Interim Results

For Immediate Release:

Environmental Recycling Technologies plc

Interim Results for the six months ended 30 June 2015

Environmental Recycling Technologies plc ("ERT", "the Company") (AIM: ENRT), the patent rights holder to the Powder Impression Moulding ("PIM") process, which converts mixed waste plastics into commercially viable products, announces its unaudited interim results for the six months ended 30 June 2015.

Highlights

· Non-exclusive PIM licence signed for the sale and production of flat sheet in Colorado Denver; commissioning of the facility is due in Q4 2015

· Heads of Terms signed with Mettalis Recycling Limited for an exclusive PIM licence for the sale and production of flat sheet in the UK

· Commercial agreement signed with CDS Group for the manufacture and distribution of equipment for production of PIM products

· First order of AXPLAS® for our North American licensee

· Short term funding facility of £500,000 organised to cover the Company's overheads

Lee Clayton - Managing Director comments:

"Environmental Recycling Technologies PLC is now benefiting from its strategic partnerships, which have resulted in the securing of key licence agreements. With our commercial partners in place we can focus on expanding the market for our Powder Impression moulding (PIM) process for converting mixed waste plastics into commercially viable products."

For further information:

Half-Yearly Review

Results

Revenue for the six months ended 30 June 2015 was £36,000 (H1, 2014 £31,000). The loss on operations was £0.62 million (H1, 2014 loss £0.59 million). Losses attributable to equity shareholders were £1.11 million (H1, 2014 loss £1.60 million).

Turnover included revenue from royalties.

Administrative expenses, excluding depreciation and amortisation, incurred in the day to day running of the business, were £0.52 million (H1, 2014 £0.49 million).

Review of business

The Company continues proactively to market its PIM technology globally, with new and exciting opportunities presenting themselves as a result of recent changes in legislation and increased recycling targets required by the EU under the waste directives.

Your board is confident that ERT, through the wider commercialisation of its PIM process has the opportunity to capitalise on these initiatives. Through our recent collaborations, ERT now has the resources to offer turn-key solutions to licensees in the manufacturing and recycling sector.

Whilst the board of ERT has decided not to proceed with the previously announced intended acquisition, it confirms negotiations have commenced with the vendors of another business with a view to achieving a similar strategic objective of acquiring a company in a complementary sector.

Dividends and loss per share

As at 30 June 2015, as reported in the statement of financial position, the Company does not have distributable reserves and is unable to declare a dividend.

The loss per share was 0.13 pence (H1, 2014 0.18 pence).

Short term funding

The Company meets its day to day cost base by managing its cash resources and securing appropriate levels of finance to settle its liabilities as they fall due. Additional cash loans during the period were £711,000.

The directors have received written assurance from Oxford Capital, the lenders, that there is no intention to request immediate repayment of the liabilities and that subject to agreement on conversion terms, the lender would accept repayment by way of a debt for equity swap.

Short term funding facilities of £500,000 have been arranged since the half year-end to cover the Company's normal overheads for the rest of the year. The board continues to look for a longer term solution from which to develop the Company's proprietary recycling technology.

Ken Brooks

Chairman

Interim Accounts for the Six Months ended 30 June 2015 (unaudited)

The financial information contained within these accounts has been prepared by the Directors who accept responsibility for the interim results presented below and confirm that it has been properly presented in accordance with applicable law. The interim results were approved by the Board of Directors on 29 September 2015 and have been prepared on the basis of the accounting policies set out in note 1. The interim results covers the six months ended 30 June 2015.

Statement of Comprehensive Income (unaudited)

Statement of Financial Position (unaudited)

Statement of Changes in Shareholders' Equity (unaudited)

Statement of Cash Flows (unaudited)

Six months ended 30 June 2015

Notes to the comprehensive financial statements

1. Accounting policies

Basis of accounting

The financial information presented in this Interim Report 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 Interim 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.

The financial information for the year ended 31 December 2014 presented in this Interim Report does not constitute the company's statutory accounts for that period but has been derived from them. The Annual Report and Accounts for the year ended 31 December 2014 were audited and can be obtained from the Registered Office Regent House, 316 Beulah Hill, London, SE19 3HF. The Independent Auditors' Report on the Annual Report and Accounts for the year ended 31 December 2014 was unqualified and drew attention to a matter of emphasis in relation to going concern 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 and have not been reviewed by the company's auditors.

As at 30 June 2015, the company held 40% of the voting rights of Delta Waste Management Limited, which meets the definition of an associated undertaking. Delta Waste Management Limited has not been accounted for as an associated undertaking on the basis that its results are not material to the company.

This report has not been audited and has not been reviewed by independent auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

Going concern

The company has reported another operating loss for the half year and has net liabilities of £5.8 million as at the balance sheet date.

The directors have prepared detailed cash flow forecasts for the period ended 30 September 2016. Based on their current expectations of current and new licence fees the directors have a reasonable expectation that revenue will be generated in line with the forecasts and will be available to provide some level of underpinning to the cash flows of the Company for the period to September 2016. The forecasts also assume that Oxford Capital (the lender) and Mr K W brooks (a director) will not seek cash repayment of any of the £6.85 million of loan funding and £0.162m of loans made available to the company during at least the 12 months from the date of approval of these interim results. The forecasts indicate that the company should be able to meet its liabilities as they fall due for payment over the forthcoming 12 months.

Appropriate assurances have been received from the lender and Mr K W Brooks that there is no intention to request repayment of the amounts due for at least the period within 12 months from the date of signing these interim results. In addition, the directors are in discussions with the lender that will enable the company to settle the outstanding loans of £6.85 million by the issue of shares in the company rather than settling in cash.

The directors have also agreed further funding of £500,000 from Oxford Capital subsequent to the year end.

The directors have also obtained written confirmation from Magna Group confirming their willingness to make available to the company, if required, a Convertible Promissory Note amounting to the value of $0.6 million on acceptable terms to help cover the company's normal overheads in the foreseeable future.

The directors consider that the recent and expected trading performance and the requirement for the continuation of loan funding from the lenders indicate the existence of material uncertainties which may cast significant doubt over the company's ability to continue as a going concern. However, the directors are confident that the level of funds available to the company will enable the company to meet its liabilities as they fall due. Accordingly the directors continue to adopt the going concern basis in preparing these interim results.

These interim results do not include the adjustments to the carrying value of assets that would result if the company was unable to continue as a going concern.

2. Finance

3. Earnings per share

At 30 June 2015, there were 4,550,000 (31 December 2014: 5,550,000) (H1, 2014: 5,750,000) of potentially issuable shares which are anti-dilutive.

4. Borrowings

The carrying value (which is a reasonable approximation to fair value) of borrowings analysed by lender is as follows:

Cash loans advanced during the period (net of issue costs) totalled £711,000 (31 December 2014: £1,159,000) (H1 2014: £560,000).

Long term borrowings of £1,841,369 are secured five year loan notes and carry an interest rate of 2% above the Bank of England base rate. The balance of loans outstanding carry interest at 7.5%.

The company has no other borrowing facilities.

5. Share capital

Authorised share capital

The Deferred Shares do not entitle holders to receive any dividend or other distribution or to attend or to vote at any general meeting of the company.

At the Annual General Meeting held on 21 August 2014, the ordinary resolution to increase the authorised share capital of the Company from a nominal value of £2,500,000 to a nominal value of £4,000,000 was approved.