TEG.L Regulatory News (TEG)

The TEG GROUP PLC (TEG/L)

("TEG" or "the Company")

Pre Close Trading Update for 2009

The TEG Group PLC, the AIM listed cutting edge green technology company, which develops and operates organic composting and energy plants, is pleased to report on trading activity for the 12 month period to 31 December 2009.

The Company confirms that despite operational difficulties and waste shortages due to the unusually adverse weather conditions in the latter part of the year, the overall trading position for 2009 was good. The second half of the year was particularly successful with significant growth in revenues and the Board expects 2009 to have been the most successful year in its history. The Company confirms that it expects its financial performance to be in line with Board expectations for 2009.

Trading at TEG's own facilities was satisfactory. The Carleton Rode facility, acquired in June 2009, has performed well and met its targets for the second half of the year. Group sales for 2010 have been very encouraging, particularly at Carleton Rode and Perth.

The Greater Manchester construction programme remains on schedule.

TEG has been informed by its client Taywell Composting Limited ("Taywell") that Taywell still expects to return to planning committee regarding its Matlock project in early 2010, to determine compliance with Defra guidelines on odour management and the outstanding Section 106 Agreement.

The Board believes that the outlook for 2010 is very positive. The general market conditions continue to look very favourable for both the In Vessel Composting ("IVC") and Anaerobic Digestion ("AD") prospects, and regulatory policy continues to develop in favour of enclosed, IVC facilities. While the enhanced level of regulation will oblige operators, including TEG, to enhance the level of containment of some of the older existing operations, the Board also considers it likely that the regulatory pressure will lead to future composting facilities being increasingly IVC. TEG anticipates that a number of projects in its pipeline will move into construction in 2010.

The Company previously announced that it is seeking to relocate the Sherdley Farm composting plant to a larger facility meeting modern standards. The demand at Sherdley Farm exceeds capacity and the buildings housing the plant do not meet the revised regulatory requirements for a composting facility. Subject to regulatory agreement, the Company intends to run down the composting operation and relocate waste supplies to other Group plants until the new facility is constructed. Given the small scale of the facility, the Board does not anticipate this will have a material impact on projections for 2010. The Company is examining a number of longer term options for the Sherdley farm site and will update the market in due course.

The Company anticipates announcing its preliminary results for the 12 months to 31 December 2009 in the week commencing 15 March 2010.

ENDS

Contact:

Michael Fishwick, Chief Executive

Tarquin Edwards

Canaccord Adams (Nomad) Tel : 020 7050 6500

Robert Finlay

Guy Blakeney

Editor's Notes:

TEG

TEG provides an in-vessel composting technology, which is one of the few approved technologies capable of treating animal by-product (ABP) waste, and is now providing an anaerobic digestion (AD) technology to produce power from food waste. Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost). The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs"). TEG owns its composting technology and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets. The TEG processes are an economic alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies in Europe capable of treating this waste, is a natural process producing compost as an end product. The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease. TEG's Silo-Cages are housed in self-contained buildings, are not unsightly and are environmentally friendly.

Collaboration with UTS

Having supplied equipment to more than 1,500 equipped biogas plants, UTS Biogastechnik GmbH is one of the world's leading biogas companies. The UTS group of companies offers services in the planning, construction, delivery and installation of biogas plants and their key components. The company has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base. UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. The company is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited. to service the United Kingdom & Ireland markets.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners. The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste. Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year. 

The Natural Organic Fertiliser Company Limited ("NOFCO"), a subsidiary of TEG, is a marketing company specialising in the development of end markets for compost products, an important aspect of all plant developments and key to local authority development. The company has an expertise in the development of agricultural and horticultural markets and this capability is provided to customers to enhance TEG's overall service offering.