Infrastructure Update

3 March 2015

CORAC GROUP PLC

("Corac" or "Group")

Infrastructure Update

Corac, the specialist engineering group focused on the aerospace & defence and energy & process industry sectors, today provides an update on the Group's facilities, reflecting management's decision to optimise production and engineering capabilities as the business continues to evolve and grow.

· Group-wide production and workshop activities will be carried out at Corac's two established engineering centres:

- Greater Manchester: heavy engineering and fabrication will continue to take place at the Dukinfield plant and the newly acquired Shaw Sheet Metal facility in Oldham.

- Portsmouth: becomes the base for the Group's high technology build, test and assembly functions.

· The Group's technology design and development team are to be relocated to a new site just outside London, where the design team will continue to explore new applications for Corac's intellectual property.

As part of the Group's decision to streamline operations, the Slough Technology Centre is therefore to close. Management will exercise an early break clause in the lease, with exit planned in the second quarter of 2015. As a result of this closure, current estimates anticipate there will be an exceptional charge of £0.9m offset by £0.5m benefits delivered in the current financial year. From 2016, the annualised impact of savings is expected to reduce overheads by approximately £0.7m.

It is anticipated that these initiatives will enable the business to benefit from future cost synergies, whilst ensuring it has a sustainable operational footprint capable of supporting a number of ongoing organic growth opportunities. They also create a strong platform for integrating potential bolt-on acquisitions.

Phil Cartmell, Chief Executive of Corac said: "As we continue the evolution of the business as a specialist engineering company, we will focus on creating best in class capability that is technically excellent and meets the needs of our clients. The management team remains committed to delivering an improved performance year-on-year for our shareholders, and will continue to optimise our operational footprint and maximise efficiencies within the Group."

NOTES TO EDITORS

Corac Group is a specialist engineering group focused on the aerospace & defence and energy & process industry sectors. The Group designs and builds valuable solutions for critical applications in compression systems, renewable energy, atmosphere management and fabricated equipment; and provides support services through the equipment's lifetime. Corac Group shares have been trading on AIM since July 2001.