Final Results

LPA Group PLC
29 January 2008



                      PRELIMINARY ANNOUNCEMENT OF RESULTS
                      FOR THE YEAR ENDED 30 SEPTEMBER 2007


LPA Group PLC, the lighting, power and electronics system manufacturer and
distributor, announces a return to profit for the year to 30 September 2007 and
a good start to the new financial year.


KEY POINTS

•    Turnover up 21.2% to £16.65m (2006: £13.74m)

•    Profit before taxation of £298,000 (2006: loss of £143,000)

•    Adjusted earnings per share (before amortisation of goodwill) 2.91p 
     (2006: loss 0.40p)

•    Proposed final dividend of 0.40p (2006: 0.35p) per share making a total for 
     the year of 0.60p (2006: 0.50p) an increase of 20%

•    Reduction in gearing to 38.0% (2006: 38.8%); strong cash flow in current 
     year

•    Property disposal could add significantly to shareholders' funds if 
     activities can be economically relocated in the medium term

•    Continuing interest in LED lighting for defence, infrastructure and rail 
     vehicles





Peter Pollock, Chief Executive, commented



'Pleasing progress has been made during 2007 in rebuilding the profitability of
the Group. The current year has started strongly, but there are challenges which
need to be overcome in the near term before the pick up in rail project work in
2009. Orders expected to be placed during 2008, together with those already in
hand, should see a significant increase in activity from 2009 through to 2011.'



                                                                 29 January 2008

ENQUIRIES

Peter Pollock        LPA Group Plc                07881 626123 or 01799 512844

Thilo Hoffman        Landsbanki Securites         020 7426 9000

Gareth David         College Hill Associates      020 7457 2020




Chairman's Statement

Results

I am pleased to report that, as anticipated in my interim statement, the Group's
second half performance, like that of the first, was strong, resulting in
improved sales for the year of £16.65m (2006: £13.74m), a profit before tax of
£298,000 as compared to a previous year loss before tax of £143,000 and basic
earnings per share of 2.07p (2006: loss of 1.26p).


Dividends

Given the good trading performance last year and a cash position which has
continued to improve, your directors recommend an increased final dividend of
0.40p (2006: 0.35p) per share, which together with the interim dividend of 0.20p
(2006: 0.15p), will give a total for the year of 0.60p (2006: 0.50p), an
increase of 20%. The final dividend will be paid on 28 March 2008, to members on
the register at close on 7 March 2008, subject to receiving shareholder approval
at the annual general meeting to be held this year at the offices of College
Hill Associates Limited, The Registry, Royal Mint Court, London, EC3N 4QN at 12
noon on 11 March 2008.


Board

In my statement to you last year I indicated our intention to strengthen the
Board through the addition of at least one new non-executive director, and I am
delighted to report the appointment of Per Staehr, who joined the Board in
December 2007. Per has held a number of senior appointments in the rail and
transportation industries and brings with him a wealth of relevant experience.

John Goodger was due to retire at the conclusion of the forthcoming Annual
General Meeting, however the Board has asked him to provide a period of overlap
with Per Staehr and he has agreed to remain on the Board until the end of the
current financial year.



Employees

Our people have, once again, proved to be our most valuable asset and have
contributed in many ways to the Group's progress during the year. I take this
opportunity to thank them for their continued support.



Saffron Walden property

The Board has been evaluating a possible sale of its freehold site at Saffron
Walden, where there is potential to realise value by relocating manufacturing
activity and selling the site for residential re-development. The Board
solicited and received a conditional offer of £2.2m for the site from a major
house builder, which is £1.7m higher than the current book value of £0.5m. The
Board appointed King Sturge LLP, whose initial assessment of the site suggested
that a value in excess of the offer could be realised, to help identify suitable
alternative premises and to begin the formal marketing of the site. We are
actively assessing costs, other issues, and options for relocation from the
site, in the medium term.



Outlook

The start to the current financial year has been strong but the second quarter
will be weaker. The continuing delay in the award of rail vehicle contracts has
created a hiatus in the work load which will restrict progress during the
remainder of this year. The Group will be dependent on its non project
activities to sustain it, but happily these showed considerable growth during
last year, which we hope will continue this year.

The Group has already been selected for a number of projects for which,
frustratingly, contracts have yet to be placed, but which taken with the
recently announced new rail vehicle orders where the Group is an established
supplier, means that the Group remains well placed to receive a number of large
contracts during the current financial year. These, together with contracts
already on hand, should deliver growth during 2009 and sustain the load through
to 2011.

I look forward to reporting further at the Annual General Meeting and in the
Interim Statement.


Michael Rusch
Chairman
29 January 2008





Chief Executive's Review

Trading

Order entry increased by 7.5% in the year to £15.18m despite continued delay in
the placing of project orders for which the Group has already been selected.
Sales also increased, by 21.2% to £16.65m, which was the driver behind the
improved activity throughout the year, however the low rail project order intake
meant that total orders fell behind sales for the first time in five years. The
consequent weakness in the rail contract load meant that sales for the current
year were likely to fall below those for last year, and in anticipation of this,
the cost base was reduced in September.



Markets

Despite the increase in service related activities such as sub-contract and
distribution, the Group's main market remains the supply of components and
systems for rail (including new vehicle build and refurbishment) in the UK,
Europe and Asia. Other markets, including aerospace and defence, infrastructure
and general industrial, continue to grow in importance and reduce the Group's
dependence on long term contracts.



Rail

The Group remains the leading UK-based designer and manufacturer of inter-rail
vehicle electrical connection systems and has supplied an important first
contract in Asia. The Group also holds a world class position in LED's for
illumination applications, originally developed for rail vehicle interiors but
increasingly used for other markets and applications. Finally the Group
continues to be the UK's leading designer, integrator and supplier of auxiliary
battery power systems, a position which has been enhanced by a second
appointment as distributor of batteries for train use, and which now allows the
Group to offer both Lead Acid Gel and NiCad battery solutions for new build and
service replacement applications.

Following a period of unprecedented demand for new rail vehicles the UK remains,
for the second year in succession, in consolidation mode. The number of new
trains being built remains depressed and attention has been directed to
refurbishment of surface stock. There has been some demand for new Electrostar
vehicles, where the Group has only limited involvement, and the Group has made
initial supplies of lighting and shore supply for Javelin (the new High Speed
Channel Tunnel Rail Link vehicle).

Orders for Turbostar, where the Group is well represented, have now been
announced and contracts should be awarded this year. Likewise various impasses
which have delayed the placing of orders for new West Coast Mainline vehicles
could be resolved in the relatively near future which could lead to significant
contracts for the Group. The delays however mean that the hiatus in work load is
likely to be longer than expected, extending through the rest of 2008, but which
will be followed by a period of higher activity starting with the Victoria Line
upgrade at the end of 2008 and which should extend through to 2011 and quite
probably beyond. The Group is also pursuing current opportunities in Australia,
which have an earlier planned start date and which are likely also to run
through till 2011.

The Group is beginning to enjoy more success in the rail infrastructure market,
albeit from a small base and with a narrow product offering which we are
gradually expanding.


Aerospace and Defence

This market remains important to the Group, where we concentrate on the
subcontract and the spares market, which offer more opportunities than large
pan-national collaborative projects with long gestation periods. The UK defence
market remains fragmented which gives us opportunities to use our
customer-focussed service approach successfully.


Infrastructure and General Industrial

The Group remains a leading player in the global market, excluding the US, for
aircraft Ground Power connectors and cables which provide power for aircraft, on
the ground with engines switched off, to run essential services. We are dominant
in the UK, but compete against European and US competitors in export markets.
These products are used for both civil and military applications.

The Group manufactures a range of electrical connection products, for which the
London Underground station upgrades are an exciting market, albeit subject to
delays as a consequence of the Metronet insolvency.

The Group's metal forming activities have continued to prosper and grow. Their
high quality, service and ability to produce short production runs are
recognised and have resulted in them acquiring more customers.




Chief Executive's Review (continued)

Strategy

Having restored financial stability management remain focussed on delivering
shareholder value and sustaining the Group's profitability in future.

The opportunity to realise the development potential of the Saffron Walden site
has been grasped and strategies to maximise this potential at minimum cost to
the business are being followed.

Whilst recognising their importance, it is nevertheless a goal of the Group to
reduce its dependence on large long term contracts. Much of last year's growth
was achieved in activities outside of rail vehicle projects with new products in
lighting and aircraft ground power supply, together with growth in our
service-led activities in sub contract and distribution.

The reduction in manufacturing costs through outsourcing to low cost countries
continues.

It is an objective of the Group to position its products at the higher end of
the technology spectrum. LED lighting products occupy such a position and have
large growth potential. The Group's LED technology was initially developed for
the rail and defence markets, but it has wider application and an LED
replacement for the Halogen MR16 20 watt filament lamp was recently launched.
This LED replacement consumes about 20 per cent of the energy, while delivering
about ten per cent more light output than its halogen equivalent, and has a life
of up to 15 years. Pre-production quantities will be available in March, with
volume production following.

Our continuing commitment to quality, reliability and low life-cycle cost is now
reflected in our new logo with its recycling theme and strap line 'Long Life
Reliability does not cost the earth'. This is part of an effort to combat the
lowest cost initial purchasing philosophy, which sources cheap products of less
than optimal quality, and which often leads to more frequent replacement, more
maintenance and higher whole life costs. In particular it accords with the UK
and European rail industry where, the drive is towards a sustainable railway
which will be environmentally-friendly and lower cost. There is strong interest
in both our range of LED lighting products, which have easily recognisable green
credentials, but also in our inter-car connection equipment, with its high
density, compact, lightweight and long life characteristics.

Growth opportunities, both organic and through acquisition where appropriate,
are pursued.



Structure and costs

The Group structure is reviewed and adjusted as appropriate to meet market
requirements. In the year key appointments made included a managing director at
Excil Electronics, where focus on the LED lighting market development is
essential, and a sales director at Niphan Systems. As noted above operating
costs were reduced at the end of the year.


Design and development

Effort has been applied to the standardisation of product to facilitate faster
tendering, larger batch sizes and low cost country sourcing, and there has been
more focus on the development of proprietary products. LED lighting products are
in demand and we need to do more to satisfy the market requirements. There has
been a high level of tendering associated with major rail projects. The Group
has developed a new plug and socket for use on roadside light columns, where in
the event of impact the electrical connection is automatically broken rendering
the lamp standard safe.



Peter Pollock
Chief Executive
29 January 2008





Financial Review


Financial performance

Results for the year were significantly ahead of 2006 with turnover increasing
by £2.91m (21.2%) to £16.65m generating an operating profit of £278,000 as
compared to a loss of £205,000 last year. Whilst the majority of this
improvement was seen in the first half of the year - where sales of £8.60m were
£1.93m up on the corresponding period last year and an operating profit of
£128,000 replaced a loss of £181,000 - the second half with sales of £8.05m and
an operating profit of £150,000 was also in advance of prior year (2006: sales
of £7.07m, loss of £24,000).

The improved sales performance was seen across all Group activities. There was a
modest increase in gross margin, from 22.8% to 23.2%, which was mitigated by
growth being largely in lower added-value products, but benefited from a smaller
year-on-year fall in the labour and overhead content of stock. Total operating
expenses at £3.58m were £238,000 above last year, the increase largely volume
related. Costs in the year included £47,000 in respect of tender offer defence
costs and termination costs of £57,000 (2006: £83,000). As a consequence an
operating profit of £278,000 resulted, compared to an operating loss of £205,000
last year.

Interest costs were in line with prior year at £184,000 (2006: £181,000)
reflecting lower average borrowings but higher interest rates, but with a lower
net pension return of £204,000 (2006: 243,000) net finance income fell to
£20,000 (2006: £62,000). The tax charge in the period was £68,000 (2006: credit
£6,000).

The profit after tax was £230,000 (2006: loss of £137,000) representing basic
earnings per share of 2.07p (2006: loss per share of 1.26p). The adjusted
earnings per share, which excludes goodwill amortisation from the calculation,
was 2.91p (2006: loss of 0.40p).





Balance sheet

At the end of the year shareholders' funds were £5.50m (2006: £5.72m) giving a
net asset value per ordinary share of 48.3p (2006: 52.5p).

The tangible net asset value per share, which excludes goodwill and pension
asset, was 27.4p (2006: 25.2p).

Goodwill included in the balance sheet largely relates to the investment in
Excil Electronics.

The pension asset included in the balance sheet fell in the year by £498,000 to
£1.25m (2006: £1.74m). The change comprised an actuarial loss of £570,000
recognised in the statement of recognised gains and losses (being the net of
actuarial assumption changes and a restriction on the amount of surplus
recognised), £39,000 charged to the profit and loss account, less £111,000 of
contributions received.



Cash flow and debt

Cash generated from operating activities increased in the year to £697,000
(2006: £648,000) with the improved profit performance, largely offset by the
affect of a small increase in working capital during the year as compared to a
large decrease in the previous year.

Capital expenditure which remains focused in production and engineering rose
slightly to £156,000 (2006: £143,000) reducing to net expenditure of £147,000
(2006: £137,000) after asset disposals. After payments of interest £173,000
(2006: £171,000), tax £Nil (2006: £8,000), and dividends £61,000 (2006:
£55,000), the net cash inflow before financing amounted to £316,000 (2006:
£277,000).

In the year cash benefited by £600,000 from the negotiation of an increase in
the term loan facility, £156,000 was received from the exercise of share
options, and debt repayments of £340,000 (2006: £385,000) were made such that
there was a net increase in the cash position of £732,000 (2006: decrease of
£108,000).

In the year net debt fell to £2.09m (2006: £2.22m), gearing fell to 38% (2006:
39%) and at the year-end there were £1.0m (2006: £0.7m) of un-drawn committed
facilities available to the Group.



Financial Review (continued)

Treasury

The Group's treasury policy, which operates within approved Board guidelines and
has not changed since 2006, seeks to ensure that adequate financial resources
are available for the development of the Group's business whilst managing its
foreign currency, interest rate, liquidity and credit risks.

The Group's principal financial instruments comprise sterling bank loans and
overdrafts, and obligations under hire purchase contracts together with trade
debtors and trade creditors that arise directly from its operations. The main
risks arising from the Group's financial instruments can be analysed as follows:

Currency risk - the Group has transactional currency exposure arising from
normal trading activity. Such exposure arises from sales or purchases in
currencies other than sterling, the functional currency of the Group. The Group
hedges the foreign currency risk associated with sales and purchases using
forward exchange contracts. Experience to date is that any un-hedged exposure
has not led to major exchange gains or losses. The main foreign currencies in
which the Group operates are the euro and the US dollar.

Interest rate risk - the only financial liabilities of the Group which are
subject to interest charges are bank loans and overdrafts (floating rate
liabilities which bear interest at market rates) and obligations under hire
purchase contracts (fixed rate liabilities which bear interest at the negotiated
market rate prevailing at the time the commitment is made). The directors
monitor the overall level of borrowings and interest costs to limit any adverse
effects on financial performance of the Group.

Liquidity risk - the Group's policy has been to ensure continuity of funding
through acquiring an element of its fixed assets under hire purchase agreements,
and arranging funding for its operations through medium-term bank loans with
short-term flexibility achieved through the use of overdraft facilities.

Credit risk - the Group's credit risk is primarily attributable to its trade
debtors. Credit risk is managed by monitoring the aggregate amount and duration
of exposure to any one customer depending upon their credit rating. The amounts
presented in the balance sheet are net of allowances for doubtful debts,
estimated by the Group's management based on prior experience and their
assessment of the current economic environment.

The Group does not trade in derivatives or make speculative hedges.



Going concern

The directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future and
therefore the accounts have been prepared on a going concern basis.



Stephen Brett
Finance Director
29 January 2008






Consolidated Profit and Loss Account

For the year ended 30 September 2007


                                                                           2007              2006
                                                                           £'000            £'000

Turnover                                                                   16,650          13,737

Cost of sales                                                             (12,792)        (10,600)


Gross profit                                                                3,858           3,137

Net operating expenses                                                     (3,580)         (3,342)


Operating profit / (loss)                                                     278           (205)

Net finance income                                                             20              62


Profit / (loss) on ordinary activities before taxation                        298           (143)

Tax on profit / (loss) on ordinary activities                                 (68)              6



Profit / (loss) on ordinary activities after taxation                         230           (137)



Earnings / (loss) per share
Basic                                                                        2.07p         (1.26p)
Diluted                                                                      2.05p         (1.26p)





All activities are continuing.



Statement of Total Recognised Gains and Losses

For the year ended 30 September 2007


                                                                           2007             2006
                                                                           £'000            £'000

Profit / (loss) after tax for the year                                     230              (137)

Actuarial (loss) / gain recognised in the pension scheme                   (872)            144
Deferred tax attributable to actuarial loss/gain                           302              (43)


Total recognised losses                                                    (340)            (36)





Consolidated Note of Historical Cost Profits and Losses

For the year ended 30 September 2007

In both the current and the preceding financial year, there is no material
difference between the profit before taxation and the profit after taxation as
shown in the profit and loss account and their historical cost equivalent.



Reconciliation of Movements in Shareholders' Funds

For the year ended 30 September 2007


                                                                             2007           2006
                                                                             £'000          £'000

Opening equity shareholders' funds                                           5,723          5,814

Profit / (loss) for the financial year                                       230            (137)
Actuarial (loss) / gain recognised in the pension scheme                     (570)          101
Dividends                                                                    (61)           (55)
Issue of shares                                                              156            -
Fair value of share options granted                                          18             -

Closing equity shareholders' funds                                           5,496          5,723


Consolidated Balance Sheet
At 30 September 2007

                                                                        2007             2006
                                                                        £'000            £'000

Fixed assets
Intangible assets                                                       1,140            1,234
Tangible assets                                                         2,256            2,100

                                                                        3,396            3,334
Current assets
Stocks                                                                  2,448            2,632
Debtors                                                                 3,274            3,114
Cash at bank and in hand                                                3                4


                                                                        5,725            5,750
Creditors: Amounts falling due within one year                          (3,319)          (4,143)


Net current assets                                                      2,406            1,607


Total assets less current liabilities                                   5,802            4,941
Creditors: Amounts falling due after more than one year                 (1,520)          (956)
Provisions for liabilities                                              (31)             (5)

Net assets excluding pension asset                                      4,251            3,980
Pension asset                                                           1,245            1,743

Net assets                                                              5,496            5,723

Capital and reserves
Called up share capital                                                 1,137            1,090
Share premium account                                                   363              254
Un-issued shares reserve                                                18               -
Revaluation reserve                                                     311              313
Merger reserve                                                          230              230
Profit and loss reserve                                                 3,437            3,836


Total equity shareholders' funds                                        5,496            5,723





Consolidated Cash Flow Statement
For the year ended 30 September 2007

                                                                          2007             2006
                                                                          £'000            £'000
Net cash inflow from operating activities                                 697              648

Returns on investments and servicing of finance
Interest paid                                                             (163)            (163)
Interest element of hire purchase payments                                (10)             (8)


                                                                          (173)            (171)

Taxation                                                                  -                (8)

Capital expenditure
Payments to acquire tangible fixed assets                                 (156)            (143)
Receipts from sale of other fixed assets                                     9                6


                                                                          (147)            (137)

Equity dividends paid to shareholders                                     (61)             (55)

Net cash inflow before financing                                          316               277


Financing
Increase in share capital                                                 156              -
Increase in term loan                                                     600              -
Repayment of loans                                                       (294)            (305)
Capital element of hire purchase payments                                (46)              (80)


                                                                          416             (385)

Increase / (decrease) in cash                                             732             (108)



Notes

1 - EARNINGS PER SHARE

The calculation of earnings per share is based upon the profit after tax of
£230,000 (2006: loss of £137,000) and the weighted average number of ordinary
shares in issue during the year of 11.125m (2006: 10.903m). The weighted average
number of ordinary shares diluted for the effect of outstanding share options
was 11.226m (2006: 10.903). Adjusted earnings per share, which is disclosed to
reflect the underlying performance of the Company, has been calculated on a
profit of £324,000 (2006: loss of £44,000) being the profit after tax for the
year before the amortisation of goodwill. Details are as follows:


                                                        2007                             2006
                                                       Basic    Diluted                 Basic    Diluted

                                                       pence      pence                 pence      pence

                                                         per        per                   per        per

                                            £'000      share      share      £'000      share      share

Basic earnings                                230       2.07       2.05      (137)     (1.26)     (1.26)
Amortisation of goodwill                       94       0.84       0.84         93       0.86       0.86
                                            ______     ______     ______     ______     ______     ______

Adjusted earnings                             324       2.91       2.89       (44)     (0.40)     (0.40)
                                            ______     ______     ______     ______     ______     ______
                                       




2 - CHANGES IN ACCOUNTING POLICY



Share based payments


The Group's accounting policies are unchanged compared to last year apart from
the adoption of FRS20 'Share Based Payments'. The cost of share based payments,
where employees receive share options, is determined by reference to the fair
value at the date of grant. The cost is recognised in the profit and loss
account over the vesting period. Comparative figures have not been restated as
there is not a material impact on either net assets at September 2006 or
earnings in the year to September 2006 arising from the adoption of FRS20.




3 - INFORMATION


The preceding information does not constitute the Company's statutory accounts
for the years ended 30 September 2007 or 30 September 2006 but is derived from
those accounts. The 2007 accounts will be posted to shareholders on 15 February
2008 and will be available from the Company Secretary, LPA Group Plc, Debden
Road, Saffron Walden, Essex, CB11 4AN, shortly thereafter. Statutory accounts
for 2006 have been delivered to the Registrar of Companies, and those for 2007
will be delivered following the Annual General Meeting. The auditors have
reported on these accounts and their reports were unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.

The Chairman's Statement, the Chief Executive's Review and the Financial Review
included in this preliminary announcement form part of the business review
included in the 2007 accounts. The business review and other content of this
preliminary announcement have been prepared solely for the shareholders of the
Company as a body. To the extent permitted by law the Company, its directors,
officers and employees disclaim liability to any other persons in respect of the
information contained in this preliminary announcement. Sections may include
statements containing risks and uncertainties facing the Group, and other
forward-looking statements, which by their nature involve uncertainty since
future events and circumstances can cause results and developments to differ
materially from those anticipated. The Company undertakes no obligation to
update any forward-looking statements.




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