Final Results - Year Ended 23 Dec 1999, Part 1

Save Group PLC
7 April 2000


PART I

                     SAVE GROUP PLC
                            
 Preliminary Results for the 52 weeks ended 23 December
                          1999


Save Group PLC ('Save'), the UK s largest independent
petrol retailer, which operates the Save brand of
petrol filling stations, announces its Preliminary
Results for the 52 weeks ended 23 December 1999.


Highlights

*   Extensive restructuring of UK petrol retailing
    industry largely completed

*   200% increase in the price of crude oil

*   Turnover of £420.6m (1998: £422.8m)

*   Profit before tax and exceptionals of £2.055m (1998:
    £5.50m), in line with the trading update made in
    November 1999

*   Earnings per share 2.0p (1998: 5.0p)

*   Group borrowings decreased by 2.52% to £52.6m (1998:
    £53.96m )

*   Save has 6.81% market share by company owned sites

Chairman, James Frost, commented:

'The  immediate  impact  on current  trading  of  the
restructuring of the UK petrol industry in  the  year
to  date is that sales, profits and cash flow are all
ahead  of  last  year,  with profits  in  particular,
excluding Budget stock movements, up for each of  the
13 trading weeks of the new trading year.  We need to
be cautious, but we may for the first time since 1995
be able to look at this industry as one where profits
can grow significantly.'


For further information please contact:
James Frost, Chairman, Save Group Plc       01296 436 661
John Murgatroyd, Finance Director,
Save Group Plc                              01296 395 951
Charles Ryland/Catherine Miles,
Buchanan Communications                  020 7 466 5000


Chairman's Statement

I  present my Report, for the 52 weeks ended 23  December
1999,  showing  results that are in line  with  both  the
Board's expectations, announced on 12 November 1999,  and
market   expectations   amid  a   period   of   continued
unprecedented change in the oil industry worldwide.

Preliminary         1995    1996    1997    1998    1999
results
                   £'000   £'000   £'000   £'000   £'000
                                                          
Turnover
 excluding VAT   451,495 429,692 420,571 422,841 420,640                        
       
                     
Profit before                                      
 exceptionals 
 and tax          15,114  10,370   9,008   5,503   2,055
Profit before                                             
tax               11,114  10,370   7,321   4,620   1,907
Profit after                                              
tax                8,502  12,096   9,056   4,756   1,907
Earnings per        
share              10.2p   12.9p    9.7p    5.0p    2.0p
Dividend per             
share               7.0p    7.1p    7.1p    3.3p     -                          
            -


1999  was  the  year  that  marked  the  climax  to   the
restructuring of the petrol retailing industry in the UK.

The  key  events  marking this climax  were  three  major
changes  of  ownership, a 200 per cent. increase  in  the
price  of  crude oil and an innovative sale and leaseback
by Shell of 180 petrol filling stations for a sum of £300
million.  These events shaped the industry for  1999  and
have  set  the  basis  for  the  industry  for  2000  and
thereafter.

The  three  major changes of ownership were the takeovers
of  Asda,  Fina  and  Elf, each of  which  produced  long
successive  periods  during which the  targets  had  good
reason to chase market share at the expense of profits.

1999  started  with the end of Esso's 2p  per  litre  off
campaign  on 15 January and this was rapidly followed  by
Asda's  announcement that it was in negotiations  firstly
with  Kingfisher and then with Walmart. In  April,  Total
agreed  to  acquire Fina. The acquisition and integration
did  not, however, start until after EU approval  in  the
summer.  In turn this was quickly followed by  the  fight
between  Total and Elf. Again, while shareholders  agreed
in  October, EU approval only came in February this  year
and Total's control of the operations only occurred then.

Coupling  these events with the rapidly escalating  price
of  crude oil meant that pump price rises did not keep up
and  margins or volumes were squeezed for all players  in
the  industry as the following chart on industry  margins
shows.

The  number of players in the industry has contracted and
the  following chart shows the emergence of, in  football
terms,  a Premier Division, a First division and a  Third
Division with the supermarkets forming a substantial  but
not  overpowering (and possible weakening) force  in  the
middle.

Market Share by Company
Owned sites
                   
                    Sites       %
Total/Fina/Elf        945     15.72
Shell                 880     14.64
Esso                  878     14.61
BP                    827     13.76
                              58.74
Texaco                511      8.50
Save                  409      6.81
                              15.31
Tesco                 326      5.42
Sainsbury             219      3.64
Safeway               175      2.91
Asda                  141      2.35
Morrisons              73      1.21
                              15.54
Jet                   192      3.19
Murco                 100      1.66
Q8                     95      1.58
Repsol                 42      0.70

                               7.14
                     5813     96.72
Others                197      3.28
Total                6010    100.00

The  Institute of Petroleum conducts an annual survey  of
sites, which is produced in March of each year. As usual,
I  have  used those figures to assemble a picture of  the
industry  over the years. The following chart expands  on
those figures.

Petrol retailing sites in the UK - movements
                                               
 Year           Small       
                rural                   
                sites   Total             Super-    
                first    on               markets  Private
      Revised  introd. previous Supplier  inc.big  indepen-      
       Total    1997    basis    Owned    five     dents
                                              
 1964  38500            38500     5435             33065
 1985  21140            21140     6642     190     14308
 1990  19465            19465     6490     357     12618
 1995  16244            16244     5870     823      9551
 1997  14824    871     13953     5383     934      7636
 1998  13758    601     13157     5179     977      7001
 1999  13716    867     12849     4997    1013      6839
                                              
Change                                        
  %
1999/
1998    -0.3   44.3     -2.3     -3.5      3.7      -2.3

Despite  being  the best available data, I would  caution
use of these figures for the following reason.

The  'small rural sites', first introduced in 1997,  have
always  been supplied by someone and therefore  could  be
duplicated in the independents' figure. In any event, the
numbers  distort  the whole picture because  their  total
market  share  is most unlikely to exceed 0.5%  of  total
volume  compared  with nearly 6.5% in site  numbers.  How
they can increase by more than 44% in one year when there
are  numerous complaints of rural sites closing I do  not
know.  I  think  that for any meaningful comparison  they
should be left out.

Apart  from  believing that more sites have  closed  than
have been shown, there is one figure to draw attention to
and  that is the 3.5% closures under Company Owned sites.
You will see more closures as a result of the mergers and
therefore average volumes will continue to rise.

Total  Retail Motor Fuel Sales in 1999 amounted to 28.65m
tonnes  compared with 28.04m tonnes for 1998 an  increase
of  2.2%. As the following chart shows this is a positive
result  and  there  is  no  reason,  given  the  economic
conditions currently prevailing, the fact that demand for
road  fuel is inelastic and the ongoing increase in motor
vehicles, why this should not continue.

Average road fuel volumes per site         
and total volume
                                              
                                     Av.
                                     Sales
                       Volume        per     
      Number            in           site
       of        %     tonnes   %   litres     %  
Year  sites   Decrease  (m)   Change  (m)   Increase
                
1990   19465   -1.3    26.7    2.3   1.82     3.8
1991   19247   -1.5    26.5   -0.6   1.83     0.6
1992   18549   -1.1    26.9    1.3   1.92     5.1
1993   17969   -3.6    27.0    0.5   1.99     3.7
1994   16971   -3.1    26.7   -1.1   2.09     4.7
1995   16244   -5.5    26.3   -1.6   2.15     2.8
1996   14748   -4.3    27.3    4.0   2.46    14.6
1997   13953   -9.2    28.0    2.6   2.65     7.9
1998   13157   -5.7    28.0    0.4   2.83     6.8
1999   12849   -2.3    28.7    2.2   2.96     4.6

10 year                bil.                   per
movement             Litres                  site
      -34%              38                    69%

As mentioned in the half year statement to members, as  a
result  of the conditions prevailing in 1999 as described
above,  Save  once  again  had to  premium  price  for  a
significant part of the year, particularly in  the  early
and  middle  months. This was necessary  to  protect  its
position overall as thought best under the circumstances.
As  a  result, the overall sales volume for 1999 was  5.2
per  cent  below  1998  (compared with  a  7.7  per  cent
increase in 1998) and this has lead to the lower level of
profits which are being reported for 1999.

In  view  of  these  results and as the  changes  in  the
industry  have yet to fully work their way  through,  and
with the prospect of more change to come, your Board  has
decided not to declare a dividend for 1999 but to  review
the  position  in  the  light of circumstances  when  the
interim results are considered.

I  am pleased to say that, from the closing weeks of last
year,  margins in the market have generally  been  firmer
and this has enabled Save to be competitive on nearly all
sites  while  earning  adequate  gross  margins.  In  the
current year the indications continue to suggest that the
restructuring  is  beginning to take effect,  bearing  in
mind  that  EU approval for the integration of  Elf  into
Total  did  not come through until February  2000.  Sales
volumes  for  the first quarter were as follows:  January
 3%, February +0.4% and March +5% making for a cumulative
increase  of 1.2% in the first 13 trading weeks.  As  the
benefits of the restructuring continue to come through  I
would  expect this sales growth to follow on,  both  this
year and in future years.

Two further matters of interest to members which we would
expect to impact positively on future trading:

      1  We  have started to change the gantry sign  tops
from  Save  to  Blue  Chip, to better  reflect  that  the
company's  sales  are higher quality  sales  than  before
because they are being achieved at less discounted prices
than those prior to Price Watch in 1995.

      2 We have agreed an advertising contract for poster
advertising  on  our forecourts and this  will  gradually
bring in increased revenue.

The  group's balance sheet remains strong with borrowings
down by £1.35m to £52.6m. There is a continuing reduction
in  the  underlying figures and I would expect to  report
further  progress in the 53 weeks of this year ending  28
December  2000. At the above level, gearing is  equal  to
44.6% of net assets or 26.9% of fixed assets.

Finally, I want to refer to a new reporting standard  FRS
15  which  comes into operation from next year.  We  have
reviewed  the  impact  of this  on  the  Group  with  the
auditors  and have concluded that, viewed as a Group,  no
impairment has been incurred over the carrying  value  of
the  Group's  freehold and long leasehold petrol  filling
stations and accordingly no provision will be required. I
can  confirm to members that this is the way your Company
has  been  reporting  in the past and  will  continue  to
report in the future.

Prospects

There   are  two  matters  I  want  to  refer  to  before
summarising our immediate prospects:

      1  I  am constantly asked why Save has not, at this
stage,  featured in any restructuring. I cannot of course
comment.  I  believe,  however, that  the  restructuring,
until  recently, has focused on reduction of site numbers
and international consolidation. As a result, it has only
just    started   to   deal   with   isolated    national
consolidation. If the Texaco report referred to below  is
true,  this is now starting. In addition, I and my  Board
believe that there may be a new market place for sites on
sale  and leaseback deals such as the one Shell announced
on  the  24  December  1999. This deal  has  created  new
securitisation opportunities that simply were  not  there
before.

      2  Internet shopping this has started and it does
seem to me that it is going to take off in a very big way
over the next year or two. The competition will force the
supermarkets  to deliver the weekly shop free  of  charge
and  there will be no need to even visit the store.  This
could  provide  a  very big switch for motorists  to  buy
their  petrol away from the supermarket and back  to  the
petrol filling station. Similarly, that forgotten item is
increasingly  likely  to be picked  up  from  the  petrol
station  shop  rather  than go all  the  way  back  to  a
supermarket.  Petrol stations could become even  more  in
demand.

So far as the immediate future is concerned, I am pleased
to  say  that in my speech to the Institute of  Petroleum
European  Conference on the 4 June 1996 I indicated  that
the restructuring of the UK downstream market would bring
about  fewer  suppliers,  fewer  sites,   higher  prices,
profits and site values.

The  table above shows that there are fewer sites selling
more  petrol  on  average.  The  table  below  shows  the
reduction in supplier numbers since 1995.

In my half year statement to members I listed the changes
that  had already taken place since 1995 and repeat those
here:

Major refining suppliers   1995      2000
in the UK                   Esso     Esso
                            Shell    Shell
                            BP       BP
                            Mobil    
                            Total    Total
                            Elf      
                            Fina     
                            Texaco   Texaco
                            Conoco   Conoco?
                            Gulf     
                            Burmah/  
                            ICI

In  the  Sunday Times,  January 16 issue,  there  was  an
article  under  the headline 'Texaco poised  to  snap  up
petrol  stations' and which went on to refer  to  Conoco.
This,  of  course,  may or may not be true.  For  reasons
mentioned earlier, if true, this might have a short  term
impact on margins as market share became the priority but
would end up by reducing the market place to just 5 major
players.  This  should, as mentioned above,  bring  about
even  fewer  sites and enable higher prices, profits  and
site values to continue to emerge and should therefore be
viewed as positive.

The   immediate   impact  on  current  trading   of   the
restructuring in the year to date is that sales,  profits
and cash flow are all ahead of last year, with profits in
particular, excluding Budget stock movements, up for each
of  the 13 trading weeks of the new trading year. We need
to  be cautious, but we may for the first time since 1995
be able to look at this industry as one where profits can
grow significantly.


R James Frost
Chairman
7 April 2000


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