RNS Number:3748P
Estates & General PLC
04 September 2003


                             Estates & General PLC


               Interim results for the six months to 30 June 2003


                    ESTATES & GENERAL REPORTS ROBUST RESULTS


Estates & General PLC, ("Estates & General") the strategic property investment
company, has today announced its interim results for the six months to 30 June
2003.  Estates & General has a #120 million property portfolio weighted towards
the South East of England.

Highlights:
          
*   Underlying rental surplus up by 12.4% to #1.81 million (2002: #1.61 million)
*   Pre-tax profits #2.52 million (2002: #3.40 million)
*   Interim dividend maintained at 1.5 pence per share (2002: 1.5 pence)
*   NAV per share up 3.2% to 227 pence (31 December 2002: 220 pence)

Commenting on the results, Roger Dossett, Managing Director said:

"Over the past few years we have re-structured our portfolio considerably.  We
have sold assets where the potential for adding further value had been maximised
and invested in assets with longer-term growth prospects.

We have a substantial asset base of well-let property, securely funded with
limited exposure to interest rate movements.  The resultant income surplus
provides a sound foundation for our trading activity.

Net asset value has been enhanced by a combination of rental profits and trading
surpluses and we have the firepower available for further acquisitions as
opportunities occur."


                                     -ends-


Date: 4 September 2003

For further information contact:

  Roger Dossett, Managing Director      Estates & General PLC      01923-285999
  Phil Holland, Finance Director        Estates & General PLC      01923-285999
  e-mail: info@estates-general.co.uk
  Web:   http://www.estates-general.co.uk/

  Simon Courtenay                       City Profile               020-7448-3244


CHAIRMAN'S STATEMENT

The restructuring of the property portfolio over the last few years has provided
an excellent base for the continuing strong performance of the Group.  Whilst
the level of transactions has been much reduced from 2002, the underlying
strength of the rental income is evident in the results for the first period of
2003.

Financial performance

Profit before tax for the half year to 30 June 2003 was #2.52 million (2002 -
#3.40 million) with underlying rental profitability increasing by 12.4% to #1.81
 million (2002 - #1.61 million).  Profit in the period from asset sales was
#0.71 million (2002 - #2.46 million).  The utilisation of brought forward tax
losses and the impact of property sales give rise to a deferred tax charge of
#0.10 million (2002 - #0.43 million).  There is no cash tax liability.  Earnings
per ordinary share for the period were 8.7 pence (2002 - 10.7 pence).

Net asset value per ordinary share has increased by 3.2% to 227 pence (31
December 2002 - 220 pence).  On a "triple net" basis net assets per ordinary
share would be 200 pence (31 December 2002 - 192 pence).  This would include the
post-tax adjustment to mark the Group's debt to market and reflect the fact that
there is no inherent tax liability in the Group revaluation reserve.

Dividend

The Board has declared an unchanged interim dividend of 1.5 pence per share.
This will be paid on 3 October 2003 to shareholders on the register at the close
of business on 19 September 2003.

Portfolio activity

In February I announced the disposal of the Group's office investment at Regents
Wharf, Kings Cross, London.  The gross consideration totalled #21.11 million,
giving a profit of #0.46 million over 31 December 2002 book value.  This sale
was in line with the Group's strategy of disposing of assets where their
potential value had been maximised with little scope for further upside in the
short to medium term.  The impact of falling rents in the City and the West End
of London, together with the increasing availability of space, has reinforced
the view that the time was right to reduce our exposure to the London market.

A significant increase in the demand for retail property has been evident in
recent months.  Improving rental values coupled with robust consumer spending
have made retail investments appear stronger for the "income" buyer.  With
medium term interest rates falling over the first six months of the year,
investors were prepared to accept lower yields from retail property.  This will
not continue indefinitely and advantage was taken of this trend to dispose of a
retail warehouse in Swansea, South Wales.  The property comprised approximately
37,000 square feet let to B&Q for a further 20 years.  Proceeds totalled #4.29
million representing and exit yield of 6.18% and giving a profit after costs of
#0.21 million.

In addition the proceeds from small land sales at Hayle in Cornwall totalled
#0.11 million, giving a surplus of #0.04 million over book value.

The property portfolio continues to be well occupied with vacant space
representing less than 1% of the total rent roll.  The underlying covenant
strength of the Group's tenants significantly reduces the risk of default on the
payment of rent and therefore improves the predictability of future cash flows.

Portfolio analysis by capital value*
_____________________________________________________________________________________________________________
                          Office   Industrial     Retail      Development      Total   30 Jun 03   31 Dec 02
                                                                     Site
                              #m           #m         #m               #m         #m           
_____________________________________________________________________________________________________________

South East                 75.20         9.53          -             0.14      84.87         69%         71%
West & South West           6.00         0.72          -             1.35       8.07          6%          8%
North & Midlands           15.19         6.27       6.22                -      27.68         23%         19%
East Anglia                 0.97            -          -                -       0.97          1%          1%
Scotland                       -         1.39          -                -       1.39          1%          1%
_____________________________________________________________________________________________________________
                           97.36        17.91       6.22             1.49     122.98        100%        100%
_____________________________________________________________________________________________________________

30 Jun 03                    79%          15%         5%               1%       100%
31 Dec 02                    80%          12%         7%               1%       100%
_____________________________________________________________________________________________________________

*Value is 31 December 2002 valuation adjusted for additions and disposals.

Acquisition

Contracts were exchanged on 2 September 2003 for the acquisition of a modern
industrial property in Redditch.  The property consists of 103,000 square feet
of production space, together with 19,000 square feet of office space producing
a total rent of #648,560 per annum and is let to a strong covenant for a further
12 years.  The property is being acquired for #8.20 million, representing an
initial yield of 7.5%.  The Group's investment criteria continue to be focused
on good quality property that provides a secure underlying income stream from a
strong covenant with the potential to add value through active management.

Funding

The sales that I have detailed above produced net proceeds totalling #25.19
million.  These have been used to reduce Group debt, with higher rate bank loans
being repaid in full, releasing a large value of uncharged property.

As at 30 June 2003 net Group debt stood at #57.22 million (31 December 2002 -
#84.80 million) with gearing reduced to 91% (31 December 2002 - 140%).  Variable
rate loans are 91% hedged by derivative products acquired in recent years.  The
average rate of interest incurred by the Group, including derivatives and
debenture coupons, is 7.29% (31 December 2002 - 7.35%).

Compliance

A revised Combined Code on Corporate Governance for all companies listed on the
London Stock Exchange will be effective for financial periods commencing on or
after 1 November 2003.  This draws from the recommendations of both the Higgs
Report on non-executive directors and the Smith Report on audit committees that
were published earlier this year.  The Code recognises that smaller companies
may find it difficult to fully comply with all its provisions but the Board is
committed to ensuring that the highest possible standards of governance are
maintained and our compliance will be detailed in future Annual Reports.

In this era of increasing "internationalisation" of business, greater
comparability of company accounts has long been desired when evaluating
performance.  The European Union has stated that for financial periods starting
on or after 1 January 2005 all companies listed on European exchanges must
prepare their group accounts in accordance with International Accounting
Standards.  There are many differences between the requirements of UK and
International Standards in both presentation and accounting policies.  This
means that from 2005 onwards the Group's financial statements will be in a form
somewhat different from those in this and previous reports.

Prospects

The current year is proving to be challenging for the property sector.  Whilst
yields continue to be very keen, disposals can be profitable but reinvestment is
increasingly difficult at sensible prices.  Evidence shows that office rental
values have stabilised, providing increased optimism for future growth.

Stock markets across the world have shown signs of making progress toward
recovering losses seen in recent years.  However, uncertainty remains with
regard to the performance of major economies, the rate at which they will grow
and the sustainability of the stock market recovery.  Short and medium term
interest rates have been historically low, although medium and longer-term rates
have seen small increases in recent months.  For as long as this continues and
overall returns from property compare well with alternative investment choices,
property investment will retain its attraction.

The results achieved for this period underline the success of the Group's
investment strategy.  We will continue to look to acquire good property assets
let to quality covenants with a secure recurring income stream and to seek added
value through our management approach.  Based on this strategy I am confident
that 2003 will prove to be another successful year for the Group.

David G M Cull
Chairman
3 September 2003


INDEPENDENT REVIEW REPORT TO ESTATES & GENERAL PLC

Introduction

We have been instructed by the Company to review the financial information for
the six months ended 30 June 2003 which comprises the Group profit and loss
account, Group balance sheet, Group cash flow statement, Group statement of
total recognised gains and losses and related notes 1 to 12.  We have read the
other information contained in the Interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.

This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board.  Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose.  To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company, for our review work, for this report, or for the conclusions we
have formed.

Directors' responsibilities

The Interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors.  The Directors
are responsible for preparing the Interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts, except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom.  A
review consists principally of making enquiries of management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied, unless otherwise disclosed.  A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions.  It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit.  Accordingly, we do not
express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.

Deloitte & Touche LLP,
Chartered Accountants
London
3 September 2003


GROUP PROFIT AND LOSS ACCOUNT


                                                                   Six months to  Six months to       Year to
                                                                       30 Jun 03      30 Jun 02     31 Dec 02
                                                         Notes        (Reviewed)     (Reviewed)     (Audited)
                                                                              #m             #m            #m
_____________________________________________________________________________________________________________

Turnover - continuing operations                                 1         13.65           6.74         16.82
Cost of sales                                                             (7.71)         (0.46)        (2.46)
_____________________________________________________________________________________________________________

Gross profit                                                     1          5.94           6.28         14.36

Administrative expenses                                                   (0.91)         (0.91)        (2.32)
Other operating income                                                         -              -          0.03
_____________________________________________________________________________________________________________

Operating profit - continuing operations                                    5.03           5.37         12.07
Profit on sale of investment properties                                     0.38           2.46          2.57
Interest receivable and similar income                                      0.09           0.15          0.19
_____________________________________________________________________________________________________________

Profit on ordinary activities before interest payable                       5.50           7.98         14.83
Net interest payable and similar charges                                  (2.98)         (4.58)        (8.07)
_____________________________________________________________________________________________________________

Profit on ordinary activities before taxation                               2.52           3.40          6.76
Tax on profit on ordinary activities                             2        (0.10)         (0.43)        (0.65)
_____________________________________________________________________________________________________________

Profit on ordinary activities after taxation                                2.42           2.97          6.11
Equity dividends                                                          (0.42)         (0.42)        (1.25)
_____________________________________________________________________________________________________________


Profit attributable to ordinary shareholders                     9          2.00           2.55          4.86


Earnings per 10p ordinary share - basic                          3          8.7p          10.7p         22.0p
_____________________________________________________________________________________________________________

Earnings per 10p ordinary share - diluted                        3          8.6p          10.5p         21.7p
_____________________________________________________________________________________________________________


GROUP BALANCE SHEET


                                                                           As at         As at         As at
                                                                       30 Jun 03     30 Jun 02     31 Dec 02
                                                             Notes    (Reviewed)    (Reviewed)     (Audited)
                                                                              #m            #m            #m
____________________________________________________________________________________________________________

Fixed assets
Intangible assets                                                4          0.26          0.32          0.32
Tangible assets                                                  5        115.30        134.00        132.28
____________________________________________________________________________________________________________
                                                                          115.56        134.32        132.60
____________________________________________________________________________________________________________

Current assets

Stocks                                                                      7.84         17.10         15.28
Debtors                                                          6          1.00          5.91          3.80
Investments                                                      7          9.29          1.60          0.59
Cash at bank and in hand                                                    1.67          1.81          1.63
____________________________________________________________________________________________________________
                                                                           19.80         26.42         21.30
____________________________________________________________________________________________________________
                                                                                                       
Creditors: amounts falling due within one year                            (5.06)       (13.93)       (12.72)
____________________________________________________________________________________________________________

Net current assets                                                         14.74         12.49          8.58
____________________________________________________________________________________________________________

Total assets less current liabilities                                     130.30        146.81        141.18

Creditors : amounts falling due after more than one year                 (67.29)       (86.95)       (80.17)            
____________________________________________________________________________________________________________
                
Net assets                                                                 63.01         59.86         61.01
____________________________________________________________________________________________________________

Capital and reserves                                                        2.77          2.77          2.77
                                                                            
Called up share capital                                                                                 
Share premium account                                            9          9.93          9.93          9.93
Revaluation reserve                                              9          4.60          9.29          8.22
Capital redemption reserve                                       9          0.34          0.34          0.34
Other reserves                                                   9         11.44         11.44         11.44
Profit and loss account                                          9         33.93         26.09         28.31
____________________________________________________________________________________________________________

Equity shareholders' funds                                                 63.01         59.86         61.01
____________________________________________________________________________________________________________

Net asset value per ordinary share                              10          227p          216p          220p


GROUP CASH FLOW STATEMENT

                                                             Six months to  Six months to         Year to
                                                                 30 Jun 03      30 Jun 02       31 Dec 02
                                                                (Reviewed)     (Reviewed)       (Audited)
                                                      Notes             #m             #m              #m
_________________________________________________________________________________________________________

Net cash inflow from operating activities               11a          11.84           5.93           15.49
Returns on investments and servicing of finance                     (3.00)         (3.56)          (8.03)
Capital expenditure and financial investment                         19.57        (33.04)         (33.41)
Equity dividends paid                                               (0.83)         (0.72)          (1.16)
_________________________________________________________________________________________________________

Cash inflow / (outflow) before management of
liquid resources and financing                                       27.58        (31.39)         (27.11)

Management of liquid resources                                      (8.70)           2.56            3.57
Financing                                                          (18.84)          28.66           23.19
_________________________________________________________________________________________________________

Increase / (decrease) in cash in the period                           0.04         (0.17)          (0.35)
_________________________________________________________________________________________________________



Reconciliation of net cash flow to movement in net debt

Increase / (decrease) in cash in the period                           0.04         (0.17)          (0.35)
Cash outflow / (inflow) from decrease / (increase) in                18.84        (28.66)         (23.19)
debt
Cash outflow / (inflow) from increase/(decrease) in
liquid resources                                                      8.70         (2.56)          (3.57)
_________________________________________________________________________________________________________
                                                                    
Change in net debt resulting from cash flows                         27.58        (31.39)         (27.11)

Net debt - opening balance                              11b        (84.80)        (57.69)         (57.69)
_________________________________________________________________________________________________________

Net debt - closing balance                              11b        (57.22)        (89.08)         (84.80)
_________________________________________________________________________________________________________


GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                                                                   Six months to Six months to       Year to
                                                                       30 Jun 03     30 Jun 02     31 Dec 02
                                                                      (Reviewed)    (Reviewed)     (Audited)
                                                                              #m            #m            #m
____________________________________________________________________________________________________________

Profit for the financial period                                             2.42          2.97          6.11
Deficit arising on revaluation of properties                                   -             -        (1.16)
____________________________________________________________________________________________________________

Total recognised gains and losses relating to the period                    2.42          2.97          4.95
____________________________________________________________________________________________________________


NOTES TO THE INTERIM REPORT
     
1.   Turnover and profit analysis
                                                Turnover                               Gross Profit
                                    Six months   Six months     Year to    Six months     Six months     Year to
                                  to 30 Jun 03 to 30 Jun 02   31 Dec 02  to 30 Jun 03   to 30 Jun 02   31 Dec 02
                                    (Reviewed)   (Reviewed)   (Audited)    (Reviewed)     (Reviewed)   (Audited)
                                            #m           #m          #m            #m             #m          #m
________________________________________________________________________________________________________________

Rental income from investment             5.17         5.72       11.26          5.12           5.56       11.02
properties
Rental income from properties held        0.51         0.76        1.55          0.49           0.72        1.50
as stock
________________________________________________________________________________________________________________

Total rental income                       5.68         6.48       12.81          5.61           6.28       12.52
Sale of properties held as stock          7.97         0.26        4.01          0.33              -        1.84
________________________________________________________________________________________________________________
                                       
Total                                    13.65         6.74       16.82          5.94           6.28       14.36
________________________________________________________________________________________________________________
     

2.   Tax on profit on ordinary activities

                                                                          Six months   Six months     Year to
                                                                        to 30 Jun 03 to 30 Jun 02   31 Dec 02
                                                                          (Reviewed)   (Reviewed)   (Audited)
                                                                                  #m           #m          #m
_____________________________________________________________________________________________________________

UK Corporation tax charge for the period                                           -            -           -

Deferred tax

Capital allowances in excess of depreciation                                    0.25            -        0.40
Removal of timing differences on sale of asset                                (0.44)            -           -
Utilisation of losses                                                           0.29         0.43        0.25
_____________________________________________________________________________________________________________
                                                                                0.10         0.43        0.65
_____________________________________________________________________________________________________________
                                                                               
Total                                                                           0.10         0.43        0.65           
_____________________________________________________________________________________________________________
              
Taxation has been calculated at a rate of 30% (2002: 30%), being an estimate
applicable to the full year ending 31 December 2003.
     
3.   Earnings per 10p ordinary share

Earnings per 10p ordinary share are based upon the profit after tax attributable
to ordinary shareholders of #2.42 million (30 June 2002: #2.97 million; 31
December 2002: #6.11 million).  The calculation of the basic earnings per 10p
ordinary share is based on the average number of ordinary shares in issue during
the period of 27,735,542 (30 June 2002: 27,735,542; 31 December 2002:
27,735,542).

The calculation of the diluted earnings per 10p ordinary share is based on a
weighted average of 28,051,341 ordinary shares (30 June 2002: 28,165,605; 31
December 2002: 28,150,495).  The difference in the number of ordinary shares
between the basic and diluted earnings per share reflects the impact were the
outstanding share options exercised.
     
4.   Intangible assets - Goodwill

                                                                                                            #m
______________________________________________________________________________________________________________

Cost                                                                                                      
At 1 January 2003                                                                                         0.32
Disposals during the period                                                                             (0.06)
______________________________________________________________________________________________________________

At 30 June 2003                                                                                           0.26
______________________________________________________________________________________________________________

The Companies Act 1985 provides that goodwill be systematically amortised. This
conflicts with the principle set out in FRS 10 that goodwill with an indefinite
useful economic life should not be amortised. The Directors consider that in
order to give a true and fair view the principle as set out in FRS 10, not to
amortise the goodwill should be adopted.

Goodwill stated above at historical cost represents the difference between the
value of the underlying property assets of subsidiaries when acquired and the
consideration paid to the vendor. This is due to the different basis of
valuation used to value property assets and that used to value the share capital
of the companies. The acquisition of single asset property companies provides
scope for the recovery of that difference in value.

It is not possible to quantify the effects of the departure from the requirement
of the Companies Act 1985 as under current legislation the asset has an
indefinite useful economic life.

The amount charged during the period relates to the proportion of purchased
goodwill allocated to property sold during the period. This charge has been made
against the profit on sale of investment properties.
     
5.   Tangible assets

Investment properties totalling #115.14 million are included in tangible fixed
assets.  These have been stated at 31 December 2002 valuation, adjusted for
additions and disposals during the period.  Other tangible fixed assets
totalling #0.16 million are included at net book value.
     
6.   Debtors

Included within debtors is the net deferred tax asset as follows:
                                                                          30 Jun 03    30 Jun 02   31 Dec 02
                                                                         (Reviewed)   (Reviewed)   (Audited)
                                                                                 #m           #m          #m
____________________________________________________________________________________________________________

Tax losses carried forward                                                     2.26         2.37        2.55
Capital allowances in excess of depreciation                                 (1.77)       (1.56)      (1.96)
____________________________________________________________________________________________________________
                                                                                                                        
Total net asset                                                                0.49         0.81        0.59            
____________________________________________________________________________________________________________
             
Tax losses carried forward and recognised in the financial statements relate
mainly to excess management expenses incurred in previous years.  The Directors
are of the opinion that based on current forecasts, profits for the foreseeable
future will be of a level to utilise these losses in full.

In addition tax losses totalling #18.18 million are carried forward at 30 June
2003 but have not been recognised in the financial statements.  These may be
utilised to offset profits that arise on future property sales.

6.    Debtors (continued)

No provision has been made for deferred tax assets or liabilities arising on the
revaluation of investment properties to their market value.

                                                                                                            #m
Analysis of movement in the net deferred tax asset:
______________________________________________________________________________________________________________

Asset at 1 January 2002                                                                                   1.24
Items in profit and loss account for the six months to 30 June 2002                                     (0.43)
______________________________________________________________________________________________________________

Asset at 30 June 2002                                                                                     0.81
Items in profit and loss account for the six months to 31 December 2002                                 (0.22)
______________________________________________________________________________________________________________

Asset at 31 December 2002                                                                                 0.59
Items in profit and loss account for the six months to 30 June 2003                                     (0.10)
______________________________________________________________________________________________________________

Asset at 30 June 2003                                                                                     0.49
______________________________________________________________________________________________________________
          
7.   Investments

                                                                          30 Jun 03    30 Jun 02   31 Dec 02
                                                                         (Reviewed)   (Reviewed)   (Audited)
                                                                                 #m           #m          #m
____________________________________________________________________________________________________________

Secured cash                                                                   9.21            -           -
Cash on deposit                                                                0.08         1.60        0.59
____________________________________________________________________________________________________________

Total                                                                          9.29         1.60        0.59
____________________________________________________________________________________________________________

8.   Fair values of financial assets and liabilities


                                               Book value                            Fair value
                                    30 Jun 03   30 Jun 02  31 Dec 02   30 Jun 03  30 Jun 02 31 Dec 02
                                   (Reviewed)  (Reviewed)  (Audited)  (Reviewed) (Reviewed) (Audited)
                                           #m          #m         #m          #m         #m        #m
_____________________________________________________________________________________________________

Assets

Cash deposits held at variable rates     0.07        1.60       2.22        0.07       1.60      2.22
_____________________________________________________________________________________________________

Liabilities

Primary financial instruments:
Debenture stock at fixed rates          20.43       20.43      20.43       29.62      24.66     29.60
Bank loans at fixed rates                   -        4.45          -           -       4.52         -
Bank loans at variable rates            48.15       67.45      67.05       48.15      67.45     67.05

Derivative instruments held
to manage the Group's interest
rate cost:
Interest rate swaps                         -           -          -        1.65       0.87      2.03
_____________________________________________________________________________________________________
                                        68.58       92.33      87.48       79.42      97.50     98.68
_____________________________________________________________________________________________________
                                                                          
Total fair value adjustment                                                10.84       5.17     11.20
_____________________________________________________________________________________________________

     
9.   Reserves

                                         Share                    Capital              Profit and
                                       premium   Revaluation   redemption       Other        loss
                                       account       reserve      reserve    reserves     account       Total           
                                            #m            #m           #m          #m          #m          #m
_____________________________________________________________________________________________________________

As at 1 January 2003                      9.93          8.22         0.34       11.44       28.31       58.24
Profit for the period                        -             -            -           -        2.00        2.00
Realised on disposal                         -        (3.62)            -           -        3.62           -
_____________________________________________________________________________________________________________

As at 30 June 2003                        9.93          4.60         0.34       11.44       33.93       60.24
_____________________________________________________________________________________________________________
     
10.  Net asset value per share

Net asset value per share has been calculated using the number of ordinary
shares in issue on 30 June 2003: 27,735,542 (30 June 2002: 27,735,542; 31
December 2002: 27,735,542).

11.  Cash flow statement
     
a)   Reconciliation of operating profit to operating cash flows
                                                                        Six months   Six months      Year to
                                                                      to 30 Jun 03 to 30 Jun 02    31 Dec 02
                                                                        (Reviewed)   (Reviewed)    (Audited)
                                                                                #m           #m           #m
____________________________________________________________________________________________________________

Operating profit                                                              5.03         5.37        12.07
Depreciation                                                                  0.03         0.05         0.08
Decrease in stocks                                                            7.44         0.23         2.05
Decrease / (increase) in debtors                                              0.50       (2.19)         0.64
(Decrease) / increase in creditors                                          (1.16)         2.47         0.65
____________________________________________________________________________________________________________

Net cash inflow from operating activities                                    11.84         5.93        15.49
____________________________________________________________________________________________________________
     
b)   Analysis of net debt
                                                                At 1 Jan                Non-cash   At 30 Jun
                                                                    2003   Cash Flow     changes        2003
                                                                      #m          #m          #m          #m
____________________________________________________________________________________________________________

Cash at bank and in hand                                            1.63        0.04           -        1.67

Debt due after one year                                          (79.73)       12.20        0.65     (66.88)
Debt due within one year                                          (7.29)        6.64      (0.65)      (1.30)
____________________________________________________________________________________________________________
                                                                 (85.39)       18.88           -     (66.51)

____________________________________________________________________________________________________________
Cash on deposit and secured cash                                    0.59        8.70           -        9.29
____________________________________________________________________________________________________________

Net debt                                                         (84.80)       27.58           -     (57.22)
____________________________________________________________________________________________________________
     
12.  Basis of accounting

The Interim report has been prepared by the Directors in accordance with
applicable United Kingdom accounting standards and is consistent with the
accounting policies set out in the 2002 Report and Accounts.  The Interim report
was approved by the Directors on 3 September 2003.

The Interim report does not constitute statutory accounts.  The comparative
figures for the year to 31 December 2002 have been extracted from the Group's
financial statements that have been delivered to the Registrar of Companies.
The report of the auditors was unqualified and did not contain a statement under
Section 237 (2) or (3) of the Companies Act 1985.


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