Final Results

Petards Group PLC
19 June 2006


                               PETARDS GROUP PLC:

                        PRELIMINARY RESULTS ANNOUNCEMENT


Petards Group plc ('Petards'), the AIM quoted developer of advanced surveillance
systems, announces preliminary results for the year ended 31 December 2005.

In his statement to shareholders, Tim Wightman, non-executive Chairman, said:

'I am pleased to report that during 2005, Petards Group plc made encouraging
steps towards profitability and in positioning itself to take advantage of the
many opportunities that exist in the markets that it serves.

In the year ended 31 December 2005 Petards Group made an operating profit of
£56,000 which represents a significant turnaround from the loss of £3,325,000
incurred in the previous year.'

Financial highlights

•    Revenue of £21.8m (2004: £22.6m)

•    Gross profit of £7.0m up 9% (2004: £6.5m)

•    Total administrative expenses down 28% to £7.0m (2004: £9.8m)

•    Operating profit of £56,000 (2004: £3,325,000 loss)

•    Loss before tax of £449,000 (2004: £3,570,000 loss)

•    Loss per share of 0.06 pence (2004: loss per share 5.46 pence)

•    Total net borrowings were £4.0m (31 December 2004: £7.4m)

•    No dividend

•    £5.1m net cash from placing in January 2005

Other highlights

•    Acquisition of UK and US network video recording software businesses of PI 
     Vision in August 2005

•    Establishment of US operation

•    Acquired EIMC, specialist supplier of a range of infrared and daylight
     camera technologies in March 2006

Commenting on outlook, Tim Wightman, non-executive Chairman, said:

'As I reported in December, while significant progress has been made by the
Group over the past year, it is taking longer than we expected to overcome the
effect of its past difficulties within some of our markets.  In order to exploit
the growing market opportunities available, the Group has invested further in
its sales and marketing for the UK, Europe and the US.  The Board is confident
that the benefits of this investment will be seen in the future.

'The first six months of 2006 will reflect the impact of the adverse effect on
software solutions sales that I have referred to above.  However, the Board
expects to see the Group's recovery continue in the full year with a further
improvement in profitability over 2005.'

Contacts:

Petards Group plc                               Parkgreen Communications

Tim Wightman, Chairman                          Paul McManus
Andy Wonnacott, Finance Director                Tel: [phone]
Tel: [phone]                              Mob: [phone]


CHAIRMAN'S STATEMENT

I am pleased to report that during 2005, Petards Group plc made encouraging
steps towards profitability and in positioning itself to take advantage of the
many opportunities that exist in the markets that it serves.

Results

In the year ended 31 December 2005 Petards Group made an operating profit of
£56,000 which represents a significant turnaround from the loss of £3,325,000
incurred in the previous year. This profit was earned on turnover of £21.8m,
which while down 3% on the prior year, generated gross profits of £7.0m, an
increase of 9% over 2004.  Margins were up from 29% to 32% reflecting the
elimination of the low margin and loss making contracts that Petards Joyce-Loebl
had suffered from in previous years.

As I reported in December, administrative expenses have reduced dramatically as
a consequence of the action taken to consolidate the Group's operations onto
many fewer sites.  Administrative expenses, before exceptional items, were
reduced by over 25%.  Management is continuing its drive to exploit synergies
between its businesses and to realise efficiency savings wherever possible.

The Group made a loss before tax of £449,000 (2004: £3,570,000 loss) and the
underlying loss per share was 0.06p (2004: 5.46p loss).

A particularly pleasing achievement during the year was the establishment of
Petards Joyce-Loebl as a leading supplier to the rail CCTV market in the UK and
Europe, with its eyeTrain(TM) Digital CCTV System.  It secured contracts worth
over £5m to supply digital CCTV systems to First Group for ScotRail, Alstom for
West Coast Mainline operated by Virgin Trains, and Wabtec for London Eastern
Railways.  It is now well positioned to take advantage of other opportunities in
the rail sector and since the year end has secured a £1.8m contract with Arriva
Trains Wales.  These orders follow on from the successful completion of large
contracts for Portuguese customers during the year.

An important element of the acquisition in August of the UK and US businesses of
PI Vision is that this provided the Group with an established North American
presence.  The acquired business made a positive contribution to the Group's
results returning an operating profit of £281,000 on turnover of £1.8m.  Since
acquisition, as well as winning and executing a £0.8m order for a system running
UVMS(TM) software for a new US casino, UVMS(TM) software has become the first
network video recording software to be approved by Siemens N.V. (Belgium) for
operation with its unique Open Transport Network ('OTN') solution.

The suspension of the Company's shares for five months of the year undoubtedly
generated uncertainty for some of our customers and particularly affected our
ability to secure significant orders for Petards' existing software solutions
business during that period.  The re-commencement in trading of the Company's
shares on AIM in December removed this uncertainty but in order to regain
momentum for its software solutions sales, the Group has further strengthened
its senior sales team in the UK.  This has already led to an encouraging
increase in the level of interest and enquiries for its surveillance solutions.

The Group's defence operations performed well during the period and made
substantial sales of countermeasure dispensing systems and of control systems
for the Challenger 2 tank.  In addition it won a £1.1m contract to supply
specialist displays for AWACS aircraft to Air France Industries.

Post balance sheet events

On 8 March 2006 the Company acquired the entire share capital of European
Innovation Manufacturing Centre Limited ('EIMC') for a maximum total
consideration of £1.8 million.  We have paid an initial £225,000 comprising of
£25,000 in cash and the balance in 14,285,714 new ordinary shares at 1.4p.  An
additional payment of up to £75,000 in cash will be made on a
performance-related basis for the year ended 31 March 2006.  Further payments up
to a total aggregate maximum of £1,500,000 will be made on a performance-related
basis for the ten months ending 31 December 2006 and the year ending 31 December
2007.  These further payments will be satisfied by either the issue of loan
notes or new Petards shares at the prevailing market price.  The vendors of EIMC
may elect whether to opt for loan notes or new Petards Shares for the first
£133,500 of the further payment in respect of 2006 and the first £175,000 in
respect of 2007.  Petards have the option as to whether the balance of any
further payments is satisfied by way of loan notes or new Petards shares.

EIMC is a specialist supplier of a range of IR (Infrared) and daylight camera
technologies that underpin many video and ANPR (Automatic Number Plate
Recognition) systems in the UK and Europe and are used in approved systems in
the emerging North American markets.  This acquisition of leading edge
technology in rapidly expanding specialist camera and surveillance equipment
markets, strengthens the Group's position within its existing client base and
adds new opportunities in the global law enforcement, security service and
commercial sectors.  Petards will build on the existing relationships that EIMC
has established to supply ANPR solutions worldwide and will have the opportunity
to incorporate its core range of digital recording, storage and control room
solutions (including UVMS(TM) and Advantage.Net+).

The acquisition will also enable Petards to accelerate the further development
of its market leading Provida range of digital video and speed enforcement
systems.  New systems will meet the growing demands for greater in-car computer
integration and digital storage.  The use of UVMS(TM) as the management tool for
the storage of high volumes of digital evidence will provide further synergies
and sales opportunities.  EIMC's special-vehicle installation capability also
offers Petards an in-house facility whereby both EIMC and Petards systems will
be fitted to a wide variety of covert and overt surveillance vehicles used by
security agencies.

Dividends

The Board is not recommending the payment of a dividend.

The Board

On 31 May 2006 David Hayes resigned as a director and stepped down as Chief
Executive. David joined the Group in 2004 and since then he has overseen a major
restructuring of the business and, through the acquisition of PI Vision in
September 2005, established operations in the US.  He will continue in a
consulting capacity with the Group, in particular to help develop the Group's US
activities.  He has been succeeded as Chief Executive by Bill Conn. Bill joined
the Group in September 2004 as Managing Director of Petards Joyce-Loebl and
under his stewardship the performance of Petards Joyce-Loebl has improved
significantly.

After serving as a non executive director for the past four years, Tim Sulivan
is retiring by rotation at the Annual General Meeting and will not be seeking
re-election as a director.  I would like to thank Tim for his contribution since
he joined the Board in 2002.  This leaves the Company with three non executive
directors which is considered to be an appropriate number at the present time.

Staff

I would like to take the opportunity to thank all of our people for their hard
work and commitment to develop the Group's future prospects and in making the
changes that have led to a significant improvement in the Group's performance
over the past year.

Outlook

As I reported in December, while significant progress has been made by the Group
over the past year, it is taking longer than we expected to overcome the effect
of its past difficulties within some of our markets.  In order to exploit the
growing market opportunities available, the Group has invested further in its
sales and marketing for the UK, Europe and the US.  The Board is confident that
the benefits of this investment will be seen in the future.

The first six months of 2006 will reflect the impact of the adverse effect on
software solutions sales that I have referred to above.  However, the Board
expects to see the Group's recovery continue in the full year with a further
improvement in profitability over 2005.

Tim Wightman
16 June 2006


PETARDS GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2005


                                                                       Year ended              Year ended
                                                       Note      31 December 2005        31 December 2004
                                                                            £'000                   £'000


Turnover
Continuing operations                                                      20,053                  22,162
Acquisitions                                                                1,786                       -
Discontinued operations                                                         -                     443
                                                                           21,839                  22,605
Cost of sales                                                            (14,793)                (16,153)
Gross profit                                                                7,046                   6,452

Exceptional items                                                               -                   (402)
Goodwill amortisation and impairment                                         (31)                    (25)
Other administrative expenses                                             (6,959)                 (9,350)
Total administrative expenses                                             (6,990)                 (9,777)

Operating profit / (loss)
Continuing operations                                                       (225)                 (3,272)
Acquisitions                                                                  281                       -
Discontinued operations                                                         -                    (53)
Total operating profit / (loss)                                                56                 (3,325)
Profit on disposal of discontinued operations                                   -                     702


Costs of fundamental reorganisation                                             -                   (724)


Profit / (loss) on ordinary activities before                                  56                 (3,347)
  interest and taxation on ordinary activities
  before interest
Net interest payable                                                        (505)                   (223)
Loss on ordinary activities before taxation                                 (449)                 (3,570)
Taxation                                                                      115                       -
Loss on ordinary activities after taxation being                            (334)                 (3,570)
  loss for the financial year

Loss per share
Basic and diluted                                       3                 (0.06p)                 (5.46p)



PETARDS GROUP PLC
CONSOLIDATED BALANCE SHEET
As at 31 December 2005

                                                                  31 December 2005         31 December 2004
                                                                             £'000                    £'000
Fixed assets
Intangible assets                                                              783                      365
Tangible assets                                                                887                      969
                                                                             1,670                    1,334
Current assets
Stocks                                                                       2,799                    3,539
Debtors                                                                      4,662                    4,577
Cash at bank and in hand                                                       550                      249
                                                                             8,011                    8,365

Creditors: amounts falling due within one year                             (7,547)                 (16,278)

Net current assets / (liabilities)                                             464                  (7,913)

Total assets less current liabilities                                        2,134                  (6,579)

Creditors: amounts falling due after more than one                         (3,964)                     (25)
year

Net liabilities                                                            (1,830)                  (6,604)

Capital and reserves
Called up share capital                                                      6,224                      654
Share premium account                                                       23,198                   23,660
Profit and loss account deficit                                           (31,252)                 (30,918)
Equity shareholders' deficit                                               (1,830)                  (6,604)



PETARDS GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2005

                                                                       Year ended                    Year ended
                                                                  31 December 2005             31 December 2004
                                                    Note         £'000       £'000            £'000       £'000

Net cash outflow from operating activities            4                      (674)                      (1,819)

Returns on investments and servicing of
  finance
Interest received                                                    -                          294
Interest paid                                                    (179)                        (503)
Finance lease interest paid                                        (6)                         (14)

Net cash outflow from returns on                                             (185)                        (223)
  investments and servicing of finance

Taxation                                                                         -                            -

Capital expenditure
Purchase of tangible fixed assets                                (246)                        (541)
Sale of tangible fixed assets                                       47                           97

Net cash outflow from capital expenditure                                    (199)                        (444)

Acquisitions and disposals
Purchase of business                                                         (562)                            -
Sale of business                                                                 -                          835

Net cash outflow before financing                                          (1,620)                      (1,651)

Financing
Issue of shares                                                  5,108                       -
Increase in bank loans                                           3,266                       -
Finance lease capital repayments                                  (79)                        (114)

Net cash inflow / (outflow) from financing                                   8,295                        (114)

Increase / (decrease) in cash in the year                                    6,675                      (1,765)




PETARDS GROUP PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 December 2005

                                                                    31 December 2005             31 December
                                                                                                        2004
                                                                               £'000                   £'000

Loss for the financial year                                                    (334)                 (3,570)

Currency translation difference on foreign currency net investments                -                    (21)

Total recognised losses relating to the year                                   (334)                 (3,591)





RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
For the year ended 31 December 2005

                                                                          Year ended            Year ended
                                                                    31 December 2005      31 December 2004
                                                                               £'000                 £'000

Loss for the financial year                                                    (334)               (3,570)

Other recognised gains and losses                                                  -                  (21)

New share issue                                                                5,570                     -

Expenses of share issue                                                        (462)                     -

Opening equity shareholders' deficit                                         (6,604)               (3,013)

Closing equity shareholders' deficit                                         (1,830)               (6,604)



PETARDS GROUP PLC
NOTES TO THE PRELIMINARY RESULTS ANNOUNCEMENT
For the year ended 31 December 2004

1.   Basis of preparation

These financial statements do not constitute financial statements within the
meaning of Section 240 of the Companies Act 1985.

The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 December 2004 or 2005.  Statutory
accounts for 2004 have been delivered to the registrar of companies, and those
for 2005 will be delivered following the company's annual general meeting.  The
auditors have reported on those accounts; their reports were unqualified and did
not contain statements under section 237(2) or (3) of the Companies Act 1985.

The financial statements have been prepared in accordance with UK generally
accepted accounting practice and on the basis of accounting policies consistent
with those applied in previous periods.

2.   Dividend

The Board of Directors does not recommend the declaration of a dividend for the
year ended 31 December 2005.

3.   Loss per share

The calculation of the basic loss per share is based on the loss for the year on
ordinary activities after taxation of £334,000 (2004: loss £3,570,000) divided
by the weighted average number of ordinary 1p shares of 579,691,942 (2004:
65,420,709).  Due to the group's loss for the year the diluted loss per share is
the same as the basic loss per share.

4.   Net cash outflow from operating activities


                                                                                         2005           2004
                                                                                        £'000          £'000

Operating profit / (loss)                                                                  56        (3,325)

Goodwill amortisation and provision for impairment                                         31             25

Depreciation of tangible fixed assets                                                     420            387

Profit on sale of tangible fixed assets                                                   (6)           (15)

Cash flows relating to fundamental reorganisation                                       (341)          (383)

Decrease in stocks and work in progress                                                   770          1,219

Decrease in debtors                                                                       356            878

Decrease in creditors                                                                 (1,960)          (596)

Exchange differences                                                                        -            (9)

Net cash outflow from operating activities                                              (674)        (1,819)



5.   Analysis of net cash
                              At 1 January     Cash flow Other non cash       Exchange         At 31
                                      2005                      changes       movement      December
                                                                                                2005
                                     £'000         £'000         £ '000          £'000         £'000

Cash at bank and in hand               249           301              -              -           550
Overdrafts                         (6,374)         6,374              -              -             -
                                   (6,125)         6,675              -              -           550
Debt due within 1 year             (1,219)           669              -              -         (550)
Debt due after 1 year                    -       (3,950)             15              -       (3,935)
Finance leases                        (68)            79           (95)              -          (84)

Total                              (7,412)         3,473           (80)              -       (4,019)


6.   Acquisition of business

On 8 August 2005 the group acquired the trade and certain net assets of PI
Vision Limited and PI Vision Inc. The maximum total consideration payable is
£1,638,000.  An initial cash consideration of £476,000 was paid in 2005 and
£91,000 of costs incurred associated with the acquisition.  In 2006 an amount is
payable equal to the sum by which PI Vision's gross profit exceeds £1,600,000 in
the 12 months following its acquisition, and depending upon the amount payable
in 2006, a further conditional sum may be payable in 2007.  The payments made in
2006 and 2007 cannot exceed £1,000,000 in aggregate and are payable, at the
vendors' option, either all in cash or cash and up to 50% in new Petards Group
plc shares at the prevailing market price.

The acquisition has been accounted for using the acquisition method of
accounting.  The book values of this acquisition were:

                                                                           £'000

Net assets acquired
Tangible fixed assets                                                         38
Stock                                                                         30
Debtors                                                                      196
Creditors due within 1 year                                                (125)
Net assets                                                                   139

Goodwill arising on acquisition                                              449
                                                                             588

Satisfied by
Cash consideration                                                           476
Cash at bank and in hand acquired                                            (5)
Costs associated with acquisition                                             91
                                                                             562
Deferred consideration                                                        26
                                                                             588


There have been no fair value adjustments or reorganisation costs provided.


7.   Report and accounts

Copies of the Report and Accounts will be sent to shareholders in due course.

8.   Announcement

Copies of this announcement will be available from the Nominated Adviser:

Collins Stewart, 9th Floor, Wood Street, London, EC2V 7QR for 14 days from the
date of this announcement.


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