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Alumasc Group Plc (ALU)

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Thursday 10 February, 2005

Alumasc Group Plc

Interim Results

Alumasc Group PLC
10 February 2005


Thursday 10 February 2005

                  THE ALUMASC GROUP PLC - INTERIM ANNOUNCEMENT

Alumasc, the high specification engineering and building products group,
announces its results for the half year ended 31 December 2004.

Financial Highlights

     •    Pre-tax profit on continuing activities of £3.5m (2003: £3.4m).

     •    Trading profit on continuing activities of £4.3m (2003: £3.7m).

     •    Earnings per share on continuing activities of 7.0p (2003: 6.9p).

     •    Interim dividend per share of 3.0p (2003: 3.0p).
     
     •    Net borrowings of £3.4m (gearing of 8.6%) at the seasonal high point 
          of 31 December 2004 (2003: £1.9m), despite the £6.4m outflow on two
          acquisitions in the period.
          
     •    The disposal in January of the loss-making G E Bissell generated a
          pre-tax loss on discontinued activities of £4.6m, including £3.3m of
          goodwill previously written off to reserves.

Commercial Highlights

     •    Alumasc Building Products, the Group's largest division, grew turnover 
          by £2.8m to £21.9m, and operating profit by £0.4m to £2.5m. This 
          strong performance was assisted by the acquisition of Roof-Pro Limited 
          in July and of Timloc Building Products Limited in September, both of 
          which performed well.

     •    Alumasc Precision enjoyed mixed success, with weak demand from its
          automotive customers countering growth achieved in other areas. 
          Overall, turnover declined by £1.3m and operating profit by £0.1m, to 
          £16.4m and £1.15m respectively.

     •    The Group's continuing Industrial Products activities advanced 
          turnover by £2.0m and operating profit by £0.3m, to £18.6m and £0.7m 
          respectively. Alumasc Dispense benefited from high demand from 
          on-going projects with its Brewery customers and has new products 
          under development using patented wireless energy transfer technology.

With regard to prospects, John McCall, Chairman, stated "The bias in Alumasc's
profit generation towards the second half year - an increasing feature of recent
years - is expected to continue. Moreover, Alumasc's strong cash generation and
sound balance sheet will ensure that the Group continues to exploit the
opportunities which it has generated with its key customers and markets and to
consider appropriate acquisitions in the Building Products sector."

Enquiries:

The Alumasc Group plc                                            01536-383 844
John McCall (Chairman)              ) from 10.30 to 12.30
Paul Hooper (Chief Executive)       ) 020-7588 7511

Bankside Consultants Limited
Charles Ponsonby                                                 020-7444 4166

Presentation:

From 09.30 to 10.30 today, there will be a presentation to brokers' analysts and
private client investment advisers at the offices of Williams de Broe, 6
Broadgate, London EC2M 2RP.


                              Chairman's Statement
Overview

The Group earned profits before tax from continuing activities of £3.5 million
in the six months to December 2004, £0.1 million ahead of those in the first
half of the previous year. Earnings in the half-year were 7.0p per share on this
basis (2003: 6.9p). The Board has declared an unchanged interim dividend of 3.0p
per share.

Our continuing activities earned trading profits (before interest, goodwill and
pensions deficit charges) of £4.3 million in the period, £0.6 million higher
than in the previous year, and the margin on turnover rose from 7.0% to 7.5%.
The Building Products and Industrial Products divisions moved strongly ahead in
the period, while Precision Components, which is being re-positioned to become
less dependent on automotive customers, achieved slightly lower turnover and
profit.

Interest costs rose marginally to £0.2 million on net borrowings of £3.4 million
at the seasonal high point of 31 December 2004, giving gearing of 8.6%. This
increase in borrowings over £1.9 million twelve months earlier reflects two
acquisitions in the period at a cash cost of £6.4 million. The cost of funding
the Group's pensions deficit increased by £0.34 million to £0.5 million.

The reported pre-tax loss of £1.1 million includes the loss incurred on the sale
of the non-core, loss-making G E Bissell business, including re-charging the
profit and loss account with £3.3 million of goodwill previously written off to
reserves.

Operations

Alumasc Building Products, the Group's largest division, grew turnover by £2.8
million to £21.9 million, and operating profit by £0.4 million to £2.5 million.
This strong performance was assisted by the acquisition of Roof-Pro Limited in
July and of Timloc Building Products Limited in September, both of whom
performed in line with expectations. The success of newer products also
contributed to the division's advance and will help to drive future growth.

Alumasc Precision enjoyed mixed success, with weak demand from its automotive
customers countering the growth achieved in other areas. Overall, turnover
declined by £1.3 million and operating profit by £0.1 million, to £16.4 million
and £1.15 million respectively. In the light of this continuing decline in
automotive activity and the development into other market areas, the Board is
actively reviewing with management and employees the options for re-aligning
capacity in the division to meet the future needs of our customers while
enhancing divisional profitability.

The Group's continuing Industrial Products activities advanced turnover by £2.0
million and operating profit by
£0.3 million, to £18.6 million and £0.7 million respectively. Alumasc Dispense
benefited from higher demand from on-going projects with its Brewery customers.
A number of new products are under development, including a particularly
exciting project utilising patented wireless energy transfer technology under
licence. Brock Metals was little changed from the previous year.

Development

Two building products companies were acquired during the half year- Roof-Pro
Limited and Timloc Building Products Limited - at a combined cost of £6.4
million, in line with our strategy for growing the Building Products division
organically and through add-on acquisitions. Both businesses have performed well
since acquisition and are proving useful extensions to our market presence.

Since the end of the period, G E Bissell, the small loss-making Industrial
Products business, has been sold and the proceeds will be used to develop our
core activities. Bissell is treated as discontinued in the half year accounts.
Goodwill of £3.3 million, written off to reserves in 1995, has been accounted
for in accordance with FRS 2.

Prospects

The bias in Alumasc's profit generation towards the second half year - an
increasing feature of recent years - is expected to continue. Moreover,
Alumasc's strong cash generation and sound balance sheet will ensure that the
Group continues to exploit the opportunities which it has generated with its key
customers and markets, and to consider appropriate acquisitions in the Building
Products sector.


John McCall
Chairman 10 February 2005

Unaudited Consolidated Profit and Loss Account
for the half year to 31 December 2004

                       Half year 31 December 2004      Half year 31 December 2003            Year to 30 June 2004
                   ________________________________  ________________________________  ________________________________
                   Continuing Discontinued           Continuing Discontinued           Continuing Discontinued  
                   activities   activities    Total  activities   activities    Total  activities   activities    Total
            Notes        £000         £000     £000        £000         £000     £000        £000         £000     £000 

Turnover

Existing
operations             54,403            -   54,403      53,404            -   53,404     112,358            -  112,358
Acquisitions            2,519            -    2,519           -            -        -           -            -        -
Discontinued
operations                  -        1,356    1,356           -        1,406    1,406           -        2,954    2,954
                   ________________________________  ________________________________  ________________________________
                2      56,922        1,356   58,278      53,404        1,406   54,810     112,358        2,954  115,312
Operating
profit/ (loss)

                   ________________________________  ________________________________  ________________________________
Before
goodwill
amortisation            3,768         (206)   3,562       3,538         (122)   3,416       8,476         (230)   8,246

Goodwill
amortisation             (107)           -    (107)           -            -        -           -            -        -
                   ________________________________  ________________________________  ________________________________


                   ________________________________  ________________________________  ________________________________
Existing
operations              3,223            -   3,223        3,538            -    3,538       8,476            -    8,476

Acquisitions              438            -     438            -            -        -           -            -        -

Discontinued
operations                  -         (206)  (206)            -         (122)    (122)          -         (230)    (230)
                   ________________________________  ________________________________  ________________________________

Operating
profit/ (loss)  2       3,661         (206) 3,455         3,538         (122)   3,416       8,476         (230)   8,246

Share of
operating
profit in
associates      2          30            -     30            25            -       25          50            -       50

Profit on
fixed asset
disposals                   -            -      -             -            -        -         880            -      880

Loss on
business
disposal:

                   ________________________________  ________________________________  ________________________________
Loss on sale                -       (1,129) (1,129)           -            -        -           -            -        -

Goodwill write
back                        -       (3,260) (3,260)           -            -        -           -            -        -
                   ________________________________  ________________________________  ________________________________
                            -       (4,389) (4,389)           -            -        -           -            -        -

                   ________________________________  ________________________________  ________________________________
Profit/ (loss)
on ordinary
activities             
before
interest                3,691       (4,595)   (904)       3,563         (122)   3,441       9,406         (230)   9,176

Net interest
payable                  (160)           -    (160)        (123)           -     (123)       (229)           -     (229)
                   ________________________________  ________________________________  ________________________________
Profit/ (loss)
on ordinary
activities             
before tax              3,531       (4,595) (1,064)       3,440         (122)   3,318       9,177         (230)   8,947

Tax on profit
on ordinary
activities      4      (1,094)         294    (800)      (1,021)          36     (985)     (2,526)          67   (2,459)
                   ________________________________  ________________________________  ________________________________

Profit/ (loss)
on ordinary
activities
after                   
tax                     2,437       (4,301) (1,864)       2,419          (86)   2,333       6,651         (163)   6,488

Equity
minority
interest                   -             -       -          (11)           -      (11)         (7)           -       (7)
                   ________________________________  ________________________________  ________________________________
Profit/ (loss)
for financial
period                 
attributable
to shareholders        2,437        (4,301) (1,864)       2,408          (86)   2,322       6,644         (163)   6,481

Dividends             (1,060)            -  (1,060)      (1,041)           -   (1,041)     (3,225)           -   (3,225)
                   ________________________________  ________________________________  ________________________________
Retained
profit/ (loss)
for the
financial              
period                 1,377        (4,301) (2,924)       1,367          (86)   1,281       3,419         (163)   3,256
                   ________________________________  ________________________________  ________________________________

Basic earnings
per share       5        7.0p        (12.3)p  (5.3)p       6.9p         (0.2)p    6.7p       19.1p        (0.5)p   18.6p

Diluted
earnings per
share           5        6.9p        (12.2)p  (5.3)p       6.8p         (0.2)p    6.6p       19.0p        (0.5)p   18.5p

Dividend per
share           6                              3.0p                               3.0p                              9.3p


Unaudited Consolidated Balance Sheet
at 31 December 2004
                                                                          Restated*
                                                          31 December   31 December   30 June
                                                                 2004          2003      2004
                                                                 £000          £000      £000
                                                          ____________________________________
Fixed assets

Intangible assets                                               5,269            54        50
Tangible assets                                                26,274        27,901    25,901
Investments                                                       515           493       515
                                                          ____________________________________
                                                               32,058        28,448    26,466
                                                          ____________________________________
Current assets                                            

Stocks                                                         12,835        11,830    11,745
Debtors                                                        24,807        21,904    26,875
Cash at bank and in hand                                            -           816     5,625
                                                          ____________________________________
                                                               37,642        34,550    44,245
                                                          ____________________________________
Creditors: amounts falling due within one year     
     
Bank overdraft                                                  1,487             -         -
Trade and other creditors                                      23,511        19,653    24,966
Taxation                                                          807         1,132     1,151
Proposed dividend                                               1,048         1,041     2,185
                                                          ____________________________________
                                                               26,853        21,826    28,302
                                                          ____________________________________
Net current assets                                             10,789        12,724    15,943
                                                          ____________________________________

Total assets less current liabilities                          42,847        41,172    42,409
Creditors: amounts falling due after more than one year         1,519         2,966     1,907
Provisions for liabilities and charges                          1,336           825     1,040
Equity minority interest                                           28            31        28
                                                          ____________________________________
Net assets                                                     39,964        37,350    39,434
                                                          ____________________________________

Capital and reserves

Called up share capital                                         4,383         4,352     4,352
Share premium                                                  27,156        26,907    26,909
Revaluation reserve                                             1,727         1,874     1,727
Capital redemption reserve                                        693           693       693
Capital reserve - own shares                                     (247)         (164)     (164)
Profit and loss account                                         6,252         3,688     5,917
                                                          ____________________________________
Equity shareholders' funds                                     39,964        37,350    39,434
                                                          ____________________________________
     
*    Comparative figures have been restated to reflect treatment in accordance 
     with UITF 38.

Unaudited Consolidated Statement of Recognised Gains and Losses
For the half year to 31 December 2004



                                                                            Half year       Half year         Year
                                                                          31 December     31 December      30 June
                                                                                 2004            2003         2004
                                                                                 £000            £000         £000
___________________________________________________________________________________________________________________
(Loss)/profit for the financial period attributable to shareholders           (1,864)           2,322        6,481
Currency translation differences on foreign currency net investments               -                -           (6)

___________________________________________________________________________________________________________________
Total recognised gains and losses for the period                              (1,864)           2,322        6,475
___________________________________________________________________________________________________________________


Unaudited Reconciliation of Movement in Shareholders' Funds
For the half year to 31 December 2004


                                                      Half year        Half year         Year
                                                    31 December      31 December      30 June
                                                           2004             2003         2004
                                                           £000             £000         £000
______________________________________________________________________________________________

Retained (loss)/profit for the financial period          (2,924)           1,281        3,256
Exchange difference                                           -                -           (6)
Issue of shares                                             278                -            2
UITF 17 charge on long term incentive plan                    -                -          113
Movement on capital reserve - own shares                    (84)               -            -
Goodwill transferred to profit and loss account           3,260                -            -
______________________________________________________________________________________________

Net increase in shareholders' funds                         530            1,281        3,365
Opening shareholders' funds                              39,434          *36,069      *36,069
______________________________________________________________________________________________
Closing shareholders' funds                              39,964           37,350       39,434
______________________________________________________________________________________________

* As restated


Unaudited Consolidated Cash Flow Statement
for the half year to 31 December 2004

                                                      Half year        Half year         Year
                                                    31 December      31 December      30 June
                                                           2004             2003         2004
                                                           £000             £000         £000
______________________________________________________________________________________________

Net cash inflow from operating activities                 4,479            1,088        9,637
______________________________________________________________________________________________

Returns on investments and servicing of finance
Net interest paid                                          (160)            (123)        (229)
Dividends paid to minority shareholders                     (15)             (16)         (15)
______________________________________________________________________________________________
                                                           (175)            (139)        (244)
______________________________________________________________________________________________

Taxation
UK corporation tax paid                                  (1,252)            (963)      (2,192)
______________________________________________________________________________________________

Capital expenditure and financial investment
Purchase of tangible fixed assets                        (1,405)          (1,505)      (2,490)
Proceeds from sale of tangible fixed assets                  32              273          264
______________________________________________________________________________________________
                                                         (1,373)          (1,232)      (2,226)
______________________________________________________________________________________________

Acquisitions and disposals
Purchase of subsidiary undertakings                      (7,351)               -            -
Net cash acquired with subsidiary undertakings              865                -            -
______________________________________________________________________________________________
                                                         (6,486)               -            -
______________________________________________________________________________________________

Equity dividends paid                                    (2,197)          (2,185)      (3,225)
______________________________________________________________________________________________

Financing
Issue of ordinary share capital                             278                -            2
Repayment of amounts borrowed                              (386)            (361)        (735)
______________________________________________________________________________________________
                                                           (108)            (361)        (733)
______________________________________________________________________________________________
     
(Decrease)/increase in cash in the period                (7,112)          (3,792)       1,017
______________________________________________________________________________________________

Reconciliation of operating profit to net cash
inflow from operating activities

Operating profit                                          3,455            3,416        8,246
Business disposal costs                                  (1,129)               -            -
Depreciation                                              2,292            1,720        3,643
Amortisation of goodwill                                    107                4            8
(Profit)/loss on disposal of tangible fixed                  (8)              22           10
assets
Increase in working capital*                               (922)          (3,752)      (1,350)
Increase/(decrease) in warranty and other
provisions                                                  684             (322)        (920)
______________________________________________________________________________________________
                                                          4,479            1,088        9,637
______________________________________________________________________________________________
     
*    Included within the movement in working capital for the half year to 31
     December 2004 are proceeds received of £2.0 million from the sale of land 
     at the Burton-upon-Trent site, the sale of which occurred in the year to 
     30 June 2004.

Notes on the Unaudited Accounts
for the half year to 31 December 2004
     
1.   Basis of preparation

     The interim financial statements for the half year ended 31 December 2004 
     are not statutory accounts. They have been prepared in accordance with the
     accounting policies detailed in the 2004 annual report and accounts, but 
     they have been neither audited nor reviewed by the Group's auditors. The 
     financial information for the year ended 30 June 2004 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 profit before tax

                                                   Half year 31 December 2004                 Half year 31 December 2003
                                     Continuing activities              Total  Continuing activities               Total
                                         Turnover   Profit   Turnover   Profit     Turnover   Profit   Turnover   Profit
                                             £000     £000       £000     £000         £000     £000       £000     £000
Building Products                          21,853    2,457     21,853    2,457       19,098    2,083     19,098    2,083
Engineering Products
- Precision Components                     16,410    1,148     16,410    1,148       17,740    1,224     17,740    1,224
- Industrial Products                      18,659      687     20,015      481       16,566      407     17,972      285
________________________________________________________________________________________________________________________
                                           56,922    4,292     58,278    4,086       53,404    3,714     54,810    3,592
Pension deficit cost                                  (494)               (494)                 (151)              (151)
Goodwill                                              (107)               (107)                    -                   -
________________________________________________________________________________________________________________________
     Operating profit including associates           3,691               3,485                 3,563               3,441
     Loss on business disposal                           -              (1,129)                    -                   -
Goodwill write back                                      -              (3,260)                    -                   -
Interest                                              (160)               (160)                 (123)              (123)
________________________________________________________________________________________________________________________
Profit/(loss) before tax                             3,531              (1,064)                3,440               3,318
________________________________________________________________________________________________________________________

     Goodwill amortisation in the period relates wholly to Building Products.

     The amounts disclosed as pension deficit cost have been shown separately 
     because they relate to closed schemes, 90% of whose members are not now 
     employed by the Group.
     
3.   Activities discontinued

     Discontinued activities in the period comprise the sale of the business and
     certain assets of G E Bissell and Co, a manufacturer and supplier of spring 
     pins and disc springs, on 14 January 2005. The loss on disposal comprises a
     write-down of retained freehold property, costs and an estimated loss on 
     stock which will be paid for by the purchaser at a rate and value dependent 
     on usage. Goodwill which was written off to reserves on acquisition in 1995 
     has been transferred back through the Profit and Loss Account in accordance 
     with FRS 2.

Notes on the Unaudited Accounts
for the half year to 31 December 2004
     
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
                                                2004              2003         2004
                                                £000              £000         £000
____________________________________________________________________________________
Current tax - UK Corporation tax                 610               893        2,114
            - Foreign tax                          -                 -           27
Share of associate's current tax - overseas        -                 -           28
Deferred tax                                     190                92          290
____________________________________________________________________________________
                                                 800               985        2,459
____________________________________________________________________________________
     
5.   Earnings per share

     Earnings per share is based on the weighted average number of ordinary 
     shares in issue for the period of 34,924,462 (31 December 2003: 34,817,305, 
     year ended 30 June 2004: 34,817,592). 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 
     35,093,754 (31 December 2003: 34,988,648, year ended 30 June 2004: 
     34,980,410).
          
6.   Dividends

     The directors have declared an interim dividend per share of 3.0p 
     (2003: 3.0p) which will be paid on 6 April 2005 to shareholders on the 
     register at the close of business on 11 March 2005.
     
7.   Acquisitions

     The Group acquired two building product businesses during the six months 
     to 31 December 2004.

                                                                          £000
     _________________________________________________________________________
     Total cost including deferred consideration and cash acquired       7,501
     Provisional fair value to the Group of the net assets acquired      2,175
     _________________________________________________________________________
     Goodwill                                                            5,326
     _________________________________________________________________________
     
8.   Reconciliation of net cash flow to movement in net (debt)/cash

                                                           Half year        Half year         Year
                                                         31 December      31 December      30 June
                                                                2004             2003         2004
                                                                £000             £000         £000
___________________________________________________________________________________________________
(Decrease)/increase in cash in the period                     (7,112)          (3,792)       1,017
Repayment of debt                                                386              361          735
___________________________________________________________________________________________________
Change in net (debt)/cash from cash flows in the period       (6,726)          (3,431)       1,752
___________________________________________________________________________________________________
Net cash at start of period                                    3,288            1,536        1,536
___________________________________________________________________________________________________
Net (debt)/cash at end of period                              (3,438)          (1,895)       3,288
___________________________________________________________________________________________________




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