Trading Statement

Quadnetics Group plc ("Quadnetics", "the Group" or "the Company") Post-Close Trading Update Quadnetics Group plc, a leader in advanced surveillance technology and security networks, provides an update on trading following the end of the 12-month period to 31 May 2010. As previously announced, the Company has changed its year end from 31 May to 30 November, and the current financial year therefore encompasses the 18-month period ending 30 November 2010. The Board is pleased to report that trading in the second six months of this extended financial year has been, as anticipated, much stronger than in the first six months. Underlying profits* for the 12 months to 31 May 2010 are expected to be in line with market expectations. Exceptional reorganisation costs of approximately £900,000 have been incurred in the same period, being predominantly the final elements of the Group restructuring described in last year's annual report. No material further reorganisation costs are anticipated in the remainder of this financial year. Consolidated net cash balances as at 31 May 2010 were approximately £4.8 million. During the second six months of the financial year there were substantial improvements in the performance of the Synectics Networks division in the Middle East, as the benefits of the restructuring of Synectics' activities in that region began to come through, and in the US, where business in the casino security market has picked up markedly after many planned projects were delayed during the recession. Synectics Mobile Systems also delivered much better performance, due mainly to increased sales to its rail and defence customers. The momentum of increased sales was particularly strong towards the end of the period across all divisions. Notable contract wins in the six months included: -         £1.7 million full security system for the new Pembroke gas-fired power station in Milford Haven; -         Combined technology supply (Synectics Network Systems) and systems integration (Integration & Managed Services Division) for three city centre security systems; -         Major upgrade to the East Coast Mainline security system; -         3-year contract with Stagecoach for on-bus security systems, with an anticipated value of £3.7 million; -         $1.5 million analogue-to-digital upgrade of Stratosphere Casino in Las Vegas (plus letter of intent for an additional casino from the same group); -         Follow-on orders for on-board CCTV on the Docklands Light Railway; and -         7 major orders from the oil & gas industry for explosion rated CCTV, many incorporating Synectics command and control software. Overall, the Board is pleased with the progress the Company is now making following the major restructuring completed by the new senior management team over the past year. Apart from the lower fixed cost base, an important objective of the restructuring was to increase dramatically the focus on cross-selling the Group's technology, systems integration and service capabilities across its three major specialist customer sectors: high security infrastructure protection, mobile surveillance and oil & gas. The tangible benefits of these efforts are now evident, and we are confident they will provide the catalyst for a trend of increasing margins and quality of earnings over the coming years. Quadnetics will issue a second interim report, covering results for the 12 months to 31 May, on or around 28 July 2010. * that is, profit before tax, exceptional reorganisation costs and share-based payments For further information, please contact: Quadnetics Group plc Tel: +44 (0) 1527 850080 John Shepherd, Chief Executive Email: john.shepherd@quadnetics.com <mailto:john.shepherd@quadnetics.com> Brewin Dolphin Corporate Advisory & Broking Tel: +44 (0) 845 213 4726 Neil Baldwin Buchanan Communications Limited Tel: +44 (0) 207 466 5000 Tim Anderson / Isabel Podda [HUG#1423402]

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