Preliminary Results

Falkland Islands Holdings PLC
25 July 2001

                                 
                   Falkland Islands Holdings plc

       Preliminary Results for the year ended 31 March 2001

                       Chairman's Statement


Financial Summary
Turnover at £10.0 million was lower than the previous year  figure
of  £10.4 million due, for the most part, to lower shipping agency
revenues and reduced hotel activity as was reported in the Interim
Statement.   However, the financial performance for the  year  was
badly  affected by exceptional items mainly relating to the write-
off  of  sums  outstanding  from HR  Holdings  Limited  which  has
recently been put into receivership.

Operating profit at £967,000 (before exceptional items) was  lower
than last year's figure of £1.33 million.  After adjusting for the
exceptional items mentioned above, operating profit before tax and
interest was reduced to £392,000.

Earnings per share at 2.0p compared to 15.4p in the previous year.

However, the Company's cash flow from operating activities remains
positive  and  the Directors are recommending an increase  in  the
final dividend to 4.6p (2000: 4.4p) payable on 8 November 2001  to
shareholders  on  the register on 12 October 2001.   The  dividend
will  absorb  £279,000 and as a result £154,000 will  be  deducted
from reserves.


Review of Activities
The  turnover from our retail services continued to grow in  spite
of an extremely quiet winter season.  Cruise vessel activity began
well but was hampered later by bad weather which prevented several
of the larger vessels from making their scheduled visit.

Whilst  the  Company represented an increased  number  of  fishing
vessels, the season was disappointing in that the catching rate of
Ilex  Squid  did not reach the exceptional levels of the  previous
year.   This  had a marked effect on the financial performance  of
the   fishing   agency   operation  substantially   reducing   the
contribution from this important business.

As   reported  in  the  interim  statement,  the  Company's  hotel
operation  also  suffered from the quiet  winter  season  and  was
unable   to   recover  early  losses  with  reduced   demand   for
accommodation continuing into the summer period.

Activity  at  Darwin Shipping showed some recovery in  the  second
half  with five voyages being completed in the twelve months,  the
same  number as the previous year, and cargo levels were  slightly
higher.   This activity was hit very hard by the huge increase  in
fuel  oil  prices which were largely responsible for reducing  its
contribution by £80,000.

The Company commenced a fresh contract to manage the port facility
on  behalf  of the Falkland Islands Government and this,  together
with  expanded stevedore facilities provided to the fishing fleet,
enabled this sector to improve its financial performance.

During  the  period the Company disposed of its remaining  farming
interest,  George  and  Barren  Islands  farm  together  with  the
livestock, to a local agricultural operation.

The long drawn out discussions with HR Holdings Limited eventually
proved  to  be  unsuccessful.  We had contracts with this  company
regarding the reimbursement of our abortive acquisition costs  and
the  payment  to us of shipping agency fees.  HR Holdings  Limited
chose   to   dispute   the  implementation  of  these   contracts.
Consequently,  we  issued writs against that company  and  matters
were  proceeding to Court when HR Holdings Limited was placed into
receivership.   We  understand from the  receiver  that  there  is
little  likelihood  of  a dividend for the ordinary  creditor  and
therefore  we  have  had  to  write-off abortive  acquisition  and
associated costs of £449,000.

The  focus  of  the  Company's mineral joint  venture  exploration
during  the  year was the bulk sampling of the streams and  rivers
not  sampled  in the previous year.  Gold and other minerals  were
recovered  supporting  the presence of host  rocks  that  normally
occur  with gold mineralisation.  However, as the benefits  likely
to  occur  from  this operation are still some way  off,  we  have
thought it prudent to write-off, as an exceptional item, our costs
to date of £126,000.


Current Trading and Prospects
The  current year performance to date is broadly in line with that
of the previous year with no exceptional items.

The  Company's new retail outlet was recently completed  and  this
facility, aimed specifically at the tourist trade, is now open.  A
range  of company branded as well as indigenous products  will  be
available  for the tourist traffic which is expected  to  increase
further in the coming season and more specifically late 2002  when
a  number of activities marking the twentieth anniversary  of  the
conflict are expected to attract many visitors.

Fishing  agency activities have continued to be depressed  by  the
low  level of the Ilex catch and did not improve by the end of the
season (July 2001).  We must, therefore, wait and see what the new
season brings when it commences early in 2002.

Demand  for rental property, both domestic and commercial, remains
strong and the Company is actively planning to expand its property
portfolio.

We  have  also  recently  been  awarded  a  sub-contract  for  the
maintenance  of  the  Ministry  of  Defence  mechanical   handling
equipment and plant at the Mount Pleasant complex and we  continue
to  seek opportunities to bid for more contracts at this location.
The   Ministry  of  Defence  may  be  implementing  several  other
outsourcing initiatives which could provide opportunities  in  the
future.

The  Falkland Islands Government has produced an Islands  plan  in
which  it  states the desire to change the balance of  public  and
private  sector  spending by encouraging entrepreneurial  activity
and  reducing  public sector dominance.  There are  several  areas
being  reviewed and the Company is well placed to derive  benefits
from  this policy.  Private house building is to be stimulated  by
investment  in  the  infrastructure which  should  also  stimulate
economic activity.

The next stage of onshore mineral development, which will be aimed
at  locating  the  source rock of the gold and  possibly  Titanium
gravel,  is  currently being planned.  Test work has already  been
conducted  on  high  grade Titanium gravel  occurring  within  the
streams and rivers on East Falklands in the same area as the gold.

As  far as offshore oil exploration is concerned, the Company  has
recently   taken  a  10%  interest  in  the  Falkland  Hydrocarbon
Consortium  which is being led by Dana Petroleum.  The  Consortium
is  currently negotiating with the Falkland Islands Government for
licensing in the Falkland Islands offshore designated area.  It is
anticipated  that  a  firm application will  be  lodged  in  early
August.    In   our  view,  this  initiative  could  represent   a
significant opportunity for the Company.

We  continue  to  seek  acquisition opportunities  to  expand  the
commercial  activities  of the Company but  to  date  no  suitable
candidates, at the correct price, have been identified.  The Board
have  always  kept in mind not to dilute the equity unnecessarily.
The general reverse in the stock market and the dramatic change in
valuations  in certain sectors should ensure that more interesting
opportunities are presented to us in the future.

On behalf of the Board I would like to thank our employees for the
positive efforts in achieving a creditable trading performance  in
spite  of  difficulties  which have  been  largely  outside  their
control.


Enquiries

Falkland Islands Holdings plc                         01279 461 630
John Gainham, Chairman

Square  Mile BSMG Worldwide                           020 7601 1000
Kevin Smith




FALKLAND ISLANDS HOLDINGS plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2001

                                                            2001         2000
                                                           £'000        £'000

Turnover - continuing operations                           9,984       10,443
Cost of sales                                             (6,861)      (7,038)
__________________________________________                 _____        _____

Gross profit                                               3,123        3,405
__________________________________________                 _____        _____


Administrative expenses excluding exceptional items       (2,496)      (2,428)
 Exceptional items:
  Abortive acquisition and associated costs                (449)            -
  Costs of mineral exploration venture                     (126)            -
___________________________________________                _____        _____
 
Administrative expenses including exceptional items       (3,071)      (2,428)
Other operating income                                       340          349
__________________________________________                 _____        _____

Operating profit before exceptional items                    967        1,326
Exceptional items                                           (575)           -
_________________________________________                  _____        _____

Operating profit on ordinary activities                      392        1,326
Net interest payable and similar charges                     (37)         (33)
__________________________________________                 _____        _____

Profit on ordinary activities before taxation                355        1,293
Tax on profit on ordinary activities                        (230)        (355)
__________________________________________                 _____        _____

Profit on ordinary activities after taxation                 125          938
Dividend                                                    (279)        (269)
__________________________________________                 _____        _____

(Deficit)/retained profit for the financial period          (154)         669
__________________________________________                 _____        _____

Earnings per share                                           2.0p        15.4p
__________________________________________                 _____        _____




FALKLAND ISLANDS HOLDINGS plc
CONSOLIDATED BALANCE SHEET
At 31 March 2001

                                                 2001               2000
                                            £'000   £'000       £'000   £'000

Fixed assets
Tangible assets                                     3,125               3,010
Investments                                             -                  62
_________________________                           _____               _____
                                                    3,125               3,072

Current assets
Stocks                                      2,629               2,441
Debtors                                     1,566               1,789
Cash at bank and in hand                      646               1,603
_________________________                   _____               _____
                                            4,841               5,833

Creditors: amounts falling due within
 one year                                  (3,664)             (3,953)
_________________________                   _____               _____

Net current assets                                 1,177                1,880
_________________________                          _____                _____

Total assets less current liabilities              4,302                4,952
Creditors: amounts falling due after
 more than one year                                 (750)              (1,289)
Provisions for liabilities and charges              (962)                (919)
_________________________                          _____                _____

Net assets                                         2,590                2,744
_________________________                          _____                _____

Capital and reserves
Called up share capital                              611                  611
Other reserves                                       703                  703
Profit and loss account                            1,276                1,430
_________________________                          _____                _____

Equity shareholders' funds                         2,590                2,744
_________________________                          _____                _____




FALKLAND ISLANDS HOLDINGS plc
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2001


                                                  2001                2000
                                            £'000   £'000       £'000   £'000


Cash flow from operating activities                   404               1,384

Returns on investments and servicing
 of finance
Interest received                              60                  73
Interest paid                                (107)                (93)
_________________________                    _____               _____
                                                      (47)                (20)
Taxation
UK Corporation tax paid                       (43)                (25)
Overseas taxation paid                       (362)               (375)
_________________________                    _____               _____
                                                     (405)               (400)
Capital expenditure
Purchase of tangible fixed assets            (393)                (275)
Disposal of fixed assets                       64                   17 
_________________________                    _____               _____
                                                     (329)               (258)
Acquisitions
Investment in unincorporated
 joint venture                                        (64)                (62)
Equity dividends paid                                (266)               (244)
_________________________                            _____               _____

Cash (outflow)/inflow before financing               (707)                400

Financing

Repayment of secured loan                            (250)               (500)
_________________________                            _____               _____

(Decrease) in cash                                   (957)               (100)
_________________________                            _____               _____



FALKLAND ISLANDS HOLDINGS plc
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT


                                                               2001      2000
                                                              £'000     £'000

(i)  Reconciliation of net cash flow to movement in net debt
     (Decrease) in cash in the period                         (957)      (100)
     Cash outflow from decrease in debt                        250        500
     _______________________________________________          _____     _____

     Movement in net debt in period                           (707)       400
     Net cash/(debt) at start of period                        353        (47)
     _______________________________________________          _____     _____

     Net (debt)/cash at 31 March                              (354)       353
     _______________________________________________          _____     _____

(ii) Reconciliation of operating profit to operating cash flows
     Operating profit                                          392      1,326
     Depreciation charges                                      214        196
     (Increase)/decrease in stocks                            (188)       222
     Decrease/(increase) in debtors                            220       (134)
     (Decrease) in creditors and provisions                   (360)      (226)
     Investment in mineral exploration written off             126          -
     _______________________________________________          _____     _____

     Net cash inflow from operating activities                 404      1,384
     _______________________________________________          _____     _____

(iii) Analysis of changes in net debt


                                                              Other
                                     31 March    Cash      non cash  31 March
                                         2000   flows       changes      2001
                                        £'000   £'000         £'000     £'000

Cash at bank and in hand               1,603     (957)           -        646
Debt due within one year                (250)     250         (250)      (250)
Debt due after one year               (1,000)       -          250       (750)
____________________                   ______    ____       _______   ________

Total                                    353     (707)           -       (354)
____________________                   ______    ____       _______   ________


Notes


1. All  significant turnover, profits and net assets are generated
   from general trading in the Falkland Islands.

2. The   taxation  charge  based  on  the  profit  for  the   year
   comprises:

                                                            2001      2000
                                                           £'000     £'000

   U.K. corporation tax at 30% (2000:30%)                    187       275
   Less double tax relief                                   (128)     (212)
                                                            _____     _____ 
                                                              59        63

   Overseas tax                                              178       298
   Adjustment in respect of prior years                       (7)       (6)
                                                            _____     _____
                                                             230       355
                                                            =====     ===== 

3. The  Directors  recommend a dividend of  4.6  pence  per  share
   (2000: 4.4 pence) payable on 8  November  2001 to shareholders 
   on the register at  close  of business on 12 October 2001.

4. The  calculation of earnings per ordinary share is based  on  a
   profit  of  £125,000  (2000: £938,000) and ordinary  shares  of
   6,110,037  (2000: 6,110,037) being the weighted average  number
   of  shares in issue during the year.  The share options do  not
   have a dilutive effect.

5. The  financial  information set out above does  not  constitute
   the  Company's statutory accounts for the years ended 31  March
   2001  or  2000.  The financial information for 2000 is  derived
   from  the statutory accounts for 2000 which have been delivered
   to  the Registrar of Companies.  The auditors have reported  on
   the  2000  accounts; their report was unqualified and  did  not
   contain  a  statement  under  section  237(2)  or  (3)  of  the
   Companies  Act 1985.  The statutory accounts for 2001  will  be
   finalised  on the basis of the financial information  presented
   by  the Directors in this preliminary announcement and will  be
   delivered   to   the  Registrar  of  Companies  following   the
   Company's Annual General Meeting.

6. Copies  of  Falkland  Islands Holdings plc  annual  report  and
   financial  statements will be sent to shareholders at  the  end
   of August.