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Alumasc Group Plc (ALU)

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Wednesday 07 September, 2005

Alumasc Group Plc

Final Results

Alumasc Group PLC
07 September 2005


                THE ALUMASC GROUP PLC - PRELIMINARY ANNOUNCEMENT

Alumasc (ALU.L), the premium building and engineering products company,
announces its preliminary results for the year ended 30 June 2005.

FINANCIAL HIGHLIGHTS

   • Group profit of £8.4m before tax and goodwill from ongoing businesses
     was in line with market expectations for the Group as a whole, prior to the
     demise of MG Rover, as a result of higher Building Products profits.

   • MG Rover write offs and increased pension deficit costs - £1.0m in
     aggregate - held ongoing underlying profits below 2004's equivalent of
     £8.7m.

The total reported profit before tax of £0.7m includes losses in connection with
the withdrawal from two non-core businesses, inclusive of goodwill of £3.3m
previously written off to reserves.

Year end net debt totalled £3.3m, equivalent to gearing of 8.5%.

An unchanged final dividend per share of 6.3p is proposed, giving an unchanged
total for the year of 9.3p, covered 1.8 times by pre-goodwill earnings from the
ongoing business.

COMMERCIAL HIGHLIGHTS

   • Building Products contributed two-thirds to Group profit pre-tax and
     goodwill compared with just one-third five years earlier.

   • Building Products increased its trading profit* by £1.2m (24%) to £6.2m
     on sales which were £8.2m (20%) ahead of the previous year at £48.7m.
     Excluding acquisitions, the organic sales growth was 5%.

   • Two Building Products acquisitions - Roof-Pro and Timloc - were
     concluded during the year at a combined net cost of £6.6m and both performed
     well.

   • Prospects are bright for further developing Building Products activities
     through organic growth and bolt-on acquisitions.

   • At Precision Components, ongoing trading profit* reduced by £0.8m (27%)
     to £2.2m on ongoing sales reduced by £2.8m (9%) to £27.5m, reflecting the
     approximately £1.0m profit impact of the collapse of MG Rover's sister
     company, Powertrain.

   • Precision Components will continue its strategy to grow sales outside
     the high volume automotive area and to grow its business with major
     international OEMs.

   • The disposal of Bissell and the expected disposal of Copal means that
     the long process of essential restructuring, is the Board believes,
     virtually complete."

   • The Industrial Products companies increased trading profit* by £0.3m
     (35%) to £1.3m on sales of £38.7m, an increase of £3.7m (10%).

   • In Industrial Products, Alumasc Dispense had an outstanding year with
     record countermount and tap sales, built on projects won such as Scottish
     Courage Fosters' "Super Chilled" Font.

* Defined as operating profit pre pension deficit costs and goodwill
amortisation from ongoing activities.

John McCall, Chairman, stated "We enter the new financial year with strength in
both our operations and our balance sheet, and the ability to invest in the
marketing resources, bolt-on acquisitions and physical expansion that will drive
the future growth of our company."

Paul Hooper, Chief Executive, added "The Group's businesses will build upon the
opportunities generated to date whilst managing the impacts of several cost
variables which are predominately outside their control. The Group will continue
its transition away from commodity type businesses towards increased added value
areas which require high levels of technical and service input."

Presentation:

Today, Wednesday 7 September, from 09.30 to 10.30, Alumasc will be presenting to
brokers' analysts and private client investment advisers at the offices of
Bankside Consultants, 1 Frederick's Place, London EC2R 8AE.

Enquiries:

The Alumasc Group plc                                            01536-383 844
Paul Hooper (Chief Executive)      (today from 10.30-12.30 at 020-7367 8851
John McCall (Chairman)

Bankside Consultants Limited
Charles Ponsonby                                                 020-7367 8851
                                                  [email protected]



                              CHAIRMAN'S STATEMENT

An important change has occurred in the balance of our Group as a consequence of
five years of strong growth from our building products activities. Following a
24% increase, pre-goodwill, in the most recent year, building products now
contribute two-thirds to Group profits compared with just one-third five years
earlier.

FINANCIAL

For the year ended 30 June 2005, Group profit of £8.4 million before tax and
goodwill from our ongoing businesses was in line with market expectations for
the Group as a whole, prior to the demise of MG Rover. Write-offs incurred in
connection with Rover and increased pension deficit costs - amounting to £1.0
million in aggregate - held ongoing profits below the previous year's equivalent
of £8.7 million.

Two building products acquisitions - Roof-Pro and Timloc - were concluded during
the year at a combined net cost of £6.6 million and both have performed well.
Borrowings rose to £3.3 million (2004: net cash of £3.3 million) at the year end
largely as a result of these acquisitions, equivalent to gearing of 8.5%.

The total reported profit before tax of £0.7 million includes losses in
connection with the withdrawal from two non-core businesses, inclusive of
goodwill of £3.3 million previously written off to reserves.

The directors are recommending an unchanged final dividend of 6.3p per share,
giving an unchanged total for the year of 9.3p covered 1.8 times by pre-goodwill
earnings from the ongoing business.

TRADING

Trading profit (profit before interest, goodwill amortisation and pension
deficit costs) from ongoing operations of £9.7 million was 8% higher than in the
previous year.

Our building products companies grew their turnover by 20% to £48.7 million,
with organic growth of 5.3%, augmented by the acquisition of Roof-Pro and
Timloc, acquired in July and September 2004 respectively. Divisional trading
profits of £6.2 million showed a 24% increase over 2004. Within the division's
two principal markets, commercial activity in the UK levelled off, while
government spending on schools, hospitals and other public assets strengthened.

The environment was less favourable for manufacturing and engineering companies,
faced with softer markets and rising input costs. The loss of MG Rover's
business, which in total represented 4% of Group sales in the previous year, was
painful for Alumasc Precision, where ongoing turnover and trading profits fell
from £30.2 million to £27.5 million and from £3.0 million to £2.2 million
respectively. This activity is expected to recover as work grows with our newer
partnerships.

Our industrial products companies performed better thanks to renewed activity at
Alumasc Dispense, with turnover and trading profits on continuing activities
rising from £35.1 million to £38.7 million and £1.0 million to £1.3 million
respectively.

DEVELOPMENT

The acquisitions in the year are in line with the Board's strategy of focusing
development in our core business areas of premium building and engineering
products where know-how and service are at a premium and, hence, valued by
customers.

The businesses from which we have chosen to withdraw - Bissell and Copal -
operate in markets which have become increasingly commodity in nature, and both
businesses were generating operating losses. While this has led to further
losses on disposal and the recycling of Bissell's goodwill written off to
reserves 10 years earlier, the disposals should be cash positive.

The Board believes that the long process of costly but essential restructuring
is virtually complete, enabling the Group to concentrate wholeheartedly on
building the ongoing business. We continue to view bolt-on acquisitions as a
useful adjunct to organic growth in the development of our building products
activities, while investment in our engineering business is directed towards the
manufacturing base, in support of new market opportunities.

PROSPECTS

Opportunities exist to continue the growth achieved in recent years by our
building products companies. Order books were higher at the start of the new
financial year than a year earlier with a number of major domestic and export
projects in the pipeline. Sustained public sector spending is expected to
counter any weakness in the private sector and, in the medium term, London 2012
is likely to boost demand for high specification building products. Alumasc will
continue to grow its marketing resources in order to gain its share of these
market opportunities.

Our engineering business has been successful in developing new customers who
represent major potential for Alumasc. This will help to replace the business
lost through Rover's demise and counter any more general weakness in the UK
manufacturing sector. This trend will also reduce the division's historic
dependence on the automotive sector, in line with its stated policy. Energy is a
significant cost to this division which has continued to rise, as expected, in
the course of the current year.

We enter the new financial year with strength in both our operations and our
balance sheet, and the ability to invest in the marketing resources, bolt-on
acquisitions and physical expansion that will drive the future growth of our
company.

J S McCall
Chairman


                            CHIEF EXECUTIVE'S REVIEW

OVERVIEW

The Group's trading profit (defined as operating profit, pre pension deficit
cost and goodwill amortisation) from ongoing activities continued its growth
with an increase of £0.7 million (8%) to £9.7 million.

Turnover on the ongoing activities grew by 9% (3% excluding the benefit of the
two acquisitions).

The Group maintained its focus on efficiencies, especially in manufacturing. By
the year end the headcount across the Group from ongoing buinesses, excluding
acquisitions, had reduced by 5% (5% in 2004, 5% in 2003).

An emphasis on the utilisation of assets led to a tight control on capital
expenditure in the year, which came in at the depreciation level. The Group
finished the year with net borrowings of £3.3 million versus net cash of £3.3
million in the prior year. The movement was principally linked to the
acquisition of Roof-Pro and Timloc.

DEVELOPMENT

The two building product company acquisitions, Roof-Pro Limited and Timloc
Building Products Limited, were in line with the Group's strategy to grow the
Building Products division through both organic and acquisition growth.

Both acquisitions have been immediately earnings enhancing for the Group.

Despite major restructuring and other activities across several years which led
to sporadic profitability at Copal and Bissell, both companies have operated in
declining, consolidating, commodity markets. The Group is not strong in these
areas and, therefore, Bissell has been divested and the Group is currently in
negotiations to dispose of Copal.

The Group will continue to focus its activities towards premium products
requiring high quality technical support and service. Bolt-on acquisitions will
feature further in the Group's expansion plans.

BUILDING PRODUCTS

The Building Products Division increased its trading profit by £1.2 million
(24%) to £6.2 million on sales which were £8.2 million (20%) ahead of the
previous year at £48.7 million. Excluding acquisitions, the organic sales growth
was 5%.


Alumasc Exterior Building Products

AEBP grew its sales following a further investment in sales and marketing
activity. Of particular note was the good growth seen for the MR facade product
range which benefited from the increased refurbishment rate of social housing as
higher levels of funding were released from Housing Associations under the
Decent Homes Initiative.

Armaseam, the standing seam metal roof product, also had a good year which
culminated in the winning of a £2.4 million project for the supply of roofing
products for a new aluminium smelter at Fjardaal in Iceland to be built for
Alcoa. Approximately £1.6 million is expected to be invoiced in the current
year.

Roof-Pro had an excellent 11 months with the Group and fulfilled all
expectations. Good opportunities exist for future expansion, particularly in the
UK, and, with this in mind, investment has been made into additional sales
resource.

The continued refurbishment of social housing, schools and hospitals, combined
with new build projects for both government and commercial properties, puts AEBP
in a strong position for future growth.

Alumasc Interior Building Products

AIBP's investment in sales and marketing grew its sales into newly developed
sectors. The business was particularly successful at developing sales in private
housing with several housebuilders now specifying its main brand, Pendock.
Merchant sales also moved well ahead as a result of a substantial expansion of
stockists. Meanwhile, the roll-out into Europe has taken time to be established.

New product development has been encouraging with four new initiatives either
launched or imminent, including a range of washroom cubicles.

A focus will be maintained in the current year on both social and private
housing whilst activities in Europe should benefit from a product listing at a
Saint Gobain subsidiary in France.

Alumasc Construction Products

Elkington Gatic had a record year for sales with its two main access and
drainage products showing growth. Activity in the UK was strong for both
regional airport expansion and maintenance replacement work.

The agreement with Saint Gobain to distribute Gatic engineered access covers on
the Continent resulted in a satisfactory expansion of sales into Europe.

Elkington China, the marketing arm based in Hong Kong, contained its costs well
in a depressed market place.

Scaffold & Construction Products had a second successive record year for both
sales and operating profit. New products are being introduced by this fast
response company.

While ACP was broadly successful in offsetting the high level of raw material
cost increases suffered in the year, it is investing in additional manufacturing
equipment to reduce costs further. ACP should make progress in the current year.

Housebuilding Products

Timloc had an encouraging first 10 months within the Group. Its main
distribution contracts were renewed and in some cases augmented.

Investment has been made into additional sales and marketing resource and, with
several new products due for launch in the forthcoming year, there is an
expectation for growth. This is on the assumption that housebuilders will at
least maintain their current level of construction activity.

PRECISION COMPONENTS

At Precision Components ongoing sales reduced by £2.8 million (9%) to £27.5
million. Following the 53% trading profit improvement in the prior year, the
impact of the loss of Powertrain of around £1 million, comprising both trading
activity and write-offs, was the main contributor to a trading profit decline
which reduced by £0.8 million (27%) to £2.2 million on ongoing activities. There
were additional effects from energy cost increases along with the movement of
some customer operations to offshore locations.

With the exception of sales to BMW (for both the Valvetronic and the Mini Cooper
S engines), all sales to automotive customers declined in the year, partly due
to project run outs and partly due to flat automotive demand in Europe. Added to
this was the impact of the loss of business to Powertrain (engine supplier to
its sister company, MG Rover). Across the Division sales to automotive companies
accounted for 37% of sales compared to the prior year of 47%.

Good growth was seen outside the automotive area, particularly for two new
customers, Deutz and JCB. Projects also ramped up with Garret Thermal Systems
for Mercury Marine in the USA. Sales to Philips were developed and Siemens has
returned as a customer at Dyson. During the year Precision Components worked
hard to improve its manufacturing efficiencies and costs. The year end headcount
was 8% lower than the year before.

Precision Components will continue its strategy to grow sales outside the high
volume automotive area, while retaining more complex, niche type projects such
as the large multi-faceted component recently won with Aston Martin. By building
on the engineering and technical support available in the organisation, combined
with its reputation for the timely supply of quality components, Alumasc
Precision is expected to recover from a difficult 2005. There are several
projects coming on stream in the second half of the current year that will help
to uplift sales. These will include the expansion to supply five Caterpillar
plants while commencing a new project with its subsidiary, Perkins Engines.

INDUSTRIAL PRODUCTS

The Industrial Products companies had sales, on continuing activities, of £38.7
million, an increase of £3.7 million (10%). Trading profit increased by £0.3
million (35%) to £1.3 million.

Alumasc Dispense had an outstanding year with record countermount and tap sales,
built on projects won such as Scottish Courage Foster's 'Super Chilled' Font.
The business also negotiated a worldwide licence for a patented technology
called Wireless Energy Transfer (WET) offering exciting opportunities for
wireless illumination applications in point of sale products. In addition to
this, Alumasc Dispense will have several other product launches in the current
financial year.

Brock Metal had a challenging year. Whilst its sales grew, and it remained in
profit, its margins were impacted by severe competition in a softening UK
market. Export sales were successfully developed. Demand from China drove up
prices for scrap aluminium which, in turn, had an adverse effect on Brock's
secondary aluminium business. For the current year, Brock's exports are expected
to develop further.

PROSPECTS

The Group has seen the benefit from investing in additional sales and marketing
resource to drive sales forward. This activity will be augmented in the current
year with further investment. New products will be launched and new markets will
be sought for the Group's established products.

Efficiencies will once more be targeted at all the Group's businesses and it is
essential that customer service levels are not only maintained but also built
upon.

The UK building product market place, in general, looks relatively healthy with
good levels of government expenditure continuing on new build and refurbishment
projects. The forthcoming Olympic Games in London will also benefit construction
activities in an area where the Group's products are present.

The Precision Components business has new projects coming on stream in the
current financial year which will help to offset the demise of Powertrain. These
projects are mainly in non-automotive areas where the business has positioned
itself for the future. Investment is already in place for several of these
forthcoming activities.

Whilst raw material costs, particularly steel and cast iron, appear to have
stabilised at the high levels seen last year, this is not the case for energy
costs. Significant increased costs will be incurred in the current financial
year. Much effort has been made to reduce energy consumption including changing
the working week times at our two Precision Components foundries to maximise
energy efficiencies. Price increases for customers are also being advised where
possible. However, there will inevitably be some impact from the energy cost
increases.

The Group's businesses will build upon the opportunities generated to date
whilst managing the impacts of several cost variables which are predominately
outside their control. The Group will continue its transition away from
commodity type businesses towards increased added value areas which require high
levels of technical and service input.

G P Hooper
Chief Executive

                                FINANCIAL REVIEW

During the past year, the Group's activities were strengthened by two building
product acquisitions, a loss-making spring pin manufacturing business was sold,
and progress has been made in disposing of a loss-making precision component
manufacturing unit badly hit by the collapse of MG Rover. Thus, in addition to
the results of ongoing activities, the Group's total result contains the results
of discontinued activities and activities to be discontinued during 2005/6. The
results of discontinued and to be discontinued businesses include operating
exceptional costs of £2.0 million and the write-off of £3.3 million goodwill
originally written-off to reserves at the time of acquisition in 1995. The
latter item, whilst having no effect on shareholders' funds, does affect total
reported earnings per share in 2004/5.

Profit before tax

Profit before tax from ongoing activities, including acquisitions, evolved as
follows:-

                                                               2005       2004
                                                                 £m         £m
Trading profit plus associates                                  9.7        9.0
                                                                ---------------
Goodwill                                                       (0.2)         -
Pension deficit costs                                          (1.0)      (0.1)
Profit on fixed assets disposals                                  -        0.8
Interest                                                       (0.4)      (0.2)
                                                               ----------------
Profit before tax from ongoing activities                       8.1        9.5
                                                               ----------------

Total profit before tax was £0.7 million after the losses from discontinued
activities (including recycled goodwill) and activities to be discontinued.

Overheads in ongoing activities increased by £2.3 million during the year, of
which £1.8 million related to acquisitions. The balance reflects increased
pension costs (see below) and an investment in additional sales and marketing
resources. Underlying administration costs were reduced.

Earnings, tax and dividends

Earnings per share on ongoing activities were 15.7p (loss per share 2.1p
overall). The effective tax rate on profit from ongoing activities was 31.9%
(2004: 30.4% on ongoing activities, excluding the impact of the sale of land).
The effective tax rate was increased by 0.9 percentage points in the current
year by the non-allowable goodwill charge of £0.26 million relating to 
acquisitions in the year.

The Board is recommending an unchanged total dividend per share of 9.3p (2004:
9.3p) covered 1.8 times by the profit on ongoing activities excluding goodwill.
The directors propose a final dividend per share of 6.3p (2004: 6.3p) payable on
28 October 2005 to shareholders on the register at 7 October 2005.

Shareholders' funds

Shareholders' funds decreased to £39.2 million (2004: £39.4 million). The
goodwill adjustment of £3.3 million relating to the business disposal has no
effect on shareholders' funds.

Business acquisitions

Two building product businesses, Roof-Pro Limited and Timloc Building Products
Limited, were acquired during the year for a combined cost of £6.6 million net
of cash acquired. Both have performed well since their acquisition.

The impact of the acquisitions, together with organic growth in the building
product sector, has been to change the proportion of the Group's profits
deriving from building products. From one-third five years ago building products
now contributes two-thirds to the Group's
on going trading profits.

Business disposals

In January 2005 the Group disposed of GE Bissell & Co, its loss-making spring
pin manufacturing business. This disposal generated a cash inflow of £0.4
million during 2004/5, with further amounts expected in 2005/6. In addition, the
Group is in discussions to dispose of its loss-making precision component
manufacturing unit, Copal Casting, treated as "to be discontinued" in the
accounts.


Cash

The Group moved into a net borrowing position of £3.3 million at 30 June 2005
(2004: net cash £3.3 million) mainly as a result of its two acquisitions, with
gearing at the year end of 8.5% (2004: nil). Net interest costs increased by
£0.2 million to £0.4 million, reflecting good underlying cash control which
mitigated the effect of the net acquisition cost in the period.

Capital expenditure was £3.7 million (2004: £2.5 million) compared with
depreciation of £3.6 million (2004: £3.6 million).

Share price and market capitalisation

As at close of business on 5 September 2005 the share price was 173.5p compared
with 142.5p at 1 July 2004. The market capitalisation of the Group at 5
September 2005 was £61.2 million.

Pensions

Overall pension costs in the Group increased by £0.5 million during the year.
This comprises a year on year increase of £0.9 million in the cost of funding
the Group's pension deficit less a current year saving of £0.4 million
reflecting the full year effect of cost reduction arrangements introduced in the
last quarter of the year ended 30 June 2004.

The overall funding position of the Group's two final salary pension schemes
measured under FRS 17 improved by £1.1 million during the year; a £5.9 million
increase in the market value of the schemes' assets (2004: £2.2 million)
compared with a £4.8 million increase in the schemes' liabilities (2004: £5.9
million). Net of deferred tax, the overall deficit was £20.6 million (2004:
£21.4 million).

IFRS implementation

The Group will adopt International Financial Reporting Standards (IFRS) in
reporting its consolidated financial statements for the year to 30 June 2006.
Thus the present report is the last to be prepared in accordance with UK
accounting standards (UK GAAP).

Under IFRS, the results for the year to 30 June 2005 will be restated and
reconciled to the previously reported UK GAAP numbers. The interim financial
statements for the 6 months to 31 December 2005 will be the first to be based on
IFRS.

The process of dealing with conversion is well under way; the major balance
sheet impact will come from the adoption of IAS 19 dealing with pension
accounting. There will also be impacts arising from the standards on goodwill
and the treatment of proposed dividends. There is also likely to be some impact
arising from the standards on financial instruments. Deferred tax on property
held in the balance sheet at a valuation will be eliminated by the benefit of
the Group's £22 million capital losses. The overall presentation and disclosure
requirements will also result in extensive changes from UK GAAP.

Further changes may arise when the Group has concluded its detailed assessment
of the impact of IFRS.

The Group remains well positioned to take advantage of its strong balance sheet,
positive cash flow and low gearing to grow both by internal investment and by
acquisition.

D R Sowerby
Group Finance Director

                      CONSOLIDATED PROFIT AND LOSS ACCOUNT

                        for the year ended 30 June 2005
                                                                                      2005
                                                       Continuing activities

                     Notes      Ongoing          To be        Total Discontinued     Total
                             activities   discontinued   continuing   activities      £000
                                   £000           £000         £000         £000
Turnover:
Existing
operations                      108,778          5,234      114,012            -   114,012
Acquisitions                      6,091              -        6,091            -     6,091
Discontinued
operations                            -              -            -        1,494     1,494
                                 ---------------------------------------------------------

                         1      114,869          5,234      120,103        1,494   121,597
Cost of sales                    83,852          5,072       88,924        1,205    90,129
                                ----------------------------------------------------------
Gross profit                     31,017            162       31,179          289    31,468


Selling and
distribution
costs                            10,706            122       10,828          176    11,004

Administrative
expenses
(including
exceptional
costs)                   2       11,871          2,665       14,536          761    15,297


Operating profit/
(loss):

Before
goodwill
amortisation                      8,696         (2,625)       6,071         (648)    5,423

Goodwill
amortisation
arising on                                     
acquisitions                       (256)             -         (256)           -      (256)


Existing
operations                        7,491         (2,625)       4,866            -     4,866

Acquisitions                        949              -          949            -       949

Discontinued
operations                            -              -            -         (648)     (648)


Operating
profit/(loss)                     8,440         (2,625)       5,815         (648)    5,167
                                  ---------------------------------------------------------

Share of
operating
profit in
associates                           55              -           55            -        55

Profit on fixed asset                 -              -            -            -         -
disposals

Loss on business
disposal:

Loss on sale                          -              -            -         (824)     (824)

Goodwill write
back                                  -              -            -       (3,260)   (3,260)

                                      -              -            -       (4,084)   (4,084)
                                    -------------------------------------------------------

Profit/(loss)
on ordinary
activities
before
interest                          8,495         (2,625)       5,870       (4,732)    1,138

Interest
receivable                           24              -           24            -        24

Interest
payable                            (419)             -         (419)           -      (419)
                                  ----------------------------------------------------------

Profit/(loss)
on ordinary
activities
before
taxation                 1        8,100         (2,625)       5,475       (4,732)       743

Tax
(charge)/credit 
on profit on
ordinary
activities                       (2,587)           718       (1,869)         399    (1,470)
                                 -----------------------------------------------------------

(Loss)/profit
on ordinary
activities
after taxation                    5,513         (1,907)       3,606       (4,333)     (727)

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

(Loss)/profit
for the
financial
period
attributable
to
shareholders                      5,513        (1,907)       3,606       (4,333)     (727)
Dividends                3       (3,282)            -       (3,282)           -    (3,282)
                                 -----------------------------------------------------------

Retained
(loss)/profit
for the
financial year                    2,231        (1,907)         324       (4,333)    4,009)
                                  ----------------------------------------------------------

Basic
(loss)/earnings 
per share                4         15.7p         (5.4)p       10.3p       (12.4)p    (2.1)p
                                   ----------------------------------------------------------

Diluted
(loss)/earnings
per share                4         15.6p         (5.4)p       10.2p       (12.3)p    (2.1)p
                                   ---------------------------------------------------------

          CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                        for the year ended 30 June 2005
                                                                2005      2004
                                                                £000      £000
(Loss)/profit for the financial year attributable to
shareholders                                                    (727)    6,481
Currency translation differences on foreign currency net
investments                                                        -        (6)
                                                                ---------------
Total recognised gains and losses for the year                  (727)    6,475
                                                                ---------------

                      CONSOLIDATED PROFIT AND LOSS ACCOUNT
                        for the year ended 30 June 2004

                                                                                       2004
                                                       Continuing activities

                     Notes      Ongoing          To be        Total   Discontinued    Total
                             activities   discontinued   continuing     activities     £000
                                   £000           £000         £000           £000
Turnover:
Existing
operations                      105,768          6,590      112,358              -  112,358
Acquisitions                          -              -            -              -        -
Discontinued
operations                            -              -            -          2,954    2,954
                                 ----------------------------------------------------------

                         1      105,768          6,590      112,358          2,954  115,312
Cost of sales                    76,609          6,234       82,843          2,366   85,209
                                 ----------------------------------------------------------
Gross profit                     29,159            356       29,515            588   30,103


Selling and
distribution
costs                             9,267            131        9,398            405    9,803

Administrative
expenses                         11,056            585       11,641            413   12,054


Operating profit/
(loss):

Before
goodwill
amortisation                      8,836           (360)       8,476           (230)   8,246

Goodwill                              -              -            -              -        -
amortisation arising
on acquisitions


Existing
operations                        8,836           (360)       8,476              -    8,476

Acquisitions                          -              -            -              -        -

Discontinued
operations                            -              -            -           (230)    (230)


Operating
profit/(loss)                     8,836           (360)       8,476           (230)   8,246
                                  ---------------------------------------------------------

Share of
operating
profit in
associates                           50              -           50              -       50

Profit on
fixed asset
disposals                           880              -          880              -      880

Loss on business
disposal:

Loss on sale                          -              -            -              -        -

Goodwill write                        -              -            -              -        -
back
                                      -              -            -              -        -
                                    -------------------------------------------------------

Profit/(loss)
on ordinary
activities
before
interest                          9,766           (360)       9,406           (230)   9,176

Interest
receivable                           13              -           13              -       13

Interest
payable                            (242)             -         (242)             -     (242)
                                  ---------------------------------------------------------

Profit/(loss)
on ordinary
activities
before
taxation                 1        9,537           (360)       9,177           (230)   8,947

Tax
(charge)/credit
on profit on
ordinary
activities                       (2,632)           105       (2,527)            68   (2,459)
                                 ----------------------------------------------------------

(Loss)/profit
on ordinary
activities
after taxation                    6,905           (255)       6,650           (162)   6,488

Equity
minority
interest                             (7)             -           (7)             -       (7)
                                  ----------------------------------------------------------

(Loss)/profit
for the
financial
period
attributable
to                                                                                  
shareholders                      6,898           (255)       6,643           (162)    6,481
Dividends                3       (3,225)             -       (3,225)             -    (3,225)
                                 -----------------------------------------------------------

Retained
(loss)/profit
for the
financial year                    3,673           (255)       3,418           (162)    3,256
                                  ----------------------------------------------------------

Basic
(loss)/earning
s per share              4         19.8p          (0.7)p       19.1p         (0.5)p    18.6p
                                   ---------------------------------------------------------

Diluted
(loss)/earning
s per share              4         19.7p          (0.7)p       19.0p          (0.5)p   18.5p
                                   ---------------------------------------------------------


                           CONSOLIDATED BALANCE SHEET
                                at 30 June 2005
                                                               2005       2004
                                                               £000       £000
Fixed assets
Intangible assets                                             5,324         50
Tangible assets                                              26,138     25,901
Investments                                                     487        515
                                                             -----------------
                                                             31,949     26,466
                                                             ------------------

Current assets
Stocks                                                       12,248     11,745
Debtors                                                      30,209     26,875
Cash at bank and in hand                                          -      5,625
                                                             -----------------
                                                             42,457     44,245
                                                             ------------------

Creditors: amounts falling due within one year
Trade and other creditors                                    29,125     24,966
Corporation tax                                                 704      1,151
Proposed dividend                                             2,219      2,185
                                                             ------------------
                                                             32,048     28,302
                                                             -----------------
Net current assets                                           10,409     15,943

Total assets less current liabilities                        42,358     42,409
Creditors: amounts falling due after more than one year       1,106      1,907
Provisions for liabilities and charges                        2,050      1,040
Equity minority interest                                         28         28
                                                             -----------------
Net assets                                                   39,174     39,434
                                                             -----------------

Capital and reserves
Called up share capital                                       4,409      4,352
Share premium                                                27,387     26,909
Revaluation reserve                                           1,551      1,727
Capital redemption reserve                                      693        693
Capital reserve - own shares                                   (165)      (164)
Profit and loss account                                       5,299      5,917
                                                             -----------------
Equity shareholders' funds                                   39,174     39,434
                                                             -----------------

                        CONSOLIDATED CASH FLOW STATEMENT
                        for the year ended 30 June 2005
                                                            2005          2004
                                                            £000          £000

Net cash inflow from operating activities                  6,224         9,637
                                                           -------------------

Returns on investments and servicing of finance
Interest received                                             24            13
Interest paid                                               (301)          (85)
Interest element of lease/ hire purchase payments           (118)         (157)
Dividends paid
to minority
interests                                                      -           (15)
Return of
capital from
associate                                                      52             -
                                                            -------------------
Net cash
outflow from
returns on
investments and
servicing
of
finance                                                     (343)         (244)
                                                            -------------------

Taxation
UK corporation tax paid                                   (2,082)       (2,192)
                                                          ---------------------

Capital expenditure and financial investment
Purchase of tangible fixed assets                         (3,709)       (2,490)
Proceeds from sale of tangible fixed assets                2,043           264
                                                         ----------------------
                                                          (1,666)       (2,226)
                                                          ---------------------

Acquisitions and disposals
Purchase of subsidiary undertakings                       (7,354)            -
Cash acquired with subsidiary undertakings                   864             -
Proceeds from sale of business activities                    449             -
                                                          --------------------
                                                          (6,041)            -
                                                          ---------------------

Equity dividends paid                                     (3,248)       (3,225)
                                                          ---------------------

Cash (outflow)/inflow before use of liquid resources
and                                                       (7,156)        1,750
                                                          --------------------
financing

Financing
Issue of ordinary share capital                              535             2
Repayment of amounts borrowed                               (784)         (735)
                                                            -------------------
                                                            (249)         (733)
                                                            -------------------

(Decrease)/Increase in cash in the year                   (7,405)        1,017
                                                          ---------------------





                             Notes on the Accounts
                        for the year ended 30 June 2005

1 Analysis of turnover, assets employed and profits between activities and
markets

Turnover comprises the invoice value of goods and services supplied by the Group
exclusive of VAT and intragroup transactions.

Certain sales are made on a consignment stock basis but these are not recognised
in revenue until title transfers to the customer.

Turnover, assets employed and profit/(loss) on ordinary activities before
taxation attributable to each of the classes of activity of the Group are as
follows:

Segmental analysis

                                                                          2005
Turnover          Ongoing          To be        Total   Discontinued     Total
               activities   discontinued   continuing     activities      £000
                     £000           £000         £000           £000
Building           48,674              -       48,674              -    48,674
products
Engineering
products
- Precision
components         27,449          5,234       32,683              -    32,683
- Industrial
products           38,746              -       38,746          1,494    40,240
                  ------------------------------------------------------------
                  114,869          5,234      120,103          1,494   121,597
                 -------------------------------------------------------------
Included in ongoing activities for the year to 30 June 2005 are amounts within
Building products relating to acquisitions of £6,091,000.
                                                                          2004
Turnover          Ongoing          To be        Total   Discontinued     Total
               activities   discontinued   continuing     activities      £000
                     £000           £000         £000           £000
Building           40,430              -       40,430              -    40,430
products
Engineering
products
- Precision
components         30,246          6,590       36,836              -    36,836
- Industrial
products           35,092              -       35,092          2,954    38,046
                  ------------------------------------------------------------
                  105,768          6,590      112,358          2,954   115,312
                  ------------------------------------------------------------
Segmental analysis
Assets employed
                                                           2005           2004
                                                          Total          Total
                                                           £000           £000
Building products                                        13,912         10,292
Engineering products
- Precision components                                   16,518         15,992
- Industrial products                                    11,317         12,895
                                                         ---------------------
                                                         41,747         39,179
Net (debt)/cash                                          (3,332)         3,288
Non-operating and miscellaneous                             759         (3,033)
                                                         ----------------------
                                                         39,174         39,434
                                                         ---------------------
Included in assets employed for the year to 30 June 2005 are amounts within
Building products relating to acquisitions of £1,878,000, which form part of
continuing activities.

Included in assets employed are amounts within Precision components relating to
activities to be discontinued comprising: £1,054,000 at 30 June 2005 and
£2,193,000 at 30 June 2004.

Included in assets employed are amounts within Industrial products relating to
discontinued activities comprising: £974,000 at 30 June 2005 and £2,774,000 at
30 June 2004.

Net (debt)/cash comprises cash less overdrafts, medium term secured asset backed
borrowings and lease/hire purchase financing.

Non-operating and miscellaneous items include tax balances, pension creditors
and dividends.
                             Notes on the Accounts
                        for the year ended 30 June 2005

1    Analysis of turnover, assets employed and profits between activities and
markets (continued)

Segmental analysis
                                                                          2005
Profit             Ongoing          To be        Total   Discontinued    Total
                activities   discontinued   continuing     activities     £000
                      £000           £000         £000           £000
Building             6,148              -        6,148              -    6,148
products
Engineering
products
- Precision
components           2,208         (2,625)        (417)             -     (417)
- Industrial
products             1,324              -        1,324           (648)     676
                     ---------------------------------------------------------
Trading
profit/(loss)        9,680         (2,625)       7,055           (648)   6,407
Pension deficit
cost                  (984)             -         (984)             -     (984)
Goodwill (all
Building
products)             (256)             -         (256)             -     (256)
                     ----------------------------------------------------------
Operating
profit/(loss)        8,440         (2,625)       5,815           (648)   5,167
Share of
operating
profit                  55              -           55              -       55
in associates
Loss on
business
disposal before
goodwill write           -              -            -           (824)    (824)
back
Goodwill write
back                     -              -            -         (3,260)  (3,260)
Net interest          (395)             -         (395)             -     (395)
                    -----------------------------------------------------------
Profit/(loss)
before tax           8,100         (2,625)       5,475         (4,732)     743
                    ----------------------------------------------------------

Included in ongoing activities for the year to 30 June 2005 are amounts within
Building products relating to acquisitions of £1,191,000, before goodwill
amortisation of £242,000.
                                                                          2004
Profit              Ongoing          To be        Total   Discontinued   Total
                 activities   discontinued   continuing     activities    £000
                       £000           £000         £000           £000
Building              4,961              -        4,961              -   4,961
products
Engineering
products
- Precision
components            3,044           (360)       2,684              -   2,684
- Industrial
products                978              -          978           (230)    748
                      --------------------------------------------------------
Trading
profit/(loss)         8,983           (360)       8,623           (230)  8,393
Pension deficit
cost                   (139)             -         (139)             -    (139)
Goodwill (all
Building
products)                (8)             -           (8)             -      (8)
                      ---------------------------------------------------------
Operating
profit/(loss)         8,836           (360)       8,476           (230)  8,246
Share of
operating profit
in associates            50              -           50              -      50
Profit on sale
of                      880              -          880              -     880
land
Net interest           (229)             -         (229)             -    (229)
                      ---------------------------------------------------------
Profit/(loss)
before tax            9,537           (360)       9,177           (230)  8,947
                      --------------------------------------------------------

The amounts disclosed as pension deficit cost have been shown separately because
they relate to closed schemes, 91% of whose members are not now employed by the
Group, (2004: 89%).


                             NOTES TO THE ACCOUNTS
                        for the year ended 30 June 2005

1.     Analysis of turnover, assets employed and profits between activities and
markets (continued)

Geographical analysis

All business operations are located in the United Kingdom and all turnover is
generated there with the exception of Elkington China Limited, based in Hong
Kong, whose turnover is not significant.

Turnover by destination is as follows:
                                       2005                                  2004
        Continuing   Discontinued     Total   Continuing   Discontinued     Total
        activities     activities      £000   activities     activities      £000

United      98,562            736    99,298       92,878          1,358    94,236
Kingdom
Europe      14,573            564    15,137       11,847          1,280    13,127
- EU
- Non        1,619             80     1,699        1,017             52     1,069
EU
Other        5,349            114     5,463        6,616            264     6,880
             --------------------------------------------------------------------
           120,103          1,494   121,597      112,358          2,954   115,312
           ----------------------------------------------------------------------

Included in continuing activities for the year to 30 June 2005 are amounts
relating to acquisitions of: UK £5,730,000 and Europe - EU £361,000.

Included in continuing activities for the year to 30 June 2005 are amounts
relating to activities to be discontinued of: UK £5,109,000 and Europe - EU
£125,000 (2004: UK £6,446,000 and Europe - EU £144,000).

2.     Administration expenses

Included within administrative expenses within activities to be discontinued are
exceptional costs of £1,500,000 relating to fixed asset impairments, stock write
downs, and other costs of discontinuance.

Included within administrative expenses within discontinued activities are
exceptional costs of £466,000 relating to fixed asset impairments.

3.     Dividends

                                                               2005       2004
                                                               £000       £000
Interim dividend of 3.0p per share (2004: 3.0p), paid 6
April                                                         1,063      1,040
2005
Proposed final dividend of 6.3p per share (2004: 6.3p),
payable 28 October 2005                                       2,219      2,185
                                                              ----------------
                                                              3,282      3,225
                                                             -----------------

4.     Earnings per share

Both the earnings per share and the diluted earnings per share are based on the
loss after tax attributable to shareholders for the financial year of £727,000
(2004: profit £6,481,000). Earnings per share is based on the weighted average
number of ordinary shares in issue during the year ended 30 June 2005 of
35,039,846 (2004: 34,817,592). Diluted earnings per share is based on the
weighted average number of ordinary shares in issue during the year, after
allowing for the exercise of outstanding share options, of 35,186,032 (2004:
34,980,410).

                             NOTES TO THE ACCOUNTS
                        for the year ended 30 June 2005

5.       Reconciliation of movement in shareholders' funds


                                                              2005        2004
                                                              £000        £000

(Loss)/profit attributable to shareholders                    (727)      6,481
Dividends                                                   (3,282)     (3,225)
                                                            -------------------
                                                            (4,009)      3,256
Exchange difference                                              -          (6)
New shares issued                                              535           2
UITF 17 charge on long-term incentive plan                      37         113
Goodwill written back on disposals                           3,260           -
Increase in capital reserve                                    (83)          -
                                                            ------------------
Net (decrease)/ increase in shareholders' funds               (260)      3,365
Opening shareholders' funds                                 39,434      36,069
                                                            ------------------
Closing shareholders' funds                                 39,174      39,434
                                                            ------------------


6.     Audited Accounts

The above financial information is derived from the statutory accounts for the
years ended 30 June 2005 and 30 June 2004, on both of which the auditors have
issued an unqualified opinion.

The preliminary announcement is prepared on the same basis as set out in the
previous year's annual accounts.

The information does not constitute statutory accounts as defined in Section 240
(1) of the Companies Act 1985.

The accounts for the year ended 30 June 2004 have been filed with the Registrar
of Companies and the accounts for the year ended 30 June 2005 will be filed in
due course.

Copies of the Annual Report and Accounts will be posted to all shareholders on
16 September 2005. Copies will be available from the Company Secretary, The
Alumasc Group plc, Burton Latimer, Kettering, Northamptonshire, NN15 5JP, and
can be viewed on www.alumasc.co.uk from 19 September 2005.



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