Final Results

Sirdar PLC
18 September 2003


Sirdar PLC

Preliminary results for the year ended 30th June 2003

Chairman's Statement

Introduction

In the interim report to December 2002 I highlighted that market conditions
continued to be difficult and little change has been noted in the second half of
the year.  The acquisition of William Pownall and Sons Limited in August 2002
has proven to be successful and was earnings enhancing in 2003, resulting in an
overall increase in operating profit for the year.



The results

Turnover increased in the year to £69.9m (2002: £65.1m) including ten months
contribution from William Pownall.  In light of current market conditions I am
pleased to report an increased operating profit of £5.4m (2002: £4.9m). Profit
before tax was £4.8m which represents an increase of 18% over the previous year
after adjusting for the profit on the sale of the Hotel. The increase in the
underlying profit before tax is due to the contribution from William Pownall and
a reduction in the interest charge.



Divisional performance reviews and further financial information are contained
within the Group Chief Executive's Review.



Earnings and dividend per share

Basic earnings per share amounted to 6.60p per share compared to 16.36p last
year but adjusted earnings per share, which is calculated to show the underlying
performance of the group and excludes the profit on disposal of the Hotel, shows
an increase of 21%.  The directors are proposing a final dividend of 4.00p per
share which remains unchanged from last year.  The dividend is payable on the
24th November 2003 to those shareholders on the register of members at the close
of business on 31st October 2003.



Management and personnel

After 30 years with the group, Kevin Burley decided to step down from his
positions on the group board and as Managing Director of Sirdar Spinning Limited
with effect from 30th April 2003. Kevin Henry has now assumed responsibility for
the day to day management of Sirdar Spinning Limited, whilst remaining as Group
Finance Director.



I would like to thank all our employees for their support in addressing the
challenges facing the group and dealing with the difficult market conditions in
which we are operating.



Current trading and future prospects

The market conditions for the current financial year remain challenging with no
indication that the difficult conditions experienced in recent years will
relent. The group continues its policy of looking for growth by developing new
products and new market areas and if possible through appropriate acquisitions.
These initiatives, together with the cost conscious focus of the group, mean
that, despite uncertainty within the market, we are well placed to deliver a
continuing strong performance.

GERRY LUMB
Chairman
                                           18th September 2003



Group Chief Executive's Review

Introduction

In the interim report for the six months ended 31st December 2002, released on
20th March 2003, we stated that market conditions had become even more
challenging and with the ongoing uncertainty in the global economy we did not
anticipate an improvement in trading conditions in the short term.



With this in mind our key objective has been to control costs and protect
operating margins whilst generating cash. Our strategy continues to be that if
further acquisition opportunities arise they will be considered carefully, and
we will seek to grow our business organically into new product areas closely
associated with our core operations, where it is possible to do so without the
need for major capital expenditure and the associated risks.



Floor coverings division

Our floor coverings division, including contract and residential products,
increased sales by 12% to £56.4m (2002: £50.4m) and operating profit by 7% to
£5.8m (2002: £5.4m). Both sales and operating profit benefited from the
inclusion of William Pownall and Sons Limited from August 2002.



We experienced intense price competition in both the above sectors but resisted
significant price cuts and discounts in order to protect margins.



Contract floor covering products are marketed under the Burmatex and Carpet Tile
Company (CTC) brands. Sales of Burmatex products held up well in the UK.
However, CTC sales in the UK and exports generally were below expectations.  New
products such as Tivoli-on-Line and Inter City, and re-launched products such as
Velour Excel, were well received in the market and all contributed to the sales
achievement.



Towards the end of the financial year we launched a new contract floor covering
brand within Burmatex, Burmafloors International.  This brand will market and
sell designer vinyl products targeted at high street retailers for own use.  The
products have wood and marble effects and are designed for heavy contract
installations.  This is a market area where we have identified growth potential.



A number of items of capital expenditure were commissioned successfully, which
were designed to increase efficiency, reduce waste and control costs whilst
ensuring that the business is, and remains, environmentally conscious.



Considering the particularly competitive nature of the contract floor covering
market it has been a good year for Burmatex.  Richard Clark, the Managing
Director, along with everyone involved within the business, should be
congratulated on their performance.



Residential floor coverings are marketed under the Ryalux, William Lomas and
William Pownall brands. The three brands each have their own individual identity
developing their own products with sales teams targeting distinct sectors of the
residential carpet market.  Whilst aiming to preserve the distinctions between
the brands, we are continuing to work on the most appropriate way of integrating
William Pownall into the Ryalux operations to generate cost savings whilst
maintaining the high level of quality and service that has become synonymous
with our floor coverings brands.



A number of new products have been developed for each of the brands and initial
reviews with key customers have provided very positive responses.  These
products were presented to the trade at the National Floor Show at Harrogate in
early September.



Major capital expenditure within this operation included the purchase of a
carpet cutting machine to handle more effectively the increased volumes we
anticipate from new product launches, as well as the introduction of beaming
equipment to feed the carpet tufting machines.  The beaming equipment will allow
us to tuft smaller quantities of carpet resulting in savings in waste and
reduced stock holdings.



Considering the ongoing difficult market conditions and the re-organisations
that have taken place within this part of the group, it has been a satisfactory
year and I believe we are now well placed for future profit growth.



Specialist yarns division

It has been another difficult year for this division resulting in an 8%
reduction in sales to £13.5m (2002: £14.7m).  However, operating profit was
marginally higher at £142,000 (2002: £30,000).



Hand knitting sales, both in the UK and particularly overseas, held up
reasonably well. However, sales of industrial yarns from the Tilsa brand were
disappointing, particularly in the UK and USA although business in Eire did show
some improvement.



We are continuing to work on the development of the technical yarn business and
are making progress. Whilst this has been slower than we would have liked,
current initiatives with key customers should yield an improvement in the
performance of this product area.



This division has a relatively young but experienced board of directors, lead by
Kevin Henry. The board is reviewing a number of strategic options designed to
reduce the inherent risks associated with this business and enable it to deliver
an acceptable return on our investment on a consistent basis.



Conclusion

There has been and continues to be a great deal of valuable work being carried
out across the group and we remain well positioned to cope with the challenging
conditions and capitalise on our efforts.



We have a strong management team and we continue to invest heavily in their
training and development.  I would like to thank my senior management team and
all our employees for their continued support in helping to maintain Sirdar PLC
as one of the more profitable textile groups in the UK.


DUNCAN VERITY                                                18th September 2003
Group Chief Executive







Enquiries:


Duncan Verity, Group Chief Executive, Sirdar PLC                    01924 371501
Kevin Henry, Group Finance Director, Sirdar PLC                     01924 371501








Consolidated Profit and Loss Account
year ended 30th June 2003


                                            Note                        2003                          2002
                                                                        £000                          £000
Turnover

   Continuing                                                        61,326                        65,143

   Acquisition                                                        8,574                             -

                                               2                     69,900                        65,143

Operating costs                                                     (64,494)                      (60,215)

Operating profit

   Continuing                                                         4,951                         4,928

   Acquisition                                                          455                             -

                                               2                      5,406                         4,928

Profit on disposal of subsidiary                                          -                         5,032
undertaking

Net interest payable and similar                                       (586)                         (849)
charges

Profit before taxation                                                4,820                         9,111

Taxation                                                             (1,770)                       (1,548)

Profit for the year                                                   3,050                         7,563

Dividends                                      3                     (2,775)                       (2,775)

Retained profit for the year                                            275                         4,788

Earnings per share

(basic and diluted)                            4                       6.60p                        16.36p




There were no recognised gains or losses in the year other than the profit shown
above.






Consolidated Balance Sheet
as at 30th June 2003

                                                                     2003                       2002
                                                               £000          £000         £000          £000

Fixed Assets

Intangible                                                                15,497                     13,035

Tangible                                                                  17,459                     17,751

                                                                          32,956                     30,786
Current assets

Stocks                                                      17,891                     15,375

Debtors                                                     12,996                     13,345

Cash at bank and in hand                                       453                     15,232

                                                            31,340                     43,952

Creditors (due within one year)                            (15,973)                   (23,720)

Net current assets                                                        15,367                     20,232

Total assets less current liabilities                                     48,323                     51,018

Creditors (due after more than one year)                                  (9,736)                   (12,847)


Deferred taxation                                                         (3,237)                    (3,096)

                                                                          35,350                     35,075

Equity shareholders' funds

Called up share capital                                                   11,561                     11,561

Share premium account                                                        504                        504

Capital redemption reserve                                                 2,395                      2,395

Profit and loss account                                                   20,890                     20,615

                                                                          35,350                     35,075






Consolidated Cash Flow Statement
year ended 30th June 2003


                                                                  2003                        2002
                                              Note          £000          £000          £000          £000

Net cash inflow from operating                   5                      9,298                       9,150
activities

Returns on investments and
servicing of finance

Interest received                                           310                         651

Interest paid and similar charges                          (883)                     (1,659)

                                                                         (573)                     (1,008)

                                                                        8,725                       8,142

Corporation tax paid                                                   (1,328)                     (2,473)

Capital expenditure

Purchase of tangible fixed assets                        (1,416)                     (2,073)

Sale of tangible fixed assets                               374                         157

                                                                       (1,042)                     (1,916)
Acquisitions and disposals

Acquisition of subsidiary                        8       (5,293)                          -
undertaking

Cash balance acquired with                       8          291                           -
subsidiary undertaking

Disposal of subsidiary undertaking                            -                      13,697

Cash balance disposed of with                                 -                         (21)
subsidiary undertaking

Receipt of deferred consideration                           350                           -

                                                                       (4,652)                     13,676

Equity dividends paid                                                  (2,775)                     (2,775)

Cash (outflow)/inflow before                                           (1,072)                     14,654
financing

Financing

Receipt from cash collateral                             11,333                           -
account

New bank loan                                            14,038                           -

Redemption of loan notes                                (25,445)                          -

Payments into cash collateral                            (1,666)                     (7,548)
account

Repayment of bank loans                                  (2,300)                        (86)

                                                                       (4,040)                     (7,634)


(Decrease)/increase in cash                      6                     (5,112)                      7,020



A reconciliation of net cash flow to movement in net debt is set out in note 7.






Notes



1.   Basis of Preparation



These preliminary financial statements do not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985.  The group's
statutory financial statements on which the company's auditors,
PricewaterhouseCoopers LLP, have given an unqualified opinion in accordance with
Section 235 of the Companies Act 1985, are to be delivered to the Registrar of
Companies.



2.   Segmental Information


Analysis of results by class of business

                                       Turnover            Operating profit       Net operating assets/
                                                                                       (liabilities)
                                     2003        2002         2003         2002        2003        2002
                                     £000        £000        £000         £000        £000        £000
Floor coverings
   Continuing                      47,867      50,426       5,383        5,433      37,354      36,778
   Acquisition                      8,574           -         455            -       1,325           -

                                   56,441      50,426       5,838        5,433      38,679      36,778
Specialist yarns                   13,459      14,717         142           30      10,562      11,137
                                   69,900      65,143       5,980        5,463      49,241      47,915
Central group costs/liabilities                              (574)        (535)     (1,117)     (1,376)
Total net operating assets                                                          48,124      46,539

Operating profit                                            5,406        4,928

Profit on disposal of subsidiary                                -        5,032
undertaking
                                                            5,406        9,960
Net interest payable and                                     (586)        (849)
similar charges
Profit before taxation                                      4,820        9,111




Net operating assets are stated excluding inter-company financing and are
derived from the balance sheet total by excluding bank borrowings, loans and
loan notes totalling £12,774,000 (2002:  £26,481,000), cash collateral account
of £nil (2002:  £9,667,000), cash on deposit of £nil (2002:  £5,000,000) and
deferred consideration of £nil (2002:  £350,000) receivable on the disposal of
Eversure Textiles Limited.




3.    Dividends

                                                                               2003                  2002
                                                                               £000                  £000

Interim - 2.00p (2002:  2.00p)                                                  925                   925
Proposed final - 4.00p (2002:  4.00p)                                         1,850                 1,850
                                                                              2,775                 2,775



4.   Earnings per share

The calculation of basic earnings per share is based on earnings of £3,050,000
(2002:  £7,563,000) and on 46,242,455 (2002:  46,242,455) ordinary shares, being
the weighted average number in issue during the year.

Adjusted earnings per share, as set out below, is calculated after excluding the
profit on disposal of subsidiary undertaking of £5,032,000 in the year ended
30th June 2002 and is presented in order to demonstrate the underlying
performance of the group.

                                                                   2003                         2002
                                                        Earnings        Earnings     Earnings        Earnings
                                                                       per share                    per share
                                                            £000           pence         £000           pence

Earnings and basic earnings per share                      3,050            6.60       7,563           16.36
Profit on disposal of subsidiary undertaking                   -               -      (5,032)         (10.89)
Adjusted earnings and basic earnings per share             3,050            6.60       2,531            5.47



5.     Reconciliation of operating profit to net cash inflow from
       operating activities
                                                                                   2003              2002
                                                                                   £000              £000

Operating profit                                                                 5,406             4,928
Depreciation                                                                     2,423             2,385
Goodwill amortisation                                                              869               724
(Profit)/loss on sale of tangible fixed assets                                     (58)               69
(Increase)/decrease in stocks                                                   (1,368)            2,884
Decrease/(increase) in debtors                                                   1,605            (1,324)
Increase/(decrease) in creditors                                                   421              (516)

Net cash inflow from operating activities                                        9,298             9,150




6.   Analysis of changes in net debt

                                       2003        Cash flows          New bank         Loan note          2002
                                                                           Loan        Redemption
                                       £000              £000              £000              £000          £000

Cash at bank                           453            (5,112)                -                 -         5,565
Cash collateral account                  -             1,666                 -           (11,333)        9,667
Loan notes                            (649)           14,112                 -            11,333       (26,094)
Bank loan                          (12,125)            2,300           (14,038)                -          (387)

Total net debt                     (12,321)           12,966           (14,038)                -       (11,249)




7.   Reconciliation of movement in net debt
                                                                                 2003                2002
                                                                                 £000                £000

(Decrease)/increase in cash                                                   (5,112)              7,020
Receipt from cash collateral account                                         (11,333)                  -
New bank loan                                                                (14,038)                  -
Redemption of loan notes                                                      25,445                   -
Payments into cash collateral account                                          1,666               7,548
Repayment of bank loans                                                        2,300                  86

Movement in net debt                                                          (1,072)             14,654
Net debt at start of year                                                    (11,249)            (25,903)

Net debt at end of year                                                      (12,321)            (11,249)




8.    Acquisition of subsidiary

On 15th August 2002, the group acquired the whole of the issued share capital of
William Pownall and Sons Limited for a total consideration, including
acquisition costs, of £5,293,000.

The provisional fair values of the assets acquired are as follows:

                                                     Book value              Adjustments            Fair value
                                                           £000                     £000                  £000

Tangible fixed assets                                      942                      (22)                  920
Stock                                                    1,189                      (41)                1,148
Debtors                                                  1,809                      (90)                1,719
Cash and bank balances                                     291                        -                   291
Trade creditors                                         (1,112)                     (66)               (1,178)
Corporation tax                                           (462)                      88                  (374)
Accruals and other creditors                              (335)                     (95)                 (430)
Deferred taxation                                            -                     (134)                 (134)
Net assets acquired                                      2,322                     (360)                1,962

Goodwill                                                                                                3,331
                                                                                                        5,293

Consideration
Cash                                                                                                    5,000
Acquisition costs                                                                                         293
                                                                                                        5,293



The fair value adjustments relate to accounting policy alignments to reflect the
application of the group's policies.



The results of William Pownall and Sons Limited from 1st January 2002 to the
date of acquisition were:  turnover £6,764,000, operating profit £564,000 and
profit after tax of £382,000  (12 months to 31st December 2001:  turnover
£9,925,000, operating profit £778,000 and profit after tax £515,000).



William Pownall and Sons Limited contributed £779,000 to operating cashflow from
the date of acquisition to 30th June 2003 before net capital expenditure of
£64,000, taxation payments of £218,000 and net interest received of £20,000.



End


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