Preliminary Unaudited Results

DENSITRON TECHNOLOGIES PLC

PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012

Densitron Technologies plc ("Densitron" or the "Company" or the "Group"), the designer, developer and distributor of electronic displays is pleased to announce its preliminary unaudited results for the year ended 31 December 2012.

·; Orders booked increased by 9% to £23.1 million (2011: £21.2 million).

·; Profit from continuing operations of £0.6 million (2011: £1.1 million).

·; Dividends for the year totaling 0.3p per share (2011: 0.6p per share).

·; Earnings per share of 0.36p (2011: 1.18p).

·; Gross margin decreased from 29.6% to 28.6% reflecting the mix of sales made during the year.

·; New branch office in India has progressed well in the year.

·; Optical Bonding Facility in Taiwan has been set up.

·; A suite of software and smart TFT Solution (Ripdraw™) has been introduced.

Jan G Holmstrom, Chairman of Densitron, commented:

"2012 was a difficult year for the Company but I am confident that with the introduction of new products and services the business will grow, as business confidence returns to the marketplace."

Enquiries:

Chairman's Statement

Introduction

It is disappointing to report on the results for the year ended 31st December 2012 as I do not believe that they truly reflect the positive progress that the business has made over the last five years. The results reflect a general lack of confidence in the economy and caution exercised by customers, which has resulted in delays to orders which themselves have been at lower levels than originally anticipated. Together with some additional supply issues this has caused revenues to be at a lower level than expected and consequently operating profit to be lower than that achieved in the previous year. Nevertheless, I am pleased to report that the investment made over the year will enable the business to progress during the ensuing years.

Densitron Displays

The year was an extremely challenging and ultimately frustrating one for the displays business. Right up until the end of the year there was an expectation that certain revenues would be achieved but for reasons outside the Group's control these were delayed causing a shortage in the expected revenues and consequently operating profit for the year.

I outlined in my statement in the 2011 Annual Report that four specific business objectives had been identified and would be incorporated into the business plan:

·; Increase in market share from the existing business;

·; Geographical expansion of the business;

·; Introduction of new products to the current product offerings; and

·; Creation of more value by development of the Group's own products and intellectual property.

The first three of these objectives reflect how the business had been grown over the previous years and as objectives they remain unchanged but due to the global recession it has been difficult to increase our market share. However, at the beginning of 2012 we opened an office in India and this has progressed satisfactorily with a strong pipeline of business opportunities being developed. It is a complex marketplace and one that we will look to develop further as we see revenues being generated over the next 12 months. At the end of 2012 we appointed a commissioned agent to exclusively represent the business in The Netherlands and we are already seeing new opportunities for business in that region. We have also continued to expand on our existing product offering including our new range of E-Paper technology that generated its first sales during the year.

The final objective is an intention to differentiate the business from its competitors by offering either internally developed products or by providing additional services. During the year we have opened an Optical Bonding facility in Taiwan that will enable the business to offer a service to customers to improve the quality of the images displayed by their product. In addition we have developed a suite of software (Ripdraw™) and smart TFT line that will enable customers to develop their own design to display their information without the requirement for employing "expensive" software developers. We anticipate that both of these new developments will enable our business to not only develop new customers but also retain existing ones by ensuring the business is offering more to customers than its competitors.

Land at Blackheath

The Group owns a 1.25 acre piece of land that the Group owns in Blackheath, South East London.

I reported in my statement last year that we were working on the reclassification of the land through the Local Development Framework and also exploring existing use rights on the site. This continues to be the case with the Local Development Framework issuing its consultancy document on 14 February 2013 with a consultation period of 3 months. We have lodged representations detailing the reasons that we consider that the land should no longer be designated as Metropolitan Open Land. Following the consultation period the plan will be revised and passed to a Planning Inspector who will review the plan and the key issues during a period of public examination prior to submitting the final plan to the Secretary of State for approval. It is likely that the timescales involved in the process will mean that the final plan will not be adopted by the Council until next year.

In the meantime the Council has confirmed the existing use class of the land and club house as D2 and accordingly issued an appropriate certificate of lawful use for both the land and club house. This confirmation was received in April 2013 and it is now our intention to submit a planning application to develop the footprint of the clubhouse into a residential dwelling. We will continue to advise shareholders when there is further information to report.

Shareholders

Capital growth - It is disappointing that the share price fell 25% during the year and has further weakened since the year end. I believe that this was in part due to operational performance and in part due to the uncertainty caused by the ongoing issue of the claim against the Company in respect of the lease of a property in Newcastle. The Executives have continued to meet with investors and potential investors during the year to present our business and future expectations and will continue to do so throughout the year.

Dividends - An interim dividend of 0.2p per share was paid to Shareholders in September 2012. Considering the results for the full year I think it is appropriate to propose a final dividend for the year of 0.1p per share (2011: 0.4p per share) resulting in a total dividend payment for the year of 0.3p per share (2011: 0.6p per share). This represents a return to Shareholders of 85% of profit for the year (2011: 51%). The Board remains committed to paying dividends to its Shareholders but will do so taking into account the requirements of the Group to ensure continued and sustained growth.

Claim against the Company

I reported in my statement in the 2011 Annual Report that the Company had received a writ in respect of unpaid rents on a property occupied by a former Group Company. Having reviewed all of the documentation surrounding the lease, some of which dates back more than 10 years with our Lawyers, we believe that there is considerable uncertainty surrounding the lease. We believe that the most appropriate way forward is to achieve a negotiated settlement with the Landlord to bring this matter to a close in order to avoid further substantial costs accruing on both sides and to make it possible to let the property which currently stands empty. At this stage we are unable to say at what level that settlement would be achieved.

Outlook and strategy

The Board regularly reviews the medium and long term strategy for the business and believes the main driver of the business should remain organic growth. I have already written about the strategy in my review of the business above and consider that the results from this strategy have yet to be realised to their maximum potential.

During the year, through internal development, we have added two potentially significant revenue streams with the Optical Bonding line and Ripdraw™ software and smart TFT line. We begin 2013 with little or no revenue from these two new products but consider that the demand for optical bonding in particular will grow rapidly during the year. However, we expect that Ripdraw™ will take longer to generate significant levels of business due to its complexity and consider that revenues will start to be made in the second half of the year and beyond.

The addition of an office in India provides a great opportunity for the business but it is a difficult market so it is taking time to develop. At the beginning of 2013 we have a good pipeline of business opportunities and we expect to see those opportunities being turned into orders and revenues during the current year.

Overall the first four months of 2013 have been mixed with parts of the Group exceeding expectations while other parts have found closing business to be particularly difficult. The pipeline of new business remains strong and we expect to see this being converted into new orders over the next few months. We have addressed certain operational issues which should mean that the business is more focussed and able to support its customers more effectively going forward.

I would like to thank the Directors and staff throughout the Group for their continued dedication during what has turned out to be a very difficult year. Despite the difficulties of 2012 the Group is in a far better position to move forward than it was even three years ago.

Finally I would like to thank the Company's Shareholders for their continued support.

Jan G Holmstrom

Chairman

Densitron Technologies plc

Notes to the Consolidated Financial Statements

For the year ended 31 December 2012

1. Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the European Union (Adopted IFRSs) and are in accordance with IFRS as issued by the IASB.

The accounting policies applied are consistent with those set out in the financial statements of Densitron Technologies plc for the year ended 31 December 2011. The financial information in the announcement is unaudited and does not constitute the company's statutory accounts for the years ended 31st December 2012 or 2011. The financial information for the year ended 31 December 2011 is derived from the statutory accounts for that year, which were prepared under IFRSs as adopted by the EU, which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under the Companies Act 2006.

The statutory accounts for the year ended 31 December 2012, prepared in accordance with IFRSs as adopted by the EU, will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.

2. Other operating income

3. Financial income and expense

4. Business and geographical segments

The chief operating decision maker in the organization is made up of an Executive Committee comprising the Executive Directors and Chairman, they have determined the operating segments detailed within this report and on which the business is managed.

The Group is managed by the geographical location of its subsidiaries and resources are allocated as required on this basis:

·; Europe - The European market, being so diverse, is serviced by subsidiaries based in four locations:

- UK - the UK is responsible for business conducted in the UK, management of offices in India, Italy and the Netherlands, management of the Group's distribution network and sales into other locations where the Group does not have a physical presence. The UK business contributed 27% (2011: 26%) to Group revenues.

- France - the subsidiary in France is responsible for business conducted in France and with French customers whose manufacturing operations may be located elsewhere in the world. The French business contributed 11% (2011: 15%) to Group revenues.

- Nordic - Densitron Nordic is the Group's subsidiary located in Finland and servicing business locally along with Sweden and customers located in the Baltic region. The Finnish business contributed 2% (2011: 2%) to Group revenues.

- Germany - Densitron Deutschland is the Group's subsidiary based in Germany. It is responsible for business conducted in Germany, Switzerland and Austria and through the Group's distributor based in Germany. The German business contributed 9% (2011: 10%) to Group revenues.

In total the European region represented the largest part of the business contributing 49% (2011: 53%) to Group revenues.

·; US - the US segment is responsible for business conducted in the US, Canada and Central and South America. It represents 35% (2011: 34%) of the Group total revenues.

·; Asia - The Asian segment is made up of subsidiaries located in Japan and Taiwan.

- Japan - Densitron Japan is responsible for sales into Japan. It contributed 13% (2011: 11%) to Group revenues.

- Taiwan - Densitron Asia is the Group's subsidiary located in Taiwan. It is primarily a facilitating function for the rest of the Group managing suppliers located in Taiwan and China. It contributed 2% (2011: 2%) to Group revenues.

Inter-segment transfer pricing is based on the level of work carried out and the risk encountered by each party in order to make a third party sale.

Reconciliation of reportable segments, profit and loss, assets and liabilities to the Group's corresponding amounts:

The analysis of the Group's segmental information by geographical location is: