Norish - Cold Storage Specialists

Executive Chairman's Statement

I am pleased to present the Annual Report of Norish Plc for 2005.

Earlier in the year we availed of the fast track admission procedures and moved from the Official List of the United Kingdom Listing Authority to the Alternative Investment Market of the London Stock Exchange ("AIM"), and delisted from the Official List of the Irish Stock Exchange. The AIM market is better suited to a company of our size and gave us the ability to complete necessary transactions in a time efficient and cost effective manner.

As part of the Group´s strategy in exiting the coffee and cocoa commodity storage market we were able to dispose of our Belvedere, Kent premises, in April 2005 for a cash consideration of £2.9m, which gave rise to a profit on disposal of £1.0m. We have now taken the decision to exit the non-food storage sector and have successfully agreed to sub-let our leased facility at Felixstowe. The operating loss incurred in exiting these activities amounted to £0.4m.

In August 2005 we exercised our option to acquire the land and property of the ambient food storage facility at York, from RSH Properties for a total consideration of £2.0m. The company had leased this facility for a period of five years since July 2000. The property covers an area of approximately 10 acres, within six miles from the city of York.

Just before the year end we acquired the land and property at Wrexham, for £5.8m. This is a cold storage facility on a freehold site of approximately 14 acres, which has been leased by the company since 1994.

The company incurred an exceptional reorganisation cost of £0.2m in restructuring the business to meet its current needs.

Results

The Group announces pre-tax profits of £1.0m (after net exceptional gains of £0.8m and operating losses from discontinued operations of £0.4m). This compares with pre-tax profits of £0.3m for last year. Turnover from continuing operations increased by £0.8m to £9.5m. The total profit per share is 11.5p compared with 2.7p last year and profit per share from continuing operations is 3.3p compared to 2.5p for last year. Net debt at the year-end increased to £7.2m, from £2.0m. The increase in debt arose mainly as a result of the purchase of the York and Wrexham properties.

Operations

Our cold stores performed well last year in a market still suffering from overcapacity and increased energy costs. We started the year better than expected which helped to contribute to the improved performance. Our stores finished the year with high occupancy levels.

The Bury St Edmunds site was operating at reduced capacity for 3 months, while essential maintenance work was undertaken. This resulted in the contribution from this site falling short on expectations.

We are encouraged by improved results at Wrexham, West Midlands and Braintree cold stores.

Following the exit from commodity and non-food business we no longer operate from Belvedere and Felixstowe. We are now concentrating on the storage of temperature controlled and ambient food products.

Dividend

At the interim stage we declared a dividend of €1.25c per share. The board recommend the payment of a final dividend of €1.25c per share. Subject to shareholder approval this dividend will be paid on 26 May 2006 to shareholders on the register on 28 April 2006. This will bring the total dividend (paid and proposed) for the year to €2.5c per share which compares with €2.0c per share in respect of last year´s results. This represents an increase of 25%. Under new accounting standards proposed dividends are not provided in the year end results.

Personnel

The Board again would like to thank the staff for their contribution in a difficult trading environment in 2005.

Trading Outlook

We have started the year with high occupancy levels. However, as is being experienced throughout industry, we are experiencing high energy costs and are struggling to pass these increases onto customers. However, we are continuously introducing initiatives to reduce our consumption.

The group will continue to operate in the areas of both temperature controlled and ambient food storage.

Ted O´Neill
Executive Chairman
2 March 2006

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