Trading Statement

27 Oct 2005 10:17

Croma Group PLC27 October 2005 CROMA GROUP PLC ("Croma" or "the Group") TRADING STATEMENT The Board of Croma, the specialists in the design, development and production ofovert and covert surveillance, security and defence related products, notes therecent press speculation and can confirm that it is in advanced negotiations toacquire two separate private companies which will provide complementary productsto Croma's existing portfolio. The two acquisitions are subject to, inter alia, completion of due diligence andfinancing. It is anticipated that part of the consideration for the twoacquisitions will be satisfied by the issue of Croma shares, based on avaluation of the higher of 6.5 pence per share, or the mid-market closing priceon completion. A further statement regarding these acquisitions will be made indue course. It is expected that the preliminary results for the year ended 30 June 2005 willbe announced during the latter part of November. Those results will be belowmanagement expectations as a material contract which was anticipated tomaterialise during the period, suffered delays due to delays in the customers'own product launch. Deliveries of those products have now commenced. Inaddition, further delays have been experienced with certain military trialswhich again are expected to take part in the current financial year. This isexpected to result in losses before taxation for the year ended 30 June 2005being in the region of £600,000. On a positive note, the current financial year has started well. With increasinglevels of orders with high conversions, coupled with the benefits of theacquisitions made in the previous year coming through and the acceptance of newproducts, trading in the first quarter of this financial year is encouraging. In addition, the consolidation of the two divisions of Croma Defence Systems toa single location is showing an improved efficiency in administration, assemblyand marketing. As a result, there will be cost savings in the latter half of thecurrent financial year. With the good start to the first quarter of the current financial year, theBoard views the future with confidence. --ENDS-- Enquiries: Croma Group plcJohn French, Chairman & Chief Executive Mobile: 07836 722 482 Bishopsgate Communications Ltd. Tel: 020 7430 1600Dominic Barretto Mobile: 07930 450 156Maxine Barnes Mobile: 07860 489 571 Notes to Editors: Listed on the AIM market of The London Stock Exchange, Croma Group plc, the specialists in the design, development, production and marketing of overt and covert surveillance and defence related products, comprises of three divisions; namely Croma Defence Systems Ltd, Shawley (a division of Croma Defence) and R&D Design Services Ltd. This information is provided by RNS The company news service from the London Stock Exchange