Trading Update

24 July 2015

TRADING UPDATE

In anticipation of the approval of our Bangladesh contract, given the ongoing security challenges in Yemen, and as a result of a further slowdown in our North American oil and gas related business, we now expect the 2015 interim and full year results to fall short of current market expectations.

In Power Projects, our 325MW of gas contract extensions in Bangladesh are entering the final stages of approval, with our expectation being that 180MW will be secured into the first half of 2016 and the remaining 145MW for three years. The trading terms secured for these extensions, which would retrospectively apply from the second quarter 2015, are likely to be less favourable than our earlier expectations. While we will be seeking to mitigate the profit impact by reducing operating costs, there will be a net adverse impact on profits this year and in 2016.

The ongoing security challenges in Yemen have impacted our ability to operate at full capacity and we remain concerned about the impact for the remainder of the year.

In addition, at the time of our trading update in May 2015 we said that we had started to see a decline in volumes and pricing in our shale oil business and that the full year impact of a lower oil price on our business remained unclear. Since then we have seen a further slowdown in North America with volumes in the shale basins continuing to decline. More recently, we have begun to see an impact on our offshore oil and gas business in the Gulf of Mexico.

As a result of these trading issues, we now expect our full year profit before tax to be between £250 million and £270 million at current exchange rates1, which have moved adversely in recent months.

On 6 August 2015 the Group will announce Interim Results for the half year to 30 June 2015 and Chris Weston, CEO, will outline the Group's business priorities together with the actions being taking to position the Group for future growth.

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