Loan Facility

Armour Group plc ("Armour" or the "Group")

Loan facility

Armour, the UK's leading consumer electronics group focused on the in-car communications and entertainment and home entertainment markets, announces that Hawk Investment Holdings Limited ("Hawk") has agreed to loan the Group an additional £0.8 million. Armour currently has a £1.2 million loan from Hawk which was announced in July 2011.

Whilst Armour's automotive division has perpetuated its year-on-year sales growth and increased profitability, the ongoing weakness in consumer related markets continues to have a significant adverse impact on the Group, particularly at Armour Home. The actions taken by the Group's management, in response to these market conditions, have mitigated the impact through downsizing the Group's cost base, repositioning Armour Home and promoting the growth of the automotive division. As announced in the trading update on 2 May, the Group now anticipates returning to profit in the year ending August 2013 and continues to work on optimising its cost base and developing new markets that reduce reliance on the UK markets currently served.

Armour has existing funding facilities with GE Commercial Finance Limited totalling £16 million in aggregate of which approximately £7 million had been drawn down at 30 April 2012. These facilities provide a variable level of funding due to the invoice discounting and inventory elements. Due to the lower than expected level of sales, the Group has not been able to fully utilise these facilities, and consequently, the Board has decided to proceed with an additional £0.8 million loan from Hawk to support working capital requirements.

Terms of loan

Hawk will lend the Group an additional £0.8 million for a period up to 23 July 2012. The loan carries an interest rate of 1% per month and can be repaid at any time at the request of the Company with no early redemption cost. The loan will be secured by way of a debenture, which will rank behind the security in respect of the funding facilities provided by GE Commercial Finance Limited.

Hawk is an investment vehicle controlled by ALR Morton. Hawk owns 29.9% of the issued ordinary share capital of Armour and is deemed to be in concert with various other parties as detailed in the circular of 28 January 2011. In aggregate, ALR Morton and persons acting in concert, hold 39.1% of the issued ordinary share capital of Armour.

Due to the above shareholding and ALR Morton's position as Chairman of Armour, the loan from Hawk is deemed a related party transaction under Rule 13 of the AIM Rules. The Independent Directors (being all directors excluding ALR Morton), having consulted with the Group's nominated adviser finnCap, consider that the proposed transaction is fair and reasonable insofar as the Group's shareholders are concerned.

15 May 2012

Further Details:

Armour Group plc: Tel: 01892 502700

George Dexter

John Harris

FinnCap: Tel: 020 7220 0500

Geoff Nash

Ben Thompson

Stephen Norcross (Broking)