Final Results

Dialight PLC
03 March 2008

Date:               Embargoed until 07.00am, Monday 3 March 2008

Contacts:           Roy Burton - Group Chief Executive
                    Cathy Buckley - Finance Director
                    Dialight PLC
                    Tel:  [phone]

                    Chris Bowman
                    Canaccord Adams Limited
                    Tel: [phone]

                    Alistair Mackinnon-Musson
                    Nicola Savage
                    Hudson Sandler
                    Tel:  [phone]
                    Email:  [e-mail]


                                  DIALIGHT PLC

              Preliminary results for the year to 31 December 2007

Dialight plc, the UK based leader in Applied LED Technology, announces its
Preliminary results for the year ended 31 December 2007.

Dialight consists of two business segments:-

O   Signals/Illumination which includes Traffic and Rail Signals, Obstruction 
    Lights and the new product area of Solid State Lighting
O   Components comprising Light Emitting Diode ('LED') Indication Components and
    Electromagnetic Disconnects ('smart' meter disconnect switches)

Highlights

O   Signals/Illumination sales up 17% at constant currency
O   Group sales up 8% at constant currency
O   Profit before tax £4.5m - in line with market expectations
O   Earnings per share of 8.8p (2006:11.8p)
O   Operating cash flow increased to £5.8m from £2.4m in 2006
O   Recommended final dividend increased by 9% to 3.8p
O   Initial conclusion of Strategic Review to realise full value of LED 
    Indication Components business


Roy Burton, Group Chief Executive, said

'We are pleased to report our strategy of identifying and then servicing large
niche markets for LED based products is progressing well. In 2007, sales in the
Signals/Illumination segment of our business grew over 17%.  With an excellent
pipeline of new products complementing the Safesite and White Strobe products,
we are confident of continued growth in our Signals/Illumination business.'



Financial results

With two-thirds of the Group's sales denominated in US$, the US$:£ exchange rate
is a major influence on Dialight's results. The average USD:£ rate declined 9%
from 1.84 to 2.0 from 2006 to 2007 and as a result, while Group sales in 2007 in
constant currency terms increased by 8% to £63.4 million, the effect of the
dollar's decline was to constrain the Group's reported revenue growth to 2%.

There were marked differences in the performance of the Group's two business
segments. The Signals/Illumination division showed strong growth of 17% at
constant currency, versus 10% at actual exchange rates. Within this, the Traffic
product line, which is a lower margin Signals product, grew by an impressive
20%. Reported revenue in the Components segment was down by 6% but this decline
was principally due to adverse currency movements.

Second half Group sales increased over the first half by 19% to £34.5 million,
returning an operating profit for the half of £2.9 million (compared to £966,000
in the first half) at an operating margin of 8.4%. The increase in profitability
over the first half was due to higher sales and the successful implementation of
the material cost reduction programme delayed in the first half.

Margins for the Group remained healthy; however, the adverse impact of currency
would have reduced the 2006 reported contribution of the Components and Signals/
Illumination segments by £1 million and £0.6 million respectively.

There was further investment in resource to support the expanding Signals/
Illumination business during the second half of the year, increasing the
expected year on year overhead base by 9%. The Components business reported a
segment profit of £5.3 million and for the first time Signals/Illumination
business reported a profit at £0.1 million.

In line with market expectations, Group profit before tax decreased by 23% to
£4.5 million from £5.8 million; this was a 15% decline on a constant currency
basis. Earnings per share were 8.8p compared with 11.8p in 2006. The Group
generated net cash inflow from operations of £5.8 million (2006: £2.4 million)
representing 149% of operating profit and the Group ended the year with a cash
balance of £6.6 million (2006: £4.3 million).

Dividend

The Board is recommending a final dividend of 3.8 pence per share an increase of
9% over last year's final dividend. The dividend will be paid on 9 May 2008 to
shareholders on the register at close of business on 14 March 2008. The full
year dividend is 5.7 pence per share and the dividend cover is 1.5 times.

Strategic Review

In January, the Board announced the commissioning of a strategic review of the
Group's businesses. This review has been received and after consideration by the
Board it has been concluded that we should explore the possibilities of
divesting the LED Indication Components business (from the Group's Components
division) with a view to realising the Board's view of appropriate shareholder
value and streamlining the profile of the Group to more accurately reflect
Dialight as a focused Solid State Lighting business.

Operating Review

Signals/Illumination
                                                                       Change             2007             2006

Sales                                                                   + 10%           £33.4m           £30.3m
Segment result (see page 14)                                                             £0.1m          £(0.4)m

Dialight's strategy is to address large niche markets which have some measure of
regulation or other barriers to entry. Whilst there are many areas where LEDs
can be used, Dialight has been careful to select those markets which fit its
strategy and allow defensible and profitable growth.

During 2007, the efficiency of white LEDs has improved significantly and a
number of new applications are becoming economically viable, bringing new
opportunities for the Company. This segment of our business saw significant
growth in 2007 and the availability of more efficient white LEDs enabled us to
launch some important new products which we expect to deliver continued growth
for 2008. Overall this segment grew at 17% for the year at constant currency.

Traffic

Our Traffic Light Business showed growth of 20% year on year with both Europe
and North America contributing strongly; however, in Group terms this is a
relatively low margin activity. Under normal circumstances, we would expect
North American sales to be relatively flat but increased adoption of the 2006
ITE Standard for Traffic Lights helped Dialight to grow. Dialight was the first
company to have a comprehensive portfolio of traffic light products that are
fully compliant to the new standard and we believe we gained market share for
that reason. In developing lights for the new standard, we have filed several
patents to protect our investment in this area.

Towards the end of the year, we were awarded a contract to supply over 70,000
traffic lights for Miami Dade County in Florida. A minor portion of this
contract was supplied in 2007 and it is expected that the balance will be
delivered in 2008.

With the exception of major contracts like Miami, the US Traffic Business should
continue at current levels and will be serviced in the main through our
extensive and exclusive network of Traffic Dealers who allow us to maintain our
market share in North America. Whilst a majority of the installed base of lights
has been converted to LEDs, the earliest installed LED lights are coming to the
end of their useful life, after well over five years in service. The cycle of
replacement of these lights should sustain this business for the foreseeable
future.

European traffic lights have been targeted by Dialight as a major growth
opportunity due to the current low adoption of LED traffic lights in Europe.
This market is serviced through traffic systems OEMs who are nationally based
and standards are set either by the OEM or by the individual countries in
Europe. Dialight has increased its list of OEM partners in both Western and
Eastern Europe and is well placed to service this market growth. We have
relationships with at least one major OEM in almost every European country. The
largest multinational OEM is Siemens and we continue to develop our
relationships with them building on a strong base with Siemens in Germany.

Former US President Bill Clinton has been instrumental through the Clinton
Climate Initiative in setting up volume pricing arrangements with companies
providing energy efficient products. In November Dialight announced the signing
of a volume pricing agreement with the Clinton Foundation to make attractive
pricing for our LED traffic lights available to cities on a global basis. It is
hoped that this agreement will help to accelerate the adoption of our energy
efficient traffic lights by cities around the world.

Obstruction Lights

For the past five years, Dialight has been developing products for the aircraft
obstruction light market. This is a true niche market with strong regulation
which represents an opportunity to substitute LED based lights in an installed
base worth well over $300 million in North America alone, with similar
regulatory standards being applied throughout the world. Obstruction lights are
positioned on broadcast towers, cellular phone towers, tall buildings and
structures and latterly on wind turbines. The wind turbine lighting market
represents a new build opportunity of several million dollars over the next five
years if wind energy projections are met.

Dialight has been the global innovator in the obstruction light market and has
established clear market leadership and a growing business for products using
red LEDs. However, half of the installations in this obstruction light market
use white lighting and up until early in 2007, no qualified white LED products
were available; the advent of brighter and less expensive white LEDs has changed
that situation.

Early in 2007, we launched a ground breaking white LED strobe light to address
the cell phone tower market in North America and for the new wind installations
niche in Europe. The initial version of this new light was introduced after
extensive development efforts by our scientists and engineers and once again
resulted in several patents being filed. This was succeeded by the introduction
of an improved version to meet this very demanding specification and in the
second half of 2007 we announced the qualification of our new smaller, lighter
and lower price product which performed to the same exacting standards as our
first generation.

In the North American market, there are over 50,000 conventional versions of
this light installed on towers and the complete unit is replaced on a ten year
cycle, with a change of strobe tubes six or seven times in this period - our LED
light does not need to be replaced. Although our improved product was only
launched in the second half of 2007, we sold close to a hundred units by the end
of the year, into a market which is inherently cautious of adopting new
technology. The Company foresees excellent growth prospects for this product in
2008 which has already been adopted as a standard by one North American cellular
operator.

The largest potential for Obstruction Lights is in North America and overall our
sales grew by 25% in that market in 2007. As the white strobe light was only in
its initial year it made no more than small contribution to this growth. 2008
should see continued opportunity for this whole product line, helped by
aggressive adoption of the white strobe light and by further installations on
wind turbines.

Lighting

In the LED world, there is much talk of the potential for LEDs to replace
conventional light sources for illumination purposes and undoubtedly there is
the possibility that in time this will become a reality. Up until now, the
majority of LED use for illumination has been in coloured lighting for
architectural or entertainment uses and in order to gain a presence in this part
of the market, Dialight acquired Lumidrives two years ago. This acquisition has
been successfully integrated into the Group and we have been able to bring
Lumidrives coloured products to the North American market and to open up
opportunities in our distributor channel, due to our existing relationships with
those distributors.

Although we have had some success with lighting OEMs in North America, with
sophisticated coloured and colour mixing lights using our patented technologies,
sales progress has been slower than we would have liked, as the lighting
companies themselves take time to roll out their new Dialight offerings and to
obtain the appropriate approvals. In May 2007, in conjunction with Hydrel, a
division of Acuity Brands, we were awarded a prize for a coloured underwater
fixture at the Lightfair Show in New York and we expect to see sales growth of
this and similar products in 2008.

Growth of the whole Lighting product line was 2% in 2007 although volume sales
grew just under 10 per cent offset by some price erosion. Along with the slow
adoption by US based OEMs, in Europe we were adversely affected by some delay in
the introduction of next generation products for the Dialight Lumidrives line.
This in turn resulted in some price erosion as our less sophisticated
competition was able to replicate our old range of products. By the end of the
year, a complete new line of products had been successfully introduced and we
fully expect to get back to good growth in 2008 and be able to distance
ourselves once more from the competition.

Whilst great technical improvements in white LEDs have been realised in 2007,
these devices are still expensive and have no better energy performance than the
most efficient conventional light sources. Dialight believes there are
applications in industrial white lighting today where LEDs can do a better and
more effective job than the incumbent conventional light. We identified lights
qualified for use in hazardous locations as a good potential for LED lighting
and in late 2006 'relamped' an existing hazardous location fixture with LEDs.

Encouraged by the favourable reaction to this light, we have developed a custom
LED fixture which fulfils the same application and the SafeSite range was shown
at the New York Lightfair show with a very complimentary reaction. This light
was finally qualified and launched to the market in the fourth quarter of 2007.

SafeSite is designed to emulate an existing 150 watt HID (very efficient)
conventional fixture and would be used typically as an area illumination light
in oil refineries, offshore rigs, mines, pharmaceutical plants, food processing
plants and so on. It is qualified to the appropriate Underwriters Laboratories
specifications and is a 'sealed for life' product - life being at least five
years.

Although it is noted earlier in this report that LED light sources available
today cannot outperform the better conventional light sources  (like HID), we
have demonstrated that through clever and unique design, the SafeSite fixture
can offer a 40% energy saving over its conventional rival, whilst delivering the
same amount of useful light. In addition, this is a product which requires no
maintenance and is warranted for at least five years - in fact we expect
significantly longer life. It sells at close to the price of a conventional
light and addresses a market of at least $250 million a year in new
installations. There is also a significant installed base of conventional lights
which offer potential for retrofit.

While the SafeSite only became available late in the year, we are pleased to
have sold some 300 lights, most of which were for initial trial purposes before
our customers commit to major adoption or refits. In one case, however, a major
US operator of offshore exploration rigs has decided to refit a complete rig
with over forty SafeSites and to test it in the field.

Dialight, through its distributor Unimar, has recently reached an agreement with
Rio Tinto to install Dialight's LED based SafeSite  fixtures throughout many of
their coal distribution centres, thus improving safety and decreasing
maintenance and energy costs in these locations.

Dialight is in discussion with a number of OEMs to private label this product in
addition to opening up its own routes to market. SafeSite provides an immediate
value proposition for lighting users in the hazardous location market and there
is the potential for Dialight to ship several thousands of these lights in 2008
and beyond.

This hazardous location light is an example of using our strong technical skills
to develop a product for a market where today the special attributes of LEDs can
make an attractive proposition for the end user. Other examples are in the area
of 'rough service'; we have been qualified to supply an LED light for use in
mobile shelters for field hospitals, communications centres, command posts etc.
The rugged nature of LEDs, combined with the ability to offer a low profile
light with the certainty that however roughly the shelter has been transported,
the LED light will still work, is a very attractive proposition.

For some years Dialight has been the predominant supplier of coloured LED
exterior lights for the US transit bus industry. We have an excellent position
and command a major share of this market with a strong reputation for quality
based on the lifetime warranty that we provide to the bus operators. As
mentioned earlier, the efficiency and economics of white LEDs improved
significantly in 2007, enabling us to solve a problem with the interior lighting
of these buses. Typically, fluorescent tubes are used for the interior
illumination of a bus. These tubes do not perform well due to their sensitivity
to shock, vibration, cold and also being switched on and off frequently. This
results in a significant maintenance cost for the operators. Dialight has
started shipping LED lights to a number of transit authorities to replace these
fluorescent tubes. Our LED lights are impervious to vibration and shock and they
can be switched off and on any number of times without deterioration. Since they
have a warranty for the life of the bus, they eradicate the maintenance issue of
conventional lights. Each year there are almost 5,000 new buses built which
could use these lights and of course, there is a significant retrofit
opportunity for those buses which are already in service.

With the continuing improvements in white LED performance, a number of larger
lighting markets such as roadway, tunnel and industrial lighting are beginning
to open up. Creating a value proposition against existing technology in these
demanding applications means we need to harness all the unique properties of LED
technology. To expand our knowledge base we are working with the University of
Manchester, with strategic grant support from the UK Technology and Strategy
Board, to develop a number of key technologies essential to create reliable and
efficient LED lighting systems.

The results of the project can be used to produce new generation street lighting
solutions - with levels of reliability, control and performance never before
possible and with a superior light quality to today's solutions.

During the year, Dialight's technical staff filed 19 patents and had 7 granted
with 47 pending approval. We typically spend over 6% of our Signals/Illumination
revenues on R & D as we keep pace with the developments in efficiency and
economics of our LED suppliers. Dialight has teams of engineers and scientists
from optical, mechanical and electrical/electronic backgrounds, in the USA, UK,
Germany and Mexico, working to keep Dialight at the forefront in LED
application.

Components
                                                                                      2007              2006
Sales
        LED Indication Components                                                   £19.0m            £20.6m
        Electromagnetic Disconnects                                                 £11.0m            £11.4m
Total sales                                                                         £30.0m            £32.0m

Segment results
        LED Indication Components                                                    £5.4m             £6.6m
        Electromagnetic Disconnects                                                £(0.1)m             £0.5m
Total segment result (see page 14)                                                   £5.3m             £7.1m


Dialight's Components business comprises two product areas: LED Indication
Components - LED indicator lights supplied to the OEM market; and
Electromagnetic Disconnects - 'smart' meter disconnect switches which are used
by utility companies to manage remotely electrical supply to residential and
business premises. As described above, the Group is exploring the possibilities
of divesting the LED Indication Components business which would leave the '
smart' meter operation as the segment's sole activity.

The start of 2007 was adversely affected by a slowdown in orders for indicator
lights which had first impacted in December 2006. This was principally as the
result of a decision by one of our major distributors to reduce inventory, which
had the effect of reducing our revenues in the first quarter. However, as
anticipated there was no slowdown in the demand from end users and we saw a
recovery to normal revenues by the end of the quarter, which continued for the
rest of the year.

Dialight's Indication business services a mature niche in the electronics market
place which will exhibit low growth over time. Sales of our US distributors grew
at over 3% in the year and our sales to OEMs were steady. Many such components
businesses are commodities and are subject to severe price pressures, however,
Dialight is in a unique position in a market niche which avoids such major
pressures to reduce price and once again our margins have been maintained.

Whilst most of our Components business relates to LED Indicators, Dialight also
supplies 'smart' meter disconnect switches to the utility industry. In the
United States there is a major move to implement an advanced meter
infrastructure in the electricity market. This requires the replacement of up to
130 million electricity meters over the next several years. Each one of these
meters may need a switch capable of safely handling 200 amps. Dialight
manufactures such a switch and is qualified with three of the top suppliers of
these new 'smart' meters.

Market projections are that up to 18 million switches will be needed by the end
of 2010 and Dialight is well positioned to supply over a quarter of these. The
Dialight switch is the result of significant development effort and uses several
unique approaches for which patents have been filed. Supply of these switches is
expected to drive significant growth for Dialight, beginning this year and
Elster, one of the major US smart meter manufacturers, has placed a blanket
order for 200,000 switches worth over $4,000,000 of which volume shipment is
expected to start late in the first half.

Outlook

The return of our Components segment to normal levels is expected to continue,
given no major market downturns, with the added potential for good performance
from the 'smart' meter disconnect products in 2008. As reported above, the Board
believes that the divesture of the LED Indication Components business may be the
most appropriate way to deliver value to shareholders from this part of the
group and to assist the focus on the Solid State Lighting business.

During 2007, the Signals/Illumination segment achieved strong growth and
importantly, a number of key new products were introduced. The Dialight
Lumidrives line was completely redesigned, SafeSite was successfully launched
and the newest version of the White Strobe is showing strong acceptance in the
market. In addition there is a pipeline of other new white light based products
for 2008.The Board is therefore confident that in 2008 and beyond, our strategy
for growth in the Signals/Illumination market will show continued success
following the double digit sales performance in 2007.


Roy Burton                      Harry Tee
Chief Executive                 Chairman



Safe Harbour Statement

This announcement contains certain statements, statistics and projections that
are or may be forward looking. The accuracy and completeness of all such
statements, including, without limitation, statements regarding the future
financial position, strategy, projected costs, plans and objectives for the
management of future operations of Dialight plc and its subsidiaries is not
warranted or guaranteed. These statements typically contain words such as '
intends', 'expects', 'anticipated', 'estimates', and words of similar import. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
Although Dialight plc believes that the expectations will prove to be correct.
There are a number of factors, many of which are beyond the control of Dialight
plc, which could cause actual results and developments to differ materially from
those expressed or implied by such forward-looking statements.



CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2007

                                                                              Note            2007          2006
                                                                                             £'000         £'000
Continuing operations
Revenue                                                                         1           63,408        62,302
Cost of sales                                                                             (49,137)      (46,202)

Gross profit                                                                                14,271        16,100

Distribution expenses                                                                      (5,053)       (5,126)
Administrative expenses                                                                    (5,325)       (5,650)
Operating profit                                                                1            3,893         5,324
Financial income                                                                             2,383         2,154
Financial expense                                                                          (1,796)       (1,665)

Net financing costs                                                                            587           489

Profit before tax                                                                            4,480         5,813

Income tax expense                                                              2          (1,751)       (2,145)

Profit for the year attributable to equity holders of the parent                             2,729         3,668

Earnings per share
Basic earnings per share                                                        3             8.8p         11.8p

Diluted earnings per share                                                      3             8.6p         11.7p



CONSOLIDATED BALANCE SHEET
As at 31 December 2007


                                                                                             2007          2006
                                                                                            £'000         £'000
Assets
Property, plant and equipment                                                               6,072         5,557
Intangible assets                                                                           7,913         7,495
Deferred tax assets                                                                         1,209         1,249

Total non-current assets                                                                   15,194        14,301

Inventories                                                                                 9,846        10,397
Trade and other receivables                                                                15,629        14,629
Cash and cash equivalents                                                                   6,561         4,346
Total current assets                                                                       32,036        29,372

Total assets                                                                               47,230        43,673

Liabilities

Current liabilities
Interest-bearing loans and borrowings                                                     (2,172)       (2,184)
Trade and other payables                                                                  (9,271)       (8,478)
Tax liabilities                                                                           (2,822)         (765)

Total current liabilities                                                                (14,265)      (11,427)

Non-current liabilities
Employee benefits                                                                         (1,227)       (1,671)
Provisions                                                                                  (779)         (802)
Deferred tax liabilities                                                                    (110)          (83)

Total non-current liabilities                                                             (2,116)       (2,556)

Total liabilities                                                                        (16,381)      (13,983)

Net assets                                                                                 30,849        29,690

Equity
Issued share capital                                                                          591           591
Merger reserve                                                                                546           546
Other reserves                                                                            (1,637)       (1,842)
Retained earnings                                                                          31,349        30,395

Total equity                                                                               30,849        29,690



CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2007
                                                                             Note            2007          2006
                                                                                            £'000         £'000

Operating activities

Profit for the year                                                                         2,729         3,668
Adjustments for:
Financial income                                                                          (2,383)       (2,154)
Financial expense                                                                           1,796         1,665
Income tax expense                                                                          1,751         2,145
Share based payments                                                                          196           130
Depreciation of property, plant and equipment                                               1,155         1,154
Amortisation of intangible assets                                                             843           658

Operating cash flow before movements in working capital                                     6,087         7,266
Decrease/(increase) in inventories
                                                                                              475       (4,152)
Increase in trade and other receivables                                                   (1,356)       (2,062)
Increase  in trade and other payables                                                         800         1,504
Decrease in pension liabilities                                                             (192)         (615)
Transfer from 'Restricted Cash'                                                                 -           485

Cash generated from operations                                                              5,814         2,426

Income taxes received/(paid) on profit on ordinary activities                                 423       (1,623)
Income tax paid on gain on disposals                                                            -       (2,559)
Interest paid                                                                               (152)         (100)

Net cash from operating activities                                                          6,085       (1,856)

Investing activities

Interest received                                                                             484           355
Acquisition of subsidiary (net of cash received)                                                -       (2,449)
Capital expenditure                                                                       (1,626)       (1,207)
Expenditure on development                                                                  (958)         (976)
Sale of tangible fixed assets                                                                  11            82

Net cash used in investing activities                                                     (2,089)       (4,195)

Financing activities

Dividends paid                                                                            (1,687)       (1,484)
Transfer to 'Restricted Cash'                                                  5                -         2,559
Preference shares redeemed                                                                   (12)          (29)
Own shares acquired                                                                             -         (308)

Net cash (used in)/generated from financing activities                                    (1,699)           738

Net increase/(decrease) in cash and cash equivalents                                        2,297       (5,313)
Cash and cash equivalents at 1 January                                                      4,346         9,829
Effect of exchange rates on cash held                                                        (82)         (170)
Cash and cash equivalents at 31 December                                                    6,561         4,346


Consolidated statement of recognised income and expense
For the year ended 31 December 2007

                                                                                             2007          2006
                                                                                            £'000         £'000
Exchange difference on translation of foreign operations                                      193       (1,900)
Actuarial losses on defined benefit pension schemes                                         (339)           303
Tax on items taken directly in equity                                                         131         (133)
Effect of change in UK Tax rate                                                              (64)             -
Income and expense recognised directly in equity                                             (79)       (1,730)
Profit for the period                                                                       2,729         3,668

Total recognised income and expense for the period attributable to                          2,650         1,938
equity holders of the parent



Notes to the consolidated financial statements
for the year ended 31 December 2007

The consolidated financial statements of the Company for the year ended 31
December 2007 comprise the Company and its subsidiaries (together referred to as
the 'Group').

Statement of compliance

The consolidated financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting Standards as
adopted by the EU ('Adopted IFRSs'). The Company has elected to present its
parent company financial statements in accordance with UK GAAP.

Basis of preparation

The financial statements have been prepared on the historical cost basis except
for the revaluation of certain financial instruments which are carried at fair
value.

The financial information contained in this preliminary announcement does not
constitute the Company's statutory accounts for the years ended 31 December 2007
and 2006.  Statutory accounts for 2006 have been delivered to the registrar of
companies, and those for 2007, will be delivered in due course.  The auditors
have reported on these accounts, their reports were unqualified and did not
contain statements under section 237 (2) or (3) of the Companies Act 1985.  Full
financial statements for the year ended 31 December 2007, will shortly be posted
to share holders, and after adoption at the Annual General Meeting on 7 May 2008
will be delivered to the registrar.

1.                   Segment reporting

Business segments

The Group comprises the following business segments: -

•    Components comprising the indication business and electromagnetic 
     disconnects
•    Signals/Illumination which includes Traffic and Rail Signals, Obstruction 
     Lights and the new Solid State Lighting products.

All revenue relates to the sale of goods. The primary format used for segmental
reporting is by business segment as this reflects the internal management
structure and reporting of the Group. Segment results, assets and liabilities
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated expenses comprise corporate costs
including share based payments and unallocated assets and liabilities comprise
cash, borrowings, and pension fund liabilities. The 2006 segmental results have
been restated in line with the format included in this year's report.

Business segments

2007                                Electro             LED
                                   magnetic      Indication              Total         Signals/
                                 components        business         Components     Illumination        Total            
                                      £'000           £'000              £'000            £'000        £'000
Revenue                              11,000          19,029             30,029           33,379       63,408

Contribution                          2,656          10,525             13,181           10,774       23,955

Overhead costs                      (2,808)         (5,083)            (7,891)         (10,660)     (18,551)

Segment results                       (152)           5,442              5,290              114        5,404

Unallocated expenses                                                                                 (1,511)

Operating profit                                                                                       3,893
Net financing income                                                                                     587

Profit before tax                                                                                      4,480
Income tax expense                                                                                   (1,751)

Profit after tax                                                                                       2,729



2006                                Electro             LED
                                   magnetic      Indication              Total         Signals/
                                 components        business         Components     Illumination        Total            
                                      £'000           £'000              £'000            £'000        £'000
Revenue                              11,361          20,654             32,015           30,287       62,302

Contribution                          3,078          11,701             14,779           10,602       25,381

Overhead costs                      (2,598)         (5,076)            (7,674)         (10,970)     (18,644)

Segment results                         480           6,625              7,105            (368)        6,737

Unallocated expenses                                                                                 (1,413)

Operating profit                                                                                       5,324
Net financing income                                                                                     489

Profit before tax                                                                                      5,813
Income tax expense                                                                                   (2,145)

Profit after tax                                                                                       3,668


                                                                                                        2007
Other Information           Electro magnetic             LED
                                  components      Indication   Total Components        Signals/
                                                    business                       Illumination        Total
                                       £'000           £'000              £'000           £'000        £'000
Capital Additions                        222             431                653             973        1,626
Depreciation and                         441             420                861            1101        1,962
amortisation


                                                                                                        2006
Other Information           Electro magnetic             LED
                                  components      Indication   Total Components        Signals/
                                                    business                       Illumination        Total
                                       £'000           £'000              £'000           £'000        £'000
Capital Additions                        209             344                553             654        1,207
Depreciation and                         352             397                749           1,020        1,769
amortisation


Balance Sheet - Assets                                                                                  2007
                            Electro magnetic             LED
                                  components      Indication   Total Components        Signals/
                                                    business                       Illumination        Total
                                       £'000           £'000              £'000           £'000        £'000
Segment assets                         6,320           7,999             14,319          24,495       38,814
Unallocated assets                                                                                     8,416

Consolidated total assets                                                                             47,230



Balance Sheet - Liabilities                                                                             2007

                            Electro magnetic             LED
                                  components      Indication   Total Components        Signals/
                                                    business                       Illumination        Total
                                       £'000           £'000              £'000           £'000        £'000
Segment liabilities                  (1,267)         (2,705)            (3,972)         (5,757)      (9,729)
Unallocated liabilities                                                                              (6,652)

Consolidated total                                                                                  (16,381)
liabilities


Balance Sheet - Assets                                                                                  2006
                            Electro magnetic             LED
                                  components      Indication   Total Components        Signals/
                                                    business                       Illumination        Total
                                       £'000           £'000              £'000           £'000        £'000
Segment assets                         6,901           7,033             13,934          23,828       37,762
Unallocated assets                                                                                     5,911

Consolidated total assets                                                                             43,673



Balance Sheet - Liabilities                                                                             2006
                            Electro magnetic             LED
                                  components      Indication              Total        Signals/
                                                    business         Components    Illumination        Total
                                       £'000           £'000              £'000           £'000        £'000
Segment liabilities                  (1,448)         (1,773)            (3,221)         (5,455)      (8,676)
Unallocated liabilities                                                                              (5,307)

Consolidated total                                                                                  (13,983)
liabilities


Geographical segments

The Components and Signals/Illumination segments are managed on a worldwide
basis, but operate in three principal geographic areas, UK, Europe and North
America.  The following table provides an analysis of the Group's sales by
geographical market, irrespective of the origin of the goods. All revenue
relates to the sale of goods.

Sales revenue by geographical market
                                                                                                       Total
                                                                                             2007       2006
                                                                                            £'000      £'000
North America                                                                              37,116     36,386
UK                                                                                         11,401     10,896
Rest of Europe                                                                              7,300      7,690
Rest of world                                                                               7,591      7,330
                                                                                           63,408     62,302


Continuing operations                                          Segmental assets        Capital expenditure
                                                            2007           2006            2007       2006
                                                           £'000          £'000           £'000      £'000
North America                                             26,059         22,394           1,125        899
UK                                                        14,487         15,248             460        259
Rest of Europe                                             6,684          6,031              41         49
                                                          47,230         43,673           1,626      1,207



2.                   Income tax expense


Recognised in the income statement
                                                                                           2007          2006
                                                                                          £'000         £'000
Current tax expense
Current year                                                                              1,825         1,838
Adjustment for prior years                                                                (110)         (209)

                                                                                          1,715         1,629
Deferred tax expense
Origination and reversal of temporary differences                                            58           505
Adjustment for prior years                                                                 (22)            11
Total income tax expense                                                                  1,751         2,145


Reconciliation of effective tax rate
                                                                      2007       2007       2006       2006
                                                                         %      £'000          %      £'000
Profit for the period                                                           2,729                 3,668
Total income tax expense                                                        1,751                 2,145

Profit excluding income tax                                                     4,480                 5,813

Income tax using the UK corporation tax rate of 30%                   30.0      1,344       30.0      1,744
Effect of tax rates in foreign jurisdictions                           6.7        302        6.0        346
Non-deductible expenses                                                1.2         54        0.6         37
Research and development credit                                          -          -      (0.7)       (41)
Unrecognised losses                                                    4.3        194        4.4        257
Change in UK tax rate                                                (0.2)       (11)          -          -
Over provision in prior years                                        (2.9)      (132)      (3.4)      (198)

                                                                      39.1      1,751       36.9      2,145


Deferred tax recognised directly in equity                                                     2007      2006
                                                                                              £'000     £'000
Relating to pension accounting                                                                   67     (133)


3.                   Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 31 December 2007 was based on the
profit for the year of £2,729,000 (2006:£3,668,000) and a weighted average
number of ordinary shares outstanding during the year ended 31 December 2007 of
31,084,000 (2006:31,150,000).

Diluted earnings per share

The calculation of diluted earnings per share at 31 December 2007 was based on
profit for the year of £2,729,000 (2006:£3,668,000) and a weighted average
number of ordinary shares outstanding during the year ended 31 December 2007 of
31,619,000 (2006:31,367,000) calculated as follows: -

Weighted average number of ordinary shares (diluted)
                                                                                            2007        2006
                                                                                            '000        '000
Weighted average number of ordinary shares                                                31,084      31,150
Effect of share options on issue                                                             535         217

Weighted average number of ordinary shares (diluted)                                      31,619      31,367


4.                   Dividends

The following dividends were paid in the year:
                                                                                       2007              2006
                                                                                      £'000             £'000
Interim-1.90p  per ordinary share (2006:1.75p)                                          594               547
2006 Final-3.5p per ordinary share (2005:3.0p)                                         1093               937
                                                                                      1,687             1,484

After the balance sheet date the following dividends were recommended by the
Directors.  The dividends have not been provided for and there are no
corporation tax consequences.

                                                                                       2007              2006
                                                                                      £'000             £'000
Final recommended dividend
3.8p per ordinary share (2006:3.5p)                                                   1,187             1,093


5.                   Restricted cash

As part of the Capital Reduction in 2005 the Court required certain cash to be
set aside into a separate bank account 'Creditors Account' for the protection of
actual, prospective or contingent liabilities of the Company. At 31 December
2007 the balance on the restricted cash balance was £956,000 (2006:£956,000) and
is included in trade and other receivables.



                                    - ENDS -


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