Preliminary Results

Capitaltech PLC
7 September 2001


                                 CapitalTech plc

             Preliminary Results for the year ended 30 April 2001


Chairman's Statement

Year to 30 April 2001

I have pleasure in presenting our results for the year ended 30 April 2001.

I am pleased to report that our work on improving our property portfolio, with
the aim of achieving growth in shareholder value from a solid property asset
base, appears to be bearing fruit.  Even though this process has involved
substantial expenditure through our profit and loss account, net asset value
per share increased, albeit slightly, from 31.3p at our half year (31 October
2000) to 31.9p at our year end.  As a result of work done and expenditure
incurred to date, group net asset value has increased from negative 
(£1,218,529) at 30 April 1999 in two years by £19,486,173 to £18,267,644 at 30
April 2001.


Balance Sheet

As our primary aim is a solid asset base, I will deal first with points worthy
of note in the group balance sheet at 30 April 2001.

Overall, our net asset value increased in the year to that date from 
£11,317,461 to £18,267,644, all now held for the benefit of the ordinary
shareholders, as our Preference Shares were repaid during the year and our
Convertible Shares effectively cancelled following the year end.  Net debt
(borrowings less cash) reduced as a percentage of investment property from 79
per cent at 30 April 2000 to 69 per cent at 30 April 2001, and as a percentage
of equity from 327 per cent to 187 per cent.  As before, I should point out
that we show negative current assets (£4,290,873) only because our
longstanding secured property borrowing arrangement with our clearing bankers
in the amount of £7,738,000 was in the form of overdraft.  The 69 per cent
loan to property investment ratio comprised 60 per cent bank borrowings and 9
per cent shareholder loans.  Since 30 April 2001 net debt has further reduced.


Profit and Loss Account

The loss for the year under review amounted to £4,604,844. This can be broken
down into four major components:


(a)     Considerable upgrading and repairs of property took place all of which
we expense through profit and loss account, reducing operating profit to only
£182,957 (2000: £826,203).  This was necessary to bring properties acquired up
to the standard which we desire.


(b)     Non-property investments: as already announced, we have been
restricting new investments to residential property. In reducing and writing
off other exposures, losses and write-downs of £1,638,569 (which includes 
£600,000 non-cash cost of one investment received in exchange for property
management arrangements) exceeded gains of £823,333.


(c)     Losses on property disposals: we have made acquisitions, disposed of
property which we considered showed low rental yield or low growth prospects,
and also, to acquire the best of a portfolio, from time to time we have taken
the opportunity of acquiring a portfolio from which the best property only has
been retained.  This activity, while contributing to our aim of building a
good portfolio, has incurred two large negative items in the profit & loss
account, namely loss on disposals and interest payable.  As regards losses on
disposals, in the course of the year we disposed of properties with a book
value (following upwards revaluations) of £25,890,000 incurring a loss in
doing so of £668,843.  Such a loss, in disposing of such a volume of property
which did not fit our strategy, of 2.58 per cent (which includes the costs of
disposal) we can regard as satisfactory.


(d)     Interest costs: as indicated immediately above, during the year, and
before completing all disposals, our property investment had peaked at 
£67,032,000, with net borrowings of £49,369,000 (reduced to £34,132,000 at the
year end and currently £28,150,115) and this incurred substantial interest
costs.



Portfolio at Year End

Our investment property at 30 April 2001 comprised 919 houses and flats
throughout the United Kingdom, but with an increasing emphasis on property in
Scotland and the north of England.  The units were located geographically
thus:


Scotland                                       -     213
North of England                               -     313
Rest of England and Wales                      -     393



In moving the emphasis of our investment portfolio north, we have taken
account of our own experiences and paid heed to our advisers and to analysts
of the housing market.  These experiences and views are well reflected in its
consideration  of the Residential Housing Market Outlook of 'The Property
Analyst' (volume 2/2001) published by Capital Economics Limited.  This
indicates that we have entered a phase in which London prices are no longer
the driving force behind the national housing market.

A gauge of the regional adjustment process may be obtained by looking at where
regional house prices are in relation to regional earnings and to compare
these with their long run averages.  The house-price to earnings ratio (HPE)
in London is some 17 per cent above its long-run average.  The price of an
average London property would have to fall by £21,000 or 14 per cent, in order
to restore the ratio to its long-run average value.

On the same basis there are many other regions where prices still have to rise
to restore this balance.  In Yorkshire, this rise is as much as 20 per cent,
in Scotland 17 per cent.

Now I would like to give you some detailed information on the improving
performance of our own portfolio.

Across our whole portfolio, we have seen an improvement in collection of rent
and reduction of arrears, which have often been endemic in portfolios
acquired.  The last six months of the year are well illustrated in the
following chart; it should be borne in mind that when rent collected has
exceeded rent demanded that has resulted from collection of arrears.  The
improvement shown reflects the quality of both the management and the
portfolio itself.


                                                     Rent Collection

  Rent Collection                 Rent Received as percentage of rent demanded

November                                                                97.90%
December                                                                87.50%
January                                                                124.10%
February                                                               102.60%
March                                                                  106.70%
April                                                                   98.50%


Even in England, where we have been moving the concentration of the portfolio
northward, we have been seeing good progress in rents achievable; the graph
below illustrates our average rent per let English property over the same six
month period.


                             Rental Performance - English Properties

  Month               Average Monthly Rent

November                     £357
December                     £372
January                      £365
February                     £390
March                        £392
April                        £397


                             Average Monthly Rent

At rent reviews in England too we have been seeing increases well ahead of
inflation.  In the six months up to my writing this statement the following
percentage increases have been achieved across properties where rent reviews
occurred in each month shown:


February 2001          -           5.1 per cent
March 2001             -           4.6 per cent
April 2001             -           4.7 per cent
May 2001               -           8.2 per cent
June 2001              -           8.1 per cent
July 2001              -           7.6 per cent


Current Prospects

Since the year end we have (on 31 July 2001) made one major acquisition, in a
50/50 joint venture company, managed by us, of 220 cottage flats in Glasgow.

160 of the flats are situated in the traditional 'south side' residential area
of King's Park and Croftfoot, some three miles south of the city centre; the
remaining 60 flats are in the residential suburbs of Hillington and Cardonald,
about five miles south west of the city centre.

Rents, averaging around £5,000 per annum, are at the same level as the Group's
principal concentration of flats just west of the city centre, for which the
Group has had constantly high rental demand, and which have been showing good
growth in capital value.

The Group has confidence in Glasgow in particular, with Glasgow running behind
only Leeds in employment percentage increases in recent years of UK major
cities outside London.  In the Ward where the bulk of the flats are situated,
King's Park, the most recent edition of 'Glasgow Economic Monitor' published
by Glasgow City Council shows total unemployment in October 2000 at only 116
persons (2.8 per cent) and in the other most relevant ward to the south west,
unemployment showed a drop of over 10 per cent in the year to October.

We will continue to improve and enhance the portfolio with further disposals
and acquisitions.  We also anticipate that gearing will continue to fall.
Further progress towards increasing rental yield and reducing costs should
narrow the gap between income and expenditure.  Our aim is to increase net
asset value per share.


Robert FM Adair
Chairman




CapitalTech plc


GROUP PROFIT AND LOSS ACCOUNT
for the year ended 30th April 2001
                                                                  2001     2000
                                                                     £        £

TURNOVER
Group:
Ongoing operations                                           3,002,242 1,935,062
Acquisitions                                                 1,208,838 1,933,660
                                                              ________  ________

                                                             4,211,080 3,868,722

Share of joint venture                                           5,026     3,525
                                                              ________  ________
                                                                       
                                                             4,216,106 3,872,247

OPERATING PROFIT / (LOSS)
Group:
Ongoing operations                                           (504,385)  173,003
Acquisitions                                                   686,122  687,732
                                                              ________  _______

                                                               181,737  860,735
Share of joint venture profit / (loss)                           1,220 (34,532)
                                                              ________  _______

TOTAL OPERATING PROFIT                                         182,957  826,203

Continuing operations:
Gain on disposal of other fixed asset                          823,333  118,875
investments                                                             
Net (loss)/gain on disposal of investment                    (668,843)  387,943
property
Discontinued operations:                                      
Loss on liquidation of former subsidiary                      (18,400)        -

Loan stock redeemed below par                                        -  303,347
Interest receivable                                            198,002  149,113
Net write back/(write off) of provision for                (1,638,569)   20,958
unlisted investments
Interest payable                                          (3,455,574)(1,791,392)

                                                             _________ _________


(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION                                            
Taxation (charge)/credit                                  (4,577,094)   15,047  
                                                             (27,750)  175,602 
                                                            __________ _________


(LOSS)/PROFIT ATTRIBUTABLE TO MEMBERS OF THE
PARENT COMPANY                                             (4,604,844)  190,649
Preference dividend on non-equity shares                       (8,095) (15,600)
Proposed final ordinary dividend on equity                           - (144,772)
shares                                                       _________ ________

                                                           (4,612,939)   30,277
TRANSFER (FROM)/TO RESERVES
                                                               
Basic (loss)/earnings per share                                (9.51p)    1.69p 
Diluted (loss)/earnings per share                              (9.51p)    1.69p




CapitalTech plc
GROUP BALANCE SHEET
at 30th April 2001


                                                              2001         2000
                                                                 £            £
FIXED ASSETS
Intangible assets
Positive goodwill                                          498,099      440,710
Negative goodwill                                        (296,248)    (355,309)
                                                          ________     ________

                                                           201,851       85,401
Tangible assets                                         49,535,151   47,075,970
                                                          _________     ________

                                                        49,737,002   47,161,371

Investments
Joint venture - share of gross assets                       47,500       47,500
Joint venture - share of gross liabilities                (37,884)     (35,816)
                                                         _________    _________

                                                             9,616       11,684
Other fixed asset investments                              861,519      440,001
                                                         _________    _________

                                                           871,135      451,685
                                                         _________    _________

                                                        50,608,137   47,613,056

CURRENT ASSETS
Debtors                                                  4,485,399    2,990,538
Cash at bank and in hand                                 1,655,076      978,625
                                                         _________    _________

                                                         6,140,475    3,969,163
CREDITORS: amounts falling due within one year        (10,431,348)  (7,973,975)
                                                         _________    _________

NET CURRENT LIABILITIES                                (4,290,873)  (4,004,812)
TOTAL ASSETS LESS CURRENT LIABILITIES                   46,317,264   43,608,244
CREDITORS: amounts falling due after more than one    (28,049,620) (32,290,783)
year
                                                        __________    _________

                                                       18,267,644    11,317,461

CAPITAL AND RESERVES
Called up share capital                                  1,797,704      774,928
Deferred consideration                                     192,551      192,551
Share premium account                                    8,631,376      698,331
Revaluation reserves - investment properties             4,673,334    1,993,930
Revaluation reserves - other                                37,758       97,179
Capital redemption reserve                                 140,997        9,500 
Merger reserve                                           9,281,908    9,281,908
Profit and loss account                                (6,487,984)  (1,730,866) 

Shareholders' funds:                                    
Equity                                                  17,616,616   11,197,461
Non-equity                                                 651,028      120,000
                                                        __________    _________

                                                        18,267,644   11,317,461



CapitalTech plc

GROUP STATEMENT OF CASH FLOWS

for the year ended 30th April 2001


                                                            2001          2000
                                                               £             £

Cash inflow/(outflow) from operating activities          558,716     (667,552)

Returns on investments and servicing of finance      (2,502,294)   (1,467,310)

Taxation                                               (167,440)     (299,217)

Capital expenditure and financial investment         19,421,307    33,709,029 

Acquisitions and disposals                                 6,327   (8,577,749)

Equity dividends paid                                  (144,772)             - 
                                                       _________     _________

Cash inflow before liquid resources and financing     17,171,844    22,697,201

Management of liquid resources                                 -        75,000  
                                                    
Financing                                           (18,526,663)  (26,870,483) 

                                                      __________    __________

Decrease in cash                                     (1,354,819)   (4,098,282)
 



CapitalTech plc



GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

for the year ended 30th April 2001


                                                                2001       2000
                                                                   £          £
(Loss)/profit attributable to members of 
the parent company excluding share of losses 
of joint venture company                                 (4,602,776)    229,719
Share of joint venture loss for the year                     (2,068)   (39,070)

(Loss)/profit attributable to members of the             (4,604,844)    190,649
parent company                                            _________      _______
Unrealised surplus on revaluation of 
investment properties                                     3,094,402   1,993,930 
Unrealised (deficit)/surplus on revaluation of 
unlisted investments                                        (59,421)      97,179
                                                          _________     ________
                                                                     
TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR           (1,569,863)  2,281,758
                                                          _________    ________


Notes

1.       The financial information set out in this announcement does not
constitute the company's statutory financial statements for the years ended 30
April 2000 and 30 April 2001.



2.       Basis of Preparation

          This financial information is extracted from the audited financial
statements of the group for the year ended 30 April 2001 which were approved
by the board of directors on 7 September 2001.



3.       (LOSS)/EARNINGS PER ORDINARY SHARE

          The calculation of (loss)/earnings per ordinary share is based on a
loss of £4,612,939 (2000 earnings - £175,049), being loss for the year of 
£4,604,844 (2000 profit - £190,649) plus preference dividends of £8,095 (2000 -
£15,600), and on 48,492,361 (2000 - 10,361,954) ordinary shares, being the
weighted average number of shares in issue during the year.

          The calculation for diluted (loss)/earnings per share is unchanged
from that for the (loss)/earnings per share as the outstanding share options
do not result in a dilution in either year.  Since the convertible shares
which were due for conversion on 31 May 2001 have subsequently been converted
into deferred shares and cancelled, they have not been taken into account in
the calculation of (loss)/earnings per share.



4.       Copies of this announcement are available, free of charge, for a
period of one month from Noble & Company Limited, 1 Frederick's Place, London,
EC2R 8AB.  Copies of the full financial statements will be posted to
shareholders in due course.