BSN Biocare

RNS Number:6833Q
Biocare Solutions PLC
05 February 2007

               Biocare Solutions plc ("Biocare" or the "Company")

                                 Trading Update
                                      and
                       Report on Expansion of Production

Trading in 2006

The Board of Biocare announces a trading update ahead of the release of its
final results. Preliminary unaudited figures for the year ended 31 December 2006
show that turnover increased by 100 per cent. per cent. to approximately #2.4
million (#1.2 million). Since flotation, the Company has invested #0.9 million
on new production equipment, a further #1 million on a new facility in Southern
Italy and repaid all loans.

Late delivery of some equipment has delayed the full build-up in production
capacity envisaged in the fourth quarter of 2006 and held back the Company's
ability to meet the anticipated increase in demand for its range of all-natural
cleaning products. The new and improved production lines will be fully
operational within the next four weeks, increasing production capacity from
1,200 units to 7,500 units per hour. The current facility in Meda has been
running at a high capacity to maintain the existing customer base throughout
2006.

Following the delay in equipment delivery, the Company scaled-back expenses in
the latter half of the year so that the expected loss for the year is in line
with management expectations.

New Production Facility

In December the Board became aware of proposed changes in Italian law relating
to capital investment and tax concessions and revised production plans
accordingly. The new law, designed to encourage investment in specific regions,
was enacted on 28 December 2006.

To capitalise on the new tax law the Board has decided to relocate Italian
production facilities to Ferrandina in the region of Basilicata, in the South of
Italy. The group has acquired a 15,000 square metre freehold property with a new
4,000 square metres facility for a net #1 million as result of the aid of
government subsidies and grants. This building has been recently valued by a
government certified agent and the valuation is #2.1 million, an increase of
#1.1 million in assets. The new tax law will provide the group with 48 per cent.
tax credit on capital investment at Ferrandina until 2013.

In the north of Italy, operations are being transferred from the existing
production facility in Meda to a more effective and cheaper unit at Novedrate
close-by. The Novedrate facility will provide logistics for the north of Italy
and will be the commercial management centre.

Italian Market

The Board announced at the time of float that they were in discussion with a
major Italian retail group, to extend the distribution of existing Biocare
cleaning products to a wider group of stores. The Board is delighted to announce
that this group has since indicated their intention to launch a new range of
own-label natural household cleaning products, providing the facilities meet
their production standards. The Board expects confirmation of business with the
major Italian retailer shortly after the new facility is commissioned.

New Market Opportunities

Discussions are well advanced with a consortium for a proposed joint venture
agreement. Under the terms of the agreement the consortium will provide funding
of #2.5 million to the joint venture. Biocare Solutions Plc will retain 20 per
cent. of the joint venture and provide concentrated and finished product for
distribution in South East Asia. The #2.5 million will fund market development
costs, working capital and the purchase of the Company's original production
equipment in Meda which will be installed in Malaysia.

Though at an earlier stage, the Company is also in negotiations with a group in
Romania who are looking at a similar arrangement to that in South East Asia for
Eastern Europe. The Board intends to update shareholders once the agreements are
finalised.

Outlook

Substantial progress has been made since flotation. Full production is expected
in March at our new facility in Ferrandina. The Board is confident that sales
will increase substantially as a result of its potential working relationship
with a major Italian retailer and other large Italian retail groups. Italy will
remain the major contributor to revenues in 2007 but sales growth is also
expected from the UK and S.E. Asian markets. The Company starts the year with a
strengthened balance sheet, a more favourable tax regime in Italy and very
strong prospects. Consequently the Board are confident that Biocare will make
significant progress in 2007.

The Company expects to publish preliminary results for the year ending 31
December 2006 on 27 April 2007.

Further information:

Biocare Solutions
Stuart Anderson, Chairman                               +44 (0)20 7448 5211
Tony Higson, Managing Director

KBC Peel Hunt
Richard Kauffer                                         +44 (0)20 7418 8850

SPA Way
James Poole                                             +44 (0)207 3540356
                                                        +44 7768991096



                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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