LGM Longmead Grp.

RNS No 3019a
LONGMEAD GROUP PLC
22nd September 1998

The Longmead Group plc (the "Company")

The Company announced today that its results for the year
ended 1 August 1998 are expected to be substantially
below those achieved in the previous year.  This is
principally as a result of disappointing sales in the
last quarter of the year, reflecting poor retail sales by
the Company's customers.  In addition, door furniture
sales were affected by low cost imports from the Far East
while export sales suffered due to the strength of
sterling.  In an effort to stimulate sales in the final
quarter, a number of promotions at discounted prices were
effected which depressed margins.  The impact of
disappointing sales was exacerbated by higher than
anticipated manufacturing costs arising partly from the
introduction of a number of enhancements to the current
product range and partly from technical problems with raw
materials which have now been resolved.   The immediate
outlook for the Company is expected to reflect the
slowdown in the retail sector with sales remaining flat.

Nevertheless, the Directors remain confident about the
longer term prospects for the Company.  A major programme
of new product development to complement the current
product range and to take the Company into new markets
has recently been initiated and a senior marketing
executive has been recruited to spearhead this
development.  The Company has also recently acquired
assets from a small manufacturer of doorknobs which will
enable it to reduce costs and compete more effectively
with products manufactured in the Far East.  In addition,
almost all door furniture products are now being
manufactured in-house which is expected to have a
favourable impact upon margins.

The Company also continues to seek appropriate small
"bolt-on" acquisitions.  However, the Company will be
careful to guard against over paying for any acquisitions
particularly given the current economic outlook.

The Company's balance sheet remains strong and, as a
demonstration of the Board's continuing confidence in the
future, the Board anticipates proposing a final dividend
at the announcement of its final results.

END

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