RNS Number:2542K
Ferraris Group PLC
23 April 2003


23 April 2003

Ferraris Group plc
Interim Results - 6 months to 28 February 2003


Ferraris Group plc ("Ferraris"), the medical diagnostics and life sciences group
with operations in the UK, Europe and North America, announces Interim results
for the six months ended 28 February 2003. Products and services are supplied to
a wide range of healthcare providers and the world's leading pharmaceutical and
diagnostic companies.


Financial Highlights (before discontinued and exceptional items)

*   Continued Growth
    *   Turnover growth of 6% to #30.1m (5% contributed by Acquisitions; 1%
        Organic)
    *   Operating profit (pre-goodwill) up 11% to #2.72m (2002: #2.45m)
    *   Operating margin up 9.0% for H1 03 (H1 02: 8.6%)
    *   Pre-tax profits (pre-goodwill) up 16% to #2.27m (2002: #1.96m)
    *   EPS growth of 14.5% on continuing activities (pre-goodwill)
    *   Dividend 2.2p (2002: 2.2p), covered 1.9 times
    *   Interest cover 3.9 times


Other Highlights

*    R&D expenditure written off as incurred - all figures stated on this
     basis
*    Acquisitions of Del Mar and PiKo in January 2003
*    New product launches; strength of new contracts in clinical trails
*    Member of Stock Exchange techMARK and techMARK Mediscience groups in March
     2003


Operational

*   Medical Diagnostic Division (58% of sales) - margin increased

*   Established as Europe's premier provider of cardio-respiratory devices and
    services
*   Acquisition of Del Mar secures premier global position for cardiac
    ambulatory monitoring products
*   Rapid expansion in clinical trial services, rebranded as "Quantum
    Research"
*   Asthma management business stable - launch of PiKo, world's smallest
    electronic peak flow meter
*   European liaison of pulmonary and cardiology product groups
*   Infant pulmonary laboratory sales on target

*   Life Science Division (42% of sales) - margin maintained

*   Challenging period across division - like-for-like sales reduced by 2.5%
*   Focus on cost control to remain lowest cost producers of top quality
    products
*   New product opportunities for medical diagnostics


Regarding Prospects, Ian Dighe, Chairman, said:

"The current level of orders is however encouraging in most businesses within
the group. Provided this is maintained, the Board can be optimistic about a
satisfactory outcome for the current financial year."


For further information:
Ferraris Group plc                                         Binns & Co PR Ltd
Steven Mills, Chief Executive     Tel:     0121 782 6000   Peter Binns
                                  Mob:     07831 677 067   Paul McManus
www.ferraris.co.uk                                         Tel: 020 7786 9600
                               

CHAIRMAN'S REVIEW

I am pleased to report interim figures to 28 February 2003 showing increased
sales and operating profit before goodwill and exceptionals on continuing
operations (our best indicator of underlying earnings), compared to the same
period last year. On this basis, earnings per share at 6.3p rose 15% above 5.5p
reported for 2002.

The Medtech sector continues to change and is driven by needs to serve an ageing
population cost effectively and by the accelerating trend towards globalisation.
The requirement to expand market share, lower costs of distribution, achieve
critical mass, offer a fully integrated product portfolio and introduce latest
technology drives consolidation in the sector. We have responded to
consolidation amongst US end-user customers, in particular, by the acquisition
of the business of Del Mar Medical Systems ("Del Mar") and by the purchase of
the business and intellectual property rights to PiKo. Details of this corporate
activity are given below. There is also an increasing trend towards outsourcing
drug evaluation clinical trial programmes by the major pharma groups to which
our diagnostic products and services are tailored.

Work on integrating the Del Mar business with our existing cardiology brand of
Reynolds Medical is proceeding smoothly and should be completed by the year
end. The combined business offers a coordinated global approach to customers
for an increased range of products. On a similar note the combination of our
clinical trials operations in the UK following the acquisition of Hertford
Medical in August 2002 is virtually complete. We have adopted the brand name
'Quantum Research' on a worldwide basis for our expanded range of clinical
trials services. Acceptance of membership to join the London Stock Exchange
TechMARK and TechMARK Mediscience groups in March 2003 further underscores our
commitment to the medical diagnostics sector.

Following extensive discussions with shareholders, advisors and bankers, the
Board has decided to expense our significant Research and Development costs as
incurred. We have made this change of policy to demonstrate additional clarity
in our results and to be consistent with current accounting trends. We shall
continue to track expenditure, as any material variation in spending would give
additional volatility to earnings. A favourable consequence of this approach is
a reduction in future tax payments in the USA amounting to $0.75 million. Prior
year results have been restated allowing a proper comparison with previous
periods.

RESULTS AND DIVIDEND

Sales on continuing operations increased by 6% to #30.1 million (2002: #28.5
million). A first contribution of #1 million came from the acquisition of Del
Mar and a further #0.5 million from Hertford Medical International Limited,
acquired in August 2002, giving a like for like increase of 1%. Adverse changes
in #/$ exchange rates depressed sales by #0.75 million. Total sales increased in
Medical Diagnostics by 12%, whilst market conditions led to a decrease of 2.5%
in Life Sciences. Operating margin for the Medical Diagnostic division rose to
10.6% from 10.0% whilst that for the Life Sciences division remained static at
around 6.8%.

Operating profit (before goodwill and exceptionals), our best indicator of
underlying earnings, at #2.7 million was 11% ahead of the #2.4 million for 2002.
Exceptional costs of #847,000 (2002 : #243,000) have been incurred in connection
with long term contractual arrangements for key customers in our Life Sciences
Division. Certain costs are necessarily taken up front with this investment
expected to yield commercial benefit over several years as stipulated in
individual contracts. In accordance with best accounting practice and consistent
with the Board's revised approach to Research and Development expenditure, these
items have been expensed as incurred. It is not anticipated that there will be
any further costs of this nature in the second half of this year. In 2002,
exceptional costs related primarily to reorganisation of the asthma management
products group. The higher charge for goodwill amortisation of #968,000 (2002:
#867,000), reflects the acquisitions of Hertford Medical International Limited,
Del Mar and PiKo. Profit before taxation is #453,000 (2002: #736,000), after an
almost similar interest charge.

Earnings per share before exceptional charges and goodwill amortisation were
6.3p (2002: 5.5p). After these charges earnings per share were 0.9p 
(2002: 1.4p).

There have been significant changes in cash flow in the period as the
acquisitions noted above were largely financed from increased debt facilities
and there was the usual half-year trend of increased working capital. Stock
levels were contained despite higher sales volumes, debtors increased only
marginally above the uplifted sales but there were sizeable changes in
creditors. These changes reflect both the earlier payment to suppliers in
exchange for substantially better pricing and payment of reorganisation costs
provided for last year. Gearing increased to 68% of shareholder funds. Interest
cover before exceptional items is 3.9 times.

An interim dividend of 2.2p net (2002: 2.2p) per Ordinary Share is declared and
will be payable on 28 July 2003 to holders on the register on 4 July 2003.
Adding back goodwill amortisation to retained earnings this dividend is covered
1.9 times.

CORPORATE ACTIVITY

On 6 January 2003, we announced the purchase of the business of Del Mar, a major
US supplier of ambulatory cardiac monitoring systems, based near Los Angeles.
Consideration on closing was $10 million (#6.25 million) of which $2.75 million
(#1.72 million) was satisfied by the issue of New Ordinary Shares to the Vendors
and the remaining $7.25 million (#4.53 million) paid in cash. A further
contingent payment (payable in cash) of up to $1.5 million (#0.94 million) may
be payable if net sales targets are achieved during the 24 months subsequent to
closing. $1m (#0.6 million) is payable over a four year period to certain
vendors in exchange for a non-compete agreement.

We announced the launch of 'PiKo', the world's smallest electronic peak flow
meter on 28 January 2003, following the purchase of the business, intellectual
property, certain marketing rights and assets relating to 'PiKo' and a range of
other digital spirometers from PiKo Healthcare Products Inc. Initial cash
consideration was $1.9 million (#1.19 million). At the same time, a supply
agreement for manufacture of initial production in Hong Kong and China was
signed. Additional payments of up to $2.4 million (#1.5 million) are payable
upon achievement of various milestones relating to sales over a period of 24
months from completion. Any such payments will be satisfied as to 56 percent in
cash and 44 percent in New Ordinary Shares. Further New Ordinary Shares to a
value of $0.5 million will be issued 24 months after completion in respect of a
non-compete agreement, lasting for a period of three years from completion.

OPERATIONS REPORT

Medical Diagnostics

Sales in the cardiology group have held up well despite difficult conditions
prevailing in both Germany and the UK. As expected, it is now apparent that
previously reported increased Government spending on the NHS has primarily been
allocated to staff costs and that a relatively small proportion of around 10%
was available for medical equipment. Diagnostic and Treatment Centres for heart
disease and cancer screening equipment should however be particular
beneficiaries. Our cardiology product group has good prospects of further sales
during the remainder of 2003 and into 2004. Sales in the US have shown an
encouraging uplift from 2002 and will of course be additionally increased
following the acquisition of Del Mar. Work on integrating the two US businesses
by the executive management team is already in hand. There are good indications
of aggressive targets being achieved, worldwide distribution has been enhanced
(particularly in the Pacific Rim and South America) and product ranges
streamlined.

The European cardiology businesses are working closer with their sister
pulmonary diagnostic companies and a combination of sales and service resource
is operating to good effect on a lower cost base. Further close working
relationships are planned in these units, which have performed to target in the
six months. In the US sales of the Infant Pulmonary Laboratory are on schedule,
primarily accounting for an 18% increase in sales in this product grouping.
Sales of the high end stress equipment have been slow as capital budgets were
severely reduced by many of the buying groups prior to the well telegraphed war
in Iraq

We have established Denver as our US base for our asthma management and allergy
management devices group. To date sales both there and in Europe have been
relatively flat but stable. With the recent launch of PiKo, opportunities should
present themselves for increased income. The revolutionary PiKo product has
already won an award in the US Medical Design Excellence Awards for the Best
over the counter and Self Care Product. It offers an accurate device with good
digital transmission capabilities at a price within the reimbursement level of
most Western healthcare markets.

We have rebranded our clinical trial services activities under the global name
of 'Quantum Research', combining the businesses of PDS and Hertford Medical in
both the US and UK. Eliminating the exceptionally sizeable sale of pulmonary
equipment last year underlying sales rose by 40%. We were however pleased to
obtain a follow on order worth almost #1 million for pulmonary equipment and
associated clinical trial services from the same pharmaceutical customer. This
is scheduled for delivery by the end of this fiscal year.

Performance by the respiratory team has been significantly above budget from
both existing and new pharmaceutical clients. At times staff resources have been
stretched with a resultant increase in overtime costs. Internal training of
cardiology technicians in respiratory reviews has also been required. Having
started slowly the cardiology activity is now accelerating and has a number of
tenders outstanding for sizeable contracts. Combining the UK businesses is
underway and will be concluded by April 2003 in a single site at Welwyn Garden
City. Development work on digital communication has been extensive and the KoKo
Link software should further enhance the services from this product group.

Life Sciences

Already well publicised operating difficulties at a prime customer supplying
safety critical components for MRI scanners have provided management with a
number of challenges including efficient batch manufacturing and maintaining
margins. Combined with new product development by customers being slower than
expected there has been a below budget profit reported by this unit. Various
initiatives are in hand working with OEM customers to secure 'Preferred
Supplier' status on a medium term contract sharing cost savings and examining
new production techniques. Third party delays have also resulted in a
significant reduction in profit earned from the contract for Cern.

Suppliers to the semi-conductor sector have been adversely hit throughout the
period under review as capital projects were frequently either postponed or
curtailed. Although the operating performance of our business outperformed the
sector by taking market share, its profitability was down against budget, as the
upturn predicted by sector specialists did not emerge. Labour costs were taken
out and sub contracting was kept to a minimum but the result reported was
disappointing. Sales trends are volatile but a further review of costs is
underway and should result in additional savings in the absence of any sign of
improved sales.

Early indications of the impending war in Iraq caused a number of grants in the
US to be withheld pending clarification of available budgets for governmental
institutions and related laboratories. These delays significantly reduced the
last three months' performance in the US for our cryogenics products. European
sales performed reasonably and the overall performance was on budget. As new
products come on stream increased visibility of future profits should be
evident.

PROSPECTS

It is a difficult time to comment upon prospects with a background of
uncertainty about business confidence post the war in Iraq, a potential epidemic
in the Far East delaying production volumes for PiKo, and a poor economic
climate in most of our markets.

The current level of orders is however encouraging in most businesses within the
group. Provided this is maintained, the Board can be optimistic about a
satisfactory outcome for the current financial year.


I R Dighe

Chairman

23rd April 2003


Consolidated Profit and Loss Account
(unaudited)

                                          
                                Half Year to     Half Year to          Year to 
                            28 February 2003      28 February        31 August
                                        2003             2002             2002
                                                 (as restated)    (as restated)
                                       #'000            #'000            #'000

Turnover
Continuing operations                 29,087           28,472           58,016
Acquisitions                             994                -                -
                                     -------          -------          -------
                                      30,081           28,472           58,016
Discontinued Operations                    -            2,733            4,250
                                     -------          -------          -------
                                      30,081           31,205           62,266

------------------------------------------------------------------------------
Operating Profit
Operating profit before                
 amortisation of goodwill,
 discontinued operations and
 exceptionals                          2,715            2,446            4,786
Exceptional                             (847)            (243)          (1,830)
Amortisation of goodwill                (968)            (867)          (1,734)
------------------------------------------------------------------------------

Operating profit
Continuing operations                    826            1,336            1,222
Acquisitions                              74                -                -
                                     -------          -------          -------
                                         900            1,336            1,222
Discontinued operations                    -             (113)            (452)
                                     -------          -------          -------
Total operating profit                   900            1,223              770
Loss on disposal of                        
 discontinued operations                   -                -             (810)
                                     -------          -------          -------
Profit/(loss) on ordinary                
 activities before interest              900            1,223              (40)
Interest (net)                          (447)            (487)            (440)
                                     -------          -------          -------
Profit/(loss) on ordinary                453              736             (480)
 activities before taxation

Taxation                                (182)            (336)            (482)
                                     -------          -------          -------
Profit/(loss) after                      
 taxation                                271              400             (962)
Minority Interests - equity               
 interests                                (3)              (6)              (7)
                                     -------          -------          -------
Profit/(loss) for the                    
 financial period                        268              394             (969)
Dividend                                (661)            (625)          (1,600)
                                     -------          -------          -------
Retained loss for the                   
 period                                 (393)            (231)          (2,569)
                                     -------          -------          -------
Basic earnings per share -               
 before goodwill amortisation,
 discontinued and
 exceptional                             6.3p             5.5p            11.8p
Basic earnings per share -
 before goodwill
 amortisation                            4.3p             4.5p             2.7p
Basic earnings per share -               
 after goodwill amortisation             0.9p             1.4p            (3.4p)
                                         
Dividend per share                       2.2p             2.2p             5.6p
                                        

The restatement of 2002 relates only to the change in accounting policy to
expense Research and Development expenditure as incurred.



Consolidated Balance Sheet
(unaudited)

                                 28 February      28 February        31 August 
                                        2003             2002             2002
                                                (as restated)    (as restated)
                                       #'000            #'000            #'000
                                                           
Fixed assets
Intangible assets                     43,334           32,358           33,451
Tangible assets                       10,581           11,843           10,304
Investments                            1,081            1,049              964
                                     -------          -------          -------
                                      54,996           45,250           44,719
                                     -------          -------          -------
Current assets
Stocks                                10,675           11,976            9,800
Debtors                               16,017           15,924           13,333
Cash at bank and in hand                 415              836              904
                                     -------          -------          -------
                                      27,107           28,736           24,037
Current Liabilities
Creditors - amounts falling due
 within one year
Short term borrowings                 (9,026)          (8,630)          (7,418)
Other creditors                      (13,927)         (15,294)         (14,820)
                                     -------          -------          -------
Net current assets                     4,154            4,812            1,799
                                     -------          -------          -------

Total assets less current            
liabilities                           59,150           50,062           46,518

Creditors: amounts falling due
 after more than one year
Borrowings                           (16,787)         (11,044)          (9,228)
Other creditors                         (202)            (165)            (187)        
                                     -------          -------          -------   
                                     (16,989)         (11,209)          (9,415)
Provisions for liabilities and       
 charges                              (4,744)          (1,026)          (1,551)
                                     -------          -------          -------                                

                                      37,417           37,827           35,552
                                     -------          -------          -------
Capital and reserves
Called up share capital                7,604            7,175            7,237
Contingent equity share capital          645              401              201
Share premium account                 20,670           19,031           19,297  
Merger reserve                        12,252           12,252           12,252
Profit and loss account               (3,773)          (1,046)          (3,450)  
                                     -------          -------          -------
Shareholders' funds - equity
 interests                            37,398           37,813           35,537
Minority interests - equity           
 interests                                19               14               15
                                     -------          -------          -------  

                                      37,417           37,827           35,552
                                     -------          -------          -------


The restatement of 2002 relates only to the change in accounting policy to
expense Research and Development expenditure as incurred.


Consolidated Cash Flow Statement
(unaudited)

                                Half Year to     Half Year to          Year to
                                 28 February      28 February        31 August
                                        2003             2002             2002
                                       #'000    (as restated)    (as restated)
                                                        #'000            #'000

Cash (outflow)/inflow from              
 operating activities                   (722)              61            3,084

Returns on investments and
 servicing of finance
Interest received                         10               27              472
Interest paid                           (465)            (299)            (923)
                                     -------          -------          -------
Net cash outflow from returns           
 on investments and servicing
 of finance                             (455)            (272)            (451)

Taxation
UK corporation tax & overseas
 tax paid                               (655)            (325)            (856)
                                     -------          -------          -------
Tax paid                                (655)            (325)            (856)
                                     -------          -------          -------
Net cash outflow before
 investing activities                 (1,832)            (536)           1,777
                                      
Capital expenditure and
 financial investment
Purchase of tangible fixed
 assets                               (1,023)            (475)          (1,122)
Receipts from sales of                
 tangible fixed assets                    53               53              122
Purchase of fixed asset                  
 investments                            (117)            (139)            (138)
                                     -------          -------          ------- 
Net cash outflow from capital
 expenditure and financial
 investment                           (1,087)            (561)          (1,138)

Acquisitions                          
Acquisition of subsidiary
 undertakings                         (5,837)               -             (983)
Net cash acquired with new
 subsidiaries                            200                -              163
Cash received on disposal of               
 subsidiary undertakings                   -                -            2,638
Net cash disposed of with                
 subsidiary undertakings                   -                -              (22)
                                     -------          -------          -------   
Net cash (outflow)/inflow                  
 arising from acquisitions and
 disposals                            (5,637)               -            1,796

Equity dividends paid                   (975)            (857)          (1,482)
                                     -------          -------          -------
Net cash (outflow)/inflow
 before use of liquid
 resources and financing              (9,531)          (1,954)             953
                                        

Financing
Issue of ordinary share                   15              370              148         
 capital net of expenses
Other loans                            8,761            1,394             (797)
Loan repayments                         (927)          (1,036)               -
Loan note repayments                  (1,764)               -                -
Hire purchase and finance                 
 lease payments                         (468)            (520)          (1,017)
                                     -------          -------          -------
Net cash inflow/(outflow)               
 from financing                        5,617              208           (1,666)
                                     -------          -------          ------- 
Decrease in cash in period            (3,914)          (1,746)            (713)    
                                     -------          -------          -------
                                       

                                     
Consolidated Statement of Total Recognised Gains and Losses
(unaudited)

                                    Half Year to   Half Year to         Year to
                                     28 February    28 February       31 August 
                                            2003           2002            2002
                                                   (as restated)  (as restated)
                                           #'000          #'000           #'000
                

Profit/(loss) for the financial            
 period                                      268            394            (969)
Currency translation gains/(losses)           70             53            (378)
                                         -------        -------         -------                       
Total recognised gains/(losses)          
 relating to the period                      338            447          (1,347)
Prior period adjustment - Deferred               
 tax (FRS19)                                   -           (494)           (494)
Prior period adjustment - Change        
  in R&D policy                           (4,995)             -               -
                                         -------        -------         -------
Total recognised gains and losses        
  since last annual report                (4,657)           (47)         (1,841)        
                                         

Reconciliation of movements in shareholders' funds

                                     Half Year to  Half Year to         Year to
                                      28 February   28 February       31 August 
                                             2003          2002            2002
                                                   (as restated)    (as restated)
                
                                            #'000         #'000           #'000
                
                
Profit/(loss) for the financial                  
 period                                       268           394            (969)
Dividends                                    (661)         (625)         (1,600)
                                          -------        -------        -------
                                             (393)         (231)         (2,569)

Goodwill on acquisition written back            -             -             365
Other recognised gains and losses             
 relating to the period                        70            53            (378)
Net proceeds of share issue                 1,740           370           1,463
Contingent equity share capital               444             -            (965)
                                          -------        -------        -------
Net addition/(reduction) to                    
 shareholders' funds                        1,861            192         (2,084)
Opening shareholders' funds                35,537         37,621         37,621
                                          -------        -------        -------
Closing shareholders' funds                37,398         37,813         35,537
                                          -------        -------        -------



The opening shareholders' funds at 1 September 2001 as previously reported
amounted to #41,801,000 before the prior year adjustment of #4,180,000.


NOTES TO THE INTERIM RESULTS

 1. This interim report was approved by the Board on 23 April 2003. It has been
    prepared using accounting policies that are consistent with those adopted in
    the statutory accounts for the year ended 31 August 2002 as amended for the
    change in accounting policy to expense Research and Development expenditure
    as incurred. The decision to change the accounting policy followed extensive
    discussions with shareholders, advisers and bankers. We believe it will
    bring additional clarity to our results and is consistent with current
    accounting trends. As a result of this change in accounting policy, the
    comparatives have been restated to ensure comparability of corresponding
    figures. This results in a decrease in operating profit of #1,220,000 for
    the year to 31 August 2002 and a decrease of #293,000 for the half year to
    28 February 2002. The net assets have been reduced by #4,995,000 as at 31
    August 2002 and by #4,507,000 as at 28 February 2002. The figures for the
    year to 31 August 2002 were derived from the statutory accounts for that
    year. The statutory accounts for the year ended 31 August 2002 have been
    delivered to the Registrar of companies and received an audit report which
    was unqualified and did not contain statements under S237(2) or (3) of the
    Companies Act 1985.


 2. The taxation charge is based upon the expected rate for the year ending 31
    August 2003.


 3. Segmental Analysis

By class of   Turnover                         Operating Profit
business
                   Half Year         Year to         Half Year         Year to
                 to 28 February    31 August      to 28 February     31 August
                 2003      2002         2002      2003       2002         2002
                                                              (as          (as 
                                                         restated)    restated)
                #'000     #'000        #'000     #'000      #'000        #'000
               --------  --------     --------  --------  --------    --------
Continuing
Operations

Medical
 Diagnostics   17,540    15,613       32,291     1,862      1,560       2,929
Life           
 Sciences      12,541    12,859       25,725       853        886       1,857
               
               --------  --------     --------  --------   --------   --------
               30,081    28,472       58,016     2,715      2,446       4,786
               --------  --------     --------  --------   --------   --------

Discontinued
 Operations
Engineering         -     2,733        4,250         -       (113)       (452)
               --------  --------     --------  --------   --------   --------
               30,081    31,205       62,266     2,715      2,333       4,334
Exceptional         
 items              -         -            -      (847)      (243)     (1,830)
Goodwill            -         -            -      (968)      (867)     (1,734)
               --------  --------     --------  --------   --------   --------
               30,081    31,205       62,266       900      1,223         770
               --------  --------     --------  --------   --------   --------


 4. Basic earnings per share has been calculated on the weighted average number
    of ordinary shares in issue during the relevant period. For diluted earnings
    per share, where earnings are positive the weighted average number of
    ordinary shares in issue is adjusted to assume conversion of all dilutive
    potential ordinary shares, being share option schemes, where the exercise
    price is less than the average market price of the company's ordinary shares
    during the period. The number of shares is also adjusted for the potential
    dilution of deferred consideration.

                                            Half year to               Year to
                                             28 February             31 August
                                        2003             2002             2002
                                      Number           Number           Number

Weighted average number of        
 shares - basic                   28,994,339       28,064,488       28,295,605
Share option adjustment               73,950          287,878          226,041
                                  --------------------------------------------
Weighted average number of        
shares - diluted                  29,068,289       28,352,366       28,521,646
                                  -------------------------------------------- 

                                                (as restated)    (as restated)
                                       #'000            #'000            #'000

Earnings attributable to               
 ordinary shareholders before
 goodwill, discontinued and
 exceptionals                          1,829            1,544            3,334
Earnings attributable to
 ordinary shareholders before
 goodwill                              1,236            1,261              765
                                       
Earnings attributable to
 ordinary shareholders after
 goodwill                                268              394             (969)
                                         
Earnings per share - basic
* before goodwill, discontinued
   and exceptionals                      6.3p             5.5p            11.8p
* before goodwill                        4.3p             4.5p             2.7p     
* after goodwill                         0.9p             1.4p            (3.4p)
                                         
Earnings per share - diluted
* before goodwill, discontinued
   and exceptionals                      6.3p             5.4p            11.7p
* before goodwill                        4.3p             4.4p             2.7p  
* after goodwill                         0.9p             1.4p            (3.4p)  
                                        

5. Reconciliation of operating profit to net cash flow from operating activities


                                            Half year to               Year to
                                             28 February             31 August
                                        2003             2002             2002
                                                (as restated)    (as restated)
                                       #'000            #'000            #'000

Operating profit                         900            1,223              770                              
Depreciation charges                     874              968            1,594
Amortisation of goodwill and             
 intangibles                             968              867            1,735  
Loss/(profit) on sale of fixed            
 assets                                   30               (5)              13 
Increase in stocks                      (319)          (1,619)            (990)
Increase in debtors                   (1,274)          (2,120)             (22)
(Decrease)/increase in creditors      
 and provisions                       (1,901)             747              (16)
                                     -------          -------          -------
Net cash (outflow)/inflow from          
operating activities                    (722)              61            3,084
                                     -------          -------          -------

6. Analysis of net debt
                       At 1 September   Cash Flow         Other          At 28 
                                2002                  Movements       February
                                                                          2003                                    
                               #'000        #'000         #'000          #'000
                                                             
Cash in hand and at             
 bank                            904         (489)            -            415            
Bank overdrafts               (2,905)      (3,425)            -         (6,330)
                             -------      -------       -------        -------
Cash                          (2,001)      (3,914)            -         (5,915)
Hire Purchase and               
 Finance leases due                        
 within one year                (887)          47             -           (840)
Loans due within one          
 year                         (1,862)           -             6         (1,856)
Loan notes due within         
one year                      (1,764)       1,764             -              -
Hire purchase and             
 finance leases due                          
 after one year               (1,172)         421          (178)          (929) 
Loans due after one           
 year                         (8,056)      (7,834)           32        (15,858)
                             -------      -------       -------        -------
         
                             (15,742)      (9,516)         (140)       (25,398)
                             -------      -------       -------        -------             


7. Included in the share premium account is a premium that arose on the
acquisition of Del Mar Medical Systems.



8. Further copies of the Interim Report are available from the Company's
registered office.



INDEPENDENT REVIEW REPORT TO FERRARIS GROUP PLC

Introduction

We have been instructed by the company to review the financial information for
the six months ended 28 February 2003 which comprises the consolidated profit
and loss account, balance sheet, summarised cash flow statement, statement of
total recognised gains and losses, and related notes 1 to 8, together with the
reconciliation of movements in shareholders' funds. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.

This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
polices and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 28th February 2003.


Deloitte & Touche
Chartered Accountants
Birmingham

23rd April 2003







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

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IR SELFUESDSEEL