Interim Results

CEPS PLC                                    

             Interim results for the six months ended 30 June 2006             

Chairman's Statement

Overview:

In the six months to 30 June 2006 the Group has seen profit levels very much in
line with the first half of the previous year. Turnover has risen steadily, but
margins have come under pressure, both from raw material costs and consumer
price resistance. Steps to redress this margin erosion have been taken, which
should bear fruit in the second half.

Both the main business units have completed highly satisfactory relocations to
streamline their activities. I referred in the Annual Report and Accounts for
2005 to the successful Friedman's move which has enabled customers to be shown
their full range of capabilities and encouraged further turnover growth.

At the end of June within Davies Odell, responsibility for all footwear related
activities was transferred, along with the associated stock, to Rushden. This
has enabled this business to more fully leverage its excellent customer
relations in this arena, and leaves the Kettering part of the business free to
concentrate on its various streams of matting business and to develop the new
product opportunities it has identified.

Excellent progress has been made to reduce net debt since the 2005 year-end,
with a reduction of £278,000 from £1,220,000 to £942,000. This has been
achieved through steady profitability, focused capital spending and careful
control of working capital.

Financial Review:

In the first half of 2006 the Group produced an operating profit slightly
behind the same period last year of £113,000 (2005, £131,000). This fall can
largely be attributed to a small reduction in Friedman's operating margin and
additional Group costs for pensions and legal fees. After a reduction in
interest payable to £52,000 (2005, £59,000) and taxation of £6,000 (2005, £nil)
the profit for the period, after minority interests, was £48,000 (2005, £
52,000). Earnings per share (fully diluted) were unchanged at 0.03p (2005,
0.03p).

Operational Review:

By comparison with the first half of 2005, Group sales rose by 9% to £3.53
million, but segmental profit, before Group costs, was down 4%, reflecting the
narrower margins encountered, particularly at Friedman's. Overall Group costs
were up by £10,000 over the previous year reflecting agreed additional
contributions to the pension scheme and some further legal costs related to the
hive-down of Davies Odell.

Davies Odell has had a better first half than 2005 with turnover up 5.2% and
segmental profit, before group costs, up by 37% to £118,000. In the matting
business emphasis has been placed on driving improved margins, notwithstanding
upward pressures from raw material and energy costs. I am pleased to report
margins have improved over 2005 and, with sales up by 5.0% and overheads
slightly down, operating profit is ahead of the corresponding half-year in
2005.

In the footwear business first half sales are up 5.4%, with a particularly
strong showing from all parts of the footwear repair sector. Here margins have
been eroded slightly as a result of sharp increases in raw material prices, but
steps have already been taken to mitigate the impact of these increases by
immediate price increases where possible. In consequence, operating profit is
unchanged from the first half of last year.

At Freidman's sales for the first half were up by 16% by comparison with the
five month period of the previous year but margins have fallen by about 2
percentage points, leaving segmental profit before group costs at £92,000
(2005, £132,000). The testing trading conditions encountered in the second half
of 2005 carried over into the first half of 2006. The lively new website,
www.friedmans.co.uk, has been launched and will be used as a vehicle to promote
the business more widely.

Dividend:

The Board is not recommending the payment of an interim dividend (2005, nil).
It is nevertheless committed to returning to the dividend list, and to paying a
growing dividend as part of investor's overall return from their investment.

Prospects:

The second half has started encouragingly at Davies Odell with sales levels
ahead of both last year and our internal budgets. Margins remain under pressure
but, with the steps taken to increase prices and mitigate costs, we expect to
see an improvement in profitability during the second half of 2006.

At Friedman's the steady turnover growth continues and we expect to see an
improving trend in margins as negotiated lycra material price reductions flow
through and the mix of business is more heavily orientated to bespoke products.
During the second half the new website will be made accessible in five further
languages enabling the continued growth of European distribution.

Taken together we expect to see a significant improvement in operating
profitability in the second half of 2006.

With regard to acquisitions, considerable efforts have gone into reviewing
suitable investments and the Board is hopeful of bringing an opportunity to
shareholders within the current year.

Richard Organ

Chairman

28 September 2006

CEPS PLC

Consolidated Profit and Loss Account

Six months ended 30 June 2006

                                          Unaudited          Audited   
                                                                       
                                   6 months to 6 months to 12 months to
                                                                       
                                       30 June     30 June  31 December
                                          2006        2005         2005
                                                                       
                                         £'000       £'000        £'000
                                                                       
Turnover                                 3,526       3,230        6,919
                                                                       
continuing operations                                                  
                                                                       
Operating profit                           113         131          168
                                                                       
Analysis of operating profit                                           
                                                                       
Continuing operations, trading             210         218          380
                                                                       
Continuing operations, Group costs        (97)        (87)        (212)
                                                                       
Interest payable                          (52)        (59)        (115)
                                                                       
Profit on ordinary activities               61          72           53
                                                                       
before taxation                                                        
                                                                       
Taxation                                   (6)           -          (6)
                                                                       
Profit after taxation                       55          72           47
                                                                       
Minority interests                         (7)        (20)          (7)
                                                                       
Profit for the period                       48          52           40
                                                                       
Dividends                                    -           -            -
                                                                       
Retained profit for the period              48          52           40
                                                                       
Earnings per share                       0.03p       0.03p       0.02 p
                                                                       
- basic                                  0.03p       0.03p       0.02 p
                                                                       
- diluted                                                              
                                                                       

Statement of total recognised                                          
gains and losses                                                       
                                                                       
                                         £'000       £'000        £'000
                                                                       
Profit for the period                       48          52           40
                                                                       
Actuarial loss recognised in                 -           -        (272)
pension scheme                                                         
                                                                       
Movement on deferred tax relating            -           -           82
to pension scheme                                                      
                                                                       
Total recognised gains/(losses)             48          52        (150)
for the period                                                         
                                                                       
Prior year adjustment                        -       (454)        (318)
                                                                       
Total recognised profit/(losses)            48       (402)        (468)
since last annual report                                               

CEPS PLC

Consolidated Balance Sheet

As at 30 June 2006

                                          Unaudited          Audited   
                                                                       
                                         As at       As at        As at
                                                                       
                                       30 June     30 June  31 December
                                          2006        2005         2005
                                                                       
                                         £'000       £'000        £'000
                                                                       
Net assets employed                                                    
                                                                       
Fixed Assets                             1,489       1,502        1,529
                                                                       
Intangible                                 288         303          259
                                                                       
Tangible                                                               
                                                                       
                                         1,777       1,805        1,788
                                                                       
Current assets :                                                       
                                                                       
Stocks                                   1,154       1,171        1,087
                                                                       
Debtors                                  1,304       1,267        1,428
                                                                       
Cash at bank and in hand                    39          33           24
                                                                       
                                         2,497       2,471        2,539
                                                                       
Creditors: amounts falling due         (2,161)     (1,951)      (2,093)
within one year                                                        
                                                                       
Net current assets                         336         520          446
                                                                       
Total assets less current                2,113       2,325        2,234
liabilities                                                            
                                                                       
Creditors : amounts falling due          (745)       (997)        (878)
after more than one year                                               
                                                                       
Provisions for liabilities and            (36)         (4)         (42)
charges                                                                
                                                                       
Net assets excluding pension             1,332       1,324        1,314
liability                                                              
                                                                       
Pension liability                        (435)       (433)        (471)
                                                                       
Net assets including pension               897         891          843
liability                                                              
                                                                       
Capital and reserves                                                   
                                                                       
Called up share capital                    178         178          178
                                                                       
Share premium                              676         645          676
                                                                       
Profit and loss account                   (90)        (72)        (138)
                                                                       
Total equity shareholders' funds           764         751          716
                                                                       
Minority interests                         133         140          127
                                                                       
Capital employed                           897         891          843
                                                                       

CEPS PLC

Consolidated Cash Flow Statement

Six months ended 30 June 2006

                                          Unaudited          Audited   
                                                                       
                                   6 months to 6 months to 12 months to
                                                                       
                                       30 June     30 June  31 December
                                          2006        2005         2005
                                                                       
                                         £'000       £'000        £'000
                                                                       
Reconciliation of operating profit                                     
to net cash flow from operating                                        
activities                                                             
                                                                       
Operating profit                           113         131          168
                                                                       
Depreciation and amortisation               91          78          170
charges                                                                
                                                                       
Difference between pension charge         (36)           -         (53)
and cash contributions                                                 
                                                                       
Increase in stocks                        (67)       (147)         (63)
                                                                       
Decrease/(increase) in debtors             124          24        (120)
                                                                       
Increase/(decrease) in creditors           185        (86)           36
                                                                       
Net cash inflow from operating             410           -          138
activities                                                             
                                                                       
Cash Flow Statement                                                    
                                                                       
Net cash inflow from operating             410           -          138
activities                                                             
                                                                       
Returns on investments and                (52)        (59)        (115)
servicing of                                                           
                                                                       
finance                                                                
                                                                       
Taxation                                     -           -         (68)
                                                                       
Capital expenditure and financial         (80)        (35)         (41)
investment                                                             
                                                                       
Acquisition                                  -     (1,563)      (1,599)
                                                                       
                                           278     (1,657)      (1,685)
                                                                       
Financing                                (133)       1,288        1,197
                                                                       
Increase/(decrease) in cash                145       (369)        (488)
                                                                       
Reconciliation of net cash flow to                                     
movement in net debt                                                   
                                                                       
Increase/(decrease) in cash in the         145       (369)        (488)
period                                                                 
                                                                       
Cash decrease/(increase)                   133       (560)        (438)
                                                                       
from change in debt                                                    
                                                                       
Change in net debt                         278       (929)        (926)
                                                                       
Net debt at 1 January                  (1,220)       (294)        (294)
                                                                       
Net debt at period end                   (942)     (1,223)      (1,220)

Notes to the Financial Statements

1. Segmental analysis

Unaudited                  Friedman's        Davies Odell          Group       
                                                                               
6 months to 30 June           2006    2005    2006     2005     2006       2005
                                                                               
                             £'000   £'000   £'000    £'000    £'000      £'000
                                                                               
Turnover                     1,374   1,184   2,152    2,046    3,526      3,230
                                                                               
Segmental profit/               92     132     118       86      210        218
(loss)                                                                         
                                                                               
before Group costs                                                             
                                                                               
Group costs                                                     (97)       (87)
                                                                               
Profit before interest                                           113        131
and taxation                                                                   
                                                                               
Interest payable                                                (52)       (59)
                                                                               
Group profit before                                               61         72
taxation                                                                       
                                                                               
Net assets                   1,432   1,633     842      914    2,274      2,547
                                                                               
Pension liability                                              (435)      (433)
                                                                               
Unallocated net                                                (942)    (1,223)
liabilities                                                                    
                                                                               
Total net assets                                                 897        891
                                                                               

Audited                      Friedman's    Davies Odell         Group      
                                                                           
Year ended 31 December         £'000           £'000            £'000      
2005                                                                       
                                                                           
Turnover                       2,410           4,509            6,919      
                                                                           
Segmental profit                161             219              380       
                                                                           
before Group costs                                                         
                                                                           
Group costs                                                     (212)      
                                                                           
Profit before interest and                                       168       
                                                                           
taxation                                                                   
                                                                           
Interest payable                                                (115)      
                                                                           
Group profit before                                              53        
taxation                                                                   
                                                                           
Net assets                     1,517           1,017            2,534      
                                                                           
Pension liability                                               (471)      
                                                                           
Unallocated net                                                (1,220)     
liabilities                                                                
                                                                           
Total net assets                                                 843       

Friedman's converts and distributes specialist Lycra. The investment in
Friedman's was acquired on 25 January 2005.

Davies Odell manufactures and distributes protection equipment, matting and
footwear components.

2. Earnings per share

Basic earnings per share is calculated on the profit on ordinary activities
after taxation and minority interests of £48,000 (2005, £52,000) and on
178,191,426 (2005, 172,451,369) ordinary shares, being the weighted number in
issue during the period.

Diluted earnings per share is calculated on the weighted number of ordinary
shares in issue adjusted to reflect the potential effect of the exercise of
share warrants. In 2005 diluted earnings per share is calculated on 190,299,165
ordinary shares but in 2006 no adjustment is required because the fair value of
warrants was below the exercise price.

3. Reclassification of debtor backed working capital facilities

In 2005 the Group reviewed the accounting treatment of its debtor backed
working capital facilities and included them within creditors. The amount of
these facilities at 31 December 2005 was £416,000, at 30 June 2005 £410,000 and
at 31 December 2004 £271,000. These were previously included within bank
overdrafts and comparative figures have been restated.

4. Status of the financial information

The financial information has been prepared under the historical cost
convention and in accordance with the accounting policies disclosed in the 2005
Report and Accounts. The information does not constitute full accounts within
the meaning of the Companies Act 1985. The results for the half year to 30 June
2006 are unaudited. The abridged profit and loss account, balance sheet and
cash flow statement for the year ended 31 December 2005 were extracted from the
published accounts which received an unqualified audit report and which have
been delivered to the Registrar of Companies.

5. Distribution of the interim report

A copy of the interim report is being circulated to shareholders. Further
copies will be available to the public from the Company Secretary at the
company's registered address at 11 George Street, Bath BA1 2EH or from City
Financial Associates Limited, Pountney Hill House, 6 Laurence Pountney Hill,
London EC4R 0BL.