Interim Results

Mercury Recycling Group PLC
23 September 2005


                          MERCURY RECYCLING GROUP PLC

               INTERIM REPORT FOR THE PERIOD ENDING 30 JUNE 2005



CHAIRMAN'S STATEMENT



I am pleased to present the Group's Report for the 6 months to 30 June 2005.



These unaudited results show a further substantial increase in sales of more
than 30% on the same period last year, from £783,000 to £1,031,000.  Operating
profits for the six months before goodwill amortisation, and exceptional items,
increased from £96,000 to £133,000 at the interim stage, compared to £176,000
for the full year.



I indicated in my statement with the 2004 full year's accounts, that 2005 would
be a transitional year.  I can now say that the group's re-organisation is
proceeding as planned.  Administrative staff have already been relocated to our
major new site in Trafford Park.  The recycling equipment comprising of new and
refurbished plant currently being installed and commissioned.



It will be seen, that some of the 'one-off' relocation costs in respect of the
move to Kiwi Park have been included.  These are on line with our initial
budget.



By the end of 2005, we will be in a very strong position to meet any further
boost to sales when the WEEE Directive is implemented in 2006.  The very latest
technology in our plant, together with the necessary staff and infrastructure,
will all be in place.



Even without the WEEE Directive, closure of landfill sites, and new registration
requirements, that were introduced through the Hazardous Waste Regulations, by
the Environment Agency in mid July this year, have helped to boost the increased
demand for recycling from industry.



This transitional year continues to produce monthly increases in both sales and
operating profits.  Not surprisingly, I look forward to 2006 and beyond, with
considerable optimism.



The Rt Hon The Lord Barnett JP PC

Chairman

23 September 2005




GROUP PROFIT AND LOSS ACCOUNT

for the six months ended 30 June 2005


                                                                    6 Months ended 6 Months ended            Year
                                                                           30.6.05        30.6.04  ended 31.12.04
                                                                             £'000          £'000           £'000

Turnover                                                                     1,031            783           1,603

Cost of Sales                                                                (120)           (53)           (188)


Gross Profit                                                                   911            730           1,415


Administrative expenses                                                      (778)          (634)         (1,239)

Group operating profit before goodwill amortisation
and exceptional item                                                           133             96             176

Relocation costs                                                              (57)              -               -
Goodwill amortisation                                                        (102)          (101)           (204)

Group operating loss                                                          (26)            (5)            (28)


Interest receivable                                                              7              2               3
Interest payable                                                               (1)            (2)             (6)

Loss on ordinary activities before taxation                                   (20)            (5)            (31)

Taxation                                                                         -              -               -
Loss on ordinary activities after taxation retained for the period            (20)            (5)            (31)


Earnings per share:  Basic (pence)                                          (0.06)         (0.02)          (0.09)
                                Adjusted (pence)                              0.42           0.29            0.52




GROUP BALANCE SHEET
as at 30 June 2005

                                                                             As at          As at           As at
                                                                           30.6.05        30.6.04        31.12.04
                                                                             £'000          £'000           £'000
Fixed assets
Tangible assets                                                                994            543             578
Intangible assets                                                            3,327          3,515           3,429
                                                                             4,321          4,058           4,007
Current assets
Stock                                                                            -             10               -
Debtors                                                                        445            293             347
Cash at bank and in hand                                                       181            159             170
                                                                               626            462             517
Creditors: amounts due within one year                                       (727)          (235)           (294)

Net current assets                                                           (101)            227             223


Creditors:  amounts due after more than one year                              (44)           (51)            (34)
Accruals and deferred income                                                     -           (12)               -


Total assets less current liabilities                                        4,176          4,222           4,196

Capital and reserves
Called up share capital                                                      3,336          3,336           3,336
Share premium account                                                          242          1,541             242
Other reserve                                                                  612              -             695
Merger reserve                                                               (111)          (111)           (111)
Profit and loss account                                                         97          (544)              34
Equity shareholders' funds                                                   4,176          4,222           4,196



GROUP CASHFLOW STATEMENT
for the six months ended 30 June 2004
                                                                    6 Months ended 6 Months ended           Year
                                                                           30.6.05        30.6.04          ended
                                                                                                        31.12.04
                                                                             £'000          £'000          £'000

Net cash inflow/(outflow) from operating activities                            148           (39)             67

Returns on investment and servicing of finance
Interest paid                                                                  (1)            (2)            (6)
Interest received                                                                7              2              3

Capital expenditure and financial investment
Purchase of tangible fixed assets                                            (431)           (23)           (96)

Acquisitions
Cash acquired with subsidiary undertakings                                       -              -            (7)
                                                                             (277)           (62)           (39)

Financing
New loan                                                                       300              -              -
Repayment of loans                                                             (7)              -              -
Capital element of hire purchase                                               (5)           (11)           (23)
Increase/(Decrease) in cash in period                                           11           (73)           (62)

Reconciliation of operating loss to net
cash outflow from operating activities

Operating loss                                                                (26)            (5)           (28)
Depreciation                                                                    43             33             71
Amortisation of goodwill                                                       102            101            204
Profit on disposal of assets                                                   (5)              -              -
Increase in stocks                                                               -           (10)              -
Increase in debtors                                                           (98)           (60)          (114)
(Decrease)/increase in creditors                                               132           (98)           (66)
Net cash inflow (outflow) from operating activities                            148           (39)             67







NOTES:



1.         Earnings per share



The calculation of basic loss per share is based upon the loss for the period of
£20,000 (2004 - first half - £5,000) and the weighted average number of
33,359,000 (2004 - first half - 33,359,000) shares in issue during the period.
As the Group reports a loss for the period, in accordance with Financial
Reporting Standard 14, the share options are not considered dilutive.



Adjusted earnings per share is calculated using earnings before amortisation of
goodwill and exceptional items.  Adjusted earnings is one of the primary
performance measures used by the directors and is provided, in addition to the
statutory results prepared under UK GAAP, to assist the shareholders to gain a
clearer understanding of the underlying performance of the business.


                                                                       6 Months to    6 months to        Year to

                                                                           30.6.05        30.6.04       31.12.04
                                                                             pence          pence          pence

Basic loss per share                                                        (0.06)         (0.02)         (0.09)
Goodwill and exceptional item                                                 0.48           0.31           0.61
Adjusted earnings per share                                                   0.42           0.29           0.52



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 2004.



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 2004 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, Mercury House, 17 Commerce
Way, Trafford Park, Manchester, M17 1HW.


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