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Electronics Production | November 22, 2005

Abacus expects year-end profit

Abacus Group plc, a franchised distributor of electronic components in the UK, Eire, Italy, Benelux and the Nordic region, announce its preliminary results for the year ended 30 September 2005. Profit before tax, exceptional items and intangibles' amortisation of £8.1 million (2004: £10.0 million).
Profit before tax, after exceptionals (2005: £4.0 million; 2004: £nil) and intangibles (2005: £0.8 million; 2004: £0.7 million) of £3.3 million (2004: £9.3 million). Turnover of £178.3 million down 5.1% (2004: £187.8 million), less than the overall sales declines registered in Abacus markets. Gross margin up at 23.2% (2004: 22.9%).

Operating costs, before exceptionals and intangibles at £32.0 million (2004: £32.1 million) due to tight control over expenditure.

Costs in Nordic region cut by £0.4 million in the last quarter. Cost of securing these ongoing cost savings amounted to £0.5 million - treated as an exceptional item.

Interest at £1.3 million (2004: £0.9 million) reflects the full year effect of acquisition borrowings taken on in 2004. Net borrowings at £29.1 million (2004: £29.4 million).

Exceptional cost of £4.0 million includes £3.5 million inventory provision made in anticipation of the new Restrictions on Hazardous Substances (RoHS) legislation in the EU.

Notwithstanding the challenges of 2005 the Directors now believe there are signs of stability in all of the markets in which Abacus operates. UK market share improved from 14% to 15% with Trident, CTL and CCS all showing growth over 2004.

Post year end highlightsOn 26 October Abacus announced a recommended all share offer for Deltron Electronics plc. The offer documents will today be posted to Deltron and Abacus shareholders inviting them to vote in favour of the offer at their EGMs on 15 December 2005.Commenting on the results for the year, Harry Westropp, Chairman, said. "2005 was in line with the Board's expectations as announced in July. Notwithstanding the weakness exhibited by our markets, the business has performed ahead of the competition, gaining market share. We believe we are well placed for 2006".

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