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Ultraframe PLC (UTF)

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Wednesday 07 December, 2005

Ultraframe PLC

Final Results

Ultraframe PLC
07 December 2005



                                                                 7 December 2005

                  ULTRAFRAME PLC ('Ultraframe' or 'the Group')
                              PRELIMINARY RESULTS

Ultraframe Plc, the leading specialist designer of conservatory systems in
Europe and North America, today announces preliminary results for the 52 weeks
ended 30 September 2005 (2004: 53 weeks).

Financial results (before goodwill 
amortisation and exceptionals) *                       2005                2004 
                                                  (52 weeks)          (53 weeks)

Turnover                                             £96.7m             £118.2m
Operating profit                                      £5.5m              £12.8m
Profit before tax                                     £4.5m              £12.0m
Earnings per share                                     3.5p                8.5p

Statutory results
(post goodwill amortisation and exceptionals)
Operating (loss)/profit                            (£7.1)m                £4.6m
(Loss)/profit before tax                           (£8.5)m                £3.6m
(Loss)/earnings per share                           (7.2)p                 1.0p

* Management use results that exclude goodwill amortisation and exceptional
items as the primary measure to provide a better comparison of underlying
business performance

   • The Group results for 2005 reflect the changes undertaken to meet the
     demands of a particularly challenging market environment. This resulted in
     an improved operating performance in the second half and a full year profit
     before tax, goodwill and exceptional items in line with the Board's
     expectations.

   • In the UK, the trading environment has remained very challenging. In
     response, management has introduced new product and marketing initiatives,
     worked more closely with customers to retain and build key relationships,
     and pursued opportunities for operational efficiencies.

   • North America returned to operating profitability in line with the
     turnaround plan. Good sales growth in Company-owned retail stores
     demonstrates market potential but offset by sales decline in the franchise
     network, mainly due to franchise deletions.

   • Cost reduction plans delivered Group-wide savings of over £5m in 2005 as
     planned.

   • Net cash outflow before financing of £4.5m, after the cash cost of
     exceptional items of £4.8m. Net debt increased to £11.1m, representing
     gearing of 18.2%.


   • Statutory results reflect an exceptional item charge of £10.1m, including 
     abnormal litigation costs of £6.5m net,  redundancy costs of £0.8m and a 
     provision of £2.8m attributable to potential product rectification in
     North America.

   • In view of the current trading environment, the Board is not proposing a
     final dividend for 2005.

   • The rate of decline in operating performance is expected to moderate
     during 2006.

   • The Board is considering alternative ways of maximising shareholder value 
     and has initiated a strategic review to explore options for the Group.


Rod Sellers, Chairman, commented:

'These results reflect the tough UK market conditions, which are likely to
remain so in the near term. We continue to focus the UK business on long term
market trends and to position the Company to defend and build its market
leadership. We are pleased that the US business has returned to profitability as
a result of the business turnaround plan and is well positioned to build market
awareness and take advantage of the potential the US market offers.

'The board believes that the actions we have taken to date, particularly on
efficiency and cost, have protected the business from the worst of the difficult
environment and maintained our market leading position. Despite the underlying
strength of the business, we cannot escape the reality that the Group's
performance remains disappointing. Against that background and given the
outlook, particularly for big ticket spending in the UK, the Board has taken the
decision to appoint advisers to conduct a strategic review. It is too early to
speculate on the outcome of that review, but we will keep shareholders fully
informed of progress over the coming weeks and months.'

Enquiries

Ultraframe Plc David Moore, Chief Executive      ) today:        020 7404 5959
               Alan Rothwell, Finance Director   ) thereafter:   01200 443311
Brunswick      Gill Ackers/Sarah Lindgreen                       020 7404 5959

Access our investor website at www.ir.ultraframe.com, and view our commercial
websites at
www.ultraframe-conservatories.co.uk and www.fourseasonssunrooms.com.


Notes to editors:

Ultraframe, established in 1983, is the leading international designer and
manufacturer of conservatories and sunroom systems for domestic and light
commercial use. In Europe, the Group is primarily focused on the UK where it is
the industry leader in conservatory roof design and manufacture. In 1997
Ultraframe listed on the London Stock Exchange. In North America, the Four
Seasons business was acquired in 2001 and is the only nationally recognised
consumer brand for sunrooms in the US. The Group HQ team is based on the main UK
site in Clitheroe, Lancashire. Ultraframe employs 1,000 people worldwide and has
more US and European quality accreditations and patents as well as a broader
intellectual property base for its roofing and sunroom systems than any other
conservatory company. This ensures that the Group remains at the forefront of
quality and technological innovation with a reputation for excellence.


OPERATING & FINANCIAL REVIEW


Group results

The Group results for 2005 reflect the changes undertaken to meet the demands of
a particularly challenging market environment. This resulted in an improved
operating performance in the second half and a full year profit before tax,
goodwill and exceptional items in line with the Board's expectations, albeit
down on 2004. The weaker trading result is against the background of a lower UK
conservatory market overall and increased competition in the UK, partly offset
by an improved trading performance and return to operating profitability in
North America. The overall trading performance reflects significant Group wide
cost saving initiatives in direct costs and indirect overheads, amounting in
total to over £5m in the year under review.

Reported operating results reflect a 52 week trading year, against 53 weeks in
2004, whilst underlying trends are adjusted for a like number of trading weeks.
Group turnover for the full year was down by 16.8% on an underlying basis, with
reported turnover down by 18.2% to £96.7m (2004: £118.2m). Gross margin
decreased from 47.4% to 43.0% as the Group responded to the UK competitive
environment, while operating margin declined from 10.8% to 5.7%, reflecting
sales related operational gearing. Operating profit before goodwill amortisation
and exceptional items was down to £5.5m (2004: £12.8m). Profit before tax,
goodwill amortisation and exceptional items fell to £4.5m (2004: £12.0m). After
an exceptional item charge of £10.1m gross, the reported pre-tax loss after
goodwill amortisation and exceptional items amounted to £8.5m (2004: profit
£3.6m). Earnings per share before goodwill amortisation and exceptional items
decreased to 3.5p (2004: 8.5p), with a reported loss per share of 7.2p (2004:
reported EPS 1.0p).
Net cash outflow before financing amounted to £4.5m (2004: neutral cash flow),
after payment of the final dividend for 2004 of £7.6m and the cash cost of
exceptional items of £4.8m. Net debt at the financial year end increased to
£11.1m (2004: £6.5m), representing gearing of 18.2% (2004: 9.6%).

Exceptional items

An exceptional item of £10.1m gross (2004: £5.3m gross), less attributable tax
relief of £1.9m (2004: £nil), has been charged to the profit and loss account
for the year under review. This gross charge includes £6.0m in respect of
abnormal litigation and £0.5m in incremental financing costs, directly related
to the provision of collateral for the ongoing US litigation involving Patio
Enclosures. It also includes £2.8m relating to product rectification costs in
respect of our North American business and Group wide redundancy costs of £0.8m.
Dividend

In view of the current trading environment, the Board is not proposing a
dividend for the financial year ended 30 September 2005 (2004: 11.1p per share).

Board and employees

New UK divisional board appointments were made during the year in marketing,
sales, finance and operations. The new team has made significant changes to the
UK business, against a challenging market background. In North America, David
Ewing stepped down at the end of March 2005 and Mitch Pisik was appointed
divisional CEO in July 2005, having previously joined the business as divisional
CFO in October 2003. The turnaround plan in North America is on track and the
business has returned to profitability.

Strategic review

Against a background of the Group's performance and outlook, the Board is
considering alternative ways of maximising shareholder value. Accordingly,
Rothschild has been appointed to assist the Group with a strategic review to
explore options for the Group. The review is currently at an early stage and
options, which could include the disposal of divisions or assets of the Group,
are under consideration. The Board will keep shareholders advised of progress.

Current trading and outlook

United Kingdom

In the UK, turnover in the first two months of the new financial year is 22%
down. The outlook in terms of the competitive environment and big ticket
consumer expenditure generally remains challenging. We do not expect that this
will improve in the near term. However, the wide-ranging operational initiatives
are expected to slow the decline in year-on-year sales trends in 2005/6. We are
now better placed to defend our market share, and plan further sales and
marketing initiatives to defend and build our share of the UK market. Key UK
macroeconomic trends in interest rates, house prices and real disposable income
are indicative of a flat conservatory market in volume terms in 2006, albeit at
competitive pricing levels. We expect the rate of UK gross margin erosion to
moderate in 2006, following customer price realignment initiatives in 2005 and
expected efficiency improvements in 2006. The board anticipates lower sales and
operating profit in the UK in 2006, albeit at a lower rate of decline than in
2005.

North America

In North America, dollar sales are 3% below the comparable first two months last
year. We expect dollar sales growth in 2006 and for the rate of growth to gather
momentum as the year progresses, against the background of a sunroom market with
good growth potential. The major restructuring of the franchise network is now
complete and accordingly, the adverse sales impact of franchise deletions is
expected to be less marked in 2006. However, new product introductions, partner
additions to the network and marketing initiatives are expected to grow dollar
sales in the franchise network. In addition, we expect continued good growth in
retail sales in our Company-owned stores, as newer stores build to their trading
potential and our seventh store in Austin comes on stream. Whilst we continue to
expect good growth in North American operating profit in the medium term, we
expect that profit progression in 2006 will be restrained, as we uprate the
sales and marketing programmes to stimulate franchise sales growth.

Group outlook

Notwithstanding the significant cost savings implemented in 2005, the board
remains vigilant for further opportunities to control costs. Overall, given the
operating environment in each business, the Board expects the rate of decline in
Group operating profitability (pre goodwill and exceptional items) to moderate
during 2006, as the steps taken to address market conditions have further
impact.


United Kingdom

Financial highlights                                     2005            2004
£m                                                  (52 weeks)      (53 weeks)
------------------------                              ---------       ---------
Turnover                                                 54.5            73.8
Operating profit before exceptional items                 5.2            15.4
------------------------                              ---------       ---------
Operating margin                                          9.5%           20.9%
------------------------                              ---------       ---------


Turnover decreased 24.9% on an underlying basis (like number of trading weeks)
and by 26.1% on a reported basis to £54.5m. Sales were down 27.4% in the first
half and down 22.5% in the second half in underlying terms. Against a lower
market overall, underlying sales volume declined 12%, reflecting a decrease of
14% in the first half and 10% in the final six months. Within overall sales
volume, budget products now represent 27% of total roofing volumes (2004: 24%).
Gross margin declined from 49.5% to 40.9%, reflecting the highly competitive
market background across the product spectrum. As announced at the Interims,
significant cost reduction plans were implemented during the year. This resulted
in savings both in direct costs (charged in arriving at gross profit) and
indirect overheads amounting to over £4m in the year under review.
Notwithstanding this, operating profit declined from £15.4m to £5.2m, against
the challenging market environment.

In response to the significant demographic and structural changes in the UK
conservatory market in recent years, the new UK management team remains focused
on developing new product solutions in partnership with customers, providing
enhanced customer service and delivering operational efficiencies. The business
is improving product and process flows and is enhancing quality assurance
arrangements to improve customer service and reduce reprocessing costs.
Continuing operational efficiency improvements are focused on lean manufacturing
initiatives and better supply chain arrangements, for example by working more
closely with key suppliers on strategic sourcing. In-house distribution was
outsourced to a specialist services provider towards the end of the financial
year, as part of a wider initiative to improve cost effective on-time in-full
deliveries. These initiatives are focused on an enhanced customer offering, in
line with our plans to aggressively defend and build our market leading
position.

In terms of new product development, our newly developed click-lock technology
is quicker and easier to install than conventional systems and is competitively
priced. Following the launch of Uzone and Litespace in prior periods, we
introduced the 'Elevation' lean-to roof in the first half of 2005. We previewed
our latest click-lock roofing product 'Sunroom' at the Glassex exhibition in
March and also displayed our newly developed chambered top cappings, offering
superior thermal performance, as a product enhancement for our core 'Classic'
range of highly configurable products. We plan further product development in
2006 and have very recently previewed and launched purpose designed conservatory
side frames. Looking ahead, we plan to extend the range and reach of click-lock
technology to further expand product configurability.

North America

Financial highlights                                     2005             2004
£m                                                  (52 weeks)       (53 weeks)
---------------------                                 --------        ---------
Turnover                                                 42.2             44.5
Operating profit/(loss) before goodwill
amortisation and exceptional items                        2.6             (0.5)
---------------------                                  --------        ---------
Operating margin                                          6.1%            (1.1)%
---------------------                                  --------        ---------

In North America, dollar sales were flat on an underlying basis (like number of
trading weeks) and were 1.9% down on a reported basis to $78.1m. Dollar sales
were up 2.1% in the first half and down 1.6% in the second half in underlying
terms. Within overall dollar turnover, sales in our Company-owned retail stores
rose 17.3% on an underlying basis to $16.1m, offset by an underlying decline of
3.6% in franchise network sales to $62.0m mainly due to franchise deletions.
Sales attributable to franchise deletions amounted to $1.0m, against $3.4m in
2004. The major restructuring of the franchise network has been completed and we
are now seeking to add suitable partners to the network in 2006. There were 289
franchise and dealer outlets at the financial year end, compared with some 380
on acquisition and 310 at September 2004. Gross margin increased from 44.1% to
45.7%, reflecting operational efficiencies. As previously announced, cost
reduction initiatives were implemented during the year, resulting in savings in
the overall direct and indirect cost base in excess of $3m in 2005. Overall, the
business turnaround plan was delivered in line with expectations and North
America returned to profitability, resulting in an operating profit of $4.8m
(pre goodwill and exceptional items) against a comparable operating loss of
$0.9m in the prior year. The 3% depreciation in the US dollar exchange rate has
impacted the sterling reported results of our North American business during the
period under review.
We have continued to make good progress in improving the operational performance
of the business. The second half saw a significant year-on-year improvement in
operating profit (pre goodwill and exceptional items). The cost base has been
realigned and we have achieved significant labour efficiencies in manufacturing
operations, together with the quality control improvements and procurement
savings. Plant automation is supporting the continuous improvement programme.

In the franchise network, we are working more closely with our business partners
to exploit the good growth potential in the embryonic sunroom market. In
addition to recruiting new partners to the network going forward, our regional
business development managers are proactively liaising with existing partners to
help develop their business potential. We plan to uprate our sales and marketing
programmes in 2006 to stimulate sales growth and enhance brand awareness. New
product introductions are extending our market leading product range, including
the recently developed upgradeable screen room and sunroom offerings introduced
at the end of the financial year. We also expanded our vinyl room product
portfolio during the year to complement our predominantly painted aluminium
systems and existing hardwood products. We are continuing to expand regulatory
and energy code approvals for our sunroom systems to facilitate shorter
installation lead times.
Our flagship Company-owned retail stores are an integral part of our market
development plan, particularly in growth areas where we are under-represented.
They also provide a base for regional field support services to franchisees in
surrounding locations, as part of our co-ordinated approach to an expanding
market presence. Following the opening of our Orlando store in October 2004, our
seventh store opened in Austin towards the end of the financial year under
review. Our retail stores generated good sales growth in 2005 and a positive
contribution to operating profit. No further store openings are currently
planned for 2006, in order to focus effort on further developing sales in our
newer stores towards their full trading potential and to avoid significant set
up costs.

Major litigation

The £6m charge relating to abnormal litigation comprises £5.6m in the UK and
£0.4m in respect of the Patio Enclosures case in the US. Abnormal UK litigation
charges include legal costs incurred of £3.9m in the complex intellectual
property case brought against Burnden, together with a provision of £2.1m in
respect of an interim cost award against the Company (in favour of Burnden) at
the High Court hearing in October 2005. Based on legal advice, the Company is
currently seeking leave to appeal the Burnden ruling and any potential payment
to Burnden is dependent upon the final outcome of the appeal. The appeal process
is significantly less time intensive and costly than the initial court case. The
abnormal UK litigation charge also reflects a net credit of £0.4m in respect of
an interim damages receipt of £0.8m paid by Eurocell in 2005 (less attributable
litigation costs) for infringement of the Company's intellectual property. A
Court hearing to determine the final damages award and cost reimbursement in
favour of the Company is scheduled to take place in February 2006, following the
judicial rejection of a final appeal application by Eurocell in November 2005.
Further details relating to abnormal litigation in the UK and North America are
set out in note 9 to the financial statements.

Product rectification (Four Seasons)

As previously reported in our Interims, Four Seasons has been working
confidentially with a supplier to assess a potential product defect issue
related to a bought-in product component. Four Seasons and the supplier have
recently formulated a joint remediation plan, based on currently available
information. Accordingly, Ultraframe has made provision for potential product
rectification costs in the 2005 financial statements. This charge to the profit
and loss account, by way of an operating exceptional item, amounted to $5.2m
(£2.8m), including directly related advisory fees incurred of $0.9m (£0.5m) as
set out in note 10 to the financial statements.

Goodwill

The goodwill charge, relating to our Four Seasons business in North America,
decreased from £3.1m to £2.9m, having been positively impacted by £0.2m as a
result of dollar depreciation.

Interest

Net interest payable (before exceptional items) increased from £0.8m to £1.0m,
resulting from a decrease in interest receivable reflecting the reduction in
cash balances during the year. In order to manage the risk of exposure to
fluctuating interest rates, the Group continues to maintain the majority of its
debt at fixed rates of interest by the use of interest rate swaps, as set out in
note 3 to the financial statements.

Net interest payable (before exceptional items) for the year under review was
covered 5.6 times (2004: 16.2 times) by operating profit before goodwill
amortisation and exceptional items.

Taxation

The tax credit of £1.5m reflects a credit of £2.6m in respect of goodwill and
exceptional items. It also includes a tax charge based on an effective tax rate
of 23.5% (after release of prior year over provisions) on pre-tax profit
excluding goodwill and exceptional items, compared with 30.9% in the prior year.

Cash flow

Net debt at the financial year-end was £11.1m (2004: £6.5m), representing
gearing of 18.2% (2004: 9.6%). The level of net debt reflects a cash outflow of
£4.5m, together with a foreign exchange increase of £0.1m in dollar denominated
North American debt.

Cash inflow from operating activities (excluding exceptional items) amounted to
£13.2m, against £22.8m in the previous year. The net cash inflow on working
capital of £4.4m compares with a net inflow of £5.9m in 2004. Cash outflow on
operating exceptional items, mainly relating to abnormal litigation and
redundancy costs, amounted to £4.6m (2004: £nil).
Cash outflow on capital expenditure of £3.3m was significantly down on last year
(£4.9m) and comprised £2.2m in the UK and £1.1m in North America. The overall
level of capital expenditure was scaled back from budget in response to lower
trading levels and compares with a depreciation charge for the year of £4.0m
(2004: £3.9m). We plan a capital investment spend of some £2.6m in 2005/6,
including £1.6m in the UK and £1m in North America.

Net cash outflow before financing and management of liquid resources was £4.5m
for the year under review (2004: £nil), after the cash cost of exceptional items
£4.8m and the payment of the final dividend for 2004 of £7.6m.

International Financial Reporting Standards ('IFRS')

As previously reported, the Group is required to adopt IFRS with effect from 1
October 2005. During the 2005 financial year, an initial review was carried out
to identify the principal impact on the transition balance sheet. The most
relevant areas of impact relate to non-amortisation of goodwill, share based
payments, financial instruments and non-accrual of dividends. The analysis of
IFRS impact is currently being updated; however it remains our understanding
that, in line with the initial assessment, there will be no significant change
to the Group's net assets resulting from the transition to IFRS.

The Group contributes to employee personal pension plans and other similar US
retirement plans. The accounting standard IAS 19 'Employee benefits' has no
impact on the financial statements as the Group does not operate a defined
benefits scheme.

Funding

Following the 2005 financial year end, the Company arranged an extension of
existing syndicated bank facilities through to December 2006, in line with the
planned refinancing of the business prior to the expiration of the current
facilities. Committed facilities amount to £31.0m of which £29.6m was utilised
at the financial year end, including the $10m (£5.7m) letter of credit in favour
of Patio Enclosures. The facilities available reduce by £1.1m in December 2005,
£1.1m in June 2006 and a further £2.0m in September 2006, in line with the new
loan repayment terms, with the remaining facilities of £26.8m maturing in
December 2006. The maturity profile of bank debt drawn down at the financial
year end for balance sheet reporting purposes is based on circumstances
prevailing at the balance sheet date and does not reflect the extended repayment
terms subsequently agreed. This would have the effect of reclassifying bank debt
repayments due of £19.8m in the 2005 year end financial statements, from
creditors falling due within one year to falling due in more than one year.
Further details relating to bank facility terms are set out in notes 3 and 11 to
the financial statements.

Financial calendar

As part of its ongoing financial calendar, the Company intends to update the
market with a trading statement at the time of its AGM on 7 February 2006.

CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the 52 weeks ended 30 September 2005

                    Note            2005            2005       2005       2004
                         Before goodwill        Goodwill    Total      Total
                            amortisation    amortisation
                         and exceptional and exceptional
                                   items           items
                                    £000            £000       £000       £000

Turnover               2          96,691               -     96,691    118,243
Cost of sales                    (55,126)              -    (55,126)   (62,142)
                                --------        --------   --------   --------

Gross profit                      41,565               -     41,565     56,101
Distribution
costs                             (2,824)              -     (2,824)    (2,766)
                               -----------     -----------   --------  ---------
Administrative
expenses               4         (33,258)         (9,609)   (42,867)   (45,607)
before goodwill
amortisation
Goodwill
amortisation                           -          (2,939)    (2,939)    (3,091)
                               -----------     -----------   --------  ---------
Administrative
expenses                         (33,258)        (12,548)   (45,806)   (48,698)
                                --------        --------   --------   --------
Operating
profit/(loss)          2           5,483         (12,548)    (7,065)     4,637

Interest receivable                  481               -        481        743
and similar income
Interest payable     3,4          (1,457)           (447)    (1,904)    (1,763)
and similar charges
                                --------        --------   --------   --------
Profit/(loss)
on ordinary
activities
before
taxation               2           4,507         (12,995)    (8,488)     3,617
Taxation on
profit/(loss)          5          (1,058)          2,578      1,520     (2,676)
on ordinary                     --------        --------   --------   --------
activities

Profit/(loss) on 
ordinary activities
after taxation                     3,449         (10,417)    (6,968)       941

Dividends              7               -               -          -    (10,788)
                                --------        --------   --------   --------
Retained 
profit/(loss)                      3,449         (10,417)    (6,968)    (9,847) 
for the period                    ======          ======     ======     ======

(Loss)/earnings per
ordinary share
Basic                  6                                       (7.2)p      1.0p
Diluted                6                                       (7.2)p      1.0p
Earnings per
ordinary share
before goodwill
amortisation and
exceptional items
Basic                  6                                        3.5p       8.5p
Diluted                6                                        3.5p       8.5p


CONSOLIDATED BALANCE SHEET
as at 30 September 2005

                                                 Note        2005        2004
                                                             £000        £000

Fixed assets
Intangible assets                                   8      48,046      50,305
Tangible assets                                            26,244      26,930
                                                        ---------   ---------
                                                           74,290      77,235
                                                        ---------   ---------
Current assets
Stocks                                                      8,885       9,697
Debtors                                                    15,367      16,482
Cash at bank                                       15      12,821      21,151
                                                        ---------   ---------
                                                           37,073      47,330

Creditors: amounts falling due within one year            (40,244)    (29,803)
                                                        ---------   ---------
Net current (liabilities)/assets                           (3,171)     17,527
                                                        ---------   ---------

Total assets less current liabilities                      71,119      94,762
Creditors: amounts falling due in more than one
year                                                            -     (21,641)
Provisions for liabilities and charges                    (10,306)     (5,771)
                                                        ---------   ---------

Net assets                                          2      60,813      67,350
                                                            =====       =====

Capital and reserves
Called up share capital                                    24,347      24,347
Share premium account                                      15,824      15,824
Merger reserve                                                 14          14
Profit and loss account                                    20,628      27,165
                                                        ---------   ---------
Equity shareholders' funds                          2      60,813      67,350
                                                            =====       =====


CONSOLIDATED CASH FLOW STATEMENT
for the 52 weeks ended 30 September 2005

                                                  Note        2005        2004
                                                              £000        £000

Cash inflow from operating activities               13       8,607      22,835

Returns on investments and servicing of
finance
Interest received                                              481         684
Interest paid                                               (1,695)     (1,582)
                                                         ---------   ---------
Net cash outflow from returns on                            (1,214)       (898)
investments and servicing of finance
                                                         ---------   ---------

Taxation                                                    (1,090)     (6,310)
                                                         ---------   ---------
Capital expenditure
Purchase of tangible fixed assets                           (3,266)     (4,921)
Sale of tangible fixed assets                                  147          83
                                                         ---------   ---------
Net cash outflow from capital expenditure                   (3,119)     (4,838)
                                                         ---------   ---------

Equity dividends paid                                       (7,639)    (10,788)
                                                         ---------   ---------

Cash (outflow)/inflow before                     14,15      (4,455)          1
management of liquid resources and financing             ---------   ---------
Management of liquid resources                   14,15       4,556       8,615

Transfer of cash from deposits
                                                         ---------   ---------
Financing
Repayment of loans                               14,15      (4,002)     (2,069)
                                                         ---------   ---------

(Decrease)/increase in cash in the period        14,15      (3,901)      6,547
                                                            ======      ======


CONSOLIDATED STATEMENT
OF TOTAL RECOGNISED GAINS AND LOSSES
for the 52 weeks ended 30 September 2005

                                                          2005            2004
                                                          £000            £000

(Loss)/profit for the period                            (6,968)            941

Exchange differences on foreign currency net
investment                                                 431          (3,755)
                                                     ---------      ----------
Total gains and losses relating to the period            6,537          (2,814)
                                                        ======          ======


RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the 52 weeks ended 30 September 2005

                                                          2005            2004
                                                          £000            £000

(Loss)/profit for the period                            (6,968)            941
Dividends                                                    -         (10,788)
                                                     ---------      ----------
Retained loss for the period                            (6,968)         (9,847)

Exchange differences on foreign currency net
investment                                                 431          (3,755)
                                                     ---------      ----------
Net reduction to shareholders' funds                    (6,537)        (13,602)

Opening shareholders' funds                             67,350          80,952
                                                     ---------      ----------
Closing shareholders' funds                             60,813          67,350
                                                        ======          ======


                       NOTES TO THE FINANCIAL STATEMENTS

(1) Basis of preparation

The financial information set out above does not comprise full accounts within
the meaning of Section 240 of the Companies Act 1985. The financial information
contained in this announcement in respect of the 52 weeks ended 30 September
2005 and 53 weeks ended 1 October 2004 has been extracted from the financial
statements which have been audited and reported upon without qualification by
KPMG Audit Plc and did not contain a statement under Section 237 (2) or (3) of
the Companies Act 1985. The 2004 accounts have been filed with the Registrar of
Companies, and the 2005 accounts will be filed in due course.

In order to indicate the underlying profitability of the Group and the effect of
goodwill amortisation and exceptional items on reported profit; operating
profit, profit before tax and earnings per share has been calculated and
separately disclosed using consolidated profit before these items.

(2) Segmental information

In the directors' opinion, all profit and turnover arises from one class of
business, that being the specialist design and manufacture of conservatory
systems for domestic and light commercial applications and may be analysed by
geographical market as follows:

                                                2005                     2004
                                                £000                     £000

Turnover
By origin
United Kingdom                                54,503                   73,775
North America                                 42,188                   44,468
                                          ----------               ----------
                                              96,691                  118,243
                                              ======                   ======

By destination
United Kingdom                                53,716                   72,962
Rest of Europe                                 1,567                    1,667
North America                                 41,180                   43,496
Rest of World                                    228                      118
                                          ----------               ----------
                                              96,691                  118,243
                                              ======                   ======

(2) Segmental information (continued)

                                 2005            2005         2005        2004
                      Before goodwill        Goodwill        Total       Total
                         amortisation    amortisation
                      and exceptional and exceptional
                                items           items
                                 £000            £000         £000        £000
Profit on ordinary
activities before 
taxation
By origin
United Kingdom                  5,167          (6,228)      (1,061)     15,387
North America                   2,568          (6,320)      (3,752)     (8,643)
Group head
office costs                   (2,252)              -       (2,252)     (2,107)
                           ----------      ----------   ----------   ---------

                                5,483         (12,548)      (7,065)      4,637
Net interest payable             (976)           (447)      (1,423)     (1,020)
                           ----------      ----------   ----------   ---------
Profit/(loss) on                4,507         (12,995)      (8,488)      3,617
ordinary activities   
before taxation                 =====           =====        =====       =====



                                                        2005             2004
                                                        £000             £000
Operating net assets

By origin

United Kingdom                                        19,361           21,203
North America                                         51,639           54,347
                                                   ---------        ---------
                                                      71,000           75,550

Net borrowings                                       (11,092)          (6,491)
Corporation and deferred taxation                        905           (1,709)
                                                   ---------        ---------
Shareholders' funds                                   60,813           67,350
                                                       =====           ======


(3) Interest

The majority (73%) of the US dollar borrowings are fixed, by way of interest
rate swaps, at an annual interest rate of 4.59% plus a margin of up to
2.5%through to June 2006. The remainder of the US dollar borrowings are subject
to floating rates based on dollar LIBOR plus the same margin to 30 June 2006.
Thereafter, all US dollar borrowings are subject to floating rates based on
dollar LIBOR plus a margin that potentially rises (on a phased incremental
basis) up to 9% in December 2006.

The sterling borrowings are subject to floating rates based on LIBOR plus a
margin of up to (2.5%) through to sterling debt maturity in June 2006.

(4) Exceptional items

                                                            2005          2004
                                                            £000          £000
Operating exceptional items

Litigation in UK                                          (6,050)            -
UK litigation damages receipt (net)                          424             -
Litigation in North America                                 (353)       (5,073)
Potential product rectification                           (2,832)            -
Restructuring costs                                         (798)            -
                                                       ---------     ---------
                                                          (9,609)       (5,073)
Non-operating exceptional item
Judgment interest and financing costs relating to
litigation in North America                                 (447)         (231)
                                                       ---------     ---------
Total exceptional items before taxation                  (10,056)       (5,304)
                                                          ======        ======

Full details relating to the litigation in the UK and North America are set out
in notes 9 and 11 to the financial statements. Likewise, further details
relating to the potential product rectification are set out in note 10.

(5) Taxation

                                                             2005         2004
                                                             £000         £000
UK Corporation tax
Current tax on income for period                                -        4,248
Adjustments in respect of prior periods                      (575)        (668)
                                                           ---------    -------
                                                             (575)       3,580

Foreign tax                                                     -         (146)
Deferred tax
Origination/reversal of timing differences                 (1,029)        (926)
Adjustments in respect of prior periods                        84          168
                                                            ---------   -------
                                                             (945)        (758)
                                                            ---------   -------
                                                           (1,520)       2,676
                                                             ====         ====

The tax credit of £1.5m reflects a credit of £2.6m in respect of goodwill
amortisation and exceptional items. It also includes a tax charge based on an
effective tax rate of 23.5% (after release of prior year over provisions) on
pre-tax profit excluding goodwill amortisation and exceptional items, compared
with 30.9% in the prior year.

(6) Earnings per share

Earnings per share has been calculated by dividing the consolidated profit after
tax attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period. In order to indicate the underlying
profitability of the Group and the effect of goodwill amortisation and
exceptional items on the reported earnings, earnings per share has also been
calculated using the consolidated profit after taxation before these items.

Diluted earnings per share has been calculated, on the same basis as the above,
except that the weighted average number of ordinary shares that would be issued
on the conversion of all the dilutive potential ordinary shares (arising from
the Group's share option schemes) into ordinary shares has been added to the
denominator. There are no changes to the profit (numerator) as a result of the
dilutive calculation.

The earnings per share information has been calculated as follows:

                                          2005                   2004

                                  Earnings    Earnings    Earnings    Earnings
                                 after tax   per share   after tax   per share
                                      £000       pence        £000       pence
Profit on ordinary activities
after taxation before                3,449         3.5       8,305         8.5
goodwill amortisation and
exceptional items
Operating exceptional items         (7,741)       (8.0)     (5,073)       (5.2)
Goodwill amortisation               (2,229)       (2.3)     (2,060)       (2.1)
Non-operating exceptional item        (447)       (0.4)       (231)       (0.2)
                                 ---------   ---------   ---------   ---------
(Loss)/profit on ordinary
activities after taxation and       (6,968)       (7.2)        941         1.0
attributable to ordinary
shareholders                          ====        ====        ====        ====
                                        No                      No
                                       000                     000
Weighted average number             97,191                  97,191
of ordinary shares in issue
Effect of dilutive potential
ordinary shares                          -                       3
                                 ---------               ---------
Weighted average number of
ordinary shares in                  97,191                  97,194
issue plus assumed conversion
                                      ====                    ====

The above calculation excludes shares held by the QUEST in accordance with FRS
14.

(7) Dividends

The board is not recommending the payment of a final dividend (2004: 7.86 pence
per share). Accordingly, no dividend arises in respect of the period under
review (2004: 11.10 pence per share).

(8) Goodwill

                                                                          £000
Cost
At beginning of period                                                  60,289
Exchange difference                                                        888
                                                                     ---------
At 30 September 2005                                                    61,177
                                                                     ---------
Amortisation
At beginning of period                                                   9,984
Charge for period                                                        2,939
Exchange difference                                                        208
                                                                     ---------
At 30 September 2005                                                    13,131
                                                                     ---------
Net book value

At 30 September 2005                                                    48,046
                                                                     ---------
At 1 October 2004                                                       50,305
                                                                     ---------

(9) Major litigation

Ultraframe Plc continuously and vigorously defends its intellectual property
rights and legal rights generally and at any one time there are a number of
legal cases being pursued. All legal costs are fully expensed in the profit and
loss account as they are incurred.

United Kingdom

Burnden

As previously reported, Ultraframe has a major legal case currently ongoing,
arising from the alleged infringement of intellectual property rights owned by
Ultraframe's wholly owned subsidiaries Northstar Limited ('Northstar') and
Seaquest Limited ('Seaquest'). In July 2005, the High Court delivered a judgment
in this long running case between Ultraframe and The Burnden Group and Burnden
Conservatory Products ('Burnden'), Burnden's founder Gary Fielding and his wife
Sally Fielding and others. It was established that the overwhelming majority of
Intellectual Property Rights ('IPR'), in the disputed roofing system belong to
Northstar and Seaquest. Burnden are liable to pay licence fees in respect of
past use and have been obliged to undertake to the Court to take a licence from
Northstar and Seaquest relating to any future infringing use of the IPR, the
terms of which will be determined at a later date.

The Court found evidence of two dishonest conspiracies perpetrated against
Ultraframe's wholly owned subsidiaries. Mr Fielding was found to have been
deliberately untruthful when giving evidence to the Court and to have been
involved in the fabrication of documents to support his defence. The Court also
found Burnden and/or Mr Fielding liable to compensate Ultraframe's companies in
respect of management charges wrongly levied to the companies. Notwithstanding
these findings, the Company was disappointed with certain parts of the judgement
particularly in so far as potential recovery of damages was concerned.

A High Court hearing to determine any reimbursement of costs for respective
parties took place in October 2005. The judge ruled that Ultraframe may be
required to pay a proportion of Burnden's costs, and indicated an interim award
in the region of £2.125 million; such payment would only be made upon the final
outcome of the appeal process, should it find in Burnden's favour.

Ultraframe has now sought leave to appeal and a Court decision on the grounds
for appeal is expected in 2006. The appeal process is significantly less time
intensive than the initial court case, and any additional cost incurred by
Ultraframe would not be of the magnitude of the costs incurred to date. In the
meantime, on the grounds of accounting prudence, full provision has been made in
the 2005 profit and loss account for the interim award of £2.125 million
referred to above. This has been charged as an operating exceptional item.

The duration and related cost of this complex UK legal case has exceeded initial
estimates and the level of costs specifically incurred on this case is
significantly higher than the normal run rate of legal expenses. Accordingly,
directly attributable costs incurred on this case amounting to £3.9m have also
been similarly treated as abnormal by size, incidence and materiality in the
period under review and have been charged to the profit and loss account by way
of an operating exceptional item. This major court case follows earlier,
directly related, legal proceedings in prior periods. Specifically related costs
incurred in respect of earlier proceedings were charged in arriving at operating
profit and were not separately disclosed. These costs amounted to £1.5m in the
last financial year and additional costs were also incurred in prior periods.

Eurocell

In June 2005, the Court of Appeal ruled that Ultraframe's patent rights and
design rights in the Ultralite 500 roofing technology and the Ultralite 500
system had been infringed by Eurocell. In light of this decision, Ultraframe has
now applied to the Court for reimbursement of its legal costs and for a
substantial multi-million pound damages award. The infringing product produced
by Eurocell has also been withdrawn from the market. Ultraframe was awarded
interim damages of £0.8m and incurred directly attributable costs of £0.4m in
the period under review. A hearing to determine the remaining damages payable to
Ultraframe is scheduled to take place in February 2006. Receipts and directly
related costs in respect of material damages are credited to the profit and loss
account as an operating exceptional item, in recognition of their abnormal size
and incidence.

North America

Patio Enclosures
As previously disclosed, our Four Seasons business was the subject of an adverse
US jury verdict in September 2004. The case concerned a relatively junior
employee of Four Seasons employed between December 2001 and May 2002, who had
previously been employed by Patio Enclosures, the claimant in this case. The
case concerned alleged interference with contractual employment obligations and
alleged misuse of trade secrets. The trial court entered judgement on a jury's
verdict to the plaintiff, Patio Enclosures, in the amount of approximately $8.8m
(£4.9m), including legal costs.

In September 2005, The Ohio Court of Appeal considered an appeal by Four Seasons
but upheld the earlier adverse verdict of the jury in the lower Court.
Ultraframe is disappointed by this verdict and based on advice from our US legal
advisers, Four Seasons has submitted an application for permission to appeal to
the Ohio Supreme Court. A Court decision on the grounds for appeal is expected
in 2006.

Full provision was made in the 2004 profit and loss account, for the recorded
judgement and directly attributable costs, by way of an operating exceptional
item. Any cash settlement will not be payable until final determination of this
case. In 2005, further legal costs were incurred amounting to $0.7m (£0.4m),
together with attributable financing costs relating to the overall litigation of
$0.8m (£0.5m). These items have similarly been charged to the profit and loss
account as an exceptional item.

(10) Product rectification (Four Seasons)

As previously reported, Four Seasons has been working confidentially with a
supplier to assess a potential product defect issue related to a bought-in
product component. The evaluation includes assessment of whether the product
component is defective, and if so, the nature and the extent of any product
defect and any necessary remedial action to address the potential defect. This
matter primarily relates to sunrooms sold from 1996 to 2002.

Four Seasons and the supplier have recently formulated a joint remediation plan,
based on currently available information. Accordingly, Ultraframe has made
provision for potential product rectification costs in the 2005 financial
statements. This charge to the profit and loss account, by way of an operating
exceptional item, amounted to $5.2m (£2.8m), including directly related advisory
fees incurred of $0.9m (£0.5m).

(11) Contingent liabilities

The Group's bankers have issued a guarantee in favour of HM Customs and Excise
up to a limit of £160,000 (2004: £160,000) for payment of duties, taxes, levies
and similar amounts. The Group's bankers have recourse to the Group for recovery
of this amount.

The Company is party to banking facilities for certain members of the Ultraframe
Plc group of companies arranged by The Royal Bank of Scotland. The Company and
certain other members of the Ultraframe Plc group of companies have provided
security to The Royal Bank of Scotland as agent for the lenders in the form of a
first fixed and floating charge and an unlimited intercompany composite cross
guarantee as part of these arrangements. At 30 September 2005, the total bank
debt outstanding was £23,962,000 (2004: £27,783,000). In addition, pending final
determination of the litigation between Four Seasons and Patio Enclosures (see
note 9 to the financial statements), collateral has been put in place in favour
of Patio Enclosures, in accordance with US legal procedures. Consequently, the
Company has given an indemnity for $10m (2004: $8.8m) to the Group's bankers in
respect of a bank letter of credit issued as required collateral.

(12) Exchange rates

The principal exchange rates used were as follows:

                                       Average                 Closing

                                      2005      2004          2005        2004

US dollar                             1.85      1.79          1.77        1.80
Canadian dollar                       2.26      2.38          2.05        2.27

(13) Reconciliation of operating (loss)/profit to net cash inflow from operating
activities

                                                         2005            2004
                                                         £000            £000

Operating (loss)/profit                                (7,065)          4,637
Depreciation charge                                     4,017           3,925
Goodwill amortisation                                   2,939           3,091
Profit on sale of tangible fixed assets                   (46)            (17)
Decrease/(increase) in stocks                             911            (587)
Decrease in debtors                                     1,935           8,517
Increase/(decrease) in creditors                        1,564          (1,983)
Increase in provisions                                  4,352           5,252
                                                      --------         --------
Net cash inflow from operating activities               8,607          22,835
                                                       ======          ======
Net cash outflow from exceptional items                 4,596               -
                                                       -------         ------
Net cash inflow from operating activities              13,203          22,835
before exceptional items
                                                        ======         ======

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

                                                            2005          2004
                                                            £000          £000

(Decrease)/increase in cash in the period                 (3,901)        6,547
Cash inflow from the movement in liquid resources         (4,556)       (8,615)
Cash outflow from the movement in debt and lease
financing                                                  4,002         2,069
                                                       ---------     ---------
Changes in net debt resulting from cash flows             (4,455)            1
Exchange difference                                         (146)        1,836
                                                       ---------     ---------
Movement in net debt                                      (4,601)        1,837
Net debt at beginning of the period                       (6,491)       (8,328)
                                                       ---------     ---------
Net debt at end of the period                            (11,092)       (6,491)
                                                          ======         =====

(15) Analysis of changes in cash and net debt

                                                                         At 30
                           At 1 October   Cash flow     Exchange     September
                                   2004               difference          2005
                                   £000        £000         £000          £000


Cash in hand and at bank         12,016       (3,901)         127        8,242
Liquid resources
(deposits)                        9,135       (4,556)           -        4,579
                                  ------      ------        -------     -------
Cash at bank as per
balance sheet                    21,151       (8,457)         127       12,821

Debt due in less than one
year                             (6,001)     (17,068)        (844)     (23,913)
Debt due in more than one
year                            (21,641)      21,070          571            -
                                  -------     -------       -------     -------
Debt and lease financing        (27,642)       4,002         (273)     (23,913)
                                   ------      ------       -------     ------
Net debt                         (6,491)      (4,455)        (146)     (11,092)
                                 ======        ======       ======       ======

Liquid resources consist of short term deposits of no more than three months
duration.

(16) Annual Report

The annual report and accounts for the 52 weeks ended 30 September 2005 will be
posted to shareholders in January 2006.

(17) The Annual General Meeting

The annual general meeting will be held at Enterprise Works, Clitheroe at
11.30am on 7 February 2006.





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