ETQ.L Regulatory News (ETQ)

ENERGY TECHNIQUE PLC

("The Company")

TRADING UPDATE

In the Chairman's Statement accompanying the 31 March 2011 final results announcement issued on 27 May 2011, he referred to cause for more optimism in the coming financial year. Against this background, the Board is pleased to announce the unaudited trading results for the quarter ended 30 June 2011.

The Company's operating subsidiary, Diffusion, has experienced a much stronger start to the current financial year. Sales in the current quarter ended 30 June 2011 of £1.60m were 36% higher than in the corresponding quarter in the previous financial year and operating profit was much improved at £47,000, compared with an operating loss of £85,000 incurred in the corresponding quarter. This means Diffusion has returned to profitability for the last four quarters, excluding the seasonally low December 2010 quarter.

Central and plc related costs were also much lower in the current quarter ended 30 June 2011 at £32,000 (2010: £46,000) after the board reorganisation last year. There were no exceptional items in the current quarter and after interest expense of £8,000 (2010: £8,000), the Group generated a small profit before tax of £7,000 in the current quarter, compared with a loss before tax in the corresponding quarter of £138,000.

The Company had cash in hand balances at 30 June 2011 of £395,000 (31 March 2011: £417,000), draw downs under the invoice discounting facility of £335,000 (31 March 2011: £189,000) and obligations under hire purchase agreements of £88,000 (31 March 2011: £112,000).

Whilst it is too early to predict order intakes for the remainder of the financial year, there are positive signs with a number of landmark South East based projects under development generating much-improved fan coil enquiry levels, although a continuing feature is the much shorter order lead times. Diffusion's commercial heating products are presently enjoying improved enquiries and order intakes.

For further information:

Walter Goldsmith Chairman 020 8783 0033

Rob Unsworth Company secretary 020 8783 0033

Ed Frisby/Ben Thompson finnCap Limited (Nominated Adviser) 020 7600 1658