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Faupel Trading Group (FAP)

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Friday 16 November, 2001

Faupel Trading Group

Interim Results

Faupel Trading Group PLC
16 November 2001


FOR IMMEDIATE RELEASE                     16 NOVEMBER 2001


                           Faupel Trading Group plc

                         Unaudited interim results
                  for the six months ended 30 September 2001

Faupel Trading Group plc has today announced unaudited interim results for the
six months ended 30 September 2001.

Summary

*        Losses before tax were £486,000 (2000: profit before tax £232,000).

*        Losses per share of 4.15p (2000: earnings per share 1.38p).

*        No interim dividend payable (2000: interim dividend 0.8p per share).

*        Additional equity is being raised of approximately £600,000 after
         expenses.  Full details contained in circular to shareholders to be    
         issued today.

*        Proposal to transfer quotation from Official List to AIM.

*        Laurence Mead will join the Board as Chief Executive Officer
         Designate in mid November. His previous business experience has been in
         the UK and Hong Kong.

*        The Company's strategy will continue to be to drive down stock
         levels, generate cash, focus on margin and dispense with non-profitable
         business.  In the short-term profitability will suffer.


Enquiries:

David Newbigging, Chairman
James McClean, Finance Director
Faupel Trading Group plc
Tel: 020 8339 3100




Chairman's Interim Statement

Results

The Group made a loss before tax for the six months ended 30 September 2001 of
£486,000 (2000: pre-tax profit £232,000).  Losses per share were 4.15p (2000:
earnings per share 1.38p).  Turnover in the period was £18.5m (2000: £17.4m).

Dividends

The Board is not recommending the payment of an interim dividend.

Trading

The Group as a whole increased sales by 6.3% over the same period last year.
An operating loss of £176,000 was generated, however, compared to an operating
profit of £499,000 in the same period last year.  The greatest contribution to
this loss was the Garments division which made a loss of £500,000 after
allocation of central costs compared to a loss of £18,000 in the same period
last year.

The central costs were inflated by the non-recurring cost involved in the
departure of the previous chief executive.  This amounted to £164,000,
including legal expenses, and was paid in early September.



Before allocation of central costs, the operating profit of the Household
Textiles division was very close to that of the same period last year.  The
benefit of extra sales was eroded to some extent by a decline in gross margin
and extra overheads; principally employment costs and costs which vary with
activity. The events in America on 11 September have caused a downturn in
sales in that part of the business which supplies the travel and tourism
industry and this is likely to continue in the near future.  This area of the
business usually contributes about 17% of the division's sales.



The turnover of the Garments division fell slightly compared to last year.
This was accompanied by a significant fall in margin and a sharp fall in
operating profit.  Before allocation of central costs, overheads were kept to
last year's levels.  The fall in margin, while unwelcome, has been accepted as
a consequence of the Group accelerating its drive to reduce stocks and to
generate cash to repay borrowings.  A professional Interim Manager has been
managing the division since early August.  He will remain with the Company
until early in 2002 in order to see through the disposal of problem stock
lines, and to concentrate the division on cash generation.



While the General Trading division, which includes the Company's agency
activities, exports of general merchandise and the direct sale of products
from China, reported reduced sales compared with the same period last year, it
performed slightly better than in the second half of last year.



Finance

Stocks remained considerably higher than they were last year as did bank
borrowings.  Both of these are a legacy from the poor performance in the
second half of last year, particularly in the Garments division.  Due to the
seasonal nature of the product, this could not be sold in the first half of
the financial year and the sale of this stock is targeted for the second half
of the year.



Interest costs were at higher levels than last year due to the consistently
higher level of borrowing, caused largely by overstocking in the Garments
division.

Subscription of new equity

The Group has announced today proposals involving the issue, conditionally, of
an aggregate of 4,000,000 new shares at 20p to raise approximately £800,000
before expenses and approximately £600,000 net of expenses.  Of this total, it
has been agreed that 3,000,000 new shares would be issued to a new investor,
Max Money Resources ('Max'), for an aggregate subscription price of £600,000,
giving Max approximately 19% of the enlarged share capital of the Company.
Stephen Redfarn, an existing shareholder and non-executive director of the
Company, has also agreed to subscribe for 1,000,000 new shares for an
aggregate subscription price of £200,000, which will increase his stake in the
Company to approximately 16%.

As part of these arrangements, both Max and Stephen Redfarn will be granted,
conditionally, options over a further 1,133,712 and 377,903 new shares
respectively. Each option will be exercisable within 120 days of the date of
completion of the subscription, at a price of 20p.  Assuming these options are
exercised in full, then Max and Stephen Redfarn will respectively own
approximately 24% and 17% of the enlarged issued share capital of the Company.

Full details of these proposals are contained in a circular to shareholders to
be issued today.  Implementation of the proposals is subject to approval by
the shareholders at an Extraordinary General Meeting to be held on 11 December
2001.  In the case of Stephen Redfarn, his agreement to subscribe for new
shares is also subject to completion of the initial subscription of 3,000,000
shares by Max.

Laurence Mead

It has also been agreed that Laurence Mead, the beneficial owner of 40% of
Max, will join the Board as Chief Executive Officer Designate on or around 19
November 2001.

Laurence Mead (40) has been the Asia Pacific Managing Director of Schutz
Container Systems (HK) Limited since 1998.  He has been responsible for
formulating and implementing the company's expansion plan in the Asia Pacific
region.  Prior to this, he was responsible for identifying the opportunity and
the formation and leadership of an investor group that acquired the branded
sporting goods business 'Gaastra' in a US$8.5m transaction.  Subsequently, as
a shareholder and executive director of Gaastra International Group Limited
(Hong Kong) between 1994 and 1998, he established and implemented a turnaround
plan and sale of the business.

Laurence Mead thus brings with him considerable experience in company
management and strategy, in particular in the Asia Pacific region.

Max Money Resources

Max is a British Virgin Islands registered company limited by shares, that has
been incorporated for the purpose of participating in the Subscription and the
Options. The remainder of the issued share capital of Max not owned by
Laurence Mead is owned by business associates of Laurence Mead.

Transfer to AIM

Due to the Company being too small to warrant it being subject to the
additional requirements and costs associated with being a fully listed
Company, the Board considers it appropriate that the Company's quotation be
transferred to AIM.



It is expected that the entire issued share capital of the Company will be
admitted to trading on AIM and that dealings on AIM will commence on 14
December 2001.  The listing of the existing Ordinary Shares on the Official
List will be cancelled as at the closure of the market on 13 December 2001. No
new share certificates in respect of existing Ordinary Shares will be issued.



Beeson Gregory Limited are acting as nominated adviser and broker to the
Company in respect of AIM.



Prospects

The injection of new capital by Max and Stephen Redfarn will reduce the
borrowings of the Company, and hence its interest costs, giving the Company a
more secure platform from which to develop.



The Board believes that Laurence Mead will bring in new ideas together with a
fresh approach to the management of the Company.  Initially, however, our
strategy will continue to be to drive down stock levels, generate cash, focus
on margin and dispense with non-profitable business.  Returning the balance
sheet to health and reducing borrowings is likely to mean that, in the short
term, profitability will suffer. It is unlikely that the Group will report a
profit or pay a dividend in respect of the current financial year.





D K Newbigging

Chairman





16 November 2001


Independent review report by KPMG Audit Plc

to Faupel Trading Group plc





Introduction



We have been instructed by the company to review the financial information set
out on pages 6 to 9 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.



Directors' responsibilities



The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.  The directors
are responsible for preparing the interim report in accordance with the
Listing Rules of the Financial Services Authority which require that the
accounting policies and presentation applied to the interim figures should be
consistent with those applied in preparing the preceding annual accounts
except where they are to be changed in the next annual accounts in which case
any changes, and the reasons for them, are to be disclosed.



Review work performed



We conducted our review in accordance with guidance contained in Bulletin 1999
/4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom.  A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed.  A review is substantially
less in scope than an audit performed in accordance with Auditing Standards
and therefore provides a lower level of assurance than an audit.  Accordingly
we do not express an audit opinion on the financial information.



Review conclusion



On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2001.



                                                                 1 Forest Gate

                                                                 Brighton Road

KPMG Audit Plc                      Crawley
Chartered Accountants               West Sussex RH11 9PT



16 November 2001





Interim Results
for the six months ended 30 September 2001


                                            6 months       6 months   Year ended
                                        30 September   30 September     31 March
                                                2001           2000         2001
                                         (unaudited)    (unaudited)    (audited)
                                   Notes       £'000          £'000        £'000


Turnover                               2      18,540         17,443       36,261

Operating profit                       2       (176)            499          458

Interest                                       (310)          (267)        (602)

(Loss)/profit on ordinary activities before    (486)            232        (144)
taxation

Taxation                                           -           (70)          (5)
                                            --------       --------     --------
(Loss)/profit after taxation                   (486)            162        (149)

Dividends                                          -           (94)         (94)
                                            --------       --------     --------
Retained (loss)/profit                         (486)             68        (243)
                                            --------       --------     --------

(Loss)/earnings per share              3     (4.15)p          1.38p      (1.27)p
                                            --------       --------     --------

Diluted (loss)/earnings per share      3     (4.15)p          1.38p      (1.27)p
                                            --------       --------     --------



Consolidated Balance Sheet
at 30 September 2001

                                         6 months       6 months     Year ended
                                     30 September   30 September       31 March
                                             2001           2000           2001
                                      (unaudited)    (unaudited)      (audited)
                                            £'000          £'000          £'000

Fixed assets
  Intangible assets                             -             66              -
  Tangible assets                           1,793          1,862          1,827
  Investments                                  85             85             85
                                         --------       --------       --------
                                            1,878          2,013          1,912
                                         --------       --------       --------

Current assets
  Stocks and goods in transit               8,873          7,312          7,932
  Trade debtors                             8,006          8,005          5,612
  Other debtors                               443            397            300
  Cash at bank and in hand                      -              -             68
                                         --------       --------       --------
                                           17,322         15,714         13,912
                                         --------       --------       --------


Creditors: amounts falling due within one year
  Bank overdrafts                             193             74              -
  Bills of exchange payable                10,328          8,524          7,102
  Other creditors                           2,482          2,001          2,039
                                         --------       --------       --------
                                           13,003         10,599          9,141
                                         --------       --------       --------
Net current assets                          4,319          5,115          4,771
                                         --------       --------       --------
Total assets less current liabilities       6,197          7,128          6,683


Creditors: amounts falling due 
after more than one year                        -            134              -

                                         --------       --------       --------
Net assets                                  6,197          6,994          6,683
                                         --------       --------       --------


Capital and reserves
Called up share capital                       585            585            585
Share premium account                       2,383          2,383          2,383
Other reserve                                  93             93             93
Revaluation reserve                           680            684            682
Profit and loss account                     2,456          3,249          2,940

                                        ---------        -------       --------
Equity shareholders' funds                  6,197          6,994          6,683
                                        ---------        -------       --------




Summary Consolidated Cash Flow Statement
for the six months ended 30 September 2001


                                         6 months       6 months           Year 
                                            ended          ended          ended
                                     30 September   30 September       31 March
                                             2001           2000           2001
                                      (unaudited)    (unaudited)      (audited)
                                            £'000          £'000          £'000


Operating (loss)/profit                     (176)            499            548

Depreciation                                   71             78            164

Amortisation of goodwill                        -              6             12

Net decrease in working capital           (3,065)        (3,585)        (1,411)
                                         --------       --------       --------

Cash flow from operating activities       (3,170)        (3,002)          (687)

Returns on investments and servicing        (280)          (205)          (540)
of finance

Taxation                                        -              -          (132)
                                                 

Capital expenditure and financial            (37)          (102)          (160)
investment


Equity dividends paid                           -          (151)          (245)
                                         --------       --------       --------
Cash outflow before use of liquid         (3,487)        (3,460)        (1,764)
resources

Management of liquid resources              3,226          3,207          1,653
                                         --------       --------       --------
Decrease in cash in the period              (261)          (253)          (111)
                                         --------       --------       --------


Reconciliation of net cash flow to movement in net debt

Decrease in cash in the period and          (261)          (253)          (111)
movement in net debt in the year

Net funds at beginning of period               68            179            179
                                         --------       --------       --------
Net (debt)/funds at end of period           (193)           (74)             68
                                                           
                                         --------       --------       --------


Notes


1.     Results for the six months ended 30 September 2000 and 2001 are
unaudited and have been prepared on the basis of the accounting policies set
out in the company's statutory accounts for the year ended 31 March 2001.


        The results for the year ended 31 March 2001 have been abridged from
the published group accounts, for which an unqualified audit report was issued
and which have been filed with the Registrar of Companies.   The financial
information set out on pages 6 to 8      does not comprise full financial
statements within the meaning of the Companies Act 1985.


2.      Analysis of turnover and operating profit

                             6 months ended      6 months ended       Year ended
                          30 September 2001   30 September 2000    31 March 2001
                                  Operating           Operating        Operating
                              Sales profit/       Sales profit/    Sales profit/
                                     (loss)              (loss)           (loss)
                            £'000    £'000      £'000    £'000   £'000     £'000

Household Textiles         13,265      403     11,422      558  23,631       904

Garments                    4,789    (500)      5,058     (18)  11,184     (298)
    
General Trading               486     (79)        963     (41)   1,446     (148)

                         -------- --------   -------- -------- ------- ---------
                           18,540    (176)     17,443     499   36,261       458
                         -------- --------   -------- ----------------  --------


3.      Earnings per share for the six months ended 30 September 2001 are
based on the group loss after taxation of  £486,000 (2000: profit after tax £
162,000) and ordinary shares in issue during the period of 11,709,447.
Diluted earnings per share calculated in accordance with FRS14 is unchanged
from the basic earnings per share.


4.      Copies of this statement of interim results have been sent to
shareholders and copies will also be available on application to the group's
headquarters and registered office at Faupel House, Giggs Hill Road, Thames
Ditton, Surrey KT7 0TR.