AGM Statement

Radstone Technology PLC
12 September 2001

                           Radstone Technology PLC                            
                            Annual General Meeting                            
                                                                              
                             Chairman's Statement                            

At today's Annual General Meeting of Radstone Technology PLC, ('Radstone') the
leading supplier of  high performance, rugged computer products to the defence
and aerospace industries, Chairman Rhys Williams made the following statement:

'  We meet today within hours of an unimaginable terrorist atrocity, at a time
when  its consequences  cannot begin to be calculated.   It is  a tragedy that
directly  affects our  colleagues in  the US  as well  as  our customers,  our
suppliers  and their families.   All  of our  thoughts are  with them  at this
difficult time.  

'  My statement  this  morning  will  be  confined to  the  Company's  trading
experience thus far this year.

'  Despite the strength of  the order book, the  first five months of the year
have seen trading at levels  somewhat below those  of last year in both of our
core businesses.   Total sales  for  the  Radstone Group  were  £12.2  million
compared with  £14.9 million  for the  same period last  year.  More than £1.5
million  of  this  shortfall  reflects production  delays resulting  from  the
transition  to a  new  Enterprise  Resource  Planning  System which took place
during the period. I shall return to this later.

'  Also,  as  had  been  widely  expected  within  the  defence  industry,  US
procurement  activity   was   overshadowed  by  the  hiatus  surrounding   the
Quadrennial  Defense Review, (QDR), compounding earlier delays associated with
the appointment  of new  Department of Defense  officials by the incoming Bush
administration. 

'  As a result, there  were no  significant  new  US  procurement  initiatives
during the period and none are due  until the completion of the QDR, which had
been expected by 30 September 2001, and its adoption by the US Congress.  This
has led to  a virtual absence of large new  orders in the first five months as
major US defence system integrators awaited the outcome of the QDR.  

'  However, call-off schedules totalling $5 million have already been received
against existing long  term orders on  the Harris/MLRS,  Lockheed-Martin/LAMPS
and Raytheon/ATFLIR programmes.

'  Enquiry  levels  and  order  intake  in  the  European  and   rest-of-world
territories  continue to  be encouraging  and bookings this  year include a $5
million VME processor order from a  new Far East customer for a civil avionics
application.
 
'  Total Radstone Group orders  received  were £12  million compared with last
year's £28 million.  Prior year figures benefitted from an $18 million tranche
of  Firefinder  orders from Northrop Grumman  which we  announced in September
2000.

'  The  order book  for future delivery  was £74 million at the end of August,
compared with £59m a year ago.

Contract Electronic Manufacturing Business (CEM)

'  Against the background of the general decline in UK manufacturing activity,
we can report that the diversified nature of the CEM business' client list has
provided  a  welcome  degree  of  insulation  from  the  worst effects  of the
downturn. Increased levels of demand from the UK defence industry  have offset
much  of  the  revenue  re-scheduled  or  cancelled  by  our  major industrial
customers  in  the first five  months, although  largely for deliveries in the
second half of the year.

'  Third party  shipments  were  £5.3  million compared  with £6.1 million for
the equivalent five month period in 2000.

Embedded Computing Business

'  Embedded Computing Business deliveries were £6.9 million compared with £8.8
million for the equivalent period last year. 

'  Shipments  to  the  US declined  by  48%,  reflecting  differences  in  the
year-to-year  phasing of several  long-running production contracts. Prominent
among these were programmes  involving  Harris/MLRS  and Lockheed-Martin/LAMPS
which resume deliveries later in the current year.

'  By contrast,  non-US deliveries  increased overall  by 6%, with substantial
new gains in several territories.  Shipments to the Far East, including China,
Singapore and Korea, increased to £0.8 million in the period, a 182% increase.
Sales  to mainland Europe  reached  £1.6 million, a  141% increase, reflecting
growing recognition of the value of standard off-the-shelf computer subsystems
by defence system integrators in France, Spain and Italy.

Enterprise Resource Planning System

'  Preparation  for  the  implementation  of  the  SAP R/3 Enterprise Resource
Planning System continued throughout last financial year, representing a major
background task for personnel at every level on the Towcester site.  

'  Although  these preparations  were substantially complete by December 2000,
migration  to the new  system was deferred  until the  first half  of  the new
financial  year  in order to  protect the  Group's  operational  effectiveness
during  the traditionally  most active  period of the financial calendar.  The
new system went live in July 2001  and now forms the main planning and control
tool for both Towcester-based businesses.

'  Over time, the  system will enable these businesses to respond more quickly
and more accurately to the needs of their customers while using fewer physical
and financial resources.  However the move to the new system has resulted in a
temporary  decrease  in efficiency  while personnel become fluent with the new
system.   This has caused a delay of shipments in the first five months of the
year. These shipments will now take place in the second half of the year.
 
Outlook

'  The  business faces  a challenging timetable for the remainder of the year.
It is impossible to  predict the  affect of the  events of   yesterday on  the
embedded   computing  business  in  the short  or medium term.  I  expect  the
imbalance between the performance in  the first  and second halves of the year
to be even more marked than usual.

'  Whilst the Board is encouraged by the strength of our order book and wealth
of design-wins, a  determined effort is needed to book and ship the additional
short-term orders needed to meet our expectations for the year.

'  The increasing  adoption of  the COTS  philosophy in  all  our major market
areas  will  favour  the  long-term  growth of  the  Radstone Group.  I remain
confident  that   this  will  provide  further  opportunities  for  sustained,
profitable expansion.'
                                                                     
Date: 12 September 2001

For further information please contact:

Radstone Technology PLC                                   01327 359444
Dr. Charles Paterson, Group Managing Director
Jeff Perrin, Finance Director

City Profile Group                                        020 7448 3244
Ed Senior/Simon Courtenay