Interim Results

Dinkie Heel PLC
30 September 2004

                                Dinkie Heel plc

             Interim results for the six months ended 30 June 2004

Chairman's Statement

Financial overview

I am pleased to be able to report that in the first half of 2004 the company has
returned to profit. The segmental profit at Davies Odell has increased 43%
before exceptional items by comparison with the same six months of 2003. Losses
within the toe cap segment, £524,000 including exceptional items in the first
half of 2003, have been reduced to £45,000.

The balance sheet now reflects the benefits of the re-organisation and fund
raising. At 30th June net assets were £475,000. Total net debt at that date was
£490,000 by comparison with £2,973,000 a year earlier.

Operational review

Sales for the first six months were £2,619,000 (2003, £2,710,000) and the
operating profit before exceptional items was £149,000 (2003, loss £216,000).
Exceptional costs of £29,000 include £10,000 of employee termination payments
and £19,000 of other costs largely representing penalties on VAT overdue for
payment and immediately settled following the re-financing. After a much reduced
interest charge of £45,000 (2003, £95,000) the profit on ordinary activities
before taxation was £75,000 (2003, loss £462,000). Earnings per share, basic and
diluted, were 0.11p (2003, loss per share 3.11p).

The net cash inflow from operating activities in the six months was £32,000
(2003, outflow £391,000) after settling VAT of £223,000 that was substantially
related to the sale of the company's freehold premises in October 2003. The
proceeds, net of expenses, of shares issued for cash were £872,000 and net debt
was further reduced by the conversion to shares of £330,000 of Loan Notes. Net
debt fell by £1,169,000 in the period and at 30 June 2004 was £490,000 (30 June
2003, £2,973,000).

Davies Odell sales were £2,191,000 (2003, £2,011,000). Sales of stiletto heel
pieces were 40% ahead of last year and sales of leather heels up by 25%. Matting
sales were also ahead of a year ago, especially equestrian matting where sales
were increased by 24%. Sales from the rest of the business segment were largely
unchanged from 2003 levels. Overall the division increased its segmental profit
before exceptional items to £246,000 (2003, £171,000) on net assets, reduced by
lower use of working capital, of £933,000 (2003, £1,181,000).

The Dinkie segment comprises a small sales and administrative office facility.
On sales of £428,000 (2003, £699,000) the division recorded a segmental loss
before exceptional items of £16,000 (2003, £295,000).



Dividend

The Board is unable to recommend the payment of an interim dividend for this
year (2002, nil). It will continue to be unable to do so while a deficit remains
on the company profit and loss account. The Board is progressing an application
to the Court for sanction of a reduction of capital to eliminate the profit and
loss account deficit.

Current trading and prospects

The second half of the year has begun slowly but in line with the usual seasonal
reduction in sales. Orders and enquiry levels are much as expected and prospects
are encouraging for the second half year.

Future strategy

Now that the financial position of Dinkie Heel has been restored, the Board is
working both to develop the existing businesses and to seek out further
opportunities to develop the Company.

The Company will be looking to invest in profitable, cash generative businesses
with strong market positions and which would benefit from the resources, both
financial and managerial, which the restructured Dinkie Heel will be able to
apply.


Richard Organ
Chairman
30 September 2004



Dinkie Heel plc
Profit and Loss Account
Six months ended 30 June 2004
                                                               Unaudited               Audited
                                                        6 months to   6 months to      12 months to
                                                       30 June 2004  30 June 2003  31 December 2003
                                                              £'000         £'000             £'000
Turnover
Continuing operations                                         2,619         2,710             5,636

Operating profit/(loss)
   before exceptional items                                     149         (216)             (476)
Exceptional items
  Restructuring costs                                          (29)         (229)             (477)
  Goodwill impairment provision                                   -             -              (36)
Operating profit/(loss)
  from continuing operations                                    120         (445)             (989)
Profit on sale of fixed assets                                    -            78               481
Interest payable                                               (45)          (95)             (177)
Profit/(loss) on ordinary activities
  before taxation                                                75         (462)             (685)
Taxation                                                          -             -                10
Profit/(loss) for the period                                     75         (462)             (675)
Dividends                                                        -             -                  -
Retained profit/(loss) for the period                            75         (462)             (675)

Earnings/(loss) per share - basic and diluted                 0.11p       (3.11p)           (4.41p)
                                                              
                                                              

Dinkie Heel plc
Balance Sheet
As at 30 June 2004
                                                              Unaudited               Audited
                                                              As at         As at             As at
                                                       30 June 2004  30 June 2003  31 December 2003
                                                              £'000         £'000             £'000
Net assets employed

Fixed Assets                                                    266         1,340               272

Current assets :
Stocks                                                          553           775               589
Debtors                                                         814           956               859
Cash at bank and in hand                                          -             -                 -
                                                              1,367         1,731             1,448

Creditors : amounts falling due within one year               (656)       (2,976)           (1,982)
Net current assets/(liabilities)                                711       (1,245)             (534)

Total assets less current liabilities                           977            95             (262)

Creditors : amounts falling due after more than one
year                                                          (502)         (684)             (540)
                                                              
Provisions for liabilities and charges                            -             -                 -
                                                                475         (589)             (802)

Capital and reserves

Called up share capital                                         914           785               785

Share premium                                                 1,783           710               710
Revaluation reserve                                               -           513                 -
Profit and loss account                                     (2,222)       (2,597)           (2,297)
                                                                 
Total equity shareholders' funds                                475         (589)             (802)



Dinkie Heel plc
Cash Flow Statement
Six months ended 30 June 2004
                                                               Unaudited               Audited
                                                        6 months to   6 months to      12 months to
                                                       30 June 2004  30 June 2003  31 December 2003
                                                              £'000         £'000             £'000
Reconciliation of operating profit/(loss) to net cash
flow from operating activities

Operating profit/(loss)                                         120         (445)             (989)

Depreciation and amortisation charges                            26            80               121
Impairment provisions                                             -             -                36
Decrease in stocks                                               36            73               259
Decrease in debtors                                              45            83               180
Decrease in creditors                                         (195)         (182)               (6)

Net cash inflow/(outflow)
  from operating activities                                      32         (391)             (399)


Cash Flow Statement
Net cash inflow/(outflow)
 from operating activities                                       32         (391)             (399)
Returns on investments and servicing of
finance                                                        (45)          (95)             (177)
Taxation                                                          -             -                10
Capital expenditure and financial investment                   (20)           124             1,518
                                                               
                                                               (33)         (362)               952

Financing                                                       890           349               231
Increase/(decrease) in cash                                     857          (13)             1,183

Reconciliation of net cash flow to movement in net
debt

Increase/(decrease) in cash in the period                       857          (13)             1,183
Cash decrease/(increase)
 from change in debt                                            312         (307)             (189)
Change in net debt                                            1,169         (320)               994

Net debt at 1 January                                       (1,659)       (2,653)           (2,653)

Net debt at period end                                        (490)       (2,973)           (1,659)



Notes to the Financial Statements

1. Segmental analysis

Unaudited                                   Dinkie           Davies Odell             Company
6 months to 30 June                        2004      2003      2004      2003        2004        2003
                                          £'000     £'000     £'000     £'000       £'000       £'000

Turnover                                    428       699     2,191     2,011       2,619       2,710

Segmental profit/(loss)
  before exceptional items                 (16)     (295)       246       171         230       (124)
Exceptional items                          (29)     (229)         -        78        (29)       (151)
Segmental profit/(loss)
  before Group costs                       (45)     (524)       246       249         201       (275)
Group costs                                                                          (81)        (92)
Profit/(loss) before interest and
  taxation                                                                            120       (367)
Interest payable                                                                     (45)        (95)
Company profit/(loss) before taxation                                                  75       (462)
                                                                                       

Net assets                                   32     1,203       933     1,181         965       2,384
Unallocated net liabilities                                                         (490)     (2,973)
Total net assets/(liabilities)                                                        475       (589)

Audited                                     Dinkie            Davies Odell              Company
Year ended 31 December 2003                 £'000                 £'000                  £'000

Turnover                                    1,142                 4,494                  5,636

Segmental (loss)/profit
before exceptional items                    (682)                  386                   (296)
Exceptional items                           (477)                 (36)                   (513)
Profit on sale of fixed assets               403                   78                     481
Segmental (loss)/profit
before Group costs                          (756)                  428                   (328)
Group costs                                                                              (180)
Loss before interest and
taxation                                                                                 (508)
Interest payable                                                                         (177)
Company loss before taxation                                                             (685)

Net (liabilities)/assets                    (275)                 1,132                   857
Unallocated net liabilities                                                             (1,659)
Total net liabilities                                                                    (802)


2. Earnings per share

The calculation of earnings per share for the six months is based on 66,667,761
(2003, 14,867,200) ordinary shares, being the weighted number in issue during
the period. In 2004 the exercise of warrants or share options would not have
been dilutive as the fair value of ordinary shares was below the relevant
exercise price. In 2003 the exercise of share options would not have been
dilutive because losses were incurred. Accordingly in each period basic and
diluted earnings per share are the same.


3. Status of the financial information

The financial information contained in the accounts does not constitute full
accounts within the meaning of the Companies Act 1985. The results for the half
year to 30 June 2004 are unaudited. The abridged profit and loss account,
balance sheet and cash flow statement for the year ended 31 December 2003 were
extracted from the published accounts which received an unqualified audit report
and which have been delivered to the Registrar of Companies.


4. Distribution of the interim report

A copy of the interim report is being sent to shareholders. Further copies will
be available to the public from the Company Secretary at the company's
registered address, St Ivel Way, Warmley, Bristol BS30 8TY or from City
Financial Associates Limited, Pountney Hill House, 6 Laurence Pountney Hill,
London EC4R 0BL.


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