Trading Statement

Lupus Capital PLC
10 January 2007




LUPUS CAPITAL PLC

PRE - CLOSE TRADING STATEMENT                                10 January 2007


Lupus is pleased to report that it anticipates a record set of results for the
year ended December 31, 2006 together with the successful integration of
Schlegel Building Products, which was acquired on April 4, 2006.  As a
consequence, profits, earnings, cash generation and dividends are all likely to
exceed analysts' expectations.

Gall Thomson Environmental, which operates primarily in the oil and gas sector,
has had its best ever year, surpassing 2005 in sales, profits, cash generation
and also return on capital employed.  The year end order book, comprising both
marine and industrial breakaway couplings, is at an all time high which bodes
well for 2007.

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.  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 action from exhaustive
analysis has yielded higher gross margins.  The global market for housing 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 US new build housing
market difficulties where we have taken action to mitigate any effects.  2006
has seen many exciting changes to Schlegel, which has produced increased
profitability over the previous year and which we hope to build on.



On the corporate front:

A comprehensive tax review is being undertaken with the expected outcome that
our worldwide group cash tax rate should decline from an anticipated 38 per cent
band previously planned.  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 at a speed quicker than originally
envisaged.  It will also provide funds to increase our dividend to shareholders
for the 2006 year at a higher rate than forecast at the time of the Schlegel
acquisition.  This is likely to be a recommendation of at least a 20 per cent
increase over the .410p net dividend for the 2005 year.

Record order books at Gall Thomson together with a 12 month contribution from
the global activities of Schlegel, rather than nine months in 2006, enable us to
enter 2007 with optimism.

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



Enquiries to:

Greg Hutchings             020 7976 8000

Alan Frame                 020 7405 7777






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