Trading Update

For Immediate Release 14 November 2012

Specialist Energy Group plc

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

Trading Update

Highlights

·; Gross profit margins improving in the manufacturing division as a result of the Company's "continuous improvement programme";

·; Annualised cost savings of £1.0m on-track to be achieved;

·; Supply-chain benefits through MBE Cologne now coming into effect;

·; Order intake up 15% over last year at £31.2m (£27.2m to 31 October 2011);

·; Operational improvements recognised by peer group as shortlisted for the Manufacturer of the Year Awards, ICT category (Information and Communication Technology);

·; Board cautiously optimistic on improving trading environment.

Specialist Energy Group plc (AIM: SEG), the specialist engineering group, is pleased to provide an update of trading activity within its main operating subsidiary, Hayward Tyler Group Limited, for the current financial year which saw order intake rise to £31.2 million as at 31 October 2012 (up 14.7% year on year).

Across all of its sectors, Hayward Tyler has experienced an improving order intake environment. Key contract wins since the half year have included a £1.8m Oil & Gas order for a sea water lift and firewater package; a Nuclear order for reactor water clean-up pumps and spares valued at US$1.0m; Boiler Circulation Pump ("BCP") unit wins in India and China valued at over £1.5m; and an Aftermarket order in South Africa for £1.0m - the largest received to date from the African continent.

Furthermore the Board is pleased to report that excellent progress has continued to be made in improvements to Hayward Tyler's manufacturing supply chain resulting in a significant reduction in the number of suppliers to Hayward Tyler during Q3. Likewise the first pump case sub-assembly utilising the Cologne based heavy machine shop owned by McNally Bharat is due for delivery by the end of the November and the delivery is currently on plan.

Further improvements in Hayward Tyler's manufacturing process as a result of its "Continuous Improvement Programme" have additionally been recognised by its industry peers resulting in it being shortlisted for the Manufacturer of the Year Awards, ICT category (Information and Communication Technology).

The Board is confident that annualised cost-savings of £1.0m are on-track to be achieved.

Ewan Lloyd-Baker, Chief Executive Officer, commented:

"The Company has worked hard to cement the advantages of a strengthened balance sheet and highly complementary strategic partner. This is allowing us to focus on our core strengths - design excellence and international sales. As a result I am delighted to report that we have seen an improvement in the order environment and that we are on target to exceed 2011 order levels. Likewise we are cautiously optimistic that the operational improvements now coming into effect will positively impact our margins in the second half of the year."

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