Interim Results

Sorbic International Plc

("Sorbic International" or "the Group" or "the Company")

Interim Results

Sorbic International plc, (AIM:SORB), the third largest sorbates producer in China today announces its interim results for the six months period ended 31 March 2010.

Summary

Since period end

John McLean, Non-Executive Chairman of Sorbic, commented: "During a period when the Company has experienced significant pressure on its margins, as well as disruption from environmental factors such as power outages, Sorbic has remained profitable. The new facility in Inner Mongolia will be key to driving growth, and this significant development will double the Company's production capacity. The long-term prospects for Sorbic therefore remain strong."

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Notes to Editors:

Sorbic International's principal activity is the production and sale of the food preservatives Sorbic Acid and Potassium Sorbate from its base in Linyi City, Shandong Province, Peoples Republic of China. Approximately half of Sorbic International's production is sold to overseas markets, across 46 countries and half into the Chinese domestic market.

Sorbic Acid is a naturally occurring organic compound that is used in all kinds of foods for its anti-decomposition and anti-fungus function and also in grains, medicines, cosmetics, toothpaste, tobacco, animal feed, latex, paper-manufacturing and pesticides. Potassium Sorbate is used to inhibit moulds and yeasts in many foods, such as cheese, wine, yogurt, dried meat, baked goods, cosmetics and pharmaceuticals.

Sorbic International operates through its wholly owned subsidiary Linyi Van Science and Technique Co., Ltd ("LVST").

Operational Overview

Demand for the Company's products remains strong, with order levels beyond the Company's current capacity.

During the period, the Company experienced interrupted production due to unforeseen environmental factors. Sales were affected by intermittent stoppages of the production lines for the following reasons:

Estimated losses as a result of the 30 days of lost production total approximately RMB 3.7 million (£350,000) in profit before tax. The Board looks forward to operating in Inner Mongolia, where the new business park is well connected in terms of resources such as coal, electricity and water.

LVST Financials

The prices of raw materials are escalating, and although selling prices are increasing, this has not fully offset the increases in raw materials prices. This has resulted in gross profit margins decreasing to 22% (six months to 31 March 2009: 35%). WithinLVST the average cost of producing Sorbic Acid has risen by 19% over the six month period to 31 March 2010, whereas the average selling price has only risen by 7%. Similarly the average cost of producing Potassium Sorbate has risen by 14% whereas the average selling price as only risen by 7%.However, selling prices are starting to increase and the Board expects the firming of prices to continue, thereby improving margins over the coming months.

Part of the cost increase is due to under recovery of fixed costs such as depreciation, wages and utilities as a result of not operating a full capacity. Further, from January 2010 onwards, the Company has incurred additional recurring cost from the enhancement to the water treatment process at its site in Linyi City. This government directed enhancement will cost the Company an additional RMB 600 for every ton of sorbates produced which reduces gross margins by 2.5 to 2.7 percentage points.

New production facility

The new production facility in Ulanqab City, Inner Mongolia, is currently being built on newly acquired factory site of 290,167sqm. The ground breaking ceremony took place on 25 April 2010 with actual work beginning early May 2010. Due to the unusually cold and prolonged winter, construction work did not start as planned in early April 2010, but despite this construction is on target and the foundations are nearly complete. Production is expected to commence in summer 2011.

The new site on the Chahar Industrial Park benefits from:

·; Modern infrastructure, with excellent energy, water and transport links

·; Availability of resources such as coal, electricity and water at a lower cost than the current site in Linyi

·; Industrial land resources costing only 45% of the national benchmark rate

The Board remains extremely optimistic about the next stage of Sorbic's development. Once the plant turns operational in the summer of 2011 with the completion of the two new lines, production capacity will reach 15,000 tonnes per annum, which will double the existing production capacity. Gross profit margins at the new facility are expected to be 20% better than existing facility which will greatly enhance the Company's competitive advantage. The new site has further expansion possibility up to an additional six more lines.

Loan from Albany

Albany Capital Group Limited ("ACGL") (formerly Albany Capital plc), which is a significant shareholder (20.4%) in the Company, has agreed to extend its one year term loan facility to Sorbic International plc from £500,000 to £550,000 on the same terms as the loan advanced in November 2009 in order to fund head office operating costs.

Outlook

China GDP growth exceeded the government's 8 percent target in 2009 and is expected to be close to 10 percent in both 2010 and 2011.

The Purchasing Managers' Index ("PMI") for China's manufacturing sector stood at 53.9 percent in May. (source: the China Federation of Logistics and Purchasing), as an indication of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment. A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. This is the eleventh consecutive month that China manufacturing activities achieve expansionary growth.

Whilst the food additive industry in PRC remains highly competitive, and the business environment continues to be challenging, Sorbic is well placed within the industry due to the long-standing emphasis on quality of its product. Going forward, the Group will continue to monitor the business environment closely, while at the same time exploring various expansion options and opportunities to attain long term sustainable and profitable growth.

We have registered a new subsidiary, Inner Mongolia Gold Van Science and Technique Company in January 2010 with registered capital of 10 million RMB. The company in Inner Mongolia expects to recruit 60-80 supervisory staff for the new plant. The first batch of 20 workers from Ulanqab, Inner Mongolia has arrived in Linyi for training in April 2010.

Whilst in the short term the Group's profitability will continue to be impacted by the environmental factors such as power outages, the move to the Inner Mongolia site underpins Sorbic's growth prospects for the longer term.  We are excited about the opportunities in the sector, and are confident that the Group is well positioned to capitalise on the rapid growth in the Chinese domestic market.

John McLean, Non-executive Chairman

24 June 2010

Unaudited condensed consolidated statement of comprehensive income

For the six month period ended 31 March 2010

Unaudited condensed consolidated statement of financial position

As at 31 March 2010

Unaudited condensed statement of cash flows

For the six month period ended31 March 2010

Unaudited condensed consolidated statement of changes in equity

For the six month period ended31 March2010

Basis of Presentation and Summary of Significant Accounting Policies

The Company was established to seek to acquire a controlling interest in a company located in Europe, North America or Asia. Following the change of name from Ninety plc to Sorbic International plc and the completion of the acquisition of Honour Field International Limited ("HF") and its subsidiary ("Honour Field Group") on 29 September 2008, the Group's principal activities comprise the production and sale of food preservatives, namely Sorbic Acid and Potassium Sorbate. The Group's main operations are in the People's Republic of China.

Sorbic International, a public limited company, is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of Sorbic International's registered office is 17 Hanover Square, London W12 1HU. Sorbic International's shares are traded on the AIM market of the London Stock Exchange.

The financial information for the six months ended 31 March 2009 and 31 March 2010 set out in this interim financial information is unaudited and does not constitute statutory financial statements. The financial information for the year ended 30 September 2009 set out in this interim financial information does not comprise the Group's statutory financial statements as defined in Section 435 Companies Act 2006 but has been extracted from those financial statements.

The interim financial information for the six months ended 31 March 2010 was approved by the directors on 20 June 2010.

Copies of this interim financial information will be available on the Company's website: www.sorbicinternational.com

The interim financial information has been prepared in accordance with IAS 34 "Interim financial reporting" as adopted by the European Union. The standards have been applied consistently (except as otherwise stated).

The statutory financial statements for the year ended 30 September 2009, which have been filed at Companies House, were prepared under IFRS and IFRIC interpretations as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS. The auditors reported on those financial statements; their Audit Report was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.

The interim financial information for the six months ended 31 March 2010 has been prepared on the basis of the accounting policies set out in the most recently published financial statements for the Group for the year ended 30 September 2009, which are available on the Company's website; www.sorbicinternational.com, as the Company does not anticipate the addition of new standards to the Group's results for the year ending 30 September 2010.

With effect from 1 October 2009, the Group has implemented IFRS 8 - operating segments and IAS 1 (revised 2007) - presentation of financial statements.

a. IFRS 8 - Operating Segments

IFRS 8 is effective for annual periods beginning on or after 1 January 2009. IFRS 8 is a disclosure standard. The adoption of this standard does not affect the identified operating segments for the Group and has no impact on the reported results or financial position of the Group. The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker.

The Group has adopted IFRS 8 which is required for all annual reports and interim financial statements starting 1 January 2009 or later. Implementation of IFRS 8 has not resulted in changes to the Group policy in measuring/valuing the amounts included in segmental reporting. However, the composition of the reportable segment in March 2010 interim reporting compared to March 2009 and September 2009 has changed and there are additional narrative disclosures. The measures of profit or loss, revenues and expenses included in segmental reporting are the same as those used in the consolidated financial statements and remain unchanged from 2009.

The reportable segments identified make up the Group's revenue, which is derived from the sale of its products. The reportable segments are an aggregation of operating segments within the Group as prescribed by IFRS 8. The reportable segments are determined based on the Group's management structures and the consequent reporting to the chief operating decision maker. Thus, they are determined based on both geographical segments and business segments of the Group.

Income and expenses included in profit for the year are allocated to the extent that they can be directly or indirectly attributed to the segments on a reliable basis. Expenses allocated as either directly or indirectly attributable comprise: cost of sales, other operating expenses and administrative expenses.

The income and expenses allocated as indirectly attributable to the segments are allocated by means of sharing key resources determined on the basis of utilisation of key resources in the segment.

Non-current segment assets comprise the non-current assets used directly for the segment operations, including property, plant and equipment, land use rights and construction in progress prepayments.

Current segment assets comprise the current assets used directly for segment operations, including inventories, trade receivables, other receivables and prepayments.

b. IAS 1 (revised 2007) - Presentation of Financial Statements

IAS 1 (revised 2007) introduces a number of changes to the requirements for the presentation of financial statements which include the followings:- the separate presentation of owner and non-owner changes in equity; requirement for entities making restatements of classifications of comparative information to present a statement of financial position at the beginning of the comparative period, and voluntary name changes for certain primary statements.

The Group has adopted IFRS 8, Operating Segments for the March 2010 interim reporting. IFRS 8 requires that segments represent the level at which financial information is reported to the Board of directors ("The Board") of the Group, being the chief operating decision maker as defined in IFRS 8. The Board consists of the Chairman, the President, the Chief Executive Officer, the Chief Financial Officer and the independent director. The Board determines the operating segments based on reports reviewed and used by the Board for strategic decision making and resource allocation.

Segment information is presented in respect of the Group's geographical and operating segments.

The Group's operating segments are as follows:

(i) Sorbic acid

(ii) Potassium sorbate

There were no inter-segment sales and transfers during the year ended 31 March 2010.

Geographical Information - Six months ended 31 March 2010

Operating Segments - Six months ended 31 March 2010

Geographical Information - Six months ended 31 March 2009

Operating Segments - Six months ended 31 March 2009

Geographical Information - Year ended 30 September 2009

Operating Segments - Year ended 30 September 2009

The taxation charge for the six months ended 31 March 2010 has been based on the estimated effective rate of 12.5% from October to December 2009 and 25% from January 2010 onwards (31 March 2009 - 12.5%).

The Group's subsidiary, Linyi Van Science and Technique Company Limited ("LVST") has had the benefit of a tax holiday from 2004 in which it is entitled to be exempted from the Enterprise Income Tax ("EIT") for tax years starting from the first profit making year followed by a 50% tax relief for the next three years. The tax holiday granted expired from 1 January 2010 onwards.

(a) Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period:

Profit attributable to equity holders of the company: £219,895 (2009: £2,210,786)

Weighted average number of ordinary shares in issue: 33,388,500 (2009: 23,144,784)

Basic earnings per share: 0.66 pence (2009: 9.55 pence)

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares during the period.

Profit attributable to equity holders of the Company: £219,895 (2009: £2,210,786)

Weighted average number of ordinary shares in issue: 33,388,500 (2009: 23,744,784)

Diluted earnings per share: 0.66 pence (2009: 9.31 pence)

The dilutive effect of the options granted to Hermes Capital and Finn Cap to subscribe 400,000 shares and 200,000 shares respectively at 75 pence per share has no impact on the calculation of the earnings per share. There were no potential dilutive share arrangements in place during the six months ended 31 March 2010.

The balance due from Hermes Financial of £301,625 was the remaining fund that Hermes Financial owed in relation to the reverse acquisition exercise.

The amount due to Hermes Capital of £177,274 was related to the provision of advisory and consultancy service to Honour Field International for the reverse acquisition exercise.

In respect to the work that Hermes Capital carried out for Sorbic International in relation to the reverse acquisition exercise, an accrual of £250,000, being approximately 1.0% of Sorbic's gross market capitalisation at the time of listing was provided in addition to £73,917 of expenses.

The Company disclosed in its financial statements for the year ended 30 September 2009 that a contingent liability of up to £1 million may be due arising from the acquisition of LVST.

In order to resolve the position, a loan of £4.6 million was made by Wang Yan Ting ("WYT"), a director and shareholder in Sorbic International plc and the former owner of LVST to LVST, and a contribution of the same amount was made by WYT to Honour Field International Limited ("HF"). These amounts are repayable on demand. Since the legal agreements relating to the set off of the above transactions have not been executed at the date of statement of financial position, the amounts due to and due from WYT are included in other payables and other receivables respectively.

As a result of the arrangements, there is no contingent liability at the date of statement of financial position.

On 22 January 2010, the Group has, via LVST, incorporated IMGVST with registered capital of RMB 10 million (£0.97 million). Total cash consideration of RMB 2 million (£0.19 million) has been paid (refer to Note 9).

The registered capital of the Inner Mongolia entity is RMB 10 million (£0.97 million). As at 31 March 2010, RMB 2 million (£0.19 million) has been paid by LVST and Chen Zhi Chang in a 90:10 split. Chen Zhi Qiang, an employee of the Company, is holding the 10% in trust for the Company to allow the Company to stagger payments for the remaining RMB 8 million (£0.77 million) over the two years of set up.

During the board meeting held on the 26 of April 2010, the Board has agreed to a management incentive of RMB 16 million (£1.55 million) payable to WYT, the president of the Company upon the completion of the new production facilities in Inner Mongolia within the approved budget and timeline.

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