UK Oil & Gas Regulatory News (UKOG)

6 May 2011

Sarantel Group PLC

Trading update and major contract win

Sarantel Group PLC, (AIM: SLG, "Sarantel"), a leading manufacturer of high-performance, miniature antennas for mobile and wireless devices, announces a trading update for the six months to 31 March 2011 and a major contract win.

As announced on 18 February 2011, sales in the first half of this financial year were slower than expected. This was largely due to technical issues, unrelated to Sarantel's technology, experienced by two major customers. Both of these customers have now resolved their problems and have placed orders for revenue in the second half.

First-half revenues were £1m (2010: £1.4m) with a net cash balance at 31 March 2011 of £0.4m and a further £166,000 tax credit received during April.

Excluding the two major customers referred to above, GPS unit sales volume grew 3% and revenue by 1% while military unit sales volume increased by 52% and revenue by 26%. Development revenues grew by 185%.

Despite the recent set backs, Sarantel continues to make very good progress with its military customers and is also in discussion with a number of large corporations about the use of its technology in consumer applications.

As evidence of its progress in the military market and largely as a result of the success of its previous contract program, Sarantel has been awarded a new major contract by a leading US supplier of tactical radio systems. This new contract is to develop a customised rugged GPS antenna solution for the US company's best-selling tactical radio system. Sarantel believes this contract will contribute more than $1 million in annual revenues beginning in early 2012.

In order to capitalise on recent successes and to build on the momentum in the business, the Board is currently seeking further funding for working capital and to finance future growth.

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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.