Final Results

Quadnetics Group PLC
29 September 2003




Press Release                                              29 September 2003




                              Quadnetics Group plc

               Preliminary Results for the year ended 31 May 2003



Quadnetics Group plc, a leader in the design, integration and control of
advanced CCTV and networked video systems, reports its Preliminary Results for
the year ended 31 May 2003.



Highlights


-      Sales up by over 50% to £20.3 million (2002: £13.4 million)

-      Operating profit of £1.4 million (2002: £0.1 million)

-      Profit before tax £1.4 million (2002: loss of £0.8 million)

-      Strengthened balance sheet

-      Dividend payments recommenced at 2p per share





Commenting on the results, Russ Singleton, Chief Executive, said:  'I am
delighted to report that the Group has met or exceeded all its primary
objectives this year.  Our leading position in the high-complexity end of the
CCTV and security systems market, combined with a broad range of technical and
commercial capability, has allowed us to capture a significant share of the
market.  As a result, our sales increased by over 50 per cent to £20.3 million
and our operating profit rose from £0.1 million to £1.4 million, representing a
return on sales of 7 per cent.



'Many of our products have become industry standards and we continue to develop
new products which we believe will become the accepted systems of the future.
This year Quadnetics was involved in one of the largest and most technically
challenging CCTV systems seen so far in the UK, and has strengthened its
successful relationships with large corporate customers such as NCP.  Our
objectives are to continue to build on the success to date and also to develop
the international side of our business, which has already begun through
partnerships with IBM and Barco.  We look forward to another successful year.'




For further information, please contact:

Quadnetics Group plc                                   Tel: [phone]
Russ Singleton
Email: [e-mail]


Brewin Dolphin Securities
Neil Baldwin                                           Tel: [phone]



Media enquiries:

Bankside Consultants Limited                           Tel: [phone]
Peter Curtain / Ariane Vacher
Email: [e-mail]



Chairman's Statement



The Company has delivered a strong performance in the year to 31 May 2003.  I am
therefore pleased to announce, subject to shareholder approval, the
recommencement of dividend payments.



After several years of hard work and investment, the Company has established a
pre-eminent position in the market for advanced and complex CCTV and security
systems, and the financial rewards are now being realised.



Sales improved by more than 50 per cent to £20.3 million from £13.4 million last
year, and profit before tax increased to £1.4 million.  No tax is payable for
the year due to the benefit of brought forward losses.



The Group balance sheet at 31 May 2003 is in a strong position with net assets
of £5.5 million, and minority interests fully eliminated following the issue of
987,800 Ordinary shares to acquire the outstanding 21% interest in Quadrant
Video Systems plc and Synectic Systems Limited. The Group finished the year with
net funds of £3.3 million compared with net debt of £0.9m at 31 May 2002,
although this was partly an overly flattering position because of unsustainably
favourable cash collections on a number of contracts shortly before the
year-end. Nevertheless the underlying position was, and remains, positive.



Your Board is recommending the payment of a dividend of 2 pence per share, which
will be paid on 10 December 2003 to shareholders on the register on 7 November
2003.



Our industry is robust and growing rapidly as it is recast in the digital era.
We are seeing rapid and sustained growth in demand as the benefits of advanced
CCTV products and services gain recognition.  Our position within that industry
is assured by virtue of our dominance of the public space surveillance sector of
the market and our evolving product line, which utilises advanced proprietary
technology.



We are moving rapidly to the position of being suppliers of products as well as
projects.  Our award winning products, including Synergy control system and TLL
(Time Lapse Later) video data management software, have generated enthusiastic
interest across the whole video imaging market.



We are confident of significant further advances in the Group's financial
performance, and we anticipate making further announcements in relation to
ongoing business within the next few months.



Peter Rae
Chairman


Consolidated Profit & Loss Account
For the year ended 31 May 2003


                                                                                Unaudited
                                                                                     2003            2002
                                                                   Notes            £'000           £'000
Turnover                                                             1
Continuing operations                                                              20,299          13,392
Discontinued operations                                                                 -           4,659
                                                                                   20,299          18,051
Less share of joint venture's turnover                                                  -           (308)
Group turnover                                                                     20,299          17,743
Cost of sales                                                                    (15,110)        (14,125)
Gross profit                                                                        5,189           3,618
Net operating expenses                                                            (3,773)         (3,782)
Operating profit/(loss)
Continuing operations                                                               1,416             102
Discontinued operations                                                                 -           (266)
Group operating profit/(loss)                                                       1,416           (164)
Share of operating profit in discontinued joint venture                                 -              67
Share of operating profit in discontinued associate                                     -              13
Total operating profit/(loss)                                                       1,416            (84)
Exceptional item - discontinued operations                           2                  -           (518)
Profit/(loss) before interest                                                       1,416           (602)
Net interest payable                                                 3                (9)           (150)
Profit/(loss) before taxation                                                       1,407           (752)
Tax charge on ordinary activities                                    4                  -               -
Profit/(loss) on ordinary activities after taxation                                 1,407           (752)
Minority interests                                                                  (232)               8
Profit/(loss) on ordinary activities after taxation and minority                    1,175           (744)
interests
Dividends                                                            5              (150)               -
Retained profit/(loss) for the year                                                 1,025           (744)

Basic earnings/(loss) per ordinary share                             6              17.4p         (11.6)p
Diluted earnings/(loss) per ordinary share                           6              17.0p         (11.6)p




Consolidated Balance Sheet
31 May 2003

                                                                   Notes        Unaudited
                                                                                     2003            2002

                                                                                    £'000           £'000
Fixed assets
Intangible assets                                                    7              1,233              32
Tangible assets                                                                       501             555
                                                                                    1,734             587
Current assets
Stocks                                                                              1,767           1,973
Debtors                                                                             4,375           6,489
Cash at bank and in hand                                                            3,376               -
                                                                                    9,518           8,462

Creditors: amounts falling due within one year                                    (5,722)         (5,656)

Net current assets                                                                  3,796           2,806
                                                                                                 

Total assets less current liabilities                                               5,530           3,393

Creditors: amounts falling due after more than one year                              (25)            (59)

Provisions for liabilities and charges                                               (48)             (8)

Net assets                                                                          5,457           3,326

Capital and reserves

Called up share capital                                              8              1,496           1,288

Share premium account                                                9              3,770           6,934

Other reserves                                                       9                835           4,387

Profit and loss account                                              9              (644)         (9,557)

Equity shareholders' funds                                                          5,457           3,052

Equity minority interest                                             8                  -             274

                                                                                    5,457           3,326






Consolidated Cash Flow Statement
For the year ended 31 May 2003

                                                                                Unaudited
                                                                                     2003            2002
                                                                   Notes            £'000           £'000

Net cash inflow/(outflow) from operating activities                                 3,719         (1,228)

Returns on investments and servicing of finance                                      (14)            (89)

Net capital expenditure and financial investment                                     (88)           (301)

Acquisitions and disposals                                           10               593           1,339

Cash inflow/(outflow) before financing                                              4,210           (279)

Financing                                                                            (14)            (68)

Increase/(decrease) in cash                                                         4,196           (347)



Statement of Total Recognised Gains and Losses
For the year ended 31 May 2003
                                                                                     2003            2002
                                                                                    £'000           £'000
Total gains/(losses) recognised since the last annual report:
Consolidated profit/(loss) after taxation and minority interests                    1,175           (744)



Reconciliation of Movements in Shareholders' Funds
For the year ended 31 May 2003


                                                                  Notes              2003            2002
                                                                                    £'000           £'000
Total recognised gains/(losses) in the year                                         1,175           (744)
Issue of shares                                                       8             1,380               -
Proposed dividend                                                                   (150)               -
Goodwill previously written off to reserves                                             -             220
Net movement in shareholders' funds                                                 2,405           (524)
Opening shareholders' funds                                                         3,052           3,576
Closing shareholders' funds                                                         5,457           3,052




Notes


  1. Continuing operations comprise the businesses of Quadrant Video Systems plc ('QVS') and Synectic Systems
     Limited ('Synectics').

     Discontinued operations comprise Axiom Design & Print Limited, Quadrant Systems Limited, the Group's joint
     venture company, Quest Flight Training Limited, and the Group's associated company Quadrant Visual
     Solutions Limited all of which were sold in the year ended 31 May 2002.

  2  The exceptional item in 2002 arose on the disposal of the Group's interests in commercial printing and
     flight simulation, and a 21% interest in QVS and Synectics.

  3. Net interest payable in 2002 includes £68,000 in respect of net interest payable by joint ventures and
     associates.

  4. No tax charge arises in 2003 owing to the availability of tax losses brought forward.  At 31 May 2003 the
     Group has tax losses available to be carried forward against the future taxable profits of certain Group
     companies of approximately £1.6 million, the benefit of which will only be realised over a number of
     years.

  5. Following the completion of the capital reduction, noted in 9 below, the Company is now able to recommence
     the payment of dividends, and the Directors recommend the payment of a final dividend of 2p per share,
     totalling £150,000 on 10 December 2003 to shareholders registered on 7 November 2003.

  6. The calculation of basic earnings per ordinary share is based on the profit after taxation and minority
     interests for the year of £1,175,000 (2002: loss £(744,000)) and on 6,766,627 shares, being the weighted
     average number of shares in issue and ranking for dividend during the year (2002: actual number of shares
     - 6,439,956).

     The calculation of diluted earnings per share in the current year is based on the profit after taxation
     and minority interests for the year of £1,175,000 and on 6,904,185 shares, being the weighted average
     number of shares that would be issued on conversion of all the dilutive potential ordinary shares into
     ordinary shares.

     Diluted earnings per share for 2002 was the same as basic earnings per share because there was no dilution
     caused by share options outstanding at the end of that year.

  7. Intangible assets represent goodwill arising on consolidation and include additions in the year of £1.2
     million arising from the acquisition of SJC 120 Limited explained in note 8.

  8. During the year the Company exercised a call option to acquire SJC 120 Limited, a company which held a 21%
     interest in both QVS and Synectics and which was owned by four managers of those two companies.

     As a result of the option exercise 987,800 ordinary shares of 20p each were issued to the four managers as
     consideration for this purchase under the terms of an agreement approved by shareholders on 27 February
     2002.

     Following this acquisition there were no other minority interests in the Group.

     A further 50,000 ordinary shares of 20p each were issued during the year following the exercise of options
     over that number of shares.

  9. Following approval by the Company's shareholders at an extraordinary general meeting on 12 February 2003
     and the subsequent approval by the High Court on 5 March 2003, the Company cancelled £4,219,438 standing
     to the credit of the capital redemption reserve and reduced the balance on the share premium account by
     £4,336,000 to eliminate the deficit on the Company's profit and loss account. An amount of £119,000 was
     not required to eliminate the deficit at the date of the capital reduction and therefore, in accordance
     with the undertaking given to the High Court, this amount has been transferred to a Special reserve,
     included within Other reserves.

 10. Net cash inflows from acquisitions and disposals include £600,000 of deferred consideration from the
     disposal of Quadrant Systems Limited and Quest Flight Training Limited.

 11. The preliminary results for the year have not been audited by the Group's auditors and do not constitute
     statutory accounts. The comparative figures for 2002 have been abridged from the statutory accounts for
     the year ended 31 May 2002. The Auditors' opinion on these accounts was unqualified and did not contain
     any statements under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the year
     ended 31 May 2002 have been filed with the Registrar of Companies.

 12. Copies of this preliminary statement are available from Quadnetics Group plc, North Court House, Morton
     Bagot, Studley, Warwickshire B80 7EL or on the Company website at www.quadnetics.com.



                                    - Ends -


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