Final Results - Year Ended 30 September 1999

LPA Group PLC
18 January 2000

                                     
                    PRELIMINARY ANNOUNCEMENT OF RESULTS
                    FOR YEAR ENDED 30TH SEPTEMBER 1999
                                     
                     'LPA MAKING THE RIGHT CONNECTION'
                                     
LPA Group Plc, the Essex based electrical connection system and equipment
manufacturer and distributor, announces pre-tax profits of £1.065m for the
year ended 30th September 1999, an increase in pre-tax profits before
exceptional items of  17.7%.
                                     
                                KEY POINTS
                                     
-    SALES                                         UP   34.3% TO £10.3m

-    PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS       UP   17.7% TO £1.065m

-    PROFIT BEFORE TAX                             Down 32.6% TO £1.065m
     (incl. 1998 exceptional £675k gain)

-    EARNINGS PER SHARE  NORMALISED                UP   25.0% TO 7.74p
                         FRS14                     Down 37.7% TO 7.74p
                         
-    DIVIDENDS           FINAL                     UP   7.7% TO 1.40p
                         TOTAL                     UP   8% TO 2.70p
                         
-    EXCELLENT CONTRIBUTION FROM CHANNEL ELECTRIC EQUIPMENT
     
-    LPA INDUSTRIES' RAIL BUSINESS INCREASED 61% DESPITE CUSTOMER DELAYS
     
-    PROFITS HELD BACK BY DELAYS, WEAK PERFORMANCE FROM INDUSTRIAL
     PRODUCTS, AND STOCK REDUCTION PROGRAMME ARISING FROM MRP IMPLEMENTATION

-    STRENGTHENED MANAGEMENT TEAM

-    STEADY PROGRESS ON SYSTEM IMPROVEMENT

-    STRONG CASH FLOW AND BALANCE SHEET WITH CASH BALANCE. ROBUST LONG TERM
     ORDER BOOKS, STRONG DEMAND FOR RAIL, AEROSPACE, AND DEFENCE PRODUCTS


Peter Pollock, Chief Executive, commented 'while these results are in line
with expectations, and Channel has made an outstanding contribution, LPA
Industries, having made good progress on Rail Projects, has to improve the
performance of its industrial products and complete its stock reduction
programme. There are many exciting growth opportunities in the Rail,
Aerospace and Defence markets both at home and overseas.  The strengthened
management team will work to improve our performance and exploit available
organic growth and acquisition opportunities.'

ENQUIRIES

Peter Pollock            LPA Group Plc          0788 1626123 or 01799 512800
Ian Dighe                Singer & Friedlander   020 7523 5804
Richard Andrews,         Greig Middleton        020 7655 4000
Rod Venables                   


                                        
                     AUDITED KEY FINANCIAL INFORMATION
                                     



 £000's                                          1999       1998  % + (-)
                                                                         
TURNOVER                                       10,297      7,670     34.3
OPERATING PROFIT                                1,095        937     16.9
PROFIT INCLUDING INTEREST                                                
     BEFORE EXCEPTIONAL ITEMS                   1,065        905     17.7
                                                                         
EXCEPTIONAL ITEMS                                                        
Profit on sale of property                          -        675         
                                                                         
PROFIT ON ORDINARY ACTIVITIES                                            
     BEFORE TAXATION                            1,065      1,580   (32.6)
                                                                         
Tax on profit on ordinary activities              279        362         
                                                                         
PROFIT ON ORDINARY ACTIVITIES                                            
     AFTER TAXATION                               786      1,218   (35.5)
                                                                         
DIVIDENDS                                         274        254      7.9
                                                                         
EARNINGS PER SHARE                                                       
                                                                         
Including exceptional items                     7.74p     12.42p   (37.7)
Excluding exceptional items                     7.74p      6.19p     25.0
                                                                         
DIVIDENDS PER SHARE                             2.70p      2.50p      8.0
                                                                         
                                                                         
CHAIRMAN'S STATEMENT

Results

I am pleased to report continued progress during the year ended 30th
September 1999. Profit before tax and exceptional items increased 17.7%
from £905,000 to £1.065m, while sales increased 34.3% from £7.670m to
£10.297m.  Normalised earnings per share, excluding the effect of
exceptional items, increased 25.0% from 6.19p to 7.74p.

As a result of the exceptional profit of £675,000 made from property sales
included in the 1998 results, pre tax profits fell 32.6% from £1,580,000 to
£1,065,000 and basic earnings per share calculated in accordance with FRS14
decreased 37.7% from 12.42p to 7.74p.

Channel Electric Equipment Limited made a strong contribution to these
results. LPA Industries is yet to exploit its full potential following the
new management appointments and system improvements, which have been made.
Although good progress was made on rail projects, some deliveries were
delayed by the customer. Industrial product lines experienced increased
competition and suffered from a lack of innovation caused by the
concentration on the rail market. Stock reduction, a welcome and cash
positive consequence of Manufacturing Resources Planning (MRP)
implementation, also held back profits.

Cash flow has been particularly encouraging in the second half of the year
and the Group now has net cash balances. Interest charges amounted to
£30,000 during the year.


Dividends and Annual General Meeting

Your Board is recommending an increase of 7.7% in the final dividend to
1.40p (1998: 1.30p) which, together with the 8.3% increase in the interim
dividend to 1.30p, makes a total of 2.70p
(1998: 2.50p) for the year, an increase of 8.0%. The dividend is covered
2.87 times by normalised earnings per share, reflecting the Group's ability
to maintain a progressive dividend policy. The final proposed dividend
(net) of 1.4p per share (1998: 1.3p), subject to the approval at the Annual
General Meeting of the company to be held at noon on 24th February 2000 at
the offices of Singer & Friedlander Ltd, 21 New Street, Bishopsgate,
London, EC2M 4HR, will be paid on 28th February 2000 to all Ordinary
Shareholders on the Register at the close of business on 28th January 2000.


Board Changes

Michael Edmonds, formerly the Managing Director of Channel, relinquished
his executive role on 30th April 1999 following the appointment of his
successor. However I am delighted that Michael will remain a Non-Executive
Director of the Group.

I take this opportunity to announce that I shall relinquish my executive
responsibilities with the Group in June of this year but will continue as
Non-Executive Chairman.


Auditors

On the recommendation of the Audit Committee, RSM Robson Rhodes were
appointed auditors of the group during the year, replacing Ernst & Young.
                                     

Employees and Savings Related Share Option Scheme

People are the Group's most valuable asset and I would like to record the
Board's appreciation of the diligence and hard work of all our employees. I
am particularly pleased to report that the new Savings Related Share Option
Scheme was fully subscribed and is a good measure of our employees'
commitment to the Group.


Gordon Orley

Gordon Orley, who transferred from the Group Board last year to the Board
of LPA Industries, retired early due to ill health on the 31st December
1999. Gordon was one of the first employees of LPA and has been a close
friend and colleague. I would like to record my appreciation, and that of
the Board, for his 38 years of diligent service with LPA.


Prospects

Overall the Group has made a sound start to the new financial year and,
with the increasing investment in the rail market, is in a strong position
to grow organically. In addition the strong balance sheet and cash flow
will allow the Group to make further acquisitions.  Accordingly, your Board
is confident of further progress in the current year.


Michael Rusch
Chairman
18th January 2000



CHIEF EXECUTIVE'S REVIEW


Trading Results

A full year contribution from Channel Electric Equipment Limited, acquired
in February 1998, helped to increase sales 34% from £7.7m to £10.3m and
profit after interest, but before the effects of exceptional items,
increased 17.7% from £905,000 to £1,065,000.  During the year the Group
experienced strong demand for rail, aerospace and defence products and
several major contracts have been won. The rail market remains particularly
strong with several major opportunities still to be awarded.

Output at LPA Industries increased 16.3% and would have been higher but for
postponement of deliveries on some rail projects. Rail activity increased
61% during the year. The projected deliveries of rolling stock, required to
satisfy the investment expectations of the government, are at significantly
higher levels than currently being demanded. Most of the orders, to satisfy
the requirements, are yet to be placed. This provides significant
opportunities for the future.

Profits were constrained by increased competition on certain industrial
product lines and a stock reduction programme arising from the
implementation of Manufacturing Resources Planning (MRP). The management
team has been further strengthened and progress is being made in improving
performance.

Export demand for rail and aircraft products has recovered from the low
levels experienced last year caused by the recession in Far Eastern
economies. Channel Electric Equipment had an excellent year with
significantly increased sales and profits.

Capital Expenditure

Capital expenditure during the year amounted to £237,000 compared with
depreciation of £231,000, and mainly comprised further upgrades to the
computer system hardware and software and the replacement of vehicles.

Cash Flow

Net cash flow from operating activities amounted to £1,018,000. The Group
had £63,000 net debt at the start of the year but closed with £114,000 net
cash in hand, having paid £100,000 of long term liabilities.

Design and Development

Design and development activity has continued to be concentrated on new
rail vehicle projects and the integration and rationalisation of the
industrial connector ranges. Further work is required on the industrial
products to bring them up to future standards. The increase in rail vehicle
manufacture is now manifest in large contracts for the design and
manufacture of equipment for several new projects. The range of aircraft
ground power connectors continues to be developed. Channel has taken on
four new franchises for rail and industrial applications.


Management and resources

On 1st June 1999 Graham Clark was appointed Director and General Manager of
LPA Industries and Philip Waller, a Cranfield University Manufacturing
Fellow, became Manufacturing Director on
1st October 1999. Kevin Cornfoot was appointed Sales and Marketing Director
on 20th September 1999.

Michael Edmonds relinquished his executive role as Managing Director of
Channel on 30th April 1999. I am delighted to report that George Renshaw,
formerly Managing Director of Gewiss UK, has been appointed to this role
with effect from 1st February 2000. Michael remains a Non-Executive
Director of the Group providing continuity for Channel's important
relationships with suppliers and customers.


Prospects

Priorities for the Group in the current year are to continue to exploit the
organic growth opportunities offered by the strong rail and export markets
and to actively pursue acquisitions in our existing product and markets.
LPA Industries will endeavour to complete the implementation of
Manufacturing Resources Planning, improve the performance of LPA's range of
Industrial Products and continue to improve delivery performance and
customer service. Channel will continue to exploit new agencies and expand
sales while maintaining high levels of customer service. Given the strong
order books, the strengthened management team and the sound balance sheet,
the Group is well placed to take advantage of organic growth and
acquisition opportunities. We look forward to the future with confidence.


Peter Pollock
Chief  Executive
18th January 2000


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 30th September 1999

                                                  
                                                  
                                         1999       1998
                                       £ '000     £ '000
                                                  
Turnover - continuing operations       10,297      7,670
Cost of sales                          (7,328)    (5,085)
                                                  
                                                  
                                                  
Gross profit                            2,969      2,585
Net operating expenses                 (1,874)    (1,648)
                                                  
                                                  
Operating profit - continuing           1,095        937
operations
                                                  
                                                  
Exceptional items -                                                   
Profit on sale of property                  -        675
                                                  
                                                  
                                                  
Profit before interest and taxation     1,095      1,612
Net interest                              (30)       (32)
                                                  
                                                  
                                                  
Profit on ordinary activities before    1,065      1,580
taxation
Tax on profit on ordinary activities     (279)      (362)
                                                  
                                                  
                                                  
Profit on ordinary activities after       786      1,218
taxation
Dividends                                (274)      (254)
                                                  
                                                  
                                                  
Retained profit for the year              512        964
                                                  
                                                  
Earnings per share                                
Basic                                    7.74p     12.42p
Fully Diluted                            7.23p     11.82p
Excluding exceptional items              7.74p      6.19p
 



CONSOLIDATED BALANCE SHEET
at 30th September 1999


                                                                       
                                         1999       1998
                                       £ '000     £ '000
Fixed assets                                      
Tangible assets                         1,571      1,737
                                                  
                                                  
                                                  
Current assets                                    
Stocks                                  2,177      2,402
Debtors                                 2,465      2,278
Cash at bank and in hand                  397        374
                                                  
                                                  
                                                  
                                        5,039      5,054
Creditors: Amounts falling due within  (2,042)    (2,650)
one year
                                                  
                                                  
                                                  
Net current assets                      2,997      2,404
                                                  
                                                  
                                                  
Total assets less current liabilities   4,568      4,141
Creditors: Amounts falling due after     (103)      (217)
more than one year
Provision for liabilities and charges     (83)       (54)
                                                  
                                                  
                                                  
Net assets                              4,382      3,870
                                                  
                                                  
Capital and reserves                              
Called up share capital                 1,016      1,016
Share premium account                     100        100
Revaluation reserve                       347        348
Profit and loss account                 2,919      2,406
                                                  
                                                  
                                                  
Equity shareholders' funds              4,382      3,870



CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30th September 1999

                                       1999       1998
                                     £ '000     £ '000
                                                
Net cash inflow from operating        1,018      1,255
activities
                                                
                                                
Returns on investments and                      
servicing of finance
Interest received                        -          29
Interest paid                          (30)        (61)
                                                
                                                
                                       (30)        (32)
                                                
                                                
Taxation                                        
Corporation tax paid                  (458)       (237)
                                                
                                                
Capital expenditure                             
Payments to acquire tangible fixed    (236)       (309)
assets
Receipts from disposal of              123       1,048
properties (net)
Receipts from sale of other fixed       65          30
assets
Receipts from sale of investments        -          23
                                                
                                                
                                       (48)        792
                                                
                                                
Acquisitions                                    
Purchase of subsidiary undertakings      -      (1,634)
Net cash acquired with subsidiary        -         284
undertakings
                                                
                                                
                                         -      (1,350)
                                                
                                                
Equity dividends paid                  (264)      (228)
                                                
                                                
Net cash inflow before financing        218        200
                                                
Management of liquid resources                  
One month deposit account                -         265
                                                
                                                
                                        218        465
                                                
                                                
Financing                                       
New bank loan                             -      1,500
Repayment of new bank loan                -     (1,500)
Share issue costs                         -        (50)
Repayment of loans of acquired            -     (1,281)
subsidiary undertaking
Hire purchase and finance lease         (25)       (16)
commitments
                                                
                                                
                                        (25)    (1,347)
                                                
                                                
                                                
Increase /(Decrease) in cash            193       (882)
                                                
                                                
                                     
NOTES

EARNINGS PER SHARE
Earnings per share represents the profit attributable to shareholders
divided by the weighted average number of shares in issue during the year,
being 10,159,641 (1998: 9,807,914) Ordinary Shares of 10p each.

FINAL PROPOSED DIVIDEND
The final proposed dividend (net) of 1.4p per share (1998: 1.3p) is payable
on 28th February 2000 to all Ordinary Shareholders on the Register at the
close of business on 28th January 2000.

The preceding information does not constitute the Company's statutory
accounts for the years ended 30th September 1999 or 30th September 1998 but
is derived from those accounts. The 1999 accounts will be posted to
shareholders on the 28th January 2000 and will be available from the
Company Secretary, LPA Group Plc, Debden Road, Saffron Walden, Essex, CB11
4AN, shortly thereafter. Statutory accounts for 1998 have been delivered to
the Registrar of Companies, and those for 1999 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.