RNS Number:5916L
Peacock Group PLC
28 May 2003

                                                                   28th May 2003



                              THE PEACOCK GROUP PLC

            PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 31 MARCH 2003


"This has been a year of massive change and real progress for The Peacock Group.
  The acquisition of bonmarche has strengthened our business by adding a
fast-growing and successful brand whose customer profile ideally complements
that of the Peacocks chain.  Peacocks has developed and begun to roll out a new
fascia and image that reflects its growing focus on more fashionable clothing
for the 25 - 45 age group, projected through a much simpler brand portfolio and
supported by a reconfigured supply chain."


*          Sales up 47% to #396.6 million, including a #108.8 million
           contribution from bonmarche

*          Gross product margins improved in both divisions through better 
           buying and stock control

*          Operating profit before goodwill amortisation and exceptionals 
           increased by 50% to #26.8 million.

*          Profit before tax, goodwill amortisation and exceptional items 
           increased by 41% to #23.1 million.

*          Adjusted earnings per share increased by nearly 20% to 15.3p (2002: 
           12.8p).

*          77 new format Peacocks stores now trading; average 13.5% sales uplift 
           in refits against chain

*          bonmarche chain increased by 11 stores since acquisition to 270 
           stores by year end;  Peacocks chain increased by 25 stores during 
           year to 370 stores.

*          Like-for-like sales for 13 week period to 24 May (which includes 
           impact of Easter trading) up 5% at Peacocks and 13% at bonmarche

*          Uplift of 19% in total dividend for year to 5.7p, reflecting
           confidence in progress of enlarged Group

"I am confident that both divisions have management teams with the right mix of
experience and skills to ensure that they operate effectively and fulfil their
undoubted growth potential."

                                                       - John Lovering, Chairman



An analyst meeting will be held today at 11.00am at the offices of Hudson
Sandler, 29 Cloth fair, London, EC1A 7NN.  Please contact Rebecca Ghent on 020
7796 4133 for further details or to confirm attendance.



High resolution photographs will be available to media at www.vismedia.co.uk





ENQUIRIES:



The Peacock Group plc                                       Hudson Sandler

Richard Kirk, Group Chief Executive                         Andrew Hayes/Keith Hann
Keith Bryant, Group Finance Director                        Tel:  020 7796 4133

Tel:  020 7796 4133 (on 28 May)

Thereafter: 029 2027 0000





THE PEACOCK GROUP PLC

PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 31 MARCH 2003



CHAIRMAN'S STATEMENT



This has been a year of massive change and real progress for The Peacock Group.
The acquisition of bonmarche has strengthened our business by adding a
fast-growing and successful brand whose customer profile ideally complements
that of the Peacocks chain.  Peacocks has developed and begun to roll out a new
fascia and image that reflects its growing focus on more fashionable clothing
for the 25 - 45 age group, projected through a much simpler brand portfolio and
supported by a reconfigured supply chain.



Results

Total sales for the 52 weeks ended 31 March 2003 grew by 47.0% to #396.6 million
(2002: #269.8 million), including #108.8 million from bonmarche in the 36 weeks
since its acquisition.  Sales grew by 6.7% in the Peacocks division, and by
19.1% in bonmarche.  Group like-for-like sales, being the sales made at stores
that have been open for at least a year at the start of the financial year,
increased by 1.3%, comprising a 7.5% uplift in bonmarche and a 0.9% decline in
Peacocks.  After a disappointing first half, Peacocks responded to improved
product ranges and store enhancements with a 0.7% like-for-like sales gain over
the Christmas trading period and a 4.7% advance in the final quarter.  By the
end of the year, newly opened and refitted stores in the new Peacocks fascia
comprised some 21% of the division's portfolio.



Gross product margins improved in both divisions, as we maintained our focus on
improved buying and stock control in Peacocks, and applied our experience in
these disciplines to bonmarche.  Group operating profit, before exceptional
items and goodwill amortisation, increased by 50.2% to #26.8 million, including
a contribution of #11.7 million from bonmarche.



After increased pre-exceptional interest payable of #3.7 million (2002: #1.4
million) resulting from the acquisition, profit before taxation, goodwill
amortisation and exceptional items was #23.1 million (2002: #16.4 million), a
rise of 40.7%. This included non-trading profit of #0.2 million (2002: #0.4
million) that arose on the sale of properties held for resale.



Exceptional items included a #0.3 million (2002: #0.4 million) charge to write
off the unamortised portion of set-up fees on former bank facilities, and
integration costs relating to the acquisition of #0.8 million.  Goodwill
amortisation was #1.5 million (2002: nil) and there was a loss on disposal of
fixed assets of #0.2 million (2002: nil). After these and the exceptional items,
profit before taxation was #20.3 million (2002: #16.0 million), an increase of
26.9%.



The Group's reported tax rate has increased from 26.9% to 30.7% (excluding
goodwill which is non-deductible for tax purposes), which we expect to be the
normal level going forwards.  In consequence, earnings per share adjusted to
exclude exceptional items and goodwill were 15.3 pence (2002: 12.8 pence), an
increase of 19.5%.  Basic earnings per share were 13.0 pence (2002: 12.5 pence).



Finances

Net debt at the year end was #67.2 million (2002: #16.7 million), reflecting the
acquisition of bonmarche.  This represented gearing of 93.5%, which we expect to
reduce in the current year, while normalised interest cover was a comfortable
7.2 times.  Stock investment was well controlled, despite our development of
more fashionable ranges, and we ended the year with a much better stock balance
than in 2002.



Dividend

The Board proposes a final dividend of 3.9 pence per share (2002: 3.3 pence), a
rise of 18.2%.  Together with the increased interim dividend of 1.8 pence paid
in January, this makes a total for the year of 5.7 pence, an uplift of 18.8%,
covered 2.7 times by adjusted earnings per share (adjusted to exclude
exceptional items and goodwill).  The proposed increase reflects the Board's
confidence in the success of the bonmarche acquisition and in the growth
prospects of the enlarged Group.  Subject to the approval of the Annual General
Meeting, the final dividend will be paid on 1st August 2003 to shareholders on
the register at 6th June 2003.



Prospects

We have made a most encouraging start to the new financial year.  In the eight
weeks ending 24th May 2003 like-for-like sales are up 5% in Peacocks and 11% in
bonmarche. Gross product margins have continued to improve in both divisions and
so like-for-like gross profit is up 6% and 12% respectively.  Taking a longer
thirteen week period, to ensure that each year includes the impact of Easter
trading, the like-for-like sales growth has been 5% in Peacocks and 13% in
bonmarche.





The repositioning of the Peacocks brand is well advanced.  Refurbishment in the
new fascia and store design is also gaining momentum, with 60 refits scheduled
for the current year, together with around 25 new store openings.  We will also
continue the successful expansion of bonmarche, with around 35 new stores
planned.



Integration of Group logistics is also well advanced, benefiting from the
opening in April 2003 of bonmarche's major new distribution and head office
facility at Grange Moor, near Huddersfield.  Other common functions such as IT,
finance and store maintenance are also being brought together, in line with our
plans.  We are seeing real benefits, in addition, from the sharing of skills and
ideas between the divisions, notably through the application of Peacocks' proven
merchandising and stock control capabilities to bonmarche and the trial of
Peacocks' priorityclub based on the highly successful bonmarche bonusclub
loyalty scheme.



I am confident that the Group has been greatly strengthened by the bonmarche
acquisition. We now have two strong and highly complementary brands in the
growing value sector, with clear and distinct growth strategies and excellent,
highly motivated management teams.  I look forward to reporting on another year
of growth and progress.



John Lovering

Chairman



GROUP CHIEF EXECUTIVE'S REVIEW



The last year has been the most exciting period for The Peacock Group since I
joined the business in 1995.  The bonmarche acquisition has made us the UK's
third largest value retailer of clothing and footwear, and a strong second in
the women's outerwear sector.  It has added a successful business with
considerable further growth potential to which we can add value and from which
we can also learn.  Consequently, the enlarged Group is much more than the sum
of its two parts.  The radical repositioning of the Peacocks chain over the last
12 months has restrained its progress in the short term but has much to offer
for the future, as we provide our customers with the more fashionable products
and up-to-date retail environment that they demand.  We are already seeing a
step change in performance at these new format stores.



The Peacock Group



Market place

The value sector in UK clothing and footwear has continued to grow strongly
overall, increasing its share of the market as a whole.  However, competition
has undoubtedly grown more intense, with the continued expansion of established
discounters, a growing focus on clothing by food retailers, and the revival of
mid-market specialists.  Customers have become ever more demanding not just of
choice and value, but also of products that are in tune with current fashion
trends.  Peacocks has responded to these challenges through the development of a
much more focused product range that, whilst not at the cutting edge of fashion,
is stylish, up-to-date and well presented, while continuing to represent
exceptional value for money.  bonmarche, while also committed to value, has a
somewhat higher quality and price profile than Peacocks and is uniquely
positioned as the only targeted high street retailer of womenswear for the 45+
age group.



Strategy and management

Given their distinct market positions and customer profiles, it was always our
intention to manage the Group's two brands independently, while securing the
benefits of increased scale in purchasing, from the sharing of best practice,
and from the creation of centralised support functions in areas such as finance,
IT and logistics.  Good progress has been made in all these areas, in accordance
with our plans.



The operational management of the Peacocks division is based in Cardiff and
comprises the Group directors - myself as Chief Executive, Keith Bryant (Finance
and Property Director), Neil Burns (IT, Logistics and Estates Director) -
together with Tim Bettley (Buying and Merchandising Director).



The divisional board of bonmarche is based at Grange Moor near Huddersfield and
comprises David Pidgeon (Managing Director), Andrew McDonald (Retail and
Marketing Director), Gurchait Chima (Buying and Merchandising Director) and
Stephen Alldridge (Finance Director).  Having successfully completed the initial
stages of integrating bonmarche into The Peacock Group, Steve Bullas (ex
Managing Director) left the company in March 2003 and was succeeded by David
Pidgeon, who was previously Merchandise Director of the Peacocks chain.



I am confident that both divisions have management teams with the right mix of
experience and skills to ensure that they operate effectively and fulfil their
undoubted growth potential.



Group functions

The acquisition of bonmarche was not predicated on synergies or cost savings,
but on the strategic positioning of the two businesses and their ability to work
constructively together in a mutually beneficial way.  The key areas that are
being organised on a Group-wide basis are Logistics, Information Technology,
Human Resources and Finance.



Logistics

Good progress has been made in integrating the management of the two divisions'
transport fleets to maximise efficiency, and in developing shared services where
appropriate, for example in the co-ordination of third party deliveries to
stores in Northern Ireland.  We have also standardised management processes and
procedures in many areas.  However, given the distinctness of the two product
ranges and the importance of maintaining brand integrity in the eyes of the
consumer, we will continue to operate separate distribution facilities and
fleets for Peacocks and bonmarche albeit under the umbrella of an integrated
management.



A major design and build warehouse project for bonmarche at Grange Moor was well
advanced at the time of acquisition, and this new 150,000 sq ft facility opened
in April 2003.  Volumes will build progressively and we expect the new facility
to be fully operational by September, replacing four existing warehouses.  This
development provides us with the capacity to handle distribution for at least
500 bonmarche stores in the UK, in line with the division's long-term
development plan.



In Peacocks, all key performance targets for logistics were met or exceeded, and
further investment has been made to keep pace with the expansion of the retail
chain.  A second large sortation machine is under construction at Nantgarw, near
Cardiff, and is due to be commissioned in August, and we have received planning
permission for an 85,000 sq ft extension to the distribution centre.



Information Technology

In Peacocks, a #6 million two year investment programme is underway in the
replacement of our EPoS system to enhance its capabilities, including handling
the new 'chip and PIN' credit card technology.  This is scheduled for completion
in February 2005.



Human resources

The well developed Peacocks 'people first' culture, with its emphasis on
training and development opportunities for all our colleagues and on clear and
open two-way communication, is being progressively extended to bonmarche as part
of the integration process.  The process of re-accreditation for Peacocks' '
Investor in People' status is currently under way, and we hope to extend this
across the enlarged Group as soon as possible.



Corporate social responsibility

We are pleased that the enlarged Group has retained its place in the FTSE4Good
Index of ethical investments, reflecting the commitment of both divisions to
sound environmental practice and to ethical sourcing policies that ensure our
suppliers' adherence to internationally recognised standards.



Both divisions have long-standing partnership agreements with national
charities, on which the fund-raising efforts of our colleagues are focused.
Peacocks supports NCH, and has raised nearly #600,000 over the last four and a
half years, while bonmarche has contributed over #900,000 to Macmillan Nurses
over the last six years and is well on course to meet its goal of raising #1
million.



bonmarche

Stores

The bonmarche chain comprised 259 stores at the time of acquisition.  By the
year end we had increased this to 270 through the opening of 14 new stores and
the closure of three under performing ones.  The average size of a bonmarche
store is 2,650 sq ft, compared with 5,100 sq ft for Peacocks, reflecting the
more tightly focused bonmarche product range.  A three-year store refit campaign
was completed during the year.



During the current year we plan to add around 35 new stores, significantly
strengthening our presence particularly in Scotland, Northern Ireland, East
Anglia and the South East.  The differing property requirements and customer
profiles of bonmarche and Peacocks enable the fascias to trade comfortably
alongside each other, enabling us to undertake joint developments where suitable
opportunities arise.



Buying and merchandising

Older consumers are becoming increasingly youthful in their approach to clothing
purchases and in their desire to keep in tune with current trends.  The drive
towards a more fashionable bonmarche range began before the acquisition and has
been given added momentum by the application of Group skills; we have also been
able to assist bonmarche in the extension of its range into new areas including
lingerie and accessories.



bonmarche enjoys a niche positioning and strong customer loyalty, underpinned by
its commitment to offering products fully comparable in fabric quality, style
and finish with the leading mainstream high street retailers, at compelling
value prices.  Its historic strength has been in its buying skills, notably its
Amatexa production management division, which is responsible for sourcing
product mainly from factories in eastern Europe.  Action is already well in hand
to complement this with improved supply chain and in-store processes, based on
the best-practice models in use by Peacocks, including the introduction of more
scientific range planning, stock control, distribution and allocation and
replenishment systems.  There is a significant opportunity to improve
profitability through better control of stock and markdowns in particular.



Marketing

A key driver of bonmarche's strong like-for-like sales growth has been its
successful bonusclub loyalty card scheme, whose membership grew from 250,000 to
800,000 customers in the course of the year.  This provides us with an
exceptional database on our core customers and their shopping habits, and has
enabled us to undertake a number of successful direct mail initiatives.  These
have achieved response rates well above the industry norm and generated
substantial uplifts in the average transaction values of bonusclub members.  We
anticipate that bonusclub will achieve a membership of 1.2 million by the end of
the current year and are continuing to enhance its value to members with a range
of strategic alliances with companies offering complementary products and
services that are of interest to our customers.



Peacocks

Stores

We opened 29 new Peacocks stores during the year and closed four, giving us a
total of 370 at the year end.  The average size of our new stores continued to
rise and last year was 6,000 sq ft, adding a total of 174,000 sq ft of gross new
trading space.  This resulted in 165,000 sq ft (or 9%) of net new space added
after taking account of the four store closures.



In addition to new stores we also embarked on a major programme to modernise and
upgrade the environment in our established stores, with the introduction of a
new Peacocks brand and fascia coupled with upgraded lighting, flooring and
product display systems.  After a successful trial in Bridgend at the beginning
of the year, this format had been extended to 77 locations, including new
stores, by the end of March 2003.  Refurbished stores are generating sales
uplifts of some 13.5% compared with the chain as a whole, giving us the
confidence to press ahead with a #6 million investment programme to refit a
further 60 stores during the current year.  Together with our planned new store
openings, this will mean that over 40% of the Peacocks chain will be in the
latest format by March 2004.



Buying and merchandising

Over the last two years we have comprehensively reconfigured the Peacocks supply
chain and product range.  Our aim has been to meet our customers' demands for
more stylish and contemporary products, while reducing our dependence on
traditional basic lines that are more exposed to weather-related peaks and
troughs in demand.  To do this effectively, we have tightened our focus on
customers in the 25 - 45 age group, and have concentrated on a small range of
our own clothing 'power brands': e-vie for womenswear, Urban Spirit for
menswear, and miss e-vie and Street Gear for girls and boys respectively.  We
also offer our exclusive Curtess brand in footwear and Peacocks Home across our
homeware range.  This much more focused approach has significantly improved the
clarity of our presentation in-store.



While we do not aim to be at the leading edge of fashion, with all the risk that
entails, we do intend to offer our customers products that reflect the major
high street trends.  This has been made possible by reducing our dependence on
traditional Far Eastern suppliers, with their inevitably long lead times, and
developing new relationships with manufacturers in eastern Europe in particular.
  This gives us the flexibility to respond much more quickly than before to
changing consumer tastes.  At the same time we have redefined and updated our
traditional basic products, such as jeans and T-shirts, to offer our customers
more stylish alternatives that still represent outstanding value for money.



We continue to benefit from robust range planning and merchandise information
systems, and during the year we completed the roll-out to all stores of a new
replenishment system, following successful trials.  This combines initial stock
deliveries tailored to the profile of each store, supported by flexible
replenishment driven by their rate of sale.  This has produced availability
levels which we believe to be comparable with the very best on the high street.



Marketing

Peacocks' key advertising medium has always been its own shop windows, and we
are using these ever more effectively to communicate the scale and pace of
change within the stores.  Displays change every 2 - 3 weeks to reflect our
increased focus on timely fashion wear, and the continuing, strong, value
promotions that remain one of the cornerstones of our appeal.  Sales are also
benefiting from the introduction of more colleague- and customer-friendly
display equipment within the stores, supported by improved visual merchandising.



Trials began in February of a new Peacocks priorityclub loyalty card, based on
the successful bonmarche bonusclub concept.  Initial results are very
encouraging, with 60,000 customers already participating in the scheme through
just 40 stores.



Wholesale

Shortly before the year end we concluded a new agreement with Woolworths for a
three year period to August 2006.   This contract provides for Peacocks'
continued participation in Woolworths' 18 current big W stores and in all future
openings of the concept, three of which are scheduled for 2003.



The Future

There are significant benefits still to come from leveraging the complementary
strengths of bonmarche and Peacocks.  There is also substantial scope for
continued physical expansion, with ultimate potential for at least 700 Peacocks
and 500 bonmarche stores across the UK.  This year we plan to open some 60 new
stores under our two fascias, creating 900 new jobs to add to our current total
of 8,500 colleagues.  In the future as in the past, our success will be
dependent on the commitment of all our team to putting customers first and
delivering quality service.  On behalf of the Board, I would like to extend a
warm welcome to the 3,000 people who joined the Group through the merger with
bonmarche and to thank all our colleagues across both divisions for their
contributions to the integration of Peacocks and bonmarche, and the successful
development of both businesses throughout the year.





Richard Kirk

Group Chief Executive


                             Consolidated profit and loss account (summary)


                                                              2003             2003             2003             2002
                                                   Before goodwill     Goodwill and            Total            Total
                                                   and exceptional      exceptional
                                                             items            items
                                            Note             #'000            #'000            #'000            #'000

Turnover
Existing operations                                        287,803                -          287,803          269,818
Acquisitions                                               108,793                -          108,793                -
                                                        __________       __________       __________       __________
Continuing operations                                      396,596                -          396,596          269,818
Cost of sales                                            (320,775)                -        (320,775)        (221,326)
                                                        __________       __________       __________       __________
Gross profit                                                75,821                -           75,821           48,492
Other operating expenses                     1            (49,255)          (2,317)         (51,572)         (31,024)
Other operating income                       1                 227                -              227              368
                                                        __________       __________       __________       __________
Operating profit                                            26,793          (2,317)           24,476           17,836
Comprises:
Existing operations                                         15,080            (397)           14,683           17,836
Acquisitions                                                11,713          (1,920)            9,793                -
                                                        __________       __________       __________       __________
Continuing operations                                       26,793          (2,317)           24,476           17,836

Loss on disposal of fixed assets                                 -            (190)            (190)                -
Net finance charges                          1             (3,718)            (264)          (3,982)          (1,834)
                                                        __________       __________       __________       __________
Profit on ordinary activities before
taxation                                                    23,075          (2,771)           20,304           16,002
Tax on profit on ordinary activities         2                                               (6,695)          (4,301)
                                                                                          __________       __________
Profit on ordinary activities after
taxation                                                                                      13,609           11,701

Dividends paid and proposed                  3                                               (6,295)          (4,422)
                                                                                          __________       __________
Retained profit for the year transferred
to reserves                                                                                    7,314            7,279
                                                                                          __________       __________
Earnings per ordinary share:                 4
- Basic                                                                                        13.0p            12.5p
- Adjusted to exclude exceptional items                                                        15.3p            12.8p
- Diluted                                                                                      13.0p            12.4p


There were no recognised gains and losses other than the profit in each year.



                      Consolidated balance sheet (summary)


                                                                          Note               2003             2002
                                                                                            #'000            #'000


Fixed assets
Goodwill                                                                    5              42,640                -
Tangible assets                                                                           101,659           60,990
Investments                                                                 4               3,128            3,128
                                                                                          147,427           64,118

Current assets
Goods for resale                                                                           61,858           37,601
Debtors                                                                                    17,609           10,574
Cash at bank and in hand                                                                    6,892            6,143
                                                                                           86,359           54,318
Creditors:  Amounts falling due within one year                                         (119,065)         (58,958)
Net current liabilities                                                                  (32,706)          (4,640)
Total assets less current liabilities                                                     114,721           59,478
Creditors:  Amounts falling due after more than one year                                 (34,437)          (4,406)
Provisions for liabilities and charges                                                    (8,387)          (7,058)
Net assets                                                                                 71,897           48,014

Capital and reserves
Called-up share capital                                                                     1,135              952
Share premium account                                                                      42,762           42,762
Merger reserve                                                                             16,386                -
Capital redemption reserve                                                                     57               57
Profit and loss account                                                                    11,557            4,243
Equity shareholders' funds                                                  6              71,897           48,014



                   Consolidated cash flow statement (summary)


                                                                          Note               2003             2002
                                                                                            #'000            #'000

Net cash inflow from operating activities                                   7              50,361           26,603
Returns on investments and servicing of finance                                           (3,402)          (1,394)
Taxation                                                                                  (7,839)          (4,051)
Capital expenditure and financial investment                                             (31,388)         (18,108)
Acquisitions                                                                             (24,970)                -
Equity dividends paid                                                                     (5,028)          (3,905)
Net cash outflow before financing                                                        (22,266)            (855)
Financing                                                                                  23,015            3,857
Increase in cash in the year                                                                  749            3,002



            Reconciliation of net cash flow to movement in net debt


                                                                                             2003             2002
                                                                                            #'000            #'000

Increase in cash in the year                                                                  749            3,002
Cash outflow from increase in debt and lease financing                                   (24,763)          (3,857)
Change in net debt arising from cash flows                                               (24,014)            (855)
Loan notes acquired                                                                       (2,750)                -
Write-off of unamortised finance costs on repayment of debt                                 (264)            (403)
Costs of debt issue                                                                         1,208                -
Net debt acquired with subsidiary                                                        (24,029)                -
New finance leases                                                                          (530)                -
Amortisation of finance costs of debt issue                                                 (176)             (95)
Movement in net debt in year                                                             (50,555)          (1,353)
Net debt at start of year                                                                (16,652)         (15,299)
Net debt at end of year                                                                  (67,207)         (16,652)



Notes

1. Operating profit and exceptional items

Operating exceptional items include #1,470,000 of goodwill amortisation,
together with #847,000 of costs incurred during the current year relating to the
group restructuring that commenced following the acquisition of Bon Marche Group
Limited in July 2002.

Net finance charges includes #264,000 (2002: #403,000) of exceptional costs
being the write-off of financial costs relating to the Group's borrowings that
were repaid in July 2002 and September 2001 respectively.

Operating profit includes income from the sale of properties held for resale.

The key financial results are adjusted below to exclude the impact of property
disposals, goodwill amortisation and exceptional items:
                                                                                              2003            2002
                                                                                             #'000           #'000
Profit on ordinary activities after taxation                                                13,609          11,701
Exceptional group re-organisation costs                                                        847               -
Exceptional non-operating items:
- write-off of financing costs repaid during the period                                        264             403
- loss on disposal of fixed assets                                                             190               -
Profit on sale of properties held for resale                                                 (227)           (368)
Goodwill amortisation                                                                        1,470               -
Tax arising on above items (excluding goodwill)                                              (330)             (9)
Profit after tax excluding exceptional items, goodwill                                      15,823          11,727
amortisation and profit on sale of properties held for resale
Adjusted basic earnings per share                                                            15.1p           12.5p





2.  Tax on profit on ordinary activities
                                                                                             2003             2002
                                                                                            #'000            #'000
UK corporation tax
  - current                                                                                 6,256            4,767
  - deferred                                                                                  439             (83)
Adjustment in respect of prior years (current tax)                                              -            (383)
                                                                                            6,695            4,301





3.  Dividends paid and proposed
                                                                                              2003            2002
     
                                                                                             #'000           #'000
Interim paid of 1.8p (2002: 1.5p) per ordinary share                                         1,988           1,382
Final proposed dividend of 3.9p (2002: 3.3p) per ordinary share                              4,307           3,040
                                                                                             6,295           4,422



Dividends have been waived on the shares held by the EBT.



4.  Earnings per ordinary share



Basic earnings per ordinary share have been calculated by dividing the profit on
ordinary activities after taxation for each financial period by the weighted
average number of ordinary shares in issue during the year.



Diluted earnings per share have been calculated by dividing the profit on
ordinary activities after taxation for each financial year by the weighted
average number of ordinary shares in issue during the year adjusted for the
dilutive effect of all outstanding share options.



The weighted average number of shares excludes 3,062,000 shares, held by the
Employee Benefit Trust (2002: 3,064,000 shares) for subsequent transfer to
employees under various incentive schemes.  The market value of these shares at
year end was #3,123,000 (2002: #4,075,000).



In order to exclude the effect of the exceptional items on the results of the
group, adjusted earnings per ordinary share have been based on the profit on
ordinary activities after taxation for each financial year but excluding
exceptional items and goodwill amortisation. The number of shares and earnings
used to calculate earnings per share is as follows:


                                                                                              2003             2002
                                                                                            Number           Number

Weighted average number of shares used for basic earnings per share                    104,737,203       93,548,329
Impact of share options                                                                    130,527          516,254
Number of shares used for diluted earnings per share                                   104,867,730       94,064,583





4.  Earnings per ordinary share (continued)



Earnings attributable to ordinary shareholders
                                                                   2003             2003         2002         2002
                                                                  #'000              EPS        #'000          EPS

Profit on ordinary activities after taxation                     13,609            13.0p       11,701        12.5p
Exceptional group re-organisation costs                             847             0.9p            -            -
Exceptional non-operating items                                     454             0.4p          403         0.4p
Tax arising on exceptional items                                  (400)           (0.4p)        (121)       (0.1p)
Goodwill amortisation                                             1,470             1.4p            -            -
Profit after taxation excluding exceptional items                15,980            15.3p       11,983        12.8p
and goodwill





5.  Acquisition of Bon Marche Group Limited



The group purchased Bon Marche Group Limited on 22nd July 2002 for a total
consideration of #46.1m (#45.3m plus acquisition costs of #0.8m). The total
consideration was satisfied by #26.2m in cash, #17.1m of newly issued shares and
#2.8m in guaranteed bank loans.  The transaction was accounted for as an
acquisition.  As part of the acquisition, underlying external debt of #23.9m was
settled in cash and is now accounted for as an intercompany balance.



The total fair value of net assets of the business at acquisition was #2.3m.
These values are considered to be provisional as they may be adjusted in light
of subsequent property disposals that provide further evidence regarding the
value of assets acquired. Goodwill arising has been capitalised as an intangible
asset and amortised over 20 years, in accordance with FRS 10.  Goodwill
amortisation of #1,470,000 has been charged to operating profit since the
acquisition date.



5.  Acquisition of Bon Marche Group Limited (continued)



The following table sets out the book values of the identifiable assets and
liabilities acquired and their provisional fair value to the group:

                                               Book Value     Derecognition   Reclassifications       Provisional
                                                                Of Goodwill                            Fair Value
                                                    #'000             #'000               #'000             #'000
Goodwill                                              294             (294)                   -                 -
Tangible fixed assets                              23,579                 -                   -            23,579
Stock                                              18,339                 -                   -            18,339
Debtors                                            10,222                 -                   -            10,222
Cash                                                1,285                 -                   -             1,285
Creditors < 1 year                               (23,928)                 -                   -          (23,928)
Creditors > 1 year                                   (55)                 -             (2,027)           (2,082)
Loans                                            (23,890)                 -                   -          (23,890)
Provisions                                        (3,538)                 -               2,027           (1,511)
Net assets acquired                                 2,308             (294)                   -             2,014
Goodwill                                                                                                   44,110
Net consideration                                                                                          46,124





6.  Reconciliation of movements in group shareholders' funds
                                                                                             2003             2002
                                                                                            #'000            #'000


Profit on ordinary activities after taxation                                               13,609           11,701
Dividends paid and proposed                                                               (6,295)          (4,422)
New shares issued                                                                          17,118                -
Costs of share issue                                                                        (549)                -
Net addition to shareholders' funds                                                        23,883            7,279
Opening shareholders' funds                                                                48,014           40,735
Closing shareholders' funds                                                                71,897           48,014





7.  Reconciliation of operating profit to operating cash flows
                                                                                             2003             2002
                                                                                            #'000            #'000

Operating profit                                                                           24,476           17,836
Depreciation charges                                                                       16,653           11,659
Amortisation of goodwill                                                                    1,470                -
Loss / (profit) on sale of tangible fixed assets                                              120             (25)
(Increase) / decrease in stocks                                                           (5,918)            1,326
Decrease / (increase) in debtors                                                            3,188          (1,053)
Increase / (decrease) in creditors                                                         10,372          (3,140)
Net cash inflow from operating activities                                                  50,361           26,603



The Group has benefited from reverse premiums and rent-free periods on some of
its retail properties. The impact on profit for the year was #3,448,000 (2002:
#2,720,000).  Such incentives are spread on a straight-line basis over the
shorter of the lease term or the period to the next rental review date.



8.  Basis of preparation



The financial information set out above does not constitute statutory accounts
within the meaning of the Companies Act 1985.  The figures in this preliminary
announcement have been taken from the Group's audited statutory accounts upon
which the company's auditors expressed an unqualified opinion.  The Group's
statutory accounts for the year ended 31 March 2003 have not yet been filed with
the Registrar of Companies.



The preliminary financial information has been prepared on the basis of the
accounting policies set out in the 2002 Annual Report and Accounts.



The company's directors approved the financial information set out above during
a meeting held on 27 May 2003.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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