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Johnson Fry Holdings (JFH)

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Thursday 05 August, 1999

Johnson Fry Holdings

Interim Results

JOHNSON FRY HOLDINGS PLC
4 August 1999

UNAUDITED INTERIM STATEMENT

30 JUNE 1999

Chairman's and Chief Executive's Statement

Interim Accounts

Overview

On 15 July 1999, your Board issued a trading statement commenting on the
Group's business for the six months ended 30 June 1999 and indicating the
likelihood of a loss of approximately £1.6 million for the period.  The
statement concluded by announcing that the Board had appointed DLJ
International to advise on the strategic opportunities available to the Group
to increase funds under management and maximise the Group's operational
leverage for the benefit of shareholders.

Financial Results & Dividend

The Group made a loss before (and after) tax of £1.5 million during the
period, against a reported loss last year of £0.6 million.  

The Group's recurring revenue, mainly investment management fees net of direct
costs, showed an encouraging improvement once again over the previous period's
equivalent figure.  However, one-off revenue, mainly net commissions on sales
of the Group's investment products, was well below last year's figure as a
result of sales of the Group's PEPs in their final year being substantially
lower than the previous year's sales and of their replacement, ISAs, getting
off to a very slow start. 

The Group's results were further influenced by an increase in administrative
expenses caused mainly by investment in distribution and customer service
initiatives, in addition to one-off costs incurred as the Group continues to
reduce its fixed overhead base.

The Board has decided to pay an unchanged interim dividend of 2p per share. 
Whilst the dividend is not covered by earnings, the Board believes that the
maintenance of the dividend is appropriate, bearing in mind the Group's future
prospects.

Funds Under Management

Funds under management increased by 5% during the period from £1.18 billion to
£1.24 billion and there was a further improvement in the net recurring yield
reflecting the increase in the quality of the portfolio of funds.  Additional
funds of £72.5 million have been raised in July for the two investment trusts
managed by the Group.

Investment Performance

Investment performance remained excellent with six of the Company's eight unit
trusts having now achieved top decile performance since launch and the two
split capital investment trusts being the most successful within their
category over three years.

Sales & Marketing

During the period the Group further developed its Web site to enhance both its
IFA and direct distribution channels.  This new channel enables customers to
purchase ISAs on-line and this service will be extended progressively subject
to regulatory developments to cover the Group's complete range of products. 
There are a growing number of visits to the site and the Group expects the Web
to become a significant distribution channel in the future.  Sales through
IFAs remain the most important distribution channel and it is gratifying that
the number of IFAs buying the Group's products increased substantially during
the period.

Summary

We would like to thank all members of staff for their efforts during a busy
period.  The Board remains extremely optimistic about the retail fund
management platform that has been developed over the last three years.

The results for the year will depend critically on the sales achieved in the
second half.  The Board will keep shareholders informed of the outcome of the
strategic review as soon as practicable.

David Backhouse                                            Rebecca Thomas
Chairman                                                   Chief Executive
4 August 1999


Consolidated Profit and Loss Account
Six months ended 30 June 1999 (Unaudited)

                                     1999        1998        1998        1998
                                             Cont'ing   Discont'd       Total
                                           Activities  Activities
                          Note      £'000       £'000       £'000       £'000

Turnover                     2      9,072      11,467         491      11,958
Cost of sales                      (6,136)     (7,120)       (163)     (7,283)
                                  -------     -------     -------     -------
Gross profit                 2      2,936       4,347         328       4,675
Administrative expenses            (4,741)     (4,167)       (811)     (4,978)
                                  -------     -------     -------     -------
Operating profit/(loss)            (1,805)        180        (483)       (303)
Exceptional items
Loss on sale of operations              -           -      (1,211)     (1,211)
Reorganisation costs                    -           -           -           -
                                  -------     -------     -------     -------
Profit/(loss) on ordinary
activities before net
interest and other income          (1,805)        180      (1,694)     (1,514)
                                              -------     -------

Net interest and other income         278                                 868
                                  -------                             -------
Loss on ordinary activities
before taxation                    (1,527)                               (646)
Taxation                                -                                   -
                                  -------                             -------
Loss on ordinary activities
after taxation                     (1,527)                               (646)
Dividends                    4       (250)                               (248)
                                  -------                             -------
Retained loss                6     (1,777)                               (894)
                                  -------                             -------

                                    Pence                               Pence
Loss per share               5      (12.3)                               (5.3)
Diluted loss per share       5      (11.4)                               (4.8)


There are no recognised gains or losses other than the profits/(losses)
included in the consolidated profit and loss accounts for the six months ended
30 June 1999 and 30 June 1998 and for the year ended 31 December 1998 and
therefore no separate statement of total recognised gains and losses has been
prepared.

The results for the six months ended 30 June 1999 as shown above all arose
from continuing operations.

There is no difference between the loss on ordinary activities before taxation
and the retained loss for the period, and their historical cost equivalents.

Consolidated Profit and Loss Account
Year ended 31 December 1998 (Audited)

                                                        1998
                                   Continuing      Discont'd
                                   Activities      Activities           Total
                          Note          £'000           £'000           £'000

Turnover                     2         18,766             585          19,351
Cost of sales                         (10,531)           (270)        (10,801)
                                      -------         -------         -------
Gross profit                 2          8,235             315           8,550
Administrative expenses                (8,066)         (2,080)        (10,146)
                                      -------         -------         -------
Operating profit/(loss)                   169          (1,765)         (1,596)
Exceptional items
Loss on sale of operations                  -          (1,017)         (1,017)
Reorganisation costs                        -            (478)           (478)
                                      -------         -------         -------
Profit/(loss) on ordinary
activities before net
interest and other income                 169          (3,260)         (3,091)
                                       ------         -------
Net interest and other
income                                                                  1,887
                                                                      -------
Loss on ordinary activities
before taxation                                                        (1,204)
Taxation                                                                  200
                                                                      -------
Loss on ordinary activities 
after taxation                                                         (1,004)
Dividends                                                                (497)
                                                                      -------
Retained loss                                                          (1,501)
                                                                      -------
                                                                        Pence
Loss per share               5                                           (8.1)
Diluted loss per share       5                                           (7.5)


Consolidated Balance Sheet
At 30 June 1999 (Unaudited)
                              At 30 June 1999           At 30 June  At 31 Dec
                                                              1998       1998
                        Operat'g    Finance  (Unaud'd)   (Unaud'd)  (Audited)
                           Group   Subsid's      Total       Total      Total
                   Note    £'000      £'000       £000       £'000      £'000
Fixed assets
Tangible assets            1,302          -      1,302       1,116      1,061
Investments                2,555    147,443    149,998     145,113    147,444
                         -------    -------    -------     -------    -------
                           3,857    147,443    151,300     146,229    148,505
                         -------    -------    -------     -------    -------
Current assets
Stocks                       303          -        303         715         98
Debtors: 
amounts falling due
within one year            6,351      1,081      7,432       7,217      7,199
Debtors: 
amounts falling 
due after more
 than one year               490      1,322      1,812       2,495      2,067
Investments                  514          -        514         571        520
Cash at bank 
and in hand                3,485        745      4,230       8,248      6,749
                         -------    -------    -------     -------    -------
                          11,143      3,148     14,291      19,246     16,633
Creditors:  
amounts falling 
due within one year       (5,745)    (1,190)    (6,935)     (7,873)    (6,208)
                         -------    -------    -------     -------    -------
Net current assets         5,398      1,958      7,356      11,373     10,425
                         -------    -------    -------     -------    -------
Total assets less
current liabilities        9,255    149,401    158,656     157,602    158,930
Creditors:  
amounts falling 
due after more 
than one year                  -   (147,490)  (147,490)   (143,645)  (144,632)
Provisions for
liabilities 
and charges               (1,594)      (463)    (2,057)     (2,365)    (3,434)
Deferred taxation              -       (612)      (612)       (733)      (612)
                         -------    -------    -------     -------    -------
Net assets                 7,661        836      8,497      10,859     10,252
                         -------    -------    -------     -------    -------

Capital and reserves
Called up 
share capital                                    1,519       1,518      1,518
Share premium account                            4,758       4,737      4,737
Other reserves                                     702         702        702
Profit and loss 
account                                          1,518       3,902      3,295
                                               -------     -------    -------
Equity shareholders'
funds                 6                          8,497      10,859     10,252
                                               -------     -------    -------


Consolidated Cash Flow Statement
Six months ended 30 June 1999

                                   Six months      Six months      Year ended
                                ended 30 June   ended 30 June     31 December
                                         1999            1998            1998
                                  (Unaudited)     (Unaudited)       (Audited)
                                        £'000           £'000           £'000

Net cash flow from 
operating activities                   (2,385)            343            (782)
Returns on investments 
and servicing of finance                  769             670             391
Taxation                                    -               -             (10)
Capital expenditure and
financial investment                     (426)           (192)            (48)
Acquisitions and disposals               (226)              -             123
Equity dividends paid                    (249)           (246)           (492)
                                      -------         -------         -------
Cash (outflow)/inflow before
use of liquid resources and
financing                              (2,517)            575            (818)
Management of liquid
resources                               1,204            (181)          4,098
Financing                                  (6)           (100)           (185)
                                      -------         -------         -------
Net (decrease)/increase
in cash                                (1,319)            294           3,095
                                      -------         -------         -------


Reconciliation of net cash flow to movement in net debt and in Group net funds

                                   Six months      Six months      Year ended
                                ended 30 June   ended 30 June     31 December
                                         1999            1998            1998
                                  (Unaudited)     (Unaudited)       (Audited)
                          Note          £'000           £'000           £'000

Net (decrease)/increase
in cash                                (1,319)            294           3,095
Cash (inflow)/outflow
from (decrease)/increase
in liquid resources                    (1,204)            181          (4,098)
Cash outflow/(inflow)
from change in debt and
lease financing                            28            (220)            185
                                      -------         -------         -------
Change in net debt
resulting from cash flows              (2,495)            255            (818)
Accretion/cancellation of 
loan notes issued by the
Finance subsidiaries                   (2,858)         (2,723)         (3,957)
Other non-cash movements                    5             885             550
                                      -------         -------         -------
Movement in net debt                   (5,348)         (1,583)         (4,225)
Net debt at 1 January                (137,926)       (133,701)       (133,701)
                                      -------         -------         -------
Net debt at 
30 June/31 December                  (143,274)       (135,284)       (137,926)
Investments owned by the
Finance subsidiaries                  147,443         142,463         144,856
                                      -------         -------         -------
Group net funds at 
30 June/31 December          7          4,169           7,179           6,930
                                      =======         =======         =======

Notes to the interim results

1. Basis of Preparation
   The interim statement has been prepared on the basis of the accounting
   policies set out in the audited consolidated accounts of Johnson Fry
   Holdings PLC for the year ended 31 December 1998.  As explained more 
   fully in those accounts, the assets and liabilities of the two non-recourse
   Finance subsidiaries are separately disclosed, to distinguish as clearly as
   possible between their assets and liabilities and those of the Group.  The
   interim statement was approved by the Board of Directors on 4 August 1999
   and is unaudited.  The figures for the year ended 31 December 1998 have
   been extracted from the latest published consolidated accounts, which have
   been filed with the Registrar of Companies.  The auditors' report on these
   accounts was unqualified and did not contain any statement under Section
   237 of the Companies Act 1985.

2. Divisional Analysis of Turnover and Gross Profit

                       Six months ended   Six months ended       Year ended
                         30 June 1999       30 June 1998        31 Dec 1998
                       Turnover   Gross   Turnover   Gross   Turnover   Gross
                                 profit             profit             profit
                         £'000    £'000     £'000    £'000     £'000    £'000
   Continuing
   activities
   Fund management
    Asset management     7,789    2,473     9,011    3,380    15,246    6,955
    EZ Property Unit
    Trusts               1,283      463     2,456      967     3,520    1,280
                        ------   ------    ------   ------    ------   ------
   Total continuing
   activities            9,072    2,936    11,467    4,347    18,766    8,235
   Discontinued
   activities
   Healthsave                -        -       491      328       585      315
                        ------   ------    ------   ------    ------   ------
                         9,072    2,936    11,958    4,675    19,351    8,550
                        ------   ------    ------   ------    ------   ------


3. Analysis of funds under management

                                        30 June        30 June    31 December
                                           1999           1998           1998
                                       £million       £million       £million
   PEPs other than Unit Trust PEPs          404            377            390
   Investment Trusts                        306            278            310
   Unit Trusts (including PEPs)             246            215            200
   EZ Property Unit Trusts                  173            173            173
   Private Clients                           67             69             64
   Other                                     44             53             43
                                         ------         ------         ------
                                          1,240          1,165          1,180
                                         ------         ------         ------

4. Dividends
   This represents an interim dividend of 2 pence per ordinary share.  The
   record date will be 20 August 1999, and the payment date will be 
   26 November 1999.  The Jersey ESOP and the Gibraltar ESOP hold 1,666,039
   and 1,057,407 shares respectively, which are the subject of dividend
   waivers.  The interim dividend takes account of these waivers.

5. Earnings per share
   The calculation of basic earnings per ordinary share is based on losses of
   £1,527,000, being the loss on ordinary activities after taxation (1998 loss
   of £646,000), and on 12,444,874 ordinary shares (1998 - 12,306,952), being
   the weighted average number of ordinary shares in issue during the year
   after excluding the shares owned by the ESOPs.  The diluted earnings per
   share is based on losses as above and on 13,412,104 (1998 - 13,397,891)
   ordinary shares calculated as follows:-

                                        30 June        30 June    31 December
                                           1999           1998           1998
                                             No.           No.            No.
   Basic weighted average 
   number of shares                   12,444,874    12,306,952     12,367,122
   Employee share options                967,230     1,090,939      1,010,672
                                      ----------    ----------     ----------
                                      13,412,104    13,397,891     13,377,794
                                      ----------    ----------     ----------

   Financial Reporting Standard 14 'earnings per share' came into effect for
   accounting periods ending on or after 23 December 1998.  Prior year figures
   have been restated under the new standard.

6. Reconciliation of Shareholders' Funds

                                                                        Total
                      Share    Profit                                  Share-
                    premium  and loss     Other     Total     Share   Holders'
                    account   Account   reserve  Reserves   Capital     funds
                      £'000     £'000     £'000     £'000     £'000     £'000

   At 1 Jan 1999      4,737     3,295       702     8,734     1,518    10,252
   Loss for the
   period                 -    (1,527)        -    (1,527)        -    (1,527)
   Dividends              -      (250)        -      (250)        -      (250)
   Issue of shares       21         -         -        21         1        22
                     ------    ------    ------    ------    ------    ------
   At 30 June 1999    4,758     1,518       702     6,978     1,519     8,497
                     ======    ======    ======    ======    ======    ======

7. Analysis of net debt and Group net funds
                                        30 June        30 June    31 December
                                           1999           1998           1998
                                          £'000          £'000          £'000

   Cash in hand and at bank               4,230          6,748          5,549
   Short term deposits                        -          1,500          1,200
   Current asset listed investments           -              -              2
   Finance leases                           (14)          (134)           (45)
   Loan notes issued by the 
   Finance subsidiaries                (147,490)      (143,398)      (144,632)
                                        -------        -------        -------
   Net debt                            (143,274)      (135,284)      (137,926)
   Investments owned by the 
   Finance subsidiaries                 147,443        142,463        144,856
                                        -------        -------        -------
   Group net funds                        4,169          7,179          6,930
                                        -------        -------        -------

                                                                                                                          

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