to deliver products on more attractive
terms than the Group or to invest more resources, including research and
development, than the Group.

The Group carefully selects its development prospects and monitors their
progress carefully to maintain a range of potential opportunities. The nature of
the Group's development projects means that their potential commercial or
technical success cannot be assessed with certainty throughout the development
process. The ultimate commercial success of a project can often only be judged
when the development cycle is close to completion.

Raw materials, resources and facilities risk

The Group uses raw materials in its production processes. Prices for these raw
materials can be volatile and are affected by the cyclical movement in commodity
prices such as oil, alumina, silicon carbide and steel. The Group's ability to
pass on these price fluctuations to its customers is to some extent dependent on
the contracts it has entered into and the prevailing market conditions. There
may be times when the Group's results are adversely affected by an inability to
recover increases in raw material prices.

The Group operates from a number of production facilities, the largest facility
generating approximately one third of the Group's revenue. A disaster, such as a
fire or flood, at any of the Group's facilities could have a material impact on
the Group's performance. The Group maintains insurance of its equipment and
facilities and carries business interruption insurance to cover loss of profits.
In addition, the Group has ISO 9001 and other industry specific quality control
systems which reduce the risk that a disaster will occur.

Liability risk

The Group manufactures products that are potentially vital to the safe operation
of its customers' products or processes. A failure of the Group's products could
expose the Group to loss as a result of claims made by the Group's customers or
users of their products. The Group seeks to minimise this risk through
limitations of liability in its contracts and carries insurance cover in the
event that claims are made.

Global and regional economic, political risk and environmental risk

The Group sells its products throughout the world and derives a substantial
portion of its revenue and earnings from outside the UK. The Group's ability to
achieve its financial objectives could be impacted by risks and uncertainties
associated with local legal requirements, the enforceability of laws and
contracts, changes in the tax laws and economic conditions, political
instability, war, terrorist activity, natural disasters or health epidemics.

Christopher Tyler
Group Finance Director
28 January 2008


Consolidated income statement
For the year ended 30 November
                                     Note                 2007           2006
Continuing operations                                    £'000          £'000

Revenue                              1                  45,517         46,204
Cost of sales                                          (31,320)       (31,436)
Gross profit                                            14,197         14,768
Distribution costs                                        (679)          (619)
Administrative expenses                                 (9,683)       (10,476)
Operating profit                     1                   3,835          3,673
Interest payable and similar charges                      (722)          (716)
Interest receivable                                        258            119
Profit before income tax                                 3,371          3,076
Income tax expense                                        (930)          (970)
Overseas tax                                               (65)           (15)
Profit for the year attributable to                      
shareholders                                             2,376          2,091

Earnings per share (basic)                                 5.8p           5.2p
Earnings per share (diluted)                               5.8p           5.1p



Consolidated statement of recognised income and expense
For the year ended 30 November
                                                          2007           2006
                                                         £'000          £'000

Exchange differences on translation of foreign            (528)        (1,598)
subsidiaries
Actuarial gains on defined benefit pension scheme        2,400          2,300
Taxation charge on items taken directly to equity         (756)          (729)
Net income/(expense) recognised directly in equity       1,116            (27)
Profit for the year                                      2,376          2,091
Total recognised income for the year attributable to     3,492          2,064
shareholders


Consolidated balance sheet
As at 30 November
                                                          2007          2006
                                                         £'000         £'000
Non-current assets
Property, plant and equipment                            6,722         6,596
Goodwill and other intangible assets                    27,138        26,718
Deferred tax asset                                         753         1,976
Other receivable                                         1,056           968
                                                        35,669        36,258
Current assets
Inventories                                              6,888         6,499
Trade and other receivables                              7,888         8,195
Derivative financial instruments                            44            97
Cash and cash equivalents                                2,893         1,756
                                                        17,713        16,547

Current liabilities
Trade and other payables                                (6,937)       (5,939)
Current tax liabilities                                   (224)         (355)
Bank overdraft and loans                                  (500)         (500)
Provisions for other liabilities and charges               (78)         (150)
                                                        (7,739)       (6,944)

Net current assets                                       9,974         9,603

Non-current liabilities
Bank loans                                              (9,364)       (9,695)
Retirement benefit obligations                          (1,804)       (4,275)
Provisions for other liabilities and charges               (55)         (367)
                                                       (11,223)      (14,337)
Net assets                                              34,420        31,524

Capital and reserves
Share capital                                              814           811
Share premium account                                   32,765        32,615
Cumulative translation reserve                          (3,824)       (3,296)
Retained earnings                                        4,665         1,394
Total shareholders' equity                              34,420        31,524



Consolidated cash flow statement
For the year ended 30 November
                                           Note              2007         2006
                                                            £'000        £'000
Cash flows from operating activities
Cash generated from operations             2                5,711        2,303
Interest received                                             130           60
Interest paid                                                (780)        (744)
Tax paid                                                     (608)      (1,266)
Net cash generated from operating                           
activities                                                  4,453          353

Cash flows from investing activities
Acquisition of subsidiaries (net of cash                   
acquired)                                                  (1,046)           -
Purchase of property, plant and equipment                  (1,688)        (573)
Purchase of intangible assets                                (284)        (390)
Proceeds from sale of property, plant and                     
equipment                                                     295            -
Available for sale investments                                200          500
Net cash used in investing activities                      (2,523)        (463)

Cash flow from financing activities
Net proceeds from issue of ordinary share                     
capital                                                       153          103
(Repayment)/increase of borrowings                            (68)       1,669
Dividends paid to shareholders                               (853)        (832)
Net cash (used in)/generated from                            
financing activities                                         (768)         940

Net increase in cash and cash equivalents                   1,162          830
Effects of exchange rate changes                              (25)         (75)
                                                            1,137          755
Cash and cash equivalents at 1 December                     1,756        1,001
Cash and cash equivalents at 30 November                    2,893        1,756



Reconciliation of net cash flow to movement in net debt
                                                            2007          2006
                                                           £'000         £'000

Net increase in cash and cash equivalents                  1,162           830
Effects of exchange rate changes                             238           911
Repayment /(increase) of borrowings                           68        (1,669)
Net debt at 1 December                                    (8,439)       (8,511)
Net debt at 30 November                                   (6,971)       (8,439)



Notes


1. Segmental analyses

The segmental analyses of turnover, operating profit/(loss) and net assets and
geographical analyses of turnover are set out below:

Primary reporting format - business segments

2007                           Metals  Microfiltration           Other        Group
                           Filtration                      unallocated
                                £'000            £'000           £'000        £'000

Revenue                        19,330           26,187               -       45,517

Operating profit/(loss)
before share based payments       308            4,414            (783)       3,939
Share based payments                2              (31)            (75)        (104)
Operating profit/(loss)           310            4,383            (858)       3,835
Finance costs                       -                -            (464)        (464)
Profit/(loss) before income       
tax                               310            4,383          (1,322)       3,371
Income tax expense                  -                -            (995)        (995)
Profit/(loss) for the year        310            4,383          (2,317)       2,376


2006                           Metals  Microfiltration           Other        Group
                           Filtration                      unallocated
                                £'000            £'000           £'000        £'000

Revenue                        19,759           26,445               -       46,204

Operating profit/(loss)
before share based payments      (908)           5,506            (833)       3,765
Share based payments              (20)              (4)            (68)         (92)
Operating profit/(loss)          (928)           5,502            (901)       3,673
Finance costs                       -                -            (597)        (597)
Profit/(loss) before income      
tax                              (928)           5,502          (1,498)       3,076
Income tax expense                  -                -            (985)        (985)
Profit/(loss) for the year       (928)           5,502          (2,483)       2,091


The Metals Filtration segment's operating profit for the year includes a
restructuring charge of £0.2m (2006: £nil).

The Microfiltration segment's operating profit includes the effects of the
transactions in connection with the imminent move of the business to new
premises, comprising a contribution towards remedial works received from the
outgoing tenant of the Group's new premises, a provision for future dilapidation
costs on the property to be vacated, and duplicate rent and other operating
costs. The net credit to the income statement from these transactions is less
than £0.1m.

The 'Other unallocated 'segment mainly comprises Group corporate costs, some
research and development costs, new business development costs and general
financial services. The unallocated loss before tax in 2007 includes provisions
written back of £0.4m (2006: £0.3m) related to reduced expenses arising on the
businesses disposed of in 2003 and to the elimination of an onerous lease cost
arising on a building that was refurbished and sublet in 2006 and disposed of in
January 2008.

1. Segmental analyses continued

Net assets

At 30 November 2007            Metals  Microfiltration         Other       Group
                           Filtration                    unallocated
                                £'000            £'000         £'000       £'000

Segmental assets               20,859           28,151           423      49,433
Long term receivable                -                -         1,056       1,056
Cash and cash equivalents           -                -         2,893       2,893
Total assets                   20,859           28,151         4,372      53,382

Segmental liabilities          (1,847)          (4,587)         (860)     (7,294)
Retirement obligations              -                -        (1,804)     (1,804)
Borrowings                          -                -        (9,864)     (9,864)
Total liabilities              (1,847)          (4,587)      (12,528)    (18,962)

At 30 November 2006            Metals  Microfiltration         Other       Group
                           Filtration                    unallocated
                                £'000            £'000         £'000       £'000

Segmental assets               20,018           27,759         2,104      49,881
Long term receivable                -                -           968         968
Deferred payment on                 -                -           200         200
investment sale
Cash and cash equivalents           -                -         1,756       1,756
Total assets                   20,018           27,759         5,028      52,805

Segmental liabilities          (1,554)          (3,698)       (1,559)     (6,811)
Retirement obligations              -                -        (4,275)     (4,275)
Borrowings                          -                -       (10,195)    (10,195)
Total liabilities              (1,554)          (3,698)      (16,029)    (21,281)


Secondary reporting format - geographical segments

                                           2007                          2006
                                By                          By
                       destination    By origin    destination      By origin
                             £'000        £'000          £'000          £'000            
                                            
                                                                          
Revenue
United Kingdom              14,657       25,166         13,581         26,445
Continental Europe           6,208            -          6,012              -
Americas                    21,074       20,351         22,030         19,759
Asia                         2,659            -          3,385              -
Australasia                    457            -            506              -
Africa                         462            -            690              -
                            45,517       45,517         46,204         46,204

2. Cash generated from operations
                                                            2007          2006
                                                           £'000         £'000

Operating profit                                           3,835         3,673
Non cash pension charge                                      100           113
Share based payments                                         104            92
Depreciation and amortisation                              1,345         1,466
(Profit)/loss on disposal of property,                       
plant and equipment                                          (41)            4
Operating cash flows before movement in                    
working capital                                            5,343         5,348
Increase in inventories                                     (322)         (634)
Decrease/(increase) in trade and other                       
receivables                                                  102        (1,017)
Increase/(decrease) in payables                              972        (1,102)
Decrease in provisions                                      (384)         (292)
Decrease/(increase) in working capital                       368        (3,045)
Cash generated from operating activities                   5,711         2,303

3. Dividends

An interim dividend of 1.0p per share was paid on 14 September 2007. The
Directors recommend the payment of a final dividend of 1.2p per share (2006:
1.1p per share) on 8 May 2008 to shareholders on the register on 4 April 2008,
the ex-dividend date is 2 April 2008. This makes a total dividend for the year
of 2.2p per share (2006: 2.1p).

4. Basis of preparation

The preliminary announcement for the year ended 30 November 2007 has been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union as at 30 November 2007. The financial
information contained in this preliminary announcement does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
financial information has been extracted from the financial statements for the
year ended 30 November 2007, which have been approved by the Board of Directors
and on which the auditors have reported without qualification. The financial
statements will be delivered to the Registrar of Companies after the Annual
General Meeting. The financial statements for the year ended 30 November 2006,
upon which the auditors reported without qualification, have been delivered to
the Registrar of Companies.

5. Annual general meeting

The Company's annual general meeting will be held on Wednesday 9 April 2008 at
Brampton House, Bergen Way, King's Lynn.




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