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Johnston Group PLC (JHT)

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Wednesday 27 March, 2002

Johnston Group PLC

Final Results

Johnston Group PLC
27 March 2002

                                PRESS RELEASE

                              Preliminary Results
                     For the year ended 31st December 2001

                                                                 27th March 2002

* Profit before tax £3.8 million (2000 £9.2 million including a disposal gain of
  £3.0 million)

* Earnings per share 14.2p (2000 54.6p)

* Recommended total dividend 13.75p (2000 13.75p)

* Strong balance sheet with gearing of 12.7%

* Net assets per share 450p (2000 452p)

'Looking to the future, we have strong market positions to exploit, we have a
strengthened management team and we can already see results from some of the
tough decisions we made during the year.  Subject as always to unforeseen
events, we look forward with much greater confidence for 2002.

My thanks go to the employees throughout the Group for their efforts and
responsiveness in what has been a difficult period and also to my fellow
directors for their support.'

                                                                   Roger Holland

For further information:

Marcus Jordan, Group Managing Director                  Peter Willetts
Johnston Group PLC                                      Tavistock Communications
Tel:  01737 242 466                                     Tel:  020 7600 2288



Although there were some bright spots, this has been, as predicted in our
trading update on 20th December 2001, a disappointing year for the Group as a
whole.  While overall sales were marginally up on last year, Group profit before
taxation was sharply reduced.  From last year's profit before taxation of £9.2
million, which included a disposal gain of £3.0 million, the figure for 2001 was
lower at £3.8 million.  Earnings per share fell from 54.6p to 14.2 p.

The underlying reasons for this downturn were partly market conditions, partly
unforeseen and exceptional events and partly production difficulties.

Despite this year's poor performance, the Board has confidence that the Group's
fortunes will recover and is recommending a final dividend of 8.50p per ordinary
share making an unchanged dividend for the full year of 13.75p per ordinary

The biggest downturns in performance occurred within the sweeper division.
Despite strong order books in Europe and particularly in the UK, problems in
production delayed deliveries and cut into profit margins.  As explained in the
statement of 20th December 2001, the underlying reasons were a combination of
external and internal influences. A major external factor was the disruption of
supplies and short-term design changes from the chassis manufacturers as they
struggled to conform to the new Euro-3 emission standards.  The effects of these
external problems, however, were compounded by weaknesses that were exposed in
some of our internal systems and in some areas of management, which have
subsequently been addressed.

For different reasons, the sweeper activities in North America also had a poor
year.  Earlier in the year, although the order book was not particularly strong,
Johnston Sweeper Company was on track with its planned performance improvements.
  Then the events of 11th September  knocked us back in several ways:  products
could not be shipped because customers could not travel to inspect the machines;
anticipated orders were delayed or cancelled because, for example, with the fall
in tourism, many municipalities were unsure of future revenues.  Our recent
acquisition, Madvac, did not achieve expectations either following problems in
integrating effectively the Madvac and Sweeper Company sales networks in North
America.  Steps were taken during the year to address the organisational and
system problems.  There have also been changes in senior management.  Signs of
solid improvement are already visible.

The special vehicles division improved its overall performance from the previous
year.  In Australia, MacDonald Johnston Engineering increased sales.  In the UK,
Saxon returned to profitability.  Manufacturing efficiency has improved in its
core Fire Appliance business and the company has diversified successfully into
other vehicles.

Turning to construction materials, the profits at Johnston Pipes fell by nearly
£1 million.  On the concrete side, the effects of the bad weather and of the
foot and mouth crisis hit shipments hard in the first half.  These effects were
compounded by some major competitors cutting prices in an attempt to retain
volume and capture market share.  Fortunately, our investments in modern plant
and our experienced management team gave us a competitive edge.  We did make a
profit for the year and the adverse market conditions have now eased somewhat.

A loss was incurred on GRP products where volumes and market prices were also
down.  During the year we restructured this business to operate with lower
turnover and to focus more on the profitable special products and less on basic
pipes.  In the process, we incurred significant redundancy costs.

Once again, the best results were produced by the quarries.  Turnover increased
by 5 per cent. and profits were up by more than 25 per cent.  The result, in a
market that was not easy, was a very good performance by a first-class
management team.

Financial Review

Group turnover at £142.4 million was in line with the previous year. There were
compensating movements between the divisions with construction materials below
the prior year and engineering ahead.

Profit before taxation of £3.8 million was well below the £9.2 million reported
in 2000 which included the substantial gain of £3 million on the sale of the
minority interest in Hobas Pipe USA Inc. Group operating profit, which reflects
the performance of the Group's continuing operations, fell by 36% to £4.2
million. There was a marginal decline in the operating profit of the
construction materials division due to the difficult trading conditions at
Johnston Pipes. The decline in the engineering division was more pronounced and
reflected a mixture of market conditions and operational issues in the sweeper

Cashflow from operating activities amounted to £4.7 million. This is below the
previous year and reflects the combination of lower operating profit and
increased working capital, the latter arising primarily in the overseas
operations. Capital expenditure at £3.5 million exceeded depreciation. The
largest capital expenditure project was the acquisition of new premises at Saxon
Sanbec in November. It is anticipated that the old premises will be sold in
2002. Cash outflow before financing was £4.8 million and net debt increased to
£6.3 million. Gearing was 12.7% and interest cover 8.9 times. As reported last
year the Group medium term bank loan facility was renewed early in the year with
a five year term. The loan balance of £7.0 million has been reclassified in the
balance sheet as creditors due after one year. Shareholders' funds fell slightly
to £49.7 million with an asset value per ordinary share of 450p.

The overall tax rate was 29.1%. This is below the standard UK rate of 30% with
favourable reductions in deferred tax offsetting higher overseas tax rates and
other disallowable items. Basic earnings per ordinary share were 14.21p.

An interim dividend of 5.25p per ordinary share was paid in December 2001 and
the Board is recommending a final dividend of 8.50p per ordinary share, giving a
dividend for the year of 13.75p.

Operating Review


Sweeper Division

Johnston Engineering Limited

Manufacturer of road sweepers and other municipal vehicles

The company had a disappointing year.  Whilst levels of demand were good,
operational difficulties and high warranty costs led to depressed margins and a
poor result.  Senior management changes have been made to address these issues.

Johnston Engineering's share of the European and rest of the world sweeper
markets remains steady.  Several high profile orders were secured, including 30
units for the City of Milan.  The distribution network has been further
strengthened with the appointment of two new dealers.  The year 2001 was a
record for UK sales of truck mounted sweepers, although compact sweeper sales
fell slightly from the unusually high levels achieved in 2001.

The order book for the UK and much of mainland Europe remains strong with no
sign of a recessionary downturn.  The management anticipates a significant
improvement on last year's result, although it will take a few months before the
benefit of operational improvements is apparent and the new structure settles

Johnston GmbH, the German sales and service subsidiary, had a difficult year.
The German economy was depressed and volumes of sales reduced slightly.  Levels
of competition increased, as did our losses.  Steps are being taken to reduce
these losses.

Johnston Beam, the Danish based facility, enjoyed a busy year.  Order intake was
strong with significant inroads made in new markets - both geographic and
industrial.  Production difficulties, however, reduced the financial performance
and action has been taken to increase the strength of the management team.  The
outlook for 2002 is encouraging.

Johnston Sweeper Company

Manufacturer of road sweepers

The result for the year was disappointing, sales were static and the second half
losses more than offset the small profit made in the first half.

The second half was affected by a weaker order book, delivery delays resulting
from the events of 11th September and increased warranty and research and
development costs.

A new air regenerative sweeper was introduced early in 2001 giving the company
access to areas of the market not previously covered by its sweeper range.

Madvac Inc.

Manufacturer of walk-behind sweepers and litter collection vehicles

The company failed to achieve profitability during the year.  This was a result
of lack of sales support in the US, resulting in sales significantly below
budget and prior year levels.  The problem was addressed in the latter part of
the year, but too late to have any real effect on the result for the year.

Orders for the early part of 2002 are, however, showing a significant
improvement and continued focus will be placed on sales support.

The company is continuing with its programme of product development and new
product announcements are expected during 2002.

Special Vehicles Division

Macdonald Johnston Engineering Co.Pty.Limited

Manufacturer of refuse vehicles, roadsweepers, air hand-dryers and other
washroom equipment

MacDonald Johnston Engineering reported slightly improved profits over the
previous year despite strong competition and restricted margins on all truck
mounted products. The new air regenerative sweeper continued to gain market
acceptance and sales prospects are excellent. The restyled front loader refuse
vehicle released during the year has increased market share significantly.
Exports of side loading refuse vehicles to Europe have increased also.  The
significant investment in after sales service facilities during the past three
years is now starting to show acceptable returns and this activity will continue
to expand.

The market for washroom products generally declined on the previous year because
of reduced levels of commercial property development, but the new stainless
steel products have enabled this division to maintain market share.  A new
product, which combines air hand dryers and paper, was released in the latter
part of the year and will contribute to the improving profitability of this

Overall, volumes in 2002 are expected to be similar to those of previous years,
but with ever present price pressures management will continue to focus on
manufacturing efficiencies and unit cost reduction.

Saxon Sanbec Limited

Manufacturer of firefighting and rescue vehicles

Although sales were down, Saxon Sanbec had a very much better year in 2001 than
in the recent past and returned to profit.  Fundamental improvements in
manufacturing efficiencies, vehicle costings and stock control contributed to a
modest profit.  The introduction of a product configurator and full material
resource and procurement system during 2002 should ensure this momentum is

The fire appliance market continues to be extremely competitive and adequate
margins are difficult to secure.  The company has declined to supply the newly
formed Fire Service Procurement Agency, which currently embraces fourteen
Brigades, as it was not thought commercially prudent to accept the contract
conditions which included amongst other things unlimited liability.
Accordingly, Saxon Sanbec is now supplying a smaller fire appliance market and,
as a consequence, is looking at new business opportunities within the specialist
vehicle sector.

Saxon Sanbec will be relocating to larger premises during the second quarter of
2002, which will provide the opportunity for new processes and enhanced
manufacturing efficiencies. Overall there are opportunities on several fronts,
which should enable Saxon to have a good year.

Construction Materials

Johnston Pipes Limited

Manufacturer of concrete building products and glass reinforced plastic pipes

2001 was an unsatisfactory year for Johnston Pipes.  Many construction sites
were brought to a standstill through long spells of wet weather and by foot and
mouth restrictions.  Profits were very much less than expected.

The GRP division suffered severely from a weak market.  There were yet more
delays in the water companies' spending programmes and the few projects
available for tender were fiercely contested.  On the positive side, two new
products are attracting interest.  The Stormfox combined sewer overflow unit is
bringing increasing numbers of enquiries from companies throughout the country;
its efficient use of space in confined areas and the speed with which it can be
installed are attractive features.  The ovoid shaped liner is proving to be a
cost effective product for renovating Victorian era sewers, with interest in the
UK and Europe.  The division has been restructured to take out cost.  The
redundancy cost incurred in doing this added to the division's loss for the
year, but will benefit future years.

After a very difficult first half, the concrete building products division
increased profitability as prices and volumes improved during the second half.
Manufacturing efficiencies continued to be secured in the production of cover
slabs and pipes.  The product range was further enlarged with the addition of
seating rings.

There were two particular contracts of note during 2001; the supply of several
thousand tonnes of concrete products over two years to the Birmingham Northern
Relief Road and the supply of 14 kilometres of  900 mm GRP pressure pipe for
drinking water distribution within the Thames Water Company area.

The outlook for 2002 is mixed.  The GRP division will continue to be confronted
with difficult trading conditions, but there is a more satisfactory outlook for
the concrete products division.

Johnston Roadstone Limited

Coated and dry stone quarry operators

The company performed extremely well throughout 2001, with profits exceeding
those of recent years despite the lack of major contracts for either of the two
quarries.  The general construction market, however, enjoyed greater activity
than in the previous year and, with more stable fuel oil and bitumen prices,
quarry operators generally have had the benefit of more realistic prices and

As reported last year, the new primary crushing plant was commissioned at Leaton
during February and this has greatly increased production efficiencies.  The new
plant was a major factor in Leaton securing ISO 14001 environmental
accreditation.  The management at Leinthall Quarry will be applying for this
accreditation during the current year.

Competition, which is ever present, is likely to intensify when new facilities
at a neighbouring quarry come on stream mid-year.  Nevertheless the outlook for
2002 is encouraging; order books are satisfactory and two major road improvement
schemes due to start in Shropshire later in the year should underpin performance
in the second half.


Looking to the future, we have strong market positions to exploit, we have a
strengthened management team and we can already see results from some of the
tough decisions we made during the year.  Subject as always to unforeseen
events, we look forward with much greater confidence for 2002.

My thanks go to the employees throughout the Group for their efforts and
responsiveness in what has been a difficult period and also to my fellow
directors for their support.

                                                                   Roger Holland
                                                                 27th March 2002


For the year ended 31st December 2001

                                                                                    2001              2000
                                                                                    £000              £000

Turnover from continuing operations                                             142,356           141,415
Operating costs less other income                                               138,116           134,852

Group operating profit from continuing operations                                 4,240             6,563

     Discontinued operations - share of                                               
       associate's operating profit                                                   -                65
                                                                                  4,240             6,628
Profit on disposal of discontinued operations - associate                             -             2,448

Profit before interest                                                            4,240             9,076
Interest receivable and similar income                                              166               902
Interest payable and similar charges                                               (645)             (824)

Profit on ordinary activities before taxation                                     3,761             9,154
Taxation                                                                          1,093             2,304

Profit on ordinary activities after taxation                                      2,668             6,850
Minority equity interest                                                          1,029               862

Profit attributable to shareholders                                               1,639             5,988
Dividends (ordinary and preference)                                               1,589             1,589

Retained profit for the year                                                         50             4,399

Earnings per ordinary share
Basic                                                                             14.21p            54.55p
Diluted                                                                           14.21p            54.52p

At 31st December 2001

                                                                                      2001              2000
                                                                                      £000              £000
Fixed assets

Intangible assets                                                                    2,700             2,974
Tangible assets                                                                     30,934            30,915
                                                                                    33,634            33,889
Current assets

Stocks                                                                              26,657            24,773
Debtors                                                                             26,584            24,018
Cash at bank and in hand                                                             4,522             9,043
                                                                                    57,763            57,834

Creditors due within one year                                                       29,504            36,528

Net current assets                                                                  28,259            21,306

Total assets less current liabilities                                               61,893            55,195
Creditors due after one year                                                         8,331             1,200
Provisions for liabilities and charges                                               2,126             2,480

                                                                                    51,436            51,515
Capital and reserves

Called-up share capital                                                              2,083             2,083
Share premium account                                                                1,347             1,345
Revaluation reserve                                                                  7,191             7,449
Profit and loss account                                                             39,116            39,087

Shareholders' funds                                                                 49,737            49,964

Equity interests                                                                    48,737            48,964
Non-equity interests                                                                 1,000             1,000

Minority equity interest                                                             1,699             1,551

                                                                                    51,436            51,515

For the year ended 31st December 2001

                                                                           2001                      2000
                                                              £000         £000         £000         £000

Cash flow from operating activities                                      4,661                     8,525

Returns on investment and
servicing of finance                                                    (1,574)                   (1,010)
Taxation                                                                (2,294)                   (2,112)

Capital expenditure                                                     (3,480)                   (2,472)

Acquisition                                                               (614)                   (3,535)

Disposal                                                                     -                     6,143

Equity dividends paid                                                   (1,489)                   (1,456)

Cash (outflow)/inflow before financing                                  (4,790)                    4,083

Financing - issue of shares                                     2                       210

                 -increase/(decrease) in debt                 270                    (1,620)

                                                                           272                    (1,410)

(Decrease)/increase in cash in the period                               (4,518)                    2,673

Notes to Preliminary Results

1.      Divisional analysis of results of continuing operations
        by activity

                                                       Turnover                       Operating

                                                2001          2000             2001             2000
                                                £000          £000             £000             £000

Engineering                                  108,265       106,411             720            2,766
Construction Materials                        34,091        35,004           4,418            4,560
                                             142,356       141,415           5,138            7,326
Central                                            -             -            (898)            (763)
                                             142,356       141,415           4,240            6,563

2.      The Board is recommending a final dividend of 8.50p per ordinary share
(2000:  8.50p) payable on 5th July 2002 to shareholders on the register as at
7th June 2002, which, with the interim dividend of 5.25p (2000:  5.25p), makes
13.75p for the year (2000:  13.75p).

3.      The calculation of the earnings per share is based on Group profit for
the year attributable to ordinary shareholders of £1,539,000 (2000:
£5,888,000), divided by the weighted average number of ordinary shares in issue.
The weighted average number of ordinary shares in issue was 10,829,061 (2000:
10,789,982).  Diluted earnings per share reflecting outstanding share options is
based on 10,829,061 (2000:  10,796,002) ordinary shares, using an average share
price for the year of 304p (2000:  418p).

4.      Copies of the full accounts for the year ended 31st December 2001 will
be posted to shareholders on 23rd April 2002.  The Annual General Meeting will
be held on Thursday 23rd May 2002.

5.      The financial information set out above does not constitute the
company's statutory accounts for the years ended 31st December 2001 or 2000.
The financial information for 2000 is derived from the statutory accounts for
2000 which have been delivered to the Registrar of Companies.  The auditors have
reported on the 2000 accounts; their report was unqualified and did not contain
a statement under section 237(2) or (3) of the Companies Act 1985.  The
statutory accounts for 2001 will be finalised on the basis of the financial
information presented by the directors in this Preliminary Announcement and will
be delivered to the Registrar of Companies following the company's Annual
General Meeting.

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

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