RNS Number:9052H
Stadium Group PLC
25 February 2003

25 February 2003


STADIUM GROUP PLC SEES PRE-EXCEPTIONAL EARNINGS PER SHARE DOUBLE

Stadium Group plc, the AIM listed provider of Electronic Manufacturing Services,
today announced its preliminary results for the year ended 31 December 2002,
ahead of market expectations.


HIGHLIGHTS FOR YEAR ENDED 31 DECEMBER 2002

* Turnover from continuing activities up by 4% to #35.4m, including Stadium
  Asia turnover up by 45% to #11.7m.

* Group operating profit on continuing activities before goodwill
  amortisation up by 59% to #1.5m.

* Group operating loss of #0.35m down from #5.6m.

* Profit on continuing activities before tax, goodwill and exceptional
  items of #1.2m.

* Stadium Asia operating profits up eight-fold to #0.78m.

* Pre-exceptional earnings per share from continuing activities more than
  doubled to 4.0 pence.

* Basic loss per share reduced from 28p to 3p.

* Net bank borrowings reduced by #6.6m to #4.5m, giving year end gearing of 36%.

* Proposed full year dividend unchanged at 2.8 pence, representing a yield
  of approximately 8%.

* Net asset value of 45 pence per share.

* Substantial new business wins have brought Asia factory to 60% capacity.

* Intention to incorporate new subsidiary in the People's Republic of China
  with domestic selling rights.

* Board remains positive about prospects for future growth.



Commenting on the results, Nigel Rogers, Chief Executive, said:

"We are now in a phase of strong organic growth at Stadium Asia, and our UK
operations have been stabilised.  The strength of our balance sheet indicates
ample financial resources, and we have a strong team of dedicated people
providing first class services to an expanding list of high quality customers,
many of whom are household names."



For further information please contact:

Nigel Rogers, Chief Executive, Stadium Group plc  020 7786 9600 (today) 01429
852 500 (thereafter)

Keeley Clarke, Binns & Co PR Ltd  020 7786 9600 (today) 0113 242 1171
(thereafter)




STADIUM GROUP PLC
CHIEF EXECUTIVE'S REVIEW

Overview

We are pleased to report trading results which are ahead of expectations,
further substantial reductions in net borrowings and a positive outlook for the
year ahead.

This has been achieved against a difficult backdrop, with most UK-based
manufacturers, including both our customers and competitors, facing tougher
market conditions as volumes and margins come under continued pressure.

By contrast, rapid development of the Pearl River delta area of South Eastern
China for both sourcing and OEM inward investment has fuelled excellent  growth
in turnover and earnings at Stadium Asia.

Within the group results from continuing activities we have also borne the
effects of a weakening US dollar and additional costs associated with the
funding of UK pension obligations.

Results and Dividend

Profit before tax, goodwill amortisation and exceptional items from continuing
activities was #1.22m, based on operating profits up 59% to #1.49m (2001 :
#0.93m) less interest costs of #267,000 (2001 : #939,000).  Earnings from these
activities was more than doubled to 4.0 pence per share from 1.9 pence.  Basic
earnings, after the impact of discontinued activities, disposals and goodwill
amortisation, were a loss of 3.0 pence per share against a loss of 28.3 pence in
2001.  This reflects the final phase of implementation of the June 2001
strategic review and further exceptional costs are anticipated to be minimal.

Net borrowings were reduced by #6.57m to #4.52m to give gearing of 36%.  These
figures are expressed without allowing for deferred consideration receivable
totalling #2.30m, including #1.02m during 2003.  Adjusted gearing net of
deferred consideration was 18%.

The Board proposes a final dividend of 1.85 pence per share, bringing the total
for the year to 2.8 pence (2001 : 2.8 pence).  The final dividend will be
payable to shareholders on the register on 4 April 2003 and will be paid on 5
May 2003.

Electronics


                                                    2002                            2001
  #'000                                      Continuing            Total        Continuing            Total

  Turnover                                       25,486           26,921            24,222           28,974
  Operating profit (before                          799              625               295              178
   exceptionals)
  Operating margin                                 3.1%             2.3%              1.2%             0.6%



Turnover at Stadium Asia increased by 45% to #11.71m, and operating profits
increased eight-fold to #0.78m.  These results were especially strong in view of
the ten per cent depreciation of the Hong Kong Dollar relative to sterling
during the year.  The increase in turnover is attributable to the full annual
impact of major automotive and  consumer products contracts won in 2001, and the
introduction of new customers including a leading producer of domestic appliance
controls.

The rapid introduction of new business brought capacity utilisation to around
60%, with resulting benefits in operational gearing.  We have continued to
invest in developing the capability of the business, and this is attracting more
complex projects.  The level of new business won towards the end of the year
gives us confidence that strong growth can be sustained in the coming year.

Negotiations are ongoing to incorporate a new subsidiary in the People's
Republic of China with domestic selling rights.  This will place Stadium in a
strong position to exploit major opportunities in high growth consumer,
telecommunications and automotive markets in the region.

UK electronics achieved results slightly better than break even despite a
decline in turnover of more than 20% to #13.77 million.  This reduction reflects
the continuing difficult conditions for UK based manufacturers.  Exceptional
costs of #0.39m were borne in closing a number of sites, and our UK headcount in
electronics fell by almost half from 529 to 275.

Our businesses in the UK are lean and well managed, and remain an important part
of our service offer to customers, both in their own right and as a gateway to
Stadium Asia.

Plastics - continuing activities
  
                                                                 2002                  2001
                                                               #000's                #000's

  Turnover                                                      9,889                 9,909
  Operating profit (before exceptionals)                          922                   828
  Operating margin                                               9.3%                  8.4%



Operations at Chingford were able to deliver improved profits in stable markets,
making a valuable contribution to the group's overall performance.

Investment in additional plastic injection moulding capacity at the turn of the
year should provide the opportunity to maintain progress.

Balance Sheet and Cash Flow

The full benefits of our restructuring are now apparent, with major reductions
in fixed and working capital flowing into dramatically reduced borrowings.
This provides ample financing for the future growth of the business, and will
lead to even lower interest costs in 2003.

In November 2002 the net borrowings of the group were revised to include a US
dollar denominated loan which provides a hedge against US dollar linked assets
held in Asia.  This provided a benefit of #0.12m to reserves in 2002 and is
expected to largely eliminate further exposure in 2003.

Pensions

During the year the two principal defined benefit schemes, which have been
closed to new entrants since 1996,  were combined, and a triennial actuarial
review was carried out as at 7 April 2002.

The resulting charge to profit and loss account was #0.20 million of normal
contributions for the full year and a further #0.26 million of additional
contributions (representing nine months) to reflect the accumulated deficit.
This compares to a net pension credit of #0.11 million in 2001, and the full
cost has been expensed against continuing activities.

Current trading and prospects

Sales for the current year to date at Stadium Asia are substantially higher than
the corresponding period last year, and the order book is at a high level.
Operations in the UK remain under some pressure, but are trading at levels
comparable with last year.

The rate of new business coming into Asia, and the potential yet to be realised
in the domestic Chinese market, give us confidence both in the short and long
term future of the group.


                                                                    Nigel Rogers
                                                                 Chief Executive
                                                                25 February 2003


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002

                                                                       Discontinued,
                                                                         exceptional       Total           Total
                                                          Continuing         Items &        2002            2001
                                                     pre-exceptional        Goodwill   Unaudited     
                                                    Items & Goodwill    Amortisation   
                                                               #'000           #'000       #'000           #'000
Turnover
Continuing operations                                         35,375               -      35,375          34,131
Discontinued operations                                            -           8,482       8,482          41,606
                                                              35,375           8,482      43,857          75,737

Cost of sales                                               (28,229)         (7,837)    (36,066)        (63,604)

Gross profit                                                   7,146             645       7,791          12,133

Net operating expenses                                       (5,658)         (1,011)     (6,669)        (10,544)
Exceptional items                                                  -         (1,341)     (1,341)         (3,426)
Goodwill amortisation & impairment                                 -           (132)       (132)         (3,771)
Total net operating expenses                                 (5,658)         (2,484)     (8,142)        (17,741)

Continuing operations                                          1,488           (132)       1,356             194
Discontinued operations                                            -         (1,707)     (1,707)         (5,802)
Operating (loss)/profit                                        1,488         (1,839)       (351)         (5,608)

Exceptional losses                                                                         (772)         (3,027)

Interest payable                                                                           (267)           (939)

Loss on ordinary activities before taxation                                              (1,390)         (9,574)

Taxation                                                                                     551           1,595

Loss for the financial year                                                                (839)         (7,979)

Dividends                                                                                  (790)           (790)
Retained loss for the year                                                               (1,629)         (8,769)


Earnings per share from continuing activities
before goodwill, amortisation and exceptional
items
                                                                                            4.0p            1.9p

Basic
Diluted                                                                                     4.0p            1.9p

Loss per share
Basic                                                                                     (3.0p)         (28.3)p
Diluted                                                                                   (3.0p)         (28.3)p







GROUP BALANCE SHEET
as at 31 December 2002
                                                                                             2002          2001
                                                                                            #'000         #'000
Fixed assets
Intangible assets                                                                             933         1,067
Tangible assets                                                                            11,194        15,447
                                                                                           12,127        16,514

Current assets
Stocks                                                                                      4,128         8,898
Debtors due after more than one year                                                        1,278           279
Debtors due within one year                                                                 7,755        14,166
Cash                                                                                          590           623
                                                                                           13,751        23,966

Creditors: amounts falling due within one year
Bank overdrafts                                                                           (1,035)         (966)
Creditors                                                                                 (8,606)      (16,365)
                                                                                         ( 9,641)      (17,331)


Net current assets                                                                          4,110         6,635

Total assets less current liabilities                                                      16,237        23,149

Creditors: amounts falling due after more than one year                                   (3,459)       (8,995)
Provisions for liabilities and charges                                                      (150)         (858)
                                                                                           12,628        13,296


Capital and reserves
Called up equity share capital                                                              1,411         1,411
Share premium account                                                                       4,032         4,032
Capital redemption reserve                                                                     88            88
Merger reserve                                                                              2,751         2,751
Profit and loss account                                                                     4,346         5,014

Equity shareholders' funds                                                                 12,628        13,296

Bank borrowings (net)                                                                       4,525        11,094
Gearing                                                                                       36%           83%






CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2002
                                                                                             2002          2001
                                                                                            #'000         #'000

Net cash inflow from operating activities                                                     815         3,591

Servicing of finance                                                                        (267)         (938)

Tax received/(paid)                                                                           285         (465)

Capital expenditure
Purchase of tangible fixed assets                                                           (732)       (1,146)
Sale of tangible fixed assets                                                               1,936         1,955
                                                                                            1,204           809

Disposals
Proceeds from sale of businesses                                                            4,952         2,547
Deferred consideration                                                                        316             -


                                                                                            5,268         2,547

Equity dividends paid                                                                       (790)       (1,312)


Net cash inflow before financing                                                            6,515         4,232


Financing
Loans repaid                                                                              (6,555)       (3,878)

Net cash outflow from financing                                                           (6,555)       (3,878)

(Decrease)/increase in cash                                                                  (40)           354





NOTES:

1. Segmental Analysis


                                         Exceptional       2002                             Exceptional       2001
              Continuing   Discontinued and goodwill      Total  Continuing   Discontinued and goodwill      Total
                  #000's         #000's       #000's     #000's      #000's         #000's       #000's     #000's
Turnover
Electronics       25,486          1,435            -     26,921      24,222          4,752            -     28,974
Plastics           9,889          5,560            -     15,449       9,909         25,764            -     35,673
Other                  -          1,487            -      1,487           -         11,090            -     11,090
activities
Total             35,375          8,482            -     43,857      34,131         41,606            -     75,737

Operating
profit/
(loss)
Electronics          799          (174)        (762)      (137)         295          (117)      (5,924)    (5,746)
Plastics             922           (26)            -        896         828            179         (55)        952
Other                  -          (166)        (453)      (619)        (91)            593        (497)          5
activities
Group              (233)              -        (258)      (491)        (98)              -        (721)      (819)
adjustments
Total              1,488          (366)      (1,473)      (351)         934            655      (7,197)    (5,608)

Net assets
Electronics        5,389             31            -      5,420       6,882            751            -      7,633
Plastics           3,680              -            -      3,680       4,277          6,229            -     10,506
Other                  -             84            -         84         779            698            -      1,477
activities
Group              3,444              -            -      3,444     (6,320)              -            -    (6,320)
adjustments
Total             12,513            115            -     12,628       5,618          7,678            -     13,296







The analysis of Electronics between continuing and discontinued reflects the
fact that closure or disposal of these businesses was part of the wider
strategic review to focus the Group on the EMS market, with a reduction in the
UK manufacturing capacity.  Prior to this these businesses were a material part
of the Electronics division.


2. Exceptional Costs in Operating Expenses

                                                                             2002                        2001
                                                                            #'000                       #'000

Redundancy costs                                                            (565)                     (1,115)
Asset impairments & stock provisions                                        (518)                     (1,635)
Other closure costs                                                         (258)                       (676)
Goodwill impairment & amortisation                                              -                     (3,771)
                                                                          (1,341)                     (7,197)





3. Exceptional Gains/(Losses)


                                                                             2002                        2001
                                                                            #'000                       #'000

Gain on sale of properties                                                  1,082                           -
Impairment to Plastics division fixed assets                                    -                     (2,500)
Loss on sale of subsidiaries                                              (1,854)                       (527)
                                                                            (772)                     (3,027)

4. (Loss)/earnings  per share

The calculation of basic loss per share is based on the loss for the financial
year of #839,000 (2001 : (#7,979,000)) and the weighted average number of
ordinary shares in issue during the year of 28,212,198 (2001 : 28,212,198).

Diluted earnings per share reflect options granted resulting in a weighted
average number of 28,212,198 ordinary shares (2001 : 28,212,198).

The reconciliation of basic earnings per share to earnings per share excluding
exceptional items and goodwill amortisation is as follows:


                                                                                       2002             2001

Earnings per share (before goodwill and exceptional items)                             4.0p             1.9p
Discontinued activities                                                              (1.3)p             0.0p
Exceptional items                                                                    (5.2)p          (16.8)p
Goodwill amortisation and impairment                                                 (0.5)p          (13.4)p

Basic loss per share                                                                 (3.0)p          (28.3)p


5. Dividends

The proposed final dividend of 1.85 pence per share will cost #522,000 and will
be payable on 5 May 2003 to shareholders on the register on 4 April 2003.


6. Net Cash Inflow from Operating Activities

                                                                             2002                        2001
                                                                            #'000                       #'000

Operating loss                                                              (351)                     (5,608)
Release of grants received                                                   (67)                        (68)
Goodwill amortisation                                                         132                       3,771
Depreciation                                                                1,379                       3,434
Loss on sale of tangible fixed assets                                          25                         243
Decrease in stocks                                                          1,269                       2,920
Increase in debtors                                                         (425)                     (1,425)
(Decrease)/Increase in creditors                                          (1,147)                         324
Net cash inflow from operating activities                                     815                       3,591


7. Analysis of Changes in Net Debt


                                                                 2001    Cash Flow   Exch Diffs         2002
                                                                #'000        #'000       #''000        #'000

Cash                                                              623           29         (62)          590


Bank overdrafts                                                 (966)         (69)            -      (1,035)
                                                                (343)         (40)         (62)        (445)
Loans due within one year                                     (2,114)        1,314            -        (800)
Loans due after one year                                      (8,637)        5,241          116      (3,280)
                                                             (11,094)        6,515           54      (4,525)

8. Financial Information

The un-audited financial information set out above does not constitute the
Group's statutory accounts.

Statutory accounts for the year ended 31 December 2001 have been delivered to
the Registrar of Companies.  Statutory accounts for the year ended 31 December
2002 will be delivered to the Registrar of Companies following the Annual
General Meeting.



9. Annual Report & Financial Statements

The Annual Report and Financial Statements will be posted to shareholders
shortly.  The Annual General Meeting will be on Monday 28 April 2003 at 5
Giltspur Street, London EC1.  Copies of the Annual Report and of this
announcement will be available at the Company's registered office: Stephen
House, Brenda Road, Hartlepool, TS25 2BQ.




                      This information is provided by RNS
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