H&H GROUP REPORTS SUBSTANTIAL IMPROVEMENT IN PROFITS

The H&H Group has almost doubled its profit for the first six months of its financial year on the same period last year.

Reporting a “substantial improvement” in the Group’s result for the six months to December 31, 2006 in the interim report to shareholders, chairman Alan Bowe says that the unaudited profit before tax is £433,000 as against a restated profit for the same period the previous year of £225,000 - an increase of 92.4 per cent.

The turnover of the Group also rose from £4,082,000 to £4,585,000, an increase of 12.3 per cent.

As a result, the Group’s board of directors is recommending to raise the interim divided from 4.5p per share to 6.5p per share, an increase of 44.4 per cent over last year; this will be paid on April 27, 2007 to those shareholders on the register on the April 5, 2007.

Mr Bowe reports: “Harrison & Hetherington, through its eight sales centres, had a robust autumn sales period following the reopening of the export market for UK beef and live cattle in the summer of 2006.
“Cattle prices were much firmer, and the business increased its market share for livestock numbers. The increased turnover occurred notwithstanding pressures on farmers’ cashflows following yet further unacceptable delays in single farm payments.”

He adds: “However, I would like to add a note of caution in that whilst the Group’s result has been substantially enhanced by a strong performance in our farmstock business, the continued pressure on agriculture - particularly in the dairy sector and to a lesser extent in the sheep industry - will make the maintenance of this performance more challenging in the future.”

The Group’s achievement was enhanced through a very good performance by the estate agency and residential lettings department of H & H King.

The ongoing national decline in new vehicle registrations and the number of second-hand vehicles changing hands, together with two bank base rate increases and DTI changes with regard to early settlement procedures, have reduced the “bottom line” profitability at Borderway Finance.

Five of the Group’s operating companies are ahead of either their budgets and/or their actual positions for the same period a year ago.

Within the last few weeks an option agreement has been entered into with Story Construction Limited for a sale in relation to surplus paddocks at Lockerbie, conditional upon the builders obtaining appropriate planning permission.

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