"In the Annual Report I stated that given the global financial crisis, unsurprisingly, the current year had started quietly. However, while we have detected a slow down in routine orders compared with previous years, our success in winning projects is running at an all time high.

"Our LED lighting products, which give up to 15 years' maintenance free service and save up to 45% energy compared with fluorescent, have been well received in the market and the pace of new enquiries and orders is increasing.

"We are also awaiting imminent decisions on other important rail related projects which, if favourable, will add significantly to our already record high order book.

"Delivery of major rail projects will commence during the rest of this calendar year, increase in tempo thereafter and will continue to run for at least three years.

"We have reviewed our outsourcing contracts and where practical we are bringing these activities in-house, which should help our sheet metal facility in particular.

"We have had a team in Australia within the last week discussing technical points on the products which are the subject of the Letter of Intent for the £4.7m LED Lighting contract and we hope to be able to make a further announcement in respect of this soon.

"The weakness of Sterling is assisting us in our export effort which is evident in some of the contracts already won.

"Our working capital remains under strict control and our bank facilities remain comfortable.

"It would be foolhardy in the present downturn to say that we look forward to the future with confidence, but our own particular position is favourable."

MICHAEL RUSCH

Chairman

20 March 2009