Interim Results

Harrier Group PLC
30 August 2001

Harrier Group PLC 2001 Interim Results


Chairman's Statement

The turnover for the six months to 30 June 2001 increased by 110% to £10.21 m
(2000: £4.87 m) giving rise to a profit before tax and goodwill of £78,723.
(2000: £173,785 loss). Net funds also increased to £2,659,290 (2000: 
£1,734,339).

Most encouraging is the increase in deferred and recurring income to 
£1,523,727 (2000: £984,900), resulting from further sales of our Professional
and Managed Services and we continue to recruit revenue-earning teams to
support these services. A total of 89 staff are now employed, compared to 79
at 30 June 2000.  Additionally, we opened an office in Leeds in March 2001, to
support our northern customers and to enable the Group to provide for regional
bespoke and accredited training requirements.

During the first half of the year we have undertaken the delivery of the
largest project in the Group's history, providing the design, technology and
supporting consultancy services for a major network infrastructure
installation for a global corporate client.  We have also increased the number
and value of orders for training services, with both bespoke and accredited
courses being provided from our Training Centres in Reading and Leeds.

Demand for our specialist Information Assurance consultancy services, engaged
in the assessment, quantification and management of risk, has continued to
grow, with revenue-earning headcount in this department trebling since June
30, 2000.  Strategic alliances with legal and insurance organisations have
also expanded our service offerings in this area.

The position of the HarrierZeuros brand in the UK continues to gain strength
and reputation, as a result of both successful project completion and enduring
alliances with industry associations and key technology vendors.

The use of the public and private networks continues to grow unabated and the
secure transport of (and access to) data is of paramount importance to the
continuance of all our industries.  Harrier's business is two-fold, to ensure
that ease of availability and the protection of that data.

The IT industry will continue to provide many challenges, however, we have a
strong prospect list and a company singularly united in the common goal of
success.




A.L.R. Morton
Chairman

29 August 2001



Consolidated Profit and loss account six months ended 30 June 2001

                                            Unaudited   Unaudited
                                           six months  six months    Year ended
                                            June 2001   June 2000 December 2000
                                                    £           £             £

Turnover                                   10,214,100   4,868,437    11,163,749

Cost of sales                             (6,530,067) (2,940,049)   (6,274,993)


Gross Profit                                3,684,033   1,928,388     4,888,756

Administrative expenses                   (3,653,140) (2,123,583)   (5,415,464)


Operating profit/(loss) before goodwill
amortisation and exceptional severance         30,893   (195,195)     (526,708)
costs

Exceptional severance costs                         -    (30,000)     (275,622)
Amortisation of goodwill                    (490,799)   (136,073)     (635,007)


Operating loss                              (459,906)   (361,268)   (1,437,337)

Interest receivable                           438,257      52,780       646,602
Interest payable                            (390,427)     (1,370)     (534,788)


Loss on ordinary activities before          (412,076)   (309,858)   (1,325,523)
taxation

Taxation                                            -           -             -


Loss on ordinary activities after           (412,076)   (309,858)   (1,325,523)
taxation


Loss for the financial period               (412,076)   (309,858)   (1,325,523)


Basic loss per share                          (1.44p)     (1.36p)       (5.16p)


Diluted loss per share                        (1.29p)     (1.26p)       (4.76p)


IIMR 'headline' profit/(loss) per share         0.28p     (0.76p)       (2.69p)




Consolidated Balance Sheet as at 30 June 2001


                                       30 June 2001  30 June 2000   31 Dec 2000
                                          Unaudited     Unaudited       Audited
                                                  £             £             £

Fixed assets

Intangible assets                        18,377,016    19,366,749    18,867,815
Tangible assets                             934,358       659,798       790,671


                                         19,311,374    20,026,547    19,658,486

Current assets

Stock                                        97,051        94,913        34,249
Debtors                                   2,978,337     4,940,746     2,672,693
Cash and bank balances                    3,216,286     1,753,003     2,443,310
Term deposit                             14,000,000    14,000,000    14,000,000

                                         20,291,674    20,788,662    19,150,252

Creditors

Amounts falling due within one year     (4,774,245)   (4,533,338)   (3,567,859)


Net current assets                       15,517,429    16,255,324    15,582,393



Total assets less current liabilities    34,828,803    36,281,871    35,240,879


Creditors
Amounts falling due after more than
one year                               (14,000,000)  (14,015,119)  (14,000,000)


Net assets                               20,828,803    22,266,752    21,240,879


Capital and reserves
Called up share capital                     286,237       285,650       286,237
Share premium account                    23,935,516    23,946,311    23,935,516
Capital redemption reserve                  268,972       268,972       268,972
Profit and loss account                 (3,661,944)   (2,234,203)   (3,249,868)


Equity shareholders' funds               20,828,781    22,266,730    21,240,857

Minority interests                               22            22            22


Total shareholders' funds                20,828,803    22,266,752    21,240,879






Consolidated Cash Flow Statement six months ended 30 June 2001

                                   Note  30 June 2001 30 June 2000  31 Dec 2000
                                            Unaudited    Unaudited      Audited
                                                    £            £            £

Net cash inflow/(outflow) from       4        794,347    (651,137)      192,029
  operating activities

Returns on investments and
  servicing of finance

Interest received                             438,257       52,780      646,602
Interest paid                               (390,427)      (1,370)    (534,788)

                                               47,830       51,410      111,814


Taxation
Corporation tax paid                        (257,840)            -     (51,844)

Capital expenditure and
  financial investment
Purchases of tangible fixed assets          (265,568)    (214,822)    (480,857)
Sales of tangible fixed assets                  5,000       80,586      106,284

Net cash outflow from investing
activities                                  (260,568)    (134,236)    (374,573)

Acquisitions and disposals
Purchase of subsidiary                              -    (112,500)    (112,500)
undertakings
Net cash acquired with                              -      578,476      578,476
 subsidiaries

                                                    -      465,976      465,976


Net cash inflow/(outflow)
  before financing                            323,769    (267,987)      343,402

Financing

Issue of ordinary share capital                     -   14,758,343   14,761,490
Costs of issue                                      -    (581,111)    (594,465)
Issue of shares to minority                         -           22           22
Other loans repaid                                  -     (27,455)     (27,455)
Hire purchase loans repaid                    (1,834)     (19,690)     (21,522)


                                              (1,834)   14,130,109   14,118,070


Increase in cash                              321,935   13,862,122   14,461,472




Consolidated Cash Flow Statement six months ended 30 June 2001 (cont)


                                      Note     30 June      30 June      31 Dec 
                                                  2001         2000        2000
                                             Unaudited    Unaudited     Audited
                                                     £            £           £

Reconciliation of net cash flow
  to movement in net funds

Increase in cash in the period                 321,935   13,862,122  14,461,472

Change in net debt from cashflows                1,834       47,145      48,977
Loan notes issued for acquisition                    - (14,000,000)(14,000,000)
Finance leases acquired with                         -     (19,276)    (19,276)
subsidiaries
Debt acquired with subsidiaries                      -     (27,455)    (27,455)


Movement in net funds in the period            323,769    (137,464)     463,718


Net funds at start of period                 2,335,521    1,871,803   1,871,803


Net funds at end of period              5    2,659,290    1,734,339   2,335,521





Notes to the Interim results



1.        The interim figures for the six month period to 30 June 2001 are 
unaudited and do not constitute statutory accounts.



2.        The financial information set out in the interim statement
has been prepared in accordance with applicable accounting standards. The
accounting policies have been consistently applied both in 2000 and 2001 and
are described in the 2000 financial statements.



3.        The calculation of basic loss per ordinary share of 1p each is based
on the loss on ordinary activities after taxation divided by the weighted
average number of ordinary shares in issue during the period of 28,623,701. The
diluted loss per share includes share options not exercised and the weighted
average number of ordinary shares in the period is 31,921,999.



The IIMR 'headline' profit/(loss) per share is the basic loss per share
excluding amortisation of goodwill and is therefore based on a profit for the
six months of £78,723 and a weighted average number of shares in issue of
28,623,701.



4.        Reconciliation of loss to net cash inflow/(outflow) from operating
activities:


                                  6 months to       6 months to      Year ended
                                 30 June 2001      30 June 2000        Dec 2000
                                            £                 £               £

Operating loss                      (459,906)         (361,268)     (1,437,337)
Amortisation of goodwill              490,799           136,073         635,007
Depreciation                          106,446            58,334         150,314
Loss on sale of fixed assets           10,435            30,420          47,904
(Increase)/decrease in stock         (62,802)           573,780         634,444
Increase in debtors                 (305,644)       (2,600,928)       (332,875)
Increase in creditors               1,015,019         1,512,452         494,572


Net cash inflow/(outflow) from
Operating activities                  794,347         (651,137)         192,029





5.        Analysis of net funds:


                            At beginning   Cashflow     Other non     At end of
                               of period             cash changes        period
                                       £          £             £             £

Cash at bank and in hand      16,443,310    772,976             -    17,216,286
Overdrafts                      (90,955)  (451,041)             -     (541,996)


                              16,352,355    321,935                  16,674,290

Debt due within one year               -          -             -             -
Debt due after one year     (14,000,000)          -             -  (14,000,000)
Hire purchase contracts         (16,834)      1,834             -      (15,000)


                               2,335,521    323,769             -     2,659,290





         The overdraft represents a cash book position due to unpresented
cheques and is not incurring interest.



6.        Minority interests represent non-participating shares in the
subsidiary company Harrier Corporation Limited.



7.        The results for the year ended 31 December 2000 as shown in this
report do not constitute statutory accounts but are an abridged version of the
Company's 2000 accounts which have been filed with the Registrar of Companies,
which did not contain any statement under section 237 (2) or (3) of the
Companies Act 1985 and upon which the auditor's report was unqualified.



8.        The interim report was approved by the directors on 29 August 2001. A
copy of the interim report will be posted to shareholders and will also be
available from the Company's registered office at Pacific House, Imperial Way,
Reading, Berks RG2 0TD.