Quadrant Group Plc - Final Results

RNS No 7810h
QUADRANT GROUP PLC
10th September 1998


          PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
                 FOR THE YEAR ENDED 31 MAY 1998
                                
                      CHAIRMAN'S STATEMENT

The  1997/8  financial  year  saw the  successful  completion  of
Quadrant  Group's  restructuring,  with  the  disposal   of   our
precision engineering subsidiaries, Yewlands Engineering  in  the
UK  and Quadrant Precision Manufacturing in the US.  The Group is
now  focused  on  its  growing  electronics  systems  businesses,
particularly  flight simulation and training and  closed  circuit
television security.

The  result for the year to 31 May 1998 was a loss before tax  of
#0.6  million  (loss for the 15 months ended 31  May  1997:  #9.8
million),  confirming the substantial recovery  reported  at  the
half year point.  No dividend is proposed.

The  trend  of  improved operating results continued  across  the
Group,  with  all businesses operating profitably in  the  second
half  year.   This is particularly encouraging  in  the  case  of
Quadrant  Systems, our flight simulation and training subsidiary,
in  which major investment has been made over the past four years
to  create  a  strong base in a specialised and rapidly  evolving
global market.

Investment in organic growth and cost reductions also resulted in
improved performance at Quadrant Video Systems and Quick  Imaging
Centre, both of which moved from losses in the previous year into
profit.

Total borrowings at the year end stood at #3.0 million, down from
#5.9  million  last  time,  reflecting mainly  the  disposals  of
Yewlands   Engineering  and  Quadrant  Precision   Manufacturing.
Further amounts of #0.8 million have been received in the current
year for QPM.

More  than  ever,  the  Board  is  grateful  for  the  continuing
commitment  and enthusiasm of the Group's employees through  this
period.   Some,  of  course,  have  left  the  Group,  as   their
businesses have gone to new owners, and we wish them all well for
the future.

Trading  in the current year has begun relatively satisfactorily,
with  successful completion of a large digital video installation
and  good  progress in the CCTV market.  The second  half  should
also benefit as Quadrant Systems' recently acquired Airbus A300B4
flight simulator comes into service.

Much  has  been achieved over the past year and the robust  steps
taken have provided a focused platform for further improvement in
results in coming periods.


Lord Rees, Chairman
10 September 1998

Chief Executive's Report

Overview
Quadrant  Group's operating result for the year  recovered  to  a
small  loss of #94,000, against a #2.95 million loss  in  the  15
months  of  1996/7.  Within continuing operations  the  operating
result  improved from #(1.1) million to #(0.4) million.  Turnover
on  continuing  operations grew on an annualised  basis  by  24%,
without the benefit of any acquisitions.

Improved  results  were achieved in each of the  business  areas,
despite   the   inevitable  uncertainties  generated   by   major
restructuring within the Group.

Quadrant Systems
The  two  existing  full flight simulators  at  Quadrant  Systems
("QSL") maintained high utilisation during the year and attracted
significant  new  customers.  These included  Lufthansa  and  Air
France,  who  have  chosen QSL as back-up to  support  their  own
training operations.

During  the  year QSL also acquired an Airbus A300B4 full  flight
simulator,  which  is being extensively updated  and  will  enter
service  later  this  year.  This aircraft  type  is  enjoying  a
renaissance  in  its  new freighter configuration,  generating  a
substantial  unfilled aircrew training need in the UK.   We  have
received  strong support from the UK and Irish airlines operating
the  aircraft and are confident that QSL's simulator will quickly
achieve good utilisation.

Important  contracts  were  also  won  last  year  for  simulator
equipment  services, including the upgrade and  relocation  of  a
B737 simulator from Lufthansa to LanChile worth in excess of #0.5
million.

Crucially, QSL continued its growth and market penetration during
the  year and moved into positive operating profitability in  the
second half.

Quadrant Video Systems
Overall,  Quadrant  Video  Systems  ("QVS")  produced  annualised
turnover growth of 27%, primarily from continued expansion within
the  CCTV  security  systems sector, and  a  recovery  to  modest
profitability.

The  rationalisation  of the professional  video  branch  network
proceeded successfully, with higher than anticipated retention of
regional  business  following the  closure  of  the  Glasgow  and
Sheffield branches.  The professional video activities,  however,
still  have  some  way  further to  go  to  produce  satisfactory
results.

In  the  CCTV sector, QVS is one of the few UK companies offering
national  coverage  for design, installation and  maintenance  of
large or high-complexity systems, and is believed to have further
increased  its  market share during the year.  As  this  business
matures,   a   greater  portion  of  its  revenues  derive   from
maintenance  and upgrades of existing installations,  leading  to
higher average margins and quality of earnings. The business  has
a  strong  technical base and should benefit from the  growth  of
more complex digital CCTV equipment.

Synectic Systems
Synectics  designs  and supplies proprietary  electronic  control
system  products for large CCTV installations.   Developed  as  a
start-up business over the past three years out of Quadrant Video
Systems'  in-house research and development activity,   Synectics
has already achieved significant penetration in the UK market for
high-end  systems  and is growing rapidly.  Its  modular  product
range  is believed to have a technical edge in large applications
over other systems currently available and to have good potential
in markets beyond the UK.

Synectics'  innovative technical abilities were  recognised  when
one  of  its  products won a prestigious annual  award  from  The
British Securities Industry Association.

The  business moved through the breakeven point during last  year
and we expect further progress in the current period.

Quick Imaging Centre
Quick  Imaging  completed  a  profitable  year  as  the  combined
benefits of an innovative approach to electronic imaging  design,
solid  customer  service and tight financial control  have  borne
fruit.

Outlook
The  sale of Quadrant's precision engineering companies  has  now
enabled  us to focus single-mindedly on developing the  potential
that has been created within our electronics systems businesses.
The  objectives  set  for  the Group last  year  concentrated  on
organic  growth  and  new  systems to support  that  growth  with
tighter  operational and financial control.   Across  a  narrower
range  of  activities, organic profit growth remains the  primary
goal for the current year.

Progress in the first three months of this year has been good and
in  each  business there is now a clear sense of  confidence  and
renewed purpose.



David Coghlan, Chief Executive
10 September 1998

Consolidated Profit and Loss Account
For the year ended 31 May 1998
                                                                
                                                             15
                                            Unaudited    months
                                 Notes        year to        to
                                               31 May    31 May
                                                 1998      1997
                                                #'000     #'000
Turnover                                                
Continuing operations              1           18,431     18,533
Discontinued operations            1            8,591     29,147
                                               27,022     47,680
Cost of sales                                  19,817     38,282
Gross profit                                    7,205      9,398
Net operating expenses                          7,299     12,352
Operating profit/(loss)                                 
Continuing operations                           (382)    (1,055)
Discontinued operations                            17    (1,899)
Provision    for    losses    on                  271          -
discontinued activities utilised
                                                 (94)    (2,954)
Exceptional items                                       
 - discontinued operations                              
     Loss  on  disposal of subsidiaries        (2,120)   (1,481)
     provision utilised                        (2,276)    1,315
     provision for loss on disposal of              -    (2,547)
     subsidiary
     other exceptional items                     (193)   (2,534)
 - continuing operations                                
     provision for loss on disposal of fixed        -      (450)
     assets
     provision for restructuring costs              -      (300)

                                                  (37)   (5,997)
                                                        
Loss before interest                             (131)    (8,951)
Net interest payable                             (517)      (842)
Loss before taxation                             (648)    (9,793)
Tax charge on ordinary activities                 (20)       (26)
activities
Loss on ordinary activities after taxation       (668)    (9,819)
Minority interests                                (21)       (13)
Loss for the financial period - transferred to   (689)    (9,832)
Reserves
                                                        
Loss per ordinary share            2            (11.1)p   (470.1)p
IIMR loss per ordinary share       2            (10.5)p   (197.7)p



                                                                 
Consolidated Balance Sheet
31 May 1998
                                                               
                                           Unaudited       1997
                                                1998      #'000
                                               #'000
Fixed assets                                            
Intangible assets                                   -       136
Tangible assets                                 4,465     8,166
                                                4,465     8,302
Current assets                                          
Stocks                                            995     3,515
Debtors                                         4,133     5,127
Freehold property held for resale                   -     1,200
Cash at bank and in hand                          308       176
                                                5,436    10,018
Creditors: amounts falling due within
one year (including convertible debt)           5,519     9,411
Net current assets/(liabilities)                  (83)      607
                                                        
Total assets less current liabilities           4,382     8,909

Creditors:amounts falling due after more
than one year (including convertible debt)      1,260     2,056
convertible debt)
Provisions for liabilities and charges            424      3543
                                                        
Net assets                                      2,698     3,310
                                                        
Capital and reserves                                    
Called-up share capital                         1,243     4,613
Share premium account                           6,791     6,789
Other reserves                                  4,387     1,038
Goodwill write-off account                      (842)    (1,030)
Profit and loss account                       (8,881)    (8,192)
Equity shareholders' funds                      2,698     3,218
Equity minority interests                           -        92
                                                2,698     3,310
                                                        
                                                                 

Consolidated Cash Flow Statement
For the year ended 31 May 1998
                                                               
                                           Unaudited   15 months
                                             year to          to
                                              31 May      31 May
                                                1998        1997
                                               #'000       #'000
                                                        
Net cash inflow/(outflow) from operating       1,049      (2,096)
activities
                                                       
Returns on investments and servicing of finance (538)       (840)
                                                        
Taxation - tax received/(paid)                    18         (32)
                                                        
Net capital expenditure and financial investment(670)        (51)
                                                        
Acquisitions and disposals                     1,575       3,519
                                                        
Cash inflow before financing                   1,434         500
                                                        
Financing                                       (131)      1,238
                                                        
Increase in cash                                1,303      1,738
                                                        
                                                                 


Statement of Total Recognised Gains and Losses
For  the year ended 31 May 1998
                                           Unaudited        15
                                             year to    months
                                              31 May     to 31
                                                1998       May
                                               #'000      1997
                                                         #'000
Total  gains and losses recognised                       
since last annual report:
Loss for the financial period                  (689)   (9,832)
Translation loss on assets held in foreign      (24)      (50)
currency
Total recognised losses                        (713)   (9,882)
                                                         
                                                                 


Notes

1.Continuing  operations comprise the businesses of  Quadrant
  Systems,  Quadrant  Video Systems, Synectic Systems  and  Quick
  Imaging   Centre.   Discontinued   operations   comprise    the
  photographics businesses of Sangers, Leeds Photovisual, Premier
  Distribution and Prisma (Europe) which were  sold on 28  August
  1996,  Yewlands Engineering Co. Ltd, which was sold on 6 August
  1997  (see  note  3) and Quadrant Precision Manufacturing,  Inc
  which was sold on 29 May 1998. (see note 4).

2.The calculation of earnings per ordinary share is based  on
  the loss after taxation and minority interests for the year  of
  #689,000 (1997: loss #9,832,000) and on 6,202,558 shares (1997:
  2,091,638) being the weighted average number of shares in issue
  and  ranking  for  dividend during the year. The  earnings  per
  share  measure  recommended  by  the  Institute  of  Investment
  Management  and  Research (the "IIMR earnings per  share")  has
  been  calculated  on  the  loss  attributable  to  shareholders
  excluding exceptional capital items.

3.On  6  August 1997 the Company sold the entire issued share
  capital of Yewlands Engineering Co. Limited ("Yewlands") for  a
  nominal  consideration.  The purchaser also  assumed  Yewlands'
  debt  of  approximately  #0.6  million.  In  addition  deferred
  consideration  of  up  to approximately  #0.6  million  may  be
  payable  by the purchaser dependent on the utilisation  of  tax
  losses in Yewlands.

4.Following shareholder approval at an Extraordinary  General
  Meeting  on  29  May  1998  the Company  disposed  of  its  80%
  beneficial  shareholding  in Quadrant Precision  Manufacturing,
  Inc. ("QPM") for a total consideration of $2.2 million in cash,
  of  which  $1.0 million was deferred until September  1998.  In
  addition  the Company  received $0.4 million in loan  notes  of
  QPM,  repayable  over two years, to satisfy outstanding  inter-
  company debt. Early repayment of the loan notes, together  with
  the  balance  of  the consideration, was received  in  full  on
  2 September 1998.

5.Exceptional items incurred in the year ended  31  May  1998
  relate  to  the net loss on disposal of Yewlands and  QPM  plus
  related  goodwill  of #193,000, offset by  the  utilisation  of
  provisions created in 1996/7.

6.The   figures for the year ended 31 May 1998 are  unaudited
  and do not constitute statutory accounts.

7.The  figures  for the 15 months to 31 May  1997  have  been
  abridged  from  the  statutory accounts for  that  period.  The
  Auditors'  opinion  on these accounts was unqualified  and  the
  statutory  accounts  have  been filed  with  the  Registrar  of
  Companies.

CONTACT:

David Coghlan, Chief Executive          01527 850080
Quadrant Group plc

Nigel Poultney, Finance Director        01527 850080
Quadrant Group plc

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