FRE Freeplay

RNS Number:9134M
Freeplay Energy PLC
31 January 2008



31 January 2008

                              Freeplay Energy plc
                   ("Freeplay", "the Group" or "the Company")

                                 Trading Update

Freeplay Energy plc, the original and global brand of clean, dependable energy
products, today gives an update on trading for the year ended 31 December 2007
prior to entering its full year close period.

The Board of Freeplay Energy remains encouraged by the progress made by the
Group to date and is particularly pleased by the performance in 2007. The Group
restructuring, announced in August 2007, continues to progress as planned and
will be completed by the end of March 2008.

Freeplay Energy Division

The Freeplay Energy division benefited from a satisfying sell-through in both
the UK and the US markets during the Christmas holiday season. As a result of
the good sales performance over the Christmas period in the UK, a number of key
retailers including Currys and Marks and Spencer have also confirmed that they
will continue to stock our products during 2008.

Building our US distribution base in North America remains the Company's highest
priority for 2008 and, while our 2007 results were in-line with guidance given
at the time of our interim results in September, these are still below our long
term expectations for the region. Despite this, the sell-through of our products
at REI, the US department store, was particularly encouraging and the Board is
also pleased to have secured and shipped a first order to the Canadian Tire
Company, one of the leading outdoor retailers in Canada.

Both the Consumer Electronics Show in Las Vegas and the Outdoor Retailers show
in Salt Lake City in January 2008 gave us a good platform to showcase our
current product line as well as an opportunity to launch a number of new lines
including a radio/flashlight product offering a choice of self-charge, solar and
external charge power options and a solar powered radio product that utilises
Freeplay's patented self-charge technology, both of which received a high level
of interest from delegates and underline Freeplay's stated aim to become a
broadbased sustainable energy company.

Dixie Sales ('Dixie')

Revenue for 2007 at Dixie Sales was in line with management's expectations and
the division continued to experience robust growth in the consumer direct
(retail) and fees for service lines of business, despite continued market
weaknesses in the core dealer parts and whole goods businesses.

The gross margin at Dixie was also somewhat lower than expected due in part to a
different product mix with higher proportions of wholesale goods relative to the
parts business sold over the course of the year. A change to the customer mix
also saw a higher proportion of service dealer sales relative to dealers,
impacting gross margin performance further.

However, Dixie Sales has continued to reduce operating expenses to better
position the division's cost structure and, as a result of this, monthly
operating costs for the second half of the year were almost 20% less than
average monthly operating costs during the first half of the year although an
exceptional charge of approximately $500k has been incurred as a result of both
these restructuring activities and the measures taken to exit underperforming
lines of business.

Dixie's new business initiatives continue to give Management optimism and the
business has been invited to provide a small special order parts service to
support Lowes entry into Canada, underlining the strong relationship that the
business enjoys with this significant retail partner. Dixie is also in the final
stages of negotiating a service arrangement for a significant Canadian retail
enterprise and hopes to make an announcement on this shortly.

Aid Division

The Aid division has continued to perform strongly in 2007. We have now shipped
the latest batch of radios for the order received from South Sudan in May of
last year with a further balance of US$1.6m due during Q1 2008.

India

The joint venture with the Narang Group in India continues to excite the Board
and provide the Company with a number of interesting opportunities in the
region, the latest of which has resulted in the first orders from the Indian
Farmers Fertiliser Cooperative (IFFCO) for 225,000 units of a new, Indian market
specific LED lantern along with another lighting product which is due to
commence shipping in February 2008 and complete by July 2008. A new bespoke
facility is due to begin production of Freeplay products in February 2008
enabling the Company to compete more effectively in the region and this,
combined with the first orders from the IFFCO, gives the Company encouragement
that 2008 will see Freeplay recognise significant growth in the region.

One Laptop Per Child

Freeplay remains fully committed to its involvement in the "One Laptop Per
Child" (OLPC) programme through the supply of the human power generators for
each laptop and have now shipped first orders to the OLPC project. The project
represents an exciting opportunity for the company and an excellent validation
of both our technology and our leadership in the field.

Rory Stear, Chairman, commented:

"I am encouraged by the progress made since we announced our significant
restructuring programme in August 2007 and am pleased at how the new management
team have set about implementing these plans.

"The Group performed in-line with management expectations in 2007 and, against a
backdrop of decreased consumer spending in our key markets of the US and the UK,
we are encouraged that our products have continued to sell well. The Aid
division continues to provide us with a good degree of visibility while our
involvement in the One Laptop Per Child underlines our leadership in the field
of sustainable energy solutions.

"Following extensive product and market development in India during 2007 we are
very gratified to see strong indications that our joint venture with the Narang
Group is beginning to bear fruit. The Board views India as a significant creator
of value for the Group in 2008 and beyond and remains very excited about the
opportunities for the Company in this region."

                                    - ends -

For further information, please contact:

Freeplay Energy plc                                                020 7851 2630
Rory Stear, Executive Chairman

Weber Shandwick Financial                                          020 7067 0700
Louise Robson or James White

Charles Stanley Securities (Nominated Adviser)                     020 7149 6000
Mark Taylor or Freddy Crossley

Notes to Editors

Freeplay Energy plc is the original and leading global brand of clean,
dependable energy products. Freeplay Energy's clean, patented technology
harnesses human, solar and rechargeable energy and converts it into electricity
to power unique portable, consumer products replacing conventional disposable
battery-powered systems that are environmentally toxic and expensive. The
current product range includes radios, torches, lanterns, mobile phone chargers
and standalone foot powered generators. Freeplay Energy's "Lifeline" radio is
distributed throughout the developing world by The Freeplay Foundation
(www.freeplayfoundation.org) and other AID and Humanitarian organisations such
as Unicef and other United Nations' agencies. Further information about Freeplay
Energy plc and its products can be found at www.freeplayenergy.com.


            Freeplay Energy - Best in the World, Best for the World






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