Provalis plc Announces Interim Results for the Period ended 31st December 2003


FLINTSHIRE, U.K., Feb. 23, 2004 (PRIMEZONE) -- Provalis plc:

Meeting today:

There will be a 10.00 am briefing for analysts at Buchanan Communications, 107 Cheapside London. Running simultaneously to the briefing at 10.00 am there will be a live web cast of the Interim Results briefing. This will be followed by a 11.30 am briefing for the press.

To connect to the web cast facility please go to the following internet address approximately 10 minutes before the start of the briefing: http://radio.buchanan.uk.com.

This presentation will also be available on the Provalis website later today at: www.provalis.com.

Provalis will be holding a lunch at 12.45 pm also at Buchanan Communications. If you would like to attend any of the meetings please contact Charlie Forsyth on 020 7466 5000.



 For Immediate Release
 23rd February 2004

                           Provalis plc

     Interim Results for the period ended 31st December 2003

Provalis plc (LSE:PRO) (Nasdaq:PVLS), the Medical Diagnostics and Pharmaceuticals Group, is pleased to announce its interim results for the period ended 31st December 2003.



 Highlights

 Group

 -  Group sales GBP6.4m (1H2003: GBP7.1m) with gross profit
    GBP3.6m (1H2003: GBP4.0m)
 -  Group operating loss increased to GBP1.8m (1H2003: GBP1.1m)
 -  Dimethaid arbitration ruling in Provalis' favour
 -  Closing cash of GBP3.2m subsequently augmented by the
    scheduled receipt of GBP1.5m from Dr Falk Pharma in January 2004
 -  GBP3.0m, three year, Barclays Bank facility arranged in
    December 2003

 Medical Diagnostics

 -  Sales lower at GBP0.6m (1H2003: GBP1.6m), having been
    significantly affected by sub-distributors reducing stocks of
    Glycosal(R)test cartridges
 -  Placement rate of Glycosal(R)instruments maintained with over
    9,000 instruments now shipped
 -  Development of G5, the fully automated diagnostic platform,
    continues to make excellent progress with the HbA1c professional
    version still on track for US regulatory submission in the second
    quarter of 2004 with launch in the autumn of 2004
 -  R&D team being expanded to support the development of
    additional assays for G5

 Pharmaceuticals

 -  Sales advance to a record level of GBP5.8m (1H2003: GBP5.5m)
 -  Diclomax(R)sales stable at GBP3.2m (1H2003: GBP3.3m; 2H2003:
    GBP3.1m)
 -  Operating profit of GBP1.0m (1H2003: GBP1.3m) reflecting
    increased sales and marketing activity
 -  New products launched onto UK and Ireland markets

Commenting on these results, Provalis Chairman Frank Harding said, "The Pharmaceuticals business has performed in line with our expectations in the first half of the current financial year, with a strong second quarter performance. The first half saw new products launched and innovative marketing initiatives undertaken, and we expect to see further sales growth in the second half.

Although the placement of Glycosal(R)instruments to end users continues to be encouraging, with over 9,000 instruments shipped to date, sales of the test cartridge have been below our expectations. The stock readjustments in the distribution chain that contributed towards this have now filtered through the system, so, aided by a flow of launches in further markets, sales by Medical Diagnostics should now build in the second half of the year."

Phil Gould, CEO of Provalis, added "The continuing placement of Glycosal(R)instruments demonstrates the market need for point of care HbA1c testing, particularly in the USA. G5, our next generation product, will be well placed to fully exploit this market as, in addition to the technical attributes of Glycosal(R), it has the benefit of being fully automated. We remain extremely excited about the progress, and potential, of G5, which we believe will quickly become our leading point of care diagnostics platform. G5 development remains on track, with FDA submission scheduled for the second quarter of this year and product launch still targeted for the autumn."

"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of 1995: Statements in this announcement that relate to future plans, expectations, events, performances and the like are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. Actual results of events could differ materially from those described in the forward-looking statements due to a variety of factors. Such factors include, among others: the viability of the Group's products, which are at various stages of development; the generation of sufficient operating cash flow by the Group's pharmaceutical and medical diagnostic businesses to finance the ongoing development of these businesses as well as the Group's research and development activities; the success of the Group's research and development strategy and activities; uncertainties related to future clinical trial results and the associated regulatory process; the execution and success of collaborative agreements with third parties; availability and level of reimbursement for the Group's products from government health administration authorities or other third-party payors; the rate of net cash utilisation within the Group and, hence, the Group's possible need for additional capital in the short, medium and/or long term; the Group's intellectual property position and the success of patent applications for its products and technologies; the Group's dependence on key personnel; general business and economic conditions; the impact of future laws, regulations and policies; stock market trends in the Group's sector; and other factors beyond the Group's control that may cause the Group's available capital resources to be used more quickly than expected. These and other factors that could affect the Company's future results are more fully described in its filings with the US Securities and Exchange Commission, in particular the latest 20-F filing, copies of which are available from the Company Secretary at the Company's registered address.

Notes to Editors

Provalis plc (LSE:PRO and NASDAQ:PVLS) is a diversified healthcare company with two operating businesses:-



 - Medical Diagnostics - develops and sells to world markets medical
   diagnostic products for chronic disease management. The
   division's principle products are Glycosal(R)and Osteosal(R)in
   the areas of diabetes and osteoporosis respectively.

 - Pharmaceuticals - sells and markets its own, and third party,-
   branded, prescription medicines in the UK and Ireland to GPs and
   hospitals through its own regionally managed sales force. The
   division's principle product is Diclomax(R), a medicine for use in
   the treatment of musculo-skeletal disorders, and it also sells
   products in the areas of gastroenterology, osteoporosis, migraine
   and dermatology.

              Chairman's & Chief Executive's Statement

Group

The Group had mixed success in the first half of the financial year, with our Pharmaceuticals business achieving record half yearly sales, but our Medical Diagnostics business performing below expectations. The Group's unaudited half year sales were GBP6.4m which, as anticipated at the Annual General Meeting, were lower than in the same period last year (1H2003: GBP7.1m). It should be remembered that first half sales last year benefited from the one-off order for Glycosal(R)instruments and test cartridges from Abbott Laboratories (GBP0.4m), but, after taking this into account, the first half of this year still saw lower than anticipated sales of Glycosal(R)test cartridges.

The Group recorded an operating loss of GBP1.8m (1H2003: GBP1.1m) reflecting the costs of establishing the Irish business as well as the effect of the reduced sales by Medical Diagnostics and lower gross profit.

The Group ended the period with GBP3.2m in cash, which was achieved as a result of tight cash management which still allowed targeted spending on key R&D projects, capital spending on equipment for the manufacture of G5 and focussed promotion and market development by our Pharmaceuticals business, particularly in Ireland. In December 2003, the Group entered into a GBP3.0m Barclays Bank facility committed for three years and, since the end of the half year, has received the second GBP1.5m payment due from Dr Falk Pharma and GBP0.24m of the GBP0.95m grant awarded earlier in the year by the Welsh Assembly. It should also be remembered that future cash flows will be enhanced when the monthly payments of GBP380,000 to Pfizer for Diclomax(R)cease in November 2004, and that the final payment of up to GBP2.0m is due from Dr Falk Pharma in January 2005.

The arbitration proceedings brought by the Group against Dimethaid International Inc following the early termination of the Pennsaid distribution agreement were decided in Provalis' favour in December 2003, with Provalis being awarded damages of GBP1.2m, plus interest and costs of a further GBP0.4m. Dimethaid paid Provalis GBP0.2m of this in February 2004, with the balance being payable by instalments until April 2005. The Group has recognised this income of GBP0.2m in the period which has been offset by the GBP0.2m of legal costs incurred in the period.

Medical Diagnostics

As anticipated, Glycosal(R)sales of GBP0.6m in the period were down on the same period last year (1H2003: GBP1.6m). Sales in the first half of last year were boosted by the one-off order from Abbott Laboratories (GBP0.4m), with the remainder of this comparative shortfall being due to lower than anticipated sales of test cartridges. These lower sales resulted from a combination of de-stocking in the lengthy US sub-distributor network, and short delays to our distributors entering new markets, due to factors such as import administration, which has then held up the routine re-supply of test cartridges.

However, our distributors continued to place Glycosal(R)instruments at the target rate, with over 1,300 new units sold by them in the period, and as they have also reported to us that sales are now being made to potentially significant markets such as India, Japan and Spain, we expect sales by the Medical Diagnostics business to build.

We now have over three years' experience of commercialising Glycosal(R)and have supplied over 9,000 instruments and two million test cartridges. Our market analysis indicates that the monthly usage rate of test cartridges among established customers varies from around 40 in diabetology clinics to around 12 in the smaller general practitioner-run clinics.

This experience has given us a much greater understanding of the market for point of care diagnostic products. This is particularly so in the key US market, where the success in placing Glycosal(R)instruments has demonstrated the market demand for a rapid, accurate, technically accredited and low cost point of care test for glycated haemoglobin, particularly in the smaller general practitioner-run clinics. However, market feedback indicates that this demand will best be served by a fully automated test which fits smoothly into physicians' and nurses' work flows.

Glycosal(R)has highlighted the potential of this market but, being a semi-automated system, cannot fully exploit it; market research has indicated that it is this semi-automation that has resulted in the higher than anticipated retirement rate of Glycosal(R), particularly in the more busy clinics. G5 however, whilst sharing all of the technical, cost and time advantages of Glycosal(R), is fully automated and so will be ideally positioned to exploit this valuable market. As such, we have the opportunity with G5 to make a significant penetration of the lucrative and key US point of care market.

Pharmaceuticals

Sales by the Pharmaceuticals business showed good progress in the half year, buoyed by maintained sales of Diclomax(R)our arthritis therapy, launches of new products in the UK and the emergence of our business in Ireland. Sales advanced strongly, particularly in the second quarter, to GBP5.8m for the half year. This is 5% ahead of the first half, and 7% ahead of the second half of the last financial year. The operating profit was GBP1.0m, reduced from the same period last year (1H2003: GBP1.3m) due to the increased costs of supporting new product launches and the building of the business in Ireland.

Diclomax(R)sales were maintained at GBP3.2m (1H2003: GBP3.3m: 2H2003: GBP3.1m), despite the continuing challenge from the new COX2 inhibitors.

The sales business in Ireland made good progress in its first full half year of trading, with sales of GBP0.3m. With Diclomax(R)and other Provalis products now launched in Ireland, and an exploratory collaboration with Pfizer now underway, we expect to see further growth by this business in the second half of the year.

The Pharmaceuticals business is a dynamic and flexible business able to respond quickly to market opportunities. As an example of this, the recent NICE decision to withdraw support for the use of hormone replacement therapy in the treatment of osteoporosis has presented Provalis with the chance to increase the market share of Calceos(R), which is used as an adjunctive therapy for osteoporosis. In order to capitalise on this unexpected opportunity, Provalis has immediately focussed its promotion and marketing efforts over the next marketing cycle on Calceos(R), has reduced the price to allow more competitive tendering against other products, and has contracted in a third party sales-force to intensify the detailing of Calceos(R)to doctors in the UK; we expect to see significant sales growth of this product.

Provalis is committed to growing the range of products sold by the Pharmaceuticals business and we are in late stage discussions to license-in a new generation product with the potential to replace the revenue from the sales of the Dr Falk Pharma range, which will be returned at the end of 2004, within three years.

New product development - G5 now in manufacture and progressing towards US regulatory submission in USA

Development of G5, the fully automated diagnostic platform, has progressed well in the first half of the year and is now essentially complete. Third party manufacturing facilities for both the instrument and test cartridge components are in place, and further expansion of Provalis' cartridge assembly facility in Deeside is underway. Instruments and cartridge components have already been delivered to us for use in the definitive clinical trials to be carried out to support the US regulatory submission due in the second quarter of 2004, and in large scale trials with interested parties. We will be holding a number of research and investor events in the coming months to demonstrate G5 and to highlight its market potential and world leading features.

Third party interest in G5 has been significant, reflecting the exciting product proposition of a fully automated yet low cost, reliable, rapid and versatile doctor's office diagnostic platform. This level of interest reinforces the market opportunities for G5 that are available to Provalis. With assistance from an experienced US based consultancy firm, we are using our understanding of the marketplace and the lessons we have learned from the use of third party distributors on a global basis, to finalise our commercialisation strategy for G5 in order to best realise these opportunities.

As well as carrying out testing for glycated haemoglobin, G5 is able to perform other diagnostic tests. We believe that having a range of tests on the same instrument will be a key factor in G5's future success, and are expanding the R&D team in order to support the development of these further tests. The first additional test is planned for introduction in spring 2005.

We remain extremely excited about the prospects for G5. This product will become our flagship product in the USA following its launch onto the point of care, glycated haemoglobin testing market in the autumn of 2004.

Outlook for the full year

The Pharmaceutical business has performed in line with our expectations in the first half of the current financial year, with a particularly strong second quarter. With a number of new products launched, and new marketing initiatives underway, we expect to grow sales further.

The placement of Glycosal(R)instruments to end users continues to be encouraging, with over 9,000 instruments shipped to date. With the stock readjustment of cartridges having taken place in the sub-distribution chain, and sales now being made to potentially significant new markets, sales by the Medical Diagnostics business should now build.

Although Glycosal(R)currently takes centre stage for our Medical Diagnostics business, we remain very excited about the progress, and potential, of G5. We set ourselves a demanding programme for its secure introduction, but this remains on track with US regulatory submissions and product launch still targeted for the second quarter and the autumn of 2004 respectively, following which we believe G5 will quickly become our flagship point of care diagnostics platform, particularly in the USA.



 Frank Harding                            Philip Gould
 Chairman                                 Chief Executive Officer

 20 February 2004

 Consolidated Profit and Loss Account
 for the six months ended 31 December 2003

                                 6 months       6 months        Year
                                   ended           ended       ended
                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                     Notes         GBP'm           GBP'm       GBP'm
  Turnover
  - Continuing         1              6.4            7.1        14.0
  activities
                                      6.4            7.1        14.0
  Cost of sales                     (2.8)          (3.1)       (6.3)

  Gross profit                        3.6            4.0         7.7

  Selling and                       (1.9)          (1.6)       (3.1)
  distribution
  expenses

  Administration
  expenses

  Amortisation of
  intangible assets    6            (0.7)          (0.7)       (1.5)

  Administration
  costs                2            (1.8)          (1.8)       (3.2)

  Research and
  development costs                  (1.0)          (1.0)       (2.0)

                                     (3.5)          (3.5)       (6.7)
  Operating loss
  - Continuing activities            (1.8)          (0.7)       (1.7)
  - Discontinued
    activities         1                 -          (0.4)       (0.4)
                                     (1.8)          (1.1)       (2.1)
  Loss on termination 1, 2               -          (0.2)       (0.2)
  of discontinued activities

  Profit on variation of
  distribution agreement
  - Continuing
    activities         2                 -              -         3.4

  (Loss) profit on ordinary          (1.8)          (1.3)         1.1
  activities before interest

  Interest receivable                  0.1            0.1         0.2

  (Loss) profit on
  ordinary             1             (1.7)          (1.2)         1.3
  activities before
  taxation

  Taxation             3             (0.3)              -           -

  (Loss) profit for
  the period                         (2.0)          (1.2)         1.3

  (Loss) profit
  per ordinary         4             (0.6)p         (0.4)p        0.4p
  share - basic
  and diluted

 The accompanying notes are an integral part of this Consolidated
 Profit and Loss Account.

 Reconciliation of Movements in Shareholders' Funds
 for the six months ended 31 December 2003

                                 6 months       6 months        Year
                                    ended          ended       ended
                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                                    GBP'm          GBP'm       GBP'm

  Shareholders' funds at             17.1           15.9        15.9
  the start of the period

  (Loss) profit for the             (2.0)          (1.2)         1.3
  period

  Currency translation
  differences on foreign
  currency net
  investments                           -              -       (0.1)

  Shareholders' funds at             15.1           14.7        17.1
  the end of the period

 The accompanying notes are an integral part of this Reconciliation
 of Movements in Shareholders' Funds.


 Consolidated Balance Sheet
 at 31 December 2003

                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                     Notes          GBP'm          GBP'm       GBP'm

  Fixed assets
  Intangible assets    6             11.8           13.3        12.5
  Tangible assets                     1.8            1.6         1.6
                                     13.6           14.9        14.1
  Current assets
  Stocks                              2.4            1.7         1.9
  Debtors                             4.1            2.2         4.0

  Cash at bank and                    3.2            7.3         6.6
  in hand
                                      9.7           11.2        12.5
  Creditors:                        (8.2)          (7.3)       (7.7)
  Amounts falling
  due within one
  year

  Net current                         1.5            3.9         4.8
  assets

  Total assets                       15.1           18.8        18.9
  less current
  liabilities

  Creditors: Amounts                    -          (4.1)       (1.8)
  falling due after more
  than one year

  Net assets           1             15.1           14.7        17.1

  Capital and
  reserves

  Called-up share      7              3.3            3.3         3.3
  capital

  Share premium        7             24.1           24.1        24.1
  account

  Merger reserve       7             96.3           96.3        96.3

  Profit and loss      7          (108.6)        (109.0)     (106.6)
  account

  Equity                             15.1           14.7        17.1
  shareholders'
  funds

 The accompanying notes are an integral part of this Consolidated
 Balance Sheet.

 The interim financial statements were approved by the Board of
 Provalis plc on 20 February 2004.


 Statement of Total Recognised Gains and Losses
 for the six months ended 31 December 2003

                                 6 months       6 months        Year
                                    ended          ended       ended
                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                                    GBP'm          GBP'm       GBP'm

  (Loss) profit for the             (2.0)          (1.2)         1.3
  period

  Currency translation
  differences on foreign
  currency net
  investments                           -              -       (0.1)

  Total recognised gains            (2.0)          (1.2)         1.2
  and losses relating to
  the period


 Consolidated Cash Flow Statement
 for the six months ended 31 December 2003


                                  6 months     6 months       Year
                                     ended        ended      ended
                               31 December  31 December    30 June
                                      2003         2002       2003
                               (Unaudited)  (Unaudited)  (Audited)
                    Notes            GBP'm        GBP'm      GBP'm

  Operating loss                     (1.8)        (1.1)      (2.1)

  Depreciation of                      0.3          0.3        0.5
  tangible fixed
  assets

  Amortisation of                      0.7          0.7        1.5
  intangible fixed
  assets

  (Increase) in                      (0.5)        (0.3)      (0.5)
  stocks

  Increase                             0.6        (0.1)        0.2
  (decrease) in
  creditors

  (Increase) in                      (0.1)        (0.2)      (0.3)
  debtors

  Net cash outflow                   (0.8)        (0.7)      (0.7)
  from operating
  activities
  Cash flow
  statement

  Net cash outflow                   (0.8)        (0.7)      (0.7)
  from operating
  activities

  Returns on
  investments and
  servicing of
  finance

  Interest received                    0.1          0.1        0.2

  Net cash inflow
  from returns on
  investments and
  servicing of                         0.1          0.1        0.2
  finance

  Taxation
  R&D tax credit                       0.1          0.4        0.6
  received

  Net cash inflow                      0.1          0.4        0.6
  from taxation

  Capital
  expenditure and
  financial
  investment

  Purchase of                        (2.3)        (2.3)      (4.6)
  intangible fixed
  assets

  Purchase of                        (0.5)        (0.3)      (0.5)
  tangible fixed
  assets

  Proceeds on                            -            -        1.5
  variation of
  distribution
  agreement

  Net cash outflow
  from capital
  expenditure and
  financial                          (2.8)        (2.6)      (3.6)
  investment

  Acquisitions and
  disposals

  Termination of                         -        (0.2)      (0.2)
  discontinued
  businesses

  Net cash outflow                       -        (0.2)      (0.2)
  from
  acquisitions and
  disposals

  Net cash outflow
  before
  management of
  liquid
  resources and                       (3.4)       (3.0)      (3.7)
  financing

  Management of
  liquid resources

  Decrease in                          4.8          2.2        3.5
  short term
  deposits

  Net cash inflow                      4.8          2.2        3.5
  from management
  of liquid
  resources

  Financing

  Unsecured loan                         -        (0.1)      (0.1)
  repayments

  Net cash outflow                       -        (0.1)      (0.1)
  from financing

  Increase             8               1.4        (0.9)      (0.3)
  (decrease) in
  cash

 The accompanying notes are an integral part of this Consolidated
 Cash Flow Statement.

 Notes to Accounts
 for the six months ended 31 December 2003

 1.  Segmental analysis by class of business

 The analysis by class of business of the Group's turnover, profit
 (loss) on ordinary activities before taxation and net assets is set
 out below:

                                 6 months       6 months        Year
                                    ended          ended       ended
                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                                    GBP'm          GBP'm       GBP'm
  Turnover
  Continuing activities
  - Medical Diagnostics               0.6            1.6         3.1
  - Pharmaceuticals                   5.8            5.5        10.9
                                      6.4            7.1        14.0
  Profit (loss) on
  ordinary activities
  before taxation
  Continuing activities
  operating profit (loss)
  - Medical Diagnostics             (1.7)          (1.0)       (2.3)
  - Pharmaceuticals                   1.0            1.3         2.5
  - Common costs                    (1.1)          (1.0)       (1.9)
  Net interest receivable             0.1            0.1         0.2
  Profit on variation of                -              -         3.4
  distribution agreement
                                    (1.7)          (0.6)         1.9
  Discontinued activities*              -          (0.4)       (0.4)
  operating (loss)
  Loss on termination of                -          (0.2)       (0.2)
  discontinued activities*
                                    (1.7)          (1.2)         1.3

 *Discontinued activities relate to certain programmes in the
  Vaccines Research Business of Therapeutics R&D

                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                                   GBP'm           GBP'm       GBP'm
  Net assets
  - Medical Diagnostics               0.6            0.4         0.5
  - Pharmaceuticals                   9.7            5.1         7.2
                                     10.3            5.5         7.7
  Unallocated common                  4.8            9.2         9.4
  assets including cash
  and deposits
  Net assets                         15.1           14.7        17.1


 2.  Exceptional items

 In December 2003 the Group announced that the arbitration it
 commenced against Dimethaid International Inc. following
 Dimethaid's termination of the Pennsaid(R)distribution agreement
 had been decided in Provalis' favour, and that as a result Provalis
 had been awarded the compensatory sum of GBP1.2m, together with
 costs and interest of GBP0.4m. Subsequent to this announcement the
 Group has negotiated a payment schedule with Dimethaid resulting in
 an initial receipt of GBP0.2m in February 2004 and a series of
 monthly payments ending in April 2005. Due to the continued
 uncertainty in the receipt of these monies the award will only be
 recognised in the Group Accounts to the extent that its recovery is
 considered to be sufficiently certain, and therefore GBP0.2m has
 been recognised in the period. This offsets the GBP0.2m of costs
 incurred during this period in connection with this arbitration.

 The loss on discontinued activities of GBP0.2m in the six months
 ended December 2002 and the year ended 30 June 2003 relate to the
 redundancy and closure costs of Therapeutic R&D's Vaccine
 programmes.

 The profit on variation of distribution agreement of GBP3.4m in the
 year ended June 2003 relates to profit recognised on payments
 arising from the variation of the distribution agreement with Dr
 Falk Pharma. GBP1.5m was received in both February 2003 and January
 2004 and a further GBP0.4m is due to be received in January 2005.
 Up to a further GBP1.6m may be received in January 2005 contingent
 on the levels of sales of Falk products in calendar year 2004.

 3.  Taxation

 In December 2003 the Inland Revenue rejected a claim for R&D tax
 credits in the Medical Diagnostics business for the year ended 30
 June 2002. The Group is strongly contesting the Inland Revenue's
 decision. Cumulatively, the Group had recognised GBP0.4m in respect
 of the R&D tax credits for the Medical Diagnostics business.
 However if the Group's appeals are unsuccessful, GBP0.3m of cash
 received to date in respect of tax credits may have to be repaid,
 and a provision for this has been included in the tax charge for
 the period.

 The Inland Revenue accepted the claim for the R&D tax credits for
 the Therapeutics business at an amount of GBP0.1m in excess of the
 credits previously recognised in the accounts.

 4.  Loss per share

 The loss per share is based on the loss for the period of GBP2.0m
 (6 months ended 31 December 2002: loss GBP1.2m; full year 2003:
 profit GBP1.3m) and the weighted average number of ordinary shares
 in issue during the period of 330,603,722 (6 months ended 31
 December 2002: 330,360,181; full year 2003: 330,360,181).

 5.  Earnings before interest, taxation, depreciation and
     amortisation (EBITDA)

                                 6 months       6 months        Year
                                    ended          ended       ended
                              31 December    31 December     30 June
                                     2003           2002        2003
                              (Unaudited)    (Unaudited)   (Audited)
                                    GBP'm          GBP'm       GBP'm

  (Loss) profit on                  (1.7)          (1.2)         1.3
  ordinary activities
  before taxation

  Interest                          (0.1)          (0.1)       (0.2)

  Amortisation                        0.7            0.7         1.5

  Depreciation                        0.3            0.3         0.5

  EBITDA                            (0.8)          (0.3)         3.1

  Profit on variation of                -              -       (3.4)
  distribution agreement

  EBITDA before                     (0.8)          (0.3)       (0.3)
  exceptional items

  Operating loss from                   -            0.4         0.4
  discontinued activities*

  Loss on termination of                -            0.2         0.2
  discontinued activities*

  EBITDA before
  exceptional items and
  excluding
  discontinued activities           (0.8)            0.3         0.3

 *Discontinued activities relate to certain programmes in the
  Vaccines Research Business of Therapeutics R&D

 6.  Intangible assets

 The intangible assets represent the total cost of acquisition of
 Diclomax(R)from Parke Davis, a subsidiary of Pfizer Inc., on 3
 December 2001, for GBP14.9m. The asset is being amortised over a
 period of ten years and the Consolidated Profit and Loss Account
 for the six months ended 31 December 2003 contains amortisation of
 GBP0.7m (six months ended 31 December 2002: GBP0.7m).

 The cash outflow associated with the acquisition of Diclomax(R)was
 GBP2.3m in the six months (six months ended 31 December 2002:
 GBP2.3m). The outstanding GBP4.1m of acquisition cost is held
 within creditors and will be payable in weekly instalments until
 November 2004. As security for the payment of the deferred
 consideration Parke Davis has a fixed and floating charge over the
 assets (excluding book debts) of Provalis Healthcare Limited. The
 security offered by Provalis plc lapsed on 3 December 2002 but
 Provalis plc will continue to guarantee the debt of Provalis
 Healthcare Limited to Parke Davis Limited.

 7.  Movements in equity shareholders' funds


                    Called-up     Share               Profit
                        share   premium    Merger   and loss
                      capital   account   reserve    account   Total
                        GBP'm     GBP'm     GBP'm      GBP'm   GBP'm

  Balance at 1            3.3      24.1      96.3    (106.6)    17.1
  July 2003

  Loss for the              -         -         -      (2.0)   (2.0)
  period

  Balance at 31          3.3      24.1      96.3    (108.6)    15.1
  December 2003


 8.  Cash flow information

     (a) Reconciliation of net cash flow to movements in net funds

                                6 months        6 months        Year
                                   ended           ended       ended
                             31 December     31 December     30 June
                                    2003            2002        2003
                             (Unaudited)     (Unaudited)   (Audited)
                                   GBP'm           GBP'm       GBP'm

  Increase (decrease) in              1.4          (0.9)       (0.3)
  cash in the period

  Repayments of unsecured               -            0.1         0.1
  loan

  (Decrease) in short               (4.8)          (2.2)       (3.5)
  term deposits

  Movement in net funds             (3.4)          (3.0)       (3.7)
  in the period

  Net funds at start of               6.6           10.3        10.3
  period

  Net funds at end of                 3.2            7.3         6.6
  period


  (b)  Analysis of changes in net funds


                             As at                      As at
                            1 July        Cash    31 December
                              2003        flow           2003
                             GBP'm       GBP'm          GBP'm

 Cash                          1.6         1.4            3.0
 Short term deposits           5.0       (4.8)            0.2
 Net funds                     6.6       (3.4)            3.2

 Short term deposits have a maturity of more than 24 hours but less
 than 12 months. They are repayable on demand subject, in some
 instances, to the repayment of certain expenses. Cash includes cash
 in hand and deposits repayable on demand.

 9.  Nature of financial information

 The interim figures for the six months ended 31 December 2003 have
 been independently reviewed by the auditors, but they, and those
 for the six months ended 31 December 2002, are unaudited.

 The financial information set out herein does not comprise full
 accounts within the meaning of section 240 of the Companies Act
 1985. The comparative figures for the year ended 30 June 2003 are
 extracted from the audited accounts for that year, which have been
 filed with the Registrar of Companies. The auditors' report on
 those audited accounts was unqualified and did not contain any
 statement under sections 237(2) or (3) of the Companies Act 1985.

 The Interim Report has been prepared on the basis of the accounting
 policies set out in the most recent set of annual financial
 statements.

 Independent Review Report
 by KPMG Audit Plc to Provalis Plc

 Introduction

 We have been engaged by the Company to review the financial
 information set out on pages 7 to 12 and we have read the other
 information contained in the Interim Report and considered whether
 it contains any apparent misstatements or material inconsistencies
 with the financial information.

 This report is made solely to the Company in accordance with the
 terms of our engagement to assist the Company in meeting the
 requirements of the Listing Rules of the Financial Services
 Authority. Our review has been undertaken so that we might state to
 the Company those matters we are required to state to it in this
 report and for no other purpose. To the fullest extent permitted by
 law, we do not accept or assume responsibility to anyone other than
 the Company for our review work, for this report, or for the
 conclusions we have reached.

 Directors' responsibilities

 The Interim Report, including the financial information contained
 therein, is the responsibility of, and has been approved by, the
 directors. The directors are responsible for preparing the Interim
 Report in accordance with the Listing Rules which require that the
 accounting policies and presentation applied to the interim figures
 should be consistent with those applied in preparing the preceding
 annual accounts except where they are to be changed in the next
 annual accounts in which case any changes, and the reasons for
 them, are to be disclosed.

 Review work performed

 We conducted our review in accordance with guidance contained in
 Bulletin 1999/4: Review of interim financial information issued by
 the Auditing Practices Board for use in the United Kingdom. A
 review consists principally of making enquiries of Group management
 and applying analytical procedures to the financial information and
 underlying financial data and, based thereon, assessing whether the
 accounting policies and presentation have been consistently applied
 unless otherwise disclosed. A review is substantially less in scope
 than an audit performed in accordance with Auditing Standards and
 therefore provides a lower level of assurance than an audit.
 Accordingly we do not express an audit opinion on the financial
 information.

 Review conclusion

 On the basis of our review we are not aware of any material
 modifications that should be made to the financial information as
 presented for the six months ended 31 December 2003.

 KPMG Audit Plc
 Chartered Accountants
 8 Princes Parade
 Liverpool
 L3 1QH
 20 February 2004

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


            

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