Interim Results

Millfield Group PLC
05 December 2003

Date:                            05 December 2003

On behalf of:                 Millfield Group plc ("Millfield")

Embargoed until:           0700hrs



Millfield Group plc

Interim Results 2003



Millfield Group plc, a leading independent financial services advisory group,
today announces its interim results for the six months ended 30 September 2003.
The main highlights are:



•   Turnover up 65% to £23.5m (2002: £14.2m)

•   Losses after tax reduced to £5.65m (2002: £5.92m)

•   Number of advisers and accounting professionals grown to 640 (2002: 450)

•   Operating losses, before goodwill amortisation and results relating to 
    Lifetime joint venture, reduced to £4.4m (2002: £5.6m)

•   Turnover exceeded £5m in September, resulting in a small operating profit

•   Completion of placing and open offer to raise £8.7m, after expenses 
    of £1.4m.

•   Group cash balances of £8.2m with a further £3.3m in Lifetime

•   Transformational deal for Lifetime - £10m investment finalised by 
    Norwich Union

•   Delivery of economic gain, for Millfield, via investment in Lifetime


Commenting on the interim results, Richard Mansell-Jones, Chairman of Millfield,
said:

"Major progress has been made in the period, particularly in achieving funding
for Lifetime and in positioning it as an industry vehicle for the future.

"Achieving a small profit in September was an important milestone for the Group.
Our next objective is to deliver consistent profitability at operating level.

"We have built a strongly based Group and I am confident that, with the quality
of the people we have and are attracting, we can continue to deliver our plans."


Enquiries:

Millfield Group plc                              www.millfield-partnership.co.uk
Paul Tebbutt, Chief Executive                              Tel: [phone]
                                                           Mob: [phone]
Harry Roome, Finance & Operations Director                 Tel: [phone]
                                                           Mob: [phone]
Collins Stewart Limited                                    Tel: [phone]
Simon Atkinson/Stephen Keys

Redleaf Communications                                     Tel: [phone]
Emma Kane/Nick Lambert                                     Mob: [phone]


Notes to Editors:



•  Millfield Group plc was floated on the Alternative Investment Market of the 
   London Stock Exchange in March 2001.

•  Millfield is a national independent financial advisory company in the UK, 
   offering truly independent advice, primarily in the pensions, life 
   insurance, investment and mortgage sectors, as well as long-term care
   provision, personal wealth management and the corporate financial planning
   arena.  Millfield also has specialist divisions dealing with offshore
   investment, insurance and employee benefits.


Chairman's Statement

In just two and a half years, Millfield has created a national independent
advisory organisation offering truly independent advice to both individuals and
businesses across the length and breadth of the UK.  This has been achieved in a
period of ongoing uncertainty about regulatory changes in the financial services
industry, continuing volatility in global stockmarkets, and low levels of
confidence by businesses and individuals in the UK. However, recent improvements
in financial markets, low interest rates and inflation are starting to increase
confidence and the Group's diverse range of businesses and specialist services
enables us to react effectively to these changes.

During the period, Millfield has continued to grow the number of its high
calibre advisers and employees and to develop their businesses, utilising the
investment that has been made, since our flotation, in the Group's
infrastructure.


Results


Results for the first half of the year show turnover up 65% to £23.5m (2002:
£14.2m) and losses after tax reduced to £5.65m (2002: £5.92m).

•   Operating losses, before goodwill amortisation and results relating to our 
    Lifetime joint venture, were reduced to £4.4m (2002: £5.6m).  This reflects 
    the increase in turnover which was achieved through organic growth and 
    acquisitions made in the second half of last year, together with tight 
    control of costs which resulted in a 10% reduction in overheads in the 
    existing businesses.

•   September management accounts showed the achievement for the first time of 
    turnover exceeding £5m, resulting in a small operating profit in the month.  
    September is generally a strong seasonal month for us - nevertheless this is 
    an important milestone in the development of the Group, achieved in line 
    with the timing anticipated at the time of the flotation.

•   Changes in the corporate structure of our Lifetime joint venture have 
    resulted in a surplus of £0.8m which has been taken directly to reserves, 
    and more than offsets our share of the trading losses of the business 
    of £0.6m.


At 30 September, companies within the Group held £8.3m of cash balances with a
further £3.3m held by Lifetime.

On 9 July, we successfully completed a share issue through a placing with
institutional shareholders and an open offer to all shareholders to raise £8.7m,
after expenses of £1.4m.  The primary purpose of the issue was to provide
additional working capital for the Group, particularly to fund the increasing
pipeline debtor of business submitted to product providers awaiting issue, and
to support the business plans of Group companies.


Operating Companies

Millfield Partnership - creating value in a changing marketplace

This is Millfield's core business with 400 advisers in 19 locations, up from 347
a year ago with 16 locations.  This increase, together with some improvements in
productivity, has resulted in turnover of £16.4m, an increase of 39% from £11.8m
in the first half of last year.  Gross margin was 30.3%.

This business continues to develop satisfactorily.  Whilst productivity per
adviser during the recent economic uncertainty did drop below the levels we
anticipated, it has improved slightly in the first half of the year.  We remain
confident that the increasingly high calibre of our recruits, combined with the
marketing initiatives that we are implementing to support adviser activity, will
mean that this improvement will continue.


Millfield Associate Partnership - growing the firms

Results in the first half of the year in our Associate Partnership firms have
been most encouraging, with turnover of £3.5m, up from £1.3m last year.  A
number of these firms specialise in the mortgage and protection markets and they
have been particularly successful during this period.

We supported the establishment of Legacy Protect Limited which was launched in
September and we entered into agreements with Parker Group Financial Services
Limited, an existing firm with 9 advisers, on 10 September 2003.  Both of these
new firms utilise our stepped acquisition model, which allows Millfield to
participate in industry consolidation and secure additional firms and groups of
advisers led by vigorous entrepreneurs, with total consideration payable being
linked to proven value.

These new firms bring the total in Millfield Associate Partnership to12, 10 of
which have stepped acquisition agreements in place.  There are now 185 advisers
in these firms.

Millfield Management Services - providing the infrastructure to support growth

Most of the operational infrastructure required by the core companies is now in
place. We are currently carrying out a major upgrade of our IT with the
installation, in the early part of next year, of a new host system using the
Swift package from Sirius Financial Solutions PLC. This will support significant
improvements in operational effectiveness and management information, providing
a platform for the next stage of growth.

Millfield Moncur Jackson - Innovative Employee Benefits solutions

We have now completed the earnout from the acquisition of this business
resulting in payment of the maximum amount as the business met all its turnover
and profit targets.  We continue to develop our Employee Benefits proposition
which we believe is an area which will benefit from more IFA activity.

Simply Millfield - Online term assurance direct

We have now established the operating infrastructure of this business.
Advertising levels in the first half of the year have been low whilst we have
tested the proposition and positive results mean that these are now being
increased in the second half of the year.

RST Group Limited - broadening the client offering through complementary
financial services activities

RST has traded profitably through the first half of the year with a turnover of
£1.9m.

On 1 September RST acquired the Chartered Accountants and IFA firm Freeman Rich,
based in Preston. Total consideration is a maximum of £0.98m with initial
consideration of £0.39m having been paid in cash.  This acquisition brings RST
to a total of 16 offices in the north of England and Scotland with 126 staff,
including 40 accounting professionals and 13 IFAs.

Lifetime Group Limited

On 24 July, we announced that we had reached agreement in principle with Norwich
Union Life and Pensions Limited ("Norwich Union") for them to invest in and
become a full partner in developing our Lifetime joint venture.  As a result, we
converted our preference shares to ordinary shares and Lifetime issued 1,024,998
new ordinary 1p shares to Norwich Union for £2.0m.  Following these transactions
Millfield held 76.34% of the shares in Lifetime and Norwich Union held 7.41%.
These transactions have already delivered an economic gain in the value of
Millfield's share in the Joint Venture increasing by £0.8m and this increase in
the net assets has been included in the half year results as a movement on
reserves.

On 4 December 2003, the second stage of the agreement with Norwich Union was
concluded, resulting in a transformational deal for Millfield and the agreement
of a new business plan for the company.  Lifetime allotted a further 11,736,354
shares to Norwich Union for a consideration of £8.0m taking its shareholding to
49.9%.  Millfield retains a shareholding of 41.3% following these transactions.
The remaining 8.8% of the shares are held by the founders.  This transaction
will result in a further economic gain for Millfield, with a surplus in the
second half of the year of £1.4m, which will also be taken directly to reserves.

During the period, the company continued its work on developing the
infrastructure and systems required to deliver its online personal portfolio and
wealth management investment service.  It is now expected that the service will
be launched in the first half of the next calendar year, following regulatory
approval and live testing.  The new business plan developed in conjunction with
Norwich Union aims to deliver a service which will be used across the financial
services industry.  Millfield's share of losses from this activity during the
period was £0.6m.

Outlook

Millfield has continued to develop in line with its strategy and the plans we
set out at the time of our flotation and in subsequent announcements.  Major
progress has been made in the period, particularly in achieving funding for
Lifetime and in positioning it as an industry vehicle for the future.

Achieving a small operating profit in September was an important milestone for
the Group.  Our next objective is to deliver consistent profitability at the
operating level.

The economy and the investment markets have stabilised though there is still
considerable change to occur across the financial services market.  We have
built a strongly based Group and I am confident that, with the quality of the
people we have and are attracting, we will continue to deliver our plans.

Richard Mansell-Jones
Non-Executive Chairman
4 December 2003


Consolidated Profit and Loss Account

                                                                                  Year
                                                   Six months ended               ended
                                                      30 September              31 March

                                                      2003            2002            2003
                                               (Unaudited)     (Unaudited)       (Audited)
                                                     £'000           £'000           £'000

TURNOVER                                            23,489          14,175          31,343

Cost of Sales                                     (15,817)         (9,280)        (20,755)

Gross Profit                                         7,672           4,895          10,588

ADMINISTRATIVE EXPENSES

Goodwill amortisation                                (760)           (316)           (794)
Other                                             (12,081)        (10,484)        (21,986)
                                                  (12,841)        (10,800)        (22,780)

OPERATING LOSS                                     (5,169)         (5,905)        (12,192)

Share of operating loss
Joint venture                                        (561)           (190)           (481)
Associate                                              (7)               0               0

Interest receivable and similar income
Group                                                   87             190             378
Joint venture                                           11               4              16
Interest payable and similar charges                  (92)            (16)            (61)

LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION                                    (5,731)         (5,917)        (12,340)
Tax on loss on ordinary activities                       2               0            (21)

LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION                                     (5,729)         (5,917)        (12,361)

Equity minority interests                               83             (3)             145

LOSS FOR THE FINANCIAL PERIOD
ATTRIBUTABLE TO SHAREHOLDERS                       (5,646)         (5,920)        (12,216)

Deficit brought forward                           (20,481)         (8,265)         (8,265)

DEFICIT CARRIED FORWARD                           (26,127)        (14,185)        (20,481)

Loss per share                                     (7.64p)         (9.82p)        (18.25p)

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


Profit attributable to members of the              (5,646)         (5,920)        (12,216)
company
Surplus arising on issue of shares by joint            841               0               0
venture
Total recognised gains and losses for the          (4,805)         (5,920)        (12,216)
period






Consolidated Balance Sheet

                                                                     30 September                   31 March

                                                                     2003               2002              2003
                                                              (Unaudited)        (Unaudited)         (Audited)
                                                                    £'000              £'000             £'000

FIXED ASSETS
Intangible assets                                                  17,710             11,960            17,451
Tangible assets                                                     3,733              3,235             3,825
Investments                                                             0                 98                 0
Investments in joint venture:
    Share of gross assets                                           1,687              2,803             2,558
    Share of gross liabilities                                      (343)              (121)             (147)
    Goodwill arising on acquisition less amortisation               1,632                282               275
Investments in associate:
    Share of net liabilities                                          (7)                  0                 0
    Goodwill arising on acquisition less amortisation                   2                  0                 0
                                                                   24,414             18,257            23,962

CURRENT ASSETS
Stocks                                                                966                  0               706
Debtors                                                            15,643              9,026            12,099
Investments                                                           251                  0               251
Cash at bank and in hand                                            8,279             14,409             6,926
                                                                   25,139             23,435            19,982

CREDITORS: amounts falling due within one year                   (12,656)            (6,183)          (11,127)
NET CURRENT ASSETS                                                 12,483             17,252             8,855

TOTAL ASSETS LESS CURRENT LIABILITIES                              36,897             35,509            32,817

CREDITORS: amounts falling due after more than one year           (2,501)            (1,050)           (2,308)
                                                                   34,396             34,459            30,509

PROVISIONS FOR LIABILITIES AND CHARGES                            (1,491)              (856)           (1,440)

MINORITY INTERESTS
Equity minority interests                                            (90)                (3)             (173)

NET ASSETS                                                         32,815             33,600            28,896

CAPITAL AND RESERVES

Called-up share capital                                               159                123               124
Deferred consideration                                              1,634                325             1,656
Share premium account                                              44,599             35,628            35,888
Merger reserve                                                     11,709             11,709            11,709
Capital reserve                                                       841                  0                 0
Profit and loss account                                          (26,127)           (14,185)          (20,481)

EQUITY SHAREHOLDERS' FUNDS                                         32,815             33,600            28,896

These financial statements were approved by the Board of Directors on 4 December 2003.
Signed on behalf of the Board of Directors:



Richard Mansell-Jones            Harry Roome                Paul Tebbutt                           
                                 



Consolidated Cash Flow Statement
                                                                                                     Year
                                                                    Six months ended                ended
                                                                       30 September                31 March

                                                                      2003              2002             2003
                                                               (Unaudited)       (Unaudited)        (Audited)
                                                                     £'000             £'000            £'000

Operating loss                                                     (5,169)           (5,905)         (12,192)
Depreciation charge                                                    541               364              853
Increase in stocks                                                   (260)                 0             (94)
Goodwill amortisation charge                                           760               316              794
Increase in debtors                                                (3,544)           (1,385)          (1,381)
Increase/(decrease) in creditors                                     1,356             (173)            (579)
Increase in provisions                                                  51               104              587
Net cash outflow from operating activities                         (6,265)           (6,679)         (12,012)

Returns on investments and servicing of finance
Interest received                                                       87               190              378
Interest paid                                                         (92)              (16)             (61)
                                                                       (5)               174              317

Taxation

UK corporation tax paid                                                  3                 0                6

Capital expenditure and financial investment
Purchase of tangible fixed assets                                    (450)             (700)          (1,437)
Sale of tangible fixed assets                                            0                 0               15
                                                                     (450)             (700)          (1,422)

Acquisitions and disposals
Purchase of subsidiary undertakings                                  (425)                 0          (1,960)
Cash acquired with subsidiaries                                          0                 0              243
Acquisition expenses                                                  (22)             (151)            (811)
Overdraft acquired with subsidiary                                       0                 0            (143)
Purchase of fixed asset investments                                      0              (98)            (446)
Purchase of joint venture interest                                       0           (3,000)          (3,000)
Investment in associate                                                (2)                 0                0
                                                                     (449)           (3,249)          (6,117)

Financing
Cash receipt from share issue                                       10,154            17,238           17,238
Expenses paid in connection with share issue                       (1,407)           (1,050)          (1,055)
                                                                     8,747            16,188           16,183

Increase/(decrease) in cash in the period                            1,581             5,734          (3,045)

Reconciliation of net cash flow to movements in funds
Increase/(decrease) in cash in the period                            1,581             5,734          (3,045)
Net funds at beginning of period                                     5,630             8,675            8,675

Net funds at end of period                                           7,211            14,409            5,630






Notes



1. BASIS OF PREPARATION

The interim accounts, which are unaudited, have been prepared on the basis of
the accounting policies set out in the 2003 group accounts. The figures shown
for the full year ended 31 March 2003 represent an abridged version of the full
accounts of Millfield Group plc for that year, which have been filed with the
Registrar of Companies and on which the auditors have given an unqualified
report. The financial information contained in this interim report does not
constitute the Group's statutory accounts within the meaning of section 240 of
the Companies Act 1985.



2. LOSS PER SHARE

The calculation of loss per share on losses attributable to shareholders is
based on losses after taxation of  £5,645,844 (2002: £5,919,670) and on
73,936,187 (2002: 60,303,016) ordinary shares, being the weighted average number
of shares in issue during the six months.



FRS 14 requires presentation of diluted EPS when a company could be called upon
to issue shares that would decrease net profit or increase net loss per share.
For a loss making company with outstanding share options, the exercise of
in-the-money options would reduce rather than increase the net loss per share
and thus such options are not dilutive as defined in the FRS. Similarly,
although net loss per share would be increased by the exercise of
out-of-the-money options, it seems inappropriate to assume that option holders
would act irrationally and exercise those options. Accordingly no adjustment has
been made to diluted EPS for either in-the-money or out-of-the-money share
options and, since there are no other diluting future share issues, the diluted
loss per share is the same as the basic loss per share for the year.



3. POST BALANCE SHEET EVENTS

On 4 December 2003, Lifetime Group Limited has allotted a further 11,736,354
shares to Norwich Union for a consideration of £8.0m. Following this
transaction, Millfield Group plc's shareholding reduced to 41.3%, 24.4% held as
an investment and 16.9% held for resale.





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