365.L Regulatory News (365)

VPhase plc

("VPhase" or the "Company")

Trading Update

VPhase plc, (AIM:VPHA), a leading developer of energy saving products for residential and commercial properties today provides the following update on trading for the first half as well as growth prospects for 2012.

The Company has experienced excellent underlying growth driven by its focus on the social housing sector and in H1 2012, achieved turnover growth of 326% to £657,000 (2011: £201,000). This is 49% higher than the full year turnover figure for 2011. Despite this progress, negotiations in respect of a number of large contracts that the Company would have hoped to have concluded by now have become much more protracted than anticipated. Accordingly, it is unlikely that the Company will deliver the 11-fold year on year increase in turnover necessary to meet market expectations.

Continued progress is anticipated from the social housing sector where the Company has achieved substantial sales growth from around £50,000 to over £520,000 in the first half of this year. In addition, the Board anticipates that there will be an acceleration in demand from export markets. In particular the Australian contract, which was announced in March 2012, has already delivered sales some three times higher than the minimum commitment required for the period to September 2012.

The order book for August stands at £200,000 and the pipeline of probable orders remains healthy.

Rick Smith CEO of VPhase commented: "Underlying growth in the business is excellent although we are disappointed not yet to have the benefit of one of the large contracts we are currently negotiating. Cash at the end of the half year to 30 June 2012 was £1,350,000 and the Board is confident that it has access to sufficient funds for current working capital requirements and to fund the growth anticipated when these contracts are eventually delivered."

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About VPhase

VPhase plc is an energy efficiency technology company that launched the first domestic voltage optimisation device in the UK. The VPhase VX1 lowers the voltage in the home, reducing the energy consumption of many electrical appliances, saving money and reducing carbon emissions.

The VPhase device:

- has been proven to save up to 12% off home electricity bills;

- is easily installed by a qualified electrician;

- does not require a change in lifestyle or electricity supplier;

- is low cost, with a typical payback of under 5 years;

- has a 5 year manufacturer's warranty and an expected lifespan in excess of 25 years;

- can save up to 4.5 tonnes of CO2 over its 25+ year life;

- attaches to the consumer unit (fuse box) and regulates the voltage to 220 volts;

- is the next most affordable and effective green option for the home, after insulation.

The VPhase VX1 has been extensively tested with independent verification supporting the saving claims, including an Ofgem approved CERT demonstration action, social housing trials and a range of independent consumer trials. Many electrical appliances in the home will benefit from having their voltage optimised and reduced, including fridges, freezers, central heating pumps, televisions, washing machines, vacuum cleaners, etc. - and even 'energy-saving' light bulbs. As well as reducing the homes electricity bill, there is evidence that the life of electrical appliances can be extended by the use of this product; light bulbs in particular, have demonstrated at least a doubling of operating life when on a voltage optimised circuit.

Web: www.vphase.co.uk

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