Preliminary Results

ARMOUR GROUP PLC

 ("Armour" or the "Group")

Preliminary Results for the year ended 31 August 2012

FINANCIAL HEADLINES

§ Sales £34.4 million (2011: £42.3 million).

§ Loss from operations before exceptional items £1.2 million (2011: £1.7 million).

§ Cash generated by operations £1.0 million (2011: Utilised by operations £1.3 million).

§ Net debt £7.6 million (2011: £6.9 million).

§ Basic loss per ordinary share 13.0p (2011: 3.7p).

§ Underlying loss per ordinary share 1.6p (2011: 1.8p)

George Dexter, Chief Executive of Armour Group plc commented:

"The year to 31 August 2012 has been another difficult year for the Group with the weak economic environment continuing to impact our core UK retail markets, particularly those served by Armour Home. Our response to the challenging market conditions has been a comprehensive restructuring programme across the Group operations. This restructuring programme is now complete and over the past twenty four months has delivered underlying cost savings of £5.7 million and a gross margin improvement of two percentage points estimated at £0.6 million.

The progress that is being made is not clearly evident in the results for the year to 31 August 2012. However, the actions that have been taken by the Group over the past two years are having a positive impact on the Group's performance. Armour Automotive has reported a healthy 65% increase in underlying operating profit in the year to 31 August 2012 and Armour Home has achieved breakeven in the first months of the new financial year. In addition, the full benefits of the restructuring are still yet to be realised, with an additional £1 million of cost savings expected to flow through in 2013 together with further improvement in gross margins as new products come on stream and price increases take effect.

Strategically, the changes made to our operations over the past two years to focus on core brands, customers and sales channels have made a clear and beneficial difference to the Group. With fewer brands to manage, our efforts are concentrated on those brands with critical size selling to a core customer base that understands our products and knows how to sell them. Added to this, we have a good infrastructure that works well and is capable of managing sales growth as and when our markets recover.

There are encouraging signs that the prospects for the Group are improving, the most important of these being at Armour Home. We believe that we have sized the Group correctly for our markets, we have made significant progress in improving our margins and should consumer confidence pick up in 2013, which is being predicted by number of economic forecasters, the Group's progress to a sustained recovery should continue."

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: 0207 220 0500

Geoff Nash

Ben Thompson

Stephen Norcross (Sales)

ARMOUR GROUP PLC

 ("Armour" or the "Group")

Preliminary Results for the year ended 31 August 2012

CHAIRMAN'S STATEMENT

The year to 31 August 2012 has again been challenging for the Group with our core UK consumer markets continuing to be weak against a background of a double dip recession. Group sales were £34.4 million (2011: £42.3 million), which generated a loss from operations before exceptional items of £1.2 million (2011: £1.7 million). The basic loss per ordinary share, before exceptional items, was 1.6p (2011: 1.8p). Group net debt at 31 August 2012 was £7.6 million (2011: £6.9 million).

The restructuring programme that the Group put in place last year has delivered £3.0 million of cost savings and an increase for the Group of two percentage points in gross margin over the prior year. However, the continuing difficulties in the market and the further fall in sales have meant that these improvements have not been sufficient to return the Group to profit in 2012. The operating businesses have continued to realise cost savings with an additional £1 million anticipated in 2013 and further improvement in margins expected.

As part of the restructuring undertaken the Group has incurred exceptional costs of £2.1 million in respect of redundancy, the write off of development expenditure that is now not considered recoverable from the sales of the associated products and the exit costs in respect of two leases that are now surplus to requirements. In addition, and in accordance with the accounting standards, the Group has taken the decision to write down goodwill by £9 million, which reflects the more cautious outlook resulting from the economic conditions.

Armour Automotive has continued to improve with sales of £14.4 million marginally ahead of last year and underlying operating profits increasing by 65% to £1.3 million. The continued strengthening of the non-retail sales channels, particularly in the agricultural vehicles and the GPS and GSM antennae markets, more than compensated for the expected decline in retail. The recent launches of the new iO in-car hands free music streaming solutions and the new audio platform for the agricultural vehicle market provide confidence that Armour Automotive will continue to grow profitably in 2013.

Armour Home sales reduced by 30% to £18.9 million. By lowering the cost base by £2.5 million and improving margins by two percentage points, the underlying operating loss for the year was held at the same level as last year, at £1.2 million. The restructuring within Armour Home is now complete and the improvements made in the business are starting to show with a breakeven position achieved in the first months of the new financial year. New products, improving margins, a significantly lower cost base together with an improved year on year trading performance are all encouraging indicators for the future.

As a product based business, the continued investment in new product development is a critical part of the Group strategy to deliver future growth. The Group recently announced the launch of important new products in our iO range of in-car hands free music streaming solutions and our new Systemline E200 installed audio solution for the home market. These new products are part of a wider new product programme that regularly launches new products into the market and are expected to generate incremental sales growth in the new financial year.

The past two to three years have been very difficult for the Group and particularly for our employees. It is to their credit that they have worked professionally and with dedication to implement the significant changes that have been necessary to turn the Group around. I would like to take this opportunity of thanking them on behalf of the Board for their commitment and effort over the past year.

It is pleasing to report that the Group as a whole has returned to profit in the first quarter of the new financial year. However, our core consumer markets remain fragile and the economic outlook, whilst improved, continues to be uncertain. The Board remains cautious, but is encouraged by the progress being made by the Group, which it expects will continue in 2013.

BOB MORTON

Chairman

18 December 2012

ARMOUR GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 August 2012

ARMOUR GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 August 2012

ARMOUR GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the year ended 31 August 2012

ARMOUR GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 August 2012

 ARMOUR GROUP PLC

Preliminary Announcement of the audited financial statements for the year ended 31 August 2012

1. Accounting Policies

Basis of preparation

The Group's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board as adopted by the European Union ("Adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in mid January 2013.

Various new standards, interpretations and amendments have become effective since 1 September 2011, but have had no material effect on the financial statements.

2. Segment Information

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; and

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

These segments are considered on the basis of different products and services. The accounting policies of the operating segments are the same as those described in the accounting policies in note 1.

Geographical information

3. Exceptional items

Over the course of the last two years and in response to the economic environment, the Group has implemented a restructuring programme, particularly within the Armour Home division. The restructuring involved redundancies and the closure of various UK operational activities, which in turn has necessitated the write-down of various assets held by the subsidiary undertakings. In addition, and in accordance with accounting standards, the carrying value of goodwill has been written down by £9 million. The exceptional costs incurred are shown below:

4. Discontinued operations

In the previous year ended 31 August 2011, in response to customer indicated demand, the Group set-up a Chinese manufacturing facility. Due to the subsequent curtailment of demand, continued operation of this facility which required a steady and reliable production volume, was no longer viable. Consequently, the facility was closed in May 2011. The costs of setting up and then terminating this now discontinued operation, and the associated tax credit, are shown below:

The statement of cash flows includes the following amounts relating to discontinued operations:

5. Taxation

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to the result for the year are as follows:

6. (Loss)/earnings per ordinary share

Basic (loss)/earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the financial year of 93,627,496 (31 August 2011: 79,850,588). Diluted (loss)/earnings per ordinary share are calculated with reference to 93,627,496 (31 August 2011: 79,850,588) ordinary shares. The effect of the exercise of options on the weighted average number of ordinary shares in issue is nil (31 August 2011: Nil).

At the Company's general meeting held on 23 February 2011, the share capital was reorganised which gave rise to the creation of 68,480,067 deferred shares of 9p each. These deferred shares have restricted and minimal rights whereby holders are not entitled to receive any dividend or other distribution. The deferred shares are therefore excluded from the weighted average, and diluted weighted average, ordinary shares in issue.

At 31 August 2012, the Armour Employees' Share Trust held 3,424,000 (31 August 2011: 3,424,000) ordinary shares. The weighted average number of ordinary shares held by the Armour Employees' Share Trust during the year of 3,424,000 (31 August 2011: 3,424,000) is not included in either the weighted average, or diluted weighted average, ordinary shares in issue during the financial year.

Underlying (loss)/earnings per ordinary share are also shown calculated by reference to earnings before exceptional items, discontinued operations and share-based payments. The Directors consider that this gives a useful additional indication of underlying performance. The term "underlying" is not defined under IFRS and may not therefore be comparable with similarly titled profit measures reported by other entities.

7. Dividend

The Board did not recommend a dividend for the year ended 31 August 2011 and has not recommended a final dividend for the year ended 31 August 2012.

8. Share capital

At a general meeting held in the previous reporting year (23 February 2011) the share capital of the Company was reorganised. Each of the 68,480,067 then existing 10p ordinary shares in issue was sub-divided into one new ordinary share of 1p each and one deferred share of 9p each. Each authorised but unissued ordinary share was sub-divided into 10 new ordinary shares of 1p each. On the same date, the Company issued 28,571,429 new ordinary shares of 1p each by way of a placing at 7p per share. The number of 1p ordinary shares in issue was therefore 97,051,496 and the number of 9p deferred shares was 68,480,067. There have been no movements to share capital during the current year.

No new share certificates were issued in respect to the ordinary shares of 1p each, the existing certificates continuing to be valid and accepted as evidence of title. The holders of ordinary shares of 1p each are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All the ordinary shares of 1p each rank equally with regard to the Company's residual assets.

The deferred shares of 9p each have restricted and minimal rights, whereby:

·; Holders are not entitled to receive any dividend, or other distribution or to receive notice or speak or vote at general meetings of the Company;

·; On a return of assets on a winding up, holders are only entitled to amounts paid up on such shares after the repayment of £10 million per ordinary share;

·; The deferred shares are not freely transferable;

·; The creation and issue of further shares which rank equally or in priority to the deferred shares or the passing of a resolution of the Company to cancel the deferred shares or to effect a reduction of the capital shall not constitute a modification or abrogation of their rights;

·; The Company has the right at any time to purchase all of the deferred shares for an aggregate consideration of £1.00;

·; No application has or will be made for the deferred shares to be admitted to trading on AIM or any other stock exchange; and

·; No share certificates have or will be issued for any of the deferred shares.

9. Net cash flow from operations

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

10. Reconciliation of net cash flow to movement in net debt

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

11. Cash and cash equivalents

12. Publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute the Group's financial statements for the year ended 31 August 2012 and the year ended 31 August 2011.

The financial statements for the year ended 31 August 2011 were prepared in accordance with Adopted IFRS and have been delivered to the Registrar of Companies. The financial statements for the year ended 31 August 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors' report on both accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under sections 498(2) or (3) of the Companies Act 2006.

The full audited financial statements of Armour Group plc for the period ended 31 August 2012 are expected to be posted to shareholders in mid January 2013 and will be available to the public at the Company's registered office, Lonsdale House, 7-9 Lonsdale Gardens, Tunbridge Wells Kent, TN1 1NU and available to view on the Company's website at www.armourgroup.uk.com from that date.

13. Annual General Meeting

The Annual General Meeting will be held at the offices of Arnold & Porter (UK) LLP, Tower 42, 25 Old Broad Street, London EC2N 1HQ on Friday 22 February 2013.

ABOUT ARMOUR

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

Armour Group has two principal UK based operating divisions, Armour Home and Armour Automotive, and Armour Asia based in Hong Kong. The Group employs 190 people across operating sites in the UK, Scandinavia and Hong Kong.

The Group possesses a strong brand portfolio, including more than 6,000 products and accessories, which is underpinned by innovative product development and investment in proprietary technology.

An unrivalled distribution capability ensures that products are supplied direct to more than 5,000 retail outlets within the UK and to customers in 65 countries worldwide. Armour Group is also a leading supplier of audio and visual technology to a host of non-retail customers including vehicle manufacturers, hotel chains, house builders and custom installers.

The Group's strength is based on the following fundamentals:

·; Strong, recognised and award-winning brands

·; Quality product portfolio

·; Structured programme of product innovation

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

·; First class customer service