ILFORD IMAGING LIMITED - IN ADMINISTRATION
ILFORD IMAGING UK LIMITED - IN ADMINISTRATIVE RECEIVERSHIP

Mark Byers, Malcolm Shierson and Les Ross, partners at Grant Thornton UK LLP, were appointed Joint Administrators of ILFORD Imaging Limited (“ILFORD Imaging” or “the Company”), one of the world’s leading suppliers of photographic materials, digital inkjet products and digital photo printing technology on 20 August 2004. They were also appointed Joint Administrative Receivers of ILFORD Imaging UK Limited on the same date.

ILFORD Imaging has two major manufacturing companies based in the UK and Switzerland. The UK business, based in Mobberley, Manchester, where it employed some 740 people, principally manufactures traditional monochrome photographic supplies. The Swiss manufacturing company, based in Marly, develops and manufactures digital inkjet products. The Swiss business is not in any form of insolvency and continues to trade normally. The ILFORD Group (“Group”) employs a further 310 people in subsidiary businesses in the USA, Europe and Australia.

At the time of the appointments, Mark Byers, Head of Recovery and Reorganisation, at Grant Thornton UK LLP commented:

“These insolvency appointments have arisen in order to restructure the Company’s traditional photography business and allow it to focus on its core profitable inkjet digital business based in Switzerland, which is unaffected by these insolvencies. Currently we are analysing the traditional photographic business with a view to assessing its potential for sale as a going concern. The business has key strengths through its technology, its reputation both with the general public, professional photographers and its major corporate customers.”

“Additionally the digital inkjet business will be marketed: it has very significant market share, technological strengths and potential for further rapid profitable growth.”

“Whilst this process continues we will be talking to ILFORD Imaging’s major customers and suppliers to maintain their support through this restructuring and disposal process.”

The Group was founded in 1879 in the UK and is famed for the quality of its photographic materials and more recently has developed into the world’s leading supplier of dyes for inkjet photo printers and is the second largest manufacturer of inkjet photo paper. It has significant supply contracts with major OEM's and private label businesses worldwide.

In the past four years the Group has successfully arrested, then reversed, a decline in sales (year to December 2003: US$233m, up from US$210m in 2002) through re-focussing the business on digital photography products, thereby reducing its dependence on its traditional black and white photography markets. Although growth and profitability in its digital inkjet business has continued to accelerate, the decline in the black and white photography market, in which ILFORD Imaging has a major market share, has continued. This combined with the weakness of the dollar and major de-stocking has led to losses.

The above comments were made by Mark Byers immediately following his appointment. Since that date, as an ongoing part of the restructuring and rationalisation process the workforce at Mobberley has reduced to 375 whilst the prospect of a sale of the business is explored. The UK business continues to trade and supply product to customers.

ILFORD businesses in the USA, Australia, France, Italy and the Benelux countries continue to trade as normal. The ILFORD business in Germany has been placed into formal insolvency proceedings but continues to supply product to its customers. If customers have any further queries regarding these businesses then they should contact their local sales representative.

The Swiss business at Marly continues to be unaffected by the appointment of Receivers in the UK and is trading and supplying customers as normal.

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