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Wescol Group PLC (WCL)

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Monday 10 April, 2000

Wescol Group PLC

2nd Quarter & Interim Results to 31 January 2000

Wescol Group PLC
10 April 2000


                    Wescol Group plc

                     Interim Report
        for the six months ended 31 January 2000


Enquiries:

Stephen Brown                 10/4/00        0171 353 9203
Finance Director              thereafter:    01422 319 500

Bob Gregory/Mark Way                         0171 353 9203
Bell Pottinger Financial



CHAIRMAN AND MANAGING DIRECTOR'S INTERIM STATEMENT

In the medium term the company remains well placed to
prosper in the structural steel market, particularly
given last year's strategic alliance with steel
manufacturer Salzgitter AG, who now own 26.2% of the
Group's equity. In the shorter term the current year is
proving disappointing, although current tender values and
production levels are encouraging.


SUMMARY:

First half results at Wescol Glosford and Westok have
been depressed by a combination of short term
transitional costs relating to the change in the
company's principal steel supplier and reduced margins in
Europe, due to the rising strength of sterling. This was
on the back of already aggressive pricing, and a one off
increase in fabrication costs at Westok associated with
the rapid increase in European orders as Westok increased
its market presence in continental Europe.

Appropriate action has been taken with improvements
effected to the supply chain, more selective marketing
and pricing in Europe, and reductions in fabrication
costs.

Turnover, for the 6 months ended 31 January 2000,
increased to a record of £46.1 million (1999: £33.0
million) a rise of 40% (18% compared to the second half
of last year). Operating profit, reflecting the above
issues, fell to £1.5 million (1999: £2.0 million). Higher
net interest charges of £0.25 million (1999: £0.1
million) reduced pre-tax profits to £1.2 million (1999:
£1.9 million). Earnings per share are down from 2.3p to
1.5p.


Gearing at the period end was relatively high at 49%
(1999: 19%) reflecting higher levels of contract debtors
and work in progress at the period end. These are
expected to reduce by the summer, when unusually high
work in progress on a number of current contracts will
have worked through the system.

Capital expenditure during the period has been modest,
and, with the exception of a rolling replacement
programme for the older items of plant within the group,
no major capital expenditure projects are planned.


REVIEW OF THE PERIOD:

Wescol Glosford

The new supply agreement with Salzgitter AG came into
effect in August 1999.This is now in full operation, and
we are starting to see the long term benefits arising
from our strong links with this world class steel
manufacturer. There have inevitably been some short-term
costs involved in the transition, which have impacted
upon first half results for Wescol Glosford. Output from
the company's four factories has now averaged just over
1,000 tonnes per week from early November to the end of
March, compared with just over 800 tonnes per week during
the second half of last year.

Significant investments have been made in IT systems to
improve workflow through the company in order to maximise
the benefits which will flow from this agreement, and
further integration of the company's purchasing systems
with Salzgitter's UK trading systems is planned in the
near future.

Order intake in the period totaled £23.3 million (1999:
£33.1 million). To a certain extent this reduced figure
reflected the company's very strong order position at the
start of the year, but it is also a reflection of the
weakening domestic market during the period. This
weakness was further reflected in the poor quality and
volumes of work tendered during the period, although so
far in the second half tendering activity is showing a
significant improvement, and this will in turn lead to
increased orders.

Whilst the company has succeeded in maintaining high
volumes, prices have, as we mentioned last October, been
under consistent downwards pressure. We are confident of
maintaining volume, but work currently being won is at
prices that are lower than they were 6-12 months ago, and
this will be reflected in trading results.

Westok

Westok started the year with a strong order book, and
with increasing orders from Europe. To cope with this
workload additional shifts were introduced at the
company's Wakefield plant last autumn.


The continued strength of sterling since last autumn has
led to a need to rebalance the business towards UK and
higher margin European work, and to reduce fabrication
costs. Changes to effect this were implemented during
January and February and, whilst the company's profit for
the first half year has been severely reduced, management
is confident that the steps taken will return the
business to it's former high levels of profitability
towards the fourth quarter of this financial year.

Marbank

Marbank is trading well this year. The company has a
strong order book which should ensure a successful full
year's results. Competitive pressure is strong, as it is
in most of the construction industry, and this exerts a
downward pressure on margins.

Whilst a large proportion of the company's activities is
repeat work from existing clients, the company is
continuing to develop its client base in the South East
of England.


DIVIDEND:

In current market conditions, with the company's major
subsidiary facing significantly reduced profitability in
the second half year, your board has decided to adopt a
prudent approach. Accordingly, no interim dividend will
be paid (1999: 0.8 pence). A decision on the final
dividend will be taken at the end of the financial year.


PROSPECTS:

The current year is proving to be difficult. The first
half has been affected by transitional difficulties that
the company has largely resolved. A second half will
follow this where intense price competition will result
in reduced trading margins. However, our significantly
increased tender activity indicates that there will be a
market recovery in the coming months.

In the medium term the company is confident of continuing
to develop its position, using its technical skills base,
its advanced fabrication facilities, and the strategic
value of its links with major shareholder Salzgitter AG


Peter H Price                      PA Walker
Chairman                           Managing Director
10 April 2000


Results for the six months to 31 January 2000
                            
                               6 months  6 months   Year to
                                  to 31     to 31   31 July
                                January   January      1999
                                   2000      1999
                              Unaudited Unaudited   Audited
                                   £000      £000      £000
                               --------  --------  --------
Turnover                         46,127    32,978    72,106
                               --------  --------  --------
Operating profit                  1,487     2,007     4,916
Net Interest                       (248)     (100)     (289)
                               --------  --------  --------
Profit on ordinary                                         
 activities before taxation       1,239     1,907     4,627
Taxation                           (372)     (578)   (1,467)
                               --------  --------  --------
Profit after tax                    867     1,329     3,160
Minority interests                  (41)      (33)      (80)
                               --------  --------  --------
Profit attributable to                                     
 shareholders                       826     1,296     3,080
Dividends                             0      (444)   (1,111)
                               --------  --------  --------
Profit retained                     826       852     1,969
                               ========  ========  ========
Earnings per ordinary share                                
 (pence)                            1.5       2.3       5.4
                               ========  ========  ========
Fully diluted earnings per                                 
 ordinary share (pence)             1.5       2.3       5.2
                               ========  ========  ========
Dividend per ordinary share                                
 (pence)                            0.0       0.8       1.9
                               ========  ========  ========
Operating margin                   3.2%      6.1%      6.8%
Pre-tax margin                     2.7%      5.8%      6.4%


Summarised Group Balance Sheet at 31 January 2000
                            
                                     31        31   31 July
                                January   January      1999
                                   2000      1999
                              Unaudited Unaudited   Audited
                                   £000      £000      £000
                               --------  --------  --------
Fixed assets                     14,566    12,653    14,709
                               --------  --------  --------
Net current assets:                                        
Net (overdraft)/cash             (6,953)   (2,380)       57
Other net current assets         13,442     7,391     5,972
                               --------  --------  --------
                                  6,489     5,011     6,029
                               --------  --------  --------
Total assets less current                                  
 liabilities                     21,055    17,664    20,738
Creditors: due after more                                  
 than one year                   (1,975)     (750)   (2,484)
Provisions for liabilities                                 
 and charges                       (750)     (590)     (750)
                               --------  --------  --------
Shareholders' funds              18,330    16,324    17,504
                               ========  ========  ========

Notes:


1. The  interim financial statements have been prepared
on the basis of the accounting policies set out in the
group's 1999 statutory accounts. The statements were
approved by the board of directors on 7th April 2000. The
financial information set out above does not comprise
full financial statements within the meaning of the
Companies Act 1985 and the figures for the six months
ended 31 January 2000 have not been audited or reviewed.
The results for the year to 31 July 1999 are an abridged
version of the full accounts, which carry an unqualified
auditors' report and have been filed with the Registrar
of Companies.

2. The basic earnings per ordinary share is based on the
profit attributable to shareholders for the period of
£826,000 (1999: £1,296,000) and 55.5 million ordinary
shares (1999: 55.5 million). The calculation of diluted
earnings per ordinary share is based on 55.8 million
ordinary shares (1999: 55.8 million) which assumes the
conversion of all potential dilutive ordinary shares.

3. The tax charge is based on a current estimate of the
charge for the full year.

4. This interim report is being posted to all
shareholders. Copies are available from the Secretary ,
Wescol Group plc, Westercroft Lane, Northowram, Halifax
HX3 7TY.

                                                                                                                                            

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