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Warburg (S.G.) Group (WSGC)

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Wednesday 26 April, 2006

Warburg (S.G.) Group

Preliminary Statement

Warburg (S.G.) Group PLC
26 April 2006



S.G. WARBURG GROUP plc

Preliminary Statement

For the year ended 31 December 2005



The information contained in this Preliminary Statement, which was approved by
the Board of Directors on  26 April 2006, does not comprise statutory accounts
within the meaning of Section 240 of the Companies Act 1985.  Statutory
accounts, which are expected to contain an unqualified audit report, will be
delivered to the Registrar of Companies in accordance with Section 242 of the
Companies Act 1985.  Copies of the statutory accounts will also be sent to
shareholders in accordance with Section 238 of the Companies Act 1985.

26 April 2006




S.G. Warburg Group plc

Preliminary statement

For the year ended 31 December 2005


The Group, comprising the Company and its subsidiaries, carries on investment
activities, including the provision of finance to a number of companies within
the UBS AG Group.

The loss for the Group for the year, after taxation, amounted to £8.2m (2004 -
profit £28.9m). The Directors consider the state of the Company's affairs to be
satisfactory.

Dividends on the 7 5/8 per cent Cumulative Preference Shares amounted to £0.8m
net of tax credit (2004 - £0.8m). The Directors did not declare a dividend on
Ordinary Shares of the Company for the year ended 31 December 2005 (31 December
2004 - £12.2m, declared and paid during 2005).

Transition to International Financial Reporting Standards
The preliminary announcement is prepared using International Financial Reporting
Standards (IFRS), which represents a change from the prior year end.  The
Company first issued its interim financial statements in accordance with IFRS
for the period ended 30 June 2005.

Profit and loss
Under IFRS, preference share dividends are included as an interest cost.  Under
UK GAAP, preference share dividends were treated as a distribution.  This has
resulted in a change to the previously reported profit after taxation figures
under UK GAAP.

The aggregate dividend of £0.8m on the 7 5/8 Cumulative Preference Shares has
therefore been included as an interest cost in the profit and loss account for
the year to 31 December 2005 (31 December 2004: £0.8m).

Under UK GAAP, for the year ended 31 December 2005, the loss after taxation
would have been £7.4m (31 December 2004: profit of £29.7m) compared to the loss
after taxation under IFRS for the year to 31 December 2005 £8.2m (31 December
2004: profit of £28.9m).

The dividend on Ordinary shares declared and paid in March 2005 in respect of
the year ended 31 December 2004 was de-recognised as a liability in 2004 and
recorded in 2005 under IFRS, thus retained earnings in 2004 are £12.2m greater
than previously recorded.

Equity
Under UK GAAP, share capital comprised ordinary share capital of £58,645,694 and
preference share capital of £10,934,796.  The 7 5/8 Cumulative Preference Shares
have been separately disclosed as a financial liability on the face of the
balance sheet in accordance with IFRS.

Additionally, the dividend on Ordinary Shares attributable to minority interest
declared and paid in March 2005 in respect of the year ended 31 December 2004
was de-recognised in 2004 under IFRS, thus minority interest in 2004 is £2.3m
greater than previously recorded.

Significant events during the year

Repurchase of debt
During the year, the Company purchased by private treaty an aggregate principal
amount of £104.7m of the outstanding 9% Perpetual Subordinated Loan Notes issued
by the Company and governed by a Trust Deed dated 4 February 1994 by Private
Treaty from UBS UK Properties Limited, a fellow subsidiary of UBS AG, for
aggregate cash consideration (including accrued interest) of £152.3m.  The
Company recorded a loss of £45.6m on the purchase.  The Notes purchased were
subsequently cancelled on 5 May 2005.


Change in composition of the Group
On 30 June 2005, S.G. Securities U.K. Limited redeemed at par and cancelled its
one special redeemable £1 share, which was held by the Company.  As holder of
this redeemable share, the Company had 50.1% of the voting rights of S.G.
Securities U.K. Limited at general meetings, but no right to dividends or
participation in a distribution of assets on liquidation.  At the balance sheet
date, the Group held no interest in S.G. Securities U.K. Limited.

At the date of redemption, S.G. Securities U.K. Limited Group had assets of
£251.6m and liabilities of £12.9m.  Its profit before and after taxation for the
six months ending 30 June 2005 was £0.1m.




S.G. Warburg Group plc and Subsidiaries
Group Income Statement for the year ended 31 December 2005

                                                                                   Year             Year
                                                                                  ended            ended
                                                                            31 December      31 December
                                                                                   2005             2004
                                                                            (unaudited)      (unaudited)
                                                                                     £m               £m

Interest income                                                                    63.1             62.2
Interest expense                                                                 (28.1)           (31.3)

Net interest income                                                                35.0             30.9

Other operating income                                                              0.2              6.8
Gains less losses from investment securities                                          -              3.1
Administrative expenses                                                           (0.6)            (0.6)

Group operating profit                                                             34.6             40.2

Loss on repurchase of debt                                                       (45.6)                -

(Loss) / profit before taxation                                                  (11.0)             40.2

Tax credit / (expense)                                                              2.8           (11.3)

(Loss) / profit for the year after taxation                                       (8.2)             28.9


Attributable to:
Equity holders of the parent                                                      (8.3)             20.9
Minority interests                                                                  0.1              8.0


(Loss) / earnings per ordinary share (basic and diluted)                        (3.56p)            8.86p




Approved by the Board on 26 April 2006

Julian V Ozanne, Director






S.G. Warburg Group plc and Subsidiaries

Group Balance Sheet as at 31 December 2005
                                                                            Year            Year
                                                                           ended           ended
                                                                     31 December     31 December
                                                                            2005            2004
                                                                     (unaudited)     (unaudited)
                                                                              £m              £m

ASSETS
Non-current assets
Investment securities available for sale                                       -             6.4
                                                                               -             6.4

Current assets
Cash                                                                           -             1.0
Amounts owed by Group undertakings                                       1,326.7         1,685.3
Other assets                                                                   -             3.2
                                                                         1,326.7         1,689.5


Total assets                                                             1,326.7         1,695.9


LIABILITIES
Current liabilities
Amounts owed to Group undertakings                                         505.2           503.4
Other liabilities                                                            1.5             1.4
Current income tax liabilities                                               9.6            14.6
                                                                           516.3           519.4

Non-current liabilities
Debt securities in issue                                                     8.3           113.0
Preference shares                                                           10.9            10.9
                                                                            19.2           123.9

Total liabilities                                                          535.5           643.3


EQUITY
Capital and reserves attributable to the equity holders of the parent
Share capital                                                               58.6            58.6
Share premium                                                              291.1           291.1
Capital redemption reserve                                                  64.9            64.9
Other reserves                                                              84.9            84.9
Retained earnings                                                          291.7           312.2
                                                                           791.2           811.7

Minority interests                                                             -           240.9

Total equity                                                               791.2         1,052.6



Total equity and liabilities                                             1,326.7         1,695.9




S.G. Warburg Group plc and Subsidiaries
Group Statement of Changes in Equity for the year ended 31 December 2005

                                                 Capital
                           Share     Share       Redemption    Other       Retained   Minority
                           Capital   Premium     Reserve       Reserves    Earnings   Interest     Total
                                  £m          £m            £m          £m         £m           £m         £m

At 1 January 2004               58.6       291.1          64.9        84.9      291.3        232.9    1,023.7

Profit for the period              -           -             -           -       20.9          8.0       28.9


At 31 December 2004             58.6       291.1          64.9        84.9      312.2        240.9    1,052.6

(Loss) / profit for the            -           -             -           -      (8.3)          0.1      (8.2)
period

Dividend on ordinary               -           -             -           -     (12.2)        (2.3)     (14.5)
shares

Reduction in minority
interest due to loss of
control of subsidiary              -           -             -           -          -      (238.7)    (238.7)

At 31 December 2005             58.6       291.1          64.9        84.9      291.7            -      791.2






S.G. Warburg Group plc and subsidiaries
Group Cash Flow Statement for the year ended 31 December 2005
                                                                                        Year            Year
                                                                                       ended           ended
                                                                                 31 December     31 December
                                                                                        2005            2004
                                                                                 (unaudited)     (unaudited)
                                                                                          £m              £m

Cash flows from operating activities

Interest received                                                                       63.1            62.2
Interest paid                                                                         (28.1)          (31.3)
                                                                                        35.0            30.9
Changes in operating assets and liabilities

Net decrease / (increase) in balances with Group undertakings                          129.4          (42.1)
Net (increase) / decrease in other assets                                                  -           (2.8)
Net increase / (decrease) in other liabilities                                           0.2           (0.6)

Net cash from operating activities                                                     164.6          (14.6)


Cash flows from investing activities

Reduction in cash attributable to minority interest (see note a)                       (1.1)
Proceeds from sale of property and equipment                                               -             0.1

Net cash flows from investing activities                                               (1.1)             0.1


Cash flows from financing activities

Repayments of borrowed funds and debt securities                                     (152.3)               -
Equity dividends paid                                                                 (12.2)               -

Net cash from financing activities                                                   (164.5)               -


Net decrease in cash and cash equivalents                                              (1.0)          (14.5)

Cash and cash equivalents at the beginning of the year                                   1.0            15.5

Cash and cash equivalents at the end of the year                                           -             1.0



Note (a)

Reduction in cash attributable to minority interest

On 30 June 2005 S.G. Securities U.K. Limited redeemed at par and cancelled its
one special redeemable share which was held by S.G. Warburg Group plc. The
consideration of £1 represents the net asset value amounts included in those
consolidated accounts in respect of the S.G. Securities U.K. Limited group of
companies.


                                                                             £m
Decrease in loans and advances                                            230.3
Decrease in other assets                                                    3.2
Decrease in other liabilities                                             (0.2)
Decrease in fixed asset investments                                         6.4
Decrease in corporation tax liability                                     (2.1)
Decrease in cash at bank and in hand                                        1.1
Net Assets                                                                238.7
Reduction in Minority Interests                                         (238.7)
Consideration received                                                        -
     



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