Final Results

Quadnetics Group PLC
15 September 2005


Press Release                                                 15 September 2005



                              Quadnetics Group plc

               Preliminary Results for the year ended 31 May 2005



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 2005.



Highlights


-    Sales                                      £26.8 million (2003/04: £18.1m)
-    Profit before tax                          £2.3 million (2003/04: £1.9m)
-    Underlying profit before tax               £2.7 million (2003/04: £2.3m)
-    Underlying earnings per share              20.0p (2003/04: 21.2 p)
-    Proposed final dividend                    3p per share, making 4p for the year



Commenting on the results, Russ Singleton, Chief Executive, said:  'Synectics
has continued to make considerable progress, especially in the North American
market where it has won a number of digital security systems contracts against
worldwide competition from major companies.



'In the UK there has been evidence of renewed commitment to CCTV security from
the public sector as well as wider opportunities for on-vehicle transport CCTV
going forward. In the current year we expect a return to growth from these areas
of the business, and overall good progress in the Group's financial results.'






For further information, please contact:
Quadnetics Group plc                                   Tel: [phone]
Russ Singleton
Email: [e-mail]


Brewin Dolphin Securities
Neil Baldwin                                           Tel: [phone]



Media enquiries:


Abchurch                                               Tel: [phone]
Ariane Comstive
Email: [e-mail]



Chairman's Statement

During the year Quadnetics Group:

•  More than doubled sales of its Synectics proprietary security
systems and software

•  Established a presence in the large and rapidly growing North
American digital security systems market

•  Re-organised and expanded the capabilities of its UK transport
CCTV business.

Results

In the year to 31 May 2005, Quadnetics Group produced sales of £26.8 million
(2003/4: £18.1 million) on which it earned a profit before tax, and amortisation
of goodwill of £2.7 million (2003/04: £2.3 million, before exceptional costs of
£0.2 million). Profit before tax was £2.3 million (2003/04: £1.9 million).
Whilst these increases are pleasing, the comparison is somewhat flattered by
inclusion of the first full year of contribution from Look CCTV, acquired in
February 2004.

Underlying earnings per share were 20.0p (2003/04: 21.2p). The Board is
recommending payment of a final dividend of 3p per share, bringing the total
dividend for the year to 4p per share (2003/04: 3p).

The most noteworthy achievement in the financial year was Synectics' success in
winning a number of significant digital CCTV control system contracts in both
the UK and North America. These were won against worldwide competition from
major companies on the basis of being the best technical systems solution
available.

Synectics' sales for the year more than doubled to £7.7 million (2003/4: £3.6
million) , on which it earned very healthy operating margins. Further growth in
the North American market will be aided by the acquisition in May 2005 of the
trade and net assets of AlphaPoint LLC which, as Synectic Systems Inc., has now
become the company's North American sales and service base.

The potential of Synectics to achieve a significant global presence in the
market for digital CCTV systems and control software is becoming increasingly
clear, and success in this goal is the Group's key priority.

As set out in our interim statement, demand for public space CCTV security
systems in the UK was below the level of recent years, in part because of the
longer sales cycles associated with revised government funding processes.
Activity levels at Quadrant Video Systems, our UK security integration
subsidiary, picked up in the second half as predicted but not sufficiently to
make up for the earlier shortfalls. While still earning strong margins, Quadrant
Video's results for 2004/5 overall were below those of the previous year. There
is now evidence of renewed commitment to CCTV security from the public sector
and we expect a return to growth in the current year.

Look CCTV strengthened its leading position in the bus CCTV market during the
year, and made a strong contribution to Group earnings. The company moved to
larger premises and is being re-organised to form the core of the Group's wider
on-vehicle transport CCTV activities, which the Board sees as an important area
for future market growth and a key opportunity for Quadnetics as a whole.

Coex, the Group's specialist manufacturer of CCTV systems for the marine, and
oil and gas markets, performed satisfactorily, although with a result below
break-even as investment was made in people and systems. The Board is
particularly pleased with progress towards our objective of enabling
step-function growth at Coex through both widening the range of equipment and
software, including those from Synectics, it supplies in a given project, and
increasing the size and scope of projects it participates in. We expect to be
able to report on significant tangible progress in this area in the current
year.

Board

Last month the Company announced that Peter Rae was stepping down from the role
of Chairman due to increased business commitments elsewhere, but would continue
as a non-executive director for up to a year. Peter had been Chairman since
1998, and I would like to record our sincere thanks for his numerous and
important contributions in leading the Board over that time.

Outlook

During the past few years, the Group has made real progress towards positioning
itself as a serious player in its chosen sectors of the growing worldwide
electronic security market. We see this as a very attractive market for both the
short and long term.

Our core activity, digital CCTV security control systems, is currently competing
in a young, technology-led, relatively fragmented business, with all the
attendant challenges and opportunities that implies. That said, we are fully
anticipating that the current year will produce good progress in the Group's
financial results.

David Coghlan
15 September 2005




Consolidated Profit & Loss Account
For the year ended 31 May 2005




                                                  Before goodwill                  Unaudited
                                                     amortisation
                                                            £'000       Goodwill        2005        2004
                                                                    Amortisation       Total       Total
                                            Notes                          £'000       £'000       £'000

Turnover                                        1          26,761              -      26,761      18,079
Cost of sales                                            (18,107)              -    (18,107)    (11,570)
Gross profit                                                8,654              -       8,654       6,509
Net operating expenses                                    (6,132)          (396)     (6,528)     (4,637)
Operating profit                                            2,522          (396)       2,126       1,872
Net interest receivable                                       139              -         139          42
Profit on ordinary activities before                        2,661          (396)       2,265       1,914
taxation
Tax charge on ordinary activities:
  Tax charge on results for the year            4                                      (350)       (494)
  Exceptional tax credit                        4                                        302           -
                                                                                        (48)       (494)
Profit on ordinary activities after                                                    2,217       1,420
taxation
Dividends                                       5                                      (467)       (346)
Retained profit for the year - transferred                                             1,750       1,074
to reserves

Basic earnings per ordinary share               6                                      19.2p       16.4p
Diluted earnings per ordinary share             6                                      19.1p       16.3p
Underlying earnings per ordinary share          6                                      20.0p       21.2p



All activities are continuing.

In 2004 net operating expenses included exceptional costs of £240,000 and
amortisation of goodwill amounting to £174,000.


Consolidated Balance Sheet
31 May 2005




                                                                                 Unaudited            2004
                                                                       Notes          2005           £'000
                                                                                     £'000
Fixed assets
Intangible assets                                                          7         9,183           7,721
Tangible assets                                                                      1,280             956
                                                                                    10,463           8,677
Current assets
Stocks                                                                               3,040           2,710
Debtors                                                                              9,896           7,945
Cash at bank and in hand                                                             3,562           4,711
                                                                                    16,498          15,366

Creditors: amounts falling due within one year                                     (7,878)         (7,767)

Net current assets                                                                   8,620           7,599

Total assets less current liabilities                                               19,083          16,276

Creditors: amounts falling due after more than one year                                (3)           (375)

Provisions for liabilities and charges                                     8       (1,102)            (83)

Net assets                                                                          17,978          15,818

Capital and reserves

Called up share capital                                                              2,341           2,305

Share premium account                                                               12,622          12,248

Other reserves                                                                         715             715

Profit and loss account                                                              2,300             550

Equity shareholders' funds                                                          17,978          15,818




Consolidated Cash Flow Statement
For the year ended 31 May 2005


                                                                               Unaudited
                                                                     Notes          2005             2004
                                                                                   £'000            £'000

Net cash inflow from operating activities                                          1,939                4
Returns on investments and servicing of finance                                      107               42
Taxation                                                                         (1,398)             (13)
Net capital expenditure and financial investment                                   (497)            (331)
Acquisitions                                                             9         (867)          (6,409)
Equity dividends paid                                                              (462)            (150)
Cash outflow before use of liquid resources and financing                        (1,178)          (6,857)
Management of liquid resources                                          10         2,500          (2,500)
Financing                                                                             29            8,192
Increase/(decrease) in cash                                                        1,351          (1,165)



Reconciliation of Net Cash Flow to Movements in Net Funds
For the year ended 31 May 2005
                                                                               Unaudited
                                                                      Notes         2005             2004
                                                                                   £'000            £'000

Increase/(decrease) in cash in the year                                            1,351          (1,165)
(Decrease)/increase in bank deposits                                     10      (2,500)            2,500
Decrease in debt and lease financing                                                  63               35
Change in net funds resulting from cash flows                                    (1,086)            1,370
Acquisitions                                                                           -            (410)
Movement in net funds in the year                                                (1,086)              960
Opening net funds                                                                  4,286            3,326
Closing net funds                                                                  3,200            4,286



Reconciliation of Movements in Shareholders' Funds

For the year ended 31 May 2005
                                                                               Unaudited
                                                                      Notes         2005             2004
                                                                                   £'000            £'000

Total recognised gains in the year                                                 2,217            1,420
Dividends                                                                 5        (467)            (346)
                                                                                   1,750            1,074
Issue of shares                                                                      410            9,287
Net movement in shareholders' funds                                                2,160           10,361
Opening shareholders' funds                                                       15,818            5,457
Closing shareholders' funds                                                       17,978           15,818





Notes


  1. Continuing operations comprise Quadnetics Group plc, Quadrant Video Systems plc, Synectic Systems Limited,
     Coex Limited and Look CCTV Limited.
  2. On 27 May 2005, Synectic Systems, Inc, a newly created subsidiary incorporated in Delaware, acquired the
     trade and assets of AlphaPoint LLC, a specialist provider of digital surveillance technology in North
     America, for a total consideration of up to $3.3 million, made up of $0.7 million in cash at completion,
     $0.2 million in Ordinary Shares, plus a further $0.4 million in Ordinary Shares and $2 million in cash
     dependent on the profits of the business over the next four years.  No material transactions arose on this
     business between 27 May and 31 May 2005, and accordingly no profit or loss or cashflows have been
     reflected in the results for the year.
  3. Exceptional administrative expenses in the year ended 31 May 2004 relate to bad debts incurred with
     subsidiaries of the Mayflower Corporation plc which went into receivership in March 2004.
  4. The 2005 tax charge on ordinary activities comprises a corporation tax charge of £594,000 offset by an
     exceptional tax credit of £302,000 in respect of previous years and a deferred tax credit of £244,000. The
     exceptional tax credit arises as a result of tax relief on share options exercised.
  5. The Directors recommend the payment of a final dividend of 3p per share (2004: 3p per share), totalling
     £351,000 on 7 December 2005 to shareholders registered on 11 November 2005. The full year dividend charge
     of 4p per share (2004: 3p per share) amounts to £467,000 (2004: £346,000).
  6. The calculation of basic earnings per ordinary share is based on the profit after taxation for the year of
     £2,217,000 (2004: £1,420,000)) and on 11,546,335 shares, being the weighted average number of shares in
     issue and ranking for dividend during the year (2004: 8,633,489).

     The calculation of diluted earnings per share is based on the profit after taxation for the year of
     £2,217,000 (2004: £1,420,000) and on 11,590,130 shares, being the weighted average number of shares that
     would be in issue after conversion of all the dilutive potential ordinary shares into ordinary shares
     (2004: 8,694,400).

     The calculation of underlying earnings per ordinary share is based on the profit after taxation for the
     year, but before deducting exceptional items and amortisation of goodwill, of £2,311,000 (2004:
     £1,834,000) and on 11,546,335 shares, being the weighted average number of shares in issue and ranking for
     dividend during the year (2004:  8,633,489).
  7. Intangible assets comprise goodwill and include additions in the year of £1.9 million arising from the
     acquisition of the trade and assets of AlphaPoint LLC by Synectic Systems, Inc.
  8. Provisions for liabilities and charges include £1,097,000 deferred contingent consideration for the trade
     and assets of AlphaPoint LLC.
  9. Cash outflows on acquisitions during the year reflect the following:

     (1) Initial outflows on the acquisition of the trade and assets of AlphaPoint LLC as set out in note 2
     above, amounting to £421,000; and

     (2) Deferred consideration of £446,000 arising from the acquisitions of Look CCTV and Coex in 2004.
 10. Cash inflows of £2.5 million shown as management of liquid resources represents a term investment in a
     bank deposit account which matured on 4 June 2004.
 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 2004 have been abridged from the statutory accounts for
     the year ended 31 May 2004. 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 2004 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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