Interim Results

Zotefoams PLC
8 August 2000


                                 ZOTEFOAMS PLC
                                       
                                Interim Results

Zotefoams  plc,  the  world's leading manufacturer of cross-linked  polyolefin
block  foam, today announces its interim results for the six months  ended  30
June 2000.

                        2000                    1999
Turnover                £10.78m                 £12.44m
Operating profit        £ 0.95m                 £3.79m
Profit before tax       £1.01m                  £3.82m
Earnings per share      2.2p                    7.3p
Dividend per share      2.5p                    2.5p


  Completion of sales, marketing and development alliance with Sekisui
  Chemical Company Ltd of Japan

  No Puzz3D foam production; all stock and equipment associated with this
  area of the toys market written-off

  Sales increased in all major market areas, excluding toys

  Strong performance in North America, driven by speciality products

  New US production facility proceeding to plan; due for commissioning Q1
  2001

Commenting on the results, David Stirling, Managing Director said:

'This  business is now in shape to fulfil its potential. With the  removal  of
our  exposure  to Puzz3D and the conclusion of an alliance that gives  us  the
sales and marketing clout our product deserves, we now have the balanced, high
margin business for which our shareholders have waited so patiently.'

Enquiries:

Zotefoams plc
David Stirling, Managing Director       020 8664 1600
          
Financial Dynamics
Tom Baldock                             020 7831 3113

CHAIRMAN'S STATEMENT

As anticipated in our Annual Report in February, the pressures that impacted
on our performance in the second half of 1999 continued through the first half
of 2000.  Continuing high raw material prices and a weaker euro combined with
a sharp reduction in demand from the Puzz 3D element of the toy segment to
reduce turnover and profits in the first half year.  The company no longer
considers this element of the toy segment as a strategic part of its portfolio
and has therefore written-off all stock and equipment associated with supplies
to this market.  A similar approach has been taken on a number of technical
projects, which have not met expectations, to allow a stronger focus on
developments which offer more significant potential in the medium term.

In February we referred to transition in the company. A major element of this
is a sales, marketing and development agreement, which was successfully
completed on 26 July, with Sekisui Chemical Company Ltd of Japan.   Sekisui is
the world's leading producer of roll polyolefin foam and has an extensive
sales and marketing network in Europe and around the world.  The board
believes this agreement will enable the company to realise the full potential
of its first-class product portfolio.

Results

Profit before tax for the six months ended 30 June 2000 was £1.01 million
compared with £3.82 million for the same period last year.  The 2000 figure
includes one-off stock and capital equipment write downs of £0.77 million.
Currency movements adversely affected profits by £0.40 million.  Turnover was
£10.78 million (1999:£12.44m), the fall in sales to the toy segment of £1.94
million being partly offset by sales gains elsewhere.  Earnings per share for
the six months ended 30 June 2000 were 2.2p compared with 7.3p for the six
months ended 30 June 1999.

Zotefoams continues to be highly cash positive, generating  £2.3 million cash
from operating activities in the period.

Sales increased in all our major market areas, other than to the toy segment,
although the gains in Continental Europe were negated by adverse currency
movement.  In North America, sales increased by 25% and construction of the
new production facility is proceeding to plan and commissioning is expected in
the first quarter of 2001.

The price of LDPE, our major raw material, increased 42% compared with the
first six months of 1999 with the result that materials cost £460,000 more
than at 1999 price levels.

Capital additions of £1.39 million for the period were mainly associated with
the new North American production facility, with forecast total expenditure to
the end of 2000 being around £6.7 million.  Net cash balance at 30 June 2000
was £1.77million.

Dividend

The Directors have declared an interim dividend of 2.5p net per share.  This
dividend will be paid on 14 September 2000 to shareholders who are on the
company's register at the close of business on 25 August 2000.  This dividend
is unchanged from the interim dividend in respect of the six months ended 30
June 1999.

Zotefoams plc has a policy of progressively increasing dividends.  This year
the board has maintained the interim dividend at 1999 levels due to difficult
trading conditions, the first occasion since our flotation in 1995 on which
the dividend has not been increased.  The most important focus for the
directors is cash flow, both within the business and to shareholders.   It is
our intention to resume the progressive policy when we have returned to a
level of profitability that supports both internal business requirements for
cash while allowing us to adopt a sustainable payout to shareholders.

Board Changes

David Stirling, Finance Director and Company Secretary since 1997, was
appointed Managing Director in May following the resignation of Andrew
Gingell.  We are currently in the process of appointing a new Finance
Director.

Randall Redd resigned as a Director of Zotefoams plc and President of
Zotefoams Inc in July 2000.  Mike Lewsey, Marketing & Sales Director, has
assumed Randall's responsibilities pending a future appointment in North
America.

Outlook

For some time we have recognised the over exposure of Zotefoams to the Puzz 3D
segment of the toy market.  This business was highly volatile and difficult to
predict.  With the removal of this exposure we believe that Zotefoams is in a
much stronger position to generate sustainable, high margin growth for
shareholders.

In the short term, we anticipate resumption in sales growth in the company
with the initial benefits of the strategic alliance with Sekisui helping us to
overcome challenging market conditions.

The initial impact of the alliance, which will start during the second half of
the year, will be in Europe and this will be progressive through 2001.  In
North America, we expect the major impact following commissioning of our new
production facility early in 2001.

It is anticipated that developments in both process and new products will be
initiated this year under the Development Agreement and these are likely to
have outcomes on medium and long term time scales.  Considerable joint work
has already been carried out to meet current market requirements.

As we indicated in February this is a year of transition for Zotefoams and we
now believe we have a forward strategy that will deliver the balanced, high
margin growth business with an expanding international dimension.


Consolidated profit and loss account
for the six months ended 30 June 2000

                              Six months     Six months     Year ended
                                   ended          ended    31 December
                            30 June 2000   30 June 1999           1999
                             (Unaudited)    (Unaudited)      (Audited)
                                    £000           £000           £000
Turnover - continuing                                                 
operations                        10,778         12,435         22,426
Cost of sales                    (7,814)        (6,749)       (12,843)
                                                                      
Gross profit                       2,964          5,686          9,583
Distribution costs                 (981)          (990)        (1,945)
Administrative expenses          (1,037)          (908)        (1,932)
                                                                      
Operating profit -                                                    
continuing operations                946          3,788          5,706
Interest received                     66             39             76
Interest paid                        (4)            (5)            (9)
                                                                      
Profit on ordinary                                                    
activities before                                                     
taxation                           1,008          3,822          5,773
Taxation                           (225)        (1,165)        (1,704)
                                                                      
Profit on ordinary                                                    
activities after taxation            783          2,657          4,069
Interim dividend                   (906)          (906)          (906)
Final Dividend                         -              -        (1,813)

Retained (loss)/profit                                                
for the period                     (123)          1,751          1,350
                                        
                                        
Earnings per share                  2.2p           7.3p          11.2p


Diluted earnings per                                                  
share                               2.2p           7.3p          11.2p





Consolidated statement of total recognised gains and losses

Profit for the period          783             2,657             4,069
Currency translation                                                  
differences on foreign                                                
currency net investment         68                69                16
                                                                      
Total recognised gains                                                
and losses relating to                                                
the period                     851             2,726             4,085






Consolidated balance sheet
as at 30 June 2000


                      As at              As at             As at
                  30 June 2000       30 June 1999     31 December 1999
                
                (Unaudi            (Unaudi           (Audite       
                  ted)     £000      ted)     £000      d)       £000
                  £000               £000              £000
Fixed Assets                                                           
Intangible                                                   
assets                 -                 32                27
Tangible assets   27,397             27,453            28,034
                                                                       
                           27,397             27,485             28,061
Current Assets                                               
Stocks             2,340              2,441             2,487
Debtors            5,628              5,911             4,858
Cash at bank       1,884              2,939             2,975
and in hand
                                                                       
                   9,852             11,291            10,320
Creditors:                                                   
amounts falling                                              
due within 1                                                 
year             (4,315)            (5,287)           (5,411)
Net current                                                            
assets                      5,537              6,004              4,909
                                                                       
Total assets                                                           
less                                                                   
current                                                                
liabilities                32,934             33,489             32,970
Creditors:                                                             
amounts falling                                                        
due after more                                                         
than one year                (50)               (83)               (36)
                                                                       
Provision for                                                          
liabilities and                                                        
charges                   (3,880)            (3,893)            (3,875)

Net assets                 29,004             29,513             29,059
                                                                       
                                                                       
Capital and                                                            
reserves                                                               
Called-up share                                                        
capital                     1,813              1,813              1,813
Share premium                                                          
account                    13,707             13,707             13,707
Capital                                                                
redemption                                                             
reserve                         5                  5                  5
Profit and loss                                                        
account                    13,479             13,988             13,534

Total                                                                  
shareholders'                                                          
funds - equity             29,044             29,513             29,059



Consolidated cash flow statement
for the six months ended 30 June 2000



                   Six months       Six months       Year ended
                     ended            ended          31 December
                  30 June 2000     30 June 1999         1999
                
                (Unaudi          (Unaudi           (Audite    
                 ted)     £000    ted)     £000      d)     £000
                 £000             £000              £000
                                                                  
Net cash inflow                                                   
from operating                                                    
activities                                                        
(note 5)                   2,278            3,779            7,688
                                                                  
Returns on                                                        
investment and                                                    
servicing of                                              
finance                                                   
Interest                                                  
received             66               39                76
Interest paid                                             
-    finance                                              
  leases            (4)              (5)               (9)
                              62               34               67
Taxation                                                  
Mainstream                                                
corporation tax   (229)                -           (1,562)
Overseas tax                                              
(paid)/refunded     (2)               16                22
                           (231)               16          (1,540)
Capital                                                           
expenditure                                               
Purchase of                                               
tangible fixed                                            
assets          (1,390)          (1,150)           (2,626)
Sale of                                                   
tangible fixed                                            
assets                6                8                11
                         (1,384)          (1,142)          (2,615)
Equity                                                            
dividends paid           (1,813)          (1,740)          (2,646)
                                                                  
Cash                                                              
(outflow)/inflo                                                   
w before                                                          
financing                (1,088)              947              954
Financing                   (13)             (14)             (34)
Management of                                                     
liquid                         -                -                 
resources                                                  (1,600)
(Decrease)/Incr                                                   
ease in cash in                                                   
the period               (1,101)              933            (680)
                                                                  
                                                                  
(Decrease)/Incr                                                   
ease in cash in                                                   
the period               (1,101)              933            (680)
Cash outflow                                                      
from decrease                                                     
in debt and                                                       
lease finance                 13               14               34
Cash used to                                                      
increase liquid                                                   
resources                      -                -            1,600
Change in net                                                     
cash resulting                                                    
from cash flows          (1,088)              947              954
Translation                                                       
differences                  (9)             (27)             (19)
                                                                  
Movement in net                                                   
cash in the                                                       
period                   (1,097)              920              935
Net cash at the                                                   
start of the                                                      
period                     2,871            1,936            1,936

Net cash at the                                                   
end of the                                                        
period                     1,774            2,856            2,871



1    Basis of preparation

The accounting policies used in the preparation of the interim financial
information are the same as those in the last annual report and annual
accounts. The comparative figures for the financial ended 31 December 1999 are
not the Company's statutory accounts for that financial year. Those accounts
have been reported upon by the Company's auditors and delivered to the
Registrar of Companies.

The report of the auditors was unqualified and did not contain a statement
under section 273(2) or (3) of the Companies Act 1985.

The interim financial information is unaudited but has been reviewed by the
auditors and their report to the Company is set out on page 9.

2    Accounting Policy

The company has adopted FR15: Tangible Fixed Assets, in the period.
No adjustments were required resulting from the adoption of this standard.
A review of assets for impairment of value as required by FRS11, resulted in a
write off of £640,000 of fixed assets.

3    Earnings per share

Earnings per share in each period is calculated by dividing profit after tax,
by the number of shares in issue. There has been no change to the number of
shares in issue since the Company's flotation in February 1995.

Diluted earnings per share is also shown in compliance with FRS14.

4    Movement in shareholders' funds

                                       
                                                                   £000
Profit for the six months ended 30 June 2000                        783
Dividends                                                          (906)

Retained loss for the period                                       (123)
Other recognised gains and losses                                    68
Opening shareholders' funds at 1 January 2000                    29,059

Closing shareholders' funds at 30 June 2000                      29,004

5     Reconciliation of operating profit to net cash inflow from operating
activities



                  Six months ended   Six months ended          Year ended
                      30 June 1999       30 June 1999    31 December 1999
                        (Unaudited)        (Unaudited)          (Audited)

Operating profit               946              3,788               5,706

Depreciation and 
impairment charge and 
amortisation of 
licences                     1,768              1,034               2,080

(Profit)/Loss on the 
sale of tangible fixed
assets                        (10)                  9                   6

Decrease/(increase) in 
stocks                          14               (178)               (316)

(Increase)/decrease in 
debtors                       (626)              (894)                  94

Increase in creditors            96                 20                  19

Increase in provisions           90                  -                  99

Net cash inflow from 
operating activities          2,278              3,779               7,688