HYD.L Regulatory News (HYD)

26 May 2011

Embargoed until 07:00

Hydro International plc

("Hydro", the "Company" or the "Group")2011 AGM Trading Statement and Contract Win

Trading in line

Recent contract wins underpin 2011 financial forecasts

Hydro International plc (AIM: HYD), a leading provider of environmentally sustainable and innovative products for the control and treatment of water, will be holding its Annual General Meeting today at 12 noon. At the meeting, the Board will make the following update.

Wastewater Review

In the 2010 Annual Report the Group reported that it had closed the year with a record order book of £23.7m driven largely by success in securing a number of major landmark contracts in the Group's UK and US Wastewater businesses.

We are pleased to report that the UK and US Wastewater divisions have seen continued success into the current financial year. In February 2011, UK Wastewater was awarded a further contract for Zickert equipment at Thames Water's Crossness site in London.  Today we are also pleased to announce that US Wastewater has been awarded a $2.4m grit removal contract at the Point Loma Wastewater Treatment Plant in San Diego, California.

These major wastewater contracts improve the Group's revenue visibility and underpin the Group's 2011 financial forecasts.

We remain encouraged by general trading as the level of project proposals remains high. However we continue to see delays with projects coming through the UK Wastewater business under the new Asset Management Programme AMP5, the latest five year periodic review for the water industry. April 2011 marked the start of the second year of the AMP programme and this is typically the time when the water companies start to gain momentum and move forward having established delivery arrangements and partners for the AMP period.

Stormwater Review

The Group's Stormwater businesses are seeing recovery in their core markets. In the UK demand appears to be recovering albeit tentatively, enquiries are strong and we expect to make progress during the year. In the US enquiry levels are encouraging, but conditions remain very challenging with subdued private sector construction activity. However, the business has been successful in securing a number of larger-scale public transport related projects which are now starting to move through the system.

Our efforts to develop and grow our US Stormwater business were provided with a significant boost in April 2011 as the company entered into a relationship with a key distribution partner covering eleven Midwest US states,

International Expansion

The focus of the Group's long-term strategy is to achieve growth by maximising the opportunities presented in existing territories and seeking to develop new international markets, as demonstrated by Hydro's recent move into the Mexican marketplace. In line with this strategy, the Group announced on 10 May 2011 the appointment of an International Business Director to lead the task of developing and implementing strategic plans to support the accelerated expansion of Hydro's business in international markets.

The instability seen throughout the Middle East during the first half of the year has inhibited progress in both Egypt and Saudi Arabia with a number of project timetables slipping out. Egypt in particular has been a key market for Hydro's grit removal products over the last few years, forming part of the long-term project to introduce wastewater treatment to villages located on the banks of the River Nile.

Steve Hides, CEO of Hydro International plc, commented "The Group is trading in line with market expectations for the full year to 31 December 2011. There are encouraging signs of some recovery in the stormwater businesses. Additionally the growth experienced by wastewater, with significant contract wins in both the UK and the US, underpins revenue visibility for the year. The Group is in robust financial condition with a strong balance sheet and is well positioned to continue to grow organically in core UK and US markets as well as seek opportunities to expand in other international markets."

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About Hydro International

Hydro International plc (AIM:HYD.L) (Hydro) is a global supplier of environmentally sustainable solutions and innovative products for the control and treatment of stormwater, wastewater and combined sewer overflows. Hydro's products use a range of advanced technologies including award-winning advanced vortex technology. Headquartered in Clevedon, North Somerset, Hydro also operates in the UK from offices in Ely, Cambridgeshire as well as across the US from bases in Portland, Maine and Hillsboro, Oregon. The Group has a growing presence outside of its core US and UK markets in Ireland, Egypt, Middle East, European Union, Malaysia, Singapore, Japan, Korea, Australia and New Zealand.

Please visit the website for further information www.hydro-international.biz.