Vivergo Fuels Limited and Trading Update

Redhall Group plc

Vivergo Fuels Limited and Trading Update

On 14 March 2011 Redhall Group plc ("the Group") announced that its subsidiary Redhall Engineering Solutions Limited ("the Company") had become involved in a contractual dispute with Vivergo Fuels Limited ("Vivergo"), a joint venture between BP, British Sugar and DuPont, in relation to a pipework contract for a new bio-ethanol plant on the BP Salt End site. The dispute has since been referred to independent adjudication.

The Group is pleased to announce that it was determined by the adjudicator that Vivergo had unlawfully attempted to terminate its contract with the Company and, by denying the Company's workforce access to the site, had repudiated the contract.

The Company is vigorously pursuing the process to recover damages for Vivergo's contract repudiation and also to recover unlawfully withheld monies. The total costs outstanding on the contract at 30 June 2011, including settlement with the Company's former employees on the Vivergo site and legal fees, amounted to £16.7m.

The Board remains of the opinion at this time that no provision is required against these costs, however the outcome of any settlement remains subject to normal legal process and the timing of any resolution is uncertain.

We are also pleased to confirm that trading and cash flow for the Group's core businesses in the third quarter of the current financial year have been in line with the Board's expectations.

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