Servelec Group Regulatory News (SERV)

25 July 2017

Servelec Group plc

("Servelec" or the "Group")

H1 Scheduled Trading Update

Servelec, the UK-based technology and software group, announces a scheduled Trading Update for the half year to 30 June 2017.

· A return to growth in underlying operating profit

· Continued investment in product development

· Strong cash collection in line with expectations

· Strong balance sheet; net debt at 30 June 2017 £6.0m and aiming to be debt free by year end 2017

Servelec HSC

Servelec HSC serves the health, social care and education markets.

Servelec's Oceano Patient Administration System has successfully gone live in University Hospitals Birmingham NHS Foundation Trust (UHB) at the first attempt. UHB will act as an excellent reference site for us in the future and is one of 16 acute trusts selected by NHS England as a Global Digital Exemplar (GDE). Servelec is the only supplier with established customers on both the Acute GDE programme and the Mental Health GDE programme, meaning the Group is exceptionally well placed to benefit as funding arrangements continue to unlock.

Our healthcare and education businesses are trading in line with expectations and have delivered profit growth at the half year. Sales in Social Care are behind our expectations for the first half of the year as although the opportunity in social care remains significant, we have not converted as many of the available opportunities as we had expected. We are confident of further increasing our customer base by year end as our offering is competitive in the market place.

During the period, we have continued to invest in further developing our products across Servelec HSC, especially to support mobile working, portal usage and channel shift.

Servelec Automation

Servelec Automation comprises Servelec Controls and Servelec Technologies.

We are pleased with progress in Servelec Controls. We are rebuilding strong relationships and winning orders from former customers, enquiry levels are increasing and order entry is growing. We are now under contract to deliver works required on the third Centrica platform in the sequence and delivery of the second platform is currently being commissioned and is due to be completed in Q4 2017. We are still in active discussions to resolve the previously announced issue relating to the Combined Heat & Power plant project in Turkey which has shown no significant movement during the period.

Within Servelec Technologies, the global market place is steady. RTU sales related to the UK water AMP cycle are active but at a low level however both projects and business optimisation product sales have shown an uptick in growth.

Alan Stubbs, Chief Executive Officer of Servelec Group plc, commented, "We are pleased to report that we have returned to growth. We have a number of exciting developments taking place across our businesses as we continue to invest in our products and our people to ensure our customers continue to receive the high level of service they have come to expect from Servelec. We believe the outlook for the Group remains positive."

Servelec Group plc will release its preliminary results for the half year ended 30 June 2017 on 12 September 2017.

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 Notes to Editors:

Servelec Group plc is a UK-based technology group, with significant intellectual property, providing software, hardware and services predominantly to the UK healthcare, oil & gas, nuclear, power, water, utilities, broadcast and rail sectors.

Servelec has two operating divisions; Servelec HSC and Servelec Automation:

- Servelec HSC specialises in the design, development and implementation of Electronic Patient Record (EPR) and Patient Administration Systems (PAS), Social Care Case Management software and early Years education software within secondary care and social care and education in local government settings and is a market leader in the Mental Health, Community Health and Social Care sectors in England.

- Servelec Automation provides complex, mission-critical control systems to large blue-chip companies mainly in the UK, focusing on the oil & gas, nuclear, power, infrastructure, utilities, broadcast and rail industries. Servelec Automation also provides services from consultancy through to design, implementation, delivery, installation and on-going customer support and maintenance.