Publication of circular and unaudited results

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

11 April 2018

Flowgroup plc

("Flowgroup", the "Group" or the "Company")

Publication of circular and unaudited results

Further to its announcement on 10 April 2018 regarding the conditional sale of Flow Energy Limited ("Flow Energy"), to Co-operative Energy Limited ("Co-op Energy") (the "Sale"), the Company announces that it has today posted an explanatory circular to Shareholders detailing the Sale, together with a notice of the General Meeting to be held at the offices of Hogan Lovells International LLP, Atlantic House, Holborn Viaduct, London EC1A 2FG at 9.00 a.m. on 27 April 2018, in connection with the Sale. The circular is available to view on the Company's website at http://www.flowgroup.uk.com/

The Company also announces a summary of its unaudited results for the financial year ended 31 December 2017, which have been extracted from unaudited management accounts. The Company expects to issue its full audited 2017 results following completion of the disposal of Flow Energy Limited.

The Group expects to report that in the year ended 31 December 2017, its revenues increased by 40% to £138.1 million (2016: £98.8 million) and a gross profit (before exceptional items) of £8.3 million (2016: £7.1 million). After exceptional items totalling approximately £1.9 million (2016: £22.1 million), the Group expects to report a loss before taxation of approximately £20.8 million (2016 £45.8 million). As at 31 December 2017, net liabilities were £23.6 million (31 December 2016: £14.7million).

The summary unaudited management accounts are set out below:

Unaudited Group Income Statement

Unaudited Group Statement of Financial Position

Unaudited Group Statement of Cash Flows

Unaudited Group Statement of Changes in Equity

Notes to the Unaudited Group Management Accounts

1 Basis of preparation and accounting policies

The financial information for the year ended 31 December 2017 has been extracted from unaudited management accounts and does not constitute the Group's financial statements. Financial statements for the year ended 31 December 2017 have not yet been prepared, audited or delivered to the Registrar of Companies.

The accounting policies used in the preparation of the unaudited financial information are consistent with those used in the interim report for the 6 months ended 30 June 2017 and expected to be adopted in the annual financial statements for the year ended 31 December 2017.

The comparative figures are derived from the Group's financial statements for the year ended 31 December 2016 which carried an unqualified audit report, did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

2 Exceptional items

Further reorganisation costs comprising redundancy, empty property and contract settlements have been recognised during the year ended 31 December 2017 in respect of both the Flow Products and Flow Energy businesses. Adjustments to recognised assets and liabilities comprise the net of release of previous provisions, the gain on the settlement of long term creditors and the write off of fixed assets.

Exceptional items recognised during the year ended 31 December 2016 arise from the scaling back of the operations of the Flow Products division and comprise reductions in the balance sheet value of inventories and intangible assets together with adjustments to the carrying values of directly related prepayments and liabilities.

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