Interim Results

Flomerics Group PLC
07 August 2006

7 August 2006

                              Flomerics Group plc
                   ("Flomerics" or "the Company")  (AIM: FLO)

Flomerics Group plc, the global supplier of simulation software to the
engineering and electronics industries, today announces its results for the six
months ended 30 June 2006.

  • Turnover £5.7 million (2005: £5.3 million)
  • Adjusted Profit Before Tax £238,000 following an exceptional item and
    increased investment in sales (2005: £380,000)
  • Strong cash position £4.0 million (2005: £3.5 million)
  • US sales up 29% and Asia Pacific sales up 16% (excluding MicReD and at
    constant rates of exchange)
  • Electronics thermal line of business sales up 10%
  • Sales and operational staff numbers strengthened globally
  • Post results - NIKA acquisition 6 July 2006: established European and
    Russian based supplier of fluid flow simulation tools


Commenting on the results, Gary Carter, CEO of Flomerics plc, said: "During the
first half of this year we have achieved sales of £5.7m and seen an extremely
promising performance from our product lines in both the US and Asia Pacific.
Profit is down on 2005 but this is due in part to costs relating to the
strengthening of our sales operations and Flomerics is now in an extremely
strong position to drive the business forward into new markets for our
electromagnetic, thermal and recently acquired product lines."



                               www.flomerics.com
Flomerics Group                                                [phone]
Gary Carter, Chief Executive
Chris Ogle, Finance Director & Company Secretary
Conduit PR                                                     [phone]
Laurence Read / Angus Prentice                                 [phone]




Chairman's Statement

Introduction

Flomerics has made a good start to the year with sales reaching £5.7 million and
strong performances in the US and Asia Pacific.  We have also made an adjusted
profit for the period of £238,000, which was subject to a 13% increase in
administrative costs mainly due to key recruitment.  While our European
operations saw a decline, due in part to relatively flat economic conditions in
the region, our integration of Nika GmbH, acquired in July 2006, brings
considerable extra resources in the region as well as exposure to significant
new markets around the world.

Results

Turnover was £5.7 million (2005: £5.3 million) achieving growth of 8%.

Profit before taxation, amortisation of goodwill and share-based payment was
£238,000.  While this is down on the 2005 figure of £380,000 the period saw
administrative costs increase by 13% on a like-for-like basis, including an
exceptional charge of £58,000.

Our cash balance continues to be strong with £4.0 million at 30 June 2006,
compared with £3.5 million a year earlier.

In order to compare like-with-like, the comparisons made below with the same
period last year are all at constant rates of exchange.  Similarly, the figures
for the regions exclude the contribution from MicReD, which was acquired in
April 2005.

The US had very strong growth (29% with strong contributions from both the
thermal and electromagnetic).  Asia Pacific also performed well (up 16%) with
particularly strong performances from our thermal products in China and Japan.
In contrast European sales were down 13% partly attributable to the relatively
flat economy in the region's markets.  A key objective for Flomerics during the
next 12 months is to increase sales productivity in Europe. This will partly be
achieved through pursuing synergies between our existing and acquired
businesses.

Looking at sales by product, our electronics thermal line of business grew by
10% (2005: 16%), FLOVENT by 6% (2005: 14%) and the electromagnetics line of
business by 4% (2005: 8%).  In order to drive our electromagnetics products more
aggressively, we have recently hired an experienced sales professional with a
background in EM software to take complete responsibility for this line of
business.  In addition, and in order to improve profitability in this area, we
have committed to moving FLO/EMC and Microstripes to a common development
platform.

MicReD contributed £128,000 to first half turnover (2005: £264,000).  We are
delighted with the performance in the US, where we achieved the first sales of
T3Ster to open up this very significant market. There was some slippage of
MicReD sales in Europe and Asia Pacific, but there continue to be good prospects
in both regions

NIKA

In June we announced the proposed acquisition of NIKA GmbH, which was completed
on 6 July 2006.  NIKA develop and sell a suite of software tools for the
simulation of fluid flow that are tightly integrated with leading Mechanical
Computer-Aided Design (MCAD) tools.  The NIKA organisation is headquartered in
Germany, and has other operations in France and Russia, with all software
development taking place in Moscow.  Over the coming months we will be working
to integrate the organisations and take full and rapid advantage of the
significant opportunities facing the new combined group.  In particular we will
be investing in sales organisations in the US and in the UK where NIKA has had
minimal presence up to now.

Dividend

Having carefully considered the dividend policy, the board has decided that it
is appropriate for the Company to continue to pay only a final dividend.
Therefore, as in previous years, we will not be paying an interim dividend.

Outlook

Flomerics' strategy has been to continue to maximise the sales opportunities
associated with the growth in the electronics industries through our market
leading products and our global presence.  At the same time we have been looking
to widen the range of applications and markets we address which we have been
able to do by the 2005 acquisition of MicReD and now the addition of the NIKA
business to the Flomerics organisation.  We see the latter as bringing a
transformation in the growth of the business over the next few years.

The directors believe that investment in sales and the recent acquisitions have
created increasing momentum in the business.  There is now a strong platform for
growth and there are good prospects for the remainder of this year and beyond.


CONSOLIDATED PROFIT AND LOSS ACCOUNT
Interim results for the six months to 30 June 2006
                                                               30 Jun 06      30 Jun 05*    31 Dec 05*
                                                             (Unaudited)     (Unaudited)     (Audited)
                                                                   £'000           £'000         £'000

Turnover                                                           5,677           5,256        11,424

Cost of sales                                                      (159)           (238)         (291)

Gross Profit                                                       5,518           5,018        11,133

Administrative expenses                                          (5,367)         (4,752)      (10,197)

Amortisation of goodwill                                            (98)            (59)         (158)

Other Operating Income                                                30              35            66

Operating Profit                                                      83             242           844

Interest receivable and other income                                  54              72            92

Interest payable and similar charges                                (46)            (19)          (36)

Profit on Ordinary Activities Before Taxation                         91             295           900

Tax on profit on ordinary activities                                (18)            (66)          (37)

Profit on Ordinary Activities After Taxation                          73             229           863


Earnings per share                                                  0.49            1.55          5.83

Diluted earnings per share                                          0.46            1.49          5.59

* As restated - see Note 7.




STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                                                                            30 Jun 06    30 Jun 05* 31 Dec 05*
                                                                          (Unaudited)   (Unaudited)  (Audited)
                                                                                £'000         £'000      £'000

Profit for the Period                                                              73           229        863

Unrealised (loss) / gain on translation of foreign currency investments          (23)            31        124

Total Recognised gain                                                              50           260        987

* As restated - see Note 7.





CONSOLIDATED BALANCE SHEET                                                  30 Jun 06    30 Jun 05* 31 Dec 05*
At 30 June 2006                                                           (Unaudited)   (Unaudited)  (Audited)
                                                                                £'000         £'000      £'000
Fixed Assets
Intangible assets                                                               1,255         1,448      1,353
Tangible assets                                                                 1,754         1,756      1,726
                                                                                3,009         3,204      3,079

Current Assets
Stock                                                                              51            10         59
Debtors                                                                         3,671         3,338      3,953
Cash at bank and in hand                                                        3,976         3,504      4,081
                                                                                7,698         6,852      8,093


Creditors: amounts falling due within
one year                                                                      (3,842)       (3,582)    (4,386)

Net Current Assets                                                              3,856         3,270      3,707

Total Assets Less Current Liabilities                                           6,865         6,474      6,786

Creditors: amounts falling due after
one year                                                                        (350)         (617)      (377)

Net Assets                                                                      6,515         5,857      6,409

Capital and Reserves
Called up share capital                                                           150           148        148
Shares to be issued account                                                       108           249         33
Share premium account                                                           1,727         1,734      1,602
Merger reserve                                                                    892           759        892
Profit and loss account                                                         3,638         2,967      3,734

Equity Shareholders' Funds                                                      6,515         5,857      6,409

* As restated - see Note 7.


CONSOLIDATED CASH FLOW STATEMENT                                            30 Jun 06    30 Jun 05* 31 Dec 05*
for the six months to 30 June 2006                                        (Unaudited)   (Unaudited)  (Audited)
                                                                                £'000         £'000      £'000
Operating Activities
Operating profit                                                                   83           242        844
Depreciation and amortisation charges                                             264           211        492
Gains on disposal of fixed assets                                                   -             -        (1)
Exchange differences                                                             (23)            22        113
Share based payment                                                                49            26         66
Increase in stock                                                                   8            43        (6)
Decrease in debtors                                                               282           584         53
(Decrease) / increase  in creditors                                             (323)         (170)        283
Net Cash Inflow From Operating Activities                                         340           958      1,844


Net cashflow from returns on investments and servicing
of finance                                                                          8            53         56
Taxation paid                                                                    (30)          (23)      (126)
Net cashflow from capital expenditure                                           (194)         (247)      (376)
Net cash paid for acquisition                                                       -         (360)      (405)
Equity Dividend paid                                                            (195)         (161)      (161)
Net Cashflow Before Financing                                                    (71)           220        832

Net Cashflow From Financing                                                      (34)          (30)       (65)


(Decrease) / increase in Cash in the Period                                     (105)           190        767

* As restated - see Note 7.




RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
                                                                            30-Jun-06   30/06/2005*  31-Dec-05
                                                                          (Unaudited)   (Unaudited)  (Audited)
                                                                                £'000         £'000      £'000
(Decrease) / increase in Cash in the Period                                     (105)           190        767

Cash outflow from decrease in debt and lease financing                             34            30         65

Movement in Net Funds in the Period                                              (71)           220        832

Net Funds at Beginning of Period                                                3,637         2,805      2,805

Net Funds at End of Period                                                      3,566         3,025      3,637

* As restated - see Note 7.


NOTES TO THE INTERIM REPORT

1.      ACCOUNTING  POLICIES

The financial information contained in this Interim Report does not constitute
statutory accounts. The interim results, which have not been audited, have been
prepared using accounting policies consistent with those used in the preparation
of the Annual Report and Accounts for the year ended 31 December 2005 with one
exception: in accordance with FRS 20, 'Share based payments', the group has now
recognised the cost of share based payments in these financial statements.

The accounts for the year ended 31 December 2005 have been filed with the
Registrar of Companies and received an unqualified audit report.

2.      TAXATION

Taxation for the six months to 30 June 2006 is based on the effective rate of
taxation that is estimated to apply to the year ending 31 December 2006.

3.      EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit on ordinary
activities after taxation in the period by the weighted average number of shares
in issue in the period as follows:
                                                Unaudited            Unaudited                   Audited
                                           6 months ended       6 months ended           12 months ended
                                             30 June 2006       30 June 2005 *        31 December 2005 *

Profit for the period (£'000)                          73                  229                       863
Weighted average number of shares in
issue ('000)                                       14,932               14,717                    14,783
                                                   
Earnings per share (p)                               0.49                 1.55                      5.83
Diluted weighted average number of
shares ('000)                                      15,714               15,356                    15,439
                                                   
Diluted earnings per share (p)                       0.46                 1.49                      5.59


The diluted earnings per share calculation is based on a fair value of 99p per
share (30 June 2005: 68p).


* As restated - see Note 7.


4.      SEGMENTAL INFORMATION

The group's turnover for each geographic area of operation is:

                                                              30 Jun 06          30 Jun 05         31 Dec 05
                                                                  £'000              £'000             £'000

United States of America                                          2,796              2,032             4,609
Europe                                                            1,730              2,062             4,438
Asia Pacific                                                      1,151              1,162             2,377
                                                                  5,677              5,256            11,424

Segmental information on profit before tax and net assets is disclosed in the
Annual Report.

5.      ANALYSIS OF NET FUNDS
                                                              30 Jun 06          30 Jun 05         31 Dec 05
                                                                  £'000              £'000             £'000

Cash in hand and at bank                                          3,976              3,504             4,081
Debt due after one year                                           (343)              (416)             (377)
Debt due within one year                                           (67)               (63)              (67)

Total                                                             3,566              3,025             3,637


Debt represents a mortgage that was taken out on a property acquired in 2001.

6.      RESERVES
                                                                        
                                         Shares        Share                   Profit
                               Share      to be      Premium      Merger     and loss   
                             Capital     issued      Account     reserve      account   30 Jun 06 31 Dec 05*           
                               £'000      £'000        £'000       £'000        £'000       £'000     £'000

Issue of new shares                2       (33)          125           -            -          94       135
Profit for the year                -          -            -           -           73          73       863
Dividend paid                      -          -            -           -        (195)       (195)     (161)
Currency translation
movement                           -          -            -           -         (23)        (23)       124
Acquistion of MicReD               -        108            -           -            -         108        33
Share based payment                -          -            -           -           49          49        66
Net addition to
shareholders funds                 2         75          125           -         (96)         106     1,060
                                   
Opening shareholders funds       148         33        1,602         892        3,734       6,409     5,349
                                 
Closing shareholders funds       150        108        1,727         892        3,638       6,515     6,409

                              

* As restated - see Note 7.


7.      PRIOR YEAR ADJUSTMENT

Share based payments

In order to conform with the requirements of FRS 20, 'Share Based Payments',
share options that have been granted to employees have been recognised as an
expense as part of employee remuneration. The cost is spread over the vesting
period and has been calculated using a Black-Scholes valuation model.

The effect on the comparatives of this change in accounting policy is that
administrative expenses have increased by £26,000 for the six months to 30th
June 2005 and by £66,000 for the year to 31 December 2005. In the six months
ended 30th June 2006 the charge was £49,000.

Dividends paid

In order to conform with the requirements of FRS 21' Events after the Balance
Sheet Date', dividends have been restated and are recorded in the profit and
loss account in the period that they have been declared.

The effect of this change in accounting policy on the comparatives is that
dividends have increased by £161,000 for the six months to 30 June 2005.


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