Interim Results

Harrier Group PLC
04 September 2002



                               HARRIER GROUP PLC

                                INTERIM RESULTS

                     FOR THE SIX MONTHS ENDED 30 JUNE 2002


CHAIRMAN'S STATEMENT

Trading for the six months to 30 June 2002 has been disappointing with hardware
and software sales falling dramatically in the six months despite an encouraging
level of enquiries throughout the period.  Many projects have been deferred or
put on hold indefinitely.

However, on a brighter note training and professional consulting services
revenues have continued to grow and improved our gross margin considerably in
the period.

The revenue for the six months to 30 June 2002 was £5.72m (2001:  £10.21m)
resulting in a loss before tax, goodwill and exceptional severance costs of
£438,342 (2001:  £78,723 profit).   Cash balances reduced to £1.33m at 30 June
2002 (2001:  £3.22m).

As a result of the downturn in hardware and software sales Harrier has
consolidated its business and continued the transition to a services led
organisation.  These measures have included aligning costs to match the downturn
in market expectations, reducing headcount throughout the company, restructuring
remunerations and disposing of under utilised office space.

The company instigated a salary reduction scheme and issued additional share
options to all Directors and staff who agreed to a reduction of more than 5% of
their base salary. The basis for granting these further options was 5,000 new
shares for each £1,000 of salary sacrificed between June and December 2002.

The following options to Directors were cancelled and new options issued:


                  Options cancelled              New options granted

Name              Exercise period    Exercise    Exercise period    Exercise    Total number of
                                     Price                          price       options
                  22/12/00 -                     01/07/02 -                     held on 1
                  22/12/03           Pence       31/12/03           Pence       July 2002


D Cheesman        250,000            76.50       395,833            14p         395,833
S Carter          50,000             76.50         80,625           14p         211,175


As part of the overhead reduction programme, Bryan Wrighton resigned as a
non-executive director, I thank him for his efforts and contribution to the
Company during his period in office. In addition, Mark Rowlinson moved to a
part-time position.

Additionally, we have rationalised our product portfolio, forming niche
technology relationships and developing management tools that enable our clients
to achieve greater return on investment (ROI) and cost benefits. Through
co-operative working with other providers we are now providing a greater range
of training and service related solutions without any increase in headcount or
investment.

This strategy has enabled us to add more than 40 new clients to the Group, while
continuing to build stronger relationships with our existing client base.

The first half of 2002 has seen major rationalisation throughout the IT industry
and specifically within the sector of information protection and security.
Accordingly, we acquired the assets of IKAN plc in January, adding complementary
skills and services to our portfolio and expanding our client base.
HarrierZeuros acquired IKAN's end user client base, while IKAN was repositioned 
in April 2002 to provide training, business continuity and risk management 
services to the IT reseller channel.  In this way the Group expanded its 
potential client base while maintaining separate routes to market.

While investment and growth within the IT sector continues to be depressed,
opportunities within the business will continue as our industry enters a
prolonged period of consolidation. We are well positioned within our chosen
sector with a strong client list, a reduced cost base and a well balanced,
dedicated team that is focused on the success of the company.


ALR Morton
Chairman

4  September 2002


INDEPENDENT REVIEW REPORT TO THE DIRECTORS OF HARRIER GROUP PLC

SIX MONTHS ENDED 30 JUNE 2002

Introduction

We have been instructed by the company to review the financial information set
out on pages 4 to 9 and we have read the other information contained in the
interim report and considered whether it contains any apparent mis-statements 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 UK Listing Authority 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 primarily 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.


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 six months
ended 30 June 2002.


Saffery Champness
Chartered Accountants
London

4  September  2002


CONSOLIDATED PROFIT AND LOSS ACCOUNT
SIX MONTHS ENDED 30 JUNE 2002

                                                     Six months          Six months         Year ended
                                                          ended               ended        31 December
                                                   30 June 2002        30 June 2001               2001
                                                      Unaudited           Unaudited            Audited
                                                              £                   £                  £

Turnover                                              5,721,206          10,214,100         17,052,456

Cost of sales                                       (2,816,568)         (6,530,067)       (10,207,318)

Gross Profit                                          2,904,638           3,684,033          6,845,138

Administrative expenses                             (3,371,180)         (3,653,140)        (6,893,310)

Operating (loss)/profit before
 goodwill amortisation & exceptional
  severance costs                                     (466,542)              30,893           (48,172)

Exceptional severance costs                           (134,761)                   -          (187,479)
Amortisation of goodwill                              (501,751)           (490,799)          (989,733)

Operating loss                                      (1,103,054)           (459,906)        (1,225,384)

Interest receivable                                     282,948             438,257            807,674
Interest payable                                      (254,748)           (390,427)          (727,040)

Loss on ordinary activities before
   taxation                                         (1,074,854)           (412,076)        (1,144,750)

Taxation                                                      -                   -                  -

Loss on ordinary activities after
   taxation                                         (1,074,854)           (412,076)        (1,144,750)

Loss for the financial period                       (1,074,854)           (412,076)        (1,144,750)

Basic loss per share                                    (3.74p)             (1.44p)            (4.00p)

Diluted loss per share                                  (3.38p)             (1.29p)            (3.59p)

IIMR 'headline' profit/(loss)
   per share                                            (0.20p)               0.28p            (0.54p)


CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2002

                                                        30 June           30 June         31 December
                                                           2002              2001                2001
                                                      Unaudited         Unaudited             Audited
                                                              £                 £                   £

Fixed assets
Intangible assets                                    17,495,709        18,377,016          17,878,082
Tangible assets                                         732,948           934,358             798,209
                                                     18,228,657        19,311,374          18,676,291

Current assets
Stock                                                    96,118            97,051              21,140
Debtors                                               2,705,390         2,978,337           3,173,711
Cash and bank balances                                1,331,007         3,216,286           2,275,448
Term deposit                                         12,000,000        14,000,000          14,000,000
                                                     16,132,515        20,291,674          19,470,299

Creditors
Amounts falling due within one year                 (3,334,750)       (4,774,245)         (4,045,314)

Net current assets                                   12,797,765        15,517,429          15,424,985

Total assets less current liabilities                31,026,422        34,828,803          34,101,276

Creditors
Amounts falling due after more than
  one year                                         (12,000,000)      (14,000,000)        (14,000,000)

Net assets                                           19,026,422        20,828,803          20,101,276

Capital and reserves
Called up share capital                                 287,197           286,237             287,197
Share premium account                                23,939,703        23,935,516          23,939,703
Capital redemption reserve                              268,972           268,972             268,972
Profit and loss account                             (5,469,472)       (3,661,944)         (4,394,618)

Equity shareholders' funds                           19,026,400        20,828,781          20,101,254

Minority interests                                           22                22                  22

Total shareholders' funds                            19,026,422        20,828,803          20,101,276



CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 30 JUNE 2002

                                              Note         30 June         30 June       31 December
                                                              2002            2001              2001
                                                         Unaudited       Unaudited           Audited

Net cash (outflow)/inflow from
  operating activities                           4       (806,796)         794,347           367,222

Returns on Investments and
  servicing of finance
Interest received                                          282,948         438,257           807,674
Interest paid                                            (254,748)       (390,427)         (727,040)

                                                            28,200          47,830            80,634

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

Capital expenditure and
financial investment
Purchases of tangible fixed assets                        (46,468)       (265,568)         (290,685)
Sales of tangible fixed assets                                   -           5,000            35,449

Net cash outflow from investing
  activities                                              (46,468)       (260,568)         (255,236)

Acquisitions and disposals
Purchase of subsidiary
undertakings                                             (119,377)               -                 -
                                                     

Net cash (outflow)/inflow
  before financing                                       (944,441)         323,769          (65,220)

Financing
Issue of ordinary share capital                                  -               -             5,147
Other loans repaid                                               -               -          (16,834)
Hire purchase loans repaid                                       -         (1,834)                 -
Loan notes repaid                                      (2,000,000)               -                 -

                                                       (2,000,000)         (1,834)          (11,687)

(Decrease)/increase in cash                            (2,944,441)         321,935          (76,907)



CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 30 JUNE 2002 (continued)

                                            Note          30 June          30 June        31 December
                                                             2002             2001               2001
                                                        Unaudited        Unaudited            Audited
                                                                £                £                  £
Reconciliation of net cash flow
  to movement in net funds

(Decrease)/increase in cash in                        (2,944,441)          321,935           (76,907)
  the period
Change in net debt from cashflows                       2,000,000            1,834             16,834

Movement in net funds in the
  period                                                (944,441)          323,769           (60,073)

Net funds at start of period                            2,275,448        2,335,521          2,335,521

Net funds at end of period                     5        1,331,007        2,659,290          2,275,448



NOTES TO THE INTERIM RESULTS
SIX MONTHS ENDED 30 JUNE 2002


1.   The interim figures for the six month period to 30 June 2002 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 2001 and 2002 
     and are described in the 2001 financial statements.

3.   The calculation of basic loss per ordinary share of 3.74p 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 28,719,702.  
     The diluted loss per share includes share options not exercised and the 
     weighted average number of ordinary shares in the period is 31,747,529.

     The IIMR 'headline' loss per share is the basic loss per share excluding
     amortisation of goodwill and is therefore based on a loss for the six 
     months of £573,103 and a weighted average number of shares in issue of 
     28,719,702.

4.   Reconciliation of loss to net cash (outflow)/inflow from operating 
     activities:
                                                    6 months to        6 months to        Year ended
                                                   30 June 2002       30 June 2001          Dec 2001
                                                              £                  £                 £

Operating loss                                      (1,103,054)          (459,906)       (1,225,384)
Amortisation of goodwill                                501,751            490,799           989,733
Depreciation                                            111,728            106,446           221,027
Loss on sale of fixed assets                                  -             10,435            26,671
(Increase)/decrease in stock                           (74,978)           (62,802)            13,109
(Decrease)/increase in debtors                          468,321          (305,644)         (501,018)
(Decrease)/increase in creditors                      (710,564)          1,015,019           843,084

Net cash (outflow)/inflow from
   operating activities                               (806,796)            794,347           367,222


NOTES TO THE INTERIM RESULTS
SIX MONTHS ENDED 30 JUNE 2002 (continued)


5.       Analysis of net funds:


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

Cash at bank and in hand                16,275,448     (2,944,441)                -       13,331,007

Debt due after one year               (14,000,000)       2,000,000                -     (12,000,000)

                                         2,275,448       (944,441)                -        1,331,007




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

7.   The results for the year ended 31 December 2001 as shown in this report
     do not constitute statutory accounts but are an abridged version of the
     company's 2001 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 4 September 2002.
     A copy of the interim report will be posted to shareholders and will also 
     be available from the company's registered office at Cromwell House, 
     Bartley Wood Business Park, Hook  RG27 9XA.


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