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Universal Salvage (UVS)

  Print      Mail a friend       Annual reports

Tuesday 19 July, 2005

Universal Salvage

Preliminary Results

Universal Salvage PLC
19 July 2005

                             UNIVERSAL SALVAGE PLC

                              PRELIMINARY RESULTS

                       for the 52 weeks to 30 April 2005

                                   Key Points

   • Turnover of £49.7m (2004: £48.4m)

   • Gross margin improved from 18% to 20%

   • Operating loss before exceptional items reduced to £1.1m (2004: £4.0m)

   • Exceptional charges of £1.0m (2004: £5.1m)

   • Profit on fixed asset disposals of £4.5m (2004: nil) - relates to
     property sales

   • Profit before tax of £1.5m (2004: loss before tax of £9.6m)

   • Earnings per share of 3.5p (2004: loss of 29.1p)

   • Business Turnaround Plan commenced:

      - major restructuring undertaken
      - all key financial objectives for the year met

   • Company begins second year of business turnaround financially and
     operationally stronger

      - main focus is now on business development

   • Post year-end, contract secured with Admiral Insurance plc

Chairman, Alexander Foster, commented,

'In my Chairman's Statement in the Group's Annual Report & Accounts for 2004, I
set out a personal goal. That goal was to report to shareholders that Universal
was firmly back on the road to recovery and sustainable profitability by the
time I step down as Chairman later this year.

Twelve months on, I am pleased to report that Universal has made significant
progress in implementing the Business Turnaround Plan. We have delivered on all
of our key financial objectives this year ahead of budget.

We are now proceeding with the second stage, which is to rebuild volumes,
contain costs and return the business to profit. Avril Palmer-Baunack, our new
Managing Director, is building a strong team around her and driving the business
forward with determination and vision. I have great faith that under Avril's
leadership we will reach these objectives.'


Universal Salvage        Avril Palmer-Baunack, Managing Director       T: 020 7448 1000 (today)
                         Andrew Somerville, Finance Director           Thereafter: 01234 762283

Biddicks                 Katie Tzouliadis                              T: 020 7448 1000



In my Chairman's Statement in the Group's Annual Report & Accounts for 2004, I
set out a personal goal. That goal was to report to shareholders that Universal
was firmly back on the road to recovery and sustainable profitability by the
time I step down as Chairman later this year.

Twelve months on, I am pleased to report that Universal has made significant
progress in implementing the Business Turnaround Plan. We have delivered on all
of our key financial objectives this year ahead of budget. While our results
indicate we are in a much improved position, there is still a great deal of work
to be done. The next phase in our return to profitability is winning new
business. I am pleased to report that, after the year-end, we were successful in
securing part of the contract to provide Admiral Insurance Company plc with
salvage management and disposal services.

After the significant improvements we have made over the past year, especially
in reducing operating costs, the business now faces the second phase of the
turnaround with renewed confidence.


Excluding exceptional items, the Group's trading result for the 52 weeks to 30
April 2005, was an operating loss of £1.1 million (2004: loss of £4.0 million)
on turnover of £49.7 million (2004: £48.4 million). During the year, we made a
number of exceptional operating charges as we implemented the Business
Turnaround Plan. These totalled £1.0 million (2004: £5.1 million). Profits on
disposal of fixed assets amounted to £4.5 million (2004: nil), resulting in a
statutory operating profit of £2.5 million (2004: loss of £9.1 million). The
Board is not proposing a final dividend.

During the period under review gross margin increased to 20% from 18% last year,
and basic earnings per share were 3.5 pence (2004: loss per share 29.1 pence).

Net assets increased to £16.1 million (2004: £15.1 million). Net borrowings
decreased to £5.8 million compared to £10.3 million last year, representing
gearing of 36% (2004: 68%).

Business Turnaround

The Board's primary focus at the beginning of the financial year was to
undertake a full commercial, strategic and financial review of the business and
to secure the Group's financial position.

Under the leadership of Nigel Sandy, we entered into discussions with the Royal
Bank of Scotland plc and in July 2004 signed new banking facilities. These
underpinned the Group's finances and allowed us to commence the implementation
of our Business Turnaround Plan. Following this, we focused on the Group's cost
base, which was too high in relation to the throughput of vehicles.

By the end of the first half of the year, we had completed the rationalisation
of the branch network and implemented a number of other important cost saving
measures. Our target for the financial year had been to reduce operating costs
by £2.0 million on an annualised basis and I am pleased to record that this was
achieved ahead of schedule.

In addition, by the middle of the third quarter, we completed the sale of three
properties, which were surplus to our requirements. This resulted in gross cash
proceeds of £6.7 million, which we have used to reduce debt, substantially
improving the Group's balance sheet. At the same time, the disposals will have
no material impact on our future operational capacity.

Whilst operating cost reduction was our primary objective during the year, it is
also important to grow the business base. In the second half, after a careful
selection process, we appointed Avril Palmer-Baunack as Managing Director. Avril
brings considerable knowledge and expertise to the Group, having worked for 18
years in the automotive industry. Moreover, she has substantial experience of
the vehicle salvage sector. Avril is now leading the second phase of business
turnaround in which our main focus will be to increase volumes and return the
business to profit. Universal's core markets are substantial and growing and
there are good prospects to expand our insurance salvage business and take
advantage of opportunities in low-value vehicles and end of life vehicles. We
have also identified opportunities to provide our services to a broader range of
customers, including self-insured fleets operated by major corporations, car
rental companies and accident management companies.

In order to move these initiatives forward more effectively, we are creating a
new sales structure and upgrading and refocusing our sales and marketing
activities. In mid June, we appointed a new Sales Director who will be
responsible for rebuilding Universal's credibility in our core insurance salvage
market as well as establishing new relationships in our other automotive
sectors. We expect to make further new sales appointments in the near future.
There is further scope to improve our operational performance and we will be
focusing on this throughout the year. We are confident that the business can
become more efficient and that we can reduce unit disposal costs. To drive this
forward, at the beginning of July, we have appointed a Chief Operating Officer.

I would like to express the Board's appreciation for the efforts and commitment
of all our staff who have supported the reinvigoration of the Company. I would
especially like to thank Nigel Sandy for all his work before he stepped down
from the Board.


Over the last twelve months, we have achieved all our key financial objectives
in the first stage of turning around the business. However, there is still much
to be done in the coming year. We are now proceeding with the second stage,
which is to rebuild volumes, contain costs and return the business to profit.
Avril is building a strong team around her and driving the business forward with
determination and vision. I have great faith that under Avril's leadership we
will reach these objectives.

Alexander N Foster


Having joined the Board of Universal Salvage plc as Managing Director on 1 March
2005, this report is my first for the Group.


The 52 weeks to 30 April 2005 was the first year in the Business Turnaround Plan
for the Group. The aim of the Plan in its first year was to complete a
comprehensive restructuring of the business so as to establish a firm base on
which to build. We have made major changes over the period and I am pleased to
report that both financially and operationally, we are significantly stronger.
We are therefore beginning the second year of turnaround with considerably
improved prospects, albeit still facing many challenges.


The Group's financial position was secured with new banking facilities in July
2004. With this completed the most important issue for the business was to
realign the cost base, which was unsustainable on existing vehicle volumes.
After a full operational review, we identified savings of approximately £2.0
million on an annualised basis and a key financial objective for the year was to
realise these savings. By the year-end, this had been achieved.

The majority of our cost savings were achieved through site rationalisation and
restructuring the workforce. In addition, the Group made further savings with
other initiatives, such as replacing manned security with CCTV.

In total, as part of our site rationalisation programme, we disposed of three
properties comprising some 20 acres in total and which we considered to be
non-core. The sales included land and buildings adjacent to our main site at
Sandy in Bedfordshire, our commercial vehicle site at Corby, Northamptonshire
and our site at Redbourn, Hertfordshire. The land adjacent to our Sandy site was
surplus to requirements and its residual activities were transferred to our main
Sandy operation. Activity at our Corby commercial site was integrated into our
remaining network and we are also making use of subcontractors. Our Redbourn
site had been earmarked for disposal several years ago and while the necessary
residential planning consents were being obtained, the site had been used
principally for vehicle storage, with most of its activities already having been
transferred to our main Sandy site.

The three properties were sold for a total gross consideration of £6.7m,
significantly in excess of expectations. The individual sale prices achieved
respectively for each property at Sandy, Corby and Redbourn were £1.1 million,
£0.6 million and £5.0 million and the proceeds have been used to reduce the
Group's net debt.

Most importantly, while operating costs have been significantly reduced, the
business remains capable of handling significantly higher vehicle volumes than
we currently process. Our remaining ten sites across England and Scotland
provide us with approximately 180 acres of storage, auction and processing

I am also pleased to report that despite the major upheavals of the past year,
we have maintained the support of our existing customer base. With the new
management team we are currently putting in place, I am confident that over this
year we will continue to do much to restore our credibility and to establish new
relationships both within our core business areas and wider markets.

Business Development

Our overall key Company objective this year and next is to return Universal to
acceptable levels of sustainable profitability and we can only achieve this by
growing vehicle volumes.

The Group's core strengths have been built around our key competencies of
managing the collection, storage and auctioning of 'total loss' vehicles. The
insurance salvage market, which we estimate comprises some 600,000 vehicles per
annum, remains core to our growth strategy. While volumes of insurance vehicles
only grew by 7% over the year, I am pleased to report that after the year-end,
in June 2005 we were awarded a contract with Admiral Insurance Company plc. This
is a new relationship for us and our first major insurance win for some time.
The contract, for an initial twelve month term, is worth an estimated 6,000
units per annum and covers the South of England. We have now identified a target
list of motor insurers for the coming year and are working hard to re-establish

As well as rebuilding our presence in the insurance salvage market, we see
opportunities to grow by diversifying into different channels and by continuing
to widen our customer base.

We have already successfully expanded into fee-based vehicle disposals
(principally low-value, part-exchange cars) and into end of life vehicles. Both
these markets are substantial and we intend to expand our presence in both
sectors. From a relatively low base, we increased fee-based vehicles and end of
life vehicle volumes over the year by 25% and 71% respectively.

Within the end of life vehicle marketplace, we intend to focus our efforts on
local authority and public authority end of life business, which typically offer
longer term contracts. In addition, we intend to market the Group's end of life
vehicle service directly to the general public. Motor manufacturers must
announce their plans for establishing a 'take-back' network for end of life
vehicles by 1 August 2005. At present it is unclear as to what shape the market
will take and we are reviewing opportunities. We are continuing to work with and
act as a point of reference for the Department of Trade and Industry in this
highly legislated area.

I mentioned that we believe there is excellent scope to continue to extend our
customer base and obtain business from a broader range of sources. In
particular, we have identified opportunities to provide our salvage services to
self-insured fleets operated by major corporations, rental companies and
accident management companies. We estimate the self-insured marketplace disposes
of around 400,000 salvage vehicles per annum. By using our insurance contract
model we believe that this market, while disjointed, represents a potentially
exciting new revenue stream for the Group.

The Future

Since I took up the role of Managing Director in early March 2005, my attention
has been firmly focused on the second phase of the Turnaround Plan - business

We have a clear vision of how to grow the business and this needs to be
supported by a more proactive and aggressive sales approach. In early June 2005,
we therefore were delighted to appoint David Turney, a highly experienced Sales
Director with whom I have worked closely in the past. He will be developing a
new sales structure to ensure that we are better positioned to deliver on our
growth objectives.

We also believe that we can achieve further operational efficiencies and run the
business on a day-to-day level more effectively than present. We have therefore
created the new position of Chief Operating Officer and on 1 July appointed
Matthew Briggs to the role. He has substantial experience of both the insurance
and accident management markets. His key task will be to drive efficiency and
productivity improvements within the operations and in line with the business
plan. Neither of these are plc Board appointments.

I firmly believe that Universal Salvage plc remains a very good business with an
attractive service offering. Going forward, we intend to market our strengths
more effectively not only to our traditional motor insurance market but also to
the wider markets that are available to us.

As a Board, we are firmly focused on restoring profits and with the support of
the strengthened management team and the commitment of our staff, I am confident
that we will continue to make progress this year towards our objective.

Avril Palmer-Baunack
Managing Director

For the 52 weeks to 30 April 2005

                                 2005          2005      2005          2004          2004      2004
                               Before   Exceptional                  Before   Exceptional
                          exceptional         items             exceptional         items
                                items                   Total         items                   Total
                    Note        £'000         £'000     £'000         £'000         £'000     £'000
-----------------  ------     ---------     ---------   -------     ---------     ---------   -------
Turnover                       49,695             -    49,695        48,370             -    48,370
Cost of sales                 (39,653)            -   (39,653)      (39,467)          (69)  (39,536)
----------------   ------     ---------     ---------   -------     ---------     ---------   -------
Gross profit                   10,042             -    10,042         8,903           (69)    8,834
expenses                      (11,094)         (969)  (12,063)      (12,867)       (5,085)  (17,952)
----------------   ------     ---------     ---------   -------     ---------     ---------   -------
Operating loss        2        (1,052)         (969)   (2,021)       (3,964)       (5,154)   (9,118)
Profit on
disposals of
fixed assets                        -         4,511     4,511             -             -         -
----------------   ------     ---------     ---------  --------     ---------     ---------  --------
on ordinary
before interest                (1,052)        3,542     2,490        (3,964)       (5,154)   (9,118)
Interest receivable                56             -        56            19             -        19
Interest payable                 (602)         (397)     (999)         (521)            -      (521)
----------------   ------     ---------     ---------  --------     ---------     ---------  --------

on ordinary
before taxation                (1,598)        3,145     1,547        (4,466)       (5,154)   (9,620)
Tax on (profit)
/loss on ordinary
activities                          -          (555)     (555)        1,493             -     1,493
----------------   ------     ---------     ---------  --------     ---------     ---------  --------

on ordinary
after taxation                 (1,598)        2,590       992        (2,973)       (5,154)   (8,127)
Dividends             5                                     -                                  (336)
----------------   ------     ---------     ---------  --------     ---------     ---------  --------

profit/(deficit)                                          992                                (8,463)
----------------   ------     ---------     ---------  --------     ---------     ---------  --------

per Ordinary
    - basic           6                                   3.5p                                (29.1)p
    - diluted         6                                   3.5p                                (29.1)p

Dividends per
Ordinary share        5                                   0.0p                                  1.2p
----------------   ------     ---------     ---------  --------        ---------   ---------  -------

All operations of the Group are continuing throughout both periods and no material operations were
acquired or discontinued.

For the 52 weeks to 30 April 2005

                                                                           2005     2004
                                                                          £'000    £'000
-----------------------------------------------------            --- ----  ------   ------
Profit/(loss) on ordinary activities after taxation
for the period                                                              992   (8,127)
Unrealised surplus on revaluation of properties                               -      199
-----------------------------------------------------            --- ----  ------   ------
Total recognised gains/(losses) since the last
annual report                                                               992   (7,928)
-----------------------------------------------------            --- ----  ------   ------

For the 52 weeks to 30 April 2005
                                                                           2005     2004
                                                                          £'000    £'000
--------------------------------------------------------        --- ----  ------   ------
Reported profit/(loss) on ordinary activities
before taxation                                                           1,547   (9,620)

Realisation of property revaluation gains of
previous years                                                              620        -

Difference between the historical cost depreciation
charge and the actual
depreciation charge for
the period calculated on the revalued amount                                 30       49
--------------------------------------------------------        --- ----  ------   ------
Historical cost profit/(loss) on ordinary
activities before taxation                                                2,197   (9,571)
--------------------------------------------------------        --- ----  ------   ------
--------------------------------------------------------                  ------   ------
Historical cost profit/(deficit) for the period retained 
after taxation, dividends and other appropriations                        1,642   (8,414)
--------------------------------------------------------        --- ----  ------   ------

At 30 April 2005

                                                        2005              2004
                                     Note              £'000             £'000
----------------------------------   ------       ------------       -----------
Fixed assets
Tangible assets                         3             22,339            26,296
----------------------------------   ------       ------------       -----------
                                                      22,339            26,296
----------------------------------   ------       ------------       -----------
Current assets
Stock                                                  2,785             2,100
Debtors                                                3,551             3,552
Cash at bank and in hand               10                 13                12
----------------------------------   ------       ------------       -----------
                                                       6,349             5,664
Creditors: amounts falling due
within one year                                       (6,790)           (6,143)
----------------------------------   ------       ------------       -----------
Net current liabilities                                 (441)             (479)
----------------------------------   ------       ------------       -----------

Total assets less current
liabilities                                           21,898            25,817
Creditors: amounts falling due
after more than one year
                                       10             (5,795)          (10,327)
Provisions for liabilities and
charges                                 4                  -              (379)
----------------------------------   ------       ------------       -----------
Net assets                                            16,103            15,111
----------------------------------   ------       ------------       -----------

Capital and reserves
Called up share capital                                2,826             2,826
Share premium account                                  1,216             1,216
Capital redemption reserve                                30                30
Revaluation reserve                                    4,291             4,941
Profit and loss account                                7,740             6,098
----------------------------------   ------       ------------       -----------
Equity shareholders' funds              7             16,103            15,111
----------------------------------   ------       ------------       -----------

For the 52 weeks to 30 April 2005

                                                            2005         2004
                                               Note        £'000        £'000
---------------------------------------------  ------    ---------    ---------
Net cash outflow from operating activities        8       (1,306)      (1,346)
---------------------------------------------  ------    ---------    ---------

Returns on investments and servicing of
Interest received                                             56           19
Interest paid                                               (604)        (501)
Bank facility fees paid                                     (194)           -
---------------------------------------------  ------    ---------    ---------
Net cash outflow from returns on investments
and servicing of finance                                    (742)        (482)
---------------------------------------------  ------    ---------    ---------

Corporation tax received/(paid)                              350         (362)

Capital expenditure and financial investment
Payments to acquire tangible fixed assets                   (585)        (815)
Receipts from sales of tangible fixed assets               6,816            -
---------------------------------------------  ------    ---------    ---------
                                                           6,231         (815)
---------------------------------------------  ------    ---------    ---------

Equity dividends paid                                          -         (698)
---------------------------------------------  ------    ---------    ---------
Net cash inflow/(outflow) before financing                 4,533       (3,703)
---------------------------------------------  ------    ---------    ---------

Issue of share capital                                         -           80
Capital element of finance lease rental
payments                                                       -           (9)
Bank and other loans (repaid)/drawn-down                  (4,532)       3,633
---------------------------------------------  ------    ---------    ---------
Net cash (outflow)/inflow from financing                  (4,532)       3,704
---------------------------------------------  ------    ---------    ---------

---------------------------------------------  ------    ---------    ---------
Increase in cash                                  9            1            1
---------------------------------------------  ------    ---------    ---------


1. Basis of preparation

The accounting policies adopted are consistent with those in the most recently
published set of financial statements dated 1 May 2004.

2. Operating loss
                                                   52 weeks to    52 weeks to
                                                      30 April          1 May
                                                          2005           2004
                                                         £'000          £'000
                                                       ---------      ---------
Operating loss is stated after charging:

Depreciation of owned fixed assets                       2,307          2,662
Depreciation of assets held under finance leases
and hire purchase contracts                                  -              4

Operating lease rentals                                            
- land and buildings                                       229            223
- plant, machinery and motor vehicles                       95            162
                                                       ---------      ---------
                                                         2,631          3,051
                                                       =========      =========
Exceptional items:
Impairment of owned fixed assets                             -          3,626
Staff costs of reorganising continuing operations          453            596
Third party costs of reorganising continuing
operations                                                 516              -
Costs of renegotiating banking facilities                    -            480
FSA costs                                                    -            347
Legal costs in obtaining outline planning
permission for Redbourn site                                 -            105

                                                       ---------      ---------
                                                           969          5,154
                                                       =========      =========

The Group's borrowings were renegotiated in July 2004. The revised terms are as

   • a bank loan comprising a ten-year facility of £8,000,000 (reduced to
     £5,647,000 in January 2005 following property disposals during the year),
     bearing interest at 1.25% over London Inter Bank Offered Rate (LIBOR);
   • an overdraft comprising a £3,000,000 18-month facility which bears
     interest at 1.25% over the Royal Bank of Scotland plc's base rate; and
   • a bridging loan of £4,000,000 for the period up to and including 30 June
     2005 (repaid in full in December 2004 following property disposals during
     the year), which bears interest at 1.25% over the Royal Bank of Scotland
     plc's base rate.

The bank loan included in these new facilities reduces by £83,333 per month
commencing June 2006, with a final reduction in February 2012.

During the prior period ending 1 May 2004, the Group was subject to an FSA
investigation and these costs comprised the professional fees incurred of
£257,000 and a related fine of £90,000.

3. Fixed assets

All freehold and leasehold land and buildings were valued by DTZ Debenham Tie
Leung, a firm of independent Chartered Surveyors, at 1 May 2004 on the basis of
existing use value in accordance with the Appraisal and Valuation Standards of
The Royal Institution of Chartered Surveyors. The Directors are not aware of any
material change in the valuation of these assets.
These revaluations have been incorporated into the financial statements and the
resulting revaluation adjustments were taken to the revaluation reserve or Group
profit and loss account as appropriate in accordance with FRS15.
Following a review by the Directors of the useful lives of certain IT assets,
the estimated lives of these assets has been reduced. The effect of this change
has been to increase the depreciation charge for the period by £192,000.
No interest was capitalised into fixed assets in the 52 weeks to 30 April 2005
(2004: £nil). The total amount of finance costs included in the cost of fixed
assets is £134,000 (2004: £134,000).
The Group received a grant in prior years as a contribution towards the
development of operating land. The total amount of grant deducted from the cost
of land and buildings is £641,000 (2004: £641,000).

4. Provisions for liabilities and charges

At 1 May 2004                                                              379
Charged/(credited) in the period                                             -
Utilised in the period                                                    (379)
At 30 April 2005                                                             -

5. Dividends
                                                      52 weeks        52 weeks
                                                   to 30 April        to 1 May
                                                          2005            2004
                                                         £'000           £'000
                                                     -----------     -----------
Equity dividends on Ordinary shares:
Interim paid nil (2004: 1.2p)                                -             336
Final proposed nil (2004: nil)                               -               -
                                                     -----------     -----------
                                                             -             336
                                                     -----------     -----------

The Directors are not recommending the payment of a final dividend.

6. Earnings/(loss) per share

Earnings/(loss) per share has been calculated on the profit on ordinary
activities after taxation for the period of £992,000 (2004: loss of £8,127,000)
divided by the weighted average number of Ordinary shares, excluding shares held
by the Universal Salvage plc 2000 Employees' Share Trust, of 28,008,000 (2004:
The diluted earnings per share has been calculated on the profit on ordinary
activities after taxation for the period of £992,000 (2004: loss of £8,127,000)
divided by the weighted average number of Ordinary shares taking into account
all dilutive potential Ordinary shares of 28,171,000 (2004: 27,931,000).

7. Reconciliation of movement in equity shareholders' funds

                                                 52 weeks to      52 weeks to
                                                    30 April            1 May
                                                        2005             2004
                                                     ---------         --------
                                                       £'000            £'000

Opening equity shareholders' funds                    15,111           23,295
Issue of Ordinary share capital                            -               80
Revaluation of properties                                  -              199
Retained profit/(deficit) for the period                 992           (8,463)
                                                     ---------         --------
Closing equity shareholders' funds                    16,103           15,111
                                                     ---------         --------

8. Reconciliation of operating profit to net cash outflow from operating

                                                 52 weeks to 30    52 weeks to
                                                          April          1 May
                                                           2005           2004
                                                          £'000          £'000
                                                      ---------         --------

Operating profit/(loss)                                   2,490         (9,118)
Depreciation of tangible fixed assets                     2,307          2,666
Impairment of tangible fixed assets                           -          3,626
(Profit)/loss on disposal of tangible
fixed assets                                             (4,511)             6
(Increase)/decrease in stock (excluding
transfers between fixed assets and stock)                  (622)           118
Increase in debtors                                        (315)          (421)
(Decrease)/increase in creditors due
within one year                                            (655)         1,777
                                                      ---------         --------

Net cash outflow from operating activities               (1,306)        (1,346)
                                                      ---------         --------

9. Reconciliation of net cash flow to movement in net debt

                                                   52 weeks to    52 weeks to
                                                      30 April          1 May
                                                          2005           2004
                                                         £'000          £'000
                                                       ---------       --------

Increase in cash in period                                   1              1
Cash outflow from decrease in lease and hire
purchase funding                                             -              9
Cash outflow/(inflow) from decrease/(increase) in
bank loans and overdraft                                 4,532         (3,633)
                                                       ---------       --------
Movement in net debt in period                           4,533         (3,623)

Net debt at 1 May 2004                                 (10,315)        (6,692)
                                                       ---------       --------
Net debt at 30 April 2005                               (5,782)       (10,315)
                                                       ---------       --------

10. Analysis of changes in net debt

                                                       As at             As at
                                                    30 April             3 May
                                                        2005              2003
                                                       £'000             £'000
                                                      --------          --------

Cash at bank and in hand                                  13                12
Finance leases                                             -                 -
Bank loans and overdraft                              (5,795)          (10,327)
                                                      --------          --------
                                                      (5,782)          (10,315)
                                                      --------          --------

11. Report and accounts preliminary announcement

The Board of Directors approved the report and accounts and this preliminary
announcement on 18 July 2005. The auditors have completed their audit for the 52
weeks to 30 April 2005 and the preliminary announcement represents an extract
from these audited accounts, upon which the auditors have issued an unqualified
opinion. The report and accounts will be posted to shareholders in September
2005. Further copies can be obtained from the Company's registered office at
Acrey Fields, Woburn Road, Wootton, Bedfordshire MK43 9EJ.

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

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