Acquisition & Trading Update

Carclo plc 01 October 2007 For Immediate Release 1 October 2007 Carclo plc Acquisition of remaining minority interest in Conductive Inkjet Technology Limited and pre-close trading update The board of directors of Carclo plc ( the 'Board' and 'Carclo' respectively) is pleased to announce that it has entered into an agreement to increase its equity investment in Conductive Inkjet Technology Limited ('CIT') from 74.4% to 100%. In our Interim Management Statement of 15 August 2007 we reported continued progress at CIT across a broad range of applications including sensor and Radio Frequency Identification ('RFID') applications, photovoltaics and displays. CIT has highly attractive growth prospects in a number of established and emerging sectors. To ensure that these growth opportunities are developed effectively and that the full benefit of this growth accrues to Carclo's shareholders, the Board has decided to acquire the remaining minority interest in CIT. Conductive Inkjet Technology CIT is a unique patented process to print pure metals onto plastics. The initial invention was made by Xennia Technology Ltd ('Xennia') whilst undertaking an application development for mobile handsets on a contract funded by Carclo. It was recognised that the invention had applications well beyond mobile telephony and therefore Carclo and Xennia formed a 50:50 joint venture to safeguard, develop and exploit the invention. In 2005, the partners agreed that Carclo should take the lead in commercialising CIT and Carclo acquired a further 20% holding from Xennia at a cost of £1.6 million and thereby gained effective management control of CIT. In the past year, CIT has been funded through further issues of shares in which Xennia has not participated with the result that Carclo's stake in CIT has increased to 74.4%. Since 2005, CIT has been established as a dedicated advanced materials company adjacent to the Science Park in Cambridge. CIT is now fully independent of Xennia and employs 11 people - primarily highly qualified chemists and engineers. CIT based products have commenced production within Carclo and evaluation systems based on the MetalJet range have been sold to a number of advanced technology companies. The CIT process has been extended to printing on silicon and glass substrates, and to using laser technology to produce extremely fine lines which are invisible to the eye. Further information on CIT application areas is included in Appendix 1. Acquisition Carclo has reached agreement with Xennia to acquire its 25.6% holding in CIT which will become a 100% owned subsidiary of Carclo. The total consideration payable to Xennia in connection with the acquisition will be a maximum of £2.07 million. This implies an enterprise value for CIT of £11.47 million based on net debt of £3.40 million as at 31 March 2007. The Board believes that this represents excellent value given the rapidly expanding universe of applications for the CIT. Carclo is paying Xennia an initial consideration of £1.07 million (the 'Initial Consideration') for Xennia's 25.6% stake in CIT of which £0.97 million is in the form of 869,565 new Carclo shares at Friday's closing share price of 111 pence per share, and £0.10 million will be in cash. As part of the agreement, the sale of the consideration shares is subject to lock-up arrangements for one year such that any sale requires the written consent of Carclo. Carclo has also agreed that CIT will separately pay Xennia £0.15 million for the release of certain of its intellectual property rights relating to CIT, and £0.10 million for transitional support. In addition, Carclo has agreed to pay Xennia a deferred consideration for Xennia's 25.6% stake in CIT of up to £0.75 million, in cash, payable in June 2010 (the 'Deferred Consideration'). The first element of the Deferred Consideration is based upon 50% of the earnings before interest, tax, depreciation and amortisation ('EBITDA') generated by CIT in the financial year ending 31 March 2010 capped at £0.50 million. The second element is based upon sales of MetalJet 2000, 4000 and 5000 production platforms up to 31 March 2010 and is capped at £0.25 million. Each MetalJet production platform is expected to generate significant recurring revenues for CIT's patented inks. Pre-close trading update The board is pleased to report that the group has continued to trade in line with its expectations since the issue of our Interim Management Statement on 15 August 2007. In Technical Plastics we have seen good sales growth over the same period last year despite the impact of the weaker US dollar on the re-translation of sales from our businesses based in the USA and China. Margin progression in our European businesses has been temporarily impacted by the costs of integration of a number of new programmes and the rationalisation programme at our Slough facility. We expect a significantly stronger second half performance from this division. The Precision Products division has traded strongly throughout the first half of our financial year on the back of good demand for higher margin multiband antenna and its first half performance is expected to be well ahead of the prior period. Appendix 1 CIT applications Sensors and RFID The development of the CIT process for high speed printing on PET polyester film is now complete and commercial production has commenced. The newly launched MetalJet 6000 and MetalJet 5000 platforms enable the CIT process to be used for the production of thin metal inkjet printed circuitry on sheet or reel format which is appropriate for uses ranging from RFID antennas to sensors, keypads, switches and other printed circuits. The first production line of the MetalJet 6000, a high speed reel to reel inkjet printing line developed with our American partner, Preco Inc, is currently being installed in the USA. This contract manufacturing facility is aimed at supplying a wide range of RFID antennas and flexible circuitry to prospective purchasers of the entire system. The facility, which should generate significant future ink revenues, is expected to be operational in January 2008. We currently have a high level of interest in our technology from a number of leading players in the RFID industry, and are targeting a further three sales of MetalJet 6000 systems by March 2009. Photovoltaics Global production of solar cells is growing significantly with industry revenues forecast to rise rapidly over the next five years. The majority of the new solar installations are now taking place within Europe which accounts for nearly one third of the world's solar cell manufacturing. The industry is interested in applying non-contact printing processes such as ink-jet to allow thinner silicon wafers to be safely handled without breakages. CIT is collaborating with three of the major European solar cell producers in the development of a range of inkjet materials to be used in the solar cell manufacturing process. In the first process developed by CIT, a catalytic inkjet fluid is printed onto the anti-reflective surface of a solar cell to produce a pure silver interconnect. The wafer is then fired under special conditions to produce an ohmic contact between the silver interconnect and the photovoltaic junction. This technology potentially increases the efficiency of the solar cell by allowing narrower line widths and more conductive materials to be used. A second process, also developed by CIT, uses a CIT ink to etch away selectively the anti-reflection coating on the surface of the solar cell allowing the interconnect to be made directly onto the silicon. This process has the capability to produce more efficient cells than current production methods allow. CIT has engaged ISC Konstanz, an international solar energy research facility, to support these developments. Displays CIT has a patented technology to write extremely fine lines using lasers - line widths of five microns have been demonstrated which are invisible to the human eye. This ink technology can also be used with the existing mask aligner equipment used to produce flat panel displays. Solid state displays generally require a transparent electrode on the top of each pixel. This electrode is usually made of Indium Tin Oxide ( 'ITO' ) which is transparent but has limited conductivity. CIT's fine line technology can be used to provide a conductivity boost to the ITO electrode. In some display applications the CIT technology can actually replace the ITO electrode. The CIT technology therefore potentially allows displays to operate much more efficiently, significantly extending the range of passive matrix addressed displays and enabling the application of new display materials such as Organic Led Emitting Diodes ('OLED'). CIT is nearing completion of a DTI funded development programme with Cambridge Display Technology Limited ('CDT') using its fine line technology to produce feature sizes down to approximately five microns in the production of a full size back plane demonstrator based on CDT's P-OLED colour display design. Together with a partner company, CIT is currently seeking DTI support to commence a further eighteen month development programme to develop a prototype production process for the manufacture of OLED displays using CIT's conductive tracks for direct pixel connection. An objective of this programme is to utilise our technology in a prototype facility using existing flat panel display production equipment. Commercialisation could therefore materialise quite rapidly following a successful conclusion of the development. CIT has joined a second DTI funded programme headed by Epigem Limited to produce an alternative lower cost material to ITO. This two year programme, which is expected to start on 1 October 2007, is aimed at producing a viable ITO alternative by October 2009. CIT's fine line technology has the potential to radically change the way that flat panel displays are designed and manufactured and therefore could generate substantial commercial revenues. - Ends- Enquiries: Carclo plc 01924 268040 Ian Williamson, Chief Executive Weber Shandwick Financial 020 7067 0700 Richard Hews/James White Notes to Editors About Carclo (LSE: CAR) • Carclo plc is a global supplier of technical plastic components. It is a public company whose shares are quoted on the London Stock Exchange. • 75% of sales are derived from the supply of fine tolerance, injection moulded plastic components, which are used in medical, automotive, telecom and electronics products. This business, Carclo Technical Plastics, operates internationally in a fast growing and dynamic market underpinned by rapid technological development. • 25% of sales are derived from the supply of manufactured systems to the automotive and aerospace industries. • Carclo's strategy is to grow rapidly in low cost manufacturing regions and to develop new technologies and products to underpin future growth. This information is provided by RNS The company news service from the London Stock Exchange

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