NEW BUSINESS DRIVES EXEL’s FIRST-HALF EARNINGS INCREASE

NEW BUSINESS DRIVES EXELÆS FIRST-HALF EARNINGS INCREASE    Exel plc, the contract logistics and freight management services provider, reported strong results for the first half of 2002, crediting contract gains offset weak performance in certain markets.
   Net income increased 15.6 percent to '57.7 million ($90.3 million) for the first six months of 2002. Turnover from continuing operations was '2.24 billion ($3.51 billion), up from '2.18 billion in the first half of 2001. Operating profit increased 4 percent to '107.5 million ($168.2 million).
'    Exel said that during the first half, the group secured new business with an annualized value of '350 million ($548 million), as well as renewal of existing contracts. Net of contract losses, Exel said new business should add more than '220 million ($344 million) of turnover in future years.
   About half of Exel's new business gains came in contract logistics, principally in the consumer, retail and health care sectors. However, the company said it also continued to develop its freight management business with gains in consumer, retail and technology, due to Exel's position in the Asia Pacific.
   Contract logistics turnover increased 4 percent to '1.13 billion ($1.77 billion), while operating profit decreased 10 percent    Operating profit was impacted by nearly '4 million ($6 million) in incremental non-recoverable insurance costs. The growth in consumer, retail and health-care sectors offset weak volume trends in Exel's technology and automotive sectors, particularly in Europe and the Americas.
   Exel's freight management turnover rose 2 percent to '$1.06 billion ($1.66 billion), as operating profit increased 37 percent to '33.4 million ($52.3 million). In air freight, strong growth more than offset reduced margins toward the end of the period, while Exel's sea-freight revenues were up 6 percent, reflecting volume growth and the impact of the acquisition of U.S. Consolidators.
   Exel said that, despite the weaker dollar, the group expects to achieve market expectations for 2002.