I am pleased to report that we have made a very good start to the year with all of our Divisions trading ahead, or in line with their respective budgets for the first quarter. Results for the period are significantly ahead of the first quarter last year.

In our UK Healthcare business both the GP and hospital systems operations are performing well from a platform of strong order books. The budget for the newly acquired Laufenberg Group reflects an encouraging improvement in operating margins over those achieved in 2000. Some changes are currently being implemented, consistent with this budget, but there are no plans currently for any significant restructuring of the business. Whilst the first quarter is seasonally the weakest trading period for the Laufenberg Group, current order intake and sales prospects give us confidence that the budget is achievable.

Our Retail business had a good first quarter with a particularly strong contribution from the Food Retail operation.

As a result of the rapid growth of our Health and Retail Divisions, the Services Division’s activities have increasingly become orientated towards the provision of hardware maintenance to the customers of our two vertical operations. Reflecting this trend and to maximise operational efficiency we have decided to restructure our hardware maintenance activities by amalgamating them within our Health and Retail Divisions. Health and Retail are now directly responsible for the satisfaction of all the service requirements of their respective clients. We believe this will improve customer service and make more efficient use of our field engineers by having them work on both installation and maintenance activities. There will be a modest exceptional restructuring charge associated with this move, which is more than justified by the rapid pay back.

The encouraging start to the year’s trading, our strong order books and sales pipelines, together with the savings that will accrue from the restructuring of our hardware maintenance activities, give us confidence that 2001 will be another successful year for Torex.

On behalf of the Board I would like to thank shareholders for your continued support.