Final Results

4Less Group plc (The)
14 July 2005

                                                                  14th July 2005


                              The 4Less Group plc

               Preliminary results for the year to 31 March 2005


Key points

     •    Gross profit increases 5% to £3.203 million (2004 : £2.905 million).

     •    Group returned to profitability in current year following closure of
          non-profitable businesses and a restructuring of the core business 
          operation and overhead.

     •    Gross turnover increases by 5% to £335.4 million (2004 : £319.2
          million).

     •    Group net assets at year end of £1.194 million (2004 : £0.4 million).

     •    Adequate cash resources to meet future trading requirements.


Eric Peacock, Non-executive Chairman said:


'The year under review saw the establishment of a sound operational base on
which to develop the successful activities of the business.  Having taken robust
steps to reorganise the activities and operations of the Group, the Group has
become profitable from the start of the current financial year'.


Contacts

Nigel Paul              Chief Executive Officer
The 4Less Group plc
Telephone:              020 7594 0515


Oliver Cairns
Corporate Synergy
Telephone:              020 7626 2244



CHAIRMAN'S STATEMENT


Introduction

I am pleased to report that we have now returned to profitability after the year
under review which has been a difficult period for the Group.  Following the
poor performance of the new ventures and activities of insurance and corporate
services, the Group conducted a full and detailed review of its activities
commencing in December 2004.  This review, which is now completed, resulted in
the Group refocusing its activities on the core operations of foreign currency,
the arrangement of overseas mortgages and broking insurance products for
overseas home owners.

As a result, the corporate services division was closed, and the underperforming
Car Finance 4Less was sold to Charles McLeod at the end of the year under
review.


Performance

Gross turnover for the Group for the year under review was £335.4 million
representing a 5 per cent. increase over the 2004 result.  This resulted in a
gross profit of £3.2 million for the year, representing a 10.3 per cent.
increase over the previous year.  Continuing operations produced gross profits
of £3.1 million.

The greatest effect of the review and the measures taken to return the Group to
profitability has been on the staffing and overhead structure of the business.
Administrative expenses of £0.4 million have been eliminated by the closure of
businesses, and overhead and staff reductions in the continuing businesses have
resulted from the streamlining of operations, and improved efficiencies.  The
new structure will not affect the Group's ability to achieve improved
performance across the continuing businesses.

The directors have not recommended the payment of a dividend.


The Board

During the year there have been a number of changes to the Board of Directors.
Nigel Paul, Finance Director, was appointed Chief Executive Officer in December
2004.  At the same time Ian Collins, Financial Controller, was appointed Finance
Director.  Charles McLeod, the founder of the business, has become a
non-executive director with effect from the end of the financial year.  Greg
Begley has left the Group.


People

Having undertaken a period of expansion of personnel, the reorganisation and
refocusing of the business on its core activities has resulted in a number of
redundancies across the Group.  This has been a difficult time for the staff,
but I remain impressed by the way they have dealt with the circumstances.


Outlook

The year under review saw the establishment of a sound operational base on which
to develop the successful activities of the business.  Having taken robust steps
to reorganise the activities and operations of the Group, the Group has become
profitable from the start of the current financial year.  We continue to improve
all aspects of the Group's activities and can now look forward to the future
with confidence.


Eric Peacock CMG DL
Chairman



CHIEF EXECUTIVE OFFICER'S REVIEW

Introduction

I am pleased to report the Group has returned to profitability for the first
three months of the current financial year, following a year which has been a
difficult one for the Group resulting in significant losses.  The core
businesses of foreign currency exchange and arranging overseas mortgages
continued to grow and generate increased gross profits for the year.  Following
our successful flotation on AIM in April 2004, the Group started the development
of new business areas with the attendant increases in our cost base.  These
businesses regrettably did not perform in line with expectations.  Furthermore,
the Group bore significant one off costs associated with the intended expansion
of all activities.  In December 2004, we reassessed the Group's core priorities
and implemented an overall restructuring to close non-profitable operations, and
streamline the administrative cost base of the core businesses in order to
return the Group to profitability.

The year also saw a complete review of the Group's anti-money laundering
procedures in conjunction with our specialist advisers, and the authorisation of
both Property Finance 4Less Limited and FLG Insurance Brokers Limited under the
new FSA regulations.

Following the release of our 6 months results in December 2004, I was appointed
Chief Executive Officer in order to co-ordinate the strategic review and
implement the turnaround strategies necessary to return the Group to
profitability.  The Group addressed the issues in the last quarter of the year
under review, closing non profitable businesses, making significant
redundancies, implementing new remuneration and commission structures, and
outsourcing certain administrative functions such as human resource and health
and safety management.


Trading Review

Continuing operations

Continuing operations produced a turnover of £335.2 million up from £318.9
million in 2004 representing a 5 per cent increase, and generated a gross profit
of £3.1 million up from £2.7 million in 2004 representing a 15 per cent.
increase.

The core foreign exchange business has achieved modest growth over the year.
Both this activity and the property finance business saw a marked decline in
activity in the last quarter of the year, following the slowing of the UK
property market at that time and the tragic events in the Indian Ocean on Boxing
Day.  This trend is now reversing in both businesses.  We continue to expand the
skills within the business and adapt the offering to suit the ever changing
market place.

Property Finance 4Less increased its turnover to £315,452 and generated a net
profit of £42,959.  The market continues to develop for the overseas mortgage
provider and we continue to develop relationships with a range of banks and
mortgage providers throughout Europe, America, South Africa, and Australia.

FLG Insurance Brokers has been refocused solely on the provision of retail
insurance products to meet the requirements of property ownership overseas.  To
enhance the development of FLG Insurance Brokers and to provide a comprehensive
range of insurance products to customers, we have recently entered into a joint
venture with Healthcare International Limited, a company specialising in
healthcare insurance products to the ex-patriot communities around the world,
and associated insurance products such as critical illness, mortgage protection
and travel insurance.

Interest receivable, a fundamental income source for the business, increased by
60 per cent. to £213,236 from £133,496.

Administrative costs in the continuing businesses amounted to £3,539,056.  The
Group had increased its support structures and was faced with a high level of
legal and consultancy fees during the year.  As part of the review and
reorganisation these costs have been significantly reduced, without affecting
the Group's ability to meet its forecasts for the forthcoming year.

Discontinued businesses

The discontinued businesses of Corporate Services and Car Finance 4Less produced
operating losses of £262,335.  The activities of Corporate Services have been
closed and Car Finance 4Less was sold to Charles McLeod, producing a profit on
disposal of £35,269.

During a period of reorganisation there is inevitable uncertainty amongst staff,
but the rapid execution of changes, and the undoubted skill, temerity and
diligence of all our staff, has let to the acceptance of difficult decisions.
The costs of the reorganisation of the businesses, which is now complete,
including the costs of redundancies and associated legal fees amounted to
£199,221.

The losses have resulted in a tax credit of £86,074 being received and losses
available to be set off against future profits have produced a further deferred
tax asset of £89,319.  In total the Group made post tax losses of £529,996.


The future

Having undertaken the re-organisation, the Group is now in a position to
continue to develop the core business activities, and pursue organic growth and
acquisition opportunities.  Our infrastructure is capable of supporting the
future development plans of the business, although we continue to enhance
systems and seek opportunities to further improve our administrative and
organisational procedures.  We have identified a number of acquisition
opportunities and are looking forward to the future development of the Group
with confidence.


Nigel Paul
Chief Executive Officer



CONSOLIDATED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 MARCH 2005


                                              2005                                       2004
                          Note     Continuing Discontinued                    Continuing   Discontinued
                                   Operations   Operations         Total      Operations     Operations           Total

                                            £            £             £               £              £               £

Turnover                          335,222,877      184,403   335,407,280     318,964,063        205,389     319,169,452

Cost of sales                   (332,166,149)     (38,525) (332,204,674)   (316,244,518)       (19,980)   (316,264,498)


Gross profit                        3,056,728      145,878     3,202,606       2,719,545        185,409       2,904,954

Administrative expense            (3,539,056)    (412,699)   (3,951,755)     (2,511,618)      (224,900)     (2,736,518)


Operating (loss) / profit           (482,328)    (266,821)     (749,149)         207,927       (39,491)         168,436

Interest receivable and               208,737        4,499       213,236         130,303          3,193         133,496
similar income

Interest payable and                  (5,511)         (13)       (5,524)         (4,001)           (10)         (4,011)
similar charges


                                    (279,102)    (262,335)     (541,437)         334,229       (36,308)         297,921

Exceptional Items

Profit on sale of                                                 35,269                                              -
subsidiary


(Loss) / profit before                                         (506,168)                                        297,921
Reorganisation Costs

Reorganisation costs                                           (199,221)                                              -


(Loss) / profit on                                             (705,389)                                        297,921
ordinary activities
before taxation

Taxation                                                         175,393                                       (96,152)


(Loss) / profit for the                                        (529,996)                                        201,769
financial year


(Loss) / earnings per       1                                    (6.74p)                                         3.923p
share

Diluted earnings per        1                                    (6.74p)                                         3.815p
share


There were no other recognised gains and losses in the year.



CONSOLIDATED BALANCE SHEET
31 MARCH 2005

                                                                         2005                               2004
                                                            £               £                 £                £
FIXED ASSETS
Tangible                                                              247,084                            299,516


                                                                      247,084                            299,516

CURRENT ASSETS
Debtors                                               950,565                           608,220
Cash at bank and in hand                            5,594,089                         7,844,363


                                                    6,544,654                         8,452,583

CREDITORS: amounts falling due                    (5,598,128)                       (8,310,208)
within one year


NET CURRENT ASSETS                                                    946,526                            142,375


TOTAL ASSETS LESS CURRENT LIABILITIES                               1,193,610                            441,891


NET ASSETS                                                          1,193,610                            441,891


CAPITAL AND RESERVES
Called up share capital                                                79,762                             51,429
Share premium account                                               1,414,187                            160,805
Profit and loss account                                             (300,339)                            229,657


EQUITY SHAREHOLDERS' FUNDS                                          1,193,610                            441,891



COMPANY BALANCE SHEET
31 MARCH 2005

                                                                         2005                               2004
                                                            £               £                 £                £
FIXED ASSETS
Tangible                                                              246,716                            288,708
Investments                                                                10                                  6


                                                                      246,726                            288,714

CURRENT ASSETS
Debtors                                             1,058,581                           664,519
Cash at bank and in hand                            5,488,407                         7,784,558


                                                    6,546,988                         8,449,077


CREDITORS: amounts falling due                    (5,591,742)                       (8,229,369)
within one year


NET CURRENT ASSETS                                                    955,246                            219,708


TOTAL ASSETS LESS CURRENT LIABILITIES                               1,201,972                            508,422


CAPITAL AND RESERVES
Called up share capital                                                79,762                             51,429
Share premium account                                               1,414,187                            160,805
Profit and loss account                                             (291,977)                            296,188


EQUITY SHAREHOLDERS' FUNDS                                          1,201,972                            508,422



CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 MARCH 2005


                                                                                     2005               2004
                                                                                        £                  £
Reconciliation of operating (loss) / profit to net cash flow from
operating activities
Operating (loss) / profit                                                       (749,149)            168,436
Reorganisation costs                                                            (199,221)                  -
Disposal of assets to subsidiary                                                   10,896                  -
Depreciation of tangible fixed assets                                             157,333            108,113
Increase in debtors                                                             (213,083)          (397,280)
(Decrease) increase in creditors                                              (2,556,248)          3,520,958


Net cash (outflow) inflow from operating activities                           (3,549,472)          3,400,227


CASH FLOW STATEMENT (note 22)
Net cash (outflow) / inflow from operating activities                         (3,549,472)          3,400,227
Returns on investments and servicing of finance                                   207,712            129,485
Taxation                                                                                -           (35,189)
Capital expenditure                                                             (121,231)          (319,758)
Disposal of subsidiary                                                           (68,998)                  -


Cash (outflow) / inflow before financing                                      (3,531,989)          3,174,765

Financing - net proceeds of flotation                                           1,281,715                  -


(Decrease) increase in cash in the period                                     (2,250,274)          3,174,765


Reconciliation of net cash flow to movement in net funds (note 23)
(Decrease) increase in cash in the period                                     (2,250,274)          3,174,765

Net funds at 1 April 2004                                                       7,844,363          4,669,598


Net funds at 31 March 2005                                                      5,594,089          7,844,363



Note 1     EARNINGS PER SHARE

Both basic earnings per share and diluted earnings per share are based on a loss
after tax of £529,996 (2004: Profit after tax £201,769).  The basic earnings per
share has been calculated on a weighted average of 7,867,507 (2004: 5,142,805)
ordinary shares in issue.  Diluted loss and earnings per share is calculated on
the same basis as basic loss and earnings per share because the effect of the
potential ordinary shares (share options) reduces the net loss per share and is
therefore anti-dilutive.  For 2004, the diluted earnings per share has been
calculated on a weighted average of 5,288,452 of ordinary shares in issue and
the dilutive potential ordinary shares from warrants.


Note 2     NATURE OF ACCOUNTS

The financial information set out in the announcement does not constitute the
company's statutory accounts for the year ended 31 March 2005 or 2004.  The
financial information for the year ended 31 March 2004 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies.  The auditors reported on those accounts; their report was
unqualified and did not contain a statement under s237(2) or (3) Companies Act
1985.  The statutory accounts are expected to be sent to shareholders shortly.



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