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Zenith Hygiene Group plc

27th June 2008                                                                                                                    AIM:ZHG

Zenith Hygiene Group plc ('Zenith' or 'the Group')

AGM Trading Update

At the Annual General Meeting of the Company to be held today at 10:00am at the offices of CMS Cameron McKenna, 160 Aldersgate Street, London, EC1A 4DD, Simon Barrell, acting Chairman of Zenith, will give the following trading update.

'Sales have continued at a similar level to the first six months. Successful initial trials with potential customers have now resulted in a number of notable wins.  The market remains competitive; however customer churn has remained in line with historic levels.

Zenith's new Board has continued to take direct management action to address the fundamental weaknesses that have been prevalent in a number of areas of the Group. Whilst this work is very much ongoing, we are beginning to see the results of this activity.  

Significant progress has been made in implementing appropriate accounting controls. Major projects to further tighten controls and reporting capabilities around our core systems are continuing.

The changes that have been made to the management and systems in our warehouse and distribution facilities have resulted in markedly improved performance. Tighter controls have resulted in improved delivery efficiency for customers.  As seen with the customer wins, this is a crucial part of the business.  All staff continue to work towards a high quality 'Zenith experience'.

Although the Group continues to trade at a loss, gross margins remain in line with the levels reported at the half year.  The Board has focussed strongly on growing margins and it is pleasing to see that these remain at the levels reported at the half year.  

The wider market is experiencing significant upward cost pressure. Oil price rises are feeding through into packaging materials and chemical supply is being disrupted by reduced phosphonates availability from China. The Group continues to work with its supply chain to manage input prices and procurement.

The final £1.0m of the £12.75m banking facility became available on 1 June 2008.  The Group continues to trade within its banking facilities and covenants.

The Board remains highly focused on driving improved operational and financial performance at Zenith and on generating improved returns for shareholders going forward.'  

For further information, please contact:

Zenith Hygiene Group plc            Friday, 27th June 2008 - 0207 653 0030

From Monday 30th June 2008 - 01707 270 260

Gavin Gracie, Chief Executive    

Ian Selby, Finance Director        

Oriel Securities Limited                020 7710 7600

Malcolm Strang

Michael Shaw

Scott Harris                                     020 7653 0030

Stephen Scott

James O'Shaughnessy

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