Interim Results

Radstone Technology PLC
14 November 2001


          Interim Results for the six months ended 30 September 2001


                    STRONG DEFENCE MARKET LEAVES RADSTONE

                             CONFIDENT FOR FUTURE

Radstone Technology PLC ('Radstone', LSE:RST ), the leading supplier of
high-performance, rugged computer products to the defence and aerospace
industries, today announces its interim results for the six months to 30
September 2001.



Highlights

  * Order book 21% above same period last year
  * Confident of strong performance in second half
  * US defence spending significantly increased
  * Quadrennial Defence Review completed; heavy focus on technology spending



Rhys Williams, Chairman, commented:

' As we reported at our AGM, trading in the interim period has been below the
record levels of last year. However I can report that Radstone now finds
itself in the most positive market environment in its history. Many of the
issues which we reported were affecting Radstone's growth have now been
decisively resolved.

' In our main US market, substantially increased defence budgets and a renewed
strategic emphasis on the use of technology are likely to accelerate the
long-term growth of our business. Our products meet the growing requirements
for 'smart' technology within the defence community. Following the enlargement
of the US defence budget and the completion of the Quadrennial Defence Review,
we have seen enquiry levels rise and timetables for delivery shortening.

' As we said at our AGM, there remains a degree of uncertainty in the global
economy. However considering the amount of confirmed orders for delivery in
the second half of the year, together with the known additional opportunities,
we remain confident in the prospects of the Group.'

                                   - ends -

Date: 14 November 2001

For further information please contact:

Radstone Technology PLC                          City Profile Group

Charles Paterson, Group Managing Director        Ed Senior

                                                 
Jeff Perrin, Finance Director                    Simon Courtenay
                                         
01327-359444                                     020-7448-3244

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



Chairman's Statement

Six months ended 30 September 2001

As I indicated in my AGM statement on 12 September 2001, trading for the first
half of the financial year has been below last year's levels. Nevertheless,
the period has been one of momentous change in our industry and our Embedded
Computing business, which historically comprises over 60% of sales, is now
well positioned to take advantage of increasing defence budgets and the new
strategic emphasis on the use of technology in military platforms.

Results

Sales for the six months ended 30 September 2001 were £15,523,000, compared to
£18,196,000 last year. The lower level of deliveries resulted in a pre-tax
loss of £1,045,000, compared to a pre-tax profit of £1,155,000 last year. With
an accounting tax credit of £330,000 (2000: tax charge £344,000), the
resultant loss per share was 3.02p, compared with last year's earnings of
3.45p per share.

Gross profit in the period declined from last year's 34.4% to 28.5%,
reflecting the effect of the reduced deliveries on a relatively fixed cost of
production.

However the Board is encouraged that the order book for future delivery ended
the period at £72,317,000, 21% above the corresponding stage last year. Of
these orders, the amount scheduled for delivery in the remaining part of this
year is £16,800,000, compared to an equivalent figure of £14,800,000 twelve
months ago.

Last year the total orders that were both booked and shipped within the second
half of the year was £8,300,000.

During the first half of the year we received new orders of £15,589,000. In
the corresponding period last year, we received new orders of £32,378,000 but,
as I set out in my AGM statement, this included a single Northrop Grumman
order of $18 million. The book to bill ratio for the period was 1.00, compared
to 1.78 last year.

Business Development

Embedded Computing

Sales declined by 13% to £9,471,000, reflecting differences in the
year-to-year phasing of several long-running production contracts, together
with shipment delays resulting from the introduction of the new Enterprise
Resource Planning, (ERP), System which was activated across the whole of the
Towcester site in July 2001.

We are now beginning to experience efficiency improvements from the new system
and we expect these to accelerate as the system permeates the remaining areas
of the manufacturing process.

US bookings in the period were affected by the change of administration in
Washington and by the Quadrennial Defense Review, (QDR), both of which caused
delays to the normal processes of procurement administration.

The publication of the QDR Report by the US Department of Defense on 30
September 2001 marked a new strategic direction for the US military, in which
increased exploitation of the US advantage in technological innovation will
play a leading role. This is expressed as a renewed commitment to stealth
platforms, unmanned vehicles and smart munitions. Additional investment in R & D
will focus on smart weapon systems and on the upgrading of equipment already
in inventory, particularly tactical aircraft.

We regard the outcome of the QDR as an extremely positive indicator for
Radstone, since it is clear that the technology required to implement the new
strategy relies heavily on products for which the Embedded Computing business
is a world leader.

Following the terrorist atrocity of September 11, US customer requirements are
likely to change in response to tactical military considerations, altering the
mix of business in the second half of the year.

CEM (Contract Electronic Manufacturing)

The CEM business also participated in the ERP system upgrade and shared in the
manufacturing delays at changeover time. More significantly, third party sales
were affected by the general slowdown in the UK industrial market, resulting
in a decline in revenues of 17% to £6,052,000.

Within CEM's broadly diversified customer list, the most affected areas have
been industrial controls and civil aviation, where postponements and order
cancellations have occurred. However, areas such as commercial displays and
automotive instrumentation have remained solid, while in defence products,
there has been a noticeable increase in activity as defence OEMs seek further
to outsource their manufacturing.

Financial

Operating cash outflow for the period was £1,218,000 (2000: inflow £2,652,000), 
representing the effect of the lower level of sales.

Payments for servicing finance and taxation were respectively £227,000 and 
£448,000 (2000: £263,000 and £91,000). Expenditure on fixed assets, including
leasing of £426,000 was £969,000 (2000: £806,000). £70,000 was expended on the
purchase of the Company's own shares. These shares were allocated to the
Employee Share Ownership Plan which commenced in April 2001 and as part of the
directors' and senior managers' incentive plan for the year 2001.

The resultant cash outflow produced a £2,891,000 increase in net debt from 31
March 2001 to £8,155,000. Gearing was 55% at 30 September 2001 compared to 40%
at 30 September 2000 and 33% at the end of last year.

Investment in product development increased by 16% to £1,667,000, representing
10.7% of Group sales and 17.6% of Embedded Computing sales (2000: £1,436,000,
representing 7.9% of Group sales and 13.1% of Embedded Computing sales).

Outlook

As indicated at the time of the AGM, we expect activity levels in the second
half of the year to be significantly higher than those in the first.

The strong position of the CEM business in the defence product area is likely
to translate into shippable orders in the second half of the year, partly
offsetting the weakness in the industrial product area. The substantial size
and duration of these defence opportunities indicate good prospects for growth
in the longer term, though this part of the Group is not expected to achieve
sales growth in the current year.

With growing world-wide demand for its products, the Embedded Computing
business in the long term now finds itself in the most positive market
environment in its history. In its main US market, substantially increased
defence budgets and a new strategic emphasis on the use of technology are
likely to accelerate the growth of this part of the business.

The Board is encouraged by the confirmed orders for delivery in the second
half of the year and by the overall level of the order book. This, together
with the positive affect of the QDR, gives us confidence in the prospects for
the Group.

Rhys Williams

Chairman





Consolidated Profit & Loss Account

Six months ended 30 September 2001


                                                  6 months   6 months 12 months
                                                to 30/9/01 to 30/9/00 to 31/3/01
                                                  (neither   (neither (audited)
                                                   audited    audited
                                                       nor        nor
                                                 reviewed)  reviewed)
                                                     £'000      £'000     £'000

Turnover                                            15,523     18,196    41,263
Cost of sales                                     (11,104)   (11,928)  (26,795)
  _____________________________________________________________________________
Gross profit                                         4,419      6,268    14,468
Administration costs
Administration                                     (1,315)    (1,027)   (2,377)
Development                                        (1,667)    (1,436)   (2,752)
Goodwill                                              (93)       (90)     (186)
  _____________________________________________________________________________
Total administration costs                         (3,075)    (2,553)   (5,315)
Distribution costs - sales and marketing           (2,164)    (2,302)   (4,596)
  _____________________________________________________________________________
Operating (loss)/profit                              (820)      1,413     4,557
  _____________________________________________________________________________
Net interest payable                                 (225)      (258)     (448)
(Loss)/profit on ordinary activities before        (1,045)      1,155     4,109
taxation
Taxation                                               330      (344)   (1,240)
  _____________________________________________________________________________
Retained (loss)/profit for the period                (715)        811     2,869
  _____________________________________________________________________________
Basic (loss)/earnings per share                    (3.02)p      3.45p    12.21p
  _____________________________________________________________________________
Normalised (loss)/earnings per share               (2.62)p      3.83p    13.00p
  _____________________________________________________________________________
Diluted (loss)/earnings per share                  (3.03)p      3.41p    12.06p
  _____________________________________________________________________________

Turnover and operating (loss)/profit all relate to continuing operations



Consolidated Balance Sheet

at 30 September 2001
                                              at 30/9/01 at 30/9/00 at 31/3/01
                                                (neither   (neither  (audited)
                                                 audited    audited
                                                     nor        nor
                                               reviewed)  reviewed)
                                                   £'000      £'000      £'000
Fixed assets
Goodwill                                           3,379      3,569      3,472
Intangible assets                                     68         25         86
 _____________________________________________________________________________
Total intangible assets                            3,447      3,594      3,558
 _____________________________________________________________________________
Tangible assets                                    6,039      5,635      5,792
Own shares                                           217        131        147
 _____________________________________________________________________________
                                                   9,703      9,360      9,497
 _____________________________________________________________________________
Current assets
Stocks                                            12,784      9,104     10,010
Debtors                                            9,388      7,462     11,349
Cash at bank and in hand                             716        948        741
 _____________________________________________________________________________
                                                  22,888     17,514     22,100
 _____________________________________________________________________________
Creditors: amounts falling due within one
year
Bank and other borrowings                          6,042      1,361      1,530
 _____________________________________________________________________________
Other creditors                                    8,979      7,410      9,876
 _____________________________________________________________________________
                                                  15,021      8,771     11,406
 _____________________________________________________________________________
Net current assets                                 7,867      8,743     10,694
 _____________________________________________________________________________
Total assets less current liabilities             17,570     18,103     20,191
Creditors: amounts falling due

after more than one year
Bank and other borrowings                          2,829      4,834      4,475
Provisions for liabilities and charges                 -         35          -
 _____________________________________________________________________________
Net assets                                        14,741     13,234     15,716
 _____________________________________________________________________________
Capital and reserves
Called up share capital                            2,977      2,950      2,974
Share premium account                              9,509      9,446      9,503
Revaluation reserve                                  218        218        218
Profit and loss account                            2,037        620      3,021
 _____________________________________________________________________________
Equity shareholders' funds                        14,741     13,234     15,716
 _____________________________________________________________________________



Consolidated Cash Flow Statement

Six months ended 30 September 2001
                                                  6 months   6 months 12 months
                                                to 30/9/01 to 30/9/00 to 31/3/01
                                                  (neither   (neither (audited)
                                                   audited    audited
                                                       nor        nor
                                                 reviewed)  reviewed)
                                                     £'000      £'000     £'000

Net cash (outflow)/inflow from operating           (1,218)      2,652     4,248
activities
  _____________________________________________________________________________
Servicing of finance
Interest received                                       13          4        36
Interest paid                                        (174)      (205)     (395)
Interest paid on finance leases                       (66)       (62)     (109)
  _____________________________________________________________________________
                                                     (227)      (263)     (468)
  _____________________________________________________________________________
Taxation
UK Corporation tax paid                              (193)       (49)     (568)
Overseas tax paid                                    (255)       (42)      (29)
  _____________________________________________________________________________
                                                     (448)       (91)     (597)
  _____________________________________________________________________________
Capital expenditure
Purchase of tangible fixed assets                    (543)      (294)     (848)
Purchase of own shares                                (70)      (147)     (147)
Purchase of intangible fixed assets                      -          -      (79)
  _____________________________________________________________________________
                                                     (613)      (441)   (1,074)
  _____________________________________________________________________________
Equity dividends paid                                    -          -         -
  _____________________________________________________________________________
Net cash (outflow)/inflow before financing         (2,506)      1,857     2,109
  _____________________________________________________________________________
Financing
Issue of ordinary share capital                          9        109       190
Repayment of loans                                   (250)      (383)     (633)
Repayment of principal under finance leases          (269)      (640)     (904)
  _____________________________________________________________________________
                                                     (510)      (914)   (1,347)
  _____________________________________________________________________________
(Decrease)/increase in cash                        (3,016)        943       762
  _____________________________________________________________________________



Consolidated Cash Flow Statement/Notes

Six months ended 30 September 2001


                                                  6 months  6 months  12 months
                                                to 30/9/01 to 30/9/00 to 31/3/01
                                                  (neither  (neither  (audited)
                                                   audited   audited
                                                       nor       nor
                                                  reviewed) reviewed)
                                                      £'000     £'000     £'000

Reconciliation of operating (loss)/profit to net
cash (outflow)/inflow from continuing operating
activities
Operating (loss)/profit                               (820)     1,413     4,557
Amortisation of goodwill                                 93        90       186
Amortisation of intangible fixed assets                  18         5        23
Depreciation of tangible fixed assets                   720       657     1,354
Loss on disposal of tangible fixed assets                 1         1         2
Increase in stocks                                  (2,774)   (1,128)   (2,034)
Decrease/(increase) in debtors                        2,734       922   (2,913)
(Decrease)/increase in creditors                    (1,190)       692     3,073
  _____________________________________________________________________________
Net cash (outflow)/inflow from
continuing operating activities                     (1,218)     2,652     4,248
  _____________________________________________________________________________



Notes:

1. (Loss)/earnings per share
                                         6 months       6 months      12 months
                                       to 30/9/01     to 30/9/00     to 31/3/01

Basic (loss)/earnings per share           (3.02)p          3.45p         12.21p
  _____________________________________________________________________________
Normalised (loss)/earnings per share      (2.62)p          3.83p         13.00p
  _____________________________________________________________________________
Diluted (loss)/earnings per share         (3.03)p          3.41p         12.06p
  _____________________________________________________________________________


The calculation of basic and diluted (loss)/earnings per share is based on the
following (loss)/profit for the period after tax:

                                    6 months         6 months        12 months
                                  to 30/9/01       to 30/9/00       to 31/3/01
                                       £'000            £'000            £'000

(Loss)/profit after tax                (715)              811            2,869
 _____________________________________________________________________________

Normalised (loss)/earnings per share is calculated after adjusting the (loss)/
profit after tax for the effect of goodwill amortisation and is more indicative 
of underlying performance. The reconciliation of basic to normalised 
(loss)/earnings per share is as follows:-

                                          6 months      6 months     12 months
                                        to 30/9/01    to 30/9/00    to 31/3/01

Basic (loss)/earnings per share            (3.02)p         3.45p        12.21p
Goodwill written off                         0.40p         0.38p         0.79p
 _____________________________________________________________________________
Normalised (loss)/earnings per share       (2.62)p         3.83p        13.00p
 _____________________________________________________________________________



The weighted average number of shares in issue during the period used in the
calculation of (loss)/earnings per share is as per the following table:

                                                             6       6      12
                                                        months  months  months
                                                            to      to      to 
                                                       30/9/01 30/9/00 31/3/01
                                                          '000    '000    '000

Weighted average shares for basic and normalised        23,699  23,514  23,498
(loss)/earnings per share
Calculation of shares under option per FRS14             (107)     276     291
 _____________________________________________________________________________
Weighted average shares for diluted (loss)/earnings     23,592  23,790  23,789
per share
 _____________________________________________________________________________



2. The above accounts do not constitute full accounts within the meaning of
S.240 of the Companies Act 1985. All figures for the year to 31 March 2001 are 
abridged. Full accounts, on which the report of the auditors was unqualified and
did not contain a statement under S.237 (2) or S.237 (3) of the Companies Act 
1985, have been delivered to the Registrar of Companies. The results for the six
months to 30 September are neither audited nor reviewed.



3 The interim financial information has been prepared on the basis of
accounting policies consistent with those applied in the financial statements 
for the year to 31 March 2001, with the exception of the implementation of FRS 
18 Accounting Policies and FRS 19 Deferred Tax which have had no effect on 
reported profits and have not given rise to any restatement of figures reported 
for the prior period.



4. Copies of the 2001 Interim 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.