Rights Issue and IMS

28th Oct 2009 16:25



LAIRD PLC

28 October 2009

THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED HEREIN) IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLuMBIA), Australia, Canada, SOUTH AFRICA or Japan.

Laird PLC ("Laird" or the "Company")

PROPOSED 1 FOR 2 RIGHTS ISSUE TO RAISE APPROXIMATELY £89 MILLION AND INTERIM MANAGEMENT STATEMENT

The Board of Laird today announces a fully underwritten 1 for 2 Rights Issue to raise proceeds of approximately £89 million, before expenses, through the issue of up to 88,767,402 New Ordinary Shares. This announcement also constitutes Laird's Interim Management Statement covering the period from 1 July to 28 October 2009, as required by the UK Listing Authority's Disclosure and Transparency Rules.

Rationale for the Rights Issue

Provides Laird with appropriate headroom against the covenants in its existing attractive debt financing given the continuing uncertain economic outlook and with the limited visibility of customer demand

Laird's increased balance sheet strength as a result of the Rights Issue demonstrates to its major customers that Laird remains a financially sound supplier

Provides Laird with greater financial stability to enable it to continue its investment in the business for future growth and to preserve and enhance Laird's capabilities as and when its markets recover

Laird's major shareholders, including Aviva Investors, have already provided significant commitment for the rights issue.

Interim management statement summary

Laird's electronic markets remain extremely challenging, and visibility of customer and end market demand remains limited

Against this background Laird has taken decisive actions to align its operations to the current market environment

In addition, Laird has seen signs of improved order intake, shipment volumes and revenues during the third quarter of 2009, compared with the second quarter

Revenue in the third quarter was £130.3 million, a 22 per cent. decrease compared with the same period in 2008, but up 6 per cent. sequentially compared with the second quarter of 2009. Expressed in US$, revenue in the third quarter was up 12 per cent. compared with the second quarter of 2009

For the nine months to 30 September 2009, revenue was £396.4 million

Underlying pre tax profit in the third quarter of 2009 was £8.8 million, and for the nine months to 30 September 2009 was £16.4 million

Laird's underlying operating profit margin, before interest and tax, in the third quarter of 2009 increased to 8.1 per cent., compared with 4.3 per cent. in the first half of 2009

Laird's net debt as at 30 September 2009 was £144.2 million

Peter Hill, Chief Executive of Laird, said: "Over recent years Laird has been transformed into a focused electronics and technology company and a leader in markets with strong medium term fundamentals. However, the global recession has had a significant impact on our business. While Laird has seen some positive signs during the third quarter of 2009, trading conditions remain both challenging and uncertain, and visibility of customer demand continues to be limited and volatile. 

Against this background, the rights issue that we have announced today will provide appropriate headroom against the covenants in our attractive long term debt financing and demonstrate to our major customers that Laird remains a financially sound supplier. In addition it will enable continued investment in our businesses for future growth and allow us to preserve and enhance Laird's capabilities and take advantage of the opportunities for growth that are likely to arise as markets recover".

A copy of this release will be posted on the Laird website, www.laird-plc.com.

This summary should be read in conjunction with the full text of this announcement.

Enquiries:

Laird PLC - Tel: 020 7468 4040

Peter Hill, Chief Executive

Jonathan Silver, Finance Director

J.P. Morgan Cazenove - Tel: 020 7588 2828

Robert Constant

Shona Graham

Rothschild - Tel: 020 7280 5000

Ravi Gupta

Anselm Frost

Maitland - Tel: 020 7379 5151

Brian Hudspith

Suzanne Bartch

DISCLAIMER

This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security.

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus to be published by the Company in due course in connection with the admission of the new shares of the Company (nil paid and fully paid) to the Official List of the Financial Services Authority and to trading on London Stock Exchange plc's main market for listed securities (the "Prospectus"). Copies of the Prospectus will, following publication and subject to certain restrictions, be available on the Company's website at www.laird-plc.com.

This announcement is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia), Japan, South Africa, Australia or Canada. This announcement does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase or subscribe for any securities in the United States of America, Japan, South Africa, Australia or Canada. The New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights and the Provisional Allotment Letters have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and, subject to certain exemptions, may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or into the United States of America absent registration or an applicable exemption from, or in a transaction note subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States of America. The New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights and the Provisional Allotment Letters have not been and will not be registered under the applicable securities laws of Canada, Japan, South Africa or Australia or any other jurisdiction where to do so might constitute a violation of relevant securities laws or regulations and, subject to certain exemptions, may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdiction absent registration or an applicable exemption from and in compliance with any applicable securities laws.

1. Introduction

Laird announces today its intention to raise approximately £83.5 million (net of expenses) by means of a Rights Issue of 88,767,402 New Ordinary Shares at a price of 100 pence per share, payable in full on acceptance. This represents 1 New Ordinary Share for every 2 existing Ordinary Shares held on the Record Date. The Rights Issue is being made to Qualifying Shareholders, other than, subject to certain exceptions, those resident in or with registered addresses in the United States or any of the Excluded Territories.

The Issue Price of 100 pence per New Ordinary Share represents a discount of 49.8 per cent. to the middle market closing price of 199.2 pence per Ordinary Share on 27 October 2009, the last business day before the announcement of the Rights Issue.

The Rights Issue has been fully underwritten by J.P. Morgan Securities on the terms and subject to the conditions of the Underwriting Agreement and provides certainty as to the amount of capital to be raised. 

The Board believes the Rights Issue is in the best interests of Shareholders as a whole. 

2. Background to and reasons for the Rights Issue

Background

Over recent years Laird has been transformed from a diversified industrial group into a focused electronics and technology company and is now a leader1* in the design and supply of customised, performance critical products and systems for wireless and other advanced electronic applications.

The disposal of Laird Security Systems in 2007 was an important step in this transformation which enabled Laird to return £100 million to shareholders, and Laird has since concentrated on developing leading positions in specialist high growth electronics markets. Laird has extended its presence in its core markets through investments in expanding its technical capabilities and its low cost manufacturing base, as well as through a number of strategic acquisitions.

Laird specialises in providing products and solutions that allow customers' own electronic devices and systems to operate efficiently. Higher speed, power and performance of electronic devices, as well as the increasing trend to wireless connectivity, drive an increasing need for Laird's products and solutions. Laird has created a unique portfolio of complementary products serving markets where it holds leading positions.

As a result, Laird increased continuing revenues at a compound annual growth rate of 56 per cent. between 2003 and 2007 with organic revenue growth on a constant currency basis of 22 per cent. per annum. This growth in revenues continued during the first half of 2008 with revenue growth of 28 per cent. and underlying organic growth on a constant currency basis of 19 per cent. when compared with the first half of 2007. During the period 2003 to 2007, underlying operating profit margins before interest and tax in the continuing business were consistently above 12 per cent.

Laird's results in the second half of 2008 were impacted both by the global economic downturn and by the associated de-stocking in the global supply chain, particularly in the fourth quarter. Laird has repositioned its businesses to operate in the changed economic and market environment, with prompt actions taken to lower our operating costs.

Strategy

Laird has an established strategy of focusing on higher growth markets, obtaining a competitive edge through technology and customer service allied to a well established, low cost manufacturing base, in Asia (particularly China, Malaysia and India), Mexico and Eastern Europe. Laird focuses on specialist markets which provide opportunities for growth, with a global reach that provides advantages compared to many of its more regional or local competitors. By following this strategy Laird has expanded, and intends to continue to expand, the technology, market access, product offering and geographic spread of its three divisions.

Laird has developed a number of market leading positions in its core markets with a broad range of proprietary products and strong customer relationships. Laird believes that it is the global market leader in the design and supply of products and solutions both for the suppression or prevention of electromagnetic interference ("EMI"), allowing devices to function effectively, and in mobile handset antennae, modules and sub-assemblies, improving signal transmission and reception.

Laird also holds leading positions in thermal management products, removing heat from electronic devices and allowing them to function efficiently, and in infrastructure, satellite radio and other wireless antennae systems and modules optimising voice, visual and data transmission and storage. Laird holds a strong position in the design and supply of actuation mechanisms, improving the physical operation and versatility of mobile handsets. 

Through investment in technology leadership, Laird seeks to strengthen its leading positions in its core markets and to differentiate itself from competitors. The majority of Laird's research and development spend is on new development programmes, including redesigns for product extensions, targeted at near term customer development programmes. The remainder is in product innovation for platforms which will result in completely new product families, aimed at its customers' future needs, and on advanced technology research offering the greatest future potential. The Company's investment has resulted in 648 issued patents, with a further 615 pending, at the end of June 2009.

Laird is also developing an ability to differentiate itself from its competitors through the design and supply of "convergence products". Examples of these include combining cellular antennae with actuation mechanisms and sliders, and EMI shielding with thermal management products.

Laird is also enhancing its competitive edge by repositioning manufacturing, engineering and support functions to lower cost locations, while maintaining the highest levels of customer support. Approximately 85 per cent. of Laird's revenues by origin in the first half of 2009 were from low cost countries. The proportion of revenues by destination to emerging markets has also increased, to 63 per cent. in the first half of 2009 compared with 58 per cent. in the same period in 2008.

The Board believes that Laird is well positioned in markets which have strong medium term fundamentals where industry commentators (such as Gartner and iSuppli) are projecting attractive market growth rates from 2009 through to 2012/13, including mobile cellular handsets, mobile broadband, PC Notebooks and Netbooks, telecommunications and broadband internet infrastructure, voice and data transfer, in-vehicle electronics and communications, and "machine to machine" communications, as well as medical, aerospace, industrial and consumer electronics.

In addition to these projected underlying market growth trends, the Board believes that demand for Laird's own products and solutions will benefit from a continued trend to increased power, speed and performance of electronic devices, as well as an increase in the concentration of electronics components in these devices, both of which in turn are expected to result in an increasing need for EMI shielding and heat management. In addition, Laird expects to benefit from an expected trend to increased wireless connectivity and bandwidth, and from continually evolving changes to the design of devices, as well as increasing content of its products within these devices.

Economic downturn in the second half of 2008 and first half of 2009 and management response

The sustained upheaval in the global economy, with its associated credit pressures, reduction in consumer spending and currency volatility impacted Laird's global electronics markets during the second half of 2008 and first half of 2009. This was exacerbated by the associated de-stocking in the global supply chain.

In response Laird has been proactive in mitigating the effects of the significant reduction in revenues, and has taken actions to:

Reduce manufacturing capacity through closing or downsizing a number of facilities;

Reduce direct manufacturing labour costs in line with demand;

Continue to migrate manufacturing, engineering and support functions to lower cost locations; and

Reduce selling, general and administration costs by $27 million, or 29 per cent. compared to 2008.

Taken together, in the six months to 30 June 2009, unaudited direct overheads and selling, general and administration ("SG&A") costs were $42 million (equivalent to £28 million) lower than in the first half of 2008. Restructuring actions taken through June 2009 are expected to result in cost reductions of $13 million (equivalent to £8 million) in the second half of 2009. However, if unit volume shipments in the second half of 2009 are greater than in the first half, then certain activity based costs (such as duty, freight and commissions) will increase, compared to the first half, offsetting some of the benefits of these restructuring actions. 

In addition to the cost reductions set out above, Laird has maintained its focus on cash generation through reducing working capital and limiting capital expenditure to be in line with depreciation. This focus resulted in strong operating cash flow in the first half of 2009, with operating cash flow after capital expenditure being 200 per cent. of operating profits, compared to 74 per cent. in the first half of 2008. Over this period Laird has largely maintained an equivalent level of engineering and research and development activity and has begun to see the benefits from relocating a proportion of this activity to lower cost regions.

Debt financing

Laird has in place long term financing on attractive terms, that includes £265 million of bilateral revolving credit facilities which do not expire until August 2012. In addition, Laird has in issue $150 million (equivalent to £94 million) of US Private Placement loan notes, with $140 million of this repayable in 2014 and 2016. Laird has committed financing equivalent to £361 million and net debt as at 2 October 2009 was £144.2 million.

There are two financial covenants attached to these committed debt facilities. These are: (i) a requirement to maintain a maximum ratio of net debt, at the end of the applicable measurement period, to the previous 12 months' underlying EBITDA of 3.5 times; and (ii) a minimum interest cover ratio of underlying operating profit to financial interest of 2.5 times.

The financial covenant ratios, as at 30 June 2009, were (i) net debt to EBITDA of 2.4 times; and (ii) interest cover of 4.4 times, with these ratios benefiting from the stronger performance in the second half of 2008 compared with the first half of 2009.

Ratios for the 12 months to 31 December 2009 will be affected by both the underlying trading performance in the period and by the net debt at 31 December 2009, with the latter being determined particularly by trading performance in the fourth quarter of 2009, including its effect on working capital, by the timing of receipts from major customers, and by the sterling/US dollar exchange rate at the year end. The Board believes that sufficient risk exists that Laird may be unable to maintain appropriate headroom under its covenants, despite the aggressive actions Laird has taken to reduce operating costs and generate cash.

In the current banking environment, the Board believes that the cost of re-negotiating existing facilities and covenants with the lending banks and with the US Private Placement holders would be detrimental to shareholders and may not provide the Company with the appropriate headroom, financial stability and flexibility. The cost would be in terms of the expense of arrangement fees and the likely significantly increased interest margin, together with the potential for a reduction in the overall level of facilities available, tighter ongoing financial covenants in the future as well as potentially shorter duration of facilities. Further, the Company may not be successful in agreeing satisfactory terms with the banks and US Private Placement holders.

Reasons for the rights issue

The Board believes that the Rights Issue and the associated reduction in net financial indebtedness provides Laird with the appropriate headroom against the covenants in its existing debt financing given the continuing uncertain economic outlook and its potential impact on markets together with the limited visibility of customer demand. In addition, Laird's increased balance sheet strength as a result of the Rights Issue demonstrates to the Company's major customers that Laird remains a financially sound supplier. Lastly, the Rights Issue provides Laird with greater financial stability to enable it to continue its investment in the business for future growth and to preserve and enhance Laird's capabilities as and when its markets recover. Laird will therefore be able to continue to allocate capital expenditure to its new product development programmes, and to continue its current investment in research and development, and be well positioned to take advantage of the opportunities for growth that are likely to arise as markets recover.

3. Current trading and prospects2∗

Overview

Laird's electronic markets remain extremely challenging, and visibility of customer and end market demand remains limited. Against this background, Laird has taken decisive actions to align its operations to the current market environment.

During the third quarter of 2009, Laird has seen signs of improved order intake, shipment volumes and revenues, compared with the second quarter. Revenue in the third quarter was £130.3 million, a 22 per cent. decrease compared with the same period in 2008, but up six per cent. sequentially compared with the second quarter of 2009. For the nine months to September 2009, revenue was £396.4 million. Expressed in US$, revenue in the third quarter was up 12 per cent. compared with the second quarter of 2009. Revenue in US$ was flat in July, compared with the second quarter monthly average, but with increased shipment volumes and revenues in August and September.

Underlying pre tax profit in the third quarter of 2009 was £8.8 million, and for the nine months to September 2009 was £16.4 million. Laird's underlying operating profit margin, before interest and tax, in the third quarter of 2009 increased to 8.1 per cent., compared with 4.3 per cent. in the first half of 2009.

Management Actions

Laird has managed, and continues to manage, its cost base in response to the market downturn, flexing direct labour costs, consolidating facilities, and reducing direct overheads and SG&A costs, while largely maintaining its investment in engineering and research and development. Laird's objective has been to protect profitability during the downturn, while retaining its capabilities and its ability to respond to a market recovery.

This process, begun during the fourth quarter of 2008 and accelerated during the first half of 2009, continued in the third quarter of 2009. In the third quarter of 2009, direct overheads and SG&A costs combined were $16 million (equivalent to £10 million) less than in the third quarter of 2008; in the nine months to September 2009, direct overheads and SG&A costs combined were $58 million (equivalent to £38 million) less than in the equivalent nine month period of 2008.

Markets and Divisional Performance

Handset Products Division (54 per cent. of revenues in H1 2009)

Handset Products' revenue in the third quarter of 2009 was £60.8 million. For the nine months to September 2009, revenue was £203.2 million. Expressed in US$, revenue was up 1 per cent. in the quarter compared with that seen in the second quarter, with the improvement in divisional revenue beginning in the latter part of the third quarter.

In the division's cellular antennae area, the benefits of increasing unit volumes during the quarter were largely offset by declining average selling prices, both as a result of changes in the product "mix" of antennae and as a result of customer price-downs, with the effects of the latter largely being passed on to suppliers. However, more stable average selling prices are expected in the fourth quarter.

As highlighted in its Interim Results, Laird continued to lose market share in the division's handset board level shields ("BLS") and actuation mechanisms areas as a result of a major customer progressively moving all of its sourcing of these products to large contract manufacturers. Although Laird expects there to be opportunities to supply these large contract manufacturers rather than directly to the OEM, Laird still expects a significant reduction in market share in BLS and mechanisms products with that customer. 

Laird has been successful in broadening its customer base across the Division's product range, with a number of new programme awards for antennae, BLS and mechanisms during 2009, with the benefits of these awards to come mainly in 2010 and 2011.

Performance Materials Division (32 per cent. of revenues in H1 2009)

Performance Materials' revenue in the third quarter of 2009 was £46.9 million. For the nine months to September 2009, revenue was £133.2 million. Expressed in US$, revenue was up 18 per cent. in the quarter compared with that seen in the second quarter.

Both the EMI shielding and thermal management areas showed progressive growth during the third quarter, benefiting from a return to increasing customer demand generally and particularly from increased demand for the division's products from the PC notebook and telecommunications infrastructure markets. In addition, the Signal Integrity area showed some recovery from a weak first half.

Wireless Systems Division (14 per cent. of revenues in H1 2009)

Wireless Systems' revenue in the third quarter of 2009 was £22.6 million. For the nine months to September 2009, revenue was £60.0 million. Expressed in US$, revenue was up 37 per cent. in the quarter compared with that seen in the second quarter.

As expected, the division benefited during the third quarter from a return to production of General Motors and Chrysler, following their emergence from Chapter 11 bankruptcy protection.

The division's infrastructure antennae area also showed a progressive growth in revenues during the third quarter, following a recovery in customer demand.

Financial Position

Laird's net borrowings at 30 September 2009 were £144.2 million, up from the £123.8 million reported at the end of June, with the main component of the increase being the payment of the 2008 final dividend which was announced in March but paid in July 2009. Working capital continues to be managed in line with demand, and capital expenditure in the nine months to September 2009 was held close to depreciation.

Net debt at 31 December 2009 will be determined particularly by trading performance in the fourth quarter, including its effect on working capital, by the timing of receipts due from major customers, and by the sterling/US dollar exchange rate at the year end.

Outlook

While Laird has seen some positive signs during the third quarter of 2009, trading conditions remain both challenging and uncertain, and visibility of customer demand continues to be limited and volatile. Given this backdrop, the timing and extent of any sustained recovery remains unclear.

Laird continues to expand its customer base and reduce its operating costs, while maintaining its investment in new product development. Laird believes that the fundamentals of its markets remain attractive, and continues to take actions to best position its businesses as and when these markets return to growth.

4. Use of net proceeds

The Board intends to use the net proceeds of £83.5 million from the Rights Issue to reduce Laird's net financial indebtedness. The funds will be used to repay debt currently drawn down under Laird's existing bilateral revolving credit facilities. The facilities will remain in place until August 2012.

5. Financial impact of the Rights Issue

The Board believes that the Rights Issue will enhance underlying earnings in the year to 31 December 2009 as a result of lower interest payments. However, notwithstanding this saving on interest expense, the Board expects that the increased number of Ordinary Shares in issue following the Rights Issue will have a negative effect on Laird's reported earnings per share. These statements do not constitute a profit forecast and should not be interpreted to mean that the earnings in any financial period will necessarily match or be lesser or greater than those for the relevant preceding period.

6. Dividends and dividend policy

The Board's dividend policy is to increase returns to shareholders progressively over time, while taking account of both the underlying profitability of the Company and the cash requirements of the business.

On 29 July 2009, the Board declared an interim dividend of 4.0p per share to be paid on 8 January 2010. Under the terms of the Rights Issue, New Ordinary Shares will not rank for the 2009 interim dividend and accordingly, the Board has brought forward the dividend record date from 4 December 2009 to 6 November 2009. This will ensure that payment of the 2009 interim dividend, which will remain payable on 8 January 2010, will only be made on Existing Ordinary Shares. The New Ordinary Shares will rank pari passu in all other respects, including for any other future dividends.

As is customary, the decision on the final dividend for the year will be made at the time of the announcement of Laird's 2009 full year results, taking account of both these results and conditions pertaining to that time.

7. Principal terms of the Rights Issue

The Company is proposing to raise approximately £83.5 million (net of expenses) by way of a Rights Issue of 88,767,402 New Ordinary Shares. Subject to the fulfilment of certain conditions, the New Ordinary Shares will be offered by way of rights at 100 pence per share, payable in full on acceptance, to Qualifying Shareholders (other than, subject to certain exceptions, Excluded Overseas Shareholders) on the basis of

1 New Ordinary Share for every 2 Existing Ordinary Shares

held on the Record Date and so in proportion for any other number of Existing Ordinary Shares then held. Holdings of Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. Fractions of New Ordinary Shares will not be allotted to Qualifying Shareholders and fractional entitlements will be aggregated and, if possible, sold in the market for the benefit of the Company, save that Qualifying Shareholders will receive the proceeds in respect of any financial entitlements with a value of £5 or more.

The New Ordinary Shares will rank pari passu in all respects with Ordinary Shares now in issue, including the right to all future dividends and other distributions hereafter declared, made or paid after the allotment date of the New Ordinary Shares but, for the avoidance of doubt, not the announced 2009 interim dividend.

The Rights Issue is conditional, amongst other things, upon:

the Underwriting Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms; and

Admission becoming effective by not later than 8.00 a.m. on 30 October 2009 (or such later time and date as the parties to the Underwriting Agreement may agree, being no later than 13 November 2009).

The Rights Issue has been fully underwritten by J.P. Morgan Securities Ltd., pursuant to, and subject to the terms of the Underwriting Agreement. Applications have been made to the UK Listing Authority and to the London Stock Exchange for the New Ordinary Shares to be admitted, nil paid, to the Official List and to trading on the London Stock Exchange's main market for listed securities and Admission is expected to occur and dealings to commence in the New Ordinary Shares, nil paid, on 30 October 2009. The latest time and date for payment in full under the Rights Issue is 11.00 a.m. on 13 November 2009.

8. Structure of the Rights Issue

The Rights Issue has been structured in a way that is expected to have the effect of realising distributable reserves approximately equal to the net proceeds of the Rights Issue less the par value of the New Ordinary Shares issued by the Company. The Company and the Newco Subscriber have agreed to subscribe for ordinary shares in Newco. Monies received from Qualifying Shareholders or renouncees taking up New Ordinary Shares under the Rights Issue, after deducting expenses and commissions, shall, provided certain conditions are met, be paid to an account with the Receiving Agent which has been set up specifically for the purpose, with such funds being received by the Receiving Agent as agent for the Newco Subscriber. Provided certain conditions are met, these proceeds will be used by the Newco Subscriber to subscribe for certain redeemable preference shares in Newco.

The Company will allot and issue the New Ordinary Shares to those persons entitled thereto in consideration of the Newco Subscriber transferring its holdings of ordinary shares and redeemable preference shares in Newco to the Company. Accordingly, instead of receiving cash as consideration for the issue of the New Ordinary Shares, at the conclusion of the Rights Issue the Company will own the entire issued share capital of Newco, the only assets of which will be its cash reserves, which will represent an amount approximately equivalent to the net proceeds of the Rights Issue. The Company will be able to utilise this amount by redeeming the various classes of redeemable preference shares it will hold in Newco or alternatively, during any interim period prior to such redemption, by procuring either that Newco lends the monies it holds to the Company (or one of the Company's subsidiaries) or that Newco pays a dividend to the Company.

The Company may elect to implement the Rights Issue without using the structure described above if it deems it to be in the Company's interests to do so.

9. Directors' intentions

The Directors are fully supportive of the Rights Issue. All of the Directors intend to take up in full their rights to subscribe for New Ordinary Shares under the Rights Issue.

Expected timetable of principal events 

Each of the times and dates in the table below is indicative only and may be subject to change

	20093
Record Date for entitlements under the Rights Issue	5.00 p.m. on 27 October
Announcement of the Rights Issue	28 October
Prospectus published	29 October
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only)4	29 October
Start of Rights Issue offer period	30 October
Existing Ordinary Shares marked "ex-rights" by the London Stock Exchange	8.00 a.m. on 30 October
Admission and commencement of dealings in Nil Paid Rights on the London Stock Exchange	8.00 a.m. on 30 October
Nil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders only)	as soon as possible after 8.00 a.m. on 30 October
Nil Paid Rights and Fully Paid Rights enabled in CREST	8.00 a.m. on 30 October
Recommended latest time and date for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e. if your Nil Paid Rights and Fully Paid Rights are in CREST and you wish to convert them to certificated form)	4.30 p.m. on 9 November
Recommended latest time and date for depositing renounced Provisional Allotment Letters, nil paid or fully paid, into CREST or for dematerialising Nil Paid Rights and Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form)	3.00 p.m. on 10 November
Latest time and date for splitting Provisional Allotment Letters, nil paid or fully paid	3.00 p.m. on 11 November
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters	11.00 a.m. on 13 November
Dealings in New Ordinary Shares, fully paid, commence on the London Stock Exchange	as soon as possible after 8.00 a.m. on 16 November
New Ordinary Shares fully paid credited to CREST stock accounts (uncertificated holders only)	8.00 a.m. on 16 November
Expected date of despatch of definitive share certificates for New Ordinary Shares in certificated form	By no later than 23 November

Definitions

"2006 Act"	the UK Companies Act 2006;
"1985 Act"	the UK Companies Act 1985, as amended;
"Admission"	the admission of the New Ordinary Shares (nil paid) (i) to the Official List and (ii) to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance, respectively, with the Listing Rules and the Admission and Disclosure Standards;
"Admission and Disclosure Standards"	the requirements contained in the publication "Admission and Disclosure Standards" containing, inter alia, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities;
"Articles"	the articles of association of the Company;
"Audited Results"	the Audited Results of the Group for the year ended 31 December 2008;
"Australia"	the Commonwealth of Australia, its territories and possessions;
"Australian Person"	any person in Australia or with an address in Australia (including corporations and other entities organised under the laws of Australia but not including a permanent establishment of any such corporation or entity located outside Australia)
"Banks"	J.P. Morgan Securities, J.P. Morgan Cazenove and Rothschild;
"Board"	the Board of Directors of the Company;
"Bookrunner"	J.P. Morgan Cazenove;
"Broker"	J.P. Morgan Cazenove;
"Business Day"	any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business;
"Canada"	Canada, its provinces and territories and all areas under its jurisdiction and political subdivisions thereof;
"Capita Registrars"	Capita Registrars Limited, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU;
"certificated" or "certificated form"	not in uncertificated form;
"CCSS"	the CREST Courier and Sorting Office established by Euroclear to facilitate, amongst other things, the deposit and withdrawal of securities;
"Communications Host"	a network provider's communication host as defined in the glossary to the CREST Manual;
"Company" or "Laird"	Laird PLC;
"Control"	has the same meaning as in Section 719 of the Income Tax (Earnings and Pensions) Act 2003;
"CREST"	the relevant system (as defined in the CREST Regulations) for paperless settlement of share transfers and the holding of shares in uncertificated form in respect of which Euroclear is the operator (as defined in the CREST Regulations);
"CREST Manual"	the rules governing the operation of CREST consisting of the CREST Reference Manual, the CREST International Manual, the CREST Central Counterparty Service Manual, the CREST Rules, the CCSS Operations Manual, the Daily Timetable, the CREST Application Procedures and the CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996, as amended);
"CREST member"	a person who has been admitted to CREST as a system-member (as defined in the CREST Manual);
"CREST personal member"	a CREST member admitted to CREST as a sponsored member;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended;
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor;
"dealing day"	any day on which the London Stock Exchange is open for business in the trading of securities admitted to the Official List;
"Directors" or the "Board"	the current directors of the Company;
"EBITDA"	in respect of bank covenants, underlying profit before interest and depreciation from continuing operations adjusted to exclude the net effect of capitalised development and amortisation costs, share based payments, the underlying profit from disposals and to include underlying profit from acquisitions as if they were owned throughout the period;
"EMI"	electromagnetic interference;
"ESOP"	the Laird PLC 1990 Employee Benefit Trust, established by the Company wholly or partly for the benefit of employees of Laird or any subsidiary;
"Euroclear"	Euroclear UK and Ireland Limited, the operator of CREST;
"Excluded Overseas Shareholders"	(other than as agreed in writing by the Company and J.P. Morgan Cazenove and as permitted by applicable law) Shareholders who are located in or who have registered addresses in an Excluded Territory;
"Excluded Territory"	the USA, Canada, Japan, Australia, the Republic of South Africa and any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law);
"Existing Ordinary Shares"	the fully paid Ordinary Shares in issue at the Record Date;
"FSA"	the Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List otherwise than in accordance with Part VI of FSMA;
"FSMA"	the Financial Services and Markets Act 2000, as amended from time to time;
"Fully Paid Rights"	rights to acquire New Ordinary Shares, fully paid;
"Group" or "Laird Group"	the Company and its subsidiaries from time to time;
"HMRC"	Her Majesty's Revenue and Customs and, where relevant, any predecessor body which carried out part of its functions and references to any approval by HMRC shall, where appropriate, include approval by an officer of HMRC;
"Issue Price"	100 pence per new Ordinary Share;
"Japan"	Japan, its cities, prefectures, territories and possessions;
"Joint Financial Adviser" or "Joint Financial Advisers"	J.P. Morgan Cazenove and/or Rothschild, as the context requires;
"Joint Sponsor" or "Joint Sponsors"	J.P. Morgan Cazenove and/or Rothschild, as the context requires;
"J.P. Morgan Securities"	J.P. Morgan Securities Ltd;
"J.P. Morgan Cazenove"	J.P. Morgan Cazenove Limited;
"Listing Rules"	The rules and regulations made by the FSA under Part VI of FSMA (as amended from time to time);
"London Stock Exchange"	London Stock Exchange plc;
"Laird"	Laird PLC;
"LSSD"	The Laird Security Systems division of Laird;
"member account ID"	The identification code or number attached to any member account in CREST;
"Money Laundering Regulations"	The Money Laundering Regulations 2003, as amended from time to time;
"Newco"	Laird Finance (Jersey) Limited;
"Newco Subscriber"	J.P. Morgan Cazenove;
"New Ordinary Shares"	88,767,402 New Ordinary Shares to be issued by the Company pursuant to the Rights Issue;
"Nil Paid Rights"	Rights to acquire New Ordinary Shares, nil paid, provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue;
"Official List"	the Official List of the FSA;
"Ordinary Shares"	a fully paid ordinary share in the share capital of the Company;
"Overseas Shareholders"	Qualifying Shareholders who have registered addresses outside the UK or who are otherwise resident or located in countries outside the UK;
"Participant ID"	The identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;
"Prospectus"	The document dated 29 October 2009, comprising a prospectus relating to the Company for the purposes of the Rights Issue (together with any supplements or amendments thereto);
"Provisional Allotment Letter"	The renounceable provisional allotment letter expected to be issued to Qualifying non-CREST Shareholders by the Company in respect of the Nil Paid Rights pursuant to the Rights Issue;
"Qualifying CREST Shareholders"	Qualifying Shareholders whose Ordinary Shares on the register of members of the Company at 5.00 p.m. on the Record Date are in uncertificated form;
"Qualifying non-CREST Shareholders"	Qualifying Shareholders whose Ordinary Shares on the register of members of the Company at 5.00 p.m. on the Record Date are in certificated form;
"Qualifying Shareholders"	holders of Ordinary Shares on the register of members of the Company at 5.00 p.m. on the Record Date;
"Receiving Agent"	Capita Registrars Limited, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU;
"Record Date"	5.00 p.m. on 27 October 2009;
"Regulations"	the Uncertificated Securities Regulations 2001, as amended from time to time;
"Regulatory Information Service"	a regulatory information service that is approved by the FSA and that is on the list of regulatory information service providers maintained by the FSA;
"Remuneration Committee"	the duly authorised Remuneration Committee of the Board of Directors of the Company;
"Regulation S"	Regulation S under the Securities Act;
"Rights Issue"	the offer by way of rights of the New Ordinary Shares to Qualifying Shareholders at the Issue Price on the terms and subject to the conditions set out in the Prospectus and, in the case of Qualifying non-CREST Shareholders only, the Provisional Allotment Letter;
"Rothschild"	N M Rothschild & Sons Limited;
"SDRT"	Stamp Duty Reserve Tax;
"Securities Act"	the United States Securities Act of 1933, as amended;
"Shareholders"	holders of Ordinary Shares;
"Subsidiary"	a company which is both under the Control of the Company and is a subsidiary of the Company (within the meaning of section 736 of the 1985 Act and section 1159 of the 2006 Act, as the context permits);
"Trustee"	the trustee of the ESOP or any other trust established by the Company or any Subsidiary wholly or partly for the benefit of employees of the Group;
"UK Listing Authority"	the Financial Services Authority acting in its capacity as the competent authority for the purposes of FSMA;
"Underlying profit"	profit before amortisation of acquired intangibles, exceptional items, deferred tax on acquired intangible assets and goodwill, the gain or loss on disposal of businesses, the impact arising from the fair valuing of financial instruments and acquisition transaction costs;
"Underwriter"	J.P. Morgan Securities;
"Underwriting Agreement"	the agreement between the Company, J.P. Morgan Cazenove, J.P.Morgan Securities and Rothschild dated 29 October 2009;
"UK GAAP"	Generally accepted accounting principles in the UK
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"United States" or "USA"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;
"United States Person"	a natural resident in the United States, a corporation or partnership organised or incorporated under the laws of the United States, any estate of which any executor or administrator is "US Person" within the meaning of Rule 902(k) under the Securities Act, or any other person, entity, trust or estate included within the definition of "US person" in Rule 902(k) under the Securities Act or determined to be resident in the United States for purposes of the Investment Company Act;
"US"	of or relating to the USA;
"£", "pence", "p" or "sterling"	the lawful currency of the UK; and
"$" "dollar"	the lawful currency of the USA.

Important Notices

Each of Rothschild, J.P. Morgan Cazenove and J.P. Morgan Securities is authorised and regulated by the Financial Services Authority in the UK and is acting exclusively for Laird PLC and no one else in connection with the Rights Issue and is not, and will not be, responsible to anyone other than Laird PLC for providing the protections afforded to its respective clients or for providing advice in relation to the Rights Issue or any other matter referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on J.P. Morgan Securities, Rothschild and J.P. Morgan Cazenove by the FSMA, each of Rothschild, J.P. Morgan Cazenove and J.P. Morgan Securities accepts no responsibility whatsoever for and makes no representation or warranty, express or implied, in respect of the contents of this announcement, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with Laird PLC, the New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters or the Rights Issue, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect. Rothschild, J.P. Morgan Cazenove and J.P. Morgan Securities accordingly disclaim to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any such statement.

J.P. Morgan Securities may, in accordance with applicable legal and regulatory provisions and subject to the Underwriting Agreement, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise. Except as required by applicable law or regulation, J.P. Morgan Securities does not propose to make any public disclosure in relation to such transactions.

No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by Laird PLC or any of the Banks. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Laird PLC Group since the date of this announcement or that the information in it is correct as at any subsequent date.

The information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part in, into or from the United States, Australia, Canada, Japan or South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from, and in compliance with, any applicable securities laws.

The distribution of this announcement, the Prospectus and/or the Provisional Allotment Letters and/or the transfer or offering of Nil Paid Rights, Fully Paid Rights or New Ordinary Shares into jurisdictions other than the United Kingdom is or may be restricted by law. Persons into whose possession this announcement or any such document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia). This announcement and the information contained herein does not contain or constitute an offer for sale or the solicitation of an offer to purchase any securities in the United States. The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the Securities Act, or any other securities authority of any state in the United States, and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in the United States absent registration or pursuant to an exemption from, or in transactions not subject to, the registration requirements of the US Securities Act. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares in the United States.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Ordinary Share.

Prices and values of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.

Cautionary note regarding forward-looking statements:

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "annualised", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors, Laird PLC and the Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of Laird PLC and the industries in which it operates.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, liquidity, dividend policy and the development of the industries in which it operates may differ materially from the impression created by the forward-looking statements contained in this announcement and/or the information incorporated by reference into this announcement. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Group, and the development of the industries and markets in which it operates, are consistent with the forward-looking statements contained in this announcement and/or the information incorporated by reference into this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: changes in general economic and business conditions (such as rising unemployment, slower growth in personal income, changes in consumer spending, and other factors which can negatively affect the Laird PLC's customers as well as Laird PLC itself); commodity price volatility; industry trends; competition; the availability of debt and other financing on acceptable terms; changes in government and other regulation, including in relation to the environment, health and safety and taxation, labour relations and work stoppages; changes in political and economic stability; changes in business strategy or development plans and other risks, and changes in exchange rates and other factors.

You are advised to read this announcement and, once available, the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect Laird PLC's future performance and the industries in which it operates. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

Other than in accordance with their legal or regulatory obligations (including under the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules), neither Laird PLC nor any of the Banks undertakes any obligation to update or revise publicly any forward-looking statements contained herein, whether as a result of new information, future events or otherwise.

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*  References to "leader" or "leading" throughout this announcement are based on the Company's estimates of revenue in relation to the respective market sectors served.

∗ Financial information within this section is taken from the unaudited results to 2 October 2009

1  References to times in this announcement , the Prospectus and the Provisional Allotment Letter are to London time unless otherwise stated.

2  Other than Shareholders with registered addresses in the United States and any of the other Excluded Territories and subject to certain other restrictions relating to other Overseas Shareholders.

3  The dates set out in the expected timetable of principal events above and mentioned throughout this announcement, the Prospectus and in the Provisional Allotment Letters may be adjusted by Laird in consultation with Rothschild, J.P. Morgan Cazenove and J.P. Morgan Securities, in which event details of the new dates will be notified to the FSA, the London Stock Exchange and, where appropriate, to Shareholders.

ENDIOEEAKEPAFKNFFE

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