Chief Executive's Statement

Towers Thompson is a leading importer, exporter and distributor of Meat and Poultry with operations in the EU, Australia and New Zealand. We remain focused on serving the leading Retailers, Processors and Food Service Sectors with high quality products from around the world.

Our results for the financial year ended 31st December 2005 showed a slight drop in turnover to £153mln (2004: £158mln) with an operating profit of £1.6mln (2004:2.0mln restated). These results incorporate for the first time accounting standards FRS17 "Retirement Benefits" and FRS21 "Events after the balance sheet date". The comparative results have been restated to reflect these accounting standards as detailed in the financial statements.

Whilst the overall result is satisfactory we now intend to concentrate on improving our margins rather than securing additional volumes and market share.

The Group's Trading division performed at a high level in a difficult year. The main focus of the Group remains firmly on the trading business which are capable of generating above average returns.

The Group's Distribution business performed below expectations in an increasingly competitive environment compounded by substantial increases in the cost of electricity and fuel. This division's progress was severely hampered by the failure of a major customer. Dewhurst Butchers, in March 2006. Fortunately the ultimate loss to the company was relatively small as the debt was 90% indemnified under our Credit policy.

The poor first quarter trade and the loss of the Dewhurst account resulted in a decision being taken to close our Wolverhampton and Lytham St Annes depots. The costs of these closures will be disclosed in our 2006 results as exceptional charges.

Alan Thompson - Chief Executive

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