Preliminary Results and Related Party Transaction

Coburg Group plc

Unaudited preliminary results for the year ended 30 April 2010

Chairman's statement

Following my reappointment as Chairman last year, I am delighted to be able to report a return to profits after several years of losses. Profit after tax amounted to £106,000 compared with a loss of (£123,000) in the previous year.

This is an especially creditable achievement, as it occurred in a particularly difficult economic environment. The year to 30 April 2010 coincided with what we hope was the worst of the recession. It was also during the second half of the year that we assisted Caffé Nero in establishing their own roasting facilities, thereby losing a major customer. This had the effect of reducing total sales for the year, which fell from £3.5million in the previous year to £3.1million.

This profit was also achieved in spite of a large increase in the $US price of raw coffee which was made worse by the weakness of sterling during this period.

This period also saw big changes in our management structure. Bryan Stockley our experienced former factory manager was promoted in October 2009 to managing director of Coburg Coffee Company, our main operating subsidiary. I am confident that Bryan and his team will continue to take the company forward to a period of increasing prosperity.

Our strategy is for the coffee business to concentrate on what it does best and that is roasting quality coffee at competitive prices for discerning customers in the food services, wholesale and catering sectors.

Costs have now been reviewed, efficiencies identified and made. The group is now ready to face the current year with vigour and optimism.

The directors are conscious that the Company is one of the very smallest AIM listed companies and that therefore, the costs of maintaining that listing are significant. The directors have taken soundings of major shareholders not represented on the board and they have all indicated that they would like the Company to remain admitted to AIM. The directors have resolved to make full use of the Company's AIM listing to develop the Company's coffee businesses and to diversify the business and expand the capital base so that AIM listing costs cease to be a significant proportion of costs.

To this end, proposals are included in the agenda of the forthcoming General Meeting to reorganise the capital structure of the Company to facilitate the Company's ability to issue new shares for cash. The proposals also incorporate a provision to allow the Company to purchase for cash the holdings of very small shareholders with less than 1,000 shares, so reducing the Company's costs of maintaining a register with a large number of small shareholders.

It is also planned to seek authority to issue new shares to enable the Company to raise £270,000 by way of a placing of 18 million new shares at 1.5p per share or an equivalent price adjusted pro rata for the capital consolidation and subdivision to be approved at the forthcoming general meeting of the Company. The proposed subscribers have entered placing agreements with the Company, conditional upon passage of the resolutions referred to above, to implement these fund raising proposals. The new money is needed to improve the Company's working capital position, to provide new funds for capital investment in the coffee business and to take steps to broaden the base of the Company's activities.

In order to provide additional short term facilities, my company Tudeley Holdings Limited, which, with myself, already holds 22.09% of the Company, has agreed to provide at least £100,000 by way of a bridging loan for a three month period pending completion of the formalities set out above. The loan is secured by a debenture over the assets of Coburg Coffee Company Ltd on similar terms to those already granted to Barclays Bank, which provides an existing credit facility. By virtue of its size, this loan constitutes a related party transaction under the AIM Rules for Companies. The independent directors, having consulted with the Company's nominated adviser, believe that the terms of the transaction are fair and reasonable insofar as shareholders are concerned.

You should be aware that if shareholders do not vote in favour of the resolutions to re-organise the capital structure of the Company or the above mentioned placing is not completed as anticipated, the Company may not be able to repay the loan to Tudeley, which falls due on 30 November 2010.

Following the passing of the reorganisation proposals it is the directors' intention to invite two of the proposed investors to join the board as non-executive directors and a further announcement will be made at that time.

Colin Maitland is an experienced businessman who built up a very successful market research business focused on the pharmaceutical industry and Chris Ells is a Chartered Accountant who with others built up a successful leasing business.

I am confident that the addition of these two new non executive directors together with our new operational management team the Company will be in a position to go from strength to strength.

The existing business is progressing well. The results for the first quarter, normally seasonally the worst, show the Company continued to trade profitably. The Company has continued to make good progress in acquiring new contract roasting business. In spite of the continuing rises in raw green coffee prices, the directors expect the Company to remain profitable in the current year.

Konrad P Legg

Chairman

 Unaudited Group Statement of Comprehensive Income

FOR THE YEAR ENDED 30 APRIL 2010

The profit/(loss) is attributable to equity holders

Unaudited Group Statement of Changes in Equity

FOR THE YEAR ENDED 30 APRIL 2010

*At the 30 April 2010 the other reserves consists of the merger relief reserve brought forward. At 1 May 2008 other reserves included £9,000 in respect of the share option reserve.

Unaudited Group Statement of Financial Position

AS AT 30 APRIL 2010

Unaudited Group Statement of Cash Flows

FOR THE YEAR ENDED 30 APRIL 2010

Notes

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