Flowgroup Regulatory News (FLOW)

Energetix Group plc

("Energetix" or "the Group")

Business update &

Publication of Shareholder newsletter

Energetix Group plc, (AIM: EGX), which develops and commercialises alternative and efficient energy products, announces the following update ahead of the publication of its Preliminary Results for the year ended 31 December 2011 on Tuesday 29 May 2012. The business update is below:

In February 2012 we announced our business model for the commercialisation of our Kingston microCHP boiler which includes the creation of a new dual fuel (gas and electricity) energy supply business, provisionally called Kingston Energy. This was followed by a Placing to raise £4.6m (gross) to fund the development of that business and working capital for the Group.

We have made good progress in the development of our energy supply business. Last month we announced the acquisition of an Electricity Supply Licence and the procurement of the energy data management software needed for our operations. We have also recently recruited an experienced senior management team who are working with Tony Stiff, CEO of the energy supply business, where we plan to launch live operations during the fourth quarter of this year. This new business is located in Ipswich. A branding exercise for the energy supply business is taking place, with a number of brands being tested with focus groups and we hope to launch the new brand later in the year.

The free boiler model

Our new business model revolves around the strategy of the offering of a free gas boiler to customers - or more accurately "a boiler that pays for itself". Customers will be offered a free Kingston microCHP boiler for committing to a long-term energy supply contract. We will provide a price promise along the lines of, for example, being no more expensive than the least expensive of the standard tariffs of the big six energy suppliers.

Customers only pay for installation of the boiler and not the boiler itself thus offering significant savings. This will be particularly relevant to customers replacing boilers considering that 85% of the 1.5m boilers installed each year in the UK are to replace boilers that have broken down, often something that is not budgeted for by homeowners.

We believe that this model will generate strong consumer demand and we have already had early success with an initial online advertising campaign to gauge interest which had to end after only one week because of such high volumes of interest.

Verification / Certification of the Kingston Delta Units

To date we have produced a batch of 45 Kingston microCHP boilers using outsourced assemblers for both the boiler and microCHP power module. In March we announced that the first unit from this batch had received Unit Verification. Initially we had targeted Batch Verification for the remainder of the batch but we will now go straight to Type Verification for units produced from the outsourced manufacturing line.

Last week we announced that the LPG version of the Kingston microCHP boiler has also received Unit Verification for the first unit with certification for the remaining units anticipated to come soon. Calor Gas will then commence field trials in homes to assess the performance of the appliance in off-grid homes.

We are also in the process of having the production units certified under the Microgeneration Certification Scheme. MCS certification is needed to be eligible for the UK Government Feed in Tariff and we will update the market as this progresses.

Testing of the Kingston Delta Units

The Kingston microCHP boilers already manufactured are being used for a range of purposes, including Accelerated and Highly Accelerated Life Testing (ALT and HALT), optimisation to maximise the amount of electricity they produce in the home, and some supplied to Calor Gas, Scottish Power and Canmet.

We are working with Reliability Plus to demonstrate the reliability of the Kingston product using Design Quality Assurance (DQA) a state of the art process used by leading white goods manufacturers. To maximise the electricity output from Kingston, and hence increase the value to shareholders, we are working with Gastech who have a dynamic test facility that enables the accurate simulation of a wide range of domestic properties and environmental conditions. We expect this important data to be available by the end of the summer. The remaining units are being reserved for use with customers as part of a controlled market entry exercise for the energy supply business.

Controlled market entry and the move to volume manufacturing

As part of the process of controlled market entry for the energy supply business we need to demonstrate that we have tested the whole end-to-end process of our business model and can integrate successfully with other Energy Industry participants through the Data Transfer Network. We will provide trial customers with trial units from the already manufactured Kingston microCHP boilers under the free boiler model and these will be used to test the installation quality, our support service and delivery mechanism. We expect to undertake that testing in the final quarter of 2012.

We are currently in the final stage of selecting our preferred assembly partners and we hope to announce their appointment in due course. We expect to move into volume manufacturing in 2013.

We reiterate that we believe that our new business model is unique in the industry and represents a substantial opportunity to use the Kingston microCHP boiler to become a major energy supplier. We have a number of milestones to pass before this can become a reality but we are confident that we will be able to pass these and establish an energy supply business that the director's believe should provide significantly increased value for shareholders and I look forward to updating you on our progress in due course.

Publication of Shareholder newsletter

As a board we recognise the need to keep shareholders informed of the achievement of these key milestones as the Group works towards creating an Energy Supply Company. To that end Energetix is committing itself to updating shareholders every two months via a newsletter detailing the Company's latest activities and achievements. A copy of the first newsletter will be available soon on the Company's website: www.energetixgroup.com

For further information please contact:

About Energetix Group plc

Energetix Group plc is a developer of cost-effective products to meet the growing global demand for alternative energy, with particular focus on distributed generation, energy storage, and energy efficiency. Currently Energetix has two subsidiary businesses:

Genlec - distributed energy generation for domestic dwellings.

Pnu Power - back-up power for the Telecom, Technology and power transmission markets.

In addition, Energetix has a c.27% stake in VPhase plc, an energy efficiency business Energetix created and subsequently spun out of Energetix in 2010. VPhase is now a standalone independently funded commercial venture.

With all technology development now completed Energetix is well positioned as both its subsidiaries move into the latter phases of commercialisation with their best-of-breed solutions.

Genlec

Genlec has developed a highly efficient, compact and light weight, wall mounted microCHP (Combined Heat and Power) appliance known as the Kingston Boiler. The Kingston boiler is specifically designed to generate 1kW of electrical power to meet the UK's Microgeneration Certification Scheme (MCS) to enable UK owners to receive the Government's 12.5p/ kWh feed in tariff for approved microCHP devices. The Kingston boiler therefore has an inherent low total cost of ownership (initial outlay plus maintenance) and has already demonstrated industry leading payback cycles which many analysts believe is the key to unlocking this significant market opportunity.

In February Energetix announced its intention to create a unique dual fuel energy company to provide free Kingston microCHP boilers to its customers in return for a commitment to purchase gas and electricity for a fixed period. In March Genlec received Unit Verification for the first of its Kingston microCHP Delta production engineered units and in April it acquired an electricity supply licence.

Pnu Power

Pnu Power focuses on the provision of compressed air back-up power which can ensure an uninterruptible power supply for critical systems, particularly for the telecoms, data centre and power transmission markets. Pnu Power range has been extended to include the DC100 product that can meet the demand of the rapidly growing Green Data Centre market, providing a low carbon alternative to flywheels. Pnu Power has been successful in achieving repeat trial sales and is now poised to move out of the trial sales phase and into full volume commercial sales.

Energetix Group joined AIM in August 2006. The Group and its subsidiaries and associates are all based near Chester, NW England and Ipswich, Suffolk.