Trading and Mount Engineering Offer Update

For Immediate Release 7 October 2010

Redhall Group plc

Update on Trading and the Offer for Mount Engineering plc

Trading Update

Redhall Group plc ("Redhall" or the "Group"), the engineering services group is pleased to provide a trading update ahead of its preliminary results to be announced on 2 December 2010.

Trading for the year ended 30 September 2010 has been in line with management expectations and ahead of the comparative period for last year. The order book remains on target for the year, and at a level similar to that reported in June, providing a strong platform for the coming year. Activity in our Energy and Defence divisions has remained strong although volumes and margins remain under pressure within our Process division. 

In Energy, we experienced a relatively subdued market place in nuclear decommissioning but it was offset by improvements in the oil and gas sector. Following the successful consolidation of our oil and gas engineering services under the Redhall brand, the Group is pleased to announce its nuclear operations will be brought together as Redhall Nuclear and it has appointed Helen Simms as Managing Director. Helen joins the Group in November from Amec Nuclear, where she held the position of Unit Director, Nuclear Services.

In Defence, we have seen both revenue and profit growth with a focus on improved operational delivery. Whilst clients' budgets going forward are expected to come under pressure, the Group is concentrating on certainty of delivery for its clients in quality, programme and cost which will be a key for future success.

In Process, markets have remained challenging. Given the prospect of a prolonged period of recovery, the Group has conducted a further rationalisation programme which has resulted in additional exceptional costs in the second half.

Given the uncertainties surrounding the Government's Comprehensive Spending Review to be announced later this month, the next financial year is more difficult to predict. Whilst the Board remains cautious about the prospects for 2011, it believes the strength of balance sheet, cash position and breadth of markets continues to position the Group well for the future. 

The Offer for Mount Engineering plc ("Mount")

The Board has noted the offer for Mount announced by Cooper Safety Limited on 7 October and the subsequent recommendation of the Mount Board. After due consideration, the Redhall Board has concluded not to increase its cash offer of 70p per share and the offer will lapse in due course.

This outcome is disappointing given the complementary nature of Mount's activities, but we continue to seek earnings enhancing acquisitions that will provide the Group with critical mass in its core markets.

Enquiries:

Redhall Group plc 01924 385386

David Jackson, Executive Chairman

Simon Foster, Group Chief Executive

John O'Kane, Group Finance Director

Altium 0161 831 9133

Phil Adams / Paul Lines / Simon Lord

Buchanan Communications 020 7466 5000

Tim Anderson / Isabel Podda / James Strong