Half Yearly Report

Energetix Group plc

("Energetix" or the "Group")

Unaudited Consolidated Interim Financial Statements for the six months ended 30 June 2012

Energetix Group plc, (AIM: EGX), which develops and commercialises alternative and efficient energy products, announces its Interim Results for the six month period to 30 June 2012.

Operational highlights (Kingston Energy & Genlec)

·; Gastec testing of the Kingston boiler initial phase complete

·; Initial installation and service agreements signed with Carillion

·; All licences and approvals in place with controlled market entry scheduled to take place as planned during Q4 2012 with product launch in 2013

·; Experienced senior management team appointed

Operational highlights (PNU Power)

·; Now fully type approved by National Grid

·; Data centre unit fully operational within Co-operative Financial Services, Stockport

Strengthening of the Board

·; Appointment of Peter Richardson as Group Chief Executive Officer, joining from Dyson Ltd

·; Appointment of David Grundy as Non-Executive Director, bringing significant financial experience

Financial highlights

·; Loss before tax of £2.46m (H1 2011: loss of £1.66m)

·; Placing to raise £4.6m completed in March 2012

Post period end highlights

·; EGX has announced today that it has conditionally raised £12m (before expenses) at 28p to facilitate the business plan and planned product launch in 2013

·; EGX is also proposing to raise up £2m through an Open Offer available to Qualifying Shareholders

·; Qualifying Shareholder are any shareholders on the register of members at 5pm on 5 October 2012

Commenting on Outlook, Clare Spottiswoode, Chairman, said:

"We continue to make good progress as we move to the commercialisation of the Kingston microCHP boiler and our Energy Supply business. The Group now has the management team and infrastructure and will shortly have the funding to build a market leading energy services business based on the exclusive availability of the Kingston microCHP boiler."

Chairman's statement

The Group has continued to make good progress as it moves to the commercialisation of the Kingston microCHP boiler and our Energy Supply business.

The Kingston microCHP boiler has been through a performance testing regime with encouraging results, the operational life of the product is being assessed with rigorous testing continuing and the product is being prepared for volume manufacture. It is intended the initial roll out with test systems in the domestic environment with energy supply customers will take place in Q4 2012. Final negotiations with the preferred partners for both the product components and the contract production are now taking place and the supply of volume product for the launch in 2013 will be secured in the near term.

Similarly the Kingston Energy supply business has been established with an experienced management team and proven systems. The business will enter the controlled market entry phase of development though Q4 2012 and will be ready to provide a market leading customer experience to Kingston Energy customers from product launch in 2013.

Whilst not critical to our business plans it is encouraging to see the UK government further endorse microCHP products with an increase in the Feed in Tariff for such products. We plan to seek approval under the Micro Certification Scheme next year to benefit from the Feed in Tariff. On-going concerns regarding climate change and the increase in energy costs, particularly to domestic customers, means that our Kingston boiler can make a significant contribution both to reducing UK CO2 emissions and UK domestic bills.

The Pnu Power unit is fully type approved by National Grid and the larger data centre unit has been installed and is operational in the Cooperative Financial Services centre in Stockport. These developments should lead to growing sales over the coming years with these established reference sites, facilitating further orders from network and data centre providers.

Both product streams are now being established and particularly in the case of Kingston provide the platform to build a broadly based business with substantial recurring revenues on a residential platform.

Fund raising

As announced today the Group is intending, subject to shareholder approval, to raise £12 million by way of a placing and up to a further £2 million by way of an open offer. This provides further funding to the Group over and above the placing in March 2012 which raised £4.6 million.

The funds raised are expected to enable the Group to take the Kingston boiler to the market and develop a stable and sustainable customer base.

Board changes

The past few months have seen considerable change to the Board as the business matures and looks to fully capitalise on its technological developments.

In this context, I welcome to the Board Peter Richardson as Group Chief Executive Officer and David Grundy as a Non-Executive Director. Peter brings considerable experience in production, sourcing and delivery whilst David brings extensive financial experience.

Adrian Hutchings has now become Deputy Chairman and as well as providing valuable input to the Board will continue to work on Group product development. I would like to express my thanks to Adrian for his contribution to the Group and the leadership he has provided in all aspects of the business.

Business prospects

The Group now has the management team and infrastructure and will shortly have the funding to build a market leading energy services business based on the exclusive availability of the Kingston microCHP boiler.

I look forward to reporting our further progress in my next Chairman's statement.

Clare Spottiswoode

Chairman

28 September 2012

Chief Executive's Review

I joined Energetix Group as Group Chief Executive Officer on 3 September 2012 and I am thrilled to be able to lead such a talented team of managers and employees across the business as it fulfils the potential of its market changing products. Particularly with the Kingston microCHP boiler the Group has a compelling and potentially game changing product with the opportunity through energy supply to build a domestic services business with substantial recurring revenues and an established and secure customer base.

Business review

The Group has continued the commercialisation of its alternative and efficient energy products and is investing in the production capacity and customer service infrastructure to bring the product portfolio to market.

Our products will meet the requirements of current market needs, offering solutions with reduced environmental impact and lower lifetime operating costs.

Genlec - Kingston microCHP

The Genlec operations team is in final negotiations for the volume production of the Kingston microCHP boiler with a contract manufacturing agreement. We anticipate that the company will retain legal ownership of the tooling and components throughout the production process thus further safeguarding the technical knowledge and intellectual property.

The decentralised nature of the production process gives flexibility and minimises both the product cost and the central stockholding costs. The structure is such that the quantities manufactured can step up rapidly with a consequent benefit to unit cost as the sales volumes increase through 2013 and beyond.

A number of the 45 trial production units have been used for the rigorous Gastec and Reliability Plus testing processes, performance assessment and accelerated life testing respectively. These test the durability and performance of the units and there have been positive results in all areas. The Kingston microCHP boiler is predominately based on mass produced components configured in a novel manner, this has enabled accelerated and highly accelerated life testing to be carried out to determine the potential failure rate of product in the field. This is an on-going program of work; however the results to date indicate that as anticipated the Kingston microCHP boiler is a robust design that is likely to have a modest failure rate that is well within that modelled in our business plan.

In addition, performance testing at Gastec on their dynamic test facility has produced estimates of the likely electricity that would be generated from a range of typical domestic UK properties. The tests to date indicate that we can achieve or exceed the target annual electricity production in our business plan in around 6.9 million UK homes. This gives us a high level of confidence that the target volumes in our plan should be achievable.

The initial support contracts for the installation services and on-going maintenance have been agreed with Carillion and give boiler customers access to the services and expertise of the largest non-utility service provider in the UK. A dedicated training facility has been developed at our Capenhurst facility, and to date has trained 25 Gas Safe engineers in the installation and maintenance of the Kingston microCHP product for the initial launch. All trained personnel are tested and certified by Energetix staff dedicated to training and in field technical support.

The Genlec team has been substantially expanded over the past six months to bring additional manufacturing, supply chain, and quality process expertise into the company. The transition from product development business to product business is now substantially complete.

Kingston Energy

We believe the ability to supply the Kingston microCHP boiler for free to the homeowner and to cover the cost of these boilers with the margin from an underlying energy supply contract gives Kingston Energy a valuable opportunity to build a residential supply business generating significant ongoing revenues and returns to the Group.

Development of the operational centre in Ipswich continues with all key management roles now covered by experienced industry staff. The Billing / CRM system is in the process of implementation with staff training in progress. All the necessary licences for energy supply and gas shipping are in place.

Heads of terms have been agreed which cover the purchase of energy and security deposit arrangements giving the ability to purchase energy as customers join us. Again the arrangements are flexible giving access to competitive market rates and the ability to take advantage of the opportunities which arise with the increased scale of the business.

The Kingston concept has recently received favourable press comment which has increased market awareness and is generating a significant number of enquiries from potential customers. This gives confidence that on the launch there will be a take up of the product and service offer.

Preparations are well underway for a controlled market entry to take place in Q4 2012 alongside the testing of the initial production boiler units in the home environment.

Pnu Power

Pnu Power has continued to gain market awareness within the UK, Europe and worldwide.

The SU4 unit has been type approved by National Grid after a lengthy testing period. This should provide a strong platform for us to develop the commercial sales proposition and to exploit similar operations overseas.

The DC100 units are fully operational within the Cooperative Financial Services Data Centre in Stockport and have been the subject of considerable industry interest and comment. A marketing campaign to build on this and fully establish Pnu Power within the Data Centre market has been launched. Trane Canada have visited our facilities at Capenhurst and the Cooperative site in Stockport, and have purchased a demonstration Pnu Power system with a view to their seeking opportunities in North America.

Acceptance by National Grid and the data centre markets in the UK should give further opportunities in the broader market place as established reference sites are now available. The proven CO2 saving potential of the units continues to stimulate interest in the use of the technology.

The business operations have recently received ISO9001 reaccreditation.

Funding

As announced today the Group is proposing to raise £12 million by way of a placing and up to £2 million by way of an open offer. Subject to shareholder approval, this is expected to fund the business through market entry to a sustainable customer base.

Peter Richardson

Group Chief Executive Officer

28 September 2012

Unaudited consolidated income statement

Loss per share attributable to the equity holders of the Company

The Group has no items to be recognised in the "Consolidated statement of comprehensive income" and, consequently, this statement has not been shown.

The notes are an integral part of these unaudited Consolidated Interim Financial Statements.

Unaudited consolidated statement of financial position

The notes are an integral part of these unaudited Consolidated Interim Financial Statements.

Unaudited consolidated statement of changes in equity

Unaudited consolidated statement of changes in equity (continued)

Unaudited consolidated statement of changes in equity (continued)

Unaudited consolidated statement of cash flows

The notes are an integral part of these unaudited Consolidated Interim Financial Statements.

Notes to the unaudited Consolidated Interim Financial Statements

1 Nature of operations and general information

Energetix Group plc ("the Company") and its subsidiaries (together "the Group") develop products that provide solutions to certain identified problems in the alternative energy market. Our businesses are:

Energetix Group plc is the Group's ultimate parent company. It is incorporated in England and Wales. The address of the registered office is Castlefield House, Liverpool Road, Castlefield, Manchester M3 4SB. The Group trades through a number of subsidiaries, whose places of business are Capenhurst Technology Park, Capenhurst, Chester, CH1 6EH and Felaw Maltings, 48 Felaw Street, Ipswich, IP2 8PN. Energetix Group plc's shares are quoted on the AIM Market of the London Stock Exchange.

Energetix Group plc's unaudited Consolidated Interim Financial Statements are presented in pounds sterling (£).

2 Basis of preparation

These unaudited interim consolidated financial statements are for the six months ended 30 June 2012. They have not been prepared in accordance with IAS 34, Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2011.

These financial statements have been prepared under the historical cost convention, except for revaluation of financial instruments.

The financial information set out in these Financial Statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The consolidated statement of financial position as at 31 December 2011 and the consolidated income statement, consolidated statement of cash flows and associated notes for the year then ended have been extracted from the Group's Financial Statements as at 31 December 2011. Those Financial Statements have received an unqualified audit report from the auditors however the report contained an emphasis of matter in relation to the company's ability to continue as a going concern and the directors annual impairment review of intangible fixed assets and have been delivered to the Registrar of Companies. The 2011 statutory accounts contained no statement under section 498(2) or section 498(3) of the Companies Act 2006.

 The unaudited Consolidated Interim Financial Statements for the six months ended 30 June 2012 have not been audited or reviewed in accordance with International Standard on Review Engagement 2410 issued by the Auditing Practices Board.

The unaudited Consolidated Interim Financial Statements have been approved by the Board of Directors on 28 September 2012.

As announced on 28 September 2012 the Group has secured, subject to shareholder approval, additional capital of £12m to £14m. The funds will enable the Group to bring the Kingston boiler to market and based on the free boiler model develop a stable and sustainable customer base.

Given current business forecasts that take into account reasonable changes in performance and the additional capital committed through the fund raising the Directors have a reasonable expectation that the Group has the resources to continue in operational existence for the foreseeable future.

Accordingly, they continue to adopt the going concern basis in preparing the Group's Unaudited Consolidated Interim Financial Statements.

These unaudited Consolidated Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2011.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these unaudited Consolidated Interim Financial Statements.

3 Net finance income/(costs)

4 Share issue

On the 19 March 2012, the Company issued 18,266,600 new ordinary shares of 5 pence each at a price of 25p per share to raise gross proceeds of £4,566,000.

5 Other intangible assets

The following tables show the significant additions to intangible assets.

6 months to 30 June 2012:

6 months to 30 June 2011:

Year to 31 December 2011:

6 Loss per ordinary share

The calculation of the loss per ordinary share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

7 Investments in Associates

Impairment has been recognised to reflect the directors' current assessment of its fair value less costs to sell, based upon realising its investment in VPhase plc following a prolonged decline in share price. The directors have reviewed the market value of its investment based upon VPhase plc's share price and accordingly an impairment of £243,000 has been recognised. The market value of its investment amounts to £2,236,000 on 29 June 2012.