Final Results

RNS Number:8338L
Burtonwood Brewery PLC
03 June 2003


Burtonwood Brewery PLC announces its preliminary results for the year ending 29
March 2003.


                                   Highlights

                          March 2003    March 2002                           %
                                 #000          #000

Group operating profit:
Reported                        9,800         9,378
----------------                -------       -------       --------------
Underlying (i)                 11,197         9,578           Up 16.9
----------------                -------       -------       --------------

Profit before tax:
Reported                        5,638         7,678
----------------                -------       -------       --------------
Underlying (ii)                 9,265         8,077           Up 14.7
----------------                -------       -------       --------------

Earnings per share
Basic                            14.7p         26.5p
----------------                -------       -------       --------------
Underlying (iii)                 30.7p         26.3p          Up 16.7
----------------                -------       -------       --------------
Dividend per share               9.50p         8.85p           Up 7.3
----------------                -------       ------- ------------------------
Group operating margin           23.4%         20.0%  Up 3.4 percentage points
(i)                             -------       ------- ------------------------
----------------


      (i) Excluding amortisation of goodwill and impairment of properties.

(ii) Excluding amortisation of goodwill, impairment of properties and loss on
sale of fixed assets.
(iii) Excluding amortisation of goodwill, impairment of properties, loss on sale
of fixed assets and prior year tax credits.


The underlying results are included above to provide an indication of the trend
in profitability excluding the impact of items not directly related to the
year's trading.


* Underlying group operating profit up 16.9%

* Underlying profit before tax up 14.7%

* Acquisition of freehold interest in 94 of our tenanted pubs for #16.9 m

* Beer volumes up in the tenanted estate

* Sale of our poorest performing pubs after the year end

A presentation for analysts will be held today in the city. For invitations,
contact Deborah Walter or Jo Godfrey at Gavin Anderson & Co on 0207 554 1400.
For further information please contact:-

Lynne D'Arcy                Managing Director            01925 225131
Nigel Wimpenny              Finance Director             01925 225131
Charles Tattersall          City Press                   0161 606 0260



                              Chairman's statement


I believe that we have achieved more this year than in any other. We acquired
the freehold interest in 94 of our pubs, produced organic profit growth in both
pub divisions and negotiated the sale of our poorest performing pubs, which were
sold after the year end.

Results and dividend

Reported profit before tax was #5.6 million. Underlying profit before tax before
charging for the amortisation of goodwill, impairment of properties and loss on
sale of fixed assets, rose by 14.7% to #9.3 m. Underlying earnings per share
improved by 16.7% to 30.7 pence and have now grown by a compound rate of 14%
over the last 4 years. Underlying profits rose in both pub divisions,
particularly the tenanted estate which recorded a 13% increase and we reduced
central costs by 4%. We are proposing a final dividend of 6.5 pence per share,
producing a total dividend for the year of 9.5 pence - up 7.3%. The final
dividend, if approved, will be paid on 5 August 2003 to shareholders registered
at the close of the business on 11 July 2003.

Acquisition

In July 2002 we completed the acquisition of JER UK Public House LLC, a company
incorporated in the state of Delaware, USA which owned the freehold interest in
94 pubs that were being leased by Burtonwood. The acquisition replaced rental
charges, which were subject to upward only review, with interest on a new loan,
and was therefore immediately earnings enhancing. This is consistent with our
strategy of owning the majority of our pubs on a freehold basis: less than 5% of
our estate is now held on short lease. This policy gives us greater operating
flexibility and reduces the earnings volatility caused by high fixed costs. We
can also benefit from future increases in property values. To finance the
acquisition, the company has taken out a bank loan of #17 m.

Estate management

We improve the quality of our pub estate by investment in renovation and new
facilities, selective acquisition and the disposal of those pubs which fail to
achieve satisfactory returns. During the year we carried out 52 investments in
our estate and we acquired 6 new pubs - 4 tenancies and 2 managed houses. On 2
June 2003 we disposed of a package of low volume, poor performing tenanted pubs
for #2.6 m; although this was #2.1 m below book value, the disposal was earnings
enhancing because their contribution was negligible. This loss has been provided
in these accounts. During the year we disposed of 13 other sites which we
believed had no future in the estate: these houses realised #1.4 m, slightly
below their book value.

Revaluation

An interim revaluation of freehold and long leasehold properties was carried out
as at 29 March 2003 by Gillman Jones, Chartered Surveyors and produced a
valuation slightly below book value. The valuation does not include a lotting
premium. The revaluation has been adopted into the accounts.

People

Tony Biddle, who left the company in October after 5 years as property director,
has not been replaced. Instead we have recruited a dedicated site acquisition
manager and in Bill Cran, a non executive director, we have a wealth of
experience in commercial property matters.

It has been another successful year and I would like to thank all our staff and
licensees for their contribution.

Prospects

Our strategy of developing and adding to our estate of mainly freehold community
and rural tenanted pubs is proving successful. While we retain a nucleus of
profitable, non themed managed houses, we are not exposed to the high street
branded pub sector which has been afflicted by over supply and quickly changing
consumer tastes.

Trading since the year end has been in line with expectations. We will maintain
our competitiveness by offering customers attractive pubs, run by suitable, well
trained and motivated licensees. We will continue to drive as much profit as we
can from our existing assets, while using our financial fire power to make
further acquisitions.

Richard Gilchrist
Chairman
3 June 2003



                    Managing director's review of operations


This has been a very successful year. We have again produced strong trading
results, in both divisions and by increasing volumes in the tenanted pub estate
we have bucked the trend and gained market share. We have completed the
acquisition of the freehold interest in 94 pubs which we had previously operated
under short lease. Due to its size this was a Class One transaction and required
shareholder approval. We have continued to upgrade our pubs through
refurbishment and rolling maintenance; and we have negotiated the disposal of
the bottom end of our tenanted estate in terms of volume and profit
contribution.

I am pleased to report that Group operating profit, before the amortisation of
goodwill and impairment of properties rose by 16.9% to #11.2 m.

Managed pubs

Our larger and more profitable pubs are operated under direct management and
control. We ended the year with 36 sites, having made 2 acquisitions and a
disposal. Turnover rose by 1.9% to #15.0 m and underlying operating profit by
3.1% to

#3.0 m. Underlying operating margin increased to 20% despite the increasing
costs of insurance, labour and red tape. Our managed houses are able to absorb
these costs because we do not have to discount retail prices to maintain trade
in the sector in which we operate. We continuously seek more efficient ways of
doing business and our labour costs - at 22% of turnover - reflect this.

We acquired 2 high turnover sites adjacent to the student campuses at Salford
University and the University of North Wales (Bangor). Both pubs are performing
well and turnover in this type of outlet is sustainable. Our managed houses are
not particularly capital intensive: #0.4 m was spent on 9 refurbishments costing
between #20,000 and #50,000. Selective investment at this level can have a
significant positive effect, for example: sales at the Hoghton Arms at Withnell,
near Chorley have increased from #7,000 to #9,000 per week after a #40,000
project, which included new decor throughout and the launch of a new food menu.
We surrendered a short leasehold interest in an unprofitable pub in the centre
of Chester; this is consistent with our strategy of avoiding the town centre,
themed bar sector and owning the freeholds of our pubs.

Around 200 managers and pub staff - over one third of the total - attended
training courses during the year, which covered a range of relevant topics such
as beer and cellar management, food hygiene and assertiveness and influencing
skills. As well as training our staff, we promote the business to our target
market; food and drink offers linked to sporting events shown on big screen TV's
have helped to increase like for like sales by 1%.

Average contribution per site rose to #120,000; this was reflected in an uplift
in the valuation of the managed estate at the year end.

Tenanted pubs

Beer volumes increased over last year in an estate of roughly the same number of
pubs. This performance bucks the trend across the pub industry and demonstrates
that we have increased market share.

Turnover and underlying operating profit rose by 4.7% and 13.1%; the performance
of the estate has been held back by the package of 31 poorly performing pubs
which have been sold since the year end.

Our tenanted pub business model is simple and effective; our risk is spread over
440 individual businesses, which are run in partnership with our tenants. We
derive our revenue from the sale of beers and other drinks to the tenants,
rental income and a joint share of gaming machine income. For the third year in
succession, all three income streams have improved over the previous year.

The wholesale margin on the sale of drinks is the main contributor and we guard
it carefully. Our tenants are offered Burtonwood ales, brewed by Thomas Hardy
Burtonwood, as well as a wide range of national lager brands; in addition we
offer a different guest ale each month, as part of our Cask Collection Club.

We started the year with 448 tenanted pubs: we made 4 acquisitions and 12
disposals to finish with 440. The acquisitions, all freeholds, were the Lamb at
Newall; the Nelthorpe Arms at Brigg; the Junction at Burntwood; and the Millers
Inn, near Barnsley. Many opportunities were rejected because of concerns over
the sustainability of the trade or the price.

The acquisition of the freehold interest, in July 2002, in 94 JER pubs which we
already operated under short lease has significantly improved the profitability
of the tenanted estate. Had we not acquired the freehold interest, there would
have been a 5 yearly upward only rent review in April 2002 which was expected to
exceed 20%. The acquisition gave us a greater operational flexibility and 2 of
the houses sold during the year were formerly JER leases.

43 pubs received capital investment of between #20,000 and #100,000, the tenant
also contributing in most cases.

In order to improve the quality of our estate we will continue to acquire new
pubs, maintain and selectively refurbish them and aggressively dispose of those
pubs whose returns are lower than our cost of capital and which are expected to
decline even further. This decline usually occurs due to social, economic and
demographic changes which cannot be corrected by operational management. For
some time, we have been negotiating the sale of a package of 31 pubs
representing the bottom end of our estate. I am pleased to say that
unconditional contracts were exchanged on 2 June 2003. Proceeds of disposal were
#2.6 m, in line with a professional, third party, valuation. Although a
shortfall of #2.1 m against book value has arisen, the transaction was earnings
enhancing because the contribution from these pubs was so low. I am now
confident that the quality of our estate is higher than ever and will provide a
stable platform for the company's future.

Wholesale and brewery

We have continued to reduce our non-core turnover in low margin sectors.

Thomas Hardy Burtonwood Limited

This is the first year that we have accounted for Thomas Hardy Burtonwood as an
associate and I am pleased to report that it has been profitable. Brewing
volumes are marginally up on last year and the high speed bottling line,
installed in April 2002, has been fully utilised to package a range of national
and international flavoured spirit drinks.

Strategy

Our business is all about pubs and people; having good quality, sustainable
pubs, run by and supported by motivated, well trained and skilled individuals. I
believe that over the last few years, we have made great progress in both areas.
There is now a stable platform onto which additional pubs can be added and I am
confident that we have the management ability in place to operate a larger
business when suitable opportunities for expansion arise. At the same time we
will continue to drive organic growth from the existing assets by promoting the
business, responding to customer's needs and controlling costs.


Lynne D'Arcy
Managing director
3 June 2003



                           Finance director's review

                                           2003           2002
                                           ----           ---- 
Group operating profit - reported         9,800          9,378
Amortisation of goodwill                    645              -
Impairment of properties                    752            200
                                         --------      ---------

Underlying group operating profit        11,197          9,578     Up 16.9%
                                         --------      ---------

Profit before tax - reported              5,638          7,678
Amortisation of goodwill                    645              -
Impairment of properties                    752            200
Loss on sale of fixed assets              2,230            199
                                         --------      ---------

Underlying profit before tax              9,265          8,077     Up 14.7%
                                         --------      ---------

Profits


Group operating profit, before amortisation of goodwill and impairment of
properties rose by 16.9% to #11.2m.


The acquisition of JER gave rise to goodwill of #0.6 m representing effectively
the costs of the deal: the board has concluded that its useful life, being the
period over which the value of the acquisition is expected to exceed the value
of its net assets, is the current financial year. As a result, all the goodwill
has been written off in these accounts.


The revaluation of our properties produced a shortfall to book value of #1.9m.
#0.7m has been charged against operating profit, the balance of #1.2m being
reflected in the statement of total recognised gains and losses. 13 pubs were
sold during the year realising #1.4 m, a shortfall to book value of #0.1 m. In
June 2003 we sold a package of 31 pubs for #2.6m. The sale was being negotiated
at the year end. These accounts include a provision for the loss on this
transaction of #2.1m.


After charging the amortisation of goodwill, impairment and the loss on disposal
of fixed assets, profit before tax fell to #5.6m: adding back these costs,
underlying profit before tax rose 14.7% to #9.3 m.


Interest


The interest charge rose to #2.2 m (2002: #1.5 m), following the new #17 m loan
taken out to finance the acquisition of JER. Total operating profit, after
amortisation of goodwill and property impairment, covered the net interest
charge 4.6 times.


Taxation


The effective Corporation Tax payable rate was 25% on the underlying profit
before tax. Including the charge for deferred tax, the effective rate was 27%.
The effective total rate on reported profit before tax was 44% (2002: 27%)
because the amortisation of goodwill, impairment of properties and loss on sale
of fixed assets are not allowable for Corporation Tax relief.


Cash flow


The company generates strong cash flows. Cash inflow from operations was #4.2m
higher than last year at #16.8m, reflecting the growth in operating profit. Free
cash flow, after the payment of interest, taxation and dividends, was sufficient
to cover the acquisition of 6 new pubs and the refurbishment programme.


The acquisition of JER including its borrowings, was financed by a #17 m bank
loan. A term of fifteen years, rather than a more typical ten, limited the
repayments to little more than the property rentals. Early repayments can be
made if cash flows allow.


Proceeds from asset disposals in the year were #1.4m. Net debt, at the year end
was #37.2m, giving a balance sheet gearing ratio of 43% (2002: 27%).


Treasury and risk management


The treasury function seeks to reduce or eliminate exposure to interest rate
risk, to ensure sufficient liquidity is available to meet foreseeable needs and
to invest surplus cash safely and profitably.

Interest rate swaps are used to achieve a desired mix of fixed and floating rate
debt. At the year end 73% of borrowings were fixed or hedged. An increase in
interest rates of 100 bps would only cost the group #0.12 m, approximately 1% of
underlying operating profit.

Thomas Hardy Burtonwood Limited

Following the commissioning of the new bottling line in April 2002, the
directors of Burtonwood became more actively involved in and exerted more
influence over the business of Thomas Hardy Burtonwood Limited. Consequently, it
has been accounted for as an associate in the 2002/3 financial year. The
accounts therefore include the following amounts representing our 40% share of
its results.

                        #000                 Goodwill amortisation         #000
                                                              #000
Operating profit         320                                   (50)        270
Interest                (118)                                    -        (118)

Profit before tax        202                                   (50)        152

Tax credit                56                                     -          56

Profit after tax         258                                   (50)        208


Shareholder return


Underlying earnings per share rose 16.7% to 30.7 pence, although basic earnings
per share reflecting the amortisation of goodwill, the impairment of properties,
loss on sale of fixed assets and prior year tax credits, fell to 14.7 pence.


Reflecting the underlying growth in profits and prospects, it is proposed to
increase the dividend by 7.3% to 9.5 pence. This dividend will be covered 1.5
times by reported profits or 3.3 times by underlying profits.


Ordinary shareholders' funds increased by #0.2 m to #86.55 m; this is now
equivalent to 403 pence per share.

Our share price ranged from a low of 214.5 pence to a high of 272.5 pence. It
began the year at 214.5 pence and closed at

236.5 pence, giving a market capitalisation of #50.8 m at the year end.


Pensions


The accounts comply with the transitional disclosure requirements of FRS 17:
Retirement benefits. This standard requires that pension fund assets are valued
at market value and that liabilities are discounted at an AA bond yield rate.
The recent poor performance of equity markets and the reduction in the long term
discount rate, reflecting lower interest rates, have combined to produce a
pension fund deficit, under FRS 17, of #3.3m before taxation. This deficit
represents less than 4% of the net assets of the group. The company's ongoing
funding of the scheme will be reviewed following the results of the actuarial
valuation as at April 2003.



Nigel Wimpenny
Finance director
3 June 2003



GROUP PROFIT AND LOSS ACCOUNT
For the year ended 29 March 2003

                                                                2003      2002
                                                                #000      #000

Turnover - including share of associate                       51,710    47,947
Less: share of associate                                      (3,774)        -
                                                               -------   -------

Group Turnover                                                47,936    47,947

Cost of sales                                                (17,771)  (19,147)
                                                               -------   -------

Gross profit                                                  30,165    28,800

Operating costs
-------------------------------                                -------   -------
Operating costs before goodwill amortisation and              18,968    19,222
impairment
Goodwill amortisation                                            645         -
Impairment of properties                                         752       200
-------------------------------                                -------   -------

Total operating costs                                         20,365    19,422

Operating profit
-------------------------------                                -------   -------
Group operating profit before goodwill amortisation and       11,197     9,578
impairment
Goodwill amortisation                                           (645)        -
Impairment of properties                                        (752)     (200)
-------------------------------                                -------   -------

Group operating profit                                         9,800     9,378
Share of operating profits of associate                          270         -
                                                               -------   -------

Total operating profit                                        10,070     9,378
Loss and provision for loss on disposal of fixed assets       (2,230)     (199)
                                                               -------   -------

Profit on ordinary activities before interest and taxation     7,840     9,179

Net interest payable                                          (2,202)   (1,501)
                                                               -------   -------

Profit on ordinary activities before taxation                  5,638     7,678

Taxation                                                      (2,460)   (2,046)
                                                               -------   -------

Profit on ordinary activities after taxation                   3,178     5,632

Dividends - equity and non equity                             (2,069)   (1,916)
                                                               -------   -------

                                                               1,109     3,716
Retained profit
                                                               =======   =======

Basic earnings per share                                        14.7p     26.5p
Diluted earnings per share                                      14.5p     26.2p
Underlying earnings per share                                   30.7p     26.3p

The above results are derived from continuing activities.


GROUP BALANCE SHEET

At 29 March 2003

                                                             2003        2002

Fixed assets                                                 #000        #000
Tangible assets                                           131,864     115,162
Investments                                                 4,497       4,216
                                                          -------     -------

                                                          136,361     119,378
                                                          -------     -------
Current assets
Stocks                                                      1,062       1,257
Debtors                                                     3,065       3,700
Cash at bank and in hand                                    4,026       1,183

                                                            8,153       6,140
Creditors - due within one year                           (10,768)     (8,032)
                                                           ------     -------

Net current liabilities                                    (2,615)     (1,892)

Total assets less current liabilities                     133,746     117,486
Creditors - due after more than one year                  (42,438)    (26,587)
Provision for liabilities and charges                      (4,308)     (4,118)
                                                           ------     -------

Net assets                                                 87,000      86,781
                                                           ------     -------

Capital and reserves

Called-up share capital                                     5,817       5,773
Share premium account                                         705         484
Capital reserve                                                32          32
Revaluation reserve                                        33,992      35,352
Profit and loss account                                    46,454      45,140
                                                           ------     -------

Shareholders' funds (including non equity interests)       87,000      86,781
                                                           ------     -------



These accounts were approved by the board on 3 June 2003





R.A. Gilchrist                        )

N.B. Wimpenny                         )                Directors



GROUP CASH FLOW STATEMENT

For the financial year ended 29 March 2003
                                                                2003      2002
                                                                #000      #000
Net cash inflow from operating activities                     16,837    12,685
Returns on investments and servicing of finance               (3,009)   (1,557)
Taxation                                                      (2,544)   (1,324)
Capital expenditure and financial investment                  (7,092)   (8,940)
Acquisition                                                   (2,533)        -
Equity dividends paid                                         (1,922)   (1,782)

Net cash outflow before financing                               (263)     (918)
Financing                                                      3,106       331
                                                              ------   -------

Increase/(decrease) in cash in the year                        2,843      (587)
                                                              ------   -------

Reconciliation of net cash flow to movement in net debt
                                                              ------   -------
Increase/(decrease) in cash                                    2,843      (587)
Loan capital issued in connection with acquisition           (17,000)        -
Loan repayments                                                  486         -
Repayment of subsidiary loan                                  13,825         -
Finance lease                                                     16         -
                                                              ------   -------

Change in net debt resulting from cash flows                     170      (587)

Loans acquired with subsidiary                               (15,025)        -
Release of fair value adjustment                               1,200         -
Amortisation of debenture issue costs                            (10)       (8)
Finance lease                                                   (105)        -
                                                              ------   -------

Opening net debt                                             (23,387)  (22,792)
                                                              ------   -------

Closing net debt                                             (37,157)  (23,387)
                                                              ------   -------



Analysis of changes in net debt

            At 30/03/02    Acquisition    Cash flow   Non cash flow  At 29/03/03
                                                             item
                                                             #000
                   #000           #000         #000                         #000
Cash at           1,183              -        2,843             -          4,026
bank and
in hand
Borrowings            -        (15,025)      13,825           329           (871)
repayable
within one
year
Borrowings      (24,570)             -      (16,514)          861        (40,223)
repayable
after more
than one
year
Finance               -              -           16          (105)           (89)
lease            --------       --------     --------    ----------       --------

                (23,387)       (15,025)         170         1,085        (37,157)
                 --------       --------     --------    ----------       --------



                                                                2003      2002
                                                                #000      #000
Reconciliation of operating profit to net cash inflow from
operating activities
Operating profit                                               9,800     9,378
Depreciation                                                   3,510     3,149
Impairment                                                       752       200
Amortisation of goodwill                                         645         -
Increase in trade loan provision                                 154        30
Decrease in stocks                                               195       102
Decrease in debtors                                              635       203
Increase/(decrease) in creditors                               1,146      (377)
                                                               ------    ------

Net cash inflow from operating activities                     16,837    12,685
                                                              ------    ------

Analysis of cash flows from headings netted in the cash flow
statement

Returns on investments and servicing of finance
Interest received                                                101       122
Interest paid                                                 (1,947)   (1,647)
Cost of redemption of subsidiary's financial liabilities      (1,126)        -
Dividends paid on non equity shares                              (32)      (32)
Interest element of finance lease                                 (5)        -
                                                              ------    ------

Net cash outflow from returns on investments and servicing    (3,009)   (1,557)
of finance                                                    ------    ------


Capital expenditure and financial investment
Purchase of tangible fixed assets                            (8,098)   (10,949)
Proceeds on sale of tangible fixed assets                     1,401      2,459
Investment in Thomas Hardy Burtonwood Limited                     -       (356)
Increase in trade loans and bonds                              (395)       (94)
                                                             ------     ------

Net cash outflow from capital expenditure and financial      (7,092)    (8,940)
investment                                                   ------     ------

Financing
Issue of ordinary share capital                                 265        331
New secured loan                                             17,000          -
Loan repayments                                                (486)         -
Repayment of loans by associate                                 168          -
Repayment of subsidiary loans                               (13,825)         -
Capital element of finance lease                                (16)         -
                                                             ------     ------

Net cash inflow from financing                                3,106        331
                                                             ------     ------




                                     Notes


This preliminary announcement does not form the group's statutory accounts. The
figures shown have been extracted from the group's full financial statements
which, for the year ended 30 March 2002 have been delivered, and for the year
ended 29 March 2003 will be delivered to the Registrar of Companies. Both carry
an unqualified audit report.


The accounts have been prepared in accordance with applicable accounting
standards and are consistent with those applied last year.


1)                Segmental information

                       Turnover        Operating profit            Net operating
                                                                        assets
                      2003      2002      2003      2002       2003       2002
                      #000      #000      #000      #000       #000       #000
Tenanted pubs       32,444    30,986    12,476    11,028     95,774     83,617
Wholesale trade        413     1,465        71       138        456        278
Managed pubs        14,974    14,688     3,000     2,910     24,677     22,088
Brewery, site and      105       808      (446)     (449)     6,460      6,120
distribution
Central                            -    (3,904)   (4,049)    (3,210)    (1,935)
Impairment                         -      (752)*    (200)*        -          -
Amortisation of          -         -      (645)*       -          -          -
goodwill

           Total    47,936    47,947     9,800     9,378    124,157    110,168

Share of operating                         270         -
profits of
associate
Loss and provision                      (2,230)*  (199)**
for loss on sale
of fixed assets
Net interest                            (2,202)   (1,501)   (37,157)   (23,387)
payable/net debt

Profit before                            5,638     7,678     87,000     86,781
taxation/net
assets


Net operating assets represent the book value of all assets, excluding
borrowings, employed in each business segment.

Turnover and profit before tax are derived from continuing operations within the
UK.


* tenanted pubs.

** tenanted pubs #145,000, managed pubs #26,000 and central #28,000.


2)             Net interest payable

                                                                 2003     2002
                                                                 #000     #000
Group:
61/2% Debenture Stock 2024                                        1,625    1,625
Bank loans, overdrafts and interest rate swaps                    629       (2)
Finance leases                                                      5        -
Costs of early redemption of subsidiary's financial             1,126        -
liabilities
Release of fair value adjustment following redemption of       (1,200)       -
subsidiary's
financial liabilities
Interest receivable                                              (101)    (122)
                                                                 ------  -------

Group net interest payable                                      2,084    1,501
Share of interest payable by associate                            118        -
                                                                 ------  -------
                                                      Total     2,202    1,501
                                                                 ======  =======


3)             Taxation on profits for the year

                                                             2003         2002
                                                             #000         #000
Taxation on the profits for the year
UK Corporation Tax at 30% (2002: 30%):
- Current year                                              2,550        2,207
- Prior years                                                (224)        (447)
Deferred taxation                                             190          286
Share of associate's tax credit                               (56)           -
                                                             ------      -------
                                                            2,460        2,046
                                                             ======      =======





The tax assessment for the period is lower than the standard rate of Corporation
Tax in the UK (30%) as a result of capital allowances.

Profit on ordinary activities before taxation                   5,638    7,678
                                                                -------  -------
Profit on ordinary activities multiplied by standard rate of    1,691    2,303
Corporation Tax (30%)
Adjustments in respect of prior years                            (224)    (447)
Items disallowable for tax purposes                             1,049      190
Capital allowances in excess of depreciation                     (190)    (286)
Share of associates tax credit                                    (56)       -
                                                                -------  -------
Corporation Tax charge for the year                             2,270    1,760
                                                                -------  -------


Based on current capital investment plans, the group expects to continue to be
able to claim capital allowances in excess of depreciation in future years.


4)                Dividends

Equity shares:
Interim 3.0p (2002: 2.85p)                                  641           602
Final 6.5p (2002: 6.0p)                                   1,396         1,282

Non equity shares:
7% cumulative preference shares                              32            32
                                                          -------       -------
                                                          2,069         1,916
                                                          -------       -------


The final dividend will, if approved, be paid on 5 August, 2003 to shareholders
on the register on 11 July, 2003.


5)             Earnings per share


Basic and adjusted earnings per share are calculated by dividing the earnings
for ordinary shareholders as calculated below, by the weighted average number of
shares in issue during the year of 21,355,759 (2002: 21,124,643).

                                        Earnings           Earnings per share

                                          2003      2002      2003        2002
                                          #000      #000     Pence       Pence
Profit after taxation                    3,178     5,632         -           -
Preference dividend                        (32)      (32)        -           -
                                         -------  --------   -------    --------

Basic earnings                           3,146     5,600      14.7        26.5

Loss and provision for loss on sale of   2,230       199      10.5         0.9
assets
Prior year tax credits                    (224)     (447)     (1.0)       (2.1)
Amortisation of goodwill on                645         -       3.0           -
acquisition
Impairment                                 752       200       3.5         1.0
                                         -------  --------   -------    --------

Adjusted earnings                        6,549     5,552      30.7        26.3
                                         -------  --------   -------    --------


Adjusted earnings per share shows more clearly the underlying performance of the
group. Diluted earnings per share is the basic earnings per share after allowing
for the dilutive effect of the conversion into ordinary shares of the weighted
average number of options outstanding during the period of 278,683 (2002:
214,253).






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

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FR UUOKROKRNRAR