Interim Results

Mercury Recycling Group PLC
20 September 2007

                          MERCURY RECYCLING GROUP PLC

               INTERIM REPORT FOR THE PERIOD ENDING 30 JUNE 2007


CHAIRMAN'S STATEMENT

I am pleased to report that the Group's unaudited results for the six months
ended 30 June 2007, show a further increase in sales compared to the same period
last year to £1,304,000 from £1,219,000.  Operating profits at the interim
stage, excluding goodwill impairment and exceptional items increased to £233,000
from £212,000.  The operating profit for the whole of the last financial year
was £336,000.  As can be seen from the Balance Sheet, we have a strong liquid
position, with current assets at £901,000 including cash of £323,000.

The WEEE Directive was eventually implemented on 1 July, so that all Gas
Discharge lamps must now be legally recycled.  I said in my statement at the
year end, that there was confusion in Government Departments and the industry
generally.  Without that confusion, I am sure that sales and profits would have
been much better.  The position has now become clearer, although the complex
implementation of the Directive will take a little longer to settle down.  We
have however, had successful discussions with all the compliance schemes within
our sector, where we now have excellent relationships.

It will of course take some time for all the estimated 130 million lamps to be
recycled, given that only something below 25% are currently being recycled,
there is obviously room for large increases, and I am confident we will at the
very least maintain our present major share of the lamp recycling market.  I
should repeat again that no capital expenditure will be required, as our new
plant and premises have the capacity to substantially increase our recycling
output.  I can report that new customers continue to come on board every month.
In addition following the implementation of the WEEE directive, we are starting
to receive from our large customer base, WEEE products other than lamps for
recycling.

In order to ensure that the relevant authorities are in place to enable the
Board to issue shares, a notice convening an EGM has been prepared and is also
enclosed with these results.

I conclude by emphasising that the Board are confident following all I have said
above, that future prospects look very good.

The Rt Hon The Lord Barnett JP PC
Chairman
20 September 2007



Enquiries:

Simon Lebor, Group Chief Executive                          Tel:  [phone]
John Wakefield, Blue Oar Securities Plc                     Tel:  [phone]


CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2007
                                                                           As restated
                                                         6 Months             6 Months            Year
                                                                ended            ended           ended
                                                              30.6.07          30.6.06        31.12.06
                                                                £'000            £'000           £'000

Revenue                                                         1,304            1,219           2,399

Cost of sales                                                   (204)            (104)           (193)

Gross profit                                                    1,100            1,115           2,206

Administrative expenses                                         (979)          (1,034)         (2,096)

Operating profit before goodwill impairment,

relocation costs and share based payment costs                    233              212             336
Relocation costs                                                    -             (17)               -
Share-based payment expense                                      (10)             (12)            (22)
Goodwill impairment                                             (102)            (102)           (204)

Operating profit                                                  121               81             110

Investment revenues                                                 2                1               1
Finance costs                                                    (13)             (14)            (27)

Profit before taxation                                            110               68              84

Tax                                                                 -                -               -

Profit for the period                                             110               68              84

Earnings per share:           Basic (pence)                     0.33p            0.20p           0.25p
                              Diluted (pence)                   0.32p            0.19p           0.24p


STATEMENT OF CHANGES IN EQUITY
                                                                               As restated
                                                               6 Months           6 Months            Year
                                                                     ended           ended           ended
                                                                   30.6.07         30.6.06        31.12.06
                                                                     £'000           £'000           £'000
Opening balance (and as restated for
conversion to IFRS)                                                  4,175           4,032           4,032

Profit for the financial period                                        110              68              84

New shares issued                                                        -               -              37
Share based payments                                                    10              12              22

Closing balance                                                      4,295           4,112           4,175


CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2007
                                                                               As restated
                                                                     As at           As at           As at
                                                                   30.6.07         30.6.06        31.12.06
                                                                     £'000           £'000           £'000
Non-current assets
Goodwill                                                             2,919           3,124           3,021
Other intangible assets                                                  2               3               2
Property, plant and equipment                                        1,109           1,139           1,140
                                                                     4,030           4,266           4,163
Current assets
Trade and other receivables                                            578             493             533
Cash and cash equivalents                                              323              29             135
                                                                       901             522             668

Total assets                                                         4,931           4,788           4,831

Current liabilities
Trade and other payables                                             (163)           (172)           (172)
Current tax liabilities                                              (108)            (86)            (93)
Obligations under finance leases                                      (17)            (42)            (21)
Bank overdrafts and loans                                             (25)             (7)            (26)
                                                                     (313)           (307)           (312)

Non-current liabilities
Other payables                                                        (70)            (79)            (73)
Bank loans                                                           (248)           (290)           (259)
Obligations under finance leases                                       (5)               -            (12)
                                                                     (323)           (369)           (344)

Total liabilities                                                    (636)           (676)           (656)

Net assets                                                           4,295           4,112           4,175

Capital and reserves
Share capital                                                        3,373           3,336           3,373
Share premium                                                          242             242             242
Other reserve                                                          283             448             365
Retained earnings reserve                                              397              86             195

Equity shareholders' funds                                           4,295           4,112           4,175



CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007

                                                                               As restated
                                                                  6 Months        6 Months        6 Months
                                                                     ended           ended           ended
                                                                   30.6.07         30.6.06        31.12.06
                                                                     £'000           £'000           £'000

Net cash from operating activities                                     255             242             377

Investing activities
Interest received                                                        2               1               1
Purchases of property, plant and equipment                            (47)            (77)            (96)

Net cash used in investing activities                                 (45)            (76)            (95)

Financing activities
Proceeds on issue of shares                                              -               -              20
Repayment of loans                                                    (12)             (4)            (15)
Repayments of finance lease obligations                               (10)             (5)            (24)

Net cash used in financing activities                                 (22)             (9)            (19)

Net increase in cash and cash equivalents                              188             157             263

Cash and cash equivalents at the beginning of
year                                                                   135           (128)           (128)

Cash and cash equivalents at end of year                               323              29             135


Note to the cash flow statement

Profit for the year                                                    121              81             110
Depreciation on plant and equipment                                     79              81             145
Impairment of goodwill                                                 102             102             204
Decrease in provisions                                                 (5)             (4)             (9)
Share-based payment expense                                             10              12              22
Gain on disposal of plant property, plant and
equipment                                                                -             (4)             (1)

Operating cash flows before movements in                               307             268             471
working capital
Decrease / (increase) in receivables                                  (45)              38              15
(Decrease) / increase in payables                                        6            (50)            (82)

Cash generated by operations                                           268             256             404
Interest paid                                                         (13)            (14)            (27)

Net cash from operating activities                                     255             242             377



NOTES TO CONSOLIDATED ACCOUNTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007

1.         Basis of preparation and accounting policies

Basis of preparation

As an AIM-listed company, the Group is required to adopt International Financial
Reporting Standards (IFRS) with effect from 1 January 2007.  The Group's date of
transition to IFRS was 1 January 2006.

The results for the six months to 30 June 2007 represent the Group's first
interim financial statements prepared in accordance with IFRS.  The Group's
first annual report under IFRS will be for the year ended 31 December 2007.

A reconciliation between comparative values under IFRS and as reported under UK
Generally Accepted Accounting Principles (UK GAAP) has been published previously
and is available on the Group's website at www.mercuryrecycling.co.uk.  The
information provided also includes details of accounting policies adopted by the
Group under IFRS, and the exceptions from retrospective application of IFRS that
the Group has applied under IFRS 1 'First Time Adoption of International
Financial Reporting Standards'.

The financial information does not constitute statutory accounts as defined by
section 240 of the Companies Act 1985.  Full accounts of the company for the
year ended 31 December 2006 on which the Auditors gave an unqualified report,
have been delivered to the Registrar of Companies.

2.         Earnings per share

The calculation of basic and diluted earnings per share is based upon the profit
for the period and the weighted average number of shares in issue during the
period.

                                                                 6 Months         6 Months             Year
                                                                       to               to               to
                                                                  30.6.07          30.6.06         31.12.06
                                                                     '000             '000             '000

Weighted average number of shares                                  33,726           33,359           33,543

Options - dilution                                                    661            1,202              797
                                                                   34,387           34,561           34,340

Adjusted earnings per share is calculated using earnings before impairment of
goodwill.

                                                                 6 Months         6 Months             Year
                                                                       to               to               to
                                                                  30.6.07          30.6.06         31.12.06
                                                                    pence            pence            pence

Basic earnings per share                                             0.33             0.20             0.25

Adjustment                                                           0.33             0.40             0.67
Adjusted basic earnings per share                                    0.66             0.60             0.92


3.         Copies of report

Copies of this interim statement will be despatched to shareholders and will be
available to the public at the Registered Office, Mercury House, 17 Commerce
Way, Trafford Park, Manchester, M17 1HW.

4.         Reconciliation of balance sheet 1 January 2007 for the impact of IFRS

Items effected by change to IFRS

                                                           UK GAAP         Adjustment                 IFRS
                                                             £'000              £'000                £'000
Non-current assets
Other intangible assets                                          -                  2                    2
Property, plant and equipment                                3,021                (2)                3,019

Current liabilities
Trade and other payables                                     (167)                (5)                (172)

Non-current liabilities
Other payables                                                   -               (73)                 (73)
Provisions                                                    (78)                 78                    -

Capital and reserves
Merger reserve                                               (111)                111                    -
Retained earnings reserve                                      306              (111)                  195


Full details of the transition to International Financial Reporting Standards
are given on the Group's website at www.mercuryrecycling.co.uk


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