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LEES FOODS PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2008

		Six months to 30 June 2008 Unaudited	Six months to  30 June 2007 Unaudited & restated
	Revenue	£8.89 m	£7.85 m
	Profit before tax	£222,057	£413,252
	Basic earnings per share	5.7p	12.6p

Group Sales for the first six months of 2008 exceeded last year's figures by £1,034,324, increasing from £7,852,924 to £8,887,248. Profit before tax for the six-month period of this year was £222,057 against last year's figure of £413,252.

Raymond Miquel, Chairman & Managing Director, commented:

'The increased turnover from the first six months of 2008 reflected six months sales of Patisserie UK which we purchased in December 2007. This amounted to £1.1 m and indicates that sales in the rest of the Group were in line with last year's figures.'

'Since June sales have been strong in Lees of Scotland due to the introduction of several new products, we anticipate that this Company's sales will be ahead of last year's figures.  Waverley sales are steady and are in line with last year's figures.'

'Whilst sales are satisfactory, profits have been affected by substantial increases in power, raw materials and distribution costs. We are endeavouring to pass these costs on to our customers wherever possible, however, this has inevitably impacted on our bottom line.'

'The Company continues to trade successfully, although profits will be down on last year's figures as I reported previously.'

'We hope to announce an acquisition in the near future which will move us into a different area of operation.'

For further information:

Raymond Miquel (Chairman & Managing Director)	01236-441600
David Simson (Finance Director)	01236-441600
Cameron Grant (3x1 Public Relations)	0141-221-0707
Guy Peters (Shore Capital - Nomad)	0207 408 4090

29 September 2008

LEES FOODS PLC

CONSOLIDATED INCOME STATEMENT TO 30TH JUNE 2008

Notes 2008 Ended 30th June £'000 (Unaudited) 2007 Ended 30th June £'000 (Unaudited & restated)  2007 Ended 31st December £'000 (Audited &   restated) Revenue   8,887    7,853   15,141 Cost of Sales (6,271) (5,183) (10,105) Gross Profit 2,616 2,670 5,036 Selling and distribution costs (1,082) (1,138) (2,041) Administrative expenses (1,284) (1,134) (2,313) Other operating income   9   14   28 (2,357) (2,258) (4,326) Profit from operations   259 412 710 Interest receivable   17 13 45 Finance costs   (54) (12) (34) Profit before Taxation   222 413 721 Taxation 3   (86)   (124) (179) Profit for the year 136 289 542

Earnings per share

Basic (Pence per share) 4 5.7 12.6 23.3 Diluted (Pence per share) 4 5.6 12.3 22.9

  

LEES FOODS PLC

CONSOLIDATED BALANCE SHEET AT 30th JUNE 2008

			2008 Ended 30th June (Unaudited) £'000		2007 Ended 30th June (Unaudited & restated) £'000		2007 Ended 31st December (Audited & restated)  £'000
Non-current assets
Intangible assets			3,822		1,803		3,822
Property, plant and equipment			2,599		2,762		2,788
Total non-current assets			6,421		4,565		6,610
Current Assets
Inventories			1,220		1,212		1,142
Trade and other receivables			3,811		3,339		2,500
Cash and cash equivalents			1,030		439		955
Total current assets			6,061		4,990		4,597
Current Liabilities
Financial liabilities - borrowings			(1,335)		(102)		(1,088)
Trade and other payables			(4,075)		(3,523)		(3,018)
Current tax liabilities			(268)		(147)		(271)
Total current liabilities			(5,678)		(3,772)		(4,377)
Net Current Assets			383		1,218		220
Non-current liabilities
Financial liabilities - borrowings			(700)		(8)		(700)
Deferred Income			(139)		(161)		(148)
Deferred tax liabilities			(347)		(414)		(347)
Total non-current liabilities			(1,186)		(583)		(1,195)
Net assets			5,618		5,200		5,635
EQUITY
Called up share capital			2,395		2,330		2,395
Employee Share Ownership Trust			(183)		(204)		(183)
Share premium account			884		790		884
Share-based payment reserve			56		52		55
Merger reserve			580		580		580
Retained earnings			1,886		1,652		1,904
Total Equity Shareholders' Funds			5,618		5,200		5,635

  

LEES FOODS PLC

CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 June 2008

Six months  ended 30 June 2008 (Unaudited) Six months Ended 30 June 2007 (Unaudited & restated) Year ended 31 December 2007 (Audited & restated) £'000 £'000 £'000 Cash flows from operating activities Net Profit before taxation, and extraordinary items 259 412 710 Adjustments for: Depreciation charge 241 216 431 Share Transactions 1 3 27 Development Grants released (9) (14) (28) (Profit)/Loss on F.A. Disposals - 14 25 Operating Activities before working capital changes 492 631 1,165 Increase in Stock (78) (263) (39) Increase in trade and other receivables (1,311) (963) 173 Increase in trade payables 1,057 727 (233) Cash generated from operations 160 132 1,066 Interest paid (54) (13) (34) Income Taxes paid (90) (100) (209) Net Cash from operating activities 16 19 823 Cash Flows from Investing Activities Purchase of assets (54) (71) (138) Proceeds from sale of assets 3 1 1 Interest Received 17 14 45 Acquisition of subsidiary - - (1,578) Net Cash used in investing activities (34) (56) (1,670) Cash Flows from Financing Activities Proceeds from issuance of share capital - 20 20 Payment of finance lease liabilities (52) (50) (101) Dividends paid (154) (149) (149) New bank loans raised - - 750 Payment of loans (125) - (152) Net Cash used in financing activities (331) (179) 368 Net increase in cash and cash equivalents (349) (216) (479) Cash and cash equivalents at start of period 177 656 656 Cash and cash equivalents at end of period (172) 440 177

  NOTES TO THE FINANCIAL INFORMATION for the six months ended 30 June 2008

1.    Accounting Policies

Basis of preparation

The condensed financial statements have been prepared using accounting policies consistent with  International Financial Reporting Standards (IFRSs) and in accordance with International Accounting Standard (IAS) 34: Interim Financial Reporting.

Significant accounting policies

The condensed financial statements have been prepared under the historical cost convention.

The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2007. The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 31 December 2008.

    The figures for the year ended 31 December 2007 have been extracted from the audited accounts of Lees Foods Plc. The accounts for the year ended 31 December 2007 received an unqualified audit report and are filed with the Registrar of Companies.

    The financial information for the 6 months ended 30 June 2008 and 30 June 2007 are unaudited and do not constitute statutory accounts.

    The 6 months results have been approved by the board.

    IFRS transition

    IFRS 1 permitted companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period. The financial statements for the year ended 31 December 2007 and the interim financial information has been prepared on the basis of the following exemptions:

• Business combinations prior to 1 January 2006 have not been restated to comply with IFRS 3 'Business Combinations'.

Basis of consolidation

The condensed financial statements incorporate the financial statements of the company and all principal subsidiaries for the period ended 30 June 2008.  

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation

2.    Segment information

The directors have considered the revenue streams of the business, in line with IAS 14 'Segment reporting', and conclude that the business has one main business segment, the manufacture and supply of bakery related products. In reaching this conclusion the directors have considered, the nature of the products, the nature of the production processes, the type of customers for the products, and the methods used to distribute the products.

Geographical information

The Group's production facilities are based in the UK.

3.    Taxation

    Taxation has been provided at the expected annual tax rate.

4.    Earnings per Share

    Basic earnings per share is calculated on the basis of profit for the period after tax divided by the weighted average of shares in issue.

    Diluted earnings per share is calculated on the basis of profit after tax for the period divided by the weighted average of shares in issue, adjusted for the number of shares under option.

5.    Dividend

    The final dividend for the year ended 31 December 2007 of 6.7p (2006: 6.7p) was paid on 20 June 2008.

6.    Prior year adjustments

    The adjustment to the results for the period to 30 June 2007 was necessary to ensure the accounting treatment for incorporation of the Lees ESOP Trust was in line with UITF abstract 38 'Accounting for ESOP trusts'.

    The adjustment to the results for the year ended 31 December 2007 was necessary to reflect deferred consideration on acquisition of a subsidiary which is no longer payable.

7.     Property, plant and equipment

    During the period, the Group spent approximately £54,000 on additions to property, plant and equipment. 

It also disposed of certain of its property, plant and equipment with a carrying amount of approximately £3,000 for proceeds of £3,000.

8.    Related party transactions

    There were no material related party transactions in the period ended 30 June 2008.

9.    Statement of Changes in Shareholders' Equity

    

Statement of Changes in Shareholders' Equity	2008 30th June £'000		2007 30th June £'000		2007 31st December £'000
Opening shareholders' funds	5,635		5,084		5,036
Prior year restatement	-		(48)		-
	5,635		5,036		5,036
Profit for six months/year	136		289		542
Share-based payment	1		3		6
Dividend paid	(154)		(148)		(148)
Share vesting unconditionally with employees	-		-		21
Share capital issued	-		20		85
Premium arising on shares issued in the year	-		-		93
Closing shareholders' funds	5,618		5,200		5,635

10.    Approval of interim financial statements

    The interim financial statements were approved by the board of directors on 26 September 2008.

ENDIR EASNKAASPEFE