FII Fii Group

RNS Number:6663G
FII Group PLC
27 January 2003

                         Fii Group plc ("the Company")

                         Disposal of manufacturing site

1.     Introduction


The Company announces today that it has entered into a contract to dispose of
its manufacturing site in Banbridge, Northern Ireland ("the Banbridge Site") for
a total consideration of #2.05 million ("the Disposal"). Owing to its size, the
Disposal is subject to approval by the Company's shareholders. A circular will
be posted to shareholders shortly providing details of the Disposal and giving
notice of an extraordinary general meeting of the Company to approve the
Disposal.


2.     Background to and reasons for the Disposal


On 22 October 2002 your Board announced the completion of its review of the
viability of the Group's footwear manufacturing operations carried out on the
Banbridge Site.


As your Board reported on 27 September 2002 Private Label manufactured output
declined during 2002 as a result of price competition from overseas factories.
Your Board has recognised that UK manufacturing in this sector will continue to
be at a disadvantage to overseas sources.


With regret, your Board commenced formal consultations with the relevant unions
and negotiations were conducted regarding the level of severance payments to be
paid to the workforce. The Banbridge Site is scheduled for closure in February
2003. Your Board would like to repeat its expressions of thanks to the employees
at the Banbridge Site for their long years of hard work and loyal support to the
Group.


3.     Details of the Disposal


The Banbridge Site comprises approximately 6.5 acres of land and a factory of
some 7,906m(2). The frontage of the building is listed. The consideration for
the sale is #2.05 million, which is in addition to a further #275,000 paid by
the same purchaser for a further acre which previously formed part of the
Banbridge Site but which was surplus to requirements.


4.     Financial effects of the Disposal and use of cash proceeds


If this Disposal is approved by Shareholders and completed in accordance with
its terms, the Group will make an immediate accounting profit of #1.169 million,
being the difference between the book value of the Banbridge Site of #881,000
and the sale proceeds. It is anticipated that the gain will not give rise to a
corporation tax charge as it can be off-set in full against accumulated capital
losses existing in other Group companies.


The Group proposes to apply the net proceeds of the Disposal, amounting to
#1.875 million, as follows:


  * to pay the costs of the closure of the manufacturing operation at the
    Banbridge Site (estimated to be approximately #1.485 million, including
    redundancy payments of #1.323 million); and


  * towards funding the pension contribution of #475,000 payable in June 2003.


Contacts:

Douglas Ware / Robert Jackson     Fii Group plc               01604 593609

Paul Davies                    Collins Stewart Limited        020 7523 8309


27 January 2003


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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