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Wagon PLC (WAGN)

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Thursday 07 June, 2007

Wagon PLC

Final Results

Wagon PLC
07 June 2007

7 June 2007

                                       Wagon plc

                 Preliminary results for the year ended 31 March 2007

Wagon plc, the European automotive components group, announces its preliminary
results for the year ended 31 March 2007.

Financial summary

Year to 31 March                                            2007           2006

Manufacturing                                            £662.1m        £381.2m
Tooling & Prototypes                                      £47.9m         £33.7m
Engineering Consulting                                        -           £2.3m
Total Sales                                              £710.0m        £417.2m

Underlying operating profit *                             £15.2m         £21.5m
Operating (loss)/profit                                  £(60.1)m        £21.1m
Loss on disposal                                         £(26.4)m        £(0.8)m
Underlying profit before tax *                             £4.2m         £14.7m
(Loss)/profit before tax                                 £(99.4)m        £14.3m
Net debt before preference shares                         £94.6m         £44.1m
Net debt**                                               £108.6m         £58.1m
EPS           - basic                                     (84.8)p         19.9p
              - underlying *                                2.0p          22.2p
Dividend per share                                          5.0p           9.0p

*  Before impairment, restructuring costs loss on disposal of operations and MG
   Rover costs.

** Borrowings less cash and cash equivalents


• A period of intense integration and restructuring activity following
  the acquisition of Oxford Automotive.

• Wagon Management System implemented across the enlarged Group.

• Broader manufacturing footprint being established in low cost

• New business opportunities emerging from the combined capabilities of
  the enlarged business.

• Improvements in operations and wide-ranging cost cutting initiatives
  have delivered results in line with the Board's expectations, despite very
  difficult market conditions.

• Agreed heads of terms for refinancing of lending facilities, to
  December 2008

• Prudent reduction of final dividend to 1p per ordinary share, making
  5p for the year. Future dividends to be rebased on earnings performance,
  targeting cover of two times normalised earnings.

Pierre Vareille, Group Chief Executive, said:

'This has been a very demanding year for the Group, as we have implemented the
necessary programmes to integrate the  Oxford Automotive business, whilst at the
same time facing difficult trading conditions, particularly in France, our
largest market.

'The restructuring programmes are now well into their final phase and the
efficiencies already achieved have enabled us  to mitigate some of the effects
of trading weakness during the year.  The benefits are expected to recover fully
the costs of the restructuring by the end of 2008, as originally anticipated.

'The outlook for European new car registrations remains unclear.  However the
result of the work over the past year is a considerably stronger business,
better positioned to serve the needs of the automotive market in Europe.'

For further information, please contact:

Wagon plc                                                        0121 770 4030

Pierre Vareille, Group Chief Executive
Richard Cotton, Group Finance Director

Hogarth Partnership                                              0207 357 9477

John Olsen
James Longfield

                                   Wagon plc

                Preliminary results for year ended 31 March 2007


Following the acquisition of Oxford Automotive at the very start of the year
under review, this has been a period focussed on integration and the realisation
of the synergies arising from the combination.

Significant restructuring actions have taken place in both our European
Operational Centre and within our plants, and we successfully disposed of five
non strategic plants in December 2006.  The result is a considerably stronger
business, better positioned to serve the needs of the automotive market in

Trading conditions overall proved more difficult than the Company expected.  In
France in particular, currently our largest market, demand was weak, as
previously announced. In light of this the Company has agreed heads of terms for
a refinancing of its lending facilities.

As previously announced, order intake from French OEMs has been weaker this year
partly due to temporary in-sourcing trends, which we believe are now passed. In
mitigation, the impact of this will not be felt for at least two years and will
depend on the extent to which order intake can be made up elsewhere.

Despite these difficult market conditions, the strong improvements in our
operations and the wide-ranging cost cutting initiatives have allowed us to
deliver results in line with our expectations.

Results and dividend

Key figures for the year to 31 March 2007 are as follows:

Year to 31 March                                            2007           2006

Manufacturing                                            £662.1m        £381.2m
Tooling & Prototypes                                      £47.9m         £33.7m
Engineering Consulting                                        -           £2.3m
Total Sales                                              £710.0m        £417.2m

Underlying operating profit *                             £15.2m         £21.5m
Operating (loss)/profit                                  £(60.1)m        £21.1m
Loss on disposal                                         £(26.4)m        £(0.8)m
Underlying profit before tax *                             £4.2m         £14.7m
(Loss)/profit before tax                                 £(99.4)m        £14.3m
Net debt before preference shares                         £94.6m         £44.1m
Net debt**                                               £108.6m         £58.1m
EPS           - basic                                     (84.8)p         19.9p
              - underlying *                                2.0p          22.2p
Dividend per share                                          5.0p           9.0p

*  Before impairment, restructuring costs loss on disposal of operations and MG
   Rover costs.

** Borrowings less cash and cash equivalents

Given the significant effect of the acquisition of Oxford Automotive on 7 April
2006, and the disposal of five plants to Sonas Group (the MBO vehicle formed for
the purpose) on 4 December 2006, a supplementary comparison is given below
(unaudited), showing pro forma positions for 2006 and 2007, representing the
continuing operations of the Group, including Oxford Automotive and excluding
the plants disposed to Sonas in the results for each year.

Year to 31 March (unaudited)                          2007 p/f         2006 p/f

Manufacturing                                          £613.0m          £642.4m
Tooling & Prototypes                                    £45.5m           £73.1m
Engineering Consulting                                      -             £2.3m
Total Sales                                            £658.5m          £717.8m

Underlying operating profit *                           £17.2m           £14.2m
Operating (loss)/profit                                £(58.1)m          £10.2m

Underlying Operating Cash Flow*                         £62.0m           £46.9m
Operating Cash Flow                                     £45.2m           £49.4m

*Before impairment, restructuring costs loss on disposal of operations and MG
 Rover costs.

(In the following narrative, where comparatives are indicated as '2007' or
'2006', those numbers are as per the face of the financial statements; where
indicated as '2007 p/f' or '2006 p/f', they are pro forma numbers (unaudited)
from the table above.)

Pro forma sales from Manufacturing operations were lower at £613.0 million (2006
p/f: £642.4 million) due to reduced volumes, particularly with French OEMs.  Pro
forma sales from Tooling were £45.5 million (2006 p/f: £73.1 million), the
reduction due principally to the completion of major projects in the prior year.
Engineering Consulting reflects the residual prior year sales (2006: £2.3
million) for the Hawtal Whiting business disposed of in August 2005.

At £17.2 million, the pro forma underlying operating profit grew by £3.0 million
following productivity improvements arising from the application of the Wagon
Management System across the enlarged Group, and effective cost management. The
pro forma operating loss of £58.1 million reflects the previously announced
restructuring activity in the Group following the acquisition of Oxford

The loss on disposal of £26.4 million resulted from the sale of the five plants
to Sonas, completed and announced on 5 December 2006.

Net interest charges excluding the preference share dividend and non-recurring
finance costs were £9.5 million (2006: £4.5 million). The preference share
dividend was £1.5 million (2006: £1.5 million), bringing total net
pre-exceptional financing costs to £11.0 million (2006: £6.0 million).

The underlying tax charge was £1.9 million (2006 £4.1 million). With the tax
credit arising from exceptional charges in the year, tax income was £4.2 million
(2006: charge of £4.1 million).

Underlying earnings per ordinary share were 2.0p (2006: 22.2p), and the basic
loss per ordinary share was (84.8)p (2006: basic earnings per ordinary share of

The Group generated a pro forma underlying operating cashflow of £62.0 million
cash (2006: £46.9 million).  The pro forma operating cashflow was £45.2 million
(2006: £49.4 million), reflecting the restructuring cashflow in the year. Pro
forma capital expenditure at £49.6 million was similar to the prior year (2006:
£45.5 million).

Net Debt excluding the preference shares was £94.6 million (2006 £44.1 million).
Total Net Debt increased to £108.6 million (2006: £58.1million) reflecting the
financing of the Group's restructuring actions. As part of a refinancing of
facilities, the Group has agreed heads of terms with its lenders, on facilities
of €247.0 million, to 31 December 2008.  Interest rates and fees have increased
from the previous levels, and the fee structure includes the issue to lenders of
warrants over unissued ordinary shares equivalent to 4.99% of Wagon plc's issued
ordinary share capital.

Given the uncertain market conditions and balancing business opportunities and
operational restructuring commitments, the Board considers it prudent to
recommend a reduced final dividend of 1p per ordinary share, making 5p for the
year, which will be paid on 6 September 2007 to members on the register at close
of business on 10 August 2007. Shareholders will be given the opportunity to
elect for a scrip dividend in lieu of the cash dividend - shareholder approval
for this will be sought at the AGM. In future the company intends to align
dividends more closely to earnings, targeting cover of two times normalised

Operational Review

At the beginning of the year we established our five key priorities for the
year.  We have made significant progress against all of these:

1.  Integrate the Oxford Automotive operations to improve efficiency, and to 
    secure cost savings.

Having adopted a clearly defined new organisational model from the first day
following acquisition, we have run three major reorganisation programmes:

• The Operational Centre integration, completed in December, involved
  the closure of Wagon's former headquarters in Poissy, France and the transfer 
  of its activities to Oxford Automotive's base near Paris.

• The disposal of five low-tonnage stampings plants, also completed in
  December, was an important strategic step.  They operated in a market segment
  non-core to Wagon's new positioning and performed poorly during the first 
  half.  The transaction resulted in a loss on disposal of £26.4 million.

• The plant restructuring programmes, now well into their final stages,
  include the co-location of common production technologies and associated plant
  closures, productivity improvements and the rebalancing of our manufacturing
  footprint.  As part of this process, all of the Ford production was 
  successfully moved to Waldaschaff from Fleurus ahead of the latter's closure.   
  As previously announced, these actions will result in the loss of 
  approximately 900 jobs across the Group.

These actions have enabled the Group to mitigate some of the effects of trading
weakness during the year and the benefits are expected to recover the costs of
the restructuring by the end of 2008, as anticipated at the time of the
announcement of the acquisition of Oxford.

2.   Implement the Wagon Management System across the enlarged company.

We have been very encouraged by our progress in the Wagon Management System
programmes during the year, and in particular with the enthusiasm of engagement
by the former Oxford plants in Safety First and Wagon Excellence.

• In Safety First, a key indicator of overall plant performance, we have
  reduced the Lost Time Accident rate by 36%, and of our 22 plants, 3 achieved 
  at  least 12 months without a Lost Time Accident during the year. Although 
  Wagon has now joined the league of the good performers in our industry, we 
  believe that there are still improvements to be made, to make Wagon a safer 
  and more efficient organisation.

• In Wagon Excellence, our Internal PPM reject rate has declined by 32%,
  and our Value Added per Employee has increased by 4.5%. Our Stock on Sales % 
  has decreased by 9.9 %.

• In Customer Focus, our customer quality measure - External PPM rejects
  - has reduced by 48%, and customer claims by 8%.

All of our plants, save for the newest in Shanghai (China), now have third party
accreditations under ISO14001 (environmental systems), ISOTS16949-ISO 9001
(quality systems) and OHSAS18001 (safety systems).

3.   Establish a broader manufacturing footprint, particularly in low cost

We have opened three new plants this year:  in Atessa (Italy), producing body
structure parts for the Ducato van for the Fiat / PSA joint venture; in Orense
(Spain) producing the sun visor and glass roof systems for the new Citroen Xsara
Picasso;  and in Shanghai (China) where we have started production for Hyundai,
and where our Oleo business is also now producing lift buffers.

In addition, as part of our restructuring programme and our development in low
cost countries, we have established expertise in roll-forming and assembly at
our plant in Bursa (Turkey), and we are establishing an assembly plant in
Romania to serve our Innovative Solutions and Closure Systems businesses.  We
have also accelerated the transfer of some programmes to our plant in Turkey,
particularly from our plant in Brownhills (UK).

4.   Leverage our customer base to further develop and enhance existing

The combined capabilities of the enlarged business enable us to provide new
product lines.  In particular, we hold leading positions in several areas such
as sliding door rails and mechanisms and structural roll-profiled products. We
are also pursuing promising opportunities with those European OEMs with whom we
were not previously working, particularly in Germany.

As already announced order intake from French OEMs has been weaker this year
partly due to temporary in-sourcing trends, which we believe are now passed. The
lifetime turnover value of the orders booked in the year represents 77% of the
manufacturing turnover of the continuing business (2006: 111%). In mitigation,
the impact of this weaker intake will not be felt for at least two years and
will depend on the extent to which order intake can be made up elsewhere.

Among significant programme wins for the Closure Systems Business Group were the
front bumper assembly on the Peugeot T8 (PSA MPV), the sliding door mechanisms
and rails for the Ford Fusion, and door frames on the X35X (GM Epsilon II).

In Body Structures, the most significant success has been securing the Peugeot
T76 programme, which will replace the existing T56 (PSA 307cc) in 2008. This
secures the future of the Fontaine plant, and addresses all of the associated
legacy issues. Significant work was also won for the W62 (Renault Master).

5.   Continue new  product and new market development for the Innovative
     Solutions Business Group.

The primary focus has been on the commissioning of the two new plants in Orense
and Shanghai, and on a number of new programme start-ups.  Sales of the
innovative patented flush bay windows, currently being produced in Shanghai for
the Hyundai Starex, should develop rapidly in the years to come. The integration
of FKT following its acquisition in December 2005 has enabled us to offer our
existing products to the German market and we have started the development of a
new concept for glass roofs, which we expect to be well received amongst both
French and German OEMs.

2007/8 Priorities

Following this transformational year, we will seek to build on the solid
foundations of the enlarged and restructured Group with the following agenda of

1.  Consolidate the extensive step changes to reap the full benefits of our
    reorganisation programme

2.  Further embed the Wagon Management System (and particularly Safety
    First) across the enlarged company

3.  Develop our innovation capabilities to augment our offer, and enhance
    our relationship with our customers

4.  Examine and pursue de-leveraging opportunities

5.  Look for a new step change in our footprint and continue to develop our
    presence in low cost countries.

Current Trading and Outlook

Trading volumes since the start of the new financial year are in line with the
Board's expectations, and as previously announced, current market pressures on
raw material pricing are expected to have only a marginal effect on our

The outlook for European new car registrations remains unclear, particularly in
France, our largest market. However, we start the current year a stronger
company having integrated the two businesses, and harnessed the administrative
synergies arising from the combination.

We have progressed a long way in the rearrangement of the combined manufacturing
resources, to provide an organisation better sized and structured to serve our
markets. In the current year we expect to see the previously announced benefits
from restructuring programmes materialising in earnings improvements.

Pierre Vareille

Chief Executive

7 June 2007

Consolidated Income Statement   for the year ended 31 March 2007

                                          2007                                    2006
                            Underlying       Restructuring        Total   Underlying     MG Rover    Total
                                            and Impairment                          related costs
                                   £m                   £m           £m           £m           £m       £m


Revenue             1           710.0                    -        710.0        417.2            -    417.2
                             --------             --------     --------     --------     -------- --------
Operating       1,2,3            15.2               (75.3)       (60.1)         21.5        (0.4)     21.1

Loss on             
disposal of                  
operations          4               -               (26.4)       (26.4)        (0.8)                 (0.8)
                             --------             --------     --------     --------     -------- --------
costs                            15.2              (101.7)       (86.5)         20.7         (0.4)    20.3

income              5             7.3                   -           7.3          7.5             -     7.5
expense             5          (18.3)               (1.9)        (20.2)       (13.5)             -  (13.5)
                             --------            --------      --------     --------      -------- --------
Net financing                  
costs                          (11.0)               (1.9)        (12.9)        (6.0)             -   (6.0)
                             --------             --------     --------     --------      -------- --------
before tax                        4.2             (103.6)        (99.4)         14.7         (0.4)    14.3

Income tax                      
credit /(expense)               (1.9)                 6.1           4.2        (4.1)             -   (4.1)     
                             --------             --------     --------     --------      -------- --------
for the                      
financial year
attributable to equity
holders of the parent             2.3              (97.5)        (95.2)         10.6         (0.4)    10.2
                             ========             ========     ========     ========      ========  ========
Equity              6
- equity dividends
recognised (£m)                                                    7.1                                  4.6
- paid dividends per share                                        9.0p                                 9.0p
- proposed dividends per     
share                                                               1p                                 5.0p
                             ========             ========     ========     ========      ========  ========
Earnings per        7
- basic                                                        (84.8)p                                19.9p
- diluted                                                      (84.8)p                                19.5p
                             ========             ========     ========     ========      ========  ========

The tax credit recognised in the financial statements for the year ended 31
March 2007 is comprised entirely of non-UK charges.

Consolidated Statement of Recognised Income and Expense

for the year ended 31 March 2007

                                                          2007            2006
                                                            £m              £m

Foreign exchange translation differences                 (7.5)             0.9
Net gain on hedge of net investment in foreign           (0.8)             1.2
Cash flow hedges: effective portion of changes           (0.3)            (0.1)
in fair value
Actuarial gains on defined benefit pension                2.9              5.8
schemes                                         ---------------  ---------------
Net (loss)/income recognised directly in                 (5.7)             7.8

(Loss)/profit for the year                              (95.2)            10.2
                                                ---------------  ---------------
Total recognised income and expense for the            (100.9)            18.0
financial year attributable to equity holders   ---------------  ===============
of the parent

There is no tax effect relating to any of the above items, with the exception of
the (loss)/profit for the year as set out in the Income Statement.

Consolidated Balance Sheet   for the year ended 31 March 2007

                                                            2007          2006
                                                              £m            £m

Non-current assets
Property, plant and equipment                              189.4         137.3
Intangible assets                                          147.6          55.6
Deferred tax assets                                          9.1           0.8
Trade and other receivables                                  6.1             -
                                                      ------------  ------------
                                                           352.2         193.7

Current assets
Inventories                                                 59.0          33.7
Income tax receivable                                        6.9           5.5
Financial assets                                             0.8           1.1
Trade and other receivables                                196.0         120.5
Cash and cash equivalents                                   68.5          38.3
                                                      ------------  ------------
                                                           331.2         199.1
                                                      ------------  ------------
Total assets                                               683.4         392.8
                                                      ------------  ------------

Current liabilities
Borrowings                                                  (6.3)         (2.7)
Trade and other payables                                  (249.8)       (159.2)
Financial liabilities                                       (2.1)         (2.2)
Employee benefits                                           (3.9)         (4.0)
Income tax payable                                          (8.3)         (7.6)
Provisions                                                 (49.4)            -
                                                      ------------  ------------
                                                          (319.8)       (175.7)
                                                      ------------  ------------

Non-current liabilities
Borrowings                                                (170.8)        (93.7)
Trade and other payables                                    (1.8)         (1.7)
Employee benefits                                          (26.2)        (26.7)
Income tax payable                                          (3.2)            -
Deferred tax liabilities                                    (3.8)         (7.1)
Provisions                                                 (23.6)            -
                                                      ------------  ------------
                                                          (229.4)       (129.2)
                                                      ------------  ------------
Total liabilities                                         (549.2)       (304.9)
                                                      ------------  ------------
                                                      ------------  ------------
Net assets                                                 134.2          87.9
                                                      ------------  ------------

Issued capital                                              28.8          13.2
Share premium account                                       18.0          17.7
Other reserves                                             126.6          (3.1)
Retained earnings                                          (39.2)         60.1
                                                      ------------  ------------
Total equity attributable to equity holders of the         134.2          87.9
parent                                                ------------  ------------

Approved and signed on behalf of the Board on 7 June 2007

Chris Clark

Richard Cotton

Consolidated Cash Flow Statement   for the year ended 31 March 2007

                                                              2007        2006
                                                                £m          £m

Cash flows from operating activities
(Loss)/profit for the period                                (95.2)        10.2
Impairment of fixed assets                                    9.3            -
Depreciation and amortisation                                36.5         28.1
Loss on sale of property, plant and equipment                 6.3          0.3
Loss on disposal of intangible assets                         3.9            -
Loss on disposal of businesses                               26.4          0.8
Net financial expense                                        12.9          6.0
Income tax (income)/expense                                  (4.2)         4.1
Exchange and other non cash movements                         0.9         (0.3)
                                                        -----------  -----------
Operating (loss)/profit before changes in working            (3.2)        49.2
capital and provisions

(Increase)/decrease in non-tooling inventories               (4.8)         3.6
Increase in tooling inventories                             (21.5)        (9.1)
Decrease/(increase) in trade and other receivables            2.8         (4.6)
Increase/(decrease) in provisions and employee               32.3         (2.9)
Decrease in trade and other payables                        (14.4)        (5.2)
                                                        -----------  -----------
Cash (used in)/generated by operations                       (8.8)        31.0

Income taxes received/(paid)                                  4.9         (5.9)
                                                        -----------  -----------
Net cash (used in) / generated by operating                  (3.9)        25.1

Cash flows from investing activities
Proceeds from  sale of property, plant and equipment         15.1          4.5
Interest received                                             0.9          1.9
Disposal of businesses                                       (6.1)         0.1
Acquisition of subsidiary, net of cash acquired              53.9         (4.5)
Acquisition of property, plant and equipment                (45.0)       (25.3)
Investment in intangibles                                    (4.6)        (4.2)
                                                        -----------  -----------
Net cash (used in) / generated by investing                  14.2        (27.5)

Cash flows from financing activities
Proceeds from increased bank borrowings                      80.1         12.0
Repayment of bank borrowings                                (44.6)           -
Payment of finance lease liabilities                         (1.5)        (0.6)
Interest paid                                                (8.0)        (7.2)
Equity dividends paid                                        (7.1)        (4.6)
Proceeds from the issue of ordinary share capital             0.3          0.1
                                                        -----------  -----------
Net cash (used in) / generated by financing                  19.2         (0.3)

Net increase/(decrease) in cash and cash equivalents         29.5         (2.7)
Cash and cash equivalents at 1 April                         37.7         40.0
Effect of foreign exchange rate changes                      (2.8)         0.4
                                                        -----------  -----------
Cash and cash equivalents at 31 March                        64.4         37.7
                                                        ===========  ===========

1.   Segment reporting

Segment information is presented in respect of the Group's business and
geographical segments. The primary format, business segments, is based on the
Group's management and internal reporting structure.

Inter-segment pricing is determined on an arm's length basis.

Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to
acquire segment assets that are expected to be used for more than one period.
This includes tangible fixed asset additions, software additions and capitalised
development cost additions.

Business segments

The Group is split into the Automotive and Other sectors for business segment
analysis. Pending the completion of the disposal of the low-tonnage plants to
Sonas, the businesses in question had been classified for the interim results at
30 September 2006 as assets held for sale. The disposal having been subsequently
completed, the businesses have been disclosed separately in the business segment
information. They were previously included in the Automotive segment.

Geographical segments

The Group operates in two main geographical areas being the UK and mainland
Europe. In mainland Europe manufacturing facilities and engineering departments
are located in France, Germany, Italy, Belgium, Czech Republic, Spain and

In presenting information on the basis of geographical segments, segment revenue
is based on the geographical location of customers. Segment assets are based on
the geographical location of the assets.

The geographical segment information presented excludes the plants disposed of
to Sonas.

1.   Segment reporting (continued)

a)   Business segments

                    Automotive      Other operations  Automotive and    Sonas plants       Consolidated
                  2007      2006    2007    2006      2007      2006    2007     2006      2007      2006
                    £m        £m      £m      £m        £m        £m      £m       £m        £m        £m

revenue          642.3     310.6    16.4    15.0     658.7     325.6    51.3     91.6     710.0     417.2
                ------   -------  ------  ------   -------    ------  ------   ------   -------    ------

profit before
items             14.5      14.9     2.7     2.8      17.2      17.7    (2.0)     4.1      15.2      21.8
costs            (65.8)        -    (0.2)      -     (66.0)        -       -        -     (66.0)        -
Impairment        (9.3)        -       -       -      (9.3)        -       -        -      (9.3)        -
MG Rover             
costs                -         -       -       -         -         -       -     (0.4)        -      (0.4)
                ------   -------  ------  ------   -------    ------  ------   ------   -------    ------
Unallocated                                                                                   -      (0.3)
expenses         (60.6)     14.9     2.5     2.8     (58.1)     17.7    (2.0)     3.7     (60.1)     21.4
                ------   -------  ------  ------   -------    ------  ------   ------   -------    ------
profit                                                                                    (60.1)     21.1
Loss on              
disposal of     
operations           -      (0.8)      -       -         -      (0.8)  (26.4)       -     (26.4)     (0.8)
                ------   -------  ------  ------   -------    ------  ------   ------   -------    ------
costs                                                                                     (86.5)     20.3
Net financing                                                                             
costs                                                                                     (12.9)     (6.0)
                                                                                          -------   ------
before tax                                                                                (99.4)     14.3
Taxation                                                                                    4.2      (4.1)
                                                                                          -------   ------
for the                                                                                   
period                                                                                    (95.2)     10.2
                                                                                          =======   ======
Assets           650.4     322.9    15.3     5.6     665.7     328.5       -     55.2     665.7     383.7
assets                                                                                     17.7       9.1
                                                                                          -------   ------
Total assets                                                                              683.4     392.8
                                                                                          =======   ======

Segment         (354.0)   (133.9)   (2.0)   (2.1)   (356.0)   (136.0)      -    (28.2)   (356.0)   (164.2)
Unallocated                                                                              (193.2)   (140.7)
liabilities                                                                              -------    ------
Total                                                                                    (549.2)   (304.9)
liabilities                                                                              =======    ======
Segment           57.6      28.8     0.6     0.1      58.2      28.9     0.7      0.9      58.9      29.8
capital                                                                                  -------    ------
Total capital                                                                              58.9      29.8
expenditure                                                                              =======    ======

amortisation      35.9      24.8     0.4     0.4      36.3      25.2       -      2.7      36.3      27.9
amortisation                                                                                0.2       0.2
                                                                                         -------    ------
Total                                                                                      36.5      28.1
depreciation                                                                             =======    ======

Inter-segment sales from the Sonas plants to Automotive were at £11.3 million in
2007 (2006: £17.6 million)

b)   Geographical segments

                      UK         Mainland Europe    Other regions   Consolidated

                2007     2006     2007     2006    2007    2006     2007     2006
                  £m       £m       £m       £m      £m      £m       £m       £m

Total           43.2     30.7    598.1    280.9    17.4    14.0    658.7    325.6
revenue       ------   ------   ------  -------  ------  ------   ------   ------

Segment         61.2     32.9    619.3    298.6     2.9     6.1    683.4    337.6
assets        ------   ------   ------  -------  ------  ------   ------   ------

Segment       (215.1)  (122.1)  (333.1)  (151.4)   (1.0)   (3.2)  (549.2)  (276.7)
liabilities   ------   ------   ------  -------  ------  ------   ------   ------

Capital          3.0      2.3     54.9     26.5     1.0     0.1     58.9     28.9
expenditure   ------   ------   ------  -------  ------  ------   ------   ------

Sales from the Sonas plants in 2007 were £10.9 million in the UK and £40.4
million in mainland Europe (2006: £18.1 million and £73.5 million respectively).

2.   Operating Profit

                    -------------------                    --------------------
                                 2007                                    2006
                    Underlying Restructuring  Total Underlying  MG Rover  Total
                                   and                          related 
                                Impairment                       costs
                            £m        £m       £m        £m        £m       £m

Revenue                 710.0          -    710.0     417.2         -    417.2
Cost of Sales          (583.4)     (60.2)  (643.6)   (328.2)        -   (328.2)
                        -------  ---------  -------  --------  --------  -------
Gross profit/(loss)     126.6      (60.2)    66.4      89.0         -     89.0

Distribution            (14.1)         -    (14.1)     (9.6)        -     (9.6)
Administrative          (97.3)     (15.1)  (112.4)    (57.9)     (0.4)   (58.3)
expenses                -------  ---------  -------  --------  --------  -------
Operating profit/        15.2      (75.3)   (60.1)     21.5      (0.4)    21.1
(loss)                  =======  =========  =======  ========  ========  =======

Net foreign exchange losses in operating profit were £0.2 million (2006: £0.1

3.   Restructuring, impairment and MG Rover costs

                                                             2007         2006
                                                               £m           £m

Restructuring costs                                       (66.0)             -
Impairment                                                 (9.3)             -
MG Rover related costs                                        -           (0.4)
                                                         --------       --------
                                                          (75.3)          (0.4)
                                                         ========       ========

Following the acquisition of Oxford Automotive in April 2006, Wagon launched a
comprehensive restructuring programme encompassing a series of integration
initiatives, the analysis of the enlarged Group manufacturing footprint and the
synergies to be obtained by combining the two former French Operational Centres.
As a result, restructuring costs of £15.1 million were recorded in
administrative expenses related to the co-location of the French headquarters
and other headquarter-related integration costs, and £50.9 million related to
the industrial restructuring involving production transfers between sites and
headcount rationalisation. As previously announced, the Group restructuring when
completed will see its headcount reduced by around 900 employees in total.

Included in the above charge is £14.2 million relating to the Fleurus plant.
The loss-making Fleurus plant has seen its largest production of door components
for Ford Cologne (Germany) transferred to the Group's Waldaschaff site between
October 2006 and January 2007. Following this transfer, the Fleurus headcount
has been reduced by more than half and its remaining assets written-off. The
site will continue to operate for smaller productions for Ford Belgium and
Renault France until its complete closure in mid-2008.


Based on current projections, the estimated future cash flows, discounted at 10%
being the Group's weighted average cost of capital, of the Fontaine (France)
site show a deficit when compared to the carrying value of the site's assets.
The resulting impairment has been recognised in full.

MG Rover related costs

Following the demise of MG Rover in 2005 provisions were made for debts and
stocks and impairment of relevant assets and tooling. During the year to 31
March 2006 further costs of £0.4 million were incurred in relation to
redundancies and supplier claims.

4.   Loss on disposal of operations

                                                           2007           2006
                                                             £m             £m

Loss on disposal of operations                            (26.4)          (0.8)
                                                        --------       --------


In the year ended 31 March 2007, as part of its restructuring programme, the
Group divested five low-tonnage stamping plants in France (Beaucourt, Bessines
and La Souterraine) and the UK (Tyseley and Wantage) to Sonas. The prospect of
this was announced in the financial statements to the year ended 31 March 2006,
and generated a loss on disposal of £ 26.4 million.

Due to this management decision the values of the assets and liabilities of the
plants were redeemed through the sale proceeds rather than continued use in the
business. As a result the assets and liabilities in relation to these plants
were reclassified as assets and liabilities held for sale in the balance sheet
as reported in the Interim Report 2007. All depreciation and amortisation in
relation to these assets was halted and the value of these assets and
liabilities was adjusted to their fair value less costs to sell based on the
proposed disposal.

The loss on disposal includes £2.0 million of deferred consideration recognised
under the terms of the sale. Separately under the terms of the agreement, the
Group has provided a loan of £6.1m to the buyer. This is recoverable over the
period to September 2009 and incurs interest at between 4 and 5 percent over


The loss on disposal of operations of £0.8 million in the year ended 31 March
2006 related to the sale or closure of two machine and tool building facilities
in France at a loss of £0.5 million and a loss of £0.3 million on the sale of
the US engineering consulting business.

5.   Net financing costs

                                          2007                            2006
                        Underlying     Restructuring        Total        Total
                                      and Impairment
                                £m                £m           £m           £m

Financial income              7.3                  -          7.3          7.5
Financial expenses          (18.3)              (1.9)       (20.2)       (13.5)
                           --------        -----------      -------      -------
Net financing costs         (11.0)              (1.9)       (12.9)        (6.0)
                           --------        -----------      -------      -------

£1.9m of non-recurring finance charges were incurred in the year.

6.   Dividends

The following dividends were paid in the year

Equity                                                       2007        2006

Interim dividends paid                                       9.0p         4.0p
Prior year final dividends paid                                -          5.0p
                                              Total          9.0p         9.0p

The proposed final dividend in 2007 and the second interim dividend in 2006 were
proposed after the financial year end, and as such have not been provided for in
the financial statements and there were no income tax consequences.  The
proposed dividend relating to the year ended 31 March 2007 is £5.8 million, 5p
per ordinary share (2006: second interim dividend £2.6 million, 5.0p per share).

The dividend on the convertible participating preference shares of £1.5 million
paid in the year is classified as a financial expense.

7.   Earnings per share

Earnings per share have been calculated as follows:

                                                             2007         2006
                                                               £m           £m

(Loss)/profit before taxation                              (99.4)         14.3
Taxation                                                     4.2          (4.1)
                                                         ---------     ---------
Basic earnings                                             (95.2)         10.2

Restructuring costs and impairment                          75.3             -
MG Rover costs                                                 -           0.4
Loss on disposal of operations                              26.4           0.8
Restructuring finance costs                                  1.9             -
Taxation effect of restructuring, impairment and            (6.1)            -
disposal                                                 ---------     ---------
Underlying profit after taxation                             2.3          11.4
                                                         ---------     ---------

Weighted average number of shares in issue           112,328,817    51,648,661

Earnings per share - basic                                 (84.8)p        19.9p

Restructuring costs and impairment                          67.0p            -
MG Rover costs                                                 -           0.8p
Loss on disposal of operations                              23.5p          1.5p
Restructuring finance costs                                  1.7p            -
Taxation effect of restructuring, impairment and            (5.4)p           -
disposal                                                 ---------     ---------
Earnings per share - underlying                              2.0p         22.2p
                                                         =========     =========

Underlying earnings per share is considered by the directors to represent a more
consistent measure of year on year operating performance.

The weighted average number of ordinary shares in issue during the year excludes
those held by The Wagon Employees' Share Trust which are deemed to be cancelled
on the basis that the right to dividends has been waived.

7.   Earnings per share (continued)

After adjusting for the potentially dilutive effect of ordinary shares
exercisable under the Company's share option schemes, and the potentially
dilutive effect of convertible preference shares, the diluted earnings per share
amounts to (84.8)p (2006: 19.5p) based on an adjusted weighted average number of
ordinary shares in issue of 113,329,977 (2006: 52,501,432).

Weighted average number of ordinary shares in issue     2007              2006
                                                      Number            Number

Basic                                            112,328,817        51,648,661
Employee share options                             1,001,160           852,771
                                                     ---------         ---------

Adjusted                                         113,329,977        52,501,432
                                                     =========         =========

8.   Statement of compliance

The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) and interpretations issued
by the International Accounting Standards Board (IASB) and adopted by the
European Union ('adopted IFRSs').

9.   Basis of preparation

The financial statements are prepared in pounds sterling, rounded to the nearest
million. The financial statements are prepared on the historical cost basis
except that derivative financial instruments are stated at their fair value.

The preparation of financial statements in conformity with adopted IFRSs
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form a basis of making
the judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these

The estimates and underlying assumptions are reviewed on a regular basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of revision and future periods if the revision affects both current and future

Judgements made by management in the application of IFRSs that have significant
effect on the financial statements are limited to the estimates used to
calculate the value in use of various assets within impairment reviews and
recognition of deferred tax assets.

The balance sheet of the prior year has been restated.  Borrowings (current and
non-current) were previously classified based on the timing of the next
repricing; they have been restated to be presented based on the maturity date of
the borrowings.

The financial information in this preliminary announcement is extracted from the
company's consolidated financial statements for the year ended 31 March 2007 and
2006. The 2007 annual report and financial statements will be available on the
company's website: in early July and can, together with the
2006 annual report, be obtained from the Company Secretary, Wagon plc, 1st
Floor, 3500 Parkside, Birmingham Business Park, Birmingham B37 7YG.

The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2007 or 2006. Statutory accounts
for 2006, have been delivered to the registrar of companies, and those for 2007,
prepared under accounting standards adopted by the EU, will be delivered in due
course. The auditors have reported on these accounts and their reports were i)
unqualified, ii) did not include any references to any matters to which the
auditors drew attention by way of emphasis without qualifying their reports, and
iii) did not contain statements under section 237 (2) or (3) of the Companies
Act 1985.

This preliminary announcement of results for the year ended 31 March 2007 was
approved by the directors on 7 June 2007.

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

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