Final Results

LPA Group PLC
21 January 2005


21 January 2005


PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004


LPA Group Plc, the electrical and electronic equipment manufacturer and
distributor, announces a return to pre-tax profit of £143,000 (2003: loss of
£208,000) for the year ended 30 September 2004.


KEY POINTS

 TURNOVER                          INCREASED 7.7% TO £13.5m         (2003: £12.6m)

 OPERATING PROFIT                  £337,000 ACHIEVED                (2003: LOSS £97,000)

 PROFIT BEFORE TAX                 £143,000 ACHIEVED                (2003: LOSS £208,000)

 EARNINGS PER SHARE
 BASIC                             1.27p ACHIEVED                   (2003: LOSS 1.14p) 
 ADJUSTED (before amortisation of  2.13p ACHIEVED                   (2003: LOSS 0.28p)
 goodwill)

 DIVIDENDS
 - INTERIM                         RESUMED AT 0.15p
 - FINAL                           INCREASED 20% TO 0.30p           (2003: 0.25p)
 - TOTAL                           INCREASED 80% TO 0.45p           (2003: 0.25p)

 GEARING                           REDUCED 15.4% TO 66.3%           (2003: 81.7%)

 ORDERS INPUT UP 16% - CONTINUING DEMAND IN HOME AND EXPORT OPPORTUNITIES

 ORDER BOOK UP 47%

 STRONG CASH FLOW

 RAIL MARKET STABILISING AFTER RATIONALISATION, STRONG DEMAND FOR REFURBISHMENT 
 OF METROS AND MAINLINE VEHICLES

 GOOD EXPORT OPPORTUNITIES IN EUROPE AND ASIA

 SOURCING OF COMPONENTS FROM LOW COST COUNTRIES INITIATED


Peter Pollock, Chief Executive, commented

'We must continue to increase orders received to drive the top line. We are
building stronger relationships with our main multinational customers
internationally which will support the long term. Short-term order growth has
been encouraging and we need to develop this further to smooth the impact of
large infrequent rail contracts.

Significant progress has been made on operational issues and these efforts
continue. Sales per employee and margins have increased.

Globalisation in aerospace has reduced margins in that market and this is a
trend which will affect all manufacturing in time. We have initiated procurement
of components from low cost countries to reduce costs and ensure our
competitiveness. We continue to develop our technology.

Improved trading conditions and reduced costs have continued to deliver
progress, which should continue this year.'


ENQUIRIES

 Peter Pollock    LPA Group Plc                   07881 626 123 or 01799 512 844
 James Glancy     Teather & Greenwood Limited     0207 426 9010



PRELIMINARY ANNOUNCEMENT YEAR ENDED 30 SEPTEMBER 2004

KEY FINANCIAL INFORMATION


FINANCIAL HIGHLIGHTS
For the year ended 30 September 2004

                                                                2004        2003
                                                               £'000       £'000

Turnover                                                      13,540      12,574

Operating profit / (loss)                                        337        (97)

Profit / (loss) on ordinary activities before taxation           143       (208)

Basic earnings / (loss) per share                              1.27p     (1.14p)

Adjusted earnings / (loss) per share                           2.13p     (0.28p)

Dividends per share                                            0.45p       0.25p

Gearing                                                        66.3%       81.7%




CHAIRMAN'S STATEMENT

Results

I am pleased to report that after a long and difficult period the Group has
returned to profit, albeit modestly. After a better start further progress was
made in the second half, to give a profit before tax for the year of £143,000
(2003: loss of £208,000). Basic earnings per share amounted to 1.27p, compared
with a loss per share of 1.14p in the previous year. I am delighted that these
accounts, together with the Chief Executives Review, present the most positive
outlook for some time.


Dividends

Given the improved trading position the directors recommend the payment of an
increased final dividend of 0.30p (2003: 0.25p). This, together with the interim
dividend of 0.15p, will make a total for the year of 0.45p per share (2003:
0.25p), an increase of 80%. Subject to approval by shareholders at the Annual
General Meeting of the Company to be held at 12.00 noon on 8 March 2005 at the
offices of Teather and Greenwood Limited, 15 St Botolph Street, London, EC3A
7QR, the final dividend will be paid on 18 March 2005 to shareholders registered
at the close of business on 25 February 2005.


Authority to allot shares and authority to buy shares

The Agenda for the Annual General Meeting includes three resolutions relating to
the limited authority of the directors to allot shares, and for the Company to
make market purchases of its own shares:
     
a.   The first is a resolution to renew the authority of the directors to allot 
     shares generally, as defined in section 80 of the Companies Act 1985;

b.   The second is a resolution to renew the authority of the directors to allot 
     equity securities for cash without first offering them to existing
     shareholders, pursuant to section 95 of the Companies Act 1985; and

c.   The third is a resolution to permit the Company to make market purchases,
     as defined in section 163 of the Companies Act 1985, of its own shares.

These authorities are part of the portfolio of powers commonly granted to
directors to ensure flexibility, should appropriate circumstances arise, to
either allot shares, or make purchases of the Company's own shares in the best
interests of shareholders. Each authority will run through until the next Annual
General Meeting. The directors have no present intention of using such
authorities.


Board

Michael Edmonds, now 68, is retiring from the Board at the conclusion of the
Annual General Meeting. Michael was the Managing Director of Channel Electric
Equipment Limited and joined the Board in 1988 at the time that company was
acquired by the Group. The Board wish him well in the future.

I am the director retiring by rotation at the Annual General Meeting and am
pleased to offer myself for re-election.


Employees

Obviously, our employees continue to be our most valuable resource without whom
the progress made this year could not have been achieved.


Prospects

We have made a sound start to the current financial year, and this is
significantly ahead of the corresponding period last year. Your board is hopeful
of further progress during the year.


Michael Rusch
Chairman
21 January 2005


CHIEF EXECUTIVE'S REVIEW

Trading results

2004 was a year of progress which resulted in a return to pre-tax profit of
£143,000 (2003: loss of £208,000).  Sales increased by 8% to £13.5m and order
input was up by 16% in the year. The net cash inflow, before financing, amounted
to £564,000 (2003: £337,000) and gearing reduced 15.4% to 66.3%. The interim
dividend was resumed and the final dividend increased.


Markets

The Group's products are used in many markets. The main ones are Rail (including
vehicle builders and refurbishment), Infrastructure and General Industrial
(including ports, airports, the railway and telecommunications), and Aerospace
and Defence.


UK Rail

The Group has established itself as the leading supplier of auxiliary power
systems, inter-vehicle electrical connection systems and lighting systems for
the UK rail vehicle building and refurbishment industry. The Group also supplies
a range of components and subsystems for new-build, refurbishment and
reliability improvement.

After the chaos in Britain's railway industry, which has reigned during the last
few years, some stability is returning. There continues to be rationalisation of
activities following the restructuring of both Alstom Transport's and Bombardier
Transportation's facilities in the UK and Europe. However these are largely a
tidying up exercise.  The future is clearer.

Alstom Transport have ceased new build in the UK and will concentrate on
refurbishment and support of the West Coast mainline at their main facility in
Birmingham. As a major supplier to Alstom Transport the Group will continue to
support this activity.

Bombardier Transportation has retrenched in to Derby, and has a long-term order
book for new and refurbished Metro vehicles.  They face a gap during 2006 and
2007 before new build recommences and they have endeavoured to fill this gap by
closing peripheral sites and concentrating all refurbishment at Derby.  The
Group is a supplier on most of these refurbishment programmes, which means that
although life will not be easy, it will not be as difficult as in previous
years. The Group has already won or been selected for some of the longer-term
projects which recommence in 2007.


Overseas Rail

Whilst remaining UK based, the Group is using its position in the UK rail market
to build its presence internationally, and in particular is developing its
relationships with Europe's 'big three', Alstom Transport, Bombardier
Transportation and Siemens.

The Group is a supplier to all three in Europe, mainly for re-import to the UK
but also for re-export to other countries where performance criteria are
similarly high, and is seeking to build on this base to access further European
domestic markets.

The Group continues to work in Asia (where in recent years it has secured work
in Australia, Hong Kong, Singapore and Japan) and is now actively pursuing
opportunities in China and Taiwan. The Group has been a supplier to South Africa
for many years.


Infrastructure

The Group manufactures and distributes a range of electrical cable management
products including connectors, cleats and clamps together with circuit breakers,
relays and cable tray, which are used in the infrastructure generally. This is a
vast market but the Group has enjoyed some success in certain niches.

The Group has been most successful in ground power systems, which supply power
to aircraft when stationery on the ground with the engines switched off. Ground
power supports the computers and air conditioning as well as other essential
aircraft systems. Ground power is supplied through harnesses and connectors
plugged in to the aircraft, and the harnesses, which can exceed 30 metres in
length, are managed and kept tidy in a 'crocodile'. The Group has a dominant
position in this market in the UK and has made progress in Europe, the Middle
East, Africa and Asia. We are the main supplier to Heathrow and other BAA
facilities and to the Ministry of Defence. We will seek to continue to build on
this success.


Aerospace and Defence

Most military aerospace projects, such as Typhoon and JSF, are collaborative
between nations and most civil projects are headquartered outside the UK, for
example Airbus, Boeing and Bombardier. Aerospace prime contractors operate
globally and increasingly suppliers' prices are negotiated centrally with
reduced margins for distributors. Components are sourced through kitting agents
against framework agreements. The Group's sales to prime contractors are
increasingly being channelled through kitting agents.  Major aerospace projects,
both civil and military, will remain important to the Group but the market has
changed.  The Group will continue to operate in the spares and subcontract
market where its reputation for ingenuity and service allows it to be
appropriately rewarded.

Despite the need for international collaboration on the large platform projects,
the UK defence market is more fragmented and nationalistic and comprises many
subcontractors. This presents the Group with opportunities to supply components
and systems, which we are exploiting.


Structure and costs

The sustained improvement in order entry and the improved presence of the Group
in its markets is testament to the success of the new unified sales and
marketing organisation. The new operations team has delivered improved customer
satisfaction and is reducing lead times with improved margins. Shared resources
in quality assurance and human resource management are working well. Progress
has been made in IT but further is required. Costs continue to be well
controlled.


Design and development

The Group's design and development activity has concentrated on new auxiliary
power systems, inter-car connection systems and lighting systems for the rail
vehicle market. Other developments include remote monitoring and control, and
power supply systems for infrastructure and Light Emitting Diode based lighting
systems for rail and defence applications.  Industrial products rationalisation
and cost reduction received attention. The Group joined the University of
Cambridge Engineering Department's Institute for Manufacturing gaining access to
the Knowledge Transfer Programme and graduate and under graduate placement
programmes. Some useful work has been done.


Prospects

The prospects for the Group are better than for several years. There are still
obstacles to growth, but the Group is better placed to overcome them. We look
forward to further progress in the current year.


Peter Pollock
Chief Executive

21 January 2005



FINANCIAL REVIEW

Financial performance

Results for the year were significantly ahead of 2003 with turnover increasing
by £0.97m (7.7%) to £13.54m, on which an operating profit of £337,000 was
generated as compared to a loss of £97,000 last year. Although the majority of
this improvement was seen in the first half - where sales of  £6.74m were £0.82m
up on the corresponding period last year and an operating profit of £136,000
replaced a loss of £277,000 - the second half with sales of £6.80m and an
operating profit of £201,000 was also in advance of prior year (2003: sales of
£6.65m, profit of £180,000).

Overall the Group's gross margin improved by 0.5% from 27.0% to 27.5%. This was
principally the function of the increased sales volumes seen generally, although
aerospace margins deteriorated and the higher year on year content of rail
project work had an adverse impact. Total operating expenses at £3.39m were
lower than the £3.49m last year, which had included £0.1m of first half
reorganisation costs. The net operating margin was 2.5% (2003: -0.8%)

The year did not include any exceptional items (2003: exceptional credit of
£106,000), interest costs fell to £194,000 (2003: £217,000) with lower average
borrowings offsetting the impact of higher interest rates, and the tax charge
was £4,000 (2003: tax credit of £84,000) being 2% of profit before tax and
goodwill amortisation, with the Group benefiting from the utilisation of its
brought forward tax losses.

Resultant earnings were £139,000 (2003: loss of £124,000) representing basic
earnings per share of 1.27p (2003: loss of 1.14p). Adjusted earnings per share,
which excludes goodwill amortisation from the calculation, was 2.13p (2003: loss
of 0.28p). Including the recommended final dividend, total dividends for the
year were £49,000 (2003: £27,000), being 0.45p (2003: 0.25p) per share, which is
covered 2.8 times by basic earnings and 4.7 times by adjusted earnings.

Shareholders funds increased from £3.98m to £4.07m.


Cash flow

Cash generated from operating activities was 2.4 times higher than last year at
£948,000 (2003: £393,000) largely the result of stronger trading but including
also a reduction in working capital.

Capital expenditure was focused in production and engineering and increased to
£171,000 in the year (0.4 times depreciation) reducing to net expenditure of
£158,000 after asset disposals. This compares to net receipts of £317,000 last
year, which included the sale of surplus properties.

After interest costs of £183,000 (2003: £206,000), acquisition payments of £Nil
(2003: £167,000), and dividends of £43,000 (2003: £Nil), net cash before
financing amounted to £564,000 (2003: £337,000).

No refinancing was required in the year and after repayment of £441,000 (2003:
£821,000) of existing debt, there was a net increase in the cash position of
£123,000 (2003: decrease of £484,000).

The Group maintains a good relationship with its banker and has negotiated the
renewal of its existing facilities through to the end of November 2005 based
upon its budgeted projections. The renewal of facilities after this date is not
foreseen as a problem. In the year the Group's net debt fell to £2.70m (2003:
£3.25m), gearing fell to 66% (2003: 82%) and there were £0.7m (2003: £0.5m) of
undrawn committed facilities available to it. The main element of the Group's
debt is funded through its term loan of £1.83m (2003: £2.14m) repayable over the
next six years.


Treasury

The Group's treasury policy, which operates within approved Board guidelines and
has not changed since 2003, seeks to ensure that adequate financial resources
are available for the development of the Group's business whilst managing its
foreign currency, interest rate, and liquidity risks.

Operations are financed through a mixture of retained profits and bank
borrowings with short-term flexibility achieved through the use of overdraft
facilities.

Only 12% of sales (2003: 17%) are to overseas customers and the Group has not
found it necessary to seek local finance. 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 significant
future 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.

Interest rates are managed through a mixture of fixed and floating rate
borrowings.

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

21 January 2005



LPA GROUP PLC

CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30 September 2004
                                                                2004        2003
                                                               £'000       £'000

Turnover: continuing operations                               13,540      12,574

Cost of sales                                                (9,815)     (9,181)

Gross profit                                                   3,725       3,393

Net operating expenses                                       (3,388)     (3,490)

Operating profit / (loss): continuing operations                 337        (97)

Profit on sale of tangible fixed assets                            -         106

Profit on ordinary activities before interest                    337           9

Net interest payable and similar charges                       (194)       (217)

Profit / (loss) on ordinary activities before taxation           143       (208)

Tax on profit / (loss) on ordinary activities                    (4)          84

Profit / (loss) on ordinary activities after taxation            139       (124)

Dividends on equity shares                                      (49)        (27)

Transfer to / (from) reserves                                     90       (151)

Earnings per share
Basic                                                          1.27p     (1.14p)
Diluted                                                        1.27p     (1.14p)
Adjusted (before amortisation of goodwill)                     2.13p     (0.28p)



LPA GROUP PLC

CONSOLIDATED BALANCE SHEET
At 30 September 2004
                                                                2004        2003
                                                               £'000       £'000
Fixed assets

Intangible assets                                              1,420       1,513
Tangible assets                                                2,388       2,651

                                                               3,808       4,164

Current assets
Stocks                                                         2,491       2,647
Debtors                                                        2,806       2,895
Cash at bank and in hand                                           3           3

                                                               5,300       5,545
Creditors: Amounts falling due within one year               (3,460)     (3,707)

Net current assets                                             1,840       1,838

Total assets less current liabilities                          5,648       6,002

Creditors: Amounts falling due after more than one year      (1,575)     (2,011)

Provisions for liabilities and charges                           (5)        (13)

Net assets                                                     4,068       3,978

Capital and reserves
Called up share capital                                        1,090       1,090
Share premium account                                            254         254
Revaluation reserve                                              314         316
Merger reserve                                                   230         230
Profit and loss account                                        2,180       2,088

Equity shareholders' funds                                     4,068       3,978



LPA GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 September 2004
                                                                2004        2003
                                                               £'000       £'000

Net cash inflow from operating activities                        948         393

Returns on investments and servicing of finance
Interest paid                                                  (162)       (174)
Interest element of hire purchase and finance lease payments    (24)        (32)
Interest receivable                                                3           -

                                                               (183)       (206)

Taxation                                                           -           -

Capital expenditure
Payments to acquire tangible fixed assets                      (171)        (72)
Receipt from sale and leaseback arrangement                        -          85
Receipts from disposal of properties                               -         298
Receipts from sale of other fixed assets                          13           6

                                                               (158)         317

Acquisitions                                                       -       (167)
Purchase of subsidiary undertakings

Equity dividends paid                                           (43)           -

Net cash flow before financing                                   564         337

Financing
Repayment of loans                                             (306)       (661)
Capital element of hire purchase and finance lease payments    (135)       (160)

                                                               (441)       (821)

Increase / (decrease) in cash                                    123       (484)



LPA GROUP PLC

NOTES

1 - EARNINGS PER SHARE

The calculation of earnings per share is based upon the profit after tax of
£139,000 (2003: loss after tax of £124,000) and the weighted average number of
ordinary shares in issue during the year of 10,903m (2003: 10,903m). The
weighted number of ordinary shares diluted for the effect of outstanding share
option was 10.979m (2003: 10.903m). Adjusted earnings per share, which is
disclosed to reflect the underlying performance of the Company, has been
calculated on a profit of £232,000 (2003: loss of £31,000) being the profit /
(loss) after tax for the year before the amortisation of goodwill. Details are
as follows:

                                        £'000       2004       Diluted      £'000        2003      Diluted
                                                   Basic         Pence                  Basic        Pence
                                                   Pence           Per                  Pence          Per
                                                     Per         share                    Per        share
                                                   share                                share

Basic earnings                            139       1.27          1.27      (124)      (1.14)       (1.14)
Amortisation of goodwill                   93       0.86          0.84         93        0.86         0.86

Adjusted earnings                         232       2.13          2.11       (31)      (0.28)       (0.28)


2 - ACQUISITION COSTS

Current year acquisition cash flows comprise deferred consideration of £Nil
(2003: £167,000).


3 - INFORMATION

The preceding information does not constitute the Company's statutory accounts
for the years ended 30 September 2004 or 30 September 2003 but is derived from
those accounts. The 2004 accounts will be posted to shareholders on 11 February
2005 and will be available from the Company Secretary, LPA Group Plc, Debden
Road, Saffron Walden, Essex, CB11 4AN, shortly thereafter. Statutory accounts
for 2003 have been delivered to the Registrar of Companies, and those for 2004
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.



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