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Maclellan Group (MLG)

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Monday 09 April, 2001

Maclellan Group

Final Results

Maclellan Group PLC
9 April 2001



                             MacLellan Group plc

 Preliminary announcement of results for the fifteen months ended 31 December
                                     2000

                             CHAIRMAN'S STATEMENT

The Group has made excellent progress during the period under review and is
now well positioned for future growth.

The Group's profit before exceptional items, goodwill and taxation for the
fifteen months ended 31 December 2000 increased substantially to £1.8 million
(£0.4 million for the fifty two week period ended 26 September 1999) on an
increased turnover of £101.4 million (1999: £34.4 million). On a similar
basis, operating profits were £2.2 million (1999: £0.8 million) after charging
£0.1 million in respect of amortisation of licences (1999: £0.1 million).
Comparable earnings per share increased almost threefold to 3.7 pence (1999:
1.3 pence). Year end gearing was 27% (1999: 35%). No dividend is proposed.



Acquisitions and Disposals

The acquisitions of MacLellan International Limited and its smaller sister
companies, MacLellan Engineering Services PLC (now renamed Jordan Site
Management Services Limited) and MacLellan Internacional Limitada, were
formally completed on 20 April 2000 for a consideration of £14.3 million.
These acquisitions have totally transformed the Group's prospects.

The acquisitions led to the creation of two divisions being the Integrated
Services Division and the Engineering Services Division. We announced on 10
January 2001 that the Engineering Services Division was no longer core to the
future development of the Group and the results for the fifteen months to 31
December 2000 include an exceptional provision of £4.0 million, including £1.8
million of goodwill previously written off, which reduces the carrying value
of the attributable net assets to a level which the Board considers
appropriate for future realisation.



Operational Review

The Integrated Services Division has achieved a number of significant
milestones during the period. The operations of Checkclean, Excellence and
Alpha Plus have been integrated with those of MacLellan International Limited
resulting in a strengthened market presence under the MacLellan trading name
and a reduction of administrative overheads. MacLellan International Limited
continues to secure contracts both within and outside its traditional
automotive customer base and is now a leading supplier of integrated
facilities management services in the retail, industrial and PFI market
places. The Division produced a solid financial performance both in the UK and
Portugal during the period since acquisition and overall net operating margins
were 3.3%, representing an operating profit of £1.9 million on turnover of £58
million.

MacLellan International Limited secured sizeable long term contracts with ERF,
Lotus, West Quay Shopping Centre and the Inland Revenue during 2000. In
addition, we announced on 28 March 2001 that we had signed a £100 million,
seven year contract with Mapeley Limited to act as its chosen service provider
for three regions within the STEPS contract. The STEPS contract involves the
strategic transfer of ownership and management of some 700 Inland Revenue and
Customs and Excise buildings into the private sector and some 1500 MacLellan
International Limited personnel will be involved in the provision of
mechanical and electrical equipment maintenance and services, together with
the provision of grounds and garden maintenance and cleaning and security
services.

The performance of the Engineering Services Division was adversely affected
during the fifteen month period by lower than anticipated activity levels with
BNFL and the delay in start up of work at the Devonport Dockyard. However, the
Division remained profitable despite these issues and management is now fully
engaged in work at Devonport and other opportunities outside of BNFL continue
to arise. Jordan Site Management Services Limited has been repositioned since
its acquisition so that it can once again concentrate on its core competencies
and its financial performance is now showing the beneficial effects of this
repositioning.



Strategy

The Board remains firmly committed to expanding the Group's presence in the
outsourced business services market and to further developing our Integrated
Services Division both through organic growth and by the addition of selective
earnings enhancing acquisitions.





Employee Participation

Shareholders will be asked to approve the introduction of the MacLellan
ShareSave Scheme for qualifying Group employees at the forthcoming annual
general meeting. The Board considers this to be an important step since it
wishes to encourage active employee participation throughout the Group.



Outlook

Recent contract wins guarantee that our Integrated Services Division will
enjoy further significant growth in 2001. In addition to contracts already
secured, this Division has a growing pipeline of potential orders which should
ensure continued future growth. The Board recognises that the start up phase
of large contracts involves a number of considerable short term challenges at
operational level but we are confident about our future prospects and look
forward to continuing our mission to build the Group into a major supplier of
outsourced business services.



A L R Morton

Chairman

9 April 2001




MacLellan Group plc

GROUP PROFIT AND LOSS ACCOUNT

for the 15 months ended 31 December 2000

                   15 months ended 31 December    52 weeks ended 26 September
                               2000                           1999
                        Before  Goodwill &             Before  Goodwill &
                    goodwill & exceptional         goodwill & exceptional
                   exceptional       items        exceptional       items
                         items                          items
                                           Total                          Total
                         £'000       £'000 £'000        £'000       £'000 £'000
Turnover
Continuing
operations
Existing                45,085          - 45,085       34,126         -  34,126
operations
Acquisitions            56,322          - 56,322            -         -      -
                    ----------  ---------- ------      -------  -------- -------
                       101,407         - 101,407       34,126         -  34,126
Discontinued                 -         -       -          272         -     272
operations
                    ----------  -------- --------      -------  -------- -------
                       101,407         - 101,407       34,398         -  34,398

Cost of sales         (89,915)         - (89,915)    (27,989)     (459)(28,448)
                    ----------  ------- ---------      ------   -------- -------

Gross Profit            11,492         -  11,492        6,409     (459)   5,950

Administrative
expenses
Goodwill                     -     (513)   (513)            -      (68)    (68)
amortisation
Other                  (9,260)     (205) (9,465)      (5,635)     (219) (5,854)
                    ----------  ------- --------     --------  -------- --------
                       (9,260)     (718) (9,978)      (5,635)     (287) (5,922)
Operating Profit
Continuing
operations
Existing                   489     (366)     123          941     (746)     195
operations
Acquisitions             1,743     (352)   1,391            -         -       -
                    ----------  ------- --------   ----------  -------- --------
                         2,232     (718)   1,514          941     (746)     195
Discontinued                 -         -       -        (167)         -   (167)
operations
                    ----------  ------- --------   ----------  -------  --------
                         2,232     (718)   1,514          774     (746)      28
Exceptional
provision for
loss on sale of
business
Goodwill                     -   (1,790) (1,790)            -         -       -
previously
written off
Other                        -   (2,200) (2,200)            -      (80)    (80)
                    ----------  ------- -------    ----------  -------- --------
                             -   (3,990) (3,990)            -      (80)    (80)

Interest                 (445)         -   (445)        (405)         -   (405)
                    ----------  ------- --------   ----------  ------- ---------
(Loss)/profit on        1,787    (4,708) (2,921)          369     (826)   (457)
ordinary
activities before
taxation
                         =====    =====                 =====    =====
Taxation                                   (110)                              -
                                       ----------                       --------
(Loss) on                                (3,031)                          (457)
ordinary
activities after
taxation
                                           =====                          =====
Earnings per
share
Headline basis -
undiluted                                   3.7p                           1.3p
                                           -----                          ------
diluted                                     3.5p                           1.1p
                                           -----                          ------
FRS 3 basis -
undiluted                                  (6.7p)                         (1.7p)
                                           ------                         ------
diluted                                    (6.4p)                         (1.5p)
                                           =====                          =====

The above figures are stated on an historical cost basis and are the total
recognised gains and losses for the period.



MacLellan Group plc


        CONSOLIDATED BALANCE SHEET

        at 31 December 2000



                                                        31 December 26 September
                                                                2000       1999
                                                                £000       £000
Fixed assets
Intangible assets                                             12,734      2,869
Tangible assets                                                4,077      3,058
Investments                                                      225        275
                                                          ---------- ----------
                                                              17,036      6,202
                                                          ---------- ----------

Current assets
Stocks                                                         3,857      1,505
Debtors                                                       29,745     10,130
Cash at bank and in hand                                         603        396
                                                          ---------- ----------
                                                              34,205     12,031
                                                          ---------- ----------

Creditors: Amounts falling due within one year
Borrowings                                                   (5,614)    (1,116)
Other creditors                                             (24,363)    (9,879)
                                                          ---------- ----------
                                                            (29,977)   (10,995)
                                                          ---------- ----------
Net current assets                                             4,228      1,036
                                                          ---------- ----------

Total assets less current liabilities                         21,264      7,238
Creditors: Amounts falling due after more than
one year
Borrowings                                                      (99)    (1,362)

Provision for liabilities and charges                        (2,200)          -
                                                          ---------- ----------
                                                              18,965      5,876
                                                               =====      =====
Shareholders' funds (including non-equity
interests)
Ordinary shares                                                2,674      1,580
Convertible preference shares                                    500        500
Ordinary shares to be issued                                       -        110
Share premium account                                         17,349      4,003
Other reserves                                                   204        204
Profit and loss account                                      (1,762)      (521)
                                                          ---------- ----------
Total shareholders' funds                                     18,965      5,876
                                                               =====      =====




MacLellan Group plc

GROUP STATEMENT OF CASH FLOWS

for the 15 months ended 31 December 2000

                                                15 months ended 31     52 weeks
                                                           December       ended
                                                               2000          26
                                                                      September
                                                                           1999
                                                               £000        £000

Net cash (outflow)/inflow from operating                      (594)         988
activities

Returns on investments and servicing of
finance
Interest paid                                                 (418)       (356)
Interest element of finance lease payments                     (87)        (76)
                                                         ----------  ----------
                                                              (505)       (432)

Taxation                                                         43        (27)

Capital expenditure and financial investment
Payments to acquire tangible and intangible                   (578)       (229)
fixed assets
Receipts from disposal of tangible fixed                        467         683
assets
Proceeds from redemption of shares in                            50          25
unquoted company
                                                         ----------  ----------
                                                               (61)         479
Acquisitions and disposals
Purchase of subsidiary undertaking                         (14,282)     (1,513)
Cash balances of businesses acquired                        (1,590)       (282)
Additional consideration on acquisitions made                   (8)       (235)
in prior year
Disposal of business of subsidiary                                -          66
undertaking
                                                         ----------  ----------
                                                           (15,880)     (1,964)
                                                         ----------  ----------
Net cash outflow before financing                          (16,997)       (956)

Financing
Ordinary shares issued                                       14,970       3,990
Expenses incurred in issue of ordinary shares                 (640)       (209)
Loans (repaid)/ issued                                      (1,798)         489
Capital element of finance lease and hire                     (297)       (743)
purchase payments
                                                         ----------  ----------
Net cash inflow from financing                               12,235       3,527
                                                         ----------  ----------
(Decrease)/increase in cash in the period                   (4,762)       2,571
                                                              =====       =====





        MacLellan Group plc

        NOTES TO THE GROUP STATEMENT OF CASH FLOWS

for the fifteen months ended 31 December 2000

A. RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
                                                       15 months 52 weeks ended
                                                           ended   26 September
                                                     31 December           1999
                                                            2000               
                                                            £000           £000
Operating Activities

Operating profit                                           1,514            28
Amortisation                                                 576           120
Depreciation                                               1,186           588
Profit on disposal of tangible fixed assets                  (4)          (24)
(Increase) in stocks                                     (1,954)          (49)
(Increase) in debtors                                    (4,584)         (647)
Increase in creditors                                      2,672           972
                                                      ----------     ----------
Net cash (outflow)/inflow from operating                   (594)           988
activities
                                                           =====          =====

B. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
                                                            £000          £000

(Decrease)/increase in cash for the period               (4,762)         2,571
Net cash flow from changes in debt                         2,095           254
New finance leases and hire purchase agreements                -          (94)
Loans and finance leases obligations
 acquired with purchase of business                        (361)          (28)
Finance lease obligations of business sold                     -           128
                                                      ----------    ----------
Movement in net debt in the period                       (3,028)       (2,831)
Net debt at beginning of period                          (2,082)       (4,913)
                                                      ----------    ----------
Net debt at end of period                                (5,110)       (2,082)
                                                           =====         =====



C. ANALYSIS OF CHANGES IN NET DEBT DURING THE PERIOD
                                           At     Cash   Acquired            At
                                                             debt
                                           26     flow              31 December
                                    September                              2000
                                         1999
                                         £000     £000       £000          £000

Cash at bank and in hand                  396      207          -           603
Overdrafts                                  -  (4,969)          -       (4,969)
                                   ---------- ---------- ----------    ---------
                                          396  (4,762)          -       (4,366)

Debt due within one year                (948)      548          -         (400)
Debt due after one year               (1,250)    1,250          -             -
Finance leases and hire purchase        (280)      297      (361)         (344)
agreements
                                   ---------- ---------- ----------    ---------
                                      (2,478)    2,095      (361)         (744)
                                   ---------- ---------- ----------    ---------
                                      (2,082)  (2,667)      (361)       (5,110)
                                        =====    =====      =====         =====

D. ACQUISITIONS

On 20 April 2000 the Group acquired the entire issued share capital of
MacLellan International Limited and MacLellan Engineering Services Limited and
their subsidiary undertakings. The acquisition has been accounted for using
acquisition accounting principles. The net assets of the businesses acquired
have been adjusted to their provisional fair values and recognise certain
onerous contractual commitments. The summary of net assets acquired is as
follows:-

                                 Net assets on            Fair value Fair value
                                                         adjustments
                                   acquisition                         acquired
                                          £000                  £000       £000
Tangible fixed assets                    2,128                     -      2,128
Stocks                                     529                 (131)        398
Debtors                                 16,510               (1,294)     15,216
Deferred tax                                11                  (11)          -
Creditors                              (8,653)               (3,086)   (11,739)
Lease obligations                        (361)                     -      (361)
Cash balances                          (1,590)                     -    (1,590)
                                    ----------            ---------- ----------
                                         8,574               (4,522)      4,052
                                         =====                 =====
Goodwill                                                                 10,230
                                                                     ----------
Consideration                                                            14,282
                                                                          =====
Satisfied by:-
Cash paid                                                                 4,214
Acquisition expenses                                                        265
Group indebtedness                                                        9,803
acquired
                                                                     ----------
                                                                         14,282
                                                                           ====

During the current period the final consideration payable in respect of the
acquisition of Checkclean Limited and Corporate Clean Limited was determined
and settled. The net result of this settlement together with further fair
value adjustments amounted to £173,000 and has been adjusted through goodwill.


MacLellan Group plc

NOTES

1. SEGMENTAL ANALYSIS
                         Fifteen months ended 31             52 weeks ended 26
                                    December 2000                September 1999
                          Turnover      Operating       Turnover      Operating
                                           profit                        profit
                              £000           £000           £000           £000
Turnover
Business segment
analysis:
Integrated services         58,085          1,930         13,808            376
Engineering services        43,322            302         20,318            565
                        ----------     ----------       ----------     ---------
                           101,407          2,232         34,126            941
Discontinued operation           -              -            272          (167)
                        ----------     ----------       ----------     ---------
                           101,407          2,232         34,398            774
                             =====          =====          =====          =====

Geographical market analysis by origin:

UK                          97,590                        34,398
Europe                       3,817                             -
                        -----------                      ---------
                           101,407                        34,398
                             =====                         =====
Geographical market analysis by destination:

UK                          97,071                        33,524
Europe                       4,336                           874
                        ----------                      ---------
                           101,407                        34,398
                             =====                         =====



Further analysis of operating profit and net operating assets by business
segment is 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.
                                                                           2000
                        Continuing  Acquisitions     Discontinued         Total
                              £000          £000             £000          £000

Turnover                    45,085        56,322                -       101,407
Cost of sales
- normal                  (39,364)      (50,551)                -      (89,915)
                        ----------    ----------       ----------    ----------
Gross profit                 5,721         5,771                -        11,492
Less:
Administrative expenses
- normal                   (5,232)       (4,028)                -       (9,260)
- goodwill                   (161)         (352)                -         (513)
-exceptional                 (205)             -                -         (205)
                        ----------    ----------       ----------    ----------
Operating profit               123         1,391                -         1,514
                             =====         =====            =====         =====




                                                                           1999
                        Continuing  Acquisitions     Discontinued         Total
                              £000          £000             £000          £000

Turnover                    34,126             -              272        34,398
Cost of sales
- normal                  (27,706)             -            (283)      (27,989)
- exceptional                (459)             -                -         (459)
                        ----------    ----------       ----------    ----------
Gross profit                 5,961             -             (11)         5,950
Less:
Administrative expenses
- normal                   (5,479)             -            (156)       (5,635)
- goodwill                    (68)             -                -          (68)
-exceptional                 (219)             -                -         (219)
                        ----------    ----------       ----------    ----------
                               195             -            (167)            28
                             =====         =====            =====         =====



2. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

for the fifteen month period ended 31 December 2000
                                                     15 months         52 weeks
                                                         ended            ended
                                                   31 December               26
                                                                      September
                                                          2000             1999
                                                         Group            Group
                                                          £000             £000

Loss for the financial period                          (3,031)            (457)

New ordinary shares issued including premium            14,440            3,781
(net of expenses)

Movement in ordinary shares to be issued                 (110)            (490)

Goodwill written off to reserves                             -             (45)

Goodwill previously written off to reserves:

- in respect of companies to be sold                     1,790                -

- in respect of deferred consideration                       -              300

- business disposal                                          -              111
                                                    ----------       ----------
Net increase in shareholders' funds                     13,089            3,200

Opening shareholders' funds                              5,876            2,676
                                                    ----------       ----------
Closing shareholders' funds                             18,965            5,876
                                                         =====            =====
Analysed:

Equity                                                  16,965            3,876

Non-equity                                               2,000            2,000
                                                    ----------       ----------
                                                        18,965            5,876
                                                         =====            =====



    3. EARNINGS PER SHARE

The earnings per share calculation has been based on the weighted average
number of shares in issue during the period of 45,326,056 (undiluted) and
47,608,846 (fully diluted) (1999: 26,855,082 and 30,440,011 respectively). The
FRS3 basis has been calculated on the loss attributable to ordinary
shareholders of £3,031,000 (1999: loss £457,000). The headline basis has been
calculated on £1,673,000 (1999: £345,000), being the attributable losses as
adjusted for exceptional items of £4,195,000 (1999: £758,000), profit on
disposal of tangible fixed assets of £4,000 (1999: £24,000) and goodwill
amortisation of £513,000 (1999: £68,000); this basis has been reported to
assist in comparisons with earlier periods.

Fully diluted earnings per share has been calculated on (losses)/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
issued under the Company's share option schemes.




    4.     FINANCIAL INFORMATION

The financial information set out above does not constitute statutory accounts
as defined in Section 240 of the Companies Act 1985. The financial information
for the fifteen months ended 31 December 2000 has been extracted from the
statutory accounts on which the auditors have issued an unqualified audit
report and which will be delivered to the Registrar of Companies in due
course.

The financial information for the fifty two weeks ended 26 September 1999 has
been extracted from the statutory accounts for that period which have been
delivered to the Registrar of Companies and on which the auditors issued an
unqualified audit report.




    5.     ANNOUNCEMENT

Copies of this announcement are available from the registered office of the
company: Enterprise House, Chamber Court, Castle Street, Worcester WR1 3AD and
the Group's website: www.maclellan-group.plc.uk



Enquiries:

John R Foley, Chief Executive

MacLellan Group plc - Tel: 01905 744400



Stephen R Shipley, Finance Director

MacLellan Group plc - Tel: 01905 744400



Trevor Bass

Tel: 020 7601 1066