Bioquell Regulatory News (BQE)

FOR IMMEDIATE RELEASE

15 May, 2014

Bioquell PLC

Interim Management Statement

Bioquell PLC ("Bioquell") (LSE symbol: BQE) - provider of specialist bio-contamination control technologies to the international Healthcare, Life Sciences & Defence markets; and specialist testing services via its TRaC division, today announces its Interim Management Statement for the period from 1 January, 2014 to 14 May, 2014.

Financial position and financial performance of the Company

Group revenues in the period ending April 2014 were ahead of the same period for last year.

The Group has a strong balance sheet with positive net cash balances at the end of April.

Outlook / market expectations

The Bio division has had a slow start to the year in relation to Life Sciences equipment sales, as described further below, which we anticipate will continue to be subdued until the end of the first half and will result in a pre-tax loss in this division for the first six months of approximately £(1.0) million (2013: profit of £1.1 million prior to reconfiguration costs). There are a number of opportunities for revenue generation in the second half, and thereafter, which should see the division's profitability improve. However, on balance, management expects the results for this division will be below current market expectations which will affect the overall Group results for the year.

TRaC continues to perform well and in line with expectations, and is pursuing a number of new opportunities in the UK and overseas. While last year TRaC's revenues were slightly first half weighted, we expect this year's revenues to be slightly second half weighted.

Life Sciences

The subdued activity levels in the Life Sciences market we reported experiencing earlier in the year have continued with our equipment sales so far being weaker than expected, particularly in China and the USA. Equipment margins have also been held back in part by a higher proportion of sales to OEM customers (who incorporate Bioquell's technology into their products). Our specialist service and consumables businesses have been trading satisfactorily.

We are seeing increasing demand for our novel range of QUBE modular aseptic workstations, including certain applications driven by specific regulatory requirements. However, substantial revenues have not yet started to flow from this new product. In addition, QUBE margins are improving from a low base line as we drive costs out of the complex processes used to manufacture the product. We have taken a number of steps this year to promote additional applications for the QUBE.

Whilst we have several leading indicators that suggest an upturn in capital equipment sales in the second half of the year, this has not yet been reflected in our order book.

Healthcare

Interest in our healthcare technologies has been helped by a number of high profile publications so far this year. The recent report by the World Health Organisation on Antimicrobial Resistance, the letter in February from Public Health England to NHS England hospitals relating to carbapenemase producing Enterobacteriaceae (CPE) and the outbreak of MERS-COV (a coronavirus with a significant mortality rate) in Saudi Arabia have all increased enquiry levels for our healthcare products and services.

Market interest in the US for automated room disinfection systems continues to grow due to the problems associated with antibiotic resistant bacteria and hospital acquired infection. We have a number of initiatives underway to convert this interest into revenues.

We are in the process of addressing a number of healthcare opportunities in the emerging markets where many hospitals are facing particular difficulties with drug resistance as well as the threat from MERS-COV. We are also adjusting the business model associated with our ICE-pod (standalone hospital room) product to fit in better with market demands in these territories.

Defence

Trading in our defence business has been satisfactory so far this year - however we are still awaiting receipt of a large contract from the Middle East which should have a significant positive effect on our second half results.

TRaC

TRaC - the Group's Testing, Regulatory and Compliance service business - is trading well and is beginning to expand its specialist service activities overseas.

- Ends -

Nigel Keen (Chairman) Bioquell PLC 01264 835 900

Nick Adams (Chief Executive)

Michael Roller (Finance Director)

************************

Notes to Editors

§ Bioquell is a UK-headquartered, international technology company with two divisions:

o Bio (www.bioquell.com) which sells specialist biological contamination control products and services into the Healthcare, Life Sciences and Defence sectors, with most of its revenues generated from overseas customers; and

o TRaC (www.tracglobal.com) which provides specialist Testing, Regulatory and Compliance services - including EMC (electromagnetic compatibility), environmental, safety, ATEX (explosive atmospheres) radio and telecoms testing - principally to UK corporates.

§ Bioquell's bio-contamination control technology is principally based around hydrogen peroxide vapour (HPV) - which is highly efficacious at eradicating micro-organisms such as bacteria and viruses at room temperature - and is subsequently broken down using specialist catalysts to water vapour and oxygen (hence an extremely 'green' technology) at the end of the bio-decontamination process.

§ For the last three years Bioquell has invested substantial sums in developing new products - comprising rental, service and consumables - which have been designed to increase the proportion of the Group's recurring revenues (cf. capital equipment sales).

§ Bioquell's bio-contamination control technology:

o is used by bio-pharmaceutical, biotechnology and research institutions to provide sterile equipment and/or sterile facilities;

o is used to eradicate "superbugs" from hospitals including Clostridium difficile and carbapenemase producing Enterobacteriaceae (CPE) - sometimes referred to as carbapenem-resistant Enterobacteriaceae (CRE). Independent scientific research from a team at Johns Hopkins, one of America's top hospitals, has demonstrated that 'bioquelling' hospital equipment and facilities resulted in a 64% reduction in the rate of hospital acquired infection;

o is used to provide single rooms to hospitals (via its ICE-pod rental service) which currently only have open, multi-bed "Nightingale" ward structures

o has been incorporated in a wound-care product - BioxyQuell - which has received regulatory approval for use on chronic wounds in the European Union; and

§ Bioquell currently has overseas operations in the USA, France, Ireland, Singapore and China.

TRaC sells its specialist services to the product development departments of a broad range of companies, principally based in the UK, with a particular focus on organisations operating in the aerospace, defence and telecoms sectors. TRaC also has a small team of technical experts located in China.