ANNUAL REPORT 2005 Metalrax Group PLC Engineering specialists
BUSINESS AT A GLANCE
Highlights 1
Chairman’s statement 2
Chief Executive’s review 6
Financial review 12
Corporate and social responsibility 13
Directors and advisers 14
Report of the directors 16
Corporate governance 18
Directors’ remuneration report 20
Consolidated income statement 22
Consolidated statement of recognised 
income and expenses 23
Consolidated balance sheet 24
Parent company balance sheet 25
Consolidated cash flow statement 26
Accounting policies 27
Notes to the accounts 29
Report of the independent auditors 42
Five year record 43
Financial calendar 43
Notice of meeting 44
Group companies 45
CONTENTS
METALRAX GROUP PLC
Metalrax is a broad-based manufacturing and marketing group
of businesses, exporting to over 50 countries.
Precision manufacturing activities provide supplies to automotive,
telecommunications, off-road vehicles and bar display markets.
Engineering and support services provide surface coated metals,
architectural steelwork, mezzanine flooring and storage equipment.
Housewares operations produce and market the majority of
bakeware sold in Great Britain together with associated ranges of
kitchen tools.
Exports up
from 14% to 27%
2004
2005
14%
27% 1 Highlights Annual Report 2005
HIGHLIGHTS
Results in brief
2005 2004
£’000 £’000
Revenue 100,255 95,167
Group profit before taxation 7,408 11,406
Group profit from 
continuing operations 5,231 7,964
Earnings per 5p ordinary 
share 3.68p 7.61p
Dividends per 5p ordinary 
share 5.40p 5.40p
OPERATING PROFIT 
£7.4m
REVENUES
£100.3m 2 Metalrax Group PLC Engineering specialists
In December 2005, the group issued a trading update
which indicated that, as with other businesses operating
in similar sectors, we had been experiencing a tough and
competitive trading and economic environment
particularly from within our housewares activities where
we witnessed an adverse impact on volume and margin.
Subsequently, our preliminary results for the year ended
31 December 2005 disclosed that performance reflected
analysts’ revised forecasts, with revenue increasing to £100.3
million, producing a profit before taxation of  £7.4 million.
During 2005, the engineering and storage products
division performed in line with expectations, but as
reported a downturn in consumer spending and the
consequent decline in retail footfall, impacted directly on
the housewares division. As a result, the business did not
see the level of sales upturn normally experienced in the
last quarter of the financial year and, as shareholders will
be aware, the operational gearing of the housewares
division is such that lost sales rapidly diminish profit
margins and bottom line results.
Across the group as a whole the downturn in United
Kingdom revenue was more than compensated by
substantial increases achieved in Europe, North America
and other international markets.
The Year in Review
The implementation of the strategic review conducted at
the end of 2004, coincided with what proved to be an
extremely disappointing year for a number of reasons
including having to contend with the demise of MG Rover
and, whilst the debt write off had been successfully
mitigated in time, the subsequent loss of turnover was
not quickly replaced within the engineering and storage
products division. Despite these events, the group’s
planned reorganisation continued throughout the year as
we strengthened the foundations on which to build the
new group structure.
As part of the housewares division reorganisation, the
second quarter of the year saw the termination of
manufacture of occasional furniture and accessories and
the business transformed into a design and sourcing
operation, distributing and selling different ranges of
products to both the retail sector and direct via the
internet. In the third quarter of the year, we completed
our planned exit from manufacture in the volatile plastic
injection moulded products market with the sale of the
business. In the final quarter of the year the bathroom
furniture business was closed.
Our two pressure die-casting foundry operations were
successfully consolidated onto one site during the third
quarter with expected benefits flowing through into
2006. The coil coating business acquired at the beginning
of the year has performed ahead of expectations and the
anti-vandal cabin manufacturing operation that we
purchased at the end of the year has made a promising
start with the group.
We have recently announced the amalgamation of two of
our larger automotive component manufacturing facilities
that will bring significant economies of scale in the
second half of 2006. Similarly, we have commenced the
consolidation of our bearings company onto our site at
Bordesley Green where we shall significantly improve the
use of group assets. The coil coating operations have also
now been brought together under a common management
team and we expect to realise further benefits in due course.
Strategic Planning
The group strategic plan is regularly updated and was
reviewed by the board in January. The next phase,
implemented at the beginning of 2006, includes dividing
the group into three reporting segments:
 the Automotive and Engineering Division,
 the Engineering Support Services Division, and
 the Housewares Division.
This initiative will enable the group to continue its planned
programme of consolidation of its core activities 
and selective acquisitions, under a more effective
management structure.
2
CHAIRMAN’S STATEMENT
Introduction
Picture: Ultra sonic component cleaning at Bacol Fine Blanking Chairman’s Statement Annual Report 2005 3 4 Metalrax Group PLC Engineering specialists Annual Report 2005 5 Chairman’s Statement Annual Report 2005
CHAIRMAN’S STATEMENT
As indicated in our December trading statement, the
board is recommending the payment of an unchanged
final dividend of 3.75 pence per share to be made on 
26th May 2006 to shareholders on the register of
members at the close of business on 28th April 2006,
subject to formal approval at the Annual General Meeting
on Tuesday 23rd May 2006. This, together with the
interim dividend of 1.65 pence, makes a total dividend for
the year of 5.4 pence per share.
Our People
In January 2006, we announced the appointment of Andy
Pearson as a Non-Executive Director of the group. Reg
Fort will retire from the board at the end of the 2007
Annual General Meeting. During the course of this
financial year, it is proposed that Andy Pearson will be
appointed Chairman of the Audit Committee.
We announced on 14th March 2006 the appointment of
Bill Kelly as Group Finance Director and company secretary.
Bill brings with him a wealth of financial and commercial
acumen, as well as extensive experience of devising and
implementing successful change strategies. 
We also announced on 14th March 2006 that Jeff
Edwards, Garry Gresham, Hedley Brook-Carter and Darren
Farrimond were relinquishing their responsibilities as main
board Directors to enable them to concentrate their
efforts on ensuring the more effective performance of our
new operational board which we established during the
course of last year. This change is no reflection on their
continuing substantial contribution, but follows a careful
review of the structure required to drive the strategic plan
referred to above, with the divisional Directors being freed
to focus on its implementation.
On behalf of the board, I wish to thank all of our people
for their valued hard work, support and commitment to
the group throughout the year.
Prospects
The increased critical mass of our businesses operating
under this revised divisional structure will enable them to
provide an even greater level of service to customers
around the world.
Current trading continues to meet our expectations across
all divisions and is developing in line with our plans.
Acquisition
On 27th March 2006 we announced the acquisition of
Advanced Handling Limited together with its Romanian
subsidiary, Hidrosib S.A., for a cash consideration of up to
£2.25 million. Further details are set out in the Chief
Executive’s Review.
J. R. A. CRABTREE
Chairman
10th April 2006
Dividend
Picture: Pipe production and bending at Prescott Powell CHIEF EXECUTIVE’S REVIEW
6 Metalrax Group PLC Engineering specialists 6 Metalrax Group PLC Engineering specialists
Engineering and Storage Products comprises: 
Advanced Handling Ltd
Providing integrated 
handling solutions
Bacol Fine Blanking Ltd.
Fine blanking to 630 tonnes capacity
Bacol Industries Ltd.
Pressw.ork to 700 tonnes capacity
Deep drawing and ironing
B.S.C. (Diecasting) Ltd.
Zinc and aluminium pressure diecasting
Commercial Bearings Ltd.
Industrial bearings
Cooper Coated Coil Ltd.
Surface coated metals
Down and Francis Ltd.
Structural engineering 
and steel fabrications
Fabricote Ltd.
Surface coated metals
Hidrosib S.A.
Engineering and manufacturing facilities
Kenham Tools & Pressings Ltd.
Medium and large pressings 
and assemblies
Metalrax Group is a broad-based manufacturing and
marketing group of companies, exporting to over 50
countries worldwide. From 2006 it will operate as three
distinct divisions.
 Automotive and engineering concentrates on
precision manufacturing activities providing supplies
to automotive, telecommunications, off-road vehicles,
enclosure hardware and brewery bar display markets,
operating in niche areas with continuous process
innovation.
 Engineering support services provide surface coated
metals, architectural, primary and secondary steelwork,
mezzanine flooring and storage equipment to an
increasing number of clients and also distribute tools,
fasteners and janitorial products.
 Housewares operations produce and market the
majority of bakeware sold in Great Britain, together with
associated ranges of kitchen tools to both retail and
commercial markets. Microwave cookware and wine
racks complement these products alongside wooden
and plastic housewares. Creatively designed and
sourced products for almost every room in the house
feature strongly in ranges distributed internationally.
Review of 2005
2005 was the start of a time of change for the group.
Following a strategic review at the end of 2004, we
embarked on what is probably one of the group’s most
radical reforms in its history providing opportunities for
improved asset utilisation, personal growth amongst our
management teams and the release of certain of our sites
as we focus on our core strengths and technologies.
As the plan progressed, several events outside our control
impacted on the reorganisation and our trading results for
the year. The most significant of these was the failure of
MG Rover that caused a modest bad debt, but more
significantly resulted in the sudden loss of over £2 million
of business. Whilst costs were reduced as quickly as
possible, the full extent of business lost could not be
ascertained until we were into the second half of the year.
The other significant event was the now well-reported
slump in the retail sector, as consumers failed to shop in
the final quarter of the year, our traditional peak period
for the housewares division.
Consequently, earnings in a year that would have seen
some impact from the cost of the planned reorganisation
were below our expectations. Nevertheless, that plan is in
place and proceeding to programme and, following its
review at the end of 2005, was confirmed by the board
with further changes planned for 2006.
In January 2005 we welcomed Cooper Coated Coil into
the group and its performance in its first year with us
exceeded our expectations. Complementing the business
and facilities within Fabricote, the group now holds a
leading position in the global high temperature coating
market. Stackright Building Systems joined the group at
the end of the year and has integrated well. Forming part
of our strategic plan to expand activities in the
engineering support services area, Stackright brings a
strong customer base and a reputation for the supply of
quality anti-vandal cabins in volume to many different
sectors and will benefit significantly from the run-up to
the Olympic Games 2012. Also active in the support
services sector, Premier Stairways, acquired in July 2004,
has had a record year and continues to perform well.
A resounding success for the group in 2005 has been our
accomplishment in export markets. Not only have we
added more countries to our list of regular customers but
we have also more than doubled our export sales
accounting for 27% of the group’s turnover in 2005.
Engineering and Storage Products
A significant increase in turnover was achieved during
2005, in spite of a global fall in demand from the
automotive industry. The pressure on raw material prices
eased during the year providing some stability to the
market and benefits that should be felt in 2006.
Picture: Building systems provided by Stackright  7 Annual Report 2005 Chief Executive’s Review
ENGINEERING AND 
STORAGE PRODUCTS
OPERATING PROFIT 
£6.5m
REVENUES 
£72.1m
Makespace Mezzanine Floors Ltd
Lightweight mezzanine floors
Metalrax Ltd.
Storage systems, shelving and roller
conveyor systems
Premier Stairways Ltd.
Architectural metalwork
Prescott Powell Ltd.
Small and medium pressings
Tube manipulation and assemblies
Sections and Tubes Ltd.
Cold rolled metal sections
Stackright Building Systems Ltd.
Building systems
Toolspec Manufacturing Co. Ltd.
Tube manipulation and assemblies
Welland Engineering Supplies Ltd.
Distributor of fasteners, hand
tools and maintenance products
Weston Body Hardware Ltd.
Locks, handles, latches and
ancillary products Our automotive facing businesses have continued to bid
for and win new contracts as we apply our expertise and
technologies to selected market areas, including electric
and electro-hydraulic power steering and for security and
safety systems. We have also succeeded in winning
contracts that will replace all of the MG Rover work by the
final quarter of 2006.
It is also interesting to note that in 2005 we shipped in
excess of six million side impact air bag tubes to be used
on over one hundred vehicle platforms. During the year
we also commenced the supply of assembled doors to off-
road vehicle producers and the shipment of access
hardware to major generator manufacturers in Canada,
France and Belgium. 
Our strategic review in 2004 indicated that we should
select and develop a manufacturing site in one of the
emerging economies. This would provide opportunities to
supply both our existing markets competitively and also to
supply what are perceived to be the growth markets for
the future. This strategy was declared to several existing
customers who reacted positively, some of which have
now placed contracts for new projects to be supplied
from a new facility over the next five years. The review
also confirmed the intent to consolidate our two pressure
diecasting plants onto one site to provide the critical mass
essential for ongoing profitability. This process was
completed in the third quarter of the year with no impact
on our customer base.
For the most part, the businesses within what will in
future be known as the engineering support services
division performed well in the year. In the main, these
companies are not vulnerable to low cost economy
competition and are benefiting from prudent investment
to further increase this capacity to compete in the future.
Key to the success of all of our businesses is to maintain
an entrepreneurial spirit within them, which then benefits
from an increasing cross-fertilisation of sales and
marketing intelligence, coupled with the sharing of skill
sets and management techniques.
This blend of management styles provides for individual
businesses to be nimble in the face of rapidly changing
market forces and to maximise opportunities as they are
identified from both existing and new markets. This
approach is particularly true of those associated with the
construction industry.
The storage and handling sector made a strong
contribution to group performance in the year, with work
for high street stockroom shelving proving particularly
robust. This was balanced by the securing of a number of
contracts from within what is termed the heritage market,
with prestigious storage installations for a number of
museums and archives.
Architectural staircases and stainless steel balustrading
featured in leading retailers, hospitals and at a major
British motor racing circuit, while secondary steelwork
contracts were secured across installations as diverse as
schools and automotive plants.
Housewares
The housewares division experienced its worst
performance for many years. The well-publicised
tightening of consumer spending and the generally fewer
shopping visits made affected our business despite efforts
to promote sales. Many of our products tend to be
purchased on impulse, whilst shopping for other items, so
the number of shopping trips made can materially affect
our business.
During 2005 substantial changes were made to the
division along planned lines to improve financial
performance. Anotrim was closed and the plastic injection
moulding business of MRX Plastic Moulders was disposed
of. Significant reductions were made in our operating
costs as a result of capital investment, making us stronger
and more competitive for the future.
Mindful of the growing trend in electronic shopping on the
internet, a start-up business was created in 2005 to supply
products via this distribution channel. We are developing
products for web presentation and sales are growing.
CHIEF EXECUTIVE’S REVIEW
8 Metalrax Group PLC
8
Housewares comprises: 
Samuel Groves & Co. Ltd.
Food service equipment and
utensils
Microwise Cookware Ltd.
Microwave cookware
RTA Wine Rack Company Ltd.
Wine racks and wood products
G. S. Smart & Company Ltd.
Occasional furniture and home
accessories
George Wilkinson (Burnley) Ltd. 
PROGRESS and CLASSIC bakeware,
gadgets, pine and ceramic products
Engineering specialists
Picture: Bakeware production at George Wilkinson 9
Chief Executive’s Review Annual Report 2005
HOUSEWARES 
OPERATING PROFIT 
£0.9m
REVENUES 
£28.2m In the UK we now list virtually every major retailer of
housewares as a customer and our export growth remains
on target with new product offerings and developments
into European and markets further afield.
New for the year were bakeware promotions supplied to
Carrefour in Greece, Belgium and the Czech Republic,
Systeme U have taken promotions for their 800 stores in
France and Spanish retail group Dia have added our
bakeware promotions to their stores. Specialist bakeware
shapes have been provided to a leading departmental store
in the USA. Metro in France and Germany took new ranges
of wine racks that were also shipped to Portugal. Closer to
home our “Good Housekeeping” range was promoted by
many outlets including Waitrose, and Homebase were
supplied with own label tool and gadget ranges along with
a launch of their own label bakeware range. Morrisons
increased the number of our products displayed including a
new melamine party and picnic range and Lakeland
introduced a range of companion trays into their stores. We
were pleased to be selected as the supplier of a branded
microwave cookware range for Tesco Stores and
acknowledging the need to encourage good eating habits,
we successfully launched the new “Let’s Bake” children’s
bakeware set into many major retailers.
Summary
2005 proved to be a disappointing year for the group.
However , as we have reported, the year has seen some of the
most significant changes in the group’ s history put into place
and these have continued as the new structure takes shape.
We have now announced the consolidation of Kenham
Tools & Pressings onto the Bacol Industries site at
Smethwick, Commercial Bearings will move onto the
same site as Metalrax, and Microwise Cookware is
consolidating onto the George Wilkinson site in Burnley.
Early in 2006 Makespace Mezzanine Floors joined the
group, working closely with Metalrax to expand our
offering to the lightweight mezzanine markets, and we
announced in March the acquisition of Advanced
Handling. Both of these businesses also fulfil our growth
criteria for the engineering support services division.
Significantly, with Advanced Handling came a subsidiary
company based in Romania, Hidrosib S.A., that offers an
excellent opportunity to invest into Eastern Europe.
Hidrosib has an experienced team who have a wealth of
engineering skills and experience of the region, which will
enable us to establish a position in this emerging market
of the future. The company is recognised as Romania’s
leading business for fluid power engineering, producing
hydraulic power packs and valves.
Located on a twenty acre freehold site of which only a
small part is occupied, the Romanian operation will
benefit from the transfer of specialist machinery and
tooling that will add value to both our existing customer
contracts as well as providing the opportunity to tender
for and win new contracts that we have already identified.
Initially, the most significant impact will be in our
automotive and engineering division where new contracts
have already been won to supply customers in the Czech
Republic. Demand for our products and processes in this
market is growing and this can only be satisfied by local
manufacture. Beyond this we see significant opportunities
to promote the whole of the group’s expertise into these
rapidly growing markets.
There will inevitably be other challenges in 2006 to face
alongside the plans we already have in place. Our
projections last year for a returning stability in steel prices
proved correct, although one is mindful of certain pressures
being exerted today on the market by the major producers,
as they attempt to force through increases arguing of a
shortage of supply. Utility prices will inevitably take their toll
on margins to some extent as we seek to manage our way
through these. Will consumers return to their shopping
habits? We have more new products coming to the market
this year to tempt them — look out for our groundbreaking
new bakeware range “Heatwave” with its radical, exciting
new look and a new high performance non-stick coating,
new patented microwave cookware products and new
more stylish, fashionable wine racks.
2005 was certainly a year of change, and there is more to
come. We are positioning ourselves well to take
advantage of every market opportunity and we have a
management team ready to deliver them.
R. E. ARBUTHNOT
Chief Executive
10th April 2006
10 Metalrax Group PLC Engineering specialists 10 Metalrax Group PLC Engineering specialists
CHIEF EXECUTIVE’S REVIEW
Picture: Steelwork from Down & Francis at 
The National Museum of Science and Industry  Annual Report 2005 Chief Executive’s Review 11 12 Metalrax Group PLC Engineering specialists
FINANCIAL REVIEW
The results have been prepared under International
Financial Reporting Standards (“IFRS”). Comparative results
have been restated accordingly. A reconciliation of the
changes made to the results for the year ended 31
December 2004 are set out in note 31 of the annual report.
Revenues for the year ended 31 December 2005 at
£100.3 million were 5.3% higher than in the previous
year. We had previously reported the trading difficulties
which we were experiencing towards the end of 2005,
particularly in the Housewares division. As a result 
profit before taxation declined to £7.4 million from 
£11.4 million in the previous year. Further details are set
out in the Chief Executive’s review.
Earnings per share (“EPS”) and dividends
Although basic EPS was 3.68p per share compared to
7.61p in the previous year, the Directors have decided to
maintain the payment of the final dividend at 3.75p per
share making an unchanged dividend for the year of 5.4p
per share. The required resolution will be put to the
forthcoming Annual General Meeting.
Cash flow/capital investment
Cash balances at 31 December 2005 stood at £2.7 million
down from £10.3 million in the previous year. The two
principal reasons for the reductions were the continued
investment in routine capital expenditure for the group of
some £3.8 million together with £8.9 million spent on
acquiring new businesses. This was partially offset by a
net reduction in working capital of £1.5 million
The year end position represents a peak in the group’s
cash flow cycle. During the year movements in the cash
cycle does produce a borrowing requirement. To cover this
the group already has in place existing overdraft facilities
of £13 million.
In order to finance any further acquisition opportunities
the group has, with effect from 21 March 2006, arranged
an additional five year loan facility of £15 million on
favourable terms.
Acquisitions
During the year the group acquired the trade and assets
of Cooper Coated Coil Limited together with the entire
issued share capital of Stackright Building Systems Limited
for a combined cash consideration of £8.1 million.
Deferred consideration and bank overdrafts acquired
increased spending on acquisitions to £8.9 million in
the year.
Since the year end the group has acquired the trade and
assets of The Belsize Engineering Company Limited
together with the entire issued share capital of
Makespace Mezzanine Floors Limited for a combined cash
consideration of approximately £2.5 million.
On 27 March 2006 the group announced that it had
acquired the entire issued share capital of Advanced
Handling Limited together with its Romanian subsidiary
Hidrosib S.A. for a cash consideration of up to £2.25
million of which £1.125 million was paid on completion.
Foreign exchange
The group transacts in both dollars and euros at a modest
level. Exposure to currency movements is managed
through limited amounts of forward buying.
During the year there were no significant currency gains
or losses.
Pensions
The adoption of IFRS has resulted in the group’s gross
pension deficit of £5.8 million (£2004: £3.9 million) being
included within the balance sheet. The defined benefit
scheme was closed to new members over six years ago.
The group is continuing to monitor the implications for
future contribution rates.
Net assets
The group’s net assets at 31 December 2005 stood at
£54.5 million having absorbed the inclusion of the group’s
pension deficit.
A review of the group’s freehold properties has indicated
that their market value is in excess of their book value by
approximately £11 million, increasing net assets to
approximately £65.5 million.
Going concern
After making enquiries, the Directors have a reasonable
expectation that the group has adequate resources to
continue in operational existence for the foreseeable
future. For this reason they continue to adopt the going
concern basis in preparing the accounts.
W. D. KELLY, F.C.A.
Group Finance Director
10th April 2006
Results summary 13 Corporate and Social Responsibility Annual Report 2005
CORPORATE AND SOCIAL RESPONSIBILITY
The board believes that the long-term future of the
company is best served by acknowledging the interests of
all stakeholders, our customers, members of staff,
shareholders and the wider community. The group is
committed to its corporate social responsibility activities
and will continue to report on them. The group continues
to develop a range of policy statements which it is
intended will be posted on the group’s website.
 Ethics
The group insists that its business activities are
conducted in accordance with high standards. The
ethics policy statement provides a framework for
achievement of those standards.
 Employees
Our employees are vital to the success of our business. 
All companies within the group carry out induction
training to address all general employment and policy
issues. The degree of detail varies from company to
company to reflect the nature of the individual
company activities. For some companies these are
presented in the form of employment handbooks. The
group has published a code of conduct for labour
practices.
The group believes in equal opportunities and non-
discrimination.
We aim to treat people fairly. We welcome job
applications from all sections of the community and
encourage our employees to improve themselves.
Existing employees are considered for senior positions
before those positions are advertised externally.
The group complies with its obligations under the
Disability Discrimination Act. Whenever suitable
vacancies arise and appropriate qualified applicants
are available, disabled people are readily employed
and provided with appropriate training and support.
In the event of a member of staff becoming disabled,
every effort is made to continue their employment,
with relevant retraining as necessary. All planning and
property modifications give consideration to disabled
personnel as appropriate. Working environments will
be adapted as required to accommodate disabled
personnel. The group holds a certificate in recognition
of it being positive about disabled people.
The group recognises the crucial role training plays in
developing the knowledge and skills of employees.
Training policies and procedures are generally
incorporated within individual group company quality
management systems and many companies form
strong links with local colleges and training providers.
 Communication
Divisional group meetings are held regularly to share
information and to seek out mutual opportunities. The
group issues a newsletter at regular intervals to keep
all employees informed of developments and sales
opportunities. Works councils are currently being set
up to disseminate information to all levels. 
 Customers
Customer satisfaction is the key to business success.
Quality of product, delivery and service is paramount.
The group recognises the importance of formal quality
management systems and has a rolling programme
for all companies to achieve ISO 9001 or enhanced
standards such as ISO/TS16949 for the automotive
sector. 
 Suppliers
All group companies observe strict guidelines when
sourcing raw material or products. Suppliers of
imported materials are subject to additional controls
regarding environmental and employment aspects of
the business. Where required the group employs
independent third party bodies to monitor their
activities.
 Environment
The group has a policy of respect for the environment.
It recognises the importance of the ISO 14001
environmental management system and has several
group companies registered to the standard. Timber
products are purchased from protected renewable
sources via the FSC scheme wherever possible. The
use of packaging materials is monitored on an annual
basis and overall use is being reduced year on year due
to the amount of recycling being undertaken.
Certain manufacturing processes incorporate
abatement technology to ensure that emissions to
atmosphere comply with limits set by local authorities.
 Health and Safety
The group has recently published a revised Health and
Safety Policy Manual, which outlines the minimum
standards expected of all group companies. Similarly,
a Vehicle Users Handbook is supplied to all personnel
using company vehicles.  DIRECTORS
14 Metalrax Group PLC Engineering specialists
Advisers
Secretary
W. D. Kelly, F.C.A.
Registered Office
Ardath Road, Kings Norton
Birmingham B38 9PN
Telephone: 0121 433 3444
Facsimile: 0121 433 3325
E-mail: info@metalraxgroup.co.uk
www.metalraxgroup.co.uk
Registered in England 793639
Auditors
Bentley Jennison
Chartered Accountants
Legge Street
Birmingham 
B4 7EU
Solicitors
HBJ Gateley Wareing LLP
One Eleven 
Edmund Street
Birmingham
B3 2HJ
Board of Directors as at 20th April 2006
John R. A. Crabtree, LL.B
aged 56, is the Non-Executive
Chairman and the Chairman of
the Nomination Committee. He
was formerly senior partner of
Wragge & Co. the Birmingham-
based corporate law firm. He is
Non-Executive Chairman of SLR
Holdings Ltd, Claimar Care Group
plc and Birmingham Hippodrome
Theatre Trust. He is also a Director
of Staffline Recruitment Plc,
Advantage West Midlands,
Warwick Racecourse Company
Ltd and Vice-President of the
Birmingham Chamber of
Commerce.
Richard E. Arbuthnot,
B.Sc., M.Sc.
aged 59, is the Chief Executive.
He joined a group company in
1984, has since held senior
technical positions, was
appointed a group Director
in 1994 and promoted to
Chief Executive in 2002.
Reginald Fort, F.C.A.
aged 68, is the Chairman of the
Audit Committee. He is a
chartered accountant operating
as a consultant on financial and
taxation matters. He was
appointed to the group board
in 1995 as a Non-Executive
Director.
Andrew P . Pearson, F.C.A.
aged 47, is a Non-Executive
Director. He is a Chartered
Accountant and joined the
group on 1st January 2006.
From 1990 to 2005 he was a
partner with KPMG specialising
in advising on business
transactions. Since retiring in
2005, he has been an active
investor in several early-stage
private growth companies.
William D. Kelly, F.C.A.
aged 46, was appointed Group
Finance Director and Company
Secretary on 14 March 2006.
He is a chartered accountant
and was previously Finance
Director and Company
Secretary of James Beattie PLC
and prior to that held senior
positions at KPMG in
Birmingham.
John K. Adcock, F.C.I.B.
aged 58, is the Chairman of the
Remuneration Committee. He
held a number of senior positions
with HSBC Holdings plc until he
joined the group board in 2002
as a Non-Executive Director. He is
a Council Member of the
Birmingham Chamber of
Commerce and Industry.
John R. A. Crabtree
Chairman (Non-Executive)
Richard E. Arbuthnot
Chief Executive
William D. Kelly
Group Finance Director
Andrew P . Pearson
Non-Executive Director
John K. Adcock
Non-Executive Director
Reginald Fort
Senior Non-Executive
Director OPERATIONAL BOARD
The Operational Board is composed of the Executive Directors, Richard Arbuthnot and Bill Kelly, together with the Operating 
Directors of the Divisions, Jeff Edwards, Garry Gresham and Hedley Brook-Carter, plus the Group Financial Controller, Darren Farrimond.
*Relinquished Group Board positions on 14th March 2006
Jeffrey G. L. Edwards
aged 54, joined Bacol Industries
Limited in 1970, was promoted to
commercial Director in 1986,
and appointed chief executive in
1994. He joined the group board
in 2002 as Operations Director of
the engineering division.*
Garry H. Gresham,
B.A.(Hons)
aged 48, joined George Wilkinson
(Burnley) Limited in 1990, was
promoted to marketing Director
in 1992, and appointed chief
executive in 2001. He joined the
group board in 2002 as
Operations Director of the
housewares division.*
R. Hedley Brook-Carter
aged 56, joined the group in
1988, was appointed sales and
marketing Director of Metalrax
Limited in 1990 and promoted
to chief executive in 1999. He
joined the group board in
2005.*
Jeffrey G. L. Edwards
Divisional Operating
Director — Automotive &
Engineering
R. Hedley Brook-Carter
Divisional Operating
Director — Engineering
Support Services
Darren J. Farrimond
Group Financial Controller
Garry H. Gresham
Divisional Operating
Director — Housewares
Darren J. Farrimond, 
B.Sc., A.C.A.
aged 37, is the Group Financial
Controller. He is a chartered
accountant, joined the group in
1998 and was appointed to the
group board in 2004.*
15 Annual Report 2005 Directors Annual Report 2005
Principal Bankers
National Westminster Bank PLC
21 Digbeth, Birmingham 
B5 6BL
HSBC Bank plc
130 New Street, Birmingham 
B2 4JU
Registrars
Computershare Investor Services PLC
P .O. Box 82, The Pavilions
Bridgwater Road
Bristol 
BS99 7NH
Financial PR
Citigate Dewe Rogerson Limited
9 The Apex
6 Embassey Drive
Edgbaston
Birmingham
B15 1TP
Brokers
Arbuthnot Securities
20 Ropemaker Street
London 
EC2Y 9AR REPORT OF THE DIRECTORS
16 Metalrax Group PLC Engineering specialists
The Directors present the audited accounts of the group
for the year ended 31st December 2005.
Principal activity and business review
The company controls a group of subsidiary undertakings
engaged in manufacturing and product marketing
described in detail in the Chief Executive’s review on
pages 6 to 10.
The statement by the Chairman on pages 2 and 5
contains a review of the results and of the development of
the group’s business during the year.
In January 2005 the group acquired the business and
assets of Cooper Coated Coil Limited for a consideration
of £4.2 million.
In November 2005 the group acquired Stackright Building
Systems Limited for a consideration of £5.0 million. 
Directors
The names of the present Directors are shown on page
14. They all held office throughout the year except for 
A. P . Pearson, who was appointed Non-Executive Director
on 1st January 2006, and W. D. Kelly, who was appointed
Finance Director on 14th March 2006. 
At the Annual General Meeting the Director retiring by
rotation will be J. K. Adcock who has no service
agreement.
A. P. Pearson, who has no service agreement, and 
W. D. Kelly, whose service agreement requires twelve
months notice of termination, having both been
appointed since the last general meeting, retire at the
annual general meeting and, being eligible, offer
themselves for election.
J. G. L. Edwards, G. H. Gresham, D. J. Farrimond and 
R. H. Brook-Carter (who was appointed on 6th September
2005) relinquished their main board Directorships on 
14th March 2006 in order to take their seats on the newly
created operational board.
E. S. Moore served as a Non-Executive Director until his
retirement on 23rd May 2005.
Directors’ interests in shares
The interests of the Directors who held office at the end
of the year in the ordinary shares of the company, as
notified to the company, are shown in the Directors’
remuneration report on page 20.
Substantial shareholdings
The company has been notified or is aware of the following
substantial holdings of ordinary shares at 31st March 2006
being not more than one month prior to the date of the
notice of the Annual General Meeting.
Number of % of issued 
Ordinary shares capital
Schroders 12,721,977 10.6
Royal & Sun Alliance 7,135,548 6.0
CK Coombs 6,126,962 5.1
AXA Framlington 5,547,300 4.6
Henderson 5,536,563 4.6
Arlington Capital Investors 4,520,000 3.8
Legal & General 3,946,509 3.3
Jupiter Asset Management 3,875,000 3.2
DM Coombs 3,626,443 3.0
Fixed assets
The Directors are of the opinion that the market value of
the group’s freehold properties at 31 December 2005 was
in excess of their book value by approximately £11 million.
Payment of creditors
While not following any recognised code or standard, the
group policy on payment of all creditors is to abide by the
terms of payment agreed with the relevant suppliers. At 31st
December 2005 the trade creditors represented 52 days
(2004: 57 days) in relation to amounts invoiced by suppliers.
Charitable contributions
Donations to charitable organisations consisted of £4,050
for local charities, £750 for people with disabilities, £450
for children, £1,000 for the elderly and £200 for animals. Report of the Directors 17 Annual Report 2005
Employee involvement
The group provides employees with information on
matters of concern to them as employees by means of
formal and informal meetings and briefings. When
decisions are taken affecting the interests of employees
they or their representatives are consulted and their views
are taken into account.
Disabled persons
Full and fair consideration is given to applications for
employment from disabled persons and to continuing the
employment of those who have/may become disabled
while employed. The policy is to give equal opportunity
for training, career development and promotion.
Environment, health and safety
The group recognises the importance of maintaining and
improving the environment and seeks to minimise any
adverse effects of its operations. Environmental issues are
actively managed as part of the group’s risk management
and health and safety policies. Energy conservation and
recycling procedures are also encouraged wherever possible.
Auditors
Bentley Jennison are willing to  continue in office as
auditors and a resolution to reappoint them will be
proposed at the Annual General Meeting.
Annual General Meeting
Shareholders will be asked to approve as Ordinary
Business (Resolution 8) a new Long-Term Incentive Plan
(“LTIP”) for Directors and senior management. Further
details are set out in the Chairman’s letter which
accompanies this Annual Report.
The authority to allot unissued ordinary shares was
approved at the last Annual General Meeting and will
expire on 22nd May 2010. We shall be seeking approval
(as Resolution 9) for the annual renewal of the Directors’
authority to allot shares for cash.
Shareholders will also be asked to approve as special business
at the Annual General Meeting a resolution authorising the
Directors to make market purchases of the company’ s shares
(Resolution 10). This has become routine business at the
Annual General Meeting of many public companies.
Whilst the Directors have no current intention to purchase
any Ordinary shares of the company, they consider it
desirable to obtain authorisation from the shareholders
which would enable them to act swiftly to make
purchases if earnings per share would thereby be
increased and if they considered such action to be in the
best interests of the shareholders generally. The maximum
price which may be paid for each share is an amount
equal to 105% of the average of the middle market
quotations for an Ordinary share of the company derived
from the Stock Exchange Daily Official List for each of the
five business days immediately preceding the day on
which the Ordinary share is purchased. The minium price
will be 5p. The power will be limited to purchasing
11,989,730 shares being 10% of the total Ordinary shares
in issue at the date hereof and will expire at the next
Annual General Meeting of the Company or if earlier,
fifteen months after the resolution is passed.
Post-balance sheet events
During January 2006 the business of The Belsize
Engineering Company Limited was acquired from its
receivers and the entire issued share capital of Makespace
Mezzanine Floors Limited was acquired. The aggregate
cash consideration was £2.5 million.
On 16 March 2006 the company acquired the entire issued
share capital of Advanced Handling Limited and its
subsidiary Hidrosib S.A., based in Romania, for a cash
consideration of up to £2.25 million of which £1.125 million
was paid on completion.
On behalf of the board
W. D. KELLY, F.C.A.
Company Secretary
10th April 2006 CORPORATE GOVERNANCE
18 Metalrax Group PLC Engineering specialists
The board has studied the Combined Code on Corporate
Governance published in July 2003, which applied to the
group from the year 2004. The board now reports how it
has applied the Principles of Good Governance and the
board believes it has, save where stated, complied with the
Code provisions during 2005.
Application of the principles
The board has applied the principles in a manner which it
considers appropriate to the particular circumstances of
Metalrax Group PLC. The structure of the group is not
complicated and the activities are focused on
manufacturing and product marketing. Direction of the
group emanates from a relatively compact head office and
the emphasis is on day-to-day contact between executive
Directors as well as formal board meetings. The non-
executive Directors, who are of independent mind, are
appointed to provide a balance at board meetings and to
contribute their knowledge and experience. The finance
Director, who is also the company secretary, is responsible
for providing all board members with relevant monthly
financial information. 
Composition of the board
The board currently includes four independent non-
executive Directors, being J. R. A. Crabtree who is also the
Chairman of the Nomination Committee, R. Fort who is
the senior independent non-executive Director and
Chairman of the Audit Committee, and J. K. Adcock who
is the Chairman of the Remuneration Committee together
with A. P. Pearson who was appointed on 1st January
2006. R. Fort will retire after the Annual General Meeting
in 2007. There are now just two executive Directors, R. E.
Arbuthnot and W. D. Kelly who was appointed finance
Director and company secretary on 14th March 2006. 
J. G. L. Edwards, G. H. Gresham, D. J. Farrimond and R. H.
Brook-Carter (who was appointed on 6th September
2005) relinquished their main board Directorships on 
14th March 2006 in order to take their seats on the newly
created operational board. The Chairman, J. R. A.
Crabtree, has primary responsibility for running the board
and devotes such time to his role as is necessary to properly
discharge his duties. The chief executive, R. E. Arbuthnot,
has executive responsibility for delivering the group’s
strategy and achieving operational and financial goals. 
This year R. Fort has served on the board for over ten
years. He will retire from the board after the 2007 Annual
General Meeting. His place as Chairman of the Audit
Committee will be taken by A. P . Pearson.
Operation of the board
The board meets at least four times per annum and
convenes additional meetings to consider matters that are
time critical. Additional meetings are held annually to
consider and review strategy and opportunities arising. All
Directors attended all board meetings held during the year.
The board operates to oversee the group’s activities and as
a whole decides upon dividend policy, acquisition and
disposal strategy and other matters that affect the group
as a whole.
The performance of the board, its committees and
individual members are evaluated by the executive and
Non-Executive Directors as appropriate.
The executive Directors authorise major capital expenditure,
review the day-to-day activities of the subsidiaries, manage
group finances, perform negotiations regarding
acquisitions and disposals, recruit Directors of subsidiaries,
and allocate resources to manage the risk environment.
The Non-Executive Directors under the leadership of R. Fort
are responsible for, but not restricted by, the duties as
described in the terms of reference of the three
committees, namely the Nomination Committee, the
Remuneration Committee and the Audit Committee.
Details of the terms of reference for the committees can be
found on the group website.
The newly created operational board oversees the day-to-
day activities of the subsidiaries and internal risk
management is delegated to the management teams,
mainly Directors of the relevant subsidiary companies.
Management decisions include the purchase of authorised
capital expenditure, negotiating contracts for sales and
purchases, recruiting and controlling employees as necessary
to operate their respective companies.
Audit Committee
The committee reviews and monitors the integrity of the
group’s financial reporting and the effectiveness of
internal controls and risk management systems. It also
oversees the group’s relationship with the auditors and
determines their objectiveness and effectiveness.
Since 2003 the Audit Committee has comprised R. Fort,
who chairs the committee, J. K. Adcock and J. R. A.
Crabtree. A. P. Pearson joined the Committee on his
appointment on 1st January 2006. Meetings are held at
least three times a year. Other Directors may be invited to
attend and the financial Director attended all meetings
held in 2005. The auditors attended two meetings during
2005 and are also authorised to speak directly to any
board member whenever they wish.
Remuneration Committee
Since 2003 the Remuneration Committee has been made
up of J. K. Adcock, who chairs the committee, R. Fort and
J. R. A. Crabtree. The committee meets whenever necessary
and met as a whole three times in 2005. The prime function Corporate Governance 19 Annual Report 2005
of the committee is to establish and review the terms and
conditions for the executive Directors. The Directors’
remuneration report on pages 20 and 21 shows how the
principles regarding Directors’ remuneration have been
applied. A. P. Pearson joined the Committee on his
appointment.
Nomination Committee
The principal task of the committee is to ensure that the
skills, experience and age of the board is appropriate to
the group’s activities to ensure its future success.
J. R. A. Crabtree chaired the committee which then comprised
R. E. Arbuthnot, R. Fort and J. K. Adcock throughout the year . 
The Nomination Committee met in 2005 to consider the
appointment of A. P. Pearson and in 2006 in respect of 
the appointment of W. D. Kelly.
Internal control
The Directors have overall responsibility for the group’s
system of internal controls and at least annually review the
effectiveness of all controls including financial, operational
and compliance controls and risk management systems. The
board confirms that the procedures which accord with the
Guidance for Directors in the Combined Code have been in
place for 2005 and up to the date of approval by the board
of the Directors’ report and accounts. They recognise that
any system can provide only reasonable and not absolute
assurance against material misstatement or loss. 
The trading subsidiaries run as autonomous units, each with
responsibility for its own internal financial control. The
group’s head office, which provides the subsidiaries with
back-up expertise whenever needed, regularly monitors their
activities, largely fulfilling the role of internal auditors. The
group has a comprehensive system of financial planning and
reporting which produces inter alia detailed monthly
accounts for every subsidiary. Major capital expenditure is
subject to approval by the board. The group’s treasury
operations are conducted on a conservative basis with a view
to eliminating risk so far as possible. The risk management
systems are controlled by head office personnel. Reports are
circulated to the operating subsidiaries identifying potential
areas of risk and recommending procedures for their control. 
Shareholder relations
Both Chairman and chief executive meet regularly with
institutional shareholders mainly in the periods following
the announcement of interim and final results but also at
other times, and the results of those meetings are
communicated to the Directors.
Communication with private and other shareholders is
made both formally and informally at the annual general
meeting which is usually attended by the full board.
Directors’ responsibilities for financial statements
Company law requires the Directors to prepare financial
statements for each financial year which give a true and
fair view of the state of affairs of the company and of the
result for that period. In preparing those financial
statements the Directors are required to:
(i) select suitable accounting policies and apply them
consistently;
(ii) make judgements and estimates that are reasonable
and prudent;
(iii) state whether applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements;
and
(iv) prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the company will continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any
time the financial position of the company and to enable
them to ensure that the accounts comply with the
Companies Act 1985. They have general responsibility for
taking such steps as are reasonably open to them to
safeguard the assets of the company and to prevent and
detect fraud and other irregularities.
Auditors’ independence
The non-audit work undertaken in the year by the group
auditors, Bentley Jennison, consisted of due diligence
exercises which were controlled by a tax and advisory partner
with no direct involvement in the audit. Bentley Jennison have
also been involved in the preparation of tax computations for
group companies where they are the auditor , again controlled
by a tax and advisory partner, and assisted in the compilation
of draft financial statements for those companies from
information provided by the group. A connected company of
Bentley Jennison provided services to the Group’s
pension scheme.
On behalf of the board
W. D. KELLY, F.C.A.
Company Secretary
10th April 2006 DIRECTORS’ REMUNERATION REPORT
20 Metalrax Group PLC Engineering specialists
Remuneration Committee
The members of the Remuneration Committee during
2005 were J. K. Adcock (Chairman), R. Fort and 
J. R. A. Crabtree. On 1st January 2006 A. P. Pearson was
appointed to the committee. 
Remuneration policy
During 2005, the Remuneration Committee undertook a
review of the remuneration package applicable to the
Group’s Executive Directors. A new basis for determining
bonuses was introduced, together with short term and
long term share-based incentive schemes. In introducing
these new arrangements, the Remuneration Committee
took into account the overall remuneration package
available to executives as compared to that of a range of
similar listed companies. The main elements of the
remuneration package are:
(i) Salary
Salary is determined at the beginning of each year and
when a Director has a change of responsibility.  The
committee takes account of each Director’s
performance in the light of its knowledge of rates of
salary for similar responsibilities in other companies
and of pay levels elsewhere in the group.
(ii) Annual bonus
Executive Directors participate in an annual bonus
scheme consisting of two parts. In the first part,
bonuses are payable relative to the achievement of
agreed objectives which are typically strategic and
operational. Bonuses of up to 10% of base salary are
payable relative to the individual’s degree of
achievement. Whilst the executive Directors had
earned bonuses within this element of the scheme this
year, they have waived them. In the second part,
bonuses are payable for increases in the group’s full
year pre-tax profit. To trigger a payment, group pre-
tax profit must exceed that for the year ended 
31st December 2004 and thereafter, exceed any
subsequent higher year end figure. Bonuses are
payable at 10% of base salary for each 1% increase in
pre-tax profit, half in cash and half for the purchase of
shares in the company which will be held in trust for
the executive for 10 years, or until retirement if earlier.
(iii) Long term incentive plan (LTIP)
Subject to shareholder approval at the Annual General
Meeting, the company is to introduce a LTIP which
gives the Executive Directors options to purchase
shares in the company at market value on the award
date. The options awarded are based on 10% of base
salary for each 1% increase in the group’s pre-tax
profit. To trigger an award, group pre-tax profit must
exceed that for the year ended 31st December 2004
and thereafter, exceed any subsequent higher year
end figure. The options are exercisable within 10 years
provided that the group's Earnings per Share growth
over any three year period has exceeded RPI by 6%.
The Remuneration Committee has designed the above
incentives (ii) and (iii), bearing in mind the strategic plan,
and believes that they fairly provide for the motivation to
senior management in order to deliver the group’s
objectives. 
Directors’ Remuneration (excluding pension)
Salary/ Benefits Total Total
Fee Bonus in kind 2005 2004
£’000 £’000 £’000 £’000 £’000
Executive
R. E. Arbuthnot 152 — 15 167 167
J. G. L. Edwards 92 — 5 97 90
G. H. Gresham 94 — 10 104 97
D. J. Farrimond 86 — 5 91 55
R. H. Brook-Carter (from 6.9.05) 23 — 2 25 —
T. R. Jones (to 25.5.04) — — — — 52
Non-executive
J. R. A. Crabtree (Chairman) 45 — — 45 22
E. S. Moore (to 23.5.05) 7 — — 7 56
R. Fort 19 — — 19 19
J. K. Adcock 19 — — 19 19
2005 total 537 — 37 574 577
2004 total 475 58 44 577
Benefits in kind represent mainly the taxable value ascribed to private use of a company car and private health
insurance. 21 Annual Report 2005 Directors’ Remuneration Report
Directors’ service agreements
No Director has a contract requiring more than twelve
months notice. The Non-Executive Directors, whose
remuneration is determined by the board, do not have
service agreements but are appointed for a fixed term
expiring when they become due for re-election at an
Annual General Meeting. They are not allowed to
participate in share option schemes and are not eligible to
join any of the group’s pension schemes.
Executive Date of contract Notice period
R. E. Arbuthnot 14th March 2006* 12 months
W. D. Kelly 14th March 2006 12 months
* updated
Directors’ pension arrangements
The executive section of the pension scheme, which since
2004 has applied only to the chief executive, provides inter
alia a pension at age 62 of two-thirds of final pensionable
salary subject to completion of sufficient years of service.
The pension entitlement for the other Executive Directors
who served during the year is a pension at age 65 based
upon 1/60th of pensionable salary for each year’s service in
the pension scheme. In accordance with group policy,
pensionable salary does not include any bonuses.  If a
member of the scheme dies while still in service the
scheme provides life assurance cover of up to 4 times
pensionable salary and a widow’s pension.
Pension benefits earned by the Directors
Increase in Accumulated
accrued total accrued
pension during pension at
the year Transfer value year end
£’000 per of increase £’000 per
annum £’000 annum
R. E. Arbuthnot 10 151 72
J. G. L. Edwards 8 82 43
G. H. Gresham 4 39 20
D. J. Farrimond 5 35 12
R. H. Brook-Carter — 7 17
The pension entitlements shown are those earned during
the year and which would be paid annually on retirement
based on service to 31st December 2005. The increase in
accrued pension during the year excludes any increase for
inflation. The transfer value has been calculated on the
basis of actuarial advice in accordance with Actuarial
Guidance Note GN11. No additional voluntary
contributions have been included in the above table.
Details of Directors’ share options
At 31st December 2005 the only Director holding options
was G. H. Gresham, who held options over 27,500 (2004:
27,500) shares exercisable before 28th October 2006, at
an exercise price of 98.18 pence.
The market price of the shares at 31st December 2005
was 68.25 pence and the range during the year was
68.25 pence to 88.5 pence. 
Directors’ interests in shares
At 31st December At 31st December
Beneficial interests 2005 2004
J. R. A. Crabtree 30,000 30,000
R. E. Arbuthnot 60,714 60,714
J. G. L. Edwards 33,046 33,046
G. H. Gresham 3,770 3,770
D. J. Farrimond 3,000 3,000
R. Fort 33,705 33,705
J. K. Adcock 34,809 34,809
R. H. Brook-Carter 52,694 —
At their respective dates of appointment both 
A. P. Pearson and W. D. Kelly held no shares in the
company. On 14th March 2006 both Directors acquired
10,000 shares each. Also on 14th March J. R. A. Crabtree
acquired a further 10,000 shares and on 20th March
2006 R. E. Arbuthnot also acquired a further 10,000
shares.
Directors’ other interests
No Director had an interest in any contract subsisting
during the year which was significant in relation to the
group’s business.
Performance graph
The Directors consider the FTSE all share index and the
FTSE industrials, engineering sector index to be
appropriate for comparative purposes.
Information subject to audit
Under Part 3 of Schedule 7A of the Companies Act 1985
the following sections of this report are subject to audit:
“Details of Directors’ emoluments”, “Pension benefits
earned by the Directors”, “Details of Directors’ share
options”, “Directors’ interests in shares” and “Directors’
other interests”. The other parts of the report, including
the performance graph, are not subject to audit.
On behalf of the board
J. K. ADCOCK
10th April 2006
Chairman of the Remuneration Committee 
Metalrax ftse eng ftse-all share
200
150
100
50
0
2001 2002 2003 2004 2005 ACCOUNTS
22 Metalrax Group PLC Engineering specialists
2005 2004
Note £’000 £’000
Revenue 1 100,255 95,167
Cost of sales (76,843) (69,834)
Gross profit 23,412 25,333
Distribution costs (6,696) (5,984)
Administrative expenses (9,136) (7,814)
Exceptional items 1 (217) (363)
Operating profit 3 7,363 11,172
Net interest 2 45 234
Profit before taxation 7,408 11,406
Income tax expense 4 (2,177) (3,442)
Profit from continuing operations 5,231 7,964
(Loss)/profit from discontinued operations 5 (817) 1,226
Profit for the year 18 4,414 9,190
Attributable to:
Equity holders of the parent 4,414 9,129
Minority interest — 61
Profit for the year 4,414 9,190
Earnings per share: 6
Basic and diluted 3.68p 7.61p
From continuing operations 4.36p 6.64p
Consolidated income statement
Year ended 31st December 2005 Accounts 23 Annual Report 2005
2005 2004
Note £’000 £’000
Profit attributable to equity shareholders 4,414 9,129
Currency variations — (70)
Adjustment to goodwill — 20
Actuarial losses arising on retirement benefit obligations (1,455) (2)
Deferred tax credit on retirement benefit obligations 436 —
Total recognised income 3,395 9,077
Dividends paid 7 (6,474) (6,474)
Opening shareholders’ equity 57,547 54,944
Closing shareholders’ equity 54,468 57,547
Consolidated statement of recognised income and expenses
Year ended 31st December 2005 ACCOUNTS
24 Metalrax Group PLC Engineering specialists
2005 2004
£’000 £’000
Assets
Goodwill 8 11,058 6,555
Intangible assets 8 130 210
Property, plant and equipment 9 26,623 26,884
Deferred tax asset 16 1,744 1,180
Total non-current assets 39,555 34,829
Inventories 11 16,776 17,416
Trade and other receivables 12 23,618 21,227
Cash and cash equivalents 2,713 10,356
Assets held for sale 13 764 —
Total current assets 43,871 48,999
Total assets 83,426 83,828
Liabilities
Loan notes 300 200
Trade and other payables 19,113 18,231
Current tax payable 1,018 1,614
Total current liabilities 14 20,431 20,045
Loan notes 15 750 300
Other payables — 75
Employee benefits 27 5,814 3,932
Deferred tax liabilities 16 1,963 1,929
Total non-current liabilities 8,527 6,236
Total liabilities 28,958 26,281
Net assets 54,468 57,547
Equity
Share capital 17 5,995 5,995
Share premium account 18 2,732 2,732
Capital redemption reserve 18 274 274
Retained earnings 18 45,467 48,546
Total shareholders’ equity 54,468 57,547
Signed on behalf of the board by
R. E. ARBUTHNOT
Chief Executive
10th April 2006
Consolidated balance sheet
As at 31st December 2005 Accounts 25 Annual Report 2005
2005 2004
£’000 £’000
Assets
Property, plant and equipment 10 1,714 1,761
Investments 19 25,105 19,955
Deferred tax asset 16 1,684 1,120
Total non-current assets 28,503 22,836
Other receivables 12 38 22
Amounts owed by group undertakings 18,516 30,484
Current tax assets 1,219 —
Cash and cash equivalents 9,308 5,858
Total current assets 29,081 36,364
Total assets 57,584 59,200
Liabilities
Loan notes 300 200
Trade and other payables 780 636
Current tax payable 250 180
Total current liabilities 14 1,330 1,016
Loan notes 15 750 300
Other payables — 75
Employee benefits 27 5,614 3,732
Deferred tax liabilities 16 23 22
Total non-current liabilities 6,387 4,129
Total liabilities 7,717 5,145
Net assets 49,867 54,055
Equity
Share capital 17 5,995 5,995
Share premium account 18 2,732 2,732
Capital redemption reserve 18 274 274
Retained earnings 18 40,866 45,054
Total shareholders’ equity 49,867 54,055
Signed on behalf of the board by
R. E. ARBUTHNOT
Chief Executive
10th April 2006
Parent company balance sheet
As at 31st December 2005  ACCOUNTS
26 Metalrax Group PLC Engineering specialists
2005 2004
£’000 £’000
Operating activities
Cash generated from operations 26(a) 11,224 12,377
Net interest received 45 234
Income taxes paid (2,733) (3,820)
Net cash flow from operating activities 8,536 8,791
Investing activities
Purchase of property, plant and equipment (3,796) (3,498)
Proceeds from sale of property, plant and equipment 2,314 124
Acquisition of businesses 26(d) (8,875) (2,022)
Proceeds from sale of business 20 652 —
Proceeds from sales of subsidiary less its bank balance — 2,411
Net cash flow from investing activities (9,705) (2,985)
Financing activities
Equity dividends paid 7 (6,474) (6,474)
Net cash flow from financing activities (6,474) (6,474)
Net decrease in cash and cash equivalents 26(b) (7,643) (668)
Cash and cash equivalents at beginning of period 10,356 11,024
Cash and cash equivalents at end of period 26(c) 2,713 10,356
Consolidated cash flow statement
Year ended 31st December 2005 Accounts 27 Annual Report 2005
(a) Preparation of the accounts
As a European listed entity, the group now has to prepare consolidated accounts using IFRS instead of UK GAAP.
The group has chosen 1st January 2004 as the transition date and the comparative figures in these accounts have
been restated under IFRS (reconciliation as set out in note 31). The principal effect on these accounts has been as
follows:
 The deficit on the group’s defined benefit pension schemes, which was previously only disclosed in the notes to
the accounts, has now been incorporated into the balance sheet.
 Goodwill on acquisitions is no longer amortised over its estimated useful life, previously 20 years. It is now
stated at cost but is subject to an annual impairment review. In the case of goodwill held at its original book
value, and arrived at under UK GAAP , this is now treated as its base cost.
 In the case of pre-1998 acquisitions the cost of goodwill had been written off to reserves when the relevant
business was disposed of, a practice not required by IFRS. The 2004 comparatives in these accounts reflect the
revised treatment in relation to the business disposed of in that year.
 Dividends are only incorporated into the accounts when approved by the shareholders. Accordingly, the
proposed final dividend is no longer shown as a current liability.
 The financial results (after tax) of discontinued businesses are shown as a separate item at the end of the Income
Statement whereas they were shown, identified as such, as part of ordinary activities.
 Minor changes to wording and presentation.
(b) Basis of consolidation
The consolidated accounts are made up to 31st December 2005 and have been prepared under the historical cost
accounting rules. The acquisition method of accounting has been adopted. Under this method, the results of
subsidiary undertakings acquired or disposed of in the period are included in the consolidated income statement
from the date of acquisition or up to the date of disposal.
The parent company’s own profit and loss account is not published in accordance with the exemption available
under section 230 Companies Act 1985.
(c) Tangible assets
The cost of property, plant and equipment is capitalised as an asset. The cost, less the estimated residual value, is
depreciated over its estimated useful life. The rates of depreciation used are as follows:
Freehold and long leasehold land Nil
Freehold and long leasehold buildings 2% per annum on cost
Short leasehold land and buildings Over the term of the lease
Plant 10%–20% per annum on cost
Vehicles 25% per annum on cost
Accounting policies
Year ended 31st December 2005 ACCOUNTS
28 Metalrax Group PLC Engineering specialists
(d) Intangible assets
Goodwill on acquisition comprises the excess of fair value of the consideration plus any associated costs over the
group’s share of the fair value of the net identifiable assets acquired.
Metalrax Group PLC has elected not to apply IFRS3 retrospectively. Goodwill prior to 1st January 1998 was written
off to reserves. Goodwill from 1st January 1998 to 31st December 2003 was amortised in line with UK GAAP.
Goodwill from 1st January 2004 is subject to annual impairment testing or on such other occasions that events or
changes in circumstances indicate that it might be impaired.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
The costs of intangible assets are capitalised and amortised over their estimated useful lives.
(e) Taxation
The charge for current tax is based on the results for the year as adjusted for items which are non-assessable or
disallowed. Deferred tax is accounted for using the liability method in respect of temporary differences arising from
differences between the carrying amounts in the accounts and the corresponding tax basis.
(f) Repairs and research
Expenditure on repairs and maintenance, and on research is written off in the year in which it is incurred.
(g) Inventories
Inventories are valued at the lower of historical cost, which includes overheads where appropriate, and net
realisable value.
(h) Leasing commitments
Rentals payable under operating leases are charged to the income statement on a straight-line basis over the period
of the lease.
(i) Foreign currency
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Any
gain or loss on translation arising from a movement in exchange rates subsequent to the date of a transaction is
included as an exchange gain or loss in the income statement.
(j) Pensions
The cost of providing defined benefit pensions is determined using the projected unit credit method, with actuarial
valuations obtained. The amount recognised in the balance sheet represents the present value of the defined
benefit obligation.
The costs of the group’s defined contribution pension schemes are charged to the income statement in the period
in which they become payable.
(k) Revenue
Revenue is the value of sales of goods and services to third party customers, excluding VAT and similar taxes.
(l) Cash and cash equivalents
For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise balances with less
than three months maturity from the date of acquisition.
Accounting policies
Year ended 31st December 2005 Accounts 29 Annual Report 2005
1 Segmental analysis
Analysis by activity
2005 2004
Engineering Engineering
and Storage and Storage
Products Housewares Total Products Housewares Total
£’000 £’000 £’000 £’000 £’000 £’000
Revenue
External sales 72,050 28,205 100,255 62,906 32,261 95,167
Inter-segment sales 4,300 — 4,300 3,950 — 3,950
Total revenue 76,350 28,205 104,555 66,856 32,261 99,117
Operating profit
Trading profit 6,734 846 7,580 7,542 3,993 11,535
Exceptional items (265) 48 (217) (35) (328) (363)
Segment result 6,469 894 7,363 7,507 3,665 11,172
The exceptional items in 2005 comprise profit on sale of property £505,000 (2004: £Nil), bad debts from MG Rover
Group Limited and Powertrain Limited £225,000 (2004: £Nil) and reorganisation costs of £497,000 (2004: £363,000).
Balance sheet
Segment assets 55,334 23,961 79,295 39,910 27,915 67,825
Unallocated assets 4,131 16,003
Total assets 83,426 83,828
Segment liabilities 14,747 3,327 18,074 11,600 5,433 17,033
Unallocated liabilities 10,884 9,248
Total liabilities 28,958 26,281
Unallocated assets and liabilities principally comprise assets held for sale, cash, tax and pension scheme obligations.
Other information
Capital expenditure 1,826 1,008 2,834 3,381 602 3,983
Depreciation 2,227 866 3,093 1,891 857 2,748
Geographical revenue analysis by destination
2005 2004
£’000 £’000
United Kingdom 73,169 81,629
Rest of Europe 19,592 8,579
North America 3,489 3,060
Rest of World 4,005 1,899
100,255 95,167
Notes to the accounts
Year ended 31st December 2005 ACCOUNTS
30 Metalrax Group PLC Engineering specialists
2 Net interest
2005 2004
£’000 £’000
Finance income 77 245
Interest payable on bank loans and overdrafts (32) (11)
45 234
3 Profit for the year
2005 2004
£’000 £’000
This is stated after charging the following:
Auditors’ remuneration
Audit (including parent company £23,000) 193 170
Other services 83 4
Depreciation 3,229 3,078
Amortisation of intangibles 80 134
Plant hire 258 175
Property rentals 379 393
4 Income tax expense
2005 2004
£’000 £’000
Current tax:
UK corporation tax at 30% 2,255 3,458
Previous overprovision (33) (86)
2,222 3,372
Deferred tax (note 16):
Current year (45) 70
2,177 3,442
Factors affecting the tax charge for the year
Profit on continuing activities before tax 7,408 11,406
Tax on continuing activities at 30% 2,222 3,422
Effects of:
Expenses not deductible for tax purposes 15 7
Depreciation in excess of capital allowances 124 99
Capital profits not taxable (151) —
Adjustment to tax charge in respect of previous periods (33) (86)
2,177 3,442
Notes to the accounts
Year ended 31st December 2005 Accounts 31 Annual Report 2005
5 Discontinued operations
During the year Anotrim Limited ceased to trade and the Group disposed of the trade and assets of MRX Plastic
Moulders Limited on 16th September 2005.
The results of the discontinued businesses for the period which have been included in the consolidated accounts 
were as follows:
2005 2004
£’000 £’000
Revenue 3,754 9,291
Operating costs (4,586) (9,200)
Trading loss (832) 91
Closure costs (659) —
Profit on sale of fixed assets 552 —
Operating (loss)/profit (939) 91
(Loss) on disposal of business (note 20) (402) —
Profit on disposal of subsidiary — 1,164
(Loss)/profit before tax (1,341) 1,255
Income tax credit 524 (29)
(Loss)/profit from discontinued activities after tax (817) 1,226
(Loss)/earnings per share (0.68p) 0.97p
6 Earnings per share
The basic and diluted earnings per share are calculated on the profit for the year. The number of shares used in the
calculation is 119,897,298 (2004: 119,897,298).
The earnings per share from continuing operations are calculated on the profit and the same number of shares.
7 Dividends (equity)
2005 2004
£’000 £’000
Final dividend for 2004 paid on 27th May 2005 of 3.75p (2003: final 3.75p) 4,496 4,496
Interim dividend for 2005 paid on 7th October 2005 of 1.65p (2004: interim 1.65p) 1,978 1,978
Total equity dividends paid 6,474 6,474
Proposed dividends
The Directors recommend that a final dividend of 3.75p per share is paid and is to be proposed as a resolution at 
the Annual General Meeting in May 2006. The final dividend amounts to £4,496,000 (2004: £4,496,000). ACCOUNTS
32 Metalrax Group PLC Engineering specialists
8 Goodwill and intangible assets
Goodwill Intangibles
£’000 £’000
Cost
At 1st January 2005 6,555 250
Arising on acquisitions (note 19) 4,599 —
Adjustment to prior year consideration (96) —
At 31st December 2005 11,058 250
Amortisation
At 1st January 2005 —40
Charge for the year —80
At 31st December 2005 — 120
Net book value
At 31st December 2005 11,058 130
At 31st December 2004 6,555 210
9 Property, plant and equipment of the group
Freehold and Short
long leasehold leasehold Plant and
properties properties vehicles Total
£’000 £’000 £’000 £’000
Cost
At 1st January 2005 15,848 557 49,180 65,585
Additions 26 — 2,808 2,834
Acquisition of businesses 1,733 — 1,100 2,833
Disposals (724) — (2,404) (3,128)
Transfer to current assets (989) — (165) (1,154)
Disposal of business — — (3,191) (3,191)
At 31st December 2005 15,894 557 47,328 63,779
Aggregate depreciation
At 1st January 2005 3,321 219 35,161 38,701
Charge for year 311 11 2,944 3,266
Disposals (220) — (1,616) (1,836)
Transfer to current assets (290) — (100) (390)
Disposal of business — — (2,585) (2,585)
At 31st December 2005 3,122 230 33,804 37,156
Net book value
At 31st December 2005 12,772 327 13,524 26,623
At 31st December 2004 12,527 338 14,019 26,884
The cost of depreciable assets included above is £62,024,000.
The cost of long leasehold properties included above is £2,875,000.
Notes to the accounts
Year ended 31st December 2005 Accounts 33 Annual Report 2005
10 Property, plant and equipment of the parent company
Freehold Plant and
properties vehicles Total
£’000 £’000 £’000
Cost
At 1st January 2005 2,123 134 2,257
Additions — 11 11
At 31st December 2005 2,123 145 2,268
Aggregate depreciation
At 1st January 2005 412 84 496
Charge for year 36 22 58
At 31st December 2005 448 106 554
Net book value
At 31st December 2005 1,675 39 1,714
At 31st December 2004 1,711 50 1,761
The cost of depreciable assets included above is £1,951,000.
11 Inventories
2005 2004
Group Group
£’000 £’000
Raw materials 6,064 4,790
Work in progress 3,322 3,664
Finished goods 7,390 8,962
16,776 17,416
12 Receivables
2005 2005 2004 2004
Group Company Group Company
£’000 £’000 £’000 £’000
Trade receivables 21,745 — 20,396 —
Other receivables 1,150 29 50 —
Prepayments 723 9 781 22
23,618 38 21,227 22
13 Assets held for sale
Assets held for sale comprise two freehold properties that, following reorganisations in 2005, are now available for
disposal. ACCOUNTS
34 Metalrax Group PLC Engineering specialists
14 Creditors
2005 2004
Group Company Group Company
£’000 £’000 £’000 £’000
Loan notes 300 300 200 200
Trade payables 13,595 157 12,255 37
Accruals 2,209 112 2,552 96
Social security and other taxes 2,743 146 3,005 84
Current tax payable 1,018 250 1,614 180
Other payables 566 365 419 419
20,431 1,330 20,045 1,016
15 Non-current liabilities
Loan notes 750 750 300 300
Other payables —— 75 75
750 750 375 375
The loan notes are wholly repayable within five years of which £300,000 (2004: £200,000) is repayable within one year,
£250,000 (2004 - £Nil) within one to two years and £500,000 (2004: £300,000) between two and five years.
16 Deferred taxation
Group Company
£’000 £’000
Balance at 1st January 2005 749 (1,098)
Transfer from income statement:
Continuing (45) (127)
Discontinued (125) —
Acquired with subsidiary 76 —
Transfer from statement of recognised income and expenses (436) (436)
Balance at 31st December 2005 219 (1,661)
Accelerated allowances 1,963 23
Pension scheme deficit (1,744) (1,684)
219 (1,661)
17 Called up share capital
2005 2004
Allotted and Allotted and
Authorised fully paid Authorised fully paid
£’000 £’000 £’000 £’000
Ordinary shares of 5 pence each 7,000 5,995 7,000 5,995
At 31st December 2005 there were options to subscribe for 264,000 ordinary shares under the executive share 
option scheme at a price of 98.18 pence per share. Options are exercisable before 28th October 2006.
Notes to the accounts
Year ended 31st December 2005 Accounts 35 Annual Report 2005 35
18 Reserves
Capital
Share Redemption Retained
premium reserve earnings
£’000 £’000 £’000
Group
Balance at 1st January 2005 2,732 274 48,546
Profit for the year — — 4,414
Equity dividends paid — — (6,474)
Actuarial deficit on retirement benefits (net of tax) — — (1,019)
Balance at 31st December 2005 2,732 274 45,467
Capital
Share Redemption Retained
premium reserve earnings
£’000 £’000 £’000
Company
Balance at 1st January 2005 2,732 274 45,054
Profit for the year — — 3,305
Equity dividends paid — — (6,474)
Actuarial deficit on retirement benefits (net of tax) — — (1,019)
Balance at 31st December 2005 2,732 274 40,866
The parent company’s profit for the financial year amounted to £2,973,000 (2004: £10,100,000).
19 Parent company investments
Shares in
subsidiaries
£’000
Cost
At 1st January 2005 24,874
Additions 4,996
Adjustment to purchase consideration (96)
At 31st December 2005 29,774
Provisions
At 1st January 2005 4,919
Movement for the year (250)
At 31st December 2005 4,669
Net book value
At 31st December 2005 25,105
At 31st December 2004 19,955 ACCOUNTS
36 Metalrax Group PLC Engineering specialists
19 Parent company investments (continued)
The company acquired the entire issued share capital of Stackright Building Systems Limited on 30th November 2005.
The underlying assets acquired, at what the Directors considered to be fair values, were as follows:
Fair values
£’000
Tangible fixed assets 1,441
Current assets 2,693
Bank overdraft (152)
Current liabilities (2,732)
Non-current liabilities (76)
Net assets acquired 1,174
Goodwill 3,822
4,996
Consideration and costs:
Cash 4,246
Loan notes 750
4,996
The loan note element of the consideration will be payable only if Stackright Building Systems Limited achieves profit
targets for each of the years ending 31st December 2006, 2007 and 2008.
In addition the group acquired the trade and assets of Cooper Coated Coil Limited on 17th January 2005. The
underlying assets acquired at what the Directors considered to be fair values, were as follows
Book Fair value Fair
values adjustment values
£’000 £’000 £’000
Tangible fixed assets 1,792 (400) 1,392
Current assets 4,414 — 4,414
Current liabilities (2,426) — (2,426)
Net assets acquired 3,780 (400) 3,380
Goodwill 777
4,157
Consideration and costs:
Cash 4,057
Deferred consideration 100
4,157
An adjustment was made to write down the plant acquired to its estimated fair value.
The combined revenue for Stackright Building Systems Limited and Cooper Coated Coil Limited for the year ended 
31 December 2005 was £24.4 million with an operating profit of £2.0 million.
Included in the income statement is revenue of £11.8 million and an operating profit of £1.1 million.
Notes to the accounts
Year ended 31st December 2005 Accounts 37 Annual Report 2005
20 Sale of business
On 16th September 2005 the group sold the trade and assets of MRX Plastic Moulders Limited. The assets sold were
as follows:
£’000
Tangible fixed assets 606
Current assets 957
Current liabilities (509)
Net assets disposed 1,054
Consideration received 652
(Loss) on disposal of business (402)
21 Subsidiary undertakings
The principal subsidiaries, which are listed on page 45 and at 31st December 2005, all operate in Great Britain and are
all wholly owned. 
22 Contingent liabilities
The company had given various cross-guarantees in connection with group banking arrangements. At 31st December
2005 there were no liabilities under these arrangements.  The amount shown as cash at bank in the parent company
balance sheet is the balance arising on the subdivision of the group banking arrangement.
23 Future capital expenditure
At 31st December 2005 capital expenditure contracted for but not provided in these accounts amounted to
approximately £227,000 (2004: £262,000).
24 Commitments under operating leases
The group had annual commitments at 31st December 2005 under operating leases as follows:
2005 2004
Properties Other Properties Other
£’000 £’000 £’000 £’000
Expiring within one year 39 23 52 —
Expiring within two to five years 214 36 267 100
Expiring after more than five years 74 16 74 —
327 75 393 100
25 Events after the balance sheet date
Since the year end the group has acquired the business and assets of The Belsize Engineering Company Limited
together with the entire issued share capital of Makespace Mezzanine Floors Limited. The aggregate cash
consideration was £2.5 million.
On 27th March 2006 the group announced that it had acquired the entire issued share capital of Advanced Handling
Limited together with its Romanian subsidiary, Hidrosib S.A., for a cash consideration of up to £2.25 million, of
which £1.125 million was paid on completion. ACCOUNTS
38 Metalrax Group PLC Engineering specialists
26 Notes to the cash flow statement
2005 2004
£’000 £’000
a) Reconciliation of operating profit to net cash flow from operating activities
Continuing operations
Operating profit 7,363 11,172
Depreciation, net of disposal surpluses 3,093 2,614
Profit on sale of property (505) —
Amortisation of intangibles 80 134
Decrease in inventories 2,129 (1,374)
Decrease in trade and other receivables 1,572 (642)
Decrease in payables (2,578) (398)
Increase in non-current liabilities 427 343
Cash generated from continuing operations 11,581 11,849
Discontinued operations
Operating loss (939) 91
Depreciation, net of disposal surpluses 206 464
Profit on sale of property (552) —
Decrease in inventories 801 (27)
Decrease in trade and other receivables 330 318
Decrease in payables (203) (318)
Cash absorbed by discontinued operations (357) 528
Cash generated from operations 11,224 12,377
b) Reconciliation of net cash flow to movement in net funds
Decrease in cash in the period (7,643) (668)
New loan notes issued (750) (500)
Loan notes redeemed 200 —
Movement in net funds in the year (8,193) (1,168)
Net funds at 1st January 2005 9,856 11,024
Net funds at 31st December 2005 1,663 9,856
c) Net funds reconciled to the balance sheet:
Cash and cash equivalents 2,713 10,356
Current liabilities — loan notes (300) (200)
Non-current liabilities — loan notes (750) (300)
1,663 9,856
d) Acquisitions
Cash consideration 8,125 1,575
Bank overdraft acquired 152 340
Payment of deferred consideration 598 107
8,875 2,022
The businesses acquired during the year contributed £1,282,000 to the group’s net cash inflow from operations.
Notes to the accounts
Year ended 31st December 2005 Accounts 39 Annual Report 2005
27 Pensions
Defined contribution plans
The group contributes to a number of defined contribution pension plans and the total cost charged to income for the
year was £133,000 (2004: £99,000) representing the contributions due to the plans for the year.
Defined benefit plans
The group operates defined benefit plans for qualifying employees, although these are closed to new entrants, 
which provide benefits based on final pensionable pay.  The assets of the schemes are held separately from those of
the group, being invested with insurance providers. The contributions are determined by independent qualified
actuaries employed by the insurance providers on the basis of triennial valuations using the attained age funding
method. 
The major assumptions used by the actuary were:
2005 2004 2003
% per % per % per
annum annum annum
Inflation 2.8 2.8 2.8
Rate of increase in salaries 3.8 3.8 3.8
Pension increases, subject to LPI 2.8 2.8 2.8
Discount rate 4.7 5.2 5.3
Return on plan assets
Equities 7.7 8.7 8.8
Property 7.8 7.8 7.8
Bonds 4.3 4.8 5.0
Other 4.3 4.8 3.8
Total 5.2 5.6 5.1
Amounts recognised as administrative expenses in the income statement in respect of defined benefit schemes are 
as follows:
2005 2004
£’000 £’000
Current service cost 809 583
Interest cost on scheme liabilities 861 848
Expected return on scheme assets (700) (593)
970 838
Actual return on scheme assets 1,745 959
The amounts included in the balance sheet arising from the group’s obligations in respect of defined benefit schemes
is as follows:
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Total market value of assets 14,425 11,855 9,757 9,757
Present value of scheme liabilities (20,239) (17,469) (13,689) (13,489)
Gross pension liability (5,814) (5,614) (3,932) (3,732) ACCOUNTS
40 Metalrax Group PLC Engineering specialists
27 Pensions (continued)
Movement in deficit during the year
2005 2004
£’000 £’000
Deficit at the start of the year (3,932) (3,655)
Movement in year:
Current service cost (809) (583)
Contributions 543 563
Other finance costs (161) (255)
Actuarial gains and losses (1,455) (2)
Deficit at the end of the year (5,814) (3,932)
28 Employees
2005 2004
Number Number
Average number during the year:
Monthly paid 341 353
Weekly paid 1,072 1,234
1,413 1,587
29 Employee costs (including Directors)
2005 2004
£’000 £’000
Wages and salaries 23,725 24,643
Social security 2,204 2,202
Pension costs:
Defined benefit schemes 809 583
Defined contribution schemes 133 99
26,871 27,527
Detailed information concerning Directors’ emoluments and share options is shown in the Directors’ Remuneration Report 
on pages 20 and 21.
Notes to the accounts
Year ended 31 December 2005 Accounts 41 Annual Report 2005
30 Financial instruments
The following disclosures exclude short term debtors and creditors.
(a) Financial assets
Substantially all are sterling deposits, consisting of £2,314,000 on interest-bearing accounts and £399,000 on
which no interest was being received at the year end.
(b) Financial liabilities
Financial liabilities of £1,050,000 are loan notes. £300,000 is at nil interest rate and the balance is at an interest
rate of 1% below Bank of England base rate. £300,000 matures within one year and the maturity of the balance
is shown at note 15.
(c) Currency exposure
The group holds foreign currency in currency denominated accounts for normal trading purposes and enters into
forward currency contracts in order to minimise the exposure to fluctuations in foreign currency exchange rates. At
31st December 2005 the group had bank balances of £587,000 and forward contracts totalling £1,690,000, which
are not materially different to their market values.
(d) Borrowing facilities
At 31st December 2005 the group had unused bank overdraft facilities amounting to £13,000,000 which are
reviewed on an annual basis. On 21st March 2006 further loan facilities of £15,000,000 were arranged.
31 Reconciliation of changes arising from the introduction of IFRS
2004
£’000
Profit previously reported under UK GAAP for year ended 31st December 2004 8,475
Inclusion of defined benefit pension scheme deficits (275)
Elimination of defined benefit pension scheme prepayment (68)
Change in policy on treatment of goodwill 392
Reclassification of goodwill as an intangible assets (134)
Taxation effects of the above 103
Goodwill written back on disposal of subsidiary 636
Profit reported using IFRS 9,129
1st January 31st December
2004 2004
Equity previously reported under UK GAAP 53,609 56,196
Inclusion of defined benefit pension scheme deficits (3,655) (3,932)
Elimination of defined benefit pension scheme prepayment (740) (808)
Change in policy on treatment of goodwill — 392
Reclassification of goodwill as an intangible assets (85) (219)
Taxation effects of the above 1,319 1,422
Timing differences in respect of dividends 4,496 4,496
Equity reported using IFRS 54,944 57,547 AUDIT REPORT
42 Metalrax Group PLC Engineering specialists
We have audited the consolidated accounts of Metalrax
Group PLC for the year ended 31st December 2005 set
out on pages 22 to 41 which have been prepared under
the historical cost convention and the accounting policies
set out on pages 27 and 28. We have also audited the
information in the Directors’ remuneration report that is
described as having been audited.
This report is made solely to the company’s members as a
body, in accordance with Section 235 of the Companies
Act 1985. Our audit work has been undertaken so that
we might state to the company’s members those matters
we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as
a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the annual
report, the Directors’ remuneration report and the
consolidated accounts in accordance with applicable law
and International Financial Reporting Standards (IFRS) as
adopted by the EU are set out in the statement of
Directors’ responsibilities.
Our responsibility is to audit the consolidated accounts and
the part of the Directors’ remuneration report to be audited in
accordance with relevant legal and regulatory requirements
and International Standards on Auditing (UK & Ireland).
We report to you our opinion as to whether the
consolidated accounts give a true and fair view and
whether the consolidated accounts and the part of the
Directors’ remuneration report to be audited have been
properly prepared in accordance with the Companies Act
1985 and article 4 of the IAS Regulation. We also report to
you if, in our opinion, the report of the Directors is not
consistent with the consolidated accounts, if the company
has not kept proper accounting records, if we have not
received all the information and explanations we require
for our audit, or if information specified by law regarding
Directors’ remuneration and transactions with the
company and other members of the group is not disclosed.
We review whether the Corporate Governance Statement
reflects the company’s compliance with the nine
provisions of the 2003 FRC Combined Code specified for
our review by the Listing Rules of the Financial Services
Authority and we report if it does not. We are not
required to consider whether the board’s statements on
internal control cover all risks and controls, or form an
opinion on the effectiveness of the group’s corporate
governance procedures or its risk and control procedures.
We read the other information contained in the annual
report and consider whether it is consistent with the
audited consolidated accounts. We consider the
implications for our report if we become aware of any
apparent misstatements or material inconsistencies with
the consolidated accounts. Our responsibilities do not
extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International
Standards on Auditing (UK & Ireland) issued by the
Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and
disclosures in the consolidated accounts and the part of
the Directors’ remuneration report to be audited. It also
includes an assessment of the significant estimates and
judgements made by the Directors in the preparation of
the consolidated accounts, and of whether the accounting
policies are appropriate to the company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered
necessary in order to provide us with sufficient evidence to
give reasonable assurance that the consolidated accounts
and the part of the Directors’ remuneration report to be
audited are free from material misstatement, whether caused
by fraud or other irregularity or error. In forming our opinion
we also evaluated the overall adequacy of the presentation
of information in the consolidated accounts and the part of
the Directors’ remuneration report to be audited.
Opinion
In our opinion:
 the consolidated accounts give a true and fair view, in
accordance with IFRSs adopted by the EU, of the state
of affairs of the company and of the group as at 31st
December 2005 and of the group’s profit for the year
then ended; and
 the consolidated accounts and the part of the Directors’
remuneration report to be audited have been properly
prepared in accordance with the Companies Act 1985
and Article 4 of the IAS Regulation.
BENTLEY JENNISON
Chartered Accountants
and Registered Auditors
Charterhouse
Legge Street
Birmingham
B4 7EU
10th April 2006
Report of the independent auditors 
to the members of Metalrax Group PLC FIVE YEAR RECORD
Accounts 43 Annual Report 2005 Accounts 43 Annual Report 2005
See note below
2005 2004 2003 2002 2001
£’000 £’000 £’000 £’000 £’000
Turnover 100,255 95,167 104,350 111,671 108,543
Operating profit 7,363 11,172 11,850 11,718 11,553
Profit before taxation 7,408 11,406 12,047 12,337 11,610
Profit for the financial year 4,414 9,190 8,135 8,533 8,040
Assets employed
Non-current assets 39,555 34,829 31,227 30,717 31,713
Current assets 43,871 48,999 25,100 23,913 23,660
Current liabilities (20,431) (20,045) (344) (211) (2,333)
Non-current liabilities (8,527) (6,236) (2,020) (1,953) (1,916)
Net assets 54,468 57,547 53,963 52,466 51,124
Key statistics
Earnings per share 3.68p 7.61p 6.78p 7.09p 6.68p
Dividends per share 5.40p 5.40p 5.40p 5.40p 5.40p
Dividend cover (times) — continuing operations 0.8 1.2 1.3 1.3 1.2
Return on shareholders’ funds* 8.1% 15.9% 15.2% 16.4% 15.9%
Return on assets† 13.5% 19.4% 22.0% 22.3% 22.6%
Share price — high 88.5p 100p 86p 79p 81p
— low 68.25p 74p 58p 63.5p 59p
* Profit for the year/shareholders’ funds
† Operating profit/net assets
Note: 
2005 is reported under IFRS with 2004 restated accordingly. Prior years are as previously reported.
Capital gains tax
The official market value of the company’s ordinary shares at 31st March 1982 was 46.5 pence each. Since that date the
company has declared sixteen scrip issues of 10% each, which had the cumulative effect by 31st December 2005 of
reducing that figure to the equivalent of 10.1 pence.
FINANCIAL CALENDAR 
23rd May 2006 Annual General Meeting
26th May 2006 Final Dividend
September 2006 Interim Results
October 2006 Interim Dividend
March 2007 Annual Results  NOTICE OF MEETING
44 Metalrax Group PLC Engineering specialists
Notice is hereby given that the forty-second Annual General
Meeting will be held at the Birmingham Hippodrome, Hurst
Street, Birmingham B5 4TB on 23rd May 2006 at 11.45 a.m.
The business of the meeting will be to pass:
(a) Ordinary resolutions
1 To receive the report of the Directors and the audited
accounts for the year ended 31st December 2005.
2 To approve the payment of the proposed final ordinary
dividend of 3.75p per share.
3 To receive the Directors’ remuneration report and the
report of the auditors thereon.
4 To re-elect J. K. Adcock, who is Chairman of the
Remuneration Committee and a member of the Audit
Committee, as a Director.
5 To elect A. P. Pearson, who is a member of the Audit
Committee and Remuneration Committee, as a Director.
6 To elect W. D. Kelly as a Director.
7 To reappoint Bentley Jennison as auditors and to
authorise the Directors to determine their remuneration.
8 THAT the proposed adoption by the company of a Long-
Term Incentive Plan, the detailed terms and conditions of
which are to be determined by the Remuneration
Committee, be and hereby approved.
(b) Special resolutions
9 THAT the Directors of the company be and are hereby
empowered pursuant to Section 95 of the Companies Act
1985 to allot equity securities (within the meaning of
Section 94 of the said Act) for cash pursuant to the
authority given by ordinary resolution number 7 set out in
the notice convening this Annual General Meeting as if
Section 89(1) of the said Act did not apply to any such
allotment provided that this power shall be limited:
(a) to the allotment of equity securities in connection
with a rights issue in favour of or general offer or
open offer to ordinary shareholders where the equity
securities respectively attributable to the interest of all
ordinary shareholders are proportionate (as nearly as
may be) to the respective number of ordinary shares
held by them (but subject to such exclusions or other
arrangements as the Directors may deem necessary or
expedient to deal with problems under the law of any
territory or the requirement of any regulatory body or
any stock exchange in any territory or in connection
with fractional entitlements or otherwise); and
(b) to the allotment (otherwise than pursuant to sub-
paragraph (a) above) of equity securities up to an
aggregate nominal value of £299,743 being 5 per
cent of the current issued share capital,
and shall expire at the conclusion of the next annual
general meeting of the company or fifteen months from
the date of the passing of this resolution (whichever shall
occur first), save that the company may before such
expiry make an offer or agreement which would or
might require equity securities to be allotted after such
expiry and the Directors of the company may allot equity
securities in pursuance of such offer or agreement as if
the power conferred hereby had not expired.
10 THAT the company be and is hereby generally and
unconditionally authorised to make market purchases
(within the meaning of Section 163(3) of the Companies
Act 1985) of ordinary shares of 5p each in the capital of
the company (“ordinary shares”) provided that:
(a) the maximum number of ordinary shares hereby
authorised to be purchased is 11,989,730 which
represents approximately 10 per cent of the current
issued share capital of the company;
(b) the minimum price which may be paid for an
ordinary share is 5p (exclusive of expenses); and
(c) the maximum price at which an ordinary share may
be purchased is an amount (exclusive of expenses)
equal to 105 per cent of the middle market
quotations for such shares as derived from the
London Stock Exchange Daily Official List for each
of the five dealing days immediately preceding the
date on which an ordinary share is purchased,
and shall, unless it is (prior to its expiry) duly revoked or
renewed, expire at the conclusion of the next annual
general meeting of the company or 15 months from the
date of the passing of this resolution (whichever shall
occur first), save that the company may make a contract
to purchase ordinary shares under this authority before
such expiry which will or may be executed wholly or
partly after such expiry, and may make a purchase of
ordinary shares pursuant to any such contract as if the
authority hereby conferred had not expired.
On behalf of the board Ardath Road
W. D. KELLY, F.C.A. Kings Norton
Company Secretary Birmingham
20th April 2006 B38 9PN
Notes:
1 Members are entitled to appoint a proxy to attend and vote
on their behalf and such proxy need not be a member of the
company. Proxy forms must be lodged at the registrars’ office
not later than 48 hours before the time fixed for the Meeting.
2 A statement of the share transactions of each Director for
the twelve months to 31st March 2006 and a copy of their
contracts of service, where applicable, are available for
inspection at the registered office during usual business hours
on any weekday (excluding Saturdays and public holidays)
until 22nd May 2006, and will also be available for fifteen
minutes before and during the Annual General Meeting.
Metalrax Group PLC Subsidiary Companies of the Group  45 Annual Report 2005
GROUP COMPANIES
From 2006 the group will operate with three divisions
Samuel Groves & Co. Limited
Norton Street, Hockley, Birmingham B18 5RQ
Tel: 0121 554 2001  Fax: 0121 523 2924
Food service equipment and utensils
Microwise Cookware Limited
Units 1 and 2 Murdock Road, 
Bicester, Oxfordshire OX26 4PP
Tel: 01869 248239  Fax: 01869 240332
Microwave cookware
RTA Wine Rack Company Limited
Station Road, Great Ryburgh, 
Fakenham, Norfolk NR21 0DX
Tel: 01328 829292   Fax: 01328 829667
Wine racks and wood products
G. S. Smart & Company Limited
Ardath Road, Kings Norton, Birmingham B38 9PN
Tel: 0121 459 0983   Fax: 0121 459 8559
Occasional furniture and home accessories
George Wilkinson (Burnley) Limited 
Progress Works, Elm Street, 
Burnley, Lancashire BB10 1PB
Tel: 01282 415511   Fax: 01282 433112
PROGRESS and CLASSIC bakeware, gadgets,
pine and ceramic products
Bacol Fine Blanking Limited
Sherwood Road, Aston Fields Industrial Estate,
Bromsgrove, Worcestershire B60 3DR
Tel: 01527 874205   Fax: 01527 833761
Fine blanking to 630 tonnes capacity
Bacol Industries Limited
Middlemore Industrial Estate, Middlemore Road,
Smethwick, West Midlands B66 2EQ
Tel: 0121 558 3911   Fax: 0121 558 8798
Presswork to 700 tonnes capacity
Deep drawing and ironing
B.S.C. (Diecasting) Limited
Fryers Close, Bloxwich,Walsall, 
West Midlands WS3 2XQ
Tel: 01922 710070   Fax: 01922 408008
Zinc and aluminium pressure diecasting
Hidrosib S.A.
Sibiu, Romania
Initial enquiries to Advanced Handling 
Engineering and manufacturing facilties 
Kenham Tools & Pressings Limited
Plume Street, Aston, Birmingham B6 7RY
Tel: 0121 327 4852   Fax: 0121 328 9045
Medium and large pressings and assemblies
Prescott Powell Limited
466 Moseley Road, Birmingham B12 9AN
Tel: 0121 446 4411   Fax: 0121 446 4681
Small and medium pressings
Tube manipulation and assemblies
Toolspec Manufacturing Co. Limited
Sedgwick Road, Luton, Bedfordshire LU4 9DT
Tel: 01582 572626   Fax: 01582 596891
Tube manipulation and assemblies
Weston Body Hardware Limited
Crossgate Road, Park Farm Industrial Estate,
Redditch, Worcestershire B98 7SN
Tel: 01527 516060   Fax: 01527 526060
Locks, handles, latches and ancillary products
Advanced Handling Limited
Northfields Industrial Estate,
Market Deeping, Petersbrough PE6 8LD
Tel: 01778 345265   Fax: 01778 341654
Providing integrated handling solutions
Commercial Bearings Limited
Plume Street, Aston, Birmingham B6 7RY
Tel: 0121 327 1349   Fax: 0121 327 6926
Industrial bearings
Cooper Coated Coil Limited
Great Bridge Street, West Bromwich
West Midlands B70 0DJ
Tel: 0121 521 1500   Fax: 0121 521 1526
Surface coated metals
Down and Francis Limited
Ardath Road, Kings Norton, Birmingham B38 9PN
Tel: 0121 433 3300   Fax: 0121 459 9222
Structural engineering and steel fabrications
Fabricote Limited
Unit 38, Planetary Industrial Estate,
Planetary Road, Wednesfield, 
Wolverhampton WV13 3XB
Tel: 01902 864422   Fax: 01902 305442
Surface coated metals
Makespace Mezzanine Floors Limited
Unit 1, Millfield Road Industrial Estate,
Donington, Spalding, Lincolnshire
Tel: 01775 822060   Fax: 01775 822061
Lightweight mezzanine floors 
Metalrax Limited
Bordesley Green Road, Birmingham B9 4TP
Tel: 0121 772 8151   Fax: 0121 772 6135
Storage systems, shelving 
and roller conveyor systems
Premier Stairways Limited
Unit 300, Catesby Park, Eckersall Road, 
Kings Norton, Birmingham B38 8SE
Tel: 0121 451 1212   Fax: 0121 451 1220
Architectural metalwork
Sections and Tubes Limited
Hall Street, West Bromwich, 
West Midlands B70 7DW
Tel: 0121 553 2721   Fax: 0121 500 5002
Cold rolled metal sections
Stackright Building Systems Limited
Charleywood Road, Knowsley Industrial Park
(North), Kirkby, Merseyside L33 7SG
Tel: 0151 548 3666   Fax: 0151 548 3777
Building Systems
Welland Engineering Supplies Limited
Units 4B and 5B, King Street Industrial Estate,
Langtoft, Peterborough PE6 9NF
Tel: 01778 560057   Fax: 01778 560058
Distributor of fasteners, hand tools 
and maintenance products
Automotive & Engineering Engineering Support Services Housewares Registered Office
Ardath Road, Kings Norton
Birmingham B38 9PN
Tel: 0121 433 3444
Fax: 0121 433 3325
Website: www.metalraxgroup.co.uk
E-mail: info@metalraxgroup.co.uk
Registered in England 793639