Information  X 
Enter a valid email address

Alumasc Group Plc (ALU)

  Print          Annual reports

Tuesday 14 September, 1999

Alumasc Group Plc

Final Results, etc.

ALUMASC GROUP PLC
14 September 1999


     THE ALUMASC GROUP PLC - 1999 PRELIMINARY ANNOUNCEMENT
                               
*    Alumasc,  the high specification engineering and building
     products group, reports considerable progress in the year
     ended 30 June 1999 in the Board's strategy to restructure
     the Group into a smaller number of strong businesses with
     their focus on premium engineering and building products.

*    The  Group's on-going business earned profits before  tax
     and  exceptional  costs  of  £9.4  million  (1998:  £11.3
     million),   in  line  with  expectations  and  generating
     sufficient  cash  to  finance record  investment  in  its
     operations of £7.2 million.

*    Engineering Products on-going business made an  operating
     profit of £6.7 million (1998: £8.4 million) on a turnover
     of £82.8 million (1998: £90.7 million).

*    Building  Products  ongoing business  made  an  operating
     profit of £3.1 million (1998: £3.3 million) on a turnover
     of £44.0 million (1998: £45.6 million).

*    The Group's total profit before tax and exceptional costs
     (including  discontinued  activities)  was  £7.9  million
     (1998: £10.4 million).

*    Exceptional costs of £17.2 million, including  losses  of
     £8.9 million incurred in the disposal and closure of non-
     core  activities  and a £7.7 million  goodwill  writeback
     which does not affect shareholders' funds, led to a  pre-
     tax loss of £9.3 million (1998: profit of £9.6 million).

*    The  balance  sheet  remains strong,  with  shareholders'
     funds  of  £36.6  million and net debt  reduced  to  £0.7
     million (1998: £1.8 million).

*    The performance of the on-going business coupled with the
     strong  balance sheet has led the directors to  recommend
     unchanged dividends per share for the year of 8.5p,  with
     an unchanged 6.05p final.

*    John   McCall,   Chairman,  stated  'As   a   result   of
     restructuring, Alumasc has become a group of largely  new
     businesses,  formed  by  combining  our  more  successful
     members  into stronger commercial entities.   While  this
     may  not  alter  the  markets in  which  we  operate,  it
     enhances  our  ability to compete and to  develop  within
     those markets - the prerequisites for growth.  We believe
     that  a sound and profitable base is now established upon
     which a successful future will be built.'

Enquiries:

The Alumasc Group plc                             01536-383844
  John McCall (Chairman and Chief Executive)

Bankside Consultants Limited                     0171-220 7477
  Charles Ponsonby


Chairman's Statement

Overview

The  Board's  strategy to restructure Alumasc into  a  smaller
number  of  strong  businesses with  their  focus  on  premium
engineering   and  building  products  has  made  considerable
progress  during the past year.  We believe that a  sound  and
profitable  base  is now established upon which  a  successful
future will be built.

Trading  for the Group's engineering businesses was influenced
by   the  recessionary  conditions  that  developed  in   U.K.
industrial  markets during the year.  The continuing  strength
of  sterling and the decline in Far East markets were  factors
also.    Building  activity in the U.K. was  level,  with  new
commercial work compensating for weakness in other sectors.

Against  this  background,  and  during  a  period  of   major
restructuring,  the  Group's ongoing business  earned  profits
before  tax and exceptional costs of £9.4 million in the  year
ended  30  June  1999  (1998: £11.3  million),  in  line  with
expectations and generating sufficient cash to finance  record
investment  of  £7.2  million  in  its  operations.   Proceeds
received  on  the  disposal  of non-core  business  activities
enabled  the Group to lower borrowings to £0.7 million  (1998:
£1.8  million) at the year end, representing gearing of 2%  on
shareholders'  funds of £36.6 million (1998:  £42.3  million).
Net  interest  of £0.45 million was covered 22  times  by  the
operating profits of the ongoing business.

The  performance  of  the ongoing business  coupled  with  the
strength  of the Group's balance sheet have led the  directors
to  recommend  an unchanged final dividend per share  of  6.05
pence,  making 8.5 pence for the full year (1998: 8.5  pence).
The  dividend is payable on 29 October 1999 to members on  the
register at close of business on 24 September 1999.

The Board acknowledges that the cost of executing its strategy
to  restructure the Group has been high in human and financial
terms.   Losses of £8.9 million incurred in the  disposal  and
closure of non-core activities, in addition to accounting  for
£7.7  million of goodwill previously written-off to  reserves,
exceeded the profits from trading in the year, giving rise  to
a  loss for the first time in the Company's history.  However,
the  Board considered the strategic imperative of creating the
right platform for the Group's future to be paramount.

Personnel

For  the  process of change to yield lasting benefits,  it  is
essential to match the challenge of building from the new base
with the appropriate skills.  This has necessitated widespread
change  in  the  Group's management over the past  two  years,
including the Group's board of directors, executive  and  non-
executive, as well as the teams who manage the business  on  a
day to day basis.

It gives me particular pleasure to welcome Debbie Howard (aged
36)  as  an additional non-executive director of Alumasc  with
effect  from  1  October 1999.  Debbie  is  a  member  of  the
management  board  of   Lex Service PLC where  she  holds  the
position  of Human Resource Director.  I am certain  that  her
experience  and skills will be of considerable  value  in  the
process  of  developing the Group from its restructured  base.
Eric  O'Loughlin, who has been a director of Alumasc  and  its
predecessors for over 30 years, retires at this year's  Annual
General  Meeting and will not seek re-election.  I would  like
to express my personal gratitude to Eric for his many years of
service  to  our  Group.  Michael Reid retired from  executive
duties on 30 June 1999 and has accepted the invitation of  the
Board to become a non-executive director of the Group.

Restructuring

Alumasc  has  restructured to become a group  of  largely  new
businesses,  formed  by combining its more successful  members
into  stronger commercial entities.  This positive development
has  been  accompanied  by  a number  of  disposals  and  part
closures which will generate cash and, through the elimination
of  trading  losses, improve the profitability of the  ongoing
Group.   These transactions, including those in the course  of
execution, are reflected in the accounts for the year ended 30
June   1999.    Following  this  programme  of  restructuring,
Alumasc's  ongoing business comprises two operating  divisions
with  five product groups in total.  The Engineering  Products
division   includes  the  Group's  precision  components   and
industrial   products  activities.   The   Building   Products
division  is  structured in three product  groups  related  to
customer and market sector.

Prospects

It  is  easier to predict the continuation of rapid change  as
the dominating factor in our markets than particular trends in
demand  for  our products.  The wide range of activity  levels
experienced  in the past year was a factor also, ending  above
the depressed levels prevailing during the middle months.

While the act of restructuring our business has limited impact
in  terms  of  altering the markets in which  we  operate,  it
enhances  our  ability to compete and to develop within  those
markets.   We view these two factors as the prerequisites  for
growth and grounds for confidence in the trading prospects for
the restructured business.

J S McCall
Chairman and Chief Executive
14 September 1999


Operations Review

*    Engineering Products

     Ongoing Business
                            1998/99        £m   1997/98
     
     Turnover                  82.8                90.7
     Operating profit           6.7                 8.4
     
     The  Group's  ongoing  engineering activities  are  split
     between the supply of Precision Components and the supply
     of   specialist  Industrial  Products.   Both  activities
     encountered recessionary market conditions in the  middle
     part  of   the year, influenced by sterling's  continuing
     strength and the impact of declining economic activity in
     the Far East.

     Precision Components

                            1998/99        £m   1997/98
     Turnover                  39.4                39.4
     Operating profit           3.2                 3.7
     
     During  the  year, the Group merged its three non-ferrous
     diecasting specialists - APC, Copal and Dyson -  to  form
     Alumasc  Precision  Limited under the  supervision  of  a
     strengthened  management team.  The  principal  objective
     behind  this  change is to provide the OEM customer  base
     with  a  full engineering service, backed by  the  widest
     production  capability.  Moreover,  this  re-organisation
     enables  opportunities  to lower  the  cost  base  to  be
     coupled  more  readily  with  the  application  of   best
     practice throughout the operation.

     Alumasc Precision's principal markets showed weakness  in
     the year, especially the U.K. automotive sector, with the
     negative  influence of sterling's strength continuing  to
     affect  customer  demand.   The  business  did  well   to
     introduce  new  work  to compensate  and  this  essential
     renewal process is continuing as new projects are brought
     to market.

     Major  investment  was  made in expanding  and  upgrading
     facilities in support of new projects particularly in the
     development  of  customer-dedicated machining  cells  and
     high  pressure diecasting capacity.  Equal  emphasis  was
     apparent  in  the continuous development  of  engineering
     skills  and Alumasc Precision was successful in obtaining
     QS9000 accreditation during the year.

     Crossland,  the  Group's automotive  stampings  business,
     underwent a major restructuring exercise during the year,
     discontinuing   the  major  part  of  its  non-automotive
     activities, and is now focused on developing its business
     as  a  second-tier supplier to the UK automotive  market.
     Investment  in new coil feeding equipment was  made  with
     the twin aims of raising quality and reducing costs.

     Industrial Products
                            1998/99        £m   1997/98
     
     Turnover                  43.4                51.3
     Operating profit           3.5                 4.7
     
     Alumasc's   four   industrial  products  businesses   are
     operated under their individual market-leading brands.
     
     As  a  result  of the shift in emphasis from  brewing  to
     retailing,  A  G  Standard experienced a severe  fall  in
     demand  from  the UK brewing industry for  its  range  of
     dispense  and promotional products.  While  it  is  hoped
     that this proves a short term phenomenon, the company  is
     re-developing its portfolio of products to include  brand
     support  in  the  soft  drink and  retailing  sectors  in
     addition to brewing.
     
     Alumasc Grundy performed well in its confined market  for
     aluminium  beer containers, while developing further  its
     support  services for brewers.  The introduction  of  the
     'Non-Returnable' keg towards the end of the year was well
     received  and  gives hope for volume  sales  in  the  new
     financial year.
     
     Brock Metals' sales of zinc alloys were lower in the year
     in  line  with  weaker customer demand,  lower  commodity
     prices and tighter margins.  Firm management helped Brock
     to  retain  its  strong market position in  the  face  of
     aggressive competition.
     
     Bissell's  export markets for spring pins were  adversely
     affected  by the strength of sterling while progress  was
     achieved with its disc spring and bespoke product ranges.

     Discontinued Engineering Operations
     
                            1998/99        £m   1997/98
     
     Turnover                  14.1                20.0
     Operating loss           (1.4)               (1.0)
     
     During   the  year  Alumasc  undertook  a  programme   of
     withdrawal  from  non-core activities including  Wellings
     Forgings  and Alumasc Tubular Products, which  were  sold
     during  the year, and Thermex Industries, Arnold Plastics
     and  Crew Stainless, where negotiations for disposal  are
     in   hand.   While  incomplete  at  30  June  1999,  this
     programme  was sufficiently advanced for these activities
     to  have been treated as discontinued for the purpose  of
     the  above review. These disposals are in accordance with
     the  Group's strategy to focus its operations on  premium
     engineering and building products.

Operations Review

*    Building Products

     Ongoing Business
     
                            1998/99        £m   1997/98
     Turnover                  44.0                45.6
     Operating profit           3.1                 3.3
     
     The  Group's  ongoing  building products  activities  are
     organised  in  three  entities related  to  customer  and
     market  sector. The decline during the year in industrial
     building  activity  and spending on  public  housing  was
     offset  by  advances  in  commercial  and  infrastructure
     spending,  assisting  the division through  a  period  of
     major structural change.
     
     Alumasc Exterior Building Products

                            1998/99        £m   1997/98
                    
     Turnover                  25.2                26.3
     Operating profit           1.9                 2.4
     
     During the year, the Group merged the four businesses  of
     Alumasc  Building  Products, Euroroof,  MR  Swisspan  and
     Corofil  Morden to form a single entity focused  on  high
     performance  systems  used to protect  the  exteriors  of
     buildings.   In this process, management was strengthened
     with the recruitment of several key senior directors.
     
     Discrete  sales  forces  have been  maintained  for  each
     brand.  By contrast, a site rationalisation programme and
     the  installation of new IT systems have enabled the  new
     business to be established on a single site at St Helens,
     with  limited manufacturing and distribution at satellite
     locations.
     
     The  results  for the year reflect the initial  costs  of
     establishing  the new structure for the merged  business.
     However,  the combining of marketing and customer service
     activities  and  the gradual lowering of  the  cost  base
     contributed to a strengthening trading performance as the
     year progressed in all major product groups.
     
     As  the new business combination settles down, new market
     opportunities   will   be   pursued   including   product
     innovation and the exploitation of internet marketing.
     
     Alumasc Interior Building Products
     
                            1998/99        £m   1997/98
                    
     Turnover                  11.4                12.4
     Operating profit          0.5m              (0.1m)
     
     The  businesses of Pendock Profiles and Tate were  merged
     during  the  previous financial year  to  form  a  single
     business   focused  on  interior  casings  and  enclosure
     systems for institutional and commercial premises.  While
     volumes    were   reduced   through   strategic    market
     repositioning,  progress was achieved  from  the  reduced
     cost  base  and integrated product offer.   The  recovery
     from the losses of the previous year was achieved despite
     further costs associated with pre-merger Tate contracts.
     
     Investment in manufacturing and marketing has helped both
     brands  to  be  re-presented to the  commercial  building
     market,  with some encouraging prospects for  development
     of the European potential for the product range.
     
     Alumasc Construction Products
     
                            1998/99        £m   1997/98
                    
     Turnover                   7.4                 6.9
     Operating profit           0.7                 1.0
     
     Elkington  Gatic's  export markets for  high  performance
     access covers were severely affected by the set-backs  in
     South  East Asia and the uncertainties in Hong Kong  that
     followed  its  hand-back  to  China.   In  contrast,  its
     performance  in  the UK was ahead of the  previous  year.
     The division's scaffolding products began the year weakly
     with a dearth of start-up construction projects in the UK
     but  strengthened  as the year progressed  and  equipment
     hire companies returned to the market.
     
     
     Discontinued Building Operations
     
                            1998/99        £m   1997/98
                    
     Turnover                   6.4                 9.8
     Operating profit         (0.1)                 0.1
     
     During   the  year  Alumasc  undertook  a  programme   of
     withdrawal  from non-core activities, including   Corofil
     Woodall  at  Hurst  Park and Superior  Pipeline  Fittings
     which  were  sold  prior  to  14  September  1999.  These
     disposals were in accordance with the Group's strategy to
     focus  its operations on premium engineering and building
     products.


FINANCIAL HIGHLIGHTS

                                                1999      1998
                                                  £m        £m

Profit/(loss) before tax and exceptional costs
  on-going business                              9.4      11.3
  other businesses                              (1.5)     (0.9)

Exceptional & discontinuance costs
  discontinuance costs                          (8.9)        -
  goodwill                                      (7.7)        -
  restructuring costs                           (0.6)     (0.8)

Total (loss)/profit before tax                  (9.3)      9.6

Earnings per share
  on-going business                            17.8p     21.2p
  total                                       (24.7p)    17.9p

Dividends per share                             8.5p      8.5p
Shareholders' funds                             36.6      42.3

Net borrowings                                   0.7       1.8


Financial Review
year to 30 June 1999

The  last 12 months have seen a period of intense activity  as
the Group continued its policy of focussing on fewer, stronger
and   better  managed  business  units.   This  has   involved
restructuring   the   Group's   ongoing   business   and   the
sale/partial closure of other business activities both  during
the year and since the year end.

In  reflecting the effects of this process in these  financial
statements,  and particularly in the profit and loss  account,
our  objective has been to provide shareholders with as  clear
and straightforward a view as possible of the profitability of
the  Group's ongoing businesses as distinct from the remainder
(i.e.  those  business  activities  discontinued  and  to   be
discontinued).

This   process   has   involved  the  Group   in   significant
discontinuance  costs,  coupled with a write-off  of  goodwill
originally  written off to reserves at the time of acquisition
in  accordance  with FRS 10 and 11.  The latter  item,  whilst
having  no effect on shareholders' funds, does affect reported
earnings per share for 1998/9.

Accounts presentation

The   results   of   ongoing  businesses   are   clearly   and
straightforwardly  presented in the profit and  loss  account.
However,  the  presentation of the remainder  of  the  Group's
activities is more complex:-

(i)  Business  units  where  sale  contracts  were  signed  or
     activities  closed  prior  to  14  September   1999   are
     designated as 'discontinued activities' in the profit and
     loss  account  in  accordance with  FRS  3.   Comparative
     figures  for  these  businesses  are  shown  for  1997/8.
     Related losses on termination (including the write-off of
     goodwill) totalling £8.8 million are explained in Note 1.

(ii) Business  units  where sale contracts  were  still  being
     negotiated   at  the  time  of  the  Group's  preliminary
     announcement   are   designated  'to  be   discontinued'.
     Anticipated losses on termination (including  the  write-
     off of goodwill) totalling £7.8 million are dealt with in
     Note 1.

(iii)       The   1998   comparative  figures  for  continuing
     activities before exceptional costs includes results  for
     businesses  shown  as  'ongoing' in  1999  together  with
     losses  of £1.0 million related to activities treated  as
     'to be discontinued' in the 1999 results.

Profits and dividends

Overall  profits  before tax and exceptional items  fell  from
£10.4  million  to £7.9 million.  After exceptional  items  of
£17.2  million (1998: £0.8 million), comprising discontinuance
costs  of  £16.6 million (including goodwill of £7.7  million)
and reorganisation costs of £0.6 million, the Group produced a
pre-tax loss of £9.3 million (1998: profit of £9.6 million).

However, the Group's ongoing business produced profits  before
tax  of  £9.4  million,  or £7.2 million  after  taxation  and
minority interests.  In the light of this performance, coupled
with  the  Group's  strong balance sheet,  the  directors  are
recommending an unchanged final dividend  per share of  6.05p,
after  an  unchanged interim dividend of 2.45p,  bringing  the
year's  total  to  8.5p  (1998: 8.5p)  covered  2.1  times  by
earnings from ongoing businesses.

Cash and investment

Operating  cash flow was strong at £12.8 million (1998:  £13.5
million)  with a further inflow of £1.0 million from  proceeds
of  business  units  sold during 1998/9.  Capital  expenditure
amounted  to  £7.2 million (1998: £6.4 million) compared  with
depreciation  of £4.6 million (1998: £4.3 million).   Proceeds
of  asset  sales amounted to £1.2 million (1998: £1.0 million)
including £0.65 million from a freehold property vacated as  a
result  of reorganisation.  The profit on this sale  of  £0.26
million  has been netted against related reorganisation  costs
and   reported  within  exceptional  items.   Working  capital
decreased    by £2.5 million, producing net borrowings  at  30
June  1999 of £0.7 million (1998: £1.8 million) giving gearing
of  1.9%.   Net interest payable fell to £0.45 million  (1998:
£0.58 million).

Earnings and tax

Although  earnings per share from ongoing businesses  amounted
to  17.8p,  the  impact of trading losses  in  the  remainder,
together with their cost of discontinuance and goodwill write-
off,  produced losses per share of 24.7p (1998:  earnings  per
share of 17.9p).

Within  these figures, the effective tax rate on profits  from
ongoing  businesses  was  23.8%    compared  with  an  overall
effective  tax rate of 25.0% in 1998.  The overall tax  charge
fell  to £0.6 million (1998: £2.4 million) as a result of  the
tax effect of the discontinuance of the remainder.

Movement in shareholders' funds

Shareholders'  funds  fell  by  £5.7  million  in   the   year
reflecting   a net increase of £3.2 million arising  from  the
profits of ongoing businesses net of restructuring costs,  tax
and  dividends, reduced by £8.9 million of trading losses  and
closure costs relating to businesses discontinued and  in  the
course  of  discontinuance.  The goodwill  write-off  of  £7.7
million  under  FRS 10 and 11 has no effect  on  shareholders'
funds.

Acquisitions

During  the year, the Group acquired the 25% minority interest
in  Tate  Access Floor Systems Limited at a net cost  of  £0.1
million.

I.T.

The  Group  has  substantially  completed  its  programme   of
investment in new, business-wide systems to facilitate growth.
It has generally been possible to achieve Year 2000 compliance
on  the back of this investment and as such the Group does not
expect  to  suffer  any profit impact as a  result  of  issues
arising  from  the  Year 2000 problem.  The Group  expects  to
achieve Year 2000 compliance by October 1999.  The Group  will
continue  to invest in appropriate levels of I.T.  support  to
ensure  that  businesses are able to develop  and  grow  in  a
profitable manner.


David Sowerby
Group Finance Director

CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 30 June 1999


                                           1999
                        Continuing activities
                      Activ-
                       ities
                          to                     Dis-
                          be                  contin-
                        dis-  Excep-              ued
                 On- contin-  tional           activ-
               going     ued   costs    Total   ities    Total
                £000    £000    £000     £000    £000     £000
                            (note 1)                *

Turnover     126,849   8,943       -  135,792  11,505  147,297
Cost of
sales         94,420   7,747   6,979  109,146  11,019  120,165
             -------------------------------------------------
Gross profit/
(loss)        32,429   1,196 (6,979)   26,646     486   27,132

Selling and
distribution
costs          9,909     800      16   10,725   1,144   11,869
Administrative
expenses      12,733   1,499   1,354   15,586   1,982   17,568
             -------------------------------------------------
Operating
profit/
(loss)         9,787 (1,103) (8,349)      335 (2,640)   (2,305)

Share of
operating
profit
in associates    100       -       -      100       -      100
Loss on
sale of
business
activities         -       -       -        - (6,659)   (6,659)
Interest
receivable       697       -       -      697       -      697
Interest
payable      (1,150)       -       -  (1,150)       -   (1,150)
             --------------------------------------------------
Profit/(loss)
on ordinary
activities
before
taxation       9,434 (1,103) (8,349)     (18) (9,299)   (9,317)

Taxation
charge/
(credit)       2,248   (323)   (831)    1,094   (452)      642
             --------------------------------------------------

Profit/(loss)
on ordinary
activities
after
taxation       7,186   (780) (7,518)  (1,112) (8,847)   (9,959)

Equity
minority
interest        (21)      -       -      (21)      -       (21)
             --------------------------------------------------

Profit/(loss)
for
the financial
year
attributable
to the
members of
the parent
company       7,165   (780) (7,518)  (1,133) (8,847)    (9,980)
Dividends     3,429       -       -    3,429       -     3,429
             ---------------------------------------------------

Retained profit/
(loss)
for the
financial
year          3,736   (780) (7,518)  (4,562) (8,847)   (13,409)
             =================================================

Earnings per
share and
diluted
earnings
per share     17.8p  (1.9p) (18.7p)   (2.8p) (21.9p)   (24.7p)
             =================================================

*   Included in the operating loss for discontinued activities
is £2,204,000 of exceptional costs (note 1).


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 30 June 1999

                       Comparative figures - 1998
                          Continuing
                          activities         Discon-
                Before   Excep-               tinued
                excep-   tional               activ-
               tionals    costs     Total      ities     Total
                  £000     £000      £000       £000      £000
                       (note 1)

Turnover       147,028        -   147,028     19,002   166,030
Cost of sales  111,339      388   111,727     14,970   126,697
               -----------------------------------------------
Gross profit/
(loss)          35,689     (388)   35,301      4,032    39,333
Selling and
distribution
costs           10,872        -    10,872      1,680    12,552
Administrative
expenses        14,052      390    14,442      2,273    16,715
               -----------------------------------------------
Operating profit/
(loss)          10,765     (778)    9,987         79    10,066

Share of operating
profit
in associates      104        -       104          -       104
Loss on sale
of business
activities           -        -         -          -         -
Interest
receivable         915        -       915          -       915
Interest
payable         (1,500)       -    (1,500)         -    (1,500)
               ------------------------------------------------
Profit/(loss)
on ordinary
activities before
taxation        10,284     (778)    9,506         79     9,585

Taxation charge/
(credit)         2,516     (156)    2,360         43     2,403
               ------------------------------------------------

Profit/(loss)
on ordinary
activities after
taxation         7,768     (622)    7,146         36     7,182

Equity minority
interest            19        -        19          -        19
               ------------------------------------------------

Profit/(loss)
for the financial
year attributable
to the members
of the parent
company          7,787     (622)    7,165         36     7,201
Dividends        3,428        -     3,428          -     3,428
               ------------------------------------------------

Retained profit/
(loss)
for the financial
year             4,359     (622)    3,737         36     3,773
               ===============================================

Earnings per
share and
diluted earnings
per share        19.3p   (1.5p)     17.8p       0.1p     17.9p
               ===============================================

Statement of total recognised gains and losses
There  are no recognised gains or losses in the year ended  30
June  1999  other than the losses attributable to shareholders
of the Company of £9,980,000 (1998: profit £7,201,000).


CONSOLIDATED BALANCE SHEET
at 30 June 1999

                                                  1999    1998
                                                  £000    £000

Fixed assets
Intangible assets                                   88       -
Tangible assets                                 32,204  36,240
Investments                                        859     662
                                                ------  ------
                                                33,151  36,902
                                                ------  ------

Current assets
Stocks                                          12,662  16,321
Debtors                                         28,755  32,343
Cash at bank and in hand                           521   2,863
                                                ------  ------
                                                41,938  51,527
                                                ------  ------

Creditors: amounts falling due
within one year
Trade and other creditors                       30,893  34,794
Taxation                                         1,496   4,152
Proposed dividend                                2,440   2,439
                                                ------  ------
                                                34,829  41,385
                                                ------  ------
Net current assets                               7,109  10,142
                                                ------  ------
Total assets less current liabilities           40,260  47,044
Creditors: amounts falling due
after more than one year                         3,349   4,398
Provisions for liabilities and charges             282     373
Equity minority interest                            35      14
                                                ------  ------
Net assets                                      36,594  42,259
                                                ======  ======

Capital and reserves
Called up share capital                          5,043   5,041
Share premium                                   26,891  26,875
Revaluation reserve                              2,374   2,477
Profit and loss account                          2,286   7,866
                                                ------  ------
Equity shareholders' funds                      36,594  42,259
                                                ======  ======


CONSOLIDATED CASH FLOW STATEMENT
at 30 June 1999

                                                  1999    1998
                                                  £000    £000

Net cash inflow from operating
activities                                      12,794  13,502
                                                ------  ------

Returns on investments and
servicing of finance
Interest received                                  697     915
Interest paid                                   (1,129) (1,424)
Interest element of finance
lease payments                                     (21)    (76)
                                                ------  ------
Net cash outflow from returns
on investments
and servicing of finance                          (453)   (585)
                                                ------  ------

Taxation
UK corporation tax paid                         (2,450) (4,924)
                                                ------  ------

Capital expenditure and
financial investment
Purchase of tangible
fixed assets                                    (7,152) (6,387)
Proceeds from sale of
tangible fixed assets                            1,224   1,009
                                                ------  ------
                                                (5,928) (5,378)
                                                ------  ------

Acquisitions and disposals
Proceeds from sale of
business activities                              1,056       -
Purchase of investments                           (205) (1,051)
                                                ------  ------
                                                   851  (1,051)
                                                ------  ------

Equity dividends paid                           (3,428) (3,425)
                                                ------  ------

Cash inflow/(outflow) before use
of liquid resources and financing                1,386  (1,861)
                                                ------  ------

Financing
Issue of ordinary share capital                     18      97
Repayment of amounts borrowed                   (3,342) (4,132)
Capital element of finance
lease payments                                    (404)   (689)
                                                ------  ------
                                                (3,728) (4,724)
                                                ------  ------
Decrease in cash in the year                    (2,342) (6,585)
                                                ======  ======

1. Exceptional and discontinuance costs

                           1999                    1998
                Continuing
                activities
                              Dis-                 Dis-
                     To be contin-       Contin-contin-
                      dis-     ued          uing    ued
               On- contin-  activ-  Total activ- activ-  Total
             going     ued   ities         ities  ities
              £000    £000    £000   £000   £000   £000   £000

Cost of
sales          127   6,852   1,781  8,760    388    269    657
Selling
and
distribution
costs           16       -       -     16      -     13     13
Administrative
expenses       409     945     423  1,777    390     25    415
             -------------------------------------------------

               552   7,797   2,204 10,553    778    307  1,085
Loss on
sale of
business
activities       -       -   6,659  6,659      -      -      -
             ------------------------------------------------
               552   7,797   8,863 17,212    778    307  1,085
             =================================================
Comprising:
Discontinuance
costs            -   6,871   2,070  8,941      -      -      -
Impairment
write-off
of goodwill      -     926   6,793  7,719      -      -      -
Other          552       -       -    552    778    307  1,085
             ------------------------------------------------
               552   7,797   8,863 17,212    778    307  1,085
             =================================================

Exceptional  costs of £552,000 relating to ongoing  activities
comprises company reorganisation costs incurred in pursuit  of
the Board development strategy; the figure (which is net of  a
£260,000 profit on the sale of a property vacated as a  result
of  reorganisation) comprises cash received or expended in the
year,  with  the exception of £381,000 (1998: £114,000)  which
represents:  (i)  a  provision for the  anticipated  shortfall
between rent received for leasehold premises vacated and  rent
payable to the landlords; and (ii) the net book value of fixed
assets  written off.  The expenditure comprises  the  cost  of
site closure, removal and redundancy.

Discontinuance  costs  comprise  the  known  and   anticipated
shortfall of proceeds of sale against the book value of assets
sold/to be sold and other related costs.

Write  off  and impairment of goodwill is goodwill  previously
written off to reserves and now dealt with in accordance  with
FRS 10 and FRS 11 respectively.

2. Earnings per share

Both the earnings per share and the diluted earnings per share
are  based  on  the loss for the financial year of  £9,980,000
(1998:  profit £7,201,000) and on the weighted average  number
of ordinary shares in issue during the year ended 30 June 1999
of 40,345,477 (1998: 40,320,542).

3. Audited accounts

The  financial  information for the year ended  30  June  1999
included  in  the preliminary statement are a summary  of  the
Group's  statutory accounts for that year.  Statutory accounts
of the Group for the year ended 30 June 1999 have not yet been
delivered to the Registrar of Companies.  The Group's auditors
have  reported on the accounts as required by section  235  of
the  Companies Act 1985.  The auditors' report was unqualified
and did not contain a statement under Section 237(2) or (3) of
the  Companies  Act 1985.  The financial information  for  the
year  ended  30  June  1998  is abridged  from  the  statutory
accounts  for that year.  Those statutory accounts  have  been
delivered  to  the  Registrar of  Companies  and  included  an
unqualified auditors' report.

Copies of the Annual Report and Accounts will be posted to all
shareholders.   Copies  will  be available  from  the  Company
Secretary,  The  Alumasc  Group  plc,  Station  Road,   Burton
Latimer, Northamptonshire  NN15 5JP.

a d v e r t i s e m e n t