Half Yearly Report

Embargoed until 0700 hrs 22 September 2015

KBC Advanced Technologies plc

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

Half year results for the six months ended 30 June 2015

KBC Advanced Technologies plc, a leading consultancy and software provider to the hydrocarbon industry, today announces its half year results for the six months ended 30 June 2015.

HIGHLIGHTS

- Solid operational and financial performance in difficult oil market conditions

- Revenue up 5% to £36.2m (H1 2014: £34.4m) with Consulting up 5% and Technology up 6%

- Adjusted profit before tax (as defined in note 7) grew 3% to £4.2m (H1 2014: £4.0m)

- Cost base reduced by around £3.5m per annum with full benefit expected in the second half

- Healthy pipeline of contracted work, up 17% to £74m at period end (H1 2014: £63m)

- Demand for KBC's operational excellence and profit improvement services is increasing in refining

- Senior leadership team enhanced, with appointment of CEO and recruitment of new CFO

Ian Godden, Chairman of KBC, commented:

"Early management action in 2015 to respond to the oil price fall, combined with an improving downstream refining market, resulted in a solid first half performance. These actions, together with the modernisation of KBC over recent years, led to a strong finish to the first half and good momentum into the second half, with early contract wins, higher consulting utilisation and good Technology opportunities. Long term client relationships in the downstream market are now delivering material contracts to the Group as that market segment looks to profit improvement initiatives.

The new CEO and his enhanced senior leadership team took action to rebalance KBC's global resource pool, which has both improved focus on the Group's strategic objectives and reduced KBC's cost base, with full benefit expected in the second half year. At the same time management has maintained focus on Technology and on business development in growth regions such as the Middle East.

Recent contract wins in the Middle East and Russia improve medium term visibility of Consulting revenue and therefore we expect full year results to be in line with the Board's expectations."

- Ends -

For further information, please contact:

Notes to Editors

KBC is a leading consultancy and software provider to the global hydrocarbon processing industry. With over 30 years of experience, KBC combines industry-leading technology with experienced engineers and operations personnel using robust methodologies to create personalised, sustainable solutions for its clients. For more information, visit www.kbcat.com.

KBC Advanced Technologies plc

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

Half year results for the six months ended 30 June 2015

Chairman's Statement

The hydrocarbon industry is continuing to experience changing and difficult conditions, impacting most upstream (and integrated downstream) sectors, causing major project cutbacks throughout the world and headwinds in discretionary spending budgets. In parts of the downstream market, refinery and petrochemical margins have improved, and the search for profit improvement has continued, leading to recent firm demand for KBC's solutions.

The Group has reshaped and repositioned its business in response to these conditions. KBC has reduced its cost base, bringing annualised savings of approximately £3.5m, including consolidation of offices in North America and reduction of staff in more mature regions. The Group has continued its expansion in parts of the world where hydrocarbon projects are still well-funded.

Whilst KBC has not altered its long-term strategy of increasing and strengthening the more profitable software business, expanding its resources in growth regions and breaking further into the upstream sector, the Group has in the short term adjusted its tactics to reflect the new market conditions in the upstream sector. KBC currently sees further opportunity to develop its core business in the downstream market particularly in Europe, the Middle East and North Africa, areas which are experiencing a boost from lower oil and gas prices and some expansion in refining and/or petrochemicals. Investment in business development skills and resources will therefore continue in these markets. In the downstream sector we are executing our technology strategy of adding KBC content to third party alliance software to deliver software as a service.

KBC's core skills in providing clients with profit improvement and operational excellence across the whole hydrocarbon chain are compensating for the major cutbacks in new projects in upstream.

TECHNOLOGY

Technology revenues were solid in the first half, growing by 6% to £8.9m (H1 2014: £8.4m) with key contract wins in Australia, Oman and the United States maintaining KBC's momentum in this business. Revenue from royalties and maintenance, support and upgrade revenue grew by 23% to £5.3m (H1 2014: £4.3m).

The upstream business acquired in 2014 with FEESA Ltd ("FEESA") performed well in the first half, but is facing a tough upstream market. Work continues on the integration of FEESA's products into the KBC software suite, creating a unique selling point for the Group.

New agreements with Kongsberg, announced in April 2015, have strengthened KBC's business base and critical mass for the future in upstream.

CONSULTING

Consulting revenue in the period was up by 5% to £27.3m (H1 2014: £26.0m). During the first half year the Group continued to deliver on both its major South American project and a number of new Middle East projects. Renewed client interest in Europe as refinery margins improve has also resulted in growth in that market.

The Group remains focused this year on the three key elements of a successful consulting business (pricing, utilisation and staff leverage) with a stronger and more effective global operations team in place. The Group continues its emphasis on larger consulting assignments where there is an opportunity for higher margins and leverage along with the opportunity to deploy its own technology and that of third parties.

Since the period end we have announced a three year, US$8.5m contract to assist a major Middle Eastern client with margin improvement and workforce capability development and a multi-million dollar reliability and maintenance contract for a major Russian refining company.

LEADERSHIP

The Group has strengthened its leadership with the appointment of a new Chief Executive Officer and the appointment of a new Chief Financial Officer. Internal appointments have also been made to two positions: Chief Commercial Officer to improve the Group's sales execution and Chief Technology Officer to support the commitment to further technology investment and third party relationships.

RESULTS

Group revenue increased by 5% in the first half of the year to £36.2m (H1 2014: £34.4m), with Consulting revenue growing by 5% and Technology revenue growing by 6%. Direct costs increased by 20% in the first half year to £6.1m (H1 2014: £5.1m) due to an increase in subcontractor costs on projects where local third party partners are required to secure multi-million pound contracts. Staff and associate costs increased by 8% in the first half to £17.8m (H1 2014: £16.5m) due to an increase in average headcount compared to the first half of 2014, but have decreased by 4% when compared to the second half of 2014 as a result of the restructuring of the Group's cost base in early 2015. The full benefit of the restructuring is expected to be realised during the remainder of the year. Other operating charges increased by 2% in the first half to £7.3m (H1 2014: £7.1m) due to restructuring costs of £0.8m, offset by reduced foreign exchange losses of £0.5m (H1 2014: £0.7m) and recruitment costs. Depreciation and amortisation charges increased by 39% in the first half to £3.4m (H1 2014: £2.5m) due to an increase in amortisation linked to the acquisition of FEESA in July 2014.

EBITDA in the first half was £4.1m (11% EBITDA margin) compared with £4.9m (14% EBITDA margin) in the first half of 2014. This margin reduction was due to lower Consulting utilisation and higher staff and associate costs before executing the restructuring programme earlier in the year. Adjusted EBITDA (as detailed in note 8) was £4.9m (14% aEBITDA margin) in the first half compared with £5.3m (15% aEBITDA margin) in the first half of 2014.

Profit before tax decreased in the first half to £1.6m (H1 2014: £2.9m) due to increases in amortisation of acquisition intangibles, and redundancy and reorganisation costs.

Profit before tax, as detailed in note 7, adjusted for acquisitions, capitalisation of R&D, amortisation, exceptional and other items which do not reflect underlying operations, increased to £4.2m in the first half year (H1 2014: £4.0m) which represents a 12% adjusted profit before tax margin (H1 2014: 12%).

The tax expense in the first half was £0.6m (H1 2014: £1.1m) reflecting an estimated effective year-end tax rate reduction to 37% (H1 2014: 39%), driven by the Group's geographic mix of business and location of contracting entities.

Profit after tax in the first half of 2015 was £1.0m (H1 2014: £1.8m). Basic earnings per share in the period was 1.2p, down from 2.9p in the first half of 2014. On an adjusted basis, earnings per share decreased by 16% to 3.8p (H1 2014: 4.5p).

During the period the Group incurred research and development costs of £2.3m (H1 2014: £1.7m), the increase being due to the research and development costs in FEESA. Of this amount, £0.8m (H1 2014: £0.7m) related to development expenditure and has been carried forward as an intangible asset. Amortisation of development costs in the period was £0.8m (H1 2014: £0.7m).

The Company expects its cash balance to grow sequentially in line with normal seasonal weighting. The final year end cash balance is expected, however, to reflect increased working capital demands. Net cash at 30 June 2015 was £10.6m (31 December 2014: £11.0m) with no outstanding bank loans. This decrease in net cash is due to the timing of receipts associated with large contracts.

Net cash inflow during the period from operations was £2.6m (H1 2014: £2.1m outflow).

Trade and other receivables increased to £43.7m (H1 2014: £30.1m) due largely to the extension of a multi-year contract.

The Group's pipeline of contracted work at 30 June 2015 was £74m, which compares to £63m at 30 June 2014 and £88m at 31 December 2014 (31 December 2013: £78m).

DIVIDEND

A final dividend for the year to 31 December 2014 of 1.1p per share was paid to shareholders on 22 July 2015.

As last year, the Board does not intend to pay a dividend with respect to the first half year and intends to propose a final dividend following its full year results.

BOARD

Andrew Howell, already a Board member, was appointed as the new CEO on 1 January 2015. Ian Godden, previously Executive Chairman, has been re-appointed as Non-Executive Chairman as of 1 January 2015 and continues his presence in the Middle East to assist the executive team in expansion within the Middle East, North Africa and parts of Asia. The new Chief Financial Officer, Eric Dodd, joined the Group on 1 May 2015, replacing the interim CFO.

In line with good corporate governance practice, the Chairman has resigned as a member of the Audit and Remuneration Committees. Paul McCloskey has been appointed as Chairman of the Nomination Committee, with Oliver Scott stepping down from that role but remaining as a member of the Committee.

OUTLOOK

The second half of 2015 has started well. KBC's traditional strengths in the downstream area have resulted in a number of Consulting contracts and opportunities which are helping to buffer the Group from the full hydrocarbon downturn. Together with current opportunities for Technology, these  give KBC a solid business base and the Board expects the full year results to be in line with its expectations.

Ian Godden

Chairman

22 September 2015

Group income statement

for the six months ended 30 June 2015

Group statement of comprehensive income

for the six months ended 30 June 2015

Group statement of changes in equity

for the six months ended 30 June 2015

Group balance sheet

as at 30 June 2015

Group cash flow statement

for the six months ended 30 June 2015

Notes to the half year financial information

1. General information

KBC Advanced Technologies plc (the "Company") is a company domiciled in England. The half year results of the Company for the six months ended 30 June 2015 comprise the Company and its subsidiaries (together referred to as the "Group").

2. Accounting policies

Basis of preparation

The financial information presented in these half year results has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union. The principal accounting policies adopted in the preparation of the financial information in this Half year report are unchanged from those used in the company's financial statements for the year ended 31 December 2014 and are consistent with those that the company expects to apply in its financial statements for the year ended 31 December 2015.

This Half year report will be sent to shareholders and published on the Investor Relations section of the corporate website at www.kbcat.com. Further copies of this Half Year Report may be obtained from the Company Secretary, KBC Advanced Technologies plc, 42-50 Hersham Road, Walton on Thames, Surrey, KT12 1RZ.

The financial information for the year ended 31 December 2014 presented in this Half year report does not constitute the company's statutory accounts for that period but has been derived from them. The Annual Report for the year ended 31 December 2014 were audited and have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report for the year ended 31 December 2014 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006. The financial information for the periods ended 30 June 2015 and 30 June 2014 are unaudited.

3. Segment information

With regard to the balance sheet, those elements of the balance sheet where regional reporting is prepared have been disclosed. Those elements are trade receivables and provisions, amounts recoverable on contracts and deferred revenue.

At the balance sheet date 55% (December 2014: 39%) of total trade receivables were concentrated with one (December 2014: one) of the Group's customers. The balance was spread over 112 (December 2014: 123) customers, two of whom comprised more than 5% (December 2014: none) of the total.

3. Segment information (continued)

Revenues above are based on the location of the customer and non-current assets on the location of the Group's assets. The countries listed represent those where the total revenue or assets are greater than 5% of the Group total on an annualised basis.

The following customers account for more than 10% of the Group's revenues:

The revenue generated from the major customer above is derived from both Consulting and Technology.

The adjusted profit before tax (note 7) and adjusted EBITDA (note 8) also form part of the internal reporting.

4. Tax

Tax is charged at 37% for the six months ended 30 June 2015 (30 June 2014: 39% and 31 December 2014: 39%) representing the best estimate of the average annual effective tax rate expected to apply for the full year, applied to the pre-tax income of the six month period.

5. Dividends

A final dividend for the year to 31 December 2014 of 1.1p per share was paid to shareholders on 22 July 2015.

6. Earnings per share

7. Adjusted profit before tax

7. Adjusted profit before tax (continued)

8. Adjusted EBITDA

9. Cash and cash equivalents