Final Results

Radstone Technology PLC
4 June 2001

                           Radstone Technology PLC

             Preliminary Results for the year ended 31 March 2001

                        CORE BUSINESS PERFORMANCE AND

                      DEFENCE TECHNOLOGY SPENDING DRIVES

                         RADSTONE TO 54% PROFIT RISE

Radstone Technology PLC ('Radstone', LSE: RST), the leading supplier of
high-performance, rugged computer products to the defence and aerospace
industries, today announces its full year results for the year ended 31 March
2001. The Company is announcing record order book levels of £74.0 million,
following strong European and US defence technology spending.

Highlights include

  * Profit before tax up 54% to £4.11 million (2000: £2.66 million)
  * Sales increased by 37% to £41.26 million (2000: £30.16 million)
  * Basic Earnings Per Share increase 15% to 12.19p (2000: 10.87p)
  * New orders up 34% to £68.7m (2000: £51.3m)
  * $18m contract win for Northrop Grumman
  * Major contract wins with BAE Eurofighter project and Finmeccanica

Rhys Williams, Chairman, commented:

' I am pleased to report that Radstone's trading performance during the year
exceeded expectations, with significant achievements in both the Group's
businesses. Our products meet the growing requirements for 'smart' technology
within the defence community. Radstone's ruggedised computers are designed to
withstand the harshest conditions and environments, and are used in key
defence projects world-wide.

' This year we have won major contracts from, among others, Northrop Grumman,
Lockhead Martin, and Boeing. Much of our business continues to involve such
blue-chip clients, and these strong long term relationships provide Radstone
with a valuable security of income.

' Radstone is entering the new year in a position of financial strength and
with credible claims to leadership in our markets. The quality of our products
and the strength of our order books for future delivery, give us confidence
that our growth will continue in the year ahead.'

                                   - ends -

Date: 4 June 2001

For further information please contact:
Radstone Technology PLC                       City Profile Group

Charles Paterson, Group Managing Director     Simon Courtenay

Jeff Perrin, Finance Director                 Ed Senior

01327 359 444                                 020 7726 8588

Web: www.radstone.com                         E-mail: [e-mail]



                             Chairman's Statement

                       for the year ended 31 March 2001

I am pleased to report that the trading performance of the Radstone Group
during the year exceeded expectations, with significant achievements in both
major businesses. Profit before tax increased from £2,661,000 last year to £
4,109,000, (+54%).

Sales increased from £30,163,000 to £41,263,000, (+37%). On a like-for-like
basis, (excluding the contract manufacturing business acquired in December
1999), sales grew by 18%, a similar rate to last year.

With the tax losses from previous years now fully consumed, the profit for
2001 is subject to a full tax charge, resulting in a post tax profit of £
2,869,000, (2000: £2,399,000), an increase of 20%.

Basic earnings per share under FRS14 were 12.21p (2000: 10.89p). Normalised
earnings per share increased by 16% from 11.17p to 13.00p.

New orders received exceeded last year's record of £51,335,000, reaching a
Group total of £68,796,000, an increase of 34% over the year. Our order intake
performance over the past 5 years now shows a compound annual growth rate of
29%. At year end, the order book for future delivery stood at £74,001,000, an
increase of 64% over last year's record £45,137,000.

Business Development

We continue to regard our investment in new product development as the
cornerstone of the Radstone Group's commercial success. In the year ahead, we
shall use every available means to increase development resources to levels
which enable Radstone to maintain its present leadership role in the embedded
computing area.

While neither Radstone core business has significant direct exposure to the
datacomms/telecomms markets, the unusual trading conditions in those markets
provided an uncomfortable background to the year, with indirect consequences
which affected some of the Group's operations. The abrupt reversal of
telecomms expansion in the latter part of the year restored a degree of
stability, though the situation remains a cause for concern.

The Embedded Computing business continued to benefit from the progression to
production status of a growing list of design wins from previous years. The
lead-time for this process remains long, with some important programmes
spending years in development before graduating to production.

As the number and diversity of Radstone's design wins has grown, so also has
the number of concurrent production programmes, resulting in a pleasing
increase in the total of Embedded Computing sales, up from £21,902,000 last
year to £25,927,000 (+18%).

Technical support to these active production programmes, particularly in the
Configured Systems area, has required the diversion of some design effort away
from new product development, resulting in a decline in development
expenditure from £2,981,000 to £2,752,000, (-8%).

The first part of the year saw the completion of the re-organisation of the
Contract Electronic Manufacturing (CEM) business, following the December 1999
acquisition of the Hawarden plant.

While some further re-equipment activity remains to be completed in the
current year, the Hawarden plant already ranks alongside the original
Towcester facility as a fully-qualified assembly location for the most complex
circuit boards.

Following the re-organisation, both sites now trade as a single Foundation
Technology service provider, operating under a unified management structure.
With total sales, (including inter-company sales), of £16.5 million, the
combined business now leads its UK market sector.

Throughout the year, Radstone's revenues have been affected by unpredictable
conditions in the component supply chain. In these circumstances, both
operating businesses now recognise the need to take special action to maintain
their ability to support their customers. This may include an increase in
stocks of the more strategically important components.

Employee Share Ownership

During April 2001, the Company introduced an All Employee Share Ownership Plan
(AESOP) that gives employees the opportunity to own the Company's shares
within a favourable tax environment. Already, almost a third of all employees
are shareholders in the Company and we believe that this plan will increase
that number and enhance the positive culture of ownership within the Group.

Outlook

The Group's performance during 2001 was the result of a clearly focussed plan,
which your Board has implemented over a period of more than five years.

In most respects, this plan has now been successfully completed. The Radstone
Group now enters a new phase of growth in which we seek not only to build on
the success of our existing businesses, but also, through strategic
partnerships, to increase the scale of our activities more rapidly than could
be achieved through organic growth alone.

The core businesses of the Group enter the new year in positions of financial
strength and with credible claims to leadership in their respective markets.
The quality of our products and the strength of our order books for future
delivery, give us confidence that our growth will continue in the year ahead.





                              Operations Review

                       for the year ended 31 March 2001



Radstone Group Structure and Strategy

The Radstone Group's strategy is one of long-term partnership with system
integrators and original equipment manufacturers in the electronics and
computing markets.

The Radstone Group has two Core Businesses:

  * The Embedded Computing business supplies high-performance computer
    subsystems to the world's major defence system integrators.

    The business specialises in the supply of highly resilient hardware,
    capable of withstanding the rigours of the tactical military environment.
    Radstone pioneered the use of subsystem modules based on specially-adapted
    forms of the IEEE 1014 VMEbus standard and has made major contributions to
    the extensions of the standard to provide enhanced mechanical strength and
    permit conduction-cooling.

    The business operates internationally, with 88% of sales outside the UK.



  * The Contract Electronic Manufacturing (CEM) business is a circuit board
    assembler, specialising in small and medium sized batches of complex
    surface-mount technology designs. The business has direct access to the
    technology resources of the Radstone Group, enabling it to develop and
    deliver manufacturing processes at an unusually early stage in the
    technology cycle.

    Sales operations focus on the UK, where it trades as Foundation
    Technology. With factory locations at Towcester, Northants and Hawarden,
    Flintshire, the business is now among the best-equipped UK CEM operations
    in its market sector.


Embedded Computing                                         2001           2000
                                                          £'000          £'000

Total Sales (all external)                               25,927         21,902
Gross Profit                                             12,070         10,785
Contribution                                              5,265          4,151





Another successful year ended with sales up by 18%, contribution up by 27% and
the order book for future delivery at £64,681,000, an increase of 61% above
last year's equivalent figure.

Production stage shipments to Lockheed Martin, (LAMPS), Northrop Grumman,
(Firefinder) and Harris Corporation, (MLRS), were the largest contributors in
a record sales total of £25,927,000.

A notable feature of the period was the rapidly growing proportion of the
sales total representing production phase shipments of mature products
resulting from the design wins of prior years.

This contributed to an increase in the sales for mature products from £
5,619,000 to £10,476,000, (+86%). This subtotal also benefits from the
increasing level of demand for Radstone's value-added obsolescence management
services from major defence prime contractors in the US and the UK.

Systems Products, including equipment enclosures, circuit boards and
integration fees, showed another substantial increase to £4,510,000 (2000: £
3,211,000, +40%), responding to a growing trend among defence prime
contractors to outsource at progressively higher levels in the computer system
hierarchy.

Radstone's response to this trend has taken the form of a coherent range of
enclosures, backplanes and integration services which, taken together, now
represent a valuable differentiator in the embedded computing marketplace.
There is good potential to market this capability to encourage the long-term
customer partnerships that have proved to be so economically significant in
the past.

Embedded Computing - Product and Process Development

The year saw important new stages in the evolution of the flagship PowerPC
product family. The new product additions are particularly relevant to the
serial communications and display requirements of military ground vehicles,
where major new US procurement initiatives are expected in the medium term.

At the extreme limit of the high performance, severe environment product
range, Radstone maintained its market lead with the release of the PPC4B, the
most powerful VMEbus processor yet offered to defence system integrators.

Despite its very high memory bandwidth, the PPC4B maintains the integrity of
the standard PReP architecture which, for several years, has provided the
bridge between successive generations of Radstone processors. The resulting
ease of software migration is now well understood and anticipated by
Radstone's customers, many of whom now rely on technology insertion to provide
regular low-risk performance upgrades to their own equipment.

The new PPC6 processor addresses the needs of systems located in sheltered
defence environments, typically found in ground-based control rooms and in
some naval and vehicle electronics applications, where the overhead cost of a
high performance cooling system is not required. PPC6 brings a new level of
PReP compliant performance to this rapidly expanding market segment.

The year also saw important extensions to the family of mezzanine support
products that provides additional functionality to the processor product line
and has become an important source of competitive advantage for Radstone.

A planned increase in the engineering design resource available to the
business could not be achieved in the turbulent market conditions operating in
the early part of the year. Greater recruitment success was achieved later in
the year but this came too late to recover the overall position. In
consequence, total development expenditure showed a decline for the first time
in four years, from £2,981,000 last year, to £2,752,000, (-8%).


CEM                                                        2001            2000
                                                          £'000           £'000

Total Sales                                              16,533           9,912
Sales to Embedded Computing                             (1,197)         (1,651)
External Sales                                           15,336           8,261
Gross Profit                                              2,398           1,686
Contribution                                              1,855           1,164



The first full year of operations following the acquisition of the assembly
facility at Hawarden, Flintshire, saw a substantial increase in the number of
customers and prospective customers and the completion of a new, unified
management structure.

Upon this completion, the combined CEM businesses commenced operating as a
single Foundation Technology business, with no explicit differentiation
between the Hawarden and Towcester locations.

At Hawarden, completion of the first stages of the re-equipment programme saw
the introduction of a number of process improvements designed to achieve a
capability equivalent to that of the Towcester plant.

At the same time, management action was taken to re-focus the business towards
the high complexity, surface-mount assembly model successfully operated by the
Towcester facility. This had the effect of eliminating a stream of low margin,
labour intensive business and enabling a significantly more efficient layout
of the main factory area.

Joint ISO9002 accreditation of both sites within a common quality system was
achieved in June 2000. Following formal validation of processes and quality
systems, the Hawarden facility was awarded Approved Supplier status by
Radstone's Embedded Computing business in September 2000, enabling it to
participate fully in the manufacturing plan for the second half of the
financial year.

After this approval, it was pleasing to receive equivalent approvals from a
succession of major external customers, many of whom now regard the choice of
assembly plant location as a matter for CEM management's discretion. Tangible
evidence of the enhanced credibility and status of the enlarged business came
in the form of multiple orders of over £1,000,000 received during the course
of the year.

Component supply problems over the period tended to result in an increase in
the proportion of external orders requiring full material procurement, thereby
inflating the sales total while diluting the gross margin.

Foundation's business strategy of developing responsive long-term
relationships with its major customers made good progress during the year. The
business was able to increase the number of strategically significant
customers over the period and at the same time achieve an effective transition
to a new operating structure which will serve as a strong platform for future
growth.

At year end, the third party order book for future delivery was £9,320,000 an
increase of 88% above last year's equivalent figure.



Group Geographical Analysis of Operations

Sales

The CEM business was entirely responsible for the 53% increase in third party
UK deliveries to £18,253,000, (2000: £11,959,000).

UK third party shipments include a full year's output from the acquisition,
with Foundation Technology (Hawarden) contributing £7,522,000, (2000: £
1,593,000), to the Group total. Foundation Technology (Towcester) extended its
unbroken sequence of nine years of sales growth, increasing sales by a further
17% to £7,814,000 from last year's £6,668,000.

Embedded Computing shipments to the UK declined 14% in the year, to £
3,173,000, (2000: £3,700,000).

The UK is an important market for large configured systems and a portion of
the decrease reflects the normal year-to-year scheduling fluctuations within
large contracts. In addition, UK deliveries were depressed by the component
supply chain difficulties which resulted in arrears of shipments to UK
customers at the year end.

Embedded Computing shipments to the main US market were similarly affected,
though the nature of the product mix and, in particular, the relative absence
of large system assemblies enabled a greater proportion of the order book to
be shipped.

The USA was the most important single sales territory for the Embedded
Computing business as well as the Radstone Group. Seven of the Group's ten
largest customer accounts are US companies.

US deliveries increased by 35% to £17,577,000, (2000: £12,989,000)
representing 43% of total Radstone Group sales and 68% of Embedded Computing
business sales.

Orders

For the Embedded Computing business, the US continued to be the most
strategically significant geographical territory, both in terms of total
bookings and the ongoing level of new bid activity.

US bookings of £28,209,000 represented no less than 56% of the total for the
Embedded Computing business and 41% for the Group.

An encouraging feature of the year was the number of medium size orders, (in
the $1 million to $2 million range), indicating the transition to initial
production stage of a number of earlier design wins.

A new $18,300,000 production order from Northrop Grumman included provision
for the insertion of new technology into an already well-proven design,
extending Radstone's association with the Firefinder programme for at least
another three years.

Embedded Computing's bookings success in recent years has been based on its
ability to anticipate and satisfy the computing subsystem requirements of
defence system integrators. While these requirements are broadly similar in
most developed countries, in the USA they have been overlaid with statutory
procurement rules that have tended to create market conditions favourable to
specialist computer suppliers like Radstone.

No other country has sought to introduce equivalent changes by legislative
means, but over time, the success of US procurement reform has influenced the
equivalent procurement organisations in other countries.

Evidence of this is clear in the record order intake reported here, which
reflects a year of success for the UK-based sales team who have responsibility
for all non-US sales territories.

Bookings for this region totalled £22,247,000 during 2001, compared with £
9,039,000 in 2000, (+146%).

Large integrated systems featured prominently in the total, with substantial
new orders from the UK, Turkey, Italy and Korea.

A major achievement was the signing of a Euro14,500,000, (£9,000,000)
production contract with Whitehead Alenia Sistemi Subacquei, (WASS), Italy, by
which Radstone will supply its rugged processor technology into a variant of
the NH90 naval helicopter being developed by Finmeccanica Agusta. The
processor is at the core of the helicopter's sonic management system and uses
items from Radstone's standard Commercial-off-the-Shelf (COTS) product range.

In the UK, Radstone received a production order of £2,350,000 from BAE
Systems, Stanmore to supply a version of its rugged PowerPC processor for
integration within the Defensive Aids Sub-System, (DASS), of the Eurofighter
swing-role combat aircraft. First production deliveries are scheduled for
delivery in October 2001.

Enquiry levels remain high across the region.

The CEM business booked new third party orders in the year to a total value of
£18,341,000. Virtually all of these were related to UK OEM customers. At this
time, the UK is the only territory targetted by the CEM sales team.



Enterprise Resource Planning System

Radstone has adopted the SAP R/3 Enterprise Resource Planning (ERP) System for
implementation throughout the Group.

Preparation for the migration of existing business processes to SAP has
continued through most of the financial year and will continue until the
activation of the system on the Towcester site in July 2001. The extension of
the system to the Hawarden site will follow in 2002.



                               Financial Review

                       for the year ended 31 March 2001

Overview

Group sales increased by 37% to £41,263,000 and, as in previous years, were
weighted towards the second half of the year. Second half deliveries were 56%
of the total, the same weighting as last year.

Gross profits were 35.1% compared to 41.3% last year. Approximately half of
this reduction is due to growth in the lower margin CEM business, representing
37% of the total sales compared to 27% last year, as a result of the
acquisition. The balance is due to lower gross profits in the Embedded
Computing Business of 46.6% compared to 49.2% last year, as a result of a
change in the mix of contracts and products sold during the year.

Absolute gross profits increased by £1,997,000. Expenditure on development,
sales, marketing and administration increased by only £287,000 over last year
with the result that operating profit (excluding goodwill amortisation)
increased by £1,710,000 to £4,743,000, a 56% improvement. This represented an
operating profit of 11.5% of sales, compared to 10.1% last year.

EBITDA at £6,120,000 was 52% above last year. The first half generated £
2,181,000 and the second half £3,939,000, compared to £1,137,000 and £
2,902,000 respectively last year.

Interest costs of £448,000 were £138,000 more than last year, mainly due to
the £3,097,000 of additional debt involved in the acquisition in December
1999.

The tax charge of £1,240,000 represented 30% of the pre-tax profit compared to
10% in 2000. The low level in 2000 was the result of using the last of the
prior year tax losses.

The basic earnings per share (FRS14) were 12.21p (2000: 10.89p). The
normalised earnings per share were 13.00p, a 16% increase compared to last
year.

Cash flow

Cash flow from operating activities was £4,248,000 compared to £2,407,000 last
year, reflecting the very strong trading performance in the year. Additional
income of £190,000 was received from the exercise of share options. After net
interest, tax payments and purchase of own shares of £468,000, £597,000 and £
147,000 respectively and capital expenditure of £1,735,000, free cash flow
amounted to £1,491,000.

Free cash flow, offset slightly by a £154,000 exchange rate movement on net
foreign borrowings, was used to reduce net debt from £6,601,000 to £5,264,000
at the year-end.

Investment

During the year a net £1,735,000 was invested in capital equipment compared
with £1,980,000 spent last year.

Company-funded development expenditure amounted to £2,752,000 (2000: £
2,981,000), representing 10.6% of sales for the Embedded Computing business
(2000: 13.6%). Consistent with the Group's established policy, all product
development was charged directly to the profit and loss account.

Liquidity

Gearing at the year-end was reduced to 33%, (31 March 2000: 53%) from 40% at
the half year. Current and quick ratios were 1.9 and 1.1 respectively,
compared to 1.9 and 1.0 at 31 March 2000. Interest was covered 10.6 times
compared to 9.8 times last year.

The Group seeks to reduce financial risk and to ensure sufficient liquidity is
available to meet foreseeable needs. Our policy is to maintain a balance
between continuity of funding and flexibility through the cost-effective use
of borrowings with a range of maturities.

Performance

Normalised earnings per share, (see calculation in note 1), which is more
indicative of underlying performance, grew by 16% from 11.17p last year,
(restated to take account of the exercise of share options during the year),
to 13.00p.

The return on capital employed shows an increase to 22.6% from 16.0% last
year. Return on equity of 18.3% was below last year's 19.4%, due to the
increased tax charge from 10% to 30%.

Treasury

With a substantial part of sales in United States dollars, hedging foreign
exchange fluctuations against this currency is recognised by the directors as
a key responsibility. Whilst the majority of this exposure is hedged by
purchases of components in US dollars and local costs for our US operation,
there still remains a net exposure to be hedged. The prudent use of various
financial instruments minimises this vulnerability to the volatility of the
rate of exchange to the US dollar.

At 31 March 2001 there were £358,000 of unrealised net losses on 74 forward
foreign currency contracts and options (31 March 2000: £8,000 of net losses)
covering US dollars, and Euro. None of these was recognised at the balance
sheet date. All unrealised net losses are expected to be dealt with in the
profit and loss account for the period ending 31 March 2002. During 2000/01,
all of the net losses not realised at 31 March 2000 were included in the
profit and loss account.

Since unrealised gains or losses are calculated by marking to market forward
foreign currency contracts and options, that in themselves are used to
calculate foreign currency prices for our products, the off-set for these
unrealised amounts are the sales which will result from the physical delivery
of these products.

Translation exposure arising on the consolidation of the Group's US assets is
hedged by use of a US dollar loan in the UK parent company. The net effect of
this is taken direct to reserves as allowed under SSAP20, ensuring that only
trading transaction gains and losses on foreign exchange are represented in
the profit and loss account.

The interest rate exposure created by the requirement of the US dollar loan is
managed by interest rate SWAPS. Interest rate exposures on Sterling loans are
currently unhedged during a period of falling interest rates. This is
continually under review.

Consolidated Profit & Loss Account

for the year ended 31 March 2001
                                                 Notes        2001         2000
                                                             £'000        £'000

Turnover                                                    41,263       30,163
Cost of sales                                             (26,795)     (17,692)
            ___________________________________________________________________
Gross profit                                                14,468       12,471

Administration costs
Administration                                             (2,377)      (2,282)
Development                                                (2,752)      (2,981)
Goodwill                                                     (186)         (62)
            ___________________________________________________________________
Total administration costs                                 (5,315)      (5,325)
Distribution costs - sales and marketing                   (4,596)      (4,175)
            ___________________________________________________________________

Operating profit                                             4,557        2,971

Net interest payable                                         (448)        (310)
            ___________________________________________________________________


Profit on ordinary activities before taxation                4,109        2,661
Taxation                                                   (1,240)        (262)
            ___________________________________________________________________

Retained profit for the year                                 2,869        2,399
            ___________________________________________________________________

Basic earnings per share                           1        12.21p       10.89p
            ___________________________________________________________________

Normalised earnings per share                      1        13.00p       11.17p
            ___________________________________________________________________

Diluted earnings per share                         1        12.06p       10.85p
            ___________________________________________________________________



Statement of total recognised gains and losses
                                                               £'000      £'000

Profit for the financial year                                  2,869      2,399
Exchange rate adjustment                                         311          -
            ___________________________________________________________________
Total gains recognised in the year                             3,180      2,399
            ___________________________________________________________________

There is no material difference between the profit reported above and that
calculated on the historical cost basis. Turnover and expenses all relate to
continuing operations.

Balance Sheets

at 31 March 2001
                                                     Group          Company
                                                   2001    2000    2001    2000
                                                  £'000   £'000   £'000   £'000
Fixed assets
Goodwill                                          3,472   3,650       -       -
Intangible assets                                    86      30      86      30
            ___________________________________________________________________
Total intangible assets                           3,558   3,680      86      30
            ___________________________________________________________________

Tangible assets                                   5,792   5,487   1,567   1,588
Own shares                                          147       -     147       -
Investments                                           -       -   6,865   6,865
            ___________________________________________________________________
                                                  9,497   9,167   8,665   8,483
            ___________________________________________________________________

Current assets
Stocks                                           10,010   7,976       -       -
Debtors falling due after more than one year          -       -   2,746   5,235
Debtors                                          11,349   8,413   3,618     843
Cash at bank and in hand                            741     778   2,816     125
            ___________________________________________________________________
                                                 22,100  17,167   9,180   6,203
            ___________________________________________________________________

Creditors: amounts falling due within one year
Bank and other borrowings                         1,530   2,550       -       -
Other creditors                                   9,876   6,574   1,057     783
            ___________________________________________________________________
                                                 11,406   9,124   1,057     783
            ___________________________________________________________________
Net current assets                               10,694   8,043   8,123   5,420
            ___________________________________________________________________

Total assets less current liabilities            20,191  17,210  16,788  13,903

Creditors: amounts falling due after more than
one year
Bank and other borrowings                         4,475   4,829   5,350   5,189
Provisions for liabilities and charges                -      35       -       -
            ___________________________________________________________________
                                                  4,475   4,864   5,350   5,189
            ___________________________________________________________________
Net assets                                       15,716  12,346  11,438   8,714
            ___________________________________________________________________
 Capital and reserves
 Called up share capital                          2,974   2,925   2,974   2,925
 Share premium account                            9,503   9,362   9,503   9,362
 Revaluation reserve                                218     218     218     218
 Profit and loss account                          3,021   (159) (1,257) (3,791)
            ___________________________________________________________________
 Equity shareholders' funds                      15,716  12,346  11,438   8,714
            ___________________________________________________________________



Consolidated Cash Flow Statement

for the year ended 31 March 2001
                                                                2001       2000
                                                               £'000      £'000
Operating activities
Net cash inflow from operating activities                      4,248      2,407
            ___________________________________________________________________
Servicing of finance
Interest received                                                 36         43
Interest paid                                                  (395)      (160)
Interest paid on finance leases                                (109)       (89)
            ___________________________________________________________________
                                                               (468)      (206)
            ___________________________________________________________________
Taxation
UK Corporation tax paid                                        (568)      (322)
Overseas tax paid                                               (29)        (4)
            ___________________________________________________________________
                                                               (597)      (326)
            ___________________________________________________________________

Capital expenditure
Purchase of tangible fixed assets                              (848)      (969)
Purchase of own shares                                         (147)          -
Purchase of intangible fixed assets                             (79)       (27)
            ___________________________________________________________________
                                                             (1,074)      (996)
            ___________________________________________________________________

Acquisitions
Consideration for purchase of subsidiary undertaking               -    (3,500)
Bank debt assumed on purchase of subsidiary undertaking            -    (1,678)
            ___________________________________________________________________
Net cash outflow for acquisitions                                  -    (5,178)
            ___________________________________________________________________

Equity dividends paid                                              -          -
            ___________________________________________________________________

Net cash inflow/(outflow) before financing                     2,109    (4,299)

Financing
Issue of ordinary share capital                                  190      2,387
            ___________________________________________________________________
                                                                 190      2,387
            ___________________________________________________________________
New loans advanced                                                 -      2,500
Repayment of loans                                             (633)      (497)
Repayment of principal under finance leases                    (904)      (254)
            ___________________________________________________________________
                                                             (1,537)      1,749
            ___________________________________________________________________
                                                             (1,347)      4,136
___________________________________________________________________
Increase/(decrease) in cash                                      762      (163)
___________________________________________________________________

Note to the Consolidated Cash Flow Statement

Reconciliation of operating profit to net cash

Inflow from operating activities
Operating profit                                              4,557      2,971
Amortisation of goodwill                                        186         62
Amortisation of intangible fixed assets                          23         26
Depreciation of tangible fixed assets                         1,354        980
Loss on disposal of tangible fixed assets                         2         41
Increase in stocks                                          (2,034)    (1,245)
(Increase)/decrease in debtors                              (2,913)        137
Increase/(decrease) in creditors                              3,073      (592)
Increase in provision for liabilities and charges                 -         27
           ___________________________________________________________________
Net cash inflow from operating activities                     4,248      2,407
           ___________________________________________________________________

Notes:

1. Earnings per share
                                                         2001              2000
                                                        pence             pence
                                                    per share         per share

Basic earnings per share                                12.21             10.89
            ___________________________________________________________________
Normalised earnings per share                           13.00             11.17
            ___________________________________________________________________
Diluted earnings per share                              12.06             10.85
            ___________________________________________________________________

The calculation of basic and diluted earnings per share is based on the profit
for the year after tax of £2,869,000 (2000: £2,399,000). Normalised earnings
per share is calculated after adjusting profit after tax for the effect of
goodwill amortisation and is more indicative of underlying performance. The
reconciliation of basic to normalised earnings per share is as follows:

                                                         2001              2000
                                                        pence             pence
                                                    per share         per share

Basic earnings per share                                12.21             10.89
Goodwill written off                                     0.79              0.28
            ___________________________________________________________________
Normalised earnings per share                           13.00             11.17
            ___________________________________________________________________

The weighted average number of shares in issue during the year used in the
calculation of earnings per share is as per the following table:

                                                                 2001      2000
                                                                pence     pence
Weighted average for year - basic and                          23,498    22,033

normalised earnings per share
Calculation of shares under option per FRS 14                     291        78
            ___________________________________________________________________
Weighted average for year - diluted earnings per share         23,789    22,111
            ___________________________________________________________________

 2. The comparative figures for the year to 31 March 2000 do not constitute
    full accounts within the meaning of Section 240 of the Companies Act 1985.
    Full accounts for that period, which received an unqualified audit report
    and did not contain a statement under Section 237(2) or Section 237(3) of
    the Companies Act 1985, have been delivered to the Registrar of Companies.
    The financial information set out in the preliminary statement of results
    for the year ended 31 March 2001 does not constitute statutory accounts
    within Section 240 of the Companies Act 1985. The Group's statutory
    accounts for the year ended 31 March 2001 have not yet been filed with the
    Registrar of Companies. The Company's auditors have issued an unqualified
    report on those financial statements. Their report contains no statement
    under Section 237(2) or Section 237(3) of the Companies Act 1985.
 3. This preliminary announcement is prepared on the basis of the accounting
    policies as stated in the financial statements for the year ended 31 March
    2000.
 4. Copies of the 2001 Report and Accounts will be sent to shareholders in due
    course. Further copies will be available from the registered office of
    Radstone Technology PLC, Water Lane, Towcester, Northants NN12 6JN.