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Yorkshire Group PLC (YOR)

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Tuesday 19 March, 2002

Yorkshire Group PLC

Final Results

Yorkshire Group PLC
19 March 2002

Tuesday 19th March 2002

                                YORKSHIRE GROUP

                         2001 PRELIMINARY ANNOUNCEMENT


                                                         Year to 31st December

                                                     2001               2000

Turnover                                           £120.4m             £143.4m
Operating (loss)/profit before exceptional items    (£0.4m)              £9.6m
Exceptional reorganisation costs                   (£16.1m)                  -
Exceptional income                                       -               £7.5m
(Loss)/profit before taxation                      (£19.5m)             £14.3m
Earnings per share before exceptional items         (9.4)p                9.0p
Earnings per share after exceptional items         (40.2)p               21.2p
Net gearing                                            64%                 27%

  • Decline in US textile market impacted sales on world's major
  • Comprehensive Financial Review carried out
  • Significant new investments made in selling and technical resources in
    Asia Pacific
  • Continued focus on reduction of cost base and working capital
  • Strengthened management team committed to return group to profitability

Pat Barrett, Chairman, commented:-

' Elements of the business under our control such as costs, working capital and
the re-alignment of assets to exploit changing market demands are being
vigorously managed. We believe that the measures under way will strengthen the
base of our business within a marketplace which could stabilise at current
levels. If the market does remain steady, we should see a modest improvement in
results although this is not anticipated before the second half of 2002 '.


Andrew Dick, Chief Executive                              Patrick Toyne-Sewell

Martin Towers, Finance Director                           Seb Hoyle

Tel. 020 7282 8000 until 12pm                             Citigate Dewe Rogerson

Thereafter 0113 244 3111                                  Tel. 020 7638 9571

CHAIRMAN'S STATEMENT - 2001 Preliminary Results


Following the satisfactory trading performance in 2000, 2001 was a disappointing
year in which ambitious growth plans for the enlarged business had to give way
to an almost exclusive concentration on further reductions in the Group's cost
base. It was unfortunate that the sharp downturn in trade, with its adverse
impact on profits and cash flow, should coincide with the major restructuring of
the European and US manufacturing operations, the main benefits of which will
only come through from 2002 onwards.

In spite of the severe challenges of the trading climate, there were a number of
positive signs. The key elements of Group strategy were confirmed, and
significant new investments were made in selling and technical resources in Asia

In response to the challenges facing the Group, the strengthened management team
will take all necessary action, however difficult and painful, to return the
Group to sustainable profitability without an improvement in market conditions.


As a result of the steep decline in the US textile market and its impact on
sales in the world's major textile-exporting countries, the Group's turnover of
£120.4m was 16% lower than in 2000 (£143.4m).

Operating costs were reduced and major cost saving measures completed as
planned. However, since most of the benefit from these actions will not appear
before 2002, cost savings in the year could not prevent the £23.0m fall in sales
and accompanying pressure on margins from producing an operating loss of £0.4m
before exceptional items, compared with an operating profit of £9.6m in 2000.

After exceptional restructuring charges of £16.1m and interest costs of £3.0m,
losses after exceptional items and before tax were £19.5m resulting in a loss
per ordinary share of 9.4p before exceptional items (2000 - 9p earnings per
ordinary share) and a loss per ordinary share of 40.2p after exceptional items
(2000 - 21.2p earnings per ordinary share).

Net borrowings at the year end were £34.8m, with gearing at 64%.

A comprehensive financial review has been carried out at year end, the results
of which, together with an analysis of exceptional items and movements in net
borrowings during the year, are contained in the Finance Director's Review.


The review carried out by Andrew J Dick, appointed Chief Executive in January
2001 confirmed the core elements of the Group's strategy and in the face of
rapidly deteriorating market conditions, steps were taken to shorten the
timescales for implementation. Accordingly, plans were drawn up for a further
reduction in the Group's excess dye manufacturing capacity, including the
concentration of disperse dyemaking on a single site in Leeds, and investment in
new marketing and technical resources was accelerated in the growth markets of

In the circumstances of last year, less emphasis was placed on the Group's
commitment to growth through targeted acquisitions. Indeed for the time being,
given the importance of maintaining cash resources, the focus will continue to
be on those elements of the strategy which reduce both the cost base and working
capital and accelerate the switch of sales away from declining products and
markets into specialities and the textile growth areas of the future.

Directors and employees

There were a number of changes at Board level during the year.

In October Sid Taylor decided to step down as Chairman and was temporarily
replaced by Philip Howard, the Group's senior Non-executive Director. My own
appointment as Chairman was announced on 22nd February 2002 and was effective
from 18th March 2002. I would like to thank my predecessors for their guidance
over the past 18 months and Philip Howard in particular for holding the fort so
resolutely over the past 5 months.

In August Stevan Fowler, the Group Finance Director since May 1999, resigned. In
November we were more than pleased to secure the services of Martin Towers,
whose experience as Finance Director in challenging manufacturing environments
is already proving to be of great value.

Over the course of the year there was some reorganisation of the
responsibilities of the Leeds-based executive Directors following the departure
of Frank Holt in March and the recruitment of Volker Steidel in July into the
newly created position of Managing Director, Asia Pacific. Having taken over as
Managing Director, Europe on an interim basis, Michael Greenhalgh handed on his
responsibilities to Paul Davies at the end of the year. This will allow him to
concentrate on a number of restructuring projects within the Group and the
potential property disposals arising from them. At the same time, the move will
enable Paul to bring his wide-ranging commercial experience to bear on
refocusing our European sales and marketing resources.

With the closure of two dyemaking factories in continental Europe and redundancy
programmes in Leeds and our US operations, the numbers employed by the Group
declined during the year by over 200 to 973. These restructuring moves,
necessary to adjust our resources in line with market requirements, are
difficult and painful for all concerned. We have made every effort to handle
them as sensitively as possible and are grateful for the understanding shown by
those affected.


We announced in our trading statement of 30th November 2001 that in view of the
ongoing restructuring programme and the unlikely prospect of any short-term
improvement in trading conditions, the Board would not consider the payment of a
final dividend appropriate. Since nothing has happened to alter that view, there
will be no final dividend proposed.


Whilst trading in the first two months of 2002 has been in line with the Board's
expectations, no short term recovery in trading conditions is so far apparent.
Elements of the business under our control such as costs, working capital and
the re-alignment of assets with changed market demands are being vigorously

Cash flow will be under pressure because of restructuring costs in 2002 and is
likely to postpone a significant reduction in the level of borrowings until
2003. The undrawn balance under the committed bank facilities at 31st December
2001 is £8.2m (£19.5m).

We believe that the measures under way will strengthen the base of our business
within a marketplace which could stabilise at current levels. If the market does
remain steady, we should see a modest improvement in results but this is not
anticipated before the second half of 2002.

Pat Barrett


19th March 2002

CHIEF EXECUTIVE'S REVIEW - 2001 Preliminary Results


2001 presented a set of major new challenges for the Group: the rapid structural
decline of our customer base in the US - our major profit generator - and its
knock-on effects in the rest of the world severely impacted the Group's turnover
and profitability. Nevertheless, progress was made in the development of our
strategy and the further restructuring and refocusing of our business should
lead to an improved performance, both this year and next, given no further
market deterioration.


Group sales from operations during the year of £120.4m were 16% below those of
2000. An already difficult trading environment was compounded by the events of
11th September. The US, our largest market, was impacted by a slowing economy
but more importantly by a structural decline in our customer base which was both
more rapid and more severe than anticipated. Apparel manufacturers responded to
the slowdown by accelerating the transfer of production to lower cost regions,
notably Asia. European activity was sluggish and Italy, our second largest
market, was also impacted by the US slowdown through lower export volumes. Sales
in Asia were likewise affected by reduced export volumes. We do not yet have the
critical mass in Asia to profit from the transfer of production by major western

Group operating loss of £0.4m before exceptional items is clearly both
disappointing and unacceptable. Cost reduction actions already taken during 2001
together with further far reaching initiatives during the current year are
intended to deliver an improved performance but much work remains.

Excluding the additional provisions arising from the financial review, stocks
were reduced by £5.9m during 2001, a creditable performance given the radical
restructuring of the business and the need to support customer service levels
during the extensive transfer of production. Further opportunities to reduce
stock levels during 2002 have already been identified.

Capital expenditure of £8.6m during 2001 was anticipated in order to ensure that
the Group's remaining dye production facilities have the capability to produce
the required volumes in a cost effective manner.


In 2001 Europe was managed for the first time as a separate entity. Sales of
£51.1m were 17% below 2000 reflecting economic conditions in Europe, the
slowdown in exports to the US and the continued decline of apparel manufacturing
in certain countries including the UK, France and Spain.

Gross margins remain healthy, despite the continued pricing pressure experienced
throughout the year.

As in 2000, a primary focus last year was the restructuring of the business to
bring the manufacturing base in line with future needs. The former Viochrom site
in Athens was closed in June 2001 and the Crompton site in Tertre, Belgium
closed at the end of September 2001. The professionalism demonstrated in this
difficult process is a tribute to all those involved. The cost savings envisaged
from these actions will come through in 2002. The former Crompton finance and
administration centre in Brussels will close in the second quarter of 2002 the
team there too having shown great professionalism during the protracted closure

In Europe, the Group continues to ensure that it will manufacture only those
products where it is confident it can retain a competitive advantage. Where this
is not the case, both finished and semi-finished products are outsourced,
principally from quality Asian producers.

During 2001, the first steps were taken to establish Yorkshire as a 'solution
provider' with the development of marketing platforms and the accompanying
support material. Much work remains to be done in this area but the new
management team, led by Paul Davies, has clearly identified the actions needed
to rapidly transform the Group's European business from a disperse dye
manufacturer to a full range solution provider. Paradoxically, the key to
success in this process lies in the radical simplification of the product
offering and the focus on key customers. The quality of service and performance
we provide to our targeted customers will be fundamental to our future success.

We are confident that the market focused reforms, together with the integration
of production in Leeds on one site, announced in January 2002, will form the
basis for a return to profitability of the European business.

Asia Pacific

2001 has seen a step-change in our approach to Asia - the future growth engine
of our business. In July 2001 Volker Steidel was appointed Managing Director of
our Asia Pacific business. Sales in 2001 of £12.6m were disappointing and
reflected both a slowdown in export sales and because of our lack of critical
mass, our inability to attract the new business which is being transferred to
the region. This situation is now starting to change and we anticipate year on
year growth in the region for 2002.

Through the establishment and expansion of sales and technical support centres
we will develop a relatively low cost entry into four of the key markets in the
region: China, Taiwan, Indonesia and Korea. Taiwan and Korea, though large
markets in their own right, are themselves suffering from low cost Chinese
competition. Nevertheless, establishing a recognised presence here is key since
Taiwanese and Korean joint ventures with China will strongly influence local
Chinese purchasing decisions for dyes and chemicals. The Korean operation was
strengthened at the beginning of 2002 and we will form a majority owned joint
venture in Taiwan by the second quarter of 2002.

We plan to open a sales and technical support operation in mainland China by the
second half of 2002. Our regional headquarters in Hong Kong have already been
strengthened by recruiting a number of industry professionals. The Asian team
will continue to receive support from the European and American based teams
where appropriate.

The growth will be achieved by delivering a high quality service to a limited
number of key accounts and by strengthening our distribution and agency network
throughout the region.


Sales in the Americas in 2001 were £56.8m compared to £67.9m in 2000, a decline
of 16%. The severity and rapidity of the structural decline in the customer
base, together with the overall slowdown in the US economy, has hit the Group's
most profitable business hard. In addition to this, severe pricing pressure
prevailed as suppliers attempted to retain volumes in a declining market. It is
therefore a real tribute to the performance of the team that Yorkshire was able
to enhance its position as a market leader and to maintain profitability at an
operating level. This was achieved through aggressive cost cutting measures
taken in the first quarter, the early termination of the Crompton supply
agreement and the winning of new business at targeted key accounts.

The main manufacturing facility in Lowell was upgraded and the new investments
allow Yorkshire Americas to be largely self sufficient in dye production.

Although much of the reduction in the apparel manufacturing base will be
permanent, the Group holds strong market positions in the carpet, home
furnishings and automotive areas. As the economy improves, the Group, with its
increased emphasis on quality and customer service, will be well positioned to
penetrate these markets further.

To help offset the declines in North America, additional resources are being
focused on Central and South America. Brazil in particular showed a significant
year on year improvement but the gains were wiped out when translated into US
dollars because of the Real's devaluation. In 2002 more resources will be
diverted from the US to this region and year on year growth is anticipated.

For 2002, the Americas will continue to reduce costs and consolidate activities
wherever possible to ensure improved profitability.


The strategy to improve the Group's performance remains clear and focused:
continue to align costs in the mature western markets with future demand;
simplify the business and target key customers with long term growth prospects;
develop low cost entry into the major Asian growth markets and generate cash
through better use of working capital and the disposal of assets no longer

In conclusion, the result for 2001 was both disappointing and unacceptable.
However, in making the necessary initial steps, the strengthened management team
has both the capability and determination to return Yorkshire to profitability
and growth.

Andrew J Dick

Chief Executive

19th March 2002

FINANCE DIRECTOR'S REVIEW - 2001 Preliminary Results

Financial Review

Subsequent to my appointment as Group Finance Director on 29th November 2001, a
financial review has been undertaken across the Group, the results of which are
reflected in the 2001 accounts. This review has complemented both the structural
review which was already underway of the European business, and other work, as
the Group has addressed the impact of progressively deteriorating trading
conditions, particularly during the fourth quarter.

The review has given rise to a number of exceptional items, the details of which
are set out in note 4 and are discussed below.

The Group has appointed a dedicated Finance Director for the European business
and redefined the role of Group Financial Controller. A number of system
developments to improve internal financial reporting are in progress. A Group
Finance Manual is being introduced during the first half of 2002 to replace the
statement of Group policy on internal controls issued in September 1999. These
changes are designed to enhance but simplify management reporting systems and
improve the Group's working capital control.

Results before exceptional items

Turnover of £120.4m in 2001 compares with £143.4m in 2000 and reflects the
difficult trading conditions experienced. This overall reduction of 16% has been
experienced in substantially equal measures across the mature markets of Europe
and the US.

The operating loss of £0.4m before exceptional items is by comparison with £9.6m
operating profit in 2000 following the impact of lower turnover and margin
pressure in 2001. The strategic restructuring programme underway in 2001 is
expected to result in major cost reductions from 2002 onwards.

Interest expense of £3.0m in 2001 compares with £2.7m in 2000 as a result of
higher borrowings. The interest rate swap of $27.5m, fixed at 6.65% plus margin
in February 2001 until January 2005, restricts the ability of the Group to
benefit from the prevailing lower interest rates.


The European region reported turnover of £51.1m (£61.7m) and an operating loss
of £1.4m (profit £2.0m) before exceptional items. The pressing need to restore
profitability and reduce fixed costs throughout the European business in line
with expected demand has led to an exceptional item of £5.7m, being £6.5m from
reorganising the UK manufacturing base and European operational structure, less
£0.8m release of a surplus accrual.

Reorganisation and simplification of the complex European business gives rise to
£1.8m stock provision within the above exceptional item as numerous product
lines generating little or no profit are terminated. A new management structure
combined with the progressive disposal of excess stock is expected to improve
operational focus, with the objective of improving sales in the chosen areas of

The detailed consultation, planning and engineering work associated with
restructuring the UK manufacturing base announced in January 2002 is expected to
preclude any significant benefit arising in 2002. Cost savings of around £3.0m
are expected from early 2003. The fixed asset write down of £3.2m originates
from restructuring the UK manufacturing base.

Prepayments to the UK pension scheme amounting to £0.9m and relating to previous
years have been written off. The initial disclosure requirements of FRS17 are
contained in the accounts and reveal an actuarial surplus of £383,000 (net of
deferred tax) at 31st December 2001.

The Group had already taken action during 2001 to reduce the fixed cost base.
Plants in Greece and Belgium were closed during the year with savings of some
£4.5m expected to benefit 2002 to counter the prevailing market conditions.

The exceptional item arising from restructuring the European business excludes
an estimated £2.9m of redundancy and related costs that will be substantially
incurred during the second half of the year.

Asia Pacific

The continuing impact of the slowdown in the US hampered development of the Asia
Pacific business, the major region of textile growth. Turnover of £12.6m
(£13.9m) gave rise to an operating profit of £0.4m (£0.9m).


Turnover of £56.8m (£67.9m) was affected by the significant deterioration in
trading conditions during 2001, with an operating profit before exceptional
items of £2.5m (£7.5m) at the lower levels of activity.

These considerably changed trading conditions have necessitated exceptional
items of £4.5m. The principal items are an additional £1.4m stock provision
recognising the lower levels of demand against current stock levels, £0.8m bad
debt provision as an abnormal number of customers ceased business in the harsh
trading environment, and a write down of £1.9m relating to the carrying value of
specific properties and plant and equipment following an impairment review.

The remaining supply agreement in the US was successfully terminated at the end
of July with annualised cash savings thereafter of $3.0m that will increasingly
benefit the results during 2002.

Impairment review

As part of the year end financial review, an impairment review has been carried
out that has resulted in a write off amounting to £5.2m relating to the
impairment of goodwill arising from the acquisition of the Crompton businesses
in 1999 by reference to the prevailing and anticipated future trading

Group Services

Head office and corporate costs amounted to £1.5m before exceptional items in
2001 (£1.2m), an increase due to recruitment and temporary staff costs without
the benefit of credits taken in 2000.

Cash flow

The deterioration in trading conditions during 2001, particularly during the
fourth quarter, impacted upon the Group's cash flow in the context of the
committed reorganisation costs and capital expenditure incurred during the year
and originating from the Crompton acquisition.

Net borrowings were £34.8m at year end by comparison to £20.1m at 31st December
2000 and £31.1m at 30th June 2001.

Working capital reduction of £5.5m compares with an increase of £4.8m in 2000.
Stock levels were temporarily increased by £6.4m in 2000 ahead of the
restructuring of manufacturing plants. Stocks reduced by £5.9m, excluding the
additional provisions arising from the financial review, in 2001 to £43.3m as
the increase in 2000 unwound, with further reduction sought in 2002. Debtors
declined by £3.6m at the lower levels of activity.

Fundamental reorganisation costs of £9.2m (£2.3m) were paid during 2001 arising
from the Crompton acquisition. Further cash expenditure is planned in 2002
against the provision carried forward at 31st December 2001 of £5.0m.

Capital expenditure of £8.6m was paid in 2001 (£4.1m) by comparison to the
depreciation expense of £4.2m (£3.9m). The UK manufacturing reorganisation is
expected to contribute to a level of capital expenditure in 2002 in excess of
the depreciation expense by a lesser amount.

Translation differences involving primarily the dollar gave rise to an increase
in borrowings of £0.8m (£2.2m) in 2001. A significant proportion of the Group's
net assets are denominated in dollars. To reduce this exposure and recognising
that a substantial proportion of the Group's income flow is in dollars, the
majority of bank borrowings are also in dollars.

Whilst the Group will be managing its cash resources carefully in 2002 and
taking every opportunity to reduce working capital and in particular stocks, the
level of committed restructuring expenditure is likely to postpone a significant
reduction in the level of borrowings until 2003.

Borrowing facilities

The Group has various borrowing facilities available to it. The principal
facility is a term loan and multi-currency revolving credit facility secured by
fixed and floating charges over certain assets of certain Group companies. The
term loan amounts to $40.5m and is repayable in full in December 2004. The
revolving credit facility expires at the same time and reduces by $4.05m at six
monthly intervals.

The undrawn balance under the committed facilities at 31st December 2001 is
£8.2m (£19.5m).

Balance sheet

Net assets of the Group are £54.1m at 31st December 2001 with balance sheet
gearing of 64%.


The financial review has provided the platform from which the Group can move
forward enabling the strengthened management team to concentrate upon trading
and operational issues.

Martin Towers

Group Finance Director

19th March 2002
                                                  YORKSHIRE GROUP PLC
                                               2001 PRELIMINARY RESULTS
                                             GROUP PROFIT AND LOSS ACCOUNT
                                         for the year ended 31st December 2001

                                Note     Exceptional        Exceptional                   2001                2000
                                               items              items
                                               £'000              £'000                  £'000               £'000

Turnover                         2           120,426                  -                120,426             143,441

Cost of sales                    4          (85,383)            (8,995)               (94,378)            (96,899)
                                       -------------       ------------          -------------       -------------
Gross profit                                  35,043            (8,995)                 26,048              46,542

Other operating expenses         4          (35,485)            (7,113)               (42,598)            (36,942)
                                       -------------       ------------          -------------       -------------
Operating (loss)/profit          3             (442)           (16,108)               (16,550)               9,600

Non-operating exceptional        4                                                           -               7,476
                                                                                 -------------       -------------
(Loss)/profit on ordinary                                                             (16,550)              17,076
activities before interest

Net interest                                                                           (3,015)             (2,725)
                                                                                 -------------       -------------
(Loss)/profit on ordinary                                                             (19,565)              14,351
before taxation

Tax on loss on ordinary          5                                                     (1,401)             (3,221)
                                                                                 -------------       -------------
(Loss)/profit on ordinary
after taxation                                                                        (20,966)              11,130

Minority interest - equity                                                                (41)                (25)
                                                                                 -------------       -------------
(Loss)/profit for the                                                                 (21,007)              11,105
financial year

Dividends - on equity shares                                                                 -             (2,354)
                                                                                 -------------       -------------
Transfer (from)/to reserves                                                           (21,007)               8,751
for the financial year
                                                                                 -------------       -------------
Basic & diluted (loss)/
earnings per ordinary share
          before exceptional                                                             (9.4) p               9.0 p
          exceptional items                                                             (30.8) p              12.2 p
          less attributable
                                                                                 -------------       -------------
Basic & diluted (loss)/          6                                                      (40.2) p              21.2 p
earnings per ordinary share
                                                                                 -------------       -------------

                                                  YORKSHIRE GROUP PLC
                                                     BALANCE SHEETS
                                                 at 31st December 2001

                                                                       Group                             Company
                                                               2001              2000              2001             2000
                                                              £'000             £'000             £'000            £'000
Fixed assets
Intangible assets                                                 -             5,072                 -                -
Tangible assets                                              45,558            47,662               810              978
Investments                                                      23                23            98,666          128,705
                                                       ------------       -----------       -----------     ------------
                                                             45,581            52,757            99,476          129,683
                                                       ------------       -----------       -----------     ------------
Current assets
Stocks                                                       43,263            52,446                 -                -
Debtors                                                      25,421            32,517             8,410            9,630
Cash at bank and in hand                                      3,334             8,155                 -                -
                                                       ------------       -----------       -----------     ------------
                                                             72,018            93,118             8,410            9,630
Current liabilities
Creditors - amounts falling due within one year            (26,531)          (37,381)          (10,305)         (25,165)
                                                       ------------       -----------       -----------     ------------
Net current assets/(liabilities)                             45,487            55,737           (1,895)         (15,535)
                                                       ------------       -----------       -----------     ------------
Total assets less current liabilities                        91,068           108,494            97,581          114,148
Creditors-amounts falling due after more than
one year                                                   (30,345)          (16,360)          (30,559)         (16,667)

Provisions for liabilities and charges                      (6,063)          (16,214)                 -                -
                                                       ------------       -----------       -----------     ------------
Net assets                                                   54,660            75,920            67,022           97,481
                                                       ------------       -----------       -----------     ------------
Capital and reserves

Called up share capital                                      13,076            13,076            13,076           13,076

Share premium account                                        26,760            26,760            26,760           26,760

Revaluation reserve                                             550               550               319              319

Capital redemption reserve                                      300               300               300              300

Profit and loss account                                      13,427            34,723            26,567           57,026
                                                       ------------       -----------       -----------     ------------
Equity shareholders' funds                                   54,113            75,409            67,022           97,481
Equity minority interest                                        547               511                 -                -
                                                       ------------       -----------       -----------     ------------
Total capital employed                                       54,660            75,920            67,022           97,481
                                                       ------------       -----------       -----------     ------------

                                                  YORKSHIRE GROUP PLC
                                            CONSOLIDATED CASH FLOW STATEMENT
                                         for the year ended 31st December 2001
                                                                                            2001                    2000
                                                                    Note                   £'000                   £'000

Net cash inflow from operating activities                           7(a)                     676                   6,573

Returns on investments and servicing of finance                     7(b)                 (2,595)                 (2,431)

Taxation                                                            7(c)                 (1,661)                 (1,337)
                                                                                      ----------              ----------
                                                                                         (3,580)                   2,805
                                                                                      ----------              ----------
Capital expenditure and financial investment                        7(d)                 (8,471)                   3,633

Acquisitions and disposals                                          7(e)                   (232)                 (2,573)

Equity dividends paid                                                                    (1,569)                 (2,182)


New bank loans                                                                            15,748                   5,378

Repayment of loans                                                                       (5,625)                 (5,279)
                                                                                      ----------              ----------
                                                                                          10,123                      99
                                                                                      ----------              ----------
(Decrease)/increase in cash in the year                                                  (3,729)                   1,782
                                                                                      ----------              ----------
Reconcilation of net cash flow to movement in net debt

(Decrease)/ increase in cash in the year                                                 (3,729)                   1,782

Cash inflow from increase in debt                                                       (10,123)                    (88)
                                                                                      ----------              ----------
Change in net debt resulting from cash flows                                            (13,852)                   1,694
Borrowings of businesses acquired                                                              -                    (11)
Translation differences                                                                    (801)                 (2,219)
                                                                                      ----------              ----------
Movement in net debt in the year                                                        (14,653)                   (536)

Net debt at 1st January                                                                 (20,133)                (19,597)
                                                                                      ----------              ----------
Net debt at 31st December                                                               (34,786)                (20,133)

                                                                                      ----------              ----------

                                                  YORKSHIRE GROUP PLC
                                               OTHER FINANCIAL STATEMENTS
                                         for the year ended 31st December 2001

                                                  Group                                        Company
                                           2001                    2000                 2001                        2000
                                          £'000                   £'000                £'000                       £'000
Statement of total recognised
gains and losses
(Loss)/profit for the financial        (21,007)                  11,105             (30,742)                         936
Currency translation differences
on foreign currency
net investments                           (289)                   1,427                  283                         936
                                   ------------             -----------         ------------                 -----------
Total gains and losses recognised      (21,296)                  12,532             (30,459)                       1,872
in the year
                                   ------------             -----------         ------------                 -----------
Reconciliation of movements in
shareholders' funds
(Loss)/profit for the financial        (21,007)                  11,105             (30,742)                         936
Dividends                                     -                 (2,354)                    -                     (2,354)
                                   ------------             -----------         ------------                 -----------
                                       (21,007)                   8,751             (30,742)                     (1,418)

Currency translation differences          (289)                   1,427                  283                         936
                                   ------------             -----------         ------------                 -----------
Net (decrease)/increase in             (21,296)                  10,178             (30,459)                       (482)
shareholders' funds in the year

Shareholders' funds at 1st January       75,409                  65,231               97,481                      97,963
                                   ------------             -----------         ------------                 -----------
Equity shareholders' funds at 31st       54,113                  75,409               67,022                      97,481
                                   ------------             -----------         ------------                 -----------

                                                  YORKSHIRE GROUP PLC


1.   Preparation of financial statements

     This preliminary announcement which has been agreed with the auditors, was
     approved by the auditors on 19th March 2002. The financial statements for
     the year ended 31st December 2001 have been prepared on the basis of the    
     accounting policies as set out in the Group's annual report for 2000. The
     abridged financial information presented above is based on the full 
     accounts of the Group for 2001 and 2000, on which the auditors have given
     an unqualified report. The full accounts for 2001 have not yet been filed 
     with the Registrar of Companies.

2.   Turnover

     Turnover represents sales by Group companies after eliminating intra-group 

                                                                                        2001                        2000
                                                                                       £'000                       £'000
     Geographical destination analysis of Group turnover
     Continental Europe                                                               45,243                      50,408
     Asia                                                                             11,646                      13,551
     Australasia                                                                       1,254                       1,910
     North and South America                                                          53,780                      69,326
     Africa and the Middle East                                                        3,872                       2,396
                                                                                ------------                ------------
                                                                                     115,795                     137,591
     U.K.                                                                              4,631                       5,850
                                                                                ------------                ------------
     Total turnover                                                                  120,426                     143,441
                                                                                ------------                ------------
                                                                                        2001                        2000
                                                                                       £'000                       £'000
     Divisional analysis of Group turnover
     Europe                                                                           51,055                      61,700
     Asia Pacific                                                                     12,564                      13,862
     Americas                                                                         56,807                      67,879
                                                                                ------------                ------------
                                                                                     120,426                     143,441
                                                                                ------------                ------------

     The divisional analysis set out in this note and note 3 below reflects the 
     new management reporting structure of the Group. The results for Asia 
     Pacific include Hong Kong, Australia, Indonesia and direct sales which were
     previously incorporated in the Eurasian results. Comparative figures for 
     2000 have been restated accordingly.

3.   Divisional analysis of Group operating profit

                                  Exceptional               Exceptional                   2001                    2000
                                        items                     items
                                        £'000                     £'000                  £'000                   £'000

     Europe                           (1,441)                   (5,746)                (7,187)                   2,026
     Asia Pacific                         379                         -                    379                     903
     Americas                           2,537                   (4,552)                (2,015)                   7,541
     Group services                   (1,515)                     (604)                (2,119)                 (1,159)
                                 ------------             -------------          -------------            ------------
                                         (40)                  (10,902)               (10,942)                   9,311
     Other operating                    (402)                   (5,206)                (5,608)                       -
     Other operating                        -                         -                      -                     289
                                 ------------             -------------          -------------            ------------
     Operating (loss)/                  (442)                  (16,108)               (16,550)                   9,600
                                 ------------             -------------          -------------            ------------

4. Exceptional items                    Restructuring    Americas      Corporate     Impairment       Total
                                             European                      costs         review
                                             business                                                  2001         2000
                                                £'000       £'000          £'000          £'000       £'000        £'000

Fixed asset write downs                         3,200         105              -              -       3,305            -
Impairment review                                   -       1,910              -              -       1,910            -
Stock provisions                                1,800       1,399              -              -       3,199            -
Business rationalisation costs                    747         200              -              -         947            -
Release of surplus accrual                      (837)           -              -              -       (837)            -
Prepayments to pension scheme                     471           -              -              -         471            -
                                          -----------  ----------     ----------     ----------  ----------   ----------
Charged as cost of sales                        5,381       3,614              -              -       8,995            -
                                          -----------  ----------     ----------     ----------  ----------   ----------
Bad debt provisions                                 -         803              -              -         803            -
Business rationalisation costs                      -         135            546              -         681            -
Intangible asset impairment                         -           -              -          5,206       5,206            -
Prepayments to pension scheme                     365           -             58              -         423            -
                                          -----------  ----------     ----------     ----------  ----------   ----------
Charged as other operating expenses               365         938            604          5,206       7,113            -
                                          -----------  ----------     ----------     ----------  ----------   ----------
Compensation for restriction on the                 -           -              -              -           -        6,460
right to use land
Profit on disposal of Spanish                       -           -              -              -           -        1,016
                                          -----------  ----------     ----------     ----------  ----------   ----------
Total                                           5,746       4,552            604          5,206      16,108        7,476
                                          -----------  ----------     ----------     ----------  ----------   ----------

The Finance Director's Review provides further information concerning the
exceptional items.

The impairment review of fixed assets and goodwill uses a pre-tax discount rate
of 15% for the value in use calculations.

5. Tax on loss on ordinary activities                                                              2001             2000
                                                                                                  £'000            £'000
UK corporation tax
          Current tax on income for the period                                                       13              741
          Adjustments in respect of prior periods                                               (1,400)              129
                                                                                            -----------       ----------
                                                                                                (1,387)              870
Overseas tax
          Current tax charge on income for the period                                             1,822            1,970
          Adjustments in respect of prior periods                                                   966              381
                                                                                            -----------       ----------
                                                                                                  2,788            2,351
                                                                                            -----------       ----------
Tax on loss on ordinary activities                                                                1,401            3,221
                                                                                            -----------       ----------
The tax charge for 2001 includes a charge of £nil in respect of exceptional items

( 2000 - £1,065,000 credit).

6. Earnings per ordinary share

(Losses)/profits used in the earnings per share calculation are as follows:
(Loss)/profit for the financial year                                                           (21,007)           11,105
Exceptional items (less attributable tax)                                                        16,108          (6,411)
                                                                                            -----------       ----------
(Loss)/profit before exceptionals                                                               (4,899)            4,694
                                                                                            -----------       ----------
Weighted average number of shares                                                            52,303,337       52,303,337

Diluted earnings per share have been calculated for 2001 and 2000 under FRS 14 
and no dilution arises in either year.

7. Analysis of cash flow for headings netted in the cash flow statement

7(a)   Reconciliation of operating profit to net cash from operating
                                                                                          2001                      2000
                                                                                         £'000                     £'000

       Operating (loss)/profit on ordinary activities before                          (16,550)                     9,600
       Fundamental reorganisation costs paid                                           (9,228)                   (2,311)
       Depreciation of tangible fixed assets                                             4,242                     3,935
       Amortisation of intangible assets                                                   271                       201
       Impairment review                                                                 7,116                         -
       Fixed asset writedown                                                             3,305                         -
       Prepayment s to pension scheme                                                      894                         -
       Profit on sale of fixed assets                                                     (61)                      (25)
       Decrease/( increase) in stock                                                     5,946                   (6,375)
       Decrease in debtors                                                               3,647                     6,192
       Decrease in creditors                                                           (4,063)                   (4,644)
       Net increase in provisions                                                        5,157                         -
                                                                                --------------              ------------
       Net cash inflow from operating activities                                           676                     6,573
                                                                                --------------              ------------
7(b)   Returns on investments and servicing of finance
       Interest received                                                                   223                       467
       Interest paid                                                                   (2,818)                   (2,898)
                                                                                --------------              ------------
                                                                                       (2,595)                   (2,431)
                                                                                --------------              ------------
7(c)   Taxation
       Taxation received                                                                 1,254                       845
       Taxation paid                                                                   (2,915)                   (2,182)
                                                                                --------------              ------------
                                                                                       (1,661)                   (1,337)
                                                                                --------------              ------------
7(d)   Capital expenditure and financial investment
       Purchase of tangible fixed assets                                               (8,643)                   (4,063)
       Sale of tangible fixed assets                                                       172                       220
       Exceptional income
       Compensation received for restriction on the right to use                             -                     6,460
       Cash received on disposal of Spanish property                                         -                     1,016
                                                                                --------------              ------------
                                                                                       (8,471)                     3,633
                                                                                --------------              ------------
7(e)   Purchase of subsidiary undertakings
       Cash paid in the period relating to expenses for 1999
       acquisition of the Crompton dyes businesses                                           -                   (1,719)
       Consideration including expenses paid in the
       period in respect of 2000 acquisitions                                             (31)                     (854)
       Consideration including expenses paid in the
       period relating to the acquisition of the
       Indonesian distributor's business                                                 (201)                         -
                                                                                --------------              ------------
       Total cash paid in respect of acquisitions                                        (232)                   (2,573)
                                                                                --------------              ------------

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

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