Interim Results

Lupus Capital plc

Interim results


Chairman's Statement


Dear Shareholder,

I am  pleased to  be writing  to you  again to  report that  we  have
completed another satisfactory first half  in respect of our  trading
results.   The consummation  of acquisitions  however has  been  more
difficult and  despite  having been  involved  in a  number  of  very
interesting opportunities we have not  been able to complete a  deal.
Whilst this is of concern it is  by no means a mistake.  Our  primary
purpose is to create value  for shareholders, and this requires  that
we pay sensible prices for  acquisitions.  Others have been  prepared
to pay  more but  they  may find  value  creation more  difficult  to
achieve.    Our  reputation  for  protecting  shareholders  interests
remains intact.  We are determined  to develop Lupus along the  lines
we have  outlined and  we continue  to be  diligent and  resolute  on
making value producing acquisitions.

Pre-tax profits for the  six months to 30  June 2005 were  £1,241,000
(compared to the  pre tax profit  of £1,240,000 before  restructuring
costs in the same  period last year) on  sales up 3.1% to  £3,137,000
(2004: £3,044,000).  The results for the period have been prepared on
the basis of  the requirements of  International Financial  Reporting
Standards (IFRS) for the first time. The comparative figures for  the
same period in 2004 and for the year ended 31 December 2004 have been
restated to  conform  to IFRS,  as  explained  in the  notes  to  the
accounts.

The directors have declared an increased interim dividend, up  almost
5%, of  0.132p per  share (2004:  0.126p per  share), payable  on  27
October 2005 to shareholders on the register at the close of business
on 7 October 2005.

Our balance sheet remains strong and contains £2,410,000 net cash  at
30 June 2005 (2004: £1,569,000).

Our strategy  as  laid  out  in  our  Annual  Report  has  been  well
documented and  received.   We are  currently examining  a number  of
attractive opportunities  which  have  potential for  the  company.
Whilst we  are fully  committed  to expanding  the  group it  is  our
intention to do this carefully and economically as opposed to rushing
into unwise situations.

Trading prospects for  Gall Thomson remain  satisfactory.  The  order
profile  is  encouraging  and  management  are  confident  about  the
business activity in the current period. Klaw Products Limited, which
manufactures, assembles  and  distributes  industrial  quick  release
couplings for a variety of  industries, is progressing very well  and
having a record year.

With regard to Lupus Capital plc,  we have a clear strategy, a  sound
balance sheet, good operating  activities, excellent cash  generation
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 September 2005









Consolidated income statement


                              Six months     Six months
                                   ended          ended    Year ended
                            30 June 2005   30 June 2004   31 December
                                                                 2004
                             (unaudited)    (unaudited)   (unaudited)
                      Notes                  (restated)    (restated)
                                   £,000          £'000         £'000

Revenue                            3,137          3,044         6,607

Operating
profit/(loss)
Continuing operations              1,202          1,237         2,947
excluding
restructuring costs
Restructuring costs                    -        (1,309)       (1,309)
                                   1,202           (72)         1,638

Interest and similar                  39              3            27
items

Profit/(loss) before               1,241           (69)         1,665
taxation

Taxation                           (373)             10         (538)

Profit/(loss)           3            868           (59)         1,127
attributable to
shareholders of the
company



Earnings/(loss) per     4         0.365p       (0.028p)        0.502p
share - basic and
diluted



Consolidated Balance Sheet


                                                        At 31December
                             At 30 June    At 30 June            2004
                                   2005          2004
                            (unaudited)   (unaudited)     (unaudited)
                      Notes                (restated)      (restated)
                                  £'000         £'000           £'000
  Non-current assets
  Goodwill                       11,421        11,421          11,421
  Tangible                          434           417             396
  non-current assets
                                 11,855        11,838          11,817

  Current assets
  Inventories                       371           262             251
  Receivables                     2,016         1,854           2,323
  Cash                            2,410         1,569           1,649
                                  4,797         3,685           4,223

  Current liabilities           (1,101)       (1,721)         (1,372)

  Net current assets              3,696         1,964           2,851

  Total assets less              15,551        13,802          14,668
  current liabilities

  Non-current                      (15)          (20)               -
  liabilities

  Net assets            3        15,536        13,782          14,668

  Capital and
  reserves
  Share capital                   1,188         1,188           1,188
  Merger reserve                 10,389        10,389          10,389
  Lesot reserve                 (8,201)             -         (8,201)
  Retained earnings              12,160         2,205          11,292

                        6        15,536        13,782          14,668




Consolidated Statement of Changes in Equity




                                Six months     Six months
                                     ended          ended  Year ended
                              30 June 2005   30 June 2004 31 December
                                                                 2004
                        Notes
                               (unaudited)    (unaudited) (unaudited)
                                     £'000          £'000       £'000

Opening balance             3       14,668    13,161      13,161

Profit/(loss) for the
financial period/year       3          868      (59)       1,127

Shares issued net of
costs and debit reserve                  -     1,231       1,231
Dividends paid or
legally committed to be
paid on ordinary shares     5            -     (551)       (851)

Closing balance                     15,536    13,782      14,668



Consolidated Cash Flow Statement



                             Six months      Six months    Year ended
                          ended 30 June           ended   31 December
                                   2005    30 June 2004          2004

                            (unaudited)     (unaudited)   (unaudited)
                                             (restated)    (restated)
                                  £'000           £'000         £'000

Cash flows from operating
activities
Operating profit/(loss)           1,202            (72)         1,638

Depreciation                          7              27            55
Movement in inventories           (120)            (11)             -
Movement in receivables             306           1,017           548
Movement in payables              (120)           (503)         (575)


Interest received                   155             113           252
Interest paid                     (117)           (103)         (221)

UK corporation tax paid           (507)           (198)         (489)

Net cash from operating             806             270         1,208
activities


Investing activities
Property, plant and                (45)            (29)          (36)
equipment

Net cash from investing            (45)            (29)          (36)
activities


Financing
Issue of shares net of                -           1,231         1,231
costs
Equity dividends paid                 -               -         (851)

Net cash from financing               -           1,231           380
activities


Increase in cash and cash           761           1,472         1,552
equivalents



Notes

1.   Status of the financial statements
These financial statements are  not the Company's statutory  accounts
for the purposes of Section 240  of the Companies Act 1985. They  are
unaudited. The Company's  statutory accounts  for the  year ended  31
December 2004  received an  unqualified audit  report and  have  been
filed with the registrar of companies at Companies House.

The Directors approved the interim report on 28 September 2005.

2.   Accounting policies
The interim financial information has been prepared on the basis of
the recognition and measurement requirements of International
Financial Reporting Standards (IFRS), which are the accounting
policies to be used in the Report and Accounts of the Group for the
year ended 31 December 2005, as required for the consolidated
accounts of listed companies.  Previously, the consolidated financial
statements were prepared in accordance with United Kingdom Generally
Accepted Accounting Principles (UK GAAP) up to and including the year
ended 31 December 2004. UK GAAP differs in some respects from IFRS.
In accordance with the rules of IFRS, the date of transition to IFRS
is deemed to be 1 January 2004, so that the comparative information
is also prepared under IFRS and has been restated where necessary.
The accounting policies are unchanged from those used in the last
annual accounts except where otherwise stated.

The relevant changes of accounting policies are as follows:
(a) The previous requirement to amortise goodwill is replaced by an
impairment review of the value of the Company's investments.  The
directors have conducted an impairment review and have 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 are not greater than the realisable
values of those investments.  Therefore the carrying value of
goodwill is the value as at 1 January 2004 and no further provision
has been made against that value.

(b) Dividends payable are no longer recorded as liabilities until a
legal requirement to pay them has arisen.  As explained in note 5
below, payment of the final dividend for the year 2004 did not become
a legal obligation of the Company until after 30 June 2005. Therefore
this dividend is added back to the shareholders' funds previously
shown as at 31 December 2004 and is not deducted from shareholders'
funds as at 30 June 2005.  During the comparative period ended on 30
June 2004 the final dividend for the year ended 31 December 2003 had
become a legal obligation of the Company, having been approved by
shareholders at the AGM in May 2004 (although it had not yet been
paid in cash).

(c) Under UK GAAP the Company made a charge to profit in its income
statement for 2004 relating to employment cost of establishing the
Lupus Employee Share Ownership Trust (lesot).  Under IFRS there is no
charge as the award pre-dated the application of the relevant
standard in this case.  The cost of the award remains as a charge to
reserves and there is no effect on net assets.

3.   IFRS transition reconciliation
The restatements required by the changes in accounting policy, as set
out in note 2 above, are as follows:


(a) Profit after taxation
                                  Six months ended         Year ended
                                      30 June 2004   31 December 2004
                                       (unaudited)        (unaudited)
                                             £'000              £'000

Profit / (loss) for the
financial period/year, as
previously stated under UK GAAP            (5,897)            (6,328)

Amortisation of goodwill
written back                                   370                740
Lesot charge to current profit,
written back                                 5,468              6,715

As reported under IFRS                        (59)              1,127






3.   IFRS transition reconciliation - continued


(b) Net assets
                                At 1 January 2005   At 1 January 2004
                                      (unaudited)         (unaudited)
                                            £'000               £'000

Opening net assets, as                     13,301              12,610
previously stated under UK
GAAP

Proposed dividends written                    627                 551
back
Amortisation of goodwill                      740                   -
added back

As reported under IFRS                     14,668              13,161



4.   Earnings per share
Earnings per share figures are based on 237,696,286 ordinary shares
in issue throughout the half-year ended 30 June 2005 (half-year to 30
June 2004: 209,819,393 shares; year to 31 December 2004: 224,306,337
shares).   The number of shares in issue at 30 June 2005 was
237,696,286.  If restructuring costs are added back to earnings in
2004, the adjusted earnings per share are as follows:


                              Six months     Six months    Year ended
                                   ended          ended   31 December
                            30 June 2005   30 June 2004          2004

Adjusted earnings per             0.365p          0.41p         0.94p
share before
restructuring costs


5.   Dividends
The final dividend for the year ended 31 December 2004 of 0.264p per
share was declared by the Annual General Meeting on 7 July 2005.
This dividend was paid to shareholders on 18 July 2005 and absorbed
£627,000.

The directors have today, 28 September 2005, declared an interim
dividend of 0.132p per share (2004: 0.126p) payable to shareholders
on the register at the close of business on 7 October 2005, which
will be paid on 27 October 2005.  This dividend will absorb £314,000
(2004: £300,000).

Under IFRS, proposed dividends that have not yet become a legal
liability are not reflected in the financial statements.   The
dividends paid or payable and those proposed are summarised below:


                              Six months     Six months    Year ended
                                   ended          ended   31 December
                            30 June 2005   30 June 2004          2004

(a) dividends reflected
in the financial
statements
Dividends paid/payable                 -          0.25p        0.376p
per share
(b) dividends not
reflected in the
financial statements
Final dividend proposed           0.264p              -        0.264p
per share
Interim dividend proposed         0.132p         0.126p             -
per share


6.   Movement on share capital and reserves


                      Share    Merger     Lesot   Retained   Total
                    capital   reserve   Reserve   Earnings
                      £'000     £'000     £'000      £'000    £'000

At 1 January 2005,    1,188    10,389   (8,201)      9,925   13,301
as previously
stated
Restatement -             -         -         -        627      627
dividend
Restatement -             -         -         -        740      740
amortisation
Profit for the            -         -         -        868      868
period

At 30 June 2005       1,188    10,389   (8,201)     12,160   15,536






Registered office Crusader House
                  145-157 St John Street
                  London EC1V 4RU







The interim report will be sent to shareholders and copies will be
made available to the public at the registered office of the Company
and at the Company's website www.lupuscapital.co.uk.




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