Nature Group Regulatory News (NGR)

Nature Group PLC

("Nature" or the "Company" or the "Group")

Unaudited Interim Results for the 6 months to 30 June 2014

Nature Group PLC (AIM:NGR), the provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, announces its interim results for the six months ended 30 June 2014.

Financial Highlights

· Revenues for the period of £9.05 million (H1 2013: £10.99 million)

· Underlying pre-tax loss for the period of £0.72 million (H1 2013: profit of £1.41 million)

· Earnings per share for the period of - 0.85 pence (H1 2013: 1.41 pence)

· Cash balance as at 30 June 2014 of £2.98 million (H1 2013: £4.31 million)

Operational Highlights

· Maritime

~ Gibraltar rebuild approved by Government of Gibraltar

~ Insurance claim finally settled

~ Completion of major one-off contract delayed in first half completed post period end

· Oil & Gas

~ Contract with SeaDrill in Brazil delayed by visa issues but operations now underway

~ Two year contract signed for the deployment of a CTU and STU on the West Alpha semi-submersible drilling rig

~ Strong pipeline of new business opportunities

· Engineering

~ Completion of two major projects in Duqm, Oman and for Interserve Defence Limited / MoD in an overseas territory

~ Currently working in Houston and Sohar

Chairman of Nature, Nigel Sandy, commented:

"There is no hiding the fact that we have had a disappointing first half of the year, due in part to contract delays affecting revenues in our Maritime and Oil & Gas divisions. However, I am confident that we are well positioned for the rest of this year and beyond. Our Oil & Gas division is gaining traction; we are cognisant of, and are addressing, the issues in our Maritime division and we can now finally start the rebuilding of our Gibraltar operations. Importantly, we also have in place a strong, experienced management team to deliver the growth and returns our shareholders expect. "

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About Nature Group

A company with more than 25 years' experience in waste water treatment and a unique corporate social responsibility (CSR) strategy that enables us to be truly a part of Nature and responding to the ever expanding and demanding legislative framework.

Nature Group combines port reception services and facilities, offshore treatment services and the latest sustainable waste treatment technologies in a steadily growing global network. Nature Group is traded on the AIM market, (ticker: NGR). www.ngrp.com

Chairman and Chief Executive Statement

We are pleased to announce the unaudited interim results for the six months to 30 June 2014. Whilst a difficult and disappointing second half of 2013 has continued into the first half of the current financial year, we have started several initiatives that we expect to come to fruition and bring positive results, and a return to profitability, in the second half of the year.

Financial Review

Revenues for the six months to 30 June 2014 were £9.05 million compared with £10.99 million for the same period in 2013. The Group incurred an underlying pre-tax loss of £0.72 (excluding exceptional items of £0.29) compared to an underlying pre-tax profit of £1.41 million in the same period in 2013 (excl. SART). The loss after tax stood at of £0.67 million, (2013 - earnings after tax of £1.07 million excluding SART).

Capital expenditure for the period amounted to £0.40 million, partly covered by profits before depreciation of £0.14 million. Significant projects include work in progress in the construction of 4 sludge treatment units ("STUs"). Group cash balances as at 30 June 2014 were £2.98 million with free cash flow in the period of £0.52 million.

Both Maritime and Oil & Gas performed below management expectations, albeit for very distinct reasons. In our Oil & Gas division, it has proved difficult to forecast the exact timing of the different projects and deployment of the Company's offshore containerised treatment units ("CTUs") and STUs. Also, the sale of two units in the first half of 2013 to a third party has impacted the comparison negatively. However, the demonstrable growth in projects deployed shows the robust future for this business, about which the board remains extremely optimistic. Our Maritime Division has suffered as a result of the delay to the rebuilding of our Gibraltar operations, but this project has now started after final approval by the Gibraltar authorities in April 2014.

Dividend

Having regard to the financial performance of the Group in the first half of the year, the Board does not believe that it is appropriate to announce an interim dividend for 2014 at this point. However, assuming performance in the second half of the year in line with management's expectations, we would anticipate a return to the payment of a final dividend after the publication of our full year results for 2014.

Operational Review

Maritime Division

Rotterdam

The business is feeling the pressure from a continuing decline in ship calls to the Port of Rotterdam - the average reduction of vessels is 5% per year over the past 4 years with the impact within the Eurozone from the absence of any real growth in economic activity having an adverse effect on our operations. With Rotterdam's standing as the largest port in Europe and sixth largest in the world, it is inevitable that there will be consequences for the support services operating in the port.

However, with the recently appointed head of our Maritime Division having previously been a senior manager in the Port of Rotterdam, we believe we are well placed to redefine our commercial strategy to seek alternative business opportunities. In addition to ensuring that we operate the optimum barge fleet to service the market, we are extending our offering into a wider range of maritime wastes. This will be accompanied by a shift into trading from the purchase and sale of sludges with a high oil content that can be used as secondary fuels.

We can also report that a major one-off contract, delayed from the first half of the year, has now been completed at the start of the second half, which will make a significant contribution to the full year outturn.

As the leading operator in our business in the Amsterdam-Rotterdam-Antwerp region we remain confident about our future.

Gibraltar

Investors will be well aware of the frustrations we have felt in securing approval to rebuild the plant after the unfortunate fire in 2011. As we had previously reported, during the first half of the year we were granted planning permission to rebuild the tank storage facility as the first stage in providing a full service for the collection and disposal of maritime liquid wastes in Gibraltar. The only restriction placed upon us was to ensure that our construction programme should not conflict with cruise liner visits, which are so important to the local economy. Though the impact of this is that the bulk of the rebuild will have to take place through the period from January to September 2015, we are looking to prefabricate as much as possible off site to expedite the process. With engineering designs and specifications currently being finalised we are aiming to recommence storage in the second half of 2015. Operationally this will be a major boost to the Group as our vessel, Crystalwater, will no longer be required as a storage facility. This will allow us to use the vessel for alternative work or, more likely, to be sold and replaced with a new seagoing barge that is more in line with operational needs and with greater operational efficiency. Despite the lack of on-shore facilities, we have maintained the overall volume handled. Concurrent with the planning permission we also finally secured a settlement of £1.35 million with underwriters for material damage and part compensation for loss of business.

Following a retirement, we have appointed Matthew Byrne as the new Managing Director of the Gibraltar operations, who has a wide range of international maritime experience. As the financial highlights have noted we have slimmed down the organisation to reflect both short and long term needs of the Group. Good progress is being made on winning back contracts that were lost last year and formed part of the hub and spoke business that centred on Gibraltar. After a difficult period in the region, we now look forward to a more rewarding future.

Portugal

With Gibraltar operating on a reduced basis we have been unable to fully exploit the benefits of our joint venture to receive and recycle maritime waste with high oil content into a refined and marketable product. We have a very experienced manager for the JV, Carlos Cardoso, with extensive knowledge of the waste industry who is currently pursuing a number of interesting opportunities to build up a long term feed stock of oily waters for the JV. As we have previously mentioned, we see our presence in Portugal benefitting the realisation of our plans for port reception facilities there. We expect the waste/recycled oil market to change in 2015 resulting in our Portugal facility being one of the only viable locations in Europe to upgrade waste oil. This will not only directly benefit our Portugal location but also strengthen our position in the Rotterdam area. In addition, capitalising on the historical ties that Portugal has with old colonies of Brazil and Angola, Carlos is proving a vital resource and contributor to the growth of our Oil & Gas Division.

Houston

In April we announced that our subsidiary, Nature Port Reception Facilities (NPRF) Holdings Ltd., had committed to invest a total of US$1,700,000 to acquire the assets of Global Environmental & Marine Services, Inc ("GEMS"), a maritime waste management company located in Texas, USA and which provides port reception facilities on the Gulf coast between Houston and Corpus Christi. Having identified this region as being strategically well placed for our international growth we were pleased to identify GEMS as the right company to achieve our goals and Nature's resources will assist in the development of what was originally a family business. Within the last month one of our senior Dutch colleagues has relocated to Houston to spearhead the development and growth of the business in the US. We are pleased to report that the first 3 months under our ownership has exceeded expectations and with our plans to invest in improved operational facilities we anticipate that the profitability of our operations there will continue to grow and reward our long term vision for this business.

Oil & Gas Division

Having announced the award of a major contract in Brazil at the beginning of 2014, we were frustrated by almost 6 months of delays in securing work visas for our offshore operators, resulting in the need to reschedule our revenue flows from this contract. We are pleased to report that men and equipment are now onsite to start operations. Although the first half was quieter than we anticipated, the second half is showing a significant increase in contracted activity. The potential of our Oil & Gas Division is reflected in the successes we have achieved - delivering offshore treatment on time and to specification with a growing international experience stretching from Tanzania and Brazil to the Arctic Circle; a good track record with an increasing number of drilling rig owners working for blue chip oil companies and a good pipeline of new business opportunities.

When our Oil & Gas Division first started operations contracts were of a short duration and, whilst these will continue, our success is being reflected in the increasing number of long term contracts being awarded for up to two years and possibly extending to 5 years. To support our growth and confidence in the future we are investing in new treatment units - currently we have seven CTUs, two STUs and a mobile bioreactor in operation or available with another four STUs currently being built and expected for delivery during Q4 2014. We are currently reviewing our order book for CTUs and have the option to hire back two units which were sold to a third party in 2013. With the offshore experience we have developed, we are looking at providing clients with a wider range of services within our field of expertise.

Engineering Division

The Engineering Division, which is both a Group support service and a profit centre in its own right, successfully finalised two major projects during the period - the final training programme and handover for the Duqm treatment plant in Oman and, apart from final commissioning, the successful completion of a large treatment plant for Interserve Defence Limited / MoD in an overseas territory. The Engineering team based in Cornwall have demonstrated their ability to design and build treatment plants, working on remote sites often in inhospitable conditions. Currently, the team are fully committed to the provision of the operational improvements for Houston, and for the new contract in Sohar, Oman for the construction of the reception and treatment infrastructure. The Gibraltar rebuild has, due to our resources being more usefully deployed on customer contracts, been outsourced to a third party.

Business Development

Our longer-term strategy for the Maritime Division remains to build a network of Port Reception Facilities around the world at the major ports and/or along the major shipping routes. Houston was added this year and next year the Middle East Port of Sohar will be added to our network. As part of our marketing strategy we are looking at new locations to develop, preferably, in the Far East, Africa and South-America as part of our longer term plan to provide a global network of waste treatment facilities.

For our Oil & Gas division, we want to significant expand our fleet of rental units, capitalising on the successful projects completed and the proven delivery of 80% savings through the use of our containerised units compared to the existing, dominant method of shipping the waste to shore facilities for treatment. We are working on expanding into the Gulf of Mexico (through our Houston maritime operation), Africa and the Middle East.

Organisation

With the significant historical issues for Nature now resolved and behind us, it was recognised that to create a successful Group for the future we needed to build strength into the management team. Having established a divisional structure we now have in place a team of professionals under Stig Feyling (Oil & Gas) and Rene van der Wolf (Maritime), each supported by the senior managers in Stavanger, Gibraltar and Portugal.

Our most recent appointment was Jan Vesseur as Chief Operating Officer - Jan is a very experienced international manager whose role is to assist the CEO in providing the bridge between the finance and commercial roles, working closely with Kieron Becerra, our Chief Financial Officer.

The final step was to establish the head office in Rotterdam where Andreas Drenthen, our Chief Executive Officer, will be based along with Jan and Rene. We are confident we have the right team to continue Nature's growth and its development into what is becoming a key environmental service, which has the ability to contribute to the reduction of pollution in our seas and oceans. Further additions are planned for the Board as we seek new non-executives who can bring relevant expertise to the Company.

Outlook

Notwithstanding the disappointing start to the year, the Board is confident of a return to profitability in the second half of the year and for the year as a whole.

Specifically, we remain extremely positive about the new projects in the pipeline for our Oil & Gas Division and expect, in the second half of the year, to accelerate our activities in that sector as well as fix several of our challenges in Maritime, especially in Gibraltar and Rotterdam.

We remain confident that we are operating in the right sectors for growth driven by economic need and the continuing quest for improvement in environmental standards. Nature has an enthusiastic management team whose objective is to ensure we deliver shareholder value.

1. The calculation of earnings per share has been based on the profit for the period and the average 79,280,655 Ordinary Shares in issue throughout the period.

2. These unaudited results have been prepared on the basis of the accounting policies adopted in the accounts to 31 December 2013.

3. The interim report to 30 June 2014 was approved by the Directors on 8 September 2014. The report will be posted to shareholders and will be available to the public, free of charge, from the offices of Cenkos Securities Plc 6.7.8 Tokenhouse Yard, London, EC2R 7AS.