UK Oil & Gas Regulatory News (UKOG)

2 June 2010

Sarantel Group PLC

Intention to outsource manufacturing

Sarantel Group PLC, (AIM: SLG, "Sarantel"), a leading manufacturer of high-performance, miniature antennas for mobile and wireless devices, announces that on 1 June 2010, the Group signed a Letter of Intent with Elcoteq SE to outsource its assembly, test and supply chain processes.

The initiative is expected to generate annual production savings of approximately £0.5m and the transfer of these processes and associated equipment should be completed by the end of 2010, with little or no disruption to supplies. The exceptional costs arising on the consequent restructuring are approximately £50,000.

Outsourcing allows the Group to focus more effectively on its uniquely valuable production processes and increase resources for product development. At the same time, it will simplify day-to-day operations by reducing the number of direct suppliers to the Group's remaining operations, which will be consolidated from two sites into one.

Sarantel will also benefit from Elcoteq's sourcing capabilities to reduce BOM (bill-of-material) costs and from its design-for-manufacturing experience, which will optimise and reduce the cost of the assembly process itself.

David Wither, Chief Executive, commented:

"This is an important development that will significantly reduce our costs and simplify our business so we can focus on developing the next generation of innovative antennas for consumer and high-value markets."

Separately today, Sarantel has announced interim results for the six months to 31 March 2010.

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About Sarantel www.sarantel.com

Sarantel is a leader in the design of high-performance miniature antennas for portable wireless applications. Sarantel's revolutionary ceramic filtering antennas offer dramatically improved performance over existing antenna designs, resulting in a clearer signal, better range and a 90 per cent reduction in the amount of signal radiation absorbed by the body. Because of their smaller size and higher capabilities, Sarantel's antennas enable manufacturers to create innovative wireless products for the GPS, WiMax, Satellite Radio and Satellite phone markets.