Eco Chemical Enterprises plc - Final results for the year ended 31 March 2007

21 Jun 2007

Overview

Although the company has not had any sales during the year, the company has successfully listed on PLUS and has acquired Perachem Limited, a speciality chemical development company which is a "spin out" from Leeds University.

Chairman's statement

Since our successful listing on PLUS, the company has been looking to acquire an emergent technology company which has patented (or patentable), commercially exploitable intellectual property.

In January, we completed the acquisition of Perachem Limited a private company which has developed and continues to develop unique and environmentally advantageous  chemical treatments for textiles, personal care industries and paper manufacturing. At the same time as the acquisition, the company raised £250,000 through a private placing on the same terms.

Financial review

During the year, the cost of seeking admission to PLUS has been written off through the Profit and Loss account. In addition, there is continued research expenditure which has resulted in a loss on ordinary activities before taxation of  £233,403. The group has a healthy cash position with cash at bank of £423,146  at 31st March 2007.

Post balance sheet events

We are pleased to confirm the encouraging trial results and anticipated subsequent launch of the Perachem FR product. Perachem FR is a novel wash durable flame retardant treatment for cellulose and wool based substrates. The overall worldwide annual market for all flame retardants is estimated at $3.3 billion. The product uses chemical formulations with significant health and safety advantages over existing treatments. There are zero formaldehyde emissions in manufacture or use of the product, which also contains no  antimony or bromine derivatives. Formaldehyde is classed by the International Agency for  Research on Cancer as a Class 1 (proven  human) carcinogen. In the UK, the legal workplace exposure limit (WEL) is 2 parts per million and a reduction has been mooted.

International patent protection has been sought via application PCT/GB2007/000738 filed on 2 March 2007.

It is expected that Perachem FR can be produced at a price which will be highly competitive in the market place; can be applied to a number of garments, such as night clothes for children, without fear of carcinogenic formaldehyde residues; will give fabrics a  good handle and minimal loss of strength; and will be tolerant of reactive dyes, giving access to a full range of vibrant colours. Results of the industrial trials were presented at the CRIET 2007 congress held in Istanbul on 24-26 May 2007. CRIET is the EU branch association for the textile finishing industry.

Prospects

Perachem Limited is a chemicals company which is committed to developing speciality products that have a more benign environmental profile than, but maintain the same   performance and cost competitiveness as, traditional products. Perachem Limited owns exclusive rights over intellectual property in the areas of bleach activator compounds and textile treatments and has close links to the Department of Colour and Polymer Chemistry at the University of Leeds.

We have a team with the ability to grow the business organically and I am confident that Eco Chemical Enterprises is now positioned to increase the value of the business and enhance shareholder value.

Proposed change of name

At the Company's AGM to be held on 26 July 2007 a resolution will be put to the meeting to approve a change of name for the Company to Green Chemicals plc.

R Farleigh
Chairman
21 June 2007