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Johnston Group PLC (JHT)

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Wednesday 26 March, 2003

Johnston Group PLC

Final Results

Johnston Group PLC
26 March 2003

                                 PRESS RELEASE
                               Johnston Group Plc

                         Preliminary Unaudited Results
                     for the year ended 31st December 2002

                                                                 26th March 2003

•  Turnover increased marginally to £144.5 million (2001:  £142.4 million)

•  Pre-tax profit increased by 37.9% to £5.2 million (2001:  £3.8 million), 
   including a profit of £1.0 million on property disposals and one-off
   expenses of over £1 million on restructuring costs and professional fees

•  Earnings per share increased by 66.4% to 23.64p (2001:  14.21p)

•  Maintained final dividend of 8.50p per share, making a total for the
   year of 13.75p (2001:  13.75p)

•  Excellent results from Johnston Roadstone

•  Johnston Pipes increased profit by over £1 million reflecting
   improved volumes and margins from the concrete division, but continuing
   difficult market conditions for the GRP division

•  Mixed results from Engineering division; strong order book and
   excellent result from the UK sweeper business; restructuring in Germany 
   should ensure losses will be eliminated going forward; North America 
   experienced weak demand, but the order book for 2003 is looking healthier;  
   Madvac, in Canada, suffered low margins in a very competitive market; the 
   Australian business and Saxon Specialist Vehicles both increased sales, but 
   suffered from manufacturing problems and costs associated with the move to a 
   new factory, respectively

•  Roger Holland, Chairman, commented:  'In the present worldwide political and 
   economic climate, it is difficult to make any firm predictions for
   the Group for the current year.  Comfort can be found, however, in that each 
   of our businesses has a respected name and a good market position.  Our 
   continuing policies to invest in modern plant and new product development 
   and to strengthen our management teams make us well positioned to take 
   advantage of opportunities when they arise.'

For further information:

Marcus Jordan                              Peter Willetts/Justin Griffiths
Johnston Group PLC                         Tavistock Communications
Tel:  01737 242 466                        Tel:  020 7600 2288



The Group's performance showed an improvement over last year. On slightly
increased sales, profit before taxation rose to £5.2 million from £3.8 million
in 2001. Within this profit total gains of £1 million on property disposals were
balanced by over £1 million of one-off restructuring costs and professional
fees. Earnings per share increased from 14.2p to 23.6p.

The Board is recommending a final dividend of 8.50p per ordinary share. This
will maintain the dividend for the full year at 13.75p per share.

Within the overall result, there were widely differing performances from the
subsidiaries. Among the highlights, the Johnston Roadstone quarries again
produced excellent results despite increased competition and a lack of major
contracts. I extend my congratulations to the entire quarry workforce for having
been awarded, once again, the 'Sir Frank Davies' trophy for overall excellence
in Health and Safety.

After a poor 2001, Johnston Pipes produced a significant improvement, increasing
its profits by over £1 million. The concrete division benefited from increased
margins and sales volumes, reflecting the successful introduction of new
products. The division will continue to diversify the product range. As
indicated in the interim statement, the GRP division experienced challenging
market conditions in the second half of the year. The division continues to
focus on profitable special products.

The engineering activities produced very mixed results, reflecting the difficult
conditions for the manufacturing sector in a number of key markets. Within the
Sweeper division, Johnston Engineering in the UK benefited from a strong order
book and achieved an excellent result. The company's performance was underpinned
by major changes to its production management and facilities, which should
enable further significant efficiencies. In Germany, we have restructured
Johnston GmbH and appointed a new dealer. It is anticipated that the losses
sustained in the past will be eliminated going forward.

The Group's operations in North America had a poor year. Johnston Sweeper
Company in the US encountered depressed sales with uncertain economic conditions
creating weak overall market demand. We have appointed a new president and made
a number of changes to senior management. The company is focusing resources on
improving product quality and reliability and on selected market opportunities.
Some improvements are already apparent: key municipal orders delayed by the
uncertainties of 2002 are now coming in; the order book for 2003 is looking

In Canada, Madvac suffered low margins in a very competitive market. It also
incurred high research and development costs as it expands its product range.
The more aggressive marketing campaign by Madvac in the US has restored its
sales after the slippage last year; there is scope for similar improvement in

The result from the specialist vehicles division was also below expectations. In
Australia, despite increasing sales and market share, MacDonald Johnston
Engineering underperformed as a result of significant manufacturing problems.
Steps are being taken to resolve these issues and the order book is strong. In
financial terms, Saxon Specialist Vehicles also had a poor year.  Sales
increased, but the costs associated with the move to a new factory and the
integration of the Norquip product, coupled with increased overheads, lead to
results much lower than expectations. Looking forward, the company should reap
the rewards of improvements made with increased sales and profitability in 2003.

In common with most companies, the loss of the tax credit on dividends and the
decline in share values have created problems for our pension fund.  Following
actuarial advice, we have closed the Group's defined benefit scheme to new
members and we have increased the contribution rates from both companies and
employees. Together with some improvement in stock markets in the long term,
these measures should reduce the fund deficit going forward. For new employees,
we have established a defined contribution scheme.

During the year we had the unwelcome distraction and expense of holding an
Extraordinary General Meeting to vote on a resolution proposed by TT electronics
plc. The resolution was defeated by a large majority of shareholders and in
December TT electronics put its 23.1% stake up for sale. The holding was
subsequently purchased by Tarmac Limited, our partner in the joint venture at
Berwyn Granite Quarries.

Financial Review

Group turnover at £144.5 million was a marginal increase over 2001. The majority
of operations were ahead of the previous year, but were offset by a substantial
reduction in the USA.

Profit before taxation was £5.2 million, an increase of 37.9% over 2001. The
profit included £1 million of fixed asset disposal gains. Group operating profit
increased by 8.5% to £4.6 million. The improvement is attributable to the
construction materials division however it was partially offset by declines in
the engineering division and increased central costs. The engineering division
was particularly affected by the losses in the USA arising from the difficult
market conditions. Central costs were increased due to professional fees arising
from the Extraordinary General Meeting together with increased pension costs
following the triennial valuation of the UK pension fund.

Cash flow from operating activities amounted to £7.5 million. This is higher
than the previous year and reflects the combination of increased operating
profit and overall containment of working capital. The growth in debtors arose
in the UK engineering operation due largely to its increase in activity. Capital
expenditure at £3.4 million was in line with depreciation. Proceeds from the
sale of fixed assets amounted to £2.9 million. These were sales of the old
premises at Saxon Specialist Vehicles, as anticipated in this report last year,
and of surplus land owned by Johnston Management Holdings. Cash inflow before
financing was £2.2 million and net debt reduced to £3.8 million. Gearing was
7.5% and interest cover 12.8 times.

The overall tax rate was 25.7%. This is below the standard UK tax rate of 30%.
The main factor contributing to the reduced tax rate is the relief applicable to
the fixed asset disposal gains. Basic earnings per ordinary share were 23.64p.

An interim dividend of 5.25p per ordinary share was paid in December 2002 and
the Board is recommending a final dividend of 8.50p per ordinary share, giving a
maintained dividend for the year of 13.75p covered 1.7 times.

The retained profit for the year was £1.1 million and shareholder's funds have
increased to £50.3 million. This represents an asset value per ordinary share of

Operating Review


Sweeper Division

Johnston Engineering Limited

Manufacturer of road suction sweepers

The year saw significant improvements in financial and manufacturing
performance. Sales enquiries continued at a high level throughout the year and
with the help of several large fleet orders; this resulted in a record level of
deliveries. Johnston's unique ability to supply a complete range of sweepers
from the Madvac PS300 pedestrian sweeper to the largest truck mounted suction
machines helped the company obtain orders from customers such as Onyx for its
Singapore turnkey contract.

The company's organisation was simplified during the year. Management
responsibilities and objectives were more clearly defined. The new team
delivered a good financial result while making major changes to production
management and facilities.

A new more rigorous product design and development regime was introduced with
the objective of reducing warranty claims and customers' cost of ownership by
further improving product durability. This is being applied to the first of a
new range of products to be introduced in 2003.

Our German subsidiary Johnston GmbH has been substantially restructured and
Kupper-Weisser, part of the Boschung group of Switzerland, was appointed as our
new distributor.  Foundations were laid for further improvements, particularly
in the Customer Support division and in the strategic development of our
overseas distributor network.

Steps were taken to improve the performance of Johnston Beam, our specialist
sweeper manufacturer located in Denmark.  During the year Johnston Beam started
an initiative to increase sales in the low volume specialist sweeper sector and
delivered a number of very high value machines for unique applications.

Johnston Sweeper Company

Manufacturer of mechanical, suction and air regenerative street sweepers

The company's performance for the year was unsatisfactory due to poor sales
related to economic conditions. Weak overall market demand reduced order intake,
although market share in general was maintained.

As reported at the half year a new President was appointed following the
retirement of Azam Qureshi due to illness.  The management team has been
re-organised and resources directed towards improving the quality and
reliability of the mechanical range of sweepers.  This effort has already paid
dividends in reduced warranty costs.  Market opportunities are being exploited
by new product development.  This will generate sales from markets not currently

The award by New York City of a three year contract for sweepers has helped
ensure that the order book at the start of 2003 is healthier, and the management
anticipates a significant improvement over last year's results.

Madvac Inc.

Manufacturer of small to medium size sweepers and litter collection machines

2002 sales showed a 50% increase over the previous year.  The company was
awarded its largest ever order from Singapore City and there were improved sales
to major cities such as Washington DC, Detroit and Dallas.  Repeat fleet orders
from the cities of Montreal, Toronto and London reinforced the view that this
segment of the sweeper market is developing and Madvac's reputation is growing
as its distribution network strengthens.

Record sales were offset by increased research and development costs as the
company seeks to extend its product range and to increase the reliability of
products and reduce warranty costs.

Organisational and managerial improvements made to research and development,
engineering, sales, marketing and production in 2002 will bring future benefit.
A more aggressive marketing campaign should help offset the effect of any
economic slowdown in the US.

Special Vehicles Division

Macdonald Johnston Engineering Co. Pty. Limited

Manufacturer of refuse vehicles, road suction sweepers and fire tankers; air
hand-dryers and other washroom equipment

The company had a disappointing year, recording a small loss; this was due to a
number of factors including lack of volume in the first half of the year,
production issues and costs incurred in replacing faulty components delivered by

Performance improved in the second half when these issues were addressed and the
company is commencing 2003 with a record order book.

The company improved its market share in the refuse truck sector during the year
and cost reductions implemented in 2002 are now improving gross margins.  Sales
of side loading refuse equipment have also increased in both Europe and New
Zealand.  New fire truck orders were obtained from the West Australian
authorities.  Increased local manufacture of sweeper products has improved the
competitive position.

Major improvements have been implemented in Customer Services over the year
giving the company increased advantage over its competitors.

Sales of washroom products improved over the previous year, but profitability
was restricted by the costs incurred in the release of a new hand dryer and a
new range of stainless steel washroom products.

In 2003 the company is expected to reap the benefits of the expenditure made as
prospects for both product ranges are excellent.

Saxon Specialist Vehicles Limited (formerly Saxon Sanbec Limited)

Manufacturer of fire fighting and rescue vehicles and airport support equipment

The 2002 trading performance was below expectations. Conditions in the fire
appliance market remained difficult with subsequent pressure on margins.
However, the company was successful in the year in achieving orders from new
customers, notably Strathclyde and Limerick. Costs were incurred in the transfer
of the business to new premises.

It is anticipated that investment in a prototype fire fighting vehicle, the
company's long term strategy to diversify its product range and its first class
production facility will lead to major improvements in the business going

Saxon plans to use its skills and knowledge to also become a leading supplier of
scissor lift and other airport support vehicles.  Initial levels of activity
have been encouraging with the first deliveries of these vehicles being made in
2002 and the prospect of further substantial orders in 2003.

Construction Materials

Johnston Pipes Limited

Manufacturer of concrete building products and glass-reinforced plastic pipes

The company's profit was greatly improved over the previous year.  This was
underpinned by a particularly strong performance from the concrete division, but
the GRP division also made a positive contribution despite extremely difficult
market conditions.

Margins on concrete products improved steadily during the year and the sales
again benefited from deliveries to the Birmingham Northern Relief Road contract.
Although the division suffered from the particularly wet weather in November
and December, enquiry levels remained high giving confidence for a busy start to
2003.  The product range was diversified by the production of concrete cable
ducting for Railtrack.  The company will continue to investigate new products
that can be added to the company's portfolio.  The market for concrete drainage
products is forecast to increase slightly during 2003 and Johnston Pipes is well
positioned as a low cost producer to maintain its status as one of the
industry's leading suppliers.

The GRP division had an excellent first half of the year which included the
supply of the second phase of a contract for potable water pipes to Thames Water
PLC.  A dearth of major projects in the second six months, however meant that
the momentum could not be maintained.  Due to delays in water companies awarding
contracts, sales of the Stormfox unit, introduced in 2001, did not materialise
until two significant contracts were won at the end of the year.  The market for
ovoid liners continued to offer opportunities with orders being won in Ireland,
France and Poland as well as in the UK.

Although both divisions will once again be operating in a very competitive
market, prospects are encouraging for 2003.

Johnston Roadstone Limited

Coated and dry stone quarry operator

The company completed another successful year with profits exceeding all
previous results, despite increased competition within the traditional market
areas of both quarries.

Neither quarry was directly involved in major contracts during the year, but the
general level of activity in the Midlands area remained high with supplies to
two major road improvement schemes, the Birmingham Northern Relief Road and a
new by-pass on the A5 to the west of Leaton Quarry.  The cost of bitumen
increased significantly, but with a buoyant market this had little effect on

Quarrying is set to continue for at least the next 25 years at Leinthall Quarry
at current production rates following the successful outcome of a mineral
planning application. This was submitted early in 2002 and approved by the local
authority at the end of the summer for an additional 5.2 million tonnes of stone
reserves.  Work commenced immediately on removing soil and overburden in
readiness for quarrying this coming year.

Leinthall Quarry has been successful with the first two stages in its bid for
ISO 14001 environmental accreditation and should gain full accreditation by

The employees at Leaton Quarry are to be congratulated for again being awarded
the 'Sir Frank Davies' trophy for the second successive year.  The award for
overall excellence in Health and Safety in the small to medium size enterprise
category was presented at the Quarry Products Association awards ceremony in
London.  The Leaton Quarry management also collected a further three prime
awards together with two certificates of commendation.

The prospects for 2003 are encouraging following the Government announcement of
increased levels of expenditure for both highway maintenance and new road
projects, notably the M6 widening north of Birmingham. If this expenditure
materialises, the company should benefit from the proposed increase in activity


In the present worldwide political and economic climate, it is difficult to make
any firm predictions for the Group for the current year. Comfort can be found,
however, in that each of our businesses has a respected name and a good market
position. Our continuing policies to invest in modern plant and new product
development and to strengthen our management teams make us well positioned to
take advantage of opportunities when they arise.

I extend my thanks to all employees for their hard work and dedication in what
are difficult conditions and also to my fellow directors for their support.

Roger Holland

26 March 2003


For the year ended 31st December 2002
                                                                                 2002                 2001
                                                                                 £000                 £000
Turnover from continuing operations                                          144,525              142,356
Operating costs less other income                                            139,925              138,116

Group operating profit                                                         4,600                4,240
Profit on disposal of fixed assets                                             1,028                    -

Profit before interest                                                         5,628                4,240
Interest receivable and similar income                                           125                  166
Interest payable and similar charges                                            (565)                (645)

Profit on ordinary activities before taxation                                  5,188                3,761
Taxation                                                                       1,335                1,093

Profit on ordinary activities after taxation                                   3,853                2,668
Minority equity interest                                                       1,193                1,029

Profit attributable to shareholders                                            2,660                1,639
Dividends (ordinary and preference)                                            1,589                1,589

Retained profit for the year                                                   1,071                   50

Earnings per ordinary share
                 Basic                                                         23.64p               14.21p
                 Diluted                                                       23.64p               14.21p


At 31st December 2002
                                                                                     2002                  2001
                                                                                     £000                  £000
Fixed assets
Intangible assets                                                                   2,373                 2,700
Tangible assets                                                                    29,420                30,934
                                                                                   31,793                33,634
Current assets
Stocks                                                                             26,331                26,657
Debtors                                                                            28,079                26,584
Cash at bank and in hand                                                            7,173                 4,522
                                                                                   61,583                57,763

Creditors due within one year                                                      31,850                29,504
Net current assets                                                                 29,733                28,259

Total assets less current liabilities                                              61,526                61,893
Creditors due after one year                                                        7,331                 8,331
Provisions for liabilities and charges                                              2,222                 2,126

                                                                                   51,973                51,436
Capital and reserves
Called-up share capital                                                             2,083                 2,083
Share premium account                                                               1,347                 1,347
Revaluation reserve                                                                 5,987                 7,191
Profit and loss account                                                            40,889                39,116
Shareholders' funds                                                                50,306                49,737

Equity interests                                                                   49,306                48,737
Non-equity interests                                                                1,000                 1,000
Minority interest - equity                                                          1,667                 1,699

                                                                                   51,973                51,436


For the year 31st December 2002

                                                                                2002                     2001
                                                                   £000         £000        £000         £000

Cash inflow from operating activities                                         7,498                    4,661
Returns on investment and servicing of finance                               (1,849)                  (1,574)
Taxation                                                                     (1,401)                  (2,294)
Capital expenditure                                                            (471)                  (3,480)
Acquisition                                                                     (87)                    (614)
Equity dividends paid                                                        (1,489)                  (1,489)

Cash inflow/(outflow) before financing                                        2,201                   (4,790)
Financing - issue of shares                                           -                        2
          - increase in debt                                        287                      270

Cash inflow from financing                                                      287                      272
Increase/(decrease) in cash in the year                                       2,488                   (4,518)

Notes to Preliminary Results

1.  Divisional analysis of results of continuing operations by activity

                                                           Turnover                        Profit/(loss)
                                                   2002             2001              2002              2001
                                                   £000             £000              £000              £000

Engineering                                     109,168          108,265             (115)              720

Construction materials                           35,357           34,091            5,895             4,418

                                                144,525          142,356            5,780             5,138

Central                                               -                -           (1,180)             (898)

                                                144,525          142,356            4,600             4,240

2.  The Board is recommending a final dividend of 8.50p per ordinary
share (2001: 8.50p) payable on 4th July 2003 to shareholders on the register as
at 6th June 2003, which, with the interim dividend of 5.25p (2001: 5.25p), makes
13.75p for the year (2001: 13.75p).

3.  The calculation of the earnings per share is based on Group profit
for the year attributable to ordinary shareholders of £2,560,000 (2001:
£1,539,000), divided by the weighted average number of ordinary shares in issue.
The weighted average number of ordinary shares in issue was 10,829,070 (2001:
10,829,061).  Diluted earnings per share reflecting outstanding share options is
based on 10,829,070 (2001: 10,829,061) ordinary shares, using an average share
price for the year of 306p (2001: 304p).

4.  Copies of the full accounts for the year ended 31st December 2002
will be posted to shareholders on 23rd April 2003. The Annual General Meeting
will be held on Thursday 22nd May 2003.

5.  The financial information set out above does not constitute the
company's statutory accounts for the years ended 31st December 2002 or 2001. The
financial information for 2001 is derived from the statutory accounts for 2001
which have been delivered to the Registrar of Companies. The auditors have
reported on the 2001 accounts; their report was unqualified and did not contain
a statement under section 237(2) or (3) of the Companies Act 1985. The statutory
accounts for 2002 will be finalised on the basis of the financial information
presented by the directors in this Preliminary Announcement and will be
delivered to the Registrar of Companies following the company's Annual General

6.  FRS 19 Deferred tax has been adopted by the Group during the year.
There was no material effect.

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