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Swallowfield PLC (BAR)

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Thursday 05 September, 2002

Swallowfield PLC

Final Results

Swallowfield PLC
05 September 2002

                              Swallowfield plc
Preliminary announcement of final results for the 18 months ended 30 June 2002

Chairman's Statementwallowfield formulates, manufactures and packages fine,
tories and cosmetics across the whole specets for own label and brand name

I am pleased to present the Company's first report and accounts since changing
the year-end to 30 June. For statutory purposes these have been drawn up for the
18 months to 30 June 2002, and the comparative figures for the previous period
are those for the 12 months to 31 December 2000. These results therefore include
the typically weak January to June trading period for both 2001 and 2002.
However, to enable proper comparisons to be made, the last five years' results
have been restated to years ending 30 June, using previously reported interim
accounts. This restatement is shown in Note 1, and comparisons made in this
review are with reference to these restated results.

Results

During the year to 30 June 2002 profit after tax increased by 20.6% compared
with the prior year to £1.7m. Over the same period, and on the same basis,
earnings per share increased to 15.0p from 12.4p.

The cosmetics division reported an operating loss in the year to 30 June 2002 of
£0.1m, on sales of £11.5m. This is lower than the loss of £0.2m reported in the
previous year. The business became much more seasonal in nature and made a loss
of £0.7m in the last six months of the year. Lower sales, a worse product mix
and price pressures contributed to this loss. We still believe this business
contributes to the Group's capabilities and customer base, but continue to look
for ways to improve its core profitability.

The aerosols division made an operating profit of £2.7m during the year to 30
June 2002, an increase of 12.9% over the previous year on a 10.1% increase in
turnover. We continue to leverage our core strengths in this business to broaden
our product capabilities.

As anticipated, the Group's business has become more seasonal, justifying our
decision to change the year-end which will also provide greater clarity to the
results. As a consequence the new June year-end will typically result in higher
debt levels than a December year-end.

Gearing stood at 42% at the end of June compared to 46% at the same time last
year. Net debt levels have increased from the low levels reported at December
2001 mainly due to the seasonality impact noted above and the increased working
capital necessary to meet our growing business volumes.

The results for the last four months have been adversely affected by rising
insurance costs. Despite the insurance industry acknowledging our superior and
improving risk management, our insurance costs have increased £0.25m a year from
March 2002.

Strategic Update

We have continued to progress the strategy developed two years ago, and during
the past year, have briefed all employees on its rationale and intent.

During the last 18 months, we have invested £3.1m in plant and equipment and
laboratory facilities. This investment, facilitated by good cash management, has
been focused on increasing capacity, improving manufacturing efficiencies and
enhancement of our product capabilities. Our strategy for the business requires
organic growth and we have now started construction of a factory extension at
our site in Wellington. This extension will provide much needed room for
expansion, for both production and office accommodation and allow us to continue
to significantly improve our new product development facilities on this site.

We continue to look for opportunities to enhance our business through
acquisition or partnership, although as yet we have seen no suitable targets
which match our perception of value for money.

Changes to Accounting Standards

A number of new accounting standards have been implemented during the year, and
these are more fully described in the financial review section of the report and
accounts.  We have adopted the transitional rules for implementing the
controversial new pensions accounting standard FRS17. The defined benefit
pension scheme operated on behalf of our Wellington site had an apparent
liability of £1.1m net of deferred tax at 30 June 2002 on an FRS17 basis, due
mainly to asset values on that date and use of a discount rate which does not
reflect an equity premium. However, the scheme underwent a triennial valuation
as at 6 April 2002. The results of this valuation indicate that the fund has a
slight surplus on an ongoing funding basis and importantly, was 119.6% funded on
the Government's minimum funding rate basis.

Looking Forward

Our positive outlook for the next six months remains. Whilst this is dependent
on seasonal sales, orders for the Autumn/Winter gift season exceed last year's
levels. At the end of June, the unit volume order book in the Aerosols business
was significantly higher than last year. Despite a weak sales performance in the
first six months of this calendar year, production in the cosmetics business has
picked up strongly and we remain hopeful that this will be reflected in sales in
the final quarter of this calendar year. The size of the current order books has
put us at full operating capacity in the short-term. This inevitably puts a
strain on the existing infrastructure and management is striving to ensure that
any effect on customer service levels is minimised.

Dividends

Your Board is proposing a final dividend of 2.0p against 1.7p declared at the
same time last year. This brings the total for the last 12 months to 4.8p
against 4.2p in the previous 12 month period and continues the progressive
dividend policy that we have followed over the last two years, whilst
recognising that our strategy requires reinvestment in the business to achieve
organic growth. The dividend will be paid on 30 October 2002 to shareholders on
the register on 11 October 2002.

Chairman
J S Espey


Group Profit and Loss Account
for the 18 months ended 30 June 2002

                                                                                      18 months          12 months
                                                                                          ended              ended
                                                                                        30 June             31 Dec
                                                                                           2002               2000
                                                                                          £'000              £'000

Turnover                                                                                 62,458             39,576
Cost of sales                                                                          (50,155)           (30,780)
Gross profit                                                                             12,303              8,796
Net operating expenses                                                                  (9,168)            (6,095)
Operating profit                                                                          3,135              2,701
Fundamental restructuring credit                                                              -                 74
Profit on ordinary activities before interest and taxation                                3,135              2,775
Interest receivable                                                                         148                 48
Interest payable                                                                          (589)              (473)
Profit on ordinary activities before taxation                                             2,694              2,350
Tax on profit on ordinary activities                                                      (749)              (527)
Profit attributable to shareholders                                                       1,945              1,823
Dividends                                                                                 (732)              (450)
Transferred to reserves                                                                   1,213              1,373
Earnings per share
- basic                                                                                   17.3p              16.2p
- basic excluding fundamental
restructuring credit                                                                      17.3p              15.0p
- diluted                                                                                 17.2p              16.2p



Group Statement of Total Recognised Gains and Losses
for the 18 months ended 30 June 2002

                                                                                      18 months          12 months
                                                                                          ended              ended
                                                                                        30 June             31 Dec
                                                                                           2002               2000
                                                                                          £'000              £'000

Profit for the financial period                                                           1,945              1,823
Translation gain on overseas investment                                                       6                  -
Total recognised gains and (losses) relating to the year                                  1,951              1,823
Prior year adjustment                                                                     (556)                  -
Total recognised gains and (losses) since the last annual report                          1,395              1,823



Group and Company Balance Sheets
as at 30 June 2002


                                                                     Group                        Company
                                                              30 June         31 Dec        30 June         31 Dec
                                                                 2002           2000           2002           2000
                                                                £'000          £'000          £'000          £'000
                                                                          (restated)                    (restated)
Fixed assets
Tangible assets                                                11,142         10,194              -              -
Investments                                                         -              -          6,072          6,072
Current assets
Stocks                                                          8,626          5,899              -              -
Debtors                                                         8,488          6,176          7,790          7,539
Cash at bank and in hand                                        1,306          2,419             18             46
                                                               18,420         14,494          7,808          7,585

Creditors: amounts falling due within one year               (11,993)        (9,127)        (3,880)        (4,249)

Net current assets                                              6,427          5,367          3,928          3,336
Total assets less current liabilities                          17,569         15,561         10,000          9,408

Creditors: amounts falling due after more than one year       (5,187)        (4,452)        (4,500)        (3,925)

Provisions for liabilities and charges                          (770)          (716)              -           (12)
                                                               11,612         10,393          5,500          5,471
Capital and reserves
Called up share capital                                           563            563            563            563
Share premium                                                   3,796          3,796          3,796          3,796
Revaluation reserve                                               152            173              -              -
Capital reserve                                                     -              -            467            467
Profit and loss account                                         7,101          5,861            674            645
Equity shareholders' funds                                     11,612         10,393          5,500          5,471


Group Statement of Cash Flows
for the 18 months ended 30 June 2002

                                                                                      18 months          12 months
                                                                                          ended              ended
                                                                                        30 June             31 Dec
                                                                                           2002               2000
                                                                                          £'000              £'000

Net cash inflow from operating activities                                                 3,670              3,242
Returns on investments and servicing of finance
Interest received                                                                           148                 48
Interest paid                                                                             (512)              (402)
Interest element of finance lease rentals                                                  (77)               (71)
                                                                                          (441)              (425)

Corporation tax paid                                                                      (823)              (678)
Capital expenditure
Purchase of tangible fixed assets                                                       (2,463)              (868)
Sale of tangible fixed assets                                                                77              1,007
                                                                                        (2,386)                139
Equity dividends paid                                                                     (788)              (394)
Net cash (outflow)/inflow before financing                                                (768)              1,884
Financing
New loans                                                                                 6,000              5,665
Repayment of loans                                                                      (5,863)            (5,895)
Capital element of finance lease rentals                                                  (482)              (338)
                                                                                          (345)              (568)
(Decrease)/increase in cash                                                             (1,113)              1,316



Reconciliation of Net Cash Flow to Movement in Net Debt
                                                                                      18 months          12 months
                                                                                          ended              ended
                                                                                        30 June             31 Dec
                                                                                           2002               2000
                                                                                          £'000              £'000

(Decrease)/increase in cash                                                             (1,113)              1,316
Cash outflow from changes in debt and lease financing                                       345                568
Change in net debt resulting from cash flows                                              (768)              1,884
New finance leases                                                                        (723)               (44)
Movement in net debt in the year                                                        (1,491)              1,840
Net debt at 1 January                                                                   (3,386)            (5,226)
Net debt at 30 June/31 December                                                         (4,877)            (3,386)


Notes

1 Restated five year summary

The following unaudited and restated five year summary has been produced to
allow improved comparisons to be made between the current results and those of
prior years.

                        Notes          Unaudited         Unaudited       Unaudited       Unaudited       Unaudited
                                       Financial         Financial       Financial       Financial       Financial
                                            Year              Year            Year            Year            Year
                                            2002              2001            2000            1999            1998
                                           £'000             £'000           £'000           £'000           £'000
                                           
First day of financial   (a)        17 June 2001      18 June 2000    20 June 1999    21 June 1998    15 June 1997
year
Last day of the          (a)        30 June 2002      16 June 2001    17 June 2000    19 June 1999    20 June 1998
financial year
Number of weeks in       (b)
financial year                                54                52              52              52              53

Profit and Loss Account
Turnover                                  44,404            40,425          37,600          39,731          52,797
Adjustment to 52 week    (b)
basis                                     (1,088)
Adjusted turnover                         43,316            40,425          37,600          39,731          52,797
Operating profit                           2,628             2,177           2,205             917           3,231
Fundamental                                    -                20              54         (3,302)               -
restructuring
Interest                                   (296)             (354)           (454)           (503)           (462)
Profit/(loss) before                       2,332             1,843           1,805         (2,888)           2,769
taxation
Taxation                                   (645)             (444)           (501)           (325)           (864)
Profit attributable to
shareholders                               1,687             1,399           1,304         (3,213)           1,905
Dividends                                  (541)             (472)           (394)           (113)           (778)
Retained earnings                          1,146               927             910         (3,326)           1,127

Balance Sheet
Fixed assets                              11,142            10,228          10,516          11,972          12,278
Net current assets                         6,427             6,610           5,146           (421)           3,855
Total assets less
current liabilities                       17,569            16,838          15,662          11,551          16,133
Long-term creditors:
Loans and lease finance                  (5,187)           (5,669)         (5,243)         (1,211)         (3,726)
Deferred tax                               (770)             (716)           (720)           (667)           (623)
Provision for                                  -                 -           (146)           (950)               -
liabilities
Equity                                    11,612            10,453           9,553           8,723          11,784
Net debt                                   4,877             4,777           5,825           6,285           7,731

Segmental Analysis
Aerosol products:
Turnover                                  31,783            28,880          25,041          21,671          29,606
Operating profit                           2,710             2,400           2,470           1,734           3,247
Cosmetic products:
Turnover                                  11,533            11,545          12,559          18,060          23,191
Operating profit                            (82)             (223)           (265)           (817)            (16)

Statistics
Weighted average number
of shares in issue                    11,256,416        11,256,416      11,256,416      11,256,416      11,248,021
Undiluted earnings per
share                                      15.0p             12.4p           11.6p         (28.5)p           16.9p
Earnings per share
excluding fundamental                      15.0p             11.7p           11.1p          (0.8)p           16.9p
restructuring
Gearing                                      42%               46%             61%             72%             66%
Dividends per share                         4.8p              4.2p            3.5p            1.0p            6.9p


Notes to five year summary

(a)  The restated five year summary is based on previously reported interim and
full year reports as adjusted for the restrospective implementation of FRS19,
Deferred Tax. The results for each financial year comprise the interim results
for the first half of the calendar year in which the financial year ends,
together with the second half of the previous calendar year. The balance sheet
and net debt numbers are those reported at the last day of the financial year.

(b)  Except for turnover, where the relevant adjustment has been shown above, no
material changes would be required to the profit and loss account to adjust the
financial year 2002 numbers to a 52 week basis.

 2 Turnover and Segmental Analysis


                                            18 months ended 30 June 2002          12 months ended 31 December 2000

                                         Turnover  Profit before         Net       Turnover Profit before        Net
                   Class of                                  tax       assets                        tax      assets
                   business                 £'000          £'000        £'000         £'000        £'000       £'000

                   Aerosol products        45,615          3,430       11,004        27,637        2,698       9,203
                   Cosmetic                16,843          (295)        6,667        11,939            3       5,898
                   products

                                           62,458                      17,671        39,576                   15,101

Operating                                                  3,135                                   2,701
profit

Fundamental
restructuring                                                  -                                      74
Net interest
payable                                                    (441)                                   (425)

Profit before                                              2,694                                   2,350
tax

Unallocated net
liabilities                                                           (6,059)                                (4,708)

Group net                                                              11,612                                 10,393
assets

Geographic segment
By destination:
UK                                         47,546                                    32,258
Continental Europe                         10,766                                     6,426
North America                               1,223                                       252
Far East                                    2,336                                       583
Other                                         587                                        57
                                           62,458                                    39,576


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

3 Earnings per Share

                                                                                          18 months      12 months
                                                                                              ended          ended
                                                                                            30 June         31 Dec
                                                                                               2002           2000
(a)  Basic
Profit on ordinary activities after taxation                                             £1,945,000     £1,823,000
Weighted average number of ordinary shares in issue during the year                      11,256,416     11,256,416
Earnings per share                                                                            17.3p          16.2p

(b)  Basic excluding fundamental restructuring credit
Profit on ordinary activities after taxation                                             £1,945,000     £1,823,000
Less:
Fundamental restructuring credit                                                                  -      £(74,000)
Tax credit on fundamental restructuring expenditure                                               -      £(60,000)
                                                                                         £1,945,000     £1,689,000

Weighted average number of ordinary shares during the year                               11,256,416     11,256,416
Earnings per share                                                                            17.3p          15.0p

(c)  Diluted
Profit on ordinary activities after taxation                                             £1,945,000     £1,823,000
Basic weighted average number of ordinary shares in issue during the year                11,256,416     11,256,416
Dilutive potential ordinary shares:
executive share options                                                                      26,838         29,586
                                                                                         11,283,254     11,286,002

Earnings per share                                                                            17.2p          16.2p


4 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 18 months ended 30 June 2002, on which an unqualified
audit report has been issued and which will be delivered to the Registrar
following their adoption at the Extraordinary General Meeting. The statutory
accounts for  the financial year ended 31 December 2000 have been delivered to
the Registrar of Companies with an unqualified audit report thereon. The
restated five year summary in Note 1 above which has been produced to allow
comparisons to be made between the current results and those of prior years, is
unaudited.

5 Extraordinary General Meeting

The Extraordinary General Meeting will be held on Thursday 10 October 2002 at
the Castle Hotel, Taunton, Somerset at 12.00 noon



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