RESULTS REFLECT SUCCESS OF MANAGEMENT ACTION SINCE 9.11, AND GOOD PROGRESS IN NEW BUSINESS DEVELOPMENT

Umeco plc, Europe's leading provider of value-added distribution services to the aerospace and defence industries, announces its interim results for the six months ended 30 September 2002.

(Due to significant change in trading conditions in core aerospace markets since 11 September 2001, results are more validly compared with the second half of last year - H2 2001).

Turnover of £88.0m, down 4% on H2 2001 (£91.4m), reflecting conditions in core aerospace markets;

Profit before tax* of £4.7m, up 6% on H2 2001 (£4.4m), demonstrates success of action taken to reduce cost base and working capital levels;

Continued strong cash generation, reducing net debt by £4.4m (H2 2001 reduction: £11.7m);

Earnings per share* of 12.9 pence, up 9.3% on H2 2001 (11.8 pence);

Interim dividend of 4.0p pence per share (H1 2001: 3.25 pence) reflects intention to reduce disparity between interim and final dividend;

Rolls-Royce plc expected to rise following major extension to relationship effective from April 2002;

Interest in outsourcing services continues to increase; considerable focus on winning additional business from existing and new customers.

(* before goodwill amortisation and exceptional items)


Clive Snowdon, Umeco's Chief Executive said:

"The period under review has been very encouraging, despite the challenging market conditions. The progress over the prior period reflects the success of the prompt action we have taken on costs and working capital, the enhanced contractual terms under our major contract with Rolls-Royce plc, and our success in winning additional business from existing and new customers.

"Interest in our outsourcing services continues to rise, and the considerable resource we are putting behind winning additional business is paying off. Our international presence is an important factor behind this success.

"Against this background, and although conditions in our markets will remain challenging, we are confident about Umeco's longer term prospects and currently expect a further improved performance in the second half."