Interim Statement

Armour Group plc

(AIM: AMR)

("Armour Group" or the "Group")

Unaudited Interim Statement

For the six months to 28 February 2013

Armour Group plc is the United Kingdom's leading consumer electronics group within the home and in-car communications and entertainment markets, committed to designing, manufacturing and distributing leading-edge audio and visual products and solutions.

Financial Headlines

·; Sales £16.0 million (2012: £18.0 million)

·; Profit before interest, tax and exceptional costs of £0.2 million (2012: Loss of £0.5 million)

·; Cash generated from operations of £1.1 million (2012: Utilised £0.5 million)

·; Net debt £7.1 million (2012: £8.3 million)

·; Basic loss per ordinary share 0.1p (2012: 0.7p)

Commenting on today's results, George Dexter, CEO, said:

"Whilst sales in the six months to 28 February 2013 were down 11% at £16.0 million, we were cash generative with profit before interest and tax of £0.2m against a loss of £0.5 million last year. Consumer demand in our core UK markets remains subdued. However, there are positive signs that UK consumer demand is stabilising and showing signs of recovery, but in certain categories of product, such as audio-visual furniture, sales have continued to fall. Internationally, the Group has generated good sales growth of 9% year on year, arising from Armour Home's very strong export sales performance.

The Group's gross margin performance has continued its improving trend with a further increase of two percentage points in the first six months of the year. All the Group's operations have contributed to this improvement, with a better sales mix driven by a management focus on the quality of the revenues being generated.

The restructuring programme undertaken over the past two years, which is now broadly complete, continues to deliver savings. In the six months to 28 February 2013, the Group's year on year operating costs fell by a further £1.3 million, which is already ahead of the £1.0 million of savings anticipated in the 2012 Annual Report. In the past two and a half years, the Group has reduced its annualised operating cost by £7.0 million.

Group net debt at the half-year point was £7.1 million, £1.2 million better than a year ago and £0.5 million lower than the year end position at 31 August 2012. This improvement comes from a combination of the better trading performance and significantly improved working capital."

For further information please contact:

Armour Group plc Tel: 01892 502700

George Dexter, Chief Executive

John Harris, Finance Director

FinnCap, Nominated Adviser and Broker Tel: 020 7220 0500

Geoff Nash, Ben Thompson (corporate finance)

Stephen Norcross (corporate broking)

Unaudited Interim Statement

For the six months to 28 February 2013

Results and Dividend

The Group has made significant progress in the first six months of the year, improving margins, returning to profit at an operating level and reducing net debt. Both the core operating businesses of Armour Home and Armour Automotive were in profit, with Armour Home reporting a £0.7 million turnaround from the prior year. Whilst sales in the six months to 28 February 2013 were down 11% at £16.0 million, profit before interest and tax was £0.2m.

·; Sales £16.0 million (2012: £18.0 million)

·; Profit before interest, tax and exceptional costs of £0.2 million (2012: Loss of £0.5 million)

·; Cash generated from operations of £1.1 million (2012: Utilised £0.5 million)

·; Net debt £7.1 million (2012: £8.3 million)

·; Basic loss per ordinary share 0.1p (2012: 0.7p)

The Board is not recommending an interim dividend.

Operations

Consumer demand in our core UK markets remains subdued, heavily influenced by the challenging conditions in the wider economic environment, particularly in the UK where the Group sales are down 19% on the prior year. There are positive signs that UK consumer demand is stabilising, but in certain categories of product, such as audio-visual furniture, sales have continued to fall. Internationally, the Group has generated good sales growth of 9% year on year, arising from Armour Home's very strong export sales performance.

The Group's gross margin performance has continued its improving trend with a further increase of two percentage points in the first six months of the year. All the Group's operations have contributed to this improvement, with a better sales mix driven by a management focus on the quality of the revenues being generated.

The restructuring programme undertaken over the past two years, which is now broadly complete, continues to deliver savings. In the six months to 28 February 2013, the Group's year on year operating costs fell by a further £1.3 million, which is already ahead of the £1.0 million of savings anticipated in the 2012 Annual Report. In the past two and a half years, the Group has reduced its annualised operating cost by £7.0 million, with the home division accounting for £5.9 million of this figure.

Group net debt at the half-year point was £7.1 million, £1.2 million better than a year ago and £0.5 million lower than the year end position at 31 August 2012. This improvement comes from a combination of the better trading performance and significantly improved working capital.

Armour Home

Armour Home has had a much improved six months, with the benefits of the restructuring clearly evident and the division delivering an operating profit of £0.2 million. This return to profit is despite a further fall in sales of 15% to £8.7 million, which is primarily accounted for by a continued fall in demand for audio-visual furniture. In general, whilst the market conditions within the core UK retail sector remain difficult, there are signs of stabilisation and the potential for a return to growth in most of the product categories over the next twelve months.

Margins within Armour Home have continued to increase and are up two percentage points on the prior year and five percentage points from two years ago. This has been a key area targeted for improvement as part of restructuring programme of the Armour Home business and further improvement is anticipated.

Operating costs in the period have continued to fall, down by a £1.2 million on the comparative period, with some further reductions expected in the second half of the year. Over the last two and a half years, Armour Home has reduced its operating costs by £5.9 million, which is a reduction of 44%. The division is now close to its optimal cost base for its size and the focus is now on driving efficiencies and strategic investment targeted at sales growth.

The most difficult product category remains the Alphason branded range of audio-visual furniture. Consumer demand has continued to fall with sales within this product category down by 52% in the first six months of the year. Our expectation is that sales will start to stabilise over the coming twelve months, but we nonetheless expect a further decline in sales between now and the end of the financial year.

In the specialist UK retail channel, sales have performed better than our budgeted plan, although they have declined on a year on year basis. Changes to the product portfolio and timings of new product launches have had an impact on the first half performance when compared to the prior year. The strategy of focusing on core brands and customers is continuing to deliver good results for the business and, when combined with the introduction of new products such as the recently launched Q Acoustics Concept 20 speakers, this sales channel is expected to return to net growth in the next six to eight months.

The home automation sales channel has had a mixed first half of the year with sales of our core multi-room Systemline brand increasing year on year, but overall sales falling. This fall is in part due to the discontinuance of a number of smaller third party brands but more significantly the decline is caused by the continuing subdued nature of the housing market, which is holding back the sales recovery in this channel. Our strategy in this channel is similar to that followed successfully in specialist retail, focusing on our core strengths and partners, which in turn is building a firm foundation that forms the basis of our continued optimism for the medium term prospects for this sales channel. There are increasing signs of improvement in the house building market but, given the long lead times in the sales cycle, any sustained improvement in demand is unlikely to have a material impact in this financial year.

In recognising the difficulties with the UK retail sales channel, Armour Home has invested over the past two years in growing its international business, which has been previously reported in the 2012 Annual Report and last year's Interim Statement. This investment is starting to deliver tangible improvement with year on year sales growth of 27% in the first six months. This growth is coming from our core QED and Q Acoustics brands and across a range of territories, with Scandinavia and Russia again performing well. Looking forward continued growth in our international business is expected as new products and territories are added.

The contract that we announced in January, being the supply of a bespoke designed speaker for the fitting out of the retail outlets of a major international fashion group, is going well. To date, we have delivered 9,000 speakers with another 6,000 scheduled for delivery before the year-end. In addition, based on the success of this contract, we have been asked by our customer to quote on two new speaker projects, which if successful will commence delivery in early 2014.

Armour Home is making good progress in its recovery and is expected to improve on its half-year performance by the year-end. However, the speed of recovery does depend quite heavily on improvement in the consumer facing markets that it serves. These markets are expected to remain challenging and whilst there are encouraging signs of better times ahead, any upturn is likely to be slow and unpredictable.

Armour Automotive

Armour Automotive has had a quiet start to the year with sales in the six months to 28 February 2013 down 6% at £6.8 million and operating profits in-line with last year at £0.6 million. The sales slowdown has come from both the retail and non-retail sales channels and in part can be attributed to the discontinuance of the third party distribution of the Directed range of security products. Despite the sales fall in the first six months of the year, there is nothing to suggest a major change in the generally positive outlook for the business.

Compensating for the sales decline have been improving gross margins and lower operating costs. Gross margins have increased by one percentage point, driven by an improved sales mix weighted towards the higher margin cable and connectivity solutions. Operating costs in the first six months were £0.1 million below the prior year.

Sales into the retail market have performed relatively well and whilst they are 3% down on last year, the performance in the first six months is ahead of our expectations. Good demand from the large key customers has broadly compensated weaker demand from the independent retail customer base, the latter reflecting the major part of the discontinuance of the Directed security product range. Sales of the Autoleads range of cable and connectivity solutions, which now accounts for 35% of total sales, has performed well being 3% up on the prior year.

The non-retail sales channel has had a slow first half and is below our plan with sales down 7% on last year. There are a combination of factors influencing the first half sales with timing issues on orders and a slow down in vehicle production in the construction sector being the principal causes. The second half of the year looks promising, with a number of new contracts anticipated to come on stream for our new radio platform, our driver monitoring system (designed to improve driver safety and fuel economy) and in-vehicle video recording systems. Armour Automotive continues to build its customer base in this channel both in the UK and overseas and we expect the second half sales to deliver overall year on year growth.

We launched, last September, the second generation of our iO branded in-vehicle music streaming and hands free solutions. Sales in the first half of the year have been slower than anticipated, but are steadily growing as the customer base expands and the products establish themselves in the market. The second half of the year will see this growth continue as the products build market share and new customers adopt iO as their preferred solution.

Armour Automotive continues to be a strong business and our expectation is for year on year growth in its operating profits.

Outlook

The Group is making good progress in its recovery from a difficult two years. The restructuring of the Group operations is delivering an improving performance, which is expected to continue and accelerate in the medium term as our core consumer facing markets regain their confidence. The Board believes that the strategy is right and the Group remains on course to be profitable and meet market expectations for 2013.

Bob Morton George Dexter

Chairman Chief Executive

9 May 2013

CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOME

For the six months to 28 February 2013

CONSOLIDATEDSTATEMENT OF FINANCIAL POSITION

At 28 February 2013

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the six months to 28 February 2013 (unaudited)

For the six months to 29 February 2012 (unaudited)

For the twelve months ended 31 August 2012

CONSOLIDATEDSTATEMENT OF CASH FLOWS

For the six months to 28 February 2013

Notes to the Interim Financial Statements

1. Basis of Preparation

These interim financial statements have been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively "Adopted IFRS").

The principal accounting policies used in preparing these interim financial statements are those expected to apply to the Group's Consolidated Financial Statements for the year ending 31 August 2013 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 August 2012. The financial information for the six months ended 28 February 2013 and 29 February 2012 is unaudited and does not constitute statutory financial statements for those periods.

The comparative financial information for the twelve months ended 31 August 2012 has been derived from the audited statutory financial statements for that year. These financial statements were approved by shareholders at the Annual General Meeting and have been delivered to the Registrar of Companies. The Auditors' Report on those financial statements was unqualified, did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying their report and did not include a statement under section 498(2) or 498(3) of the Companies Act 2006.

The Board of Directors approved this interim report on 9 May 2013.

2. Business Segments

The Group operates in the following main business segments:

Armour Automotive: The design, manufacture and supply of products for the in-vehicle communications and entertainment market;

Armour Home: The design, manufacture and supply of products into the Hi-Fi, home theatre, home entertainment and office furniture markets;

Armour Asia: The sale of Armour Automotive and Armour Home products into Asian markets and provision of supplier support services, including quality control, to the UK businesses;

Central operations: The provision of Group-wide support services including finance and future product concepts to the other business segments within the Group.

3. Exceptional items

In response to the economic environment, the Group has implemented a restructuring programme, particularly within the Armour Home division. The exceptional costs incurred are shown below, which include recognition, last year, of an impairment to the carrying value of goodwill of £9.0 million:

4. Taxation

The taxation credit for the six months to 28 February 2013 is based on the effective taxation rate, which is estimated will apply for the year ending 31 August 2013.

5. Loss per Ordinary Share

The basic loss per ordinary share is calculated using the weighted average number of ordinary shares in issue during the financial period of 93,627,496 (29 February 2012 and 31 August 2012: 93,627,496).

The diluted loss per ordinary share is calculated using the weighted average number of ordinary shares in issue during the financial period of 93,627,496 (29 February 2012 and 31 August 2012: 93,627,496). The effect of the exercise of options on the weighted average number of ordinary shares in issue is nil for all periods.

The weighted average number of ordinary shares held by the Armour Employees' Share Trust of 3,424,000 (29 February 2012 and 31 August 2012: 3,424,000) are not included in either the weighted average, or diluted weighted average, ordinary shares in issue during the financial period.

The underlying loss per ordinary share is also shown calculated by reference to the loss before exceptional items and, where applicable, discontinued operations and share-based payments. The Directors consider that this gives a useful additional indication of underlying performance.

6. Net Cash from Operations

*EBITDA is defined as profit/(loss) before interest, taxation, depreciation, amortisation and share-based payments.

7. Reconciliation of Net Cash Flow to Movement in Net Debt

Net debt incorporates the Group's loans, borrowings and bank overdrafts less cash and cash equivalents. A reconciliation of the movement in the net debt is shown below:

8. Copies of Interim Report

A copy of this interim report can be viewed on the Group's website: www.armourgroup.uk.com and will be made available upon request at the Company's Registered Office, Lonsdale House, 7-9 Lonsdale Gardens, Tunbridge Wells, Kent, TN1 1NU.

ABOUT ARMOUR

Armour Group is the United Kingdom's leading consumer electronics group within the home and in-car communications and entertainment markets, committed to designing, manufacturing and distributing leading-edge audio and visual products and solutions.

Armour Group has two principal operating divisions, Armour Home and Armour Automotive, and now employs 200 people in the UK, Scandinavia and Hong Kong.

The Group possesses a strong brand portfolio, which is underpinned by innovative product development and investment in proprietary technology.

An unrivalled distribution capability ensures that products are supplied direct to retail outlets throughout the UK, direct to consumer where required and to customers in 65 countries worldwide. Armour Group is also a leading supplier of audio and visual technology to many non-retail customers including vehicle manufacturers, hotel chains, house builders and custom installers.

The Group's strength is based on 5 fundamentals:

·; Strong recognised brands

·; Quality product portfolio

·; Structured programme of product innovation

·; Unrivalled distribution into the UK's retail electronics market

·; First class customer service