Trading Update

December 10th 2012

Nature Group PLC

("Nature Group" or the "Company")

Trading Update

Nature Group, (AIM:NGR), the provider of port reception facilities and waste treatment solutions for the oil, marine and process industries provides a trading update for the financial year ending December 2012.

On November 13th we announced the appointment of a new Chairman and have since instigated a thorough review of the company structure and reporting lines. Over the last two years we are extremely pleased by the number of opportunities which have been generated in both existing and new market locations and are actively progressing several of these and we expect to make further announcements in the near future. The first, details of which follow at the end of this announcement, is the signing of a contract with the UK Ministry of Defence for the construction of a waste processing facility in one of the overseas territories with a contract value in excess of £2m.

However, several of these projects are taking longer to finalise than had been anticipated and consequently a considerable amount of income which had been expected to fall into this financial year will now not be recognised until 2013. At the same time shareholders will be aware that over the last two years we have been obliged to increase our overheads considerably in order to deliver the contracts which we have been negotiating and to put in place the structure behind an increasingly international operation. This overhead has necessarily run ahead of sales.

Part of our operational review is centred on ensuring that we make the most economical use of our resources and that the increasingly international nature of our reporting lines does not cause us to lose focus. We remain very conscious of the need to maintain a long term balance between the exploitation of our many opportunities and the costs of doing so.

Divisional details:

Oil and Gas Division

The second half of 2012 has been adversely affected by a lower than expected level of revenue in the Company's oil and gas division and decreased margins .The deployment and sales of our CTU units are taking longer than previously anticipated and consequently revenue from these units that management had expected to occur in the year ending 2012 are now expected to complete in 2013.

Whilst our CTU technology is receiving increasing acceptance, it can be slow in translation into firm orders. In the coming weeks we expect to receive orders for CTU projects from four different locations around the world, which have been under negotiation for a long period. We had anticipated when building the last two CTU's that they would have been deployed sooner, but it is now apparent that they won't contribute to Nature's 2012 results. As the pipeline of projects for our CTU's is growing, we are still confident that the operational shift within the oil and gas industry, for treating waste offshore instead of onshore, is happening.

Whilst we are gratified by the new opportunities which have come our way, many of which are currently being actively negotiated, it has become apparent that contracts are taking longer to come to fruition than had been anticipated. In particular a contract for the deployment of a CTU in South America has been delayed and it was expected that either two more CTU's would be deployed or else a single unit sold in 2012. We are pleased to report that the Company has recently won a contract with Dong Energy for the use of its technology.

The new opportunities which have arisen have required additional overhead which has increased our cost base over the last year and, in particular, the Norway operation which has affected our margins in this division.

Maritime Division

We have reported previously on the slowdown in world shipping which was impacting on volumes in Rotterdam and while this has improved in the second half of the year any upturn remains dependent on external factors. In addition our Joint Venture in Portugal has seen a decrease in treatment volumes from Malta. 

Work on the full resumption of operations in Gibraltar is progressing and using third party disposal facilities we have maintained our services to customers. Discussions with the Gibraltar administration are ongoing, and while our waste, trade and port operator's licenses have been renewed and re-issued in the meantime, we are still awaiting the final confirmation for rebuilding our storage and treatment facility. Despite the initial rejection of our insurance claim we maintain an ongoing dialogue with the insurers. The expansion of our international network of Port Reception Facilities is ongoing where we confidently expect to announce the addition of a new location to our network shortly after the New Year.

Engineering Division

As we said above, we are pleased to report that our Engineering division has signed an order from the MoD for the building of a waste treatment facility on one of the overseas territories, for delivery in the 2nd quarter of 2013, with contract value of in excess of £ 2 million. Further details are attached below.

However, we have incurred extra costs in completing the handover of the project in Oman.

Summary

Overall therefore, as a result of the delay in completion of a number of projects and orders together with the increased costs associated with preparing for the expansion of the business, the results for the year ending 31 December 2012 will be materially below market expectations. As explained we have assumed that certain orders will only be recognisable with absolute certainty in 2013 while we continue to ensure that all costs are fully accounted.

The Board is confident of the fundamental long term prospects of the Group. Our technology and services are gaining increasing recognition and we are committed to a controlled expansion. Our balance sheet is robust and we still have approximately £1m of net cash, despite our many recent capital expenditures. The company remains committed to its previously announced dividend payout policy.

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For further information contact:

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December 10th 2012 

Nature Group PLC

"Ministry of Defence gives order to Nature for building waste treatment solution for one of the overseas territories"

Nature Group PLC (AIM: NGR), the leading maritime and offshore waste specialist is pleased to announce that it has been awarded a major contract from Interserve Defence Ltd, on behalf of the MoD, for building a waste treatment facility on one of the overseas territories for the treatment of oil contaminated waste from the MoD base and Royal Naval fleet in the region.

Nature's engineers have used their unique experience in operating, but also designing and constructing waste treatment facilities to find a solution to the MoD's long running problem with the storage and treatment of oil contaminated waste collected from the MoD's Base, Airfield and Royal Naval ships operating in the region.

The project to provide a treatment solution is divided into two operational requirements. The first requirement is to treat a large volume of waste that has been collected over a number of years, as a result of the lengthy storage the contamination levels were much higher than would normally have been expected. The second requirement was to provide a long-term solution for the treatment of the waste collections, avoiding the need to store the waste for extended periods of time. The project value is over £ 2 million and the installation is planned to be installed and operational in 2013.

Andreas Drenthen the CEO of Nature Group comments "I am very happy to see that our unique knowledge and experience is getting more and more recognition. Besides the design and construction, Nature Group is also bidding for operating the treatment plant once in operation. The experience from designing and building the facility in Oman is invaluable for managing this new project abroad."

About Nature Group:

A company with more than 25 years' experience in waste water treatment and a corporate social responsibility (CSR) strategy that enables us to be responsive to the ever expanding and demanding legislative framework.

Nature Group combines port reception services and facilities, offshore treatment services and the latest sustainable waste treatment technologies in a steadily growing international network. Nature Group is traded on the AIM market, (ticker: NGR). www.ngrp.com

For more information

Nature Group: Andreas Drenthen (CEO)

Telephone: : +31 181 291 144

E -mail: [email protected]