Final Results

Aggregated Micro Power Holdings plc

("AMPH", the "Company" or the "Group")

Results for the year ended 31 December 2014

Aggregated Micro Power Holdings plc, the renewable energy developer focused on biomass energy generation, announces its audited results for the year ended 31 December 2014.

Operational Highlights

· Proposed strategic partnership with Forest Fuels Holdings Ltd ("Forest Fuels")

· Wood drying facilities installed and commissioned at Low Plains

· Significant upgrade and re-commissioning work carried out on Low Plains 1MWe

· Five biomass boilers installed and refinanced via AMPIL and two additional biomass boilers installed and refinanced post year end

Future Developments

· Planning consent received for two 1.5MW gasification CHP sites in Devon and Kent; construction to commence within the next 12 months

· Biomass Boiler and CHP ESCO (energy service company) pipeline in excess of £5m expected to be installed over the next 12 months

· 50% interest secured in two 50MWe CHP developments on the Humber awaiting next round of Contracts for Difference auction

Financial Highlights

· Group revenue increased by 77% to £252,973 (2013: £142,665)

· Group loss before tax adjusted for non-cash items and one off charges1 : £3,194,465

· Reported Group loss before tax of £6,038,730 (2013: £2,445,261) including non-cash items and one-off charges

· £9.5m (before expenses) raised at IPO in July 2014

· Successful launch of AMPIL2 and on-going discussions with investment institutions in relation to the potential funding of the Group's development pipeline

Proposed Strategic Partnership with Forest Fuels

The strategic partnership is expected to include:

· Assistance with funding wood chip drying facilities on Forest Fuels' existing depots

· Assistance with Forest Fuels ESCO developments which can be sold on to AMPIL or other third party finance providers

· Sale of dried wood chip to Forest Fuels from AMP gasification plants

· Forest Fuels preferred supplier status for biomass boilers managed by AMP on behalf of AMPIL

Further details will be provided to shareholders in due course.

1 Non-cash items and one off charges relate to an IFRS fair value adjustment on deferred consideration shares which may or may not be issued subject to certain hurdles being met, an impairment charge at Low Plains, tax credits and loss on disposal of AMP Heat Limited.

2 AMPIL is a special purpose vehicle which is wholly owned by Law Debenture for general charitable purposes and is funded via the issuance of listed loan notes.

Richard Burrell, Chief Executive of Aggregated Micro Power Holdings plc, said: "I am very pleased to announce our first preliminary results since listing on AIM last year. Adjusted for non-cash items and one off charges our underlying performance has been broadly in line with management's expectations. In addition to our financial results, we announce our intention to form a strategic partnership with Forest Fuels, a leading and profitable biomass chip and pellet distributor with sales representing 10% of the UK chip market; this is a significant step in the development of the Group which could accelerate our strategic ambitions significantly and, together with the operational progress of the business, allows us to look to the future with great confidence."

Enquiries

Notes to Editors:

About Aggregated Micro Power Holdings plc

The AMP Group was established to develop, own and operate renewable energy generating facilities. The AMP Group's strategy is to develop and operate projects using small-scale technologies for converting biomass to energy and to sell the energy produced in the form of electricity, heat and wood fuel.

The AMP Group's existing facilities comprise a 1MWe CHP plant located at Low Plains in Cumbria and a heat dried wood chip sales business on the same site in Cumbria. AMP has also installed and commissioned seven biomass boilers supplying heat to schools, hotels, a care home and a rural business park.

EXECUTIVE CHAIRMAN'S STATEMENT

This is our inaugural Report and Accounts since becoming an AIM listed company. It has been a period of frenetic activity in terms of delivering on our business objectives and this is detailed in the Strategic Report. I would like to thank our shareholders, management and staff for their continued commitment and hard work.

The regulatory and economic background has produced some surprises. Small-scale biomass continues to receive strong support through the Renewable Heat Incentive and this is a market which is growing in size and maturity each year. The recent regulations regarding fuel quality have helped to stimulate the market for forced dried wood chip and AMP's strategy which is focussed on using surplus heat at its Combined Heat and Power (CHP) plants to dry wood chip for onward sale will provide us with a significant capability to sell high quality wood chip into the growing biomass boiler market. Whilst at the time of our IPO no one would have forecast today's low oil price, we have not seen any decline in biomass boiler sales and our pipeline for Energy Service Company ("ESCO") contracts remains robust.

We have continued to invest in our plant at Low Plains and whilst we have prudently reduced the carrying value of this asset in the consolidated statement of financial position we expect good growth in operating cash flow during 2015. We intend to expand Low Plains in 2015 and we have recently installed two additional smaller-scale CHP systems on the site.

We have now received planning approval on our future CHP sites in Kent and Devon. We intend to commence construction at both sites in the next 12 months. Looking beyond 2015, we have secured a significant position in two large scale biomass CHP developments in Immingham and Hull and both these schemes have planning and grid connection offers. With a strong pipeline, our future success will depend upon our ability to attract further capital to enable schemes to reach financial close, begin construction and ultimately to be refinanced, post commissioning.

We are now getting into the execution phase of our business plan as outlined at the time of the IPO and I look forward to reporting further progress over time.

Neil Eckert

Executive Chairman

22 May 2015

Strategic Report

Following the successful admission to AIM in July 2014 raising £9.5m from new and existing investors, we are pleased to present our inaugural Report and Accounts for the twelve months ending 31 December 2014.

AMP Group strategy

The AMP Group was established to develop, own and operate renewable energy generating facilities. The AMP Group's strategy is to develop and operate projects using small-scale technologies for converting biomass to energy and to sell the energy produced in the form of electricity, heat and wood fuel.

The AMP Group's preferred technology for generating electricity from wood fuel involves a process of gasification, in which wood is converted into syngas by the application of heat in a low oxygen environment. The engine, as well as producing electricity, generates waste heat which can be captured and used commercially to dry the wood fuel, firstly, needed as feedstock for gasification, and secondly, for sale in the open market or into the portfolio of biomass boilers operated and managed by AMP. The AMP Group's use of excess heat to dry wood chip for onward sale provides a natural hedge to adverse movements in feedstock prices, as increases in feedstock prices can potentially be offset by increases in wood chip prices.

The AMP Group intends to replicate its strategy at new locations and to refinance its projects once they have been commissioned. This will enable the AMP Group to recycle capital in order to develop further projects. The Company may also pursue and prioritise other opportunities where it is commercially advantageous to do so.

AMP seeks to recognise the value of its projects held directly at fair value in accordance with IAS 39.9. Henceforth, changes in fair value will be booked as an unrealised profit or loss in the Company's own unconsolidated accounts. Quarterly valuations are expected to be based on a discounted cash flow analysis of each project's future cash flow and will be validated at the time of a project's commissioning and at year end by an independent third party acceptable to the Company's auditors.

In addition, the Directors anticipate that the AMP Group will sell its smaller scale biomass boiler and CHP projects following financial close, to Aggregated Micro Power Infrastructure Limited ('AMPIL') or other third parties and aim to earn development fees, a margin on the management of the plant, revenues from the supply of fuel and a deferred payment in the relevant project.

Results

The Group made a loss before tax of £3,194,465, adjusted for non cash items and one off charges being the impairment and deferred consideration charges, tax credits and the loss on the disposal of AMP Heat Limited, which was broadly in line with management's expectations. The total loss before tax of £6,038,730 includes a provision for the deferred consideration shares which may or may not be issued, subject to certain hurdles being met, as well as a £2,224,661 impairment charge at Low Plains. Turnover was lower than predicted, mainly due to unforeseen downtime in October and December at Low Plains but the impact on profitability was partially offset by lower depreciation charges.

Our intention is to build on the operational platform we have built at Low Plains, bolting on new revenue lines in the form of additional electricity generation and wood chip drying capacity to enable us to reverse the impairment charge in future years.

Progress following the AMP IPO in July 2014

AMP has continued to invest in its 1.0MW plant at Low Plains in Cumbria which has involved capital investment in new wood chip drying floors for third party chip sales as well as a number of further upgrades and improvements as part of the commissioning process for the main plant. Whilst these additional works have taken longer than anticipated, resulting in down time at the plant during recent months, the plant is now commissioned post year end and we are now in the phase of operational stabilisation and improvement in order to produce high and consistent energy outputs for the remainder of 2015.

In December, we purchased a small scale 45kW CHP unit from Germany and in January 2015 we purchased a similar 40kW unit from Finland, with the intention of providing additional heat to the drying floors as well as electricity for the parasitic load at Low Plains. Both systems are now installed and commissioned. These smaller units are expected to have shorter commissioning periods and a higher return on investment compared with larger CHP systems.

We have now received planning approval for our next gasification development sites in Kent and Devon. We intend to commence construction on these two projects in the next 12 months.

During the financial year 2014, AMP has installed seven biomass boilers supplying heat to three schools, a care home, a rural business park and two biomass boilers at a Champneys health spa resort. Five of these systems are fully commissioned and have been sold to AMPIL and development fees have been earned by AMP. AMPIL is a special purpose vehicle which is wholly owned by Law Debenture for general charitable purposes and is funded via the issuance of listed loan notes. AMP will continue to manage the boiler projects on behalf of AMPIL under the terms of a commercial agreement. The remaining two boilers installed at Champneys have been commissioned in 2015 and have been sold to AMPIL in the financial year 2015.

AMP has also secured a significant development interest in two large scale biomass CHP developments in Immingham and Hull on two port-side locations that will be leased from Associated British Ports. Both these schemes have secured planning permission and grid connection offers for 49.0MW and 49.9MW respectively. Over the next twelve months, AMP and its development partners intend to secure external, off-balance sheet construction finance for these projects which is contingent on both schemes achieving Government incentives in the form of Contracts for Difference. Both projects are unlikely to be commissioned until 2018 at the earliest.

Future Financing

AMP requires further capital to develop out its substantial pipeline of future projects as well as to invest in sites currently operated by Forest Fuels, pursuant to our proposed strategic partnership with Forest Fuels.

We are pleased to announce that we are in discussions with investment institutions in relation to the potential funding of the Group's development pipeline. Further details will be provided to shareholders in due course.

Proposed Strategic Partnership with Forest Fuels

The strategic partnership is expected to include:

· Assistance with funding wood chip drying facilities on Forest Fuels' existing depots

· Assistance with Forest Fuels ESCO developments which can be sold on to AMPIL or other third party finance providers

· Sale of dried wood chip to Forest Fuels from AMP gasification plants

· Forest Fuels preferred supplier status for biomass boilers managed by AMP on behalf of AMPIL

Further details will be provided to shareholders in due course.

Risk factors

The principal risks of the business are documented below:

AMP Group objectives and KPIs for 2015 are as follows:

· Achieve the maximum power output on the existing plant at Low Plains of 1.0 MWe and fully utilise spare heat from the drying floors to maximise revenues from the sale of forced dried wood chip to third parties.

· Complete the installation and testing of the two small-scale gasification systems at Low Plains to allow a decision to be made on which technology to roll-out at our new gasification development sites.

· Commence construction at the two 1.5 MWe sites at Hill Barton, Devon, and Kingsnorth, Kent, in the next 12 months and aim to commission these projects within 12 months following breaking ground. Identify and apply for planning permission on at least two further sites for construction to commence in 2016.

· Execute on the existing £5m+ pipeline of biomass boiler ESCO projects, wood drying facilities and/or small-scale CHP ESCO installations with the aim to sell completed systems to AMPIL or other third parties to generate development fees.

· Supplement AMP's cash resources with additional new funding from one or a combination of: the refinancing of existing assets; raising project finance from third party providers; asset financing of core items of equipment; the issue of new Ordinary Shares for cash; or any other compelling financing mechanism where the Directors consider doing so to be in the best interests of the Company and its Shareholders.

· Seek to pay a dividend to Ordinary Shareholders in respect of 2015, provided sufficient profits have been generated.

Industry and policy background

We believe that there are a number of features of the renewable energy market which are highly beneficial for the AMP Group:

· The UK's lack of energy security means that domestic energy production, especially renewable energy production, has a high value even in the absence of environmental factors and falling oil prices;

· In light of the gap between the UK's current and proposed energy supply mix, public policy support measures, including incentives, are generally expected to endure;

· Current and proposed support measures specifically favour the smaller scale, de-centralised generation that the AMP Group is targeting;

· By operating smaller scale facilities in close proximity to customers, the AMP Group is able to reduce energy delivery costs and exploit the price premium between retail and wholesale energy pricing; and

· The market for forced dried wood chip is growing rapidly and is strongly supported by new requirements introduced under the RHI Regulations on 24th September 2013, setting emissions limits for biomass boilers. The regulations stipulate that all RHI participants must buy dry fuels, or allow fuel felled from their own land to dry out sufficiently before use and ensure that fuel doesn't become damp when being stored. Non- compliance may delay or affect RHI payments.

Under the EU's Renewable Energy Directive, the UK was set a legally binding target of procuring 15 per cent of its energy consumption from renewable sources by 2020. In 2013 renewable energy accounted for only 5.2 per cent of total energy consumption. We believe this target should underpin political support and financial incentives for the renewable energy sector in the near term.

The UK's drive to decarbonise (the Government has a legally binding target of reducing the UK's greenhouse gas emissions by 80 per cent by 2050 against 1990 levels), is expected to require significant structural changes to the power market, with 8 GW of coal fired generating capacity scheduled to be decommissioned by 2015 due to the Large Combustion Plant Directive. This represents 10.2 per cent of current power generation; a reduction in supply, which in the Directors' opinion will help support the wholesale price of electricity in the near term.

The inception of the RHI in November 2011 has driven a rapid uptake of biomass boilers fuelled by wood chip. Biomass boilers account for 99 per cent of the capacity of accredited RHI installations (as of December 2014). From January 2013 to December 2014 the installed capacity of RHI accredited biomass boilers grew almost sevenfold from 175MW to 1,215 MW.

We believe that the structure of the energy markets, in the UK and elsewhere, provide a commercial opportunity for the small scale energy facilities that comprise the AMP Group's primary areas of focus, making use of local energy sources to generate and supply energy close to the point of demand, so capturing higher retail prices for the energy produced and reducing the costs arising from energy delivery losses.

This Strategic Report was approved by the Board of Directors of the Company on 22 May 2015 and signed on their behalf by:

Richard Burrell

Chief Executive Officer

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2014

Consolidated Statement of Financial Position

As at 31 December 2014

Consolidated Statement of Changes in Equity

For year ended 31 December 2014

Consolidated Statement of Cash Flows

For year ended 31 December 2014

Notes to the financial statements

For the year ended 31 December 2014

1. Basis of preparation of financial statements

The financial information set out above does not constitute statutory financial statements for the year ended 31 December 2014 or 2013 but is derived from those financial statements. Statutory financial statements for the year ended 31 December 2013 have been delivered to the Registrar of Companies. Statutory financial statements for the year ended 31 December 2014 were approved by the Board of Directors on 22 May 2015, are audited and will be delivered to the Registrar of Companies following the Annual General Meeting on 23 June 2015.

The Company's auditors, BDO LLP, have reported on the 2014 and 2013 financial statements and those reports were:

i. Not qualified;

ii. Did not include a reference to any matters to which the auditors drew attention to by way of emphasis without qualifying their report; and

iii. Did not contain a statement under Section 498(2) and 498(3) of the Companies Act 2006 in respect of the financial statements for the year ended 31 December 2014 and 31 December 2013.

The financial statements have been adjusted to account for the expected repayment of £609,960 stolen from the Company by a former employee who has since been dismissed for gross misconduct. The theft related to forged wood fuel invoices at Low Plains for the period beginning February 2012 and ending in March 2015. The former employee has undertaken to repay the monies in full and the Group has been provided with a legal charge over sufficient assets to ensure full repayment. This matter is isolated to a single employee and does not affect any customers or suppliers.

The Directors anticipate a full cash repayment of £609,960 to the Group during 2015 and have made the following adjustments to the prior year financial statements.

Full year 2012

Expenses have been reduced in the consolidated statement of comprehensive income by £113,605 resulting in a commensurate reduction in carried forward losses. The Group have recognised a receivable of £136,326 against the former employee and a VAT liability of £22,721 in the consolidated statement of financial position.

Full year 2013

During the year the majority of wood fuel costs at Low Plains were capitalised as an asset under construction. Fixed assets have been reduced by £178,531 and the Group have recognised a receivable of £214,237 against the former employee and a VAT liability of £35,706 resulting in no net change to the previously reported balance sheet position apart from the adjustment noted above re 2012.

Full year 2014

Although the 2014 figures are not being restated we have included the impact of the fraud for 2014 and 2015 in here for completeness.

During the year the majority of wood fuel costs at Low Plains were capitalised as an asset under construction. Fixed assets have been reduced by £196,808 and the Group have recognised a receivable of £235,422 against the former employee and a VAT liability of £38,614 resulting in no net change to the balance sheet position.

The remaining adjustments will be made in 2015, comprising of a £19,356 reduction in the cost of sales, a receivable of £23,975 against the former employee and a VAT liability of £4,619. These 2015 adjustments do not require a restatement of prior year results but have been included for completeness.

2. Revenue

3. Taxation

A deferred tax asset on carried forward loss has not been recognised on the basis that there is no certainty over the profits for the 12 month period following the year end losses carried forward to be utilised against future profits of  £9,753,103 (2013:  £6,587,990). Deferred tax unrecognised at the end of the year amount to £1,950,621 (2013:  £1,317,598). The deferred tax rate for 31 December 2014 is 20% being the substantively enacted rate at the end of the year. The Finance Act 2013 which was substantially enacted on 2 July 2013 includes legislation reducing the main rate of corporation tax from 24% to 23% from 1 April 2013 and further reducing the main rate of corporation tax from 23% to 21% from 1 April 2014 and to 20% from 1 April 2015.

Tax credit of £54,148 for Research and Development Tax Relief in relation to technical development in the gasification plant for FY 2012 was received during the year. During the year the Company also applied for Research and Development Tax Relief for FY 2013 (£70,666) and ECA Tax relief for both FY 2012 and 2013 (Total: £368,656). Total tax credits recognised in 2014 amount to £493,470.

4. Property, plant and equipment

Impairment of Low Plains

The Directors have used a DCF model to determine the revised carrying value of Low Plains. The model applies a discount rate of 12%, which the Directors believe is a fair market based discount rate for a biomass plant, to forecast forward looking earnings and assumes the plant generates at its target 1MW capacity. The valuation excludes the additional income from the smaller scale CHP and biomass boiler units which are expected to increase the profitability of Low Plains in 2015. The total impairment loss recognised in the consolidated statement of comprehensive income is £2,224,661 (2013: nil), making the recoverable value of the plant at year end equal to approximately £4,694,189.

5. Loans and borrowings

6. Loss per Share

The basic and diluted earnings per share have been calculated using the loss attributable to shareholders of the parent company, Aggregated Micro Power Holdings plc. The basic and dilutive loss per share are the same as the Group made a loss in the year.

7. Post balance sheet event

The Group has successfully installed and commissioned two biomass boilers at Champneys Forest Mere which have been transferred to AMPIL for a consideration of £519,750. The Group is also in discussions with Forest Fuels Holdings Ltd regarding a proposed strategic partnership as set out in the Strategic Report.

Company Balance Sheet

For the year ended 31 December 2014