Interim Results - Part 2

Berry Birch & Noble PLC
10 December 2001

PART 2


Notes to the interim results for the half year ended 31 July 2001

1. Basis of Accounting

The interim financial information has been prepared on the basis of the
accounting policies set out in the Group's statutory accounts for the year
ended 31 January 2001, except, that the Group has now adopted FRS 19: Deferred
Taxation for the first time. The adoption of this standard does not affect the
figures reported during the previous year.

2. Capital Adequacy

The interim information has been prepared on the going concern basis. In the
last four completed financial years a total provision of £5.8 million has been
made to cover the costs associated with the Pensions Review. A further £
444,000 has been provided for in the half year ended 31 July 2001. This has
resulted in the Group having net liabilities of £1,656,000 at 31 July 2001.
This has also resulted in the main trading subsidiary, Berry Birch & Noble FS
failing to meet the Capital Adequacy requirements of its Regulator. On the
basis of these results there was a shortfall in the requirement amounting to
approximately £3.7 million. The Company has been working closely with the
Regulator in order to arrive at proposals to address the shortfall.

As announced earlier today the boards of Berry Birch & Noble and Berkeley have
agreed the terms of a share offer, to be made by Brewin Dolphin Securities
Limited on behalf of Berry Birch & Noble plc, to acquire the entire issued and
to be issued ordinary share capital of Berkeley. The Offer is conditional,
inter alia, on Berkeley raising £10 million of new funds (before expenses) and
on Berry Birch & Noble shareholder's approval. On completion of the
Acquisition the Directors believe that sufficient funds will be available to
address the Capital Adequacy shortfall in the subsidiary and ensure the
Group's ability to continue trading.

Should the Acquisition not proceed the Directors believe that the Regulator's
Investment Firms Division will require realistic alternative proposals to
address the Capital Adequacy shortfall in Berry Birch & Noble FS within a
short timescale. If such proposals are not forthcoming then the Regulator may
ask for a managed wind down of the Berry Birch & Noble FS business.

If access to additional working capital is not secured via the Acquisition, an
immediate capital injection will be required to recapitalise the Group.

3. Segmental information
                                       Unaudited      Unaudited         Audited
                                       half year      half year            year
                                           ended          ended           ended
                                         31 July        31 July      31 January
                                            2001           2000            2001
                                           £'000          £'000           £'000
Turnover
Financial services                         4,515          4,345           8,271
Insurance broking                          1,355          1,189           2,528

                                           5,870          5,534          10,799

(Loss)/profit before taxation
Financial services                        (561 )            265        (1,945 )
Insurance broking                          (10 )            137               8

                                          (571 )            402        (1,937 )


4. Taxation

The taxation charge for the half year is calculated by applying estimated
rates, based on the anticipated rate for the full year, and is arrived at
after taking into account prior year tax losses and after writing back advance
corporation tax previously written off.

5. (Loss)/earnings per share

The calculation of the basic loss per share of (8.0p) (2000 earnings: 5.8p) is
based on a loss after taxation of £571,000 (2000 profit: £381,000) divided by
the weighted average of 7,137,836 (2000: 6,525,221) shares in issue during the
period. The diluted loss per share of (8.0p) (2000 earnings: 5.8p) is based on
the same loss after taxation of £571,000 (2000 profit: 381,000) divided by the
weighted average of 7,137,836 (2000: 6,525,221) shares.

The calculation of the basic loss per share before exceptional items of (8.8p)
(2000 earnings: 5.8p) is based on a loss before exceptional items but after
taxation of £629,000 (2000 earnings: £381,000) divided by the weighted average
number of shares in issue during the period of 7,137,836 (2000: 6,530,478)
shares.

6. Reconciliation of operating (loss)/profit to net cash outflow from
operating activities
                                                 Unaudited Unaudited    Audited
                                                 half year half year       year
                                                     ended     ended      ended
                                                   31 July   31 July 31 January
                                                      2001      2000       2001
                                                     £'000     £'000      £'000
Operating (loss)/profit before exceptional items    (626 )       386     (334 )
Exceptional items
- Pensions Review payments made net of              (766 )    (738 )   (1,085 )
recoveries
- Commission commutation                               502        --         --
Amortisation of goodwill                                27        26         54
Impairment provision for goodwill                       --        --         40
Depreciation charges                                   118       100        225
Loss on sale of tangible fixed assets                   --         3         --
Decrease/(increase) in debtors                         359     (49 )     (137 )
(Decrease)/increase in creditors                    (361 )       269      1,017

Net cash outflow from operating activities          (747 )      (3 )     (220 )


7. Analysis of net debt
                                                     At                      At
                                             1 February       Cash      31 July
                                                   2001       flow         2001
                                                  £'000      £'000        £'000
Cash at bank                                        780         84          864
Overdrafts                                        (12 )     (166 )       (178 )

Cash                                                768      (82 )          686

Debt due after one year                          (645 )         32       (613 )
Debt due within one year                         (810 )         --       (810 )

Financing (excluding share capital)            (1,455 )         32     (1,423 )

Net debt                                         (687 )      (50 )       (737 )


8. Pensions Review

After consideration of payments made since 31 January 2001 and further work
carried out on outstanding cases the Directors have decided to charge an extra
£444,000 to the profit and loss account for the half year ended 31 July 2001.

In line with FSA guidelines issued in May 2000, the directors of Berry Birch &
Noble FS have initiated a review of all eligible FSAVC business. To date no
redress has been paid or has become due. As Berry Birch & Noble FS's review
population is small in number, the Directors believe any potential redress
liability will not be material and therefore no provision has been made in
these financial statements.

Whilst every effort has been taken to accurately quantify and provide for all
potential future liabilities arising from the Pensions Review, the actual
liabilities may differ as more information becomes available.

9. Staff Pension Scheme

Berry Birch & Noble currently operates a defined benefit, occupational pension
scheme to provide retirement and death benefits for its employees (the ''BBN
Staff Pension Fund''). The last completed actuarial valuation of the BBN Staff
Pension Fund was carried out as at 31 January 1998 and disclosed that the
aggregate market value of the BBN Staff Pension Fund assets was £3,708,000 and
that the actuarial value of these assets represented 115 per cent. of the
benefits which had accrued to members, after allowing for increases in
salaries.

A valuation of the BBN Staff Pension Fund as at 31 January 2001 is currently
being prepared. The preliminary view from Berry Birch & Noble's actuaries
indicates that there is a deficit of £118,000 as at that date. The Directors
believe that in view of market conditions since 31 January 2001, the funding
position is likely to have deteriorated significantly.

10. General

The interim report was approved by the Directors on 7 December 2001.

The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is extracted from
the statutory accounts for the financial year ended 31 January 2001. Those
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.

This report has been sent to the Shareholders and will be made available to
the public, upon request, at the registered office of Berry Birch & Noble plc,
Eaton House, 1 Eaton Road, Coventry, CV1 2FJ.

Independent review report to Berry Birch & Noble

Introduction

We have been instructed by the Company to review the financial information for
the half year ended 31 July 2001 above. We have read the other information
contained in the interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the interim report in accordance with the
Listing Rules of the FSA which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999
/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data and based thereon, assessing whether the accounting policies
and presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly, we
do not express an audit opinion on the financial information.

Fundamental uncertainty

In arriving at our review conclusions, we have considered the adequacy of
disclosures made in the financial information concerning the adverse effects
of the Pensions Review on the Capital Adequacy of the Group and its major
trading subsidiary, together with the proposals to provide additional
necessary funds to enable the Group to continue as a going concern. Details of
the circumstances relating to this fundamental uncertainty are described in
note 2.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the half year
ended 31 July 2001.

BDO Stoy Hayward

Chartered Accountants

7 December 2001

                                 DEFINITIONS

The following definitions apply throughout this press release unless the
context requires otherwise:

''Acquisition'' or ''Reverse Takeover'' the proposed acquisition or reverse
takeover by Berry Birch & Noble, by way of conditional share offer, of the
entire issued and to be issued ordinary share capital of Berkeley, pursuant to
the terms and conditions of the Offer Document, further details of which are
set out in this announcement

''Act'' the Companies Act 1985 (as amended)

''Admission'' first admission of the Consideration Shares to the Official List
becoming effective in accordance with the Listing Rules and to trading on the
main market of the London Stock Exchange in accordance with the Admission and
Disclosure Standards

''Admission and Disclosure Standards'' the Admission and Disclosure Standards
of the London Stock Exchange plc

''Approved Plan'' the executive share option plan of the Company intended to
be approved by the Inland Revenue under Schedule 9 of the Income and
Corporation Taxes Act 1988 proposed to be adopted by the Company at the EGM

''Articles'' the articles of association of the Company at the date of this
announcement

''Berkeley'' Berkeley Financial Services Group plc (registered number 4334082)
of Eaton House, 1 Eaton Road, Coventry CV1 2FJ

''Berkeley AM'' Berkeley Asset Management Limited, a wholly owned subsidiary
of Berkeley

''Berkeley Directors'' Messrs Lockyer, Butcher and Ingledew

''Berkeley Fundraising'' the raising of £10,000,000 for Berkeley (before
expenses) by the allotment and issue of 40,000,000 new Berkeley Shares on the
terms set out in the Berkeley Prospectus

''Berkeley Group'' Berkeley and the Berkeley Subsidiaries

''Berkeley IA'' Berkeley Independent Advisers Limited, a wholly owned
subsidiary of Berkeley (which is regulated by the FSA)

''Berkeley Options'' options granted by Berkeley to various individuals
further details of which are set out in paragraph 10 of Part VII of the
Listing Particulars

''Berkeley Prospectus'' the prospectus dated 7 December 2001 despatched by
Berkeley to potential investors in respect of, inter alia, the Berkeley
Fundraising

''Berkeley Subsidiaries'' Berkeley AM, Berkeley IA and Berkeley T&T

''Berkeley Shares'' the fully paid ordinary shares of 20 pence each in the
capital of Berkeley which are unconditionally allotted or issued as at the
date of the Offer and any further such shares which are unconditionally
allotted or issued and fully paid while the Offer remains open for acceptance
(or, subject to the rules of the City Code, such earlier date as Berry Birch &
Noble may decide)

''Berkeley Preference Shares'' the fully paid 9% cumulative preference shares
of 10 pence each in the capital of Berkeley and which as at the date of the
Offer are held by Mr Lockyer

''Berkeley Shareholders'' holders of Berkeley Shares and the Placees

''Berkeley T&T'' Berkeley Training & Technology Limited, a wholly owned
subsidiary of Berkeley

''Berry Birch & Noble FS'' Berry Birch & Noble Financial Services Limited, a
wholly owned subsidiary of Berry Birch & Noble (which is regulated by the FSA)

''Berry Birch & Noble IB'' Berry Birch & Noble (Insurance Brokers) Limited, a
wholly owned subsidiary of Berry Birch & Noble

''Berry Birch & Noble M'' Berry Birch & Noble Management Limited, a wholly
owned subsidiary of Berry Birch & Noble

''Berry Birch & Noble Shareholders'' holders of Existing Ordinary Shares

''Berry Birch & Noble T'' Berry Birch & Noble Trustees Limited, a wholly owned
subsidiary of Berry Birch & Noble

''Brewin Dolphin Securities'' Brewin Dolphin Securities Limited (which is
regulated by the FSA)

''Capital Adequacy'' adequate financial resources, as required pursuant to the
provisions of section 41 and schedule 6 of FSMA and (where the context
requires) prior to the commencement of such provisions, as required pursuant
to the Financial Services Act 1986

''Change of Name'' the proposed change of name of Berry Birch & Noble to
Berkeley Berry Birch plc as described in this announcement

''Circular'' or

''Listing Particulars'' the document (also comprising listing particulars as
required by the Listing Rules) dated 7 December 2001 and sent to Berry Birch &
Noble Shareholders (other than certain avesco shareholders)

''City Code'' the City Code on Takeovers and Mergers

''Clerical Medical'' Clerical Medical Investment Managers Limited

''Company'' or

''Berry Birch & Noble'' Berry Birch & Noble plc (registered number 788306) of
Eaton House, 1 Eaton Road, Coventry CV1 2FJ

''Consideration Shares'' up to 53,055,556 new Ordinary Shares to be issued by
the Company pursuant to the Offer

''Concert Party'' or

''Concert Parties'' those parties listed at paragraph 8.1.2 of Part VII of the
Listing Particulars and who are restricted in their subsequent acquisition of
Ordinary Shares as set out in paragraph 15 of Part I of the Listing
Particulars

''Directors'' or ''Board'' the directors of Berry Birch & Noble

''EGM'' or ''Extraordinary General Meeting'' the extraordinary general meeting
of the Company to be convened in accordance with the Notice of EGM

''EMI Plan'' an enterprise management incentive plan of the Company proposed
to be adopted by the Company at the EGM

''Enlarged Group'' the Company and its subsidiaries as enlarged by the
Acquisition

''Enlarged Share Capital'' the Existing Ordinary Shares and the Consideration
Shares

''Executive Plan'' the unapproved executive share option plan of the Company
proposed to be established by the Company at the EGM

''Existing Ordinary Shares'' or ''Existing Shares'' the ordinary shares of 10p
each in the share capital of Berry Birch & Noble at the date of this document

''FSMA'' Financial Services and Markets Act 2000

''Form of Acceptance'' the form of acceptance to be used by Berkeley
Shareholders in respect of the Offer

''Form of Proxy'' the form of proxy for use by the Berry Birch & Noble
Shareholders in connection with the appointment of a proxy to attend and vote
in their place at the EGM

''Friends Provident'' Friends Provident Life and Pensions Limited

''FSA'' or ''Regulator'' the Financial Services Authority

''Gift of Shares'' the gift of 10,300,000 Berkeley Shares by Mr Lockyer to the
management and key individuals in the Berkeley Group and certain individuals,
further details of which are set out in paragraph 9 of Part VII of the Listing
Particulars

''Group'' or ''Berry Birch & Noble Group'' the Company and the Subsidiary
Companies at the date of this document

''IFA'' independent financial adviser, a business authorised under FSMA,
either directly or as a member of a Network, to give independent advice and
conduct investment business and who is authorised to advise upon regulated
financial products of the Product Providers

''IFA Firm'' a firm, company, partnership or other entity which provides
independent financial advice to potential purchasers of financial services
products

''Independent Directors'' Sir John Jeremy Black, James Joseph Gaskin and David
John Birch

''Independent Shareholders'' Berry Birch & Noble Shareholders other than
members of the Concert Party

''Interim Results'' the unaudited interim results statement of the Group set
out in this announcement

''Listing Rules'' the Listing Rules of the UK Listing Authority

''Mr Lockyer'' Clifford Philip Lockyer, Director, being the majority
shareholder in Berkeley

''London Stock Exchange'' London Stock Exchange plc

''Member Firm'' or

''Appointed Representative'' an IFA Firm which is a member of a Network

''Network'' a company, directly regulated by the FSA, providing services to
member IFAs which include compliance, training and competency, commission
processing and technical and sales training. Member Firms are referred to as
Appointed Representatives and each IFA within a Member Firm is a Registered
Individual

''Network Member'' an IFA Firm which is a member of the Network

''New Options'' the new options proposed to be granted on completion of the
Acquisition to the holders of Berkeley Options

''Norwich Union'' Norwich Union Life and Pensions Limited

''Notice of EGM'' the notice to Berry Birch & Noble Shareholders of the EGM
contained in the Listing Particulars

''Offer'' the conditional share offer, further details of which are set out in
of this announcement to be made to all Berkeley Shareholders (other than
certain overseas shareholders) on the terms and subject to the conditions
contained in the Offer Document

''Offer Document'' the offer document to be dated 7 December 2001and to be
sent to all Berkeley Shareholders (other than certain overseas shareholders)
containing the Offer

''Official List'' the Official List of the UK Listing Authority

''Ordinary Shares'' ordinary shares of 10p each in the share capital of Berry
Birch & Noble from time to time

''Panel'' the Panel on Takeovers and Mergers

''Pensions Review'' the review instigated by the Securities and Investments
Board into the sale of pensions covering the period April 1988 to June 1994

''PIA'' the Personal Investment Authority

''Placees'' Norwich Union, Friends Provident, Clerical Medical, Scottish
Widows and Skandia, each of whom have undertaken to subscribe for Berkeley
Shares, inter alia, pursuant to the Berkeley Fundraising

''Product Provider'' financial institutions such as life assurers, banks and
insurance companies that supply the financial products (including regulated
financial products) marketed, sold and advised upon by direct sales forces,
tied agents and IFAs

''Registered Individuals'' an individual who is a 'registered individual'
within the meaning of the rules of the FSA (formerly the rules of the PIA)

''Regulations'' the Uncertificated Securities Regulations 1995 (SI 1995 No. 95
/3272)

''Related Party'' or

''Related Parties'' Messrs. Lockyer, Butcher, Ingledew and Herring

''Relationship Deed'' the deed dated 6 December 2001 between Mr Lockyer and
Berry Birch & Noble plc relating to the operation of the Enlarged Group

''Resolutions'' the resolutions to be proposed at the EGM as set out in the
Notice of EGM

''Scottish Widows'' Scottish Widows plc

''Share Option Schemes'' together the Approved Plan, the Executive Plan and
the EMI Plan

''Subsidiary Companies'' Berry Birch & Noble FS, Berry Birch & Noble T, Berry
Birch & Noble IB and Berry Birch & Noble M, being the trading subsidiaries of
Berry Birch & Noble

''UK Listing Authority'' or ''UKLA'' the FSA acting in its capacity as the
competent authority for the purposes of Part VI of FSMA, including where the
context so permits, any committee, employee, officer or servant to whom any
function of the UKLA may for the time being be delegated

''United Kingdom'' or ''UK'' the United Kingdom of Great Britain and Northern
Ireland

''United States'' or ''USA'' the United States of America, its territories and
possessions, any state of the United States of America and the District of
Columbia and all other areas subject to its jurisdiction

''Waiver'' the proposed waiver of the obligation on the Concert Party to make
a general offer under rule 9 of the City Code, to be granted by the Panel
conditionally on the approval of the Independent Shareholders by the passing
of Resolution 2 on the Notice of EGM at the Extraordinary General Meeting.