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Alumasc Group Plc (ALU)

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Thursday 12 February, 2004

Alumasc Group Plc

Interim Results

Alumasc Group PLC
12 February 2004



                  THE ALUMASC GROUP plc - INTERIM ANNOUNCEMENT


   • Alumasc, the high specification engineering and building products
     group, announces pre-tax profits of £3.3m in the half year ended 31 
     December 2003, a £0.1m reduction against underlying profit in the first 
     half of the previous year and consistent with the Board's AGM-announced 
     expectation that second half profits will increase relative to the first 
     half.


   •Net borrowings at 31 December, a seasonal high point, decreased to £1.9m
    from £2.4m a year earlier, reflecting continuing net cash generation.


   •As promised, the Board has re-balanced the Group's dividend payments by
    declaring an interim dividend per share of 3.0p (2002: 2.45p), equal to 34%
    of last year's total.


   •Alumasc Precision increased operating profit by £0.3m (29%), following
    improved cost control and increased business with non-automotive customers.
    The drive to improve margins, and to focus the business where satisfactory
    margins can be achieved, will continue during the second half year.


   •Industrial Products reduced operating profit by £0.8m, reflecting the
    anticipated lower demand for brewery dispense and brand promotion products
    and a more general weakness in the markets for industrial commodities.


   •Building Products increased operating profit by £0.3m (19%), reflecting
    the success of internal developments as well as continued firmness in its
    commercial and public sector markets. As part of plans for developing
    opportunities in European markets, agreement was reached in December 2003
    with Saint-Gobain to distribute Gatic engineered access covers on the
    Continent.


   •John McCall, Chairman, stated "Our markets, and the economy generally,
    are calmer than for some years. However, in many U.K. manufacturing sectors,
    talk of recovery remains more wishful than established. Suppliers of
    commodity products continue to feel extreme competitive pressure, as do
    those customers whose products have failed to develop in line with the
    demands of their markets. The consequent weakness in first half demand from
    certain customers is expected to continue as a result.



Our new business initiatives are increasingly contributing to Alumasc's
performance and, supported by the strong Group balance sheet, will carry through
to the second half year and beyond. Any strengthening of the economy will be a
bonus. We expect the pattern of trading, which favours our second half year, to
continue."


Presentation:


A presentation for brokers' analysts and private client investment advisers will
be held from 9.30 a.m. to 10.30 a.m. today at Bankside Consultants Limited, 123
Cannon Street, London EC4N 5AU (100yds east of the station, on the opposite side
of the road).



Enquiries:

The Alumasc Group plc                                          01536-383 844
John McCall (Chairman)
Paul Hooper (Chief Executive)

Bankside Consultants Limited
Charles Ponsonby                                               charles.ponsonb
                                                                [email protected]
                                                               / 020-7444 4166
                     -----------------------------------------------

                              CHAIRMAN'S STATEMENT



Summary


Pre-tax profits for the 6 months to December 2003 of £3.3 million are below
those of the previous year (2002 : £3.75 million) but in line with our
expectations. The Group's Precision Components and Building Products divisions
were both ahead in turnover and operating profit. Excluding the previous year's
profit on the sale of land of £0.3 million, the current year's reduction is £0.1
million and consistent with our expectation, alluded to in my AGM statement of
16 October 2003, that second half profits will increase relative to the first
half.


Historically, the Group's borrowings have tended to be higher in the first 6
months of our trading year. The Group's net borrowings of £1.9 million at 31
December 2003 (2002: £2.4 million) followed this pattern, and interest costs of
£0.1 million (2002: £0.2 million) reflect continuing net cash generation by the
Group.


Dividend


Following last year's increase in dividends, the Board declared its intention to
rebalance the Group's dividend payments less heavily towards the final payment,
commencing with the interim dividend in the current financial year. Accordingly,
the Board has declared an interim dividend per share of 3.0p (2002: 2.45p),
equal to 34% of last year's total. Recommendations in respect of a final
dividend will make allowance for this rebalancing.


Operations


Alumasc Precision continued to increase its business with non-automotive
customers during the half year. Turnover was modestly ahead as a result, despite
weak demand from its automotive customer base. Operating profits grew by £0.3
million (29%), showing the benefit of improved cost control. In particular, a
reduction in headcount contributed to productivity improvements and generated
savings to set against the recent hike in national insurance costs. The drive to
improve margins, and to focus the business where satisfactory margins can be
achieved, will continue during the second half year.


The Group's Industrial Products activities were well below the previous year in
both turnover, down by £3.0 million, and operating profits, by £0.8 million. In
part, this reflects the lower demand for our brewery dispense and brand
promotion products, foreshadowed in earlier reviews of last year's activities.
Demand for these products is project related and such variation in activity
levels is not unusual. A more general weakness was evident in the markets for
industrial commodities.


Alumasc Building Products continued the advances of recent years with turnover
growth in each operating company and operating profits ahead by £0.3 million
(19%). This encouraging performance reflects both the success of developments
within our own businesses, as well as continued firmness in our commercial and
public sector markets. As part of our plans for developing opportunities in
European markets, agreement was reached in December 2003 with Saint-Gobain to
distribute Gatic engineered access covers on the Continent.


Prospects


Our markets, and the economy generally, are calmer than for some years. However,
in many U.K. manufacturing sectors, talk of recovery remains more wishful than
established. Suppliers of commodity products continue to feel extreme
competitive pressure, as do those customers whose products have failed to
develop in line with the demands of their markets. The consequent weakness in
first half demand from certain customers is expected to continue as a result.


Our new business initiatives are increasingly contributing to Alumasc's
performance and, supported by the strong Group balance sheet, will carry through
to the second half year and beyond. Any strengthening of the economy will be a
bonus. We expect the pattern of trading, which favours our second half year, to
continue.



John McCall
Chairman                                                     12 February 2004


               UNAUDITED CONSOLIDATED BALANCE SHEET
                        At 31 December 2003

                                         31 December    31 December    30 June
                                                2003           2002       2003
                                 Notes          £000           £000       £000
------------------                ------    ----------     ----------  ---------
Fixed assets
Intangible assets                                 54             62         58
Tangible assets                               27,901         29,931     28,411
Investments                                      493            524        493
------------------                ------    ----------     ----------  ---------
                                              28,448         30,517     28,962
------------------                ------    ----------     ----------  ---------
Current assets
Stocks                                        11,830         12,530     11,698
Debtors                                       22,068         20,880     24,356
Cash at bank and in hand                         816            989      4,608
------------------                ------    ----------     ----------  ---------
                                              34,714         34,399     40,662
------------------                ------    ----------     ----------  ---------
Creditors: amounts falling due
within one year
Trade and other creditors                     19,653         22,024     25,608
Taxation                                       1,132          1,311      1,202
Proposed dividend                              1,041            850      2,185
------------------                ------    ----------     ----------  ---------
                                              21,826         24,185     28,995
------------------                ------    ----------     ----------  ---------
Net current assets                            12,888         10,214     11,667
------------------                ------    ----------     ----------  ---------
Total assets less current                     41,336         40,731     40,629
liabilities
Creditors: amounts falling due
after more than one year                       2,966          4,161      3,656
Provisions for liabilities and                   825            809        704
charges
Equity minority interest                          31            102         36
------------------                ------    ----------     ----------  ---------
Net assets                                    37,514         35,659     36,233
------------------                ------    ----------     ----------  ---------
Capital and reserves
Called up share capital                        4,352          4,352      4,352
Share premium                                 26,907         26,907     26,907
Revaluation reserve                            1,874          2,021      1,874
Capital redemption reserve                       693            693        693
Profit and loss account                        3,688          1,686      2,407
------------------                ------    ----------     ----------  ---------
Equity shareholders' funds           8        37,514         35,659     36,233
------------------                ------    ----------     ----------  ---------


                 UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
                        For the half year to 31 December 2003

                                       ---------------         ---------------------------------
                                         Half year                        Half year
                                        31 December                      31 December
                                            2003                          2002
                                        ---------------        ---------------------------------
                                                                                 
                                                              Continuing    Discontinued
                                                              activities      activities     Total
                                              £000                  £000            £000      £000
Notes
                                     ---------------  --------------------       ---------   -------
    2   Turnover                            54,810                56,272           1,976    58,248

    2   Operating profit/(loss)              3,416                 3,592              45     3,637
    2   Share of operating profit               25                    55               -        55
        in associates
        Profit on fixed asset                    -                   305               -       305
        disposals                                    
                                             -------  --------------------       ---------   -------
        Loss on business closure:
        Costs of business closure/loss on        -                     -            (854)     (854)
        sale
        Goodwill write back                      -                     -          (2,388)   (2,388)
                                             -------  --------------------       ---------   -------
                                                 -                     -          (3,242)   (3,242)
        Net interest payable                  (123)                 (199)              -      (199)
        --------------------------   ---------------  --------------------       ---------   -------  
        Profit/(loss) on ordinary            3,318                 3,753          (3,197)      556
        activities before
        taxation
    4   Taxation (charge)/credit              (985)               (1,170)            236      (934)
         --------------------------  ---------------  --------------------       ---------   -------  
        Profit/(loss) on ordinary            2,333                 2,583          (2,961)     (378)
        activities after taxation
        Equity minority interest               (11)                   (6)              -        (6)
        --------------------------   ---------------  --------------------       ---------   -------  
        Profit/(loss) for the                2,322                 2,577          (2,961)     (384)
        financial period
        attributable to
        shareholders
        Dividends                           (1,041)                 (850)              -      (850)
        --------------------------  ---------------  --------------------       ---------   -------  
        Retained profit/(loss) for           1,281                 1,727          (2,961)   (1,234)
        the financial period         
        --------------------------  ---------------  --------------------       ---------   -------  
    5   Basic earnings per share               6.7p                  7.4p           (8.5)p    (1.1)p
        --------------------------   ---------------  --------------------       ---------   ------- 
    5   Diluted earnings per                   6.6p                  7.4p           (8.5)p    (1.1)p
        share                          
        --------------------------   ---------------  --------------------       ---------   -------
    6   Dividend per share                     3.0p                                           2.45p
        --------------------------   ---------------  --------------------       ---------   -------  

                            ---------------------------------------
                                            Year
                                          30 June
                                            2003

                Continuing                 Discontinued
                activities                   activities                         Total
                      £000                         £000                          £000
             ---------------              ---------------               ---------------
                   117,425                        2,499                       119,924

                     7,738                          (51)                        7,687
                        55                            -                            55
                       305                            -                           305
             ---------------              ---------------               ---------------

                         -                         (875)                         (875)
                         -                       (2,388)                       (2,388)
             ---------------              ---------------               ---------------
                         -                       (3,263)                       (3,263)
                      (322)                           -                          (322)
             ---------------              ---------------               ---------------
                     7,776                       (3,314)                        4,462
                    (2,302)                         246                        (2,056)
             ---------------              ---------------               ---------------
                     5,474                       (3,068)                        2,406
                       (22)                           -                           (22)
             ---------------              ---------------               ---------------
                     5,452                       (3,068)                        2,384
                    (3,035)                           -                        (3,035)
             ---------------              ---------------               ---------------
                     2,417                       (3,068)                         (651)
             ---------------              ---------------               ---------------

                      15.7p                        (8.8)p                         6.9p
             ---------------              ---------------               ---------------
                      15.6p                        (8.8)p                         6.8p
             ---------------              ---------------               ---------------
                                                                                 8.75p
             ---------------              ---------------               ---------------


     UNAUDITED CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                     For the half year to 31 December 2003



                                           Half year      Half year       Year
                                         31 December    31 December    30 June
                                                2003           2002       2003
                                                £000           £000       £000
                 ----------------------     ----------      ---------  ---------

Profit/(loss) for the financial
period
attributable to shareholders                   2,322           (384)     2,384
Currency translation differences on
foreign currency net investments                   -              -         (9)
----------------------                      ----------      ---------  ---------
Total recognised gains and losses for          2,322           (384)     2,375
the period                                  
----------------------                      ----------      ---------  ---------



                   UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
                     For the half year to 31 December 2003

                                        Half year         Half year       Year
                                         31 December    31 December    30 June
                                                2003           2002       2003
                                                £000           £000       £000
------------------              -------     ----------      ---------   --------

Net cash inflow from                           1,088          2,892      9,464
operating activities            
------------------              -------     ----------      ---------   --------
Returns on investments and servicing of finance
Net interest paid                               (123)          (199)      (322)
Dividends paid to minority                       (16)           (17)       (16)
shareholders                       
---------------------           -------     ----------      ---------   --------
                                                (139)          (216)      (338)
------------------              -------     ----------      ---------   --------
Taxation
UK corporation tax paid                         (963)          (911)    (2,095)
------------------              -------     ----------      ---------   --------
Capital expenditure and financial investment
Purchase of tangible fixed                    (1,505)        (1,238)    (2,217)
assets
Proceeds from sale of tangible                   273          1,060      1,520
fixed assets                   
---------------------              ----     ----------      ---------   --------
                                              (1,232)          (178)      (697)
------------------              -------     ----------      ---------   --------
Acquisitions and
disposals
Sale of subsidiary                                 -              -        109
undertaking
Net cash disposed of with                          -              -       (108)
subsidiary undertaking         
------------------              -------     ----------      ---------   --------
                                                   -              -          1
------------------              -------     ----------      ---------   --------
Equity dividends paid                         (2,185)        (2,098)    (2,948)
------------------              -------     ----------      ---------   --------
Financing
Repayment of amounts                            (361)          (409)      (688)
borrowed                        
------------------              -------     ----------      ---------   --------
(Decrease)/ increase in                       (3,792)          (920)     2,699
cash in the period             
------------------              -------     ----------      ---------   --------

Reconciliation of operating profit to net cash inflow from operating
activities

Operating profit                                3,416          3,637     7,687
Business closure costs                              -           (854)     (870)
Depreciation                                    1,720          1,979     3,964
Amortisation of goodwill                            4              4         8
Loss/ (profit) on disposal of tangible             22             (2)       21
fixed assets
Increase in working capital                    (3,752)        (1,846)     (880)
Decrease in warranty and other provisions        (322)           (26)     (466)
------------------------                      ---------      ---------  --------
                                                                        
                                                1,088          2,892     9,464
                                              ---------      ---------  --------


                        NOTES ON THE UNAUDITED ACCOUNTS

                     For the half year to 31 December 2003


1 Basis of preparation


The interim financial statements for the half year ended 31 December 2003 are
not statutory accounts. They have been prepared in accordance with the
accounting policies detailed in the 2003 annual report and accounts. The
financial information for the year ended 30 June 2003 is an abridged version of
the financial statements filed with the Registrar of Companies, on which the
auditors gave an unqualified report. The interim report is being posted to
shareholders and copies are available to the public at the registered office,
Burton Latimer, Kettering, Northamptonshire NN15 5JP.


2 Analysis of turnover and operating profit, including associates on continuing
activities

                                        Half year               Half year
                                     31 December 2003       31 December 2002
                                       ---------------        -------------
                                                           
                                Turnover      Profit     Turnover      Profit
                                    £000        £000         £000        £000
-------------------              ---------    --------     --------    --------
Engineering Products
- Precision Components            17,740       1,224       17,720         952
- Industrial Products             17,972         285       20,941       1,072
Building Products                 19,098       2,083       17,611       1,751
-------------------              ---------    --------     --------    --------
                                  54,810       3,592       56,272       3,775
Pension deficit cost                            (151)                    (128)
Interest                                        (123)                    (199)
-------------------              ---------    --------     --------    --------
                                               3,318                    3,448
Profit on fixed asset                              -                      305
disposals                        
-------------------              ---------    --------     --------    --------
                                               3,318                    3,753
-------------------              ---------    --------     --------    --------


The amounts disclosed as pension deficit cost have been shown separately because
they relate to closed schemes, 86% of whose members are not now employed by the
Group.


3 Activities discontinued


Discontinued activities in the half year to 31 December 2002 and the full year
to 30 June 2003 comprise the results of Leonardo Internet Limited, a web
development business which was sold on 7 February 2003, and the Alumasc Grundy
business which manufactured and repaired beer barrels, and which was closed in
March 2003.


                        NOTES ON THE UNAUDITED ACCOUNTS
                     For the half year to 31 December 2003


4 Taxation


The taxation provided is based on an estimated effective rate for the year.

                                        Half year         Half year       Year
                                         31 December    31 December    30 June
                                                2003           2002       2003
                                                £000           £000       £000
----------------------                      ----------      ---------  ---------
Current tax - UK Corporation tax                 893            812      1,878
- Foreign tax                                      -              -         15
Share of associate's current tax -                 -              -         30
overseas
Deferred tax                                      92            122        133
----------------------                      ----------      ---------  ---------
                                                 985            934      2,056
----------------------                      ----------      ---------  ---------


5 Earnings per share


Earnings per share is based on the weighted average number of ordinary shares in
issue for the period of 34,817,305 (31 December 2002: 34,816,788, year ended 30
June 2003: 34,816,788). Diluted earnings per share is based on the weighted
average number of ordinary shares in issue during the period, after allowing for
the exercise of outstanding share options, of 34,988,648 (31 December 2002:
34,878,487, year ended 30 June 2003: 34,864,434).


6 Dividends


The directors have declared an interim dividend per share of 3.0p (2002: 2.45p)
which will be paid on 6 April 2004 to shareholders on the register at the close
of business on 12 March 2004.


7 Reconciliation of net cash flow to movement in net (debt)/cash

                                        Half year         Half year       Year
                                         31 December    31 December    30 June
                                                2003           2002       2003
                                                £000           £000       £000
---------------------                      -----------     ----------  ---------
(Decrease)/ increase in cash in the           (3,792)          (920)     2,699
period
Repayment of debt                                361            409        688
---------------------                      -----------     ----------  ---------
Change in net (debt)/cash from cash           (3,431)          (511)     3,387
flows in the period                        -----------     ----------  ---------
---------------------
Net cash/(debt) at start of period             1,536         (1,851)    (1,851)
Net (debt)/cash at end of period              (1,895)        (2,362)     1,536
---------------------                      -----------     ----------  ---------



                        NOTES ON THE UNAUDITED ACCOUNTS
                     For the half year to 31 December 2003


8 Reconciliation of movement in shareholders' funds

                                      Half year       Half year         Year
                                    31 December     31 December      30 June
                                           2003            2002         2003
                                           £000            £000         £000
---------------------                  ----------      ----------    ---------
Retained profit/(loss) for the            1,281          (1,234)        (651)
financial period
Exchange difference                           -               -           (9)
Goodwill write back on disposal of            -           2,388        2,388
business                               ----------      ----------    ---------
---------------------
Net increase in shareholders' funds       1,281           1,154        1,728
Opening shareholders' funds              36,233          34,505       34,505
---------------------                 -----------      ----------    ---------
Closing shareholders' funds              37,514          35,659       36,233
---------------------                 -----------      ----------    ---------







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