Interim Results

Mercury Recycling Group PLC
21 September 2004


                          MERCURY RECYCLING GROUP PLC

               INTERIM REPORT FOR THE PERIOD ENDING 30 JUNE 2004




CHAIRMAN'S STATEMENT



I am pleased to present the Group's Report for the 6 months to 30 June 2004.



These unaudited results reflect the continuing progress of the Group, and show
an increase in sales to £783,000 from £484,000, an overall increase of 60%
compared with the previous half year.  The Simister acquisition contributed
£210,000 so without Simister, the overall increase would have been 18.4%.  The
profit of the Group for the 6 months, before goodwill amortisation, was £96,000
against £71,000 for the full year ended 31 December 2003.



Sales are now being driven by the implementation of EU Directive on Waste
Electrical and Electronic Equipment ('WEEE'), together with the large reduction
in the number of landfill sites, which are able to accept mercury bearing waste.
  Thus, the market for recycling is expanding rapidly, and our number of
customers is growing monthly.  The Group is well placed to take advantage of
these forthcoming opportunities.



The total potential market is such that the Board is considering a major capital
investment programme in 2005 to increase capacity, and meet the increasing
demands for our services.  The bank position continues at a healthy level with
£159,000 in hand despite having paid the cash element of the acquisition, and
the sales growth has resulted in an increase in debtors from £154,000 at June
2003, to the current level of £293,000.



Undoubtedly, the future now looks exciting, and offers serious growth potential.
  We are the leaders in the field, with near national coverage, the appropriate
technology, and the credibility to take advantage of this large market.  Sales
in the second half of the year seem likely to at least maintain the first half
growth.



The Rt Hon The Lord Barnett JP PC

Chairman

21 September 2004




GROUP PROFIT AND LOSS ACCOUNT

for the six months ended 30 June 2004


                                                                    6 Months ended 6 Months ended

                                                                           30.6.04        30.6.03      Year ended
                                                                                                         31.12.03
                                                                             £'000          £'000           £'000


Turnover                                                                       783            484             947

Cost of Sales                                                                 (53)           (45)           (105)


Gross Profit                                                                   730            439             842


Administrative expenses                                                      (634)          (366)           (771)

Group operating profit before goodwill amortisation                             96             73              71
Goodwill amortisation                                                        (101)           (82)           (168)

Group operating loss                                                           (5)            (9)            (97)


Interest receivable                                                              2              3               6
Interest payable                                                               (2)            (3)             (6)

Loss on ordinary activities before taxation                                    (5)            (9)            (97)

Taxation                                                                         -              -               -
Loss on ordinary activities after taxation retained for the period             (5)            (9)            (97)


Earnings per share:  Basic (pence)                                          (0.02)         (0.04)          (0.35)










GROUP BALANCE SHEET

as at 30 June 2004


                                                                             As at          As at           As at

                                                                           30.6.04        30.6.03        31.12.03
                                                                             £'000          £'000           £'000
Fixed assets

Tangible assets                                                                543            260             553
Intangible assets                                                            3,515          2,940           3,616
                                                                             4,058          3,200           4,169

Current assets

Stock                                                                           10              -               -
Debtors                                                                        293            154             232
Cash at bank and in hand                                                       159            333             232
                                                                               462            487             464
Creditors: amounts due within one year                                       (235)          (103)           (337)

Net current assets                                                             227            384             127


Creditors:  amounts due after more than one year                              (51)          (109)            (57)
Accruals and deferred income                                                  (12)            (2)            (12)


Total assets less current liabilities                                        4,222          3,473           4,227


Capital and reserves

Called up share capital                                                      3,336          2,512           3,336
Share premium account                                                        1,541          1,523           1,541
Merger reserve                                                               (111)          (111)           (111)
Profit and loss account                                                      (544)          (451)           (539)
Equity shareholders' funds                                                   4,222          3,473           4,227







GROUP CASHFLOW STATEMENT

for the six months ended 30 June 2004


                                                                    6 Months ended 6 Months ended

                                                                           30.6.04        30.6.03     Year ended

                                                                                                        31.12.03
                                                                             £'000          £'000          £'000


Net cash (outflow)/inflow from operating activities                           (39)             85            175


Returns on investment and servicing of finance

Interest paid                                                                  (2)            (3)            (5)
Interest received                                                                2              3              5

Capital expenditure and financial investment

Purchase of tangible fixed assets                                             (23)              -            (5)

Acquisitions

Cash acquired with subsidiary undertakings                                       -              -          (181)
                                                                              (62)             85           (11)

Financing

Repayment of loans                                                               -          (117)              -
Capital element of hire purchase                                              (11)              -            (6)
Decrease in cash in period                                                    (73)           (32)           (17)



Reconciliation of operating loss to net cash outflow from operating 6 Months ended 6 Months ended
activities
                                                                           30.6.04        30.6.03     Year ended
                                                                                                        31.12.03
                                                                             £'000          £'000          £'000
Operating loss                                                                 (5)            (9)           (97)
Depreciation                                                                    33             16             36
Amortisation of goodwill                                                       101             82            168
Loss on disposal of assets                                                       -              2              2
Increase in stocks                                                            (10)              -              -
(Increase)/decrease in debtors                                                (60)              2             12
(Decrease)/increase in creditors                                              (98)            (3)             54
Increase in accruals                                                             -            (5)              -
Net cash outflow from operating activities                                    (39)             85            175







NOTES:



1.         Earnings per share



The calculation of basic earnings per share is based upon the loss for the
period and the weighted-average number of 25,118,000 (2003 - first half -
25,118,000) shares in issue during the period.  The diluted earnings per share
is based upon the loss for the period and the number of shares in issue as
follows:


                                                                       6 Months to    6 months to        Year to
                                                                           30.6.04        30.6.03       31.12.03
                                                                             000's          000's          000's
Weighted average number of shares                                           33,359         25,118         28,047
Dilution - share options in issue                                                -              -              -
                                                                            33,359         25,118         28,047



2.         Basis of preparation



The interim financial information has been prepared on the basis of the
accounting policies set out in the accounts for the year ended 31 December 2003.



The interim financial information is unaudited.  The financial information does
not constitute statutory accounts as defined by section 240 of the Companies Act
1985.  Full accounts of the company for the year ended 31 December 2003 on which
the Auditors gave an unqualified report, have been delivered to the Registrar of
Companies.  These accounts consolidate the accounts of Mercury Recycling Group
Plc and all of its wholly owned subsidiaries.  The goodwill arising on the
acquisition of Mercury Recycling Limited and Simister Engineering Limited has
been capitalised and amortised over the Directors' estimate of its useful life.



3.         Copies of report



Copies of this interim statement will be despatched to shareholders and will be
available to the public at the registered office of the Company, Unit G,
Canalside North, John Gilbert Way, Trafford Park, Manchester  M17 1DP.


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