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Monday 11 March, 2002


Final Results

11 March 2002

11 March 2002

IMI plc Preliminary Results

IMI plc, the major international engineering group, today announced its
preliminary results for the year ended 31 December 2001.

                                                                                      2001             2000
Sales                                                                                £1642m           £1615m

Results before rationalisation & restructuring costs *
    Operating profit                                                                £151.4m           £182.9m

    Operating cash flow                                                             £182.1m           £159.8m

    Profit after interest                                                           £126.1m           £154.9m

    Adjusted earnings per share                                                      26.7p             29.9p

Rationalisation & restructuring costs                                                £44.6m            £6.6m

Profit before tax                                                                    £86.4m           £143.6m

Earnings per share                                                                   18.3p             27.0p

Dividend per share                                                                   15.5p             15.5p

* Before goodwill amortisation and exceptional items

      • Restructuring on target
      • Strong cash generation
      • Strengthened market positions


2001 was a year of major change for the Group, with a new management structure
and a strategy review resulting in a plan which significantly repositions the
Group into the two business areas of Fluid Controls and Retail Dispense.

All our businesses have been managed robustly during the year, pressing ahead
with restructuring and responding well to the challenging economic environment
with decisive actions and cost cutting. There has been a strong focus on cash
resulting in operating cash flow (before rationalisation and restructuring
costs) of £182m compared to operating profit of £151m.

The programme for the execution of the operational and strategic changes
required to restructure the Group is making sound progress. £45m had been
committed by the year end for rationalisation and restructuring costs and
another £35m is already planned for 2002. During the year we spent £45m on the
acquisition of BTG (Fluid Controls), Display Technologies (Retail Dispense) and,
also in Fluid Controls, a number of small Indoor Climate service and
commissioning businesses. Disposals during the year realised £53m net of costs.
In June we sold a number of the valve businesses and in October we sold the
remaining Marston cooling business. Since the year end we have also sold the
Eley shotgun cartridge business for £1.6m and, in severe service, we have agreed
to acquire STI of Italy for £4.2m.

Our remaining Building Products businesses are being actively managed and
opportunities further to reduce the cost base have been taken. Each of these
businesses is performing well in the current economic conditions, producing good
profit and cash.

During the course of the year we have given regular trading updates and the
audited results for the year are in line with the statement issued in December.

Results Summary

The overall market conditions resulted in a demanding year. The US downturn was
evident throughout the year and European markets also declined markedly in the
second half. Market share gains and contributions from new products and
acquisitions helped mitigate some of the market weakness.

Group sales at £1642m compare with £1615m reported last year. However, after
adjusting for exchange rates, sales are marginally lower. Organic sales, net of
acquisitions and disposals, were around £36m (2%) lower.

Profit before rationalisation and restructuring costs, goodwill amortisation and
exceptional items was £126.1m (2000: £154.9m). Rationalisation and restructuring
costs charged against profit were £44.6m (2000: £6.6m) resulting in profit
before tax, goodwill amortisation and exceptional items of £81.5m (2000:

Interest cover based on operating profit before rationalisation and
restructuring costs and goodwill amortisation was 6 times (2000: 6.5 times).

For 2001 the tax charge benefited from overseas tax credits on profit
distributions and the effective tax rate on profit before goodwill and
exceptional items was 25% (2000: 32%). The underlying rate was 32%.

Profit arising on the sale of businesses during the year amounted to £20.3m
(2000: £0.5m) and profit on the sale of surplus properties was £1.0m (2000:

Adjusted earnings per share (before rationalisation and restructuring costs,
goodwill amortisation and exceptional items) were 26.7p (2000: 29.9p revised to
exclude rationalisation and restructuring costs). Basic earnings per share were
18.3p (2000 restated: 27.0p).

Net borrowings at the end of the year were £345m (2000: £403m) and balance sheet
gearing 70% compared with 84% at the end of last year. In November 2001 we
refinanced $100m of short term debt with borrowings maturing in 2009 at an
interest rate of 6.56%. Nearly 50% of the Group's net debt at 31 December 2001
has a maturity of over nine years, reducing dependency on the shorter term
credit market.

The interim dividend paid in October was maintained at 6.0p and the Board is
recommending the payment of an unchanged final dividend of 9.5p making a total
of 15.5p for the year. Excluding rationalisation and restructuring costs,
goodwill and exceptional items, the dividend is covered 1.7 times (2000: 1.9
times). In 2001 free cash flow before dividend payments was £108m and dividend
payments amounted to £55m.

FRS 19: Deferred Tax has been fully adopted in the 2001 accounts with negligible
impact. Under FRS 17: Retirement Benefits, net assets at 31 December 2001 would
be £36m higher as a result of the surplus on the main UK pension scheme.


Our restructuring will continue, with the bulk of the rationalisation expected
to be substantially completed by the end of this year. Disposals will continue
to be made over time in a manner consistent with realising shareholder value. We
are pursuing suitable investment opportunities for growth, both organic and by

As for the short term economic outlook, we said in December that we were not
anticipating any general improvement in market conditions and have geared our
cost base accordingly. The year has started as expected. Improvements in volumes
are yet to show, but cost savings arising from restructuring are coming through


We are now actively engaged in developing those businesses which provide the
strongest prospects for the future within a clear strategic framework. We have
focused our activities on businesses with well-defined, highly defendable global
markets enjoying significant growth potential. Businesses which do not share the
same potential, currently accounting for around a third of Group sales, will
over time be divested.

Our future is being built on the two business areas of Fluid Controls and Retail
Dispense, together enjoying strong market positions in five discrete and clearly
defined business segments. Each of these businesses shares similar
characteristics - niche, global markets of around £1-3bn in size, growing in
excess of five per cent a year, where innovative technical solutions and service
support are highly valued by customers.

We have chosen our sectors carefully and, in concentrating our activities in
five global, but niche markets of this size, it is both practical and realistic
for IMI to build and sustain leadership in each of these sectors concurrently.
Whilst managed separately, clear synergies do exist between the businesses. In
Fluid Controls our businesses share similar technologies to drive efficiency
improvements for our plant and machinery customers. Our Retail Dispense
businesses share merchandising know-how to drive incremental volume for brand
owners and retailers alike. All five businesses share a common goal to deliver
innovative and complete solutions for a highly targeted group of leading global

In executing this strategy, IMI is reducing its dependence on commodity products
increasingly threatened by emerging markets competitors; moving further into
high value, knowledge-based engineering and systems solutions and focusing its
attention on a smaller number of large global customers.

Our cost base is being significantly reduced. Some manufacturing activities are
being outsourced or transferred to lower cost parts of the world, and overhead
is being eliminated by the streamlining of many of our business structures and
processes. We have doubled the capacity of our existing facility in China, and
are opening two major new facilities in Mexico. Over the course of the next two
years, around 30 per cent of our existing manufacture will be outsourced or
moved to Mexico, China and Eastern Europe.

A significant part of the savings is being reinvested in initiatives that
promote future growth and enable our chosen businesses to take full advantage of
their undoubted potential. These initiatives include the rapid development of
improved customer management skills (an IMI Academy for Key Account Managers has
been established), investments in new technologies (three new Technology centres
have been set up), and the creation of new initiatives using internet-based
tools to improve our service and after-sales care.

All these actions will lead to a sustained improvement in economic profit.

Those businesses earmarked for future disposal fall within Building Products.
The management of these companies fully understand the position of their
respective businesses and are actively engaged in improving the cost base and
exploiting market strengths. Despite a difficult trading environment, their
results are commendable and I congratulate them on their contribution this year.

For IMI the strategy is clear and is being pursued with purpose and
determination. Our plan to deploy our assets and resources more effectively is
on target, and further portfolio realignment will come in due course. Our
businesses will be focused increasingly on adding value for both customers and
investors by exploiting our expert market knowledge, intellectual property and
first class supply chain management. Over the coming years we will realise the
full potential and deliver the value that our shareholders expect of us.


The following is a review of our business areas where comparisons with the
previous year relate to continuing operations and operating profit is stated
before rationalisation and reorganisation costs and goodwill amortisation.


Sales:                            £682m (2000: £670m)

Operating Profit:                 £64.9m (2000: £86.8m)

Severe Service

CCI, our Severe Service valves business continued to perform well, maintaining
its record of year on year organic growth with a 15% increase in the year. The
long term prospects for the power generation sector of our market are sound and
our current order book is healthy. Investment in Severe Service was accelerated
in 2001. The acquisition of Swedish company BTG provides both a complementary
product range and an increase in our installed customer base. Aftermarket sales
for BTG have doubled since acquisition. A major plant extension in California,
completed in January 2002, and an increased sales and engineering resource
provide the platform for future growth.

Fluid Power

Fluid Power is the most exposed of our businesses to cyclical downturns in the
capital equipment markets. Volumes in the US declined by 20% during the year.
European volumes in the second half fell by around 10% against the previous year
due to weakening demand. Good progress in our sector initiatives offset some of
the general market disappointment. Significant changes are being made to the
structure of Norgren and the rationalisation of manufacturing and reorganisation
of the market facing activities are well under way. It is pleasing to record
that despite difficult market conditions, our automotive tooling subsidiary,
ISI, has been turned round and is now trading profitably.

Indoor Climate

Indoor Climate, whilst still achieving attractive margins, suffered a set back
with continued market decline in Germany and a softening elsewhere in Europe.
Volumes overall were around 5% lower. Cost reduction measures have been
implemented, the benefits of which will begin to be realised in 2002.

We are increasingly developing our service and commissioning capability and over
the last two years have acquired a number of small businesses in Europe to
extend the reach and concept of Indoor Climate.


Sales:                         £382m (2000: £340m)

Operating Profit:              £37.2m (2000: £34.6m)

Beverage Dispense

Beverage Dispense produced a strong performance with market share gains and new
product contributions offsetting the slowdown in the US food service market. The
dramatic reduction in restaurant traffic in the US in September caused a brief
interruption but the underlying trading pattern returned by mid-October. Further
evidence of the success of our new product investment programmes was provided in
the second half with the award of a £25m contract for the supply of a
sophisticated new frozen drinks dispenser to a leading US convenience store
chain. This programme will run throughout 2002. Closure of two of our major
factories in the US was announced and the transfer of production to a new
facility in Mexico came onstream in October. At the same time we doubled output
from our existing facility in China. We expect to move over 35% of the US
capacity to Mexico and China by the middle of 2002. Excellent progress was made
in our UK beer business.

Merchandising Systems

In the first half sales were ahead of last year with a good performance from our
mainstream Point of Purchase product lines. However, the events of 11 September
did have an impact, with major retailers and brand owners cutting promotional
expenditure in response to concerns over the outlook for consumer spending in
the US. Scheduled merchandising programmes were affected with many being
postponed into 2002, resulting in the first reversal in volume in nearly ten
years. We are now beginning to see these programmes being released. Our purchase
of Display Technologies in June 2001 demonstrated our determination to be an
industry leader.


Sales:                     £555m (2000: £544m)

Operating Profit:          £47.8m (2000: £54.8m)

Polypipe volumes recovered going into the second half, with access to major road
and agricultural programmes returning to normal after the difficulties of poor
weather and foot & mouth earlier in the year. The pipes business, the largest
single part of Polypipe, continued to trade well and contributed a strong
performance in both profit and cash. With the benefit of tight expenditure
controls the other UK Polypipe businesses improved as the year progressed.
Downsizing and a plant closure were required in the small European businesses,
which continued to struggle.

Copper tube and fittings held up well in the UK, but volumes and margins in
Europe suffered with the German market, in particular, continuing to disappoint.
In December we announced a proposal for the major restructuring of the copper
fittings business which will see the closure of our German manufacturing plant,
some capacity relocation to Hungary and increased focus on higher margin sales.

                         GROUP PROFIT AND LOSS ACCOUNT

                      for the year ended 31 December 2001


                                                           Before            isation &
                                                   restructuring,        restructuring
                                                     goodwill and           & goodwill        Exceptional
                                                     exceptionals         amortisation              items         Total
                                                             2001                 2001               2001          2001
                                    Notes                      £m                   £m                 £m            £m
Turnover                              1
Continuing operations                                      1580.0                                                1580.0

Acquisitions                                                 38.6                                                  38.6

Total continuing operations                                1618.6                                                1618.6

Discontinued operations                                      23.1                                                  23.1

Total turnover                                             1641.7                                                1641.7
Operating profit                      1
Continuing operations before                                146.8               (15.6)                            131.2
rationalisation and restructuring
Acquisitions                                                  3.1                (0.8)                              2.3

Total continuing operations before                          149.9               (16.4)                            133.5
rationalisation and restructuring

Rationalisation/restructuring                                                   (44.6)                           (44.6)

Total continuing operations                                 149.9               (61.0)                             88.9

Discontinued operations                                       1.5                                                   1.5

Operating profit                                            151.4               (61.0)                             90.4

Profit on disposal of discontinued    2                                                              20.3          20.3

Profit on disposal of property                                                                        1.0           1.0

Profit before interest                                      151.4               (61.0)               21.3         111.7

Net interest payable                                       (25.3)                                                (25.3)

Profit on ordinary activities before                        126.1               (61.0)               21.3          86.4

Tax on profit                         3                    (31.6)                 11.2              (0.8)        (21.2)

Profit on ordinary activities after                          94.5               (49.8)               20.5          65.2

Equity minority interests                                   (0.7)                                                 (0.7)

Profit for the financial year                                93.8               (49.8)               20.5          64.5

Dividends paid and proposed           4                                                                          (54.5)

Transfer to reserves                                                                                               10.0
Adjusted earnings per share           5                     26.7p

Earnings per share                    5                                                                           18.3p

Diluted earnings per share            5                                                                           18.3p


                                                           Before            isation &
                                                   restructuring,        restructuring
                                                     goodwill and           & goodwill        Exceptional
                                                     exceptionals         amortisation              items         Total
                                                             2000                 2000               2000          2000
                                    Notes                      £m                   £m                 £m            £m
Turnover                              1

Continuing operations                                      1554.3                                                1554.3

Acquisitions                                                    -                                                     -

Total continuing operations                                1554.3                                                1554.3

Discontinued operations                                      61.2                                                  61.2

Total turnover                                             1615.5                                                1615.5

Operating profit                      1

Continuing operations before                                176.2               (15.2)                            161.0
rationalisation and restructuring   

Acquisitions                                                    -                    -                                -

Total continuing operations before
rationalisation and restructuring                           176.2               (15.2)                            161.0

Rationalisation/restructuring                                                    (6.6)                            (6.6)
Total continuing operations                                 176.2               (21.8)                            154.4

Discontinued operations                                       6.7                                                   6.7

Operating profit                                            182.9               (21.8)                            161.1

Profit on disposal of discontinued    2                                                               0.5           0.5

Profit on disposal of property                                                                       10.0          10.0

Profit before interest                                      182.9               (21.8)               10.5         171.6

Net interest payable                                       (28.0)                                                (28.0)

Profit on ordinary activities before                        154.9               (21.8)               10.5         143.6

Tax on profit                         3                    (49.6)                  2.1              (0.9)        (48.4)

Profit on ordinary activities after                         105.3               (19.7)                9.6          95.2

Equity minority interests                                   (0.3)                                                 (0.3)

Profit for the financial year                               105.0               (19.7)                9.6          94.9

Dividends paid and proposed           4                                                                          (54.5)

Transfer to reserves                                                                                               40.4
Adjusted earnings per share           5                     29.9p

Earnings per share                    5                                                                           27.0p

Diluted earnings per share            5                                                                           27.0p

                              GROUP BALANCE SHEET

                              at 31 December 2001


                                                                                             2001                  2000

                                                                                               £m                    £m
Fixed assets

Intangible assets                                                                           298.0                 286.4

Tangible assets                                                                             373.0                 386.9
                                                                                            671.0                 673.3
Current assets

Stocks                                                                                      312.2                 325.4

Debtors                                                                                     311.1                 332.7

Investments                                                                                   7.7                   4.4

Cash and deposits                                                                            58.2                  50.4
                                                                                            689.2                 712.9

amounts falling due within one year

Borrowings and finance leases                                                             (141.5)               (100.0)

Other creditors                                                                           (330.6)               (326.0)
Net current assets                                                                          217.1                 286.9

Total assets less current liabilities                                                       888.1                 960.2


amounts falling due after more than one year

Borrowings and finance leases                                                             (262.0)               (353.4)

Other creditors                                                                            (24.3)                (31.2)

Provisions for liabilities and charges                                                    (108.5)                (99.5)
Net Assets                                                                                  493.3                 476.1

Capital and reserves

Called up share capital                                                                      87.9                  87.9

Share premium account                                                                       132.4                 132.1

Revaluation reserve                                                                           1.0                   1.0

Other reserves                                                                                1.6                   1.6

Profit and loss account                                                                     267.8                 253.5
Equity shareholders' funds                                                                  490.7                 476.1

Minority interest                                                                             2.6                     -
                                                                                            493.3                 476.1

                           GROUP CASH FLOW STATEMENT

                      for the year ended 31 December 2001


                                                          2001                                         2000
                                               £m                      £m                     £m                      £m
Reconciliation of operating profit to net cash
inflow from operating activities

           Operating profit                                          90.4                                          161.1

           Depreciation & goodwill                                   87.1                                           84.4

           Stocks decrease/(increase)                                 1.8                                         (21.2)

           Debtors decrease/(increase)                               37.7                                         (13.3)

           Creditors and provisions increase/                         3.7                                         (10.4)
                                                            -------------                                   ------------
           Net cash inflow from operating                           220.7                                          200.6
                                                            -------------                                   ------------


Net cash inflow from operating activities                           220.7                                          200.6

Return on investments and servicing of                             (25.8)                                         (28.5)

Taxation                                                           (27.0)                                         (38.3)

Capital expenditure and financial                                  (60.4)                                         (47.4)

Acquisitions and disposals                                            6.5                                         (23.4)

Equity dividends paid                                              (54.5)                                         (53.8)
                                                            -------------                                   ------------

Cash flow before use of liquid resources                             59.5                                            9.2
& financing

Management of liquid resources                                        2.5                                          (5.4)
           Issue of ordinary shares           0.3                                            1.5

           Decrease in borrowings          (44.2)                                         (19.4)
                                      -----------                                     ----------
                                                                   (43.9)                                         (17.9)
                                                            -------------                                  -------------
Increase/(decrease) in cash in the year                              18.1                                         (14.1)
                                                            -------------                                  -------------

Reconciliation of net cash to movement in
net borrowings

           Increase/(decrease) in cash 
           in the year                       18.1                                         (14.1)
           Cash used to repay borrowings     44.2                                           19.4

           Cash (inflow)/outflow from 
           movement in liquid resources     (2.5)                                            5.4
                                      -----------                                     ----------
           Change in borrowings resulting from                       59.8                                           10.7
           cash flows

           Borrowings assumed with                                      -                                          (5.5)

           Loan notes issued as part of                                 -                                          (9.7)

           Currency translation differences                         (2.1)                                         (10.5)
                                                             ------------                                   ------------

           Movement in net borrowings in the                         57.7                                         (15.0)

           Net borrowings at 1 January                            (403.0)                                        (388.0)
                                                            -------------                                  -------------
           Net borrowings at 31 December                          (345.3)                                        (403.0)
                                                            -------------                                   ------------


                      for the year ended 31 December 2001
                                                                                                  2001             2000
                                                                                                    £m               £m
Profit for the financial year                                                                     64.5             94.9

Dividends                                                                                       (54.5)           (54.5)

                                                                                                  10.0             40.4

Other recognised gains and losses relating to the financial year                                 (1.5)              6.6

Contribution to the Quest                                                                            -            (0.1)

New ordinary share capital issued                                                                  0.3              1.5

Previously acquired goodwill taken through the profit and loss
account in arriving at the profit for the financial year                                           5.8              0.4

Net increase in shareholders' funds for the year                                                  14.6             48.8

Shareholders' funds at 1 January (originally £478.0m, before deducting prior
year adjustment of £1.9m)                                                                        476.1            427.3
Shareholders' funds at 31 December                                                               490.7            476.1


1.     Segmental analysis

                                                                                                   Operating profit
                                                                                                    before goodwill
                                                                  Turnover                           & restructuring
                                                            2001            2000                  2001            2000
                                                              £m              £m                    £m              £m
                                                      ---------------------------             --------------------------

Following a strategy review the Group is being reported in the following new

Fluid Controls                                                682             670                 64.9            86.8
   Severe Service                                             132              97                 13.8            12.1

   Fluid Power                                                416             444                 29.0            46.6

   Indoor Climate                                             134             129                 22.1            28.1
Retail Dispense                                               382             340                 37.2            34.6
   Beverage Dispense                                          291             269                 27.2            23.5

   Merchandising Systems                                       91              71                 10.0            11.1
Building Products                                             555             544                 47.8            54.8
Total continuing operations                                  1619            1554                149.9           176.2


UK                                                            563             544                 55.4            67.5

Rest of Europe                                                538             531                 50.6            61.6

The Americas                                                  467             431                 40.8            44.7

Asia/Pacific                                                   51              48                  3.1             2.4
                                                        -------------------------          ---------------------------
Total continuing operations                                  1619            1554                149.9           176.2

                                                           2001          2000
                                                             £m            £m
UK                                                          484           460

Germany                                                     194           199

Rest of Europe                                              381           376

USA                                                         402           376

Asia                                                         77            64

Rest of World                                                81            79
Total continuing operations                                1619          1554

                                                                                                   Net assets


                                                               Operating profit                      goodwill
                                                              2001           2000               2001           2000
                                                                £m             £m                 £m             £m
                                                         --------------------------     ----------------------------

Following a strategy review the Group is being reported in the following new

Fluid Controls                                                 34.3           82.1                246            281
     Severe Service                                            13.5           12.0                 29             18

     Fluid Power                                                3.4           42.2                189            222

     Indoor Climate                                            17.4           27.9                 28             41
Retail Dispense                                                27.7           32.6                125            116
     Beverage Dispense                                         18.5           21.7                 99             97

     Merchandising Systems                                      9.2           10.9                 26             19
Building Products                                              26.9           39.7                245            262
Total continuing operations                                    88.9          154.4                616            659


UK                                                            33.7            52.0              250               283

Rest of Europe                                                24.4            58.9              193               211

The Americas                                                  28.0            41.1              160               150

Asia/Pacific                                                   2.8             2.4               13                15
                                                        --------------------------        ---------------------------
Total continuing operations                                   88.9           154.4              616               659

1.     Segmental analysis (continued)


        BTG valve business is reported within Severe Service and rest of Europe
        from its acquisition in February 2001 and Display Technologies within
        Merchandising Systems and Americas from its acquisition in June 2001.

Discontinued operations

        The amounts shown for discontinued operations comprise the turnover and
        operating profits of Fittings Australia sold in November 2000,
        previously reported within Asia/Pacific together with a number of valve
        companies sold in June 2001 which were located in the UK, France and US
        and Marston cooling (UK) sold in October 2001.

2.     Exceptional items

        Profit on disposal of discontinued operations arises from the sale of a
        number of valve companies and Marston cooling. The profit in 2000 arises
        from the sale of Fittings Australia.

3.     Taxation

        The tax rate of 25% (2000: 32%) on profit before goodwill amortisation
        and exceptional items (£81.5m) reflects the benefit of tax credits on
        profit distributions. The underlying rate remains 32%.

        The Group has implemented FRS 19 : Deferred Tax for the first time. The
        impact on the profit and loss account is negligible. Balance sheet
        provisions are £1.9m higher as a result of the implementation.

4.     Dividend

        The Directors recommend a final dividend of 9.5p per share (2000: 9.5p)
        payable on 27 May 2002 to shareholders on the register at close of
        business on 12 April 2002, which will absorb £33.4m (2000: £33.4m).
        Together with the interim dividend of 6.0p per share paid on 22 October
        2001, this makes a total distribution of 15.5p per share (2000: 15.5p
        per share).

5.      Earnings per ordinary share

        The weighted average number of shares in issue during the year was
        351.5m, 352.1m diluted for the effect of outstanding share options
        (2000: 351.2m, 351.5m diluted). Earnings per share have been calculated
        on earnings of £64.5m (2000: £94.9m). The Directors consider that
        adjusted earnings per share figures, using earnings as calculated below,
        give a more meaningful indication of the underlying performance.

                                                                              2001                  2000
                                                                                £m                    £m
Profit for the period                                                         64.5                  94.9

Goodwill amortisation                                                         16.4                  15.2

Exceptional items (after tax)                                               (20.5)                 (9.6)

Rationalisation/restructuring (after tax)                                     33.4                   4.5
Earnings for adjusted EPS                                                     93.8                 105.0

6.     Pensions

        For the year ended 31 December 2001 the group has continued to account
        for pension costs under SSAP 24, resulting in a net liability, after tax
        of £16m in the group balance sheet.

        FRS 17 : Retirement Benefits would have required the inclusion of
        an additional net pension asset of £52m, which after tax of £16m would
        result in an increase in net assets of £36m.

7.     Exchange Rates

        The profit and loss accounts of overseas operations are translated into
        sterling at average rates of exchange for the year, balance sheets are
        translated at year end rates. The most significant currencies are the US
        Dollar and the Euro - the relative rates of exchange were:

                                            Average Rates                    Balance Sheet Rates
                                         2001          2000                   2001         2000
                                       ----------------------              -----------------------
Euro                                     1.61          1.64                   1.63         1.59

US Dollar                                1.44          1.52                   1.46         1.49

The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2000 or 2001 but is derived
from those accounts. Statutory accounts for 2000 have been delivered to the
Registrar of Companies, and those for 2001 will be delivered following the
Company's Annual General Meeting. The auditor has reported on those accounts,
its reports were unqualified and did not contain a statement under section 237
(2) or (3) of the Companies Act 1985.

The Company's 2001 Annual Report and Accounts including the notice of the
forthcoming Annual General Meeting will be posted to shareholders on 11 April

                                    - ends -

Enquiries to:

Graham Truscott     -     Corporate Communications     -      Tel: 0207 950 2800

Press release available on the Internet at
Issued by:

Ben Padovan         -     Weber Shandwick Square Mile  -      Tel: 0207 950 2800

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

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