Half Yearly Report

Energy Technique Plc

("Energy Technique" or the "Company")

Half-Yearly Report

30 September 2011

Headlines

·; Diffusion increased sales by 18% over corresponding half year;

·; Turnaround in Diffusion's operating profits to £149,000 from loss of £61,000 in corresponding half year;

·; Turnaround in Group profit before tax to £65,000 from loss of £359,000 in corresponding half year;

·; Strong balance sheet at 30 September 2011 with net assets of £1.42 million;

·; Cash and cash equivalents at 30 September 2011 of £38,000;

·; Diffusion has an improved order book with continuing high levels of enquiries.

Chairman's statement

Introduction

I am very pleased to report a turnaround in trading performance in the half year ended 30 September 2011. Sales increased by 18% over the corresponding half year and with continued tight management and control of costs, this produced a return to profitability for both Diffusion and the Group. This is an encouraging set of trading results for Diffusion, particularly in the context of the current downturn in the UK property and construction market.

Financial performance

Sales in the half year were up 18% on the corresponding half year at £3.29 million (2010: £2.78 million), resulting in an operating profit for Diffusion of £149,000, compared with a loss in the corresponding half year of £61,000. Central and plc related costs were much lower in the current half year at £64,000 (2010: £144,000), arising from the decision not to replace the former Group CEO role, leading to a Group operating profit of £85,000 (2010: loss of £205,000).

After interest charges of £20,000 (2010: £20,000), Group profit before tax was £65,000, compared with a loss of £359,000 incurred in the corresponding half year.

The trading results of SIAS FM, the Company's former building services management company sold on 24 March 2011, are included under Discontinued Operations.

The cash inflow from operating activities before changes in working capital was £121,000. Working capital absorbed £239,000 in line with the increase in sales levels and after interest charges of £20,000, cash absorbed by operations was £138,000. The Company remains soundly financed, having a strong balance sheet at 30 September 2011 with net assets of £1.42 million and cash at bank of £388,000, together with a modest draw down of £350,000 under its invoice discounting facility.

Diffusion

Diffusion has enjoyed very buoyant trading in the half year ended 30 September 2011, particularly in the context of the current downturn in the UK property and construction market. Both fan coils and commercial heating products experienced strong sales growth in the half year. Fan coil sales increased by 23% and commercial heating by 11% over the corresponding half year. A feature of the current sales cycle is the high volume of refurbishment work and demand for Diffusion's energy efficient products.

Diffusion has improved its share of the UK fan coil market. The growth in fan coil sales is testament to Diffusion's quality products, engineering excellence and continued innovation. During the half year ended 30 September 2011, Diffusion has worked on many prestigious developments including the Shard Building, Heathrow T2, BBC Media City Salford, Hilton Hotels, London Stock Exchange, Tower 42, Google and follow on work in the Middle East. Diffusion first supplied fan coils into the One Hyde Park residential development in 2009 and it has built on this success through the Quadrant residential development.

Diffusion's commercial heating sales have also grown through a combination of its existing customer base and new customer wins. The commercial heating range enjoys the same reputation for engineering quality as Diffusion's fan coils and customers particularly like the availability of delivery from stock or short lead times, combined with a specialist bespoke service. End user customers are all blue chip retailers and hotels and these include Sainsbury's, Tesco, House of Fraser, TK Maxx, New Look, Primark, Superdry, the new Westfield Stratford Shopping Centre and Excel Hotel London.

Current trading

Sales in October are ahead of management's expectations. As I mentioned in my Chairman's Statement accompanying the 31 March 2011 accounts, Diffusion has market leadership and a high quality reputation allowing for the successful pursuit of major commercial projects. With a number of landmark South East projects under development, we continue to experience high levels of enquiries at the premium end of the market and an improved order book. Whilst it is too early to predict the outturn for the remainder of the current financial year ending 31 March 2012, there is presently cause for more optimism.

Walter Goldsmith

Chairman

21 October 2011

Contacts:

Energy Technique Plc: 020 8783 0033

Walter Goldsmith, Chairman

Rob Unsworth, Company Secretary

finnCap (Nominated Adviser): 020 7220 0500

Geoff Nash/Ed Frisby

Consolidated statement of comprehensive income

For the six months ended 30 September 2011

There are no other recognised gains or losses other than as recorded in the consolidated statement of comprehensive income for the period.

Consolidated statement of financial position

At 30 September 2011

Consolidated statement of changes in equity

Consolidated cash flow statement

For the six months ended 30 September 2011

Consolidated segmental analysis

For the six months ended 30 September 2011

Notes to the consolidated interim report

For the six months ended 30 September 2011

1. GENERAL INFORMATION

Energy Technique Plc ("the Company") is a public limited company incorporated in the United Kingdom (registration number 13273). The Company is domiciled in the United Kingdom and its registered office address is 47 Central Avenue, West Molesey, Surrey KT8 2QZ. The Company's Ordinary Shares are traded on the AIM market of the London Stock Exchange.

2. BASIS OF PREPARATION

Energy Technique Plc has adopted International Financial Reporting Standards ("IFRS") as adopted by the European Union. The financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated. The accounting policies and methods of computation used in the preparation and presentation of this half-yearly report are in a form consistent with that which will be adopted in the Company's annual accounts.

3. REPORTING UNDER INTERNATIONAL REPORTING STANDARDS

As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing these half-yearly financial statements and therefore the half-yearly financial information is not in full compliance with IFRS.

4. EARNINGS/(LOSS) PER SHARE

The earnings/(loss) per share calculations have been arrived at by reference to the following earnings/(loss) and weighted average number of shares in issue during the period.

5. OTHER INFORMATION

The half-yearly financial statements do not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. It does not therefore include all the information and disclosures required in the annual financial statements. The financial information for the year ended 31 March 2011 has been extracted from the statutory financial statements for the Company for that period. These published financial statements prepared in a form consistent with International Financial Reporting Standards, as adopted by the European Union, were reported on by the auditors without qualification or an emphasis of matter reference and did not include a statement under Section 498(2) or (3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.

6. POSTING TO SHAREHOLDERS

In an effort to further reduce costs and in accordance with the AIM Rules for Companies, this half-yearly report will be announced on a Regulatory Information Service and published on the Company's website, www.diffusion-group.co.uk, but it will not be posted to shareholders.