Preliminary Results for the year to 31 August 2013

ARMOUR GROUP PLC

 ("Armour" or the "Group")

Preliminary Results for the year ended 31 August 2013

FINANCIAL HEADLINES

§ Turnover £32.1 million (2012: £34.4 million).

§ Return to profit from operations of £0.6 million (2012: Loss of £1.2 million).

§ Cash generated by operations £1.4 million (2012: £1.0 million).

§ Net debt £7.6 million (2012: £7.6 million).

§ Basic earnings per ordinary share 0.04p (2012: Loss per ordinary share 12.98p).

§ Underlying earnings per ordinary share 0.04p (2012: Loss per ordinary share 1.56p)

George Dexter, Chief Executive of Armour Group plc commented:

"In the year to 31 August 2013, the financial results for the Group provided hard evidence that the Group's recovery from the impact of the economic downturn is well underway. The operating profit of £0.6 million in the year represents a £1.8 million improvement from the loss reported in the 2012 results. All our operating businesses showed good improvement on their prior year performances, and in the case of Armour Home, our home entertainment division, this improvement has been significant.

Strategically, we have continued to focus on developing the core brands in our portfolio, our key customers and sales channels whilst optimising the cost base and gross margins within the Group. I believe that good progress has been made in respect of all these strategic objectives in 2013 and I am confident that further progress and improvement will be achieved in 2014".

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)

Newgate Threadneedle Tel: 0207 653 9850

Graham Herring

Robyn McConnachie

CHAIRMAN'S STATEMENT

The year to 31 August 2013 has been one of recovery for the Group and I am pleased to report that there has been a return to profit, with all the operating businesses making good progress. Of particular importance has been the recovery in Armour Home, which has returned to profit after two difficult and challenging years.

Group sales for the year were £32.1 million (2012: £34.4 million), which generated a profit from operations before interest and tax of £0.6 million (2012: Loss before interest, tax and exceptional items of £1.2 million). There were no exceptional items in the year (2012: £11.1 million). The basic earnings per ordinary share were 0.04p (2012: Loss per ordinary share before exceptional items of 1.56p). Group net debt at 31 August 2013 was £7.6 million (2012: £7.6 million).

The core retail markets that we serve have remained challenging, particularly in the UK, where consumer confidence continues to be fragile despite the encouraging signs of a more sustained economic recovery. The over-reliance on UK generated sales has been recognised by the Board and, as a consequence, one of the core parts of our strategy has been to develop our international business. In 2013, we have made good progress on this with our international sales increasing by 15% on the prior year, which now account for 36% of all Group sales, up from 29% last year. We have also continued to reduce our cost base with a further 17% reduction in our operating costs in the year to 31 August 2013, which equates to a saving of £2.5 million on the prior year. These savings exceed those anticipated this time last year, when I reported that we were targeting a further £1 million of additional savings in 2013.

Armour Automotive has made steady progress increasing sales by 1% in the year to £14.5 million and increasing underlying operating profit by 18% to £1.5 million. The year started slowly but accelerated in the second half with another strong performance from the non-retail sales channel, with the agricultural vehicle market again being the key sales driver for the business.

Armour Home has delivered significant improvement in 2013. Whilst sales fell in the year by 14% to £16.1 million, the operating result has been turned from an underlying £1.2 million loss reported last year into a £0.1 million profit. The UK remained a difficult market in terms of sales, but good progress has been made internationally with strong sales growth coming from a wide range of geographical markets. The cost base of the business has been further reduced and once again gross margins increased. There is still some way to go in the recovery of Armour Home, but the results reported this year show that we are making good progress and the future looks considerably more positive than for some time.

Armour Asia, our business based in Hong Kong that serves the Asian markets, recorded a 27% increase in sales to £1.5 million. Whilst this resulted in a small operating loss, the result was much improved on 2012. The development of our sales network in Asian markets forms a key part of our strategy of broadening the international reach of the Group. We can see from the progress being made in Armour Asia that the business is reaching a critical mass, which we believe positions it to deliver a sustainable ongoing profit.

We remain committed to developing class-leading products and this is a core element of the Group strategy. Throughout the year we have continued to invest in new products across our core brands as well as developing customer specific products. It is this investment that drives future sales and I remain confident that the products being developed and launched by the Group's operating divisions will deliver sales growth in 2014 and beyond.

The Group's employees are an important asset and a fundamental part of the future success of the Group. I would like to take this opportunity of thanking them, on behalf of the Board, for their professionalism, commitment and effort over the past year.

The Group has made a considerable amount of progress over the past two years and it is very pleasing to see this reflected in the results for 2013. I am delighted to report that this progress is continuing and our trading performance in the first quarter of the new financial year is showing improvement on the comparative period in both sales and operating profit. There is still work to be done as we recover from the difficulties of the last two years, however we remain confident that our strategy is right and with the improving wider economic outlook, there are grounds for optimism.

BOB MORTON

Chairman

17 December 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 August 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 August 2013

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the year ended 31 August 2013

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 August 2013

Preliminary Announcement of the audited financial statements for the year ended 31 August 2013

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 2014.

Various new standards, interpretations and amendments have become effective since 1 September 2012, 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

In the prior year, and in response to the economic environment, the Group 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 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 was written down by £9 million. The exceptional costs incurred are shown below:

4. 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:

5. Earnings/(loss) per ordinary share

Basic earnings/(loss) 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 2012: 93,627,496). Diluted earnings/(loss) per ordinary share are calculated with reference to 93,627,496 (31 August 2012: 93,627,496) ordinary shares. The effect of the exercise of options on the weighted average number of ordinary shares in issue is nil (31 August 2012: Nil).

The Company's 68,480,067 deferred shares of 9p each 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 2013, the Armour Employees' Share Trust held 3,424,000 (31 August 2012: 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 2012: 3,424,000) is not included in either the weighted average, or diluted weighted average, ordinary shares in issue during the financial year.

Underlying earnings/(loss) per ordinary share are also shown calculated by reference to earnings before exceptional items. 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.

6. Dividend

The Board did not recommend a dividend for the year ended 31 August 2012 and has not recommended a final dividend for the year ended 31 August 2013.

7. Share capital

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.

8. Net cash flow from operations

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

9. 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:

10. Cash and cash equivalents

11. 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 2013 and the year ended 31 August 2012.

The financial statements for the year ended 31 August 2012 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 2013 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 2013 are expected to be posted to shareholders in mid January 2014 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.

12. 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 Monday 24 February 2014.

ABOUT ARMOUR

Armour Group plc is a leading United Kingdom 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 170 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 4,000 retail outlets within the UK and to customers in 63 countries worldwide. Armour Group is also a leading supplier of audio and visual technology to a host of non-retail customers including vehicle manufacturers, house builders and custom installers.

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

· A quality product portfolio supported by a structured programme of product innovation,

· Highly regarded and award-winning brands,

· Unrivalled distribution into the UK's retail electronics market and a focus on efficiency and first class customer service.