RNS Number:5455R
Carbo PLC
31 October 2003











Press Release
                             31 October 2003



Carbo Announces Its Interims



Today Carbo plc, the Manchester-based industrial abrasives manufacturer and
distributor, announced its interim results for the half-year ended 31 July 2003.
    Turnover for the half-year to 31 July 2003 was #29.4 million with losses
before interest and tax of #1.4 million compared to a turnover of #27.1 million
and losses of #5.2 million (prior to exceptionals) for the half year to 31 July
2002.  No dividend is payable.   The Company is in the process of finalising a
refinancing package to underpin the recent improvements in its performance which
is the subject of another announcement.



Following the insolvency of its heavily loss making UK subsidiary last year, the
Group has continued to consolidate its activities and win back lost market
share.  Indeed, like for like activity has risen almost nine percent compared to
the same period last year, achieved in acknowledged difficult market conditions.



The availability of working capital remains tight due to poor inventory and
receivables management and shortened credit terms from suppliers.  However, the
Board has initiated a program of working capital reduction which has already
yielded Euro1.5m in its first eight weeks and improvements in supplier terms are
also expected.



Commenting on the results Group Chairman, Lord Hodgson, said, "Although the
results for the half year are disappointing, the Group is weathering the storm.
Our market share is growing again and, as our customers' confidence returns, we
intend to increase it further.  However, more work is required to drive down
operating costs and increase manufacturing efficiency.  To achieve this we are
assembling a refinancing package and negotiations for this are almost complete.
This package will increase the availability of working capital, and with it the
Board hopes to deliver a significant turnaround in Carbo's performance in the
next six months."

Carbo plc has subsidiaries across Europe in Germany, Belgium, Norway, Italy,
Portugal and France.  Manufacturing units are located in Germany, Italy and the
UK.  Carbo supplies high quality abrasive products throughout the world under
various brand names including Carborundum, Carbo-Schroeder and BMA.  They are
used in a wide variety of industries including automotive, aerospace, metal
work, furniture, cutlery, valves, power tools, hand tools and tobacco
production.  The Group also owns Anglo Abrasives Limited, one of the largest
distributors of abrasive products in the UK, with branches located throughout
the country.

Notes for Editors

The Interims are attached



For further information please contact

Lars Nyqvist, Chief Executive, CARBO PLC                Tel: 0161 872 8291

or

Stuart Dootson, Finance Director, CARBO PLC        Tel: 0049 211 7493 333











INTERIM RESULTS FOR THE SIX MONTHS ENDED 31ST JULY, 2003

CHAIRMAN'S STATEMENT



Dear Shareholder



I am pleased to be able to present the results covering the six months which
ended on 31 July 2003.



Overall, these results, though improving, are still not satisfactory.  The loss
from continuing operations for the period is #2 million below the loss incurred
in the first six months of the prior year - but we are still making losses.  Not
all of this results from factors within our control and the continuing economic
slowdown in Germany, our key market, is inevitably having an effect.



Carbo plc  At the Group level it is comforting to note that sales levels have
been maintained and cash flow from operations increased. But the further losses
have had a serious impact on the level of shareholder funds.  Further, working
capital remains tight - too tight to permit the efficient organisation of the
Group's production. "Hand to mouth" has remained the order of the day and this
has had an adverse effect on profit margins.



Turning to the individual country operations:



a)         Italy. BMA has now been refinanced. Sales and production efficiencies
are starting to rise as the company's reputation in the market place begins to
return. There is no reason why this company should not now be able to earn a
decent return.



b)         United Kingdom. The Razor and Rubber manufacturing operation in
Manchester has responded well to increased management focus. Output is up and,
though small, the operation is nicely profitable. Anglo, our distribution
business, has closed further three depots and made other cost reductions. Again,
as our market reputation has begun to improve sales have stabilised. We
therefore anticipate a return to profitability in the next few months.



c)         Germany. Last year our focus was on eliminating the losses in the UK.
Now our focus has to be on reorganising the German operations. We have begun to
implement a new management structure based on business units in place of the
previous hierarchal structure more appropriate to an earlier age and an old
fashioned manufacturing company. Given the restrictions of Germany's labour laws
all this has taken time to achieve. But at last we are on our way.



Finance. We are in the process of finalising a refinancing package, the details
of which will be described in a separate document.



People

As announced earlier to the Stock Exchange, Klaus Kopnick has resigned as a
director. Klaus has devoted a major part of his life to Carbo. I would like to
take this opportunity to thank him for his commitment and contribution.



As ever the Board remains grateful to all of the Group who have worked
tirelessly to help improve its fortunes.



Outlook. As before, the completion of the refinancing is a key priority. Once
that is done the new management team, the new operational structure and the new
approach will begin to show results.





                                                                    Lord Hodgson

                                                                        Chairman

                               31st October, 2003







Carbo PLC


Group profit and loss account (unaudited)                                     6 months ended                 Year ended
                                                           Notes                 31st July                 31st January
                                                                           2003                2002                2003
                                                                          #'000               #'000               #'000


Sales

Continuing activities                                                    29,429              27,065              53,211
Discontinued activities
                                                                              -               2,879               2,879
                                                               1         29,429              29,944              56,090


Costs and overheads                                                    (30,870)           (33,400)             (63,625)
Continuing and discontinued activities                                 (30,870)            (33,065)            (63,029)
Exceptional operating items                                                   -               (335)               (596)


Operating loss                                                          (1,441)             (3,456)             (7,535)
Continuing activities                                                   (1,441)             (1,562)             (5,641)
Discontinued activities                                                       -             (1,894)             (1,894)
Loss on disposal of business                                                  -             (1,251)             (1,317)
Loss on disposal of Chesterfield site                                         -               (508)               (508)
Loss before interest and taxation                                       (1,441)             (5,215)             (9,360)


Bank debt forgiven                                                            -               5,529               5,529
Interest payable and similar charges                                      (547)               (237)               (657)
Profit/(loss) on ordinary activities before taxation                    (1,988)                  77             (4,488)


Taxation on ordinary activities                                           (163)               (111)                 167
Loss on ordinary activities after taxation                              (2,151)                (34)             (4,321)


Dividends -cumulative preference shares                                    (14)                (11)                (25)
Loss for the period                                                     (2,165)                (45)             (4,346)
Loss per ordinary share

-        basic and diluted                                              (27.4p)             (0.06p)             (54.9p)

Dividends per ordinary share                                                  -                   -                   -










Carbo PLC


Group balance sheet (unaudited)                                      31st July           31st July          31st January
                                                                          2003                2002                  2003

                                                          Notes          #'000               #'000                 #'000
Fixed assets
Intangible assets                                                          141                 243                   145
Tangible assets                                                         19,001              17,404                18,073
Investments                                                                 31                  32                    34

                                                                        19,173              17,679                18,252
Current assets
Stocks                                                                  10,915              12,942                11,099
Debtors                                                                 10,013              11,885                 8,813
Cash                                                                       770                 268                   386

                                                                        21,698              25,095                20,298

Creditors due within one year                                         (18,888)            (17,613)              (16,273)

Net current assets                                                       2,810               7,482                 4,025

Total assets less current liabilities                                   21,983              25,161                 2,277

Creditors due after one year
Convertible debt                                                       (3,185)             (3,185)               (3,185)
Bank loans and other creditors                                         (2,243)             (1,345)               (1,743)


Provisions for liabilities and charges                                (16,357)            (14,800)              (15,475)


Net assets                                                                 198               5,831                 1,874


Capital and reserves

Called up share capital                                                 20,135              20,135                20,135
Share premium account                                                      290                 290                   290
Profit and loss account                                     4         (20,227)            (14,594)              (18,551)
                                                           


Shareholders' funds (inc non-equity interests)                             198               5,831                 1,874








Carbo PLC


Group cash flow statement (unaudited)                                        6 months ended                   Year ended
                                                                                31st July                   31st January
                                                                           2003               2002                  2003
                                                          Notes           #'000              #'000                 #'000


Net cash flow from operating activities                                     497                150                 1,390

Return on investments and servicing of finance

            - net interest paid                                           (416)              (745)               (1,165)

Taxation                                                                     46              (421)                 (722)


Capital expenditure and financial investment

            - purchase of tangible assets                                 (240)              (402)                 (812)

            - sale of tangible assets                                         -              3,413                 3,364

            - Chesterfield site deposit repaid                                -            (2,750)               (2,750)


Acquisitions and disposals
                                                                              -                  -                 (145)
             - acquisition of business

            - net overdraft eliminated on disposal of                         -                  -                   688
               business


Cash (outflow)/inflow before financing                                    (113)              (755)                 (152)

Financing

            - loan repayments                                             (277)            (3,178)               (3,581)

            - loans advanced                                                524                400                   420

            - convertible loan notes                                          -              3,185                 3,185

Cash inflow/(outflow) for the period                                        134              (348)                 (128)





Carbo PLC



Interim results for the period ended 31 July 2003



Notes







1.     The Group has significant unencumbered assets mainly in its Continental
operating locations and has begun negotiations with new lenders in the UK and on
the Continent where the bulk of its operations are now located.  These
negotiations are designed to ensure that the Group has the necessary working
capital not only to continue in operational existence but also to develop the
new shape of its operations as a cohesive whole.  As part of this development
the Company has taken steps to reduce its cost base.



The accounts have been prepared on a going concern basis, which assumes that the
Group will continue in operational existence for the foreseeable future.  Whilst
the directors cannot be certain as to the outcome of negotiations with
alternative lenders they believe that it is appropriate for the accounts to be
prepared on a going concern basis.  If the Group were unable to continue in
operational existence for the foreseeable future, adjustment would have to be
made to reduce balance sheet values to their recoverable amounts and to provide
for further liabilities that may arise and to re-classify fixed assets and long
term liability as current assets and liabilities.



2.   Dividends
                                                                   2003                       2002

                                                                   #'000                      #'000


      Preference shares - appropriated                             14                         11




      The dividend payable on the cumulative preference shares for the current
period has been charged to profit and loss account but cannot be paid until the
Company has sufficient distributable reserves to cover it.





3.   The calculation of the loss per ordinary share is based on the weighted
average number of ordinary shares in issue of 7,913,990 and the loss after
taxation and   preference dividend of #2,165,000.  The diluted earnings per
share is based on the       weighted average number of ordinary shares adjusted
to assume the full conversion of the convertible loan stock issued on 16th May
2002.




4.   Statement of total recognised gains and losses


                                                                                              #'000


Loss for the period                                                                           (2,151)
Currency translation differences on foreign currency net investments

                                                                                              475
Total recognised losses for the period                                                        (1,676)






5.   These 2003 interim accounts have been prepared on the basis of the
accounting policies set out on pages 13 and 14 of the annual report and accounts
2003 and are unaudited and unreviewed. They do not constitute full accounts for
the purposes of Section 240 of the Companies Act 1985.  The comparative figures
relating to the year ended 31 January 2003 have been extracted from the full
accounts on which the auditors' opinion was modified as to the going concern
uncertainty referred to in paragraph 1 above.





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