Final Results

Anglian Group PLC 6 June 2000 Contact: Eddie Boss, Chief Executive Robert Aitken, Finance Director Tel: 020 7831 3113 (6/6/00) ANGLIAN GROUP PLC 01603 787000 (thereafter) Tom Baldock FINANCIAL DYNAMICS Tel: 020 7831 3113 Anglian Group PLC Preliminary Results Anglian Group PLC, a leader in the UK home improvements market, announces its preliminary results for the 52 week period ended 1st April 2000. 52 weeks to 53 weeks to 1st April 2000 3rd April 1999 Turnover £259.7m £253.3m Operating profit £26.8m £27.8m Profit before tax £27.2m £30.5m Tax charge 30% 32% Earnings per share 26.0p 23.6p Dividend per share 12.1p 11.0p - Operating profits affected by supply difficulties last year and by one week less trading, but benefited from £1.8m of insurance claims principally related to the supply disruption. - Living Design direct sales kitchen business generated useful contribution to profits and cash. - Profit before tax reflects reduction of £2.3m in interest income as a result of the £44m cash returned to shareholders in May 1999. - Group remains cash generative. Commenting on the results, Chief Executive Eddie Boss said: 'Markets continue to be very competitive and cost inflation is putting margins under pressure. However, the fundamental strengths of our business remain. We are driving for increased efficiency across all our activities to mitigate the margin pressures as far as possible'. ANGLIAN GROUP PLC Chairman's and Chief Executive's Statement and Review Overview Underlying profit on trading was in line with market expectations immediately following the trading statement on 2nd February, but final operating profits benefited from recoveries of £1.8m under insurance claims primarily related to the power supply interruption last August. With £44m of cash returned to shareholders in May 1999, profit before tax was inevitably affected by a significant drop in interest income, though earnings per share benefited from the improved capital structure. Cash generation for the year was better than expected and the group closed the year with £13.5m of cash. The supply and installation issues last year inevitably created a break in our three year record of 20% plus per annum earnings per share growth. Comparison with last year also suffered through having a 52 week rather than a 53 week trading period. Our aim remains to be the biggest and the best in each product and market we serve - gaining market leadership through premier brands and enhancing our reputation for customer value. We believe we are achieving this aim. We continue to drive for improved quality, productivity and innovation. We have launched completely new ranges of kitchens and windows products to enhance our competitive position as we enter the new millennium. Financial summary - Turnover up 3% at £260m (1999: £253m). - Operating profit down 4% to £26.8m (1999: £27.8m). This year's operating profit includes £1.8m of insurance recoveries. - Profit before taxation down 11% to £27.2m (1999: £30.5m). This reflects £2.3m less interest income as a result of the £44m cash returned to shareholders last year. - Earnings per share up 10% to 26.0 p per share (1999: 23.6 p). This benefited from the improved capital structure and the one off insurance recovery. - Operating cash generation continued to be positive with a net cash inflow of £14.5m. We recommend an increase in final dividend to 7.6p making a total of 12.1p (dividend per share up 10%). The dividend will be payable on 4th September 2000 to shareholders on the register at 4th August 2000. Business review Consumer home improvements Consumer home improvements turnover finished the year up 5% at £203m. Anglian Windows generated strong demand particularly in the first half year but was constrained by the production and installation difficulties, which we have since resolved. Living Design our specialist kitchen company expanded strongly as planned and made a significant contribution to the group earnings and cash. Commercial building products Commercial building products turnover finished the year down 4% at £57m. New house building turnover increased for the year overall despite the supply issues but we temporarily reduced our rate of tendering to the public sector refurbishment market in view of our production constraints. Manufacturing The issues with our major I.T. programme and an untimely power outage at our main factory site impacted severely on our integrated manufacturing process. As a result we were unable to meet the increased demand as planned. The production problems were overcome by November but with the pent up demand particularly in the south east we experienced a labour shortage for installation when returning to work after the millennium holiday period. We overcame these installation problems towards the end of the financial year and indeed have improved customer service with a greater specialist focus on product categories in consumer home improvements, with a new warehouse facility for the new house build market and with a return to full capacity for tendering public sector refurbishment. Outlook The trading environment for the coming year is expected to be challenging. Order intake for the first two months of the year was below last year's levels and, in addition, we are experiencing cost inflation, notably in PVCu, fuel and regional labour costs. Both our consumer and commercial markets remain competitive and early indications are that demand in our most significant consumer home improvements market for windows and doors could be slowing. Also there is a natural delay in our return to the required level of installation for new house building as order books reduced significantly during the year. Although we are now back to normal tendering activity for public sector refurbishment work, with demand seasonally weighted towards the second half of the year, it is still too early to judge the pace of recovery of demand in this sector. Our current demand for conservatories and kitchens remains positive. We are driving for increased efficiency across all of our activities with particular emphasis on our manufacturing to achieve cost, quality and service improvements and to mitigate competitive and inflationary margin pressure as far as possible. We remain strongly cash generative and, with last year's production associated problems now firmly behind us, look forward to re- establishing profitable growth in due course. We thank our employees and suppliers for their continued commitment to our company's success. ANGLIAN GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT for the period ended 1st April 2000 52 weeks 53 weeks to to Notes 1st April 3rd April 2000 1999 £000 £000 Continuing operations Turnover 259,712 253,263 Operating costs (net) (232,876) (225,446) Operating profit 26,836 27,817 Interest receivable and similar income 534 2,741 Interest payable and similar (156) (53) charges Profit on ordinary activities 27,214 30,505 before taxation Tax on profit on ordinary (8,232) (9,762) activities Profit on ordinary activities after taxation attributable to 18,982 20,743 equity shareholders Ordinary dividends paid and 2 (8,651) (8,484) proposed Retained profit for the period transferred to reserves 10,331 12,259 Pence Pence Earnings per ordinary share - 3 26.0 23.6 basic 3 25.8 23.4 - diluted All recognised gains and losses during the current and previous period are included in the consolidated profit and loss accounts above. There is no difference between reported profits and historical cost profits. ANGLIAN GROUP PLC BALANCE SHEETS At 1st April 2000 Group Company 1st 3rd 1st 3rd April April April April Notes 2000 1999 2000 1999 £000 £000 £000 £000 Fixed assets Tangible assets 31,279 29,501 - - Investments - - 147,127 183,684 31,279 29,501 147,127 183,684 Current assets Stocks 12,763 10,289 - - Debtors 28,248 26,947 12,659 14,561 Cash at bank and in 13,451 50,196 167 47,295 hand 54,462 87,432 12,826 61,856 Creditors - amounts falling due within one year (64,336) (63,079) (5,515) (12,596) Net current (liabilities)/assets (9,874) 24,353 7,311 49,260 Total assets less current liabilities 21,405 53,854 154,438 232,944 Creditors - amounts falling due after more than one year (607) (907) - - Provisions for liabilities and (8,655) (8,378) - - charges Net assets 12,143 44,569 154,438 232,944 Capital and reserves Called up share 4,454 4,399 4,454 4,399 capital Share premium account 28,193 56,614 28,193 56,614 Revaluation reserve - - 66,904 150,948 Profit and loss (20,504) (16,444) 54,887 20,983 account Shareholders' funds - equity interest 4 12,143 44,569 154,438 232,944 ANGLIAN GROUP PLC CONSOLIDATED CASH FLOW STATEMENT for the period ended 1st April 2000 52 weeks 53 weeks to 1st to 3rd April April Notes 2000 1999 £000 £000 Net cash flow from operating activities 5 33,275 36,827 Returns on investment and servicing of finance Interest received 534 2,741 Interest paid (156) (53) 378 2,688 Taxation (10,323) (7,428) Capital expenditure Purchase of tangible fixed assets (9,406) (9,188) Sale of tangible fixed assets 571 1,001 (8,835) (8,187) Equity dividends (8,024) (8,962) paid Net cash inflow before management of liquid resources and 6,471 14,938 financing Management of liquid resources 35,813 (16,313) Financing 6 (43,216) 172 Decrease in cash in the period (932) (1,203) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Decrease in cash in the period (932) (1,203) Cash outflow from decrease in finance leases 459 264 Cash (inflow)/outflow from (decrease)/increase in liquid (35,813) 16,313 resources Inception of finance leases (166) (385) Movement in net funds in the period (36,452) 14,989 Net funds at the start of the 48,889 33,900 period Net funds at the end of the period 12,437 48,889 ANGLIAN GROUP PLC NOTES TO THE FINANCIAL STATEMENTS for the period ended 1st April 2000 1. Basis of preparation The consolidated financial statements comprise the accounts of Anglian Group PLC and all of its subsidiary undertakings made up to 1st April 2000. Other than changes necessary to comply with new Financial Reporting Standards (FRS), accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements. 2. Dividend If approved at the annual general meeting, the final dividend of 7.6p (1999: 6.8p) will be paid on 4th September 2000 to shareholders on the register on 4th August 2000. 3. Earnings per share The calculation of earnings per ordinary share is based on earnings of £18,982,000 (1999: £20,743,000), and the weighted average number of ordinary shares in issue during the period of 73,078,540 (1999: 87,902,094). The calculation of diluted earnings per ordinary share is based on earnings of £18,982,000 (1999: £20,743,000) and an assumed number of ordinary shares of 73,618,559 (1999: 88,486,641) which is calculated after the assumed conversion of 2,351,965 (1999: 2,486,672) dilutative share options. No adjustment has been made to prior periods' earnings per share as a result of the special payment and share capital consolidation as this represented a repurchase of shares at fair value. 4. Reconciliations of shareholders' funds Group Company 2000 1999 2000 1999 £000 £000 £000 £000 Profit for the period 18,982 20,743 12,555 19,930 Dividends (8,651) (8,484) (8,651) (8,484) Retained profit for the period 10,331 12,259 3,904 11,446 Special payment to shareholders (43,987) - (43,987) - Cost charged against share premium (247) - (247) - Revaluation of investment in subsidiary - - (40,057) 150,948 Funding of employee share option trusts (404) - - - New shares issued 1,881 436 1,881 436 Net movement in shareholders' funds (32,426) 12,695 (78,506) 162,830 Opening equity shareholders' funds 44,569 31,874 232,944 70,114 Closing equity shareholders' funds 12,143 44,569 154,438 232,944 5. Reconciliation of net cash flow from operating activities 2000 1999 £000 £000 Operating profit on continuing 26,836 27,817 operations Depreciation 7,325 7,069 Profit on sale of fixed assets (102) (71) (Increase)/decrease in stocks (2,474) 741 Increase in debtors (1,337) (1,989) Increase in creditors and provisions 3,027 3,260 Net cash inflow from operating 33,275 36,827 activities 6. Financing 2000 1999 £000 £000 Issue of share capital 1,881 436 Special payment to shareholders (43,987) - Expenses paid in connection with share capital consolidation (247) - Funding of employee share option (404) - trusts Repayment of finance leases (459) (264) (43,216) 172 7. The financial information set out above does not constitute the company's statutory accounts for the periods ended 1st April 2000 or 3rd April 1999 but is derived from those accounts. Statutory accounts for 1999 have been delivered to the Registrar of Companies, and those for 2000 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. 8. The annual report and accounts will be posted to shareholders on 23rd June 2000.

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