Re Contract

TEG Group (The) PLC
03 July 2007



For release                          7:00 am                         3 July 2007







                            The TEG GROUP PLC (TEG)

                            ('TEG' or 'the Company')





                           New Plant Order Received.



            Delay to Greater Manchester Waste PFI Financial Closure.







The TEG Group PLC ('TEG' or 'the Company') has been advised that financial close
for the Greater Manchester Waste PFI contract is to be delayed from June until
September 2007.  The Company confirms it expects a corresponding delay in the
conclusion of its contracts with its customer Costain Limited, the company
retained by the Viridor/Laing consortium to manage the construction projects for
the Greater Manchester Waste PFI contract.  Along with all the construction
projects, TEG's contracts will be executed simultaneously with financial close
and TEG therefore expects to enter into its contracts in September.



TEG anticipates that the delay will have a consequential impact on construction
programmes and it is therefore likely that construction programmes will be
delayed by a corresponding period.   TEG still expects the overall contract
value to be approximately £35m and does not anticipate any change to its scope
of supply.  TEG still anticipates its first revenues from the Greater Manchester
contracts in 2007 but under IFRS accounting standards it is unlikely that the
construction programmes will be sufficiently advanced for TEG to be able to
recognise profits against the revenues in its year ending 31 December 2007
accounts.



The Company is also pleased to announce that it is to receive an order from a
new customer to build a facility in 2007.  Details of the order are to be
announced in due course.



Commenting for TEG, Chief Executive Mick Fishwick said 'While the delay in
reaching Financial Close is of course disappointing for all involved in the PFI
project, the complexity of such contracts, coupled with the large number of
companies involved, does often lead to delays.  We are very pleased that design
and contract work is progressing well and we expect that once financial close
has taken place we will go straight into the construction phase for the first
facility.



'We are delighted to secure a further order for a TEG plant and the construction
programme dovetails in well with the delay with the Greater Manchester project.



'In a developing business such as ours, phasing issues are to be expected but I
am pleased to say we remain in a strong position for the future and as our
revenue streams grow, such phasing issues will have an ever reducing impact on
results.  The Company's pipeline of BOO and Plant Sale projects remains very
strong, as evidenced by yet another order, and whilst the PFI delay is
frustrating we remain very confident of the Company's growth prospects going
forward'.





ENDS



Contact:



The TEG Group Plc                                          Tel: [phone]

Michael Fishwick, Chief Executive



Adventis Financial PR                                     Tel: [phone]

Tarquin Edwards                                                07879 458 364



Cannacord Adams (Nomad)                                  Tel : [phone]

Chris Bowman









Editor's Notes:



TEG provides an in-vessel composting technology, which is one of the few
approved technologies capable of treating animal by-product (ABP) waste.  Plant
economics are predominantly driven by the gate fees charged, rather than the
value of the end product (compost).  The TEG process is an economic alternative
to landfill.



The Silo Cage system, one of the few technologies in Europe capable of treating
this waste, is a natural process producing compost as an end product, used as an
excellent soil conditioner that fertilises, retains moisture, provides structure
and reduces the incidence of plant disease.  TEG's Silo-Cages are housed in
self-contained buildings, are not unsightly and are environmentally friendly.



Customers include local authorities, waste management companies, food
processors, farmers and landowners.  The Company's expanding market is driven by
increasingly stringent EU and UK legislation regulating the treatment and
disposal of organic waste.  Statutory targets for the diversion of waste from
landfill increase annually through to 2020, increasing TEG's market opportunity
year on year.  The Waste Resource Action Programme estimates that 450 composting
plants will be needed by 2020 to satisfy local authority requirements alone, and
there is increasing demand from the private sector driven by ABP legislation.



NOFCO is a marketing company specialising in the development of end markets for
compost products, an important aspect of all plant developments and key to local
authority development.  The company has an expertise in the development of
agricultural and horticultural markets and this capability is to be provided to
customers to enhance TEG's overall service offering.




                      This information is provided by RNS
            The company news service from the London Stock Exchange