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Swallowfield PLC (BAR)

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Thursday 22 March, 2001

Swallowfield PLC

Final Results

Swallowfield PLC
22 March 2001

                               SWALLOWFIELD PLC


           Preliminary Results for the year ended 31 December 2000


Headlines

o          Turnover up 8% to £39.6m

o          Operating profit up 52% to £2.7m

o          Earnings per share* up 81% to 15.0p

o          Gearing reduced from 55% to 31%

o          Dividend increased 33% to 4.0p


*  basic earnings per share excluding fundamental restructuring credit


Chairman's Statement

As the headlines confirm, 2000 was an exciting year for Swallowfield as the
Group continued the strong recovery that was started in 1999. Taken as a
whole, the results for the year show further progress from that reported both
at the half year and last year.

During the year our main focus was to restore profitability, strengthen our
balance sheet and make a number of operational improvements necessary to put
the Group into a position to achieve sustained growth. We believe that the
results show progress in each of these key areas.

The Group's results for the year show an increase in profit after tax of 95%
to £1.8m and an improvement in earnings per share from 8.3p in 1999 to 16.2p
this year. The results include a fundamental restructuring credit of £74k
arising from finalising the Brussels factory closure. Ignoring this additional
credit and the tax effects of restructuring, profit after tax increased 81% to
£1.7m and earnings per share increased from 8.3p to 15.0p.

The balance sheet was strengthened by a reduction in gearing levels together
with the reorganisation of the Group's debt that we announced last year.
Gearing levels were reduced to 31% at the year-end compared to 55% at the end
of 1999 and 58% at the end of the first half. Net debt was reduced from £5.2m
at the end of 1999 to £3.4m at the year-end. This reduction was helped by the
receipt of £1.0m from the sale of the building in Brussels.

Operational performance improved in a number of important areas. The most
noticeable highlights were in the Cosmetics business, where on time deliveries
reached 98% and we received a key quality award from one of our major
blue-chip customers. The Aerosols business continued to enhance its reputation
for quality and service and, by responding quickly, was able to secure a
number of new business opportunities.

A significant effort has been put into planning for the future of the Group.
The senior management team undertook a review of the long-term strategy, a
summary of which is reproduced in the Report and Accounts. This is a
significant step forward and it is key to our success that we continue to
drive this strategy. Our plans demand, amongst other things, a new focus and
business culture as well as a positive attitude throughout the organisation.
The pursuit of this strategy will also require us to consider strategic
acquisitions.

The strategic planning was complemented by further improvements in our
corporate governance standards as the Turnbull recommendations were introduced
throughout the Group. We have initiated a risk management approach to
operational and financial controls that encourages vigorous dialogue between
operational managers and the main Board. We believe that over the medium-term
this approach will provide additional benefits to the strength and robustness
of the Group.

Teresa White, the Sales and Marketing Director, left on 13 October to further
her career in the fashion clothing sector and we wish her well. The Board
appointments made during the year have added new impetus to the Group's future
direction and enhanced the workings and skills set of the Board. We believe
that we now have the right balance to drive the Group forward.

Our main focus for 2001 is to continue to improve the fortunes of the Group
and to make progress towards meeting the 5 year strategic target. This will
require prudent investment in plant and equipment, systems and processes.

In the Cosmetics business, in particular, we now need to invest in sales and
new product development to achieve the growth required to restore the
profitability of this sector of the Group to more acceptable levels. We do
not, however, anticipate the effects of this investment effort becoming
apparent for 6 to 12 months.

Although we are experiencing a relatively slow start to the year, we remain
confident for the full year as a whole. This confidence is underpinned by
historic trading patterns which favour the second half, a record order book in
our Aerosols business and the highest level of enquiries in our Cosmetics
business for more than two years.

The Board is proposing a final dividend of 2.5p against 2.0p in the prior
year. This, together with the interim dividend announced in September 2000,
gives a total dividend of 4.0p for the year, a 33% increase on the 1999
dividend of 3.0p. As announced in the interim report, our future strategy
requires reinvestment for growth and future dividend increases will be
consistent with this strategy. The final dividend will be paid on 29 May 2001
to shareholders on the register on 18 May 2001.

Our employees, customers and suppliers have helped make the improvement in the
Group's fortunes possible, and I would like to take this opportunity to thank
them publicly.

J S Espey
Chairman


Group Profit and Loss Account

                                                                 2000      1999
                                                                £'000     £'000

Turnover                                                       39,576    36,573
Cost of sales                                                (30,780)  (27,466)

Gross profit                                                    8,796     9,107
Net operating expenses                                        (6,095)   (7,331)

Operating profit                                                2,701     1,776
Fundamental restructuring credit                                   74         -

Profit on ordinary activities before interest and taxation      2,775     1,776
Interest receivable                                                48         9
Interest payable                                                (473)     (458)

Profit on ordinary activities before taxation                   2,350     1,327
Tax on profit on ordinary activities                            (527)     (392)

Profit attributable to shareholders                             1,823       935
Dividends                                                       (450)     (338)

Transferred to reserves                                         1,373       597

Earnings per share
- basic                                                         16.2p      8.3p
- basic excluding fundamental restructuring credit              15.0p      8.3p
- diluted                                                       16.2p      8.3p



Group Statement of Total Recognised Gains and Losses
for the year ended 31 December 2000


                                                                  2000     1999
                                                                 £'000    £'000

Profit for the financial year                                    1,823      935
Translation gain on overseas investment                              -        4

Total recognised gains and (losses) relating to the year         1,823      939



Group Balance Sheet
as at 31 December 2000

                                                               2000        1999
                                                              £'000       £'000

Fixed assets
Tangible assets                                              10,194      11,587

Current assets
Stocks                                                        5,899       5,231
Debtors                                                       6,176       6,286
Cash at bank and in hand                                      2,419       1,282

                                                             14,494      12,799

Creditors: amounts falling due within one year              (9,127)    (13,270)

Net current assets/(liabilities)                              5,367       (471)

Total assets less current liabilities                        15,561      11,116

Creditors: amounts falling due after more than one year     (4,452)     (1,123)
Provisions for liabilities and charges                        (160)       (417)

                                                             10,949       9,576

Capital and reserves
Called up share capital                                         563         563
Share premium                                                 3,796       3,796
Revaluation reserve                                             173         191
Profit and loss account                                       6,417       5,026

Equity shareholders' funds                                   10,949       9,576



Group Statement of Cash Flows
for the year ended 31 December 2000


                                                               2000       1999
                                                              £'000      £'000

Net cash inflow from operating activities                     3,242        793

Returns on investments and servicing of finance
Interest received                                                48          9
Interest paid                                                 (402)      (374)
Interest element of finance lease rentals                      (71)       (84)

                                                              (425)      (449)

Corporation tax paid                                          (678)      (242)


Capital expenditure
Purchase of tangible fixed assets                             (868)      (551)
Sale of tangible fixed assets                                 1,007         28

                                                                139      (523)

Equity dividends paid                                         (394)      (113)

Net cash inflow/(outflow) before financing                    1,884      (534)
Financing
New loans                                                     5,665      5,175
Repayment of loans                                          (5,895)    (5,585)
Capital element of finance lease rentals                      (338)      (297)

                                                              (568)      (707)

Increase/(decrease) in cash                                   1,316    (1,241)



Reconciliation of Net Cash Flow to Movement in Net Debt


                                                               2000        1999
                                                              £'000       £'000

Increase/(decrease) in cash                                   1,316     (1,241)
Cash outflow from changes in debt and
  lease financing                                               568         707

Change in net debt resulting from cash flows                  1,884       (534)
New finance leases                                             (44)       (118)
Translation difference                                            -          52

Movement in net debt in the year                              1,840       (600)

Net debt at 1 January                                       (5,226)     (4,626)

Net debt at 31 December                                     (3,386)     (5,226)



Notes:

1.   Turnover and Segmental Analysis

                                     2000                          1999

Class of business   Turnover       Profit     Net Turnover       Profit     Net
                               before tax  assets            before tax  assets

                       £'000        £'000   £'000    £'000        £'000   £'000

Aerosol products      27,637        2,698   9,203   22,132        2,048   9,326
Cosmetic products     11,939            3   5,898   14,441        (272)   7,030

                      39,576               15,101   36,573               16,356

Operating profit                    2,701                         1,776
Fundamental
restructuring                          74                             -
Net interest                        (425)                                 (449)
payable

Profit before tax                   2,350                                 1,327

Unallocated net                           (4,152)                       (6,780)
liabilities

Group net assets                           10,949                         9,576



Geographic segment

By destination:
UK                    32,258                        29,094
Continental Europe     6,426                         6,442
North America            252                           703
Far East                 583                             -
Other                     57                           334

                      39,576                        36,573



Unallocated net liabilities comprise bank loans, finance leases, taxation,
proposed dividend and certain other holding company assets.


2.   Earnings per Share

The calculation of basic earnings per share is based on 11,256,416 ordinary
shares, being the weighted average number of ordinary shares in issue during
the year, and the profit on ordinary activities after taxation of £1,823,000
(1999: £935,000).

The calculation of basic earnings per share excluding the fundamental
restructuring credit is based on 11,256,416 ordinary shares, being the
weighted average number of ordinary shares in issue during the year, and the
profit on ordinary activities after taxation but excluding the effects of the
fundamental restructuring credit of £1,689,000 (1999: £935,000) calculated as
follows:

                                                                  2000     1999
                                                                 £'000    £'000

Profit on ordinary activities after taxation                     1,823      935
Less:
  Fundamental restructuring credit                                (74)        -
  Tax credit on fundamental restructuring expenditure             (60)        -

                                                                 1,689      935




3.   Statutory Accounts

The financial information does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985, but has been extracted from the
statutory accounts for the financial year ended 31 December 2000, on which an
unqualified audit report has been issued and which will be delivered to the
Registrar following their adoption at the Annual General Meeting. The
statutory accounts for the financial year ended 31 December 1999 have been
delivered to the Registrar of Companies with an unqualified audit report
thereon.

4.   AGM

The Annual General Meeting will be held on Wednesday 9 May 2001 at the Castle
Hotel, Taunton, starting at 12.00 noon.



                                                                                
             

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