Interim Results

Ceres Power Holdings plc
20 March 2006

                            Ceres Power Holdings plc
                    ('Ceres', 'Ceres Power' or 'the Group')

           Interim results for the six months ending 31 December 2005

Highlights

   • Key milestone achieved with a compact, lightweight 1kW fuel cell

   • British Gas relationship extended with £2.7 million part-funded programme

   • Second BOC contract secured and successfully delivered

   • Income of £562,000, up by 13% compared to the six months ended 31.12.04

   • Strong balance sheet with cash and short term investments of £15.4 million

   • Cash outflow from operating activities during the period of £1.6 million

   • Management team strengthened through key director appointments

   • Enhancement of market applications engineering capability

   • New contract awarded to accelerate mass-manufacturing capability

   • Prestigious role in the UK Government's Energy Research Partnership

Philip Holbeche, Chairman, commented:

'I am very pleased with the significant progress Ceres Power has made in the
first half of the year towards delivering cost-effective, efficient and reliable
commercial solutions using our advanced fuel cell technology. We recently
achieved a key technical milestone: the delivery of a production engineered 1kW
fuel cell, suitable for domestic CHP and many other applications. The £2.7
million programme with British Gas reinforces the commercial transformation of
our business. Ceres Power's clear competitive advantage is now becoming more
evident to industry partners, financial backers and Government.'

For further information contact:

Philip Holbeche, Chairman
Peter Bance, Chief Executive                    [phone]
Ceres Power

Patrick d'Ancona / Charlotte Kirkham            [phone]
M: Communications

David Poutney                                   [phone]
Numis Securities


Chairman's Statement

Introduction

Ceres Power made significant progress in the half year ended 31 December 2005
towards delivering cost-effective, efficient and reliable commercial solutions
using its fuel cell technology. Investment in our product engineering and
manufacturing capabilities has enabled achievement of a major technical
milestone. The Group continues to build commercial partnerships in the UK and
internationally.

The energy industry is currently the focus of much debate. Ceres is pleased to
participate and contribute to the debate at the highest levels, as the only fuel
cell company in the UK's Energy Research Partnership, reflecting Government
interest in micropower generation as part of a coherent national energy policy.

Financial results

The Group's balance sheet remains strong, with £15.4 million in cash and short
term investments allowing the Group to fund immediate growth plans and take
advantage of emerging opportunities. Income for the six months totalled
£562,000, of which interest on cash balances provided £334,000, income from
government contracts was £148,000 and revenue from development contracts was
£80,000. In total this represents a 13% increase compared to the six months
ended 31 December 2004.

Operating costs increased by 19% over the comparable period last year, due in
large part to the strengthening of the skill base in line with the Group's
commercialisation plans. Administration overheads decreased to efficient levels,
in the absence of the exceptional costs incurred in association with admission
to AIM in November 2004.

Capital expenditure during the period totalled £665,000, significantly above the
£163,000 during the prior interim period, reflecting investment in the Group's
design, testing and manufacturing capabilities, including the building of
complete fuel cell systems.

The cash outflow from operating activities during the period was £1.6 million,
with cash outflows attributable to capital expenditure totalling £596,000. There
were cash inflows of £173,000 from the exercise of warrants and employee share
options, in addition to the £562,000 income highlighted above.

Commercial engagement

Based on the Group's proven technology and product capability, major new
commercial engagements have been successfully secured.

Our relationship with Centrica plc (trading as British Gas) has been further
enhanced with the announcement of a £2.7 million programme, part funded by the
DTI, to design, build and evaluate domestic fuel cell Combined Heat and Power
(CHP) units. The Group's products are designed to deliver electricity, heating
and hot water to the home, substantially reducing both energy bills and CO2
emissions. British Gas estimates that the Ceres technology is accessible by 14.5
million British homes.

Ceres has extended its relationship with The BOC Group plc ('BOC'), successfully
securing and completing a second significant contract. This contract builds on
previous work and focuses on using Ceres fuel cell products to provide
electrical power from LPG and propane fuels, which are distributed by BOC to
millions of customers in over 50 countries.

During the period the Group successfully completed an important Government
programme for the DTI, continuing our exemplary delivery record in such
contracts. The Group's close relationship with Government and other agencies
continues, highlighted by the recent announcement of a further £0.5 million
contract with The Carbon Trust to assist development of mass production
processes for Ceres fuel cells.

Technical review

Ceres has recently achieved a key technical milestone: the delivery of a
production-engineered 1kW fuel cell, suitable for domestic CHP and many other
applications. This fuel cell successfully passed multiple tests for performance
and fuel flexibility. We continue to expand the Group's engineering resources to
successfully integrate fuel cell technology into complete products for a range
of markets.

The Group's innovations in materials and engineering have continued to drive up
fuel cell performance to levels required for market applications. Recent
investment in analytical and testing equipment further supports this important
activity and enhances our excellent facilities.

We have continued to invest to ensure that the newly-established manufacturing
team has the necessary skills to deliver high quality product in large volumes.
Recent progress includes successful adoption of proven manufacturing processes
for the deposition of fuel cell layers.

The Group is capturing a very rich stream of intellectual property (IP),
building a substantial portfolio of patents, trademarks and trade secrets. To
support this activity, we have retained the services of a firm of highly
experienced patent attorneys with an outstanding pedigree in IP protection,
commercialisation and litigation.

Ceres has continued to receive awards and recognition from major organisations.
The Group received the Frost & Sullivan Technology Innovation Award, and took a
leading role in the formation of the UK Fuel Cell Industry Association.

People

During the period the Group recruited 10 new members of staff, increasing our
skill base and depth of experience. Important new directorships also reflect the
successful transformation from an R&D focused company to a commercially driven
market-led business.

Andrew Baker, Operations Director, is appointed to the board of the Group (see
Note A) with responsibility for technology, engineering and manufacturing. He
has previously held a number of international board-level directorships within
major organisations such as Calsonic and Ricardo.

Professor Nigel Brandon moves to the newly created role of Chief Scientist,
leaving the board of the Group but remaining on the operating company board.
Nigel focuses on technology foresight, Government programmes and liaison with
academic research institutions, combining his role at Ceres with the prestigious
position of Shell Professor of Sustainable Development in Energy at Imperial
College London.

We recently welcomed Bob Flint as Commercial Director of Ceres Power Limited,
with responsibility for deal-structuring, partnership negotiation and marketing.
He has over 15 years experience in business development, technology licensing
and corporate venturing, specialising in building businesses from platform
technologies.

Outlook

During the last six months Ceres has put more essential elements of the Group's
development platform into place. The Group's clear competitive advantage, as
demonstrated by the delivery of a compact, highly engineered 1kW fuel cell, is
now becoming more evident to industry partners, financial backers and
Government.

I am immensely pleased that our relationships with key partners continue to
strengthen, for example through contracts with British Gas and BOC. Ceres now
has a proven ability to win and deliver contracts in order to achieve key
technical, commercial and financial goals. I believe this to be an indicator of
future commercial success in other geographic and market sectors.

As is usual in high growth companies in emerging industries, there are a number
of significant challenges and hurdles to overcome to reach our ambitious goals.
In order to address the execution risks inherent in the Group's strategy, we are
continuing to build top-class capabilities in all areas of the business.
Finally, and as ever, the demands of a rapidly growing company place substantial
burdens on all employees and their families. I wish to thank each one of them
for their commitment to making Ceres such a success.

Philip Holbeche
Chairman

Note A
Under Schedule 2(g) of the AIM Rules we can confirm that Dr. Andrew Robert
Baker, aged 55, is a current director of Ceres Power Limited, a subsidiary of
Ceres Power Holdings plc. Dr. Baker has previously been a director of Ricardo
Consulting Engineers Limited.


Consolidated Profit and Loss Account
for the six months ended 31 December 2005

                                        Six months      Six months    Year ended 
                                          ended 31        ended 31   30June 2005
                                     December 2005   December 2004
                                         Unaudited       Unaudited       Audited
                                             £'000           £'000         £'000
                                         ---------       ---------     ---------

Turnover                                        80              61            71
Research and development costs             (1,548)         (1,032)       (2,324)
Administrative expenses                      (656)           (816)       (1,272)
Other operating income                         148             299           366
                                         ---------       ---------     ---------
Operating loss                             (1,976)         (1,488)       (3,159)

Interest receivable and similar income         334             136           508
                                         ---------       ---------     ---------
Loss on ordinary activities before
taxation                                   (1,642)         (1,352)       (2,651)

Tax on loss on ordinary activities               -               -             -
                                         ---------       ---------     ---------
Loss for the financialperiod / year        (1,642)         (1,352)       (2,651)
                                         ---------       ---------     ---------

Loss per £0.05 ordinary share
- Basic and diluted                        (2.91)p         (3.04)p       (5.28)p
                                         ---------       ---------     ---------

Weighted average number of shares used 
to compute loss per £0.05 
ordinary share                          56,432,218      44,507,813    50,232,830
                                         ---------       ---------     ---------

Consolidated Balance Sheet
as at 31 December 2005

                               31 December      31 December         30 June 2005
                                      2005             2004
                                 Unaudited        Unaudited              Audited
                                     £'000            £'000                £'000
                                 ---------        ---------            ---------
Fixed assets
Tangible assets                      1,728            1,186                1,302
                                 ---------        ---------            ---------

Current assets
Debtors                                397              213                  316
Short term investments              14,100           14,950               15,600
Cash at bank and in hand             1,301            3,391                1,444
                                 ---------        ---------            ---------
                                    15,798           18,554               17,360

Creditors: amounts falling due 
within one year                      (758)            (325)                (471)
                                 ---------        ---------            ---------
Net current assets                  15,040           18,229               16,889
                                 ---------        ---------            ---------
Total assets less current 
liabilities                         16,768           19,415               18,191

Creditors: amounts falling due 
after more than one year               (5)             (14)                 (10)
                                 ---------        ---------            ---------
Net assets                          16,763           19,401               18,181
                                 ---------        ---------            ---------

Capital and reserves
Called up share capital              2,838            2,794                2,804
Share premium account               14,386           14,130               14,199
Merger reserve                       7,463            7,463                7,463
Profit and loss account            (7,924)          (4,986)              (6,285)
                                 ---------        ---------            ---------
Equity shareholders' funds          16,763           19,401               18,181
                                 ---------        ---------            ---------


Consolidated Cash Flow Statement
for the six months ended 31 December 2005

                                        Six months      Six months    Year ended
                                          ended 31        ended 31  30 June 2005
                                     December 2005   December 2004
                                         Unaudited       Unaudited       Audited
                                             £'000           £'000         £'000
                                         ---------       ---------     ---------
Net cash outflow from operating 
activities                                 (1,604)         (1,129)       (2,629)
                                         ---------       ---------     ---------
Returns on investments and servicing 
of finance
Interest received                              334             134           508
                                         ---------       ---------     ---------
Net cash inflow from returns on
investments and servicing of finance           334             134           508
Taxation                                         -               -             -
Capital expenditure
Purchase of tangible fixed assets            (596)           (157)         (338)
                                         ---------       ---------     ---------
Net cash outflow for capital 
expenditure                                  (596)           (157)         (338)
                                         ---------       ---------     ---------
Net cash outflow before use of liquid
resources and financing                    (1,866)         (1,152)       (2,459)
Management of liquid resources
Reduction /(increase) in short term
deposits with banks                         1,500         (10,550)      (11,200)
Financing
Issue of ordinary share capital                173          16,301        16,312
Net expenses of share issue                    50          (1,399)       (1,400)
                                         ---------       ---------     ---------
Net cash inflow from financing                 223          14,902        14,912
                                         ---------       ---------     ---------
(Decrease)/increase in net cash               (143)          3,200         1,253
                                         ---------       ---------     ---------

Reconciliation to net funds
Opening net funds                           17,044           4,591         4,591
(Decrease) / increase in net cash             (143)          3,200         1,253
Movements in short term deposits            (1,500)         10,550        11,200
                                         ---------       ---------     ---------
Closing net funds                           15,401          18,341        17,044
                                         ---------       ---------     ---------

Cash flow from operating activities
Reconciliation of operating loss to net 
cash outflow from operating activities:
Operating loss                             (1,976)         (1,488)       (3,159)
Depreciation charge                            239             158           346
Share option compensation charge                 3              21            20
(Increase) / decrease in debtors              (83)              48          (67)
Increase in creditors                          213             132           231
                                         ---------       ---------     ---------
Net cash outflow from operating 
activities                                 (1,604)         (1,129)       (2,629)
                                         ---------       ---------     ---------

Notes to the Interim Financial Statements
for the six months ended 31 December 2005

1.    Basis of preparation

These interim financial statements do not constitute statutory financial
statements within the meaning of Section 240 of the Companies Act 1985. Results
for the six month periods ended 31 December 2005 and 31 December 2004 have not
been audited. The results for the year ended 30 June 2005 have been extracted
from the statutory financial statements of Ceres Power Holdings plc that have
been filed with the Registrar of Companies and upon which the auditors reported
without qualification.

2.    Principal accounting policies

These interim financial statements for the six months ended 31 December 2005
have been prepared in accordance with the accounting policies set out in the
statutory financial statements of Ceres Power Holdings plc for the year ended 30
June 2005. These accounting policies include:

(a)    Basis of consolidation

The consolidated financial statements of Ceres Power Holdings plc have been
presented under merger accounting rules. This means that the financial
statements of Ceres Power Holdings plc and its wholly owned subsidiary, Ceres
Power Limited, have been aggregated and presented as if the two companies have
always formed a group. Accordingly, although Ceres Power Holdings plc acquired
the entire issued share capital of Ceres Power Limited on 3 September 2004, the
results for both companies are reflected in the group financial statements for
the period to 31 December 2004.

(b)    Turnover

Revenue, which excludes value added tax and other sales taxes, represents the
invoiced value of services supplied.

Amounts received or receivable under development agreements are recognised as
revenue when earned. Amounts received or receivable in respect of milestone
payments under agreements are recognised as revenue when the specific conditions
in the agreement have been met. All costs relating to these development
programmes are recorded as research and development expenditure. As revenue
represents contributions towards costs incurred, no amounts have been allocated
to cost of sales.

3.    Called up share capital

Ceres Power Holdings plc had called up share capital totalling 56,076,293
ordinary shares of £0.05 each at 30 June 2005 as disclosed in the statutory
financial statements of Ceres Power Holdings plc for the year ended 30 June
2005.

Between 13 July 2005 and 21 December 2005, 664,582 ordinary shares of £0.05 each
were issued on the exercise of employee share options for cash consideration of
£167,929.

On 25 November 2005, the Company issued 3,340 ordinary shares of £0.05 each on
the exercise of warrants for cash consideration of £2,338.

On 2 December 2005, the Company issued 3,900 ordinary shares of £0.05 each on
the exercise of warrants for cash consideration of £2,730.

No issue costs have been incurred with respect to the above transactions.
However, an amount of £49,806 has been credited to the share premium account in
respect of VAT reclaimed in the six months to 31 December 2005 relating to share
issue costs in prior periods.

4.    Profit and loss account

In accordance with the provisions of Urgent Issues Task Force Abstract 17,
'Employee Share Schemes', the share option compensation charge in the period of
£2,520 (six months ended 31 December 2004: £20,770; year ended 30 June 2005:
£20,020) has been charged to the profit and loss account and credited to the
profit and loss reserve.


Independent review report to Ceres Power Holdings plc

Introduction

We have been instructed by the Company to review the financial information for
the six months ended 31 December 2005 which comprises the consolidated profit
and loss account, the consolidated balance sheet, the consolidated cash flow
statement and the related notes. We have read the other information contained in
the interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report and the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
and therefore provides a lower level of assurance. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the Company and for no other
purpose. We do not, in producing this report, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in
writing.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2005.

PricewaterhouseCoopers LLP
Chartered Accountants
Cambridge

17 March 2006

Notes:

(a)    The maintenance and integrity of the Ceres Power Holdings
plc website is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have occurred to the
interim report since it was initially presented on the website.

(b)    Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from legislation in other
jurisdictions.


Directors

Philip Holbeche (Chairman) 1,2
Peter Bance (Chief Executive Officer) 1,2
Andrew Baker (Operations Director) 1,2
Nigel Brandon (Chief Scientist) 2
Robert Flint (Commercial Director) 2
Harry Fitzgibbons (Non Executive Director) 1
John Gunn (Non Executive Director) 1

Company Secretary

Matthew Stride

Company Registered Number

5174075

Registered Office

Unit 18, Denvale Trade Park
Haslett Avenue East
Crawley RH10 1SS

Solicitors

Taylor Wessing
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0DX

Registered Auditors

PricewaterhouseCoopers LLP
Abacus House
Castle Park
Cambridge CB3 0AN

Bankers

National Westminster Bank plc
South Kensington Station Branch
PO Box 592
18 Cromwell Place
London SW7 2LB

Brokers

Numis Securities Ltd
Cheapside House
138 Cheapside
London EC2V 6LH

Registrar

Computershare Investor Services PLC
PO Box 82, The Pavilions
Bridgwater Road
Bristol BS99 7NH

1 Ceres Power Holdings plc
2 Ceres Power Limited



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