Trading Update

ENERGY TECHNIQUE PLC

("The Company")

TRADING UPDATE FOR THREE MONTHS ENDED 30 JUNE 2015

The Board is pleased to announce its unaudited trading results for the three months ended 30 June 2015. Sales increased by 5.1% over the corresponding quarter to £2.91 million (2014: £2.77 million), generating further growth in both Diffusion's operating profit to £340,000 (2014: £325,000) and in group profit before tax to £258,000 (2014: £252,000). These results continue the strong trading performance reported over the last three financial years.

Financial performance

Increased sales generated 4.6% growth in Diffusion's operating profit to £340,000, representing an operating profit margin of 11.7% (2014: £11.7%). Fan coil sales grew by 4.6% over the corresponding quarter to £2.29 million (2014: £2.19 million) and it is also pleasing to report that sales of the smaller commercial heating product range, which continue to be adversely impacted by the UK high street, also grew to £428,000 (2014: £392,000).

Group profit before tax increased by 2.8% to £259,000 (2014: £252,000) after charging Central costs of £74,000 (2014: £59,000). Central costs for the remainder of the financial year will run at lower annualised levels than the year ended 31 March 2015, whilst the Board assimilates the impact of the initiatives taken in that year of franchising the Diffusion brand in overseas markets.

In total, fan coils were supplied into over 90 different projects during the quarter, including large commercial developments at Lacon House, 8 Finsbury Circus, Eland House, St James Market, MPS Training Centre, Chiswick Park and HS2 in Birmingham. High end residential projects included Riverwalk, 1 Tower Bridge and Riverlight. Diffusion is in the process of concluding an OEM agreement with a leading controls supplier. This is expected to enhance Diffusion's competitive position by offering a combined fan coil and controller package.

Net assets and cash

Group net assets at 30 June 2015 grew to £2.42 million (31 March 2015: £2.22 million), with net cash of £1.32 million (31 March 2015: £1.38 million). The cash position at 30 June 2015 remained the same as at the last year end due to settlement in the quarter of capital expenditure creditors at 31 March 2015 and other working capital fluctuations.

Business strategy

On 26 February 2015, the Board announced it had resolved to offer the Company for sale by means of a formal sale process in accordance with Note 2 on Rule 2.6 of the City Code on Takeovers and Mergers. Whilst the Board believes the Company has a secure future as an independent business, the Board took this decision to seek to unlock and crystallise value for shareholders. The Company appointed Cavendish Corporate Finance LLP as financial adviser to conduct the sale process. Further announcements about the progress of this formal sale process will be made in due course.

Current trading and prospects

Whilst this formal sale process is ongoing with a number of interested parties, the Board continues to manage the Company for further growth. Trading in the first quarter ended 30 June 2015 has laid the foundations for another successful year ending 31 March 2016. Enquiry levels remain high and the order book is strong. Improved UK fan coil market demand that started two years ago is expected to continue for the year ending 31 March 2016 and beyond.

For further information:

Walter Goldsmith Chairman 020 8783 0033

Leigh Stimpson CEO 020 8783 0033

Ed Frisby/Scott Mathieson finnCap Limited (Nominated Adviser) 020 7220 0500

NOTES TO EDITORS

The Company's trading subsidiary, Diffusion, enjoys a leading market position as a manufacturer of premium quality fan coils and commercial heating products to the UK commercial and high-end residential sectors, combined with a blue-chip client base, renowned brand and over 50 years trading experience. Diffusion and Energy Technique brands are recognised by the UK heating ventilation and air conditioning sector ("HVAC") as highly engineered, quality products providing leading edge performance and energy efficiency.

Diffusion's products are supplied into commercial offices, hotels, airports, retail outlets, schools, and high-end residential developments. Business risk is reduced by third-party M&E contractors installing Diffusion's products. Fan coils are supplied to developments of the major property owning companies, including Land Securities, Stanhope Properties, Grosvenor Estates and British Land. Commercial heating end users include Marks & Spencer, Sainsbury's, Tesco, New Look, Boots, ASDA, John Lewis, Fat Face, Lloyds Bank and TK Maxx.

Diffusion's management team has a demonstrable track record of success, working closely with designers, technicians, support staff and clients across all UK geographical locations to deliver bespoke HVAC solutions of the highest standard. Diffusion operates from a 30,000 sq. ft. facility in West Molesey, Surrey, ideally placed to serve its principal London and South East market by providing a highly valued just-in-time service.