Final Results

Associated British Engineering PLC
20 June 2000


ASSOCIATED BRITISH ENGINEERING PLC

PRELIMINARY ANNOUNCEMENT

 
The group made a pre-tax loss of £3,335,000, of which a loss of £209,000 was
in respect of the continuing operations. This compares with a Group profit of
£432,000 last year. 
 
These results include losses on discontinued operations amounting to
£3,126,000 which includes £1,120,000 of goodwill charged to the profit and
loss account and written back to shareholders' funds. These losses have
arisen as a result of the implementation of the plan set out in the circular
dated 5th November 1999 to shareholders for the sale of the Middle East
operations and the subsequent closure of the catering equipment operations. 
 
The shareholders approved the sale of the Middle East operations at the
Extraordinary General Meeting of the Company on 12 November 1999 and the sale
was completed on 17 January 2000. The Middle East operations were sold in
excess of net asset value and, after deducting associated costs, there was a
small loss of £117,000. The cash inflow amounting to £6,507,000 from the
disposal allowed the Group to pay off substantially all its bank borrowings
leaving it with positive cash balances of £1.2 million at the year-end. 
 
On 8 February 2000, following a review of trading in the catering equipment
operations and news of the loss of a major contract, the Board resolved to
commit no further financial support and appointed administrative receivers.
This has resulted in an exceptional loss of £1,618,000 which includes
£1,120,000 of goodwill previously eliminated against reserves but now charged
to the profit and loss account in accordance with FRS 10. 
 
This year has seen substantial changes to the Board. Mr R A Pearce-Gould was
appointed as a non-executive director on 13 March 2000 and Mr D A H Brown was
appointed as a non-executive director on 22 March 2000. I am very pleased to
welcome them both to the Board. 
 
Following the disposal of the Group's Middle East operations and the closure
of the catering operations, the scale of the Group's continuing operations
have been insufficient to support the costs of a Group Chief Executive and
Managing Director. The Board has therefore negotiated a termination agreement
with the Chief Executive, Mr M J Barry and he resigned from the Board with
effect from 31 May 2000. Full provision has been made for these costs within
these accounts. Mr P I Janardanan, Managing Director of the Middle East
operations, also resigned as a director of the company on 31 May 2000. 
 
I am now glad to report that despite the slow start to the year, British
Polar Engines returned to profitability in the second half of the year under
review. A review of the business will be set out in more detail in the
Group's annual report. 
 
The plan set out in the circular dated 5 November 1999 to shareholders is
well on the way to completion and the Group is in a net cash position. The
Board is considering a number of proposals for the future direction of the
Company and will communicate further with shareholders as soon as firm plans
have been formulated. 
 
J H Davies 
Chairman 
20 June 2000 


Profit and Loss Account for the year ended 31 March 2000 

                                                                              
                                                              2000       1999 
                                                             £000s      £000s 
  Turnover                                                  3,363      3,695  
  - Continuing operations                                                     
  - Discontinued operations                                20,027     33,596  
                                                           23,390     37,291  
  Operating (loss)/profit                                    (334)      (229) 
  - Continuing operations                                                     
  - Discontinued operations                                 (713)      1,475  
                                                           (1,047)     1,246  
  Exceptional loss on the sale of the Middle East            (117)      -     
  operations                                                                  
  Loss on discontinued catering equipment operations                          
  Exceptional costs                                          (498)      -     
  Goodwill previously eliminated against reserves          (1,120)      -     
                                                           (1,618)      -     
  (Loss)/profit on ordinary activities before finance                         
  costs                                                                       
  - Continuing operations                                    (334)      (229) 
  - Discontinued operations                                (2,448)     1,475  
                                                           (2,782)     1,246  
  Net finance income/(costs)                                  125        125  
  - Continuing operations                                                     
  - Discontinued operations                                  (678)      (939) 
                                                             (553)      (814) 
  (Loss)/profit on ordinary activities before taxation                        
  - Continuing operations                                    (209)      (104) 
  - Discontinued operations                                (3,126)       536  
                                                           (3,335)       432  
  Taxation                                                   -           (10) 
  (Loss)/profit on ordinary activities after taxation      (3,335)       422  
  Equity minority interest                                    (23)       (30) 
  (Loss)/profit for the financial year                     (3,358)       392  
  Dividends in respect of non-equity shares                   (51)       (40) 
  Retained (loss)/profit                                   (3,409)       352  
                                                       
                          Earnings per ordinary share  
                                                                             
    - Continuing operations                                   (20)p    (10)p 
    - Basic                                                  (260)p      27p 
    Dividends per share paid and proposed:                                   
    - Cumulative preference shares of £1 each                  7.0p     4.9p 
    - Cumulative redeemable preference shares of £1 each       8.0p     8.0p 
    - Ordinary shares of £2 each                                  -        - 
 
 

                                                                           
    Group balance sheet as at 31 March 2000                                
                                                           2000       1999 
                                                          £000s      £000s 
    FIXED ASSETS                                                           
    Tangible assets                                        724      3,605  
    CURRENT ASSETS                                                         
    Stock                                                1,389      6,582  
    Properties held for sale                               921       -     
    Debtors - amounts falling due after one year          -           588  
    Debtors - amounts falling due within one year        1,685     14,345  
    Cash at bank and in hand                             1,203        318  
                                                         5,198     21,833  
    Creditors - amounts falling due within one year      1,721     17,946  
    Net current assets                                   3,477      3,887  
    Total assets less current liabilities                4,201      7,492  
    Creditors - amounts falling due after one year          38        702  
    Provisions for liabilities and charges                  37         42  
    Net assets                                           4,126      6,748  
    CAPITAL AND RESERVES                                                   
    Called up share capital                              3,339      3,339  
    Share premium account                                5,038      5,038  
    Revaluation reserve                                   -           370  
    Other reserves                                          11         36  
    Profit and loss account                             (4,262)    (2,074) 
    Equity shareholders' funds                           3,414      5,997  
    Non-equity shareholders' funds                         712        712  

Statement of total recognised gains and losses 
 
                                                               2000      1999 
                                                              £000s     £000s 
  (Loss)/profit for the financial year                      (3,358)      392  
  Foreign exchange adjustment                                  101       121  
  Unrealised loss on the revaluation of the fixed asset       (370)      -    
  investment properties                                                       
  Total recognised gains and losses for the year            (3,627)      513
  
  The foreign exchange adjustment represents exchange gains during the year   
  relating to the restatement of the balance sheet and results of Danway,     
  trading in the United Arab Emirates, using the exchange rate at the date of 
  sale (1999 using the exchange rate at 31 March 1999).                       

  Reconciliation of movements in shareholders' funds 

  Total recognised gains and losses for the year - as       (3,627)      513  
  above                                                                       
  Goodwill previously eliminated against reserves            1,120       -    
  Dividends paid and proposed                                  (51)      (40) 
  Other reserves disposed of                                   (25)      -    
  Net (decrease)/increase in shareholders' fund             (2,583)      473  
  Shareholders funds at 1st April 1999                       6,709     6,236  
  Shareholders funds at 31st March 2000                      4,126     6,709  

                                                               2000      1999 
                                                              £000s     £000s 
  (Loss)/profit for the financial year                      (3,358)      392  
  Foreign exchange adjustment                                  101       121  
  Unrealised loss on the revaluation of the fixed asset       (370)      -    
  investment properties                                                       
  Total recognised gains and losses for the year            (3,627)      513  

  The foreign exchange adjustment represents exchange gains during the year   
  relating to the restatement of the balance sheet and results of Danway,     
  trading in the United Arab Emirates, using the exchange rate at the date of 
  sale (1999 using the exchange rate at 31 March 1999).                       
 
Group cash flow statement for the year ended 31st March 2000 
 

                                                                              
                                                               2000      1999 
                                                              £000s     £000s 
  OPERATING ACTIVITIES                                                        
  Cash flow from operating activities                         (498)    2,158  

  RETURNS ON INVESTMENTS AND SERVICING OF FINANCE                             
  Finance income received                                      191       207  
  Finance costs paid                                          (702)     (982) 
  Finance cost element of finance lease rental payments        (42)      (39) 
  Preference dividends paid                                    (51)      (40) 
  Net cash flow from returns on investments and servicing     (604)     (854) 
  of finance                                                                  

  TAXATION                                                                    
  UK Taxation paid                                              (5)      (10) 

  CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT                                
  Purchase of tangible fixed assets                           (213)     (847) 
  Net proceeds on sale of tangible fixed assets                  8         1  
  Net cash flow from capital expenditure and financial        (205)     (846) 
  investment                                                                  

  DISPOSALS                                                                   
  Sale of the Middle East operations and                                      
  repayment of intercompany debt                             6,507          - 
  Discontinued catering equipment operations                    77          - 
  Net cash flow from disposals                               6,584          - 
  Cash inflow before financing                               5,272       448  

  FINANCING                                                                   
  Decrease in debt                                            (384)     (185) 
  Capital element of finance lease repayments                 (110)     (142) 
                                                              (494)     (327) 
  Increase in cash in the year                               4,778       121  
 
 

                                                                              
  Analysis of turnover, (loss)/profit before taxation and net                 
  assets                                                                      
                                              (Loss)/profit                   
                             Turnover        before taxation      Net assets  

                              2000    1999       2000   1999  2000     1999 
                                                                              
                              £000s   £000s      £000s   £000s  £000s   £000s 
                                               
British Polar                                                  
Engines including                                              
ABE Diesels                  3,363    3,695      53     136   2,007    2,093  

Common 
expenses/                                                      
net assets                       -       -     (387)   (365)  2,119    3,243  

Continuing                   3,363    3,695    (334)   (229)  4,126    5,336  
operations              

Middle East                 12,844   22,722     549   1,687      -     5,604  
operations             

Catering                     7,183   10,874    (610)   (146)    -     (4,192)
equipment                               

Common                           -       -     (652)   (66)     -       -    
expenses                                                       

Discontinued                20,027   33,596    (713) 1,475      -     1,412  
operations          

Turnover/net                23,390   37,291                  4,126    6,748  
assets                

Operating                                    (1,047) 1,246
(loss)/profit                                      
                                                                   
Exceptional                                                    
items:                                                         
- Loss on the sale of the                      (117)    -                  
Middle East operations                                         

- Loss on discontinued                       (1,618)    -                  
catering equipment                                             
operations                                                     

Net finance                                    (553)  (814)
costs                                            
                                                                              
(Loss)/profit                                (3,335)   432                
before taxation                                                       
 
Notes 
 
 
1.  The Group's full statutory accounts for the year ended 31st March 2000
have not been reported upon by the Auditors nor delivered to the Registrar of
Companies. The 1999 figures are audited. The Auditors have agreed to the
release of this statement.

2.  The comparative figures for the year ended 31 March 1999 are abridged
from the accounts for that year and do not constitute full accounts within
the meaning of Section 240 of the Companies Act 1985 (as amended). Statutory
accounts for that period, on which the Auditors gave an unqualified opinion,
have been delivered to the Registrar of Companies.

 
The board does not recommend a net dividend per ordinary share for the year
(1999 Nil). 
 
J H Davies                                                
Chairman
78 Chapel Street 
Thatcham 
Berkshire
RG18 4QN 
 
20 June 2000                            
 
Enquiries:  
Mrs K M Hill (Finance Director) 
Tel: [phone]