Update on Current Trading and Operations

Lupus Capital PLC
17 February 2000


Update on current trading and operations
 
Proposed sale of Gall Thomson's US business 

Add-on acquisition for Gall Thomson's main marine couplings business

Settlement relating to disposal of property services operations

Current trading

Following the acquisitions of Gall Thomson Environmental plc and Octroi Group
PLC, both of which were declared unconditional in all respects on 22 December
1999, Lupus announces that trading in Gall Thomson's major business, the
design, marketing and distribution of marine breakaway couplings, has
continued to be very satisfactory and that the prospects for the business are
encouraging.  In part, this results from the sustained period of higher oil
prices which, in turn, is being reflected in that business's order books. 

Strategy and further acquisitions

Lupus's strategy is to invest in, or acquire, small and medium sized public
companies which it believes are lacking strategic direction and the Company is
giving active consideration to a number of further acquisitions or investments
in such companies.  Lupus intends to generate significant returns by promoting
and, where necessary, implementing strategic plans for the companies,
including appropriate exit routes.  The Company will therefore create value by
providing a service to shareholders and company boards, as well as to
acquisitive well-run international companies looking to expand and diversify
their businesses. 

Intention to dispose of Gall Thomson's marine survey and navigation business

In line with this strategy, Lupus announces that it now intends to put up for
sale the smaller part of the Gall Thomson business, Survey Equipment Services
Inc ('SES') which rents, sells and supplies specialist marine survey and
navigation equipment to the oil and gas industry from its base in Houston,
Texas. SES is totally separate from Gall Thomson's main marine breakaway
couplings business and, in Lupus's view, would benefit from being part of a
larger business.

Gall Thomson acquisition

Lupus also announces that Gall Thomson has acquired a business and the
relevant assets from Steel Services (Great Yarmouth) Limited, together with
related property assets, for a cash consideration of £450,000 to which will be
added an agreed valuation for stocks and work-in-progress estimated to be
approximately £50,000.  This business and the assets are principally dedicated
to the manufacture of Gall Thomson's marine breakaway couplings and
inextricably linked to that business.  Lupus believes that the acquisition
provides significant added value to the marine couplings business both in
terms of immediate financial performance and longer term strategic value.

Settlement relating to disposal of property services operations

On 13 August 1999 Lupus completed the sale of its property services operations
to Environmental Property Services Holdings Limited ('EPS Holdings'), an MBO
vehicle led by David Anderson, Managing Director of the operations.  The sale
consideration, which was subject to adjustment following the preparation of
Completion Accounts, amounted to £9.34 million, comprising a cash payment to
Lupus of £7.81 million and the assumption of deferred liabilities of £1.53
million.  Completion Accounts have now been prepared and a cash settlement
from Lupus to EPS Holdings of £1.35 million has been agreed.  After accounting
for the settlement, Lupus expects to realise a small profit on the disposal of
the EPS operations.

Preliminary results announcement

Lupus will be announcing its results for the year to 31 December 1999 on
Wednesday, 22 March 2000. 


Enquiries:

Lupus Capital plc       
Charles Ryder, Chief Executive              Tel:       [phone]
James Orr, Finance Director       or        Tel:       [phone]


Merlin Financial       

Paul Downes                                 Tel:       [phone]