Final Results

Lupus Capital plc


Lupus Capital plc announces its unaudited preliminary results for the
year ended 31 December 2004

Highlights


*          £2,974,000 * pre tax profits
*          0.94p* earnings per share
*          0.39p dividend per share
*          strong cash generation
  *Adjusted for goodwill, employee benefit scheme charges and
  exceptional items.


Greg Hutchings, Executive Chairman, said:
The foundations of the Group are strong.  We have a clear strategy, a
sound balance sheet, good operating activities generating cash and an
enthusiastic entrepreneurial management team ambitious to drive Lupus
Capital plc forward.  I am confident that we have the right platform
to deliver value for shareholders.


For further information please contact:
85 Buckingham Gate, London SW1E 6PD
Telephone: [phone]           Fax:  [phone]
8014
E-mail: [e-mail]


Listed on the London Stock Exchange and classified under "Speciality
and other finance"



Chairman's Statement

Dear Shareholder,

The financial year ending 31 December 2004 was an eventful one for
your company.  In January, I personally invested several million
pounds in the shares of Lupus.  This was quickly followed by the
appointment of Denis Mulhall as a director who, also, made a
significant investment into share ownership.  Operational management
was reorganised, incentive schemes installed and a mergers and
acquisitions function added.  The balance sheet and share premium
account were restructured by means of a capital reorganisation in
order to allow the continuation of the payment of dividends.  All
these were achieved through a series of Extraordinary General
Meetings supported by full documentation for the approval of
shareholders.

Our trading results have been good, however acquisition progress has
been frustrating.  We have been involved in numerous potential
purchases, but none so far have been consummated.  While it has been
tempting to succumb to short term opportunities for the sake of being
seen to be active, we have managed to resist buying anything that
would not be in the long term interests of shareholders.  Patience
and value have to be our watchwords if we are determined to build up
Lupus into a major industrial concern.  We continue to be diligent
and resolute on making value producing acquisitions.

I would like to thank our non-executive directors, Mr Fred Hoad (our
lead non-executive director), Mr Roland Tate and Mr Konrad Legg (who
retired from the Board on 17 January 2005) for all their wise advice
and patience in dealing with the many complicated issues.

Results for the year
Our financial results for the year to 31 December 2004 were good.

Adjusted pre-tax profits were £2,974,000 (2003: £2,848,000) before
goodwill, the lesot charge and exceptional items.  After tax, this
translates into earnings per share of 0.94p (2003: 1.20p) out of
which we are paying a total full year dividend of 0.39p net (2003:
0.37p).  Gall Thomson Environmental, our main subsidiary, performed
well increasing profits by 4.0%.

The reported Group pre-tax result for the year was a £5,790,000 loss
(2003: profit  £1,908,000), after taking £740,000 of goodwill,
exceptional charges of £1,309,000 and a £6,715,000 non-cash lesot
charge.  After tax, this translates into a loss per share of 2.82p
(2003: profit 0.65p).

Dividend
The cash generation of your company is excellent and the Board is
recommending a full year dividend increase of just over 5%.  This
means a final dividend of 0.264p per share (2003: 0.25p per share)
making the total for the year ending 31 December 2004 of 0.39p (2003:
0.37p per share).

Employees
I would like to thank, on behalf of all shareholders, all our
employees for the hard work and dedication shown over what has been a
transforming few years.

Background
In early 2004 I personally invested several millions of pounds in the
shares of the Company as I felt it was an excellent base from which
to build a major industrial enterprise.  Denis Mulhall, with whom I
worked at Tomkins plc, has also invested personally.  We chose Lupus
for a number of reasons:
*          The existing non-executives and their advisors had
  reorganised and rationalised the Group, leaving it free of any
  debts;
*          As can be seen from the financial results, Lupus produces
  good figures and continues to demonstrate underlying reliability of
  earnings;
*          Gall Thomson Environmental has growth potential;
*          The reliable cash generation provides a sound base for
  paying dividends; and
*          Unlike many listed companies, there is no pension deficit
  as only defined contributions schemes are in use.

Strategy
Our strategy is to build shareholder value through the acquisition of
undervalued or under-managed businesses, using a spectrum of funding
instruments, where with the application of our management skills and
systems we can achieve greater profitability. Once they have been
improved and potential long-term growth configurations installed, we
would expect to realise a gain through a variety of exit mechanisms.

Our strategy is very similar to that which we developed at Tomkins
plc, with one key exception. Institutional investors in the public
markets are not sympathetic to public conglomerate organisations;
they have, however, even though with very diverse interests, favoured
private equity structures.  We intend to follow private equity
principles with investment exits by demergers or sale and cash
returns to shareholders when appropriate.

The speed and management experience we possess together with the
flexibility of being able to offer an on-going interest should give
us a competitive edge over private equity competitors.  In addition,
we have proven management skills and systems, as well as the
application of financial modelling.

Our approach to sectors will be very disciplined and with a clear
focus. Target companies will be involved in industrial manufacturing,
processing or services or distribution for industries, businesses or
consumers.  Retailing, financial services, property and media are
outside our range.  Our key requirements are asset based, positive
cash flow, under-valued or under-managed, but not loss making,
companies.  In addition we will target fragmented industries, seek
consolidations, as well as develop organic growth opportunities.

We will choose to operate in stable markets where the technology is
low-risk rather than markets exposed to quick innovation and sudden
obsolescence.  We prefer to sell high quantities of inexpensive items
or fulfil a high volume of contracts as opposed to a small number of
very significant cost constituents.

We expect to inject our management skills, operating systems,
financial control mechanisms and strategy experience to improve
profitability and financial efficiency.

Our industrial focus and business experience of acquiring,
stabilising, controlling, investing in and developing businesses,
together with a strong existing operation gives Lupus Capital plc
exciting prospects.

Current status
Shareholders will know that Lupus Capital plc is listed on the London
Stock Exchange and classified for historical reasons under
"Speciality and Other Finance".  We intend to remain with this until
such time as the composition of the Group changes, when a more
appropriate sector will be selected.  As of the end of March 2005 our
market capitalisation was approximately £31.5m.  Gall Thomson
Environmental Ltd., which is our main operating company, will be
retained within the Group.

Business of Gall Thomson Environmental
Gall Thomson Environmental Ltd. is the world's leading supplier of
marine breakaway couplings. Its subsidiary, KLAW Products Ltd., is a
supplier of industrial couplings including quick release couplings
and breakaway couplings.

A Gall Thomson marine breakaway coupling is used in the oil and gas
industry to enable a loading line to part safely and then to shut off
the product supply in the event of a vessel moving off station during
the loading or discharging of oil and gas products, whether at
offshore moorings or jetty terminals. The purpose of the breakaway
coupling is to prevent environmental pollution and damage to pumping
and transfer equipment. Gall Thomson Environmental also supplies the
quick release Welin Lambie camlock coupling which is used in the hose
and loading arm system for the transfer of oil and gas products.

The greater number of our couplings are designed and made to order
for the major oil producers. Stock and working capital levels are
thus easily visible.  There is also an increasing demand for
refurbishment of our products which have been in use for many years
and exposed to the elements.  The excellence of the couplings and
their technology together with the huge environmental and financial
consequences of risking less established products gives Gall Thomson
Environmental a significant advantage and strong market share.

The principal activity of KLAW Products Ltd is that of the
manufacture, assembly and distribution of industrial quick release
couplings to the oil and gas industries, such as refining,
exploration and construction. They are also used in the
transportation of product by road and rail.

Outlook
Gall Thomson Environmental is a reliable business and looks forward
to continued success. There are opportunities in most areas of the
world due to an increase in world floating production systems, as
well as the traditional Single Point Mooring business. The drive to
exploration in deeper waters (greater than 1,000 metres) which
require off loading techniques as opposed to pipeline infrastructure,
provides a sound basis for the Gall Thomson Environmental business in
the short and long term.  KLAW has started the year well.  During
recent years new products have been developed, which, together with
the existing range and having become CE markings approved, are
generating higher sales and increasing market penetration.

The foundations of the Group are strong.  We have a clear strategy, a
sound balance sheet, good operating activities generating cash and an
enthusiastic entrepreneurial management team ambitious to drive Lupus
Capital plc forward.  I am confident that we have the right platform
to deliver value for shareholders.


Greg Hutchings
Chairman
28 April 2005


Consolidated profit and loss account
For the year ended 31 December 2004



                                             Unaudited     Audited
                                       Notes      2004        2003
                                                  £000        £000

Turnover                               1         6,607        6,551
Cost of sales                                  (1,838)        (1,940)
Gross profit                                     4,769          4,611

Administrative expenses
 - excluding lesot charge,
exceptional
   expenses and goodwill
amortisation                                   (1,822)        (1,682)
 - lesot charge                                (6,715)              -
 - exceptional restructuring costs             (1,309)              -
 - goodwill amortisation                         (740)          (740)
Total administrative expenses                 (10,586)        (2,422)

Operating (loss)/profit                        (5,817)          2,189

Loss on disposal of fixed asset
investments                                          -          (200)
Interest receivable and similar
income                                             251            161
Interest payable and similar
charges                                          (224)          (242)
(Loss)/profit on ordinary
activities before taxation                     (5,790)          1,908
Taxation                               2         (538)        (788)
(Loss)/profit on ordinary
activities for the year                        (6,328)        1,120
Ordinary dividends                     3         (927)        (758)
Retained (loss)/profit for the
year                                           (7,255)          362


(Loss)/earnings per share              4     (2.82)p       0.65p

Earnings per share before lesot
charge, exceptional items, and
goodwill                               4       0.94p       1.20p

amortisation


There were no recognised gains and losses other than the loss for the
year.
All results relate to continuing operations.


Consolidated balance sheet
As at 31 December 2004


                                              Unaudited       Audited
                                                   2004          2003
                                                   £000          £000

Fixed assets
Intangible assets                                10,681        11,421
Tangible assets                                     396           415
                                                 11,077        11,836
Current assets
Stocks and work-in-progress                         251           251
Debtors                                           2,323         2,871
Cash at bank and in hand                          1,649            97
                                                  4,223         3,219

Creditors: amounts falling due within one
year                                            (1,999)       (2,360)
Net current assets                                2,224           859

Total assets less current liabilities            13,301        12,695

Creditors: amounts falling due after more
than
                  one year                            -          (85)

Net assets                                       13,301        12,610

Capital and reserves
Called up share capital                           1,188           864
Share premium account                                 -         4,709
Merger reserve                                   10,389        10,389
Lesot reserve                                   (8,201)             -
Profit and loss account                           9,925       (3,352)
Equity shareholders' funds                       13,301        12,610



Company balance sheet
As at 31 December 2004


                                      Unaudited          Audited
                                           2004             2003
                                           £000             £000

Fixed assets
Investments                              25,100           25,100
                                         25,100           25,100
Current assets
Debtors                                       5               39
Cash at bank and in hand                  4,050            2,782
                                          4,055            2,821

Creditors: amounts falling
due within one year                     (4,175)          (4,519)
Net current liabilities                   (120)          (1,698)

Total assets less current
liabilities                              24,980           23,402

Creditors: amounts falling
due after more than
          one year                      (7,876)          (7,876)

Net assets                               17,104           15,526

Capital and reserves
Called up share capital                1,188                864
Share premium account                      -              4,709
Merger reserve                         8,920              8,920
Lesot reserve                        (8,201)                  -
Profit and loss account               15,197              1,033
Equity shareholders' funds            17,104             15,526




Consolidated cash flow statement
For the year ended 31 December 2004


                                                  Unaudited   Audited
                                            Notes      2004   2003
                                                       £000      £000

Net cash (outflow)/inflow from operating
activities                                  6(a)    (5,049)   1,289

Returns on investments and servicing of
finance
Interest received                                       252       161
Interest paid                                         (221)     (273)
Dividends received                                        -        56
                                                         31      (56)

Taxation
UK corporation tax paid                               (489)     (146)

Capital expenditure and financial
investment
Sale of tangible fixed assets                             -         4
Purchase of tangible fixed assets                      (36)       (8)
Sale of fixed asset investments                           -     3,622
                                                       (36)     3,618

Equity dividends paid                                 (851)   (1,060)

Net cash inflow before financing                    (6,394)     3,645

Financing
Issue of shares net of costs                          7,946       279


Increase in cash                            6(b)      1,552     3,924



Notes to the preliminary results


1.             Nature of the financial information

This preliminary results statement has been prepared on the basis of
the same accounting policies as those set out in the financial
statements for the year ended 31 December 2003. The preliminary
results, which have been prepared in accordance with applicable
accounting standards under the historical cost convention,
consolidate the results of the Company and its subsidiary
undertakings for the year ended 31 December 2004.

The results for the year ended 31 December 2004 are unaudited and
have not yet been delivered to the Registrar.  Those for the year
ended 31 December 2003 are an abridged version of the Group's full
accounts, which received an unqualified audit report, not containing
statements under section 237(2) or 273(3) of the Companies Act 1985,
and which have been filed with the Registrar of Companies.

The financial information set out above does not constitute statutory
accounts of the Company for the year ended 31 December 2004 as
defined in section 240 of the Companies Act 1985 but is derived from
those accounts.  Statutory accounts for the year ended 31 December
2004 will be delivered to the Registrar of Companies following the
Annual General Meeting.

The exceptional costs associated with the change of strategy and
introduction of new executive management to the Group in February
2004 were as follows: legal fees £112,000; costs of establishing the
lesot £99,000; corporate finance fees £308,000; management fees
including performance fee and termination fee £732,000; printing
costs, listing fees and other miscellaneous costs £58,000.



2.      Taxation

a).  Analysis of the tax charge in the year:

                                                         2004    2003
                                                         £000    £000

Taxation based on the result for the year:
UK Corporation tax on profits for the year                480     846
Adjustment in respect of prior year                        59    (58)

Total current tax                                         539     788

Origination and reversal of timing
differences
Current year                                              (1)       -
Prior year                                                  -       -
Total deferred tax                                        (1)       -

Tax on profit on ordinary activities                      538     788

b).  Factors affecting the tax charge in
the year:
The tax assessed for the year differs from
the
standard rate of tax in the UK (30%).  The
differences are explained below:
                                                         2004    2003
                                                         £000    £000

(Loss)/profit on ordinary activities before
taxation                                              (5,789)   1,908


Rate of corporation tax in the UK of 30% (2003:
30%)                                                  (1,737)     572
Effects of:
Expenses not deductible for tax purposes
                Charge in respect of transfer of
                shares to lesot                         2,014       -
                Legal charges in respect of share
                issues                                     63       -
                Goodwill amortisation                     210     210
                Other items                                14      27
Capital allowances in advance of depreciation             (2)     (9)
Other timing differences                                 (69)    (14)
Loss on sale of investment                                  -      60
CT rate difference                                        (8)       -
Offset of Advanced Corporation Tax                        (5)       -
Adjustment in respect of prior periods                     59    (58)

Current tax for the year                                  539     788



c).  Factors that may affect future tax charges:

There are estimated tax losses of £11,954,000 (2003: £11,296,000)
within the Group, comprising capital losses of £6,760,000 and other
tax losses of £5,194,000.  As the future use of these losses is
uncertain, in accordance with the Group's accounting policy no
deferred tax asset has been recognised in respect of them.

The amounts of deferred tax not recognised are as follows:



                  2004      2003
                  £000      £000

Tax losses     (1,558)   (1,361)
Capital losses (2,028)   (2,028)
               (3,586)   (3,389)



3.      Dividends


                                                          2004   2003
                                                          £000   £000
Ordinary dividend:
Proposed final dividend at 0.264p per share (2003:
0.25p)                                                     627    551
Interim dividend at 0.126p per share (2003: 0.12p)         300    207
                                                           927   758



4.      (Loss)/earnings per share

The calculation of basic (loss)/earnings per share is based on the
(loss)/profit after taxation for the financial year and on a weighted
average number of shares in issue during the year of 224,306,337
ordinary shares of 0.5p (2003: weighted average 171,772,126).

An additional EPS figure is provided to show the earnings before the
lesot charge, goodwill and the non-recurring costs (net of tax)
arising from the restructuring of the board in February 2004.  The
calculation of adjusted earnings per share is based on adjusted
profit which is set out below and on the weighted average number of
shares in issue during the year of 224,306,337  ordinary shares of
0.5p (2003: weighted average 171,772,126).


                                                       2004    2003
                                                       £000    £000

(Loss)/profit on ordinary activities after taxation (6,328)   1,120
Lesot charge                                          6,715       -
Administration costs - exceptional items              1,309       -
Tax effect of exceptional items                       (329)       -
Goodwill amortisation                                   740     740
Impact of ceasing investment activities:                  -     200

                                                      2,107   2,060



5.    Movements on share capital and reserves


Group                            Share                         Profit
                      Share    Premium    Merger     Lesot   and loss
                    capital    account   reserve   Reserve    Account
                       £000       £000      £000      £000       £000

At 1 January 2004       864      4,709    10,389   -          (3,352)
Shares issued net                                        -
of costs                 86      1,145         -                    -
Lesot share issue       238      7,963         -   (8,201)          -
Capital                                                  -
reorganisation            -   (13,817)         -               13,817
Loss for the year         -          -         -         -    (6,328)
Lesot cost included                                      -
in loss for the
year                      -          -         -                6,715
Dividends                 -          -         -   -            (927)
At 31 December 2004   1,188          -    10,389   (8,201)      9,925



Included within the profit and loss account above, is £96,000, which
represents an amount transferred to a Special Reserve within the
accounts of a subsidiary company under the terms of a Court Order on
a reduction in share capital of that company.

On 26 March 2004 the Company allotted 47,539,257 ordinary shares to
the trustees of the Lupus Employee Share Ownership Trust ("the
lesot") under the employee incentive arrangements approved by
shareholders on 16 February 2004.  The lesot subscribed for the
shares in cash at a price of 17.25p per share using funds contributed
to the lesot by the Company.

The shares held by the lesot have been allocated to the benefit of Mr
Hutchings and his family.  However, the Company retains the right
until 31 December 2005 to ask the trustees to reverse this allocation
if Mr Hutchings should cease to be an employee of the Company.  The
cost of these shares is identified separately in the reserves to
reflect this residual element of control on the part of the Company.

As explained in a circular to shareholders dated 27 April 2004, the
issue of shares to the lesot described above gave rise to an
additional £238,000 of paid up share capital and £7,963,000 of share
premium, offset by a charge to reserves of £8,201,000.  There was no
change to the Company's net assets, but distributable reserves were
reduced.  The Board therefore sought and obtained approval from
shareholders and from the Court to effect a capital reduction through
the cancellation of the amount standing to the credit of the
Company's share premium account.  The cancellation was registered on
18 June 2004.

Company


                                 Share                         Profit
                      Share    premium    Merger     Lesot   and loss
                    capital    account   reserve   Reserve    Account
                       £000       £000      £000      £000       £000

At 1 January 2004       864      4,709     8,920   -            1,033
Shares issued net                                        -
of costs                 86      1,145         -                    -
Lesot share issue       238      7,963         -   (8,201)          -
Capital                                                  -
reorganisation            -   (13,817)                         13,817
Loss for the year         -          -         -         -    (5,441)
Lesot cost                                               -
included in loss
for the year              -          -         -                6,715
Dividends                 -          -         -   -            (927)
At 31 December                                     (8,201)
2004                  1,188          -     8,920               15,197



6.      Notes to the cash flow

(a)          Reconciliation of operating profit to net cash inflow
from operating activities



                                            2004   2003
                                            £000      £000

Operating (loss)/profit                  (5,817)     2,189
Depreciation                                  55        52
Amortisation of goodwill                     740       740
Movement in stock and work-in-progress         -      (51)
Movement in debtors                          548   (1,006)
Movement in creditors                      (575)     (635)
                                         (5,049)   1,289


(b)           Analysis of net cash


                1 January    Cash   31 December
                     2004    flow          2004
                     £000    £000          £000

Cash balances          97   1,552         1,649




7.      Annual report

Copies of the annual report and accounts will be sent to shareholders
in the near future and will be obtainable from the Company's head
office at 85 Buckingham Gate, London SW1E 6PD and from the Company's
website www.lupuscapital.co.uk.


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