Tclarke Regulatory News (CTO)

TCLARKE PLC

Interim results for the six months ended 30th June 2012

TClarke plc, the Building Services Group, has announced its interim results for the six months to 30th June 2012.

Highlights:

Group revenue £90.7m (30th June 2011: £92.6m)

Profit before taxation £0.5m (30th June 2011: £1.4m)

Profit before tax margin 0.5% (30th June 2011: 1.5%)

Underlying operating profit £1.6m (30th June 2011: £2.5m)

Underlying operating profit margin 1.7% (30th June 2011: 2.7%)

Earnings per share - basic 0.79p (30th June 2011: 2.38p)

Earnings per share - diluted 0.78p (30th June 2011: 2.38p)

Earnings per share - underlying 2.31p (30th June 2011: 3.90p)

Improved order book £230m (30th June 2011: £193m)

Net cash £0.7m (31st December 2011: £0.6m)

Interim dividend per share 1.0p (2011: 1.0p)

New contracts secured include:

·; 240 Blackfriars, for Great Portland Estates.

·; 3 Quays Residential Development, London.

·; BAE / Detica, Guildford.

·; Brunel University, Uxbridge.

·; Credit Suisse UPS Upgrade, London.

·; Data Centres in Buckinghamshire, Newcastle upon Tyne and Northamptonshire.

·; DeVere Gardens, Kensington.

·; Dixons Allerton Academy, Bradford.

·; LOCOG Event Maintenance.

·; Swansea Metropolitan University.

·; University of Bath.

·; Waitrose Stores, Alton, Bedford and Stratford Upon Avon.

·; West Linton Primary School.

 Mark Lawrence, Chief Executive commented:

"I am pleased to report that TClarke has remained profitable and cash generative in the face of extremely challenging market conditions.

We are delighted that our forward order book has strengthened to an impressive £230m. Whilst our core markets face prolonged margin pressures, we continue to have a proven track record for delivery on the UK's most iconic projects, none more so than can be seen across the London skyline, The Emirates Cable Car, The Shard, Westfield Stratford City and the London 2012 Olympic Stadium.

In these uncertain times clients, principal contractors and our supply chain continue to be reassured by the stability and strength of TClarke and the diversity and resilience of our business."

-ends-

Date 7th August 2012

For further information contact:

T. Clarke plcMark Lawrence Martin Walton

Group Chief Executive Finance DirectorTel: 020 7997 7400 Tel: 020 7997 7400

www.tclarke.co.uk

N+1 Brewin (Financial Adviser and Broker)

Sandy Fraser

Tel: 020 3201 3710

City Profile

Simon Courtenay/ Abigail Genis

Tel: 020 7448 3244

Chairman's statement

As reported by most of our peers the first half of 2012 has been marked by a lack of confidence across the sector. Against this backdrop it is unsurprising that the period has been slower than we had hoped with the highly competitive market environment also resulting in pressure on our margins. Underlying operating profits for the period were £1.6m (30th June 2011 £2.5m).

As evidenced by our recent completions and project awards we continue to secure some of the most significant projects that have come to market. Our long standing reputation, financial strength, and the quality and commitment of our people across the UK continues to differentiate TClarke from its competitors. We will continue to target high quality projects supported by respected clients and principal contractors.

We continue to take action to mitigate the impact of market conditions and have made further progress with our strategy to adopt a more regionalised approach to our operations. Moving away from individual stand-alone businesses has enabled the group to reduce annual operating costs by £0.6m without impacting our future growth potential.

A consistent focus on cash management throughout the period has seen net cash improve, remaining positive at £0.7m (31st December 2011: £0.6m).

With a number of projects due to begin shortly we are confident of significant revenue progress in the second half. The Board is extremely pleased to note that the group has one of the strongest forward order books in its history, up 20% to £230m as at 30th June 2012 compared to £193m as at 30th June 2011. We see this as strong validation of our strategy to focus on key sectors. Our growing order book provides us with visibility although the margin pressures we face mean that underlying profits will remain subdued and it is highly likely that full year profits will be significantly lower than originally expected.

Despite the uncertain environment the Board is proposing a maintained interim dividend of 1.0p (2011: 1.0p) and, in the absence of unforeseen circumstances, expects to maintain total dividends for the year.This reflects both the financial health of TClarke and our confidence in the medium term prospects for the group.

Russell Race

Chairman

7th August 2012

Business review

Operational review

The group is managed in three operational areas, South, North and Scotland. We operate from 16 locations across the UK, the majority of which trade under the TClarke brand.

Our strategy is to focus on eight key sectors in building services:

·; Facilities Management

·; Intelligent Buildings

·; Green Technologies

·; Rail

·; Utilities and Technologies

·; Manufacturing

·; Residential

·; M&E Contracting

Helping to build the business and further progress the delivery of our strategy we believe these eight sectors offer good growth potential and will also enable us to develop a stream of recurring revenues as part of our business model.

Frustratingly opportunities are taking longer to convert into firm orders, often as a result of a "value engineering" process. We are however encouraged with the opportunities in data centres, rail and new London commercial office schemes. In addition we are pursuing opportunities to grow the facilities management (FM) and green technologies businesses within the group.

TClarke - South

The South Division is the largest of our three operating divisions and includes our two London businesses.

Recently secured schemes include:

·; 3 Quays Residential Development, London.

·; 240 Blackfriars commercial office scheme for Great Portland Estates.

·; BAE / Detica London and Guildford.

·; Brunel University, Uxbridge.

·; Credit Suisse UPS Upgrade, London.

·; Data Centres in Buckinghamshire, and Northamptonshire.

·; DeVere Apartments, Kensington.

·; LOCOG Event Maintenance for the London 2012 Olympic Stadium.

·; Swansea Metropolitan University.

·; University of Bath.

Schemes in progress include:

·; 20 Fenchurch Street, London.

·; Bluewater Shopping Centre, Kent.

·; Dungeness Power Station, Kent.

·; London Bridge - The Place, London.

·; Nazareth House, Plymouth.

·; Regents Place - NEQ, London.

·; Tate 2 - Transforming Tate Modern, London.

·; The Eye, Bristol.

·; Turner Broadcasting, London.

·; University of Cambridge Sports Hall.

·; Victoria Underground Station, London.

Completions for the first half of the year included The Emirates Airline, the UK's first urban cable car and The Shard, London Bridge.

Recognising our capabilities we have been awarded data centre projects in Buckinghamshire, and Northamptonshire and there are a number of other schemes that will be coming to market in the next 18 months for us to pursue.

Our order book and tendering opportunities remain strong across the division and in the London market there are several large schemes that are now progressing to a construction stage that will be available for bidding later this year or early 2013.

TClarke - North

TClarke North West (formerly D&S Engineering Facilities) based in Accrington, specialises in FM (Facilities Management). Since becoming part of the TClarke group in March 2010 it has seen revenues grow over 70% with expected revenues of £28m for 2012. This growth has primarily been driven by securing larger contracts and work volumes with its existing clients reassured by the stability that a larger organisation brings.

In Redcar, as part of the area's regeneration, we are nearing completion of the Vertical Pier project and have recently secured the Redcar Leisure and Community Heart, a new development with a sports and leisure centre, swimming pools, business centre and community spaces.

Reaffirming our UK data centre capabilities we have secured a data centre in the North East that will be undertaken by our engineers and operatives from Newcastle and Leeds.

In the education sector we have completed Campsmount Technology College and are currently on site at the De Warenne Academy, both in Doncaster. INTO University in Newcastle will be completed later this year and we have recently secured Dixons Allerton Academy in Bradford.

TClarke - Scotland

The contracting scene in Scotland remains fiercely competitive and we have continued to streamline our business to achieve the lowest possible cost base, whilst retaining the ability to successfully secure and deliver projects in key sectors. The forward order book remains healthy with targeted revenues for this year secured and £6m of work for 2013 and beyond. Whilst the market remains very challenging the diversity of services offered is attractive to our core clients and new clients alike.

From its base in Scotland, TClarke Intelligent Buildings has strengthened its reputation for IT led projects; clients range from the international security market, retail, and rail and sports arenas. Residential and engineering markets are proving to be relatively robust and continue to be targeted for growth.

A key objective for the next 18 months is to develop a "whole life care" solution to end user clients after their NHBC warranty expires, offering security in their domestic household services, which has been met very enthusiastically by our partners in house building. With an average of 1,000residential units being completed every year we believe this could be a significant area of growth in the residential sector over the next 5 years.

Summary and Outlook

Given the challenging conditions it is pleasing to report that the group remains both profitable and cash generative with no debt. The increase in our forward order book is impressive but, as evidenced by government statistics, UK construction activity continues to contract. This indicates that trading will remain challenging and our core markets will continue to face material margin pressure. We believe that economic recovery and a rebound in confidence is key to the return of improved margins.

Despite these challenges the Board is focused on delivering value for our customers and shareholders. The actions to reduce our cost base and the strategy of broadening our sector coverage in specific markets have resulted in the group securing some of the most significant projects that have come to the market. We have stated previously that it is a reflection of the strength and confidence of the business that TClarke is selected to work on many prestigious projects. In these continuing uncertain times clients are reassured by our financial strength, service levels and operational stability and we will continue to build upon these client relationships and partnerships as part of our wider plans to grow the business.

Mark Lawrence

Group Chief Executive

7th August 2012

Financial review

Summary of financial performance

Revenue decreased by £1.9m (2%) to £90.7m (2011: £92.6m), and gross profit reduced by £0.9m from £12.8m (13.9%) to £11.7m (12.9%).

Underlying operating profit fell by £0.9m to £1.6m (2011: £2.5m). Underlying operating profit consists of operating profit before amortisation of intangible assets, profit on disposal of land and buildings, share based payment expense and non-recurring costs totaling £0.9m (2011: £0.9m).

Profit before tax decreased by £0.9m to £0.5m (2011: £1.4m). Taxation was £0.1m (2011: £0.4m), and the effective tax rate was 27.8% (2011: 28.3%).

Basic earnings per share were 0.79p (2011: 2.38p) and diluted earnings per share were 0.78p (2011: 2.38p). Underlying earnings per share were 2.33p (2011: 3.90p).

The results by division are considered below. 2011 comparatives have been restated to include the results of our Huntingdon and Kings Lynn operations in the South division in accordance with the revised operating structure. Huntingdon and Kings Lynn were previously reported as part of the North division.

TClarke - South

Revenue in the South was £60.7m (2011: £67.1m) and operating profit was £0.2m (2010: £3.4m), reflecting the tough market conditions in the London commercial sector.

Underlying operating profit was £0.7m (2011: £0.6m), after adjusting for £0.2m restructuring costs (2011: £0.3m), £0.2m long term employee benefit charges from the acquisition of DG Robson in 2010 (2011: £0.2m) and £0.1m share based payment expenses (2011: £nil).

TClarke - North

Revenue in the North increased by £7.3m to £23.2m (2011: £15.9m). Operating profit decreased by £0.5m to £0.6m (2011: £1.1m).

Underlying operating profit was £0.9m (2010: £1.3m), after adjusting for £0.2m intangibles amortisation (2011: £0.2m) and £0.1m restructuring charges (2011: £nil).

TClarke - Scotland

Revenue in Scotland decreased by £2.9m to £6.8m (2011: £9.7m), reflecting the impact of the restructuring of the business in 2011 to focus on profitable contract opportunities in its core residential, engineering and IT sectors.

Underlying operating losses improved to £0.1 million (2011: £0.2m) before restructuring costs of £0.1m (2011: £0.1m).

Cash flow and dividend

Our net cash position improved to £0.7m at 30 June 2012, up £0.1m since the year end. Net cash inflow in the period was £0.1m (2011: £3.8m outflow), after dividend payments of £0.8m (2011: £1.8m).

Net cash inflow from operating activities was £1.1m (2011: £1.9m outflow), with an improved working capital position. We are continuing to monitor and manage our cash and working capital position closely.

Dividend

The interim dividend has been maintained at 1.0p (2011: 1.0p) and will be will be paid on 12th October 2012 to shareholders on the register at 14th September 2012 as detailed in note 6.

Pension obligations

The continuing turmoil in the financial markets has again impacted our pension scheme liability, with the deficit increasing by £2.1m in the six months to 30th June 2012 due to the low yield on government bonds. We continue to meet our ongoing funding obligations to the pension scheme, with employers' contributions amounting to £0.4m in the first half of the year.

Martin Walton

Finance Director

7th August 2012

Notes to the condensed consolidated financial statements for the six months to 30th June 2012

Note 1 - Basis of preparation

T.Clarke plc (the 'company') is a company incorporated and domiciled in the United Kingdom. The consolidated interim financial statements comprise the condensed financial statements of the company and its subsidiaries (together the 'group').

These interim financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34) as adopted by the European Union, and the Disclosure and Transparency Rules ('DTR') of the Financial Services Authority. They do not include all the information required for the full annual financial statements, and should be read in conjunction with the financial statements of the group as at and for the year ended 31st December 2011.

The figures for the year ended 31st December 2011 do not constitute statutory accounts but have been extracted from the group's statutory accounts for that year. The statutory accounts for the year ended 31st December 2011 have been delivered to the Registrar of Companies House and a copy has been made available on the company's website at www.tclarke.co.uk. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial statements have not been audited or reviewed by the company's auditors.

Note 2 - Accounting policies

Except as described below, the financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31st December 2011.

Taxes on income in the interim periods are accrued using the estimated effective tax rate that would be applicable to expected total annual earnings.

Note 3 - Segmental information

The group provides electrical and mechanical contracting and related services to the construction industry and end users.

For management and internal reporting purposes the group is organised geographically into three regional divisions; the South, the North and Scotland, and an internal property division, reporting to the Chief Executive, who is the chief operating decision maker. All assets and liabilities of the group have been allocated to segments, apart from the retirement benefit obligation and tax assets and liabilities.

With effect from 1st January 2012 the management of the Huntingdon and Kings Lynn offices has been transferred to the South division. Previously these operations were reported as part of the North division. Comparative information has been restated.

Note 4 - Taxation expense

The effective income tax rate applied for the period is 27.8% (30th June 2011: 28.3%; 31st December 2011: 18.4%)

Note 5 - Earnings per share

A. Basic earnings per share

The earnings per share represent the profit for the period divided by the weighted average number of ordinary shares in issue.

B. Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The company has three categories of dilutive potential ordinary shares: share options granted under the Savings Related Option Scheme, and share options and conditional share awards granted under the Equity Incentive Plan. Further details of these schemes are given in note 20 of the 2011 annual report and financial statements.

C. Underlying earnings per share

Underlying earnings per share represents the profit for the period from continuing operations adjusted for goodwill impairment, amortisation of intangible assets, acquisition expenses, other long-term employee benefit costs and restructuring costs, divided by the weighted average number of ordinary shares in issue. The number of ordinary shares for the purpose of this calculation is 41,399,795 (30th June 2011: 41,399,795; 31st December 2011: 41,399,795). The underlying profit for the period is calculated as follows:

Note 6 - Interim dividend

An interim dividend of 1.0p per share (2011: 1.0p) was approved by the board on 6th August 2012 and has not been included as a liability as at 30th June 2012. The shares will go ex-dividend on 12th September 2012 and the dividend will be paid on 12th October to shareholders on the register as at 14th September 2012. A dividend reinvestment plan is available for shareholders. Those shareholders who have not elected to participate in this plan, and who would like to participate with respect to the 2012 interim dividend, may do so by contacting Capita Registrars on 0870 162 3131. The last day for election for the interim dividend reinvestment is 17th September 2012 and any requests should be made in good time ahead of that date.

Note 7 - Notes to the consolidated statement of cash flows

b. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments that are readily convertible into cash, less bank overdrafts, and are analysed as follows:

Note 8 - Pension commitments

The present value of the defined benefit pension scheme and the related past and current service costs were measured using the projected unit method. The amount included in the balance sheet arising from the group's obligations in respect of its defined benefit retirement scheme is as follows:

Note 9 - Related party transactions

Transactions between the company and its subsidiary undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Full disclosure of the group's other related party transactions is given in Note 23 to the group's financial statements for the year ended 31st December 2011. There have been no material changes in these relationships in the six months ended 30th June 2012 that have materially affected the financial position or performance of the group during that period.

Note 10 - Risks and uncertainties

Details of the key risks facing the group are included on pages 11 to 13 of the group's annual report and financial statements for the year ended 31st December 2011. Details of further potential risks and uncertainties arising for the six months ended 30th June 2012 are included within the Chairman's statement and the Business and Financial Reviews as appropriate. The directors consider that the main areas of risk and uncertainty with respect to the remainder of 2012 remain market conditions, operational risk, cost inflation, people, health and safety, credit and liquidity risk, cash flow interest rate risk and risk from pension obligations.

Statement of directors' responsibilities

The directors confirm that the interim management report includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year) and DTR 4.2.8 (disclosure of related party transactions and changes therein). The directors also confirm that the interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and present a true and fair view of the assets, liabilities, financial position and profit of the group.

On behalf of the Board

Russell Race - Chairman

Mark Lawrence - Chief Executive

Martin Walton - Finance Director

7th August 2012