Voller Energy Group PLC a leader in portable fuel cell systems and one of the first companies in the world with deliverable technology, announces its preliminary results for the year ended 30 June, 2007.

Highlights
Announces today:

Maiden order from GenQuip for twenty 1kW fuel cell systems to be installed in welfare cabins
Unipart Leisure and Marine appointed as fuel cell distributor

    * Remain on track for commercialisation of systems
    * Prototype systems installed in Cabin, RV and Yacht and trials underway
    * Strong cash balance of £4.73m

Stephen Voller, Chief Executive Officer, commented:

“Our progress to date has been very encouraging. Voller continues to lead the way in developing fuel cell generators running from alternative fuels.  We are one of the first fuel cell companies worldwide to have products ready for commercialisation and first to have fuel cell systems running from LPG.  We are delighted to have received our first order for our APU system called “Emerald” which will roll off our new production line in Basingstoke, United Kingdom in early 2008. We are cautiously optimistic for the year ahead."

Chairman’s Statement

I am pleased to report that considerable progress has been achieved in many areas of the business during the year ended 30 June 2007. The Group has developed its fuel cell technology into a number of working prototype units, which have been installed into each of the targeted market applications.

There have been a number of significant developments during the year regarding the continuing development of the 1kW fuel cell system. In April 2006, we announced a series of milestones leading to the commercial availability of our fuel cell auxiliary power units (APUs) by the end of 2007.  As the year has progressed, we have been able to confirm that each of the milestones has been achieved and that the Group remains on track for commercial delivery.

The APU system that we have developed is based on hydrogen reforming technology, which enables fuel cells to run on hydrocarbon fuels such as Calor Gas, propane or liquefied petroleum gas (LPG).  These fuels are widely available, an attribute which makes our units very attractive to our key target markets of construction and leisure. 

During the year we have installed prototype units into our chosen market segments of yachting, welfare cabins and recreational vehicles (RVs) or motorhomes. In each of these markets standard diesel generators are commonly used, which are both noisy and produce high levels of emissions. Emissions from our fuel cell unit are much lower than with a conventional generator.

In March of this year we announced that the first prototype APU would be installed on a Beneteau Oceanis Clipper 411 yacht, followed in May by the installation of a prototype unit into a construction site cabin. The installation was in a mobile Groundhog 360 welfare cabin manufactured by GenQuip Plc. This cabin can be towed to the site and provides hand washing facilities, a kitchen area, a drying room and a rest area. The installed unit was on show at the Site Equipment Demonstration (SED) Show in Kettering (UK).  In June we confirmed the installation of the third unit into a recreational vehicle produced by MCL Motor Homes. Each of these industry applications represents a significant opportunity for the Voller Energy Fuel Cell System.

The progress that the Group has made during the year is testament to the extensive expertise that Voller has developed in the design and integration of fuel cell systems and the Company’s intellectual property (IP) and know-how has been enhanced as a consequence. Voller is one of the few organisations that have successfully integrated these technologies into a commercially viable product which reaffirms the strength of our in house expertise.

The fuel cell consists of a number of complex inter dependant sub systems that are integrated into a seamless product. The design goal is that the user attaches their LPG canister and clean, quiet power is produced. The user does not need to be aware of complexities inside the system.

Financial Overview

The financial performance of the Group for the year was in line with our expectations.

Administrative expenses incurred amounted to £2.515m in comparison to the previous year of £2.092m reflecting the impact of increased development expenditure as the Company focused on the 1kW APU system.

Capital expenditure of £0.12m (2006: £0.09m) was in line with the amounts incurred in the previous year. At the end of the year the company held cash at bank of £4.73m (2006: £6.78m).

People

During the course of the year we have continued to strengthen our employee base, both in the development and sales and marketing area. Recruitment of specialist employees in the sales and marketing field has enabled the Company to significantly increase its knowledge of market applications and customer requirements. 

Dr Robin Francis joined the Board on 24 November 2006 as Chief Technology Officer.  Robin is an expert in solid-state chemistry and brings to Voller a wealth of chemical and technological experience. 

Each one of our employees is a valued member of the team and I would like to thank all of them for the continuing contribution they are making to the development of the business.

Outlook

The continuing importance of alternative and renewable energy is highlighted by the UK Government on a regular basis. Voller has developed and demonstrated a fuel cell power unit that addresses these issues.

We are delighted to announce that we have secured our first order for the 1kW APU to be supplied to the construction market. This is the first confirmation of our ability to successfully address our key target markets and we are confident that the Company will build on this success in the future.

John Brown

Chairman

14 September 2007

Chief Executive’s Review

Growth and Opportunity

When Sir Oliver Stern issued his report to HM Treasury last year on the Economics of Climate Change, he noted three areas of importance:

1.      Global warming is a serious problem that mankind must address;

2.      No one technology will provide a solution – wind, solar, wave, fuel cells will all play their part; and

3.      Together these technologies will represent a market of $500bn annually by 2050.

Awareness of the climate change has increased enormously since the Stern Review. This culminated in July 2007 with the Live Earth concerts across all seven continents with a worldwide television audience of more than 2 billion people. Today awareness of green issues has never been greater.

Since the Group’s admission to the AIM Market of the London Stock Exchange in 2005, we have embarked on a programme of developing fuel cell technology that operates from commercially available fuels.

Fuel cell technology offers key advantages over conventional generators in many fields of application where self-contained power supply is indispensable. Fuel cells run more quietly, cause less vibration, consume less fuel, emit fewer pollutants and need to be serviced less often.

To date, our products work on gas fuels such as LPG, but we believe that there are opportunities beyond gas fuels and intend to add products in the future based on liquid fuels such as diesel or bio-diesel.

Operating Review

I am pleased to report on the progress that we have made over the last twelve months.  In April 2006, the Group set out the technology milestones that would pave the way for the commercial availability of our fuel cell systems.  During this year we have confirmed that each of these milestones has been met to plan. 

In November 2006 we achieved the successful integration of a complete fuel cell processor and 1kW fuel cell system ahead of our anticipated schedule.
 
In March 2007 Voller engineers successfully assembled and demonstrated the operation of a complete and totally self-contained prototype fuel cell system including a proprietary fully automated control and safety system, gas reformate clean-up and cooling.   

We announced on 26 March 2007 that the first installation of our APU system would be on a Beneteau Oceanis Clipper 411 yacht. 

On 11 June 2007 we confirmed the successful installation of a prototype 1kW fuel cell system in each of our three target markets; construction site cabin, sailing yacht and recreational vehicle.  The fuel cell systems, have been installed in different platforms; a Beneteau Oceanis Clipper 411 sailing cruiser, a GenQuip Groundhog mobile welfare cabin and a recreational vehicle (RV) produced by MCL motor homes. 

Voller is initially targeting commercially attractive areas which are likely to be early adopters of the technology since the benefits of using fuels cells - such as low noise, no toxic emissions and health and safety issues - are important drivers. We believe that each of these industry applications represents a significant market opportunity for the Group.

In the sailing sector, modern yachts are using an ever increasing amount of electrical equipment, including autopilots, instrument systems, refrigeration and lighting, which are a constant drain on yachts power. Other equipment such as electrical winches and computers are also becoming far more common, so we believe that Voller’s Emerald product has the potential to be the preferred source of power for yacht owners. The Group is developing a 'fit and forget' power unit that can supply the power load and keep batteries charged automatically; Voller Energy's reformer technology can be easily integrated into a yacht’s electrical systems to work from the yacht’s existing diesel or liquefied petroleum gas (LPG) or propane supplies.

Since the year end, the Voller Energy Emerald sailing yacht was moored at the RHP Marine pontoon, West Cowes for the duration of Skandia Cowes Week, welcoming on board guests throughout the eight days of racing.

On 7 July 2007, Voller supplied the organisers of ‘Live Earth’ four of its “ABC” fuel cells for use at the event.  The Voller ABC units provide mains power output, but the only emissions are pure water.

Maiden Order

We are delighted to have received our first order from the construction sector.  GenQuip Plc, the UK largest supplier of welfare cabins, has ordered 20 Emerald systems to be installed into its mobile groundhog 360 welfare cabins.   Voller will work closely with GenQuip on the installation of the system.

There are an estimated 20,000 welfare cabins in use in the UK and these are normally fitted with a diesel generator. Our trial cabin that has been fitted with our fuel cell system is quieter and does not experience the vibration associated with conventional generators.  The emissions are much lower and the cabins require considerably less maintenance.

The units will be produced at the Company’s manufacturing facility in Basingstoke, United Kingdom and delivery to GenQuip is expected in early 2008. 

Prospects

“Our progress to date has been very encouraging.  Voller continues to lead the way in developing fuel cell generators running from alternative fuels.  We are one of the first fuel cell companies worldwide to have products ready for commercialisation and first to have fuel cell systems running from LPG.  We are delighted to have received our first order for our APU system called “Emerald” which will roll off our new production line in Basingstoke, United Kingdom in early 2008. We are cautiously optimistic for the year ahead.”

Stephen Voller

Chief Executive

14 September 2007