Disposal

Reece PLC 8 December 2000 DISPOSAL OF APP DIVISION The Company is pleased to announce that its wholly owned subsidiary, Service (Engineers) PLC ('Service (Engineers)') has today entered into a conditional sale and purchase agreement for the disposal of the APP Division to Cavalier Technical Services Limited. Because of the relative size of the disposal the agreement is conditional, inter alia, upon the approval of ordinary shareholders. A circular convening the necessary Extraordinary General Meeting will be sent to shareholders in due course. The consideration payable under the agreement amounts to £352,000 of which £282,000 is payable in cash on completion with the balance of £70,000 (subject to subsequent adjustment by reference to the net asset value on completion as detailed below) payable in cash three months after the completion date. Completion is expected to occur in January 2001. The consideration is subject to adjustment depending on the net asset value on completion. To the extent that the value of the net assets being disposed of less the sum of £200,000 differs from the sum of £552,000 the consideration will be adjusted by an amount equal to the difference. As a result of this, the transaction is expected to result in a loss on disposal of some £200,000. The APP division is a manufacturer of exterior grade plastic skinned door infill panels and ancillary products, comprising foam and non-foam filled bow window canopies and decorative glass. The division is well established and serves both the UK and French window and door industry with a substantial portion of sales exported. Principal manufacturing techniques include vacuum thermoforming, laminating and customising products to individual order. The APP Division operates from premises of 2,800 square metres located in Kent and currently employs 32 people. During the year ended 31 December 1999 the APP Division made operating losses of £21,000 (after management charges and exceptional administrative expenses of £84,000) on turnover of £2.8 million. At that date it had net assets of £551,000. In the half year to 30 June 2000, the division reported an unaudited operating profit of £64,000 on turnover of £1.5 million. The net sale proceeds will be applied in reducing the Group's indebtedness.