Final Results

LPA Group PLC
23 January 2006




                                    NEWS RELEASE

                      PRELIMINARY ANNOUNCEMENT OF RESULTS
                      FOR THE YEAR ENDED 30 SEPTEMBER 2005


LPA Group Plc, the lighting, power and electronics system manufacturer and
distributor, announces modestly increased pre-tax profits of £176,000 (2004:
£143,000) for the year ended 30 September 2005.


                                   KEY POINTS

     
• TURNOVER                          Unchanged at £13.5m

• OPERATING PROFIT                  Increased 10% to £370,000   (2004: £337,000)

• PROFIT BEFORE TAX                 Increased 23% to £176,000   (2004: £143,000)

• BASIC EARNINGS PER SHARE          Unchanged at 1.28p          (2004: 1.27p)

• ADJUSTED EARNINGS PER SHARE       Unchanged at 2.14p          (2004: 2.13p)
  (before amortisation of goodwill)

• DIVIDENDS - INTERIM               Unchanged at 0.15p          (2004: 0.15p)
            - FINAL                 Increased 17% to 0.35p      (2004: 0.30p)
            - TOTAL                 Increased 11% to 0.50p      (2004: 0.45p)

• GEARING                           REDUCED 8.4% TO 57.9%       (2004: 66.3%)

• ORDER BOOK UP 12% DESPITE DELAY IN AWARD OF CONTRACTS
  
• STRONG CASH FLOW

• GOOD POTENTIAL FOR UPGRADE OF LONDON UNDERGROUND VEHICLES AND STATIONS

• GOOD SURFACE STOCK OPPORTUNITIES, INCLUDING REPLACEMENT OF HST FLEET

• FIRST MAJOR ASIAN CONTRACT WON, FURTHER EXCITING OPPORTUNITIES IN EUROPE AND 
  ASIA

• LED TECHNOLOGY LEADERSHIP SUPPORTED WITH MORE RESOURCES

• PROGRESS IN LOW COST COUNTRY SOURCING


Peter Pollock, Chief Executive, commented

'Orders entered have exceeded sales for the third successive year and the long
term order book continues to grow, securing the future for the Group. In the
short term the base load is light in some key areas and margins are under
pressure.  Quick turn round orders have been growing, which, is encouraging.
Success in the Asian market is reward for hard work. Further progress has been
made on operational issues, but more is required to meet the increasing
challenges from low cost imports.

We are responding to the challenge of Globalisation and Low Cost Country
Sourcing, which will affect all manufacturing. We expect that the nature of our
business will change significantly over the next few years.

We have a leading position in the application of LED technology for internal
passenger train and emergency lighting. We intend to build on this strength by
developing LED applications in other markets. We believe that LED application
technology presents an important opportunity for the Group and we are increasing
our investment accordingly.

Following a good final quarter, trading conditions at the start of the current
year have been disappointing. These variable conditions are likely to persist in
the short term and will limit progress this year.'


ENQUIRIES

Peter Pollock        LPA Group Plc                  07881 626123
Stephen Brett        LPA Group Plc                  01799 512860 or 07881 626127
James Glancy         Teather & Greenwood Limited    0207 426 9010



             PRELIMINARY ANNOUNCEMENT YEAR ENDED 30 SEPTEMBER 2005

                           KEY FINANCIAL INFORMATION



FINANCIAL HIGHLIGHTS
For the year ended 30 September 2005

                                                                           2005          2004
                                                                           £'000         £'000

TURNOVER                                                                   13,469        13,540

OPERATING PROFIT                                                           370           337

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                              176           143

BASIC EARNINGS PER SHARE                                                   1.28p         1.27p

ADJUSTED EARNINGS PER SHARE                                                2.14p         2.13p

DIVIDENDS PER SHARE                                                        0.50p         0.45p

GEARING                                                                    58%           66%



CHAIRMAN'S STATEMENT


Results

I am pleased to report that the Group has continued to trade profitably during
the period under review. The year enjoyed a sound start and a relatively strong
finish, but a weakness in load in the mid-year period restricted overall
progress. A profit before tax of £176,000 (2004: £143,000) was achieved, and
basic earnings per share were essentially unchanged at 1.28p (2004: 1.27p).


Dividends

In view of the improved cash position the directors recommend the payment of an
increased final dividend of 0.35p per share (2004: 0.30p). This, together with
the interim dividend of 0.15p per share, this will make a total for the year of
0.50p per share (2004: 0.45p) an increase of 11%. Subject to approval by
shareholders at the Annual General Meeting of the Company to be held at 12.00
noon on Wednesday 8 March 2006 at the offices of Teather and Greenwood Limited,
15 St Botolph Street, London, EC3A 7QR, the final dividend will be paid on 17
March 2006, to shareholders registered at the close of business on 24 February
2006.


Authority to allot shares and authority to buy shares

The Agenda for the Annual General Meeting includes three resolutions relating to
the limited authority of the directors to allot shares, and for the Company to
make market purchases of its own shares:
     
a.   The first is a resolution to renew the authority of the directors to
     allot shares generally, as defined in section 80 of the Companies Act 1985;

b.   The second is a resolution to renew the authority of the directors to allot 
     equity securities for cash without first offering them to existing
     shareholders, pursuant to section 95 of the Companies Act 1985; and

c.   The third is a resolution to permit the Company to make market purchases, 
     as defined in section 163 of the Companies Act 1985, of its own shares.

These authorities are part of the portfolio of powers commonly granted to
directors to ensure flexibility, should appropriate circumstances arise, to
either allot shares, or make purchases of the Company's own shares in the best
interests of shareholders. Each authority will run through until the next Annual
General Meeting. The directors have no present intention of using such
authorities.


Board

Stephen Brett and Peter Pollock are the directors retiring by rotation and I am
delighted that they have indicated their willingness to offer themselves for
re-election at the Annual General Meeting.

Under the present management the Group's strategy is beginning to achieve
important progress. Subject to the afore mentioned re-election it has been
agreed with Peter Pollock, Group Chief Executive, that his existing service
agreement will be extended to expire in September 2011 when he will be aged
sixty five years. His contract has a one year rolling notice period.


Employees

As usual, on behalf of the Board, I acknowledge that our most valuable asset, in
all our locations, is our people. I take the opportunity to thank them all for
their continued loyalty and support.


Prospects

After a good final quarter the start to the new financial year has been
disappointing. This roller coaster effect has become a pattern in recent years,
which will be eliminated when the underlying load in the long-term order book
becomes current. Action is being taken to secure the many prospects available to
the group in sales, operational efficiency and procurement. Your board is
hopeful of progress during the year.


Michael Rusch
Chairman
23 January 2006


CHIEF EXECUTIVE'S REVIEW


Trading results

The Group enjoyed a good final quarter, which resulted in a pre-tax profit for
the year of £176,000 (2004: £143,000). The order book increased 12% to £8.8m.
Sales remained static at £13.5m. The net cash inflow, before financing, amounted
to £304,000 (2004: £564,000) and gearing reduced 8.4% to 57.9%. The interim
dividend was maintained and the final dividend increased.


Markets

The Group's main market remains rail vehicle builders in the UK, Europe and Asia
and refurbishment of rail vehicles in the UK. Other markets include Aerospace
and Defence, Infrastructure and General Industrial.


UK Rail

The Group remains the leading supplier of auxiliary battery power systems,
inter-vehicle electrical connection systems and lighting systems for the UK rail
vehicle building and refurbishment industry, and continues to supply a wide
range of components and subsystems for new-build, refurbishment and reliability
improvement.

The sale is made at many levels: the Train Operating Company (TOC), which wants
reliability and low maintenance; the Rolling Stock Owning Company (Rosco), which
wants low initial cost and low life cycle cost; and the Train Builder, which
wants low initial cost, but which is increasingly being required to maintain the
vehicle throughout its life. This development favours our commitment to quality,
reliability and low life cycle cost.

Despite the upheavals in Britain's railway industry, half the fleet of trains is
now less than ten years old. The investment in new vehicles, which has been
satisfied from suppliers in the UK as well as suppliers from Europe, has slowed
down. Immediate UK prospects will be concentrated on London Underground, High
Speed Train refurbishment, the Channel Tunnel Rail Link as well as some infill
to existing fleets of Diesel Multiple Unit and Electric Multiple Unit trains.
There is still overcapacity in Europe, particularly Germany and France, and
continuing rationalisation must be expected. As anticipated in my report last
year trading conditions have remained challenging. Delays in the award of
contracts, especially those where we have been selected, continue to be a
frustrating fact of life.

Low Cost Country Sources (LCCS) are also a fact of industrial life, which we are
embracing. We are sourcing an increasing number of components and sub-assemblies
from LCCS, which we do in concert with our customers.


European Rail

The UK market is increasingly satisfied from Europe and elsewhere. We are using
our experience of the particular nature and standards required in the UK rail
industry to encourage suppliers to the UK market to use our products. It is not
easy to replace an established supplier but increasingly we are making progress.
We continue to build our relationships with Europe's 'big three', Alstom
Transport, Bombardier Transportation and Siemens, to whom we remain suppliers.
Our reputation for quality and reliability is enabling us to make progress.


Global Rail

We have studied the market in China and have concluded that until the cost of
maintenance increases, there is little prospect for our high quality, high
reliability, and higher initial cost products. We have been selected for our
first major contract for new build equipment in Taiwan. This is giving us useful
exposure in the region where we continue to secure work in Australia, Hong Kong,
Singapore, and Japan, as well as other markets such as South Africa.


CHIEF EXECUTIVE'S REVIEW (continued)

Markets (continued)

Aerospace and Defence

The global and internationally collaborative nature of most aerospace projects
was reported last year. The market remains important, but challenging for the
Group. We continue to concentrate on the subcontract and spares market where our
approach to quality and service are better rewarded

There are a number of small and medium sized enterprises in the UK defence
market, which present the Group with opportunities to supply components and
sub-systems. This is an increasingly important market for the Group and we have
enjoyed success with new customers during the year.


Infrastructure and General Industrial

The Group continues to be the leading supplier in the UK of Aircraft Ground
Power Harnesses, which enable aircraft on the ground to run essential services
when the engines are switched off. These products are used for civil and
military applications and are also exported to many countries around the globe,
in Europe, Asia and Africa.

The Group manufactures and distributes electrical cable management products
including connectors, cleats and clamps together with circuit breakers, relays
and cable tray, which are used in infrastructure, telecoms and general industry.


Structure and costs

The continued growth of the order book, and the success of the Group in new
markets, reflects well on the sales structure, which we will continue to develop
as market conditions change. Customer satisfaction continues to improve with
quality and delivery being the most important factors. Some operational issues
remain to be resolved. Information technology continues to present opportunities
for the Group to progress.


Design and development

The Group's design and development activity has continued to concentrate on new
auxiliary power systems, inter car connection systems and lighting systems for
the rail vehicle market. The most exciting development has been in the
application engineering of Light Emitting Diodes (LED) in lighting systems for
rail, defence and infrastructure applications. LED has significant advantages
over halogen or dichroic lamps. The Group is investing additional resources in
the development and marketing of this technology.


Management

There have been no material management changes during the year.


Prospects

The long-term prospects for the Group are good although short-term obstacles to
progress remain. The Group is increasingly better placed to overcome them.


Peter Pollock
Chief Executive
23 January 2006



FINANCIAL REVIEW


Financial performance

Results for the year were broadly in line with those of 2004 with turnover
falling by £0.07m (0.5%) to £13.47m, on which an improved operating profit of
£370,000 was generated as compared to £337,000 last year.

Overall the Group's gross margin improved by 0.9% from 27.5% to 28.4%. Total
operating expenses at £3.45m were higher than the £3.39m last year, largely the
consequence of higher sales costs, and the net operating margin was 2.7% (2004:
2.5%)

Interest costs were unchanged at £194,000 with lower average borrowings
offsetting the impact of higher interest rates, and the tax charge was £36,000
(2004: £4,000) being 13% of profit before tax and goodwill amortisation, with
the Group continuing to benefit from the utilisation of its brought forward tax
losses.

Resultant earnings were £140,000 (2004: £139,000) representing basic earnings
per share of 1.28p (2004: 1.27p). Adjusted earnings per share, which excludes
goodwill amortisation from the calculation, was 2.14p (2004: 2.13p). Including
the recommended final dividend, total dividends for the year were £55,000 (2004:
£49,000), being 0.50p (2004: 0.45p) per share, which is covered 2.5 times by
basic earnings and 4.2 times by adjusted earnings.

Shareholders funds increased from £4.07m to £4.15m.


Cash flow

Cash generated from operating activities in the year was £787,000 (2004:
£948,000) the reduction being explained by an increase in working capital over
the current year as compared to a decrease last year.

Capital expenditure was again focused in production and engineering and
increased to £248,000 (2004: £171,000) in the year, 0.6 times depreciation
(2004: 0.4 times) reducing to net expenditure of £223,000 (2004: £158,000) after
asset disposals.

After interest costs of £183,000 (2004: £183,000), tax payments of £28,000
(2004: £Nil), and dividends of £49,000 (2004: £43,000), net cash before
financing amounted to £304,000 (2004: £564,000).

No refinancing was required in the year and after repayment of £448,000 (2004:
£441,000) of existing debt, there was a net decrease in the cash position of
£144,000 (2004: increase of £123,000).

The Group maintains a good relationship with its banker and has negotiated the
renewal of its existing facilities through to November 2006. The renewal of
facilities after this date is not foreseen as a problem. In the year the net
debt fell to £2.40m (2004: £2.70m), gearing fell to 58% (2004: 66%) and at the
year end there were £0.7m (2004: £0.7m) of un-drawn committed facilities
available to the Group. The main element of the Group's debt is funded through
its term loan of £1.53m (2004: £1.83m) repayable over the next five years.


FINANCIAL REVIEW (continued)


Treasury

The Group's treasury policy, which operates within approved Board guidelines and
has not changed since 2004, seeks to ensure that adequate financial resources
are available for the development of the Group's business whilst managing its
foreign currency, interest rate, and liquidity risks.

Operations are financed through a mixture of retained profits and bank
borrowings with short-term flexibility achieved through the use of overdraft
facilities.

Only 15% of sales (2004: 12%) are to overseas customers and the Group has not
found it necessary to seek local finance. The Group has transactional currency
exposure arising from normal trading activity. Such exposure arises from sales
or purchases in currencies other than sterling, the functional currency of the
Group. The Group hedges the foreign currency risk associated with significant
future sales and purchases using forward exchange contracts. Experience to date
is that any un-hedged exposure has not led to major exchange gains or losses.

Interest rates are managed through a mixture of fixed and floating rate
borrowings.

The Group does not trade in derivatives or make speculative hedges.


Going concern

The directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future and
therefore the accounts have been prepared on a going concern basis.


Stephen Brett
Finance Director

23 January 2006



LPA GROUP PLC

CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30 September 2005
                                                                                 2005          2004
                                                                                 £ '000        £ '000

Turnover                                                                         13,469        13,540

Cost of sales                                                                    (9,645)       (9,815)


Gross profit                                                                     3,824         3,725

Net operating expenses                                                           (3,454)       (3,388)


Operating profit                                                                 370           337

Net interest payable and similar charges                                         (194)         (194)


Profit on ordinary activities before taxation                                    176           143

Tax on profit on ordinary activities                                             (36)          (4)


Profit on ordinary activities after taxation                                     140           139

Dividends on equity shares                                                       (55)          (49)


Transfer to reserves                                                             85            90


Earnings per share
Basic                                                                            1.28p         1.27p
Diluted                                                                          1.27p         1.27p
Adjusted (before amortisation of goodwill)                                       2.14p         2.13p



LPA GROUP PLC

CONSOLIDATED BALANCE SHEET
At 30 September 2005

                                                                          2005              2004
                                                                          £'000             £'000
Fixed assets
Intangible assets                                                         1,327             1,420
Tangible assets                                                           2,235             2,388

                                                                          3,562             3,808

Current assets
Stocks                                                                    2,604             2,491
Debtors                                                                   3,085             2,806
Cash at bank and in hand                                                  3                 3

                                                                          5,692             5,300
Creditors: Amounts falling due within one year                            (3,874)           (3,460)

Net current assets                                                        1,818             1,840

Total assets less current liabilities                                     5,380             5,648

Creditors: Amounts falling due after more than one year                   (1,211)           (1,575)

Provisions for liabilities and charges                                    (16)              (5)

Net assets                                                                4,153             4,068

Capital and reserves
Called up share capital                                                   1,090             1,090
Share premium account                                                     254               254
Revaluation reserve                                                       313               314
Merger reserve                                                            230               230
Profit and loss account                                                   2,266             2,180

Equity shareholders' funds                                                4,153             4,068



LPA GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 September 2005


                                                                            2005             2004
                                                                            £'000            £'000

Net cash inflow from operating activities                                   787              948

Returns on investments and servicing of finance
Interest paid                                                               (169)            (162)
Interest element of hire purchase and finance lease payments                (14)             (24)
Interest receivable                                                         -                3

                                                                            (183)            (183)

Taxation                                                                    (28)             -

Capital expenditure
Payments to acquire tangible fixed assets                                   (248)            (171)
Receipts from sale of other fixed assets                                    25               13

                                                                            (223)            (158)

Equity dividends paid                                                       (49)             (43)

Net cash flow before financing                                              304              564

Financing
Repayment of loans                                                          (306)          (306)
Capital element of hire purchase and finance lease payments                 (142)          (135)

                                                                            (448)          (441)

(Decrease) / increase in cash                                               (144)          123


LPA GROUP PLC


NOTES


1 - EARNINGS PER SHARE

The calculation of earnings per share is based upon the profit after tax of
£140,000 (2004: £139,000) and the weighted average number of ordinary shares in
issue during the year of 10.903m (2004: 10.903m). The weighted number of
ordinary shares diluted for the effect of outstanding share option was 11.000m
(2004: 10.979m). Adjusted earnings per share, which is disclosed to reflect the
underlying performance of the Company, has been calculated on a profit of
£233,000 (2004: £232,000) being the profit after tax for the year before the
amortisation of goodwill. Details are as follows:

                                                   2005                               2004
                                                     Basic     Diluted                 Basic     Diluted
                                                     pence       pence                 pence       pence
                                                       per         per                   per         per
                                         £'000       share       share      £'000      share       share

Basic earnings                             140        1.28        1.27        139       1.27        1.27
Amortisation of goodwill                    93        0.86        0.85         93       0.86        0.84
                                        ______      ______      ______      ______     ______     ______
Adjusted earnings                          233        2.14        2.12        232       2.13        2.11
                                        ______      ______      ______      ______     ______     ______


2 - INFORMATION

The preceding information does not constitute the Company's statutory accounts
for the years ended 30 September 2005 or 30 September 2004 but is derived from
those accounts. The 2005 accounts will be posted to shareholders on 10 February
2006 and will be available from the Company Secretary, LPA Group Plc, Debden
Road, Saffron Walden, Essex, CB11 4AN, shortly thereafter. Statutory accounts
for 2004 have been delivered to the Registrar of Companies, and those for 2005
will be delivered following 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.



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