Disposal

Havelock Europa PLC

("Havelock" or the "Company")

Proposed disposal of Showcard Print Limited

Notice of General Meeting

Havelock Europa, (AIM:HVE.L), the retail and educational interiors and point of sale printing group, today announces it has entered into a conditional agreement to sell its entire shareholding in Showcard Print Limited ("Showcard") to Ingleby (1884) Limited for a £15.25 million on a cash and debt-free basis.

 Key highlights:

·; Consideration is £15.25 million on a cash and debt-free basis. The purchase price is subject to a net £1.25 million upwards adjustment to take account of debt-like items, normalisation of working capital and payment for profits generated from the Locked Box Date.

·; Havelock will also retain the long leasehold property known as Fontana House which will be leased to Showcard Print Limited for a 10 year period, providing an annual rental income to Havelock of £150,000 from 1 January 2013.

·; Ingleby (1884) Limited is a newly incorporated company part-controlled by certain of the current senior management of Showcard Print Limited and funded by debt and equity from subsidiaries of Lloyds Banking Group PLC.

·; Showcard Print Limited operates in the point of sale print and display market. In the year to December 2010, Showcard Print made profit before taxation of £2.9 million on sales of £21.0 million.

·; The Board intends to apply the net proceeds of the Disposal to reduce the Group's net indebtedness, which stood at £17.2 million at 30 June 2011.

·; The Company has today entered into amended bank facilities with its lender which become effective upon application of £12.87 million of the net proceeds of the Disposal to reduce the Group's net indebtedness and satisfaction of certain related documentary conditions precedent.

·; In view of the size and the fundamental nature of Showcard Print relative to the Company, it is a requirement of the AIM Rules that the Transaction be conditional on the approval of Shareholders. A General Meeting is being convened for this purpose and will be held at 11.00 a.m. on 23 April 2012 at Mossway, Hillend Industrial Park, Dalgety Bay, Fife, FY11 9JS.

·; The Transaction is also conditional on the satisfaction of certain conditions contained in the facility agreement between the Proposed Purchaser and its debt provider. It is expected that this condition will be satisfied by the Proposed Purchaser following the General Meeting. As a result, the approval by Shareholders of the Resolution will not necessarily mean that the Transaction will be completed, but it cannot be completed unless Shareholder approval is obtained.

·; The Transaction is expected to complete by 30 April 2012.

Eric Prescott, CEO of Havelock Europa said:

"The disposal of Showcard will enable us to concentrate on the future growth of our core business of interiors fittings and fit out services. Our core business has made substantial progress in the last year, underpinned by significant new business with Balfour Beatty and in the financial services sector. The reduction in our Group debt and the provision of amended medium term bank facilities mean that we are financially stronger and have a platform for growth."

Copies of this announcement and the circular will shortly be made available on the Company's website www.havelockeuropa.com.

Unless the context requires otherwise, capitalised terms used in this announcement have the same meanings as in the circular dated 7 April 2012.

Investec, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Havelock and no one else in connection with the Disposal and this announcement and will not be responsible to anyone other than Havelock for providing the protections afforded to clients of Investec nor for providing advice in connection with the Disposal or this announcement or any matter referred to herein.

Havelock Europa PLC

("Havelock" or the "Company")

Proposed disposal of Showcard Print Limited

Notice of General Meeting

Introduction

The Board of Havelock announces today that Havelock has entered into a conditional agreement to sell its shareholding in Showcard Print Limited to Ingleby (1884) Limited, a newly incorporated company part-controlled by certain of the current senior management of Showcard Print Limited and funded primarily by debt and equity from subsidiaries of Lloyds Banking Group PLC, for £15.25 million on a cash and debt-free basis. The purchase price is subject to a net £1.25 million upwards adjustment to take account of debt-like items, normalisation of working capital and payment for profits generated from the Locked Box Date.

Havelock will retain the long leasehold property known as Fontana House which will be leased to Showcard Print Limited for a 10 year period from the Transfer Date, providing an annual rental income to Havelock of £150,000 from 1 January 2013.

Certain of the current senior management of Showcard Print will be directors of, and shareholders in, the Proposed Purchaser upon completion of the Transaction.

In view of the size and the fundamental nature of Showcard Print relative to the Company, it is a requirement of the AIM Rules that the Transaction be conditional on the approval of Shareholders. A General Meeting is being convened for this purpose and will be held at 11.00 a.m. on 23 April 2012 at Mossway, Hillend Industrial Park, Dalgety Bay, Fife, FY11 9JS.

The Transaction is also conditional on the satisfaction of certain conditions contained in the facility agreement between the Proposed Purchaser and its debt provider. It is expected that this condition will be satisfied by the Proposed Purchaser following the General Meeting. As a result, the approval by Shareholders of the Resolution will not necessarily mean that the Transaction will be completed, but it cannot be completed unless Shareholder approval is obtained.

Information on Showcard Print and Showcard Print Limited

Showcard Print operates in the point of sale print and display market. Showcard Print became part of the Group in 1996 when Havelock acquired the Letchworth-based Showcard Group. The Company subsequently acquired Hartcliffe Limited, a Bristol-based operation, in 1997 and following the merger of Showcard Group and Hartcliffe Limited in 2005, the enlarged business was made a division of Havelock.

Showcard Print's main manufacturing and distribution facilities are located in Letchworth. It also operates a sales office based in Bristol. In the year to 31 December 2010, Showcard Print made profit before taxation of £2.9 million on sales of £21.0 million. As at 30 June 2011, Showcard Print had gross assets of £9.4 million.

Showcard Print Limited is a newly incorporated, wholly-owned subsidiary of Havelock. The trade, assets and liabilities (save for certain excluded assets and liabilities) of Showcard Print were transferred into Showcard Print Limited on the Transfer Date, with the exception of the long leasehold property known as Fontana House which was retained by Havelock and will be leased to Showcard Print Limited for a 10 year period from the Transfer Date. The lease will provide an annual rental income to Havelock of £150,000 from 1 January 2013. Showcard Print Limited has a right to break the lease after 7 years.

Background to and reasons for the Disposal and use of proceeds

Havelock's principal activities are the supply of interior fittings and fit out services to customers in the retail and educational sectors. The Board sees long term opportunities to grow these activities by expanding the range of services that can be supplied to both new and existing customers. In the short term, the Board's focus continues to be on improving the level of profitability of these activities.

Showcard Print is not core to this strategy and, since the business is operating at close to capacity, further development of its business would require significant investment in new space and capacity. As Havelock's aim is to reduce its net debt levels and therefore strengthen its balance sheet, the Board does not believe it could make the necessary level of investment in the current financial environment.

As a consequence, the Board intends to dispose of Showcard Print Limited and to apply the net proceeds of the Disposal to reduce the Group's net indebtedness, which stood at £17.2 million at 30 June 2011.

In recent years, Showcard Print has been the most profitable business unit of the Group. Consequently, the Disposal is expected to reduce the overall profitability of the Group. In the year to 31 December 2012, the Directors expect the Transaction to be earnings dilutive for Shareholders.

In the medium term, the Board believes the Disposal will reduce the pressures inherent in operating in a significantly indebted manner and will enhance the prospects for the focused expansion and continued development of the Group's interior fittings and fit out services business.

Current trading

The Group expects to report in its final results for 2011 that the Group's trading for the year to 31 December 2011 was in line with expectations.

The Group has made good progress in a difficult market. In the core Interiors business, the team has been strengthened with the appointment of highly experienced Commercial and Business Development Directors. The Group has already announced a new framework agreement with Balfour Beatty which secures a significant amount of work in the educational sector.

The Group has also recently renewed its framework agreement with Lloyds Banking Group, its largest customer, and Boots the Chemist worth between £15-20 million and in excess of £5 million respectively. In line with the Group's growth plan, both of these tenders have been awarded in recognition of an expanded range of capabilities that the Group has offered to its customers. The Group has made good progress in securing new business with Marks and Spencer and Primark both in the UK and overseas.

The Group expects market conditions to remain challenging in 2012.

Amended bank facilities

The Company has entered into amended bank facilities with its lender which will become effective upon application of £12.87 million of the net proceeds of the Disposal to reduce the Group's net indebtedness and satisfaction of certain related documentary conditions precedent.

The terms of the amended bank facilities include:

(a) a revolving credit facility of £6,250,000 reducing by £500,000 on 30 June 2013, by a further £500,000 on 31 December 2013 and by a further £500,000 on 30 June 2014. The revolving credit facility will expire on 31 December 2014;

(b) revised working capital facilities (consisting of overdraft, guarantee, bonding and letter of credit facilities and forward foreign exchange contracts) with an initial aggregate overdraft limit of £3,250,000 (reducing to £1,250,000 on 1 November 2012 then increasing to £2,050,000 on

1 January 2013) together with aggregate payment systems limits of £15,250,000. The availability of the revised working capital facilities and payment systems will be subject to review on 31 May 2013;

(c) the margin applicable to the revised revolving credit facilities is 5.0 per cent. above LIBOR, the margin applicable to the revised working capital facilities is 4.5 per cent. above the Bank of England base rate for secured overnight lending to borrowers (where applicable) and total arrangement fees payable at the time the revised facility terms become effective are £178,750;

(d) revised financial covenants tailored to reflect the revised Group, based on interest cover, leverage, cash generation and trade debtor cover ratios; and

(e) the existing security package granted by the Group will remain substantially unchanged.

Principal terms and conditions of the Transaction

A Sale and Purchase Agreement was entered into on 6 April 2012 between the Company and the Proposed Purchaser for the sale and purchase of the entire issued share capital of Showcard Print Limited. The principal terms and conditions of the Sale and Purchase Agreement are as set out below:

(a) Conditions precedent to Completion

Completion of the Disposal is conditional on:

(i) the passing of the Resolution by Shareholders at the General Meeting; and

(ii) satisfaction of the conditions precedent in the facility agreement entered into between the

Proposed Purchaser and its debt provider.

If the second condition is not satisfied as soon as reasonably practicable and in any event within 5 Business Days of the passing of the Resolution (or such later date as Havelock shall agree in writing with the Proposed Purchaser), the Transaction shall not proceed to Completion and the Agreement will cease to have effect immediately after that date (with the exception of certain provisions such as confidentiality obligations). If the Resolution is passed and the second condition is satisfied within 5 Business Days of the General Meeting then Completion is expected to occur by 30 April 2012.

(b) Consideration

The debt and cash free consideration payable by the Proposed Purchaser in respect of the Disposal will be £15.25 million. The purchase price is subject to a net £1.25 million upwards adjustment to take account of debt-like items, normalisation of working capital and payment for profits generated from the Locked Box Date.

Havelock will also retain the long leasehold property known as Fontana House which will be leased to Showcard Print Limited for a 10 year period from the Transfer Date, providing an annual rental income to Havelock of £150,000 from 1 January 2013. Showcard Print Limited shall have an option to purchase Havelock's interest in Fontana House. This option may be exercised at any time whilst the parties are landlord and tenant respectively but the option will not prevent Havelock from marketing the property for sale, and disposing of it to a third party, unless Showcard have previously exercised the option.

(c) Warranties and indemnities

The Company has given a number of warranties, and certain indemnities in respect of tax matters, to the Proposed Purchaser which are customary for a transaction of this nature. The aggregate liability of Havelock for any breaches of such warranties and under such indemnities shall not exceed £11,223,480.

The Proposed Purchaser is not entitled to recover any amount in respect of warranty claims unless the aggregate value of recoverable claims exceeds £100,000 (such amount being a threshold and not an excess). Any individual warranty claim with a value of less than £10,000 cannot be recovered by the Proposed Purchaser and such irrecoverable claims do not count towards the £100,000 threshold. Claims must be brought within 18 months after the date of Completion in respect of general matters, and within 7 years in respect of tax matters.

Havelock has given an unlimited indemnity in respect of leakage from the "Locked box" mechanism (see paragraph (d) below) and no liability caps will apply in respect of any claims under that indemnity. A claim under this indemnity must be notified within 12 months from Completion.

Havelock has also granted an unlimited indemnity in respect of any liabilities which arise for Showcard Print Limited or the Proposed Purchaser as a result of any deemed participation by Showcard Print Limited in the occupational pension scheme operated by Havelock. The Board does not believe there to be any material risk of a claim being brought against the Company pursuant to this indemnity as Showcard Print Limited has not become a participating employer in the pension scheme (the liability for benefits of Showcard Print employees accruing between the Transfer Date and Completion being met by Havelock) and will not do so if Completion occurs because the Proposed Purchaser intends to implement an alternative pension arrangement. A claim under this indemnity must be notified within 33 months of Completion.

(d) Locked box mechanism

The "locked box" is a mechanism by which Havelock and the Proposed Purchaser agreed the purchase price for Showcard Print based on a balance sheet drawn up and settled as at the Locked Box Date. This is beneficial to Havelock as it means that the value of Showcard Print Limited was determined before the signing of the Sale and Purchase Agreement, avoiding the potential for disputes and/or price adjustments that can arise with a completion accounts mechanism following Completion. It also provides greater certainty for the Proposed Purchaser of the final consideration that it must fund.

The Proposed Purchaser receives a number of protections in the Agreement to prevent the Company from being able to extract value (referred to as "leakage") from the Locked Box Date until Completion, other than any pre-agreed value extraction that has already been factored into the purchase price (referred to as "permitted leakage"). Any "leakage" that is not "permitted leakage" will be repayable by Havelock on a pound-for-pound basis to the Proposed Purchaser under an agreed uncapped indemnity.

(e) Undertakings

The Company grants certain customary undertakings to the Proposed Purchaser in the Agreement. In particular, it grants certain restrictive covenants for a three year period to protect Showcard Print Limited by prohibiting Havelock or any member of its Group from competing with Showcard Print Limited or from soliciting its executives, senior employees or officers to leave Showcard Print Limited. Havelock is also prohibited from divulging confidential information and from using the name "Showcard Print" or any similar name at any time. These undertakings are subject to certain exceptions, including allowing the Company to hold certain listed shares for investment purposes and to continue undertaking the core business of education and retail interiors and educational supplies in the normal way.

The Proposed Purchaser has undertaken to use all reasonable endeavours to procure the release of the Company from certain guarantees granted by the Company to the landlords of certain properties occupied by Showcard Print Limited. The Proposed Purchaser together with Showcard Print LImited also granted a counter indemnity in favour of the Company in respect of those guarantees.

(f) Termination

In the event that any of the conditions to Completion are not satisfied or waived by the last date for satisfaction of that condition then the Agreement will cease to have effect, and the parties shall have no further obligation to each other, except that any rights or liabilities accrued prior to termination will not be extinguished and certain limited provisions will survive termination.

In the event that the conditions are all satisfied, neither party shall be entitled to rescind the Agreement and any breach of the Agreement by either party will be actionable by monetary award of damages or (where applicable) remedies such as injunction or specific performance unless the Proposed Purchaser believes that a breach of certain warranties to be restated at Completion will occur (or would occur but for the Company exercising its right to disclose such a breach). If the Proposed Purchaser has a reasonable and demonstrable basis for such belief, and it can show that as a result of the relevant matter a material adverse change would occur to Showcard Print Limited, then the Proposed Purchaser may elect to rescind the Agreement in which event the Agreement ceases to have effect in the same manner as if a condition was not complied with.

(g) Governing Law

The Agreement and all ancillary documentation are governed by English law and any dispute will be settled exclusively by the English courts.

General Meeting

The Transaction is conditional on the approval of Shareholders at the General Meeting. The General Meeting will be held at the Company's offices at Mossway, Hillend Industrial Park, Dalgety Bay, Fife, FY11 9JS on 23 April 2012 at 11.00 a.m. At the General Meeting, the Resolution will be proposed to approve the Transaction. The Resolution will be proposed as an ordinary resolution and to be effective it requires to be approved by the holders of a simple majority of the Ordinary Shares represented (in person or by proxy) at the General Meeting.

The Board considers the Disposal to be in the best interests of the Company and Shareholders as a whole and accordingly the Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the General Meeting.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Note

All references in this announcement are to London times unless otherwise stated.

DEFINITIONS