Preliminary Results

Symphony Plastic Technologies PLC
27 April 2006



                       SYMPHONY PLASTIC TECHNOLOGIES PLC


                              PRELIMINARY RESULTS
                      FOR THE YEAR ENDED 31 DECEMBER 2005


Symphony Plastic Technologies plc, the degradable plastics company, today
announces its preliminary results for the year ended 31 December 2005.



HIGHLIGHTS



     •   Turnover up 3% to £9.11m (2004: £8.86m)

     •   Operating loss after exceptional costs of £1.25m (2004: £0.60m)

     •   Gross profits decreased 4% to £1.77m (2004: £1.84m)

     •   Loss per share increased to 2.28 pence from 1.31 pence

     •   Legal case won and no further challenges to Symphony's d2w(R)
         technology

     •   Strategic review completed and implemented.

     •   The Co-op confirms it will be using Symphony's d2w(R) additives in all
         its degradable plastic bags

     •   New orders in the Caribbean in excess of US$3m


Commenting on the results, Nirj Deva, Chairman of Symphony, said:


'This has been a year of several material changes and events. The legal
challenge on our core technology and business was successfully defended with a
substantial cost award in our favour. Raw material prices continued to outpace
our efforts to pass the cost on to our customers and our largest carrier bag
contract came to an end.  However, the new brand has been launched and the
global coverage for d2w(R) continues to expand in terms of customers and
volumes. With substantial reductions in operational costs and a new focus in
selling d2w(R) and higher value technology and products we are confident that
the business is well placed to move forward into profitability.'



For further information, please contact:


Symphony                                           Tel: [phone]
Michael Laurier, CEO

Ian Bristow, FD


Panmure Gordon & Co                                Tel: [phone]
Andrew Godber

Citigate Dewe Rogerson                             Tel: [phone]
Patrick Toyne-Sewell

Ged Brumby



Further information on Symphony Plastic Technologies plc


Symphony develops and supplies environmentally responsible plastic packaging
products and additives, which are distributed primarily to the retail, local
authority and health related sectors. The Group's main technology, d2w(R),
allows plastic to degrade, leaving only water, a minimal amount of carbon
dioxide and trace amounts of non-toxic biomass over a short time period. The d2w
(R) product range now includes additives, carrier bags, refuse sacks, mailing
wrap, stretch film, and packaging films.



Symphony has a diverse customer base in the UK and has successfully established
itself as an international business after signing distribution agreements with
companies in Brazil, Canada & USA, New Zealand, South Africa, the Caribbean,
Saudi Arabia, Colombia and Qatar.  Symphony's products can now be found in more
than 37 countries. Further information on Symphony can be found at
www.symphonyplastics.com and www.degradable.net.


CHIEF EXECUTIVE'S REVIEW



The year under review was probably the most significant in the Company's
history, being marked, amongst other events, by three noteworthy developments: a
review of the Company's activities and strategic direction; the successful
conclusion of the long-running and disruptive legal case; and a significant move
in sentiment towards greater environmental responsibility.



Review of activities

During the year the Board undertook a fundamental and thorough review of all the
Group's activities and has adopted what we are confident will prove to be an
effective new corporate strategy to take advantage of the changed circumstances
of the business and opportunities within our market place.



Successful conclusion of legal case

During the period the Group also successfully concluded the long period of legal
challenge against our core technology, brand and business by Environmental
Products Inc (EPI).  Symphony was awarded its full Appeal costs and, in
addition, an interim award of £600,000 was ordered for immediate settlement from
funds previously lodged by EPI with the Court as security for Symphony's costs.
Although the legal process was disruptive and costly, the end result is
extremely positive as it successfully moves Symphony from being a company
reliant on a limited and restricted licence to one which owns and can develop
its own intellectual property and brand.



Environmental responsibility

There were also clear signs of a step change in activity surrounding
environmentally responsible plastics: from a significant increase in Government
action in many countries to the emergence of more technologies and companies
competing in this field, and a far greater awareness and interest from
retailers, manufacturers and other businesses around the world.



New strategy

Consequently, since the start of 2006 the Board has pursued a new strategic
direction for the Group with a focus on developing sales of the Group's
technology through the sale of higher margin additives rather than trying to
compete for the sale of high volume, low price, commodity finished products.
Having redefined the Group's focus we have reorganised and restructured our
operations, which has involved cost reductions and staff reorganisation as well
as a review of our logistics and warehousing needs.  The changes implemented
will lead to significant improvement in operating margins as we start to achieve
a fundamental change towards being driven by margin instead of sales.



The benefits to sales from these changes will not be instantly effective but the
initial response from prospective customers to our changed strategy has been
very positive indeed; for example Co-operative Retail, the first major
supermarket in the UK to use degradable technology, has confirmed that it is
switching to using our additive and d2w(R) brand on all their degradable plastic
bags from a rival product.



Symphony's d2w(R) brand and trade mark remains by far the best established and
most widely recognised world-wide symbol for plastics degradability and this is
key  in our current and future marketing strategy.  Our international
distribution network continues to grow;  our additives and d2w(R) brand can now
be found in more than 37 countries.  Our current priority, however, is to build
sales rapidly through our existing network of distributors before further
expanding our global coverage.  Historically, we have disclosed the location or
identity of important prospects or opportunities before sales were achieved but
believe that now it is more prudent to withhold such commercially sensitive
disclosure until actual sales or higher volumes have been established.



Our North American business activities are getting back on track having been
delayed throughout the period under review by potential customer and investor
concerns over the legal challenge the Group was facing.  I am very pleased to
report we are now aggressively pursuing the business opportunity in what is one
of the world's largest markets. New sales of finished products were established
in the year under review.



Many Governments are taking more active steps towards dealing with the problems
of waste and litter.  Whilst there are too many to warrant inclusion in this
review, it is useful to note, as an example, the decision of the French
Government to require all plastic carrier bags to be bio-degradable by 2010.  It
is clearly important for Symphony to continue to take a very proactive part in
influencing decision makers in this area, despite the cost in cash and
management time and despite the absence of any immediate return for that
investment.



Financial review

Total group sales increased by 3% to £9.11m. Group gross profits decreased by 4%
from £1.84m to £1.77m. The Group completed the Somerfield contract in November
2005 which brought to an end a satisfactory three year contract. The turnover to
Somerfield in 2005 was £4.60m. During 2005 costs were increased, primarily staff
related, to augment activities relating to the Somerfield contract and
furthering commodity product sales in the UK. The other factors affecting Group
profits during this period were oil prices, currency exchange rates and polymer
raw material prices.



The operating loss in 2005 increased to £1.25m from £0.60m in 2004.



Included in the operating loss are exceptional legal costs of £191,000 relating
to the EPI case. Although the director's are confident that a significant amount
of this is recoverable and indeed £270,000 is held in Court, the complicated
process of recovery has led to this provision. Since the year end £600,000 has
been awarded and received as an interim settlement. The gross legal costs of the
case and subsequent appeal were in excess of £1.15m.



Research and development tax credits totalling £40,000 were received during 2005
and these are included in tax on loss on ordinary activities in the profit and
loss account.



The loss per share increased to 2.28 pence from 1.31 pence.



We raised approximately £1.8 million in the year under review through share
placings which was used to support cost for the EPI legal challenge, working
capital, new projects, staff and re-branding.



I am pleased to report that our North American distributor recently paid
US$100,000 as a commitment fee, and has confirmed, subject to market conditions,
to make a further payment of US$550,000 before the end of this financial year
for the exclusive distribution licence in North America.



We have continued to support the development of the Caribbean markets through
our exclusive distributor in the region. The investment made to date has been
through product supply credit to the value of around £800,000 and is partly
secured by assets under debenture in the Group's favour. We anticipate that the
operations in the territory will require less financial commitment from the
Group going forward as the new orders received are cash positive.



Outlook

The d2w(R) brand appears as a droplet style logo and is developing into a
recognised symbol for Symphony's oxo-biodegradable plastic technology in an
expanding range of applications. Market awareness is growing as a result of many
new interlinked websites and sales and marketing activities.  These connecting
sites that are managed through our global distribution network can be found at
www.degradable. net.



The re-branding program is now complete and a new range of retail products are
available for marketing and distribution. Work continues on product development,
testing and lobbying for changes to legislation. We are also continuing our
efforts to make changes to the European Standards as these are essential before
the French legislation comes into effect in 2010.



As the new strategy and business model develops we believe that cash-flow will
strengthen as our need to hold stocks and large debtors diminishes. Sales
turnover for this year is expected to be lower but operating margins
significantly higher. Costs have now reduced as we have a smaller supply chain
requirement and our main sales drive is led by independent external
distributors.



The North American business has got off to a good start with new orders and
commitments for d2w(R) additives and products. Furthermore, a substantial number
of product trials are on-going for a range of new applications.



The Caribbean business is increasing with confirmed orders for the territory
exceeding US$3 million. We are currently waiting for final approval in the
region for bank facilities to fund these orders.



With a larger distribution network, strong brand, lower cost and a developing
global need to resolve the issues of plastic pollution we believe that 2006 will
mark the year of positive change and substantial improvement in operating
performance.



CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the year ended 31 December 2005
                                                        Year ended            Year ended
                                                     31 December 2005      31 December 2004
                                                        £'000       £'000     £'000     £'000

Turnover                                                            9,109               8,855

Cost of sales                                                     (7,342)             (7,013)

Gross profit                                                        1,767               1,842

Distribution costs                                                  (272)               (283)

Administrative expenses - other                       (2,552)               (2,054)
Administrative expenses - exceptional item              (191)                 (100)
Administrative expenses                                           (2,743)             (2,154)

Operating loss                                                    (1,248)               (595)

Net interest                                                        (166)               (132)

Loss on ordinary activities before taxation                       (1,414)               (727)

Tax on loss on ordinary activities                                     40                 105

Loss for the financial year transferred from                      (1,374)               (622)
reserves

Basic and diluted loss per share in pence                         (2.28)p             (1.31)p



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



CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2005


                                                                                   2005              2004
                                                                                  £'000             £'000
Fixed assets
Intangible assets                                                                    18                15
Tangible assets                                                                     247               203
Investments                                                                          16                16

                                                                                    281               234

Current assets
Stocks                                                                              304               380
Debtors                                                                           2,773             3,397
Cash at bank and in hand                                                              1                 1

                                                                                  3,078             3,778

Creditors: amounts falling due within one year                                  (1,607)           (2,763)

Net current assets                                                                1,471             1,015

Total assets less current liabilities                                             1,752             1,249

Creditors: amounts falling due after more than one year                            (89)              (41)

                                                                                  1,663             1,208

Capital and reserves
Called up share capital                                                             634               513
Share premium account                                                            10,824             9,116
Other reserves                                                                      822               822
Profit and loss account                                                        (10,617)           (9,243)

Shareholders' funds                                                               1,663             1,208


CONSOLIDATED CASH FLOW STATEMENT


For the year ended 31 December 2005
                                                                                      2005              2004
                                                                                     £'000             £'000
Net cash outflow from operating activities                                         (1,546)           (1,049)

Returns on investments and servicing of finance
Interest received                                                                        2                 -
Interest paid                                                                        (157)             (128)
Interest element of finance leases and hire purchase                                  (11)               (5)

Net cash outflow from returns on investments and servicing of finance                (166)             (133)

Taxation                                                                                40               105

Capital expenditure and financial investment
Payments to acquire intangible fixed assets                                            (6)              (15)
Payments to acquire tangible fixed assets                                             (26)               (8)
Receipts from sale of fixed assets                                                      44                 4

Net cash outflow from capital expenditure and financial investment                      12              (19)
Cash outflow before financing                                                      (1,660)           (1,096)

Financing
Issue of equity share capital                                                          121                60
Share premium on issue of equity share capital                                       1,718               565
Share issue expenses                                                                  (10)              (42)
Capital element of finance leases and hire purchase                                   (61)              (22)

Net cash inflow from financing                                                       1,768               561

(Decrease)/increase in cash                                                          (108)             (535)



NOTES TO THE PRELIMINARY STATEMENT


Preliminary Results for year ended 31 December 2005



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 2005.



2     LOSS PER SHARE

      The calculation of basic loss per share is based on a loss for the year of
      £1,374,000 (2004: £622,000) divided by the weighted average number of 
      shares in issue during the year of 60,327,090 (2004: 47,526,432).



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 2005 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 2004 financial statements have been filed with the Registrar of 
      Companies, but the 2005 financial statements are not yet filed.








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