Interim Results

Spirent Communications PLC
09 August 2007

                          SPIRENT COMMUNICATIONS PLC

                    INTERIM RESULTS FOR THE FIRST HALF 2007

London, UK - 9 August 2007: Spirent Communications plc ("Spirent" or "the 
Group") (LSE: SPT), a leading communications technology company, today announces
its interim results for the first half of 2007.



Highlights

  • Restructuring actions in the first half of 2007 on course to achieve £21.5
    million of full year cost savings in 2008.  Exceptional expenses lower than
    anticipated at £12.6 million of which

£3.5 million are cash.

  • Adjusted earnings per share from continuing operations increased from 0.65
    pence in the first half of 2006 to 0.85 pence per share in the first half of
    2007 after absorbing negative foreign exchange impact equivalent to 0.22
    pence per share.

  • Net cash inflow of £10.3 million in the first half, increasing cash to
    £106.9 million with no debt.

  • Results of Strategic Review to be communicated to shareholders in October
    2007 will address portfolio and product development priorities, further cost
    reduction opportunities and optimisation of balance sheet structure.





Performance Analysis

  • Operating profit increased by 20 per cent at constant currency on slight
    sales decline compared with the same period in the prior year.

  • Legacy Broadband sales continued declining trend evidenced in 2006 offset
    by strong growth in Wireless and Positioning products and the new release of
    Spirent TestCenterTM.

  • Actions stemming from Operating Review in April expected to contribute to
    significant profit improvements in the second half of 2007.

  • In Broadband, revenue was up 9 per cent sequentially from the first
    quarter to the second quarter in the period, and up 14 per cent over the
    prior half year at the top 6 customers which account for a third of
    Broadband revenue.



Service Assurance

  • Service Assurance operating profit exceeded expectations as downsizing
    actions taken in 2006 more than offset an anticipated revenue decline.



Systems

  • Operating profit declined by 32 per cent in sterling terms, in line with
    expectations, entirely due to movement in exchange rates.



Edward Bramson, Chairman, commented:



"The major focus of Spirent's attention in the first half of 2007 was on
implementing the actions stemming from the Board's Operating Review in April.
These have proceeded well and we are on course to meet the cost objectives that
were announced.



"The effects of the Operating Review on first half profits were minimal and so
the first half is not a good indicator of future financial prospects.  Our
outlook for the second half is for flat to slight sequential growth in revenue
in US dollars based on typical seasonal patterns.  The cost reductions and the
operating changes that have now been made should produce a significant
improvement in second half profits."



Results summary


£ million                                      First half       First half    Change (%)  Underlying change at
                                                     2007             2006               constant currency (%)

Reported
Continuing operations
Revenue                                             114.2            134.2          (15)                   (8)

Loss before tax                                     (4.5)           (15.7)
Basic loss per share (pence)                       (0.60)           (1.68)

Adjusted1
Continuing operations
Operating profit2                                     5.0              4.2            19                    64
Profit before tax3                                    8.1              6.5            25                    54
Adjusted earnings4 per share (pence)                 0.85             0.65            31                    64



Notes

1 The adjusted profit and earnings per share have been restated to include
  share-based payment and intangible amortisation.

2 Before exceptional items and goodwill impairment.

3 Before exceptional items, goodwill impairment and costs associated with the
  repayment of loan notes.

4 Adjusted earnings per share is based on adjusted earnings as set out in note
  6.



                                    - ends -

Enquiries

Edward Bramson, 
Executive Chairman           Spirent Communications plc      [phone]
Eric Hutchinson, 
Chief Financial Officer

Andrew Dowler/Harriet Keen   Financial Dynamics              [phone]





  The Company will host a results presentation today at 09.15am for 09.30am UK
  time.   A simultaneous webcast of the presentation will be available on the
             Spirent Communications plc website at www.spirent.com



About Spirent Communications plc

Spirent Communications plc is a leading communications technology company
focused on delivering innovative systems and services to meet the needs of
customers worldwide.  We are a global provider of performance analysis and
service assurance solutions that enable the development and deployment of
next-generation networking technologies such as broadband services, Internet
telephony, 3G wireless and web applications and security testing.  The Systems
group develops power control systems for specialist electrical vehicles in the
mobility and industrial markets.  Further information about Spirent
Communications plc can be found at www.spirent.com.

Spirent Communications plc Ordinary shares are traded on the London Stock
Exchange (ticker: SPT).  The Company operates a Level 1 American Depositary
Receipt ("ADR") programme with each ADR representing four Spirent Communications
plc Ordinary shares.  The ADRs trade in the US over-the-counter ("OTC") market
under the symbol SPMYY and the CUSIP number is 84856M209.

Spirent and the Spirent logo are trademarks or registered trademarks of Spirent
Communications plc.  All other trademarks or registered trademarks mentioned
herein are held by their respective companies.  All rights reserved.



Cautionary statement

This document may contain forward-looking statements which are made in good
faith and are based on current expectations or beliefs, as well as assumptions
about future events.  You can sometimes, but not always, identify these
statements by the use of a date in the future or such words as "will",
"anticipate", "estimate", "expect", "project", "intend", "plan", "should",
"may", "assume" and other similar words.  By their nature, forward-looking
statements are inherently predictive and speculative and involve risk and
uncertainty because they relate to events and depend on circumstances that will
occur in the future.  You should not place undue reliance on these
forward-looking statements, which are not a guarantee of future performance and
are subject to factors that could cause our actual results to differ materially
from those expressed or implied by these statements.  The Company undertakes no
obligation to update any forward-looking statements contained in this document,
whether as a result of new information, future events or otherwise.



                   INTERIM RESULTS FOR THE FIRST HALF OF 2007



Executive Chairman's statement

The major focus of Spirent's attention in the first half of 2007 was on
implementing the actions stemming from the Board's Operating Review in April
2007.  These have proceeded well and we are on course to meet the cost
objectives that were announced.

As indicated in April, we expected local currency (US$) sales in the Performance
Analysis business, Spirent's largest, to be essentially flat, reflecting market
conditions and the continuing decline in sales of older legacy broadband
products.  Sales were in fact down slightly as strong growth in the Wireless and
Spirent TestCenter products, which grew at constant currencies by 21 per cent
and 127 per cent respectively, did not quite make up for the reduction in legacy
sales.  If current trends continue, these products should provide overall sales
growth for Performance Analysis at some point in 2008.  The smaller businesses,
Service Assurance and Systems both produced results in line with or slightly
better than expected.

Most of our sales, 90 per cent, are billed in US dollars but the negative effect
of the increase in the sterling exchange rate was mitigated by the fact that
approximately 85 per cent of our expenses were also incurred in dollars.  As a
result, while exchange rates reduced earnings in the first half by approximately
0.22 pence per share we were nevertheless able to increase adjusted earnings to
0.85 pence per share from 0.65 pence in the prior year.

The effects of the operating review on first half profits were minimal and so
the first half is not a good indicator of future financial prospects.  Our
outlook for the second half is for flat to slight sequential growth in revenue
in US dollars based on typical seasonal patterns.  The cost reductions and the
operating changes that have now been made should produce a significant
improvement in second half profits.

We are actively involved in preparing a Strategic Review for the Board, an early
outcome of which was the divestiture of the SwissQual business completed in
July.  The balance of the review will address the Company's business portfolio
and product development priorities, as well as further cost containment
opportunities and the structure of the balance sheet.  We look forward to
communicating the results of this review to shareholders in October.

As announced in June, Duncan Lewis has joined the Board bringing considerable
telecoms experience with a number of major companies.  I am now pleased to
welcome Tom Maxwell, who has a long career in investment management, to the
Board as an additional independent non-executive director with effect from 1
October 2007.  Board composition, in terms of independent non-executive
directors, is now compliant with the requirements of the Combined Code and, from
1 October the composition of the Board Committees will also be compliant.



Group financial performance

Results overview



Continuing operations

£ million                                      First half        First half         Change (%)      Underlying change at
                                                    2007              2006 1                           constant currency
                                                                                                               (%)

Revenue                                             114.2              134.2             (15)                       (8)
Adjusted operating profit2                            5.0                4.2               19                        64
Return on sales2 (%)                                  4.4                3.1      

Adjusted earnings per share3 (pence)                 0.85               0.65               31
                                                                                                                     64
Adjusted cash flows from operating                   19.4              (2.7)
activities4



The Group is reporting an underlying change in revenue and adjusted operating
profit given the significant effect the weakness of the US dollar has had on the
operating results this period compared with the same period in the previous
year.  Underlying change is the change at constant currencies and eliminates the
effect of fluctuating exchange rates on the translation of operating results and
on the transactions during the period.

Notes

1 The adjusted profit and earnings per share have been restated to include
  share-based payment and intangible amortisation.

2 Before exceptional items and goodwill impairment.

3 Before exceptional items, goodwill impairment, costs associated with the
  repayment of loan notes and any related tax.

4 Before the cash cost of exceptional items and lump sum pension contributions.



Revenue

Reported revenue in sterling was down 15 per cent compared with the first half
of 2006.  At constant currencies revenue was down 8 per cent.  The reduction in
revenue can be attributed to a one-time contract in Service Assurance recognised
in the first half of 2006 for £4.5 million, the effects of translation and
transaction exchange of £8.3 million and £1.2 million respectively and the
subdued market conditions experienced by our Performance Analysis division,
which did not offset completely the expected legacy revenue decline.

North America contributed 54 per cent of total revenue by market and this was
down from 60 per cent in the first half 2006 being the region most affected by
currency translation and market conditions.  By contrast revenue in Europe grew
marginally and now represents 19 per cent of total revenue compared with 15 per
cent in the first half of 2006.  Revenue in the Asia Pacific region was down in
absolute terms period on period and represents 27 per cent of total revenue
compared with 25 per cent in the first half of 2006.



Operating profit

Operating profit before exceptional items was £5.0 million compared with £4.2
million for the first half of 2006.  This was after giving effect to exchange
rate impact of £1.9 million in 2007 principally due to a weak US dollar and the
comparison is further distorted by an inventory absorption credit in 2006 which
did not recur in 2007.  The cost reductions announced in April and the reduction
in regulatory costs have resulted in approximately £1.6 million of profit
improvement.  The balance of the cost reduction benefits are expected to be seen
in the second half 2007 and full year 2008.

Underlying profitability compared to the same period of 2006 is as follows:


£ million                                                First half                    First half
                                                               2007                          2006

Adjusted operating profit reported                              5.0                           4.2
Exchange effect of translation                                  0.5                             -
Exchange effect on transactions                                 1.4                             -

Underlying profit                                               6.9                           4.2




Currency impact

The average sterling to US dollar exchange rate increased from 1.79 for the
first half of 2006 to 1.97 for the first half of 2007.  90 per cent of our
revenues are invoiced in US dollars so translation into sterling reduced
reported revenue.  Translation exchange impact reduced revenue by £8.3 million
compared with the first half of 2006.  The translation effect of exchange rates
on operating profit was relatively smaller at £0.5 million.  The Group
experienced transaction losses compared with the prior year and the reduction in
revenue due to the weakening of the US dollar period on period for the Group
amounted to £1.2 million and the effect on operating profit was a reduction of
£1.4 million.  Based on current exchange rates currency is expected to continue
to be a feature in the second half of 2007.



Cost of sales and operating expenses

Product development has been reclassified out of cost of sales to improve the
transparency and is shown separately on the face of the income statement. In
addition the costs of our customer service operations have been reclassified out
of selling and distribution costs and into cost of sales which is considered a
fairer representation of these costs.  Comparative amounts have been restated to
reflect these changes.

Gross margin excluding exceptional items was lower at 59.9 per cent compared
with 60.5 per cent for the first half of 2006, principally due to a
non-recurring inventory absorption credit in 2006.

As the development of Spirent TestCenter, a major new broadband product in our
Performance Analysis division is ongoing, product development spending continues
to form a substantial portion of our total costs.  A total of £22.8 million,
being 20 per cent of revenue, was expensed during the first half of 2007 (first
half 2006: £29.7 million and 22 per cent of revenue).  Of this amount £18.8
million (first half 2006: £22.6 million) was incurred in the Performance
Analysis division, £2.8 million (first half 2006: £5.9 million) in the Service
Assurance division with the remaining £1.2 million (first half 2006: £1.2
million) in the Systems group.  The Board continues to place emphasis on
optimising returns from future product development investments.

Other operating costs, excluding exceptional items and goodwill impairment, were
essentially unchanged at about 35 per cent of sales but were down in absolute
terms at £40.6 million compared with £47.3 million in 2006.  Approximately £1.6
million of savings have been realised from the actions resulting from the April
operating review and reduction in regulatory expenses.

The charge for share-based payment was £1.0 million for the first half of 2007
compared with £2.4 million for the first half of 2006.  This charge is lower
than normal having been reduced by the high rate of cancellation and lapse of
awards resulting from the restructuring actions that have taken place during the
period, which reduced the charge by approximately £0.8 million.



Exceptional items

Following completion of the operating review and as reported to shareholders in
April a number of changes were implemented.  These changes focused on
Performance Analysis, shared services and corporate overheads.  In Performance
Analysis actions resulting from the review focused on three main areas: product
portfolio, operational efficiency and reduction in the number of facilities.  As
a result of these cost reduction actions, Spirent has recorded an exceptional
charge in the first half of 2007 of £12.6 million.  This charge includes
redundancy and other restructuring costs of £3.5 million, provisions for onerous
lease costs of £3.7 million and a write-down of assets which are now redundant
of £5.4 million.  The annualised cost savings from these actions are expected to
be in the region of £21.5 million (US$43 million).  The cost savings derive from
four main areas: reduced manufacturing costs £7.3 million, product development
£4.5 million, sales and marketing spending £2.2 million and general
administrative overhead reduction of £7.5 million.  Some £1.6 million of savings
have already benefited the second quarter but there will be a future benefit
realised through the second half of 2007 with the total amount being fully
realised in the year ended 31 December 2008.  We will continue to explore any
further opportunities for cost savings in our businesses throughout the rest of
the year.



Net finance income

Cash and cash equivalents were £106.9 million at the end of the first half of
2007, cash is held in short term bank deposits and short dated commercial paper.
Finance income was £3.2 million compared with income of £3.6 million in the
first half of 2006, as the cash surplus had been reduced throughout 2006 by the
on-market share repurchase programme.  In 2006 interest payable of £1.3 million
was incurred in relation to loan notes which were redeemed in February 2006 and
there was a charge of £8.8 million reported related to the early redemption of
the loan notes.



Loss before tax for continuing operations

Reported loss before tax for continuing operations was £4.5 million compared
with a loss before tax in the first half of 2006 of £15.7 million.

Adjusted profit before tax for continuing operations, to exclude exceptional
items and goodwill impairment, was £8.1 million compared with £6.5 million for
the first half of 2006.



Tax

The tax charge for the first half of 2007 was £0.7 million, an effective rate of
8.6 per cent on the adjusted profit before tax (first half 2006: £0.3 million).
We continue to incur a low effective rate due to tax losses carried forward.



Discontinued operations

Discontinued operations in 2007 relate to the loss making SwissQual business
that was acquired in January 2006.  The disposal of this business was completed
on 5 July 2007 for cash proceeds of US$3.0 million (£1.5 million).  At the end
of the first half year an impairment charge of £4.5 million has been reported as
the assets of this business have been written down to fair value less costs of
sale as required by accounting standards.  In the period SwissQual reported
revenue of £3.4 million and an operating loss of £3.4 million.

Discontinued operations in 2006 also include the HellermannTyton Division sold
in February last year.



Earnings per share

Basic loss per share for the Group was 1.55 pence, compared with earnings of
14.80 pence for the first half of 2006, earnings in 2006 include the profit on
sale of the HellermannTyton Division of £165.3 million.  Adjusted earnings per
share for continuing operations, being before exceptional items, goodwill
impairment and costs associated with the repayment of loan notes net of any
related tax, was 0.85 pence compared with 0.65 pence in the first half of 2006.



Financing and cash flow

Cash and cash equivalents were £106.9 million at the end of the first half of
2007 up from £97.6 million at 31 December 2006 with £10.3 million of cash being
generated in the first half year, the Group continues to be debt free.  The cash
flows for the first half of 2006 reflect the sale of the HellermannTyton
Division and the repayment of debt.

Net cash inflow from continuing operating activities before tax was £16.4
million (first half 2006: £51.6 million outflow).  The outflow in 2006 included
a £47.0 million contribution to fund the UK final salary pension scheme.

Adjusted operating cash flow before tax from continuing operations is set out
below:


£ million                                                                   First half          First half
                                                                                  2007                2006

Reported cash flows from continuing operating activities                          16.4              (51.6)
Add back:
UK final salary pension fund contribution                                            -                47.0
Cash cost of exceptional items                                                     3.0                 1.9

Adjusted cash flows from continuing operating activities                          19.4               (2.7)





The cash outflow in respect of exceptional items comprised £1.4 million in
respect of 2006 actions and £1.6 million in respect of those taken in 2007, with
a further £1.9 million expected to be paid in the second half year.

Reported operating cash inflow for the Group after tax was £14.9 million (first
half 2006: £52.6 million outflow) discontinued operations used £1.0 million of
operating cash in the period (first half 2006: £1.7 million generated).  Tax
payments in the first half of 2007 amounted to £0.5 million compared with £2.7
million in first half of 2006 (including discontinued operations).  In the first
quarter of 2007 we settled tax obligations on the sale of the HellermannTyton
Division of £6.7 million.  We received tax refunds amounting to £6.8 million
during the period.

Capital expenditure was down, £2.4 million compared with £8.4 million in the
first half of 2006, well below the depreciation charge for the period of £5.8
million for the continuing Group (first half 2006: £6.6 million).

We spent £4.0 million on deferred consideration in relation to our 2006
acquisitions and there will be further payments of up to £1.0 million due in the
second half year.

Net finance income received in the first half of 2007 was £2.2 million compared
with net finance income received in the first half of 2006 of £1.2 million.

We returned £4.2 million of cash to shareholders during the period as part of
the share buy back programme.



Pension fund

The accounting valuation at the end of the first half of 2007 for the UK defined
benefit plans was based on the triennial actuarial valuations of the plans at 1
April 2006 which were completed during the period.  The surplus in the plans
rose from £2.4 million at 31 December 2006 to £13.0 million at the end of the
first half of 2007 with improvement in funding being due to rising equity
markets and to changes to the values of financial assumptions, namely the rate
of return on corporate bonds, underlying the calculation of the liabilities
during the interim period.  The accounting rules however, limit the surplus that
may be recognised by the Company and as such none of this surplus has been
recognised on the balance sheet at the end of the first half of 2007.  The Group
has also reported a £0.7 million liability in respect of the UK unfunded plan at
the end of the first half of 2007.



Capital structure, on-market share repurchase programme and dividend

We returned a further £4.2 million of cash to shareholders representing 6.7
million shares continuing the on-market share repurchase programme commenced in
May 2006.  To date 97.0 million shares have been repurchased with £45.8 million
of cash now returned of the original £50 million programme.

As part of the on-going strategic review we are evaluating the optimal balance
sheet structure.

Dividend policy is also kept under review by the Board, however no dividend is
being paid in respect of the first half of 2007.



Review of US listing and SEC registration

The recent adoption of new rules by the US Securities and Exchange Commission 
("SEC") gave Spirent the opportunity to terminate its reporting obligations
under the US Securities Exchange Act of 1934 ("the Exchange Act").  Spirent
believes that the administrative burden and increasing costs associated with
maintaining the listing on the New York Stock Exchange and the reporting
requirements necessary for its registration with the SEC under the Exchange Act
outweighed the benefits to Spirent and its shareholders.

The average daily trading volume of shares represented by Spirent's American
Depositary Receipts ("ADRs") was very small, accounting for 0.5 per cent of the
total number of Spirent Ordinary shares traded in the relevant 12 month period.
In light of this level of trading activity and the recent adoption of new rules
by the SEC, Spirent has changed its ADR facility with The Bank of New York to a
Level 1 Programme.  This means that the Company's ADRs are now traded in the US
over-the-counter market.  The Company's Ordinary shares will continue to trade
on the London Stock Exchange.

On 5 June 2007 Spirent filed an application to terminate the US registration of
its ADRs and Ordinary shares.  The Company's Exchange Act reporting obligations
have now ceased and termination of registration will occur ninety days after
filing, subject to the SEC having no objections.



Outlook

The major focus of Spirent's attention in the first half of 2007 was on
implementing the actions stemming from the Board's Operating Review in April.
These have proceeded well and we are on course to meet the cost objectives that
were announced.

The effects of the Operating Review on first half profits were minimal and so
the first half is not a good indicator of future financial prospects.  Our
outlook for the second half is for flat to slight sequential growth in revenue
in US dollars based on typical seasonal patterns.  The cost reductions and the
operating changes that have now been made should produce a significant
improvement in second half profits.



Business group development and performance

Communications

£ million                            First half 2007  First half 2006   Change (%)    Underlying change at
                                                                                      constant currency
                                                                                             (%)

      Revenue
      Performance Analysis                      80.6             90.5         (11)                    (3)
      Service Assurance                         16.5             24.9         (34)                   (28)

      Communications group                      97.1            115.4         (16)                    (9)


      Operating profit before
      exceptional items and goodwill
      impairment
      Performance Analysis                       4.5              4.6          (2)                     20
      Service Assurance                          0.9              0.1         >100                   >100

      Communications group                       5.4              4.7           15                     38

      Return on sales (%)
      Performance Analysis                       5.6              5.1
      Service Assurance                          5.5              0.4

      Communications group                       5.6              4.1



Performance Analysis

The market conditions for test equipment for Performance Analysis in the first
half of 2007 were subdued.  Underlying revenues in US dollar terms for
Performance Analysis were below the same period last year by 3 per cent.

Despite the decrease in total sales for the division, the underlying rate of
profitability was improved.  The prior year benefited from an increase in
inventory value through overhead absorption of £2.3 million and exchange
impacted the results by £1.0 million.  After taking into account these items
profits improved on lower sales, largely as a result of cost improvements
actioned during the first half year.

By geographic region Asia sales increased, but other regions, notably North
America, were down.  Wireless and Positioning revenues were 31 per cent of the
continuing Performance Analysis business.

Similar trends continued from last year in that top customers were working
through merger integrations, reducing activity levels in the market, although
the impact of this is declining in importance.  A number of other major
customers showed meaningful growth in activity.

Customer consolidation is driving a move to larger, more strategic relationships
which favour vendors that have broader technology assets in meeting testing
requirements across multiple platforms (wireless and wireline assets, integrated
technologies on single platforms).  Addressing customer requirements driven by
technology and service convergence offers an opportunity for Spirent given its
asset base across wireless, wireline and service assurance solutions.

With regard to the Performance Analysis Broadband activities a further major
release of Spirent TestCenter was made at the end of May 2007 using our Inspire
ArchitectureTM delivering increased productivity for customers.  This resulted
in the highest recorded monthly order intake for Spirent TestCenter in June
2007.  Overall the decline in existing product revenues outweighed the growth in
new product revenues for Broadband in the period.  It is worth noting that the
top 6 customers, which make up a third of the global revenue in the Broadband
business, delivered a 14 per cent revenue increase in the first half of 2007
compared with the first half of 2006.  In addition, overall Broadband revenue
increased by 9 per cent from the first quarter of 2007 to the second quarter of
2007.

The market conditions for the Performance Analysis Wireless division were in
line with expectations.  Revenue grew strongly by 21 per cent at constant
currency in the first half year compared to the same period last year.  Notably
location based service test requirements grew markedly.  CDMA activity tracked
plan and fader product sales continued to be robust on the back of sustained
investment by customers in WiMaX.  This is in areas where we have seen
competitors enter the market.

New development areas include video test capability, upgrades to location based
systems and the ability to deliver more automated solutions for mobile device
testing.  Regionally growth was strong in Asia with additional equipment
manufacturers entering the mobile handset market.

We have continued to build on the strength of our product capabilities in the
GPS emulation market, where all market segments have been buoyant.  New
customers provided a significant portion of revenue and in addition revenues
were recorded for the sale of Galileo simulators.



Service Assurance

The market for traditional service assurance solutions continues to be in long
term decline as service providers transition capital spending to next-generation
services.  In addition, the consolidation of network service providers has
reduced the number of target customers for service assurance solutions.  The
result of this market trend is that customers continue to drive for lower costs
resulting in pressure on maintenance contracts.  Despite this, our control over
costs within our own operations has resulted in improved profit performance for
the division.

Operating profit was significantly improved sequentially and over the same
period last year.  However, revenues were down from first half 2006 due to £4.5
million of revenue from a one-time project for remote packet access testing that
occurred in the prior year.

Next-generation service offerings are beginning to be deployed and service
providers are evaluating our next-generation service assurance solutions.  One
of the first service providers to select a next-generation service assurance
solution is Telus, a Canadian carrier, which signed a contract to deploy our
triple play solution late last year.  During the first half 2007 Telus commenced
successful deployment of our next-generation hardware and software triple play
service assurance solution.



Systems

£ million                       First half 2007     First half 2006      Change (%)    Underlying change at
                                                                                         constant currency
                                                                                                (%)

Revenue                                    17.1               18.8              (9)                  (3)
Operating profit/(loss)                     1.7                2.5             (32)                    -
Return on sales (%)                         9.9               13.3




The Systems group comprises PG Drives Technology, a leading supplier of control
systems for electrically powered medical and small industrial vehicles.  Revenue
was down due to changes in US government healthcare funding for powered
wheelchairs, which created a shift from premium systems to lower-cost solutions.
The US dollar exchange rate also had a marked affect on revenue and profit.
We continued to relocate more production into the Far East to support our
activities in the Asia Pacific Region and to gain product and logistical cost
benefits.

During the first half of 2007 we began penetrating new industrial market
segments (forklift trucks and golf carts) with our new Sigma and X30/25
products.  Later this year we are planning more new product launches that will
enable us to further strengthen our position in the medical mobility market.



Non-segmental costs

Non-segmental costs excluding exceptional costs, being those which are not
directly attributable to the operating segments, were lower at £2.1 million
compared with £3.0 million in the first half of 2006.  Corporate overheads were
reduced as a result of the operating review and a number of activities were
integrated into the business units.  The termination of the Company's reporting
obligations under the US Exchange Act has reduced corporate compliance costs.



Board

As announced in June, Duncan Lewis joined the Board as an independent
non-executive director bringing extensive telecoms experience to the Company.

The Company is now pleased to announce that Tom Maxwell will be appointed as an
additional independent non-executive director with effect from 1 October 2007
and will become a member of the Audit and Nomination Committees.  A Member of
the Chartered Institute of Bankers in Scotland and a Member of the Society of
Investment Professionals, Tom has considerable financial and investment
experience.  He has previously worked for, among others, Martin Currie
Investment Management Limited and Ivory & Sime Investment Management plc.

As a result of Mr Maxwell's appointment, Gerard Eastman will cease to be a
member of the Audit and Remuneration Committees on 1 October 2007, enabling
their composition to become compliant with the Combined Code.  Mr Eastman will
remain as a non-executive director on the Board and a member of the Nomination
Committee.

Board composition, in terms of independent non-executive directors, is now
compliant with the requirements of the Combined Code and, from 1 October the
composition of the Board Committees will also be compliant.



Consolidated income statement


                                   Notes                           First half                         First half
£ million                                                                2007                   2006 (restated)1

                                                Before  Exceptional     Total       Before  Exceptional    Total
                                           exceptional       items2            exceptional   items2 and
                                                 items                           items and     goodwill
                                                                                  goodwill   impairment
                                                                                impairment
Continuing operations
Revenue                             2, 3         114.2            -     114.2        134.2            -    134.2
Cost of sales                                   (45.8)        (2.4)    (48.2)       (53.0)            -   (53.0)

Gross profit                                      68.4        (2.4)      66.0         81.2            -     81.2
Product development                             (22.8)            -    (22.8)       (29.7)            -   (29.7)
Selling and distribution                        (25.6)            -    (25.6)       (30.9)            -   (30.9)
Administration                                  (15.0)       (10.2)    (25.2)       (16.4)       (13.4)   (29.8)

Operating profit/(loss)              2             5.0       (12.6)     (7.6)          4.2       (13.4)    (9.2)
Finance income                                     3.2            -       3.2          3.6            -      3.6
Finance costs                                    (0.1)            -     (0.1)        (1.3)            -    (1.3)
Costs associated with the                            -            -         -            -        (8.8)    (8.8)   
repayment of loan notes

Profit/(loss) before tax                           8.1       (12.6)     (4.5)          6.5       (22.2)   (15.7)
Tax - overseas                                   (0.7)            -     (0.7)        (0.3)            -    (0.3)

Profit/(loss) for the period from                  7.4       (12.6)     (5.2)          6.2       (22.2)   (16.0)
continuing operations after tax
Discontinued operations              4
Profit/(loss) for the period from                (3.8)        (4.5)     (8.3)          0.2        157.1    157.3
discontinued operations

Profit/(loss) for the period                       3.6       (17.1)    (13.5)          6.4        134.9    141.3
attributable to equity holders of
parent

Earnings/(loss) per share (pence)    6
Basic and diluted earnings/(loss)                                      (1.55)                              14.80
Basic and diluted loss from                                            (0.60)                             (1.68)
continuing operations


Note

1 The first half of 2006 has been restated to reflect the presentation of
  SwissQual as a discontinued operation, the reclassification of product
  development costs out of cost of sales and the reclassification of the costs 
  of customer service operations to cost of sales from selling and distribution
  expense.

2 Exceptional items are equivalent to material one-time items which were
  presented in previous financial information.





Consolidated statement of recognised income and expense

£ million                                                               First half               First half
                                                                              2007                     2006

Income and expense recognised directly in equity
Exchange differences on retranslation of foreign                             (1.0)                    (3.9)
operations
Actuarial gains/(losses) on defined benefit pension plans                    (2.6)                      6.8

                                                                             (3.6)                      2.9
Transfers to income statement
Exchange gain transferred to profit on sale                                      -                    (1.3)
Gains on cash flow hedges                                                        -                    (1.9)

Net expense recognised directly in equity                                    (3.6)                    (0.3)
Profit/(loss) for the period                                                (13.5)                    141.3

Total recognised income and expense for the period                          (17.1)                    141.0
attributable to the equity holders of parent





Consolidated statement of changes in equity

£ million                                                               First half               First half
                                                                              2007                     2006

Total recognised income and expense                                         (17.1)                    141.0
New shares issued                                                              2.5                      1.0
Share-based payment                                                            1.0                      2.7
On-market share repurchase                                                   (4.2)                    (8.2)
Employee share ownership trust                                                 0.8                      0.4
Minority interests sold                                                          -                    (1.9)

Total movement                                                              (17.0)                    135.0
At 1 January                                                                 182.8                    122.2

At the end of the period                                                     165.8                    257.2



Consolidated balance sheet
                                                                  1 July            2 July        31 December
£ million                                                           2007              2006               2006

Assets
Non-current assets
Intangible assets                                                   57.7              96.3               63.3
Property, plant and equipment                                       17.8              27.7               25.3
Trade and other receivables                                          1.4               1.6                1.4
Cash on deposit                                                      7.7                 -                8.5
Defined benefit pension plan surplus                                   -               4.3                2.4
Deferred tax                                                         1.0               1.1                1.2

                                                                    85.6             131.0              102.1

Current assets
Inventories                                                         18.8              32.3               25.4
Trade and other receivables                                         52.8              59.5               63.8
Derivative financial instruments                                     0.3               0.4                0.1
Cash and cash equivalents                                          106.9             146.3               97.6

                                                                   178.8             238.5              186.9

Assets held in disposal group held for sale                          5.6                 -                  -

Total assets                                                       270.0             369.5              289.0

Liabilities
Current liabilities
Trade and other payables                                          (52.5)            (67.6)             (61.8)
Current tax                                                       (30.7)            (31.1)             (30.5)
Provisions and other liabilities                                   (6.8)             (3.3)              (5.9)

                                                                  (90.0)           (102.0)             (98.2)

Non-current liabilities
Trade and other payables                                           (0.8)             (1.0)              (0.5)
Defined benefit pension plan deficit                               (0.7)             (0.9)              (1.4)
Provisions and other liabilities                                   (8.2)             (8.4)              (6.1)

                                                                   (9.7)            (10.3)              (8.0)

Liabilities included in disposal group held for sale               (4.5)                 -                  -

Total liabilities                                                (104.2)           (112.3)            (106.2)

Net assets                                                         165.8             257.2              182.8

Capital and reserves
Share capital                                                       32.0              32.3               32.5
Share premium account                                               13.7               8.7               10.6
Capital redemption reserve                                           0.7                 -                  -
Capital reserve                                                      4.7               6.8                5.5
Translation reserve                                                (7.1)               0.3              (6.1)
Retained earnings                                                  121.8             209.1              140.3

Total equity                                                       165.8             257.2              182.8


Consolidated cash flow statement

                                                                             First half           First half
£ million                                                    Notes                 2007                 2006

Cash flows from operating activities
Cash flows from operations                                   7                     15.4               (49.9)
Tax paid                                                                          (0.5)                (2.7)

Net cash inflow /(outflow) from operating activities                               14.9               (52.6)

Cash flows from investing activities
Interest received                                                                   2.2                  2.1
Transfer from long term deposit                                                     0.7                    -
Disposal of operations                                                                -                278.5
Purchase of property, plant and equipment                                         (2.4)                (8.4)
Purchase of intangible assets                                                     (0.3)                    -
Proceeds from sale of property, plant and equipment                                 0.1                  0.2
Acquisition of subsidiaries                                                       (4.0)               (32.6)

Net cash (used in)/from investing activities                                      (3.7)                239.8

Cash flows from financing activities
Interest paid                                                                         -                (0.9)
Costs associated with the repayment of loan notes and                                 -                (9.7)
swap break fees
Proceeds from the issue of share capital and employee                               3.3                  1.4
share ownership trust
On-market share repurchase                                                        (4.2)                (7.2)
Repayment of borrowings                                                               -               (95.6)
New borrowings                                                                        -                 23.0

Net cash used in financing activities                                             (0.9)               (89.0)

Net increase in cash and cash equivalents                                          10.3                 98.2
Cash and cash equivalents at the beginning of the period                           97.6                 48.8
Transfer of cash and cash equivalents to assets of                                (0.5)                    -
disposal group held for sale
Effect of exchange rate changes                                                   (0.5)                (0.7)

Cash and cash equivalents at the end of the period                                106.9                146.3




Notes to the financial information


1      Basis of preparation



The consolidated interim financial information has been prepared on the basis of
the accounting policies set out in the Group's statutory accounts for the year
to 31 December 2006, which have been filed with the Registrar of Companies.  The
consolidated interim financial information is unaudited but has been reviewed by
the auditors.  The consolidated interim financial information does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.  The comparative financial information for the year to 31 December 2006 is
based on the statutory accounts for that period apart from as stated below.  The
auditors' report on those accounts was unqualified and did not contain a
statement made under Section 237(2) or Section 237(3) of the Companies Act 1985.



The Group has reclassified product development costs out of cost of sales and is
disclosing these costs separately in the income statement.  The change has been
made to improve the transparency of the Group's results.



The costs of customer service operations have been reclassified from selling and
distribution expense to cost of sales.  This reflects the increasing proportion
of revenues derived from the provision of added value services, and the Board
has concluded that this classification is a fairer representation of the
commercial operations and the gross profit achieved by the Group.



Comparatives have been restated accordingly.



The Interim Report for the period ended 1 July 2007 was approved by the
directors on 9 August 2007.


2     Segmental analysis

                                                                                                     
£ million                                                                                            Continuing
                                  Performance     Service                                     Non-   operations
                                     Analysis   Assurance  Communications      Systems   segmental        Total    

First half 2007
Revenue                                  80.6        16.5              97.1       17.1           -        114.2

Operating profit/(loss) before            4.5         0.9               5.4        1.7       (2.1)          5.0
exceptional items
Exceptional items (note 5)              (7.6)       (2.7)            (10.3)          -       (2.3)       (12.6)

Operating profit/(loss)                 (3.1)       (1.8)             (4.9)        1.7       (4.4)        (7.6)

Other information
Product development                      18.8         2.8              21.6        1.2           -         22.8
Share-based payment                       0.7         0.2               0.9          -         0.1          1.0
Intangible amortisation                   0.4           -               0.4          -           -          0.4

First half 2006
Revenue                                  90.5        24.9             115.4       18.8           -        134.2

Operating profit/(loss) before            4.6         0.1               4.7        2.5       (3.0)          4.2
exceptional items and goodwill
impairment
Exceptional items (note 5)              (1.5)       (2.4)             (3.9)          -           -        (3.9)
Goodwill impairment                         -       (9.5)             (9.5)          -           -        (9.5)

Operating profit/(loss)                   3.1      (11.8)             (8.7)        2.5       (3.0)        (9.2)

Other information
Product development                      22.6         5.9              28.5        1.2           -         29.7
Share-based payment                       1.5         0.6               2.1        0.1         0.2          2.4
Intangible amortisation                   0.1           -               0.1          -           -          0.1



2     Segmental analysis continued


£ million                                                                                            Continuing
                                  Performance     Service                                     Non-   operations
                                     Analysis   Assurance  Communications      Systems   segmental        Total    

Year 2006
Revenue                                 179.5        43.6             223.1       35.8           -        258.9

Operating profit/(loss) before           10.6       (1.1)               9.5        4.7       (5.8)          8.4
exceptional items and goodwill
impairment
Exceptional items                       (3.8)       (5.3)             (9.1)          -         0.3        (8.8)
Goodwill impairment                         -      (19.1)            (19.1)          -           -       (19.1)

Operating profit/(loss)                   6.8      (25.5)            (18.7)        4.7       (5.5)       (19.5)

Other information
Product development                      42.0         9.5              51.5        2.3           -         53.8
Share-based payment                       3.6         1.2               4.8        0.1         0.3          5.2
Intangible amortisation                   0.5           -               0.5          -           -          0.5



Revenue and operating profit for discontinued operations is disclosed in note 4.


3     Geographical analysis

                                                                        First half               First half
£ million                                                                     2007                     2006
Revenue by market
Continuing operations
Europe                                                                        21.9                     20.7
North America                                                                 61.1                     79.8
Asia Pacific, Rest of Americas, Africa                                        31.2                     33.7

                                                                             114.2                    134.2
Revenue by source
Continuing operations
Europe                                                                        32.0                     31.8
North America                                                                 72.6                     92.3
Asia Pacific, Rest of Americas, Africa                                         9.6                     10.1

                                                                             114.2                    134.2
Average exchange rates
US dollar                                                                     1.97                     1.79
Euro                                                                          1.48                     1.46



4     Discontinued operations

                                                                        First half               First half
£ million                                                                     2007         2006 (restated)1

Revenue                                                                        3.4                     32.0

Operating profit/(loss)                                                      (3.4)                      0.9
Share of profit of associates                                                    -                      0.2
Profit on disposal of operations                                                 -                    165.3
Loss recognised on the measurement to fair value less                        (4.5)                        -
costs to sell
Net finance costs                                                                -                    (0.1)

Profit/(loss) before tax                                                     (7.9)                    166.3
Tax                                                                          (0.4)                    (0.8)
Tax on the disposal of operations                                                -                    (8.2)

Profit/(loss) for the period                                                 (8.3)                    157.3


Note

1 Restated to reflect the presentation of SwissQual as a discontinued operation.



Discontinued operations relate to the HellermannTyton Division which was sold on
15 February 2006 and SwissQual which has been classified as a discontinued
operation at 1 July 2007.  The sale of SwissQual was completed on 5 July 2007.
SwissQual was included within the Performance Analysis division.


5     Exceptional items


                                                                        First half               First half
£ million                                                                     2007         2006 (restated)1

Restructuring costs                                                            3.5                      3.9
Lease provisions                                                               3.7                        -
Write-down of redundant assets                                                 5.4                        -

                                                                              12.6                      3.9


Note

1 Restated to exclude the effect of the inventory absorption adjustment.



Exceptional items are discussed in more detail in the interim report under Group
financial performance.


6     Earnings/(loss) per share

                                                               First half         First half            Year
                                                                     2007               2006            2006

Earnings/(loss) per share (pence)
Basic and diluted                                                  (1.55)              14.80           11.75
Basic and diluted from continuing operations                       (0.60)              (1.68)          (2.45)

Adjusted                                                             0.41               0.67            1.73
Adjusted from continuing operations                                  0.85               0.65            1.48


Weighted average number of shares in issue (million)
Basic and adjusted                                                  873.7              954.5           925.9
Dilutive potential of employee share options                         10.5                6.1             3.8

Diluted                                                             884.2              960.6           929.7


£ million                                                      Continuing       Discontinued           Total
                                                               operations         operations      operations

First half 2007
Profit/(loss) for the year attributable to equity holders           (5.2)              (8.3)          (13.5)
of parent
Exceptional items                                                    12.6                  -            12.6
Loss recognised on the measurement to fair value less                   -                4.5             4.5
costs to sell

Adjusted earnings attributable to equity holders of                   7.4              (3.8)             3.6
parent



First half 2006 (restated)1, 2
Profit/(loss) for the year attributable to equity holders          (16.0)              157.3           141.3
of parent
Exceptional items                                                     3.9                  -             3.9
Goodwill impairment                                                   9.5                  -             9.5
Costs associated with the repayment of loan notes                     8.8                  -             8.8
Profit on the disposal of operations                                    -            (157.1)         (157.1)

Adjusted earnings attributable to equity holders of                   6.2                0.2             6.4
parent



Year 2006 (restated)1
Profit/(loss) for the year attributable to equity holders          (22.7)              131.5           108.8
of parent
Exceptional items                                                     8.8                  -             8.8
Goodwill impairment                                                  19.1               27.7            46.8
Costs associated with the repayment of loan notes                     8.8                  -             8.8
Profit on the disposal of operations                                    -            (156.9)         (156.9)
Prior year tax credit                                               (0.3)                  -           (0.3)


Adjusted earnings attributable to equity holders of                  13.7                2.3            16.0
parent


Note

1 The first half of 2006 and the year 2006 have been restated to present
  SwissQual as a discontinued operation.

2 Adjusted earnings for the first half of 2006 has been restated to include
  share-based payment and intangible amortisation.


7     Reconciliation of profit/(loss) before tax to cash generated from operations

                                                                        First half               First half
£ million                                                                     2007         2006 (restated)1

Continuing operations
Operating loss                                                               (7.6)                    (9.2)
Goodwill impairment                                                              -                      9.5
Amortisation of intangible assets                                              0.4                      0.1
Depreciation of property, plant and equipment                                  5.8                      6.6
(Profit)/loss on disposal and impairment of property,                          3.0                    (0.1)
plant and equipment
Share-based payment                                                            1.0                      2.4
Deferred income received                                                       4.1                      0.4
Decrease/(increase) in receivables                                             4.6                    (2.9)
Decrease/(increase) in inventories                                             5.0                    (6.1)
Decrease in payables                                                         (2.5)                    (3.2)
Increase/(decrease) in provisions                                              2.6                    (2.1)
Retirement benefit obligations                                                   -                   (47.0)

Cash flows from continuing operating activities                               16.4                   (51.6)

Discontinued operations
Operating profit/(loss)                                                      (3.4)                      0.9
Amortisation of intangible assets                                              0.6                      0.8
Depreciation of property, plant and equipment                                  0.2                      1.7
Profit on disposal of property, plant and equipment                              -                    (0.1)
Share-based payment                                                              -                      0.3
Decrease/(increase) in receivables                                             3.0                    (0.1)
Increase in inventories                                                      (0.2)                        -
Decrease in payables                                                         (1.2)                    (1.8)


Cash flows from discontinued operating activities                            (1.0)                      1.7

Cash flows from operating activities                                          15.4                   (49.9)



Note

1 The first half of 2006 has been restated to present SwissQual as a
  discontinued operation.


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