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Havelock Europa PLC (HVE)

  Print      Mail a friend       Annual reports

Monday 08 April, 2002

Havelock Europa PLC

Final Results

Havelock Europa PLC
8 April 2002



                 HAVELOCK EUROPA PLC - PRELIMINARY ANNOUNCEMENT


Havelock Europa, the Retail and Educational Interiors and Point of Sale Display
business, announces its results for 2001, which was a year of significant change
for the Company;  involving the acquisition, in September, of ESA McIntosh, the
market leader in educational science laboratories, and the subsequent decision
to rationalise significantly its Retail Interiors business in the first half of
2002.

•    Despite a sharp drop in turnover to £63.1 m (2000: £71.5 m) and a
     substantial half-year loss, profit for the year before tax and exceptional 
     items amounted to a creditable £1.1 m (2000: £1.5 m) which included an 
     excellent post-acquisition contribution from ESA McIntosh.

•    Basic earnings per share before exceptional costs were 4.5p (2000: 4.0p).

•    Exceptional costs of £3.75 m (2000: nil) represent a one-off charge
     relating to the closure of the Retail Interiors factory at Nottingham.

•    A final dividend per share of 1.5p (2000: 1.25p), up 20%, is proposed,
     making a total dividend for the year of 2.0p per share (2000: 1.75p).

•    The Retail Interiors Division turnover fell markedly to £29.5 m (2000:
     £47.1 m) as a result of difficult and volatile conditions in the High 
     Street, particularly in the first three quarters of the year, and as a 
     consequence the Division was loss-making. However, annualised savings from 
     the closure of the Division's Nottingham premises of over £2 m are 
     expected. Prospects for an early sale of these premises are good.

•    Havelock's share of the 49% owned Havelock AHI Middle East Joint Venture's 
     turnover almost doubled to £6.2 m, whilst the share of profit almost 
     trebled to £1.08 m (2000: £0.37 m).

•    In three months of ownership, ESA McIntosh made an excellent operating
     profit of £1.22 m.

•    Turnover in the Point of Sale Display Division increased by 6.6% to £22.5 m 
     (2000: £21.1 m), reflecting advances made in the acquisition of new 
     clients, including Tesco and Safeway.


Michael Kennedy, Chairman, stated 'The strategic decisions taken in 2001 will in
the Board's opinion, put Havelock in a much better position to deliver value for
shareholders. The Directors are confident that 2002 will be a year of
considerable progress and this confidence is underlined by the proposed 20%
increase in the final dividend for 2001.'


Enquiries:

Havelock Europa PLC                                                 01383-820044
Hew Balfour (Chief Executive)                             (Mobile) 07801-683 851

Bankside Consultants Limited
Alistair Macdonald                                                 020-7444 4168




                              CHAIRMAN'S STATEMENT


OVERVIEW

The Board announces its results for 2001, which was a year of significant change
for the Company; involving the acquisition, in September, of ESA McIntosh, the
market leader in educational science laboratories, and the subsequent decision
to rationalise significantly its Retail Interiors business in the first half of
2002.

Despite a sharp drop in turnover to £63.1 million (2000: £71.5 million),
Havelock achieved a creditable profit before tax and exceptional items of
£1,107,000 (2000: £1,513,000), including an excellent post-acquisition
contribution from McIntosh.

After allowing for an exceptional charge of £3.75 million, relating to the
closure costs of the Retail Interiors factory in Nottingham, announced in
November, the loss before tax amounted to £2.64 million (2000: profit £1.51
million).  Basic earnings per share were 4.5p (2000: 4.0p), before exceptional
costs.  The nil tax charge on earnings from the Middle East and McIntosh,
together with the deferred tax credit on the closure costs, resulted in a tax
credit of £1,025,000 (2000: tax charge of £412,000).

Two of Havelock's four businesses, the Middle East Interiors Joint Venture
(Havelock AHI) and McIntosh, performed very well; the Point of Sale Division
performed well; whilst the exception, the Retail Interiors Division, had to
contend with extremely difficult trading conditions, especially in the first
three quarters of the year.

Havelock took two key strategic decisions in the last third of the year which
laid the foundations for improved prospects.  First, in September, it acquired
McIntosh for up to £8 million, which the Board believes will prove an excellent
acquisition, being a market leader in a strongly growing market.  Secondly, in
November, it put in train the closure of the Retail Interiors Division's
Nottingham premises, with a view to realigning overheads more closely to the
level of activity expected in the future.


DIVIDEND

The Board is proposing a 20% increase in the final dividend per share to 1.5p
(2000: 1.25p).  If approved at the AGM on 25 June 2002, the dividend will be
paid on 1 July 2002 to shareholders on the register at the close of business on
7 June 2002.  Including the interim dividend per share of 0.5p (2000 : 0.5p),
paid on 28 December 2001, the proposed dividends per share for the year total
2.0p (2000: 1.75p).


STRATEGY

As the Board has for some time believed that the UK retail interiors market, in
particular the non-food sector, is likely to remain difficult and unpredictable,
it has developed Havelock's business further into areas offering prospects of
enhanced returns, which also build on the Company's existing resources and
skills.  First, a Point of Sale Display business was built by the acquisitions
of Showcard in 1996 and Hartcliffe in 1997. Secondly, the Middle East Joint
Venture was set up in 1998. Most recently, ESA McIntosh was acquired in
September 2001, whilst the size of the UK Retail Interiors Division has been
reduced.


TRADING

Retail Interiors

The Retail Interiors Division manufactures and installs furniture and fittings
for retailers and banks.  During the year, it operated from premises in Dalgety
Bay, Fife extending to 170,000 sq ft and in Nottingham extending to 188,000 sq
ft.

The Division's turnover fell markedly to £29.5 million (2000: £47.1 million) as
a result of difficult and volatile conditions in the High Street, particularly
in the first three quarters of the year, and as a consequence the Division was
loss-making.  Turnover with Marks & Spencer, traditionally one of the Division's
largest customers, fell significantly as this customer wrestled with strategic
change. In the financial services industry, activity remained at a low ebb as
customers delayed or abandoned capital expenditure programmes to concentrate
their energies on mergers or potential mergers.

In November, as a result of the intensely competitive conditions being
experienced in this sector, the Board announced the closure of the Division's
Nottingham premises. This programme is now well advanced, resulting in the
unfortunate loss of approximately 170 jobs.  Annualised savings are expected to
run at in excess of £2 million, with the cash outlay of £2.5 million likely to
be recouped once the sale of the land and buildings has been completed.
Prospects for an early sale are good with a number of parties showing strong
interest.  Future manufacturing in this Division will take place at the Group's
factory in Dalgety Bay, where a significant number of jobs will be created,
although a substantial sales and project management presence will remain in the
East Midlands to service the Division's southern-based customers.


Middle East Joint Venture

Havelock AHI, which is 49% owned by Havelock, is a manufacturer and installer of
retail and hotel interiors with facilities totalling 150,000 sq ft in Bahrain.

For the second successive year, major advances were made in the Gulf region,
vindicating the Group's decision to utilise its store fitting skills in markets
beyond the UK.  Under the guidance of a focused management team, strong progress
was made in both the retail and hotel refurbishment markets following the
addition of a number of new customers, including the significant retail groups,
Al Hokair in Saudi Arabia, Al Futtaim in the United Arab Emirates and Jawad in
Bahrain. The Group's share of the Joint Venture's turnover almost doubled to
£6.2 million, whilst the share of profit almost trebled to £1.08 million (2000:
£374,000).  All loans to the Joint Venture were repaid during 2001 and a
dividend of £456,000 was also received.


ESA McIntosh

ESA McIntosh is the UK market leader in the design, manufacture and installation
of educational science laboratories, with 205,000 sq ft of facilities in
Kirkaldy, Fife.

In three months of ownership, McIntosh made an excellent operating profit of
£1.22 million. The first earnout target of a trading profit of £3.0 million in
the year to 31 December 2001 was attained, triggering further consideration of
£2.5 million which was paid at the end of March.

The business has integrated well into the existing Group and further
opportunities for synergistic benefits remain as the Group consolidates its
retail and educational furniture and fittings manufacturing skills into its two
chosen factories in Fife.


Point of Sale Display

The Point of Sale Display Division prints promotional graphics and manufactures
display equipment in Bristol and Letchworth for use in retail and branded goods
businesses, typically as part of marketing, rather than capital expenditure,
budgets.

Turnover in the Division increased by 6.6% to £22.5 million (2000: £21.1
million), reflecting advances made in the acquisition of new clients.  Tesco and
Safeway joined Somerfield as customers of the Division as the Group pushed
forward with its strategy of lessening its traditional dependence on the fashion
sector. At the same time, BHS became a significantly larger customer.  Further
progress was also made in the branded goods market.


FINANCE

Net debt at the year end was £15.7 million (2000: £9.6 million), reflecting the
initial consideration, expenses and acquired debt relating to the acquisition of
McIntosh totalling £6.3 m. Whilst the Group's gearing rose to 191% after
purchasing McIntosh and providing for the closure of the Retail Interiors
factory in Nottingham, interest at pre-exceptional charge level was 2.2 times
covered.

The Group has adopted the transitional arrangements required by FRS 17, the new
accounting standard on retirement benefits, details of which are set out in Note
11.


CURRENT TRADING AND PROSPECTS

The Group's prospects have sharply improved as the full effects of the revised
strategy, announced in the autumn of 2001, unfold.

The UK Retail Interiors Division will be capable of trading profitably on a much
lower level of turnover following completion of its rationalisation programme.

After the strong performances of the last two years, another healthy
contribution from the Middle East Joint Venture is expected, albeit at a lower
level than in 2001.

Current trading at ESA McIntosh is running well up to expectations.  Work has
started with the Amey Miller Construction Joint Venture for Edinburgh Schools to
add to that for the Glasgow Schools started in 2001. These contracts will extend
well into 2003. Elsewhere in Scotland, significant P.F.I. programmes are
underway.  McIntosh's first two P.F.I. projects in  England were signed within
the last month.  Further substantial progress within this arena is expected in
various parts of the UK, during the course of this year.  Meanwhile, enquiries
for traditional local authority expenditure on educational furniture are running
at record levels.  The decision by the Group to create centres of excellence in
Scotland coupled with the close proximity and compatibility of the two
manufacturing plants at Dalgety Bay and Kirkcaldy mean that the Group has
substantial additional capacity to handle a significant uplift in workload.

In the Point of Sale Display sector, as the Group drives further into the
branded goods market, a number of new customers have been acquired since the
beginning of the year. Whilst this Division invariably suffers low order
visibility, another good year is envisaged.

The strategic decisions taken in 2001 will in the Board's opinion, put Havelock
in a much better position to deliver value for shareholders. The Directors are
confident that 2002 will be a year of considerable progress and this confidence
is underlined by the proposed 20% increase in the final dividend for 2001.


Michael Kennedy                                                     8 April 2002
Chairman



                      CONSOLIDATED PROFIT AND LOSS ACCOUNT
                      for the year ended 31 December 2001

                                                             Before
                                                        exceptional   Exceptional      Total     Total
                                             Notes            items         items       2001      2000
                                                               £000          £000       £000      £000

Turnover

Group and share of Joint Venture                             63,072             -     63,072    71,511
Less:  share of Joint Venture's turnover                    (6,206)             -    (6,206)   (3,364)
                                                             ______        ______     ______    ______

Group turnover (of which 2001 acquisition £4,881,000)        56,866             -     56,866    68,147

Operating profit before exceptional items
Group (of which 2001 acquisition £1,217,000)                    931             -        931     2,266

Exceptional reorganisation costs                                  -       (3,750)    (3,750)         -
                                                             ______        ______     ______    ______

Operating profit/(loss) after exceptional
items                                                           931       (3,750)    (2,819)     2,266


Share of Joint Venture's operating profit                     1,095             -      1,095       408

                                                             ______        ______     ______    ______
Total operating profit/(loss):
Group & share of Joint Venture                                2,026       (3,750)    (1,724)     2,674

Net interest payable and other similar items
Group                                                         (904)             -      (904)   (1,127)
Joint Venture                                                  (15)             -       (15)      (34)
                                                             ______        ______     ______    ______

Profit/(loss) on ordinary activities before
taxation                                                      1,107       (3,750)    (2,643)     1,513
                                                             ______        ______
Tax credit/(charge) on (loss)/profit on
ordinary activities                          3                                         1,025     (412)
                                                                                      ______    ______

(Loss)/profit for the financial year                                                 (1,618)     1,101

Dividend - equity                                                                      (617)     (490)
                                                                                      ______    ______

Retained (loss)/profit for the year                                                  (2,235)       611
                                                                                      ______    ______

Basic and diluted (loss)/earnings per share  4                                        (5.7p)      4.0p


Diluted earnings per share before
exceptional costs                            4                                          4.5p      4.0p
                                             
Dividends per share                                                                     2.0p     1.75p



There is no material difference between the reported (loss)/profit for 2001 and
2000 and the (loss)/profit for those years restated on an historical cost basis.

All operations are continuing.


                               GROUP BALANCE SHEET
                              as at 31 December 2001

                                                                                      2001           2000
                                                                  Notes               £000           £000

Fixed assets
Intangible assets - goodwill                                                         5,936            154
Tangible assets                                                                     16,088         13,511

Investment in own shares                                                               250            221

Investment in Joint Venture
- goodwill                                                                             136            160
- share of assets                                                                    2,569          1,503
- share of liabilities                                                             (1,492)          (877)
                                                                                    ______         ______

                                                                                     1,213            786
                                                                                    ______         ______

                                                                                    23,487         14,672
                                                                                    ______         ______
Current assets
Stocks                                                              5                5,793          4,835
Debtors                                                             6               16,659         14,729
Cash at bank and in hand                                                                 -          2,417
                                                                                    ______         ______
                                                                                    22,452         21,981

Creditors:  Amounts falling due within one year                     7             (26,315)       (16,109)
                                                                                    ______         ______

Net current (liabilities)/assets                                                   (3,863)          5,872
                                                                                    ______         ______

Total assets less current liabilities                                               19,624         20,544


Creditors: Amounts falling due after more than one year             8             (11,372)       (10,388)

Provision for liabilities and charges                                                    -          (564)
                                                                                    ______         ______

Net assets                                                                           8,252          9,592
                                                                                    ______         ______

Capital and reserves
Called up share capital                                                              3,083          2,803
Share premium account                                               9                  844            242
Revaluation reserve                                                 9                1,762          1,762
Profit and loss account                                             9                2,563          4,785
                                                                                    ______         ______

Equity shareholders' funds                                                           8,252          9,592
                                                                                    ______         ______



              GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                      for the year ended 31 December 2001

                                                                               2001               2000
                                                                               £000               £000

(Loss)/profit for the financial year                                        (1,618)              1,101
Exchange gain on investment in Joint Venture                                     13                 19
Surplus on revaluation of fixed assets                                            -              1,125
                                                                             ______             ______

Total recognised (losses)/gains relating to the year                        (1,605)              2,245
                                                                             ______             ______




               RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
                      for the year ended 31 December 2001
                                                                               2001               2000
                                                                               £000               £000

(Loss)/profit for the financial year                                        (1,618)              1,101
Dividends                                                                     (617)              (490)
                                                                             ______             ______

Retained (loss)/profit for the financial year                               (2,235)                611
Other recognised gains and losses relating to the year                           13              1,144
New share capital issued                                                        882                  -
                                                                             ______             ______

Net (decrease)/increase in shareholders' funds                              (1,340)              1,755
Opening shareholders' funds                                                   9,592              7,837
                                                                             ______             ______

Closing shareholders' funds                                                   8,252              9,592
                                                                             ______             ______



                       CONSOLIDATED CASH FLOW STATEMENT
                      for the year ended 31 December 2001

                                                                                 2001            2000
                                                                                 £000            £000

Cash inflow from operating activities                     10(a)                 2,801           6,946

Dividends from Joint Venture                                                      456               -

Return on investments and servicing of finance
Interest received                                                                 36              16
Interest paid                                                                 (1,016)         (1,078)
                                                                               ______         _______

                                                                                (980)         (1,062)
                                                                               ______          ______

Taxation                                                                        (322)           (442)
                                                                               ______          ______

Capital expenditure and financial investment
Purchases of tangible fixed assets                                            (1,187)           (988)
Proceeds from sale of tangible fixed assets                                       40              49
Loan to ESOP trust                                                               (28)           (221)
                                                                               ______          ______

                                                                              (1,175)         (1,160)
                                                                               ______          ______
Acquisitions
Purchase of subsidiary undertakings                                             (476)               -
Net overdraft acquired with subsidiary undertaking                            (3,449)               -
                                                                               ______          ______

                                                                              (3,925)               -
                                                                               ______          ______

Equity dividends paid                                                           (471)           (420)
                                                                               ______          ______

Cash (outflow)/inflow before financing                                        (3,616)           3,862
                                                                               ______          ______

Financing

Repayment of loan from joint venture                                              186               -
Repayment of loan notes issued on acquisition of subsidiaries                   (181)           (115)
Capital element of finance lease rental payments                                (455)           (358)
Repayment of long term loan                                                     (312)               -
                                                                               ______          ______

                                                                                (762)           (473)
                                                                               ______          ______

(Decrease)/increase in cash for the year                  10(b)               (4,378)           3,389
                                                                               ______          ______




                             NOTES TO THE STATEMENT


1.   The profit and loss account, balance sheet and abridged cash flow statement 
     do not constitute the Company's statutory accounts for 2001 or 2000 but are 
     derived from those accounts.  The statutory accounts for 2000, on which the 
     auditors have given an unqualified report, have been delivered to the
     Registrar of Companies.  Those for 2001 will be delivered following the 
     Annual General Meeting.  The auditors have reported on those accounts which 
     were unqualified and did not contain a statement under Section 237(2) of 
     the Companies Act 1985.


2.   Basis of consolidation

     The consolidated profit and loss account and balance sheet include the 
     financial statements of the Company, its subsidiaries and its interests in 
     a joint venture made up to 31 December 2001. The acquisition method of 
     accounting has been adopted.  Under this method the results of subsidiary 
     undertakings acquired in the year are included in the profit and loss 
     account from the date of acquisition.  The Group's share of profits is 
     included in the consolidated profit and loss account and its interests in 
     their net assets is included in the balance sheet.

3.   Tax credit/(charge) on (loss)/profit on ordinary activities

                                                                                   2001            2000
                                                                                  £ 000           £ 000

UK corporation tax
- current year at 30 %                                                              432           (504)
- prior year                                                                         29              46
Deferred tax
- current year                                                                      591              58
- prior year                                                                       (27)            (12)
                                                                                 ______          ______

                                                                                  1,025           (412)

                                                                                 ______          ______


     The tax credit for the current year differs from 30% of the pre-tax loss
     mainly because the Joint Venture profit of £1,080,000 (2000: £374,000) is 
     not subject to taxation.  There are also losses utilised at ESA McIntosh of
     £1,188,000, permanent differences between profit for account purposes and
     profits subject to taxation and unrelieved tax losses incurred in the year 
     that are carried forward.

4.   Earnings per share

     Based on a profit before exceptional costs but after tax of £1,253,000 
     (2000: £1,101,000) and 28,192,578 shares (2000: 27,522,989), being the 
     weighted average number of shares in issue during the year, the basic 
     earnings per share before exceptional costs was 4.5p (2000: 4.0p).

     Based on a loss after exceptional costs and tax of £1,618,000 (2000: 
     profit: £1,101,000) and 28,192,578 shares (2000: 27,522,989), being the 
     weighted average number of shares in issue during the year, the basic loss 
     per share after exceptional costs was 5.7p (2000: earnings: 4.0p). Diluted 
     loss per share based on a loss after exceptional costs and tax of 
     £1,618,000 (2000: profit: £1,101,000) and 28,192,578 shares 
     (2000: 27,522,989) was 5.7p (2000: earnings: 4.0p).


     Diluted (loss)/earnings per share and diluted earnings per share before
     exceptional items are calculated as follows:

                                                             2001          2001            2000          2000
                                                         Earnings                      Earnings
                                                  attributable to                  attributable
                                                         ordinary       Diluted     to ordinary       Diluted
                                                     shareholders  earnings per    shareholders  earnings per
                                                                          share                         share
                                                             £000                          £000

Diluted (loss)/earnings                                   (1,618)        (5.7p)           1,101          4.0p
Add exceptional reorganisation costs                        3,750         13.3p               -             -
Less tax relief on exceptional costs                        (879)        (3.1p)               -             -
                                                          _______        ______          ______        ______

Diluted earnings before exceptional costs                   1,253          4.5p           1,101          4.0p
                                                          _______        ______          ______        ______


                                                            000's                         000's

Basic weighted average number of ordinary shares           28,193                        27,523
Dilutive potential ordinary shares share options                -                             -
                                                          _______                       _______

                                                           28,193                        27,523
                                                         ________                       _______


Earnings per share are calculated for the issued shares excluding those held by
the Employee Share Scheme in accordance with UITF 13.

5.   Stocks
                                                                                   2001            2000
                                                                                   £000            £000


Raw materials and consumables                                                     1,861           1,588
Work in progress                                                                  1,455           1,082
Finished goods                                                                    2,477           2,165
                                                                                  _____           _____

                                                                                  5,793           4,835
                                                                                  _____          ______

6.   Debtors

     Trade debtors                                                               15,149          13,671
     Other debtors                                                                  566             348
     Prepayments                                                                    944             710
                                                                                 ______          ______

                                                                                 16,659          14,729
                                                                                 ______          ______



7    Creditors: amounts falling due within one year
                                                                                   2001            2000
                                                                                   £000            £000

Bank loans and overdraft (secured)                                                3,211               -
Loan notes                                                                        3,144           1,244
Trade creditors                                                                   8,192           8,281
Corporation tax                                                                       -             359
Other taxes and social security                                                   2,112           2,943
Accruals                                                                          2,657           2,539
Provision for Nottingham closure                                                  3,500               -
Dividend proposed                                                                   496             350
Obligations under hire purchase contracts & finance  leases                         503             393
Provision for deferred consideration                                              2,500               -
                                                                                 ______          ______

                                                                                 26,315          16,109
                                                                                 ______          ______


     The loan notes are repayable at par on the holder giving one month's 
     notice. The Company's obligations under these notes are guaranteed by the 
     Bank of Scotland.  In so far as the notes relating to the acquisition of 
     Hartcliffe have not already been redeemed, they will be redeemed in full by 
     the Company on 5 January 2003 at par. In so far as the notes relating to 
     the acquisition of ESA McIntosh have not already been redeemed, they will 
     be redeemed in full by the Company on 31 December 2004 at par.

     The Company has made full provision for the deferred consideration in
     relation to ESA McIntosh.  It is expected that this will be satisfied by 
     the issue of loan notes in 2002 and 2003 and these will be redeemable six 
     months and one day after issue.


8.   Creditors: amounts falling due after more than one year
                                                                               2001            2000
                                                                               £000            £000

Bank loans (secured)                                                          8,438          10,000
Obligations under hire purchase contracts & finance leases                      434             388
Provision for deferred consideration                                          2,500               -
                                                                             ______          ______

                                                                             11,372          10,388
                                                                             ______          ______
9.   Reserves

                                                GROUP AND COMPANY             GROUP           COMPANY

                                             Share    Revaluation        Profit and        Profit and
                                           premium        reserve      loss account      loss account
                                              £000           £000              £000              £000


At 1 January 2001                              242          1,762             4,785             4,785
Retained loss for the year                       -              -           (2,235)           (3,865)
Exchange gain on investment                      -              -                13                13
New shares issued on acquisition               602              -                 -                 -
                                            ______         ______             _____            ______

At 31 December 2001                            844          1,762             2,563               933
                                            ______         ______            ______            ______


10.   Cash Flow Statement

                                                                                     2001         2000
                                                                                     £000         £000
(a)  Reconciliation of operating (loss)/profit to net cash inflow
     from operating activities

     Operating (loss)/profit after exceptional items                              (2,819)        2,266
     Depreciation                                                                   2,116        2,104
      Amortisation                                                                    136           62
     (Gain)/loss on disposal of fixed tangible assets                                 (8)           10
     Decrease in stocks                                                               126        1,769
     Decrease/(increase) in debtors                                                 3,440        (330)
     (Decrease)/increase in creditors                                               (190)        1,065
                                                                                   ______       ______
     Net cash inflow from operating activities                                      2,801        6,946
                                                                                   ______       ______


(b) Reconciliation of net cash flow to movement in net debt

     (Decrease)/increase in cash for the year                                     (4,378)        3,389
      Finance lease creditor acquired with acquisition                              (318)            -
     Finance lease payments                                                           455          358
     Inception of new finance leases                                                (293)            -
      Loan notes issued in the year                                               (2,080)            -
     Loan notes repaid                                                                181          115
      Bank loan repaid                                                                312            -
                                                                                   ______       ______
     Movement in net debt in the year                                             (6,121)        3,862
     Opening net debt                                                             (9,608)     (13,470)
                                                                                   ______       ______
     Closing net debt                                                            (15,729)      (9,608)
                                                                                   ______       ______


(c)  Analysis of net debt
                                                                                 Acquisition
                                        At 1 January                     Other    (excluding       At 31
                                                2001       Cash       non-cash      cash and    December
                                                £000       flow        changes    overdraft)        2001
                                                           £000           £000          £000        £000

     Cash at bank and in hand                  2,417    (2,417)              -             -           -
     Overdraft                                     -    (1,961)              -             -     (1,961)
                                              ______     ______         ______        ______      ______
     Total                                     2,417    (4,378)              -             -     (1,961)
                                              ______     ______         ______        ______      ______
     Debt due within one year
      Bank loans                                   -          -        (1,250)             -     (1,250)
     Loan notes                              (1,244)        181        (2,080)             -     (3,143)
     Finance lease creditor                    (393)        455          (519)          (46)       (503)
                                              ______     ______         ______        ______      ______
                                             (1,637)        636        (3,849)          (46)     (4,896)
                                              ______     ______         ______        ______      ______

     Debt due after one year
     Finance lease creditor                    (388)          -            226         (272)       (434)
     Bank loans                             (10,000)        312          1,250             -     (8,438)
                                              ______     ______         ______        ______      ______
                                            (10,388)        312          1,476         (272)     (8,872)
                                              ______     ______         ______        ______      ______
     Total net debt                          (9,608)    (3,430)        (2,373)         (318)    (15,729)
                                              ______     ______         ______        ______      ______


11.  Pension Costs


     Pension costs SSAP24 basis

     The most recent actuarial valuation of the defined benefit section was at 
     31 October 2000. At the valuation date the defined benefit section had 
     assets with a total market value of £15.9 million, which represented 
     approximately 101% of the value of the benefits that had accrued to 
     members, after allowing for expected future increases in pensionable pay 
     for defined benefit members.


     Pension costs FRS17 basis

     The last full valuation of 31 October 2000 has been updated to 31 December 
     2001 by qualified independent actuaries, using revised assumptions that are
     consistent with the requirements of the new accounting standard, FRS17. 
     This new standard requires certain disclosures this year under the 
     transitional arrangements.  In summary, the UK defined benefits pension 
     scheme has assets at a current market value of £14.7 m and liabilities 
     discounted at the AA bond yield of £19.2 m.  Using this valuation method, 
     there is a deficit of £4.5 m which is partially offset by deferred tax of 
     £1.3 m giving a net deficit of £3.2 m.

     The defined benefit section has been closed to new entrants.

12.  The accounts for the year ended 31 December 2001 were approved by the
     Directors on 5 April 2002


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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