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TWST: Can we start with a quick introduction to UMECO (London: UMC.L) and then just bring us up to date with how you see the company positioned today?

Mr. Snowdon: UMECO is a fairly longstanding company in the UK market. I became chief executive six years ago and since that time we have rather transformed the group to become Europe’s leading provider of value added distribution services to the aerospace business. Six years ago we turned over about £20 million and in the year to March ’03 we turned over £181 million. We focus on three areas: the supply of small aerospace parts -- the nuts and bolts which keep aircrafts and engines together and they principally go to original equipment manufacturers rather than the aftermarket; aerospace chemicals from glues to composite materials which we sell through a broad range of companies to a mixture of OEM and aftermarket customers; and we also have our own repair and overhaul business that specializes in avionics helicopter landing gear and safety equipment; by safety equipment I mean evacuation slides and life rafts. We have subsidiaries in the UK in Europe and a number in the United States and we can offer the same services on a very uniform platform to our growing customer base.

TWST: What are the value added distribution services you provide?

Mr. Snowdon: We provide a complete outsourcing solution for the customer. We manage the whole of their procurement, their inward goods inspection, normally using our facilities rather than theirs. We manage a multiple vendor or supplier list. On some of our larger contracts that can be 200 or 300 different suppliers and then we deliver the goods normally to point of use. If you look at our largest contract, which is with Rolls-Royce plc, the UK-based aero-engine manufacturer, we’re delivering about £50 million worth of parts to about 33,000 unique locations within Rolls-Royce plc’s facilities.

TWST: Is that what customers are asking for these days, a full outsourcing solution?

Mr. Snowdon: Yes, it’s an increasing trend. Customers are obviously looking to save money and reduce their own investment in their business. Using solutions such as ours they can achieve a sizeable one-off cash gain from our acquiring their inventory completely. Our model is also much more to work with the customer to improve their stock turn. Quite often stock turns will be less than one and over a period of time we can get stock turns to two to three to four and that can represent quite a considerable saving for the customer. In addition to that, they’ll get savings by having all the parts available when they need them and those efficiency gains plus the procurement gains can be quite considerable.

TWST: What are the key objectives on your agenda for the next 12 to 24 months?

Mr. Snowdon: We have remained profitable as a group over this difficult period. Now we would like to return to the rates of growth and earnings per share we enjoyed previously, which were north of 20% compound. To do that now we need to win some new contracts and we need to grow business with existing customers and we have a number of plans to do that. As I said earlier, the financial benefits to customers of the services we provide are now well understood and therefore getting out there and selling that to customers and closing those deals is very important to us.

TWST: Do you have a good sales force to do that?

Mr. Snowdon: Yes, we’ve increased our sales force over the last 18 months. Other people have been cutting back, but we’ve actually been hiring people. Many of our larger competitors have been somewhat aggressive in headcount reductions and where possible we have hired both in Europe and in North America some very high quality people, and they normally bring business with them, which is to everyone’s mutual benefit.

TWST: What would you underline as your advantage when going out there and securing new business?

Mr. Snowdon: Over the last two to three years we think we have developed a very sophisticated complete outsourcing service. A lot of our competitors will only offer certain elements of that service. The service levels we can offer a customer of the nature of Rolls-Royce plc - where it is very, very rare with a multiple parts population to have any inventory shortages at all - is seen as a very key attribute, especially in these days of real-time and 24/7 operations. So we are aiming to be the highest-level service provider in terms of our offering in the marketplace. It costs a little bit more but we expect the customer to see the benefits from that additional cost.