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Western Selection (WSE)

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Wednesday 06 March, 2002

Western Selection

Interim Results

Western Selection PLC
6 March 2002

                            Western Selection P.L.C.

Directors:                                                 Registered office
D.C. Marshall, Chairman                                    25 City Road,
A.R.C. Barclay                                             London, EC1Y 1BQ
A.J. Hall
J.M. Robotham, OBE, FCA, MSI                               6th March 2002


TO THE MEMBERS

The directors are pleased to present the unaudited interim results of the
company for the six months ended 31st December 2001.

Results

Profit for the period after tax was £417,000 (2000: £1,754,000), including an
exceptional profit on the disposal of part of our strategic investment in The
Sanctuary Group plc of £542,000 (2000 - £1,575,000). The comparative for the
period to 31st December 2000 also includes an exceptional dividend from our
strategic investment in Creston plc of £414,000. Our loss for the period before
exceptional items has declined to £125,000 (2000 - £235,000).



Investment policy and management

Our investment policy is to have strategic stakes in a few special situations,
hold a diversified general portfolio of U.K. and European listed equities,
together with a small proportion of capital in unlisted, AIM and Ofex issues.
Strategic investments are minority positions where we seek to exercise influence
over the management of the investment. Western is represented on the boards of
the two strategic investments, Creston plc and The Sanctuary Group PLC.

An analysis of assets is set out below. Our general portfolio, which is managed
by two non-executive directors, Andrew Hall and Michael Robotham, has declined
in value along with the market. The board as a whole takes decisions in relation
to both our strategic and unlisted investments.
Assets at market value                                              December     December         June
                                                                        2001         2000         2001
Strategic Investments                                                   £000         £000         £000

Sanctuary Group PLC                                                    4,050        4,543        4,495
Creston plc                                                            1,416        1,201        1,320
Swallowfield plc                                                         740            -          559
General Portfolio Investments                                          5,604        8,451        7,174
Other Investments                                                        492          461          542
                                                                      12,302       14,656       14,090
Other Assets
Cash at bank and on deposit                                               53           51           52
Other net (liabilities)/assets                                         (119)          311        (272)
                                                                      12,236       15,018       13,870

Bank overdraft                                                         (291)        (298)        (740)
                                                                      11,945       14,720       13,130

Number of shares in issue                                         43,511,532   43,508,936   43,511,078
Net assets per share                                                   27.45        33.83        30.18



Our assets per share at 31st December 2001, taking listed investments at market
value, were 27.45p. This is a reduction of 9% from 30th June 2001 and 19% from
31st December 2000. This compares with falls in both the FTSE 100, which was
down 7.53% over the last six months and 16.15% over the year, and the FTSE All
Share, which fell 7.17% in the last six months and 15.13% in over the year. The
market value of General Portfolio investments listed on the London Stock
Exchange was £5,604,000 (£7,174,000 at 30th June 2001), on other exchanges
£386,000 (£405,000 at 30th June 2001) and on Ofex and AIM £106,000 (£137,000 at
30th June 2001).

Strategic investments

The Sanctuary Group plc is one of the world's leading developers of intellectual
property rights in the fields of music, television and entertainment. It has
issued accounts for the twelve months to 30th September 2001, reporting an
increase in turnover of 87% and operating profits before interest and tax of
£10,146,000 (2000 - £5,533,000). Earnings per share increased 36% to 2.56p from
1.88p last year, and the full year dividend is increased from 0.25p to 0.30p.
The Sanctuary share price has decreased from 74.0p at 30th June 2001 to 67.5p at
31st December 2001 and was 60.0p on 28th February 2002.

Creston plc is the recently transformed holding company of a Marketing Services
Group with a strategy incorporating acquisitions as well as organic growth. The
main components of the group are Marketing Sciences Ltd (MSL), Mobile Sensory
Testing Services Ltd, both acquired in January 2001, and The Real Adventure
Marketing Communications Ltd (RAMC), which was acquired in November 2001. MSL is
a broad based market research agency, MSTS provides expertise in sensory
analysis and profiling of products and RAMC provides a comprehensive range of
creative and marketing disciplines for clients including brand development,
direct mail campaigns, eMarketing, customer relationship and database
management, incentive schemes, advertising and design. Interim results for the
six months to 30th September 2001 show a loss for the six months of £194,000,
reflecting the bedding-in of the first acquisitions made under the new strategy.
The Creston share price was 82.5p at 30th June, improved to 88.5p at 31st
December 2001 and was 81.5p on 28th February 2002.

We have acquired 7.1% of Swallowfield plc, a high value added and innovative
supplier of quality personal care and other products to branded and own label
customers. They specialise in formulation and manufacture of aerosol and
non-aerosol products for retail distributors, the contract filling of aerosols
and the manufacture of cosmetic pencils and other cosmetic products. Results for
the 24 weeksyear ended 31st December 16th June 2001 show turnover up 85%, andbut
operating profit down 51up 6% to £5072,875,000. This was primarily an effect of
an unfavourable product mix together with margin pressures in European export
markets caused by the relative strength of sterling. Against a background of
cautious optimism for the year-end, they have declared an interim dividend of
1.7p, a 13% increase over the previous yearEarnings per share, excluding
restructuring, increased 9% on last year. Our average acquisition cost for this
long term investment of 108p per share compares with Swallowfield's share price
of 105.5p at 30th June, 92.5p at 31st December 2001 and 105.0p on 28th February
2002.

In the last report and accounts I advised shareholders that we had entered into
an agreement providing for the investment of a sum totalling £500,000 in Doctors
Direct plc, as part of an offer for subscription by way of a prospectus prior to
admission to trading on Ofex. A legal problem was encountered during due
diligence and this has resulted in a delay in the publication of the prospectus.
We remain keen to invest in Doctors Direct subject to early resolution of the
outstanding matters and publication of the prospectus.

Conclusion

In these times of market volatility we believe that long-term shareholder value
can best be achieved through investment in real businesses providing goods and
services that will continue to be required. Our investment portfolio continues
to be weighted accordingly.

We declared a dividend of 0.46p per share for the year ended 30th June 2001. It
is not our policy to pay interim dividends, but it is our intention, subject to
unforeseen circumstances, to increase the dividend for the current year, which
we anticipate paying in October 2002.



                                                                David C Marshall

                                                                        Chairman



Unaudited Profit and Loss Account

For the half year ended 31 December 2001
                                                          Before                                      Year
                                                     Exceptional Exceptional                         Ended
                                                           Items       Items     Total             30 June
                                                            2001        2001      2001      2000      2001
                                              Notes         £000        £000      £000      £000      £000

Interest receivable                                           1           -         1        20        22

Income from investments in:

Listed strategic undertakings
                                                            
                    - Normal                                  -           -         -         -        10
                                                                   
                    - Exceptional               1             -           -         -       414       414

Other listed investments                                     59           -        59        48       160
Other unlisted undertakings                                   3           -         3         3         5
(Deficit)/Surplus on disposal of listed
undertakings
                                                            
                    - Normal                                (57)          -       (57)     (182)       88

                                               
                    - Exceptional               2             -         542       542     1,575     1,575

                                                              6         542       548     1,877     2,274
Administrative expenses                                    (120)          -      (120)     (118)     (245)
Operating profit                                           (114)        542      428      1,759     2,029
Interest payable and similar charges                        (10)          -       (10)       (5)      (29)
Profit on ordinary activities before                       (124)        542       418     1,754     2,000
taxation
Taxation                                                     (1)          -        (1)        -       (15)
Profit on ordinary activities after taxation               (125)        542       417     1,754     1,985
Dividends                                                     -           -         -         -      (200)
Retained profit for the period                             (125)        542       417     1,754     1,785
Earnings per share                                                               0.96p     4.03p     4.56p
Dividend per share                                                                 Nil       Nil     0.46p

Unaudited Balance Sheet
                                                      31 December                 30 June
                                                         2001           2000         2001
                                                         £000           £000         £000
Fixed assets                                           9,799          9,130        9,985
Current assets                                            70            702           75
Bank overdraft                                          (291)          (298)        (791)
Current liabilities                                     (135)          (539)        (243)
Net current liabilities                                 (356)          (135)        (959)
Total assets less current liabilities                  9,443          8,995        9,026
Capital and Reserves
Called up share capital                                4,351          4,351        4,351
Share premium account                                  1,647          1,646        1,647
Warrants reserve                                         355            356          355
Profit and loss account                                3,090          2,642        2,673
                                                       9,443          8,995        9,026
Net Assets at market value - £000                     11,946         14,720       13,130
Net Assets at market value per share - pence           27.45p         33.83p       30.18p

Notes:-
1.      Creston plc paid special dividends of 36p per share on 5th May 2000 and 32.5p on 17th November 2000.
2.      Profit on part disposal of the holding in The Sanctuary Group PLC.
3.      The results for the half-year are unaudited. They have been prepared on the basis of the accounting
        policies adopted in the accounts for the year ended 30th June 2001. The financial information in this
        interim announcement does not constitute statutory accounts within the meaning of Section 240(5) of the
        Companies Act 1985. The statutory accounts of Western Selection P.L.C. for the year ended 30th June 2001
        have been reported on by the company's auditors and have been delivered to the Registrar of Companies.
        The report of the auditors was unqualified and did not contain a statement under Section 237(2) or 272(3)
        of the Companies Act 1985.
4.      The calculation of earnings per share is based on the weighted average number of shares in issue for the
        period and the profit on ordinary activities after tax.

Cash Flow Statement

For the year ended 31 December 2001
                                                                      31 December 2001       30 June 2001

                                                           Notes       £000        £000      £000       £000
Net cash inflow from operating activities                   (a)                     41                  742
Returns on investments and servicing of finance
Interest paid                                                          (10)                  (29)
Interest received                                                        1                    22
                                                                                    (9)                  (7)
Taxation paid                                                                       (1)                 (14)
Financial investment
Proceeds of disposal of fixed asset investments - Normal             1,444                 3,295
                                                                       
                                    - Exceptional                      709                 1,979

                                                                    (1,483)               (6,526)
Net cash inflow/(outflow) from financial investment activities                     670               (1,252)
Equity dividend paid                                                              (200)                (174)
Financing
Share capital issued                                                                  -                    1
Decrease/(Increase) in cash                                                        501                 (704)
Debt at start of year                                                             (739)                 (35)
Net debt at end of year                                     (b)                   (238)                (739)
Notes:


 a. Reconciliation of operating profit to net cash inflow from operating
    activities

Operating profit                                                              428                   2,029
Profit on sale of investments                                                (485)                 (1,663)
Interest received                                                              (1)                    (22)
Decrease in debtors and accrued income                                          6                     376
Increase in creditors                                                          93                      22
Net cash inflow from operating activities                                      41                     742

(b) Reconciliation to movements in net funds

                                                                          At Start        Cash      At End
                                                                            Period        Flow      Period
                                                                              £000        £000        £000
2001/2002
Cash at bank                                                                   52           1          53
Bank overdraft                                                               (791)        500        (291)
                                                                             (739)        501        (238)
2000/2001
Cash at bank                                                                   49           3          52
Bank overdraft                                                                (84)       (707)       (791)
                                                                              (35)       (704)       (739)



Market value of General Portfolio

At 31 December 2001
                                                                            £000          %
Richmond Foods                                                               338        6.03
Pura                                                                         293        5.22
Lavendon Group                                                               190        3.40
Uti Worldwide                                                                188        3.36
Julius Baer Holdings                                                         185        3.31
Sarasin Bank                                                                 133        2.38
Somerfield                                                                   127        2.26
Anglo American                                                               125        2.23
Vontobel Holdings                                                            125        2.22
United Utilities                                                             123        2.20
Associated British Foods                                                     121        2.16
Fisher (James) & Sons                                                        118        2.11
Shell Transport & Trading                                                    118        2.11
Total Fina                                                                   118        2.10
Credit Suisse Group                                                          117        2.09
Bioquell                                                                     113        2.01
GlaxoSmithKline                                                              112        2.00
BP Amoco                                                                     107        1.91
UBS                                                                          104        1.86
BG Group                                                                     101        1.80
Novartis                                                                      99        1.77
Telefonica De Espana                                                          96        1.71
Johnson Matthey                                                               95        1.70
AstraZeneca                                                                   93        1.66
Finsbury Worldwide Pharmaceuticals Trust                                      89        1.59
Fortis NL                                                                     89        1.58
Shire Pharmaceuticals Group                                                   86        1.53
Shanks                                                                        84        1.50
Rolls-Royce                                                                   83        1.49
P&O Steam Navigation Company                                                  83        1.48
Merrill Lynch & Co                                                            82        1.47
Allianz                                                                       81        1.45
HSBC Holding                                                                  81        1.44
Koninklije Philips Electronics                                                80        1.42
Prudential Corporation                                                        80        1.42
Schroders                                                                     79        1.41
Vivendi Universal                                                             75        1.34
Roche Holdings, Genusscheine                                                  74        1.31
Invensys                                                                      72        1.28
ING Groep                                                                     70        1.25
Cable & Wireless                                                              66        1.18
Johnson & Johnson                                                             65        1.16
National Grid                                                                 64        1.15
Forbo Holdings                                                                63        1.12
Others (less than 1%)                                                        719       12.83
                                                                           5,604      100.00





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