Interim Results

Actif Group PLC
31 May 2001


31 May 2001


Actif Group plc

   Announcement of interim results for the six months ended 31 January 2001


Summary

*          Turnover up 67% to £11.2 million (2000: £6.7 million)

*          Gross margins have increased from 34.2% to 40.8% as a result of the
           increasing proportion of retail business within the Group

*          Operating loss before exceptional costs of £757,000 (2000: profit    
           £30,000) includes the Joe Boxer operating loss of £173,000

*          Loss before tax of £1.64 million reflects exceptional costs of       
           £831,000 arising from the cessation of the Joe Boxer concession      
           business

*          Four new ELLE retail stores opened in Southampton, Milton Keynes,
           Bicester and Clark's Village, Street


Martin Lent, Chief Executive of Actif Group, commented:

'The disappointing performance of the Joe Boxer concession business has
impacted upon our ELLE retail expansion programme.  However the imminent
closure of the remaining Joe Boxer concessions will enable the Group to focus
fully on improving the quality of the ELLE retail offer and delivering
improved returns from our core business.'

Further information is available on the corporate website, www.actifgroup.com

Enquiries:      ACTIF GROUP PLC                       HUDSON SANDLER
                Martin Lent, Chief Executive          Piers Hooper
                Simon Banfield, Finance Director      Wendy Baker
                Tel: [phone]              Tel: [phone]


31 May 2001



                                Actif Group plc

   Announcement of interim results for the six months ended 31 January 2001


CHAIRMAN'S STATEMENT

This is my first opportunity to write to shareholders since my appointment as
Chairman in March 2001 and I am disappointed to have to report to you that the
Group incurred a loss before tax of £1.64 million in the period.

Against the background of a tough trading environment, the six months to
January have been a difficult time for the Group.  In common with many other
clothing retailers, our ELLE retail business has been adversely affected by
the prevailing market conditions.  However, our problems have been compounded
by the diversion of launching the Joe Boxer brand in the UK and these two
factors have led to weaker than expected sales performance across the ELLE
brand.  We have now identified a number of areas of our ELLE retail business,
which need to be addressed in order to achieve sustained growth and have
already made progress in delivering improvements in these areas. The benefits
of taking these actions will be minimal in the current financial year but
should ensure that the retail business is restored to profitability in the
following year.

The substantial investment in Joe Boxer, in terms of both cash and management
resources, has not generated the returns that we had anticipated and has
distracted our attention from our core ELLE business.  As previously announced
the Board has taken the decision to close the Joe Boxer concessions and this
will be completed by the end of August.



Results

In the six months to 31 January 2001, Group turnover increased by 67% to £11.2
million (2000: £6.7 million).  Gross margins have increased from 34.4% to
40.8% as a result of the increasing proportion of retail business within the
Group.  Operating loss before exceptional costs of £757,000 (2000: profit £
30,000) includes pre-opening costs of the Joe Boxer concession business and
the associated operating loss of £173,000.  Loss before tax of £1.64 million
(2000: loss £220,000) reflects exceptional costs of £831,000 arising from the
cessation of the Joe Boxer concession business.  Although the exceptional
costs are higher than originally anticipated, the cash effect of these items
will not exceed £50,000.  We continue to make significant investments for the
future development of the business.  Capital expenditure during the period
totalled £1.4 million (2000: £1.2 million), of which the majority was incurred
on the development of new ELLE retail selling space.


ELLE Retail

Retail sales increased from £1.3 million to £5.5 million reflecting a period
in which several new stores and concessions were opened.  Despite this
significant sales growth, our core ELLE business has traded below expectations
as we have been affected by the market influences referred to by other
clothing retailers.  On a like for like basis retail sales are up 8%, although
comparatives are only available for a small proportion of the retail outlets
due to the immature nature of the business.

The number of prime ELLE retail stores has increased in the period from four
to six with new stores opening in Southampton and Milton Keynes. The number of
factory outlet stores has increased to seven with stores opening at Bicester
and Clark's Village, Street.

As part of our strategy to develop our higher margin retail business, the
Company has opened 18 concessions within House of Fraser department stores
during the period.  Whilst our House of Fraser concessions are still in the
early stages of development, we believe that the concession format offers
great potential for retail sales growth.  Once the existing concessions have
established themselves we will look to expand this sector of our business and
to this end we are already in negotiations with other department stores to
take additional, high quality concession space.


ELLE Wholesale

In line with our stated strategy, our programme to convert a number of our UK
ELLE wholesale customers to higher margin retail concessions is progressing
with the transfer of House of Fraser now completed.  As a result of this ELLE
wholesale sales decreased by 18% in the period to £3.7 million (2000: £4.5
million).  The effect of the reduction in wholesale turnover has been more
than offset by the additional margin generated from the new retail
concessions.

The development of our European markets has proved more challenging and we are
currently reviewing the options for maximising the brand's potential in these
markets.  In addition, our third party agency sales have increased by 33% to
£1.15 million (2000: £0.86 million) during the period.



Outlook

The initial reaction to our ELLE Spring/Summer range was disappointing as we
had insufficient transitional product in our offer to meet the needs of our
customers and this was compounded by the unfavourable weather conditions in
the period.  This has led to sales densities being below our expectations.
However, as the season has progressed we have seen some uplift in sales as new
product has been introduced. We do not anticipate any further ELLE retail
stores opening during the current year.

In the light of the poor performance of the Group, the Board has carried out
an extensive review of its overheads and cost base and has implemented a
significant cost reduction programme, which will reduce central overheads
substantially in the next financial year.

As a result of the factors referred to above the Board regrets that the loss
before tax for the year will exceed market expectations.

The last six months has been a challenging time for the Group, but we remain
committed to increasing sales and restoring profitability to our core ELLE
business and we believe that the long-term development prospects of the
business are encouraging.


David Brock

Chairman



CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the 6 months to 31 January 2001
                                                Unaudited    Unaudited Audited
                                               Six months   Six months Year to
                                                       to           to
                                       Notes   31 January   31 January 31 July
                                                     2001         2000    2000
                                                    £'000        £'000   £'000

STARTTurnover                                     11,158        6,694  14,100
Cost of sales                                     (6,601)      (4,391) (8,993)

Gross profit                                       4,557        2,303   5,107
Other operating expenses (net)                    (6,145)      (2,449) (5,080)
Other operating income                                 -            2       -

Operating (loss)/profit                           (1,588)        (144)     27

Operating (loss)/profit before                      (757)          30     201
exceptional costs
Exceptional costs                        2          (831)        (174)   (174)

Interest payable and similar charges                 (49)         (76)   (132)

Loss on ordinary activities before                (1,637)        (220)   (105)
taxation
Taxation                                               -           28     (13)

Loss for the period                               (1,637)        (192)   (118)
Dividend proposed - preference shares                  -           (3)     (3)

Loss for the period taken to reserves             (1,637)        (195)   (121)



(Loss)/earnings per share

Basic loss per share                     3        (2.51p)      (0.66p) (0.28p)

Adjusted (loss)/earnings per share                (1.24p)      (0.13p)  0.05p

Diluted loss per share                            (2.51p)      (0.66p) (0.28p)

Adjusted diluted (loss)/earnings per              (1.24p)      (0.13p)   0.03p
share



CONSOLIDATED BALANCE SHEET

As at 31 January 2001
                                                 Unaudited   Unaudited Audited
                                                31 January  31 January 31 July
                                                      2001        2000    2000
                                                     £'000       £'000   £'000
Fixed assets
Intangible assets                                      80          52      85
Tangible assets                                     2,914       1,460   1,852

                                                    2,994       1,512   1,937
Current assets
Stocks                                              4,328       2,960   4,301
Debtors                                             1,730       4,093   2,282
Cash at bank and in hand                                -           -     739

                                                    6,058       7,053   7,322

Creditors: amounts falling due within              (3,928)     (4,986) (2,973)
one year

Net current assets                                  2,130       2,067   4,349

Total assets less current liabilities               5,124       3,579   6,286
Creditors: amounts falling due after               (1,343)       (359)   (868)
more than one year

Net assets                                          3,781       3,220   5,418

Capital and reserves
Called up share capital                               655         585     655
Share premium account                               4,340       2,312   4,340
Other reserves                                         89          39      89
Profit and loss account                            (1,303)        284     334

Shareholders' funds                                 3,781       3,220   5,418



CONSOLIDATED CASH FLOW STATEMENT

For the 6 months to 31 January 2001

                                       Notes    Unaudited    Unaudited Audited
                                               31 January   31 January 31 July
                                                     2001         2000    2000
                                                    £'000        £'000   £'000

Net cash outflow from operating        4(a)       (1,338)      (1,595) (2,049)
activities

Returns on investments and servicing
of finance
Interest paid                                        (49)         (76)   (132)
Dividends paid                                        (3)         (16)    (16)

Net cash outflow from servicing of                   (52)         (92)   (148)
finance


Taxation paid                                          -         (100)   (129)

Capital expenditure and financial
investment
Purchase of intangible fixed assets                    -            -     (32)
Purchase of tangible fixed assets                 (1,445)        (739) (1,246)
Sale of tangible fixed assets                          -            -       7

Net cash outflow from capital                     (1,445)        (739) (1,271)
expenditure


Net cash outflow before financing                 (2,835)      (2,526) (3,597)


Issue of shares                                        -        2,287   4,394
Repayment of secured loans                           (89)         (80)   (184)
New secured loan                                     820            -     688
Capital element of lease payments                   (163)         (16)    (54)

Net cash inflow from financing                       568        2,191   4,844



(Decrease)/increase in cash in the     4(b)       (2,267)        (335)  1,247
period



NOTES TO THE INTERIM FINANCIAL STATEMENTS

1.       Basis of preparation

The consolidated interim financial statements have been prepared under the
historical cost convention and in accordance with applicable accounting
standards.  The accounting policies applied are consistent with those set out
in the financial statements of Actif Group plc for the year ended 31 July
2000.  The interim financial statements are unaudited and do not constitute
accounts within the meaning of section 240 of the Companies Act 1985.  The
financial information for the year ended 31 July 2000 has been extracted from
the Group's statutory accounts for the period, which have been delivered to
the Registrar of Companies.  The auditors' report on those accounts was
unqualified and did not contain any statement under section 237 of the
Companies Act 1985.


2.       Exceptional item

The exceptional item for the 6 months ended 31 January 2001comprises the costs
of terminating the Joe Boxer concession business.  The exceptional item for
the 6 months ended 31 January 2000 and the year ended 31 July 2000 comprises
the costs of the capital restructuring and reorganisation carried out in
preparation for the flotation of the Company on the Alternative Investment
Market.


3.       Earnings per share

Earnings per share and fully diluted earnings per share for the 6 months ended
31 January 2001, the year ended 31 July 2000 and the 6 months ended 31 January
2000 have been calculated on loss or profit after tax and non-equity dividends
and on the weighted average number of shares in issue and under option during
the period, as set out below:

                                                                              
                 6 months ended         6 months ended             Year ended 
                      31-Jan-01              31-Jan-00              31-Jul-00 

Weighted average     65,144,571             28,772,449             43,397,384 
number of ordinary                                                              
shares                                                                      
              -----------------       ----------------       ----------------

Weighted average                                                                
number of ordinary 
and potential        82,040,140             40,021,562             59,338,217 
ordinary shares                                                                 
              -----------------       ----------------       ----------------


For the periods ended 31 January 2000, 31 July 2000 and 31 January 2001 the
potential ordinary shares are non-dilutive.  Adjusted loss per share for the 6
months ended 31 January 2001 has been calculated on loss on ordinary
activities after tax and non-equity dividends but excluding the exceptional
item of £831,000.


4.       Notes to the Consolidated Cash Flow Statement for the 6 months ended
         31 January 2001


(a)     Reconciliation of operating profit to operating cash flows

                                                Unaudited    Unaudited Audited
                                               31 January   31 January 31 July
                                                     2001         2000    2000
                                                    £'000        £'000   £'000

Operating (loss)/profit                           (1,588)        (144)     27
Depreciation charges                                 779          190     432
Amortisation of goodwill                               1            -       1
(Profit)/loss on sale of tangible fixed                -            -      (1)
assets
Non-cash exceptional costs of flotation                -           88      88
Increase in stock                                    (27)        (710) (2,051)
Decrease/(increase in debtors)                       529       (2,184)   (418)
(Decrease)/increase in creditors                  (1,032)       1,165    (126)
Foreign exchange loss relating to                      -            -      (1)
non-operating activity

Net cash outflow from operating activities        (1,338)      (1,595) (2,049)



(b)     Reconciliation of cashflow to movement in net debt

                                                Unaudited     Unaudited Audited
                                               31 January    31 January 31 July
                                                     2001          2000    2000
                                                    £'000         £'000   £'000

(Decrease)/increase in cash in the period         (2,267)         (335)  1,247
Cash outflow from decrease in debt and               252            95     239
lease financing

Change in net debt resulting from cash            (2,015)         (240)  1,486
flows
New secured loans                                   (820)            -    (688)
New finance leases                                  (392)            -    (133)

Movement in net funds/(debt) in the period        (3,227)         (240)    665
Net (debt)/funds at the beginning of the            (370)       (1,035) (1,035)
period

Net debt at the end of the period                 (3,597)       (1,275)   (370)



5.       Copies of Interim Report

The Interim Report will be sent by post to all registered shareholders.
Copies of the Interim Report are available from the Company Secretary at the
Registered Office of Actif Group plc, 20 Little Portland Street, London W1W
8AA.