Final Results

Actif Group PLC
16 October 2002

                                                                 16 October 2002

                                Actif Group plc

              Preliminary results for the year ended 3 August 2002



Highlights



•        Turnover from continuing operations up 9.6% to £24.9 million (2001:
         £22.7 million)



•        Net debt reduced to £1.8m (2001: £3.1m)



•        Gearing ratio reduced to 47% (2001: 91%)



•        Gross margins have increased to 42.5% from 41.2% as a result of the
         increasing proportion of retail business within the Group



•        Total operating costs reduced by 7.8% to £9.8m (2001: £10.6m)



•        Operating profit, pre exceptionals of £784,000 (2001: loss pre
         exceptionals £564,000)



•        Profit before tax of £315,000 (2001: loss £1,981,000)



•        Basic earnings per share of 0.74p (2001: loss per share 3.04p)



•        New store opening programme recommenced



Commenting on these results, David Brock, Chairman said:



'This has been an encouraging year for the Group. These results reflect the
benefit of concentrating on the core Elle brand, and thereby growing sales,
whilst improving margins and reducing costs. The combination of these activities
has meant a return to profitability following the disappointing loss last year.
I am particularly pleased with the level of cash generated in the year, allowing
the Group to reduce its debt and gearing ratio and providing a stronger basis
from which to expand the business in the forthcoming financial year.'



Enquiries:     Actif Group plc  (020 7436 3330)  Hudson Sandler (020 7796 4133)
               Mark Evans, Chief Executive       Piers Hooper
               Julian Ghinn, Group Finance Director


Chairman's statement



I am pleased to report the Group's final results for the twelve month period to
3 August 2002.  This has been an encouraging year for the Group. These results
reflect the benefit of concentrating on the core Elle brand, and thereby growing
sales, whilst improving margins and reducing costs. The combination of these
activities has meant a return to profitability following the disappointing loss
last year. I am particularly pleased with the level of cash generated in the
year, allowing the Group to reduce its debt and gearing ratio and providing a
stronger basis from which to expand the business in the forthcoming financial
year

Results

In the twelve months to 3 August 2002, the underlying growth in total Group
turnover was 9.6%, taking turnover to £24.9m (2001: £22.7 million). The total
increase in Group turnover was 1.8%, when the non-continuing Joe Boxer business
is included within the prior year numbers (2001: £24.4m). Composite gross
margins have increased to 42.5% from 41.2% as a result of changes in sales mix,
with the retail business accounting for a higher proportion of sales than in the
prior period. Costs have been reduced to 39.4% of sales (2001: 43.5% of sales)
as a result of the restructuring programme following the closure of the Joe
Boxer business. Operating profit before exceptional items was £784,000, against
an operating loss before exceptional items last year of £564,000.  Total profit
before tax was £315,000 (2001: loss £1,981,000) and basic earnings per share
were 0.74p (2001: loss per share 3.04p).

ELLE Retail

Total retail sales in the period increased by 6.3% to £15.0 million (2001: £14.1
million). Excluding the Joe Boxer business, which was discontinued in 2001,
retail sales increased by 21.1%. The growth in retail sales partly reflects a
full period of trading from the stores and concessions opened in the first half
of last year, but the main factors behind this growth are improved operating
standards in the stores, improved fashionability of the product offer and
improved stock availability.  Retail gross margins are significantly better than
the comparative period at 57.0% (2001: 53.4%).  2001 margins were adversely
impacted by the need to clear stocks from the Joe Boxer concession, prior to its
closure. Stripping out the closed business from the comparisons reveals a slight
drop in retail gross margins from 58.4% in 2001.

In the period under review we have opened 5 concessions in 3 department store
groups, all of which opened during the second half. These stores have traded
well and in line with expectations. In keeping with our short term policy of
focusing on the existing business and keeping capital expenditure low, no new
stand alone stores opened during the year.  Overall our retail selling space has
increased by 2,500 square feet to 49,000 square feet.

ELLE Wholesale

Wholesale revenues from our Elle collections in the period have decreased by
4.8% to £7.5 million (2001: £7.9 million). As reported in our Interim Statement,
we have relinquished certain non-core product categories and territories as part
of the re-alignment of our Elle licence. This had an impact for the first time
on the Autumn/Winter season 2002, the first element of which was delivered to
our wholesale customers in July. Initially, the changes in the Elle licence have
affected our export sales, which have fallen by 20% to £2.4m, as a result of
stopping daywear and underwear sales to European markets. This impact will
continue into the new financial year, as the second and third elements of the
Autumn/Winter 2002 collection will be delivered in September and October.
However, we have a renewed impetus in our sales of Sports and Swimwear to
European markets, having signed a licence with a sales agent in France and we
are in advanced negotiations with a distributor in Italy. These agreements,
together with our existing arrangements in Germany, Spain, Switzerland and
Ireland, will give us widespread market coverage throughout Europe. We have also
renewed our licence to distribute Elle bags within the UK, enabling us to
benefit from improved buying terms, without carrying the cost of design and
production. Given the shift in emphasis within the business towards retail
sales, and the resultant impact on wholesale opportunities, the new management
team have taken steps to control the level of stock risk taken on wholesale
collections. In conjunction with this, a more aggressive approach has been taken
to clearing through unsold stocks at the end of a season. This has contributed
to an overall reduction in wholesale margin rate to 24.6% (2001: 29.8%), and a
significant reduction in stock levels (see below). Through tighter buying
controls on wholesale stocks, the management team anticipates a recovery in
margin rates in the forthcoming year.

Costs

Operating costs, less exceptional items, have decreased by 7.8% to £9.8m (2001:
£10.6m), which represents 39.4% of sales (2001: 43.5%). This follows a cost
reduction programme undertaken in response to the poor trading performance in
2001, which was effective in all areas of the business. Retail operating costs
fell by 2.3% to 39.3% of retail sales (2001: 42.7%), whilst total central
overhead was reduced by 12.6% to £3.8m or 15.3% of sales (2001: £4.3m and 17.8%
of sales).

Cash flow

Net cash flow from operating activities was £1.7m, an improvement of £2.4m on
the previous year (2001: outflow of £0.7m).  Of this £2.4m improvement, £2.0m
derives from increased profitability (net of depreciation and the impairment
provisions taken in 2001) and £0.4m derives from improvement in working capital
(a £0.2m reduction in working capital in 2002, compared to an increase of £0.2m
in 2001).

Capital expenditure was significantly lower in the year at £198,000 (2001:
£1,346,000) reflecting our objective to focus on the existing business and
identify the key profit drivers before prioritising further areas for profitable
investment.

The improvement in working capital reflects a 21% reduction in stock levels to
£3.4m at the year end (2001: £4.3m). This is a direct result of improved stock
management in both the retail and wholesale businesses, combining a policy of
tighter buying for new season product, improved sell through of stock within
season and aggressive action to reduce carry forward of old season stocks.
Debtors have been reduced by 8.7% to £3.7m (2001: £4.0m), reflecting tighter
management of slow paying customers and lower wholesale sales in July. Trade and
other creditors have decreased by 30.6% to £2.7m (2001: £3.9m) due to a
combination of the closure of the Joe Boxer business and closer adherence to
trading terms.

As a result of the positive cash flow, net debt has been reduced by £1.3m to
£1.8m (2001: £3.1m). This has resulted in a gearing ratio at the year end of 47%
(2001: 91%), which is comfortably within our banking covenants

Exceptional bad debt

In June, one of our trading partners, The Designer Room Limited went into
administration. We have been trading with this company since early 2000,
operating Elle concessions within their stores. We had been given no cause for
concern over their trading performance as our sales were growing strongly and
our account was settled on time each month. The report of the Administrators
dated 14 August 2002 forecasts a zero dividend to unsecured creditors and as a
result we have fully written off the amount owed to us at the date in which the
company went into administration (£257,000). We have continued to trade
successfully in the Designer Room stores that remained open during the period of
administration, and have recently signed a contract with the new owners of these
stores, which will enable this distribution channel to remain open. As a result
we do not foresee any adverse impact on this year's trading performance.

Board changes

On 15 March Simon Banfield resigned as Finance Director to take up a new
position in the house building sector and was succeeded by Julian Ghinn, who
joined the Group with effect from 2 April 2002 and was appointed to the Board on
23 July 2002.

Our People

On behalf of the Board I would particularly like to thank our people, who have
responded well to the changes brought about by the new management team and have
demonstrated their ability to stabilise and then improve the trading performance
of the business, and position the Group for continuing success in 2003.

Current trading and prospects

Since the year end, in line with the majority of our competitors on the High
Street, we have seen softer trading conditions in August and September. However
total retail sales remain in line with budget expectations.

As I said in my statement in last year's Annual Report, the objective for this
year was to focus more effectively on the key profit drivers of the business and
restore profitability to our core business. Having achieved this, we intend to
build on the platform of a profitable business and seek opportunities to expand
the distribution of the Elle brand, primarily through opening new stores in
major shopping centres within the UK.

August saw the opening of our first new prime Elle store in almost 2 years in
the Oracle Centre in Reading. Trading to date has been encouraging, with the
store ranking third within our chain of prime stores. We are currently working
on our next new store, which will open in Meadowhall, Sheffield in December
2002, and will feature an updated store environment, designed to better reflect
the characteristics of the Elle brand and to enhance the shopping experience for
our customers.

David Brock

Chairman

10 October 2002










Group profit and loss account
For the year ended 3 August 2002




                                                               Notes                          Unaudited         Audited
                                                                                                  Total           Total
                                                                                                   2002            2001
                                                                                                  £'000           £'000
Turnover                                                         2                               24,877          24,434
Cost of sales                                                                                  (14,303)        (14,359)
                                                                                             __________      __________
Gross profit                                                                                     10,574          10,075
Other operating expenses (net)                                                                 (10,047)        (11,180)
                                                                                             __________      __________

Operating profit/(loss) before exceptional costs                                                    784           (564)
Exceptional costs:

    Exceptional bad debt                                                                          (257)
    Permanent diminution in asset value                                                               -           (200)
    Launch costs                                                                                      -           (341)

Operating profit/(loss)                                                                             527         (1,105)
Exceptional cost of termination of operation                                                          -           (662)
                                                                                             __________      __________
Profit/(loss) on ordinary activities before interest                                                527         (1,767)

Interest payable and similar charges                                                              (212)           (214)
                                                                                             __________      __________
Profit/(loss) on ordinary activities before taxation                                                315         (1,981)
Taxation                                                                                            168               1


                                                                                             __________      __________
Profit/(loss) for the financial year                                                                483         (1,980)
                                                                                             __________      __________

Earnings/(loss) per share                                        3

Basic earnings/(loss) per share                                                                    0.74         (3.04p)
                                                                                             __________      __________
Adjusted basic earnings/(loss) per share                                                          1.14p         (1.19p)
                                                                                             __________      __________
Diluted earnings/(loss) per share                                                                 0.70p         (3.04p)
                                                                                             __________      __________
Adjusted diluted earnings/(loss) per share                                                        1.08p         (1.19p)
                                                                                             __________      __________



All amounts relate to continuing activities.






Group balance sheet
As at 3 August 2002
                                                                                           Unaudited            Audited
                                                                                                2002               2001
                                                                                               £'000              £'000
Fixed assets
Intangible assets                                                                                 47                 50
Tangible assets                                                                                1,687              2,356
                                                                                          __________         __________
                                                                                               1,734              2,406
Current assets
Stocks                                                                                         3,426              4,347
Debtors                                                                                        3,688              4,037
Cash at bank and in hand                                                                           4                  7
                                                                                          __________         __________
                                                                                               7,118              8,391
Creditors: amounts falling due within one year                                               (4,854)            (6,467)
                                                                                          __________         __________
Net current assets                                                                             2,264              1,924
                                                                                          __________         __________
Total assets less current liabilities                                                          3,998              4,330
Creditors: amounts falling due after more than one year                                        (100)              (911)
                                                                                          __________         __________
Net assets                                                                                     3,898              3,419
                                                                                          __________         __________
Capital and reserves
Called up share capital                                                                          657                655
Share premium account                                                                          4,322              4,322
Other reserves                                                                                    89                 89
Profit and loss account                                                                      (1,170)            (1,647)
                                                                                           _________          _________
Shareholders' funds - all equity                                                               3,898              3,419
                                                                                          __________         __________



Group cash flow statement
For the year ended 3 August 2002
                                                                         Notes                Unaudited          Audited
                                                                                                   2002             2001
                                                                                                  £'000            £'000
Net cash inflow/(outflow) from operating activities                    4                          1,677            (670)
Returns on investments and servicing of finance                                                   (212)            (217)
Taxation                                                                                              -             (21)
Capital expenditure and financial investment                                                      (184)          (1,346)
                                                                                             __________       __________
Net cash inflow/(outflow)  before financing                                                       1,281          (2,254)
Financing                                                                                       (1,029)              312
                                                                                             __________       __________
Increase/(decrease) in cash in the year                                5                            252          (1,942)
                                                                                             __________       __________




Notes:

1      Basis of preparation

This summary financial information comprises that of Actif Group plc and its UK
and overseas subsidiaries for the year ended 3 August 2002.  The results have
been prepared using accounting policies consistent with those presented in the
2001 financial statements, with the exception of the calculation of deferred
taxation, which has now been calculated in accordance with FRS19.  The
preliminary announcement, which does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985, is an extract from the
Group statutory accounts for the year ended 3 August 2002, which will be
delivered to the Registrar of Companies in due course.  The auditors have not
yet reported on those accounts.  The results for the year ended 31 July 2001
have been extracted from the statutory accounts for that period, which have been
delivered to the Registrar of Companies and on which the auditors gave an
unqualified report.

2    Segment information

The turnover and profit before taxation are attributable to the Group's
principal activity, being the design, contracted manufacture, wholesale and
retail of high quality fashion clothing.

a)   Analysis of turnover by destination:
                                                                                              Unaudited          Audited
                                                                                                   2002             2001
                                                                                                  £'000            £'000

United Kingdom                                                                                   22,504           21,463
Overseas  -  European community                                                                   1,489            1,991
Overseas  -  Non European community                                                                 884              980
                                                                                             __________       __________
                                                                                                 24,877           24,434
                                                                                             __________       __________






b)  Classes of business

Year ended 3 August 2002                            Third party       Wholesale          Retail           Group
                                                       sourcing
                                                          £'000           £'000           £'000           £'000

Turnover                                                  2,335           7,519          15,023          24,877
Cost of sales                                           (2,166)         (5,671)         (6,466)        (14,303)
                                                     __________      __________      __________      __________
Gross profit                                                169           1,848           8,557          10,574
Common costs                                         __________      __________      __________         (9,809)
                                                                                                     __________
Operating profit                                                                                            765
Exceptional costs                                                                                         (257)
Net interest payable                                                                                      (193)
                                                                                                     __________
Profit before taxation                                                                                      315
                                                                                                     __________


The exceptional costs of £257,000 relate to amounts owed by The Designer Room
Ltd. when it went into administration on 12 June 2002



Year ended 31 July 2001                                   Third party        Wholesale           Retail            Group
                                                             sourcing
                                                                £'000            £'000            £'000            £'000

Turnover                                                        2,401            7,900           14,133           24,434
Cost of sales                                                 (2,223)          (5,549)          (6,587)         (14,359)
                                                           __________       __________       __________       __________
Gross profit                                                      178            2,351            7,546           10,075
Common costs                                               __________       __________       __________         (10,638)
                                                                                                              __________
Operating profit                                                                                                   (563)
Exceptional costs                                                                                                (1,204)
Net interest payable                                                                                               (214)
                                                                                                              __________
Loss before taxation                                                                                             (1,981)
                                                                                                              __________


The exceptional costs of £1,204,000 relate to launch costs, the termination of
the Joe Boxer operation and the permanent impairment loss on a leasehold
property.



3    Earnings/(loss) per ordinary share

The calculations of earnings/(loss) per share is based on the earnings/(loss)
for the financial period attributable to equity shareholders and the weighted
average number of ordinary shares as follows:
                                                                                                 2002               2001

Weighted average number of shares:                                                               Number           Number
For basic earnings per share                                                                 65,194,434       65,144,571
                                                                                             __________       __________
For diluted earnings per share                                                               68,809,587       68,829,858
                                                                                             __________       __________



Adjusted earnings/(loss) per share has been calculated after excluding the
impact of exceptional items after taxation and the amortisation of goodwill.
This has been disclosed to provide shareholders with a better indication of the
underlying performance of the Group.


                                                               Basic/diluted                       Adjusted
                                                                 2002             2001             2002             2001
                                                                £'000            £'000            £'000            £'000

Profit/(loss) for the financial year                              315          (1,980)              315          (1,980)
Exceptional costs                                                   -                -              257            1,203
Less notional taxation                                            168                -              168                -
Amortisation of goodwill                                            -                -                3                3
                                                           __________       __________       __________       __________
                                                                  483          (1,980)              743            (774)
                                                           __________       __________       __________       __________



4    Reconciliation of operating profit to operating cash flows

                                                                                              Unaudited          Audited
                                                                                                   2002             2001
                                                                                                  £'000            £'000
Operating profit/(loss)                                                                             527          (1,105)
Exceptional cost of termination of operation                                                          -            (662)
Depreciation charges                                                                                855              881
Amortisation of goodwill and licences                                                                 3                9
(Profit)/loss on disposal of fixed assets                                                           (2)               26
Impairment loss                                                                                       -              415
Decrease/(increase) in stock                                                                        921             (46)
Decrease/(increase) in debtors                                                                      517          (1,755)
(Decrease)/increase in creditors                                                                (1,138)            1,567
Foreign exchange loss relating to non-operating activity                                            (6)                -
                                                                                             __________       __________
Net cash inflow/(outflow) from operating activities                                               1,677            (670)
                                                                                             __________       __________




5    Reconciliation of net cash flow to net debt

                                                                                             Unaudited          Audited
                                                                                                  2002             2001
                                                                                                 £'000            £'000
Increase/(decrease) in cash in the year                                                            252          (1,942)
Cash outflow from decrease in debt and lease financing                                           1,031              490
                                                                                            __________       __________
Change in net debt resulting from cash flows                                                     1,283          (1,452)
New secured loans                                                                                    -            (820)
New finance leases                                                                                   -            (455)
                                                                                            __________       __________
Movement in net debt in year                                                                     1,283          (2,727)
Net debt at 1 August 2001                                                                      (3,097)            (370)
                                                                                            __________       __________
Net debt at 3 August  2002                                                                     (1,814)          (3,097)
                                                                                            __________       __________



6     Annual General Meeting

The Annual General Meeting will be held at 20 Little Portland Street, London W1W
8AA on 17 December 2002 at 12 noon.


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