Tyman Regulatory News (TYMN)

LUPUS CAPITAL PLC

("Lupus" or the "Group" or the "Company")

INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2011

Lupus Capital plc, a leading international supplier of building products to the door and window industry and the world's number one manufacturer of marine breakaway couplings, announces unaudited interim results for the six month period ended 30 June 2011.

HIGHLIGHTS

Underlying is defined as before amortisation of intangible assets, deferred tax on amortisation of intangible assets, exceptional items, unwinding of discount on provisions, amortisation of borrowing costs and the associated tax effect.

·; Group sales in the period decreased by 4% to £124.7 million in constant currency

·; Gross margins maintained despite lower volumes

·; Continued successful recovery of material cost increases

·; Underlying EPS performance reflecting the restructuring of the balance sheet

·; Net debt at half year in line with 2010 year end despite slow trading

·; Successful refinancing of debt facilities to March 2016

Jamie Pike, Non-Executive Chairman, commented:

"After an encouraging first quarter, demand in the US and UK Building Products markets softened during the second quarter. The trading environment in the US and UK Building Products markets remains challenging and shows few indications of significant improvement over the next twelve months.

"In Oil Services, given the strength of the order books at both Gall Thomson and Klaw, we expect continued solid performance across the balance of the year.

"The successful refinancing of the Group's debt facilities gives Lupus a sound financial platform for the next four years and provides the Group with more favourable terms, reduced costs and significantly enhanced flexibility.

"Provided there is no significant further deterioration in end markets over the remainder of the year, the Group would expect to trade satisfactorily."

6 September 2011

Overview

After an encouraging first quarter of the financial year, demand in our core residential housing markets softened during the second quarter. New build residential housing markets in the US have not been as strong as in 2010 and the repair, maintenance and improvement sectors ("RMI") in both the US and UK have been subdued. Gall Thomson, our oil and gas services business, enjoyed another period of strong performance.

Results for the period

For the six month period ended 30 June 2011, compared with the corresponding period in 2010:

SALES

Group sales were £124.7 million (2010: £133.2 million), a decrease of £8.5 million or 6 per cent.. On a constant currency basis, this represents a decrease in total sales of 4 per cent. compared with the equivalent period in 2010.

PROFITS

Underlying earnings before interest, tax and amortisation ("Underlying Operating Profit") were £15.5 million (2010: £17.3 million), a decrease of £1.8 million or 10 per cent.. On a constant currency basis, this represents a decrease of 8 per cent. compared with the equivalent period in 2010. Underlying EBITDA in the period was £18.4 million (2010: £20.7 million).

Administrative expenses decreased by £0.7 million in the period to £34.7 million (2010: £35.4 million). Underlying administrative expenses (before amortisation and exceptional items) decreased by £0.9 million in the period to £28.4 million (2010: £29.3 million) reflecting our close focus on overheads and the cost base.

Exceptional costs of £0.6 million (2010: £0.2 million) were incurred in the period, principally in connection with the restructuring of the composite doors business.

Net finance costs decreased by £1.7 million to £4.4 million (2010: £6.1 million), reflecting the deleveraging of the balance sheet and reductions in loan fee amortisation. Net cash interest payable in the period reduced to £3.1 million (2010: £4.8 million) and, as outlined in the pre-close statement, for the 2011 full year is expected to be at least £2.5 million lower than in 2010.

Underlying profit before tax was £12.4 million (2010: £12.6 million) and the Group reported profit before tax for the period of £4.9 million (2010: 5.0 million).

MARGINS

Gross profit margins in the period improved slightly to 35.2 per cent. (2010: 35.0 per cent.) due to increased sales volumes of Gall Thomson and Klaw couplings offsetting lower sales and gross margins in the Building Products Division.

Underlying Operating Profit margins for the Group decreased to 12.5 per cent. (2010: 13.0 per cent.) in the period, as the reduced sales volumes were affected by the Group's operational leverage.

TAXATION

As a result of corporation tax rate reductions in the United Kingdom and more stable earnings profiles in overseas jurisdictions, the Group's expected underlying future tax rate is now 29 per cent. compared with 32 per cent. in the 2010 financial year.

The statutory taxation charge in the period has benefited from a £0.5million tax credit in relation to United Kingdom corporation tax rate reductions.

EARNINGS AND DIVIDENDS

Despite the decline in Underlying Operating Profit, Underlying earnings per share increased marginally to 6.83p (2010: 6.79p) reflecting the improved interest and taxation position of the Group. Basic earnings per share increased to 2.93p (2010: 2.62p).

No interim dividend will be paid in 2011, however the Board intends to declare a full year dividend in March 2012 of not less than the 2.0p per share declared this year.

Financial Position

During the period the Group has continued its tight focus on working capital, operational cash generation and reductions in net debt.

CASHFLOW

Net cash inflow from operating activities was £5.9 million (2010: £8.7 million) reflecting the lower levels of sales activity. Working capital investment during the period was lower than in the equivalent period last year due to the reduced levels of sales activity. Our working capital metrics remain in line with our expectations.

Operating Cash Conversion, being the proportion of Underlying Operating Profit converted into cash, in the period was 30 per cent. (2010: 44 per cent.). In the twelve months to 30 June 2011, Operating Cash Conversion was 101 per cent.; in line with the Group's aim of converting all profit into cash across any twelve month period.

NET DEBT POSITION

At 30 June 2011 the Group's Underlying Net Debt was £94.6 million (2010: £117.6 million).

At 31 December 2010 the Group's Underlying Net Debt was £94.7 million. Of the movement in Underlying Net Debt since the year end, approximately £2.3 million was attributable to favourable foreign exchange rate movements.

Under the IFRS definition, which reduces debt by the unamortised bank fees, net debt at the half year was £92.6 million (2010: £113.4 million).

COVENANT PERFORMANCE

At 30 June 2011, the Group had headroom on its banking covenants under its 2009 Bank facilities ranging from 38 per cent. to 65 per cent..

At 30 June 2011, the Group's net debt to Underlying EBITDA ratio was 2.52x (2010: 3.14x), calculated on the same basis as banking covenants.

Group 2010 Operational Performance

The Group has maintained its close control over staffing levels and costs in general. Headcount has decreased to 2,015 at 30 June 2011 (2010: 2,145), reflecting the restructuring undertaken within the UK Composite Doors business and the reduced activity levels within the Building Products Division as a whole.

The Group's tight focus on working capital has remained in place, with investment in inventory only permitted where there is clear evidence of demand or where required to support our industry leading levels of service. Concern over customer defaults, and continued limited availability of credit insurance, means that management of receivables remains a high priority. During the period we have been successful in further extending credit insurance cover for some of our key suppliers which has had a beneficial effect on our payables position.

We have continued to flex our operational footprint in order to optimise our market position. To date in 2011 we have exited surplus units within our Composite Door business and have started to implement the consolidation of our Door Hardware and Balance Facilities in South Dakota.

BUILDING PRODUCTS (92% of Group Revenues)

The Building Products division comprises the Group's door and window hardware and seals operations. The division's businesses are market leaders and operate across the Americas, the UK, Europe and Australasia.

In the first half the division has successfully maintained its market share positions in its key markets and has fully recovered increases in input costs.

US BUILDING PRODUCTS (41% of Group Revenues)

In North America the Amesbury Group has seen a weaker first half of the financial year compared with the corresponding period in 2010. The 2010 year was characterised by an uneven demand pattern in the US market with performance during the first four months of the year heavily influenced by one-off impacts of customers rebuilding inventories and consumer tax credits driving demand. Despite sluggish market conditions we remain confident that we have maintained our market share.

Local currency sales in the period for the Amesbury Group were $82.3 million (2010: $86.3 million) and Underlying Operating Profit was $8.0 million (2010: $10.1 million).

Key initiatives in the period included the further development of the National Accounts Program, the rebranding of the Amesbury Group and a number of operating businesses, recruitment of a dedicated team focused on the North American Commercial market and continued investment in new product development.

UK AND IRELAND BUILDING PRODUCTS (36% of Group Revenues)

Note: Comparative figures for the geographical analysis of revenue for the periods ending 30 June 2010 have been revised to reflect the elimination of intragroup trading more accurately.

In the first half of the financial year, grouphomesafe saw some increases in demand for its components products, most noticeably from the distribution sector, offset by weaker demand in the OEM sector and continued to grow market share in components. As expected, the decline in social housing demand significantly impacted sales in our composite door business. grouphomesafe has seen significant input cost pressures in the period, affecting both raw materials and imported finished goods, however has successfully managed to implement price increases to offset these.

The UK and Ireland markets, which are predominately RMI, remain subdued with little sign of sustained recovery. The Scottish and Irish markets in particular remain difficult.

During the period grouphomesafe launched a number of new products into the market which have been well received. grouphomesafe also made good progress with the restructuring and repositioning initiatives within the composite doors business and have started to win door sales in the trade and retail markets.

INTERNATIONAL BUILDING PRODUCTS (15% of Group Revenues)

Note: Comparative figures for the geographical analysis of revenue for the periods ending 30 June 2010 have been revised to reflect the elimination of intragroup trading more accurately.

Our International Building Products division has seen local currency sales broadly in line with the corresponding period in 2010, with encouraging increases in demand in Germany and Brazil, tempered by more muted demand for products in Southern Europe. Our Australasian business had a more subdued first half than in 2010, with market demand affected by the Australian floods and the New Zealand earthquake, however in recent weeks order levels have improved. Profitability in the period in this division was affected by the mix of products sold and by the high levels of operational gearing in Southern Europe.

We have continued to focus on cross selling opportunities within the International business as well as seeking to expand our market shares in our core sealing products.

OIL SERVICES (8% of Group Revenues)

Our oil services division operates through the Gall Thomson and Klaw businesses. Gall Thomson Environmental is the world's leading supplier of marine breakaway couplings and, through its Klaw subsidiary, is a supplier of industrial couplings including quick release and breakaway couplings.

During the period the division performed strongly and has delivered further growth in sales and underlying profits in both the Gall Thomson and Klaw businesses. The division's order book and enquiry levels remain healthy.

New Debt Facility Agreement

The Group has entered into a new and significantly improved debt facility agreement which extends the Group's committed facilities until 31 March 2016. Key highlights of the new facility are as follows:

·; Repayment of approximately £120 million of existing facilities.

·; £110 million multicurrency term loan and a £30 million multicurrency working capital facility.

·; Unsecured facilities with no debt silos and simplified covenant structures.

·; Annual amortisation payments of c. £11 million from December 2012.

·; Standard provisions surrounding dividends, M&A activity and capital expenditure.

·; Market pricing incorporating a margin step down as the Group degears.

·; Initial step down in margin payable of approximately 75 bps.

·; Joint Bookrunners and Joint Mandated Lead Arrangers are Barclays, HSBC, Lloydsand RBS.

·; Total fees and expenses payable in connection with the new facility agreement are estimated at £2.7 million.

Under the new debt facility agreement, the Group had pro forma headroom on the revised banking covenants of between 24 per cent. and 66 per cent. at 30 June 2011.

Outlook

The trading environment in the US and UK Building Products markets remains challenging and shows few indications of significant improvement over the next twelve months.

In Oil Services, given the strength of the order books at both Gall Thomson and Klaw, we expect continued solid performance across the balance of the year.

The successful refinancing of the Group's debt facilities gives Lupus a sound financial platform for the next four years and provides the Group with more favourable terms, reduced costs and significantly enhanced flexibility.

Provided there is no significant further deterioration in end markets over the remainder of the year, the Group would expect to trade satisfactorily.

6 September 2011

Definitions

Where appropriate "Underlying" is defined as before amortisation of intangible assets, deferred tax on amortisation of intangible assets, exceptional items, unwinding of discount on provisions, amortisation of borrowing costs and the associated tax effect.

"Underlying Net Debt" is defined as interest bearing loans and borrowings, net of cash and cash equivalents, plus unamortised borrowing costs added back.

"Operating Cash Conversion" is defined as Net cash inflow from operating activities before Income tax paid and after Payments to acquire property, plant and equipment divided by Underlying operating profit.

Exchange Rates

The following foreign exchange rates have been used in the financial statements:

Roundings

Percentages have been calculated using figures rounded to the nearest thousand from the financial statements, which may lead to small differences in some figures and percentages quoted.

Condensed consolidated income statement

For the six months ended 30 June 2011

1 before amortisation of intangible assets, deferred tax on amortisation of intangible assets, exceptional items, unwinding of discount on provisions, amortisation of borrowing costs and the associated tax effect.

Condensed consolidated statement of comprehensive income

For the six months ended 30 June 2011

Condensed consolidated statement of changes in equity

For the six months ended 30 June 2011

Condensed consolidated balance sheet

At 30 June 2011

Condensed consolidated cash flow statement

For the six months ended 30 June 2011

Notes to the Interim Report

1. Basis of preparation

The Group's interim financial statements for the six months ended 30 June 2011 were authorised for issue by the directors on 6 September 2011. The consolidated interim financial information, which is unaudited, does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. Accordingly, this condensed report is to be read in conjunction with the Annual Report for the year ended 31 December 2010, which has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and any public announcements made by the Group during the interim reporting period.

The statutory accounts for the year ended 31 December 2010 have been reported on by the Group's auditors, received an unqualified audit report and have been filed with the registrar of companies at Companies House. The unaudited condensed interim financial statements for the six months ended 30 June 2011 have been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ending 31 December 2011, which are not expected to be significantly different to those set out in note 1 to the Group's audited financial statements for the year ended 31 December 2010.

The interim financial information has not been audited but it has been reviewed under the International Standard on Review Engagements (UK and Ireland) 2410 of the Auditing Practices Board.

After review of the Group's operations, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the unaudited condensed interim financial statements.

2. Accounting policies

The interim financial information has been prepared on the basis of the recognition and measurement requirements of IFRS, which were the accounting policies used in the Report and Accounts for the Group for the year ended 31 December 2010. The accounting policies are unchanged from those used in the last annual accounts.

3. Segmental analysis

Comparative figures for the geographical analysis of revenue for building products for the periods ending 30 June 2010 and 31 December 2010 have been revised to reflect the elimination of intragroup trading more accurately.

4. Exceptional items

5. Finance income and costs

6. Income tax expense

The effective rate of tax for the full year is expected to be 29% which has been applied to reported group profit before tax of £4,852,000 at 30 June 2011.

7. Earnings per share

(a) Basic and diluted earnings per share

Basic earnings per share amounts are calculated by dividing the profit for the period from continuing operations attributable to ordinary equity shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share takes into account the dilutive effect of potential ordinary shares.

 (b) Underlying earnings per share

Underlying earnings per share is based on the profit for the period from continuing operations, adjusted for the specific items excluded from operating profit in arriving at underlying operating profit and the associated tax effect of those items.

Underlying earnings per share is calculated as follows and shown on a basic and diluted basis: