Contract Win

Embargoed until 0700 23 November 2010

Ultra Electronics Holdings plc

("Ultra" or "the Group")

Ultra selected for US Navy Multi-Purpose Bomb Rack programme

Ultra announces that its Precision Air Systems business, teamed with Raytheon Company, has been selected by the US Navy to develop and supply the Multi-Purpose Bomb Rack (MPBR) system. Raytheon, as the prime contractor, will supply the bomb racks for which Ultra will provide its innovative HiPPAG™ airborne compressor. The HiPPAG™ system will be required to generate the pneumatic energy to release the weapon from the rack and eject it from the aircraft's slipstream. The use of HiPPAG™ eliminates pyrotechnic cartridges, and thus is expected to reduce life cycle costs significantly through reduced maintenance tasks.

The initial contract awarded to Raytheon is for the engineering and manufacturing development phase and its value to Ultra is about $6m. Work under this contract will be completed in 2014. It is planned that low rate initial production will take place in 2014, 2015, and 2016, leading to full rate production commencing in 2017. The MPBRs provide an upgraded capability compared to existing racks and are intended to be used across a range of aircraft types.

Douglas Caster, Chief Executive of Ultra, commented:

"It is really good news that Ultra's HiPPAG™ compressors are to be used in the US Navy's MPBR systems. Raytheon is an excellent partner and we are committed to delivering a successful programme.

This is an excellent example of Ultra delivering its strategies for growth by winning positions on long-term programmes with its specialist capabilities and broadening the Group's customer base. This win also demonstrates how Ultra continuously improves its range of well proven products and services through a constant drive for innovation."

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Further information about Ultra:

Ultra Electronics is an internationally successful defence and aerospace company with a long, consistent track record of development and growth. Ultra businesses constantly innovate to create solutions to customer requirements that are different from and better than those of the Group's competitors. The Group has over one hundred distinct market or technology niches within its twenty one businesses. The diversity of niches enables Ultra to contribute to a large number of defence, aerospace and civil platforms and programmes and provides resilience to the Group's financial performance.

Ultra has world-leading positions in many of its niches and, as an independent, non-threatening partner, is able to support all of the main prime contractors with specialist capabilities and solutions. As a result of such positioning, Ultra's systems, equipment or services are often mission-critical to the successful operation of the platform to which they contribute. In turn, this mission-criticality secures Ultra's positions for the long term which underpin the superior financial performance of the Group.

Ultra offers support to its customers through the design, delivery and support phases of a programme. Ultra businesses have a high degree of operational autonomy where the local management teams are empowered to devise and implement competitive strategies that reflect their expertise in their specific niches. The Group has a small head office and executive team that provide to the individual businesses the same agile, responsive support that they provide to customers as well as formulating Ultra's overarching, corporate strategy.

Across the Group's three divisions, the major market sectors in which Ultra operates are:

• battlespace IT, summarised as being the systems and equipment that allows coalition commanders to have an integrated, real-time picture of the disposition of friendly and enemy forces that is better than the one available to the enemy. This information superiority underpins rapid decision making which, together with effective command, control and communications, translates into military superiority. The use of battlespace IT is fundamental to the implementation of the military doctrines of 'network-centric warfare' or 'network-enabled capability' that are seen as transformational in the capability to win future battles. Expenditure on battlespace IT equipment therefore continues to represent an increasing share of the total defence budget in the main markets in which Ultra operates.

• sonar systems, expanding Ultra's traditional world-leading airborne anti-submarine warfare capability into broader activities in the underwater battlespace. These include integrated ship and submarine sonar systems, persistent seabed-deployed sensor arrays, torpedo defence and sea mine disposal systems. The fact that over forty countries have, between them, more than four hundred highly capable, stealthy submarines is continuing to focus expenditure in this sector.

• civil and military aircraft equipment, Ultra provides specialist sub-systems and equipment for military and civil aircraft. The main military aircraft programmes on which Ultra equipment is fitted continue to have political support, underpinned by consistent financial commitment. For civil aircraft, record order intake performance by all major aircraft manufacturers underpins increasing build rates for the medium term.

• specialist defence equipment, including power conversion and signature systems for naval ships and submarines. Ultra's specialist capability in high integrity controls for submarine nuclear reactors is included in this sector, for which there is continuing commitment to new platforms and the upgrade of existing boats. Ultra also supplies advanced sub-systems for modern armoured vehicles including those for electrical power management, indirect vision and weapon control. The need for increased mobility and force protection is driving a number of large military vehicle procurements in Ultra's main markets.

• specialist civil systems and equipment, including Ultra's advanced airport IT solutions. Airline passenger growth around the world is driving continuing expansion and upgrade of airport infrastructure. Ultra supplies trackside power equipment for rail transit systems, for which demand continues driven by the need to expand and upgrade rail networks. The UK market for nuclear power generation is expanding and Ultra's offering derived from its equivalent military capability is well positioned to benefit.