Half Yearly Report

26 July 2012

LAIRD PLC

RESULTS FOR THE SIX MONTHS TO 30 JUNE 2012

(unaudited)

Laird, a global technology company focused on providing components and solutions that protect electronic devices from electromagnetic interference and heat, and that enable connectivity through wireless applications and antennae systems, today announces its results for the six months to 30 June 2012.

Highlights from Continuing Operations:

·; Revenue of £249.6 million (2011: £243.1 million)

·; Pick-up in revenue in the second quarter, over the first quarter

·; Underlying operating margin of 12.4% (2011: 11.7%)

·; Underlying profit before tax up by 7% to £27.3 million

·; Earnings per share of 8.6p, up 9% on prior year

·; Interim dividend declared of 3.4 pence (2011: 2.7 pence), up 26% on 2011

·; Strong cash conversion

·; Expansion of capacity proceeding to plan

·; New product launches on track for the second half of the year

·; Integration of recent acquisitions, Emerson & Cuming and Summit, progressing according to plan

·; David Lockwood joins the Board as Chief Executive on 13 August 2012

Nigel Keen, Executive Chairman, said:

"We are benefitting from the strength of a number of our markets and the breadth of our customer base.

The new product introductions we have planned for later this year, the incremental capacity that will come on stream, and the innovation driven demand for our customers' products, give us confidence in the strength of our business for the second half of the year and beyond.

I am delighted that our new Chief Executive, David Lockwood, will be joining our Board in August. David brings considerable experience of a variety of international market and technology sectors relevant to Laird's businesses."

Explanatory notes:

i) Laird uses underlying results as key performance indicators. Underlying profit before tax and underlying earnings per share are stated before exceptional items, the amortisation of acquired intangible assets, deferred tax on acquired intangible assets and goodwill, the gain or loss on disposal of businesses, the impact arising from the fair valuing of financial instruments and acquisition transaction costs. The narrative is based on underlying operating profit, profit before tax and earnings per share, as the directors believe that these provide a more consistent measure of operating performance.

ii) Continuing operations

iii) The weighted average number of shares used to calculate earnings per share was 265.4 million in 2011 and 265.7 million in the first half of 2012.

A live audio webcast for Shareholders and Analysts will be available at 8.30am (UK time) at: http://www.laird-plc.com/laird/investor-relations/results-centre/

OVERVIEW

The first half of 2012 has been a period of continuing progress. The challenging conditions reported at the end of 2011 continued into the first quarter, however since then trading has improved and the first half ended well. We have seen a step up in sales to the IT and automotive markets quarter on quarter. Operating margins have improved, assisted by vertical integration, operational efficiencies and a rationalisation of certain product lines to exit lower margin business. The integration of Microwave Materials Group ("Emerson & Cuming") and Summit Data Communications which we acquired during the first half of 2012 is progressing successfully.

Our capacity expansion which will support growing demand from the smartphone and tablet market is on track with the first phase now completed and ready for production to come on stream. New product introductions in our other businesses provide good prospects for the year as a whole.

Our thermal business has been weaker than in the prior year. The increasing pressure on bandwidth consumption in the telecom infrastructure industry did not produce the expected demand for base stations where we supply thermal management systems for the battery back-up systems. However, industry forecasters are expecting a return to growth in the telecoms infrastructure market later in the year.

We have a focused and energised management team and are looking forward to David Lockwood joining the Board on 13 August as Chief Executive to drive the next stage of Laird's development.

RESULTS

Continuing operations comprise solely the results from our Performance Materials and Wireless Systems Divisions. The Handset Antennae business, the exit from which was announced June 2011, is now classified as a Discontinued operation, disclosed separately in the Accounts.

Revenue in the six months to June 2012 was £249.6 million, up 3% (2011: £243.1 million). Organic revenue in the half year was down 4%. Results are stated in US Dollars on page 9.

Underlying operating profit was £31.0 million in the first half of 2012, up 9% (2011: £28.5 million). Underlying operating profit margin percentage, before interest and tax, in the half year increased to 12.4% (2011: 11.7%).

Underlying profit before tax in the six months to 30 June 2012 was £27.3 million, up 7% (2011: £25.4 million).

Statutory profit after tax in the six months to 30 June 2012 was £16.8 million (2011: loss of £113.0 million).

Underlying earnings per share in the period were 8.6 pence, up 9% (2011: 7.9 pence).

Operating cash flow after capital expenditure in the six months to 30 June 2012 was £36.2 million (2011: £20.5 million). Operating cash conversion after capital expenditure in the half year was 117% (2011: 72%) for continuing operations.

Net borrowings at the end of June 2012 were £135.1 million (December 2011: £117.7 million), with the increase more than accounted for by the acquisitions of Emerson & Cuming and Summit Data Communications ("Summit"), for which a total of £31.6 million was paid.

We continue to focus on customer diversification. In the first half of 2012, the percentage of our total revenues from our "Top 5" customers was 34%, (2011: 30%). Revenue from our Top Customer was 16% (2011:12%).

DIVIDEND

The Board has declared an interim dividend of 3.4 pence per share, up 26% on 2011. This is payable on 30 November 2012 to shareholders registered on 2 November 2012. As announced in our Interim Results last year, we will also be recommending a full year dividend of 10.0 pence and 12.0 pence for 2012 and 2013 respectively.

PERFORMANCE MATERIALS DIVISION

Our Performance Materials Division holds market leading positions in electromagnetic interference shielding ("EMI") and in active and passive thermal management and solutions. We design and supply a range of EMI shielding materials, Thermal management solutions and Signal Integrity products which provide critical protection for a wide range of electronic devices, allowing them to function and connect effectively. We hold strong positions in major markets such as IT/datacomm/telecoms and growing positions in medical and military.

Expressed in US Dollars, revenue in the half year decreased by 1% compared with 2011. On an organic basis revenue was 5% lower. Underlying operating profit for Performance Materials, in US Dollars, decreased in the first half by 1% .

EMI shielding materials provided 67% (2011: 66%) of Divisional revenues in the period, Thermal management solutions 24% (2011: 25%) and Signal Integrity products 9% (2011: 9%).

Revenue from our EMI business was 1% higher than the same period in 2011.

We have seen a substantial increase in sales of our shielding solutions for smartphones and tablets. We have had contract wins in the automotive market and seen an uplift in demand in IT products, including notebooks, driven by the increasing use of more powerful processor chips requiring our bespoke shielding solutions.

Our EMI revenues to the Telecoms markets were 24% lower, in-line with subdued demand in the infrastructure segment. We expect bandwidth capacity constraints to have a positive effect on this segment going forward. We have seen much lower demand for plasma display panel shielding as consumers continue to favour liquid crystal displays (LCD).

The EMI revenue increase in the second quarter over the first quarter has been encouraging and there has been a strong uplift in demand across most of our products groups. Our handset revenue tailed off in the second quarter, as would be expected, ahead of a major model launch, but this reduction was more than offset by demand seen for other products.

The capacity expansion we announced in May this year is well underway with the first phase now completed and ready to support the projected demand in our strongly performing markets, such as tablets and smartphones. This increased capacity will start to deliver products shortly and will drive growth for the remainder of 2012 and beyond.

The acquisition of Emerson & Cuming, completed in May this year, has broadened our absorber product range and the business is performing well as we integrate these products into our overall sales offering.

In our Thermal business, the demand for our products which are used within the IT market has continued, and in particular we have started to benefit from a pick-up in orders for notebooks, driven by the introduction of new products by our customers. However, we have seen the telecoms infrastructure market remain subdued throughout the first half of the year. It is clear that ongoing bandwidth capacity constraints will create strong demand for more telecoms units in the near-term and industry analysts are forecasting a return to growth in this important market in the second half of the year.

Overall, Thermal revenues in the first half were down 9% compared with the same period in 2011 as a result of lower demand for telecoms base stations. Although we have seen the benefit from customers upgrading existing telecoms boards, in place of more expensive base station programmes, we have yet to see the expected pick-up in demand for new base station programmes, for which we supply active thermoelectric cooling to leading customers in the telecoms market.

We have made gains within the "Green" market with our sales for LED lighting applications, where our thermal printed circuit board material is used to ensure long-term reliability in street and other lighting applications. New active cooling products for telecoms cabinets and cooling systems used within CT scanners, have been launched, strengthening further our competitive advantage.

Revenues from our Signal Integrity products were 1% higher than the first half of 2011 and we continue to see a good level of demand for our products used within the IT/printer market.

Across our Performance Materials Division, as electronic devices are required to become faster and more compact, we will continue to benefit from customers looking to combat the associated connectivity and heat problems by using our bespoke solutions. In addition, we expect there to be increasing demand in the IT market as the launch of Microsoft Windows 8© promotes a need to upgrade hardware to newer and more powerful devices. Increased infrastructure spend and the expansion of wireless networks are also expected to impact the telecoms market positively, as more telecoms base stations are deployed to meet the ever increasing bandwidth capacity requirements, which require more of our EMI and thermal management products and solutions. The use of Smart devices in the medical and energy markets will also require more of our solutions.

WIRELESS SYSTEMS DIVISION

Our Wireless Systems Division holds leading positions in telematics, infrastructure and mobile antennae (non-handset) and industrial wireless controls. We design and supply a range of telematics and infrastructure antennae products, machine-to-machine ("M2M") wireless modules and software enabled wireless control systems.

When expressed in US Dollars, Divisional revenues increased by 2%. Organic revenue was down 2%. The increase in return on sales was driven by a more profitable product mix and vertical integration efficiencies in our largest business line.

Telematics/M2M provided 58% (2011: 59%) of the Division's revenue, with Wireless Automation and Control Solutions contributing 21% (2011: 23%) and Infrastructure Antennae contributed 21% (2011: 18%).

End user demand for our Telematics product line, particularly in the North American automotive market, has been robust although revenues were flat year on year, in part due to a particularly high prior year revenue comparative caused by the restocking of inventory pipelines in 2011. We expect good growth will continue in this business.

 We have launched a new range of antennae products in the first half of 2012 and have won business with each of the major US automakers for our innovative "mega shark-fin" antenna, which has the capability to integrate a number of coaxial cables used for remote connectivity within a vehicle. This will drive growth in this business in 2014 and subsequent years.

Within our M2M asset tracking business we have been rationalising our product portfolio to allow us to focus on higher margin opportunities requiring greater design input, away from the more commoditised, lower margin segments in this market. This has resulted in lower revenue for this transitional period.

Sales for our Bluetooth© and wireless module connectivity products have held up well given the macroeconomic uncertainty among our European customers. We anticipate that sales will move forward as we launch new products later in the year.

The integration of Summit, acquired in March this year, into our M2M business is proceeding well.

In our Wireless Automation and Control Solutions business, our remote control software and hardware solutions are sold to the industrial, rail and mining markets. Revenue for this business was down 4% on the prior year against a particularly strong comparative. A significant proportion of revenue in this business is recurring, derived from our after-sales service, which has partially offset the lower sales of complete new systems which have been held back by deferred industrial and rail spend.

Our Infrastructure Antennae business revenues have increased by 20% benefitting from a buoyant public safety market, and the consumer market for gaming consoles has also held up well. We have won new contracts in the first half of the year to supply our portable radio solutions to customers in the public safety market in Japan and Europe. We have also seen a good level of demand for our RFID technology solutions, and expect increased data throughput and local network capacity to continue to drive further requirements in this area.

We expect our Wireless Systems Division as a whole to benefit from the increasing requirement for connectivity between users and devices which will continue to drive demand for our solutions and services. Customers in the automotive, medical and industrial markets are demanding more compact, integrated solutions that combine hardware and software to use in their vehicles, warehouses, hospitals and retail outlets. Our ability to offer complete solutions and provide after-sales service in these areas positions us well to continue to benefit from a range of increasing customer demands.

DISCONTINUED OPERATIONS

The contribution from our Handset Antennae business is now reported as Discontinued Operations (exit announced in June 2011).

Revenue decreased in the period by 59% in the first half of 2012 to £18.7 million (2011: £45.1 million). As the business has been exited, overhead has been reduced bringing the business back into profit.

The contract for the disposal of assets from this business has been signed, with sale proceeds of RMB198 million (£20 million). The completion of this disposal remains subject to regulatory approvals.

TARGETS

We hold leading positions across a number of markets that are forecast to deliver structural growth. As a result we expect the organic growth in our business over time to deliver an average rate of 10% per annum, notwithstanding the relatively low growth in some of our markets in the first half of the year. Since the start of 2011, we have averaged 10% organic growth across our business and remain confident of our ability to deliver the medium to long-term targets announced in July 2011. The operational gearing inherent within our business model will allow us to translate this rate of organic growth into a return on sales margin of 15%.

We have announced an interim dividend of 3.4 pence per share, an increase of 26% compared with 2011. This is consistent with the announcement made at the time of our Interim Results last year when we recommended increased payment of dividends to shareholders which will average annual compound growth of 24% from the period 2010 to 2013.

BOARD CHANGES

David Lockwood's appointment as Chief Executive was announced in May this year and he joins the Board on 13 August 2012, at which time Nigel Keen will resume his position as non-executive Chairman.

During the first half of the year Paula Bell was appointed as a non-executive Director effective from 2 March 2012. Andrew Robb and Dr Bill Spivey retired at the AGM in May, at which point Paula Bell succeeded Andrew Robb as Chairman of the Audit Committee.

OUTLOOK

We are benefitting from the strength of a number of our markets and the breadth of our customer base.

The new product introductions we have planned for later this year, the incremental capacity that will come on stream, and the innovation driven demand for our customers' products, gives us confidence in the strength of our business for the second half of the year and beyond.

Our technology remains critical to the effectiveness of electronic devices and wireless systems, and the positions we hold across a number of structural growth markets will enable us to capitalise on the growth that industry forecasters are predicting over the medium to long-term.

FINANCE REVIEW

Revenue

Revenue was 3% higher at £249.6 million in the first half of 2012 from £243.1 million in 2011. In US Dollars, revenue was flat year on year, with Performance Materials revenues 1% lower in the first half of 2012 and Wireless Systems revenues 2% higher.

Revenue on an organic basis was 4% lower in the first six months of 2012. Organic growth is defined as the increase in revenue year on year including revenue growth from newly acquired companies and basing such growth on the revenue level for the comparable period in 2011, as if we had owned those acquired companies in that period. Revenue on an organic basis for the "base" businesses (excluding the recently acquired Emerson & Cuming, Summit Data Communications and the first quarter of Klüver) was 3% lower.

Underlying Profit

The table below shows underlying operating profit for the business segments. Margins were 12.4% in the first half of 2012 (2011, 11.7%).

Underlying profit before tax in the half year increased by 7% to £27.3 million (2011: £25.4 million). Underlying profit is defined as profit before tax, exceptional items, amortisation of acquired intangible assets, the gain or loss on sale of businesses, the impact arising from the fair valuing of financial instruments, and acquisition transaction costs.

Exceptional Items

Acquisition transaction costs amounting to £1.6 million in the period have been disclosed as exceptional. The cash outlay on this and other exceptional costs which were provided for in 2011 amounted to £8.7 million in the first half.

Profit

Profit after tax from continuing operations was £13.6 million (2011: £13.6 million). Profit from discontinued operations was £3.2 million (2011 loss: £126.6 million). The profit for the period was £16.8 million (2011 loss: £113.0 million).

Finance Costs

Finance costs, before fair value adjustments, were £3.7 million (2011: £3.1 million). Interest cover was 10.0 times.

Taxation

The underlying tax charge on underlying profit before tax is equivalent to an average tax rate of 16.5% (2011: 17.5%) being the best estimate of the outcome for the full year in 2012.

Underlying Earnings

Underlying earnings per share were 8.6p (2011: 7.9p). Underlying earnings are based on underlying profit less underlying tax. There were 265.7 million shares in issue in the first half of 2012 compared with an average of 265.4 million in the first half of 2011.

Cash Flow

In the first half of 2012, Laird produced a healthy operating cash flow surplus of £45.7 million (2011: £26.2 million), a cash conversion of 117% of operating profit for continuing operations.

* after adjusting for creditor decreases on exceptional items of £8.1 million.

The working capital inflow includes £6.4 million arising from the ramp down of the Handset Antennae business.

In March 2012, Laird acquired Summit Data Communications and in May 2012, Emerson & Cuming. The cost of the acquisitions more than account for the increase in net borrowings in the period.

Net Borrowings and Debt Facilities

Overall, net borrowings increased during the half year by £17.4 million, to £135.1 million. Most of our borrowings and cash deposits are in US dollars. As at 30 June 2012, £22 million of net borrowings were in Euros.

A cornerstone of Laird's financial planning is to ensure that it maintains committed loan finance which provides sufficient headroom above expected borrowing requirements and has a significant proportion with terms that exceed one year. Laird has in place £235 million of committed bilateral revolving credit facilities which will not expire until April 2016. In addition, Laird has in issue $140 million (£90.0 million) of US Dollar Private Placement loan notes which have remaining terms in excess of two years (2014, $97 million) and four years (2016, $43 million).

Covenants

A key consideration for financial planning is to maintain sufficient headroom between borrowings and the ceiling set by the covenants. Laird's bank facilities and US Private Placement loan notes contain two principal financial covenants; net debt / EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation), and interest cover.

For the six months ended 30 June 2012, net borrowings were 1.5 times EBITDA against the maximum permitted of 3.5 times. Interest cover was 10.0 times against the minimum requirement of 3.0 times.

We routinely estimate our expected headroom against the covenants and we test their sensitivity to a number of alternative scenarios to assess ongoing compliance. We do not anticipate approaching our covenant limits in the foreseeable future.

Currencies in 2012

The average and period end exchange rates are set out in note 4. In the first half of 2012, close to three quarters of revenues were invoiced in US Dollars, 12% in Renminbi and 10% in Euros. In the first half of 2012 there was a US Dollar surplus but in most currencies costs exceeded revenues, the most significant being the Renminbi which accounted for almost 40% of costs. Collectively, our Euro, Swedish Krona and Czech Koruna cost amount to 10% of costs, some 70% of which is in Euros. Our net Euro exposure is insignificant.

We aim to balance local currency exposures but we operate a global business and this can create some currency imbalances where we cannot always match operating costs with revenues in that currency. The US Dollar strengthened against most currencies relevant to Laird in the first half of 2012 compared with the same period in 2011 but was weaker against the Renminbi.

We aim to cover forward at least 75% of the unmatched cash flows one quarter ahead. However, we have hedged all of our anticipated Renminbi exposure for the whole of 2012.

In addition, there is a translation impact in converting profits into our reporting currency (Pound Sterling); each US $0.01 appreciation against Sterling approximates to an annual increase in operating profit of £0.35 million.

The majority of Laird's assets are held overseas and these are hedged in part by foreign currency loans.

Principal Risks

Laird operates globally in varied markets. The principal risks and uncertainties that are or may be faced are disclosed in the 2011 Annual Report, (Directors' report), and these are expected to continue to be relevant for the remaining six months of the year.

The risks set out in the 2011 Annual Report, include the competitive markets in which we operate, the need to respond to technological change, the macro economic and political factors and exposure to increases in labour costs in China and world commodity prices, and the requirement to meet increasingly stringent environmental laws and regulations.

The ongoing macroeconomic uncertainty poses some threat to the markets served by our customers. Our European customers have been affected by a slowdown in the European economies. All of our business units have European customers but they account for less than 15% of revenues. Our net Euro trading and balance sheet exposure is not significant.

Shareholders' Equity

Shareholders' equity at 30 June 2012 was £442.2 million (30 June 2011: £443.8 million). The reconciliation of Shareholders' equity is set out in the Group statement of changes in equity.

Statement of directors' responsibilities

The directors confirm that to the best of their knowledge this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report set out on pages 1-12 herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules. The Board of directors of Laird PLC that served during the six months to 30 June 2012 and their respective responsibilities are set out in the Laird PLC 2011 Annual Report. Details of the changes since the year end are set out on page 8 of this Report.

By Order of the Board:

N J Keen, Executive Chairman

J C Silver, Finance Director

25 July 2012

INDEPENDENT INTERIM REVIEW REPORT TO LAIRD PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim report for the six months ended 30 June 2012 which comprises the Group income statement, Group statement of comprehensive income, Group statement of changes in equity, Group statement of financial position, Group cash flow statement and the related notes 1 to 14. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim report based on our review.

Scope of review

We conducted our review in accordance with ISRE (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

25 July 2012

Group income statement

(unaudited)

* before amortisation of acquired intangible assets, exceptional items, deferred tax on acquired intangible assets and goodwill, the gain or loss on disposal of businesses, the impact arising from the fair valuing of financial instruments and acquisition transaction costs.

Group statement of comprehensive income

(unaudited)

Group statement of changes in equity

(unaudited)

for the 6 months to 30 June 2012

for the 6 months to 30 June 2011

for the 12 months to 31 December 2011

Group statement of financial position

(unaudited)

Group cash flow statement

(unaudited)

Notes to the Interim Report

(unaudited)

1 Authorisation of interim financial statements

The Group's interim financial statements for the period ended 30 June 2012 were authorised for issue by the Board of Directors on 25 July 2012. Laird PLC is a public limited company incorporated and domiciled in England and Wales and its ordinary shares are traded on the London Stock Exchange.

The comparative financial information for the period to 30 June 2011 and the year ended 31 December 2011 has been extracted from the published financial statements of Laird PLC. The consolidated interim financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. These interim results are unaudited but have been reviewed by the Group's auditor. The statutory accounts for the year ended 31 December 2011 have been reported on by the Group's auditor and delivered to the registrar of companies. The report of the auditor was unqualified and did not contain the statements under section 498(2) or (3) of the Companies Act 2006.

Further copies of the Interim announcement may be obtained from Laird PLC's registered office at 100 Pall Mall, London SW1Y 5NQ.

2 Basis of preparation

Laird PLC prepares its Annual Report and Accounts on the basis of IFRS as adopted for use by the EU. The financial information presented in this Interim Report has been prepared in accordance with the accounting policies expected to be used in preparing the 2012 Annual Report and Accounts which do not differ significantly from those used in the preparation of the 2011 Annual Report and Accounts. 

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and for this reason, they continue to adopt the going concern basis in preparing the financial statements of the Group.

The condensed set of financial statements included in this Interim Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the EU.

Notes to the Interim Report

(unaudited)

3 Segmental analysis

The reportable segments for continuing operations (as defined by IFRS5) are as follows:

Performance Materials - designs and supplies a range of EMI shielding materials, thermal management solutions and signal integrity products to a wide variety of electronic devices;

Wireless Systems - designs and supplies a range of high specification wireless antennae, and machine-to-machine ("M2M") wireless modules for a number of markets including infrastructure and automotive markets; and

Discontinued operations comprise the Handset Antennae business, which was previously included within Wireless Systems prior to 2011.

* before unallocated costs and unallocated exceptional items.

Unallocated costs are central costs related to managing the parent company.

Notes to the Interim Report

(unaudited)

3 Segmental analysis (continued)

Notes to the Interim Report

(unaudited)

4 Exchange rates  

The results and cash flows of overseas subsidiaries are translated into sterling using weighted average rates of exchange for the period. The principal rates used were as follows:

5 Exceptional items

Note

(a) The exceptional costs in 2011 within Discontinued operations relate to the impairment of assets and other closure costs as a result of the decision taken in June 2011 to exit from the Handset Antennae business. The goodwill allocated to the Handset Antennae business was reassessed and a portion attributed to Wireless Systems. The remaining goodwill has been written down.

(b) The total cash outlay for exceptional costs in 2012 was £8.7m (June 2011, £6.6m).

(c) The tax effect on exceptional items in 2012 is £Nil (June 2011, £0.9m tax credit).

(d) Restructuring costs include redundancy and site rationalisation and closure costs.

Notes to the Interim Report

(unaudited)

6 Discontinued operations

7  Earnings per share

The calculation of basic and diluted earnings per share is based on the profit / (loss) for the period divided by the daily average of the number of shares in issue during the period. Diluted earnings per share is based on the same profit / (loss) but with the number of shares increased to reflect the daily average effect of relevant share options granted but not yet exercised where performance conditions have been met and shares contingently issuable.

Notes to the Interim Report

(unaudited)

8 Underlying results and taxation

Underlying profit and earnings per share are shown as the Board considers them to be relevant guides to the performance of the Group.