Final Results

Zytronic PLC
13 December 2005


For Immediate Release                                           13 December 2005


                                  ZYTRONIC PLC


            Preliminary Results for the year ended 30 September 2005


Zytronic Plc, a leading specialist manufacturer of touchscreens and optical
filters for electronic displays, announces its preliminary results for the year
ended 30 September 2005.


Highlights

     •    Turnover increased 21% to £10.6m (2004: £8.8m);

     •    Profit before tax  increased  181% to £984,000 (2004: £350,000);

     •    Basic earnings per share increased 176% to 4.7p (2004: 1.7p);

     •    Final dividend proposed of 1.5p per share to give total dividend for
          the year of 2.0p per share (2004: Nil);

     •    Growth in gross margin to 31.0% (2004: 29.3%) arose from the increase
          in sales and change in product mix with touchscreens becoming the 
          dominant part of the business;

     •    ZYTOUCH(R) touchscreen sales growth of 50% in 2005;

     •    Following the successful launch of ZYPOS(R) touchscreens, a large
          number of substantial enquiries have been received for the point of 
          sale and gaming markets;

     •    ZYPOS(R) production facility commissioned in November 2005 in existing
          factory. New purpose built facility, to be housed in an adjacent 
          property of 18,000 sq.ft., comes on stream in Q4 2006;

     •    Adjacent property of 18,000 sq.ft acquired in December 2005. The cost,
          including conversion for the production of ZYPOS(R) touchscreens, is 
          £1m with a further £1.5m to be invested in clean rooms, plant and 
          equipment in H2 2006;

     •    On outlook, Chairman John Kennair said:

'The continued improvement in sales, margin and profitability, the successful
launch of our ZYPOS(R) touchscreens, consistent substantial growth in sales of
ZYTOUCH(R) touchscreens, and the strong executive management team provide a
solid basis for the continued improvement of the Group's operations going
forward.'


Enquiries:


Zytronic Plc                    (Today: 020 7466 5000; thereafter 0191 414 5511)
John Kennair, Chief Executive
Denis Mullan, Finance Director

Buchanan Communications          020 7466 5000
Richard Darby, Isabel Podda


Notes to Editors

Zytronic is an industry leader in the development and manufacture of customised
optical filters to enhance electronic display performance. It is also an
innovator in the production of specialised and transparent laminates for niche
markets.

Based on this lamination expertise, Zytronic has developed a unique range of
touchscreen products employing projected capacitive technology which enables the
pointing device to sense through an anti-vandal screen in front of the display.
This system offers significant benefits to electronic display manufacturers.

Operating from two modern factories near Newcastle-upon-Tyne in England,
Zytronic assembles touchscreens and filters, utilising special glass and plastic
materials, in environmentally controlled clean rooms.


                              Chairman's Statement


With another year of strong sales growth, the results to 30 September 2005 have
again shown a solid improvement in the performance of the business.

Results and Trading

Turnover for the year under review increased 21% to £10.6m (2004: £8.8m)
resulting in a 181% increase in pre-tax profits to £984,000 (2004: £350,000) and
growth in earnings per share of 176% to 4.7p (2004: 1.7p)

The Group's cash position remains strong with cash balances at the year end of
£810,000 after spending over £1m on fixed assets and reducing borrowings by
£223,000.

Zytouch(R)

Consistent growth in the sales of ZYTOUCH(R) touchscreens in the past three
years, with sales growth of 50% in 2005, is now one of the primary strengths of
the business.  Whilst the Group's traditional optical filter business has also
grown in the past year, it is the strong growth in sales of touchscreens,
anticipated to become more than 50% of Group sales in 2006, that will continue
to drive the business forward.

The change of product mix, with touchscreens becoming the dominant part of the
Group's business, has driven the strong growth of sales and the improvement in
gross margins in the past three years.


                                             2003           2004            2005

                                            £'000          £'000           £'000

Sales                                       5,690          8,756          10,590

Gross profit                                1,615          2,569           3,278

Gross profit %                              28.4%          29.3%           31.0%


ZYPOS(R)

Following the successful launch of our new range of ZYPOS(R) touchscreens in
Spring 2005, a large number of substantial enquiries have been received for the
point of sale and gaming markets with samples being supplied from the pilot
production plant.  A ZYPOS(R) production facility has now been established
(commissioned in November 2005) in the existing factory, which the Directors
anticipate will be adequate to meet demand until the new purpose built facility
comes on stream in the October/December quarter of 2006.  This new facility will
be housed in a property, acquired in December 2005, which extends to
approximately 18,000 square feet and adjoins the existing facility.  The cost of
the property, including conversion for use for the production of ZYPOS(R)
touchscreens, is approximately £1 million and will be funded by means of a
medium term loan.  A further £1.5 million will be invested in clean rooms and
plant and equipment in the second half of the 2006 calendar year, funded by the
Group's cash resources and asset finance.

The Group has accepted the offer of a £600,000 Government grant which will be
payable over four years dependent on the timing of capital investment and job
creation.

The Directors anticipate that sales of ZYPOS(R) touchscreens will begin to
impact on the business towards the end of the 2006 financial year.

Management

I would like to express my thanks to all employees, and in particular the
Executive Directors of the trading company who are largely responsible for the
improvement in operations and consequently, the successful results for 2005.

Dividend

The Directors recommend a final dividend of 1.5p per share payable on 24 March
2006 to shareholders on the Register of Members on 10 March 2006 which,
following the dividend of 0.5p per share paid in June 2005, will bring the total
dividend for the year to 2p per share.

Outlook

The continued improvement in sales, margin and profitability, the successful
launch of our ZYPOS(R) touchscreens, consistent substantial growth in sales of
ZYTOUCH(R) touchscreens, and the strong executive management team provide a
solid basis for the continued improvement of the Group's operations going
forward.


John M. Kennair
Chairman

13 December 2005


Group profit and loss account
for the year ended 30 September 2005


                                                              2005          2004
                                                         Unaudited       Audited
                                           Notes             £'000         £'000
Group turnover                                              10,590         8,756

Cost of sales                                                7,312         6,187
Gross profit                                                 3,278         2,569

Distribution costs                                             140           121
Administration expenses                                      2,137         2,078
                                                             2,277         2,199
Group operating profit                                       1,001           370
Interest payable                                              (33)          (26)
Interest receivable                                             16             6
Profit on ordinary activities before taxation                  984           350

Tax charge on profit on ordinary activities    3             (310)         (114)
Profit on ordinary activities after taxation                   674           236

Ordinary dividends on equity shares            4             (286)             -
Retained profit for the year                                   388           236

Earnings per share - basic                     5              4.7p          1.7p
Earnings per share - diluted                   5              4.6p          1.6p



Group balance sheet
at 30 September 2005


                                                              2005          2004
                                                         Unaudited       Audited
                                                             £'000         £'000
Fixed assets

Intangible assets                                            2,133         2,172
Tangible assets                                              2,494         2,155

                                                             4,627         4,327
Current assets

Short term property investment                                   -            75
Stocks                                                       1,201         1,084

Debtors                                                      2,641         1,873

Cash at bank and in hand                                       810         1,171
                                                             4,652         4,203
Creditors: amounts falling due within one year               2,093         1,569
Net current assets                                           2,559         2,634

Total assets less current liabilities                        7,186         6,961

Creditors: amounts falling due after more than one year        161           394
Provisions for liabilities and charges

Deferred tax                                                   239           172
                                                             6,786         6,395
Capital and reserves

Called up share capital                                        143           143
Share premium                                                6,215         6,212
Profit and loss account                                        428            40
Equity shareholders' funds                                   6,786         6,395



Group statement of cashflows
for the year ended 30 September 2005


                                                                 2005       2004
                                                            Unaudited    Audited
                                                    Notes       £'000      £'000
Net cash inflow from operating activities              6a         939        520


Return on investments and servicing of finance

Interest received                                                  16          6
Interest paid                                                    (12)          -
Interest element of finance lease rental payments                (21)       (26)
Net outflow from returns on investments and servicing of finance (17)       (20)

Taxation

Corporation tax paid                                             (28)          -

Capital expenditure and financial investment

Payments to acquire intangible fixed assets                     (209)      (164)
Payments to acquire tangible fixed assets                       (830)      (237)
Receipt from sale of short term property investment                75          -
Net outflow from capital expenditure and financial investment   (964)      (401)

Equity dividends paid                                            (71)          -


Net cash (outflow)/inflow before financing                      (141)         99


Financing

Receipt from new bank loan                                          -        250
Issue of ordinary share capital                                     3          -
Repayment of bank loan                                           (83)          -
Net repayments of capital element of finance lease              (140)      (132)
Net (outflow)/inflow from financing                             (220)        118
(Decrease)/increase in cash                                     (361)        217


Reconciliation of net cashflow to movement in net funds

(Decrease)/increase in cash                                     (361)        217
Receipt from new bank loan                                          -      (250)
Repayment of bank loan                                             83          -
Net repayments of capital element of finance lease                140        132
Movement in net funds                                           (138)         99

Net funds at beginning of year                                    554        455
Net funds at end of year                               6b         416        554



Notes

1.   Basis of preparation

The preliminary results have been prepared under the historical cost convention
and in accordance with applicable accounting standards.  The preliminary results
have been prepared on the basis of the accounting policies set out in the
Group's statutory accounts for the year ended 30 September 2004.

2.   Basis of consolidation

The Group results consolidate the accounts of Zytronic plc and all its
subsidiary undertakings drawn up to 30 September 2005.

3.   Tax charge on profit on ordinary activities


                                                                   2005     2004
                                                              Unaudited  Audited
                                                                  £'000    £'000
Current tax:
UK corporation tax                                                (251)     (38)
Corporation tax over-provided in prior years                          8        6
Total current tax                                                 (243)     (32)
Deferred tax:
Origination and reversal of timing differences                     (67)     (82)
Group deferred tax                                                 (67)     (82)
Tax charge on profit on ordinary activities                       (310)    (114)


Factors affecting current tax charge:

Profit on ordinary activities multiplied by standard rate of UK 
corporation tax of 30% (2004: 30%)                                (295)    (105)
Expenses not deductible for tax purposes (includes 
amortisation of goodwill and licences)                             (86)     (80)
Deferred revenue expenses and tax credits                            47       43
Accelerated capital allowances                                       67       13
Effects of small company/marginal rates of UK corporation tax        16       25
Utilisation of brought forward tax losses                             -       66
Adjustments in respect of prior years                                 8        6
Total current tax                                                 (243)     (32)


4.   Dividends

The directors propose a final dividend for the year ended 30 September 2005 of
1.5p per share (2004: Nil per share) payable on 24 March 2006 to shareholders on
the Register of Members on 10 March 2006.

Following the interim dividend of 0.5p per share (2004: Nil) paid on 29 June
2005, this will bring the total dividend for the year to 2p per share (2004: Nil
per share).

5.   Earnings per share

The calculations of earnings per share are based on a profit after taxation of
£674,000 (2004: £236,000) and a basic and diluted weighted average of 14,292,242
and 14,594,284 shares in issue respectively (2004: basic and diluted weighted
average of 14,291,539 and 14,338,685 shares in issue respectively).

6.   Notes to the group statement of cashflows

(a)   Reconciliation of operating profit to net cash inflow from operating
activities:


                                                               2005         2004
                                                          Unaudited      Audited
                                                              £'000        £'000
Operating profit                                              1,001          370
Depreciation                                                    427          402
Amortisation                                                    246          229
Gross cash inflows                                            1,674        1,001
(Increase)/decrease in stocks                                 (117)            2
Increase in debtors                                           (767)        (747)
Increase in creditors                                           149          264
Net cash inflow from operating activities                       939          520

(b) Analysis of net funds:


                                        2004         Cashflows              2005
                                     Audited         Unaudited         Unaudited
                                       £'000             £'000             £'000
Cash at bank and in hand               1,171             (361)               810
Bank loan                              (250)                83             (167)
Finance lease                          (367)               140             (227)
Net Funds                                554             (138)               416


7.   Report and accounts

The above unaudited results do not represent statutory accounts.  The audit
report is yet to be signed.  The audited accounts will be mailed to shareholders
shortly and will be available from the registered office at Patterson Street,
Blaydon on Tyne, Tyne & Wear, NE21 5SG.

The results for the year ended 30 September 2004 have been extracted from the
2004 accounts of Zytronic plc.  The 2004 accounts, which have been filed with
the Registrar of Companies, received an unqualified audit report and did not
contain a statement under Section 237(2) or (3) of the Companies Act 1985.

8.   AGM Date

It is intended that the AGM will take place at the Company's offices at
Patterson Street, Blaydon on Tyne, Tyne & Wear, NE21 5SG on Tuesday 28 February
2005 at 2pm.  Notice of the AGM will be sent to shareholders with the financial
statements.


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