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Johnston Group PLC (JHT)

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Thursday 22 July, 2004

Johnston Group PLC

Trading Update

Johnston Group PLC
22 July 2004


22 July 2004

                                  Trading Update

At the Annual General Meeting held on 27 May 2004 the Chairman informed
shareholders that trading conditions had been tough. Since that announcement
market conditions have not improved and the Board is now of the opinion that the
results for the year ending 31 December 2004 will be substantially below market
expectations.

The new Group Chief Executive, Kash Pandya, is continuing his operational review
and cost reduction programmes are now underway. The outcome of that review will
be reported at the time of the Interim Results which are due to be announced
during the week commencing 27 September 2004.

Engineering

Johnston Sweepers has been affected by a general downturn in the UK
chassis-mounted sweeper market after the high sales levels of the last two
years. Compact sweeper sales remain sound.

The restructuring in North America continues and vacuum sweeper assembly is now
being undertaken in the new production facility in Montreal. Market conditions
in both the USA and Canada remain difficult and the weak US dollar is affecting
margins.

As part of the operational review, the Board is developing a world wide sweeper
strategy, driven by the new Group Chief Executive, to leverage its global
position and to drive cost improvements.

Both MacDonald Johnston Engineering in Australia and Johnston Beam in Denmark
are benefiting from good order books.

Saxon Specialist Vehicles has largely resolved the problems of integrating the
Norquip airport support vehicles, but market conditions for both the fire tender
and airport support vehicles are extremely difficult and the company is still
making substantial losses. Action is being taken with reductions in employee
numbers and the recent appointment of a new managing director.

Construction Materials

In common with the UK quarrying industry as a whole Johnston Roadstone is
experiencing tough market conditions, but nevertheless continues to perform
well.

Johnston Pipes is suffering from the very competitive trading conditions in the
UK concrete market which have emerged since the beginning of the financial year.
The company has maintained market share, but prices and margins have fallen
sharply. The company is enjoying some success with product diversification,
notably with sales of its new box culvert range. Trading conditions remain
difficult for the GRP division which has incurred losses.

The Board continues to keep all operations under close review.

For further information:

David Hamilton                  Lulu Bridges / Peter Willetts
Johnston Group PLC              Tavistock Communications
Tel: 01737 242 466              Tel: 020 7920 3150




                      This information is provided by RNS
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