Statement re: Chapelthorpe

Second Advance Value Realisation Co
10 March 2005


PRESS RELEASE BY SECOND ADVANCE VALUE REALISATION COMPANY LIMITED AND NORTH
ATLANTIC VALUE LLP ( for the Requisitionists) TO HOLDERS OF ORDINARY SHARES IN
CHAPELTHORPE PLC


The Requisitionists of the Extraordinary General Meeting ('EGM') to be held on
18 March 2005 and the Company have each issued statements to shareholders, the
latest being this morning from the current Board of Chapelthorpe.


The Requisitionists have concerns regarding the decision, by the current Board,
to dispose conditionally of land at Penistone. Whilst, in the view of the
Requisitionists, to dispose of the site is right in principle, shareholders may
wish to ask themselves:-


Why the urgency before the EGM of shareholders?


What are shareholders really getting? The proposed disposal will be at a price
of up to £9m but over two-thirds of this is conditional on planning consent. In
fact the Company will receive an upfront cash payment of only £3m, less than £1m
above net book value. Meanwhile, the Board has agreed an initial annual rental
payment of £350,000 per annum, representing a yield of 11.6 per cent. for the
purchaser when the timetable for the payment of the balance of the proceeds is
highly contingent. The Requisitionists believe that this rent is significantly
higher than levels normally found in industrial property - is this really the
best deal that the current Board can achieve for shareholders?


Why agree a conditional and uncertain agreement to dispose of a potentially very
valuable asset to a property acquiror before obtaining planning consent from the
local authority?


Are Messrs Leckie and Thompson the most appropriate directors to handle a
complex relocation of the Umbrella Frames division to an unspecified location
without seriously damaging customer service? In 2002 Mr Leckie reported to
shareholders 'substantial difficulties we have faced coping with the problems
arising out of the accelerated integration of American Fibers and Yarns into our
business in Virginia'.


The Requisitionists consider the transaction now announced is another rushed
reaction to shareholder pressure, which follows disclosures such as the recent
profit warning in response to the Requisition.


In the Requisitionists' opinion this is THE WRONG DEAL, AT THE WRONG TIME, AT
THE WRONG PRICE.


The Requisitionists believe that the current Board's defence is misleading to
shareholders in several key areas including:-


The Requisitionists have NOT changed their strategy. The proposed new Board
members intend to dispose of all three businesses within two years and return
cash and value to shareholders. The final disposal is likely to be the disposal
to a cash bidder of Chapelthorpe plc itself, or the separate disposal of the
last business and the residual cash shell.


The proposed new members of the Board have already announced that they intend to
support Chapelthorpe's progressive dividend policy. This will not be affected by
new executive directors' incentives and the greater part of their rewards will
arise upon CAPITAL returned to shareholders over and above 20 pence per ordinary
share. THERE IS NO THREAT TO THE ORDINARY DIVIDEND FROM THE PROPOSED NEW BOARD.


It is now time for shareholders to decide the future direction of their company
by voting on the EGM resolutions.


A vote FOR the resolutions is a vote in favour of the Requisitionists' clear and
consistent strategy to generate shareholder value by:


Installing new and experienced executive directors who are incentivised to
perform;


Improving each of the businesses of the Company;


Realising value over the next two years through a controlled and carefully
managed disposal programme to strategic buyers;


Reducing high head office costs;


Maintaining the dividend policy;


Returning cash to shareholders in as tax efficient a manner as possible.


Failure to support change now is a vote in favour of the current Board and its
strategies, which are considered to have destroyed value. Since 1997 the two
senior directors, Messrs Leckie and Thompson, have received total emoluments and
pension contributions of over £5 million while ordinary shareholders have seen:


A 48 per cent fall in the share price;


Earnings per share down by one third;


Dividends per ordinary share lower by 60 per cent;


Shareholders funds declined by more than one third;


Acquisitions costing over £31 million for no tangible return ;


Pre tax profit collapsing from £10 million in 1997 to a forecast loss of £7.4
million.


The Requisitionists note that in his statements of 23 February, 7 March and 10
March 2005 Mr Standen, the Chairman of Chapelthorpe:


did not take the opportunity to endorse publicly the record and positions of
Messrs Leckie and Thompson, his two senior executive directors;


made no reference to profit;


admitted that in four of the last five years dividends have not been covered by
earnings.


The Requisitionists stress:


The current Board's responses did not contain any initiatives for the rebuilding
of shareholder value;


They believe the Company's own trading results and broker's forecasts, make
their case for change.


This morning's announcement by Chapelthorpe, in the opinion of the
Requisitionists, is confusing, and confirms that the current Board can not be
relied upon to realise and deliver value for shareholders from the sale of the
Penistone site or from the operating businesses of Chapelthorpe.


The Requisitionists urge all shareholders to vote FOR each of the resolutions at
the EGM on 18 March 2005.


Contact: Robert Legget

Progressive Value Management Limited

Tel: [phone]


Anthony Spiro

Spiro Financial

Tel: [phone]


This is important and requires the immediate attention of holders of ordinary
shares in CHAPELTHORPE PLC. If you are in any doubt as to the action you should
take you should immediately consult your usual financial adviser.






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