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Armour Trust PLC (AMR)

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Wednesday 29 May, 2002

Armour Trust PLC

Interim Results

Armour Trust PLC
29 May 2002

                                ARMOUR TRUST plc



           Interim Results for the six months ended 28 February 2002



                              CHAIRMAN'S STATEMENT



RESULTS AND DIVIDEND



In the six months to 28 February 2002, the Group has performed well with both
sales and operating profit comfortably ahead of last year and budget. Sales in
the six months to 28 February 2002 were £6.0 million (28 February 2001: £5.3
million). Profit before interest, exceptional items and taxation was £0.1
million (28 February 2001: Loss of £15,000). Basic underlying earnings per share
were 0.5p (28 February 2001: 0.3p). As at 28 February 2002, the Group had
shareholders' funds of £8.5 million (28 February 2001: £8.3 million) and the net
cash position was £4.5 million (28 February 2001: £3.6 million).



The Board is not recommending an interim dividend.



OPERATIONS



The Audio Electronics division has continued to prosper. Autoleads, the
specialist leads brand, has driven the growth in the first half of the financial
year with sales to the key audio equipment manufacturers and retail markets
exceeding the Board's expectations. Supporting this growth, the RM Audio and
Kicker brands continue to make steady contributions to the overall performance
of the division.



The divisional management remains focused on customer service, product quality
and innovation.  In the past six months, a number of new products have been
developed for the start of the high season, which begins at Easter and runs to
October.  The most recently launched is the Vision range of audio-visual in-car
entertainment products, which include DVD players, screens and accessories. The
early market reaction to this product range has been positive.



EXCEPTIONAL ITEMS



In the six months to 28 February 2002, the Group has incurred costs in relation
to two exceptional items, namely the capital reduction and reorganisation and
the litigation.



The costs of preparing the documentation for the capital reduction and
reorganisation as well as the legal fees in respect of the litigation, which is
now settled, have been significant.  Given that these costs do not arise from
the ordinary course of business, they have been treated as exceptional items in
the Consolidated Profit and Loss Account.  To do otherwise would mask the very
real progress, which has been achieved in the underlying business.





BOARD CHANGES



At the Annual General Meeting held on 20 December 2001, Roger Pinnington and
Richard Wevill were not re-elected to the Board.



On 23 January 2002, Steve Bodger and I were invited to join the Board as
non-executive directors, with myself taking on the position of non-executive
Chairman.



Following our appointment, George Dexter, Chief Executive, and John Harris,
Finance Director, have agreed to stay with the Group and continue to build on
their achievements of the last four years.  Steve Bodger and I look forward to
working with them.







STRATEGY



The Group's strategy is to develop and grow both by organic development and
through acquisition.  The current economic environment is favourable to
acquisitive groups and the Group is currently pursuing a number of acquisition
opportunities. The clear focus is to create value for the shareholders and grow
the Group.



Given the Group's current size and its strategy for development and growth, the
Board believes that it is appropriate to move the Group's listing to the
Alternative Investment Market ('AIM') where the transaction costs for
acquisitions are significantly lower than on the full market.  The Board
believes that a move to AIM would be in the best interests of shareholders and
intends to apply to have its listing cancelled with effect from 8.00 am, 2 July
2002, and to apply to have its shares admitted to AIM on the same date.



The Board has also decided to change its brokers from Beeson Gregory to KBC Peel
Hunt, which will take effect from today.




OUTLOOK



The Audio Electronics division has performed well in the six months to 28
February 2002 with the traditionally busier months to look forward to in the
second half of the financial year. The increases in sales and operating profit,
compared with last year, are particularly encouraging, given the wider economic
uncertainties that have persisted over the past six months. Against this
uncertain economic background, consumer spending, the main driver for the Audio
Electronics division, has held up well in our key markets and, if this
continues, the Board expects that the full year results will show continued
growth.





Bob Morton

Chairman

29 May 2002






                      CONSOLIDATED PROFIT AND LOSS ACCOUNT







FOR THE SIX MONTHS TO 28 FEBRUARY 2002


                                             Notes                              Restated*           Restated*
                                                         Six months to      Six months to    Twelve months to
                                                      28 February 2002   28 February 2001      31 August 2001
                                                           (Unaudited)        (Unaudited)           (Audited)
                                                                  £000               £000                £000

Turnover                                         2               5,964              5,299              11,489

Operating profit before amortisation                               174                 21                 481
Amortisation of goodwill                                          (36)               (36)                (71)

Operating profit                                                   138               (15)                 410
Exceptional items
 Capital reduction and reorganisation            3               (266)                  -                   -
 Litigation costs relating to                    3
discontinued operations                                          (145)                  -                   -
Amounts written off investments                  4                   -                  -                (24)

(Loss)/profit on ordinary activities                             (273)               (15)                 386
before interest
Net interest                                                        67                 76                 151

(Loss)/profit on ordinary activities                             (206)                 61                 537
before taxation
Taxation on (loss)/profit on ordinary            5                (58)                  2                   4
activities

(Loss)/profit on ordinary activities
after taxation
and (loss)/profit for the period                 7               (264)                 63                 541
retained


(Loss)/earnings per ordinary share               9
Basic                                                           (0.6)p               0.2p                1.3p
Basic - underlying                                                0.5p               0.3p                1.6p
Diluted                                                         (0.6)p               0.2p                1.3p
Diluted - underlying                                              0.5p               0.3p                1.6p



*See Note 1


             CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES



FOR THE SIX MONTHS TO 28 FEBRUARY 2002


                                                                              Restated *         Restated *
                                                        Six months to      Six months to   Twelve months to
                                                     28 February 2002   28 February 2001     31 August 2001
                                                          (Unaudited)        (Unaudited)          (Audited)
                                             Notes               £000               £000               £000

(Loss)/profit for the period retained                           (264)                 63                541
Currency translation differences on                               (1)                  -                (7)
foreign currency net investments

Total recognised gains and losses relating
to the period                                                   (265)                 63                534

Prior year adjustment                            5                  4                  -                  -
                                                                (261)                 63                534

* See Note 1







                           CONSOLIDATED BALANCE SHEET





AT 28 FEBRUARY 2002




                                                                               Restated *         Restated *
                                                    28 February 2002     28 February 2001     31 August 2001
                                                         (Unaudited)          (Unaudited)          (Audited)
                                           Notes                £000                 £000               £000
Fixed assets
Intangible assets                                              1,236                1,307              1,272
Tangible assets                                                  380                  451                433
Investments                                                      176                  200                176

                                                               1,792                1,958              1,881

Current assets
Stocks                                                         1,936                2,543              1,986
Debtors                                                        2,244                2,527              2,312
Cash at bank and in hand                                       4,517                3,646              4,514

                                                               8,697                8,716              8,812

Creditors: amounts falling due within                        (1,974)              (2,365)            (1,913)
one year

Net current assets                                             6,723                6,351              6,899

Net assets                                                     8,515                8,309              8,780



Capital and reserves
Called up share capital                                        4,043                4,043              4,043
Share premium account                          6               5,586                5,586              5,586
Profit and Loss Account                                      (1,114)              (1,320)              (849)

Equity shareholders' funds                     7               8,515                8,309              8,780

*  See Note 1






                        CONSOLIDATED CASH FLOW STATEMENT



FOR THE SIX MONTHS TO 28 FEBRUARY 2002




                                                               Six months to     Six months to  Twelve months to
                                                            28 February 2002  28 February 2001    31 August 2001
                                                   Notes         (Unaudited)       (Unaudited)         (Audited)
                                                                        £000              £000              £000
Net cash inflow/(outflow) from
operating activities                                8(a)                 364             (645)               335

Returns on investment and
servicing of finance
Interest paid                                                              -              (10)              (16)
Interest received                                                         69                92               176
Interest element of finance lease rentals                                (2)               (6)               (9)

Net cash inflow from returns on investment
and servicing of finance                                                  67                76               151

Corporate taxation paid                                                 (42)              (78)              (99)

Capital expenditure and financial investment
Payments to acquire tangible fixed assets                               (90)             (123)             (250)
Sale of tangible fixed assets                                             20                32                34

Net cash outflow from capital expenditure                               (70)              (91)             (216)
and financial investment

Acquisitions and disposals
Purchase of subsidiary undertakings                                        -             (125)             (125)
Litigation costs relating to discontinued                               (51)                 -                 -
operations

Net cash outflow from acquisitions
  and disposals                                                         (51)             (125)             (125)

Equity dividends paid                                                      -             (129)             (150)


Net cash inflow/(outflow) before financing                               268             (992)             (104)


Financing
Issue of ordinary share capital                                            -                 2                 2
Capital reduction and reorganisation                                   (251)                 -                 -
Capital element of finance lease rental                                 (14)              (42)              (62)
repayments

Net cash outflow from financing                                        (265)              (40)              (60)

Net cash inflow/(outflow) after financing,
being the increase/(decrease) in cash in the        8(b)                   3           (1,032)             (164)
period





                       NOTES TO THE FINANCIAL STATEMENTS





1. BASIS OF PREPARATION


The interim financial statements have been prepared on the basis of accounting
policies consistent with those set out in the Group's Annual Report and
financial statements for the twelve months to 31 August 2001, with the exception
of the policy on deferred taxation.  Financial Reporting Standard 19, 'Deferred
tax', has been adopted and full provision has been made on an undiscounted
basis, replacing the previous partial provisioning policy.  The comparative
figures have been restated to reflect this change.  The effect on the
Consolidated Balance Sheets at 31 August 2001 and 28 February 2001 is to create
a deferred taxation asset and increase shareholders' funds by £39,000 and
£37,000 respectively.  The effect on the Consolidated Profit and Loss Accounts
for the twelve months to 31 August 2001 and six months to 28 February 2001 is to
create a deferred taxation credit of £4,000 and £2,000 respectively.



The results of the Group for the six months to 28 February 2002, and the
comparative figures for the six months to 28 February 2001, are unaudited.  The
financial information contained herein does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985.



The statutory accounts for the twelve months to 31 August 2001, which were
approved by the shareholders at the Annual General Meeting and which have been
delivered to the Registrar of Companies, carry an unqualified Auditor's Report.
They do not contain a statement under section 237(2) or 237(3) of the Companies
Act 1985.







2. TURNOVER




                                                Six months to        Six months to      Twelve months to
                                             28 February 2002     28 February 2001        31 August 2001
                                                  (Unaudited)          (Unaudited)             (Audited)
                                                         £000                 £000                  £000

Group sales by business segment
Audio Electronics                                       5,964                5,299                11,489


Group sales by country of operation
United Kingdom                                          5,830                5,182                11,253
Sweden                                                    232                  250                   495
Inter-area eliminations                                  (98)                (133)                 (259)

                                                        5,964                5,299                11,489

Group sales by country of destination
United Kingdom                                          4,543                3,733                 8,063
Rest of Europe                                          1,230                1,464                 3,164
Rest of world                                             191                  102                   262

                                                        5,964                5,299                11,489





3. EXCEPTIONAL ITEMS


                                                      Six months to         Six months to  Twelve months to
                                                   28 February 2002      28 February 2001    31 August 2001
                                                        (Unaudited)           (Unaudited)         (Audited)
                                                               £000                  £000              £000

Capital reduction and reorganisation                          (266)                     -                 -
Litigation costs relating to                                  (145)                     -                 -
  discontinued  operations

                                                              (411)                     -                 -






A capital reduction and reorganisation was commenced in September 2001, which
proposed that Court approval be sought to convert the share premium account into
distributable reserves and, following this conversion, surplus cash be returned
to shareholders by way of a tender offer.  This proposal was put to shareholders
at an Extraordinary General Meeting on 7 January 2002 at which the conversion of
the share premium account was approved but the proposed tender offer was
rejected.



As disclosed in the Annual Report for the twelve months to 31 August 2001, the
Company was joined as a party to litigation between a former supplier to the
Group and a former subsidiary undertaking, arising out of a distribution
agreement.  Damages of £2.0 million were claimed from the former subsidiary
undertaking in respect of alleged breaches of the agreement and it was contended
that the Company was a guarantor of any sums found to be payable by the former
subsidiary undertaking.  A direct claim was also made against the Company for
damages in  the sum of £2.0 million.  The maximum sum recoverable either
pursuant to the alleged guarantee or under the direct claim was £2.0 million
plus interest and costs.



The Company took and acted on legal advice, wholly refuting the claims.  The
litigation has now been settled.



4. AMOUNTS WRITTEN OFF INVESTMENTS

The trustees of  the Armour Employees Share Trust hold 966,000 of the Company's
shares, which are shown as fixed asset investments.  At 31 August 2001,  these
investments were written down to their market  value of £176,000.  The market
value at 28 February 2002 was £193,000.




5. TAXATION ON (LOSS)/ PROFIT ON ORDINARY ACTIVITIES


                                                                             Restated *        Restated *
                                                       Six months to      Six months to  Twelve months to
                                                    28 February 2002   28 February 2001    31 August 2001
                                                         (Unaudited)        (Unaudited)         (Audited)
                                                                £000               £000              £000


UK Corporation Tax at 30%                                       (64)               (37)              (74)
Overseas taxation                                                  -                (3)               (6)
Adjustment in respect of prior years - UK                          -                 40                80
Adjustment in respect of prior years - overseas                    1                  -                 -
Deferred taxation                                                  5                  -                 -
Deferred taxation - prior year adjustment                          -                  2                 4

                                                                (58)                  2                 4
*  See Note 1





6. SHARE PREMIUM ACCOUNT

On 31 January 2002, the Court approved the transfer of the share premium account
to the Profit and Loss Account, subject to certain conditions.  At the Balance
Sheet date, these conditions had not been fully discharged and therefore no
transfer has been reflected in the Consolidated Balance Sheet.  It is expected
that the conditions will have been met by 31 August 2002 at which time the
transfer will be effected.




7. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS




                                                                               Restated *        Restated *
                                                        Six months to       Six months to  Twelve months to
                                                     28 February 2002    28 February 2001    31 August 2001
                                                          (Unaudited)         (Unaudited)         (Audited)
                                                                 £000                £000              £000

(Loss)/profit for the period retained                           (264)                  63               541
New share capital subscribed                                        -                   2                 2
Currency  translation differences on foreign
  currency investments                                            (1)                   -               (7)


Net movement in equity shareholders' funds                      (265)                  65               536
Opening equity shareholders' funds                              8,780               8,244             8,244

Closing equity shareholders' funds                              8,515               8,309             8,780

*  See Note 1









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


                                                        Six months to       Six months to   Twelve months to
                                                     28 February 2002    28 February 2001     31 August 2001
                                                          (Unaudited)         (Unaudited)          (Audited)
                                                                 £000                £000               £000

Operating profit/(loss)                                           138                (15)                410
Depreciation of tangible fixed assets                             130                 131                272
Amortisation of goodwill                                           36                  36                 71
Decrease/(increase) in stocks                                      50               (357)                200
Decrease/(increase) in debtors                                     72                (12)                185
Decrease in creditors                                            (56)               (427)              (804)
(Profit)/loss on disposal of tangible fixed                       (6)                 (1)                  1
assets

Net cash inflow/(outflow) from operating                          364               (645)                335
activities





8(b).  NET CASH


                                                                                Cash at                  Net
                                                                                   bank                 Cash
                                                                                   £000                 £000

Net cash at 31 August 2001                                                        4,514                4,514
Increase in cash                                                                      3                    3

Net cash at 28 February 2002                                                      4,517                4,517






9.  (LOSS)/EARNINGS PER ORDINARY SHARE


Basic earnings per share is calculated using the weighted average number of
shares in issue during the period of 39,466,012 (28 February 2001: 39,460,032
and 31 August 2001: 39,463,026).



Underlying earnings per share is also shown calculated by reference to earnings
before amortisation of goodwill, non-operating exceptional items and amounts
written off investments.  The Directors consider that this information gives a
useful additional indication of underlying performance.




                                                                   Restated *            Restated *
                                          Six months to           Six months to       Twelve months to
                                         28 February 2002       28 February 2001       31 August 2001
Basic earnings per ordinary share          (Unaudited)             (Unaudited)           (Audited)
                                             £000           p       £000          p       £000         p

(Loss)/profit for the period                (264)       (0.6)         63        0.2        541       1.3
Amortisation of goodwill                       36         0.1         36        0.1         71       0.2
Exceptional items                             411         1.0          -          -          -         -
Amounts written off investments                 -           -          -          -         24       0.1

Underlying earnings                           183         0.5         99        0.3        636       1.6

* See Note 1



Diluted earnings per share is calculated with reference to 39,887,903 (28
February 2001: 39,870,301 and 31 August 2001: 39,847,760) ordinary shares.






                                                                    Restated *            Restated *
                                            Six months to         Six months to        Twelve months to
                                           28 February 2002      28 February 2001       31 August 2001
Diluted earnings per ordinary share          (Unaudited)           (Unaudited)            (Audited)
                                              £000          p        £000          p       £000         p

(Loss)/profit for the period                 (264)      (0.6)          63        0.2        541       1.3
Amortisation of goodwill                        36        0.1          36        0.1         71       0.2
Exceptional items                              411        1.0           -          -          -         -
Amounts written off investments                  -          -           -          -         24       0.1

Underlying earnings                            183        0.5          99        0.3        636       1.6

* See Note 1






10. COPIES OF INTERIM REPORT

Copies of this interim report are being sent to shareholders and will also be
made available upon request to members of the public at the Company's Registered
Office, Lonsdale House, 7/9 Lonsdale Gardens, Tunbridge Wells, Kent, TN1 1NU.







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