Final Results

May 8 2014

Nature Group PLC

("Nature Group" or the "Company")

Unaudited Results for the Year to 31st December 2013

Nature Group, (AIM:NGR), the provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, is pleased to present results for the year to Dec 31st 2013

2013 Financial Highlights

- Revenues increased by 52% to £21.78m (2012: £14.30m)

- Underlying EBITDA increased by 54% to £ 2.92m (2012: £ 1.90m)

- Underlying Operating profit increased by 163% to £ 1.29m (2012: £ 0.49m)

- Underlying Profit before tax increased by 172% to £ 1.28m (2012: £ 0.47m)

- Underlying Earnings per share ("EPS") increased by 129% to 1.10p (2012: 0.48p)

- Free cash flow increased by 31% to £ 1.02m (2012: £ 0.78m)

- Year-end cash balances increased by 57% to £3.63m (2012: £2.32m)

- Proposed final dividend of 0.28p per share in respect of 2013 (2012: £Nil)

2013 Operational Highlights

Maritime

• Maintained our market share of the maritime liquid waste business in Gibraltar despite the lack of our own onshore facility

• Following negotiations throughout 2013 we finally reached the £1.35m insurance settlement in March 2014 to cover material damage and business interruption following the Gibraltar accident recognised as a Post Balance Sheet Event

Oil & Gas

• Commissioned a further 5 Compact Treatment Units (CTUs) - 2 of which were sold to a third party.

• In response to client demand, developed a specialist Sludge Treatment Unit (STU) and the second such unit is close to build completion.

• 2 CTUs now operating in challenging conditions in Tanzania and Norwegian Arctic Circle.

Engineering

• Awarded contract to supply a maritime liquid waste treatment plant to the new Port of Sohar in Oman likely to contribute in 2015.

• Substantially completed the supply and build of a hydrocarbon waste treatment plant for the MOD in an overseas territory as a subcontractor to Interserve.

Commenting Nigel Sandy, Chairman, said

"I am very pleased to announce the 2013 results for Nature Group PLC which reflect the good progress that has been achieved in all 3 divisions - Maritime, Oil & Gas and Engineering. There have been challenges faced in the Maritime Division as we invested to meet changes in legislation, and delays in bringing operations in Gibraltar back online.  However, with planning approval and the resolution of our insurance claim we can now look forward to operations in the future with confidence.

We will continue to build the foundations that will allow Nature to grow and prosper in achieving its divisional strategic objectives."

Enquiries:

Chairman's Statement

2013 has been a year in which we have laid down the groundwork for our continued transformation into an international and innovative business. We have made good progress in terms of bringing Gibraltar back on line, reacted well to legislative changes and the performance of our Oil & Gas and Engineering divisions have been encouraging.

After a strong first half, we did, however, experience a more challenging second half of 2013, primarily as a result of two factors. Firstly, the Maritime Division which continued to suffer from a lack of permanent port storage and treatment facilities in Gibraltar and also experienced the additional charter hire costs of the new chemical barges which could not be passed on to our customers. Secondly, in the Oil & Gas Division, the time necessary to secure new contracts from the point at which these are first identified was longer than expected due to the logistical issues for our customers in mobilising drilling rigs. Our forecasting for such contracts has been amended as appropriate. The Chief Executive's statement will cover these issues and other operational factors in more detail.

The Board also took the strategic decision to write off approximately £12.9m of goodwill, which arose from the acquisition of International Slop Disposal B.V in 2010 in order to ensure that the Consolidated Balance Sheet more accurately reflects the net tangible asset value of the Group as at year end. The detail of this non-cash technical adjustment is covered in the Chief Financial Officer's statement.

In the 2012 Chairman's Statement, we highlighted that a resolution of the issues surrounding the accident in Gibraltar in 2011 would be a high priority. In July 2013, the Government of Gibraltar gave us the green light to initiate the first stage of restarting operations and we submitted a planning application to rebuild the storage tank area. Whilst the rapport with the Planning Committee was positive, the timescales were extended by the need to prepare and submit an Environmental Impact Assessment, which achieved the right outcome when final approval for storage only was received on 10 April 2014. Our recommendation to establish a Liaison Committee to monitor our activities is likely to be adopted and we anticipate an early agenda item will be to seek agreement to initiate treatment, after the storage area of the plant has been rebuilt and commissioned which is anticipated to take 12 months.

In addition, we had maintained that the repudiation of our insurance claim for the Gibraltar accident by our underwriters was not justified. With the support of our loss adjusters, Aon, we challenged this decision and demonstrated that we had a legitimate claim, which culminated in the recently announced settlement of £1.35million to contribute towards our material damage and business interruption losses. We are now considering possible recourse actions against third parties in respect of the shortfall recovery.

Following a review of our 2013 performance we have identified a number of initiatives aimed at the continued strengthening and improvement of the business in 2014 and beyond. At the Board level we are actively looking to appoint additional non-executive directors with relevant experience to support the executive management team and help guide the strategic development of the Company. Our decision to restructure the Company in October 2013 into three clear divisions, being Maritime, Oil & Gas and Engineering has already improved business focus. As part of the process we have started to strengthen the Executive management team with the recent appointment of an experienced Port Operations Manager to lead the Maritime Division, and a new General Manager to head up operations in Gibraltar.

Nature is now well positioned not only to ensure that we can provide our customers with services that are fully compliant with environmental and waste disposal regulation but also to exploit the operational benefits that future regulation will bring. Whilst 2013 undoubtedly required commitments that were fundamental to the positioning of our divisional operations, we have used this opportunity to establish a platform from which we can seek new opportunities in related activities and deliver shareholder value.

Nature Group's future is strongly linked to establishing growth through a series of international development projects. The current pipeline of developments includes; establishing a port reception facility joint venture at Sohar in Oman, investments in Houston following the recent acquisition on 1 April 2014, and reconstruction of the Gibraltar facility. In the Oil and Gas Division, developments include continuous improvements to the Compact Treatment Units (CTUs), new Sludge Treatment Units (STUs), and research into new slop treatment chemicals. This is a full and intensive programme, and we are excited by the opportunities each project offers. We have also identified the need for a Senior Project Manager to ensure that our projects are delivered on time and to budget.

Further steps we have taken to establish building blocks for the future include full accreditation in 2013 for ISO 9001 and 14001 for efficiency, quality and environmental compliance. Also, we were very pleased that we were able to appoint Cenkos this year as our Nomad and Broker who more accurately represent our business portfolio and strategic objectives.

As Chairman I travel regularly to our operations in Europe and further afield, including Houston, and I genuinely recognise and am proud of Nature Group as a 'can do' business, well-illustrated by our Engineering Division in taking on projects in Duqm Oman, and an overseas territory for the MOD where the working conditions can best be described as both climatically challenging and remote from their base in Cornwall. I value the help, support and commitment our executives give to Nature for which I thank them.

Finally, none of our plans could be achieved without the support of our shareholders and we are pleased to be able to announce that we intend to pay a dividend of 25% of distributable profits* in line with our Dividend Policy. Therefore, we are recommending a dividend of 0.28p per share which will be formally proposed at the AGM.

Nigel Sandy

Chairman

*distributable profits is calculated as profit after tax adding back the gain recognised on disposal of interest in former associate, the consolidated goodwill write off and the property damage insurance settlement.

Chief Executive's statement

2013 - A year of further development

For the relatively small company that we are, our ambition is huge: building a worldwide network of Port Reception Facilities to collect and treat maritime waste, and building a large pool of Compact Treatment Units (CTUs) for treating offshore generated waste at any location throughout the world. Over the last year we have made great progress with the development of Nature Houston and in Oman, where Nature won a tender for the Port Reception Facility in the Port of Sohar. Our Oil & Gas division had a good year with a substantial contribution to the bottom-line and further growth of our rental fleet. Alongside our CTUs, Nature has developed a Sludge Treatment Unit for the treatment of waste with a high mud content. Finally our engineering division capitalised on the wealth of knowledge and experience within the Group by winning a large order for the Ministry of Defence (MOD) to build a waste treatment facility for one of the overseas territories.

I am therefore very pleased and excited by the development of the Group in 2013. Our financial performance, has however, been challenged by changes in regulations in the Port of Rotterdam, and the obvious problems created by the accident in Gibraltar which meant we were still unable to store and treat our collected waste onshore at this port. I am pleased, however, at the progress that has now been made both in agreeing the insurance settlement for the accident and the first steps we have achieved in the process of the plant reconstruction. In addition, we have implemented a number of structural and operational changes to the Group that should provide a platform for growth and allow us to fully exploit future opportunities.

Maritime Division

Dutch legislation changed on the first of January 2013, and after this date it was no longer permitted to collect low flash chemical waste with a single hull barge; a double hull chemical barge was required. As the biggest chemical waste collector in Rotterdam, Nature had to charter a double hull barge to support its customers. The operating costs of running a double hull barge are significantly higher than that of a single hull barge. Nature expects to be able to pass on the higher costs when we renew our current 1-3 year contracts with revised contracted tariffs over the coming periods. Despite the change, Nature was able to collect a similar volume as in 2012 (160,000m3), which was also achieved against an 8% reduction in the number of vessel calls to Rotterdam in 2013.

Our Port Reception Facility in Gibraltar continued to serve vessels, but without agreement from the Gibraltar Government to rebuild the tanks, all collected waste had to be transported to a third party for treatment. I am happy to announce, that the Government of Gibraltar has approved the rebuild of Nature tanks at the North Mole. The rebuild time is expected to take one year.

With close to 29,000m3 collected, the volume was comparable to last year, but at a reduced margin due to both a lower recycled oil percentage than anticipated and the higher transport costs to have the waste treated at a third party site. The low recycled oil availability had an impact on Nature Portugal that led to a shortage of oil to serve its customers. The upgraded recycling facility could have received at least 5 times the volume we sent in 2013. We hope to more fully utilise this capacity in 2014.

During the year, we undertook a contract with the Government of Gibraltar (GoG) to transport contaminated dredged material to the Netherlands for treatment. Although the initial tender documents showed a low moisture content for the product, which was supported by analysis reports from samples we had received, the dredged material we received to transport and treat was completely different, with a much higher moisture level. This resulted in significantly higher costs, and we are engaged in active discussions with the GoG to review the operational issues and recover the additional costs incurred. We found it prudent to provide against this contract in 2013.

Our strategy to expand our network of Port Reception Facilities resulted in the award of a tender for the Port of Sohar in Oman where Nature has won a ten year license with a JV partner to be the sole waste collection and treatment operator in the Port. This contract will be underwritten by the Port of Sohar to ensure a smooth start of the operation in 2015. Next to this new development we have worked hard to set up Nature Environmental and Maritime Services ("NEMS"), which acquired the activities of a local waste collector Global Environmental and Maritime Services (GEMS) which operates on the Gulf Coast between Houston and Corpus Christi. The new company is committed to upgrade the GEMS facility and logistics operation. NEMS is expected to make a positive contribution to Nature's financial performance in 2014.

To support further growth we have strengthened our management team with the appointment of a Senior Manager to lead the Maritime Division and a new General Manager in Gibraltar.

Oil and Gas Division

We are pleased to see that the time we have committed to developing our Compact Treatment Unit ("CTU") is starting to contribute to Nature's financial results. In 2014 we had two units at 100% operation with long-term contracts; one unit in Tanzania to support Statoil's local operation, and one unit in the Barents Sea supporting a Seadrill drillship. Next to these continuous operations we also had multiple projects on the West Navigator for Seadrill in the North Sea and for Ocean Rig in Brazil. The efficient operating performance we were able to achieve with our units also resulted in a three year contract with Sevan Drilling and Seadrill in Brazil.

Nature's unique CTU is perfectly suited to treat offshore-generated wastewaters, but we also receive requests to treat more "muddy" types of water. For this purpose, we developed a Sludge Treatment Unit ("STU"), which is also a containerised unit and will be a pre-treatment operation for the reduction in large particle sizes prior to the CTU operation to "polish" the water and discharge to the sea. One unit is currently operational together with our CTU in the Barents Sea. As we were looking more into the treatment of mud and/or muddy water, we were asked by Maersk Oil to help them with a "mud problem" they faced with their drilling operations in Qatar. We were hired by Maersk Oil to find or develop a chemical to treat their waste together with a STU and/or CTU. During the year we found several potential solutions and we expect to be testing onsite in Qatar in the third quarter of 2014.

To further develop our offering to the Oil and Gas market and support our growing operations worldwide, we have also invested in our management team and organisation. In addition to a new and experienced Chief Technology Officer, we also hired a Sales Director. We are committed to building our contract pipeline and are looking into new markets both geographically, for example the Gulf of Mexico, as well as new applications for our products in the new build rig market.

Engineering Division

Our unique experience and knowledge for not only building but also operating waste treatment facilities resulted in the award of a significant contract to build a specially designed waste treatment facility for Interserve Defence Limited on behalf of the Ministry of Defence (MOD) in an overseas territory. The design and construction has been modular, and jointly built in Norway and the UK before shipment. Following successful implementation of these facilities, we were subsequently contracted for the provision of the civil works at this location. The treatment facility will be completed in the second quarter of 2014 and Nature is also awaiting the outcome of its bid to operate the facility once operational. Nature's Engineering Division has benefitted from the experience in building compact treatment units gained in our Oil and Gas Division, a great synergy within the Group and we look forward to similar cross selling and product development opportunities in future. Nature's own new developments in Houston and Oman will also use the experience gained from this project with new waste treatment solutions. The rebuild of Gibraltar will also be led by our Engineering Division. Next to supporting our "own" projects, we have also received many requests from third parties for specifically designed waste treatment solutions, these are being explored, but no new contracts have yet been signed.

Conclusion

Nature is a development company, where "during the building phase, sales must continue". With new developments in different time zones our goal of an international network is getting closer, but we are continuously innovating and reacting to both challenges and opportunities. Nature is still the only company developing a worldwide network of Port Reception Facilities and we are convinced this creates unique value. Our compact units for offshore treatment are performing well and we believe are the future in this sector.  Our ambition remains "Clean Seas, made possible by Nature!"

Andreas Drenthen, M.Sc.

CEO

Chief Financial Officer's statement

Throughout 2013 we have faced a number of market challenges, however, I am pleased to report on our financial statements, which I believe demonstrate the resilience of our fundamental business model and the Group's strategy. Accordingly we have been able to grow our sales.

Our divisional results show a marked increase in revenue in all our divisions:

This did not translate consistently to trading profit, which, after a good first half of the year, suffered in the second half largely due to margin attrition in our Maritime Division brought about by the introduction of the new legislation at the beginning of the year in the Netherlands which required double hull barges to be used and has meant higher operating costs in Rotterdam and the continued lack of storage and treatment facilities in Gibraltar.

The Oil & Gas Division, has, however, performed better than expected and has demonstrated an increasingly predictable stream of rental income which is subject to longer term client contracts. However some such contracts have, taken longer to finalise than had been anticipated and therefore a significant amount of income which had initially been expected to fall into the 2013 financial year is not expected to be received until Q3 2014.

The Engineering Division has performed very well in 2013 largely due to the project it undertook for the Ministry of Defence. There is still some project income to be recognised in 2014, but the majority of the revenue has been reported in 2013. The experience gained by the division has meant that it has received a number of enquiries for the design and build of specific waste treatment solutions for third parties that are being explored, and we look forward to pursuing these opportunities.

We have continued in 2013 to invest in the business and to put in place a structure suited to our increasingly international operations which now includes Houston USA and Sohar Oman later in the year, and for the continued expansion of our Oil and Gas Division.

Consequently our underlying EBITDA for 2013 was £ 2.92m, 54% higher than our 2012 EBITDA of £ 1.90m, and our underlying profit before tax was, prior to one-off costs and adjustments, £ 1.28m, which means a 172% increase compared to our results in 2012 of £ 0.47m.

Total trading revenues for the year were £ 21.78m compared to £ 14.30m in 2012, an increase of 52% and our free cash flow was £ 1.02m compared to £ 0.78m (2012), a 31% increase, with bank balances at the year-end standing at £ 3.63m compared to £ 2.32m (2012), a 57% increase.

Maritime Division

The Maritime Division suffered the most in 2013. Nature International Slop Disposal B.V (NISD) in Rotterdam, has seen its waste categories Annex I/II/IV revenues decline in the second half of the year by an average of approximately 45% compared to the first half of the year, however, overall revenues for the whole of 2013 were up 6% when compared to 2012, £7.23m versus £ 6.83m. Encouragingly, this is despite a decline in the number of calls of sea-going vessels of 8% in the Port of Rotterdam and increased competition. These tougher market conditions remain present to date in 2014, but there is some expectation of an improvement at the end of the year in trading conditions and also an improvement through an increased marketing drive with our current and prospective customers in each of the Amsterdam, Rotterdam and Antwerp regions and Hamburg Germany. Also of note for NISD, as mentioned earlier, was the introduction of new legislation at the beginning of the year in the Netherlands which has meant higher operating costs which, although expected to continue for the foreseeable future whilst old contracts are still in operation, we will try to recover as soon as possible.

The South West Europe region of our Maritime Division includes Nature PRF Gibraltar Ltd (NPRF Gibraltar), Nature PRF Portugal - Serviços Maritimos Ambientais S.A (NPRF Portugal) and Crystalwater Navigation Ltd (CWN). The high operating costs for the continued use of the M/V Crystalwater for collection and storage purposes in Gibraltar in order to continue to give a good service to our customers has been felt again in 2013. This is despite efforts to streamline our logistical costs in the region and our search for high oil content cargoes to help cover operating costs. Accordingly, we have been able to maintain our volumes and customers at the previous year's levels and we expect to take advantage of this as and when our facility in Gibraltar comes back on line. This situation has also meant that the income the M/V Crystalwater could receive from undertaking third party cargoes has been significantly reduced, thus affecting our bottom line. This problem will of course be remedied once NPRF Gibraltar's reception facilities have commenced operations, which we expect to be some time in Q2 of 2015.

Despite the fact that we collected 29,000 tonnes of waste oil in 2013, which is similar to 2011 volumes, this tonnage is 30% lower than 2012. There was a loss of volume in the Port of Gibraltar of circa 30,000 tonnes due to lack of storage or collection capacity. NPRF Gibraltar's revenues were maintained in 2013, with reception and oil sale revenues coming in at £2.38m, the same revenue as last year, but its overall trading result has been adversely affected by the loss of £ 0.82m on a dredging contract which we have prudently provided for whilst we continue in negotiations with the Government of Gibraltar for compensation of the extra costs incurred.

NPRF Portugal, which depends almost entirely on the supply of waste oil from NPRF Gibraltar performed below expectations for the same reasons NPRF Gibraltar faced difficulties in the year. This year NPRF Portugal will give more focus to acquiring third party cargoes, which give a better return.

Oil & Gas Division

The Oil & Gas division performed better than budgeted in 2013 on all counts, resulting in its overall revenue being up by 20% versus budget (£ 4.62m v £ 3.85m) and 100% compared to 2012 results (£ 2.31m), with PBT at £ 0.70m versus £ 0.49m budgeted and £0.03m in 2012. The sale and delivery of two CTU's to IKM Gruppen from Norway had a very positive impact on the revenue and PBT results of the division in the first half of the year.

The division has been able to gain some traction in a market which continues to be conservative to operational change, but we believe we can capitalise on the opportunities through continued business development and familiarisation with our CTU solution. The biggest difference this year has been the long-term nature of the purchase orders it has received, which has meant, as expected, a steadier stream of rental income. We expect this rental income to continue to increase both in the number of CTUs rented, and the continued predictability and longer term nature of the purchase orders. We have a number of contracts scheduled for 2014, which we hope will bear fruit in the current financial year and thereafter.

Engineering Division

We have been very pleased with the performance of the Engineering division in 2013 with revenues of £ 3.76m and PBT of £ 1.30m versus £ 0.69m and £ -0.13m respectively for 2012. The contract with Interserve Defence Ltd, on behalf of the MOD has progressed as planned and at the budgeted profit margin. The main project regarding treatment plant construction has almost been completed, with the civil engineering elements relating to the project at almost the half way point.

Financial Adjustments

After consultation with our auditors and extensive discussion by the board we have decided to write off the consolidated goodwill created when Nature Group Plc merged with International Slop Disposal B.V. It was agreed that the large balance sheet item did not reflect real intrinsic value and somewhat distorted the true net asset value of the company. In line with IFRS accounting rules the total write off has to go through the profit and loss account and not straight to reserves. Although in reality your Board consider this to be a non-cash adjustment to share capital, being the amount of the premium of the value at which the shares were issued in 2010 over NISD's net tangible asset value. Therefore, for the purposes of comparison, we have shown the underlying EPS omitting the goodwill write off.

As reported on 24 April 2014, after extensive negotiations with our business interruption and property damage insurers we secured a settlement of our claim totalling £ 1.35m, £ 0.89m for business interruption which has been treated as trading income for underlying profit purposes, and £ 0.46m for property damage as other revenue and not part of underlying profit. We have also reported that we had prudently made a provision for £ 0.82m against the contract carried out for the Government of Gibraltar as mentioned above.

Lastly, as previously reported in our unaudited interim results to 30 June 2013 all underlying results exclude the sale of SART our associate company in Norway, which resulted in a gain on disposal of our 40% interest in the former company of £0.88m.

Exceptional one-off expenses, totaling £ 0.39m, include £ 0.21m on legal and professional fees in relation to the acquisition of Global Environmental Marine Services Inc. (GEMS) and the set up of Nature Environmental Marine Services Inc. (NEMS), our new operation in Houston, which officially started on the 1st April 2014. The loss on sale of two barges in our Rotterdam operation totalling £ 0.06m and the professional fees in relation to our business interruption and property damage claim with our insurers which amount to £ 0.07m.

Administrative Costs

The level of group overhead has been kept at the same level in 2013 as that of 2012, being £ 1.61m, supporting the Company's growth strategy and providing the resources needed to continue to build a professional and compliant business. The main focus of this expenditure has centred around hiring and retaining the administrative and consulting staff in Nature Oil and Gas Norway, to aid in the expansion of our CTU business.

Cash & Capital Expenditure

Nature's free cash flow has been steady throughout 2013 given the cash generative nature of our businesses resulting in the increase of the free cash flow by £ 0.24m or 31% compared to 2012. After months of negotiations Nature Group Plc entered into a finance agreement with Lombard (Gibraltar) for a net £1m facility, currently on a short-term three month rollover.

The incident in Gibraltar has required continued work during 2013 as part of the basic repairs and maintenance, clean up and decommissioning, in anticipation of its reconstruction which has amounted to an additional capitalised spend of £ 0.20m.

Other significant areas of capital expenditure include £ 0.98m spent on CTUs and ancillary equipment, £ 0.14m was spent on capitalised works carried out on the M/V Crystalwater and Rotterdam barges.

During the year NISD disposed of two of its old barges at a loss on disposal of £ 0.07m.

Looking Ahead

Although we have faced challenges within our business in 2013, we continue to be financially robust,

with opportunities for 2014 and beyond coming from:

· our expertise in both design and construction of waste treatment facilities now seeing use in a number of key international ports

· our expansion into Houston and Sohar as we continue to develop as an international leader with a strategic network for the reception and treatment of waste oil in the maritime industry, and

· the continued penetration of our CTU's in the oil and gas market, we expect to remain at the forefront of the drilling and production waste treatment in the oil and gas industry.

Kieron Becerra, FCCA

CFO

Notes to the accounts

1. The calculation of earnings per share has been based on the profit for the period and the average 79,280,655 Ordinary Shares in issue throughout the period.

2. These unaudited results have been prepared on the basis of the accounting policies adopted in the accounts to 31 December 2013.

3. The statutory accounts for the year ended 31 December 2013 will be sent to shareholders of the Company on 27 May 2014 and will be delivered to the Registrar of Companies following the Company's Annual General Meeting, which will be held on 18 June 2014. The report and accounts will also be available on the Company's web site: www.ngrp.com