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FIRST AND FINAL ADD TO HARTSTONE GROUP EARNINGS, RECORD RESULTS FOR THE YEAR ENDED 31 MARCH 1992

 /FIRST AND FINAL ADD -- NY030 -- HARTSTONE GROUP EARNINGS/
 RECORD RESULTS FOR THE YEAR ENDED 31 MARCH 1992
 Stephen Barker, Hartstone Group chairman, issued the following statement:
 The board of The Hartstone Group PLC announces a further year of dramatic progress. The results for the year are shown in detail after this statement. Highlights of the period were:
 -- Turnover increased to 237.8 million pounds from 68.9 million pounds.
 -- Pre-tax profits increased by nearly 200 percent to 22.1 million pounds from 7.4 million pounds.
 -- Earnings per share up 40 percent to 21.1 pence from 15.1 pence (as adjusted)
 -- Dividend per share up 50 percent to 4.875 pence from 3.25 pence.
 -- Gearing of approximately 50 percent with interest cover of 7.4 times
 Hartstone has achieved significant and well-balanced growth during the year. Our progress has been marked by a combination of substantial improvements in profits, particularly from our North American leathergoods companies, and the further development of Hartstone's interests in Europe. This has been achieved during a difficult economic climate with UK and US retail trading being at low levels during the whole of the year. The profits are supported by strong growth in earnings per share of 40 percent.
 Divisional and central management has been continually strengthened as we have extended our geographical scope. We have a cohesive team, with the experience to develop our businesses effectively and to take advantage of our increasing presence in our chosen markets.
 DIVIDEND
 Following these results, the board proposes a final dividend of 3.0p (1991 : 2.0p). If approved, the dividend will be paid on July 31, 1992 to shareholders on the register on June 11, 1992. This final dividend together with the interim dividend will make a total of 4.875p for the year, an increase of 50 percent. The board will continue to follow a progressive dividend policy. Shareholders are again being given the opportunity of taking this dividend in Hartstone shares instead of cash.
 FINANCE
 Our approach to financing is prudent. We have interest cover of 7.4 times and, after writing off goodwill of 120 million pounds, we ended the year with gearing of approximately 50 percent on net tangible assets of Pounds 80 million. In March 1992 we arranged a private placement of debt in the USA, securing $50 million over a seven year period. Our businesses are strongly cash generative and we plan to reduce debt in the medium term.
 LEATHERGOODS
 This division performed well overall contributing operating profits of 19.8 million pounds (1991: 4.2 million market share with sales 10 percent ahead of the comparable period. The increase was mainly attributable to the perception by customers that Hartstone companies can provide assured supplies combined with excellent value for money. Triad was exceptionally successful with sales 48 percent ahead of 1991. CIMA, our luxury leathergoods manufacturer, has continued to face a particularly tough time although forward orders are now at a higher level than for the last nine months. During the year, UK distribution and information technology has been rationalised with primary focus on Leicester for handbags and luggage, and Manchester for small leathergoods. The initial benefits of efficiency and a lower cost base will be seen in the current year.
 The management team in the UK has been strengthened particularly by the promotion of Jeffrey Nash in April 1992, who has taken responsibility for the UK leathergoods companies.
 NORTH AMERICA
 Michael Stevens continued the strong performance experienced in the first six months with sales 84 percent ahead of the comparable period. During the second half, Michael Stevens moved to a new facility which increased their warehouse capacity from 80,000 to 280,000 square feet, continued to strengthen middle management and introduced a small leathergoods product range. These actions increased operating expenses but have positioned the business well for continued future expansion.
 Etienne Aigner also performed well with total sales approximately 14 percent ahead of the comparable period and with operating margins also moving ahead. During the year, extensive management changes have been made leading to a more focused and significantly strengthened structure. In addition the Etienne Aigner brand has been revitalized and a new brand image and identity will be launched in August 1992.
 The footwear division of Etienne Aigner continued to perform well and showed sales approximately 11 percent ahead of the same period in 1991. The accessories division now sources almost all of its handbags through Hartstone Hong Kong.
 Etienne Aigner has continued to open retail outlet stores as planned following Hartstone's strategic review of the business and at March 31, had 30 stores fully operational. This development has extended the company's geographical coverage, particularly onto the West Coast.
 Hosiery
 Operating profits for the division were 5.7 million pounds compared with 3.8 million pounds in the comparable period.
 The UK market has been extremely difficult, with retailers being over-stocked particularly in the fourth quarter. Despite this background own-label hosiery sales have progressed and the re-launch of Bear Brand last Autumn has led to significant growth in volume. The brand is now being stocked in the majority of national grocery chains.
 The acquisitions of Cogetex and Aznar in December 1991 have transformed Hartstone's position in European hosiery. Their leading brands in France and Spain, coupled with their modern and efficient manufacturing sites in both countries, have led to a good contribution to profits in the fourth quarter in line with expectations. Our new manufacturing capacity in mainland Europe has meant that we have now stopped fine gauge hosiery manufacturing at our Berkshire site, Hosiery manufacturing at our Berkshire site. Hosiery manufacturing is now divided between the UK (17 percent), France (26 percent) and Spain (27 percent), with sourcing from outside suppliers making up the balance.
 Co-operation between Cogetex, Aznar and the UK businesses is growing fast. Aznar's raw materials facilities are now being fully utilized and bulk buying has lead to greater economies of scale. We have already secured the listing of Cogetex's Well brand in all of the major Spanish grocery chains and begun penetration of other European markets -- using our own distribution businesses in the case of northern Europe. In the UK, Marie Claire is becoming an important addition to our brand portfolio.
 Hartstone's sock business (with products such as Mr Kler, Berkshire and Well) is now one of Europe's largest, manufacturing 30 million pairs of socks per year from its sites in the UK (six percent), France (17 percent) and Spain (24 percent), with another 30 million sourced from outside suppliers.
 Management has been continually strengthened during the year and will shortly be added to with the appointment of a European Marketing Director, who will be responsible for co-coordinating marketing for the division and developing our pan-European brand strategy.
 Pamplemousse, our casualwear subsidiary, has extended its product portfolio by developing new ranges of menswear, maternity wear and children's casual clothing. Although the recession has inevitably had an adverse effect on profitability, our positive approach to sales development and close attention to costs have produced an acceptable result for the year.
 Internal Development
 The opening of the Hartstone Centre in North London in November 1991 has benefited both existing and potential customers and now has further potential within continental Europe. This concept has now been extended with the opening earlier this month of a similar center in Hong Kong, We have thereby brought together our Far eastern operations which will enable us to identify new low cost producers whilst continuing to monitor quality and delivery for our North American and European operations. In addition it will consolidated the group's purchasing power in the region and allow it to take advantage of other opportunities in Pacific Rim countries.
 Future Strategy and Prospects
 In three years we have built leading positions in our two chosen markets of hosiery and leathergoods. We will develop and grow these businesses realizing the full manufacturing and marketing potential of our European hosiery business and our global strengths in leathergoods design, sourcing and distribution. In particular, we intend to utilize our valuable consumer brands across a wider range or related products.
 These are signs of slow economic recovery in a number of our markets, which has not as yet brought about any substantial increase in consumer spending. However, our blends of strong operational management, together with benefits of scale in our market places. lead the board to be confident of continued progress.
 The unaudited consolidated results for the year ended March 31, 1992, and the audited results for the year ended March 31, 1991, are as follows:
 HARTSTONE GROUP
 (Unaudited; pounds sterling in thousands)
 Year to March 31 1992 1991
 Turnover (A) 237,790 68,910
 Profit before taxation (A) 22,064 7,357
 Taxation 6,843 2,265
 Profit after taxation 15,221 5,092
 Dividend 4,260 1,542
 Retained profit 10,961 3,550
 Earnings per share (B) 21.1p 15.1p
 Dividend per share (net) 4.875p 3.25p
 NOTES:
 (A) -- Analysis of turnover and profit before taxation: Set out below are the unaudited divisional results for the year ended March 31, 1992, and the audited divisional results for the year ended March 31, 1991.
 1992 1991
 Turnover Profit Turnover Profit
 (Pounds in 000)
 Leathergoods 154,340 19,820 28,451 4,205
 Hosiery 83,450 5,670 40,459 3,800
 Interest -- (3,426) -- (648)
 Total 237,790 22,064 68,910 7,357
 The profit column comprises the operating profits of the divisions before interest and the group's net interest expense. Last year's figures have been restated accordingly.
 (B) -- Earnings per share: Earnings per share has been calculated by reference to earnings of 15,221,000 pounds (1991: 5,092,000 pounds) and a weighted average number of ordinary shares in issue of 72,309,227 (1991: 33,766,832). Earnings per share in respect of the year ended March 31, 1991, has been adjusted to reflect the rights issues in March 1991 and December 1991.
 (C) -- The financial information set out above does not comprise full financial statements within the meaning of the Companies Act 1985. Full accounts for the year ended March 31, 1991, on which the auditors have given an unqualified report, have been delivered to the Registrar of Companies.
 The report and accounts for 1992 will be sent to shareholders on June 15, 1992, and the annual general meeting will be held at 3 p.m. on July 10 at Hartwell House, Oxford Road, Near Aylesbury, Buckinghamshire, England.
 -0- 5/14/92 AA NY030
 /NOTE TO EDITORS: Copies of this announcement will be available (for collection only) for a period of 48 hours from the company announcements office at the Stock Exchange and at any time from the registered office of the company at Hartstone House, 1 Saint Andrew's Court, Thame, Oxfordshire, England, OX9 3GG./
 /CONTACT: Stephen Barker, chairman, or David Gratton, finance director of Hartstone Group 071-489-1441, or Richard Oldworth of Buchanan Communications, 071-489-1441; or Debra Wasser or Janet Shotter of Dewe Rogerson, 212-688-6840, for Hartstone Group/
 /END FIRST AND FINAL ADD/ CO: Hartstone Group plc ST: IN: REA SU: ERN


KD-CK -- NY030A -- 0188 05/14/92 11:41 EDT
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Date:May 14, 1992
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