Proposed £0.85m Acquisition by Joint Venture

Carr's Milling Industries PLC 14 April 2000 CARR'S MILLING INDUSTRIES plc PROPOSED £0.85 MILLION ACQUISITION BY ITS JOINT VENTURE COMPANY Carr's, the agriculture, food and engineering group, announces that Carr's Billington Agriculture Limited ('CBA'), its 50:50 joint venture with Edward Billington & Son Limited ('EBS'), has today made a recommended offer to purchase the whole of the issued share capital of AF plc, an unlisted public company, for a cash consideration of £850,000, to be funded out of existing bank facilities. In addition, accepting AF shareholders may become entitled to further consideration for those shares as a result of any compensation received by AF from the Government, in connection with a claim sought by British pig producers, during the three years following the date upon which the Offer becomes or is declared wholly unconditional, in respect of pigs owned by AF prior to that date. AF operates two compound animal feed mills and six retail stores. The feed mills are at Penrith in Cumbria and Preston in Lancashire. The retail stores are located at Gisburn, Pilling and Preston in Lancashire, Hawes in North Yorkshire, Leek in Staffordshire, and Kirkby Stephen in Cumbria. AF also markets substantial tonnages of fertiliser, straight feed materials and traded products in the North of England and Southern Scotland. CBA was formed in June 1998 to manufacture animal feed for Carr's and EBS's respective agricultural subsidiaries - Carrs Agriculture Limited and Billington Agriculture Limited. It is envisaged, following the acceptance of the offer by AF shareholders, that AF will merge its activities with CBA. CBA will incur one-off exceptional reorganisation costs which will have an adverse impact on Carr's results for the year to August 2000, but the acquisition is expected to be earnings enhancing in the following year. AF has today reported a loss excluding exceptional items of £0.3 million (1998: £0.4 million) on a turnover from continuing operations of £49.1 million (1998 £70.3 million). Exceptional items arising from the losses on disposal of fixed assets and the elimination on goodwill amount to £3.4 million (1998 exceptional losses: £3.4 million). At 30 November 1999, equity shareholders' funds were £6.6 million (1998: £10.6 million). The formation of CBA has enabled the partners to reduce the manufacturing cost base by the closure of an inefficient mill at Silloth, West Cumbria and the investment in CBA's two mills at Stone in Staffordshire and Carlisle in Cumbria. The integration of the operations has been successfully achieved and benefits have been gained through the removal of duplicated costs and greater economies of scale. Chris Holmes, Carr's Chief Executive, stated 'CBA intends that the business of AF will be integrated into CBA to form an enlarged agricultural business able to compete more effectively in the market place. CBA will strive to give the present AF customers the highest standards of service and product quality through the AF sales force. In order to meet the exacting requirements of the market place and reduce costs, it will be necessary to review the activities of the businesses of AF and CBA to ensure that increased efficiencies are achieved.' Enquiries: Carr's Milling Industries PLC 01228-528291 Chris Holmes (Chief Executive) Bankside Consultants Limited 0207 220 7477 Charles Ponsonby