CMG Croma Grp

RNS Number:2343T
Croma Group PLC
27 October 2005



                                        
                                CROMA GROUP PLC
                            ("Croma" or "the Group")
                                        
                                TRADING STATEMENT

The Board of Croma, the specialists in the design, development and production of
overt and covert surveillance, security and defence related products, notes the
recent press speculation and can confirm that it is in advanced negotiations to
acquire two separate private companies which will provide complementary products
to Croma's existing portfolio.

The two acquisitions are subject to, inter alia, completion of due diligence and
financing. It is anticipated that part of the consideration for the two
acquisitions will be satisfied by the issue of Croma shares, based on a
valuation of the higher of 6.5 pence per share, or the mid-market closing price
on completion. A further statement regarding these acquisitions will be made in
due course.

It is expected that the preliminary results for the year ended 30 June 2005 will
be announced during the latter part of November. Those results will be below
management expectations as a material contract which was anticipated to
materialise during the period, suffered delays due to delays in the customers'
own product launch. Deliveries of those products have now commenced. In
addition, further delays have been experienced with certain military trials
which again are expected to take part in the current financial year. This is
expected to result in losses before taxation for the year ended 30 June 2005
being in the region of #600,000.

On a positive note, the current financial year has started well. With increasing
levels of orders with high conversions, coupled with the benefits of the
acquisitions made in the previous year coming through and the acceptance of new
products, trading in the first quarter of this financial year is encouraging.

In addition, the consolidation of the two divisions of Croma Defence Systems to
a single location is showing an improved efficiency in administration, assembly
and marketing. As a result, there will be cost savings in the latter half of the
current financial year.

With the good start to the first quarter of the current financial year, the
Board views the future with confidence.



                                    --ENDS--


Enquiries:

Croma Group plc
John French, Chairman & Chief Executive                    Mobile: 07836 722 482

Bishopsgate Communications Ltd.                               Tel: 020 7430 1600
Dominic Barretto                                           Mobile: 07930 450 156
Maxine Barnes                                              Mobile: 07860 489 571

Notes to Editors:

Listed on the AIM market of The London Stock Exchange, Croma Group plc, the 
specialists in the design, development, production and marketing of overt and 
covert surveillance and defence related products, comprises of three divisions; 
namely Croma Defence Systems Ltd, Shawley (a division of Croma Defence) and R&D 
Design Services Ltd.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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