FOR IMMEDIATE RELEASE 4 FEBRUARY 2003

                              CHEMRING GROUP PLC                               

                              PRELIMINARY RESULTS                              

                      FOR THE YEAR ENDED 31 OCTOBER 2002                       

Results

  * Turnover �96.3m (2001: �95.2m)
   
  * Operating profit �7.7m (2001: �12.0m)
   
  * Credit to operating profit �5.6m (2001: �5.5m) relating to insurance claim
   
  * Basic earnings per share 14.16p (2001: 26.72p)
   
  * Diluted earnings per share 14.11p (2001: 26.62p)
   
  * Dividend per ordinary share 6.70p (2001: 6.70p)
   
Trading Highlights

  * Solid performance across Group, despite impact of Kilgore incident
   
  * Defence order book at record high of �78m
   
  * Strong cash performance in second half
   
Commenting on the results, Ken Scobie, Chemring Group Chairman, said: "The
Group's excellent growth since 1998 was stalled this year by the impact of
Kilgore's plant rebuild following the incident in 2001. The pressed flare
facility, which generates 70% of Kilgore's total decoy output, is now complete
and is in production. The extruded flare facility, which makes up the balance,
is currently in low-rate production and is expected to reach full capacity by
May at the latest.

The rest of the Group has performed well, with particularly strong performances
from Alloy Surfaces and the military pyrotechnics business. With Kilgore's
planned return to profitability, the defence order book at a record all-time
high, and the strong market positions of our other businesses, I am confident
that we will resume our growth path in 2003.

The Group's countermeasure decoys are enviably placed to satisfy most of the
requirements of the US military machine. The impact of September 11, the
subsequent appreciation of the terrorist threat, both domestically and
internationally, and other world events give confidence of the growing demand
for our protective products. In addition, with the increasing demand for our
marine safety products and a solid contribution from our other operations, I
believe the Group will return this year to the strong performance of previous
years. Resolution of the Kilgore insurance claim with Royal & Sun Alliance
(RSA) would enable the Board to expand its horizons beyond existing
activities."

Note

All comparisons are for the year ended 31 October 2001.

For further information:

Ken Scobie        Chairman                           0207 930 0777             
                                                                               
David Evans       Chief Executive                    0207 930 0777             
                                                                               
Paul Rayner       Finance Director                   0207 930 0777             
                                                                               
Jonathan Rooper   Cardew & Co.                       0207 930 0777             

Operating Results

Group turnover was �96.3 million (2001: �95.2 million), an increase of 1%. The
turnover of acquired operations was �0.6 million, arising from four months'
ownership of ICS Electronics.

Gross and net operating profits have been impacted by the accounting for the
Kilgore insurance claim as outlined below.

Total overheads increased during the year, due principally to higher insurance
costs of approximately �1 million and a full year of overheads for businesses
acquired last year.

The Kilgore rebuild was completed in May 2002 but subsequent commissioning took
longer than anticipated due to the need to ensure a fully safe process.
Kilgore's sales in the year were only �13 million, against potential sales of �
33 million which were covered by orders. As a result of this and the absence of
UK naval contracts, the turnover of the countermeasures business was down 11%
on last year, causing a consequential reduction in profitability. We expect
this to be reversed in the future.

Our military pyrotechnics and marine safety businesses increased turnover in
the year by 38% and 10% respectively.

Kembrey Wiring Systems performed at a similar level to last year. The reduced
activity in the civil aviation sector was offset by increased military aircraft
business.

Dividends

Against the background of the Kilgore position, the Board has given careful
consideration to the Group's dividend policy and the recommendation of a final
dividend for the year. The Board believes that its confidence in the future
prosperity of the Group will be clearly demonstrated by the recommendation of a
final dividend as normal, maintained at last year's level of 4.25p. This,
together with the interim dividend of 2.45p (2001: 2.45p) paid in August 2002,
gives a total dividend for the year of 6.70p (2001: 6.70p).

Turnover by Business Area

                                                  �m
                                                    
Countermeasures                                 45.7
                                                    
Military pyrotechnics                           17.9
                                                    
Marine safety                                   21.4
                                                    
Wiring harnesses                                 9.3
                                                    
Chemical coatings                                2.0
                                                    
Total                                           96.3

Defence Businesses

Countermeasures

The Group's countermeasures business further strengthened its market position
in the year. The order book increased to �66 million, up 24% on 2001. This was
achieved despite the difficulties associated with the implementation of
state-of-the-art manufacturing techniques, including the fully automated
manufacture of expendables, at US-based Kilgore. Total turnover was �45.7
million in the year, down �5.6 million due to the issues at Kilgore and
anticipated lower demand for naval decoys at Chemring Countermeasures in the
UK.

In the US we are the leading provider of IR expendable decoys to the US
Department of Defense. The combined sales of our US countermeasures businesses
to the US DoD contributed 24% of total Group turnover in the year. With Kilgore
now operational this is expected to increase substantially in 2003.

Demand has increased for Alloy Surfaces' proprietary special material area
decoys, particularly for pre-emptive applications. Alloy Surfaces' products are
critical, leading-edge technology decoys at the heart of all US services' decoy
programmes, and feature prominently in a number of pre-emptive countermeasures
programmes denying a missile lock-on capability. After extensive testing,
special material decoys have been selected as the US Air Force's advanced
solution to protect fixed-wing transport aircraft, US Army helicopters and US
Navy aircraft. Programmes are also in place with both the US DoD and the UK MoD
to provide this pre-emptive capability for frontline combat aircraft.

Kilgore is expanding into land and ship protection. During the year Kilgore was
awarded a contract to develop a range of decoys for armoured vehicle
protection, and the business is also supporting the US Navy on advanced concept
IR ship decoys.

Commissioning of the pressed flares facility at Kilgore was completed during
the year, and volume deliveries of pressed flares are now being made to
Kilgore's customers. Export deliveries of extruded flares have also commenced,
and US deliveries will commence in February following completion of US Navy
first article testing. The capacity of the new decoy facility at Kilgore is now
estimated at �3 million turnover per month, six times that of our UK facility.

Our full decoy product range for the protection of land, sea and air platforms
leads the market. The range includes point source magnesium flares for widely
exploited traditional threats, spectrally-matched point source flares, and area
pyrophoric spectral decoys to defeat legacy and new generation anti-platform
missiles and threat systems. Our decoys have been qualified for use on existing
and new generation air platforms such as the European Eurofighter and the US
F22 aircraft.

Against a background of increasing use of military aircraft in supporting
anti-terrorist activity, improved protection for transport aircraft and
helicopters against the ever-increasing IR Man-Portable Air Defence Systems
(MANPADS) threat is vital. IR decoy flares play a vital role in increasing the
self-protection provided for these platforms. According to official sources,
there are an estimated 500,000 shoulder-fired, heat-seeking missiles in the
world. Although most remain in government hands, many have found their way out
into the 'black market' arms trade and into the hands of terrorist groups.

The unique Modular Expendable Block (MEB) is an excellent example of the
Group's countermeasures research and development efforts to provide optimised
platform protection. The MEB can incorporate both multi-spectral IR and RF
payloads to increase platform survivability. It is specified on many platforms
including the UK MoD Apache helicopter, the Swiss Cougar helicopter, the
Italian Navy EH101 and SH3D helicopters, and on C130 and F16 aircraft in
numerous NATO and non-NATO countries.

The Group continues to invest in research and development as well as production
facilities to protect our prominent position in expendable countermeasures.

Military Pyrotechnics

Turnover in the year increased by 38% to �17.9 million, and current demand
remains strong for military pyrotechnics. Sales for the current financial year
are more than 50% covered by the opening order book, and the worldwide spread
of orders provides stability and further opportunities for the future.

The collaboration referred to last year with B�ck of Germany has resulted in
improved joint sales in overseas markets, and the companies are now jointly
progressing new enquiries.

Collaboration between PW Defence and Kilgore has proved successful, with PW
Defence assisting Kilgore in overseas markets and Kilgore assisting PW Defence
in the US market.

We continue to support the MoD in its stated aim of achieving long term cost
reductions in munitions. As a result of this initiative, we are assisting the
MoD in an end-to-end study of its logistics chain. This activity, together with
associated product and manufacturing improvements, will also benefit PW Defence
in its overseas markets.

Increased demand for military vehicle screening products assisted growth during
the year. We continue to maintain our market share in standard military
pyrotechnics.

Non-defence Businesses

Marine Safety

Turnover increased by 10% to �21.4 million in the year. Sales of electronics
increased by 20%, again providing the growth in this business area and
supporting our strategy of investment in developing new electronic products
against known legislation. Our priority going forward is to ensure that
profitability matches sales growth.

The Group is a global market leader in providing legislated marine products to
aid location and safety, including location beacons, portable VHF radios, fixed
VHF class D radios incorporating Digital Selective Calling (DSC), Automatic
Identification Systems (AIS) transponders, marine location lights and distress
signals.

The acquisition of ICS Electronics in July 2002 complemented the existing
capability of the marine business by adding MF/HF/VHF radio communications,
DSC, Navtex, satellite marine terminals, weather facsimile, weather satellite
systems and coast radio stations to the product range. The ICS Electronics
business enhances our already excellent growth prospects in marine electronics
products.

These prospects are supported by new legislation being implemented by the IMO.
In December 2002 the IMO brought forward the deadline for fitting of AIS on
ships engaged in international voyages. Now all such ships over 300 tons, not
required to fit AIS at an earlier date, will have to fit AIS at the first
safety equipment survey after 1 July 2004, but in any case not later than 31
December 2004. The deadline for ships not engaged in international voyages
remains at 1 July 2008, but national authorities can move this date forward in
their own waters. The introduction of AIS will assist our growth.

On 25 November 2002, President George Bush signed the Maritime Transportation
Security Act of 2002. This Act increases the number of vessels to be fitted
with AIS when operating in the navigable waters of the US. This represents a
significant opportunity for the Group's marine business with an estimated
overall market opportunity of �100 million over the next two years. 

Demand for our 406MHz products remains high, with our award winning EPIRB with
integral Global Positioning System (GPS) selling well, particularly in the US.
During the year, we received a five year supply contract from the US Coast
Guard for our 406MHz Personal Locating Beacon (PLB). This product will become
standard equipment for every US Coast Guard boat crewmember, and other
government authorities are now adopting the product.

We are holding our market share on marine distress pyrotechnics and lights,
although demand generally is not increasing in these markets.

The combination of new electronic products which are being introduced and
significant market opportunities offers our marine business continuing growth
prospects over the coming years.

Wiring Harnesses

Kembrey Wiring Systems (Kembrey) is the largest independent UK manufacturer of
high specification cable harnesses for the aerospace industry. It has an
excellent reputation for supplying quality wiring systems to manufacturers of
airframe and aircraft engines. During the year Kembrey expanded its role by
providing engineering and logistics services to its customers.

Turnover was �9.3 million in the year, at a similar level to last year, which
is a good result against the general downturn in the civil aviation sector.
Increased sales of military aircraft wiring harnesses compensated for the
downturn in the civil aviation business.

Following a competitive tender instigated by Rolls-Royce for the majority of
its aero engine wiring harnesses, Kembrey was awarded a five year contract,
which is expected to increase current annual sales to Rolls-Royce by �3
million. This increase should offset delays in the Nimrod programme.

Chemical Coatings

Alloy Surfaces has a niche market in supplying special chemicals to the
aerospace sector for use in diffusion coating of engine components, and demand
is expected to continue at current levels.

Kilgore Insurance Claim

�7.3 million (2001: �5.5 million) has been accrued in the results as additional
proceeds from the Kilgore insurance claim. The total amount of �12.8 million
accounted for over the last two financial years is considered to be
conservative against your Board's opinion, supported by our professional
advisers, of the sum recoverable under the policy. Our claim is significantly
in excess of �15 million.

Group operating profits are arrived at after crediting �5.6 million (2001: �5.5
million) in respect of business interruption proceeds arising out of the
insurance claim.

Under FRS15 Accounting for Fixed Assets an estimated profit on disposal of �1.1
million arises due to the allocation of material damage proceeds in excess of
historic net book value of assets, less legal and professional fees incurred.

At the end of October 2002, the unrecovered amount in respect of insurance
proceeds was �9.6 million (2001: �3.0 million), and this has been included in
other debtors.

Since the year end a further �2.5 million has been recovered from RSA, reducing
the debtor to �7.1 million.

The BBC Landmine Allegations

The results of the official investigations by HM Customs & Excise and the
Derbyshire Constabulary into inaccurate and unsubstantiated allegations made by
the BBC Today Programme were made public last November. These separate
inquiries both concluded that there was no evidence to support the allegations
brought by the BBC, and this view was endorsed by the Crown Prosecution
Service. The Group's lawyers have subsequently written to the BBC to demand a
full retraction. Your Board will pursue this matter with the utmost
determination.

Research and Development

Research and development expenditure totalled �4.6 million (2001: �5.0
million), of which �1.4 million (2001: �1.4 million) was funded by customers
and �1.0 million (2001: �2.2 million) was capitalised.

Amortisation of previously capitalised development costs was �0.7 million
(2001: �0.6 million). The Group's policy is to write-off capitalised
development costs over a three year period.

Internally funded research and development expenditure written-off to the
profit and loss account in the year was �2.2 million (2001: �1.4 million).

Profit on Disposal

A profit on disposal of �1.1 million arose from the insurance claim accounting
as outlined above.

In 2001 a gain of �0.4 million was made on the disposal of one of the Group's
freehold properties.

Interest

The interest charge for the year was �3.5 million (2001: �3.0 million).
Interest cover on operating profit was 2.2 times (2001: 4.0 times). Interest
was high due to delays in the receipt of insurance proceeds following the
incident at Kilgore and higher net debt resulting from losses at Kilgore.

Taxation

The tax charge of �1.6 million (2001: �2.7 million) is based on an effective
rate of 30% (2001: 28%).

Tax losses at Kilgore were used to offset profits at Alloy Surfaces and gain
tax refunds in the US.

The Group adopted FRS19 Deferred Taxation during the year. A prior period
adjustment of �0.4 million has been made to adjust the deferred tax charge for
the year ended 31 October 2001 and the opening balance sheet. The impact on the
deferred tax charge for the year is negligible.

It is anticipated that tax rates will rise to around 32% in this financial year
due to the incidence of higher profits in the US.

Pensions

Under FRS17 Accounting for Pension Costs, the calculated deficit on the Group's
two defined benefit pension schemes was �9.4 million (2001: �6.4 million).

Shareholder Returns

Earnings per ordinary share were 14.16p (2001: 26.72p).

The dividend per ordinary share of 6.70p (2001: 6.70p) is covered 2.07 times
(2001: 3.68 times).

Shareholders' funds at the year end were �48.7 million (2001: �46.0 million).

Goodwill

Goodwill arose in the year as follows:

                                                  �m
                                                    
Acquisition of ICS Electronics                   3.2
                                                    
Adjustment to prior years                        0.4
                                                    
Total additions                                  3.6

The goodwill relating to ICS Electronics is made up of:

                                                  �m
                                                    
Goodwill on acquisition                          1.3
                                                    
Deferred consideration                           0.3
                                                    
Deferred contingent consideration                1.6
                                                    
Total                                            3.2

The deferred contingent consideration is payable over a three year period from
acquisition, and is contingent upon the achievement of certain profit targets.
The deferred contingent consideration has been calculated on a prudent basis
with reference to ICS Electronics' budget; the maximum payable is �3.3 million.
In future years goodwill will be adjusted if ICS Electronics exceeds its
current budget and the deferred contingent consideration increases.

The Board has carried out an annual impairment test on the Group's total
goodwill of �28.3 million. This has demonstrated that no amortisation is
necessary on the constituent parts of the goodwill balance.

Cash Flow and Gearing

Operating cash flow was �10.1 million (2001: �4.1 million), representing a
conversion rate from operating profit of 131% (2001: 35%), and was particularly
strong in the second half of the year. Working capital balances have fallen and
contract receivables outstanding at the last year end of �5.6 million have been
collected.

Total fixed asset expenditure in the year was �13.1 million (2001: �7.6
million). Of the total spend on fixed assets, �9 million (2001: �3 million) was
incurred by Kilgore as part of the investment in its facilities.

The capital expenditure was funded as follows:

                                                  �m
                                                    
Cash                                             9.6
                                                    
Finance leases                                   3.5
                                                    
Total                                           13.1

Net debt stood at �47.3 million at the year end (2001: �40.9 million). Gearing
was 97% (2001: 89%). At the end of April 2002 net debt stood at �52.0 million.

Facilities

The Group has agreed total facilities of �49 million with Bank of Scotland to
provide funding and working capital for the UK businesses and Kilgore. In
addition, facilities of �6.5 million are in place with Wilmington Trust and
Pennsylvania Industrial Development Authority to provide funding for Alloy
Surfaces, and facilities of �0.6 million in Australia provide funding for Pains
Wessex Australia. In June 2002 Kilgore entered into a finance lease of �2.5
million to acquire certain assets. The finance lease is repayable over 5 years.
Total leasing lines of credit of �4 million exist to fund plant purchases in
the UK and at Kilgore.

The Board has reviewed the latest guidance on going concern and considers that
the above facilities provide the Group with adequate resources.

SUMMARY FINANCIAL INFORMATION

                                           2002          2001            2000
                                                                             
                                           �000            As     As restated
                                                     restated                
                                                                         �000
                                                         �000                
                                                                             
    Turnover                                                                 
                                                                             
    Defence                                                                  
                                                                             
    Countermeasures                      45,725        51,352          28,538
                                                                             
    Military pyrotechnics                17,942        12,991          11,169
                                                                             
                                         63,667        64,343          39,707
                                                                             
    Non-defence                                                              
                                                                             
    Marine safety                        21,345        19,356          17,700
                                                                             
    Wiring harnesses                      9,305         9,594           7,608
                                                                             
    Chemical coatings                     2,010         1,952           2,154
                                                                             
                                         32,660        30,902          27,462
                                                                             
                                         96,327        95,245          67,169
                                                                             
    Operating profit                      7,690        11,971           8,806
                                                                             
    Profit before taxation                5,416         9,399           7,127
                                                                             
    Dividend per ordinary share           6.70p         6.70p           6.30p
                                                                             
    Basic earnings per ordinary          14.16p        26.72p          22.04p
    share                                                                    
                                                                             
    Shareholders' funds                  48,671        46,014          33,225
                                                                             

CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the year ended 31 October 2002

                                                          2002       2001
                                                                         
                                                    Continuing         As
                                                                 restated
                                                    operations           
                                                               Continuing
                                                          �000           
                                                               operations
                                                                         
                                                                     �000
                                                                         
Turnover                                                96,327     95,245
                                                                         
Operating profit                                         7,690     11,971
                                                                         
Associated undertaking                                      89         43
                                                                         
Profit on disposal                                       1,123        369
                                                                         
Profit on ordinary activities                            8,902     12,383
before interest                                                          
                                                                         
Analysis of profit on ordinary                                           
activities before interest:                                              
                                                                         
Kilgore - normal operations                            (4,851)    (2,141)
                                                                         
- insurance claim                                        6,682      5,533
                                                                         
                                                         1,831      3,392
                                                                         
Rest of Group                                            7,071      8,991
                                                                         
Profit on ordinary activities                            8,902     12,383
before interest                                                          
                                                                         
Interest payable                                       (3,486)    (2,984)
                                                                         
Profit on ordinary activities                            5,416      9,399
before taxation                                                          
                                                                         
Tax on profit on ordinary                              (1,605)    (2,652)
activities                                                               
                                                                         
Profit on ordinary activities                            3,811      6,747
after taxation                                                           
                                                                         
Equity minority interest                                    29       (25)
                                                                         
Profit for the financial year                            3,840      6,722
                                                                         
Dividends                                              (1,843)    (1,831)
                                                                         
Retained profit                                          1,997      4,891
                                                                         
Basic earnings per ordinary                             14.16p     26.72p
share                                                                    
                                                                         
Diluted earnings per ordinary                           14.11p     26.62p
share                                                                    
                                                                         

ADDITIONAL FINANCIAL PERFORMANCE STATEMENTS

For the year ended 31 October 2002

                                                   2002                  2001
                                                                             
                                                   �000                    As
                                                                     restated
                                                                             
                                                                         �000
                                                                             
Statement of total recognised                                                
gains and losses                                                             
                                                                             
Profit on ordinary activities                     3,811                 6,747
after taxation                                                               
                                                                             
Currency translation differences                  (756)                 (469)
on foreign currency net                                                      
investments                                                                  
                                                                             
Total recognised gains and losses                 3,055                 6,278
relating to the year                                                         
                                                                             
Prior year adjustment                             (389)                     -
                                                                             
Total recognised gains and losses                 2,666                 6,278
since last financial statements                                              
                                                                             
Reconciliation of movements in                                               
shareholders' funds                                                          
                                                                             
Profit on ordinary activities                     3,811                 6,747
after taxation                                                               
                                                                             
Equity minority interest                             29                  (25)
                                                                             
Dividends                                       (1,843)               (1,831)
                                                                             
Retained profit                                   1,997                 4,891
                                                                             
Other recognised losses                           (756)                 (469)
                                                                             
Ordinary shares issued                               25                   151
                                                                             
Share premium arising                             1,391                 8,216
                                                                             
Net addition to shareholders'                     2,657                12,789
funds                                                                        
                                                                             
Opening shareholders' funds as                   46,014                33,225
restated                                                                     
                                                                             
Closing shareholders' funds                      48,671                46,014

CONSOLIDATED BALANCE SHEET

As at 31 October 2002

                                        �000       2002       �000        2001
                                                                              
                                                   �000            As restated
                                                                              
                                                                          �000
                                                                              
Fixed assets                                                                  
                                                                              
Intangible assets                                                             
                                                                              
Development costs                      3,002                 2,690            
                                                                              
Goodwill                              28,343                24,789            
                                                                              
                                                 31,345                 27,479
                                                                              
Tangible assets                                  42,746                 33,901
                                                                              
Investments                                         972                    924
                                                                              
                                                 75,063                 62,304
                                                                              
Current assets                                                                
                                                                              
Stock                                 17,807                18,231            
                                                                              
Debtors                               32,636                30,494            
                                                                              
Cash at bank and in hand               3,774                 2,418            
                                                                              
                                      54,217                51,143            
                                                                              
Creditors due within one            (49,288)              (33,910)            
year                                                                          
                                                                              
Net current assets                                4,929                 17,233
                                                                              
Total assets less current                        79,992                 79,537
liabilities                                                                   
                                                                              
Creditors due after more                       (29,375)               (32,097)
than one year                                                                 
                                                                              
Provisions for liabilities                      (1,644)                (1,095)
and charges                                                                   
                                                                              
Equity minority interest                          (302)                  (331)
                                                                              
                                                 48,671                 46,014
                                                                              
Capital and reserves                                                          
                                                                              
Called-up share capital                           1,434                  1,409
                                                                              
Reserves                                                                      
                                                                              
Share premium account                 20,726                19,335            
                                                                              
Special capital reserve               12,939                12,939            
                                                                              
Revaluation reserve                    2,482                 2,518            
                                                                              
Revenue reserves                      11,090                 9,813            
                                                                              
                                                 47,237                 44,605
                                                                              
Shareholders' funds                              48,671                 46,014
                                                                              
Attributable to equity                           48,609                 45,952
shareholders                                                                  
                                                                              
Attributable to non-equity                           62                     62
shareholders                                                                  
                                                                              
                                                 48,671                 46,014

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 October 2002

                                    �000         2002      �000          2001
                                                                             
                                                 �000                    �000
                                                                             
Net cash inflow from                           10,056                   4,134
operating activities                                                         
                                                                             
Returns on investments and                    (2,899)                 (3,077)
servicing of finance                                                         
                                                                             
Taxation                                          671                 (1,522)
                                                                             
Capital expenditure                          (10,622)                 (8,058)
                                                                             
Acquisitions                                    (145)                (15,401)
                                                                             
Equity dividends paid                         (1,818)                 (1,640)
                                                                             
Cash outflow before use of                    (4,757)                (25,564)
liquid resources and                                                         
financing                                                                    
                                                                             
Financing - issue of shares           54                  4,833              
                                                                             
- (decrease)/increase in debt    (2,111)                 16,896              
                                                                             
                                              (2,057)                  21,729
                                                                             
Decrease in cash                              (6,814)                 (3,835)
                                                                             
Reconciliation of net cash                                                   
flow to movement in net debt                                                 
                                                                             
Decrease in cash                              (6,814)                 (3,835)
                                                                             
Cash outflow/(inflow) from                      2,111                (16,896)
the (decrease)/increase in                                                   
debt and lease financing                                                     
                                                                             
Change in net debt resulting                  (4,703)                (20,731)
from cash flows                                                              
                                                                             
New finance leases                            (3,479)                   (115)
                                                                             
Translation difference                          1,212                      22
                                                                             
Amortisation of debt finance                    (102)                       -
costs                                                                        
                                                                             
New finance costs applied to                      737                       -
loans                                                                        
                                                                             
Movement in net debt                          (6,335)                (20,824)
                                                                             
Opening net debt                             (40,942)                (20,118)
                                                                             
Closing net debt                             (47,277)                (40,942)
                                                                             

Notes

1. The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 October 2002 or 31 October 2001 but is
derived from those accounts. Statutory accounts for 2001 have been delivered to
the Registrar of Companies, and those for 2002 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts.
Their report on the 2001 accounts was unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985. Their report
on the 2002 accounts includes an emphasis of matter which draws attention to
the uncertainty in respect of the amount recoverable under an insurance claim
following the incident at Kilgore, see note 2 below. Their opinion is not
qualified in this respect.

The financial information has been prepared in accordance with the accounting
policies adopted for the 2001 accounts with the exception of deferred taxation,
see note 4 below.

2. Following the incident at Kilgore Flares Company LLC on 18 April 2001, the
Group lodged a claim with its insurers for property damage and business
interruption. Legal proceedings in respect of this claim were filed in a
Tennessee Court in March 2002 for an additional �11,000,000 over and above the
�3,200,000 which had been received from insurers at that time. Alongside the
legal process, negotiations with the Group's insurers have continued throughout
the year ended 31 October 2002.

At 31 October 2002, the Board has made a further estimate of the additional
proceeds which it believes that Kilgore is entitled to receive under the
insurance policy, after taking advice from its professional advisers, of which
�7,300,000 has been recognised in these financial statements. Of this, �
5,559,000 (2001:�5,533,000) has been credited to cost of sales with the
balance, net of costs, being allocated as material damage proceeds. As the
material damage related to fixed assets, the related surplus of �1,123,000 has
been accounted for as a profit on disposal, in accordance with FRS15, and
included separately in the profit and loss account (2001: profit on disposal
relates to sale of freehold property).

At 31 October 2002, payments totalling �3,200,000 had been received from the
Group's insurers. Subsequent to the year end a further payment of �2,500,000
was received, bringing the total received to date to �5,700,000. This level of
recovery approximates to the amount recognised in the financial statements for
the year ended 31 October 2001.

The balance of the claim that had not been recovered from the insurers at the
year end was �9,633,000 (2001:�3,007,000) which has been included within other
debtors. This outstanding balance has been reduced to �7,133,000 since the year
end following receipt of the further payment of �2,500,000 detailed above.

3. Subject to shareholder approval, the final dividend of 4.25p per ordinary
share will be paid on 11 June 2003 to all shareholders registered at the close
of business on 16 May 2003. The ex-dividend date will be 14 May 2003.

4. FRS19 has been adopted in the year. As a result, a prior year adjustment of
�79,000 to shareholders' funds at 31 October 2000 was required to make full
provision for deferrd tax liabilities. The adoption of FRS19 has also resulted
in a reduction to the previously reported profits for the financial year ended
31 October 2001 by �310,000.

5. The financial statements for the year ended 31 October 2002 will be posted
to shareholders on 19 February 2003 and will also be available from that date
at the registered office, 1650 Parkway, Whiteley, Fareham, Hampshire PO15 7AH.

1

16



END



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