Final Results

Dinkie Heel PLC
10 June 2004


2003 Accounts
Chairman's statement


Share placing and capital re-organisation


At the EGM on 19 April 2004 the shareholders agreed to the proposals set out and
explained in my letter and in the Circular dated 26 March 2004.

The immediate financial result is the issue of 128.8 million new ordinary shares
at 1p each resulting in the receipt of £873,000 (net of expenses) from the
placing of 95.8 million shares and the cancellation and conversion into 33.0
million shares of £330,000 of Loan Notes 2003. The balance of £70,000 of Loan
Notes 2003 has been repaid and the outstanding VAT liability settled.

Existing bank facilities are more than adequate for the continuing business.

The pro forma Balance Sheet below illustrates the effect of these transactions
had they taken place at 31 December 2003 and excluding trading and other
subsequent transactions. The Balance Sheet deficit at December 2003 is
eliminated by these transactions and shareholders' funds become positive.

                                                   Loan Notes           Ordinary                  Pro-forma
                                           cancellation,conversion and   shares
                             Balance Sheet          repayment          placed (net              Balance Sheet
                                  at                                       of                       after
                              31 December                               expenses)      VAT          these
                                 2003                                                payment    transactions
                                     £'000                       £'000       £'000        £'000          £'000

Fixed assets                           272                                                                 272

Current assets:
  Stocks                               589                                                                 589
  Debtors                              859                                                                 859
  Creditors                          (863)                                                  223          (640)
  Loan Notes                         (400)                         400                                       -

Total bank borrowings              (1,259)                        (70)         873        (223)          (679)

Net (liabilities)/assets             (802)                         330         873            -            401


Future business strategy

Alongside the existing business activities of the company the Board, with the
additional benefit of the skills of its new directors David Horner and Peter
Cook, wish to invest in management buy-out and management buy-in opportunities
with an overall value below £5 million. Target companies will be stable, steady
growth, profitable and cash generative.

Suitable target businesses will be identified using the services of Chelverton
Asset Management Limited (an unlisted investment management company controlled
by David Horner) who will waive all fees until an investment is made by the
company.

Although the company now has some seed capital it is expected that further funds
will need to be raised to develop the business until such time that it becomes
self funding through realisations and yields from investments.


Current trading and prospects

The ongoing businesses of the company have begun the year ahead of plan and with
optimistic prospects. The sales of shoe repair products, especially of stiletto
heel pieces, are ahead of forecast and sales of Phillips rubber products are now
beginning to reflect the rebuilding of customer confidence that I anticipated
would take some time.

Sales of body armour and protective garments for equestrian and motor cycle use
continue to grow steadily as do sales of matting products, especially for
equestrian uses where an improved product range is now offering increased sale
opportunities. The toe cap business retains a sales office facility and has
begun the year profitably.


Financial results and operational review

Sales for the year were £5,636,000 (2002, £6,909,000) and the operating loss
before exceptional items was £476,000 (2002, £881,000). Exceptional costs were
£513,000 (2002, £691,000). The profit on sale of fixed assets was £481,000
(2002, £nil) and after charging interest of £177,000 (2002, £178,000) the loss
on ordinary activities before taxation was £685,000 (2002, £1,750,000). In each
year a research and development tax credit of £10,000 was received. The loss for
the financial year was £675,000 (2002, £1,740,000) and the basic loss per share
was 4.41p (2002, 11.78p).

Net cash outflow from operating activities was £399,000 (2002, £229,000) but was
more than compensated by proceeds of sales of fixed assets totalling £1,577,000
and net debt was reduced to £1,659,000 (2002, £2,653,000).

The Davies Odell division reported sales ahead of last year by 4% at £4,494,000
and a segmental profit before exceptional items of £386,000 (2002, £244,000).
Segmental net assets were £1,132,000 at 31 December 2003 (2002, £1,083,000) and
the ratio of segmental profit to net assets was 34% (2002, 23%).

Dinkie results reflect the repercussions of the closure of all of the UK
production facilities and sale of the related properties and fixed assets, in
addition to an intensification of global competition for safety steel toe caps.
The segmental loss before exceptional items was £682,000 (2002, £928,000).


Dividends

The Board is unable to recommend a dividend for the year (2002, nil) and it will
continue to be unable to do so while a deficit remains on the company profit and
loss account.

Having gained shareholder approval at the EGM on 19 April 2004 for a capital
reduction and re-organisation, the Board proposes in due course to apply to the
Court for sanction of the reduction of capital to eliminate the profit and loss
account deficit. The Court will be concerned to ensure that the creditors of the
company will not be prejudiced by this and may require their position to be
protected.


Directors and staff

Denis Burn stood down from the Board on 31 December 2003 and Andrew Stowey,
Martyn Stowey and Bob Mitchell immediately following the EGM on 19 April 2004.

Denis served the company as a non-executive director for more than six years and
I am most grateful for the commitment, advice and support he gave the company
over that time.

Andrew and Martyn had 25 and 28 years respective service with the company. I
would like to thank them for their long service and wish them good luck with
their new business ventures.

Bob joined what is now known as Davies Odell in 1963. He has a continuing
service contract with the company and will remain as general manager of the
profitable Odell business reporting, for the time being, to myself. The change
has enabled the Board to be re-arranged to accord with the new business
strategy.

It remains for me to thank all of our staff for their support during a very
turbulent period in the company's history. Many long serving personnel have lost
their jobs as a result of the actions that the Board has had to take to secure
the company's future and to these people particularly I offer my thanks for
their service and best wishes for the future.


Richard Organ
Chairman


Dinkie Heel plc
Profit and Loss Account
Year ended 31 December 2003

                                                                                2003               2002
                                                                               £'000              £'000

Turnover from continuing operations                                            5,636              6,909
Cost of sales                                                               (5,390)            (7,024)

Gross profit/(loss)                                                              246              (115)
Net operating expenses (including exceptional items)                         (1,235)           ( 1,457)

Operating loss before exceptional items                                        (476)              (881)
Exceptional items
   Restructuring costs                                                         (477)              (618)
   Goodwill impairment provision                                                (36)                  -
   Plant & Machinery impairment provision                                          -              (647)
   Profit on sale of property held for resale                                      -                574

Operating loss from continuing operations                                      (989)            (1,572)
Profit on sale of fixed assets                                                   481                  -
Interest payable                                                               (177)              (178)

Loss on ordinary activities before taxation                                    (685)            (1,750)
Taxation                                                                          10                 10

Loss for the financial year                                                    (675)            (1,740)

Dividends                                                                          -                  -

Loss for the year set against reserves                                         (675)            (1,740)

Loss per share - basic and diluted                                           (4.41p)           (11.78p)

The company has no recognised gains or losses other than the loss for
the financial year as set out above


Dinkie Heel plc
Balance Sheet
31 December 2003

                                                                               2003              2002
                                                                              £'000             £'000
               Net assets employed

Fixed Assets
Intangible assets                                                                 -                39
Tangible assets                                                                 272             1,427
Investment in associate                                                           -                 -

                                                                                272             1,466

Current assets :
Stocks                                                                          589               848
Debtors                                                                         859             1,039
Cash at bank and in hand                                                          -                17

                                                                              1,448             1,904

Creditors : amounts falling due within one year                             (1,982)           (2,775)

Net current liabilities                                                       (534)             (871)

Total assets less current liabilities                                         (262)               595
Creditors :
amounts falling due after more than one year                                  (540)             (764)
Provisions for liabilities and charges                                            -                 -
                                                                                  .                 .

Net liabilities                                                               (802)             (169)

Capital and reserves

Called up share capital                                                         785               738
Share premium                                                                   710               715
Revaluation reserve                                                               -               513
Profit and loss account                                                     (2,297)           (2,135)

Total equity shareholders' funds                                              (802)             (169)


Dinkie Heel plc
Cash Flow Statement
Year ended 31 December 2003
                                                                               2003            2002
                                                                              £'000           £'000
Reconciliation of operating loss to net cash outflow from operating
activities

Operating loss                                                                (989)         (1,572)
Depreciation and amortisation charges                                           121             330
Profit on sale of property held for resale                                        -           (574)
Impairment provisions                                                            36             647
Associate, provision for costs of establishment                                   -             148
Decrease in stocks                                                              259             370
Decrease in debtors                                                             180             613
Decrease in creditors                                                           (6)           (191)

Net cash outflow from operating activities                                    (399)           (229)

Cash Flow Statement

Net cash outflow from operating activities                                    (399)           (229)
Returns on investments and servicing of finance                               (177)           (178)
Taxation                                                                         10              10
Capital expenditure and financial investment                                  1,518             582
Acquisitions                                                                      -            (74)

                                                                                952             111

Financing                                                                       231              98

Increase in cash                                                              1,183             209

Reconciliation of net cash flow to movement in net debt
Increase in cash in the period                                                1,183             209
Cash increase from change in debt                                             (189)            (98)

Change in net debt                                                              994             111
Net debt at 1 January 2003                                                  (2,653)         (2,764)

Net debt at 31 December 2003                                                (1,659)         (2,653)


Notes

Turnover and segmental analysis

The United Kingdom is the source of turnover and operating profit and the
principal location of the net assets of the company. The directors consider that
the company operates in two business segments serving various markets. Turnover,
loss on ordinary activities before taxation and net assets are analysed as
follows:

Segment of activity:                         Dinkie            Davies Odell           Company
                                            2003       2002      2003      2002      2003       2002
                                           £'000      £'000     £'000     £'000     £'000      £'000

Turnover                                   1,142      2,592     4,494     4,317     5,636      6,909

Segmental (loss)/profit
  before exceptional items                 (682)      (928)       386       244     (296)      (684)
Exceptional items                          (477)      (691)      (36)         -     (513)      (691)
Profit on sale of fixed assets               403          -        78         -       481          -

Segmental (loss)/profit
  before Group costs                       (756)    (1,619)       428       244     (328)    (1,375)

Group costs                                                                         (180)      (197)
Loss before interest and taxation                                                   (508)    (1,572)
Interest payable                                                                    (177)      (178)
Loss before taxation                                                                (685)    (1,750)

Net (liabilities)/assets                   (275)      1,401     1,132     1,083       857      2,484

Unallocated net debt                                                              (1,659)    (2,653)

Total net liabilities                                                               (802)      (169)


Geographical analysis of turnover:

United Kingdom                                                                         3,872        4,534
Rest of Europe                                                                           774          773
The Americas                                                                             304          443
Australasia                                                                               49           46
Far East                                                                                 557          800
Africa                                                                                    80          313

Total turnover                                                                         5,636        6,909


Notes:

1.   The Annual Report and Financial Statements will be sent to all 
     shareholders. Further copies will be available to the public from the 
     Company Secretary at the Company's registered office, St Ivel Way, Warmley, 
     Bristol BS30 8TY.

2.   The basic loss per share is calculated on losses of £675,000 (2002,
     £1,740,000) and on 15,290,075  (2002, 14,770,000) ordinary shares, being 
     the weighted number in issue during the period. As losses have been 
     incurred in each year the exercise of options would not have been dilutive 
     and accordingly basic and diluted earnings per share are the same.

3.   The abridged Accounts for the year ended 31 December 2003 and 2002 do not 
     constitute statutory accounts and are an extract from the Company's
     statutory accounts on which the auditors give an unqualified opinion.


For further information contact
 
 Tony Rawlinson, City Financial Associates Ltd             0207 090 7800
 Geoff Martin, Dinkie Heel                                 0117 303 3404
 Richard Organ, Dinkie Heel                                0117 303 3400


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