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Maclellan Group (MLG)

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Wednesday 31 May, 2000

Maclellan Group

Interim Results

Maclellan Group PLC
31 May 2000


MacLellan Group plc


Chairman's Statement

The Group's profit before taxation for the twenty six week period ended 26
March 2000 was £0.138 million (1999: £0.052 million) on turnover of £18.130
million (1999: £14.767 million) after amortisation of intangibles of £0.089
million (1999: £0.026 million).  Comparable headline earnings per share were
0.4p (1999: 0.2p).  Period end gearing was 60% (1999: 34%).  No interim
dividend is proposed.

Acquisitions

The acquisitions of MacLellan International Limited and its smaller sister
companies, MacLellan Engineering Services PLC and MacLellan Internacional
Limitada, were formally completed on 20 April 2000 for a consideration of
£15.35 million.

The acquisitions have approximately trebled the size of the Group in terms of
its turnover and net assets.   The new MacLellan Group plc now has two
divisions;  the largest division is the Integrated Services Division and the
smaller division is the Engineering Services Division.  The formation of a new
Group has created a number of opportunities to reduce combined administrative
costs and we expect to achieve annualised cost savings of at least £0.5
million as a result of these opportunities.

MacLellan International Limited has since acquisition already secured four new
contracts with a combined annual turnover of approximately £4.5 million and
contract lengths of at least three years.

Operational Review

Turnover in the first six months of the current financial period showed a 22%
increase over the corresponding period for last year mainly because of the
increased size of our Cleaning and Travel operations.  Shareholders will
recall  that Checkclean Limited and its subsidiary company, Corporate Clean
Limited, joined the Group on 15 March 1999.

Our overall performance in the six month period was in line with budget
although the Jordan businesses saw a reduction in anticipated activity levels
as a result of the much publicised issues relating to transportation of
nuclear fuel to BNFL's Sellafield site and delays in expected work at other
sites. However, the Jordan businesses now have order book levels of
approximately £14 million which is the highest level for 12 months and includes
significant new work recently secured at Devonport Dockyard.

The integration of previously separate administrative functions within our
Cleaning operations was completed during the period and the beneficial effects
of this integration are now being felt.  Our Travel operations produced a
small operating loss during the six month period which is expected to reverse
during the peak activity summer months at London's Heathrow and Gatwick
Airports.

The Board

John Ellis, Managing Director of MacLellan International Limited, joined the
Board on 15 May 2000 as Managing Director of the Group's Integrated Services
Division and we look forward to the benefit of his contribution.

Strategy

The Board is committed to expand MacLellan Group plc's presence in the
outsourced business services market.  We intend to further develop our
Integrated Services Division both through organic growth and by the addition
of selective, earnings enhancing acquisitions.

Outlook

The Group's accounting reference date is changing to 31 December.  We
anticipate that the next nine months will show that management is making
positive progress towards our goal of becoming a leading provider of business
services.  The Board remains confident about the future of the Group.


A L R Morton

31 May 2000


GROUP PROFIT AND LOSS ACCOUNT
                                                                  
                          Twenty six      Twenty six      Fifty two
                            weeks to        weeks to    weeks ended
                       26 March 2000   28 March 1999   26 September
                         (unaudited)     (unaudited)           1999
                                                          (audited)
                                £000            £000           £000
                                                                   
Turnover                                                           
Continuing operations                                              
Existing operations           18,130          14,481         30,392
Acquisitions                       -             286          3,734
                                                                   
                              18,130          14,767         34,126
Discontinued                       -               -            272
operations
                              18,130          14,767         34,398

Cost of Sales               (15,192)        (12,100)       (28,448)
                           ---------        --------       -------- 
Gross Profit                   2,938           2,667          5,950
  
Administrative               (2,656)         (2,413)        (5,922)
Expenses                   ---------        --------       --------
                                                                   
Operating Profit                                                   
Continuing operations                                              
Existing operations              282             247          (125)
Acquisitions                       -               7            320
                                                                   
                                 282             254            195
Discontinued                       -               -          (167)
operations
                                 282             254             28
                                                                   
Exceptional item                   -               -           (80)
                                                                   
Interest payable               (144)           (202)          (405)
                           ---------        --------       -------- 
Profit on ordinary                                                 
activities before                138              52          (457)
taxation
                                                                   
Taxation on profit on              -               -              -
ordinary activities
                                                                   
Profit on ordinary               138              52          (457)
activities after
taxation
                                                                   
Dividends                          -               -              -
                                                                   
Retained profit for                                                
the financial period             138              52          (457)
transferred to
reserves
                                                                   
                                                                   
                                                                   
Earnings per share                                                 
Headline basis                                                     
- undiluted                     0.4p            0.2p           1.3p
- diluted                       0.4p            0.2p           1.1p
                           ---------        --------       --------           
FRS 3 basis                                                        
- undiluted                    0.4p             0.2p         (1.7)p
- diluted                      0.4p             0.2p         (1.5)p
                           ---------        --------       -------- 

GROUP BALANCE SHEET

                             26 March     28 March            26
                                 2000         1999     September
                          (unaudited)  (unaudited)          1999
                                                       (audited)
                                 £000         £000          £000
Fixed Assets                                                    
Intangible assets               2,780        2,529         2,869
Tangible assets                 2,910        3,382         3,058
Investments                       275          300           275
                             ---------     --------      -------- 
                                5,965        6,211         6,202
                                                                
                                                                
                                                                
Current Assets                                                  
Stocks                          2,042        2,014         1,505
Debtors                         8,455        8,072        10,130
Cash at bank and in                 -          104           396
hand
                             ---------     --------      -------- 
                               10,497       10,190        12,031
                                                                
Creditors: Amounts                                              
falling due within one
year
Borrowings                    (2,246)        (974)       (1,116)
Other creditors               (6,851)      (7,594)       (9,879)
                                                                
                              (9,097)      (8,568)      (10,995)
                                                                
Net current                     1,400        1,622         1,036
assets/(liabilities)
                                                                
                                                                
Total assets less               7,365        7,833         7,238
current liabilities                                             
Creditors: Amounts                                              
falling due after more
than one year
Borrowings                    (1,351)      (1,321)       (1,362)
                             ---------     --------      -------- 
                                                                
                                6,014        6,512         5,876
                                                                
                             ---------     --------      -------- 
                                                                
Shareholders' funds                                             
(including non-equity
interests)
Ordinary shares                 1,595        1,580         1,580
Convertible preference            500          500           500
shares
Ordinary shares to be               -          600              
issued
Share premium account           4,098        4,018              
Other reserves                    204          204              
Profit and loss account         (383)        (390)              
                             ---------     --------      -------- 
                                                                
                                6,014        6,512         5,876

                             ---------     --------      -------- 

GROUP STATEMENT OF CASH FLOWS
For the twenty six weeks to 26 March 2000
                                      Twenty    Twenty  Fifty two
                                   six weeks six weeks      weeks
                                       to 26     to 28   ended 26
                                       March     March  September
                                        2000      1999       1999
                                    (audited)(unaudited)(unaudited)

                                        £000      £000       £000
                                                                 
Net cash inflow/(outflow) from       (1,269)       523        988
operating activities
                                                                 
Returns on investments and                                       
servicing of finance
Interest paid                          (136)     (189)      (356)
Interest element of finance lease       (17)      (41)       (76)
payments
                                       (153)     (230)      (432)
                                                                 
Taxation                                   -         -       (27)
                                                                 
Capital expenditure and financial                                
investment
Payments to acquire tangible and       (100)     (153)      (229)
intangible fixed assets
Receipts from disposal of                  7       666        683
tangible fixed assets
Proceeds from redemption of                -         -         25
shares in unquoted company
                                        (93)       513        479
Acquisitions and Disposals                                       
Purchase of subsidiary                     -   (1,512)    (1,513)
undertaking
Cash balances of business                  -     (274)      (282)
acquired
Additional consideration on                -         -      (235)
acquisitions made in prior year
Disposal of subsidiary                     -         -         66
undertaking
                                           -   (1,786)    (1,964)
                                   ---------  --------   -------- 
Net cash outflow before financing    (1,515)     (980)      (956)
                                                                 
Financing                                                        
Ordinary shares issued                     -     3,990      3,990
Expenses incurred in issue of              -     (194)      (209)
ordinary shares
Loans issued/(repaid)                   (52)       134        489
Capital element of finance lease       (130)     (671)      (743)
and hire purchase payments
                                       (182)     3,259      3,527
                                   ---------  --------   -------- 
Increase/(decrease) in cash in       (1,697)     2,279      2,571
the period                         ---------  --------   -------- 
                                                                 

NOTES TO THE GROUP STATEMENT OF CASH FLOWS
For the twenty six weeks to 26 March 2000

1. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW/(OUTFLOW) FROM
   OPERATING ACTIVITIES

                                Twenty six   Twenty six   Fifty two
                                  weeks to     weeks to       weeks
                                  26 March     28 March    ended 26
                                      2000         1999   September
                               (unaudited)  (unaudited) 1999(audited)
                                      £000         £000       £000
Operating Activities                                              
                                                                  
Operating profit                       283          254         28
Amortisation                            89           26        120
Depreciation                           241          299        588
Profit on disposal of tangible           -            -       (24)
fixed assets
(Increase)/decrease in stocks        (537)        (558)       (49)
Decrease/(increase) in debtors       1,675        1,238      (647)
(Decrease)/increase in             (3,020)        (736)        972
creditors                         ---------     --------   -------- 
                                                                  
Net cash inflow/(outflow) from     (1,269)          523        988
operating activities              ---------     --------   --------

2.RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
                                      £000         £000       £000
Increase/(decrease) in cash        (1,697)        2,553       2,571
for the period
Net cash flow from changes in          182          537         254
debt
New finance leases and hire              -         (66)        (94)
purchase agreements
Loans and finance leases                                           
obligations acquired with                -        (302)        (28)
purchase of business
Finance lease obligations of             -            -         128
business sold
                                  ---------     --------    --------
Movement in net debt in the        (1,515)        2,722       2,831
period                             (2,082)      (4,913)     (4,913)
Net debt at beginning of          ---------     --------    --------
period
                                                                   
Net debt at end of period          (3,597)      (2,191)     (2,082)
                                  ---------     --------    --------

3.ANALYSIS OF CHANGES IN NET DEBT DURING THE PERIOD
                                        At 26       Cash      At 26
                                     Septembe       flow      March
                                            r                  2000
                                         1999             (unaudite
                                     (audited                    d)
                                            )
                                         £000       £000       £000
                                                                   
Cash at bank and in hand                  396      (396)          -
Overdrafts                                  -    (1,301)    (1,301)
                                          396    (1,697)    (1,301)
                                                                   
Debt due within one year                (948)         52      (896)
Debt due after one year               (1,250)          -    (1,250)
Finance leases and hire purchase        (280)        130      (150)
agreements
                                      (2,478)        182    (2,296)
                                    ---------   --------   --------       
                                      (2,082)    (1,515)    (3,597)
                                    ---------   --------   --------       

SEGMENTAL ANALYSIS

                                   Twenty     Twenty Fifty two
                                six weeks  six weeks     weeks
                                    to 28      to 28  ended 26
                                    March      March September
                                     1999       1999      1999
                               (unaudited)(unaudited)(audited)

                                     £000       £000      £000
Turnover                                                      
Business segment analysis:                                    
Engineering services                9,691      9,534    20,318
Cleaning and travel services        8,439      5,233    13,808
                                   18,130     14,767    34,126
Discontinued operation                  -          -       272
                                  -------    -------   -------       
                                   18,130     14,767    34,398
                                  -------    -------   -------       

All turnover arose in the United Kingdom.  Profit on ordinary activities
before tax and net operating assets by business segment analysis are not
provided as the Directors are of the opinion that such disclosure would be
prejudicial to the interests of the trading companies within the Group.

RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS
                                 Twenty     Twenty  Fifty two
                              six weeks  six weeks      weeks
                                  to 26      to 28   ended 28
                                  March      March  September
                                   2000       1999       1999
                             (unaudited)  (unaudited)  (audited)
                                     
                                   £000       £000       £000
                                                             
Profit/(loss) for the               138         52      (457)
financial period
New ordinary shares issued                                   
including premium  (net of            -      3,796      3,781
expenses)
Movement in ordinary shares           -          -      (490)
to be issued
Goodwill written off to               -       (12)       (45)
reserves in year
Goodwill previously written                                  
off to reserves:
 - in respect of deferred             -          -        300
consideration
 - business disposal                  -          -        111
                                -------    -------    -------                 
                                              
                                                             
Net increase in                     138      3,836      3,200
shareholders' funds
Opening shareholders' funds       5,876      2,676      2,676
                                -------    -------    -------                
                                                             
Closing shareholders' funds       6,014      6,512      5,876
                                -------    -------    -------                
Analysed:                                                    
Equity                            4,014      4,512      3,876
Non-equity                        2,000      2,000      2,000
                                -------    -------    -------                
                                                             
                                  6,014      6,512      5,876
                                -------    -------    -------                

Notes

1    The figures for the twenty six weeks ended 26 March 2000 and 28 March
     1999 are unaudited.  The results for the fifty two weeks ended 26
     September 1999, which are abridged from the full Group accounts for that
     period and on which the auditors gave an unqualified report, have been
     delivered to the Registrar of Companies.

2    No interim dividend has been declared in respect of the period.

3    The calculation of earnings per share has been based on the weighted
     average number of shares in issue during the period as follows:


                                Undiluted        Fully
                                               diluted
            March 2000         31,824,324   35,509,253
            September          26,855,082   30,440,011
            1999
            March 1999         22,260,983   24,955,983
     
     The FRS3 basis has been calculated on profits attributable to ordinary
     shareholders.  The headline basis has been calculated in accordance with
     the guidelines of the Institute of Investment Management and Research on
     the attributable profits adjusted for exceptional items.
     
     Fully diluted earnings per share has been calculated on profits and     
     shares in issue which have been adjusted to take account of future issues
     of ordinary shares in respect of the convertible preference shares and
     options under the Company's share option schemes.

4    This interim report is available from the Company's registered office: 14
     Millbrook Road, Yate, Bristol BS37 5JW.