Pinewood Shepperton plc
21 March 2005

Pinewood Shepperton plc
Preliminary results for the year ended 31 December 2004

Highlights for 2004

   • Strong revenue and profit performance

   • Turnover from continuing operations up 3% at £38.5m (2003:£37.4m)

   • Strong growth for Television and Sound Services as expected

   • Operating profit from continuing operations before exceptional IPO
     related costs, up 13% at £12.9m (2003:£11.4m)

   • Profit on ordinary activities before taxation at £6.4m (2003:£2.6m)

   • Diluted earnings per share 13.1p (2003:11.9p)

   • Proposed final dividend of 2.7p per share

   • Studio enhancement planning applications submitted and progressing well


Ivan Dunleavy, Chief Executive commented:

"This is a strong set of results. In line with our expectations, we have
maintained our revenues in Film Stage Services against a very strong prior year
comparative, and our Television and Sound Services business has grown well as we
have established a powerful position in this market."

Michael Grade, Chairman added:

"The Government has reiterated its commitment to UK film by extending the
supportive fiscal regime in the recent budget. Our performance in the first half
of 2005 will be adversely affected by the uncertainty that has surrounded this
issue and we are delighted that much of this uncertainty has now been removed.
We look forward to the future with confidence."

Enquiries

Pinewood Shepperton plc
Ivan Dunleavy - Chief Executive
Patrick Garner - Finance Director

Brunswick Group LLP                                020 7404 5959
Simon Sporborg / James Olley


A presentation of the results of the Company will be available on Pinewood
Shepperton's website: www.pinewoodshepperton.com from 12pm today.

Notes to Editors:

The Facilities

Pinewood Shepperton is the leading European provider of studio and related
services to the film and television industries encompassing 34 stages, 2 digital
television studios, 14 sound theatres, production offices, workshops, an outdoor
paddock tank, an underwater filming stage and four backlots for set building.
Accommodation is provided to over 200 businesses which benefit from being
located at Pinewood or Shepperton Studios.

Film Stage Services

Pinewood Shepperton derives income from the rental of its 34 stages for film and
filmed television production. Additional ancillary services such as art and
design facilities, utilities, consumables, specialised workshops and production
offices are also provided.

Television and Sound Services

Pinewood Television has two dedicated digital television studios, which were
introduced during 2001 to diversify revenue streams. Since that date Pinewood
Television has established itself as a recognised provider of digital television
facilities and has played host to a cross section of major productions.

Pinewood Shepperton has 13 dedicated audio mixing and recording theatres and a
preview theatre that offer a range of facilities. Customers have access to high
speed broadband secure networks which provide fast and reliable file transfer
between the studios and global locations.

Media Park Income

Pinewood Shepperton hosts over 200 businesses at its two studios on lease
arrangements ranging from six months to five years. These businesses are
generally media related and view Pinewood Shepperton as a media community,
providing them with a readily accessible market for their businesses. The
facilities are also let to production companies on a flexible basis which gives
rise to low vacancy rates.


OPERATING AND FINANCIAL REVIEW

Operating Review

Overview

For over seventy years Pinewood Shepperton has competed globally, and we will
continue to ensure that it remains a preferred destination for film and
television production. During 2004 turnover from continuing operations increased
by 3% with operating profit from continuing operations, before exceptional IPO
related costs, rising 13% to £12.9m. This has been another strong performance
for our market leading business, building on successes in prior years.

A principal element of Pinewood Shepperton's long term growth strategy is our
studio enhancement plans, which, if successful, will increase our capacity and
efficiency significantly. In May 2004 we submitted outline planning applications
for both studios and discussions with the planning authorities are progressing
well.

Global demand for filmed entertainment continued to increase - especially with
the introduction of digital technology. A large percentage of the major film
studios' revenues is now derived from DVD sales.

During 2004 we built upon our growing reputation as a provider of bespoke
television facilities, by hosting a number of new productions not previously
housed at the studios, together with productions which have established
themselves at our television facility.

Film Stage Services

Film Stage Services revenues for 2004 were £21.5m (2003:£21.5m)

During 2004 Pinewood Shepperton enjoyed strong Film Stage Services revenues,
from the following productions amongst others; Charlie and the Chocolate
Factory, Batman Begins, Harry Potter and the Goblet of Fire, Sahara, King
Arthur, Bridget Jones:Edge of Reason, Mrs Henderson, Russian Dolls and Nanny
McPhee. In the year, Pinewood Shepperton provided facilities to 21 features, 54
commercials and pop promos and 26 TV dramas or specials, such as Strictly Ice
Dancing. We also provided ancillary services to 32 location productions.

In April 2004, the 007 stage reverted to Pinewood Shepperton together with all
rights to the revenue from this unique facility. This stage was utilised
primarily by Charlie and the Chocolate Factory following reversion.

As part of the studio enhancement plans, at Shepperton Studios, we commenced
construction of 8,000 sq. ft of phase I of the Eastern Workshops, which was
completed in March 2005. These additional workshops will increase ancillary
facilities' revenues.

Additionally, at Shepperton Studios, we received detailed planning permission in
September 2004 for I Block, a major complex comprising 62,000 sq. ft of
production facilities. Pre-development work has commenced with construction
expected to start during 2005, for twelve months. This will further add to our
ancillary revenues.

Pinewood Studios commenced construction in October 2004, of a new underwater
filming stage, U Stage, which was completed in March 2005 and has a depth of 6
metres, length of 20 metres and width of 10 metres, housed in a bespoke complex.
This is a unique facility that will enhance the reputation of the studios and
add to our premium offering.

In addition to the above projects we continued to upgrade and enhance our stage
and ancillary facilities, and during the year, we invested in such projects as a
Motion Capture Studio at Pinewood and improvements to A and B Stages at
Shepperton.

Television and Sound Services

Television and Sound Services revenues for 2004 were £10.7m (2003:£9.7m).

During 2004 we hosted The Weakest Link, My Family, All About Me, According to
Bex, 20th Century Roadshow and a number of other smaller productions which we
were able to accommodate given the flexibility of the Pinewood Shepperton
offering.

We continued to invest in our television studios' infrastructure to facilitate a
broader spectrum of recorded and live productions, and actively seek to attract
major broadcasters and independent production companies.

During the second half of 2004 we restructured the management of Pinewood
Television to enhance our ability to increase our share of this potential growth
market, as the major broadcasters outsource or dispose of their studio
facilities, and to dovetail with the wider Pinewood Shepperton sales and
marketing initiatives.

During the year Pinewood Shepperton's sound services business experienced an
exceptional level of activity, working on productions such as Troy, 
Thunderbirds, Around the World in 80 Days, Alien vs Predator and Phantom of the 
Opera.

We renewed our contract in April 2004 to dub foreign language versions for
Disney Character Voices International (DCVI), a division of Buena Vista
International (UK) Limited, using four of Shepperton Studios' audio theatres
exclusively.

We continue to invest in our facilities in the sound post production businesses
and have recently renewed sound desks in the Korda Theatre and Theatre One at
Shepperton Studios, in addition to upgrades to support our foreign language
versioning for DCVI. At Pinewood Studios we are in the process of redeveloping
Theatre Two, which will facilitate the dubbing and mixing of television
programmes, being a new growth opportunity for us.

Media Park Income

Media Park Income for 2004 was £6.3m (2003:£6.2m).

As expected 2004 media park income remained consistent with 2003. As surplus
space is absorbed in the surrounding market, it is anticipated that further
demand for our media park facilities will emerge. Our market continues to
benefit from media businesses wishing to relocate away from central London.


Financial Review

Overview

Group revenues from continuing operations for 2004 were £38.5m (2003:£37.4m).

Our Film Stage Services revenue of £21.5m retained the momentum of 2003's record
success. Several major productions, notably Charlie and the Chocolate Factory
and Batman Begins, utilised facilities for a significant period during 2004.
Television and Sound Services had another satisfying year with revenues
increasing 10.2% to £10.7m, arising from established and new television
productions in the year, and a number of major sound services contracts. Media
park income of £6.3m was in line with 2003, as we continued to enjoy high
occupancy rates in 2004.

Profit Performance

Gross margin from continuing operations increased from 46.4% in 2003 to 49.1% in
2004, and operating margin from continuing operations before exceptional costs
increased from 30.4% in 2003 to 33.6% in 2004. Our business is operationally
geared and therefore growth in revenue in 2004 has beneficially impacted both
gross margin and operating margin. Continued cost control has further benefited
operating margin.

Earnings Per Share

Diluted earnings per share increased by 10% from 11.9p in 2003 to 13.1p in 2004,
including the impact of the Company's change in capital structure following its
Initial Public Offering.

Operating Cash Flow

Cash flow generated from operating activities was £12.2m (2003:£16.2m). £1.5m of
the reduction in operating cash flow in the year was attributable to costs
incurred relating to the Initial Public Offering. The balance of £2.5m reflected
a lower level of contracted productions at 31 December 2004, compared to the
equivalent position in 2003, and so reduced instalments received in advance of
facility usage.

Initial Public Offering and Refinancing Costs

During the year the company incurred £1.5m of costs related to the Initial
Public Offering, which were charged to the Profit and Loss Account, and £3.1m of
equity raising costs, which were charged to the Share Premium Account. In
addition, £0.7m of costs were incurred in arranging and executing the company's
new £60m revolving credit facility. These costs have been capitalised and are
being amortised over the five year life of the facility. In the period from 12
May to 31 December 2004, £91,000 of debt amortisation costs were charged to the
Profit and Loss Account.

Interest

Interest payable and similar charges decreased from £7.3m in 2003 to £4.3m in
2004, resulting from the refinancing of the Company at the time of the Initial
Public Offering in May 2004. The Company has put in place a revolving credit
facility that enables flexibility to pre-pay and re-draw debt in accordance with
the requirements of the business. In May 2004 the Company entered into a five
year interest rate SWAP at a fixed rate of 5.525% on £20m of drawn debt, with
interest on the remainder of the debt at floating rate libor.

During the restructuring of the Company's financing at the time of the Initial
Public Offering, it incurred a one off charge of £0.6m, being the early
termination costs of the then existing interest rate agreements.

Taxation

The effective tax rate for the year is 29.8%, reflecting one-off deductible and
disallowable exceptional items associated with the Initial Public Offering and
related reorganisation of the Company's capital structure. In future years, we
anticipate an effective tax rate of circa 32%, allowing for the impact of
certain disallowable expenditure.

Dividend

The proposed final dividend for 2004 of £1.2m, which the directors are
recommending, to be paid on 27 May 2005 to shareholders on the register on 6 May
2005 (ex dividend date 4 May 2005), represents 2.7p per share. The directors
intend to maintain a progressive dividend policy.

Net Debt

Net borrowings at 31 December 2004 were £40.6m (2003:£89.2m), after raising
£46.9m of equity from our Initial Public Offering.

Accounting Disclosures and Policies

The Company's directors are mindful of the impending implementation of the
International Financial Reporting Standards (IFRS) and continue to review, with
our auditors Ernst & Young, all accounting policies to ensure that compliance
with the standards will be met for calendar year commencing 1 January 2005.

The Company's current expectation is that the principal impact of IFRS will be
the requirement to recognise a deferred tax liability arising from the uplift in
fair values of land and buildings on the acquisitions of Pinewood Studios
Limited and Shepperton Studios Limited in 2000 and 2001 respectively. Under UK
GAAP, no deferred tax liability is required to be recognised.


Current Trading and Outlook

As anticipated, our Television and Sound Services revenues continue to perform
well as we develop a strong presence in the television market. Our Media Park
revenues are also performing in line with expectations.

Our Film Stage Services revenues are always impacted by the timing of the start
of larger films during each year. A review was expected of Section 42 film tax
policy for large films, creating uncertainty in the industry particularly among
film producers. Tax relief in the UK partly mitigates the effects of the weaker
US Dollar which is another consideration for film makers. This fiscal
uncertainty against a background of continued Dollar weakness has understandably
caused delays in the timing of some key productions provisionally booked at
Pinewood Shepperton. The effect of this will be to reduce substantially our
revenues from Film Stage Services for the first half of 2005 compared with the
first half of 2004.

The recent budget has removed this uncertainty. The government's commitment to
fiscal incentives for the film industry for the long term has been reconfirmed
by the Chancellor, and the Treasury is now working on an improved replacement
for Section 42 relief. Fiscal policy in the UK continues to be positive overall
for film and our customers can now begin to commit to their productions.

Although we are expecting the reduction in Film Stage Services revenues in the
first half of 2005 to lead to a reduction in total revenues for the year when
compared with 2004, the outlook for the second half of 2005 is encouraging and
we are expecting revenues in this period to show real growth over those for the
second half of 2004.

Overall, demand for our services continues to rise and world-wide media markets
continue to grow. In response to this we will continue our strategy of investing
in unique and state-of-the-art facilities. The Board views the Company's
prospects and strategy with confidence and looks forward to growth in the years
to come.

Group profit and loss account
for the year ended 31 December 2004


                                                           2004          2003
                                                Notes      £000          £000
Turnover
Continuing operations                                    38,535        37,438
Discontinued operations                                     132           431
                                                       --------      --------
                                                    1    38,667        37,869
Cost of sales                                       2   (19,762)      (20,434)
                                                       --------      --------
Gross profit
Continuing operations                                    18,912        17,367
Discontinued operations                                      (7)           68
                                                       --------      --------
                                                         18,905        17,435

Selling and distribution expenses                   2    (1,830)       (2,406)
Administrative expenses                             2    (4,256)       (4,094)
Exceptional administrative expenses                 4    (1,517)            -

Group operating profit
Continuing operations                                    11,418        11,393
Discontinued operations                                    (116)         (458)
                                                       --------      --------
                                                    3    11,302        10,935

Loss on sale of operations - discontinued operations         (7)            -
Interest receivable                                          28            22
Interest payable and similar charges                     (4,284)       (7,321)
Amortisation of loan issue costs                            (91)       (1,008)
Exceptional interest payable                               (555)            -
                                                       --------      --------
Total interest payable and similar charges               (4,909)       (8,307)
                                                       --------      --------
Profit on ordinary activities before taxation             6,393         2,628
Taxation                                                 (1,908)         (881)
                                                       --------      --------
                                                          4,485         1,747
Minority interest                                            91           118
                                                       --------      --------
Profit for the year attributable to the members 
of the parent company                                     4,576         1,865
Ordinary dividend on equity shares                5      (1,237)            -
                                                       --------      --------
Retained profit for the year                              3,339         1,865
                                                       --------      --------

Earnings per share - basic                        5       13.1p         12.0p
                   - diluted                      5       13.1p         11.9p


Group balance sheet
at 31 December 2004

                                                           2004          2003
                                              Notes        £000          £000
Fixed assets
Tangible fixed assets                                    99,113        97,849
                                                       --------      --------
Current assets
Stocks                                                      396           366
Debtors                                                   4,568         4,235
Cash at bank and in hand                                      -           114
                                                       --------      --------
                                                          4,964         4,715
Creditors: amounts falling due within one year          (12,048)      (11,421)
                                                       --------      --------
Net current liabilities                                  (7,084)       (6,706)
                                                       --------      --------
Total assets less current liabilities                    92,029        91,143

Creditors: amounts falling due after more than one year (38,363)      (88,436)

Provisions for liabilities and charges                   (2,634)       (2,589)

Minority interest                                             -           650
                                                       --------      --------
                                                         51,032           768
                                                       --------      --------
Capital and reserves
Called up share capital                           6       4,581           238
Share premium account                             7      43,269           807
Capital redemption reserve                        7         135             -
Merger reserve 7 348 348
Profit and loss account                           7       2,699          (625)
                                                       --------      --------
Equity shareholders' funds                               51,032           768
                                                       --------      --------

Group statement of cash flows
for the year ended 31 December 2004

                                                           2004          2003
                                                           £000          £000

Net cash inflow from operating activities                12,210        16,184
                                                       --------      --------
Returns on investments and servicing of finance
Interest received                                            28            22
Interest paid                                            (5,055)       (6,401)
Interest element of finance lease rental payments            (2)          (21)
Loan issue costs                                           (728)            -
                                                       --------      --------
Net cash outflow from returns on investments and 
servicing of finance                                     (5,757)       (6,400)
                                                       --------      --------
Capital expenditure
Payments to acquire tangible fixed assets                (3,947)       (3,033)
                                                       --------      --------
Net cash disposed of with subsidiary undertaking           (281)            -
                                                       --------      --------
Taxation
Corporation tax paid                                     (1,321)         (659)
                                                       --------      --------
Net cash inflow before financing                            904         6,092
                                                       --------      --------
Financing
Issue of ordinary share capital                          50,000             -
Share issue costs                                        (3,104)            -
Increase in loans                                        39,124           140
Repayment of capital element of finance leases             (106)         (349)
Repayment of loans                                      (88,536)       (6,597)
                                                       --------      --------
Net cash outflow from financing                          (2,622)       (6,806)
                                                       --------      --------
Decrease in cash                                         (1,718)         (714)
                                                       --------      --------

Reconciliation of operating profit to net cash inflow from operating activities

                                                           2004          2003
                                                           £000          £000

Operating profit                                         11,302        10,935
Depreciation                                              3,821         3,619
(Increase) in stocks                                        (30)          (36)
(Increase)/Decrease in debtors                             (333)           72
(Decrease)/increase in creditors                         (2,550)        1,594
                                                       --------      --------
                                                         12,210        16,184
                                                       --------      --------

Reconciliation of net cash flow to movement in net debt

                                                           2004          2003
                                                           £000          £000

Decrease in cash                                         (1,718)         (714)
Cash inflow from increase in loans                      (39,124)         (140)
Issue costs of new long term loans                          728             -
Repayment of capital element of finance leases              106           349
Repayment of long term loans                             88,536         6,597
                                                       --------      --------
Changes in net debt resulting from cash flows            48,528         6,092
Disposal                                                    774             -
Other non-cash movements                                    (91)       (2,008)
                                                       --------      --------
Movement in net debt                                     49,211         4,084
Net debt at beginning of year                           (89,178)      (93,262)
                                                       --------      --------
Net debt at end of year                                 (39,967)      (89,178)
                                                       --------      --------


Group statement of total recognised gains and losses
for the year ended 31 December 2004

                                                           2004          2003
                                                           £000          £000

Profit for the year                                       4,576         1,865
Exchange differences                                        (15)          (40)
                                                       --------      --------
Total recognised gains relating to the year               4,561         1,825
                                                       --------      --------

Notes forming part of the accounts
at 31 December 2004

1. Turnover and sector analysis

Turnover is recognised in the period in which the service is provided, and is
stated net of value added tax.

The group operates in one principal area of activity, that of media services,
arising primarily in the United Kingdom.

Continuing operations represent the provision of media services for film and
television production.

Discontinued operations relate to the activities of Silver Lining Productions
Limited, being the development of intellectual property.

Revenues from these activities can be further analysed as follows:

                                            Continuing  Discontinued     Total
2004                                              £000          £000      £000

Film stage services                             21,545             -    21,545
Television and sound services                   10,678             -    10,678
Media park income                                6,312             -     6,312
Silver Lining Productions                            -           132       132
                                              --------      --------   -------
                                                38,535           132    38,667
                                              --------      --------   -------

                                            Continuing  Discontinued     Total
2003                                              £000          £000      £000

Film stage services                             21,511             -    21,511
Television and sound services                    9,694             -     9,694
Media park income                                6,233             -     6,233
Silver Lining Productions                            -           431       431
                                              --------      --------   -------
                                                37,438           431    37,869
                                              --------      --------   -------

2. Cost of sales and operating expenses

                                            Continuing  Discontinued     Total
                                                  £000          £000      £000
2004
Cost of sales                                   19,623           139    19,762
Selling and distribution expenses                1,783            47     1,830
Administrative expenses                          4,194            62     4,256
Exceptional administrative expenses              1,517             -     1,517
                                              --------      --------   -------

                                            Continuing  Discontinued     Total
                                                  £000          £000      £000
2003
Cost of sales                                   20,071           363    20,434
Selling and distribution expenses                2,283           123     2,406
Administrative expenses                          3,691           403     4,094
                                              --------      --------   -------

3. Operating profit

This is stated after charging/(crediting):

                                                                2004      2003
                                                                £000      £000

Depreciation            - owned assets                         3,821     3,446
                        - under finance leases                     -       173
Auditors' remuneration  - audit services                          90        73
                        - non-audit services                     178        57
Development expenditure written off                               40       140
Operating lease rentals  - plant and machinery                     5        16
Reorganisation costs                                             533       333
Studio enhancement initial assessment costs                        -       775
Rates rebate                                                    (686)     (691)
                                                              ------    ------

Depreciation of owned assets includes £155,000 following an impairment review of
assets relating to reorganised activities during the year.

Reorganisation costs represents costs associated with the restructuring of
certain of the group's trading activities during the year.

In addition to the above £332,000 of non-audit services auditors' remuneration,
relating directly to the raising of equity, has been charged to the share
premium account.

Rate rebates for 2004 and 2003 reflect one off receipts in relation to the
reassessment of previous year rateable values at the group's two principal
locations.

4. Exceptional items

During the year the company incurred costs in connection with its listing on the
London Stock Exchange, and the refinancing of its banking facilities. £3,104,000
of costs were directly attributable to the raising of equity and have been
charged to the share premium account; £728,000 of costs incurred in arranging
and executing the company's new £60,000,000 revolving credit facility have been
capitalised and are being amortised over the five year term of the facility;
£1,517,000 of costs have been disclosed as exceptional administrative expenses
and expensed to the profit and loss account, being costs related to the Initial
Public Offering; £555,000 of costs relating specifically to the cancellation of
the company's existing swap agreements have been disclosed in the profit and
loss account as exceptional interest payable.

5. Earnings per ordinary share and dividend

The calculation of basic earnings per ordinary share is based on earnings of
£4,576,000 (2003 - £1,865,000), and on 34,887,000 (2003 - 15,519,000) ordinary
shares, being the weighted average number of ordinary shares in issue during the
year after.

The number of basic shares for 2004 and 2003 is adjusted to reflect the
aggregate number of shares that would have been in issue had the fourteen for
one bonus issue on all shares in issue prior to admission, been in place for the
full 2003 and 2004 years.

The calculation of basic number of shares is summarised as follows:

                                                                2004      2003
                                                           thousands thousands

Basic number of shares at start of the year                    1,035     1,035
Number of shares issued via bonus issue                       14,484    14,484
Weighted number of shares issued in the year                  19,368         -
                                                              ------    ------
                                                              34,887    15,519
                                                              ------    ------

The calculation of diluted earnings per share is based on profit for the year of
£4,576,000 (2003 - £1,865,000) and on 35,038,000 (2003 - 15,684,000) ordinary
shares, calculated as follows:

                                                                2004      2003
                                                           thousands thousands

Basic weighted average number of shares                       34,887    15,519
Dilutive potential ordinary shares:
Employee options relating to the Sharesave scheme                151         -
Employee share options                                             -        28
Warrants                                                           -       137
                                                              ------    ------
                                                              35,038    15,684
                                                              ------    ------
Dividend

                                                                2004      2003
                                                                £000      £000

Final dividend proposed at 2.7p per ordinary share             1,237         -
                                                              ------    ------

6. Share capital

                                                                    Authorised
                                                                2004      2003
                                                                   £         £

Ordinary shares of 10p each                                7,000,000         -
Ordinary shares of £1 each                                         -   150,000
A Ordinary shares of 10p each                                      -    88,946
B Ordinary shares of 10p each                                      -    13,549
C Ordinary shares of £1 each                                       -    54,450
                                                           ---------   -------
                                                           7,000,000   306,945
                                                           ---------   -------

                                            Allotted, called up and fully paid
                                                   2004                   2003
                                           No.          £        No.         £

Ordinary shares of 10p each         45,813,118  4,581,312
Ordinary shares of £1 each                   -          -    150,000   150,000
A Ordinary shares of 10p each                -          -    749,059    74,906
B Ordinary shares of 10p each                -          -    135,494    13,549
                                    ----------  ---------  ---------   -------
                                    45,813,118  4,581,312  1,034,553   238,455
                                    ----------  ---------  ---------   -------

All issued shares rank pari passu.

At the time of listing on the London Stock Exchange, on 12 May 2004, the company
redesignated and increased its authorised and issued share capital as follows:

The issued and unissued A and B ordinary shares were each redesignated as one
ordinary share of 10p.

The unissued C ordinary shares of £1 were sub-divided into ten ordinary shares
of 10p each.

The existing ordinary shares of £1 each were sub-divided into one ordinary share
of 10p and one deferred share of 90p.

In accordance with the terms of a contingent purchase contract approved by a
written resolution passed on 19 April 2004, the Company purchased all of
the 150,000 deferred shares of 90p each for an aggregate consideration of £1.
The authorised share capital was increased from £306,945 to £7,000,000 by the
creation of 66,930,550 ordinary shares of 10p each.

Prior to the listing, the company had a share option scheme under which options
to subscribe for 30,494 of C Ordinary shares of £1 were awarded to certain
executive directors and senior employees at par. These options were adjusted via
a bonus issue of fourteen for one, so as to equal options in respect of 457,410
10p ordinary shares. These options were exercised upon admission on 12 May 2004.

Intermediate Capital Investments Limited and Intermediate Capital Limited
together held warrants which entitled them to subscribe to 11.42% of the
ordinary share capital of the company at a subscription price of 10p. Following
a fourteen for one bonus issue, warrants over 2,059,635 10p ordinary shares were
created. These warrants were exercised upon admission on 12 May 2004.

On 12 May 2004, all redesignated shares in issue were increased via a fourteen
for one bonus issue.

By a resolution of the Board passed on 6 May 2004, 27,777,778 new 10p ordinary
shares were allotted.

The company has an approved and an unapproved Company Share Option Plan under
which options to subscribe for the company's shares have been granted to certain
directors and senior managers of the company. On 12 May 2004 247,663 options
were granted under the approved scheme and 510,859 options were granted under
the unapproved scheme. All options have an exercise price of 203.5p per share,
exercisable between 12 May 2007 and 12 May 2014 provided certain performance
conditions have been satisfied.

The company has a Sharesave scheme under which options to subscribe for the
company's shares have been granted to employees wishing to participate in the
scheme. On 9 June 2004 283,319 options were granted at 162.8p each. Of these
146,553 options are exercisable between 1 July 2007 and 1 January 2008 and
136,766 options are exercisable between 1 July 2009 and 1 January 2010. Since 9
June 2004, a total of 19,575 of options relating to the Sharesave scheme have
lapsed.

7. Reconciliation of shareholders' funds and movements on reserves

Group
                                Share    Capital             Profit
                      Share   premium redemption    Merger  and loss
                    capital   account    reserve   reserve   account     Total
                       £000      £000       £000      £000      £000      £000

At 1 January 2003       238       807          -       348    (2,450)   (1,057)
Profit for the year       -         -          -         -     1,865     1,865
Exchange differences      -         -          -         -       (40)      (40)
                      -----    ------     ------     -----    ------   -------
At 1 January 2004       238       807          -       348      (625)      768
Profit for the year       -         -          -         -     4,576     4,576
Dividend                            -          -              (1,237)   (1,237)
Exchange differences      -         -          -         -       (15)      (15)
New shares issued     2,778    47,222          -         -         -    50,000
Options exercised        46       (16)         -         -         -        30
Warrants exercised      206      (192)         -         -         -        14
Bonus issue           1,448    (1,448)                   -         -         -
Shares repurchased     (135)        -        135         -         -         -
Share issue costs         -    (3,104)         -         -         -    (3,104)
                      -----    ------     ------     -----    ------   -------

At 31 December 2004   4,581    43,269        135       348     2,699    51,032
                      -----    ------     ------     -----    ------   -------



The financial information contained herein does not constitute the Company's
statutory accounts for the year ended 31 December 2004, as defined in section
240 of the Companies Act 1985, but have been extracted from the statutory
accounts, upon which the auditors issued an unqualified opinion. Statutory
accounts for 2003 have been delivered to the Registrar of Companies. Statutory
accounts for the year ended 31 December 2004 will be delivered following the
Company's Annual General Meeting.




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