Final Results

Molins PLC
12 February 2003



12 FEBRUARY 2003
FOR IMMEDIATE RELEASE







                         2002 PRELIMINARY ANNOUNCEMENT

Molins PLC, the international specialist engineering company, announces its results for the year ended 31 December 2002.

                                                                             2002           2001*         Change
Turnover                                                                  £106.0m         £111.3m          (5)%
Operating profit (before goodwill)                                         £13.5m           £9.4m           44%
Profit before tax (after goodwill)                                         £12.7m           £8.2m           55%
Profit after tax                                                            £8.6m           £5.5m           56%
Underlying earnings per share                                              49.6p           31.2p            59%
Basic earnings per share                                                   46.8p           29.1p            61%
Dividend per share                                                         11.0p            7.5p            47%



* Restated for FRS 19 Deferred tax

Highlights

•        Operating profit increased by 44% from £9.4m to £13.5m

•        Arista Laboratories in USA and UK acquired for £4.2m

•        Packaging Machinery returned to profitability

•        Growth in underlying earnings per share from 31.2p to 49.6p

•        Final dividend increased from 5.0p to 7.0p



Peter Byrom, Chairman, commented:


'2002 was another successful year which benefited from a return to profit in our
Packaging Machinery business and a strong contribution from our acquisitions.



The continued investment in the Tobacco Machinery businesses and the focus on
operational efficiencies have positioned the division well for 2003.  Order
books are higher than at this time last year and we expect that business levels
will grow as a result.  The market outlook for Packaging Machinery is less
certain, but we remain confident in the ability of our businesses to perform
comparatively well in this difficult market.



We maintain a strong balance sheet and remain committed to further investment in
all parts of our business.  We believe that the Company will continue its
progress through 2003.'





Enquiries:          Molins PLC                      Tel: [phone]

                    Peter Byrom, Chairman

                    David Cowen, Group Finance Director


Issued by:          Citigate Dewe Rogerson          Tel: [phone]

                    Margaret George

CHAIRMAN'S STATEMENT

I am pleased to report another successful year in 2002.  Operating profit,
before goodwill amortisation, increased by 44% to £13.5m from £9.4m.  Underlying
earnings per share (after adjusting for goodwill amortisation) grew by 59% to
49.6p from 31.2p.  Tobacco Machinery delivered a strong profit performance on
slightly lower sales.  Packaging Machinery performed satisfactorily in difficult
markets and returned to profit in the year on broadly similar sales.  Arista
Laboratories Inc, acquired in February 2002, made a positive contribution to
profits.



The improvement in the operational efficiency within the Tobacco Machinery
division, including greater use of lower cost production facilities, and
enhanced service levels led to maintained high levels of profit margins, despite
lower sales.  Sales of original equipment in 2002 were comparable to those of
2001 while sales of rebuilt machines and spare parts were lower.  Our ability to
work to shorter lead times allowed customers to reduce stock levels and this,
together with severe currency restrictions affecting some customers' ordering
ability, led to the lower spare parts sales.  The division's focus on product
development has contributed to a considerably stronger order book at the end of
2002 than at the same time in 2001.



Cerulean has continued an investment programme to extend its range of test
smoking machines and to develop a new product range of quality test instruments,
to complement the existing QTM range.  Sales were lower in the first half of the
year, but recovered in the second half and, with the launch of the enhanced
smoking machines and the progressive introduction of the full range of new
equipment, sales are expected to improve in 2003.



Purchased in February 2002, Arista Laboratories performed strongly with sales of
£3.4m contributing £1.1m to operating profit.  The business provides fully
independent smoke constituent analytical services for the growing industrial and
regulatory requirements for the testing of cigarettes and filters.  Arista,
based in Richmond, Virginia, serves most of the major cigarette manufacturers
and a growing number of regulatory bodies.



We were pleased to announce in December 2002 the formation of Arista
Laboratories Europe, following the acquisition in the UK of the smoke
constituent analytical business of LGC Ltd (the Laboratory of the Government
Chemist).  This facility has become the European base for Arista and is the UK
Government's chosen supplier of smoke analysis services.  Together the two
businesses provide a global service to the industry.



Despite continued difficult markets, the Packaging Machinery businesses have
improved profitability during 2002.  Operating profit was £1.3m, compared with a
loss of £1.7m in 2001, on similar sales.  This reflects success in reducing the
cost base of the division and also in improving project delivery and contract
performance.  As expected, the benefits of this action increased as the year
progressed.  However, the market remains difficult and we experienced a
disappointing level of order intake in the fourth quarter of the year.  The
order book at the end of 2002, for delivery in 2003, is lower than at the same
time last year and we will remain responsive to changes in the overall outlook.



We are well placed to continue to participate in the consolidation of machinery
suppliers in this diversified sector and in 2002 we assessed a number of
packaging machinery businesses for possible acquisition.  We did not conclude a
transaction in the year as no potential acquisition could be made on terms that
we believed to be in the best interests of shareholders.



Property

We announced a year ago that we were making available for development 17 acres
of our Saunderton site, identified as being surplus to the longer term
requirements of the Tobacco Machinery business.  We believe that the maximum
potential value is unlikely to be realised in the present uncertain economic
climate.  However, we will continue to assess various options.  In the meantime
rental values and demand for short-term lettings are promising and the current
lease of a considerable proportion of the surplus buildings makes a satisfactory
contribution.



Dividend

The Board has recommended an increased final dividend of 7.0p (2001: 5.0p) per
share making a total of 11.0p (2001: 7.5p) for the year, an increase of 47%.
The total dividend is covered more than four times by basic earnings per share.



Outlook

The continued investment in the Tobacco Machinery businesses and the focus on
operational efficiencies have positioned the division well for 2003.  Order
books are higher than at this time last year and we expect that business levels
will grow as a result.  The market outlook for Packaging Machinery is less
certain, but we remain confident in the ability of our businesses to perform
comparatively well in this difficult market.



We maintain a strong balance sheet and remain committed to further investment in
all parts of our business.  We believe that the Company will continue its
progress through 2003.



Peter Byrom, Chairman - 12 February 2003


OPERATING REVIEW

TOBACCO MACHINERY

The division improved its operating profit, before goodwill amortisation, to
£9.2m from £8.5m in the previous year, an increase of 8%.  The increase reflects
the strong contribution from Arista Laboratories, acquired in February 2002, and
was achieved despite lower sales of £65.2m, compared with £69.4m in 2001.



The division services customers in two main areas: through the design and
manufacture of specialist tobacco machinery and related support; and through its
scientific services businesses, with the provision of quality control
instruments and smoke constituent testing.



Sales in the machinery businesses were 11% lower compared with 2001.  Rebuilt
machinery sales were down against a particularly strong performance in 2001,
which was not repeated.  Destocking by customers, as a result of our permanent
supply capability and our enhanced service and delivery performance, affected
sales of spare parts.  Several customers also experienced local currency
restrictions, which led to the deferral of some orders.



We have two major ranges of cigarette making machines, Passim and MK9.  During
the last eighteen months over 30 new performance kits have been introduced for
the Passim range of makers.  Significant time and resource has been invested in
cigarette tobacco rod processing to improve yield and enhance quality.  Passim
is now firmly established as the maker of the highest quality cigarettes and is
also the most economic and productive single track maker in the industry.
Customers are showing an increasing interest in this range.  We are now
developing our logistics programme to shorten lead times between order and
delivery which will increase inventories but enable us to be more responsive to
customer demand.



In February 2002 we announced the launch of an upgrade available for all MK9
making machines, increasing the speed of the machine from 5,000 to 6,000
cigarettes per minute.  We offer a complete range of performance packages and
rebuild options for MK9 machines to take account of the condition of the
original machine and the requirements and resources of the customer.  This year
we will also be building new machines to meet the level of demand for MK9-6Ks.
We expect order levels to increase as we continue to demonstrate the MK9-6Ks'
superior performance.



We remain pre-eminent in cigarette handling.  In the second half of the year we
launched a new version of our market-leading Concord cigarette handling system.
This allows handling of cigarettes and filters in the reservoir on a 'first-in,
first-out' basis.  An upgraded version of the Pegasus filter distribution system
was also launched, further enhancing its status as the highest performing system
on the market.



We have also improved the performance of our filter-making machine, the PM5N,
incorporating new control systems and other features designed to optimise the
yield from the primary filter material.



Whilst our range of machinery does not encompass twin track cigarette making
machines, the efficiency and versatility of the single track machinery compares
favourably with twin track cigarette makers.  In the majority of cases the
economics favour the Molins machines.  The developments within the original
equipment range of products have helped to reposition Molins at the forefront of
tobacco machinery suppliers.



Molins is well placed to compete effectively for the available business although
market demand remains patchy, given excess in the production capacity of
cigarette manufacturers overall.  Order levels for original equipment were
particularly strong in the second half of 2002, resulting in a significant
increase in the order book for 2003 delivery.  This helps to confirm our belief
that sales of original equipment should steadily increase.



We continue to enhance our service offerings and see this as an important part
of our development.



The division's main operation at Saunderton maintained its focus on the
improvement of logistics and manufacturing.  Efficiency levels in the machining
facility at Saunderton further improved in the year, as did delivery lead times
of spare parts.



Molins sro, based in Plzen, Czech Republic, now employs 130 people and has
continued to develop its supply capability.  It has increased the production of
spare parts for the rest of the Molins organisation by 75% compared with 2001.
Manufacturing capacity continues to expand, by improving efficiency levels and
through capital investment.



Molins do Brasil also had a good year, particularly with sales of rebuilt
machines which increased against the previous year.  The level of output of
parts to the UK for onward sale was increased and Molins do Brasil is well
positioned to continue this trend in 2003.  Its spares and service centre in
Paraguay has established itself in its market.



Molins Richmond had a strong year, building on the growth of the previous year.
Demand for original equipment, largely from the emerging North American
cigarette manufacturers, has been good and the order book for machine deliveries
into 2003 is considerably higher than at this time last year.



Singapore based Molins Far East, which provides the Far East region with spare
parts and service, performed well in difficult market conditions.  Overall,
sales were a little lower, reflecting the strong competitive environment in the
region, but profit margins were maintained.



Molmac, the UK based centre for rebuild operations, had a good year, despite
delivering lower sales than in 2001.  The particularly large orders seen in 2001
were not repeated, but the general business levels were good, fuelled to a large
degree by North American demand.



Activity levels in our Chinese joint venture, based in Kunming, Yunnan Province,
have been disappointing and there was no further progress in levels of sales and
profitability.



Scientific services

Cerulean's performance was impacted by a number of initiatives undertaken during
the year to develop the long-term potential of the business.  This restricted
its immediate progress and sales were 10% lower than in 2001.  Cerulean is
developing a new range of quality test instruments to sample on a non-intrusive
basis on-line, in production, the physical parameters of cigarettes and filters.
  The new range will complement the existing QTM range of instruments and is
planned to be launched shortly.



Cerulean's new instruments range is a result of leading edge research and
development in a highly innovative and technology led business.  It reinforces
Cerulean's position as the leading supplier of analytical equipment to the
tobacco industry.  This programme has caused some delays in the normal ordering
pattern of the business.  We expect uptake of the new product range to be
gradual, as customers analyse its benefits.



Sales of smoking machines were flat over the year as customers evaluated the new
ASM 500 range and awaited acceptance by recognised regulatory authorities.
Comparison of output data between the benchmark ASM 400 range of machines and
the new ASM 500 range was important and time was spent in agreeing calibration
methodologies.



Cerulean also reorganised its sales and service operations in China and the Far
East in 2002.  New offices were opened in Kuala Lumpur, Shanghai and Kunming,
while the Hong Kong office was closed.  As a result Cerulean was able to provide
a more responsive service to customers and these changes contributed to the
improved second half performance.



Despite Cerulean's full year sales being lower than the previous year, sales in
the second half of 2002 were at the same level as in the comparable period in
2001.  The order book at the end of 2002 was substantially higher than at the
same time last year.



Arista Laboratories, an ISO 17025 accredited laboratory, based in Richmond,
Virginia, was purchased in February 2002.  Arista is a fully independent smoke
constituent analytical facility for the testing of cigarettes and filters.  It
provides services to most of the major cigarette manufacturers and a growing
number of regulatory bodies.  It performed strongly in 2002, generating sales of
£3.4m and profit of £1.1m during the period of Molins' ownership.  Arista has
invested during the year in further laboratory equipment and testing
capabilities.



In December 2002 we formed Arista Laboratories Europe following the acquisition
of the smoke constituent analytical business of LGC Ltd.  Arista Laboratories
Europe is a UKAS and ISO 17025 accredited laboratory and is the UK Government's
chosen supplier for cigarette and smoke testing.



Overall, the division continues to move forward positively.  The operational
improvements achieved over the last three years, together with the investments
made in product development and in acquisitions, have put Tobacco Machinery in a
strong position to maintain its momentum.



PACKAGING MACHINERY

The division had a much improved year, returning an operating profit of £1.3m
compared with a loss of £1.7m in 2001.  Markets remain difficult and the
improved profit performance was achieved on sales of £40.8m, compared with
£41.9m in 2001.



The benefits of the reorganisation carried out in most of the businesses during
2001 were seen in 2002.  From the significant loss in the first half of 2001 the
performance recovered to a break even position in the second half of that year,
returning to profit in 2002.  Continued focus on effective project management
helped to ensure profitable delivery of the major contracts.



The broad range of products supplied by the businesses was demonstrated at the
two major trade shows in the year.  A new cartoner, the Chinook, was launched at
the Interpack trade show in Dusseldorf in April 2002.  Langen introduced the
machine to the North American market at the PackExpo exhibition in Chicago in
November 2002.  The Chinook is a modern design stainless steel machine,
fulfilling the highest level of hygienic requirements, and provides the division
with a cartoning solution for all parts of the food industry.  Its flexibility
and ease of operation, aligned with Langen's and Langenpac's traditional
capabilities in product collating and high speed handling, provide a strong
opportunity to make further inroads in this sector.



Overall demand remains erratic, with many projects being discussed but without
orders being placed.  The demand cycle follows the macroeconomic conditions
closely and it remains difficult at this stage to forecast when activity will
improve.



On similar sales levels, Langen's profitability was higher.  During the year it
concentrated on developing its service and aftermarket business, as well as its
main cartoning products and systems integration capabilities.  An aftermarket
business unit was formed to target activities to the specific needs of its
customer base.  Sales of the improved low cost B1 cartoner, one of the leading
industry standard machines, have increased.  Langen has initiated a rental
programme for these machines, aimed specifically at co-packer customers whose
operations need to be particularly flexible.



Langenpac, based in The Netherlands, delivered an encouraging increase in sales
and profitability and entered 2003 with a larger order book than it had at the
same time last year.  Its main markets continue to be in Western Europe,
particularly the Benelux region, France and Germany.  It has developed a
particular niche in the cartoning and case packing of complex shaped and high
volume products.



The combined business of Sandiacre and Rose Forgrove, based in Nottingham, UK,
delivered an improved performance in the year.  The systems and manufacturing
integration of Rose Forgrove into the Nottingham facility was completed in the
early part of the year and the subsequent increased operational efficiency
helped to raise profit levels.  Sales of Sandiacre's vertical form, fill and
seal bagging machines and Rose Forgrove's horizontal flow-wrapping machines were
at similar levels to 2001.  Specific marketing campaigns have focused on the
packaging of fresh vegetables, resulting in an increased share in that market,
and on coffee, in conjunction with Molins ITCM.



Sandiacre has the most complete range of vertical bagging equipment in the
market and continues to invest in product development.  It is extending its
range of reciprocating bagging machines, the first of which was launched in the
second half of 2001 and contributed well to sales levels in 2002.  Similarly,
Rose Forgrove's programme of product development has been maintained on all
three of its major products, the high end Integra, mid-range Minerva and lower
end Merlin.


Molins ITCM, based in Coventry, UK, experienced a decline in sales of its tea
bag machines in 2002.  However, its strategy of widening its customer base
helped to compensate for much of this reduction.  The business is now more
broadly spread, with contracts in the pharmaceutical, personal products,
personal care and cleaning industries, as well as in food and beverages.  A
machine to manufacture innovative coffee bags was sold during the year, launched
under the name Cafusa.  The ITCM designed coffee bag was first launched by
Sainsbury's in October 2002, with good media coverage and has gradually been
successfully introduced across all Sainsbury's major stores.



Sales of Cerulean's range of packaging machinery, including tube and filter
packing machinery, declined a little in the year but contributed to the profit
of the division.



We assessed a number of packaging machinery businesses for possible acquisition,
with the aim of further extending our range of products and building on existing
distribution, sales channels and infrastructure.  So far we have been unable to
conclude an acquisition on terms that we believe to be in the best interests of
our shareholders.  However, we will continue to assess potential opportunities
to participate in the consolidation of machinery suppliers.



The actions taken to reduce the capacity and cost base in the division and to
extend the product range resulted in a much improved overall performance.  Sales
levels were marginally down on 2001 reflecting continuing difficult market
conditions, but the businesses are now in a much stronger position.  Order
activity remains erratic, particularly in North America, and the division
entered 2003 with a lower order book than at this time last year.  We remain
vigilant in assessing activity and cost levels in the businesses, whilst
investment in product and market development is maintained.






FINANCIAL REVIEW

The Group has seen continued growth in earnings, following increased profits
from the Tobacco Machinery division, through the purchase of Arista
Laboratories, and the return to profitability of the Packaging Machinery
division.  Underlying earnings per share increased by 59% to 49.6p and profit
before tax increased by 55% from £8.2m to £12.7m.



Operating results

The trading performance of the Group is discussed in the Operating review.  In
summary, total turnover fell by 5% to £106.0m, with Tobacco Machinery sales
falling by 6% to £65.2m and Packaging Machinery sales only slightly lower at
£40.8m against £41.9m in 2001.  The operating profit for the year was £13.5m
before a goodwill charge of £0.5m (2001: £9.4m before goodwill of £0.4m).  The
operating profit of Tobacco Machinery before goodwill was £9.2m (2001: £8.5m),
which includes a contribution to profit of £1.1m by Arista Laboratories,
purchased in 2002.  The operating profit of Packaging Machinery was £1.3m (2001:
£1.7m loss).  A net pension credit contributed a further £3.0m (2001: £2.6m) to
operating profit.



Acquisitions

The Group has continued its investment in service businesses that complement the
existing Tobacco Machinery businesses.  In February 2002, Molins acquired Arista
Laboratories Inc, an independent smoke constituent analytical laboratory based
in Richmond, Virginia, for a total consideration of £3.3m.  This business
performed strongly in the year, with turnover of £3.4m and operating profit of
£1.1m.  The Group further strengthened its presence in this market in December
2002 by acquiring for £0.9m the smoke constituent analytical business of LGC
Ltd, which has been renamed Arista Laboratories Europe.



Interest and taxation

Net interest expense in 2002 was £0.3m (2001: £0.8m) reflecting lower average
levels of debt in the year and the lower cost of borrowings.  During the year
the Group implemented FRS 19 Deferred tax, which requires full provision for
future tax liabilities and prior year results have been restated accordingly.
The 2002 Group total taxation charge was £4.1m (2001: £2.7m), comprising £2.1m
of current tax (2001: £1.2m) and £2.0m of deferred tax (2001: £1.5m).  The
overall effective rate of tax was 32% (2001: 33%).  As expected, the brought
forward tax losses in the UK were fully utilised in 2002 and the Company paid
£1.5m of UK corporation tax in the year.  The deferred tax balance at 31
December 2002 was £6.4m (2001: £4.5m) and comprises mainly the future tax
liability on the pension prepayment.



Earnings per share

Underlying earnings per share, before goodwill amortisation, was 49.6p (2001:
31.2p), an increase of 59%.  Basic earnings per share was 46.8p (2001: 29.1p)
and diluted earnings per share was 42.9p (2001: 27.6p).



Dividend

The Board recommends the payment of an increased final dividend of 7.0p (2001:
5.0p), payable on 7 May 2003, which together with the interim dividend of 4.0p
makes a total for the year of 11.0p (2001: 7.5p), an increase of 47%.  The total
dividend is covered more than four times by basic earnings per share.



Cash, treasury and funding activities

Group net debt at the end of 2002 amounted to £4.7m (2001: £2.7m).  Net cash
inflow from operating activities was £7.5m (2001: £14.3m).  Working capital
increased in 2002 by £5.6m.  The primary causes were an increase in inventory of
£2.0m, reflecting higher levels supported by an increased order book in Tobacco
Machinery, and a decrease in customer deposits of £1.4m, primarily as a result
of a lower order book in the Packaging Machinery division, which tends to be
supported by relatively high levels of deposits.  There was also an increase in
the working capital of Arista Laboratories Inc of £0.5m to support its business
expansion.



Operating cash inflow was offset by capital expenditure of £1.4m, net payments
for the acquisitions of the Arista Laboratories businesses of £3.7m, with a
further £0.5m paid in January 2003 in respect of the US business, interest paid
of £0.5m and taxation of £2.4m.  A loan repayment of £0.2m was received from the
Kunming joint venture and £0.2m was received from the issue of new shares under
existing employee share option plans.  Dividends of £1.7m were paid in the year.



There were no significant changes during the year in the financial risks to
which the business is exposed and the Group treasury policy has remained
unchanged.  The Group does not trade in financial instruments and enters into
derivatives (principally forward foreign exchange contracts) solely for the
purpose of minimising currency exposures on sales or purchases not in the
functional currencies of its various operations.



The Group has maintained bank facilities to meet its short-term funding
requirements.  Committed facilities are subject to covenants covering net worth,
gearing and interest cover.  Any draw-down against facilities is as an
individual contract and the interest rate margin is fixed for the duration of
the contract based on prevailing bank base rates.  The Group currently has
little borrowing at fixed interest rates.  Short-term overdrafts and borrowings
are utilised around the Group to meet local cash requirements.  These are
typically denominated in local currencies.  Foreign currency borrowings are used
to hedge investments in overseas subsidiaries where appropriate.



Reporting standards

Given the Accounting Standard Board's announcement during the year on changes to
its requirements for the adoption of FRS 17 Retirement benefits, the Group has
continued to account for pensions under SSAP 24 Accounting for pension costs.
The Group's published accounts for the year ended 31 December 2002 will set out
the additional disclosures required under the transitional arrangements for FRS
17.  This will show for the first time the profit and loss impact of accounting
for pension costs under this standard had it been adopted.  In summary, it would
have resulted in a net pension credit of £4.8m before tax, compared with the
reported net credit of £3.0m.



FRS 19 Deferred tax was adopted during the year and prior year adjustments made
to the 2001 deferred tax charge and balances.  The impact of this required
change in accounting policy has been to reduce the value of net assets at 31
December 2001 by £4.2m to £57.2m.



Pension valuations

The triennial valuations of the UK Pension Fund and Scheme (now one fund), that
were carried out as at 30 June 2000 and adopted by the Company for the 2001
financial year, form the basis for pension accounting under SSAP 24.  When the
Fund and the Scheme were merged in 2000 the actuary reported that the combined
fund was adequately funded.  The next triennial valuation for funding purposes
will be undertaken as at 30 June 2003.



With the volatility in capital markets and the impact of small changes in
assumptions on the value of the liabilities of the pension fund, it is likely
that the 30 June 2003 valuation will show a significantly different result to
that of the 30 June 2000 valuation.  The 2000 valuation has been used as the
basis of SSAP 24 accounting for 2001 and 2002 and ordinarily would be used as
the basis for 2003 pension accounting.  If the result of the valuation is
significantly different then we may adopt the new valuation for 2003 which would
impact the accounting for pension costs.



In common with many similar schemes, the value of the UK combined fund's assets
has fallen significantly in 2002.  Using an FRS 17 valuation basis the deficit
in the market value of the scheme's assets compared to the present value of the
scheme's liabilities at 31 December 2002 was £7.3m, before deferred tax, which
compares to a surplus of £48.8m at 31 December 2001.  Following advice from
actuaries in 2001, the trustee embarked on a partial move from equities to other
asset types, but this move has only partly mitigated the impact of falling
equity markets.  The US scheme remains in surplus, at £3.3m, and its assets are
fully invested in non-equities.



Shareholders' funds

Group shareholders' funds at 31 December 2002 were £61.6m (2001: £57.2m).
Profit in the year of £8.6m was before dividends of £2.0m and adverse exchange
movements on the net assets of overseas operations of £2.4m.



David Cowen, Group Finance Director - 12 February 2003




Group profit and loss account for the year ended 31 December



                                                                                                          2001
                                                                                       2002          (restated)
                                                                     Notes               £m                 £m

Turnover
 - existing businesses                                                                102.6              111.3
 - acquisitions                                                                         3.4                  -

Turnover - continuing operations                                     4 & 5            106.0              111.3
Cost of sales                                                                         (68.2)             (75.8)

Gross profit                                                                           37.8               35.5
Distribution costs                                                                     (8.7)              (9.7)
Administrative expenses                                                               (16.1)             (16.8)


Operating profit
 - existing businesses                                                                 11.9                9.0
 - acquisitions                                                                         1.1                  -

Operating profit - continuing operations                             4 & 6             13.0                9.0

Net interest payable                                                                   (0.3)              (0.8)

Profit on ordinary activities before taxation                                          12.7                8.2

Taxation                                                               3               (4.1)              (2.7)

Profit for the financial year                                                           8.6                5.5

Dividends (including non-equity)                                                       (2.0)              (1.4)

Retained profit for the year                                                            6.6                4.1


Underlying earnings per ordinary share                                                  49.6p              31.2p
Basic earnings per ordinary share                                                       46.8p              29.1p
Diluted earnings per ordinary share                                                     42.9p              27.6p

Interim dividend paid October                                                            4.0p               2.5p
Proposed final dividend                                                                  7.0p               5.0p

Total dividend                                                                          11.0p               7.5p







The calculations of earnings per share are based on the following weighted
average number of shares :

Underlying and basic - 18,147,554  (2001: 18,577,664).  Diluted - 19,820,314
(2001: 19,555,046).




Group balance sheet as at 31 December


                                                                                                          2001
                                                                                       2002          (restated)
                                                                    Notes                £m                 £m
Fixed assets
Intangible assets - goodwill                                                           10.7                8.3
Tangible assets                                                                        19.9               20.9
Investments                                                                             4.0                3.9

                                                                                       34.6               33.1
Current assets
Stocks                                                                                 24.0               23.1
Debtors - due within one year                                                          21.2               22.7
Debtors - due after more than one year                                6                26.2               22.1
Cash at bank and in hand                                                                2.1                2.4

                                                                                       73.5               70.3
Creditors - amounts falling due within one year
Borrowings                                                                             (1.7)              (3.0)
Other creditors                                                                       (30.1)             (32.5)
Proposed dividend                                                                      (1.3)              (0.9)

                                                                                      (33.1)             (36.4)

Net current assets                                                                     40.4               33.9


Total assets less current liabilities                                                  75.0               67.0

Creditors - amounts falling due after more than one year
Borrowings                                                                             (5.1)              (2.1)

Provisions for liabilities and charges                                3                (8.3)              (7.7)

Net assets                                                                             61.6               57.2

Capital and reserves
Called up share capital                                                                 5.9                5.9
Share premium account                                                                  25.8               25.6
Revaluation reserve                                                                     5.6                5.7
Capital redemption reserve                                                              3.9                3.9
Profit and loss account                                                                20.4               16.1

Shareholders' funds (including non-equity interests)                                   61.6               57.2











Group cash flow statement for the year ended 31 December

                                                                                        2002              2001
                                                                    Notes                 £m                £m

Net cash inflow from operating activities                             7                  7.5              14.3

Returns on investments and servicing of finance                                         (0.5)             (0.7)

Taxation                                                                                (2.4)             (0.8)
Capital expenditure                                                                     (1.4)             (2.1)
Acquisitions and disposals                                                              (3.3)             (1.1)
Equity dividends paid                                                                   (1.7)             (1.3)

Net cash (outflow)/inflow before management of
  liquid resources and financing                                                        (1.8)              8.3

Management of liquid resources                                        8                    -               0.1
Financing                                                             9                  2.9              (8.6)

Increase/(decrease) in cash in the year                                                  1.1              (0.2)






Reconciliation of net cash flow to movement in net debt for the year ended 31 December


                                                                                        2002              2001
                                                                                          £m                £m

Increase/(decrease) in cash in the year                                                  1.1              (0.2)

Cash inflow from movement in liquid resources                                              -              (0.1)
Cash (inflow)/outflow from (increase)/decrease in debt and
lease financing                                                                         (3.3)              6.6

Change in net debt resulting from cash flows                                            (2.2)              6.3
Finance leases acquired with business                                                   (0.1)                -
Translation movements                                                                    0.3              (0.3)

Movement in net debt in the year                                                        (2.0)              6.0
Net debt at 1 January                                                                   (2.7)             (8.7)

Net debt at 31 December                                                                 (4.7)             (2.7)









Statement of total recognised gains and losses for the year ended 31 December


                                                                                                          2001
                                                                                        2002          (restated)
                                                                    Note                  £m                £m
Profit for the year                                                                      8.6               5.5
Currency translation movements arising on foreign
  currency net investments                                                              (2.4)             (0.4)

Total recognised gains and losses for the year                                           6.2               5.1

Prior period adjustment (FRS 19 Deferred tax)                         3                 (4.2)                -

Total recognised gains and losses since the last Annual
  Report and Accounts                                                                    2.0               5.1






Reconciliation of movements in shareholders' funds


                                                                                                          2001
                                                                                        2002          (restated)
                                                                     Note                 £m                £m
Opening shareholders' funds - as reported                                               61.4              58.1
Prior period adjustment (FRS 19 Deferred tax)                          3                (4.2)             (2.6)

Opening shareholders' funds - as restated                                               57.2              55.5

Profit for the year                                                                      8.6               5.5
Dividends                                                                               (2.0)             (1.4)
Currency translation movements arising on foreign
  currency net investments                                                              (2.4)             (0.4)
Issue of new shares                                                                      0.2                 -
Purchase of own shares for cancellation                                                    -              (2.0)

Net increase in shareholders' funds                                                      4.4               1.7

Closing shareholders' funds                                                             61.6              57.2





Notes to preliminary announcement



1.         The Group's accounts have been prepared in accordance with applicable
accounting and financial reporting standards.





2.         The financial information set out above does not constitute the
Group's statutory accounts for the years ended 31 December 2002 and 2001 but is
extracted therefrom.  The Group's statutory accounts for 2002 will be sent to
shareholders by 10 March 2003.  The Group's statutory accounts for 2002 and 2001
each received an unqualified auditors' report.





3.         The adoption of FRS 19 Deferred tax has required changes in the
method of accounting for deferred tax assets and liabilities.  The results for
the year ended 31 December 2001 have been restated accordingly.  The effect has
been to increase deferred tax liabilities and decrease retained reserves by
£4.2m and to increase the tax charge by £1.5m in 2001.





4.         Segmental analysis for the year ended 31 December




                                  Turnover           Operating profit/(loss)           Net assets

                                                                                               2001
                               2002   2001              2002         2001         2002    (restated)
                                 £m   £m                  £m           £m           £m           £m
By activity :
Continuing operations

Tobacco Machinery               

   - existing businesses       61.8   69.4               7.6          8.1         31.9         31.1

   - acquisitions               3.4   -                  1.1            -          1.4            -

Tobacco Machinery              65.2   69.4               8.7          8.1         33.3         31.1

Packaging Machinery            40.8   41.9               1.3         (1.7)         8.3          6.9

                              106.0  111.3

Net pension credit/
Prepayment                                               3.0          2.6         24.7         21.9

                                                        13.0          9.0         66.3         59.9

Net debt                                                                          (4.7)        (2.7)

                                                                                  61.6         57.2






5.              Turnover by geographical destination of goods for the year ended 31 December


                                                 2002           2002           2001           2001
                                                   £m              %             £m              %

United Kingdom                                   16.9             16           17.2             15
Continental Europe                               17.7             17           21.4             19
North America                                    37.2             35           32.0             29
Asia                                             22.8             21           25.4             23
Rest of the world                                11.4             11           15.3             14

                                                106.0            100          111.3            100




6.         Operating profit includes a net pension credit of £3.0m (2001:
£2.6m).  Debtors due after more than one year includes a pension fund prepayment
of £24.7m (2001: £21.9m).





7.         Reconciliation of operating profit to net cash flow from operating activities


                                                                                     2002            2001
                                                                                       £m              £m

Operating profit                                                                     13.0             9.0

Amortisation of goodwill                                                              0.5             0.4

Depreciation                                                                          2.3             2.7

Other movements                                                                       0.6             0.8

Cash movements on exceptional restructuring and rationalisation
  provisions                                                                         (0.3)           (0.8)

Working capital movements :
   - stocks                                                                          (2.0)            4.0
   - debtors                                                                         (0.8)            0.4
   - creditors and other provisions                                                  (2.8)            0.5
   - pension fund prepayment                                                         (3.0)           (2.7)

Net cash inflow from operating activities                                             7.5            14.3



Cash flows from exceptional items excluding tax effect                               (0.3)           (0.8)
Other cash flows                                                                      7.8            15.1

Net cash inflow from operating activities                                             7.5            14.3






8.         Management of liquid resources



Management of liquid resources includes movements in cash deposits which do not
fall within the definition of cash for the purposes of FRS 1 Cash flow
statements (revised).





9.         Financing


                                                                                     2002            2001
                                                                                       £m              £m

Issue of new shares                                                                   0.2               -
Purchase of own shares for cancellation                                                 -            (2.0)
Purchase of own shares for long-term incentive plan                                  (0.6)              -
Debt due after more than one year: increase/(decrease) in borrowings                  3.4            (6.6)
Capital element of finance lease rental payments                                     (0.1)              -

                                                                                      2.9            (8.6)





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