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Exel PLC (EXL)

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Monday 28 July, 2003

Exel PLC

Interim Results - Part 2


Group profit and loss account (unaudited)                                       
                                                                                
                                             Note     Half  Half year       Year
                                                      year                      
                                                                ended      ended
                                                     ended    30.6.02           
                                                   30.6.03              31.12.02
                                                           (restated)           
                                                        £m            (restated)
                                                                   £m           
                                                                              £m
                                                                                
Turnover                                                                        
                                                                                
Continuing operations                              2,382.6    2,230.9    4,679.4
                                                                                
Acquisitions                                           7.9          -          -
                                                                                
                                                   2,390.5    2,230.9    4,679.4
                                                                                
Discontinued operations                                  -       30.9       41.2
                                                                                
Group and share of joint ventures' turnover  5     2,390.5    2,261.8    4,720.6
                                                                                
Less: share of joint ventures' turnover             (37.6)     (13.9)     (77.6)
                                                                                
Group turnover                                     2,352.9    2,247.9    4,643.0
                                                                                
Operating profit                                                                
                                                                                
Continuing operations                                 58.8       61.2      122.7
                                                                                
Acquisitions                                         (0.5)          -          -
                                                                                
                                                      58.3       61.2      122.7
                                                                                
Discontinued operations                                  -      (0.3)      (0.2)
                                                                                
Continuing operations before goodwill                 71.7       73.0      148.3
                                                                                
Discontinued operations before goodwill                  -      (0.3)      (0.2)
                                                                                
Goodwill amortisation                               (13.4)     (11.8)     (25.6)
                                                                                
Total operating profit                       5        58.3       60.9      122.5
                                                                                
Exceptional items                            6         0.9        0.8        0.9
                                                                                
Profit on ordinary activities before                  59.2       61.7      123.4
interest                                                                        
                                                                                
Net interest                                         (4.7)      (7.2)     (12.8)
                                                                                
Other finance income - FRS 17                         15.2       30.2       60.5
                                                                                
Underlying profit before tax 1                        67.0       65.5      135.3
                                                                                
Goodwill amortisation                               (13.4)     (11.8)     (25.6)
                                                                                
Exceptional items                                      0.9        0.8        0.9
                                                                                
Other finance income - FRS 17                         15.2       30.2       60.5
                                                                                
Profit on ordinary activities before                  69.7       84.7      171.1
taxation                                                                        
                                                                                
Tax on profit on ordinary activities         7      (22.9)     (27.1)     (54.5)
                                                                                
Profit on ordinary activities after taxation          46.8       57.6      116.6
                                                                                
Equity minority interests                            (2.6)      (3.2)      (6.4)
                                                                                
Profit for the financial period                       44.2       54.4      110.2
                                                                                
Dividends                                    8      (23.2)     (22.3)     (67.5)
                                                                                
Transferred to reserves                      10       21.0       32.1       42.7
                                                                                
                                                     Pence      Pence      Pence
                                                                                
Basic earnings per share                                                        
                                                                                
On profit for the financial period           9        15.0       18.4       37.3
                                                                                
On underlying profit1 for the period -       9        19.0       21.6       44.9
including other finance income                                                  
                                                                                
On underlying profit1 for the period         9        15.4       14.4       30.6
                                                                                
Diluted earnings per share                                                      
                                                                                
On profit for the financial period           9        14.9       18.3       37.1
                                                                                
On underlying profit1 for the period -       9        18.8       21.4       44.7
including other finance income                                                  
                                                                                
On underlying profit1 for the period         9        15.3       14.3       30.5

1 Underlying profit is reported before goodwill amortisation, exceptional
items, other finance income - FRS 17 and related tax, where applicable.

Group cash flow statement (unaudited)                                            
                                                                                 
                                                       Half  Half year       Year
                                                       year                      
                                                                 ended      ended
                                                      ended    30.6.02           
                                                    30.6.03              31.12.02
                                                            (restated)           
                                                         £m            (restated)
                                                                    £m           
                                                                               £m
                                                                                 
Net cash inflow from operating activities             107.9      132.9      333.7
                                                                                 
Dividends received from joint ventures and              0.2        1.2        2.8
associates                                                                       
                                                                                 
Net cash outflow for returns on investments           (8.5)     (12.2)     (19.1)
and servicing of finance                                                         
                                                                                 
Taxation                                             (25.3)     (16.6)     (34.2)
                                                                                 
Capital expenditure and financial investment                                     
                                                                                 
Purchase of tangible fixed assets                    (49.4)     (53.8)    (136.5)
                                                                                 
Purchase of investments                              (10.5)      (0.3)      (0.5)
                                                                                 
Sale of tangible fixed assets and investments          13.6        9.7       31.6
                                                                                 
Net cash outflow for capital expenditure and         (46.3)     (44.4)    (105.4)
financial investment                                                             
                                                                                 
Free cash flow                                         28.0       60.9      177.8
                                                                                 
Acquisitions and disposals                                                       
                                                                                 
Acquisitions                                         (14.2)     (13.6)     (71.4)
                                                                                 
Disposals                                               0.1          -          -
                                                                                 
Net cash outflow for acquisitions and                (14.1)     (13.6)     (71.4)
disposals                                                                        
                                                                                 
Equity dividends paid                                (45.2)     (42.2)     (64.5)
                                                                                 
Net cash (outflow)/inflow before the use of liquid   (31.3)        5.1       41.9
resources and financing                                                          
                                                                                 
Net cash inflow/(outflow) from management of           15.4        2.3     (14.0)
liquid resources                                                                 
                                                                                 
Net cash (outflow)/inflow from financing              (0.4)     (10.2)       19.0
                                                                                 
(Decrease)/increase in cash                          (16.3)      (2.8)       46.9

Reconciliation of operating profit to operating cash flow                      
(unaudited)                                                                    
                                                                               
Operating profit                                         58.3     60.9    122.5
                                                                               
Share of profit of joint ventures and                   (1.7)    (2.3)    (4.2)
associates                                                                     
                                                                               
Group operating profit                                   56.6     58.6    118.3
                                                                               
Depreciation and amortisation                            64.4     58.8    125.8
                                                                               
Loss on sale of tangible fixed assets                     0.4        -      2.3
                                                                               
Pension service costs - non cash                         20.0     16.7     33.7
                                                                               
Movements in provisions                                   3.0      6.3      6.2
                                                                               
Movements in working capital                           (36.3)    (1.0)     55.6
                                                                               
                                                        108.1    139.4    341.9
                                                                               
Costs of reorganisation in continuing                   (0.2)    (6.5)    (8.2)
operations                                                                     
                                                                               
Net cash inflow from operating activities               107.9    132.9    333.7

Reconciliation of net cash flow to movement in net debt                        
(unaudited)                                                                    
                                                                               
(Decrease)/increase in cash                            (16.3)    (2.8)     46.9
                                                                               
Cash outflow from change in debt                          5.6     11.5     19.6
                                                                               
Cash (inflow)/outflow from change in liquid            (15.4)    (2.3)     14.0
resources                                                                      
                                                                               
Change in net debt resulting from cash flows           (26.1)      6.4     80.5
                                                                               
Arising on acquisitions                                     -        -    (1.6)
                                                                               
Non-cash movements                                        2.1      5.1   (12.8)
                                                                               
Movement in net debt                                   (24.0)     11.5     66.1
                                                                               
Net debt at 1 January                                 (153.7)  (219.8)  (219.8)
                                                                               
Net debt at end of period                             (177.7)  (208.3)  (153.7)
                                                                               
Analysis of net debt                                 30.06.03 30.06.02 31.12.02
                                                                               
                                                           £m       £m       £m
                                                                               
Cash at bank and in hand                                127.3    113.1    149.7
                                                                               
Overdrafts                                             (15.6)   (10.7)   (24.5)
                                                                               
Loans                                                 (275.7)  (296.0)  (280.1)
                                                                               
Finance leases                                         (19.1)   (19.9)   (19.6)
                                                                               
Current asset investments                                 5.4      5.2     20.8
                                                                               
                                                      (177.7)  (208.3)  (153.7)

Group balance sheet (unaudited)                                                
                                                                               
                                            Note  30.6.03    30.6.02   31.12.02
                                                                               
                                                       £m (restated) (restated)
                                                                               
                                                                  £m         £m
                                                                               
Fixed assets                                                                   
                                                                               
Intangible assets - goodwill                        399.3      378.7      415.8
                                                                               
Tangible assets                                     572.5      566.3      576.2
                                                                               
Investments                                          57.7       51.5       49.2
                                                                               
                                                  1,029.5      996.5    1,041.2
                                                                               
Current assets                                                                 
                                                                               
Stocks                                                8.2        9.0        9.2
                                                                               
Debtors                                                                        
                                                                               
Amounts falling due within one year                 896.9      883.1      874.8
                                                                               
Amounts falling due after more than one              24.1       17.8       17.6
year                                                                           
                                                                               
Current asset investments                             5.4        5.2       20.8
                                                                               
Cash at bank and in hand                            127.3      113.1      149.7
                                                                               
                                                  1,061.9    1,028.2    1,072.1
                                                                               
Creditors: amounts falling due within one                                      
year                                                                           
                                                                               
Short-term borrowings                              (35.4)     (37.0)     (50.4)
                                                                               
Other creditors                                   (973.3)    (884.5)  (1,008.5)
                                                                               
Net current assets                                   53.2      106.7       13.2
                                                                               
Total assets less current liabilities             1,082.7    1,103.2    1,054.4
                                                                               
Creditors: amounts falling due after more                                      
than one year                                                                  
                                                                               
Long-term borrowings                              (275.0)    (289.6)    (273.8)
                                                                               
Other creditors                                     (4.5)     (30.4)      (7.9)
                                                                               
Provisions for liabilities and charges            (116.7)    (112.9)    (110.0)
                                                                               
Total net assets excluding pension assets           686.5      670.3      662.7
and liabilities                                                                
                                                                               
Net pension assets and liabilities                   38.0      353.1       41.3
                                                                               
                                                    724.5    1,023.4      704.0
                                                                               
Equity shareholders' funds                   10     704.8    1,003.2      687.2
                                                                               
Equity minority interests                            19.7       20.2       16.8
                                                                               
                                                    724.5    1,023.4      704.0
                                                                               
Net debt                                          (177.7)    (208.3)    (153.7)
                                                                               
Gearing                                             25.2%      20.8%      22.4%
                                                                               
Gearing - excluding net pension assets and          26.6%      32.0%      23.8%
liabilities                                                                    

Group statement of total recognised gains and losses                           
(unaudited)                                                                    
                                                                               
                                                Half year  Half year  Half year
                                                                               
                                                    ended      ended      ended
                                                                               
                                                  30.6.03    30.6.02   31.12.02
                                                                               
                                                       £m (restated) (restated)
                                                                               
                                                                  £m         £m
                                                                               
Profit for the financial period                      44.2       54.4      110.2
                                                                               
Actuarial loss recognised on the pension                -          -    (459.1)
schemes                                                                        
                                                                               
Deferred tax relating to actuarial loss on                                     
the pension schemes                                                            
                                                                               
UK                                                      -          -      135.5
                                                                               
Overseas                                                -          -        2.2
                                                                               
Exchange differences                                (3.6)      (7.1)     (12.6)
                                                                               
Total recognised gains and losses relating           40.6       47.3    (223.8)
to the period                                                                  
                                                                               
Prior year adjustment - FRS 17                    (211.4)                      
                                                                               
Total gains and losses recognised since last      (170.8)                      
annual report                                                                  

Notes to the interim report                                                    
(unaudited)                                                                    
                                                                               
1  The interim report                                                          
                                                                               
   The interim report was approved by the Board on 25 July 2003. The financial 
   information set out in the interim report is unaudited but has been reviewed
   by the Auditors and their report to the Company is set out on page •.       
                                                                               
2  Accounting policies                                                         
                                                                               
   The interim financial statements have been prepared on the basis of the     
   accounting policies set out in the 2002 financial statements of Exel plc,   
   except for the adoption of FRS 17 `Retirement benefits'. The taxation charge
   is based on the estimated effective rate for the full year.                 
                                                                               
   The adoption of FRS 17 has resulted in the following restatements to prior  
   period results:                                                             
                                                                               
    a. an increase in the pension charge, within operating profit, of £34.8m in
       the half year ended 30 June 2002 (year ended 31 December 2002: £70.0m), 
                                                                               
    b. the inclusion of other finance income of £30.2m in the half year to 30  
       June 2002 (year ended 31 December 2002: £60.5m),                        
                                                                               
    c. a decrease in the tax charge of £1.3m in the half year to 30 June 2002  
       (year ended 31 December 2002: £2.9m),                                   
                                                                               
    d. a decrease in the profit for the period of £3.3m in the half year to 30 
       June 2002 (year ended 31 December 2002: £6.6m),                         
                                                                               
    e. a decrease in the recognised gains and losses of £3.2m in the half year 
       to 30 June 2002, being primarily the decrease in the profit for the     
       period, (year ended 31 December 2002: £328.0m), and                     
                                                                               
    f. an increase in reserves of £113.4m at 30 June 2002 (31 December 2002: a 
       decrease of £211.4m).                                                   
                                                                               
3  Statutory group financial                                                   
   statements                                                                  
                                                                               
   The accounts for the year ended 31 December 2002 set out within this report 
   are not the Group's statutory financial statements. Statutory group         
   financial statements for Exel plc for the year ended 31 December 2002, on   
   which the Auditors gave an unqualified report (which made no statement under
   sections 237 (2) or (3) of the Companies Act 1985), have been filed with the
   Registrar of Companies.                                                     

4  Exchange rates                                                                
                                                                                 
   The significant exchange rates relative to £ sterling used in the preparation 
   of these financial statements are as follows:                                 
                                                                                 
                                              Average                 Period end 
                                                                                 
                                Half    Half     Year   30.6.03 30.6.02 31.12.02 
                                year    year    ended                            
                               ended   ended 31.12.02                            
                             30.6.03 30.6.02                                     
                                                                                 
   US dollar                    1.61    1.45     1.50      1.66    1.52     1.60 
                                                                                 
   Euro                         1.47    1.61     1.59      1.45    1.55     1.54 
                                                                                 
   Singapore dollar             2.82    2.64     2.69      2.91    2.69     2.78 

Notes to the interim report (unaudited) continued                              

5 Segmental information

Analysis of change in turnover

                                                                 Restatements                         
                                                                                                      
                                                                          and                         
                                                                                                      
                         Half                   New    Increment  movement in                     Half
                         year                                                                     year
                                                                                                      
                        ended          acquisitions      on 2002 discontinued                    ended
                                                                                                      
                      30.6.02 Exchange         2003 acquisitions   operations       Organic   30.06.03
                                                                                     change           
                                                                                                      
                           £m       £m           £m           £m           £m     £m      %         £m
                                                                                                      
Europe, Middle East &                                                                                 
Africa                                                                                                
                                                                                                      
Contract logistics                                                                                    
                                                                                                      
UK & Ireland            579.6      2.6            -            -            -   49.8    8.6 %    632.0
                                                                                                      
Continental Europe &    162.6     15.4            -            -            -   14.4    8.1 %    192.4
Africa                                                                                                
                                                                                                      
                        742.2     18.0            -            -            -   64.2    8.4 %    824.4
                                                                                                      
Freight management                                                                                    
                                                                                                      
UK & Ireland            121.0      1.2            -            -            - (12.4) (10.1) %    109.8
                                                                                                      
Continental Europe &    236.2     20.2          7.9            -            -   10.9    4.3 %    275.2
Africa                                                                                                
                                                                                                      
                        357.2     21.4          7.9            -            -  (1.5)  (0.4) %    385.0
                                                                                                      
Europe, Middle East & 1,099.4     39.4          7.9            -            -   62.7    5.5 %  1,209.4
Africa                                                                                                
                                                                                                      
Americas                                                                                              
                                                                                                      
Contract logistics      341.4   (37.1)            -         43.9            -   54.1   17.8 %    402.3
                                                                                                      
Freight management      439.4   (45.0)            -          0.1            -  (7.4)  (1.9) %    387.1
                                                                                                      
                        780.8   (82.1)            -         44.0            -   46.7    6.7 %    789.4
                                                                                                      
Asia Pacific                                                                                          
                                                                                                      
Contract logistics       41.0    (0.9)            -            -          0.7    8.1   20.2 %     48.9
                                                                                                      
Freight management      259.2   (20.4)            -          3.5         18.3   24.2   10.1 %    284.8
                                                                                                      
                        300.2   (21.3)            -          3.5         19.0   32.3   11.6 %    333.7
                                                                                                      
Total Logistics                                                                                       
                                                                                                      
Contract logistics    1,124.6   (20.0)            -         43.9          0.7  126.4   11.4 %  1,275.6
                                                                                                      
Freight management    1,055.8   (44.0)          7.9          3.6         18.3   15.3    1.5 %  1,056.9
                                                                                                      
                      2,180.4   (64.0)          7.9         47.5         19.0  141.7    6.7 %  2,332.5
                                                                                                      
Environmental            50.5        -            -            -            -    7.5   14.9 %     58.0
                                                                                                      
Continuing operations 2,230.9   (64.0)          7.9         47.5         19.0  149.2    6.9 %  2,390.5
                                                                                                      
Discontinued             30.9      2.6            -            -       (33.5)      -      -          -
operations                                                                                            
                                                                                                      
Total                 2,261.8   (61.4)          7.9         47.5       (14.5)  149.2    6.8 %  2,390.5
                                                                                                      

Description of Exel's segmental analysis

Exel's segmental analysis splits logistics activities between contract
logistics and freight management.

Contract logistics includes ground-based supply chain management services, such
as integrated warehousing and transportation, just in time services,
sub-assembly and other value added activities.

Freight management includes airfreight and seafreight forwarding, customs
broking, transportation management (including US road and rail) and specialist
mail and express services.

Due to the comprehensive range of services provided to customers within
individual contracts there are some cross-overs between these two segments but
these are relatively small.

The restatements of Asia Pacific contract logistics and freight management
represent the incremental results of Exel-Sinotrans, following the
reclassification of the Group's investment in the company as a joint venture;
previously Exel-Sinotrans was included in the Group's results as an associated
undertaking. The impact of the restatements on the Group's results is an
increase in turnover of £20.7m compared to the half year ended 30 June 2002.
There was no change to the Group's profit for the financial period due to this
reclassification.

Discontinued operations are BRS Taskforce which was sold in 2003, and the
German chilled food logistics business which was closed in 2002.

Notes to the interim report (unaudited) continued                              

5 Segmental information continued

Analysis of change in operating profit before goodwill

                     Half year                                                                         
                                                                                                       
                         ended                   New    Increment  Movement in                     Half
                                                                                                   year
                                                                                                       
                       30.6.02          acquisitions      on 2002 discontinued                    ended
                                                                                                       
                    (restated) Exchange         2003 acquisitions   operations Organic change   30.6.03
                                                                                                       
                            £m       £m           £m           £m           £m      £m      %        £m
                                                                                                       
Europe, Middle East                                                                                    
& Africa                                                                                               
                                                                                                       
Contract logistics                                                                                     
                                                                                                       
UK & Ireland              15.2      0.2            -            -            -     0.8    5.2 %    16.2
                                                                                                       
Continental Europe           -      0.4            -            -            -     1.2  300.0 %     1.6
& Africa                                                                                               
                                                                                                       
                          15.2      0.6            -            -            -     2.0   12.7 %    17.8
                                                                                                       
Freight management                                                                                     
                                                                                                       
UK & Ireland               1.1      0.1            -            -            -     0.2   16.7 %     1.4
                                                                                                       
Continental Europe         5.8      1.1          0.2            -            -   (4.2) (60.9) %     2.9
& Africa                                                                                               
                                                                                                       
                           6.9      1.2          0.2            -            -   (4.0) (49.4) %     4.3
                                                                                                       
Europe, Middle East       22.1      1.8          0.2            -            -   (2.0)  (8.4) %    22.1
& Africa                                                                                               
                                                                                                       
Americas                                                                                               
                                                                                                       
Contract logistics        17.2    (2.0)            -          2.8            -     4.2   27.6 %    22.2
                                                                                                       
Freight management         7.0    (0.8)            -            -            -   (4.0) (64.5) %     2.2
                                                                                                       
                          24.2    (2.8)            -          2.8            -     0.2    0.9 %    24.4
                                                                                                       
Asia Pacific                                                                                           
                                                                                                       
Contract logistics         1.7        -            -            -            -       -      - %     1.7
                                                                                                       
Freight management        17.6    (1.5)            -            -            -     0.7    4.3 %    16.8
                                                                                                       
                          19.3    (1.5)            -            -            -     0.7    3.9 %    18.5
                                                                                                       
Total Logistics                                                                                        
                                                                                                       
Contract logistics        34.1    (1.4)            -          2.8            -     6.2   19.0 %    41.7
                                                                                                       
Freight management        31.5    (1.1)          0.2            -            -   (7.3) (24.0) %    23.3
                                                                                                       
                          65.6    (2.5)          0.2          2.8            -   (1.1)  (1.7) %    65.0
                                                                                                       
Environmental              7.4        -            -            -            -   (0.7)  (9.5) %     6.7
                                                                                                       
Continuing                73.0    (2.5)          0.2          2.8            -   (1.8)  (2.6) %    71.7
operations                                                                                             
                                                                                                       
Discontinued             (0.3)        -            -            -          0.3       -      -         -
operations                                                                                             
                                                                                                       
Goodwill                (11.8)      0.7        (0.7)        (1.6)            -       -      -    (13.4)
amortisation                                                                                           
                                                                                                       
Total                     60.9    (1.8)        (0.5)          1.2          0.3   (1.8)  (3.0) %    58.3
                                                                                                       

The FRS 17 defined benefit pension service costs included within the segmental
analysis in the half year ended 30 June 2003 are £20.2m (half year ended 30
June 2002 £16.7m).

Notes to the interim report (unaudited) continued                              

5 Segmental information continued

By business sector

                                   Turnover             Operating profit before   
                                                               goodwill           
                                                                                  
                                                              Half year       Year
                                                                                  
                              Half    Half     Year     Half      ended      ended
                              year    year              year                      
                                                                                  
                             ended   ended    ended    ended    30.6.02   31.12.02
                                                                                  
                           30.6.03 30.6.02 31.12.02  30.6.03 (restated) (restated)
                                                                                  
                                £m      £m       £m       £m         £m         £m
                                                                                  
Europe, Middle East &                                                             
Africa                                                                            
                                                                                  
Contract logistics                                                                
                                                                                  
UK & Ireland                 632.0   579.6  1,211.3     16.2       15.2       31.1
                                                                                  
Continental Europe &         192.4   162.6    341.9      1.6          -        0.6
Africa                                                                            
                                                                                  
                             824.4   742.2  1,553.2     17.8       15.2       31.7
                                                                                  
Freight management                                                                
                                                                                  
UK & Ireland                 109.8   121.0    223.6      1.4        1.1        2.6
                                                                                  
Continental Europe &         275.2   236.2    472.2      2.9        5.8       11.7
Africa                                                                            
                                                                                  
                             385.0   357.2    695.8      4.3        6.9       14.3
                                                                                  
Europe, Middle East &      1,209.4 1,099.4  2,249.0     22.1       22.1       46.0
Africa                                                                            
                                                                                  
Americas                                                                          
                                                                                  
Contract logistics           402.3   341.4    707.4     22.2       17.2       34.5
                                                                                  
Freight management           387.1   439.4    903.9      2.2        7.0       17.6
                                                                                  
                             789.4   780.8  1,611.3     24.4       24.2       52.1
                                                                                  
Asia Pacific                                                                      
                                                                                  
Contract logistics            48.9    41.0     89.2      1.7        1.7        2.7
                                                                                  
Freight management           284.8   259.2    625.6     16.8       17.6       33.3
                                                                                  
                             333.7   300.2    714.8     18.5       19.3       36.0
                                                                                  
Total Logistics                                                                   
                                                                                  
Contract logistics         1,275.6 1,124.6  2,349.8     41.7       34.1       68.9
                                                                                  
Freight management         1,056.9 1,055.8  2,225.3     23.3       31.5       65.2
                                                                                  
                           2,332.5 2,180.4  4,575.1     65.0       65.6      134.1
                                                                                  
Environmental                 58.0    50.5    104.3      6.7        7.4       14.2
                                                                                  
Continuing operations      2,390.5 2,230.9  4,679.4     71.7       73.0      148.3
before goodwill                                                                   
                                                                                  
Discontinued operations          -    30.9     41.2        -      (0.3)      (0.2)
                                                                                  
Goodwill amortisation            -       -        -   (13.4)     (11.8)     (25.6)
                                                                                  
Total                      2,390.5 2,261.8  4,720.6     58.3       60.9      122.5
                                                                                  

Notes to the interim report (unaudited) continued                                
                                                                                 
6   Exceptional items                                                            
                                                                                 
                                                    Half year Half year      Year
                                                        ended                    
                                                      30.6.03     ended     ended
                                                                         31.12.02
                                                           £m   30.6.02          
                                                                               £m
                                                                     £m          
                                                                                 
    Profit on disposals of fixed assets                   1.5       0.8       0.9
                                                                                 
    Loss on termination and disposals of                                         
    discontinued operations                                                      
                                                                                 
    Loss on termination of German chilled food              -     (7.2)     (9.0)
    logistics business                                                           
                                                                                 
    Less 2001 provision                                     -       7.2       9.0
                                                                                 
    Other disposals                                     (0.6)         -         -
                                                                                 
                                                        (0.6)         -         -
                                                                                 
    Total exceptional items                               0.9       0.8       0.9
                                                                                 
7   Tax on profit on ordinary activities                                         
                                                                                 
                                                      Half  Half year       Year 
                                                      year                       
                                                     ended      ended      ended 
                                                   30.6.03    30.6.02   31.12.02 
                                                                                 
                                                        £m (restated) (restated) 
                                                                                 
                                                                   £m         £m 
                                                                                 
    UK tax                                                9.9      14.9      31.0
                                                                                 
    Foreign tax                                          13.0      12.2      23.5
                                                                                 
    Tax on profit on ordinary activities                 22.9      27.1      54.5
                                                                                 
    The tax charge is analysed as follows:                                       
                                                                                 
    On ordinary activities before exceptional            23.6      28.8      56.6
    items                                                                        
                                                                                 
    On exceptional items                                (0.7)     (1.7)     (2.1)
                                                                                 
                                                         22.9      27.1      54.5
                                                                                 
8   Dividends                                                                    
                                                                                 
                                                    Half year Half year      Year
                                                        ended     ended          
                                                      30.6.03               ended
                                                                30.6.02  31.12.02
                                                        pence                    
                                                                  pence     pence
                                                                                 
    Dividend per share                                                           
                                                                                 
    Interim                                               7.9       7.5       7.5
                                                                                 
    Final                                                   -         -      15.3
                                                                                 
                                                          7.9       7.5      22.8

Notes to the interim report (unaudited) continued                               
                                                                                
9   Earnings per share                                                          
                                                                                
                                                      Half  Half year       Year
                                                      year      ended           
                                                     ended    30.6.02      ended
                                                   30.6.03              31.12.02
                                                           (restated)           
                                                        £m            (restated)
                                                                   £m           
                                                                              £m
                                                                                
    Profit for the financial period                   44.2       54.4      110.2
                                                                                
    Add back                                                                    
                                                                                
    Amortisation of goodwill                          13.4       11.8       25.6
                                                                                
    Exceptional items                                (0.9)      (0.8)      (0.9)
                                                                                
    Tax on exceptional items                         (0.7)      (1.7)      (2.1)
                                                                                
    Other finance income - FRS 17                   (15.2)     (30.2)     (60.5)
                                                                                
    Tax on other finance income - FRS 17               4.6        9.1       18.2
                                                                                
    Underlying profit for the period                  45.4       42.6       90.5
                                                                                
    Weighted average number of shares (millions)                                
                                                                                
    Basic average number of shares                   295.3      295.3      295.5
                                                                                
    Dilutive potential ordinary shares                 1.8        2.6        1.7
                                                                                
    Diluted average number of shares                 297.1      297.9      297.2
                                                                                
10  Movements in shareholders' funds                                            
                                                                                
                                                      Half  Half year       Year
                                                      year      ended           
                                                     ended    30.6.02      ended
                                                   30.6.03              31.12.02
                                                           (restated)           
                                                        £m            (restated)
                                                                   £m           
                                                                              £m
                                                                                
    Profit for the financial period                   44.2       54.4      110.2
                                                                                
    Dividends                                       (23.2)     (22.3)     (67.5)
                                                                                
                                                      21.0       32.1       42.7
                                                                                
    Shares allotted                                    0.2        1.3        1.6
                                                                                
    Actuarial loss recognised on the pension             -          -    (459.1)
    schemes                                                                     
                                                                                
    Deferred tax relating to actuarial loss on           -          -      137.7
    the pension schemes                                                         
                                                                                
    Exchange differences                             (3.6)      (7.1)     (12.6)
                                                                                
    Movements in shareholders' funds                  17.6       26.3    (289.7)
                                                                                
    At 1 January (originally £898.6m before          687.2      976.9      976.9
    deducting prior                                                             
                                                                                
    year adjustment of £211.4m)                                                 
                                                                                
    Shareholders' funds at end of period             704.8    1,003.2      687.2

Independent review report to Exel plc

Introduction

We have been instructed by the Company to review the financial information for
the six months ended 30 June 2003 which comprises the group profit and loss
account, group cash flow statement, reconciliation of operating profit to
operating cash flow, reconciliation of net cash flow to movement in net debt,
group balance sheet, group statement of total recognised gains and losses, and
the related notes 1 to 10. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.

This report is made solely to the Company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by the law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed.

Directors' responsibilities

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

Review work performed

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

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.

Ernst & Young LLP

London

25 July 2003