Final Results

28 August 2014

MBL GROUP PLC

Full Year Results for the Year Ended 31 March 2014

MBL Group plc ("MBL" or the "Group") announces its final audited results for the year ended 31 March 2014. Comparative figures are for the year ended 31 March 2013, unless otherwise indicated, and are restated for discontinued operations.

Key points:

· Revenue from continuing operations up 10% to £12.5 million (2013: £11.3 million)

· Loss before tax from continuing operations £0.8 million (2013: £0.8 million)

· Group revenue (including discontinued operations) fell 20% to £12.6 million (2013: £15.8 million)

· Group loss before tax (including discontinued operations) £1.2 million (2013: loss £1.5 million)

· Group loss per share reduced to 7.2p (2013: loss 8.7p)

· The Group remains debt free with a cash balance of £2.7 million at year end (2013: £3.1 million)

· No dividend is proposed.

* Reference to 'Group' items, includes both continued and discontinued operations.

Commenting on these results, Tony Johnson, Non-Executive Chairman of MBL, said:

"We are pleased to report that the Group made solid progress during the year in strengthening its core operations. Sales within both the Home Entertainment and Garden & Leisure divisions grew during the year with significant investments made into developing the brands acquired in the previous year."

Extracts from the final results appear below and a full version will be available on the Company's website www.mblgroup.co.uk from 1 September 2014.

For further information please contact:

MBL Group plc Tel: 01772 440440

Lisa Clarke, Financial Director

SPARK Advisory Partners Limited Tel: 0203 368 3555

Sean Wyndham-Quin

Mark Brady

SI Capital Limited Tel: 01483 413500

Nick Emerson

Andy Thacker

Combined Chairman's and Chief Executive's statement

We are pleased to report that the Group made solid progress during the year in strengthening its core operations. Sales within both the Home Entertainment and Garden & Leisure divisions grew during the year with significant investments made into developing the brands acquired in the previous year. These investments have, in the short term, affected the cost base of the Group which reports a loss for the period. We do however believe that the Group now operates diverse operations and is well positioned to start to deliver improved returns.

The Group completed the final stage of the rationalisation programme which commenced in 2011 with the relocation of its head office and the Garden & Leisure division to smaller premises in Preston. For the purposes of these statements, the final costs incurred in the rationalisation are classified as Discontinued and the prior year comparatives have been restated to include the disposal of surplus stock balances through MBL Direct Limited.

Operational Review

Home Entertainment

Our Home Entertainment division, which trades business to business, experienced a good sales year with revenues increasing 10% to £9.5 million. Gross profit margins reduced from 16% to 14%, due to market conditions and as a consequence operating profit fell 40% to £0.3 million. The market for the division's products has remained stable despite the overall decline in the home entertainment market and we remain cautious about the longer term impact this market decline may have on sales.

Garden & Leisure

Our Garden & Leisure division, which trades direct to consumer, comprises the two brands Garden Bird Supplies and Garden Centre Online.

Garden Bird Supplies faced a difficult market with the UK experiencing one of the mildest winters on record. As a consequence, the UK market for bird food suffered a substantial fall in general demand. The brand experienced an 11% reduction in like for like sales although gross margin percentages were maintained. During the year extensive investment was made into promoting the brand with increased advertising, improved online marketing and attendance at key shows.

The Garden Centre Online brand trialled national press advertising and the promotion of its products through voucher sites and also the introduction of a range of plants. The trial resulted in increased sales however the investment in trialling the various marketing activities in a highly competitive market resulted in a trading loss. For the coming year, the brand will concentrate on sales through its online sales channels only and a reduced product offering. As a result sales are expected to reduce and operating performance to improve.

Financial Review

The Financial Statements have been prepared to separately present the financial performance of the Group's continuing operations and discontinued operations. The prior year figures have been restated to provide a comparable position. The Segmental Analysis in the Notes to the Financial Statements presents the Group's consolidated revenue streams.

Combined Chairman's and Chief Executive's statement (continued)

Group revenue for the year decreased by 20% to £12.6 million (2013: £15.8 million) reflecting the impact of unsustainable operations discontinued in the prior year. Revenue from our continuing operations increased 10% to £12.5 million (2013: £11.3 million).

Overall gross margins from continuing operations reduced to 22% (2013: 24%) as a result of market conditions within the Home Entertainment division. Gross margin within the Garden & Leisure division improved marginally.

The Group loss improved slightly to £1.3 million (2013: £1.5 million), with discontinued operations contributing £0.5 million to this loss. The loss from continuing operations remained at £0.8 million (£0.8 million) reflecting the investment made into the Garden & Leisure division and the impact of reduced gross margins in the Home Entertainment division. The relocation of the head office and Garden & Leisure division to smaller premises just before the year end will have a positive effect on the cost base in future years.

The level of losses reflects the investment being made in the operations and we expect to see profitability across the Group's divisions improving in the coming year.

Cash flow, working capital and borrowing facilities

The Group has consumed £0.4 million net cash over the year (2013: net cash consumed of £0.9 million). At the year end cash balances were £2.7 million (2013: £3.1 million) and the Group remained debt free. The Group continues to experience a lack of available supplier credit within the Home Entertainment division but is in a position to fund its operations for the foreseeable future.

Earnings per share

Basic and diluted loss per share for the Group was 7.2p (2013: loss 8.7p).

Health and Safety

We continue to work as efficiently and as safely as possible and external reviews are undertaken throughout the year to reinforce Health and Safety practices.

People

The Group headcount has stabilised at 53 employees, as at the year end, following the rationalisation programme introduced in 2011. We continue to place emphasis on the development of our employees in line with the Group's overall strategy.

Compliance

Compliance with legislation and regulatory standards is taken seriously. This includes our obligations under Data Protection, Health and Safety and in the sourcing of our products.

Combined Chairman's and Chief Executive's statement (continued)

Board Membership

After the year end, Tony Johnson joined the Board as an independent Non Executive Director. Subsequent to this appointment Peter Cowgill, who had acted as Non Executive Chairman since 2006, resigned from the Board and Tony was appointed Non Executive Chairman.

Investment

As part of our growth strategy we have invested in our new division, Garden & Leisure. We are confident that this division will positively contribute to profitability in future years.

Strategy

We have been committed to diversifying the Group's operations to reduce the concentration on the Home Entertainment market, which has been in long term decline. Our plan is to maintain the Home Entertainment division and to grow our developing Garden & Leisure brands. We see many opportunities to build on the skills within the Group and ensure that the business is not over committed to any single market.

Current Trading

The year has started satisfactorily with sales in line with management expectations in both divisions. Our critical trading period for both divisions is in the final six months of the financial year when demand for its products increases and we believe the Group is well positioned to maximise performance.

Tony Johnson

Non-Executive Chairman

Trevor Allan

Chief Executive

28 August 2014

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2014

Consolidated Statement of Financial Position

at 31 March 2014

Consolidated Statements of Cash Flows

for year ended 31 March 2014

Notes to the Financial Statements

for the year ended 31 March 2014

1. Source of Information

The preliminary financial statements for the financial year ended 31 March 2014 were approved by the Board of Directors on 27 August 2014. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2014 or 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the registrar of companies, and those for 2014 will be delivered following the Company's Annual General Meeting.

The auditors, KPMG LLP, have reported on those accounts; their report for 2014 was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation. The report for 2013 was (i) unqualified and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Operating segments

The segments disclosed below reflect the Group's management and internal reporting structure. During the current and prior financial year, the following subsidiaries were disposed or ceased trading and have been classified as discontinued operations within these Financial Statements:

- Big Retail Limited

- MBL 2010 Limited

- Megafit Limited

- Cash4discs Limited

- Music Box Leisure Limited

- MBL Direct Limited

Consolidated statement of comprehensive income for the year ended 31 March 2014

Consolidated statement of comprehensive income for the year ended 31 March 2013 (restated)

3. Loss per Share

The calculation of basic loss per share has been calculated on the loss after tax of £1,246,000 (2013: £1,506,000) and the weighted average number of shares in issue during the year of 17,296,068 shares of 75p each (2013: 17,296,068 shares of 75p each).

The calculation of diluted earnings per share is identical to that used for the basic loss per share.

The adjusted loss per share, as disclosed below, was calculated using the loss after tax for the financial year calculated with reference to the basic and diluted weighted average share in issue during the year.

4. Discontinued operations

5. Annual report

The Annual Report will be posted to shareholders in early September. Copies of the Annual Report will be available on request from the MBL Group plc, Unit 1 Millennium City Park, Millennium Road, Preston, PR2 5BL and will be available to download from the Company's website at www.mblgroup.co.uk.