E2V.L Regulatory News (E2V)

14 November 2011

e2v technologies plc

Half-year results for the six months to 30 September 2011

e2v technologies plc, the specialist provider of technology solutions for high performance systems announces its half-year results for the six months ended 30 September 2011:

·; Reported revenue up 9% to £115.2m, underlying*** revenue growth of 16%

·; Adjusted* operating profit up 22% to £20.0m reflecting underlying growth

·; Adjusted* operating profit margin of 17% (H1 2011: 16%)

·; Cash generated from operations of £17.0m (H1 2011: £16.9m)

·; Order book for delivery in coming 12 months of £120m (30 September 2010: £147m), as anticipated, given business mix

·; Good progress on strategic plan

·; Interim dividend of 1.3p up 8% (last year 1.2p)

The Board announces an interim dividend of 1.3 pence per share. This will be paid on 21 December 2011 to e2v shareholders on the register as at 2 December 2011.

Commenting on the results, Keith Attwood, Chief Executive said:

"e2v has performed strongly in the first half of the financial year ending 31 March 2012 and is ahead of the comparable period last year. Our industrial restructuring programme has been completed on plan, delivering the anticipated savings and a flexible cost base that provides additional resilience. Our order book for the coming 12 months reflects the anticipated change in the mix of our business and we have made considerable progress on our key strategic initiatives and our international expansion plans in Asia and the US.

The broader macro economic environment remains of concern and is reflected in more cautious buying behaviour by customers in certain sectors. Without further adverse macro economic developments, we expect trading for the remainder of this financial year to continue at a similar run rate as the first half and consequently, our outlook for the full year remains unchanged. The Board believes the Group is well positioned for the future as we continue to make progress in expanding our addressed markets."

Further enquiries:

Notes

Interim management report

Review of the half-year

SUMMARY

e2v has performed strongly in the first half of the financial year ending 31 March 2012 and is ahead of the comparable period last year. We have made considerable progress on our key strategic objectives and our international expansion plan which has expanded our addressed market and positions us as a leading provider of specialist technology for high performance systems.

Reported revenue increased by 9% in the first half to £115.2m (H1 2011: £105.4m). Underlying*** revenue increased by 16% to £98.5m (H1 2011: £84.6m).

Adjusted* operating profit of £20.0m was significantly ahead of the comparable period last year of £16.4m and represents a margin of 17% (H1 2011: 16%) in line with our updated target set in June 2011. The order book for delivery in the coming 12 months as at 30 September 2011 was £120m, as anticipated, a decrease of 18% compared with the position at the end of September last year.

We have repositioned the business and the completion of our industrial restructuring programme has delivered the anticipated savings and increased the flexibility of our cost base. Whilst the macro economic environment remains challenging, this restructuring provides us with additional resilience going forward.

Cash generated from operations was £17.0m. We have increased our investment in key research and development programmes by £2.4m to 7% of revenues and increased capital expenditure by £1.5m which supports our key growth initiatives. We returned to being dividend paying with a full year's payment of £7.6m being made in the period. Our net borrowings at 30 September 2011 were £32.0m, a decrease of £7.4m compared to 30 September 2010 of £39.4m.

Progress was made on a number of key strategic initiatives during the period. We have secured early orders for our industrial processing systems business and we have expanded our scope of supply in space imaging with wins in Brazil and Korea at the sub-system level. In electronic countermeasures (ECM), we have secured orders for our Microwave Power Modules (MPM) in Europe. We have continued our expansion in Asia and the US and strengthened the regional management teams.

We are now well positioned as a specialist technology company, providing enabling solutions to high value systems. We have expanded the markets we address with our new applications that deliver transformational economics through technology and our core applications focussed on higher value solutions for customers. We have delivered shareholder value in terms of profits and dividends ahead of expectations and the Board is committed to a progressive dividend policy.

BUSINESS OVERVIEW

RF power solutions

Sales for RF power solutions were in line with the prior year at £39.9m (H1 2011: £39.9m).

The RF power solutions division has three key applications: radiotherapy, ECM and industrial processing systems.

In radiotherapy we deliver high performance, high reliability products and provide the continuity for long term spares requirements that our radiotherapy customers require. Radiotherapy has delivered strong growth over the comparable period reflecting steady demand from Original Equipment Manufacturers (OEMs) for new systems and ongoing spares and on a sequential basis revenue is flat. In addition to the supply of components, we are developing a number of workstreams with customers for supply arrangements at a sub-system level.

We provide components and sub-systems for electronic countermeasure protection of high value air, land and naval platforms. As anticipated, ECM activity reflects continued lower demand in Europe. During the period we have secured a development contract for MPMs from a European OEM, because of our MPM's size, weight and performance. In the US we are making progress within the ALE-55 programme and are continuing to focus our engineering effort on our ultra wideband Travelling Wave Tube (TWT) development contract.

Our novel application of microwave and high power RF to the industrial processing of bulk materials delivers transformational economics in energy consumption and material yield improvements in established sectors. We have made good progress and secured further orders including an order to support an in-mine trial. During the period we have reached agreement for the first commercial field trial installation for our ProWave® vermiculite processing system and this has now been delivered. In October, this product was awarded the "green product of the year" in the British Engineering Excellence awards. We have made good progress on our development programmes and secured a further order for an RF generator to support research into a new potential mining application. Finally, we have also secured a £6.2m grant from the Regional Growth Fund following the completion of the due diligence process. These funds are accelerating our research and development programme and investment in the infrastructure in support of this growth opportunity.

The remaining product lines in the division largely provide technology for commercial and industrial applications and they continue to perform well relative to the prior year and steadily on a sequential basis.

Adjusted* operating profit decreased by 29% to £4.6m (H1 2011: £6.5m) due to accelerated investment into research and development and general start up costs of £2.1m for the industrial processing systems business.

The order book for this division at 30 September 2011 was lower at £63m (H1 2011: £78m), reflecting the anticipated reduction in European defence business and the cycle of multi-year radiotherapy customer orders.

High performance imaging solutions

Sales for High performance imaging solutions were up 7% to £32.3m (H1 2011: £30.1m).

The High performance imaging solutions division has three main applications: machine vision, space imaging and scientific imaging.

In machine vision, our camera platforms provide sensitive, high speed performance for high end inspection processes where quality and reliability are key customer requirements for applications such as semiconductor and electronics manufacturing inspection, food and beverage processing, ophthalmology and document imaging. Machine vision has delivered comparable underlying performance to the prior period, although there are some recent signs of softening demand. A new family of linescan cameras based on CMOS technology will be launched at the Vision show in Stuttgart in November which will offer significant performance improvements in this market.

We have a long established heritage of providing reliable, high performance, high quality space qualified imaging sensors and arrays for space science and astronomy applications and high speed, high resolution sensors for earth observation satellites. Space imaging has delivered significant growth over the comparable period reflecting the achievement of milestones on established programmes and progress on new projects. As we implement our strategy to widen our sub-system involvement, we are pleased to have received an order for a focal array sub-system for a Korean land based telescope and to have been selected to provide the camera for a ground based space science application in Brazil.

We support a range of other applications for our imaging technology including CMOS dental sensors and thermal imaging cameras. In aggregate, the remaining product lines in the division continue to show good underlying growth.

Adjusted* operating profit increased by 3% to £4.7m (H1 2011: £4.6m) in the prior period, reflecting the strong performance in space and science and the continued benefit of the restructuring plan, which has reduced the cost base.

The order book for this division at 30 September 2011 was £54m (H1 2011: £53m).

Hi-rel semiconductor solutions

Sales for Hi-rel semiconductor solutions increased 23% to £36.4m (H1 2011: £29.6m).

The Hi-rel semiconductor solutions division addresses two main sectors: Semiconductor Lifecycle Management (SLiM™) and aerospace and defence semiconductors.

SLiM™ is a new approach to obsolescence management for our aerospace and defence customers. This provides a proactive approach for managing critical components in aerospace and defence systems, where the original components can become obsolete during the lifetime of the system and offers the potential for lower cost and reduced risk over the lifetime of the assets. The SLiM™ programme continues to benefit from the successful delivery against its existing programmes and a further four new defence programmes in Europe and the US have been added in the period, as well as the extension of the Raytheon F15 contract to cover further product lines. We anticipate that these SLiM™ programmes will generate revenue of around £20m over their project terms in the coming ten years; this is not included in our current order book. Existing programmes account for c. £12m and the programmes secured in the period have added c. £8m. Subsequent to the period end, we were pleased to announce our strategic alliance with the semiconductor OEM Maxim Semiconductors Inc. to ensure extended availability of certain semiconductor product lines.

Aerospace and defence semiconductors has experienced strong demand for its test and assembly services in Grenoble and for its US product lines. The Application Specific Integrated Circuits (ASICs) product has experienced strong demand for legacy products whilst, as previously announced, there is no further product development being undertaken in these products.

Adjusted* operating profit increased by 40% to £11.5m (H1 2011: £8.2m), reflecting increased activity and the benefit from restructuring.

The order book for this division at 30 September 2011 was lower at £24m (H1 2011: £35m), primarily reflecting completion of the first phase of delivery against the 68k series microprocessor orders.

Central functions and all other businesses

Sales in the portfolio of businesses managed centrally increased by 16% to £6.6m (H1 2011: £5.7m). There has been continued growth in the sales of MiCS air quality sensors into the automotive markets, as well as the gas sensors products and the scientific instruments business.

The divisions are supported by group marketing and technology, group operations and support services including commercial, human resources, IT and finance, whose costs are largely included within divisional performance. Central costs not allocated relate to the management of e2v technologies plc and part of our sales expansion principally in Asia and were £1.9m (H1 2011: £1.0m).

GROUP OVERVIEW

The results for the first half of the financial year ending 31 March 2012 reflect the progress made on our strategy for growth and the benefits of completing our major restructuring plan.

Reported sales increased by 9% in the first half to £115.2m (H1 2011: £105.4m). This included 'one-off' revenue of £3.9m (H1 2011: £10.2m) and underlying*** growth was 16%. New business, being new products or new customers supplied so far in this financial year, made up approximately 15% of sales (H1 2011: 17%), more than the base of around 12% that we estimate is required to maintain renewal of our product portfolio. The proportion of sales generated from sub-systems and solutions in the period was steady at approximately 32% (H1 2011: 33%). Sales in the underlying products were £98.5m compared with £84.6m in the comparable period last year, with increased demand in radiotherapy and space partially offset, as anticipated, by lower demand in ECM.

In the main application segments, sales were up in radiotherapy by 14%, space by 126% and science by 30%. In aerospace and defence semiconductors, revenue was flat whilst machine vision was down by 16% on a reported basis but flat on an underlying basis, ECM was down by 53%. In the remainder of the Group's activities sales were up 7%. On a rolling 12 month basis the percentage of sales outside Western Europe have increased to 49% (H1 2011: 48%). Sales to Asia Pacific increased by 24% and sales to North America also increased by 11%, whilst sales to Western Europe increased by 4%.

Gross profit before exceptional items increased by 14% to £45.8m (H1 2011: £40.3m) due to the benefit of the additional sales and the cost reductions arising from the restructuring programme. Continued action to address low margin product lines, including rationalisation of the product portfolio, selective price increases, yield and other production improvements have also contributed to margins.

Research and development expenditure increased to £8.2m (H1 2011: £5.8m) representing 7% of revenue and reflects investment in the key programmes that support the growth strategy. The use of subcontract resource has continued, where necessary, to accelerate delivery on these key programmes and also provides agility and flexibility.

Selling and distribution costs decreased by £0.2m to £8.3m (H1 2011: £8.5m). This reflects the expansion in the US and Asian platforms offset by the cost savings made in Europe.

Administrative expenses, excluding amortisation of acquired intangibles, business improvement programme costs, profit on sale of Lincoln and fair value movements on foreign exchange contracts, decreased by 2% to £9.4m (H1 2011: £9.6m) reflecting the completion of restructuring activities.

Amortisation of acquired intangible assets decreased to £2.2m (H1 2011: £3.5m) as a result of a number of the acquired intangibles becoming fully amortised in the period. Fair value losses on foreign exchange contracts amounted to £0.8m (H1 2011: gains £0.8m). Business improvement programme expenses were £0.2m (H1 2011: £1.0m) reflecting the expected restructuring costs that are expensed as incurred.

The adjusted* operating profit margin increased to 17% (H1 2011: 16%) in line with our target we revised in June 2011.

Finance costs before exceptional items decreased by 34% to £1.6m (H1 2011: £2.5m) reflecting the lower levels of borrowings and the reduced margin payable on the bank facility entered into in July 2011. The resulting adjusted* profit before tax increased substantially to £18.4m (H1 2011: £13.9m).

The Group's restructuring programmes in the UK and France are substantially complete with the closure as planned of the front end wafer fabrication facility in Grenoble. Expenditure to date is £4.8m of which £4.2m has been charged against the provision established at 31 March 2010 and £0.6m which has been expensed in the period. These programmes have secured the net cost reduction target, and, along with other initiatives in the business, now provide a more resilient platform with some c. 18% of our labour cost and c.10% of support cost now being on a flexible basis.

Profit before tax amounted to £13.1m (H1 2011: £10.1m).

The underlying tax rate for the first half was 30% (H1 2011: 29%) due to the increase in the proportion of profits generated in France compared with the prior year.

Adjusted* earnings per share increased to 6.1p (H1 2011: 4.5p) and reported earnings per share amounted to 4.4p (H1 2011: 3.4p).

Operating cash flow in the first half was £17.0m (H1 2011: £16.9m) after an increase in working capital of £2.1m and restructuring payments made of £4.8m. Tax payments of £6.3m (H1 2011: £4.4m) were due to increased payments on account reflecting the improved profitability. After capital expenditure, other financing costs (including the payment of fees relating to refinancing of £0.8m), interim and final dividends totalling £7.6m and movements due to exchange rates, the overall increase in net borrowings in the period amounted to £3.9m. In the second half of this financial year, we anticipate that around £4m of the remaining £5m restructuring provision will be paid.

At 30 September 2011 the net borrowings amounted to £32.0m. The total drawings under the bank facility arrangement were £39.9m of which £33.5m was drawn in Sterling with the balance being drawn in US dollars. The unutilised facility (at 30 September 2011 exchange rates) is £41.0m, £21.4m of which is Sterling denominated, £4.8m is Euro dominated with the balance being US dollar denominated. Since the period end we have completed the purchase of a new facility in the US for e2v Aerospace and Defense Inc's operations at a cost of £4m and we anticipate incurring fit out costs of around £2m.

Operating working capital (defined as inventories, trade and other receivables less trade and other payables) has increased by £1.6m (4%) since 31 March 2011 to £42.4m. We anticipate that the increase will reverse in the second half of this financial year.

In July we completed a new revolving credit facility. The committed multicurrency revolving facilities are equivalent to c. £80m and are available for 4 years from 27 July 2011. Based on the Group's performance and net borrowings as at 30 September 2011, the margin payable is 140bps. This is almost half the level of the previous facility negotiated in autumn 2009.

The order book at 30 September 2011 was £146m (30 September 2010: £167m) of which £4.9m is for last time buy product, with £120m (30 September 2010: £147m) for delivery in coming 12 months.

Principal risks and uncertainties for the second half

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 20 and 21 of the Annual Report and Financial Statements for the year ended 31 March 2011, a copy of which is available on the Group website at e2v.com. The Board considers that these remain a current reflection of the risks and uncertainties facing the business for the remainder of the financial year. The risks identified relating to the restructuring programmes are reduced with its effective completion.

Outlook

Without further adverse macro economic developments, we expect trading for the remainder of this financial year to continue at a similar run rate as the first half and consequently, our outlook for the full year remains unchanged. The Board believes the Group is well positioned for the future as we continue to make progress in expanding our addressed markets.

C Geoghegan K Attwood

Chairman Chief Executive

Independent review report to e2v technologies plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2011 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and the related notes 1 to 12. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of half-yearly financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2011 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

Cambridge

11 November 2011

1. The maintenance and integrity of the e2v website is the responsibility of the Directors; the work carried out by the auditor does not involve consideration of these matters, and accordingly, the auditor accepts no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Consolidated income statement (unaudited)

Six months ended 30 September 2011

Consolidated statement of comprehensive income (unaudited)

Six months ended 30 September 2011

Consolidated statement of financial position (unaudited)

As at 30 September 2011

Consolidated statement of cash flows (unaudited)

Six months ended 30 September 2011

Consolidated statement of changes in equity (unaudited)

Six months ended 30 September 2011

Notes to the half-yearly financial statements

Six months ended 30 September 2011

1. Basis of preparation and significant accounting policies

Basis of preparation

These condensed half-yearly financial statements have been prepared in accordance with the accounting policies set out in the Group's 2011 Annual Report and in accordance with IAS 34 'Interim Financial Reporting' and the Disclosure and Transparency Rules of the Financial Services Authority. The condensed half-yearly financial statements have been prepared on the going concern basis as the Directors, having considered all relevant information, have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

These condensed half-yearly financial statements are unaudited but have been formally reviewed by the Company's auditors and their report to the Company is set out above. The financial information shown for the year ended 31 March 2011 in these condensed half-yearly financial statements does not constitute statutory financial statements as defined in Section 435 of the Companies Act 2006 and has been extracted from the Group's 2011 Annual Report which has been filed with the Registrar of Companies. The auditor's report on the financial statements contained within the Group's 2011 Annual Report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.

These condensed half-yearly financial statements were approved by the Board of Directors on 11 November 2011.

Significant accounting policies

During the period the Group has adopted the following new standards, amendments to standards and interpretations issued under IFRS:

Standards:

IAS 24, 'Related Party Disclosure (revised).

Improvements to International Financial reporting Standards (issued 2010).

Interpretations:

IFRIC 14, 'Prepayments of a Minimum Funding Requirement'.

IFRIC 19, 'Extinguishing Financial Liabilities with Equity Instruments'.

The adoption of these standards and interpretations has had no impact on the Group.

2. Segment information

The Group is organised into three operating divisions. These three divisions are organised and managed separately based on the key products they provide and each is treated as an operating segment and a reportable segment in accordance with IFRS 8, 'Operating Segments'.

The operating and reportable segments are:

RF power solutions which provides high performance electron devices and sub-systems in three main application areas: radiotherapy; electronic countermeasures; and industrial processing systems.

High performance imaging solutions which provides advanced Charged Coupled Devices (CCD) and Complimentary Metal Oxide Semiconductor (CMOS) imaging sensors and cameras in three main application areas: machine vision; space imaging; and scientific imaging.

Hi-rel semiconductor solutions which provides high reliability semiconductors and services in two main application areas: aerospace and defence semiconductors; and semiconductor lifecycle management under the Group's SLiMTM brand.

All other, reported below, includes the results of the Group's Instrumentation activities. These are not a separately reportable segment and for internal reporting purposes are combined with Centre-corporate, which includes those unallocated costs directly associated with the management of the Group's public quotation and other related costs arising for the corporate management of the Group along with treasury related activities.

As disclosed in note 4 to the financial statements for the year ended 31 March 2011, effective 1 April 2011, the management of the Thermal imaging cameras business unit (which during the year ended 31 March 2011 had been included within All Other) has been transferred to the High performance imaging solutions division. The disclosures for the six months ended 30 September 2010 and year ended 31 March 2011 have been restated to reflect the updated Group reporting structure.

Geographical information

The Group's revenue from external customers and information about its non-current assets by geographical location are detailed below:

3. Exceptional operating items and acquired intangible assets amortisation

After periods of consultation, business improvement programmes were provided for at the Group's Grenoble and Lincoln sites in the year ended 31 March 2010 and these programmes are now drawing to a close. Grenoble's front-end fabrication plant was closed during the period and a period of decommissioning is now being undertaken. Costs of £595,000 have been incurred in the six months ended 30 September 2011 (30 September 2010: £959,000) which principally relate to bonus payments to staff. These have been offset by a £403,000 reversal of previous impairment loss associated with plant and equipment installed in the front-end fabrication plant. This equipment will now either be redeployed or sold. During the year ended 31 March 2011, costs of £2,496,000 have been expensed in relation to moving production from Lincoln to Chelmsford, bonus payments to staff and termination costs.

Furthermore, in the 6 months ended 30 September 2011, payments of £4,218,000 (six months to 30 September 2010: £4,217,000 and six months to 31 March 2011: £5,964,000) have been made against the restructuring provision which had been established during year ended 31 March 2010.

In association with the closure of the front end fabrication plant in Grenoble a last time stock build programme was instigated in the previous year. This continued into the current period, with £1,665,000 (30 September 2010: £nil; 31 March 2011: £774,000) of inventory build during the period being provided against to recognise the excess level of inventory held.

The net impairment charge for the year ended 31 March 2011 was £nil and comprised a reversal of previous impairment loss on tangible fixed assets of £1,154,000 and an impairment loss of £1,154,000 relating to software.

4. Finance costs and finance revenue

5. Income tax

The tax charge for the period has been calculated on the basis of the Directors' best estimate of the underlying annual effective tax rate for the year of 29% (30 September 2010: 29%), consistent with the previous period.

From 1 April 2011, the UK government had reduced the main rate of UK corporation tax to 26%, previously having been 28% and the Finance Act 2011 reduced the main rate of UK corporation tax to 25% from 1 April 2012. The UK deferred tax balances have been restated accordingly.

Further reductions in the main rate of UK corporation tax have been announced which will be enacted annually in the following two years to bring the rate down to 23% from 1 April 2014. These changes had not been substantively enacted at the balance sheet date and consequently are not included in these financial statements. Further enacted tax changes are a reduction from 1 April 2012 in the rate of capital allowances applicable to plant and machinery and to integral features from 20% to 18% and from 10% to 8% respectively.

6. Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share are calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period adjusted for the effects of dilutive options.

In the Directors' judgment adjusted earnings per share is considered to more appropriately reflect the underlying performance of the business period on period.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

7. Dividends paid and proposed

On 11 November 2011 the Board declared an interim dividend of 1.3p per share, with a total dividend payment of £2,752,000. The interim dividend is to be paid on 21 December 2011 to shareholders registered at close of business on 2 December 2011 and is based on the number of shares in issue, excluding those held by the Employee Benefit Trust and the Company, at the date that these financial statements have been approved and authorized for issue. The actual payment may differ due to increases or decreases in the number of shares in issue between the date of approval of the financial statements and the record date of the interim dividend.

8. Property, plant and equipment

9. Contingent liabilities, capital commitments and post balance sheet event.

In the ordinary course of business, the Group may issue performance and advance payment guarantees to third parties. As at 30 September 2011 £2,519,000 (30 September 2010: £2,277,000; 31 March 2011: £2,603,000) were outstanding. The Directors are of the opinion that the risk to the Group associated with these guarantees is not material and consequently no provision is recorded.

At 30 September 2011, the Group had capital commitments of £1,825,000 (30 September 2010: £1,605,000; 31 March 2011: £1,137,000) principally relating to the acquisition of new plant and machinery. In addition, at 30 September 2011, the Group had committed to purchase a new facility for e2v Aerospace and Defense, inc. at a cost of $6,300,000. The transaction completed during October 2011. The Group anticipates incurring fit out costs of c. $2,800,000 in respect of this building in the second half of the current financial year.

10. Net borrowings

Net borrowings exclude capitalised borrowings costs which amounted to £770,000 at 30 September 2011 (30 September 2010: £2,290,000 and 31 March 2011 £1,390,000).

Effective 29 July 2011, the Group signed a new revolving credit facility which expires on 27 July 2015. At 30 September 2011 exchange rates, the facility was £80,886,000 (30 September 2010: £101,674,000 and 31 March 2011: £65,589,000, a combination of term loans and revolving credit facility). Provided covenants continue to be met, the draw downs under the revolving credit facility are at the discretion of the Group and consequently the loan is treated as non-current. At 30 September 2011, the Group had available £40,967,000 (30 September 2010: £47,205,000 and 31 March 2011: £24,617,000) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

11. Other post-employment and other employment benefits

In addition to the state pension scheme, the French subsidiary based in Grenoble has arrangements where there are obligations to provide termination benefits and benefits 'Medailles du Travail' - long service awards. These are unfunded arrangements and the actuarial liability has been calculated at 30 September 2011 by a qualified actuary using the projected unit credit method. The cost of providing these benefits is charged to the income statement in the period in which those benefits have been earned by the employees. During the period ended 30 September 2010, a plan amendment was enacted on the termination benefits plan, the liability of which is £206,000. This continues to be amortised over the remaining service life of the members of the plan.

12. Related party disclosures

Transactions between Group subsidiaries have been eliminated on consolidation. A list of subsidiaries can be found in the notes to e2v technologies plc, the parent company, financial statements in the Group's 2011 Annual Report.

Directors' statement of responsibilities

The Directors confirm, to the best of their knowledge, that this condensed set of financial statements has been prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union, and that the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules of the Financial Services Authority, paragraphs DTR4.2.7 and DTR 4.2.8.

The Directors of e2v technologies plc and their respective responsibilities are listed in the Group's Annual Report for the year ended 31 March 2011. There have been no changes since that date.

On behalf of the Board

K Attwood C Hindson

Chief Executive Officer Group Finance Director

11 November 2011 11 November 2011