Foster(John) & Son

Final Results

Foster(John) & Son PLC
28 January 2002


                                 John Foster & Son plc


        The Directors of John Foster & Son plc announce their results for the
        year ending 29 February 2000:


        Chairman's Statement


        Turnover for the year to 29 February 2000 amounted to £2,752,000 (1999:
        £4,588,000), the profit, after taxation and minority interests, was
        £129,000 (1999: loss £942,000).


        The Board of Directors is unable to declare a dividend on the ordinary
        shares (1999: nil) with the preference dividend being withheld.


        The financial statements have not been prepared on a going concern basis
        as, after making appropriate enquiries, and having regard to the cash
        flow forecast for the coming twelve months and in the absence of an
        injection of a new business and refinancing, the Directors have decided
        the going concern presumption in SSAP 2 is not appropriate.


        During the year being reported upon the Group continued to operate its
        two core businesses, those being the manufacture and sale of high
        quality worsted and mohair suitings and the provision of low cost
        industrial space at Black Dyke Mills.


        Whilst John Foster (Textiles) Limited remained in operation for the full
        twelve month period, generating sales revenue of £2,752,000 (1999:
        £4,588,000), on 30 December 1999 the Company sold Black Dyke Mills, its
        car park and Broomfield sites for gross proceeds of £1,550,000. This
        disposal generated a profit of £477,000.


        During the ten month period prior to the sale Black Dyke Mills generated
        £163,000 (1999: £226,000) of rental income


        The funds received from the disposal of the three properties were
        utilised to reduce bank borrowings that fell from £2,638,000 at the
        start of the period to £1,227,000 at its close on 29 February 2000.


        Since the end of the financial period being reported upon there are a
        number of significant post balance sheet events on which to report.


        Suspension of trading in John Foster & Son plc shares

        Following the failure of the Company to file its accounts for the year
        ended 29 February 2000 by 31 August 2000 trading in the shares of the
        Company were suspended and remain so today.


        Reservoir and Sandbeds site

        As announced on 30 August 2000 a contract was exchanged with Bowthorpe
        Limited for the disposal of the Reservoir and Sandbeds sites for a gross
        value of £100,000. This contract was completed on 2 November 2000 with
        the net proceeds being used to reduce secured bank borrowings.


        The Company also agreed two options with the above purchaser which will
        yield to the Company 45% of the enhanced value of the grazing land to
        the North of the reservoir site, approximately 4.60 acres, should
        outline planning permission be obtained for the residential development
        of the land and the options exercised by Bowthorpe Limited during the
        option period. Should the options not be exercised during the option
        period of fifteen years then the land will revert back to the Group.


        John Foster (Textiles) Limited

        On 31 October 2001 the National Westminster Bank plc demanded from the
        directors of John Foster (Textiles) Limited the immediate payment of the
        sum of £1,052 including accrued interest due by the company to the bank.
        In addition, they also demanded the immediate payment of £1,058,999
        including accrued interest to date due under a guarantee given by John
        Foster (Textiles) Limited on 18 January 1999 for the account of John
        Foster & Son plc.


        Subsequently, on 5 November 2001 the National Westminster Bank plc
        appointed Tenon Lathams as Administrative Receiver to John Foster
        (Textiles) Limited following its failure to meet the immediate payment
        of the sums demanded.


        On 10 December 2001 Tenon Lathams sold the business and certain assets
        of John Foster (Textiles) Limited to Staveley Fine Worsteds Limited, a
        company of which S. A. Oxley, a Director of John Foster & Son plc, is a
        minority shareholder.


        John Foster & Son plc 1977 Executive Retirement Benefit Scheme

        During July 2000 the Company reached individual settlements with all but
        one of the deferred pensioners of the John Foster & Son plc 1977
        Executive Retirement Benefit Scheme. Following the completion of these
        agreements the scheme became 101% funded on a Minimum Funding
        Requirement basis and the provision of £302,000 in the accounts for the
        year being reported upon is no longer required. However, as part of the
        agreements reached with the individual members the Company accepted a
        liability of £52,000 which can only be settled by way of an issue of
        shares at the time of a corporate transaction, or cash at the Company's
        discretion.


        Prospects

        Since the appointment of Tenon Lathams as Administrative Receivers to
        John Foster (Textiles) Limited the remaining companies within the Group
        have continued to operate at a much reduced level whilst the Directors
        have pursued a number of options for the restructuring and refinancing
        of the Company. The options currently being considered by the Board
        include an injection of certain assets and a capital raising and
        reconstruction. Running parallel with this the Directors have continued
        to progress the disposal of the Group's remaining property assets.



        Whilst the Group is undergoing this period of reorganisation its future
        is dependant upon the:



 a. continuing support of the existing shareholders and unsecured creditors.


 b. disposal of the remaining property assets. The Company is in negotiations
    with third parties for the disposal of its Scottish property and the
    Directors will make the necessary announcement to shareholders should an
    agreement, subject to contract, be entered into.


 c. continuation of the bank facilities which are due to for renewal in September
    2002, and


 d. successful completion of the negotiations which are on going with third
    parties to inject certain assets into the business and the subscription, at
    the same time, by those third parties for new ordinary shares in John Foster
    & Son plc.


        The banks have indicated that, at this point in time, given the actions
        the Company is taking, they see no reason why the facilities should not
        be renewed on their expiry in September 2002 under the existing terms
        subject to the other assumptions detailed above being achieved.


        There can be no certainty that the Board will be successful in
        concluding the disposal of the remaining property assets and the
        reorganisation of the Group through the injection of certain assets
        together with a capital raising and reconstruction. Therefore, whilst
        the Directors seek to implement their plans for the future success of
        the Company it is unlikely that the suspension imposed on the shares on
        31 August 2000 will be lifted and trading able to recommence.



    CONSOLIDATED PROFIT AND LOSS ACCOUNT
    For the year ended 29 February 2000

                                                                                                                      
                                         2000           2000           2000         1999           1999           1999

                                   Continuing   Discontinued          Group   Continuing   Discontinued          Group

                                   Operations      Operation   Consolidated   Operations      Operation   Consolidated

                                    Unaudited      Unaudited      Unaudited        £'000          £'000          £'000

                                        £'000          £'000          £'000                                           

  Turnover                              2,752              -          2,752        4,588              -          4,588

  Cost of sales                      (2,135)              -        (2,135)      (4,077)              -        (4,077) 

  Gross profit                            617              -            617          511              -            511

  Selling and distribution              (575)              -          (575)        (820)              -          (820)
  expenses                                                                                                            

  Administration expenses               (262)           (40)          (302)        (482)           (50)          (532)

       recurring                                                                                                      

       exceptional                      (61)           (51)          (112)        (105)           (21)          (126) 
                                        (281)           (91)          (372)        (896)           (71)          (967)

  Other operating income                   -            163            163            -            324            324 

  Operating (loss)/ profit              (281)             72          (209)        (896)            253          (643)

  Profit on disposal of fixed            477             64            541            -              -              - 
  assets                                                                                                              

  Profit / (loss) on ordinary             196            136            332        (896)            253          (643)
  activities                                                                                                          
  before interest                                                                                                     

  Interest payable                     (190)           (13)          (203)        (263)           (23)          (286) 

  Profit / (loss) on ordinary               6            123            129      (1,159)            230          (929)
  activities                                                                                                          
  before taxation                                                                                                     

  Taxation                                 -              -              -            -              -              - 

  Profit / (loss) on ordinary               6            123            129      (1,159)            230          (929)
  activities                                                                                                          
  after taxation                                                                                                      

  Minority interest - equity               -              -              -            -           (13)           (13) 

  Profit / (loss) for financial             6            123            129      (1,159)            217          (942)
  year                                                                                                                

  Dividends on non-equity                                                                                             
  (preference                                                                                                         
  shares) not yet declared                                                                                            

  Cumulative preference 3.15%            (9)              -            (9)          (9)              -            (9) 

  Surplus / (deficit) for the            (3)            123            120      (1,168)            217          (951) 
  year                                                                                                                

  Earnings / (loss) per 25p                                           1.1p                                     (8.5p) 
  ordinary share                                                                                                    



        NOTES TO THE PRELIMINARY ANNOUNCEMENTOF RESULTS

        For the year ended 29 February 2000


     1. Basis of preparation


        On the 5 November 2001 the National Westminster Bank plc appointed Tenon
        Lathams as Administrative Receivers to John Foster (Textiles) Limited
        following its failure to meet the immediate payment of sums demanded.
        This company constituted the Group's core business and, since the time
        of the appointment of Tenon Lathams, the remaining companies within the
        Group have continued to run at a much reduced level whilst the Directors
        have pursued a number of options for its restructuring and refinancing.
        The options currently being considered by the Board include a
        transaction that would result in the injection of certain assets, a
        raising of new funds and capital reconstruction. Running parallel with
        this the Directors have continued to progress the disposal of the
        Group's remaining property assets.


        During this period of reorganisation, the Directors continually review
        the forward cash flow requirements of the ongoing activities, and have
        decided that in the absence of an injection of a new business and
        refinancing the going concern presumption in SSAP 2 is not appropriate.
        Accordingly, the financial statements have been drawn up on a basis that
        reflects the Directors intentions to dispose of the remaining property
        assets as outlined above and the events post 29 February 2000. Provision
        has been made for further liabilities that might arise and fixed assets
        and long-term liabilities have been reclassified as current assets and
        liabilities.


        The Group and the Company had a deficiency of shareholders' funds at 29
        February 2000 of £1,419,000 and £1,620,000 respectively.


        Whilst the Group is realising its remaining assets its ability to do so
        in an orderly manner, and to progress its plans for the future, is
        dependant upon the:



     a. continuing support of the existing shareholders and unsecured creditors


     b. disposal of the remaining property assets in line with its forecasts


     c. continuation of the bank facilities which are due to for renewal in
        September 2002, and


     d. successful completion of the negotiations which are on going with third
        parties to inject certain assets and trading operations into the
        business and the subscription, at the same time, by those third parties
        for new ordinary shares in John Foster & Son plc.


        The banks have indicated that, at this point in time, given the actions
        the Company is taking to dispose of the remaining property assets and
        restructure the business, they see no reason why the facilities should
        not be renewed on their expiry in September 2002 under the existing
        terms subject to the other assumptions detailed above being achieved.


        Finally, there can be no certainty that the Directors will be successful
        in concluding the disposal of the remaining property assets and the
        reorganisation of the Group through the injection of certain assets
        together with a capital raising and reconstruction. However, any funds
        raised will be utilised as follows:



     a. funds from the sale of the Group's remaining property assets in
        Queensbury, Bradford and Galashiels, Scotland will be used in the first
        instance to repay to the National Westminster Bank plc and Royal Bank of
        Scotland plc their secured borrowings within John Foster & Son plc and
        its operating subsidiaries. If there are any surplus funds following the
        repayment in full of these outstanding bank debts these will become
        available for use within the Group.


     b. cash generated by way of a capital raising will be used to pay to the two
        banks £100,000 in total in order that the cross guarantees between the
        parent company and its subsidiaries can be removed as described in note
        15 to the accounts and any other unsecured indebtedness.


     c. future working capital


    The financial information presented does not constitute statutory accounts
    as defined by Section 240 of the Companies Act 1985. It is an extract from
    2000 financial statements which have been approved by the Directors,
    reported on by the auditors and filed with the Registrar of Companies. The
    auditors' report, whilst unqualified, will contain an explanatory paragraph
    making reference to the fundamental uncertainty surrounding the future of
    the Group which is reliant on the successful completion of a proposed
    restructuring and refinancing, the continuing support of the shareholders
    and unsecured creditors, the disposal of property assets and the existing
    bank facilities being renewed on their expiry in September 2002 as referred
    to in both the Chairman's statement and the basis upon which the accounts
    have been prepared.


    The comparative information presented is an extract from the statutory
    accounts for the financial year ended 28 February 1999. These financial
    statements in which the auditors' report, whilst unqualified contained an
    explanatory paragraph making reference to the applicability of the going
    concern assumption in respect of the disposal of property assets, renewal of
    banking facilities and a proposed subsequent corporate transaction and
    capital raising, did not contain a statement under either section 237(2) or
    (3) of the Companies Act 1985 and have been delivered to the Registrar of
    Companies.


    2.      Dividends


    The Company is unable to declare a dividend on its ordinary or preference
    shares. The arrears of preference dividend at 29 February 2000 amounted to
    £63,000 (1999: £58,000).


    CONSOLIDATED BALANCE SHEET
    For the year ended 29 February 2000

                                                                                                    
                                                                            2000                  1999

                                                                       Unaudited                      

                                                                £,000      £'000      £'000      £'000

                  Fixed assets                                                                        

                  Tangible assets                                              -                 1,098


                  Current assets                                                                      

                  Stock                                           496                   597           

                  Debtors                                         323                   479           

                  Assets held for resale                         391                    386            
                                                               1,210                  1,462            

                  Current liabilities                                                                 

                  Bank overdrafts                               (660)                (1,678)           

                  Creditors - amounts falling due             (1,667)                (1,216)            
                  within one year                                                                     
                                                              (2,327)                (2,894)            


                  Net current liabilities                               (1,117)                (1,432) 

                  Total assets less current liabilities                 (1,117)                  (334)

                  Creditors - amounts falling due                            -                   (912)

                  After one year                                                                      

                  Provisions for liabilities and charges                  (302)                  (302) 

                  Net liabilities                                       (1,419)                (1,548) 


                  Capital reserves                                                                    

                  Called up share capital                                3,101                  3,101

                  Share premium account                       2,895                   2,895           

                  Profit and loss account                    (7,470)                 (7,599)            


                  Shareholders' deficit                                 (4,575)                (4,704) 

                  Equity                                     (1,827)                 (1,947)           

                  Non - equity (preference)                     353                     344            

                  Total shareholder's deficit                           (1,474)                (1,603)

                  Minority interest - equity                                55                     55 
                                                                        (1,419)                (1,548) 


GROUP CASH FLOW STATEMENT
For the year ended 29 February 2000



                                                                                              2000     1999

                                                                                         Unaudited         

                                                                                             £'000    £'000


              Net cash inflow / (outflow) from operating activities                            58    (111) 


              Returns on investments and servicing of finance                                              

              Interest paid                                                                  (201)    (284)

              Interest element of finance lease rentals                                       (2)      (2) 


              Net cash outflow from returns on investments and                              (203)    (286) 

              Servicing of finance                                                                         


              Taxation                                                                           -        -


              Capital expenditure and financial investment                                                 

              Receipt from sale of fixed asset investment                                        -       10

              Payments to acquire tangible fixed assets                                       (49)     (22)

              Receipts from sales of tangible fixed assets and assets held for resale       1,611      649 

              Net cash inflow from capital expenditure and financial                        1,562      637 
              investment                                                                                   

              Net cash inflow before financing                                              1,417      240 


              Financing                                                                                    

              Repayment of principal under finance lease                                      (15)      (5)

              Mortgage repayment                                                             (548)        -

              Other loans received/ (repaid)                                                  164    (491) 

              Net cash outflow from financing                                               (399)    (496) 

              Increase / (decrease) in cash                                                 1,018    (256) 



Contact S A Oxley or S C Hathaway on 0207 287 3965


END


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