Financial Summary
· - Net cash out-flow decreased to €0.5m for six month period (2010: €11.6m);
· - Cash balance of €27.1m as at 30 September 2011 (2010: €6.6m);
· - Sale and leaseback of Arnhem land and buildings agreed with the first part completed in the period raising €2.2m with a further - €1.8m to be received;
· - Revenue decreased by 14% to €6.2m due to lower sales to Diamond Wood together with the impact of certain customers reducing their inventory levels to reflect slower market conditions which have resulted from the poor economic
environment experienced in the wood products and building industries;
· - Other operating costs decreased by 20% to €5.9m (2010:€7.4m) (see note 3); and
· - Loss before tax fell by 17% to €6.3m (2010: €7.6m) largely attributable to a reduction in other operating costs.

Operational Highlights
· - Commenced supply of acetylated material to Medite for the production of Medite Tricoya® resulting in Tricoya® reaching the market approximately two years earlier than previously expected. Medite Tricoya® has been officially launched with encouraging progress made in respect of marketing activities together with the receipt of initial customer orders;
- Signed comprehensive heads of terms with a major multinational corporation concerning a licence for the manufacture, distribution and sale of Accoya® in Europe;
· - Passed previous target of 30 Accoya® distribution or agency agreements with a total of 31 now in place;

· - Commercial development of Red Alder and Scots Pine in progress - new species to be used for Accoya® production;

· - Significant marketing focus for new geographic and product segment introductions together with greater distributor support. This included increased attendance at trade shows, re-launching our website and developing distributor websites and on-line sales support tools; and

· - Diamond Wood continues to progress with its planned IPO, which is now expected in 2012, on the junior exchange of the Malaysian Stock exchange and we understand has recently submitted a draft prospectus to the regulatory authority. Regulatory approval still needs to be obtained.