Final Results

Lupus Capital PLC
02 March 2007


Lupus Capital plc

Preliminary Statement of Results for the year ended 31 December 2006


Chairman's Statement



Dear Shareholder,

I am pleased to report a record set of financial results for the year ended 31
December 2006 together with the successful integration of Schlegel Building
Products, which was acquired on 4 April 2006. Group profits, earnings and cash
generation all surpassed previous highs.

Gall Thomson Environmental, which operates primarily in the oil and gas sector,
has had its best year yet beating 2005 in sales, profits, cash generation and
also return on capital employed.

The nine month contribution from the acquisition of Schlegel has been very
positive.   The management has responded well both to the change of ownership
and new direction and has improved on key performance indicators over 2005.

Results for the year

It is very satisfying to be able to detail to you an outstanding year for your
company.   Sales, including Schlegel, were £62.940 million (2005: £7.479
million) and pre-tax profits increased to £10.013 million (2005: £2.435
million).  Reported earnings per share jumped to 1.233p (2005: 0.593p).   The
figures for the period are not directly comparable as they include a major
acquisition and have been prepared on the basis of the requirements of UK GAAP,
as explained in the notes to the accounts.

Dividend

A growing dividend is also one of our objectives and we have yet again been able
to achieve this with a series of dividends.

We are recommending a final dividend for 2006 of 0.334p (2004: 0.278p) which is
an increase of over 20%.   This final dividend will be paid to Shareholders on
the register at 9 March 2007 following the AGM, which we will be holding on 16
May 2007.

This, together with the special interim dividend of 0.114p per Ordinary Share in
respect of the quarter ending 31 March 2006 and the further interim dividend of
0.049 for the first half of 2006, will make a total dividend for the 2006 year
of 0.497p up 21% from the 0.410p paid in the 2005 year.

It is the intention of the Board to maintain a progressive dividend policy in
the future.

Business of Gall Thomson Environmental Limited

Gall Thomson is the world's leading supplier of marine breakaway couplings. Its
subsidiary, KLAW 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 firstly to stop environmental pollution and
secondly to prevent damage to pumping and transfer equipment.   Gall Thomson
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
significant environmental and financial consequences of risking less established
products gives Gall Thomson a considerable advantage and strong market share.

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

Both Gall Thomson Environmental Ltd (GTE) and its subsidiary KLAW Products Ltd
(KLAW) have performed well during the year.

GTE, who operate mainly in the offshore industry, has benefited from a strong
oil price that had encouraged the major oil producers to commence new projects
worldwide.  In addition,   the drive towards environmental improvements
continues to have a positive effect. Approximately 90% of turnover was derived
from exported sales spanning the world from Europe to Asia, America to the
Middle East and Africa.   Nearly all sales are made in pounds sterling so we
have limited exposure to a fluctuating dollar.

In respect of KLAW, who operate in the oil, gas, refining and petrochemical
markets, the underlying business has continued to develop.  New products have
been introduced, namely the cryogenic ERC (Emergency Release Coupling) for ship
to ship transfer of LNG and the hazardous chemical units, both being received
with much interest.   In the case of the cryogenics ERC, KLAW has already
received significant orders from major oil companies.

Business of Schlegel Building Products

The £84 million acquisition of Schlegel, a leader in the manufacture and
marketing of door and window seals, primarily for the worldwide housing market,
was completed on 4 April 2006.   Schlegel, which currently has over 625
employees and more than 5,000 customers, sells over 650 million metres of seals
in a year.   Core manufacturing competencies are continuously moulded urethane
foam, narrow fabric textiles, and extruded plastics.   As a leading producer of
urethane foam (compression seals) and woven pile (sliding seals) for the window
and door markets, seals are sold in more than 75 countries from seven
manufacturing plants located around the world.   In addition, Schlegel supply
both manufactured and assembled door and window locking mechanisms to a number
of their key seal customers.

Also manufactured are related products for the non-housing markets such as
cleaning brushes, static control devices for copiers and printers, speciality
automotive products as in sunroof seals and truck spray suppressants, tractor
seat trim and sway bar brushes.

In 2006 Schlegel saw many exciting changes, which produced increased
profitability over the previous year and which we hope to continue to build on.
New customers have been won, productivity has improved, prices have been
raised to compensate for raw material inputs, sales have been refocused into
higher margin customers, financial controls have been tightened and resulting
action from extensive analysis has yielded higher gross margins.   The global
market for housing, both new build and refurbishment, has been generally
satisfactory with the long term worldwide trend being upwards.   As an
international business with activities across three continents we have a limited
exposure to both dollar currency, and the current U.S. new build housing market
difficulties where we have taken action to mitigate any effects.

On the corporate front

A comprehensive tax review is being undertaken with an expected outcome that our
worldwide group tax rate will decline from an anticipated 38% band previously
predicted to 36% in 2006 and a lower cash tax rate in future.

The acquisition of Schlegel has broadened the sphere of operations of Lupus
Capital plc and management has reviewed the risk profile of the enlarged group.

We continue to seek the development of Lupus through both organic growth and
selective acquisitions.

The excellent cash generation from both our businesses has enabled Lupus to
reduce the net debt taken on to buy Schlegel (£35m) at a speed quicker than
originally envisaged.   At 31 December 2006 net debt stood at £23.3m.   It has
also provided funds to increase our dividend to shareholders for the 2006 year
at a higher rate than forecast at the time of the Schlegel acquisition.

Strategy

Our strategy is to build shareholder value through the acquisition of industrial
assets with the potential for development 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, potential
long-term growth configurations installed, and a critical mass built, we would
expect to realise a gain through a variety of exit mechanisms.

Our strategy is very similar to that developed at Tomkins plc, with one key
exception.   Institutional investors are not sympathetic to public conglomerate
organisations; they have, however, even though with very diverse interests,
favoured private equity structures.   We intend to follow the private equity
principle of timed investment exits when critical mass and creation of
shareholder value have been achieved by demergers, IPOs or sales followed by
cash returns to shareholders when appropriate.

The speed of our decision making and the 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 when negotiating
transactions.   In addition, we have proven management skills and systems, as
well as the application of standard 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 of interest.   Our
key requirements are asset based, positive cash flow, industrial activities with
potential for development.   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.

Outlook

Gall Thomson is a reliable business and looks forward to maintaining its
success.   There are opportunities in most areas of the world due to an increase
in global 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 business in the
short and long term.   KLAW continues to grow as a result of entering new
markets with successfully developed innovative products.

Schlegel operates within the worldwide housing market, which is likely to
continue to grow due to increased populations and more single housing
requirements.   In addition, environmental regulations for energy conservation,
of which seals are an integral part, are becoming more and more critical to both
developed and developing countries.   These factors should ensure a growing
future.

We are very excited about the progress that we are making with Lupus.   Our
results are good, backed up by strong cash generation enabling us to continue
our progressive dividend policy.   The purchase of Schlegel, a leading building
products manufacturer, was yet another step in creating a successful growing
international business.

We have a defined 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 your Board has the right
platform to deliver further value for shareholders.

Record order books, comprising both marine and industrial breakaway couplings,
at Gall Thomson and further opportunities for new products for KLAW together
with a full contribution from the global activities of Schlegel, enable us to
enter 2007 with optimism.

We look forward to another year of growth and development of Lupus Capital plc.


Greg Hutchings
Chairman

2 March 2007


Consolidated profit and loss account
For the year ended 31 December 2006

                                                            Note           2006           2005
                                                                          £'000          £'000
                                                                                      Restated

Turnover                                                                 62,940          7,479
Cost of sales                                                          (22,434)        (2,213)
Gross profit                                                             40,506          5,266

Administrative expenses
 - excluding goodwill amortisation                                     (28,960)        (2,180)
 - goodwill amortisation                                                      -          (741)
Total administrative expenses                                          (28,960)        (2,921)

Operating profit                                               3         11,546          2,345

Interest receivable and similar income                                      501            316
Interest payable and similar charges                                    (2,034)          (226)

Profit on ordinary activities before taxation                            10,013          2,435

Taxation                                                                (3,605)        (1,025)

Profit on ordinary activities for the year                                6,408          1,410

Earnings per share                                             5         1.233p         0.593p


All results relate to continuing operations.




Consolidated balance sheet
As at 31 December 2006


                                                Note                2006             2005
                                                                   £'000            £'000
                                                                                 Restated
Fixed assets
Intangible assets                                                 72,832            9,940
Tangible assets                                                   13.123              443
                                                                  85,955           10,383
Current assets
Stocks and work-in-progress                        6               7,396              331
Debtors                                            7              15,210            2,965
Deferred tax                                       7               6,067                -
Cash at bank and in hand                                           9,738            2,654
                                                                  38,411            5,950

Creditors: amounts falling due within one          8            (20,237)          (1,915)
year

Net current assets                                                18,174            4,035

Total assets less current liabilities                            104,129           14,418

Creditors: amounts falling due after more
than One year                                      9            (34,153)             (21)

Net assets                                                        69,976           14,397

Capital and reserves
Called up share capital                           11               3,083            1,188
Share premium account                             12                  45                -
Merger reserve                                    12              10,389           10,389
Profit and loss account                           12              56,459            2,820
Equity shareholders' funds                                        69,976           14,397



Consolidated cash flow statement
For the year ended 31 December 2006

                                                                     2006            2005
                                                                    £'000           £'000

Cash flows from operating activities
Operating profit                                                   11,546           2,345

Depreciation                                                        1,669              58
Amortisation of goodwill                                                -             741
Movement in inventories                                             1,698            (80)
Movement in receivables                                             1,394           (642)
Movement in payables                                                  619             342

Interest received                                                     501             316
Interest paid                                                     (2,034)           (226)
Corporation tax paid                                              (2,050)           (806)
Net cash from operating activities                                 13,343           2,048

Investing activities
Acquisition, net of cash acquired                                (47,408)               -
Schlegel debt repaid upon acquisition                            (40,281)               -
Property, plant and equipment                                       (964)           (105)
Net cash from investing activities                               (88,653)           (105)

Financing
Issue of shares, net of costs                                      51,653               -
Capital element of finance leases                                   (112)               3
Bank loan, net of costs                                            34,734               -
Repayment of long term loans                                      (2,500)               -
Equity dividends paid                                             (1,234)           (941)
Net cash from financing activities                                 82,541           (938)

Increase in cash                                                    7,231           1,005



Consolidated statement of recognised gains and losses
For the year ended 31 December 2006
                                                                     2006             2005
                                                                    £'000            £'000
                                            Note

Opening balance - as previously stated                             15,878           14,668
Restatement                                 2                     (1,481)            (740)
Opening balance - as restated                                      14,397           13,928

Profit for the financial year                                       6,408            1,410
Shares issued net of costs                                         51,653                -
Translation difference                                            (1,248)                -
Dividends paid on ordinary shares                                 (1,234)            (941)
                                                                   55,579              469

Closing shareholders' funds                                        69,976           14,397




Notes to the accounts

1.             Accounting policies

1.1          Going concern basis

The financial statements have been prepared on the going concern basis.

1.2          Accounting convention

          The financial statements have been prepared in accordance with
applicable UK accounting standards (UK GAAP).

The consolidated financial statements for the year ended 31 December 2005 were
prepared in accordance with International Financial Reporting Standards (IFRS).
UK GAAP differs in some respects from IFRS. The relevant change of accounting
policy is as follows:

Under IFRS, the requirement to amortise goodwill was replaced by an impairment
review of the value of the Company's investments.  The directors conducted an
impairment review and concluded that the value at which Gall Thomson
Environmental Limited (Gall Thomson) was stated in the Company's balance sheet
at 1 January 2004 and the value at which KLAW Products Limited was stated in the
balance sheet of Gall Thomson at 1 January 2004 were not greater than the
realisable values of those investments.  Therefore the carrying value of
goodwill under IFRS was the value as at 1 January 2004 and no further provision
was made against that value.  Under UK GAAP a decision to cease amortisation
represents a change in accounting policy; no such change was made in respect of
2004 or 2005.  The Board has resolved that amortisation should be discontinued
under UK GAAP with effect from 1 January 2006. Therefore the valuation of
goodwill is lower under UK GAAP by two years' amortisation.

The accounting policies are unchanged from those used in the last annual
accounts except where otherwise stated.

1.3          Basis of consolidation

The Group financial statements consolidate those of the Company and its
subsidiary undertakings drawn up to 31 December each year.

1.4          Turnover

          Turnover represents the value of work completed for customers during
the year net of VAT.

1.5          Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less depreciation.  Depreciation is
provided on all assets except freehold land at rates calculated to write off the
cost less estimated residual value of each asset on a straight-line basis over
its expected useful life, at the following annual rates:

Freehold buildings                                                 2%
Leasehold improvements                                             25%
Fixtures, fittings and equipment                                   15% to 25%
Plant and machinery                                                7.5% to 35%
Motor vehicles                                                     20% to 25%

The carrying values of tangible fixed assets are reviewed for impairment
periodically if events or changes in circumstances indicate that the carrying
value may not be recoverable.

1.6          Leasing

Rentals payable under operating leases are charged to the profit and loss
account on a straight-line basis over the lease term.

1.7          Stocks and work-in-progress

Stocks and work-in-progress were valued at the lower of cost and net realisable
value.  Cost is determined on a purchase cost basis.  Work-in-progress includes
materials and labour costs and an appropriate proportion of overheads incurred
on uncompleted contracts at the year end.

1.8          Pensions

The Group operates defined contribution schemes within Gall Thomson
Environmental Limited and Schlegel Building Products and contributions are
charged to the profit and loss account as incurred.  Additionally within
Schlegel Building Products defined benefit arrangements exist.  In this case in
accordance with FRS 17 the operating and financing costs are charged to the
profit and loss account in the period in which they arise and are recognised
separately.  Any difference between actual and expected returns on assets during
the year, including changes in actuarial assumptions, is recognised in the
statement of gains and losses.

1.9          Deferred taxation

Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay more,
or right to pay less or to receive more tax, with the following exceptions:

Provision is made for tax on gains arising from the revaluation (and similar
fair value adjustments) of fixed assets, or gains on disposal of fixed assets
that have been rolled over into replacement assets, only to the extent that, at
the balance sheet date, there is a binding agreement to dispose of the assets
concerned.  However, no provision is made where, on the basis of all available
evidence at the balance sheet date, it is more likely than not that the taxable
gain will be rolled over into replacement assets and charged to tax only where
the replacement assets are sold.

Deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can
be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.

1.10       Foreign currencies

          Transactions in foreign currencies are recorded at the rate ruling at
the date of the transaction.  Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the
balance sheet date.  All differences are taken to the profit and loss account.

The results of overseas companies are translated into sterling at the average
rates during the period and the balance sheets at the rate ruling at the balance
sheet date. Exchange differences on the net assets on the results of overseas
operations are reported in the statement of gains and losses.

1.11   Financial instruments

Financial assets and liabilities are recognised on the Group's balance sheet
when the Group becomes a party to the contractual provisions of the instrument.

Trade receivables are stated at their nominal value as reduced by appropriate
allowances for estimated irrecoverable amounts.  Trade payables are stated at
their nominal amount.

1.12    Share-based employee remuneration

All share-based payment arrangements are recognised in the historical financial
information.  The group operates an equity-settled share-based remuneration plan
for remuneration of its employees.  All employee services received in exchange
for the grant of any share-based remuneration are measured at their fair values.
All share-based remuneration is ultimately recognised as an expense in profit
or loss with a corresponding credit to additional paid-in capital, net of
deferred tax where applicable.

Upon exercise of share options, the proceeds received net of any directly
attributable costs up to the nominal value of the shares issued are allocated to
share capital with any excess being recorded as share premium.

2.      Restatements

The restatements required by the changes in accounting policy, as set out in
note 1 above, are as follows:

(a) Profit after taxation
                                                Year ended
                                               31 December
                                                      2005
                                                     £'000

Profit for the financial period/year, as             2,151
previously stated under IFRS

Amortisation of goodwill                             (741)

As reported under UK GAAP                            1,410


(b) Net assets
                                                          At 1 January            At 1 January
                                                                  2006                    2005
                                                                 £'000                   £'000

Opening net assets, as previously stated under                  15,878                  14,668
IFRS

Amortisation of goodwill                                       (1,481)                   (740)

As reported under UK GAAP                                       14,397                  13,928


3.      Operating profit by sector

                                                                   Pre-existing
                                                   Schlegel         Lupus Group
                                                 (9 months)         (12 months)            Total
                                                      £'000               £'000            £'000

Revenue                                              53,626               9,314           62,940
Cost of sales                                       -19,602              -2,832          -22,434
Gross profit                                         34,024               6,482           40,506
Administrative expenses                             -25,923              -3,037          -28,960
Operating profit                                      8,101               3,445           11,546

4.      Dividends

                                                                              2006     2005
                                                                             £'000    £'000
Dividends reflected in the financial statements:
Final dividend for the year 2005 at 0.278p per share                           661      627
(2004: 0.264p)
Interim dividends at 0.114p per share and 0.049p per                           573      314
share (2005: 0.132p)
                                                                             1,234      941
Dividend not reflected in the          :
financial statements
Proposed final dividend for the year                                         2,059      661
2006 at 0.334p per share (2005:
0.278p)


5.    Earnings per share

The calculation of basic earnings per share is based on the profit after
taxation for the financial year and on the weighted average number of shares in
issue during the year of 519,845,797 ordinary shares of 0.5p (2005: weighted
average 237,696,286).

6.  Stocks and work-in-progress

                                                             2006        2005
                                                            £'000       £'000

Raw materials and consumables                               3,019         194
Work-in-progress                                            1,023         125
Finished goods                                              3,354          12
                                                            7,396         331


7.  Debtors

                                                   2006                  2005
                                                  £'000                 £'000

Trade debtors                                    12,277                 2,812
Other debtors                                     1,051                    91
Prepayments and accrued income                    1,882                    62
                                                 15,210                 2,965


The deferred tax asset arises on the acquisition of Schlegel and is anticipated
to be recovered after more than one year.

8.  Creditors: amounts falling due within one year

                                                 2006                   2005
                                                £'000                  £'000

Trade creditors                                 7,016                    307
Bank loan                                       4,938                      -
Finance lease obligations                         156                      1
Corporation tax                                 1,453                    718
Other taxes and social security costs             272                    102
Accruals and deferred income                    6,402                    787
                                               20,237                  1,915

9.  Creditors: amounts falling due after more than one year

                                                           2006          2005
                                                          £'000         £'000

Bank loan                                                27,296             -
Finance lease obligations                                   334             2
Retirement benefits                                       3,290             -
Maintenance warranties                                    3,118             -
Deferred taxation                                             -            19
Other creditors                                             115             -
                                                         34,153            21


10.  Borrowings

The Group took out loans totalling £35,000,000 in connection with the
acquisition of Schlegel, of which £30,000,000 was a long term loan and
£5,000,000 short term. A repayment of £2,500,000 has been made. A further
revolving credit facility of £10,000,000 was made available by the bank, but no
drawings have been made under this facility at the end balance sheet date.

11.  Share capital
                                                                               2006           2005
                                                                              £'000          £'000

Authorised:

825,000,000 (2005: 500,000,000) Ordinary shares of 0.5                        4,125          2,500
pence each

Allotted, called up and fully paid:
616,559,778 (2005: 237,696,286)
  Ordina Ordinary shares of 0.5 pence each                                   3,083           1,188



12.  Movements on share capital and reserves


Group                                                                 Share          Profit
                                         Share        Merger        Premium        and loss
                                       capital       reserve        Account         Account
                                         £'000         £'000          £'000           £'000

At 1 January 2006 - as previously        1,188        10,389     -                    4,301
stated
Restatement - see note 2                     -             -              -         (1,481)
                                         1,188        10,389              -           2,820
Shares issued net of costs               1,895             -             45          49,713
Profit for the year                          -             -              -           6,408
Translation adjustment                       -             -     -                  (1,248)
Dividends paid                               -             -     -                  (1,234)
At 31 December 2006                      3,083        10,389     45                  56,459



13.  Status of this Report

The above results for the year ended 31 December 2006 are unaudited.  This
financial information does not constitute the Company and Group's statutory
accounts for the year ended 31 December 2006, which will be finalised on the
basis of the financial information in this Preliminary Announcement.

Statutory accounts for the year ended 31 December 2006 are to be delivered to
the Registrar of Companies following the Annual General Meeting.

The information for the year ended 31 December 2005 has been extracted from the
latest published audited financial statements, as restated to comply with UK
GAAP (see note 2).  The audited financial statements for the year ended 31
December 2005 have been filed with the Registrar of Companies.  The report of
the auditors on those accounts contained no qualification or statement under
section 237(2) or (3) of the Companies Act 1985.





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