RNS Number:5149O
Management Consulting Group PLC
11 August 2003


Financial results for the six months ended 30 June 2003

Management Consulting Group PLC ("MCG" or "the Group"), the international
management consultancy group, today announces its results for the six months
ended 30 June 2003.

Key points

*Turnover of #43.3 million (30 June 2002: #55.7 million) slightly ahead of
 the indications given in July

*Operating loss before goodwill amortisation of #1.0 million (30 June
 2002: profit of #5.2 million)

*Loss before tax of #2.8 million (30 June 2002: profit of #4.1 million)

*Net cash of #9.6 million (31 December 2002: #21.9 million)

*Loss per share before goodwill amortisation of 0.8 pence (30 June 2002:
 profit of 3.6 pence)

*Parson Consulting turnaround progressing on course

*Order book currently 40% higher than at start of 2003 and strong business
 prospect stream

*Board expects stronger trading performance in second half of 2003 in
 light of growth in order book and client demand

Rolf Stomberg, Chairman:

"The results reflect the low order book that we had at the beginning of the year
together with a slow-down in client decision-making in the second quarter of
2003. We expect that the second half will be stronger than the first half and
will establish a solid base for 2004."

Kevin Parry, Chief Executive:

"We are now seeing a greater volume of prospects in Proudfoot Consulting than at
any time in the last year. New senior management is now in place at Parson
Consulting and the turnaround is progressing satisfactorily and in line with our
plans."

For further information please contact:

Management Consulting Group PLC
Kevin Parry          Chief Executive                     020 7832 3700
Stephen Purse        Finance Director                    020 7832 3700

The Maitland Consultancy
Suzanne Bartch            020 7379 5151           (mobile) 07769 710335
Michelle Jeffery          020 7379 5151           (mobile) 07989 977837


Notes to Editors

Management Consulting Group PLC comprises two consulting businesses, Proudfoot
Consulting and Parson Consulting.

Proudfoot Consulting is a specialist consultancy which implements sustainable
operational improvements in sales, costs and overheads, and major capital
expenditure typically at no net annualised cost to its clients.

Parson Consulting is a financial management consultancy that improves the
accuracy, speed and efficiency of finance and support functions free of auditing
conflicts of interest.

Management Consulting Group PLC
interim announcement
six months ended 30 June 2003


Chairman's statement

The results for the six months ended 30 June 2003 reflect the difficult market
conditions for consulting during the last nine months coupled with losses
incurred at Parson Consulting as the turnaround of that business continues.

The results for the year are summarised as follows:

                                 unaudited       unaudited     audited
                                       six             six        year
                              months ended    months ended       ended
                              30 June 2003    30 June 2002 31 Dec 2002
                               -----------     -----------  ----------
                                     #'000           #'000       #'000
                               -----------     -----------  ----------
Revenue

Proudfoot                           33,770          53,275      93,229

Parson                               9,528           2,380      14,067
                               -----------     -----------  ----------
                                    43,298          55,655     107,296
                               -----------     -----------  ----------
Operating (loss) / profit

Proudfoot                            2,260           5,351      10,311

Parson                              (3,234)           (199)     (2,701)
                               -----------     -----------  ----------
                                      (974)          5,152       7,610
                               -----------     -----------  ----------

Group results

Overall turnover for the six months ended 30 June 2003 was #43.3 million (six
months ended 30 June 2002: #55.7 million; six months ended 31 December 2002:
#51.6 million). This was slightly ahead of the indications given in July.
Turnover has been impacted by the level of the order book at the start of the
period and by a slow-down in client decision-making in response to economic and
political uncertainties during the period. 61% of the Group's turnover was
attributable to North America; the adverse impact on revenue of the weak US
dollar relative to Sterling is estimated at #3 million compared with the first
half of last year.

The Group's gross margin was 49% (2002: 51%) which reflects tight control of the
cost of delivery and the currently lower margins being made in Parson
Consulting.

Selling expenses represented 33% of turnover for the six months. The decisions
were taken not to make short term cuts in this important resource in Proudfoot
and to invest in additional sales resource in Parson Consulting to expedite its
turnaround.

Administration expenses, excluding goodwill, were #7.5 million, a reduction of
#0.7 million compared to the 2002 second half run-rate.

Our remuneration schemes for directors and employees, including the management
incentive plan, are structured so that the rewards are linked to both the
short-term and long-term performance of the business. Accordingly, the half year
results have benefited from a lower overall charge for performance-related
remuneration schemes.

The operating loss before goodwill amortisation was #1.0 million (2002: profit
#5.2 million). After goodwill amortisation the operating loss was #3.0 million
(2002: profit of #4.1 million). The results reflect the continuing losses in
Parson Consulting and a decrease in the profitability of Proudfoot Consulting
due to the decline in its turnover. EBITDA was a loss of #0.3 million (2002:
profit of #5.6 million).

There is negligible net interest income due to low interest rates and the charge
attributable to the discount on the long-term liabilities associated with the
closed defined benefit pension scheme.

The tax charge is #0.7 million (2002: #0.4 million) representing mainly tax
payable in countries where we do not have brought forward losses.


Proudfoot Consulting

At #33.8 million, turnover for the six months was 37% down on the corresponding
period of 2002 (30 June 2002: #53.3 million) and 15% down on the preceding half
year (six months ended 31 December 2002: #39.9 million). The decrease in
turnover compared with the first half of 2002 occurred in both North America and
Europe but was offset, in part, by better trading in Asia Pacific and Africa.

As previously indicated, turnover in the first half of 2003 was impacted by the
order book at the start of the period being significantly lower than at the same
point in the previous year, and by the economic and political uncertainties that
existed for much of the first half of the year.

The year started promisingly with the work won in the first quarter exceeding
the work delivered by some 63%. However, in the second quarter (and coinciding
with the war in Iraq) the speed at which work was won slowed dramatically. This
slowdown resulted in the work won for the half year as a whole being only some
27% greater than the turnover delivered.

The order book at 30 June 2003 was 40% ahead of the year end position. This
growth was lower than our earlier expectations, but was achieved despite
cautious decision-making by clients in light of the continuing economic and
political uncertainties.

Proudfoot Consulting's engagements extend over a period of typically six to nine
months. Consequently, the revenue of an individual quarter is more dependent on
the order book at the commencement of that quarter than on work won during the
quarter. Most of the work won during a quarter results in revenue in subsequent
quarters. Accordingly, the impact of the slower order in-take during the second
quarter on the turnover for the first half year was not significant. However,
the impact on turnover for the second half is significant and led us, in July,
to downgrade our full year outlook.

In response to the lower turnover, the delivery cost base was tightly managed
and, in particular, the consulting staff numbers were adjusted to maintain
utilisation levels and maintain profitability. The Proudfoot Consulting business
made an operating profit before goodwill amortisation of #2.3 million (2002:
#5.4 million).


Parson Consulting

The Parson Consulting business was purchased at the end of May 2002 and the
corresponding period therefore only includes one month's turnover. The turnover
for the six months ended 30 June 2003 was #9.5 million (one month ended 30 June
2002: #2.4 million; six months ended 31 December 2002: #11.7 million).

The Parson Consulting business made satisfactory progress in the six months
ended 30 June 2003. Turnover, which had remained steady since the autumn of last
year, started to climb week by week in the last couple of months of the half
year. During the six months we have strengthened the management and sales teams,
and installed sales processes and methodologies using the consulting skills of
Proudfoot Consulting. The focus on Sarbanes-Oxley has resulted in a good
expansion of our client base.

Good progress is being made at increasing both the volume and price of services
provided. We believe that there is scope for further improvement in future
periods.

The operating loss before goodwill amortisation for the six months ended 30 June
2003 was #3.2 million (one month ended 30 June 2002: #0.2 million). Importantly,
the monthly loss has now decreased from #0.8 million per month at the beginning
of 2003 to #0.4 million in June 2003.


Earnings per share

The fully diluted loss per share was 1.9 pence compared with earnings of 2.4
pence per share in the corresponding period. Headline loss per share before
goodwill amortisation was 0.8 pence (2002: earnings of 3.6 pence).


Dividend

As indicated previously, it is our policy to pay only one dividend a year, after
the declaration of the annual results. Accordingly, no interim dividend is being
declared.


Balance sheet

The group's cash balance declined from #21.9 million at 31 December 2002 to #9.6
million at 30 June 2003 due principally to the deferred consideration associated
with previous acquisitions and working capital movements.

The deficit related to the closed defined benefit pension and medical plans has
increased to #18.5 million from #17.3 million at 31 December 2002. This reflects
more conservative actuarial assumptions and the weakness in world stock markets.


Employees and directors

The board recognises the continued commitment to the Group of its employees and
their contribution to the underlying progress made by both businesses against
the backdrop of a difficult consulting market place. In particular, the
directors wish to place on the record their appreciation of each individual's
efforts that resulted in Management Consulting Group being independently
assessed as the major consultancy with the fastest organic growth rate in the
world for 2002.

Following the retirements from the board after the Annual General Meeting in
April, the board is delighted to announce the appointment of Baroness Cohen of
Pimlico as a non-executive director of the Company with effect from today. Janet
Cohen is the chairman of BPP Holdings plc, a non-executive director of the
London Stock Exchange PLC, a senior adviser to a number of organisations and
active in Anglo-German business. She was originally a solicitor, then had a
career as a civil servant in the Department of Trade and Industry, and
subsequently as a corporate financier and adviser in the Charterhouse Group. She
sits as a Labour peer in the House of Lords. Baroness Cohen will be a member of
the Audit Committee, the Nominations Committee and the Remuneration Committee.


Outlook

Our current order book is 40% higher than it was at the start of the year. On
the basis of this improved order book and current strong enquiry levels, and as
stated in our July trading update, the Board believes that the turnover for the
second half of 2003 is likely to exceed that achieved in the first half of the
year. The Board expects this performance despite the fact that the second half
of the year is traditionally weaker than the first due to seasonal trading
patterns.

Whilst we are currently seeing a greater inflow of client business, and whilst
economic uncertainty has eased somewhat since the Spring, the economic climate
is still far from stable. Business confidence remains fragile and the continuing
economic and political risk in some markets makes it difficult to predict the
outlook for the year as a whole with certainty.

However, provided that client decsion-making cycles do not lengthen further at
Proudfoot, and provided that the turnaround at Parson Consulting continues to
progress as it has done in recent months, the Board is confident that the
performance of the Group will improve in the second half.

R W H Stomberg
Non-executive Chairman

11 August 2003



Management Consulting Group PLC
group profit and loss account

six months ended 30 June 2003      unaudited       unaudited     audited
                                         six             six        year
                                months ended    months ended       ended 
                                30 June 2003    30 June 2002 31 Dec 2002
                                 -----------     -----------  ----------
                        note           #'000           #'000       #'000
                        ----     -----------     -----------  ----------

Turnover                   2          43,298          55,655     107,296

Cost of sales                        (22,256)        (27,450)    (53,710)
                                 -----------     -----------  ----------
Gross profit                          21,042          28,205      53,586

Selling costs                        (14,473)        (14,551)    (29,189)
Administrative
expenses

Excluding goodwill                    (7,543)         (8,502)    (16,787)
amortisation

Goodwill                              (2,021)         (1,100)     (3,107)
amortisation
                                 -----------     -----------  ----------
Total administrative                  (9,564)         (9,602)    (19,894)
expenses
                                 -----------     -----------  ----------
Operating (loss) /
profit:
Before goodwill                         (974)          5,152       7,610
amortisation
After goodwill                        (2,995)          4,052       4,503
amortisation
                                 -----------     -----------  ----------
Total operating (loss)     2          (2,995)          4,052       4,503
/ profit and (loss) /
profit on ordinary
activities before
finance income
Finance income (net)                     176              40         395
                                 -----------     -----------  ----------
(Loss) / profit on         2          (2,819)          4,092       4,898
ordinary activities
before taxation
Tax on (loss) / profit     3            (706)           (438)       (636)
on ordinary
activities
                                 -----------     -----------  ----------
(Loss) / profit on                    (3,525)          3,654       4,262
ordinary activities
after taxation
Equity dividends                           -               -        (930)
proposed
                                 -----------     -----------  ----------
Retained (loss) /                     (3,525)          3,654       3,332
profit for the
financial period
                                 -----------     -----------  ----------
Earnings / (loss) per      5
share - pence

Basic                                  (1.93)           2.75        2.71

Diluted                                (1.93)           2.44        2.43

Headline                               (0.82)           3.58        4.68
                                 -----------     -----------  ----------


group statement of total recognised gains and losses
six months ended 30 June 2003      unaudited       unaudited     audited
                                         six             six        year
                                months ended    months ended       ended  
                                30 June 2003    30 June 2002 31 Dec 2002
                                 -----------     -----------  ----------
                        note           #'000           #'000       #'000
                        ----     -----------     -----------  ----------

(Loss) / profit for                   (3,525)          3,654       4,262
the period

Actuarial loss            14          (1,824)         (4,230)     (7,605)
relating to retirement
benefit schemes

Currency translation                    
differences on foreign  
currency net
investments                              944           1,751       (453)
                                 -----------     -----------  ----------
Total recognised gains                (4,405)          1,175      (3,796)
and losses recognised
since the last Annual
Report                           -----------     -----------  ----------


group balance sheet
as at 30 June 2003                   unaudited    unaudited      audited
                                            30           30       31 Dec
                                  30 June 2003 30 June 2002  31 Dec 2002
                                   -----------  -----------   ----------
                          Note           #'000        #'000        #'000
                          ----     -----------  -----------   ----------
Fixed assets
Intangible assets          6            73,434       74,188       73,600

Tangible assets                          1,886        3,089        2,471

Investments                                970          970          970
                                   -----------  -----------   ----------
                                        76,290       78,247       77,041
                                   -----------  -----------   ----------
Current assets
Debtors                     7            9,762       11,832        8,256

Cash at bank and in hand                 9,553       26,667       21,928
and deposits
                                   -----------  -----------   ----------
                                        19,315       38,499       30,184

Creditors: amounts falling    8        (22,781)     (31,200)     (25,265)
due within one year
                                   -----------  -----------   ----------

Net current (liabilities) /             (3,466)       7,299        4,919
assets
                                   -----------  -----------   ----------

Total assets less current               72,824       85,546       81,960
liabilities

Creditors: amounts falling      9       (3,929)      (5,444)      (4,971)
due after more than one
year

Provisions for liabilities              (2,678)      (3,120)      (2,704)
and charges
                                   -----------  -----------   ----------

Net assets excluding                    66,217       76,982       74,285
retirement benefits
liability

Retirement benefits            14      (18,491)     (14,685)     (17,290)
liability
                                   -----------  -----------   ----------
Net assets including                    47,726       62,297       56,995
retirement benefits
liability

Capital and reserves                                             

Called up share capital                 47,198       46,383       46,530

Share premium account                   38,009       39,598       37,978

Shares to be issued                      3,282        8,988        9,427

Other reserves                           1,103          279         (423)

Profit and loss account                (41,866)     (32,951)     (36,517)
                                   -----------  -----------   ----------
Shareholders' funds -          10       47,726       62,297       56,995
equity
                                   -----------  -----------   ----------


Management Consulting Group PLC
group cash flow statement

six months ended 30 June 2003      unaudited       unaudited      audited
                                         six             six         year
                                months ended    months ended        ended
                                30 June 2003    30 June 2002  31 Dec 2002
                                 -----------     -----------   ----------
                       Notes           #'000           #'000        #'000
                       -----     -----------     -----------   ----------

Net cash (outflow) /      11          (5,935)          8,636        4,884
inflow from operating
activities

Returns on investment
and servicing of
finance

Interest received                        153             202          958
Interest paid                              -               -          (86)
                                 -----------     -----------   ----------
Net cash inflow from                     153             202          872
returns on
investments and
servicing of
finance

Taxation                                (544)         (2,227)      (2,093)

Capital expenditure
and financial
investment

Purchase of tangible                     (50)           (139)      (1,116)
fixed assets
                                 -----------     -----------   ----------
Net cash outflow from                    (50)           (139)      (1,116)
capital expenditure
and financial
investment

Acquisitions and
disposals

Payments to acquire                   (4,984)        (37,991)     (37,633)
subsidiary
undertakings

Debt acquired with                         -            (141)        (691)
subsidiary
undertakings
                                 -----------     -----------   ----------
Net cash outflow from                 (4,984)        (38,132)     (38,324)
acquisitions and
disposals

Equity dividends                        (911)              -            -
paid
                                 -----------     -----------   ----------
Cash outflow before                  (12,271)        (31,660)     (35,777)
use of liquid
resources and
financing

Management of liquid
resources

Cash withdrawn from                        -             271        2,475
liquid resources

                                 -----------     -----------   ----------
Net cash inflow from                       -             271        2,475
management of liquid
resources

Financing

Net proceeds from                          -          38,847       39,022
issue of ordinary
shares
                                 -----------     -----------   ----------
Net cash inflow from                       -          38,847       39,022
financing
                                 -----------     -----------   ----------

(Decrease) / increase      12,       (12,271)          7,458        5,720
in cash in the             13
period                           -----------     -----------   ----------
                                 

1.Basis of presentation

The interim financial statements have been prepared in accordance with the
accounting policies set out in the annual report for the year ended 31 December
2002.

2.Segmental information

(a) Turnover

There is no material difference between turnover by geographical destination and
turnover by geographical origin. The analysis of turnover by geographical
destination is as follows:

                         unaudited            unaudited        audited
                               six                  six           year
                      months ended         months ended          ended         
                      30 June 2003         30 June 2002    31 Dec 2002
                       -----------          -----------     ----------
                             #'000                #'000          #'000
                       -----------          -----------     ----------

North America               26,512               31,542         66,186

Europe                      12,467               21,250         34,634

Africa                       2,128                1,678          2,188

Asia Pacific                 2,191                1,185          4,288
                       -----------          -----------     ----------
                            43,298               55,655        107,296
                       -----------          -----------     ----------

(b) Profit / (loss) before taxation

The analysis of the profit / (loss) by geographical region is as follows:

                                  unaudited        unaudited         audited
                                        six              six            year
                               months ended     months ended           ended
                               30 June 2003     30 June 2002     31 Dec 2002
                                -----------       ----------      ----------
                                      #'000            #'000           #'000
                                -----------       ----------      ----------

North America                           (525)          4,448           8,645

Europe                                (2,544)            (83)         (3,479)

Africa                                   (21)            (34)           (947)

Asia Pacific                              95            (279)            284
                                -----------       ----------      ----------
Total operating (loss) /              (2,995)          4,052           4,503
profit

Finance income                           176              40             395
                                -----------       ----------      ----------
Group (loss) / profit before          (2,819)          4,092           4,898
taxation
                                -----------       ----------      ----------

3.Taxation

The Group is tax paying in certain jurisdictions, and several jurisdictions
apply minimum levels of taxation. The tax charge for the six months ended 30
June 2003 reflects such taxes. In other jurisdictions there are unrelieved
losses.

4.Earnings before interest, tax, depreciation and amortisation

                                  unaudited        unaudited          audited
                                        six              six             year
                               months ended     months ended            ended
                               30 June 2003     30 June 2002      31 Dec 2002
                                -----------       ----------       ----------
                                      #'000            #'000            #'000
                                -----------       ----------       ----------

Operating (loss) / profit            (2,995)           4,052            4,503

Depreciation                            635              453            1,639

Amortisation of goodwill              2,021            1,100            3,107
                                -----------       ----------       ----------
EBITDA                                 (339)           5,605            9,249
                                -----------       ----------       ----------

5.Earnings per share

The basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of Ordinary Shares in
issue during the period after deducting 3.9 million shares held by the Group in
an employee share trust.

For diluted earnings per share, the weighted average number of Ordinary Shares
in issue is adjusted to assume conversion of all potentially dilutive Ordinary
Shares. The Group's only dilutive instruments are share options granted to
employees where the exercise price is less than the average market price during
the year, shares potentially to be issued to Executive Directors under a long
term incentive plan and shares to be issued as deferred consideration. Dilution
is not recognised where continuing operations are loss making.

The average share price for the six months ended 30 June 2003 was 44.4 pence (30
June 2002: 69.7 pence and 31 December 2002: 67.8 pence).

Headline earnings per share has been calculated in accordance with the
definition in the Institute of Investment Management Research ('IIMR') Statement
of Practice No. 1, 'The Definition of IIMR Headline Earnings'.


Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
                                                weighted    
six months ended 30 June                         average
2003 (unaudited)                                  number     earnings per
                              earnings         of shares     share amount 
                              --------         ---------     ------------ 
                                 #'000         (million)         (pence)
                              --------         ---------     ------------ 

Basic EPS

Loss attributable to            (3,525)          182.5           (1.93)
shareholders
Effect of dilutive
securities

Options                              -               -               -

Long term incentive plan             -               -               -

Deferred consideration               -               -               -
shares
                              --------       ---------    ------------ 
Fully diluted EPS               (3,525)          182.5           (1.93)
                              --------       ---------    ------------ 

                              --------       ---------    ------------ 
Basic EPS                       (3,525)          182.5           (1.93)
Goodwill amortisation            2,021               -            1.11
                              --------       ---------    ------------ 
Headline EPS                    (1,504)          182.5           (0.82)
                              --------       ---------    ------------ 



                                                weighted    
six months ended 30 June                         average
2002 (unaudited)                                  number     earnings per
                              earnings         of shares     share amount 
                              --------         ---------     ------------ 
                                 #'000         (million)         (pence)
                              --------         ---------     ------------ 
Basic EPS

Profit attributable to           3,654           132.9            2.75
shareholders
Effect of dilutive
securities

Options                              -             3.6           (0.07)

Long term incentive plan             -            10.5           (0.19)

Deferred consideration               -             3.0           (0.05)
shares

                              --------       ---------    ------------ 
Fully diluted EPS                3,654           150.0            2.44
                              --------       ---------    ------------ 

                              --------       ---------    ------------ 
Basic EPS                        3,654           132.9            2.75
Goodwill amortisation            1,100               -            0.83
                              --------       ---------    ------------ 
Headline EPS                     4,754           132.9            3.58
                              --------       ---------    ------------ 

year ended 31 December                       weighted            
2002 (audited)                         average number     earnings per
                           earnings         of shares     share amount
                           --------        ---------      ------------ 
                              #'000         (million)          (pence)
                           --------        ---------      ------------ 

Basic EPS

Profit attributable to        4,262            157.3              2.71
shareholders

Effect of dilutive
securities

Options                           -              3.6             (0.06)

Long term incentive               -              8.5             (0.13)
plan

Deferred consideration            -              6.1             (0.09)
shares
                           --------        ---------      ------------ 
Fully diluted EPS             4,262            175.5              2.43
                           --------        ---------      ------------ 
  
                           --------        ---------      ------------ 
Basic EPS                     4,262            157.3              2.71
Goodwill amortisation         3,107                -              1.97
                           --------        ---------      ------------ 
Headline EPS                  7,369            157.3              4.68
                           --------        ---------      ------------ 

6.Intangible assets

Intangible assets consist of goodwill arising on acquisitions which is being
amortised over a period of 20 years. The total amortisation charge for the
period was #2.0 million (30 June 2002: #1.1 million) of which #0.9 million (30
June 2002: #0.2 million) relates to North America and #1.1 million (30 June
2002: #0.9 million) relates to Europe.

7.Debtors

                                   unaudited    unaudited     audited
                                     30 June      30 June      31 Dec
                                        2003         2002        2002
                                    --------    ---------   --------- 
                                       #'000        #'000       #'000
                                    --------    ---------   --------- 

Trade debtors                          5,710         8,231      4,774
Other debtors                            827           933        890
Taxation recoverable                   1,693           919      1,422
Prepayments and accrued income         1,532         1,749      1,170
                                    --------    ---------   --------- 
                                       9,762        11,832      8,256
                                    --------    ---------   --------- 


8.Creditors: amounts falling due within one year

                                    unaudited     unaudited    audited
                                      30 June       30 June     31 Dec
                                         2003          2002       2002
                                     --------     ---------  --------- 
                                        #'000         #'000      #'000
                                     --------     ---------  --------- 

Bank loans and overdrafts                   -           711          -

Trade creditors                         1,670         2,689      2,072

Other creditors                         1,062         1,829      1,066

Corporation tax                         4,023         2,369      3,393

Other taxes and social security         1,235           969      1,342

Deferred income                         1,543         3,365      1,579

Accruals                               13,248        19,268     14,883

Proposed dividend                           -             -        930
                                     --------     ---------  --------- 
                                       22,781        31,200     25,265
                                     --------     ---------  --------- 

9.Creditors: amounts falling due after more than one year

                             unaudited         unaudited       audited
                               30 June           30 June        31 Dec
                                  2003              2002          2002
                              --------         ---------     --------- 
                                 #'000             #'000         #'000
                              --------         ---------     --------- 

Other creditors                      -             2,780           953

Corporation tax                  2,535             2,664         2,359

Accruals                         1,394                 -         1,659
                              --------         ---------     --------- 
                                 3,929             5,444         4,971
                              --------         ---------     --------- 


10.Reconciliation of movements in equity shareholders' funds

                                   unaudited       unaudited         audited
                                         six             six            year
                                months ended    months ended           ended  
                                30 June 2003    30 June 2002     31 Dec 2002
                                 -----------     -----------      ----------
                                       #'000           #'000           #'000
                                 -----------     -----------      ----------

(Loss) / profit for the               (3,525)          3,654           4,262
period

Other recognised gains and              (880)         (2,479)         (8,058)
losses during the period

New share capital issued               1,281          41,320          41,480

Equity dividends proposed                  -               -            (930)

(Decrease) / increase in              (6,145)           (250)            189
reserve for shares to be
issued
                                 -----------     -----------      ----------
Net (decrease) / increase in          (9,269)         42,245          36,943
shareholders' funds:

Opening shareholders' funds:          56,995          20,052          20,052
                                 -----------     -----------      ----------
Closing shareholders' funds           47,726          62,297          56,995
                                 -----------     -----------      ----------



11.Reconciliation of operating profit / (loss) to net cash flow from operating
activities

                                   unaudited       unaudited         audited
                                         six             six            year
                                months ended    months ended           ended  
                                30 June 2003    30 June 2002     31 Dec 2002
                                 -----------     -----------      ----------
                                       #'000           #'000           #'000
                                 -----------     -----------      ----------

Operating (loss) / profit             (2,995)          4,052           4,503

Depreciation                             635             453           1,639

Amortisation                           2,021           1,100           3,107

Management long term incentive        (1,504)            726               -

plan (credit) / charge

Retirement benefit                      (515)         (1,095)         (1,210)
contributions in excess of
service costs

(Increase) / decrease in              (1,735)          3,306           6,695
debtors

(Decrease) / increase in              (1,727)             30          (9,402)
creditors

(Decrease) / increase in                (115)             64            (448)
provisions
                                 -----------     -----------      ----------
Net cash (outflow) / inflow           (5,935)          8,636           4,884
from operating activities
                                 -----------     -----------      ----------


12. Analysis of net funds

                   net funds               
                        at 1                 exchange     net funds at
                    Jan 2003  cash flow      movement     30 June 2003                        
                    --------  ---------     ---------     ------------
                       #'000      #'000         #'000            #'000
                    --------  ---------     ---------     ------------

Cash at bank          21,928    (12,271)         (104)           9,553
                    --------  ---------     ---------     ------------


13.Reconciliation of net cash flow to movement in net funds

                                   unaudited       unaudited         audited
                                         six             six            year
                                months ended    months ended           ended  
                                30 June 2003    30 June 2002     31 Dec 2002
                                 -----------     -----------      ----------
                                       #'000           #'000           #'000
                                 -----------     -----------      ----------

(Decrease) / increase in             (12,271)          8,175           5,720
cash

Increase in bank overdraft                 -            (717)              -

Cash inflow from management of             -            (271)         (2,475)
liquid resources
                                 -----------     -----------      ----------
Change in net funds arising          (12,271)          7,187           3,245
from cash flows

Exchange movement                       (104)           (158)           (244)
                                 -----------     -----------      ----------
Movement in net funds in the         (12,375)          7,029           3,001
period

Net funds at beginning of             21,928          18,927          18,927
period
                                 -----------     -----------      ----------

Net funds at end of period             9,553          25,956          21,928
                                 -----------     -----------      ----------


14.Retirement benefits

The retirement benefits liability relates to the US defined benefit pension
scheme and to the US post-retirement medical benefits plan.

Entitlement to additional benefits under the US defined benefits pension scheme
ceased on 31 December 2001.

The US post-retirement medical benefits plan relates to certain former employees
who retired prior to 30 September 1995 and to a small number of current and
former employees who were employed at that date. Accordingly, further benefit
accruals under this plan are insignificant.

The retirement benefits liability at 30 June 2003 has been estimated by the
actuaries on the basis described in the last annual report except that the
expected rate of return on assets has been reduced by 1% to 8% and the discount
rate applied to the liabilities has been reduced by 0.75% to 6%.

                                   unaudited       unaudited         audited
                                         six             six            year
                                months ended    months ended           ended  
                                30 June 2003    30 June 2002     31 Dec 2002
                                 -----------     -----------      ----------
                                       #'000           #'000           #'000
                                 -----------     -----------      ----------

Retirement benefits liability       (17,290)        (12,212)         (12,212)
at start of period

Pension contributions                   428           1,032            1,087

Payment of medical benefits              88             118              176

Service costs                            (1)            (55)             (53)

Net finance expense                    (422)           (175)            (336)

Actuarial loss                       (1,824)         (4,230)          (7,605)

Foreign exchange                        530             837           1,653
translation
                                 -----------     -----------      ----------

Retirement benefits liability       (18,491)        (14,685)        (17,290)
at end of period
                                 -----------     -----------      ----------


15.Statutory accounts

The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The statutory accounts for the
financial year ended 31 December 2002, upon which the auditors issued an
unqualified opinion pursuant to Section 235 of the Companies Act 1985 and which
do not contain a statement under sub-section (2) or Section 237 of that Act,
have been delivered to the Registrar of Companies.

16.Interim report

A copy of the Group's interim report will be sent to shareholders on 22 August
2003 and copies will be available at the Company's registered office at 21 New
Fetter Lane, London EC4A 1AW.



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

END
IR ILFFATLITIIV