(TRBO.L) Turbotec Products PLC Buy/Sell

For further information please contact: Turbotec Products Plc
Sunil Raina, Managing Director Tel: +1 (860) 731 4205

SRaina@turbotecproducts.com Robert Lieberman, Finance
Director Tel: +1 (860) 731 4206
RLieberman@turbotecproducts.com www.turbotecproducts.com

Evolution Securities Limited
Joanne Lake / Peter Steel Tel: +44 (0) 113 243 1619

Joanne.lake@evosecurities.com

Media enquiries: Abchurch Communications
Charlie Jack / Nick Probert Tel: +44 (0)20 7398 7715

nick.probert@abchurch-group.com www.abchurch-group.com

Copies of this announcement are available for collection from Evolution Securities, offices at Kings House, 1 King Street, Leeds, LS1 2HH and electronic copies can be obtained from the Company's website www.turbotecproducts.com.
CHAIRMAN'S STATEMENT

In this, our fourth interim report since we joined the AIM market, it is pleasing in such a challenging environment to report a pre-tax profit despite sales some 35% lower compared with the same period last year. The depressed demand experienced during our first quarter has continued these last few months, with sales to most major customers being affected.

Given the difficult conditions in our main markets, our focus has been on sustaining our gross margins and controlling operating costs and I am pleased to report that the Company has generated a respectable net income, despite these many challenges.

The dispute brought by our majority shareholder, Thermodynetics Inc., against the Company in January 2008 should soon be resolved, with the trial scheduled to be held early in December. The Company remains confident of its position and is continuing to defend the claim vigorously. Ongoing legal costs in relation to the dispute, along with the continuing investment being made in our expanding Southern manufacturing unit in Hickory, North Carolina, reinforce the need to conserve cash in these present depressed market conditions. After carefully considering all of these factors, the Board has concluded that it should reserve any decision on payment of a dividend until after the current year end, as to do otherwise would be imprudent.

Our resolve and commitment is to provide sustainable shareholder value through sales growth based on product quality and innovation. Turbotec has a clear strategy built on the expansion of our presence in new markets, exploiting the benefits of our low cost base in Hickory and fully developing the talents of all of our people. The Company now has the platform in place to capitalise on any upturn in demand as conditions in our markets improve.

.

Tom Nairn

Chairman

13 November 2009

TURBOTEC PRODUCTS PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six Months Six Months Year Ended
30 September 30 September 31 March

$'000 $'000 $'000
Revenue 9,734 14,929 26,986
Cost of sales (6,903) (10,634) (19,477)
Gross profit 2,831 4,295 7,509
Distribution costs (281) (343) (683)
Administrative expenses (1,627) (2,411) (4,426)
Operating profit 923 1,541 2,400
Finance costs (3) (11) (17)
Profit before tax 920 1,530 2,383
Income tax expense (369) (602) (968)

Profit and total comprehensive
income 551 928 1,415
for the period
Earnings per share - basic $ 0.04 $ 0.07 $ 0.11
Earnings per share - diluted $ 0.04 $ 0.07 $ 0.11

There were no items of other comprehensive income for any period

UNAUDITED CONSOLIDATED statement of changes in equity
Share capital Share Premium Retained earnings Merger Reserve
Total
$'000 $'000 $'000 $'000 $'000
Balance at 31 March 2008 228 3,441 4,533 (168) 8,034

Profit and total recognized
income and expenses - - 928 - 928

for the period
Share based payment expense - - 54 - 54
Balance at 30 228 3,441 5,515 (168) 9,016

September 2008

Profit and total recognized income and
expenses for - - 487 - 487

the period
Share based payment expense - - 87 - 87
Balance at 31 March 2009 228 3,441 6,089 (168) 9,590

Profit and total recognized income and
expenses for - - 551 - 551

the period
Share based payment expense - - 62 - 62
Other - - (38) - (38)
Balance at 30 September 2009 228 3,441 6,664 (168) 10,165

TURBOTEC PRODUCTS PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

$'000 $'000 $'000

Assets Non-current assets:
Property, plant and equipment 5,174 4,666 5,018
Intangible assets 396 481 439
Other 7 5 7
5,577 5,152 5,464

Current Assets: Inventories
Trade and other receivables 3,725 4,035 3,572
Cash and cash equivalents 1,689 2,573 1,654
Current tax assets 1,984 1,173 1,509

7,398 7,975 6,735

Current Liabilities Current portion of long-term borrowings
Trade and other payables 142 179 178
Current tax liabilities 1,609 2,829 1,247

1,785 3,008 1,542
Net current assets 5,613 4,967 5,193

Non-current liabilities
Long-term borrowings 125 256 167
Deferred tax 900 847 900
1,025 1,103 1,067
Net assets 10,165 9,016 9,590

Shareholders' equity:
Share capital 228 228 228
Share premium account 3,441 3,441 3,441
Merger reserve (168) (168) (168)
Retained earnings 6,664 5,515 6,089
Total equity 10,165 9,016 9,590

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

$'000 $'000 $'000

Cash flows from operating activities
Profit before tax 920 1,530 2,383

Adjustments to reconcile net income to net
cash provided by operating

activities:
Depreciation and amortization 199 153 386
Finance expense 3 11 17
Charge recognized in respect of 62 54 121

share based payment
Cash flows from operating 1,184 1,748 2,907

activities before changes in working capital
Decrease / (increase) in trade (34) 418 1,335

and other receivables
Decrease / (increase) in (153) (898) (435)

inventory
Increase / (decrease) in trade 445 515 (1,338)

and other payables
Cash generated from operations 1,442 1,783 2,469
Taxes paid (574) (1,050) (761)

Net cash provided by operating 868 733 1,708

activities Cash flows from investing activities
Development costs paid - (10) (10)
Purchases of property, plant and (312) (323) (866)

equipment
Net cash used in investing (312) (333) (876)

activities Cash flows from financing activities
Proceeds from long term 10 - -

borrowings
Principal payments on long term (88) (89) (179)

debt
Finance expense (3) (11) (17)
Net cash used in financing (81) (100) (196)

activities
Net change in cash and cash 475 300 636

equivalents
Cash and cash equivalents, 1,509 873 873

beginning of period
Cash and cash equivalents, end of 1,984 1,173 1,509

period

NOTES TO THE FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

The AIM Rules for Companies require that the annual consolidated financial statements of the company for the 52 week period ending 31 March 2010 be prepared in accordance with International Financial Reporting Standards adopted for use in the EU ("IFRS"). Other than the adoption of IAS1 (revised), this half year financial statement has been prepared on a consistent basis in accordance with the accounting policies adopted in the accounts for the year ended 31 March 2009 and on the basis of the recognition and measurement requirements of IFRS in issue that are either endorsed by the EU and effective (or available for early adoption) at 13 November 2009 and hence on the basis of IFRS that expected to apply in preparation of the accounts for the year ending 31 March 2010. The group will also adopt the requirements of IFRS8 in reporting the accounts for the year ended 31 March 2010. The preparation of the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. These interim financial statements are unaudited.

The comparatives for the full year ended 31 March 2009 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 237(2)-(3) of the Companies Act 1985.

2. TAXATION

Analysis of charge in period:

Six months ended 30 Six months ended 30 Sept Year ended
Sept 2008 31 March

($000's) ($000's) ($000's)
Current 369 567 933
Deferred - 35 35
Total Taxation 369 602 968

Tax reconciliation:

The effective tax rates for the periods are different than the standard rate of corporate tax in the UK (28% for all periods presented). The differences are attributable to the following:

Six months ended Six months ended Year ended
30 Sept 30 Sept 31 March

($000's) ($000's) ($000's)
Profit before tax 920 1,530
2,383

Profit before tax multiplied by rate of
corporate tax in the UK of 28% 258 459 667

Effect of:
Differences between book and (10) (15) 22
taxable income
Higher rate of tax on overseas 110 153 286
earnings
Tax credits used to reduce (5) (15) (30)
taxes paid
Other 16 20 23
Total taxation 369 602 968
3. BASIC EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE

The calculations of basic and diluted earnings per ordinary share are based on the profit for the financial year and the weighted average number of equity voting shares in issue and dilutive shares during the period.

Six Months 30 Sept 2009 Six Months 30 Sept 2008 Year Ended 31 March 2009
(Numerator) (Denominator) (Numerator) (Denominator) (Numerator) (Denominator)
($000's) Weighted ($000's) Weighted ($000's) Weighted
Average Shares Average Shares Average Shares

Basic EPS

Profit for the period 551 - 928 - 1,415 -
Weighted average shares - 12,806,773 - 12,806,773 - 12,806,773

Diluted EPS- Effect of Dilutive Securities

Stock options - - - - - -
Diluted EPS 551 12,806,773 949 12,806,773 1,415 12,806,773

4. INTANGIBLE ASSETS
Capitalized
Development
Goodwill Costs Total
($000's) ($000's) ($000's)

Period Ended 30 Sept 2009 Cost and net book value
Balance at 1 April, 2009 94 345 439
Additions - - -
Amortization - (43) (43)
Balance at 30 Sept, 2009 94 302 396

Period Ended 30 Sept 2008 Cost and net book value
Balance at 1 April, 2008 94 377 471
Additions - 10 10
Amortization - - -
Balance at 30 Sept, 2008 94 387 481

Period Ended 31 March 2009

Cost and net book value
Balance at 1 April, 2008 94 377 471
Additions - 10 10
Amortization - (42) (42)
Balance at 30 March, 2009 94 345 439

Goodwill relates to the acquisition of a technology company acquired by the US parent company in 1985. The operations of that company were subsequently integrated into the company's primary manufacturing facility. The technology acquired continues to be used by the group as an integral part of the engineering and manufacturing of its current product line.

In accordance with IAS 36, the Group regularly monitors the carrying value of intangible assets. A review was undertaken at 31 March 2009 to assess whether the carrying value of assets was supported by the net present value of cash flows derived from those assets using future cash flow projections. Further to the review, there have been no impairments to the carrying amount of goodwill in any period. The deferred development costs will be amortized over the expected lives of the related products once sales of these products commence on a commercial level.

5. ANALYSIS OF CASH AND CASH EQUIVALENTS AT:
30 Sept 30 Sept 31 March

($000's) ($000's) ($000's)

Cash available on demand 1,984 1,173 1,509
Bank overdrafts - - -
1,984 1,173 1,509

6. LONG TERM BORROWINGS

30 Sept 30 Sept 31 March

($000's) ($000's) ($000's)

Current financial liabilities
Bank loans - secured 142 179 178

Non-current financial liabilities
Bank loans - secured 125 256 167

The bank loans and overdraft are secured by a fixed charge over the assets of the Group. In addition, the Group must comply with certain non-financial covenants, non-compliance with which would be considered an event of default and provide the bank with the right to demand repayment prior to the loan's maturity date.

The interest rate on floating rate financial liabilities is linked to the bank's prime rate. The interest rates charged at the balance sheet date are as follows:

30 Sept 2009 30 Sept 2008 31 March 2009
Bank overdrafts and secured loans 3.25% 5.00% 3.25%

Maturities of borrowings are as follows (including interest payments at current rates):

30 Sept 30 Sept 31 March

($000's) ($000's) ($000's)
In less than 1 year 145 194 186
In 1-2 years 88 138 90
In 3-4 years 51 89 82
Thereafter - 45 -

7. ULTIMATE PARENT COMPANY

The ultimate parent undertaking is Thermodynetics, Inc, a company incorporated in the United States. This is largest and smallest company into which the Company's results are consolidated.

8. CONTINGENCIES

The Company is the defendant in an action brought by its majority shareholder seeking to limit the recovery of administration fees paid to Thermodynetics in 2007 and 2008 and other disputed obligations between the parties pursuant to a Relationship Agreement. Thermodynetics sought an adjournment seeking additional time to prepare for trial; the court has now set December 2009 as the new trial date. The Company believes that it has meritorious defences to the claims raised and that it will ultimately prevail when the matter is dispositioned by the court. The amount initially claimed was *205,000 Pounds Sterling. An amended claim was submitted by Thermodynetics in October 2008 which increased the quantum of claim up to, in one alternative, $1.17m at that date

9. APPROVAL

This interim report was approved by the Directors of the Company on 13 November 2009. Copies may be obtained on the Company's website, www.turbotecproducts.com, or from the Company Secretary.

This information is provided by RNS The company news service from the London Stock Exchange

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