Final Results

SIG PLC
08 March 2005



8 March 2005

              PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2004

SIG plc is the market leading specialist distributor of insulation, roofing and
commercial interiors products in Europe.

•SIG reports record results due to strong trading in all its main business areas
 and products.

•Sales increased by 10.2% to £1,398.2m (2003: £1,268.5m). Like for like* sales
 growth was up 7.7%. Excluding the impact of foreign exchange, sales growth was
 up 11.6% and like for like sales growth was up 9.0%.

    • UK & Republic of Ireland sales increased 11.9% to £907.1m.  Operating 
      profit before goodwill amortisation increased 18.2% to £64.1m, with growth 
      in insulation, roofing and commercial interiors.

    • In Mainland Europe, sales increased 10.0% in Sterling to £433.6m.  Local 
      currency like for like sales growth was 10.5%.  Operating profit before 
      goodwill amortisation increased 40% in Sterling to £15.4m.

    • In the USA sales increased 1% in local currency.  Operating profit before 
      goodwill amortisation increased 85% in Sterling to £1.7m.

•Operating profit before goodwill amortisation was up 21.9% to £77.3m
  (2003: £63.4m).

•Profit before tax and goodwill amortisation was up 26.5% to £71.2m (2003:
  £56.3m). Profit before tax rose 27.2% to £65.5m (2003: £51.5m).

•Earnings per share increased by 26.2% to 36.1p (2003: 28.6p).

•Dividend increase of 12.9% to 14.0p, the 11th consecutive year in which the
 dividend has been raised.

•13 acquisitions were completed in 2004 for a total spend of £45.1m.

Les Tench, Chairman, commented:
'After a year of exceptional progress in 2004, the Group enters 2005 from a
position of strength both financially and in the markets in which we operate,
and the Board is confident that further progress will be made.'

* - Like for like is defined as the business excluding the impact of
acquisitions made since 1 January 2003.

Enquiries:

David Williams, Chief Executive  SIG plc    today            020 7251 3801
Gareth Davies, Finance Director             thereafter       0114 285 6300

Faeth Birch /Gordon Simpson      Finsbury                    020 7251 3801

Full Preliminary Results information is available on www.sigplc.co.uk
An interview with David Williams, Chief Executive, is available on SIG's website
and on www.cantos.com


Chairman's Statement

2004 has been a year of significant growth and expansion for the Group. Sales,
profit before tax and earnings per share all grew substantially compared with
the prior year. In addition the number of trading sites increased by 42 during
the course of the year to a total of 412 at the end of December 2004.

Key factors contributing to the excellent results were the strong like for like
sales performance, the positive impact of widespread product price inflation and
the increased pace of acquisition activity.

Results

For the year ended 31 December 2004, compared with the corresponding period in
2003.

Sales

   •Total sales, in Sterling, increased by £129.7m (10.2%) to £1,398.2m (2003
    : £1,268.5m).

   •Sales growth, excluding adverse movement in foreign currency exchange was
    higher at 11.6%.

   •Like for like sales growth (i.e. excluding the impact of acquisitions
    made in 2003 and 2004) was 7.7% in Sterling and 9.0% excluding foreign
    exchange movement.


Profits

   •Operating profit (before goodwill amortisation) increased by £13.9m
    (21.9%) to £77.3m (2003 : £63.4m).

   •Goodwill amortisation increased by £0.9m to £5.7m (2003 : £4.8m). Total
    interest charges were reduced by £1.0m to £6.2m (2003 : £7.2m).

   •Profit before tax increased by £14.0m (27.2%) to £65.5m (2003 : £51.5m).


Margins

   •The gross margin increased to 25.83% (2003 : 25.25%) reflecting improved
    price management and the planned investment in increased stockholding at the
    time of manufacturers' price increases.

   •The net operating profit margin before goodwill amortisation of £5.7m
    (2003 : £4.8m) increased to 5.5% (2003 : 5.0%). This reflects the gross
    margin increase and the operational gearing impact of the additional sales
    volume, compared with prior year.


Earnings and Dividends

   •Earnings per share increased by 7.5p to 36.1p (2003 : 28.6p), an increase
    of 26.2%.

   •Subject to Shareholder approval, a final dividend of 9.4p is proposed.
    This would make a total dividend for the year of 14.0p, compared with the
    2003 full year dividend of 12.4p per share. This represents an increase of
    12.9%, and is the 11th consecutive year in which the dividend has been
    increased. If approved, the final dividend will be payable on 23 May 2005 to
    Shareholders on the register at 15 April 2005.


Finances

Underlying cash flow (i.e. operating cash flow before working capital movements)
strengthened further throughout 2004 compared with prior year. An increase in
stock levels (partly due to new branches, and also to support increased
commercial activities), together with the acquisition program, resulted in an
increased borrowing figure at the year end. Gearing rose to 44% as at 31
December 2004 (2003 : 38%).

The Group has a sound financial position with dividend and interest cover ratios
both increased compared to prior year.


Acquisitions

The Group indicated early in 2004 its intention to actively resume its programme
of seeking suitable acquisitions.

A total of 13 acquisitions were completed in the year, all of which complement
existing businesses within the Group, and are within countries in which we
already had a trading presence.

The total spend on these acquisitions was £45.1m (including assumed debt and
deferred consideration).


Board

Following my appointment to the post of Non-Executive Chairman in April 2004, in
accordance with current best practice and recommendations in relation to
corporate governance, Peter Blackburn CBE has been appointed Senior Independent
Director. Peter has been a member of the Board since 1 July 2001 and this
appointment further strengthens the corporate governance of the Company.

The composition of the Board has been addressed and considered during the year,
and I believe we have a good mix of experience and varying backgrounds, which
provides very considerable professional and commercial expertise to draw upon.


Employees

The commitment, energy and drive shown by all of our employees throughout the
Group is our greatest asset, and our ability to meet the demands of our
customers, suppliers and shareholders is dependent upon their efforts. I would
like to thank all our employees for their loyalty and hard work, and wish them
continued success.

I would like to pay particular tribute to the new employees who have joined SIG
as a result of acquisition. They have been involved in a process of change and
have coped remarkably well and continued to focus on their particular role in
the business.


Prospects

Trading conditions were generally more favourable throughout 2004 than in 2003
in most of the main markets in which the Group operates. In addition, price
inflation had a higher than expected beneficial impact across a significant
proportion of our trading operations.

Looking into 2005 we expect to experience continued strong demand from the broad
based construction industry in the UK and Republic of Ireland. Pricing is
expected to be positive, but we do not expect the exceptional benefits achieved
in 2004 to be repeated.

The outlook for market conditions in France, Poland and Benelux is positive,
whilst in Germany, demand is expected to continue to be subdued.

In the USA demand for industrial and technical insulation products is expected
to improve.

We are continuing to invest in additional trading sites throughout our
operations, and where appropriate, relocating to larger premises in order to
increase capacity and further improve customer service. The recently acquired
businesses are integrating well into the Group, and we look forward to a
positive impact from these expansion activities going forward.

After a year of exceptional progress in 2004, the Group enters 2005 from a
position of strength both financially and in the markets in which we operate,
and the Board is confident that further progress will be made.


Chief Executive's Review of Operations

I am pleased to report that the Group had a very successful year in 2004. In
addition to producing record sales, profits and earnings per share, we invested
significantly in expanding the business for future growth.

Market demand and product pricing were generally more helpful in most of our
main markets and countries of operation than in the previous year.

Against this positive background, the trading and commercial skills of the Group
enabled strong underlying sales growth and maximum benefits from the pricing
environment to be achieved. Our focused, specialist approach to customers and
the markets in which we operate has enabled the Group to outperform.


Trading Highlights

UK and Republic of Ireland (65% of total Group sales)

   •Sales increased by £96.4m (11.9%) to £907.1m (2003 : £810.7m).

   •Like for like* sales increased by £71.2m (8.8%).

   •Operating profit before goodwill amortisation of £4.8m (2003 : £4.0m)
    increased by £9.9m (18.2%) to £64.1m (2003 : £54.2m).

   •Sales and operating profits were increased in all market sectors in the
    UK and the Republic of Ireland.

* - Like for like is defined as the business excluding the impact of
acquisitions made since 1 January 2003.


The Insulation operations again had a year of substantial growth, with double
digit like for like and total growth of sales and operating profits compared
with prior year. The slight decline in the operating profit margin which
occurred in 2003 due to an adverse movement in product mix was reversed in 2004
and the net operating margin for the year was ahead of that in both 2002 and
2003. This is despite continued sluggish demand from the industrial insulation
market, where margins have traditionally been slightly higher than from the
building related sectors.

Across the building sector demand for thermal and acoustic insulation products
for newbuild and renovation applications, ranging from housing upgrading right
through to major projects such as new hospitals, increased significantly
throughout the year. The tighter regulatory standards within the Building
Regulations continued to stimulate demand, as did the increased activity in the
existing housing sector driven by various Government sponsored grants and other
schemes. The Group is the leading provider across the entire spectrum of the
market and benefited from the widespread increase in demand.

The general level of increased demand exceeded internal expectations and it may
be that in addition to the more obvious demand drivers mentioned above, we are
beginning to see the effects of higher energy prices, and concern about the
impact on the environment of heating related energy consumption within
buildings, feed through to demand for insulation. Some price inflation was
evident within the insulation sector, though this was not universal across the
product range.

Overall, an excellent performance and our strong market position was further
reinforced.

The Roofing division achieved good like for like growth in sales and operating
profits, supplemented by expansion from recent acquisitions. During the year we
began a programme of upgrading premises to enable a wider range of products to
be offered to our customers and this will continue throughout the network.

As we reported at the time of our January 2005 Trading Update, we believe that
overall market demand rose very slightly in the year and that price inflation
had a modest, but positive impact on performance in this sector. The operating
profit margin was held at the prior year level, and operating profits increased.

The mix of business in the roofing division continued to be biased towards
repairs and maintenance, except in the Republic of Ireland where new housing
accounts for a relatively larger proportion of sales, reflecting the buoyant new
build sector throughout the year.

Commercial Interiors had an excellent performance across the whole division,
with a like for like double digit increase in sales and operating profits.

Throughout 2004 we saw growing demand for specialist interior products for both
the renovation of existing properties, and new construction in a wide range of
non-residential buildings. These include schools, hospitals, sports and leisure
facilities, offices, retail developments, hotels, public sector buildings,
factories and warehouse units.

The specific premium office sector began to recover after two years of sharply
reduced demand. Improvements to our product range for office fit out, and the
development and introduction of new products for specific related markets
enabled the operating margin and operating profits to double in 2004 over prior
year in this specific sector.

The core business, which is the leading supplier of interior products to the
wider non-residential buildings market invested in additional sales resources.
We also successfully re-branded and re-launched the business to provide a
simpler, more effective offering to customers. These initiatives were well
received and the division achieved excellent growth.

In Safety and Construction Products, significant like for like sales growth and
a strong improvement in the operating margin produced operating profits more
than double that of the prior year. This excellent organic growth was
supplemented by the addition of three newly acquired trading sites. The
continued development and expansion of this division is enabling us to broaden
our offering whilst remaining highly focused on the supply of specialist
products to the construction and related markets.

The use of catalogue and internet trading are growing features of our marketing
approach in this division.


Mainland Europe (31% of total Group sales)

   •Overall in Mainland Europe, sales grew by 12.4% in local currencies, and
    by £39.4m (10.0%) in Sterling to £433.6m (2003 : £394.2m). The local
    currency like for like sales growth was 10.5%.

   •On a country by country basis, we believe this represents market-beating
    performance, reflecting continued growth of our market position and market
    share.

   •Operating profits (pre goodwill amortisation) increased by 43.0% in local
    currencies and by 40.0% in Sterling, up £4.5m to £15.5m (2003 : £11.0m).


Like for like sales growth including the impact of newly opened brownfield
trading sites, was achieved in all countries in which we operate in Mainland
Europe, and this was supplemented by small bolt-on acquisitions, enabling
greater market penetration and improved customer service.

In Germany, a modest decline in the volume demand from the construction sector
was offset by increased product prices, leaving the overall market value about
the same as in 2003.

Sales increased by 6.4% in Euros, and a total of five new sites were added
during the year, one of which was acquired and four brownfield openings. Three
of the new brownfield sites are in Austria, where a local opportunity arose to
establish a position. As these branches are managed within the German management
structure, they will continue to be reported within the German results.

Particular emphasis was placed on the management of pricing and improving
operational efficiencies within the German business throughout the year. As a
result, and despite the one-off charges associated with the new branch openings,
costs were reduced as a proportion of sales, and the gross margin was
strengthened. The operating profit margin was increased and operating profits
were substantially up on prior year. An excellent performance in a difficult
market.

In France, we continued to make solid progress with sales up 25.9% in total in
Euros, of which 18.4% was like for like. Price inflation on a number of products
had a positive impact on both sales and margins.

Growth was achieved in insulation, commercial interiors and in the fledgling
roofing business. We continue to expand the range by offering more specialist
products and the sales of air handling and forced ventilation systems (which are
often installed at the same time as our commercial insulation products), grew
strongly. We have increased the dedicated sales resources aimed at this market
sector.

Operating profits increased significantly though the operating margin was
reduced compared with 2003 due to increased costs associated with the absorption
of the loss-making business acquired mid year. At the year end we had added 4
new additional branches in France, three of which were acquired.

Sales in Benelux were increased by 11.0% in Euros, on a like for like basis,
despite very depressed market conditions across the building and construction
sector.

The operating profit declined, due to increased costs partly associated with
changes to the branch structure, including the opening of a new site in Belgium,
and a reduction in the gross margin.

In Poland, sales in local currency on a like for like basis increased by 42.5%,
in a market which was considerably stronger than prior year in terms of both the
volume of demand and price levels. Four new branches were opened during the year
as part of our continuing expansion programme.

Having previously reported a small operating profit in the first half of 2004
for the first time in a six month period, profits improved progressively into
the second half, with 2004 therefore marking our first full year with a positive
operating profit in Poland.


USA (4% of total Group sales)

In the USA, whilst demand from the Petrochem sector was depressed, conditions in
the commercial market strengthened, and sales grew by 1% on a like for like
basis in Dollars. Management dealt well with these conditions, reducing costs
and achieving an increase in the gross margin. The margin improvement was partly
influenced by the significant increase in metal prices during the year. As a
result of these actions, the operating profit margin was increased, and the
operating profit more than doubled in Dollars (an increase of 85% over 2003 in
Sterling).

Acquisitions

The acquisition programme, having been deliberately de-emphasised in 2003, was
reactivated in 2004, and we increased our resources to improve the depth and
pace at which we can conduct research, and to pursue suitable opportunities.

During the year we successfully completed 13 acquisitions, and these breakdown
as follows:

                   Insulation    Commercial Interiors     Roofing     Others
                   ----------    --------------------     -------     ------

UK & ROI               2/£38m                       -      4/£18m     3/£10m
Mainland Europe             -                  4/£14m           -          -

Number of deals/approx £m sales annualised.

As the table shows, all acquisitions during the year were within our existing
geographic regions and were all complementary to our existing market focus.

In all cases the acquisitions meet the strategic requirement of being suppliers
of specialist products, chiefly to the building and construction industry. I am
pleased to say that the integration process is progressing well.

The additional sites (33) gained and retained through the acquisition programme
have enabled the Group to reach new customers, extend our product offering to
existing and new customers, and to further improve our standards of service to
all customers thereby continuing the process of strengthening the company going
forward.


People

I am proud to be part of such a professional and committed team of people;
throughout our businesses, regardless of country or market sector, our people
are acknowledged as the best in their particular field, with particular focus on
meeting their customers requirements. This is an enormous strength of the Group
and I thank everyone in the business for their own effort in enabling us to
produce such great results in 2004.


Summary

The growth and development of the Group has been very extensive in the last 12
months; virtually every part of the company has shown strong improvements over
prior year. Markets have been reasonably helpful, but I believe that the company
has outperformed, and that our people have shown skill and tenacity in
exploiting those conditions.

We have strong positions in markets which I believe will continue to show long
term growth. We will continue to seek growth opportunities both organically and
through acquisition, and I am confident in our ability to continue to develop
and grow the Group to enhance Shareholder value.


Consolidated Profit and Loss Account for the year ended 31 December 2004

                                    Note       2004        2004      2003        2003
                                            £'000's     £'000's   £'000's     £'000's
-------------------------------------------------------------------------------------

Turnover
Existing operations                     2             1,369,093             1,268,525
Acquisitions                            2                29,144                     -
-------------------------------------------------------------------------------------
Continuing operations                                 1,398,237             1,268,525
Cost of sales                                         1,037,052               948,169
-------------------------------------------------------------------------------------

Gross profit                                            361,185               320,356
Other operating expenses                                289,512               261,714
-------------------------------------------------------------------------------------

Operating profit
Existing operations                     2    69,792                            58,642
Acquisitions                            2     1,881                                 -
-------------------------------------------------------------------------------------
Continuing operations                                    71,673                58,642
Net interest payable                                      5,683                 6,466
Other finance charges                                       470                   685
--------------------------------------------------------------------------------------
|Profit before taxation and                                                          |
|amortisation of goodwill                    71,173                56,287            |
|Amortisation of goodwill               2     5,653                 4,796            |
--------------------------------------------------------------------------------------

Profit on ordinary activities                            65,520                51,491
before taxation   
Tax on profit on ordinary activities                     21,360                16,786
-------------------------------------------------------------------------------------

Profit on ordinary activities after taxation             44,160                34,705
Minority interests (all equity)                             572                   447
-------------------------------------------------------------------------------------

Profit for the financial year                            43,588                34,258
Equity dividends paid and proposed                       17,016                14,920
-------------------------------------------------------------------------------------

Retained profit for the year                             26,572                19,338
-------------------------------------------------------------------------------------

Earnings per share
Basic earnings per share                3                  36.1p                 28.6p
Diluted earnings per share              3                  35.6p                 28.2p
-------------------------------------------------------------------------------------

Earnings per share before amortisation 
of goodwill
Basic earnings per share                3                  40.7p                 32.5p
Diluted earnings per share              3                  40.2p                 32.2p
-------------------------------------------------------------------------------------


Consolidated Statement of Total Recognised Gains and Losses for the year ended 
31 December 2004

                                                                2004      2003
                                                             £'000's   £'000's
------------------------------------------------------------------------------

Profit for the financial year                                 43,588    34,258

Tax credit on exchange difference arising on foreign
currency borrowings                                            1,786     1,570
Exchange difference on retranslation of overseas net
investments                                                     (532)    5,202
Exchange difference on foreign currency borrowings            (1,676)   (5,235)
Actuarial (loss)/gain relating to the pension schemes         (8,728)      335
Deferred tax movement associated with actuarial
(loss)/gain                                                    2,534      (101)
------------------------------------------------------------------------------
Total recognised gains and losses for the year                36,972    36,029
------------------------------------------------------------------------------

There is no difference between the results presented in the Consolidated Profit
and Loss Account and the results on an unmodified historical cost basis.
Therefore, a note of historical cost profits is not required.


Reconciliation of Movements in Consolidated Shareholders' Funds
for the year ended 31 December 2004

                                                            2004          2003
                                                         £'000's       £'000's
------------------------------------------------------------------------------

Profit for the financial year                             43,588        34,258
Dividends                                                (17,016)      (14,920)
------------------------------------------------------------------------------
                                                          26,572        19,338
New share capital issued                                   1,938           895
Tax credit on exchange difference arising on
foreign currency borrowings                                1,786         1,570
Exchange difference on retranslation of
overseas net investments                                    (532)        5,202
Exchange difference on foreign currency borrowings        (1,676)       (5,235)
Credit to L-TIP reserve                                      324           137
Actuarial (loss)/gain relating to the pension schemes     (8,728)          335
Deferred tax movement associated with
actuarial (loss)/gain                                      2,534          (101)
------------------------------------------------------------------------------
Net additions to shareholders' funds                      22,218        22,141
------------------------------------------------------------------------------
Opening shareholders' funds                              199,313       177,172
------------------------------------------------------------------------------
Closing shareholders' funds                              221,531       199,313
------------------------------------------------------------------------------


Consolidated Balance Sheet as at 31 December 2004

                                                            2004          2003
                                                                      Restated
------------------------------------------------------------------------------
                                                         £'000's       £'000's
------------------------------------------------------------------------------

Fixed assets
Intangible assets - goodwill                             114,045        78,696
Tangible assets                                           74,481        69,194
------------------------------------------------------------------------------
                                                         188,526       147,890

Current assets
Stocks                                                   116,436        93,035
Debtors                                                  263,762       223,483
Cash at bank and in hand                                  19,467        55,417
------------------------------------------------------------------------------
                                                         399,665       371,935
Creditors:
Amounts falling due within one year                     (230,143)     (198,618)
------------------------------------------------------------------------------

Net current assets                                       169,522       173,317
------------------------------------------------------------------------------

Total assets less current liabilities                    358,048       321,207

Creditors:
Amounts falling due after more than one year            (106,185)      (98,419)
Provision for liabilities and charges                    (12,728)       (8,131)
------------------------------------------------------------------------------

Net assets excluding pension liability                   239,135       214,657
------------------------------------------------------------------------------

Pension liability                                        (17,032)      (14,897)
------------------------------------------------------------------------------

Net assets including pension liability                   222,103       199,760
------------------------------------------------------------------------------

Capital and reserves
Called up share capital                                   12,139        12,027
Share premium account                                     16,793        14,967
Capital redemption reserve                                   347           347
Special reserve                                           22,113        22,113
L-TIP reserve                                                554           237
Exchange reserve                                            (356)           66
Profit and loss account                                  169,941       149,556
------------------------------------------------------------------------------

Shareholders' funds (all equity)                         221,531       199,313
Minority interest (all equity)                               572           447
------------------------------------------------------------------------------

Total capital employed                                   222,103       199,760
------------------------------------------------------------------------------


Consolidated Cash Flow Statement for the year ended 31 December 2004

                                            2004      2004      2003      2003
                                  Note    £000's    £000's    £000's    £000's
------------------------------------------------------------------------------

Net cash inflow from operating
activities                           4              77,422              97,942
------------------------------------------------------------------------------

Returns on investments and
servicing of finance
Interest received                          2,319               1,744
Interest paid                             (8,301)             (8,476)
Interest element of finance lease rentals   (171)               (406)
Dividends paid to minority shareholders     (447)               (294)
------------------------------------------------------------------------------

Net cash outflow from returns on
investments and servicing of finance                (6,600)             (7,432)

Tax paid                                           (15,049)            (10,809)

Capital expenditure
Purchase of tangible fixed assets        (22,627)            (13,367)
Sale of tangible fixed assets              1,549               1,405
------------------------------------------------------------------------------

                                                   (21,078)            (11,962)

Acquisitions
Purchase of subsidiary
undertakings and businesses              (35,826)             (3,026)
Net cash acquired with subsidiary
undertakings and businesses                   86                 343
------------------------------------------------------------------------------

Net cash outflow from acquisitions                 (35,740)             (2,683)

Equity dividends paid                              (15,587)            (14,153)
------------------------------------------------------------------------------

Cash (outflow)/inflow before financing             (16,632)             50,903
------------------------------------------------------------------------------

Financing
Issue of ordinary share capital            1,938                 895
Lease financing                                -                 286
Capital element of finance lease
rental payments                           (3,317)             (5,408)
Repayment of loans                       (17,172)            (16,873)
New loans                                      -              26,499
------------------------------------------------------------------------------

Net cash (outflow)/inflow from
financing                                          (18,551)              5,399
------------------------------------------------------------------------------

(Decrease)/increase in cash          5             (35,183)             56,302
------------------------------------------------------------------------------

Notes

1. Basis of preparation

The preliminary announcement does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985 but is derived from those
statutory accounts. The financial information has been prepared on a basis
consistent with the previous year. The Consolidated Balance Sheet at 31 December
2003 has been restated for a change in pension scheme presentation, as explained
below.

In the prior year, two book reserved schemes operated in Germany and France were
reported within other provisions. In 2004, in accordance with FRS17, these are
now included as part of the FRS17 pensions liability. The effect of this change
in presentation as at 31 December 2003 is a restatement to decrease the
provision for liabilities and charges from £9.327m to £8.131m, to increase net
assets excluding pension liability from £213.461m to £214.657m, and to increase
the pension liability from £13.701m to £14.897m. There was no effect on the
Consolidated Profit and Loss Account.

The Group's statutory accounts for the year ended 31 December 2003 have been
filed with the Registrar of Companies, and those for 2004 will be delivered
following the Company's Annual General Meeting. The auditors have reported on
the statutory accounts for 2003 and 2004, and their reports were unqualified and
did not contain statements under section 237 (2) or (3) of the Companies Act
1985.


2. Segmental information

                                        2004                              2003
Geographical               
analysis                           Operating        Net               Operating        Net
                       Turnover       Profit     Assets   Turnover       Profit     Assets
                          £000's      £000's     £000's      £000's      £000's     £000's
------------------------------------------------------------------------------------------
Existing operations
- UK & Republic of
  Ireland                884,220      62,217    225,063     810,704      54,235    187,621
- Mainland Europe        427,285      15,487     93,205     394,153      11,038    121,197
- USA                     57,588       1,681     19,194      63,668         906     19,850
- Parent Company               -      (3,940)  (120,855)          -      (2,741)  (128,908)
- Amortisation of goodwill     -      (5,653)         -           -      (4,796)         -
------------------------------------------------------------------------------------------

Total                  1,369,093      69,792    216,607   1,268,525      58,642    199,760
------------------------------------------------------------------------------------------

Acquisitions
- UK & Republic of
  Ireland                 22,834       1,912      4,462           -           -          -
- Mainland Europe          6,310         (31)     1,034           -           -          -
------------------------------------------------------------------------------------------

Total                     29,144       1,881      5,496           -           -          -
------------------------------------------------------------------------------------------

Total continuing
operations             1,398,237      71,673    222,103   1,268,525      58,642    199,760
------------------------------------------------------------------------------------------

Turnover and operating profit by destination are not materially different from
these amounts.

The directors consider that all of the Group's activities in each of its market
sectors represent one principal activity, being the distribution of construction
related products.

Of the amortisation of goodwill, £4.807m (2003 : £3.951m ) relates to the UK &
Republic of Ireland, £0.639m (2003 : £0.602m ) relates to Mainland Europe and
£0.207m (2003 : £0.243m ) relates to the USA.



3. Earnings per share

The calculations of earnings per share are based on the following profits and
numbers of shares:

                                       Basic and diluted              Basic and diluted 
                                                              before amortisation of goodwill
                                         2004      2003               2004              2003
                                      £'000's   £'000's            £'000's           £'000's
--------------------------------------------------------------------------------------------

Profit after tax                       44,160    34,705             44,160            34,705
Minority interest                        (572)     (447)              (572)             (447)
Amortisation of goodwill                    -         -              5,653             4,796
--------------------------------------------------------------------------------------------

                                       43,588    34,258             49,241            39,054
--------------------------------------------------------------------------------------------

Weighted average number of shares:                                    2004              2003
                                                                    Number            Number
--------------------------------------------------------------------------------------------

For basic earnings per share                                   120,863,011       119,981,696
Exercise of share options                                        1,747,068         1,313,821
--------------------------------------------------------------------------------------------

For diluted earnings per share                                 122,610,079       121,295,517
--------------------------------------------------------------------------------------------

Earnings per share before amortisation of goodwill is presented in order to give
an indication of the underlying performance of the Group.


4. Reconciliation of operating profit to net cash inflow from operating activities

                                                              2004        2003
                                                           £'000's     £'000's
------------------------------------------------------------------------------

Operating profit                                            71,673      58,642
Depreciation charge                                         17,820      16,831
Amortisation of goodwill                                     5,653       4,796
Profit on sale of tangible fixed assets                       (279)       (335)
Increase in stocks                                         (19,307)     (2,525)
(Increase)/decrease in debtors                             (21,573)        946
Increase in creditors                                       23,435      19,587
------------------------------------------------------------------------------
Net cash inflow from operating activities                   77,422      97,942
------------------------------------------------------------------------------

The acquisitions during the year had the following effects on the Group's cash
flows: net cash inflow from operating activities, £1.125m; interest paid,
£0.049m; capital expenditure, £0.114m; taxation paid, £0.624m.

Included within the increase in creditors is a cash outflow relating to pension
contributions being £4.578m (2003 : £0.313m) greater than the amount charged to
operating profit.


5. Reconciliation of net cash flow to movements in net debt

                                                             2004         2003
                                                          £'000's      £'000's
------------------------------------------------------------------------------

(Decrease)/increase in cash in the year                   (35,183)      56,302
Cash inflow/(outflow) from movement in debt                20,255       (4,504)
------------------------------------------------------------------------------
Changes in net debt resulting from cash flows             (14,928)      51,798
Acquisitions                                               (7,488)         (20)
Exchange differences                                          413       (4,713)
------------------------------------------------------------------------------

Movement in net debt in the year                          (22,003)      47,065
Net debt at beginning of year                             (76,315)    (123,380)
------------------------------------------------------------------------------

Net debt at end of year                                   (98,318)     (76,315)
------------------------------------------------------------------------------


6. Proposed dividend

The proposed dividend of 9.4p per ordinary share, if approved, will be payable
on 23 May 2005 to shareholders on the register at 15 April 2005.





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