Half Yearly Report

24 November 2010

Hampson Industries PLC

Unaudited results for the six month period ended 30 September 2010

Hampson Industries PLC ("Hampson" or "the Group"), the international aerospace group, announces interim results for the six month period ended 30 September 2010.

Corporate highlights

·; Norman Jordan joins as CEO from Labinal SA

·; Increased activity as anticipated, and record ($53 million) tooling contract secured in the period

·; Profits held back by lower volumes, impact of legacy contracts and operational efficiency issues at Odyssey

·; Continuing programme of operational improvement actions

·; Borrowing covenants successfully renegotiated to provide increased headroom

·; Options well progressed to further strengthen the Group's capital base, including potential asset disposals

Financial highlights

* Trading profit, profit before tax and earnings per share are all stated to reflect the continuing operations of the Group before restructuring and rationalisation charges, impairment charges, gains and losses on disposal or closure of businesses, changes in the net fair value of financial instruments and amortisation of intangible assets on acquisition. The Directors believe that exclusion of these items allows trends in the performance of the Group's continuing business to be more easily identified and understood.

Chief Executive Norman Jordan commented:

"Since joining Hampson, I have been impressed with the sheer depth of technology and the breadth of capability of our businesses as well as the professionalism and commitment of our people.

"While there are many steps that we can and will be taking to improve our performance, the Group's core strategy is soundly-based and well-focussed with undoubted potential for growth."

Commenting further, Chairman Chris Geoghegan said:

"Although the macro environment for our business is improving, the Board considers it appropriate at this stage to remain cautious with respect to the rate of margin improvement.

"In the short term, considerable focus continues to be placed on operational improvement initiatives as well as other options to strengthen the business and maximise cash generation, including potential asset disposals. The Board anticipates that the performance improvement initiatives being taken will contribute to improved results in the second half."

Further information:

Norman Jordan, Chief Executive +44 (0)1384 472 941

Howard Kimberley, Finance Director +44 (0)1384 472 946

Marylene Guernier, M:Communications +44 (0)20 7920 2369

Cautionary Statement

This Half Year Report and accompanying announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Hampson's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, engineering-led or other delays in the development or launch of major new aerospace programmes, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of major investment projects.

Hampson undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

Hampson Industries PLC

Half Year Report 2010

Chairman's Statement

Revenue from continuing operations increased by 4% year-on-year to £96.1 million in the six month period ended 30 September 2010. On a constant currency, like-for-like basis, the increase was 11%.

Trading conditions have in general continued to improve since the previous year end, with a rebound in tooling demand, which, although anticipated, occurred later than we had hoped.

Despite improved overall activity, profitability in the first half was held back, as we have previously indicated, by lower volumes, legacy contracts and efficiency issues at Odyssey, our largest facility. In light of these factors, Group trading profit declined by 50% year-on-year to £7.8 million and adjusted profit before tax, at £4.4 million, was 64% lower than in the first half of 2009/10. Adjusted earnings per share ("EPS") declined to 1.21p, with statutory EPS 94% lower at 0.40p.

Although the individual shortfall at Odyssey was disappointing, the strength and depth of our combined offering in tooling and composites has helped us achieve success in the period with some significant contract wins that leave us well positioned going into the second half.

Performance in the period was otherwise in line with the Board's expectations, with improved results in the shim businesses and at Coast broadly offsetting the impact of some delayed US defence contracts.

We were pleased to welcome Norman Jordan to the Group and to the Board as Chief Executive on 1 September 2010. Norman's appointment follows the action we took earlier in the period to strengthen our management team in tooling. He joins us from Labinal SA, where he was personally instrumental in building close strategic relationships with both Boeing and Airbus.

The Board is confident that with Norman's experience, market knowledge and operational credentials, the Group will move forward with positive momentum. Although he has been with the Group less than three months, good progress has already been achieved in assessing operational and strategic priorities and in instigating change where necessary.

We indicated in early September that, following the capture of our largest ever tooling contract, we would continue to keep performance under our borrowing covenants under close review. Since that statement we have successfully renegotiated the terms of our committed borrowing facilities to provide additional covenant headroom over the next 12 months on favourable terms.

The additional financing flexibility that these new terms will provide will help ensure we can continue to take advantage of growth opportunities under the Group's new leadership as our core markets continue to recover.

As previously announced, strengthening our capital base through internal cash generation remains a key strategic priority. Preparatory work on a range of options is well progressed, including potential asset disposals, if full value can be achieved.

Although the Board is sensitive to the importance of dividends to shareholders we believe, in light of our strategic focus on debt reduction, that it is prudent to retain financial resources within the Group at the current time. Accordingly, no interim dividend is being declared.

In June 2010, we exited our Automotive Turbocharger business. Despite the relatively modest size of this transaction, it marks a strategically significant step in our transformation to a group that is now focused entirely on aerospace, a market with clear long term growth characteristics. With our strong positioning in composites, including our global leadership position in the market for large, critical tolerance component and assembly tooling solutions, the Board continues to believe that the Group is very well positioned for the future.

Although the macro environment for our business is improving, the Board considers it appropriate at this stage to remain cautious with respect to the rate of margin recovery. In the short term, considerable focus continues to be placed on operational improvement initiatives to generate cost reduction and efficiency savings as well as to maximise cash generation. The Board anticipates that these initiatives will collectively contribute to improved results in the second half.

We remain confident in our strategy, and believe that our strong market leadership position and success in winning new work will deliver attractive returns for our stakeholders in the longer term.

Chris Geoghegan

Chairman

24 November 2010

In addition to the "statutory" measures of profit, reference is made throughout this document to the impact on the continuing Group's profit before tax and earnings per share of excluding the following items; restructuring and rationalisation charges, impairment charges, gains and losses on disposal or closure of businesses, amortisation of intangible assets arising on acquisition, changes in the net fair value of financial instruments and the results of discontinued operations. The Directors believe that exclusion of these items allows trends in the performance of the Group's continuing business to be more easily identified and understood. Reference is made throughout to the terms "trading profit", "adjusted profit before tax" and "adjusted earnings per share", which are defined, respectively, as operating profit, profit before tax and earnings per share adjusted to exclude all of the fore-going items.Business Review

Hampson is a global aerospace corporation, specialising in the supply of highly engineered products, using advanced technologies and processes to deliver innovative solutions and world class value to our customers worldwide.

Group Performance

Revenue for the six month period to 30 September 2010 was £96.1 million, a headline increase of £3.3 million (4%) compared with the first half of the previous year. This reflected a £12.7 million increase in revenue from the Aerospace Composites & Transparencies division, partially offset by a headline reduction in Aerospace Components & Structures. The latter was due to the inclusion in the comparative six month period of results for Hampson Aerospace Machining Limited ("HAML"), which was divested in August 2009. On a like-for-like, constant currency basis, total Group revenue was £8.8 million (11%) higher.

The Group's total order book currently remains strong, at £133 million, of which £111 million falls due for delivery within the next 12 months. Gross new orders of £136 million were received in the period.

Group trading profit reduced by £8.0 million (50%) to £7.8 million for the six months to 30 September 2010 compared with the equivalent period in 2009. This reduction was principally due to lower volumes, the impact of legacy contracts and adverse operational efficiency issues at Odyssey.

The results for the six month period to 30 September 2010 were translated at an average rate of exchange of GBP1 = US$ 1.52 (year ended 31 March 2010: GBP1 = US$ 1.60, six months ended 30 September 2009: GBP1 = US$ 1.60). On a constant currency basis with that of the comparative half year, trading profit in 2010 would have been £0.4 million lower.

On a statutory basis, operating profit decreased by £14.1million (78%) over the equivalent half year period in 2009 which, in addition to the factors noted above, was due to an exceptional charge of US$5.0 million (£3.3 million) in respect of loss making contracts identified as part of a major restructuring at the Group's largest facility. The shortfall compared to 2009 was further magnified by a net reduction in the benefit arising from favourable movements in the fair values of derivative financial instruments between the two periods, of £3.7 million. Operating profit in 2009 also benefitted from a gain of £0.6 million arising on the disposal of HAML in August 2009.

Net financing costs reduced by £0.6 million to £2.8 million over the six month period to 30 September 2010. This was due entirely to a favourable movement in the net fair value of derivative financial instruments.

Profit before tax for the six month period to 30 September 2010 decreased by £13.5 million (91%) to £1.3 million on a statutory basis.

The Group's overall effective rate of tax on profits for the period reduced to 14%. This reduction was due to the availability of certain reliefs. As a result largely of available deductions arising from acquisition-related tax elections which should continue to benefit the Group for the foreseeable future, the Group is not currently in a cash tax paying position.

Adjusted earnings per share reduced by 4.27p to 1.21p and on a statutory basis by 6.23p to 0.40p. In addition to the reduced level of profitability, earnings per share were diluted by the further issues of ordinary shares in February 2010.

Aerospace Composites & Transparencies

Revenue in the Aerospace Composites & Transparencies division increased by £12.7 million (20%). This reflected a near doubling of revenue at the Group's Coast Composites facility and a material increase at GTS compared with the equivalent period in 2009, offset by a significant shortfall at the Odyssey facility.

Trading profit, however, reduced by £10.0 million to £7.1 million largely due to volume shortfalls, the impact of legacy contracts and adverse efficiency issues at Odyssey, as previously indicated. Results in 2009 included a non recurring benefit of £1.7 million arising from provision movements.

With the introduction of SAP and Norman Jordan's arrival, we have identified a number of issues with the business around the quotation process, materials procurement, and capacity planning which have led to reduced operating efficiencies and consequently adversely impacted margin performance. In response to these issues we have moved quickly to put in place a number of corrective actions, including restructuring the local management team, deploying new processes and consolidating a number of key business support functions to deliver improved competitiveness. We have also undertaken a detailed exercise as part of this restructuring activity to identify potential loss making contracts and have taken a one-off exceptional charge of US$5.0 million (£3.3 million) as a result.

Our SAP implementation forms a key element of the Group's internal operational improvement strategy involving the deployment of a common IT back-bone across our larger businesses. SAP was successfully implemented at our Odyssey facility to planned cost and schedule but only went live at the end of the first half period. We expect this world-class enterprise resource planning system to make a significant contribution to improved operating efficiencies at Odyssey in the second half.

With demand for the fabrication of large, primary aircraft structures out of carbon materials increasing, our strategy is seeing us win contracts of increased complexity and higher individual value as we begin to differentiate ourselves more clearly from our competitors. We expect this to have a positive impact on our margins in the medium term, driving performance to high double-digit levels across all of our tooling operations.

The successful receipt of our largest ever (US$53 million) tooling contract in early September 2010 followed many months of hard work by our teams and demonstrates the unique value proposition that we can now offer to our major airframe customers. The contract, which will provide work for three of our North American facilities, combines the fabrication of advanced, high temperature carbon structures at our recently expanded CHI facility with our established tooling design, large machining and assembly capability, provided by Coast Composites and Odyssey.

Across our composite component businesses, Texstars has seen some delay in the timing of award of US military contracts which has also modestly impacted our first half performance. Order intake has started to pick up in recent months, with CHI in particular, gaining further share of high temperature composite engine component business on a major US military programme.

Aerospace Components & Structures

The Group's Aerospace Structures and Components businesses performed well overall in the first half.

Although headline revenue reduced by £9.3 million (33%) in the period, excluding the impact of the mid-period disposal of HAML in 2009, revenues were broadly flat compared with the prior period.

Headline trading profit for the six month period increased by £0.8 million. On a like-for-like basis, the increase was £1.3 million. These results reflected another strong performance delivered by the Group's shim businesses as a result of strengthening commercial aircraft build rates and some destocking in the comparative period. This offset a weaker performance in our UK aero-structures operation where action continues to be taken to reduce the cost base in light of lower activity following the loss of Airbus work in a previous period.

Funding and Liquidity

During the six month period, £3.1 million of the Group's committed borrowing facilities were prepaid and cancelled following the divestment of the Automotive Turbocharger business. £48.6 million of the Group's committed borrowing facilities (excluding lease facilities) remained undrawn as at 30 September 2010.

Net indebtedness at 30 September 2010 stood at £89.0 million, an increase of £6.7 million from the previous year end. The increase results primarily from a net increased investment in working capital as activity levels have improved in the period, and capital investment of £3.9 million. The cash cost of settling an interest rate swap of £3.8 million and net debt service payments of £3.2 million were the other principal sources of cash absorption in the period. In addition to adjusted EBITDA of £10.6 million, positive cash flows in the period included a tax refund of £2.9 million and net proceeds from disposals of £1.6 million. Actions to generate improved cash flow remain a key management focus.

Balance sheet gearing (net indebtedness expressed as a percentage of shareholders' equity), increased by 6 percentage points to 35% reflecting both the increase in indebtedness and the impact of adverse currency fluctuations upon retranslation of the Group's US dollar denominated assets at 30 September 2010.

Interest cover (trading profit divided by net financing costs excluding unamortised debt issuance costs and changes in the net fair value of derivative financial instruments - interest instruments) on a trailing twelve month basis was 3.90 times, compared with the covenanted ratio of greater than 3.50 times. The ratio of net indebtedness to EBITDA (trading profit before depreciation and amortisation) on a trailing twelve month basis ("leverage covenant") was 3.00 times, compared with the covenanted ratio of less than 3.50 times.

In light of the reduced headroom against its financial covenants, the Group has agreed certain amendments with its senior lenders. As a result of these amendments, the leverage covenant that will apply for each of the next four measurement quarters will fall in the range 3.95 times to 4.57 times, (thereafter returning to 3.00 times) and the interest cover covenant that will apply, will fall in the range 2.70 times to 3.10 times (thereafter returning to 3.50 times). As noted above, the Board intends to seek to reduce the absolute level of the Group's current and future indebtedness and is currently considering a range of initiatives to achieve this. This may include selective asset disposals, if full value can be achieved from such a strategy.

Dividend

The Board considers that the need to reduce the Group's indebtedness from current levels must remain a key strategic priority and hence that it is prudent to retain financial resources within the Group at the current time. Accordingly, no interim dividend is being declared.

Principal risks and uncertainties

In common with all trading businesses, the Group is exposed to a variety of risks in the conduct of its normal business operations. Set out on pages 24 to 31 of the Group's Annual Report for the year ended 31 March 2010 is a summary of some of the most important risks and uncertainties which, in the opinion of the Directors, could impact its performance. These are equally applicable to the current financial year of which the period covered by these condensed financial statements forms part. Although it is not possible to completely record or quantify every risk that the Group faces, on a short term, forward-looking basis over the remainder of this financial year, a key area of potential risk and uncertainty relates to the size and timing of receipt of further tooling orders, which have a significant impact on the Group's potential future revenue generation and profitability. Significant further delays by customers in the award of purchase orders could also increase the risk of an impairment of goodwill being required due to the carrying value of the assets of a cash generating unit being higher than their recoverable amount. Other principal risks and uncertainties include those related to the global economic environment, funding and liquidity, cyclical markets, market competition, customer concentration, programme dependencies & relationships, commercial dispute resolution and litigation and interest rate and foreign exchange risk. The Group seeks to put in place strategies and actions to mitigate the potential effect of these risks wherever practical.

Directors' Responsibility Statement

The Directors confirm that to the best of their knowledge:

·; The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as endorsed and adopted by the EU;

·; The Interim Management Report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

The Directors of Hampson Industries PLC as at 9 June 2010 are listed in the Group's Annual Report for the year ended 31 March 2010 on pages 36 and 37. During the period Mr Kim Ward retired as Director on 31 July 2010, and Mr Norman Jordan was appointed as Director on 1 September 2010. There have been no other changes to Directors during the period.

By order of the Board:

Chris Geoghegan Norman Jordan Howard Kimberley

Chairman Chief Executive Finance Director

24 November 2010 24 November 2010 24 November 2010

Condensed Consolidated Income Statement

For the half year ended

* Adjustments relate to restructuring and rationalisation charges, impairment charges, gains and losses arising from the disposal or closure of businesses that do not meet the criteria to be classified as discontinued operations under IFRS 5, changes in net fair value of derivative financial instruments required under IAS 39 and amortisation of intangible assets on acquisition required under IFRS 3.

Condensed Consolidated Income Statement

For the half year ended

* Adjustments relate to restructuring and rationalisation charges, impairment charges, gains and losses arising from the disposal or closure of businesses that do not meet the criteria to be classified as discontinued operations under IFRS 5, changes in net fair value of derivative financial instruments required under IAS 39 and amortisation of intangible assets on acquisition required under IFRS 3.

Condensed Consolidated Income Statement

For the year ended

* Adjustments relate to restructuring and rationalisation charges, impairment charges, gains and losses arising from the disposal or closure of businesses that do not meet the criteria to be classified as discontinued operations under IFRS 5, changes in net fair value of derivative financial instruments required under IAS 39 and amortisation of intangible assets on acquisition required under IFRS 3.

Condensed Consolidated Statement of Comprehensive Income

For the periods ending

Condensed Consolidated Balance Sheet

As at

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Cash Flow Statement

For the periods ending

Reconciliation of movement in cash and cash equivalents to movement in net debt

For the periods ending

Other movements in net debt reflect movements in the unamortised issuance costs in relation to borrowings within the Group.

Condensed Cash Flow from Operating Activities

For the periods ending

Reconciliation of cash and cash equivalents and net debt

For the periods ending

Cash and cash equivalents comprise cash on hand and demand deposits and overdrafts together with highly liquid investments of less than three months maturity. Unless an enforceable right of set-off exists, the components of cash and cash equivalents are reflected on a gross basis in the balance sheet.

Net debt is defined as the Group's borrowings (net of unamortised issuance costs) and finance leases, less cash and cash equivalents.

Notes to the Half Year Report

1. Basis of preparation

Basis of preparation

Hampson Industries PLC (the "Company") is a Company domiciled in the United Kingdom. The unaudited condensed consolidated half year financial statements for the six months ended 30 September 2010 comprise of the Company and its subsidiaries.

These half year condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 31 March 2010. The comparative figures for the year ended 31 March 2010 do not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 March 2010 has been delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Going concern

The Group meets its day-to-day working capital requirements and medium term funding requirements through a mixture of committed bank borrowing facilities, finance leases and loan notes. The bank borrowing and loan note facilities, which total approximately £153 million, include certain covenant tests. The failure of a covenant test renders the entire facilities repayable on demand at the option of the Group's lenders.

The Directors have assessed the Group's anticipated future results and working capital requirements having prepared detailed, bottom up financial forecasts in September 2010 which have been subject to detailed review with each of the Group's major business units. In light of both the results of this exercise, and a scheduled tightening of the Group's previous leverage covenant which was to take effect from 31 December 2010, the Directors determined it would be prudent, in order to provide greater headroom, to seek to obtain certain amendments from its senior lenders.

Pursuant to an agreement dated 23 November 2010, the Group has consequently agreed certain covenant amendments with its senior lenders. As a result of these amendments, the leverage covenant that will apply for each of the next four measurement quarters will now fall in the range from 3.95 times to 4.57 times (compared with 3.00 times to 3.25 times previously), and the interest cover covenant that will apply, will fall in the range 2.70 times to 3.10 times (compared with 3.50 times). Further more, the Board intends to seek to reduce the absolute level of the Group's current and future indebtedness compared with that shown in its most recent financial forecasts and is currently considering a range of initiatives to achieve this, which may include asset disposals if proper value can be achieved.

In light of both the amended borrowing covenants that will now apply which provide headroom against anticipated performance, the Board's plans to reduce borrowings at a faster than projected rate and the range of other actions available to the Group, including the deferral of non essential capital expenditures, the Directors continue to adopt the going concern basis in preparing these financial statements.

Measurement and performance reporting

In addition to the "statutory" measures of profit, reference is made throughout to the impact on the continuing Group's profit before tax and earnings per share of excluding the following items; restructuring and rationalisation charges, impairment charges, gains and losses on disposal or closure of businesses, amortisation of intangible assets arising on acquisition, changes in the net fair value of financial instruments and the results of discontinued operations. The Directors believe that exclusion of these items allows trends in the performance of the Group's continuing business to be more easily identified and understood. Reference is made throughout to the terms "trading profit", "adjusted profit before tax" and "adjusted earnings per share", which are defined, respectively, as operating profit, profit before tax and earnings per share adjusted to exclude all of the fore-going items.

1. Basis of preparation continued

Changes in accounting policies

Except as described below, the accounting policies and basis of consolidation applied by the Group in these unaudited half year condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements for the year ended 31 March 2010.

Construction contracts

For contracts that involve the manufacturing of complex parts or tooling that take a number of periods to complete, these are valued under a degree of completion basis as defined in IAS 11 "Construction contracts". Where the outcome of such a contract can be estimated reliably, contract revenue and costs are recognised by reference to the degree of completion of each contract, as measured by the proportion of total costs at the balance sheet date to the estimated total cost of the contract.

When the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable those costs will be recoverable.

The principal estimation technique used by the Group in attributing profit on contracts to a particular period is the preparation of forecasts on a contract by contract basis. These focus on revenues and costs to complete and enable an assessment to be made of the final out-turn of each contract.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately. Contract costs are recognised as expenses in the period in which they are incurred.

Where costs incurred plus recognised profits less recognised losses exceed progress billings, the balance is shown as due from customers on construction contracts within trade and other receivables. Where progress billings exceed costs incurred plus recognised profits less recognised losses, the balance is shown as due to customers on construction contracts within trade and other payables.

Due to the adoption of this change in accounting policy being immaterial to the Group in the prior year, no restatement of the financial results for the half year to 30 September 2009 or year to 31 March 2010 is required. The impact of this change in accounting policy in the half year to 30 September 2010 is an increase in trading profit of approximately £0.9 million.

Other changes in accounting policies

Other new standards, revisions and amendments to standards and interpretations have been adopted in the period with no material impact on the Group's results, assets and liabilities.

Re-presentation of prior period accounts

Due to the disposal of Hampson Precision Automotive Limited during the period and exiting the automotive turbocharger market, in accordance with IFRS 5 its results have been classified as a discontinued operation and the comparative periods have been amended accordingly.

Critical accounting estimates and judgements

In the process of applying the Group's accounting policies, management has made a number of judgements. The process of preparing these unaudited half year condensed consolidated financial statements inevitably requires the Group to make estimates and assumptions concerning the future and the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and judgements that have the most significant effect on the amounts included with these unaudited half year condensed consolidated financial statements were the same as those that applied to the audited consolidated financial statements for the year ended 31 March 2010, along with the specific risks and uncertainties regarding the timing of future aerospace tooling orders as noted on page 5.

Seasonality

The Group does not have any revenue or results that are materially impacted by seasonality.

Approval of unaudited half year condensed consolidated financial statements

The unaudited half year condensed consolidated financial statements were approved for issue on behalf of the board of directors on 24 November 2010.

2. Exchange rates

The principal exchange rates used were as follows:

Assets and liabilities of overseas undertakings are translated at the rate of exchange ruling at the balance sheet date and the income statement is translated at the average rate of exchange.

3. Segmental analysis

For internal decision making purposes, the Group is organised into three operating divisions according to the products and market segments they serve, being Aerospace Components & Structures, Aerospace Composites & Transparencies and Automotive Turbocharger. Further details on each of the operating divisions can be noted on pages 14 to 19 of the Annual Report for the year ended 31 March 2010. This is consistent with the way the Group is managed and the format of internal financial reporting.

Segment information for revenue and profit:

3. Segmental analysis continued

3. Segmental analysis continued

Segment information for assets:

Intra group sales are priced on an 'arms length' basis and are not significant between either regions or segments. Corporate and unallocated costs represent corporate costs. Segment assets comprise all non-current and current assets (as per the balance sheet presentation) but exclude current and deferred tax assets. Balances relating to taxation are not allocated to specific segments as these resources are managed centrally and no segments have sufficient autonomy to manage these resources.

Segment information by geographical region:

Segment revenue is disclosed by geographical location of the Group's customers. Segment assets are disclosed by geographical location of the Group's assets.

3. Segmental analysis continued

Segment information on major customers:

Revenues from the Group's major customers, which is defined as customers which provide greater than 10% of the Group's revenue for the period, is shown below:

4. Operating profit

Reconciliation of revenue to total operating profit:

Trading profit for the year ended 31 March 2010 included £11,635,000 arising from the release of excess accruals and £6,619,000 arising from non-recurring trading costs, which resulted in a net benefit to trading and operating profit in the year of £5,016,000. The non-recurring costs related to temporary excess and unproductive labour costs, which, following subsequent restructuring action to realign pay rates, working practices and employee numbers will not recur.

Trading profit for the year ended 31 March 2010 included a credit of £3,172,000 arising from termination of foreign exchange contracts and a debit of £1,330,000 arising from loss making foreign exchange contracts.

5. Adjustments

Restructuring and rationalisation charges

Charges of £707,000 (half year to 30 September 2009: £nil, year ended 31 March 2010: £3,712,000) included within operating profit relate primarily to employment termination, recruitment and legal costs.

Charges of £nil (half year to 30 September 2009: £nil, year ended 31 March 2010: £3,253,000) included within net financing costs relate to fees paid to the Group's senior lenders and legal costs in relation to amendments to certain borrowing covenants in November 2009.

5. Adjustments continued

Impairment charges

As part of a review undertaken as to the utilisation and carrying value of certain assets, impairment charges of £3,288,000 (half year to 30 September 2009: £nil, year ended 31 March 2010: £2,854,000) were incurred as follows:

Following a detailed review of inventory during the half year to 30 September 2010 at certain North American sites, the Group recognised impairment charges of £3,288,000 in relation to loss-making contracts and onerous contracts where costs to complete would exceed revenues earned.

Due to reductions in customer order levels during the year ended 31 March 2010 certain subsidiaries of the Group recognised impairment charges against the carrying values of certain inventory items. As a result impairment charges of £2,114,000 were incurred.

During the year ended 31 March 2010 a subsidiary of the Group negotiated a commercial settlement with a customer to liquidate a number of significantly overdue receivables. As part of this settlement impairment charges of £740,000 were incurred.

Gains and losses on disposal or closure of businesses

During the half year to 30 September 2010 gains of £nil were made in relation to the disposal or closure of businesses that do not meet the requirements of IFRS 5 (half year to 30 September 2009: £585,000, year ended 31 March 2010: £6,147,000).

For further details on the disposal of Hampson Precision Automotive Limited during the period to 30 September 2010, which has been disclosed as discontinued operations, see note 8.

For further details on the disposal of Hampson Aerospace Machining Limited in the prior year, see note 17.

Changes in net fair value of derivative financial instruments

IAS 39 requires derivative financial instruments to be valued at the balance sheet date and any difference between that value and the intrinsic value of the instrument to be reflected in the balance sheet as an asset or liability. Any subsequent change in value is reflected in the Income Statement unless hedge accounting is achieved. Such movements do not affect cash flow or the economic substance of the underlying transaction, and thus to aid in year-on-year comparability, the change in value has been identified separately. As a result the changes in net fair value of derivative financial instruments were:

Amortisation of intangible assets on acquisition

As required under IFRS 3 'Business Combinations' and IAS 38 'Intangible Assets', intangible assets identified on acquisition have been amortised during the period - £455,000 (half year to 30 September 2009: £2,607,000, year to 31 March 2010: £3,038,000).

5. Adjustments continued