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Preliminary results

2nd Jun 2009 07:00

2 June 2009 Umeco plc Preliminary results for the year to 31 March 2009 STRONG RESULT IN INCREASINGLY CHALLENGING MARKETS

Umeco plc ("Umeco"), an international provider of supply chain services and advanced composite materials primarily to the aerospace & defence industries, announces its preliminary results for the year to 31 March 2009.

Key highlights

* Strong organic growth and margin improvement against an increasingly

challenging market environment, particularly in the second half

* Revenue from continuing operations £415.3m (2008: £335.2m), underlying

growth of 11.7%

* Adjusted operating profit £35.2m (2008: £27.1m), underlying growth of 13.0%

* Adjusted PBT £29.0m (2008: £21.9m), 32.4% higher * Adjusted EPS 40.5p (2008: 36.7p), 10.4% higher * Proposed final dividend of 11.0p (2008: 11.0p), resulting in a total dividend of 17.5p per share (2008: 17.0p), an increase of 2.9% * Year end net debt £120.2m (2008: £57.6m), gearing 67.3% (2008: 35.5%) * Principal debt facility of US$150m successfully extended to June 2014

* Planning for more modest revenue growth, with management actions focused on

cost control and debt reduction

* Brian McGowan to retire as Chairman

Clive Snowdon, Chief Executive of Umeco plc, said:

"We are pleased with our performance during what has been a period ofincreasing instability in our end markets. In the first half of the year,rapidly increasing oil prices caused significant losses by many carriers andled to increased ticket prices not helped by higher UK taxes on travel. Duringthe second half year we suffered from the strike at Boeing and then the rapidlydeteriorating global economic situation, which has caused a significant fall inpremium and cargo traffic. In addition exchange and interest rates have beenextremely volatile during the year, impacting our net debt, which is largely USdollar denominated to hedge against our US assets.

In view of this high level of uncertainty we have significantly reduced our capital expenditure plans, focused upon improving our working capital ratios and where appropriate have reduced our cost base, primarily through lower headcount.

We have successfully extended our principal debt facilities until June 2014 and are operating comfortably within our banking covenants. We are planning to reduce debt further in the current year.

We enter the new financial year with a solid order book. Nevertheless, we aremindful of the uncertain macroeconomic environment in which we operate andtherefore, are planning for a year of more modest growth in revenue. Ourexperience of such conditions will stand us in good stead as we focus ongrowing our market share through product and service innovation, securing newcontracts, cash generation and operational improvements."

Brian McGowan, Chairman of Umeco plc, said:

"After twelve years as Chairman, the time has come for me to stand back and fora successor to be found. As today's results demonstrate, Umeco is in fine shapeand I commend the management team and all who work at Umeco for successfullynavigating the company through these difficult times. Umeco provides importantservices in long term growth markets and, with its first class management team,I have no doubt it has an exciting future."There will be a meeting for analysts at 9.30am this morning at UBS, 1 FinsburyAvenue, EC2M 2PP. Should you wish to attend please contact Davina Marriott on0207 567 4875

For further information please contact:

Umeco plc Tel: +44 (0) 1926 331 800Clive Snowdon, Chief ExecutiveDoug Robertson, Finance Directorwww.umeco.comTulchan Communications Tel: +44 (0) 207 353 4200John SunnucksMal Patel

Further Information on Umeco plc

Umeco is a leading innovator in distribution and supply chain management to the aerospace and defence industries, harnessing new methods for enhancing its customers' performance and profitability.

Umeco also has significant manufacturing interests in advanced composite materials for a growing range of applications in its core aerospace and defence markets and in other high performance technology industries such as motor sport, automotive and wind energy.

Listed on the London Stock Exchange, Umeco had revenue from continuing operations of GBP415.3 million in the year to 31 March 2009.

Umeco is managed through two business streams:-

Umeco Composites - a provider of a complete range of advanced composite materials principally to the aerospace, motor sport, automotive and wind energy markets.

Customers include Boeing, Airbus, BAE Systems, manufacturers of wind turbineblades, a number of manufacturers of high performance super cars and Formula 1teams including Team McLaren Mercedes.

Umeco Supply Chain - a leading international provider of value-added distribution and supply chain outsourcing services to customers in the aerospace & defence market. With its specialisation in the supply of small and medium value components and sophisticated IT systems, its growing global customer base can enjoy significant operational, cost and working capital benefits.

Customers include Rolls-Royce plc, BAE Systems, Safran Group, Parker Aerospace, Goodrich, Thales Aerospace, Turbomeca, ATK, Lockheed Martin and the US Department of Defense.

Note on adjusted profit and earnings per share measures:

Chairman's Statement

Overview

I am pleased to report that Umeco has performed well despite very difficultmarket and economic conditions, especially during the second half of the year.Our results for 2009 are well ahead of the prior year reflecting the benefitsof the refocusing of the Group in 2008 and measures taken to contain costsduring the year. Despite softening near term demand patterns, the longer termoutlook for the Group's products and services in our main market, civilaerospace, remains resilient.

Strategic development

On 4 December 2008, we completed the acquisition of Industria PlasticaMonregalese (`IPM') for a cash consideration of â‚¬16.8 million. IPM is a leadingmanufacturer and supplier of vacuum bagging films for the composites industryand other markets. IPM had net debt at acquisition of â‚¬14.4 million. Theacquisition of IPM provides Umeco Composites with a secure supply of a keyprocess material and has enhanced our global market position in the wind energymarket.Results and dividendRevenue from continuing operations in the year to 31 March 2009 was £415.3million (2008: £335.2 million) an increase of 23.9 per cent. Of the £80.1million increase, £4.2 million relates to the acquisition of IPM; at constantexchange rates and adjusting for the effects of acquisitions the increase inrevenue was 11.7 per cent (the `underlying' increase).

Operating profit from continuing activities rose by 29.9 per cent to £35.2 million (2008: £27.1 million) with margins showing a further improvement to 8.5 per cent (2008: 8.1 per cent). Of the £8.1 million increase, £0.5 million relates to IPM. The underlying increase in operating profit was 13.0 per cent.

Net interest charges, excluding revaluation of financial instruments, were £6.2million, an increase of £1.0 million. This increase reflects the acquisition ofIPM, foreign exchange rate movements, the volume-related rise in workingcapital and higher interest rates for much of the year. Interest cover was 5.7times (2008: 5.2 times) and is comfortably within our banking covenant of 4.0times.

Profit before tax from continuing operations was £29.0 million (2008: £21.9 million), an increase of 32.4 per cent. Earnings per share were 40.5 pence compared to 36.7 pence, an increase of 10.4 per cent.

The Directors are proposing an unchanged final dividend of 11.0 pence making atotal for the year of 17.5 pence per ordinary share (2008: 17.0 pence) anincrease of 2.9 per cent. The final dividend is payable on 2 October 2009 toshareholders on the register on 4 September 2009.

Debt and financing

Net debt at 31 March 2009 was £120.2 million, an increase of £62.6 millionduring the year. As much of the Group's debt is US dollar denominated, thesignificant weakness of sterling, particularly in the second half of the year,has resulted in a rise in net debt of £28.7 million. Of the remaining increaseof £33.9 million, some £27.5 million relates to the acquisition of IPM(including £12.5 million of debt), and earnout payments of £6.1 million inrespect of acquisitions made in prior periods.At 31 March 2009, the ratio of the Group's debt to earnings before interest,tax, depreciation and amortisation (`EBITDA'), as computed under our bankingagreements, was 2.59; this compares favourably to the covenant of 3.25.In respect of the Group's principal banking facilities, agreement has beenreached to extend the term of the US$150.0 million revolving credit facilityoriginally due for repayment in 2010, until June 2014 on competitive terms. TheBoard is confident the Group has appropriate banking facilities in place tofinance its continuing operations.

Management and employees

These excellent results are a testament to the determination and skills of all of our employees to adapt to changing and increasingly difficult market conditions; I thank them for their support and continuing commitment to Umeco.

Prospects

The global economic downturn is resulting in falling civil aerospace passengernumbers and this is leading carriers to reduce their capacity and to deferdeliveries of new aircraft ordered in prior periods; this in turn will lead tolower demand for our products and services from existing customers. To counterthis expected downturn we are focused on increasing our market share, securingnew customers, reducing our cost base without sacrificing customer servicelevels and cash generation.Airbus and Boeing at 31 March 2009 had a backlog of 7,293 orders and areexpected to deliver 960 aircraft in 2009 compared with 858 deliveries in 2008.More importantly Boeing is forecasting that deliveries of the B787 willcommence in early 2010 and Airbus is committing considerable funds to thedevelopment of the A350. Both of these new programmes will generate a growingrevenue stream for the Group.The acquisition of IPM has strengthened considerably our market position in theglobal wind energy market and provides the technology to enhance our aerospaceoffering. Whilst the global wind energy market has seen a softening in recentmonths due to a lack of available credit to fund wind farm projects, we expectthe market to return to high growth from 2010 onwards as funding conditionsease and the economic stimulus programmes announced by many governments beginto take effect.We face the consequences of the economic downturn from a position of relativestrength. Our order book is robust, we have a good pipeline of new businessopportunities and have secured our long term financing. We remain vigilant tochanging conditions and have taken steps to lower our cost base and furtherreduce our net debt.Finally, I have announced today that the Board has been informed of myintention to retire as Chairman. The Nominations Committee, under theChairmanship of Senior Independent Director David Porter, has commenced theprocess to identify a suitable successor. I will stand down by 30 September atthe latest, by which time it is anticipated a suitable successor will have beenidentified.

As today's results demonstrate, Umeco is in fine shape and I commend the management team and all who work at Umeco for successfully navigating the company through these difficult times. Umeco provides important services in long term growth markets and, with its first class management team, I have no doubt it has an exciting future.

Brian McGowanChairman2 June 2009Chief Executive's ReviewOperations

Revenue in the year from continuing operations was £415.3 million, an increase of 23.9 per cent or £80.1 million. The acquisition of IPM in December 2008 generated £4.2 million of this increase. Foreign exchange rate movements, principally the US dollar and the Euro against sterling, had the effect of increasing reported revenue by £25.3 million. The underlying increase in revenue was therefore 11.7 per cent.

Growth has been achieved at both of our business streams and would have beenhigher had Boeing Commercial Aircraft not been on strike for a considerableperiod during the second half year. This reflects good underlying growth in thecivil aerospace and wind energy markets, the increasing use of advancedcomposite materials in a number of markets, and additional volumes on existingand new Supply Chain contracts.Operating profits from continuing operations were £35.2 million (2008: £27.1million), an increase of 29.9 per cent. Our operating margin continues toimprove and rose to 8.5 per cent (2008: 8.1 per cent). This primarily reflectsoperational gearing. The underlying increase in operating profit was 13.0 percent.Umeco CompositesContinuing operations 2009 2008 £ million £ million Revenue 188.9 149.2 Operating profit 24.0 17.7 per cent per cent Operating margin 12.7 11.9

Umeco Composites provides a broad range of advanced composite and related materials principally to the aerospace, motor sport & automotive, marine and wind energy markets. Revenue by end market was:

2009 2008 per cent per cent Aerospace 28.8 31.2 Motor sport & automotive 15.8 20.6 Wind 13.6 12.1 Marine 8.3 9.7 Other 33.5 26.4 100.0 100.0During the year and in anticipation of the acquisition of IPM the management ofthe division was reorganised and strengthened. Jon Mabbitt now hasresponsibility for our Structural Materials operations - Advanced CompositesGroup ('ACG'), JD Lincoln (`Lincoln') and GRPMS, whilst Tim Cooper isresponsible for our Process Materials operations - Aerovac, Richmond, IPM andMed-Lab. Both Jon and Tim report to Andrew Moss, the Group's Chief OperatingOfficer.

Revenue from continuing operations increased in the year by 26.6 per cent, or by 7.3 per cent on an underlying basis. Of the £39.7 million increase in revenue, £4.2 million relates to the acquisition of IPM.

Operating profit rose by 35.6 per cent, or by 10.7 per cent on an underlying basis, resulting in an improvement in margin from 11.9 per cent to 12.7 per cent.

This further rise in revenue and profits reflects the increasing use of advanced composite materials in a number of markets, and the full year effect of the acquisitions of Lincoln and ACG Manchester made in the prior year.

Structural Materials

ACG had an excellent year with revenues growing in excess of 25.0 per cent. TheUK business successfully completed the integration of ACG Manchester andsecured a number of new contracts across the markets in which it operates; thelargest of these was for the supply of phenolic composite materials for aMinistry of Defence project dedicated to improving the protection of Britishtroops serving in Afghanistan. ACG's US business had a much stronger yearfollowing the deferral of two orders for reasons outside of our control duringthe prior year.In May 2008, we announced that ACG is to partner Airbus and other leadingorganisations in a major collaborative aviation research programme for the NextGeneration Composite Wing. Funding of £103 million for the project has beenprovided by the UK Government, industrial and regional partners. This projectwill make a significant contribution to ACG's extended research and developmentbudget for a number of years, and clearly demonstrates ACG's leading positionin materials innovation.In addition, in July 2008, it was announced that Airbus has qualified ACG'sout-of-autoclave composite material for use in structural applications. Use ofthis new material offers immediate benefits to manufacturers, including Airbus,and adds to the Group's long term revenue development.Lincoln had a strong first half year but suffered from falling demand from itscore market place, business jets, during the second half year as well as thestrike at Boeing. As a result its expansion plans have been deferred untilmarket conditions improve. Lincoln will benefit once the B787 enters productionand is continuing to broaden its product range and qualifications.GRPMS had a difficult year due to weak market conditions in both the UK andScandinavia with, in particular, its marine customer base suffering from verysignificant falls in demand. Steps were taken to reduce its cost base includingthe outsourcing of its transportation in the UK.

Process Materials

Aerovac and Richmond continued to achieve high rates of growth during the year,though demand from the wind energy market slowed during the second half year,as wind farm operators found project funding harder to obtain. Growth wouldhave been stronger had the B787 programme not slipped and Richmond, inparticular, suffered from lower demand from Boeing during and after theirstrike. A higher level of capital investment in new plant and machinery wasmade during the year to expand further the range of value-added products andservices offered to its global customer base.The strategically important acquisition of IPM was completed in December 2008.IPM is a manufacturer of vacuum bagging materials and is a key supplier to bothAerovac and Richmond in respect of its wind energy customers. Securing thissource of supply will enable the Group to maintain its high market share andexpand further its manufacturing facilities, at the appropriate time, utilisingIPM's technology and know-how in ultra-wide film to strengthen our productofferings to both the wind and aerospace sectors. The management of IPM hasbeen considerably strengthened since acquisition with the appointment of amanaging director and financial controller. Action has also been taken toimprove the operating and financial performance of the business.Med-Lab had a record year and enjoyed significant revenue and profit growthparticularly in its supply of specialist materials to the Rolls-Royce aeroengine overhaul market.Umeco Supply ChainContinuing operations 2009 2008 £ million £ million Revenue 226.4 186.0 Operating profit 11.2 9.4 per cent per cent Operating margin 4.9 5.1

Umeco Supply Chain is a leading international provider of distribution and supply chain outsourcing services primarily to OEM customers in the aerospace & defence markets. With its specialisation in the supply of small and medium value components and its sophisticated IT systems, it creates and delivers significant operational cost and working capital benefits for its growing customer base. The Supply Chain businesses trade globally as Pattonair.

Revenue increased during the period by 21.7 per cent, all of which was organic, or by 15.5 per cent on an underlying basis.

Operating profit increased by 19.1 per cent, or by 17.7 per cent on an underlying basis. This strong growth in revenue and profits primarily reflects the implementation of contracts secured or expanded in the prior year.

Pattonair Derby continued to expand at a high rate with good growth on both ofthe contracts it manages with Rolls-Royce and Goodrich Actuation Systems. Thetransfer of new parts under the expanded Rolls-Royce contract was somewhatslower than our initial expectations but grew strongly in the second half yearand we will enjoy the full benefits of the much enlarged contract in thecurrent financial year. The facility dedicated to Rolls-Royce, which opened inlate 2007, is working very effectively enabling us to deliver exceptionalservice levels. Working capital increased significantly during the first halfyear as parts were transferred in line with the contract expansion but startedto reduce in the second half as activity levels caught up. A further reductionin working capital is planned in the current financial year. We have decided toretain our original freehold facility in Derby, and this has been refurbishedto house our growing contract with Goodrich.Pattonair Woking had another excellent year with strong growth in revenues andprofits as a result of new contracts secured and the general strength of theaerospace market. It has recently won a number of additional contracts andcontinues to improve its operational performance.

Pattonair Italy also continued to grow its revenue and profits and is focusing on improving its operational performance. The management team has been reorganised and strengthened recently following the departure of the former owners of the company.

Significant efforts have been made to return Pattonair France to profitabilityduring the year. Contractual terms on two key contracts have been renegotiatedwhere sales volumes did not reach expected levels. In addition the cost base ofthe company has been considerably reduced. These actions are bearing fruit andthe business traded profitably during the last three months of the year. Weplan to consolidate on these improvements during the current year.Pattonair's North American operations declined as a result of the contract withBombardier in Canada being terminated in the prior year. As a consequence ofthis and a number of operational issues that were holding the company back,management and organisational changes have been made. This has led to muchimproved levels of customer service and a lower cost base. A major new fiveyear contract with ATK Tactical Propulsion and Controls Division was announcedin November 2008. Pattonair manages ATK's inventory and there is a lowincremental investment in working capital. The programme is already adding toprofits.In Asia, the general manager recruited in the autumn has had a very positiveimpact on both of our operations in the region. New customers have been addedand the cost base has been reduced.

Summary

Following the divestment programme in the prior year and the senior managementchanges in June 2008, with the appointment of Andrew Moss as Chief OperatingOfficer, we have been focused on delivering further high rates of organicgrowth during a period of increasing instability in the markets in which weoperate.In the first half of the year, rapidly increasing oil prices caused significantlosses for many carriers and led to increased ticket prices not helped byhigher UK taxes on travel. During the second half year we suffered from thestrike at Boeing and then the rapidly deteriorating global economic situation,which has caused a significant fall in premium and cargo traffic. In view ofthis high level of uncertainty we have significantly reduced our capitalexpenditure plans, focused upon improving our working capital ratios and whereappropriate have reduced our cost base, primarily through lower headcount.In addition exchange and interest rates have been extremely volatile during theyear. The principal impact being on our net debt, which is largely US dollardenominated as a hedge against our US assets.Against this difficult background we are therefore very pleased with ourperformance during the year. In the coming year we will concentrate as amanagement team on growing our market share through product and serviceinnovation, securing new contracts and further reducing our cost base throughoperational improvements. Capital expenditure will be kept to minimal levelsand working capital ratios will be driven lower.We go into the new financial year with a solid order book; at the end of March2009 our order book stood at £218.9 million (2008: £216.9 million), of which £190.2 million (2008: £174.7 million) is Supply Chain. This is based onscheduled customer requirements over the coming year.The expected first deliveries of the B787 in early 2010 will add to our revenueand profits for many years to come and we are expecting a higher shipset levelfrom the A350XWB than the B787, which is due to enter service in 2013.

We have successfully extended our principal debt facilities until June 2014 and are operating comfortably within our banking covenants. We are planning to reduce our debt further in the current year.

In summary we anticipate a year of more modest growth in revenue reflecting themacroeconomic climate in which we operate being compensated for by our marketshare gains and the full year benefit of the IPM acquisition. We have a clearstrategy and an experienced management team that aims to deliver enhancedperformance in both the short and longer term.Clive SnowdonChief Executive2 June 2009Finance Director's ReviewOperating resultsContinuing operations 2009 2008 £ million £ million Revenue - total 415.3 335.2 - acquisitions 4.2 - Operating profit - total 35.2 27.1 - acquisitions 0.5 - Operating margin per cent per cent - total 8.5 8.1 - acquisitions 11.9 -Revenue from continuing operations was 23.9 per cent higher than last year,with the acquisition of IPM accounting for 1.3 percentage points of theincrease. Operating profit was £35.2 million, £8.1 million higher than theprevious year, of which IPM contributed £0.5 million. The strong organicrevenue growth is primarily due to the extension of existing business and thegaining of new contracts in Supply Chain, coupled with continuing strong demandfor advanced composite materials from the aerospace and other industries,including the wind energy market.Operating margin rose to 8.5 per cent from 8.1 per cent due to operationalgearing.Exchange ratesAverage rates 2009 2008 US dollar 1.718 2.007 Euro 1.203 1.419Closing rates 2009 2008 US dollar 1.433 1.988 Euro 1.080 1.254

Over 40 per cent of Group revenue is generated by overseas subsidiaries and an increasing amount of UK business is transacted in foreign currencies, principally the US dollar and the Euro. At constant exchange rates, the increase in revenue from continuing operations for the year would have been 16.4 per cent, £25.3 million lower than the reported figure.

Net financial expense

Net financial expense, excluding revaluations of financial instruments, rosefrom £5.2 million in 2008 to £6.2 million. Average interest rates payable inthe year were 5.4 per cent (2008: 6.4 per cent) and average net debt was £112.8million (2008: £83.3 million).

Intangible amortisation & goodwill impairment

The amortisation charge in the income statement relating to continuing operations was £4.2 million (2008: £2.3 million). This relates to the amortisation of intangible assets arising on acquisitions, principally the benefit of product approvals, order books and customer relationships on hand at the dates of acquisition. No impairment charges have been made in the year.

Significant items

Significant items of £2.2 million were incurred during the year. Thisprincipally includes costs of £0.7 million in relation to the restructuring ofoperations at Pattonair France and Pattonair USA, and £1.2 million of expensesassociated with aborted acquisition projects.

Profit before tax

The strong trading performance in the year lifted adjusted profit before taxfrom continuing operations to £29.0 million (2008: £21.9 million), an increaseof 32.4 per cent. Total profit before tax from continuing operations was £22.8million (2008: £17.1 million).

Tax

The effective tax charge on adjusted profit from continuing operations was 32.9per cent (2008: 31.3 per cent). The higher rate reflects an increasingproportion of overseas earnings which are taxed at higher rates, which offsetthe effects of the reduction in the UK rate of corporation tax to 28.0 per centfrom April 2008.Earnings per share

Adjusted earnings per share were 40.5 pence, 10.4 per cent higher than last year (2008: 36.7 pence). Earnings per share were 30.4 pence (2008: 47.5 pence).

Dividends

An interim dividend of 6.5 pence was paid in December 2008 and an unchangedfinal dividend of 11.0 pence is proposed, making a total of 17.5 pence, a 2.9per cent increase over the previous year's 17.0 pence. The value of the interimdividend was £3.1 million and the value of the proposed final dividend is £5.3million.Operating cash flowContinuing operations 2009 2008 £ million £ million Operating profit 35.2 27.1 Significant items (2.2) (0.7) Depreciation 5.1 3.8 Loss on disposal of property, 0.1 - plant & equipment Share based payments 0.1 0.4 Increase in inventories (35.9) (32.1) Decrease/(increase) in debtors 8.5 (16.2) Increase in creditors, 17.7 32.1 provisions & retirement benefit obligations Operating cash flow 28.6 14.4 per cent per cent Operating cash flow conversion 81.3 53.1 Working capital ratio 27.6 24.8 Operating profit conversion to cash of 81.3 per cent rose from 53.1 per centlast year following a lower increase in working capital and retirement benefitobligations. This principally comprised an increase of £35.9 million ininventories partially offset by an £8.5 million decrease in debtors and a netrise of £17.7 million in creditors, provisions and retirement benefitobligations. The additional investment in inventories was largely driven byincreasing demand and higher inventory to support the expansion of Supply Chaincontracts, a large proportion of which is funded by customers. Working capital,provisions and retirement benefit obligations reduced by £21.3 million in thesecond half year due to a combination of normal seasonality and managementaction. Further benefits from this management action are expected to berealised in the current year. The ratio of working capital to revenue increasedfrom 24.8 per cent to 27.6 per cent.

Capital expenditure Gross capital expenditure of £6.3 million (2008: £12.6 million) was £1.2 million higher than depreciation. There were no major projects in the year.

Free cash flow

Operating cash flow less interest, tax and capital expenditure of continuingoperations generated £8.0 million (2008: consumed £8.3 million). Tax paid was £1.1 million above the charge in the financial statements due to timingdifferences.

Acquisitions

Expenditure on acquisitions in the year, as set out in the Chairman's Statement, led to an increase in net debt of £33.6 million (2008: £34.5 million).

Net indebtedness, gearing and banking facilities

2009 2008 £ million £ million Net debt 120.2 57.6 per cent per cent Gearing 67.3 35.5Gearing increased from 35.5 per cent last year to 67.3 per cent, principallydue to the effects of the strengthening of the US dollar which, together withother exchange effects, caused the sterling value of debt to rise by £28.7million. The consideration paid for IPM and earnout payments and the higherlevels of working capital are the other primary factors in the rise in gearing.Agreement has been reached to extend the term of the US$150.0 million committedrevolving credit facility that was due for repayment in October 2010. Thisfacility has been renewed for a further five years on competitive terms, andwill now expire in June 2014. The Group's principal committed bankingfacilities therefore comprise this US$150.0 million revolving credit facilitytogether with a US$86.5 million credit facility expiring in August 2011, bothprovided by Lloyds Banking Group plc. In addition, the Group has a £10.0million overdraft giving total facilities of £175.0 million. Debt thereforeremains well within the Group's facility levels.

Banking covenants

Covenants in place with the Group's principal lending bank are testedsemi-annually on 31 March and 30 September. The covenants require interestcover to be not less than four times profit before interest and tax (as definedin the facility agreement), and require the ratio of net debt to EBITDA to benot more than 3.50 times at 30 September 2009, 3.25 times at 31 March 2010 and3.00 times thereafter. The calculation of the net debt to EBITDA covenantinvolves the translation of both net debt and EBITDA at the average exchangerates for the period.

The results of the covenant calculations at 31 March 2009 were:

Actual Covenant Interest cover 5.63 times 4.00 times Net debt to EBITDA 2.59 times 3.25 timesAppropriate monitoring procedures are in place to ensure continuing compliancewith banking covenants and, based on our current estimates, we expect to complywith the covenants for the foreseeable future.

Equity and shares issued

Equity attributable to shareholders increased from £162.4 million to £178.7million. The increase results from the retained profit for the year of £14.6million and a gain credited to the translation reserve of £12.1 million, lessdividends paid of £8.4 million and actuarial losses arising in retirementbenefit obligations of £2.3 million net of tax. Shares issued to employeesunder the Group's share option schemes raised £0.2 million and £0.1 millionrelating to share based payments expense was credited directly to reserves.

Pensions

The Group operates a number of defined contribution pension schemes and twodefined benefit plans. Both the defined benefit plans are closed to newentrants. The latest actuarial valuations of the defined benefit plans show adeficit of £4.0 million (2008: £5.5 million). The decrease was due to paymentsof special contributions, partially offset by changes in inflation andmortality assumptions. The Board agrees with the pension plans' trustees thatthe deficits in the plans will be funded over the next 5 years and,accordingly, special payments totalling £1.3 million were paid to the plansduring the year.In accordance with IFRS, the deficits of the defined benefit plans arerecognised on the balance sheet. The IAS19 valuation of the plans at 31 March2009 showed a shortfall in assets to liabilities of £4.4 million, compared to £2.7 million at 31 March 2008. This increase is principally the result of lowerthan expected investment returns and more prudent mortality assumptions.

Currency exchange risk

The Group seeks to hedge currency exchange risks by matching purchases and revenues that are denominated in foreign currencies. Where this is not possible, forward currency contracts may be taken out to protect exposures. Group policy prohibits speculation in currency management.

The retranslation of the Group's net investment in overseas businesses led to the net gain of £12.1 million being credited to the translation reserve.

Interest rate risk

Whilst the Group does not hedge the currency value of interest charges, it haspartly protected the interest rate risk by the use of interest rate swaps.During the year to 31 March 2009, these financial instruments fixed the baserate on 35.3 per cent of the Group's average debt at 4.9 per cent. For thecurrent financial year swaps in place will provide cover on a proportion of theGroup's anticipated debt at an average base rate of 2.6 per cent.Changes in the market value of these financial instruments, together with thechange in value of forward foreign exchange contracts, led to financial incomeof £0.2 million being recognised (2008: expense £1.8 million).Doug RobertsonFinance Director2 June 2009Consolidated income statement

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For the year to 31 March 2009 2009 2008 Note £ million £ million Continuing operations Revenue 2 415.3 335.2 Cost of sales (306.4) (243.0) Gross profit 108.9 92.2 Administrative expenses (80.1) (68.1) Operating profit 2 28.8 24.1 Financial income 3 1.4 1.2 Financial expense 3 (7.4) (8.2) Profit before tax 22.8 17.1 Income tax - UK 5 (4.2) (4.0) Income tax - overseas 5 (4.0) (2.0) Profit from continuing operations 14.6 11.1 Discontinued operations Profit from discontinued operations 11 - 11.7 (net of tax) Profit for the year 14.6 22.8 Attributable to: Equity holders of the parent 14.6 22.7 Minority interest - 0.1 14.6 22.8 Earnings per share Pence Pence Total Basic earnings per share 7 30.4 47.5 Diluted earnings per share 7 30.4 47.4 Continuing operations Basic earnings per share 7 30.4 23.0 Diluted earnings per share 7 30.4 22.9 Discontinued operations Basic earnings per share 7 - 24.5 Diluted earnings per share 7 - 24.5 Consolidated balance sheet

_________________________________________________________________________

As at 31 March 2009 2009 2008 £ million £ million Assets Non-current assets Property, plant & equipment 48.9 37.8 Intangible assets 154.2 117.2 Deferred tax assets 3.4 3.5 206.5 158.5 Current assets Inventories 170.2 118.3 Trade & other receivables 101.4 92.4 Income tax receivable 4.3 2.6 Cash 51.8 33.4 327.7 246.7 Total assets 534.2 405.2 Liabilities Current liabilities Trade & other payables (156.8) (127.6) Financial liabilities (1.2) (1.4) Income tax payable (5.4) (6.7) Loans & borrowings (4.6) (1.4) (168.0) (137.1) Non-current liabilities Other payables (0.3) (0.3) Deferred tax liabilities (11.7) (9.1) Retirement benefit obligation (4.4) (2.7) Loans & borrowings (167.4) (89.6) Provisions (3.7) (4.0) (187.5) (105.7) Total liabilities (355.5) (242.8) Net assets 178.7 162.4 Equity Share capital 12.0 12.0 Share premium 115.5 115.3 Translation reserve 11.4 (0.7) Retained earnings 39.8 35.8 Equity attributable to equity holders of the parent 178.7 162.4

Consolidated cash flow statement

_________________________________________________________________________

For the year to 31 March 2009 2009 2008 £ million £ million Cash flows from operating activities - c ontinuing operations Profit for the year - continuing operations 14.6 11.1 Depreciation 5.1 3.8 Amortisation & impairment charges 4.2 2.3 Loss on disposal of property, plant & 0.1 - equipment Financial income (1.4) (1.2) Financial expense 7.4 8.2 Share based payments expense 0.1 0.4 Income tax expense 8.2 6.0 38.3 30.6 Increase in inventories (35.9) (32.1) Decrease/(increase) in trade & other 8.5 (16.2) receivables Increase in trade & other payables 19.8 33.4 Decrease in other provisions (0.3) - Decrease in retirement benefit obligation (1.8) (1.3) Cash generated from operations 28.6 14.4 Net financial expense paid (5.3) (5.3) Tax paid (9.3) (5.5) Net cash flow from operating activities - 14.0 3.6 continuing operations Cash flows from investing activities - continuing operations Acquisition of property, plant & equipment (6.2) (12.4) Proceeds from sale of property, plant & 0.2 0.5 equipment Acquisition of subsidiaries, net of cash (27.6) (34.5) acquired Disposal of subsidiaries, net of cash - 45.8 disposed Net cash flow from investing activities - (33.6) (0.6) continuing operations Cash flows from financing activities - continuing operations Proceeds from issue of share capital 0.2 1.5 Drawdown of bank loans 82.6 67.2 Repayment of bank loans (32.7) (36.5) Repayment of lease finance liabilities (0.3) (0.4) Dividends paid to equity holders of the (8.4) (7.7) parent Net cash flow from financing activities - 41.4 24.1 continuing operations

Consolidated cash flow statement (continued)

_________________________________________________________________________

For the year to 31 March 2009 2009 2008 Note £ million £ million Discontinued operations Net cash from operating activities - 2.9 Net cash from investing activities - (3.6) Net cash from financing activities - (0.1) Net cash flow from discontinued operations - (0.8) Net increase in cash 9 21.8 26.3 Cash at start of year 32.4 7.4 Effect of exchange rate fluctuations (5.2) (1.3) Net cash at end of year 49.0 32.4

Consolidated statement of recognised income and expense

_________________________________________________________________________

For the year to 31 March 2009 2009 2008 £ million £ million Foreign exchange translation differences 12.1 0.3 Actuarial loss in pension schemes (3.4) (2.0) Tax in respect of the above 1.1 0.3 Income and expense recognised directly in 9.8 (1.4) equity Profit for the year 14.6 22.8 Total recognised income and expense for the 24.4 21.4 year Total recognised income and expense for the year Attributable to: Equity holders of the parent 24.4 21.3 Minority interest - 0.1 Total recognised income and expense for the 24.4 21.4 year Notes to the preliminary announcement of results____________________________________________________________________________

For the year to 31 March 2009

1 Basis of preparation

Umeco plc (the `Company') is domiciled in the UK. The consolidated financialstatements of the Company as at and for the year to 31 March 2009 comprise theCompany and its subsidiaries (together referred to as the `Group') and havebeen prepared in accordance with IFRS adopted for use in the EU (`AdoptedIFRS').The financial information set out in this announcement, which was approved bythe Board on 2 June 2009, does not constitute the Company's statutory accountsfor the years to 31 March 2009 and 31 March 2008 but is derived from the 2009statutory accounts. The statutory accounts for the year to 31 March 2008 havebeen reported on by the Company's auditors and delivered to the Registrar ofCompanies. The statutory accounts for the year to 31 March 2009 will bedelivered following the Company's Annual General Meeting. The auditors havereported on those accounts, their report was unqualified, did not includereferences to any matter which the auditors drew attention to by way ofemphasis without qualifying their report and did not contain statements undersections 237 (2) or (3) of the Companies Act 1985.In the process of applying the Group's accounting policies, management has madea number of judgements. The process of preparing these consolidated financialstatements inevitably requires the Group to make estimates and assumptionsconcerning the future and the resulting accounting estimates may not equal therelated actual results. The estimates and judgements that have the mostsignificant effect on the amounts included within these consolidated financialstatements were the same as those that applied to the audited consolidatedfinancial statements for the year to 31 March 2008.

Following the divestments of the Repair & Overhaul and Chemicals business activities in the year to 31 March 2008, the results of these undertakings have been classified as discontinued operations.

Notes to the preliminary announcement of results____________________________________________________________________________

For the year to 31 March 2009

2 Segmental reporting

Revenue Adjusted operating Total profit (see note 4) operating profit 2009 2008 2009 2008 2009 2008 £million £million £million £million £million £million Before acquisitions* Composites 184.7 179.0 23.5 18.9 19.6 16.5 Supply Chain 226.4 186.0 11.2 9.4 9.2 8.8 Repair & - 15.7 - 2.4 - 1.4 Overhaul Total 411.1 380.7 34.7 30.7 28.8 26.7 Less - (45.5) - (3.6) - (2.6) discontinued operations - note 11 Continuing operations 411.1 335.2 34.7 27.1 28.8 24.1 Acquisitions* Composites 4.2 - 0.5 - - - Supply Chain - - - - - - Continuing operations 4.2 - 0.5 - - - Total Composites 188.9 179.0 24.0 18.9 19.6 16.5 Supply Chain 226.4 186.0 11.2 9.4 9.2 8.8 Repair & - 15.7 - 2.4 - 1.4 Overhaul Total 415.3 380.7 35.2 30.7 28.8 26.7 Less - (45.5) - (3.6) - (2.6) discontinued operations - note 11 Continuing operations 415.3 335.2 35.2 27.1 28.8 24.1

* Acquisitions are defined as those that occurred during the year to 31 March 2009 and relate entirely to continuing operations.

Total operating profit (as above) 28.8 24.1 Financial 1.4 1.2 income Financial expense (7.4) (8.2) Profit before 22.8 17.1 tax Income tax - UK (4.2) (4.0) Income tax - overseas (4.0) (2.0) Profit from continuing 14.6 11.1 operations Discontinued operations Profit from discontinued operations (net of tax) - - 11.7 note 11 Profit for the year 14.6 22.8 Notes to the preliminary announcement of results____________________________________________________________________________

For the year to 31 March 2009

2 Segmental reporting (continued)

2009 2008 £ million £ million Revenue by destination UK 188.7 187.9 Rest of Europe 115.8 102.5 North America 80.1 66.6 Rest of world 30.7 23.7 Total 415.3 380.7 Less discontinued operations - (45.5) Continuing operations 415.3 335.2 2009 2008 £ million £ million Segment assets Composites 246.1 179.9 Supply Chain 269.6 179.8 Unallocated assets 18.5 45.5 Total assets 534.2 405.2 Segment liabilities Composites (59.6) (45.3) Supply Chain (120.7) (90.3) Unallocated liabilities (175.2) (107.2) Total liabilities (355.5) (242.8) Net assets 178.7 162.4

Notes to the preliminary announcement of results

_________________________________________________________________________

For the year to 31 March 2009

2 Segmental reporting (continued)

2009 2008 £ million £ million Capital expenditure Composites 4.3 3.6 Supply Chain 2.0 9.3 Repair & Overhaul - 0.2 Unallocated - 0.1 Total 6.3 13.2 Less discontinued operations - (0.6) Continuing operations 6.3 12.6 Depreciation Composites 3.0 2.4 Supply Chain 1.9 1.6 Repair & Overhaul - 0.3 Unallocated 0.2 0.1 Total 5.1 4.4 Less discontinued operations - (0.6) Continuing operations 5.1 3.8 Amortisation of intangible assets & impairment of goodwill Composites 4.2 2.3 Supply Chain - - Repair & Overhaul - 1.0 Total 4.2 3.3 Less discontinued operations - (1.0) Continuing operations 4.2 2.3

Notes to the preliminary announcement of results

_________________________________________________________________________

For the year to 31 March 2009

3 Financial income and expense

2009 2008 £ million £ million Financial income Revaluation of financial instruments 0.2 - Interest income 0.1 0.1 Expected return on pension scheme 1.1 1.1 assets 1.4 1.2 Financial expense Revaluation of financial instruments - 1.8 Interest on bank loans and overdrafts 6.1 5.4 Interest payable in respect of lease 0.1 0.1 finance Interest cost on pension scheme 1.2 0.9 liabilities 7.4 8.2

4 Reconciliation of adjusted profit measures

Umeco uses adjusted figures as key performance indicators. Adjusted figures arestated before profits arising on the divestment of discontinued operations,amortisation and impairment charges relating to intangible assets, significantitems, the revaluation of financial instruments based on their market valuesand associated tax effects. The differences between the total and adjustedprofit measures are reconciled below. The narrative in this preliminaryannouncement is based on the adjusted measures of operating profit, profitbefore tax and earnings per share. These provide a more consistent measure ofoperating performance. 2009 2008 £ million £ million Operating profit - continuing operations Total operating profit 28.8 24.1 Exclude: - significant items 2.2 0.7 - amortisation of intangible 4.2 2.3 assets Adjusted operating profit - continuing operations 35.2 27.1 Profit before tax - continuing operations Total profit before tax 22.8 17.1 Exclude: - significant items 2.2 0.7 - amortisation of intangible 4.2 2.3 assets - revaluation of financial (0.2) 1.8 instruments Adjusted profit before tax - continuing operations 29.0 21.9 Notes to the preliminary announcement of results_____________________________________________________________________________

For the year to 31 March 2009

4 Reconciliation of adjusted profit measures (continued)

2009 2008 £ million £ million Profit attributable to equity holders of the parent Total profit attributable to equity holders of the 14.6 22.7 parent Exclude: - significant items 2.2 0.7 - amortisation of intangible 4.2 3.3 assets - revaluation of financial (0.2) 1.8 instruments - profit on disposal of - (9.9) discontinued operations - associated tax effects (1.3) (0.9) Adjusted profit attributable to equity holders of the parent 19.5 17.7 Pence Pence Adjusted earnings per share 40.5 36.7 Significant items in the year to 31 March 2009 principally comprise costs of £0.7 million in relation to the restructuring of operations at Pattonair Franceand Pattonair USA and £1.2 million of expenses associated with abortedacquisition projects. Significant items in the year to 31 March 2008 comprisedre-organisation costs, principally in relation to the closure of Umeco SupplyChain's principal Canadian facility upon the termination of the contract withBombardier Aerospace.5 Tax expenseThe effective tax rate on profit before tax from continuing operations is 35.9per cent (2008: 35.1 per cent). The effective rate of tax on adjusted profitbefore tax from continuing operations is 32.9 per cent (2008: 31.3 per cent),based on a tax expense on adjusted profit before tax of £9.5 million (2008: £6.9 million). These effective tax rates differ from the UK standard rate ofcorporation tax of 28.0 per cent (2008: 30.0 per cent) principally due to anincreasing proportion of overseas earnings which are taxed at higher rates,which offset the effects of the reduction in the UK rate of corporation tax.Notes to the preliminary announcement of results_____________________________________________________________________________

For the year to 31 March 2009

6 Dividends

The Directors have proposed a final dividend of 11.0 pence per share, payable on 2 October 2009 to shareholders on the register on 4 September 2009. The amount of this final dividend is £5.3 million.

The following dividends were paid and proposed by the Company:

2009 2009 2008 2008 Pence per £ million Pence per £ million share share Dividends paid Previous year final 11.0 5.3 10.0 4.8 Current year interim 6.5 3.1 6.0 2.9 17.5 8.4 16.0 7.7 Dividends proposed Interim 6.5 3.1 6.0 2.9 Final 11.0 5.3 11.0 5.3 17.5 8.4 17.0 8.27 Earnings per shareEarnings per share is calculated on profit attributable to equity holders ofthe parent of £14.6 million (2008: £22.7 million). Adjusted profit attributableto equity holders of the parent, which provides a consistent measure ofoperating performance, was £19.5 million (2008: £17.7 million) as shown in note4.Earnings per share from continuing operations is calculated on profit fromcontinuing operations of £14.6 million (2008: £11.1 million). Earnings pershare from discontinued operations is calculated on profit from discontinuedoperations of £nil (2008: £11.7 million). 2009 2008 Million Million Weighted average number of shares in 48.1 47.9issue Dilutive effect of share - 0.1options 48.1 48.0Notes to the preliminary announcement of results_____________________________________________________________________________

For the year to 31 March 2009

8 Capital and reserves Share Share Translation Retained capital premium reserve earnings Total £million £million £million £million £million At 1 April 2008 12.0 115.3 (0.7) 35.8 162.4 Total recognised income and - - 12.1 12.3 24.4 expense Share capital issued - 0.2 - - 0.2 Cost of share based - - - 0.1 0.1 payments Dividends paid - - - (8.4) (8.4) At 31 March 2009 12.0 115.5 11.4 39.8 178.7 At 1 April 2007 11.9 113.9 (1.0) 22.1 146.9 Total recognised income and - - 0.3 21.0 21.3 expense Share capital issued 0.1 1.4 - - 1.5 Cost of share based - - - 0.2 0.2 payments Shares awarded under share - - - 0.2 0.2 schemes Dividends paid - - - (7.7) (7.7) At 31 March 2008 12.0 115.3 (0.7) 35.8 162.4

9 Reconciliation of net cash to movement in net debt

2009 2008 £ million £ million Net increase in cash 21.8 26.3 Bank loans taken on with acquisition (6.0) - Drawdown of bank loans (82.6) (67.2) Drawdown of lease finance (0.1) (0.2) Repayment of bank loans 32.7 36.5 Repayment of lease finance liabilities 0.3 0.4 (33.9) (4.2) Effect of exchange rate fluctuations (28.7) (1.6) Movement in net debt (62.6) (5.8) Net debt at start of year (57.6) (51.8) Net debt at end of year (120.2) (57.6)

Net debt comprises cash balances, bank overdrafts, bank loans and lease finance obligations.

Notes to the preliminary announcement of results

_________________________________________________________________________

For the year to 31 March 2009

10 Acquisitions

On 4 December 2008, the Group acquired the entire issued share capital ofIndustria Plastica Monregalese SpA (`IPM') for a cash consideration of â‚¬16.8million. IPM is a manufacturer and supplier of vacuum bagging films for thecomposites industry and other markets. Consideration of â‚¬12.8 million waspayable to the vendors on completion, with the remaining â‚¬4.0 million beingpaid by the Group into an escrow account pending any warranty claims.In the period from acquisition to 31 March 2009, IPM achieved a profit beforetax of £nil, after a charge of £0.5 million in respect of amortisation ofacquired intangible assets. Had the acquisition completed on 1 April 2008, itis estimated that IPM would have contributed a further £10.0 million to revenueand £nil to profit before tax, after making certain non-recurring payments tothe vendors and charges in respect of amortisation of acquired intangibleassets. Other than the recognition of intangible assets of £6.4 million and arelated deferred tax liability, the fair value adjustments made were therevaluation of property, plant & equipment, an additional inventory provisionand the recognition of additional trade and other payables.

The fair value of net assets acquired were as follows:

Accounting Acquired Book policy intangible Fair value adjustments assets value £ million £ million £ million £ million Property, plant & equipment 5.6 0.8 - 6.4 Intangible assets 0.1 - 6.4 6.5 Inventory 4.1 (0.4) - 3.7 Trade & other receivables 8.8 - - 8.8 Bank overdraft (6.5) - - (6.5) Trade & other payables (7.2) (1.1) - (8.3) Bank loans (6.0) - - (6.0) Income tax receivable 0.3 - - 0.3 Deferred tax liabilities - - (2.2) (2.2) Net identifiable assets and (0.8) (0.7) 4.2 2.7 liabilities Goodwill 12.4 Consideration 15.1 Satisfied by: Cash consideration paid 14.4 Expenses paid 0.6 Consideration and expenses 0.1 accrued 15.1

Notes to the preliminary announcement of results

_________________________________________________________________________

For the year to 31 March 2009

10 Acquisitions (continued)

The goodwill recognised on the acquisition of IPM is attributable to the skills and technical capabilities of IPM's employees and synergies expected to be generated from establishing links between IPM and the Group's existing composites activities.

Amounts recognised for intangible assets and goodwill is provisional and subject to change for the period of one year from the date of acquisition. Intangible assets have been recognised in respect of customer relationships and order books on hand at acquisition.

In addition to the acquisition of IPM, £6.1 million was paid during the year to31 March 2009 in respect of acquisitions made in prior years. This valuecomprised £3.7 million in respect of the final payment of deferredconsideration due under the terms of the acquisition of Pattonair Srl (formerlyProvest Srl) and a final earnout payment of £2.4 million under the terms of theacquisition of J.D. Lincoln, Inc. The total increase in net debt relating tothe acquisition of subsidiaries in the year to 31 March 2008 thereforecomprises: IPM Other Total £ million £ million £ million Cash consideration paid 14.4 - 14.4 Expenses paid 0.6 - 0.6 Bank overdraft at acquisition 6.5 - 6.5 Bank loans at acquisition 6.0 - 6.0 Pattonair Srl - deferred - 3.7 3.7 consideration J.D. Lincoln, Inc. - earnout - 2.4 2.4 payment 27.5 6.1 33.6

Details of acquisitions made in the year to 31 March 2008 are as follows:

On 31 August 2007, the Group acquired the entire issued share capital of J. D.Lincoln, Inc. (`Lincoln') for an initial cash consideration of US$59.5 million.Additional cash consideration of up to US$15.0 million was payable based on theEBITDA of Lincoln in the twelve months after completion. Lincoln formulates andmanufactures a range of pre-preg materials primarily used by aerospace tier 2suppliers for the manufacture of composite interior structures of commercialaircraft. In the period from acquisition to 31 March 2008, Lincoln achieved aprofit before tax of £0.2 million, after a charge of £2.0 million in respect ofthe amortisation of acquired intangible assets. Had the acquisition completedon 1 April 2007, it is estimated that Lincoln would have contributed a further£7.6 million to revenue and £0.1 million to profit before tax, after makingcertain non-recurring payments to the vendors. Other than the recognition ofintangible assets of £20.6 million and a related deferred tax liability, theonly fair value adjustments made were the recognition of additional trade &other payables of £0.2 million.On 21 November 2007, Advanced Composites Group Limited acquired the entireissued share capital of George Cole Technologies Limited which traded as Primco(`Primco') for a cash consideration of £3.0 million. The business develops andmanufactures a range of phenolic resin based pre-pregs used in aerospace,defence, industrial, medical and sporting applications.

Notes to the preliminary announcement of results

_________________________________________________________________________

For the year to 31 March 2009

10 Acquisitions (continued)

On 31 August 2007, GRPMS Limited acquired the Estonian distribution business ofAshland Composite Polymers, part of Ashland Inc., and the inventory and fixedassets related to this business. There was no goodwill arising.

The fair value of net assets acquired were as follows:

Lincoln Primco GRPMS Total Estonia £ million £ million £ million £ million Property, plant & equipment 0.8 1.0 0.1 1.9 Intangible assets 20.6 0.4 - 21.0 Inventory 1.4 0.5 0.1 2.0 Trade & other receivables 2.3 1.2 - 3.5 Cash - 0.2 - 0.2 Trade & other payables (1.4) (1.2) - (2.6) Loans & borrowings (0.2) - - (0.2) Income tax payable (0.6) (0.1) - (0.7) Deferred tax liabilities (5.8) (0.1) - (5.9) Net identifiable assets and 17.1 1.9 0.2 19.2 liabilities Goodwill 16.8 1.4 - 18.2 Consideration 33.9 3.3 0.2 37.4 Satisfied by: Cash consideration paid 29.6 3.0 0.2 32.8 Expenses paid 1.1 0.3 - 1.4

Consideration and expenses accrued 3.2 - - 3.2

33.9 3.3 0.2 37.4

The goodwill recognised on the acquisitions of Lincoln and Primco is attributable to the skills and technical capabilities of the employees of these companies, and synergies expected to be generated from establishing links between these companies and the Group's existing composites activities.

In addition to payments in respect of acquisitions made in the year to 31 March2008, £3.7 million was paid in respect of deferred consideration due under theterms of the acquisition of Avionics Mobile Services Limited and the purchaseof the minority interest shareholding in Tailored Logistics Corporation, Inc.

11 Divestments

On 1 November 2007, the Group completed the divestment of its Repair & Overhaulbusiness segment to AMETEK, Inc. for a cash consideration of £36.0 million. Thedivestment was effected by way of the sale of the entire issued share capitalof AEM Limited and Antavia SAS to Ametek Holdings B.V., a wholly ownedsubsidiary of AMETEK, Inc.

Notes to the preliminary announcement of results

_________________________________________________________________________

For the year to 31 March 2009

11 Divestments (continued)

On 31 March 2008, Umeco divested its chemicals distribution businesses(`Chemicals'). This was effected by the sale of the entire issued share capitalof Aeropia Limited, Aeropia, Inc., and RD Taylor & Company Limited to Haas TCMof the UK Limited, a wholly owned subsidiary of Haas TCM Group, Inc. for a cashconsideration of £13.0 million.In the year to 31 March 2008, the profit from discontinued operations was asfollows: Repair & Chemicals Total Overhaul £ million £ million £ million Revenue 15.7 29.8 45.5 Cost of sales (7.5) (23.1) (30.6) Gross profit 8.2 6.7 14.9 Administrative expenses (6.8) (5.5) (12.3) Profit before tax 1.4 1.2 2.6 Income tax - UK (0.3) (0.3) (0.6) Income tax - overseas (0.1) (0.1) (0.2) Profit after tax 1.0 0.8 1.8 Profit on disposal 2.6 7.3 9.9

Profit from discontinued operations 3.6 8.1 11.7

The divestments had the following effect on the financial position of theGroup: £ million Property, plant & equipment 5.1 Intangible assets 18.8 Inventories 6.5 Trade & other receivables 11.6 Income tax receivable 0.2 Cash 3.3 Trade & other payables (9.9) Loans & borrowings (2.9) Income tax payable (0.6) Deferred tax liabilities (0.6) Net assets disposed of 31.5 Consideration received (£49.0 million, net of (41.4) disposal costs of £7.6 million which includes a disposal provision of £4.0 million) Profit arising on disposal (9.9)

12 Details of Annual General Meeting

The Annual General Meeting of the Company will be held at The Falstaff Hotel, 16-20 Warwick New Road, Leamington Spa, CV32 5JQ at 1.00pm on 29 July 2009.

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