2007 Preliminary Results

Symphony Environmental Tech. PLC
28 June 2007




For Immediate Release                                               28 June 2007


                     SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC

                             PRELIMINARY RESULTS
                     FOR THE YEAR ENDED 31 DECEMBER 2006


Symphony Environmental Technologies Plc ('Symphony' or 'the Company'), the
degradable plastics and waste-to-energy Group, today announces its preliminary
results for the year ended 31 December 2006.


HIGHLIGHTS

•   Turnover down 54% to £4.20m (2005: £9.11m)
•   Gross profit margin increased to 20% (2005: 19%)
•   Gross profit down 53% to £0.84m (2005: £1.77m)
•   Administrative expenses (excluding exceptional) down 13% to £2.21m
    (2005: £2.55m)
•   Operating loss (after exceptional costs) up 87% to £2.34m (2005:
    £1.25m)
•   Loss per share up 59% to 3.62 pence from 2.28 pence
•   Name changed to 'Symphony Environmental Technologies Plc' reflecting
    the fact that Symphony is no longer just a plastics company


Michael Laurier, Chief Executive said:

'This was a challenging year for Symphony but also a year of significant change
as the business moves toward higher margin licensing sales from the high volume
product sales.  The management structure has now changed to give more control to
the core management team and significant progress has been made by the core
business and also by our new pyrolysis technologies.

We have been encouraged by the progress we have made so far in 2007 and we look
forward to the future with confidence.'


For further information, please contact:

Symphony                                           Tel: [phone]
Michael Laurier, CEO
Ian Bristow, FD

Citigate Dewe Rogerson                             Tel: [phone]
Freida Moore
Ged Brumby


Further information on the Symphony Group can be found at
www.symphonyplastics.com and www.degradable.net.



CHAIRMAN'S REPORT

Symphony has been going through difficult and changing times.  The market for
oxo-biodegradable technologies since we entered this field has not been easy,
and potential customers have been subjected to a determined campaign against
oxo-biodegradable by the hydro-biodegradable (starch-based) industry.  However,
we can now see that the market is beginning to realise the benefits of
oxo-biodegradable and the limitations of hydro-biodegradable, and this is being
reflected in enquiries and sales of additives.

In addition, Symphony is no longer just a plastics company.  Symphony Energy
Resources has commenced the expansion of Symphony into a waste-to-energy Group
as well. This division of the business is still in its infancy, but it has won
two UK government grants, and is working with Imperial College and others to
produce commercially viable machines to convert waste tyres and plastics
efficiently into valuable products.

This technology answers two of the most important questions I hear when I meet
Government Ministers and officials in many parts of the world - 'What do we do
with waste tyres and plastics? And how do we reduce dependence on imported oil?'
Legislation in the EU and elsewhere is demanding reductions in waste going to
landfill and is promoting recycling. I believe that the potential for this
business could be even greater than for oxo-biodegradable plastic.

Since 3 April 2007 the Board has taken decisive action to improve operating
performance by reducing overheads, to re-deploy resources where they can be more
effective, and to drive higher-margin sales forward. We are already seeing the
benefit of this revised strategy and look forward to a more positive future for
the Company


Nirj Deva DL, FRSA, MEP
Chairman


CHIEF EXECUTIVE'S REVIEW

Operating performance in 2006 was very disappointing, ending with continued
losses. There were a number of setbacks in the Caribbean region. An exceptional
write off of £830,000 was made in respect to our previous distributor following
a restructuring. In addition, order take up in the region following the
restructure was not at the levels anticipated.

Most of these setbacks have now been overcome.  The Board has changed the
management team removing the posts of COO and Group MD from the management
structure, and a competent manager now heads each operating department.
Overheads have been cut, and margins are improving.

On the oxo-biodegradable plastics side of the business, the Group's change in
strategic direction continued throughout 2006, with a move away from selling
high-volume/low margin commodity products in mature markets towards markets for
such products where we have identified more profitable opportunities.  In
addition Symphony has been licensing higher margin/lower volume d2w(R) additive
technology instead of plastic products. Significant progress has been made with
international sales, and d2w(R) is now sold and/or represented in more than 50
countries.


FINANCIAL REVIEW

Total group sales decreased by 54% to £4.20m, group gross profits decreased by
53% from £1.77m to £0.84m. Sales of additives, however, grew 100% in 2006. The
fall in total sales was due to the change in strategic direction away from
non-degradable sales and sales in high volume commodity products.

Non-exceptional administrative expenses decreased by 13% to £2.21m in 2006, from
£2.55 in 2005. The change in direction has started to have a positive impact on
costs, primarily staff costs where the move away from high volume commodity
products has allowed the group to operate effectively with fewer support staff.

The operating loss in 2006 increased to £2.34m from £1.25m in 2005.  This
included exceptional costs of £830,000 relating to writing off the debt owed by
our distributor in the Caribbean. (2005: exceptional costs of £0.19m related to
legal cost provisions).

Research and development tax credits totalling £37,334 were received during 2006
and these are included in tax on loss on ordinary activities in the profit and
loss account. Development costs of £64,000 (2005: £nil) were capitalised during
the year. These costs relate to continued work carried out in developing new and
improved formulations of our d2w(R) range of additives.

The loss per share increased to 3.62 pence from 2.28 pence.

Approximately £630,000 was raised in the year under review through a share
placing, and a further £254,000 net, by a convertible loan. Net cash outflow
from operating activities was £0.35m (2005: cash outflow £1.55m).


CURRENT TRADING AND OUTLOOK

Encouragingly sales of Symphony's d2w(R) additives doubled during the year, with
many new markets opening up. In South America, for example, legislation is
changing in favour of oxo-biodegradable plastic.

We are seeing a lot more exposure in global television and the press with recent
coverage of d2w(R) on television in Brazil, Argentina, and Portugal, and a front
page article in Tunisia.

The UK has, perhaps surprisingly, been one of our more difficult markets.
However, Symphony's oxo-biodegradable products are back in the Co-op, and other
major UK retailers are beginning to realise the benefits of oxo-biodegradable
and have started to demand oxo-biodegradable products.  Their suppliers around
the world are now contacting us and some are already buying d2w(R).

The market is also beginning to realise the limitations of starch-based
plastics, in particular their high cost and the fact that they emit methane,
which is a potent greenhouse gas. In addition, polylactose acid (PLA) based
products are not compatible with most recycling schemes and concern is growing
that making fuels and plastics from crops is driving up food prices and
destroying rain forests.

In Portugal the country's largest retail group, Sonae, has adopted d2w(R) in all
their carrier bags for their Continente, Mondelo and Mondelo Bonjour supermarket
chains, which are estimated to account for more than 500 million bags per year.
This is significant not in terms of absolute value, but for the breakthrough
which it represents. This builds on the current portfolio which includes
Marriott and Royal Caribbean Cruise Lines, and leading UK supermarkets are now
using d2w(R) finished products or our additive technology.  The world's largest
supermarket, Wal-Mart, is now using d2w(R) in its Argentinian stores after a
major media-launch.  In France and Belgium, products made with d2w(R) are being
sold throughout Europe by Retif; the B-to-B leader in specialised distribution
of retail equipment and supplies.

Further improvements are being made to the growing range of d2w(R) additives,
which could open new product applications. Stretch film using d2w(R) additive is
being supplied on a regular basis to New Zealand.  Trials of agricultural
mulching film and protective sleeves are ongoing.

The group's strategy into 2007 primarily incorporates the sale of high margin
additive products which enable a lower cost base and significantly improved
working capital cycle. After review of the current performance of the Group, the
new strategy has shown a marked improvement in gross profit margins. Since April
2007 significant cost reductions have also been made in areas without causing
detriment to developing business going forward.

The balance sheet was also strengthened in February 2007 with a placing which
netted the group £1,100,000 after associated costs.


MANAGEMENT CHANGES

Matthew Turner joined the main Board on 29 August 2006 and left the Company on
27 April 2007.

We were pleased to report that Michael F. Stephens rejoined the main Board on 13
November 2006 as Technical Director.

Keith Frener left the main Board on 25 September 2006 and now focuses on the
oxo-biodegradable side of the business mainly in the UK, as a Director of
Symphony Environmental Limited.

On 3 April 2007 the Chairman appointed Mr. Michael Stephen, an experienced
Barrister and former Member of Parliament, (no relation to the Technical
Director) to make recommendations for the improvement of operating procedures
and corporate governance within the Company.  These recommendations have been
endorsed by the Board and are being implemented.


STANDARDS

One of the problems experienced by oxo-biodegradable plastic has been European
Standard EN 13432, which unfairly discriminates against oxo-biodegradable
technology.  Matters are now moving in the right direction, as the British
Standards Institute is working on a new standard, which is capable of testing
oxo-biodegradable.  The French BNPP is also working on a draft standard for
oxo-biodegradable plastic in agricultural applications.


WASTE-TO-ENERGY
(Symphony Energy Resources Limited ('SER'))


THERMAL PYROLYSIS

Following Cabinet approval in Sri Lanka we are now preparing the way to draw up
formal contracts. It must be stressed that no contract is yet in place, but is
currently estimated that the programme will commence in the final quarter of
2007 for installation and commissioning of a plant to convert waste plastics to
oil and gas in the second half of 2008.


MICROWAVE PYROLYSIS

SER successfully competed at a national level with 57 other companies for a DTI
grant of £50,000 towards a feasibility study into microwave pyrolysis of waste
tyres, to convert them into useful products.  The second stage of this grant
award scheme takes place in the autumn and we could secure a further substantial
grant toward the design and construction of a commercial scale microwave
pyrolysis plant.

Following our success in the first grant award, we again competed nationally in
a separate award scheme for a research studentship grant to study microwave
processing of waste plastic.  In May this year we were one of only three
companies out of over 100 who were successful, and we were awarded £62,000 in
studentship grants.

Microwave pyrolysis of scrap tyres has been the subject of an intense academic
study programme, and we have now received the report from the lead university
conducting the study.  Further academic work is ongoing to quantify and qualify
the end products of microwave pyrolysis of tyres.


CONCLUSION

During the past twelve months Symphony has been transformed from a commodity
plastics company into an environmental technologies Group, delivering solutions
to some of the world's most pressing environmental problems.

Major changes have taken place, and the Company is now in a much better position
to face the future. We are investing in R&D for both oxo-biodegradable
applications and for waste-to-energy. We are expanding our network of
distributors, we are improving efficiency, and we are evaluating other
technologies where synergies exist.

As indicated earlier, of the 192 countries in the world Symphony is now in more
than 50 and d2w(R) continues to progress. Though 2006 was a tough year for
Symphony we have been encouraged by the progress we have made so far in 2007 and
we look forward to the future with confidence.


Michael Laurier
Chief Executive Officer



CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the year ended 31 December 2006
                                                        Year ended            Year ended
                                                        31 December           31 December 
                                                           2006                  2005

                                                        £'000       £'000     £'000     £'000

Turnover                                                            4,200               9,109

Cost of sales                                                     (3,362)             (7,342)

Gross profit                                                          838               1,767

Distribution costs                                                  (143)               (272)

Administrative expenses - other                       (2,207)               (2,552)
Administrative expenses - exceptional item              (830)                 (191)
Administrative expenses                                           (3,037)             (2,743)

Operating loss                                                    (2,342)             (1,248)

Net interest                                                         (37)               (166)

Loss on ordinary activities before taxation                       (2,379)             (1,414)

Tax on loss on ordinary activities                                     37                  40

Loss for the financial year                                       (2,342)             (1,374)

Basic and diluted loss per share in pence                         (3.62)p             (2.28)p





There were no recognised gains or losses other than the loss for the financial
year.



CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2006


                                                                                   2006              2005
                                                                                  £'000             £'000
Fixed assets
Intangible assets                                                                    70                18
Tangible assets                                                                     222               247
Investments                                                                         531                16

                                                                                    823               281

Current assets
Stocks                                                                              545               304
Debtors                                                                             897             2,773
Cash at bank and in hand                                                            215                 1

                                                                                  1,657             3,078

Creditors: amounts falling due within one year                                  (1,945)           (1,607)

Net current (liabilities)/assets                                                  (288)             1,471

Total assets less current liabilities                                               535             1,752

Creditors: amounts falling due after more than one year                           (509)              (89)

                                                                                     26             1,663

Capital and reserves
Called up share capital                                                             697               634
Share premium account                                                            11,392            10,824
Other reserves                                                                      822               822
Profit and loss account                                                        (12,885)          (10,617)

Shareholders' funds                                                                  26             1,663




CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2006


                                                                                      2006              2005
                                                                                     £'000             £'000

Net cash outflow from operating activities                                           (355)           (1,546)

Returns on investments and servicing of finance
Interest received                                                                        -                 2
Interest paid                                                                         (29)             (157)
Interest element of finance leases and hire purchase                                   (8)              (11)

Net cash outflow from returns on investments and servicing of finance                 (37)             (166)

Taxation                                                                                37                40

Capital expenditure and financial investment
Payments to acquire intangible fixed assets                                           (64)               (6)
Payments to acquire tangible fixed assets                                             (12)              (26)
Receipts from sale of fixed assets                                                       7                44

Net cash outflow from capital expenditure and financial investment                    (69)                12
Cash outflow before financing                                                        (424)           (1,660)

Financing
Issue of equity share capital                                                           63               121
Share premium on issue of equity share capital                                         567             1,718
Share issue expenses                                                                     -              (10)
Proceeds from convertible loan                                                         254                 -
Capital element of finance leases and hire purchase                                   (34)              (61)

Net cash inflow from financing                                                         850             1,768

Increase/(decrease) in cash                                                            426             (108)





NOTES TO THE PRELIMINARY STATEMENT

Preliminary Results for year ended 31 December 2006


1  BASIS OF PREPARATION

The preliminary announcement has been prepared on the basis of accounting
policies consistent with the audited financial statements for the year ended 31
December 2006.


2  LOSS PER SHARE

The calculation of basic loss per share is based on a loss for the year of
£2,342,000 (2005: £1,374,000) divided by the weighted average number of shares
in issue during the year of 64,743,108 (2005: 60,327,090).


3  PUBLICATION OF NON-STATUTORY ACCOUNTS 

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985.


The balance sheet at 31 December 2006 and the profit and loss account for the
year then ended have been extracted from the Group's financial statements upon
which the auditors' opinion is unqualified.

The 2005 financial statements have been filed with the Registrar of Companies,
but the 2006 financial statements are not yet filed.




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