Turbotec Products Plc 

("Turbotec" or "the Company")

Final Results  

Turbotec Products Plc (TRBO.L), the designer and manufacturer of high performance, high quality heat exchangers and heat transfer tubing, today announces its Final Results for the year ended 31 March 2008.

Highlights

Commenting on the Final Results, Sunil Raina, Managing Director of Turbotec, said: 

"I am pleased to report that Turbotec has again demonstrated strong growth. The resilience of our business over the last year will allow us to expand our healthy existing customer base into new product divisions with increased production and a new manufacturing base. I am cautiously optimistic about our marketplace given the growing uncertainty over global energy supply and the consequent necessity for practical, energy saving solutions."

- Ends -

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  CHAIRMAN'S STATEMENT

Introduction

In this our second Annual Report since flotation, I am pleased to report a record year on all fronts.  Further progress has been made in meeting our strategic objectives, expanding our customer base and developing our manufacturing facilities, all of which continue to support our steady growth and increased profitability. 

Business Summary

Turbotec is a manufacturer of high performance, high quality heat exchangers, heat transfer tubing and fabricated metal components.  The Company markets its products in the United States, Canada and other countries to customers in a variety of industries including space conditioning, refrigeration, marine, swimming pool and spa, plumbing, food and beverage, appliance and water heating. All manufacturing and related activities are conducted in the United States.

Results and Earnings

Turnover for the year ended 31 March 2008 increased by 19% to $28m from $23.5m in the previous year, producing an operating profit for the financial year of $3.22m. This represents an increase of 63% over the previous year's $1.97m, despite incurring over $250,000 in unforeseen costs associated with the legal dispute with our majority shareholder Thermodynetics, Inc. ("TDYT"). 

This record performance enabled the Board to pay a second interim dividend of 4.4 cents per ordinary share (c. 2.2p per share) on 28 March 2008; this together with the first interim dividend of 2.3 cents per share (c. 1.6p per share) paid on 12 December 2007 gives a total for the year ended 31 March 2008 of 6.7 cents per share (c. 3.35p per share), compared with a total dividend of 5.8 cents per share for the previous year.  Our intention is to continue to maintain a progressive dividend policy going forward.

Operations

We continue to expand our utilisation of existing manufacturing facilities by active and continuous pursuit of lean manufacturing improvements which has contributed to the improvement in gross margin to 26.2% for the current year (2007: 22.7%).  Looking to the future, we are at an advanced stage of searching for additional facilities from which to serve our increasingly geographically spread customer base.  This will also offer many further opportunities for cost savings in our operations. 

Administration Fee

We explained our treatment of this item in last year's Annual Report and during this financial year we continued to pay monthly instalments of the administration fee due to TDYT.  In accordance with the Relationship Agreement between the Company and TDYT, these amounts are recoverable.  As you may have noted from our announcements in November 2007 and January 2008, our majority shareholder, TDYT, takes a differing view on the interpretation of the Relationship Agreement. In January 2008 proceedings were issued in London against the Company by TDYT, claiming it was entitled to receive amounts paid for the 2007 financial year in addition to the administration fee instalments it had already received for that same year, and indicating the value of its claim at circa £205,000.  

On the basis of professional advice received, the Company believes that TDYT is entitled to either administration fee payments or other payments of equal amount for each of two consecutive financial years, but not both.  Accordingly, we will be robustly defending TDYT's claim.  With the conclusion of the 2008 financial year, the Company has discharged its obligation under the Relationship Agreement and will no longer pay an administration fee to TDYT.  

People

We continue to search for good quality people to augment our existing strong team, which we continue to train and develop to support our future growth.  The business expansion has placed demands on our employees at all levels and the Board would once again like to sincerely thank all employees for their dedication and support during the year.

Outlook

Given the already well publicised state of the U.S. economy, we continue to take a cautious view of the general business environment.  However, we have experienced a certain resilience in our business over the last 12 months, which suggests that consumers are still intent on reducing their energy costs and improving their carbon footprint despite the difficult market conditions.  Order intake remains reasonably healthy within our existing customer base, and we are experiencing steady expansion into a growing number of customers in new sectors.  We believe that with ever-increasing energy prices affecting running costs, and the growing awareness of global warming issues, our products are well placed to exploit further opportunities. 

We are now well advanced towards selecting a new manufacturing site in the southern United States which will enable us to expand our business more effectively and support our growing customer base. As well as geographic expansion, our growth strategy includes building sales into other related applications with new partners and the Board views the future prospects for the Company with optimism. 

Tom Nairn

Chairman

  UNAUDITED CONSOLIDATED INCOME STATEMENT 

For the YEAR ended 31 MARCH 2008

The profit for the year is all attributable to the equity holders of the parent company.

The accompanying notes are an integral part of these consolidated financial statements.

  UNAUDITED CONSOLIDATED statement of changes in equity 

For the YEAR ended 31 MARCH 2008

The accompanying notes are an integral part of these consolidated financial statements.

UNAUDITED CONSOLIDATED BALANCE SHEET AT 31 MARCH 2008 

The accompanying notes are an integral part of these consolidated financial statements 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS 

FOR THE YEARS ENDED 31 MARCH 31, 2008