IMMEDIATE RELEASE

Dowding & Mills PLC
Sale of Continental European Businesses

Dowding & Mills plc (the Group) announces the disposal of its three electrical operations in Holland and Luxembourg (the Continental European businesses) to a new company, AGW Benelux Holdings BV (AGW). The management team of Dowding & Mills' Continental European businesses, led by Regional Director Franois Garcia, has acquired a 75% interest in AGW for 1 Euro, with the Group retaining a 25% interest.

In the fourteen-month period ended 31st August 2003, the Continental European businesses incurred annualised losses before tax and exceptional items of 0.7m on sales of 7.2m, and at the year end net liabilities were 1.0m. In the current financial year the Continental European businesses have incurred a loss of approximately 0.2m on sales of 2.2m.

As part of the transaction AGW assumes responsibility for the inter company loans of 2.1m. Interest is payable on the loans every six months, the capital being repayable to the Group, in full, within ten years. The Group retains ownership of two freehold properties currently occupied by the Continental European businesses. These properties have a current book value of 0.3m and an estimated market value of 1.0m, and AGW have entered a lease at a rent of 0.1m per annum commencing after a rent-free period of up to 24 months.

The profit on disposal is estimated to be approximately 0.3m. However given the recent trading history of these businesses we consider it prudent to provide in full against the Group loans of 2.1m being assumed by AGW, resulting in an exceptional loss estimated at 1.8m. UK accounting standards require the re-instatement of goodwill previously written off to reserves of 1.5m. The goodwill will be written off through exceptional items but will have no effect on net assets.

The disposal to AGW significantly reduces the Group's risk of incurring any further losses from the Continental European businesses, as well as providing the local management with the incentive to improve the performance, and for the Group to participate in any future profits.

The completion of this transaction now enables the Group's management to increase its focus on improving the performance of its electrical and mechanical businesses, in respect of which I am pleased to report we are maintaining the progress, in terms of improvement in sales and realising the benefits from the re-organisation, reported upon in November.