Preliminary Results

Rap Group PLC
26 June 2000


RAP Group plc ('RAP' or the 'Group')
------------------------------------

PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999
---------------------------------------------------------------

KEY POINTS

*   1999  continued the integration of the operations of the Group and
    improved financial and operational control.

*   Turnover was down 21% to £19.69 million continuing the trend of recent
    years.

*   The loss before taxation was £1.64 million after exceptional costs of
    £0.68 million.

*   Trading in rubber and allied products and in safety products continued to
    fall in line with the long-term decline experienced for a number of years
    while sales at Welpac Harwood increased after having fallen significantly
    in the previous two years.

*   The claims lodged by the previous Chairman and Chief Executive have been
    resolved for £0.2 million.

*   The Group has developed an internet portal which is planned to be launched
    later this year to provide a new channel to sell certain of its products
    directly to the public.

*   On 23 June 2000 the board approved a proposed rights issue to raise £1.90
    million net of costs to provide the Group with essential working capital
    and allow it to develop its retail supply activities including the 
    e-commerce element of this business.

*   On 26 June 2000 the company acquired Touchline Network TV Limited, a
    company specialising in multi-media and e-commerce development to allow it
    to move more easily towards the future style of business-to-business
    e-commerce trading.

*   On 3 May 2000 RAP Conveyors Limited, a wholly owned subsidiary, was sold
    for approximately £0.5 million pre expenses.

*   On 19 April 2000 the Group entered into a conditional contract for the
    sale of its property in Hamilton, Scotland for £0.48 million, conditional
    on the granting of planning permission for change of use.



Press enquiries:

John Savage, Chairman   -   RAP Group plc   
Tel: [phone]



The board of RAP Group plc is pleased to announce preliminary results for the
year ended 31 December 1999.

The Group experienced another difficult year in 1999, with sales falling by
21% against the previous year, although margins were slightly improved.  The
Group has, however, secured major new contracts with the important retail
multiples which are ably served by the warehousing and distribution facilities
at Burnley. The gardenware business was relocated to Burnley in early 2000, to
take advantage of the experience and facilities already in place in order to
improve service levels to its customers. The board has also recognised that
the e-commerce systems established to interface with major store groups can be
developed to provide a new channel to sell certain of its products, in
particular gardening goods, directly to the public. The Group has, therefore,
developed an internet portal which is planned to be launched later this year.


Events since the year end 
-------------------------

Since the year end, the Group has taken advantage of a number of
opportunities:

*   On 19 April 2000, contracts were exchanged for the conditional sale of a
    portion of the property at 50 Union Street, Hamilton, Scotland, for the
    sum of £471,500.  The sale is conditional on the granting of planning
    permission to develop the site being granted within six months.  The
    remaining part of the property was sold with immediate effect for £3,500.
    The site at 50 Union Street is included in the accounts at £146,000 at 31
    December 1999.  It is the board's intention to relocate the business to
    new premises.  The proceeds will be used to reduce group indebtedness.  As
    at 26 June 2000, planning permission has not yet been granted, hence, the
    disposal has not been reflected in the proforma balance sheet for 1999.

*   On 3 May 2000 the entire issued share capital of RAP Conveyors Limited was
    sold for a consideration of approximately £500,000.  The proceeds of sale
    have been used to reduce group indebtedness.

*   On 26 June 2000, the company acquired Touchline Network TV Limited, a
    company specialising in multi-media and e-commerce development, in order
    to underpin the group's e-commerce strategy and to allow it to move easily
    towards the future style of business-to-business e-commerce trading.
    Touchline was acquired for a consideration of 500,000 ordinary shares of
    5p each at completion.  A further 330,000 ordinary shares of 5p each will
    be allotted within twelve months of completion should certain profit
    targets be met by Touchline.  Touchline brings with it an IT development
    team specialising in multi-media and e-commerce projects, together with a
    notable customer list.

*   On 23 June 2000 the board approved a proposed rights issue of 12,825,841
    shares at 18p to raise £1,900,000, net of expenses, to provide the group
    with essential working capital and allow it to develop its retail supply
    activities including the e-commerce element of this business.  The rights
    issue is fully underwritten and the directors have received irrevocable
    undertakings to vote in favour of the rights issue in excess of 50% of
    shareholdings. Of the proceeds of the rights issue, approximately
    £1,200,000 will be used to reduce group indebtedness and approximately
    £700,000 to develop its retail supply activities.

In addition, approaches have been received from third parties to purchase
other parts of the Group and, therefore, the sale of other group businesses is
under active consideration.


Financial results
-----------------

The results for the year to 31 December 1999 show a further decline in sales
to £19,685,000 from £24,863,000 in 1998. This represents a reduction in sales
in RAP Industrial Distributions, Potter Cowan and Safety Specialists of 16%. 
A decline in the sales of Anderson & Firmin of 39% was due to the loss of a
number of major contracts in 1997.

The loss for the year was £1,635,000 after exceptional costs of £679,000,
which included £436,000 of further re-organisation and closure costs, compared
to the loss of £1,882,000 for 1998, which included exceptional costs of
£1,714,000.

The claims lodged by former Chairman and Chief Executive, Mr D J Emmett, for
breach of contract and unfair dismissal have now been resolved and a charge of
£200,000 has been made in the 1999 accounts to cover the claim.  Considerable
legal costs relating to the company's defence of the action have also been
charged to the accounts in 1998 and 1999.

The directors do not propose to pay a dividend (1998: nil).


Board changes
-------------

The directors have decided to appoint Andy Makeham as e-marketing Director on
1 July 2000.  Andy was previously Sales and Marketing Director of the ERP
Division of Kewill Systems, a supplier of e-commerce solutions and the Group's
partner in implementing the new IT system at RAP.

John Griffith has agreed to join the board as a non-executive director in the
near future.  He is Managing Director of Intershop (UK) Limited, a supplier of
e-commerce software.

It is also the board's intention to appoint further non-executive directors
following the refinancing of the Group.

Once the strategic redirection of the Group has been completed, John Savage
intends to relinquish his executive role in the Group.


Operational review
------------------

During the year the Group continued its strategy of integrating all the
operations of the Group, as far as practicable and improving the financial and
operational control over the business. A fundamental tool to achieve this
control and enhance management information was the new IT system which was
successfully implemented during the year, with no major issues being
encountered.

The Group continues to develop its Burnley warehousing and distribution
facilities for its DIY and gardening products.  Having established a seamless
e-commerce system interfacing with major store groups, the board believes that
e-commerce offers RAP a new channel to sell certain of its products, in
particular gardening goods, directly to the public, thus enhancing margins.
The Group has therefore invested in the development of an internet portal
which is planned to be launched later this year.  The web portal will provide
a sales channel for a range of gardening related products and services,
including RAP's own range of products, alongside those of other suppliers.

In the Group's 1999 Interim Statement it was reported that approaches had been
received for RAP Conveyors Limited, a stand alone business specialising solely
in the supply of conveyor belting.  As announced on 4 May 2000, it has now
been sold for a consideration of approximately £500,000.  The company has also
entered into a conditional contract for the sale of its property in Hamilton,
Scotland, for £475,000.  This is conditional on the granting of planning
permission for change of use.  It is the board's intention that the business
will be relocated.  The proceeds from the two disposals will be applied to the
reduction of Group indebtedness.


Review of trading and outlook
-----------------------------

In the year to 31 December 1999, turnover fell from £24,863,000 to £19,685,000
compared to the same period the year before. Economic activity fell 14% from
£10,573,000 for the first half of the year to £9,112,000 for the second half,
mirroring the year on year decline.  The second half contraction was across
the business spectrum with the exception of Welpac Harwood which registered a
10% increase in this period.

While the underlying profitability trend of the distribution businesses is
downwards, Welpac Harwood has secured major new contracts with the important
retail multiples which will provide further growth in its revenue.  The
relocation of the gardenware business to Burnley in early 2000 offers the
opportunity to lower the cost base and improve service levels to customers.
The directors believe these will provide a solid base for the proposed
business developments.

The sales performance of the Rubber and Allied Products Distribution Division
and Safety Division continued to fall in line with the long-term decline
experienced for a number of years.

The glove-manufacturing business of Poplar Industries in Stourbridge was
closed during the year with glove sales being transferred to Burnley.  The
sales of the glove importing business of Planet were also substantially
reduced by the discontinuation of much of the lower margin business.

The benefits of the systems implementations including cost reductions started
to show through towards the end of the year.

The decision to focus on supplying the major retailers with DIY products has
already seen success with many new contracts being awarded by new and existing
customers.  RAP's fulfilment capability has given the major retailers
confidence to place more business with the Group, and the directors expect
significant growth from this sector.

The directors believe that RAP's e-commerce systems, together with its
successful fulfilment capability, have created an opportunity for the company
to benefit from the increasing demand for internet trading.

RAP is creating an internet gardening portal that will be launched later this
year and, with the acquisition of Touchline, the directors believe the Group
will be in a position to take advantage of the growth in e-commerce.




Consolidated profit and loss account for the year ended 31 December 1999

                                                            1999      1998
                                                           Total     Total
                                                           £'000     £'000

Turnover - continuing operations                          19,685    24,863
Cost of sales                                            (14,310)  (18,322)
                                                         -------   -------
Gross profit                                                5,375     6,541
Selling and distribution costs                            (1,758)   (2,593)
Administrative expenses                                   (4,985)   (5,473)
                                                         -------   -------
Operating loss - continuing operations                    (1,368)   (1,525)
Interest payable and similar charges                        (267)     (357)
                                                         -------   -------
Loss on ordinary activities before taxation               (1,635)   (1,882)
Tax on loss on ordinary activities                             -         - 
                                                         -------   -------
Loss for the financial year                               (1,635)   (1,882)
                                                         -------   -------
Loss per share
Basic                                                     (13.3p)   (15.3p)
Diluted                                                   (13.3p)   (15.3p)
Basic before exceptional items                             (7.8p)    (1.4p)


Consolidated statement of total recognised gains and losses for the year ended
31 December 1999

                                                            1999      1998
                                                           £'000     £'000

Retained loss for the financial year                      (1,635)   (1,882)
Unrealised surplus on revaluation of freehold 
   and long leasehold properties                               -       512
Unrealised deficit on revaluation of freehold 
   property                                                  (10)        - 
                                                         -------   -------
Total recognised losses since the last annual 
   report and accounts                                    (1,645)   (1,370)
                                                         =======   =======





Consolidated balance sheet as at 31 December 1999

                                              Unaudited
                                               proforma
                                                   1999     1999      1998
                                                  £'000    £'000     £'000

Fixed assets
Goodwill                                             80       28        34
Tangible assets                                   2,755    2,829     3,140
                                                -------  -------   -------
                                                  2,835    2,857     3,174
                                                -------  -------   -------

Current assets
Stocks                                            3,880    4,538     4,923
Debtors                                           4,264    4,795     5,610
                                                -------  -------   -------
                                                  8,144    9,333    10,533
Creditors: Amounts falling due within
   one year                                      (5,108)  (8,022)   (7,724)
                                                -------  -------   -------
Net current assets                                3,036    1,311     2,809
                                                -------  -------   -------
Total assets less current liabilities             5,871    4,168     5,983
Creditors: Amounts falling due after 
   more than one year                              (356)    (360)     (712)
Provisions for liabilities and charges             (482)    (482)     (300)
                                                -------  -------   -------
Net assets                                        5,033    3,326     4,971
                                                -------  -------   -------
Capital and reserves
Called-up share capital                           1,282      616       616
Share premium account                             6,603    5,259     5,259
Revaluation reserve                                 462      462       512
Profit and loss account                          (3,314)  (3,011)   (1,416)
                                                -------  -------   -------
Equity shareholders' funds                        5,033    3,326     4,971
                                                =======  =======   =======





Consolidated cashflow statement for the year ended 31 December 1999

                                                            1999      1998
                                                           £'000     £'000

Net cash inflow from operating activities                    193       138
Returns on investments and servicing of finance             (267)     (357)
Taxation                                                       -       (50)
Capital expenditure and financial investment                 (94)      999
                                                         -------   -------
Cash (outflow) inflow before financing                      (168)      730
Financing                                                   (418)   (1,247)
                                                         -------   -------
Decrease in cash in the year                                (586)     (517)
                                                         =======   =======


Notes

1. Reconciliation of operating loss to operating cash flows

                                                            1999      1998
                                                           £'000     £'000

   Operating loss                                         (1,368)   (1,525)
   Depreciation charges                                      392       351
   Write down of property held for resale                     53         -
   Amortisation of goodwill                                    6         5
   (Profit) loss on sale of tangible fixed assets            (17)       17
   Decrease in stocks                                        385     1,609
   Decrease in debtors                                       890       475
   Decrease in creditors                                    (330)     (894)
   Increase in provisions                                    182       100
                                                         -------   -------
   Net cash inflow from operating activities                 193       138
                                                         =======   =======

2. The results have been extracted from the full financial statements, which
   have been prepared under the historical cost convention as modified for the
   revaluation of certain fixed assets and in accordance with applicable
   accounting standards.  The accounting policies have been applied
   consistently with those stated in the previous accounts.

3. The basic loss per share has been calculated on the loss before and after
   taxation of £1,635,000 (1998: £1,882,000) and on the weighted average
   number of shares in issue of 12,325,841 (1998: 12,325,841).  The diluted
   loss per share has been calculated on the loss before and after taxation of
   £1,635,000 (1998: £1,882,000) and on a weighted average number of shares of
   13,074,841 (1998: 12,325,841).  The basic before exceptional items loss per
   share has been calculated on a loss of £956,000 (1998: £168,000) and on the
   weighted average number of shares in issue of 12,325,841 (1998:
   12,325,841).

4. The directors do not recommend the payment of a final dividend and the
   dividend for the year is therefore nil (1998: nil).

5. The unaudited proforma balance sheet at 31 December 1999 shows the effect
   of the proposed rights issue, the sale of RAP Conveyors Limited and the
   acquisition of Touchline Network TV Limited, all of which have arisen since
   the year end, as if the proceeds and changes in net assets and liabilities
   had occurred on 31 December 1999.  The net proceeds have been applied to
   reduce bank overdrafts.

   The proceeds of the proposed rights issue are included net of expenses on
   the basis that the rights issue is fully underwritten and that the
   directors have received at least 50% irrevocable undertakings to vote in
   favour of the rights issue.  The sale of RAP Conveyors Limited reflects the
   net assets at 31 December 1999; proceeds are included net of expenses.  The
   acquisition of Touchline Network TV Limited reflects the net assets at 31
   March 2000 which have not materially changed to the date of acquisition.
   The consideration paid reflects the fair value of the initial shares
   issued; resulting goodwill has not been amortised and no fair value
   adjustments have been made.



   The unaudited proforma balance sheet includes the following adjustments to
   the balance sheet at 31 December 1999:

                                             Sale of   Acquisition 
                                 Proposed        RAP  of Touchline  Unaudited
                        Audited    rights  Conveyors    Network TV   proforma
                           1999     issue    Limited       Limited       1999
                           £000      £000       £000          £000       £000

   Fixed assets           2,857         -       (102)           80      2,835
                        -------   -------    -------       -------    -------
   Current assets         9,333         -     (1,273)           84      8,144
   Creditors: amounts
     falling due within
     one year            (8,022)    1,900      1,068           (54)    (5,108)
                        -------   -------    -------       -------    -------
   Net current assets     1,311     1,900       (205)           30      3,036
                        -------   -------    -------       -------    -------
   Total assets less 
     current liabilities  4,168     1,900       (307)          110      5,871
   Creditors: amounts 
     falling due after
     more than one year    (360)        -          4             -       (356)
   Provisions for 
     liabilities and 
     charges               (482)        -          -             -       (482)
   Net assets             3,326     1,900       (303)          110      5,033
                        -------   -------    -------       -------    -------
   Capital and reserves   3,326     1,900       (303)          110      5,033
                        =======   =======    =======       =======    =======

6. The foregoing information does not constitute statutory accounts as defined
   by Section 240 of the Companies Act 1985.  The information for the year
   ended 31 December 1999 has been extracted from the audited accounts for
   that period, which will be filed with the Registrar of Companies following
   the Annual General Meeting, and upon which the auditors have expressed an
   unqualified opinion.  The information for the year ended 31 December 1998
   was extracted from the audited accounts for that period, which received an
   unqualified auditors' report and have been filed with the Registrar of
   Companies.

7. The full financial statements will be posted to shareholders on 30 June
   2000.  Further copies will also be available from the company's registered
   office at RAP House, Harrison Street, Briercliffe, Burnley, BB10 2HP from
   that date.'