RNS Number:8871L
Stanelco PLC
04 June 2003

                                  STANELCO PLC

             INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2003



CHIEF EXECUTIVE'S STATEMENT

I have previously reported to you that this Company, like many others, has been
going through the most dramatic changes in market conditions in its history.
International telecommunications and engineering markets remain depressed,
although they are now showing some signs of recovery. Our financial results
during this period reflect this market. However, we have made significant
progress with our Radio Frequency (RF) capsule making technology and waste
packaging systems.

Overall, the Company is robust and the development of new applications and
routes to market based upon our core technology remains a key and exciting focus
for the business.

Results

Turnover has reduced by 58.7 per cent to #889,000 compared to the comparative
period last year of #2,151,000. This has resulted in a pre-tax loss of (#96,000)
in contrast to the underlying pre-tax profit of #274,000 (#501,000 with an
exceptional item) reported at last year's interim results. The current period
trading has resulted in a basic loss per share of (0.006p) compared to a
reported basic earnings per share of 0.052p for the corresponding period last
year.

Reductions made to our cost base in anticipation of the market downturn have
significantly mitigated the impact of this downturn on the performance of the
Company.

Period end net cash decreased by #214,000 from the previous financial year-end.
Trading remained cash generative during the period, bringing in a net #139,000.
The overall reduction in cash is due to the continued investment in research and
development. During the period #357,000 of costs were capitalised. The
substantial proportion of these costs arises from the development of ingestible
capsules through InGel Technologies Ltd (InGel). This investment has been funded
through the capital injections that resulted from the sale of shares in both
InGel and Stanelco plc to R.P. Scherer Corporation for #1,130,000.

The Company has benefited from its applications for tax relief relating to its
Research and Development programme.

Dividend

The Directors' current intention is to propose to maintain the final dividend at
the current level of 0.01p per share, pending a review of trading conditions at
the financial year-end.

InGel Technologies

As reported previously, during December 2001 we entered into agreements with
R.P. Scherer Corporation (a subsidiary of Cardinal Health Inc.) concerning our
technology for sealing ingestible soft pharmaceutical capsules, which will make
production much faster and more economical whilst enabling use of encapsulation
materials other than gelatine. Cardinal Health is ranked 19 on the current
Fortune 500 list

Since that time there has been very significant progress towards commercialising
this capsule making technology. I am pleased to report:


  * Patents have been granted in several territories and are pending in others
    covering the formation, using RF, of capsules from soluble materials. We
    believe that this invention, which covers a process, is a platform
    technology with many applications and is likely to be valuable irrespective
    of the success of InGel. The Company retains ownership of this patent, which
    is currently licensed to InGel for its applications. The United States
    Patent Office has informed us that it has no objections to the grant of this
    patent in the United States - a major market for the applications.

  * InGel has made further patentable new inventions in the course of its
    development work.

  * Work with the pilot scale machine capable of producing large batch sizes
    for stability and clinical trials has reached an advanced stage. We are
    currently using it as the basis to select production scale technologies.

  * R. P. Scherer Corporation (which in December 2001 acquired 3 per cent. of
    Stanelco plc and 5 per cent. of InGel with a deferred payment to acquire an
    additional 5 per cent. of InGel) has also committed a full-time team of
    people in support of InGel, working as part of a team with our own staff and
    others. R.P. Scherer has also exercised its option to license the technology
    for health and nutritional applications, in addition to pharmaceuticals.

  * We have installed the first development machine in premises designed for
    pharmaceutical capsule manufacture.

Our best estimates are that we expect InGel to start generating revenues within
the next 12 months. Although further development work is required to prove this
technology on a commercial scale - we believe that it offers the prospect of
revolutionising the manufacture of water soluble and ingestible soft capsules.

Optical fibre

I am pleased to report, although cautiously, that the Company is now seeing the
first signs of some recovery in this market. Since the end of the period we have
seen orders for RF furnaces and consumables increasing for the first time in
nearly two years. The manufacturers of optical fibre for telecommunications are
consolidating, and those that wish to continue for the long term are
contemplating relocation to lower cost manufacturing regions and using
technology to give a lower unit cost of production. Some territories are
considering the manufacture of their entire domestic requirements to avoid
importing fibre. All of these trends create opportunities for the Company to
supply its latest technology.

We have supplied our first Modified Chemical Vapour Deposition (MCVD) system to
Japan for making the specialist quartz pre-form from which optical fibre is
drawn. The MCVD technology is used to dope the quartz with rare earth metals in
order to modify its optical properties. We expect to supply a second system to
Japan during the second half year.

Waste packaging

Stanelco's RF sealing technology enables customers to seal hazardous materials
in industrial grade plastic bags. Unlike heat sealing and other RF methods, we
can seal through liquids, dusts and particulates without burning the plastic to
produce a high integrity seal. We continue to anticipate sales from our new
waste packaging equipment in excess of #1m during the current year and have
received enquiries in excess of #4m.

We have also developed, fabricated and sold the first large scale version of
this equipment for sealing drums within industrial grade plastic bags - we have
in excess of #500k of enquiries for this version of the equipment.

During the second half year we expect to make our first overseas sales and to
begin benefiting from maintenance and service income as warranties expire.

InGel Industrial

Independently of InGel, Stanelco has developed an RF process for making capsules
from Polyvinyl Alcohol based plastics. These plastics are environmentally
friendly and biodegrade safely. The main applications for these capsules,
currently, are laundry detergents and agrochemicals. We have produced a range of
concept capsules to demonstrate the versatility of our RF process. These concept
capsules have been produced in a range of sizes and shapes, containing both
liquids and powders and capsules within capsules. Our process (which is also
covered by the same base patent licensed to InGel) appears to offer many
potential advantages over the heat-sealing method of forming these capsules, one
notable feature is that our capsules do not need to contain an air bubble -
unlike those currently available. As with InGel, we are uncertain at present as
to the full commercial potential of this technology. We are actively undertaking
trials with a number of major detergent manufacturers.

R&D Work

During the first half of the current financial year we invested the equivalent
of more than 40 per cent. of our turnover into research and development
activities. When it makes sense, we seek to protect our intellectual property
through patenting and we work closely with intellectual property specialists in
this regard. We continue to anticipate significant R&D expenditure as we develop
new products for the future.

Prospects

At the date of this report, the order book stands at #529,000.

We expect to see significant new orders from our existing businesses. The
optical fibre business showa signs of improving, having had a difficult first
half year and the waste packaging business is growing. Historically, the
underlying trend has been to have a relatively slow first half year followed by
a strong second half year. We anticipate a return to this trend with improved
performance in the second half of the year.



Ian Balchin

Chief Executive

3 June 2003



CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNT

FOR THE SIX MONTHS ENDED 30 APRIL 2003


                                                                    Unaudited           Unaudited              Audited

                                                                   Six months          Six months                 Year

                                                                        ended               Ended                Ended

                                                                30 April 2003       30 April 2002      31 October 2002

                                                                        #'000               #'000                #'000

TURNOVER                                                                  889               2,151                3,570

                                                              ---------------      --------------       --------------
Operating results before exceptional items                              (111)                 253                  411

Exceptional item                                                            -                 227                  155

                                                              ---------------      --------------       --------------
OPERATING (LOSS)/PROFIT                                                 (111)                 480                  566

Net interest receivable                                                    15                  21                   48

                                                               --------------      --------------       --------------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES                                     (96)                 501                  614

BEFORE TAXATION

Taxation                                                                   55               (155)                (177)

                                                               --------------      --------------       --------------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES                                     (41)                 346                  437

AFTER TAXATION

Minority interest                                                           -                   7                    -

                                                               --------------      --------------       --------------
(LOSS)/PROFIT FOR THE PERIOD                                             (41)                 353                  437

Dividends                                                                   -                   -                 (69)

                                                               --------------      --------------       --------------
RETAINED (LOSS)/PROFIT FOR THE PERIOD                                    (41)                 353                  368

                                                                     ========            ========             ========

EARNINGS PER SHARE

Basic (loss) / earnings per share (pence)                             (0.006)               0.052                0.064

                                                                     ========            ========             ========
Fully diluted (loss)/earnings per share (pence)                       (0.006)               0.051                0.063

                                                                     ========            ========             ========
DIVIDENDS PER SHARE (pence)                                                 -                   -                 0.01

                                                                     ========            ========             ========



NOTES TO THE CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNT

For the six months ended 30 April 2003


    1. Earnings per share

    The basic (loss)/earnings per share is based on an attributable (loss)/
    profit after tax of (#41,000) (2002: #353,000) and on the basic (2002:
    weighted average) ordinary shares in issue during the period of 686,829,750
    (2002: 682,845,377). The fully diluted earnings per share are based on an
    attributable (loss)/profit after tax of (#41,000) (2002: #353,000) and on
    the diluted share holding of 687,556,312 (2002: 688,993,320).

    2. Research and development expenditure of #357,000 (2002: #295,000) has
    been incurred in the period. Of this expenditure #357,000 (2002: #295,000)
    has been capitalised as an intangible asset to be amortised against future
    revenues. Expenditure of this type is only capitalised where the Board is of
    the opinion that future revenues will exceed the costs incurred over the
    expected product life in accordance with Statement of Standard Accounting
    Practice Number 13.

    The Company received #1,130,000 in December 2001 from the issue of new
    shares to R.P.Scherer Corporation, which is being utilised to fund the R&D
    expenditure within InGel Technologies.

    3. The figures for the year ended 31 October 2002 are an abridged statement
    of the full Group Accounts for that year which have been delivered to the
    Registrar of Companies and on which the Auditors made an unqualified report
    and which did not contain a statement under Section 237 of the Companies Act
    1985.

    The principal accounting policies of the Group have remained unchanged from
    those set out in the Group's 2002 Annual Report and Financial Statements.
    The financial information set out in this Interim Report does not constitute
    statutory accounts as defined in Section 240 of the Companies Act 1985.

    The interim financial information in this report has been neither audited,
    or reviewed by the Company's auditors.

4. Copies of this statement are being sent to all shareholders and will be
available to the public at the Company's registered office.



CONSOLIDATED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

FOR THE SIX MONTHS ENDED 30 APRIL 2003
                                                                   Unaudited           Unaudited              Audited

                                                                  Six months          Six months                 Year

                                                                       ended               ended                ended

                                                               30 April 2003       30 April 2002      31 October 2002

                                                                       #'000               #'000                #'000
(Loss)/profit for the financial period                                  (41)                 353                  437

Dividends                                                                  -                   -                 (69)

                                                                ------------        ------------         ------------
                                                                        (41)                 353                  368

Issue of 20,604,900 ordinary 0.1p shares in Stanelco Plc                   -                 567                  567

Issue of 500 ordinary 1p shares in InGel Technologies                      -                 535                  535
Limited
                                                                ------------         -----------         ------------
Net addition to shareholders' funds                                     (41)               1,455                1,470

Opening shareholders' funds                                            2,651               1,181                1,181

                                                                ------------        ------------         ------------
Closing shareholders' funds                                            2,610               2,636                2,651

                                                                    ========            ========             ========

The issue of shares in Stanelco Plc and InGel Technologies Limited were made at
a premium to R.P. Scherer Corporation.



CONSOLIDATED BALANCE SHEET

AT 30 APRIL 2003
                                                                             Unaudited                         Audited

                                                                      At 30 April 2003              At 31 October 2002

                                                               #'000             #'000           #'000           #'000
FIXED ASSETS

Intangible assets                                              1,163                               831

Tangible assets                                                  273                               307

                                                        ------------                      ------------
                                                                                 1,436                           1,138
CURRENT ASSETS

Stocks                                                           654                               637

Debtors                                                          351                               775

Cash at bank and in hand                                         937                             1,151

                                                        ------------                      ------------
                                                               1,942                             2,563

CREDITORS: amounts falling due                                 (593)                             (812)

within one year                                         ------------                      ------------

NET CURRENT ASSETS                                                               1,349                           1,751

                                                                          ------------                    ------------

TOTAL ASSETS LESS CURRENT LIABILITIES                                            2,785                           2,889

PROVISIONS FOR LIABILITIES AND CHARGES                                           (147)                           (210)

                                                                          ------------                    ------------
                                                                                 2,638                           2,679

                                                                             =========                        ========
CAPITAL AND RESERVES

Called up share capital                                                            687                             687

Share premium account                                                            1,081                           1,081

Profit and loss account                                                            842                             883

                                                                          ------------                    ------------
SHAREHOLDERS' FUNDS                                                              2,610                           2,651

Minority interest                                                                   28                              28

                                                                          ------------                    ------------
                                                                                 2,638                           2,679

                                                                              ========                        ========

The Interim Accounts were approved by the Board on 3 June 2003

Signed on behalf of the Board of Directors

Ian H Balchin (Chief Executive)

Barrie C Hozier (Finance Director)



CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 APRIL 2002


                                                                       Unaudited          Unaudited             Audited

                                                                      Six months         Six months                Year

                                                                           ended              ended               ended

                                                                        30 April           30 April          31 October

                                                                            2003               2002                2002

                                                                           #'000              #'000               #'000

NET CASH INFLOW FROM OPERATING ACTIVITIES (note 1)                           139                 52                 444

RETURNS ON INVESTMENT AND SERVICING OF FINANCE

Interest received                                                             15                 24                  49

Interest paid                                                                  -                  -                 (1)

Dividend paid                                                                (2)                  -                (64)

Finance lease interest paid                                                    -                (1)                   -

                                                             ------------------- ------------------  ------------------

NET CASH INFLOW/ (OUTFLOW) FROM RETURNS ON                                    13                 23                (16)

INVESTMENTS AND SERVICING OF FINANCE                         ------------------- ------------------  ------------------
TAXATION

Corporation tax (paid)/refunded                                              (2)                  6               (252)

CAPITAL EXPENDITURE AND FINANCIAL

INVESTMENT

Investment in intangible fixed assets                                      (357)              (295)               (844)

Purchase of tangible fixed assets                                           (13)               (87)                (86)

Sale of tangible fixed assets                                                  6                  1                   1

                                                               ----------------- ------------------  ------------------
NET CASH OUTFLOW FROM CAPITAL                                              (364)              (381)               (929)

EXPENDITURE AND FINANCIAL INVESTMENT                            ---------------- ------------------  ------------------

FINANCING

Issue of ordinary share capital                                                -              1,130               1,130

Capital element of finance lease rentals                                       -                (2)                 (3)

                                                              ------------------  -----------------  ------------------

NET CASH INFLOW FROM FINANCING                                                 -              1,128               1,127

                                                              ------------------  -----------------  ------------------

(DECREASE)/INCREASE IN CASH (note 2)                                       (214)                828                 374

                                                                      ==========         ==========         ===========



NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 APRIL 2002

1. RECONCILIATION OF OPERATING PROFIT TO THE NET CASH INFLOW

FROM OPERATING ACTIVITIES
                                                                    Unaudited           Unaudited              Audited

                                                                   Six months          Six months                 Year

                                                                        ended               ended                ended

                                                                     30 April            30 April           31 October

                                                                         2003                2002                 2002

                                                                        #'000               #'000                #'000


Operating profit for the period                                         (111)                 480                  566

Amortisation of intangible fixed assets                                    25                   -                   13

Depreciation of tangible fixed assets                                      43                  44                   99

(Profit)/loss on disposal of tangible fixed assets                        (2)                 (1)                    1

(Increase)/decrease in stocks                                            (17)                 377                  179

Decrease/(increase) in debtors                                            424               (404)                   23

(Decrease) in creditors due within one year                             (215)               (439)                (427)

(Decrease) in provision for liabilities and charges                       (8)                 (5)                 (10)

                                                              ---------------      --------------      ---------------

Net cash inflow from operating activities                                 139                  52                  444

                                                                   ==========          ==========            =========


2. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
                                                                    Unaudited           Unaudited              Audited

                                                                   Six months          Six months                 Year

                                                                        ended               ended                ended

                                                                     30 April            30 April           31 October

                                                                         2003                2002                 2002

                                                                        #'000               #'000                #'000


(Decrease)/increase in cash in the period                               (214)                 828                  374

Cash outflow from financing                                                 -                   2                    3

                                                               --------------     ---------------     ----------------

Change in net debt resulting from cash flows                            (214)                 830                  377

Net funds at beginning of period                                        1,151                 774                  774

                                                                -------------     ---------------     ----------------

Net funds at end of period                                                937               1,604                1,151

                                                                     ========           =========           ==========


3. ANALYSIS OF CHANGES IN NET FUNDS
                                                                           At                                       At

                                                                   1 November                                 30 April

                                                                         2002            Cash flow                2003

Unaudited                                                               #'000                #'000               #'000

Cash in hand and at bank                                                1,151                (214)                 937

                                                                   ==========           ==========           =========

                                                                           At                                      At

                                                                   1 November           Cash flow            30 April

                                                                         2001               #'000                2002

Unaudited                                                               #'000                                   #'000

Cash in hand and at bank                                                  777                 828               1,605

Finance leases                                                            (3)                   2                 (1)

                                                              ---------------      --------------      --------------

                                                                          774                 830               1,604

                                                                   ==========          ==========           =========

                                                                           At                                       At

                                                                   1 November                               31 October

                                                                         2001            Cash flow                2002

Audited                                                                 #'000                #'000               #'000

Cash in hand and at bank                                                  777                  374               1,151

Finance leases                                                            (3)                    3                   -

                                                                -------------      ---------------      --------------

                                                                          774                  377               1,151

                                                                     ========            =========           =========






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