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LUCAS INTERIM STATEMENT: TRADING SURPLUS HALVED, PROFITS LIFTED BY PENSION FUND SURPLUS, DIVIDEND UNCHANGED

LUCAS INTERIM STATEMENT: TRADING SURPLUS HALVED, PROFITS LIFTED BY
 PENSION FUND SURPLUS, DIVIDEND UNCHANGED
 RESTON, Va., April 8 /PRNewswire/ -- Lucas Industries plc, the leading international supplier of advanced technology systems, components and services to the world's aerospace, automotive and other selected markets, today reported results for the first six months of their 1991-92 financial year.
 Difficult market conditions halved the Trading Surplus but new product and cost reduction programs continued and new long term contracts were gained. Profits were lifted -- and continuing investment underpinned -- by surplus distributed from the Pension Fund. The interim dividend remains as last year.
 Sales $2,042.6 million - reduced volume
 Trading surplus $57.9 million ($117.7 million)
 Redundancy & reorganization
 costs $27.3 million ($3.7 million)
 Distribution from
 Pension Fund Surplus $159.3 million
 Pre-Tax Profit
 (Inc. distribution) $159.7 million ($97.9 million)
 Interim dividend 3.7 cents (3.7 cents)
 (Jan. 31, 1992, conversion rate of $1.77)
 Commenting on the results, Sir Anthony Gill, chairman of Lucas, said: "Depressed markets worldwide have continued to reduce our earnings in the short term, but we have maintained programs for new products, cost reduction


and future growth. New contracts have been gained, justifying our commitment to sustained investment, R&D and other engineering expenditure for the longer term."
 Review of Results
 During the six months to end of January 1992, difficult trading conditions, particularly in the United Kingdom and North America, reduced sales to $2,402.6 million ($2,092.1 million) which, allowing for exchange rate changes and acquisitions, represents a substantial reduction in volumes.
 Surplus on trading was halved to $57.9 million, compared with $117.7 million last year, after absorbing new product introduction costs and higher depreciation -- up 12 percent due to manufacturing investment in recent years. Reorganization and redundancy costs of $27.3 million ($3.4 million), and a swing of $7.8 million from profits to losses at related companies, reduced operating profit before interest to $30.3 million ($121.8 million).
 In November 1991, the Occupational Pensions Board approved a distribution from the Lucas Pension Fund surplus to benefit pensioners, employees and the company -- the company's share after tax being $159.3 million. This lifted profit before tax -- otherwise just above break-even -- to $159.7 million, compared with $97.9 million for the first half of last year.
 A maintained interim dividend of 3.7 cents will be paid on June 10, 1992, to shareholders registered on April 16, 1992. A scrip dividend alternative will be offered.
 The directors believe that the company is well positioned to benefit from the expected upturn in world economic activity, although Lucas has not yet seen evidence of any early overall recovery in its markets.
 Aerospace
 The aerospace markets served by Lucas have continued to be depressed. Worldwide sales, at $579.7 million ($597.7 million), reflect a 9.3 percent downturn on last year after allowing for exchange rates and acquisitions.
 Lower output from Lucas plants, higher redundancy and reorganization costs, of $5.8 million ($0.7 million), and maintained spending on projects for the future resulted in reduced operating profit, at $28.9 million, compared with $56.8 million last year.
 In the U.K. and the rest of Europe, sales fell substantially with a number of defense projects ending and the demand for spares and repairs declining as airlines destocked and laid up aircraft. In addition, the performance of related companies was badly affected by the recession.
 Lucas Aviation, which was acquired in June 1991, performed in line with expectations and, while not contributing to profits at this stage, continues to assist the development of the Customer Support Division. Other Lucas Aerospace sales in North America fell by 5 percent and operating profits were affected by the highly competitive marketplace.
 Reduction of the cost base continues -- both in response to difficult market conditions and to enhance future performance. Excluding acquisitions, the total of Lucas Aerospace employees worldwide has been reduced by 1,580 (13.5 percent) since July 1990.
 New contracts were won -- the most important for the long term being with GM Allison Gas Turbine Division, as announced in October, to provide equipment for their new GMA series of engines.
 -0- 4/8/92
 /CONTACT: Renate Myles, 703-264-2387, or Susan Roberts, 703-264-2371, both of Lucas Aerospace/ CO: Lucas Aerospace plc ST: Virginia IN: ARO SU: DIV


MH-DC -- DC038 -- 6488 04/08/92 18:08 EDT
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Date:Apr 8, 1992
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