Final Results

LPA Group PLC
24 January 2001



                                LPA Group Plc

                                 NEWS RELEASE

                     PRELIMINARY ANNOUNCEMENT OF RESULTS

                      FOR YEAR ENDED 30TH SEPTEMBER 2000



                                  KEY POINTS



  * SALES UP 0.7% TO £10.4m
  * LOSS BEFORE TAX £0.155m
  * LOSS PER SHARE BASIC (1.60p)
  * DIVIDENDS FINAL UNCHANGED 1.40p


                                TOTAL UP 3.7% TO 2.80p

  * PROFITS HELD BACK BY RAIL VEHICLE INVESTMENT DELAYS (LPA INDUSTRIES RAIL
    BUSINESS DECLINED 16.4%) AND ELIMINATION OF AGEING PRODUCTS.
  * ACQUISITION OF ELECTRONIC ENCLOSURE MANUFACTURER HASWELL ENGINEERS
    LIMITED AND INVERTER, POWER SUPPLY AND RAIL VEHICLE LIGHTING MANUFACTURER
    EXCIL ELECTRONICS LIMITED COMPLETED.
  * ROBUST LONG TERM ORDER BOOKS, PENT UP DEMAND FOR RAIL PRODUCTS,
    AEROSPACE, AND DEFENCE PRODUCTS.
  * EXCELLENT CONTRIBUTION FROM CHANNEL ELECTRIC EQUIPMENT.
  * STRENGTHENED MANAGEMENT TEAM.
  * MAJOR CAPITAL INVESTMENT PROGRAMME UNDERWAY.

Peter Pollock, Chief Executive, commented 'although the results are very
disappointing, the shortfall is mainly due to the delays in orders for new
rail vehicles and we have completed the review of our product lines which has
resulted in the discontinuation of a number of ageing products. Channel made a
positive contribution but LPA Industries had a very difficult time. Haswell
has started the new year well although Excil remains dependent on rail vehicle
contracts which ought to start contributing in the second half.'

ENQUIRIES

Peter Pollock LPA Group Plc 07881 626 123 or 01799 512800

Ian Dighe Bridgewell Corporate Finance 020 7523 5804

Russell Cook Teather & Greenwood 020 7655 4000



           PRELIMINARY ANNOUNCEMENT YEAR ENDED 30th SEPTEMBER 2000

                          KEY FINANCIAL INFORMATION
                                                               2000     1999
                                                               £'000    £'000

TURNOVER                                                       10,366   10,297

OPERATING (LOSS)/PROFIT                                        (75)     1,095

(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION           (155)    1,065

(LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION            (163)    786

DIVIDENDS                                                      (295)    (274)

EARNINGS PER SHARE                                             (1.60p)  7.74p


DIVIDENDS PER SHARE                                            2.80p    2.70p

GEARING
Net debt to shareholders' funds                                88.6%    Nil



           PRELIMINARY ANNOUNCEMENT YEAR ENDED 30th SEPTEMBER 2000



CHAIRMAN'S STATEMENT

Results

The year ended 30 September 2000 proved to be unexpectedly difficult due
mainly to continuing and persistent delays to the rail industry replacement
programme of 'out of date rolling stock'. Clearly the problems associated with
the rail infrastructure encountered during the year have been a major
distraction to the Strategic Rail Authority, and the promised orders for the
replacement of Mark 1 Slam door stock have not materialised. LPA Industries
sales of railway equipment actually fell 16.4% from £3,138,000 to £2,623,000
during a period when the investment in new rolling stock was expected to
accelerate. Importantly the loss of sales was not due to business being lost
but simply the delay in the investment programme. The Group is strongly
positioned to take advantage of the reinvestment in rail vehicles, which must
occur soon if the Strategic Rail Authority's plans are to be met.

The foregoing problems resulted in a Group pre-tax loss of £155,000.
Consequently, earnings per share dropped from 7.74p in 1999 to a loss of 1.60p
in the year ended 30 September 2000. This is on Group sales of £10.336m,
virtually unchanged from last year, despite a contribution of £1.077m from
acquisitions.

Whilst LPA Industries incurred a substantial loss, Channel Electric Equipment
again made an excellent contribution to profits. The acquisitions of Haswell
Engineers and Excil Electronics made a small negative contribution in the
short period they have been in the Group. LPA Industries and Excil
Electronics, with their substantial exposure to the rail industry, suffered
and are continuing to suffer from the delays in the rail investment programme.
At LPA Industries it was decided during the year to withdraw certain ageing
product lines from the market and rationalise the product range. This
contributed to the loss. Management changes have been made at both LPA
Industries and Excil.

Acquisitions

In June the Group acquired Haswell Engineers, the Clacton based manufacturer
of high quality electronic enclosures for a maximum consideration of £1.0m.
Haswell Engineers has made a sound start, expanding the Group's exposure to
the telecoms and electronics markets. Haswell Engineers will supply the
Group's future requirements for enclosures and structures for rail equipment.

In July the acquisition of Excil Electronics, the Normanton based manufacturer
of power supplies, inverters and lighting systems for rail vehicles was
completed for a maximum consideration of £1.8m. This was subsequently reduced
to £1.55m through the operation of a mechanism based on net assets at
completion. The level of order entry in the period of our ownership has been
encouraging. The prospects for the business are expected to improve as the
rail vehicle replacement programme gets under way.

Cash

A total of £1.9m cash was spent on the acquisitions including the assumption
of £1.5m debt. The Group took out a £3.5m term loan repayable over ten years
to finance the acquisitions and a major capital expenditure programme. The
group closed the year with cash in hand on current account.

Dividends and Annual General Meeting

Despite the difficult trading conditions during the period under review, and
because there are signs of improvement, albeit not yet satisfactory, your
Board is recommending that the final dividend be maintained at 1.40p (1999:
1.40p). This, together with the 7.7% increase in the interim dividend to
1.40p, makes a total of 2.80p (1999: 2.70p) for the year, an increase of 3.7%.
The dividend is not covered by earnings. Subject to approval by shareholders
at the Annual General Meeting of the company to be held at noon on 8 March
2001 at the offices of Bridgewell Corporate Finance, 21 New Street,
Bishopsgate, London, EC2M 4HR, the proposed final dividend (net) of 1.4p per
share (1999: 1.4p), will be paid on 12 March 2001 to all Ordinary Shareholders
on the Register at the close of business on 23 February 2001.

Board Changes

I relinquished my executive responsibilities with the Group on 30 June 2000,
but I am delighted to continue as Non-Executive Chairman. Stephen Brett joined
the group as Finance Director and Company Secretary on 4 December 2000. He was
formerly Vice President Finance of the Environmental Control Division of
Invensys Plc. His broad industrial experience will prove invaluable as the
Group meets its challenges of substantial growth both organic and through
acquisition. Sheena Trueman has left the Group board, but will continue with
the Group as Finance Director of LPA Industries.

Employees

Patricia Hodges, a past main board director, retired from LPA Industries after
thirty-one years continuous service, and I take the opportunity to wish her a
long and happy retirement. Our people continue to be the Group's most valuable
asset. The Group is committed to extending the implementation of 'Investors In
People'.



Prospects

Channel Electric Equipment and Haswell Engineers have made an excellent start
to the new year. Excil Electronics should benefit from the pick-up in rail
projects earlier than LPA Industries which is part way through a
rationalisation plan. Overall the Group has made a slow start to the new
financial year but, with the increasing investment in the rail market, it is
in a strong position to grow organically.


Michael Rusch

Chairman

23 January 2001


           PRELIMINARY ANNOUNCEMENT YEAR ENDED 30th SEPTEMBER 2000

CHIEF EXECUTIVE'S REVIEW

Trading Results

Despite a contribution of £1.077m from the two acquisitions made in June and
July, turnover only increased 0.7% from £10.297m to £10.366m which underscores
the difficult trading conditions encountered particularly during the second
half of the year ended 30 September 2000. As a consequence a pre tax loss of 
£155,000 was incurred despite another good performance by Channel Electric
Equipment. LPA Industries suffered severely from delays in the award of
contracts for new rail vehicle equipment and incurred a significant loss.
Elsewhere demand was flat with a number of aerospace and defence projects
delayed. The rail market has the potential to be very strong with several
thousand trains to be built over the next few years, but many of the contracts
for the replacement of the obsolete Mark 1 slam door stock have yet to be
placed. The main reason for this delay is the re-negotiation of the Rail
Franchises. Many of the Train Operating Companies' (TOCs) franchises are too
short to justify them committing to capital investment. The threat of losing
the franchise through the re-negotiation process has also discouraged the TOCs
from investment. The Strategic Rail Authority is committed to ensuring
investment in new rail vehicles and expects up to 6,000 new trains to come in
to service over the next ten years.

Rail equipment output at LPA Industries fell 16.4% despite pre-production
deliveries of equipment for the Virgin West Coast Mainline and Cross Country
projects. These together with Fourth Generation Tangarra in Australia will
provide a significant base load in the second half of this year and in next
year. Hopefully this will coincide with the resumption of investment in rail
vehicles elsewhere in the UK network and provide additional production load.
Demand for aircraft products has been sustained despite the strength of
sterling.

LPA Industries' losses were increased by the elimination of some ageing
industrial product lines. The implementation of Manufacturing Resources
Planning helped to reduce LPA Industries stock by 40% over the last eighteen
months. The management team is being further strengthened and a major
rationalisation programme is under way to make more efficient use of the
facilities. When the main rail vehicle programmes commence, expected in the
second half of this financial year, LPA Industries should benefit.

Channel Electric Equipment had an excellent year and has started the current
year well.

Acquisitions

Haswell Engineers, the Clacton Essex based manufacturer of high quality
electronic enclosures was acquired on 21 June for £378,000 plus deferred
consideration which is contingent upon the pretax profits for the periods
ending on 30 September 2000, 2001 and 2002, subject to a maximum total
consideration of £1.0m. Haswell Engineers serves a broad customer base
focussed mainly on telecoms and electronics. We expect Haswell Engineers to
assist the Group by expanding the scope of supply to the rail and telecoms
markets. Haswell Engineers has had an excellent start to the current year.

Excil Electronics, the Normanton Leeds based manufacturer of power supplies,
inverters and lighting solutions for the rail vehicle industry and contract
electronics, was acquired on 17 July 2000. The consideration initially agreed
was £1.8m, but this was reduced to £1.55m following the application of a net
assets formula based on completion accounts. Although Excil Electronics has,
like LPA Industries, suffered from delays in rail investment its prospects are
encouraging in the second half when volume production of the long term orders
for Virgin West Coast, Virgin Cross Country, Fourth Generation Tangarra in
Australia and Kinki Sharyo for Hong Kong coincide with the expected resumption
of supplies to the rest of the UK rail network and London Underground.
Contract manufacturing should also benefit from the significant capital
expenditure now underway. Management has been strengthened.

Capital Expenditure

Capital expenditure during the year amounted to £463,000 compared with
depreciation of £375,000, and mainly comprised a new machining centre,
upgrades to computer systems and the replacement of vehicles. Significant
capital expenditure is planned this year on new machine tools for Haswell
Engineers and Excil Electronics, together with upgrades of the manufacturing
facilities at LPA Industries.

Cash Flow

Net cash flow from operating activities amounted to £482,000. The Group had £
130,000 net cash in hand at the start of the year. Having spent £1.9million on
acquisitions and assumed £1.5m of associated debt, financed by a £3.5m term
loan repayable over ten years, the Group closed with £246,000 net cash in hand
on current account, having repaid £329,000 of long term liabilities. As a
consequence of taking out the term loan finance the Group balance sheet has
become geared. At 30 September 2000 gearing was 89% (1999 Nil). Interest
charges amounted to £89,000 during the year.

Design and Development

At LPA Industries design and development activity has continued to be
concentrated on new rail vehicle projects and updating industrial products.
The range of aircraft ground power supply products has been expanded. Channel
Electric Equipment has continued to develop its franchises. Excil Electronic's
range of inverters, power supplies and train lighting products continues to be
developed. Haswell Engineers continues to invest in the latest manufacturing
techniques.

Management and resources

Stephen Brett was appointed Group Finance Director and Company Secretary with
effect from 4 December 2000. At the same time, Sheena Trueman became Finance
Director of LPA Industries.

The future

The challenge for management at LPA Industries and Excil Electronics this year
is to manage through the hiatus in activity caused by the delay in the award
of rail vehicle contracts while preparing for the work when it arrives.
Channel Electric Equipment and Haswell Engineers must continue to build
organically on their success. Given a timely resumption of rail vehicle orders
combined with the Group's strong order books and a strengthened management
team, the Group has the potential to recover strongly in the second half with
excellent longer term prospects. We look forward to the challenges ahead.


Peter Pollock

Chief Executive

23 January 2001



CONSOLIDATED PROFIT AND LOSS ACCOUNT

for the year ended 30 September 2000
                                      Continuing operations
                                    Existing  Acquisitions Total      Total
                                   operations
                                   2000        2000        2000       1999
                                   £ '000      £ '000      £ '000     £ '000

Turnover - continuing              9,289       1,077       10,366     10,297
operations
Cost of sales                      (7,166)     (883)       (8,049)    (7,328)



Gross profit                       2,123       194         2,317      2,969
Net operating expenses             (2,169)     (223)       (2,392)    (1,874)



Operating (loss)/profit -          (46)        (29)        (75)       1,095
continuing operations


Interest receivable and                                    9          -
similar income
Interest payable and similar                               (89)       (30)
charges



(Loss)/profit on ordinary                                  (155)      1,065
activities before taxation
Tax on profit on ordinary                                  (8)        (279)
activities



(Loss)/profit on ordinary                                  (163)      786
activities after taxation
Dividends                                                  (295)      (274)



(Loss)/retained profit for                                 (458)      512
the year



Earnings per share
Basic                                                      (1.60p)    7.74p
Diluted                                                    (1.60p)    7.23p


CONSOLIDATED BALANCE SHEET

at 30 September 2000


                                                    2000          1999
                                                    £'000         £'000
Fixed assets
Intangible assets                                   2,129         -
Tangible assets                                     3,255         1,571
Investments                                         2             -


                                                    5,386         1,571
Current assets
Stocks                                              2,305         2,177
Debtors                                             3,622         2,465
Cash at bank and in hand                            246           130


                                                    6,173         4,772
Creditors: Amounts falling due within one           (3,309)       (1,775)
year



Net current assets                                  2,864         2,997



Total assets less current liabilities               8,250         4,568

Creditors: Amounts falling due after more           (3,784)       (103)
than one year

Provisions for liabilities and charges              (224)         (83)



Net assets                                          4,242         4,382


Capital and reserves
Called up share capital                             1,055         1,016
Share premium account                               149           100
Revaluation reserve                                 346           347
Merger reserve                                      230           -
Profit and loss account                             2,462         2,919



Equity shareholders' funds                          4,242         4,382


CONSOLIDATED CASH FLOW STATEMENT

for the year ended 30 September 2000
                                                2000              1999
                                                £'000             £'000

Net cash inflow from operating activities       482               1,018


Returns on investments and servicing of
finance
Interest received                               9                 -
Interest paid                                   (65)              (30)
Interest element of finance lease               (22)              -
payments
Loan issue costs                                (108)             -



                                                (186)             (30)


Taxation
Corporation tax paid                            (294)             (458)


Capital expenditure
Payments to acquire tangible fixed assets       (463)             (236)
Receipts from disposal of properties            -                 123
Receipts from sale of other fixed assets        29                65



                                                (434)             (48)


Acquisitions
Purchase of subsidiary undertakings             (1,861)           -
Net cash acquired with subsidiary               (462)             -
undertakings



                                                (2,323)           -



Equity dividends paid                           (289)             (264)



Net cash (outflow)/inflow before                (3,044)           218
financing


Financing
New bank loan                                  3,500           -
Increase in share capital                      65
Repayment of loans                             (329)           -
Capital element of hire purchase and           (76)            (25)
finance lease payments



                                               3,160           (25)



Increase in cash                               116              193



NOTES

EARNINGS PER SHARE

Earnings per share represents the profit after tax attributable to
shareholders divided by the weighted average number of shares in issue during
the year, being 10,275,194 (1999: 10,159,641) Ordinary Shares of 10p each.

FINAL PROPOSED DIVIDEND

The final proposed dividend (net) of 1.4p per share (1999: 1.4p) is payable on
12th March 2001 to all Ordinary Shareholders on the Register at the close of
business on 23rd February 2001.

The preceding information does not constitute the Company's statutory accounts
for the years ended 30th September 2000 or 30th September 1999 but is derived
from those accounts. The 2000 accounts will be posted to shareholders on the
7th February 2001 and will be available from the Company Secretary, LPA Group
Plc, Debden Road, Saffron Walden, Essex, CB11 4AN, shortly thereafter.
Statutory accounts for 1999 have been delivered to the Registrar of Companies,
and those for 2000 will be delivered, following approval by 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.