Trading Statement

RNS Number:4009T
Chloride Group PLC
22 March 2002

                                                                   22 March 2002

                               CHLORIDE GROUP PLC

                               TRADING STATEMENT



Prior to entering its close period following the end of its financial year to
31st March 2002, the Company is issuing the following statement.

Trading

The underlying market for power protection solutions remains positive with the
global market forecast to exhibit marginal growth in the coming year but to
achieve a more normal growth of 10.7% per annum by 2006*. This is underpinned by
the growing necessity for critical applications to be protected from power
failure and deteriorating power quality.

However, as previously indicated, at the current time trading conditions in the
USA and Europe are difficult, particularly in the semiconductor and telecom
sectors that last year accounted for approximately 20% of Group sales. Sales in
other sectors continue to show growth, although certain contracts and projects
are being delayed, as customers become more cautious about committing capital
expenditure. Our service businesses continue to achieve good growth.

Overall trading for the year ended 31st March 2002 will be below the low end of
expectations with full year sales at around £147 million due to the poor trading
in January and February as a result of the depressed levels of order intake in
recent months. Despite this, quotation activity is generally high although
significant delays are being experienced in the conversion to firm orders.

At this stage we anticipate first half performance in 2002/2003 at the present
levels with an expected improvement in the second half as the benefits from the
upturn in the world's largest economies start to work through to our market
sectors.



Reorganisation

The reorganisation announced at the half year has now been successfully
completed, and second half savings are in line with expectations. However, given
the trading conditions outlined above, management has decided to accelerate
plans to further streamline the UPS Systems business. This will involve closure
of the production facility in Thailand that manufactures small UPS products. (in
future these products will be outsourced to a high quality manufacturer in the
Far East) and the acceleration of the integration of research and development,
manufacturing and logistics in a number of locations. This will reduce
organisational complexity to provide better and more cost effective products and
services. As a result of these actions a further exceptional operating cost of
c. £2.9 million will be incurred in this financial year, providing annualised
savings of c. £1.6 million.

Goodwill

As required under FRS 11, an impairment test on the carrying value of goodwill
has been undertaken. Although Chloride Telecom Systems and a number of other
smaller acquisitions are expected to achieve good returns in the mid to long
term, the short term difficulties in the telecom sector result in a write off of
goodwill in the current financial year, as an exceptional operating item, of c.
£12 million.

Commenting on the announcement Keith Hodgkinson, Chief Executive, said: "This
has been a most difficult year with market conditions depressing sales and
operating profits, necessitating the required adjustment to goodwill and the
implementation of substantial restructuring. These initiatives will enable us to
be sharper and better focused and reflect our determination to build a strong
platform for a world-beating power protection business. We continue to win
market share in good long term growth markets and we expect renewed growth in
the second half of the coming year."


Enquiries:                                              Telephone:

Chloride Group PLC                                      020 7834 5500
      Keith Hodgkinson (Chief Executive)       
      Neil Warner (Finance Director)

Hudson Sandler                                          020 7796 4133
      Andrew Hayes


Note:      * Darnell Group Inc. UPS report September 2001




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