Preliminary Results - Year ended 31 March 2013

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2013

C. H. Bailey plc ("C. H. Bailey", the "Company" or together with its subsidiaries the "Group"), a diverse group of international businesses, with investments and operations in leisure, property and engineering with its current key markets being Tanzania, Malta and the UK announces its audited preliminary results for the year ended 31 March 2013

Group Financial Summary

CH Bailey plc

Bryan Warren, Company Secretary +44 (0) 1633 262 961

Arden Partners plc

Richard Day, Jamie Cameron

+44 (0) 207 614 5900

Chairman's statement

Your company in the year under review made a net loss after tax of -£0.2m. Nonetheless, I am pleased to report further improvements in the group's underlying performance. Total income from continuing operations increased for a third consecutive year to £5.3m (2012: £4.3m), as has our gross profit and operating profit.

The group continues to benefit from increasing levels of economic activity in Tanzania, part of which can be ascribed to ongoing natural resources discoveries in the region. Our Tanzanian business accounted for some £2.6m (2012: £1.8m) of gross group income from continuing operations in the period under review.

Our single remaining UK non-services business, Bailey Industrial Engineering, continues to benefit from the economic downturn in Europe as our clients have sought to repair machinery and equipment rather than invest in new capital equipment. While gross income again has increased over the previous year's, we have seen pressure on our margins but have remained profitable.

Results

The group's consolidated pre-tax loss before taxation for the year was -£0.2m, compared to profit in 2012 of £8.9m, which was due in large part to the profit on the part disposal of the group's Maltese assets. In 2011, the loss was -£0.5m.

We are pleased that our operating profit from continuing operations, which excludes exceptional items, investment activities and depreciation, has improved for a third consecutive year (2013: £320,000 2012: £64,000).

Our EBITDA has improved from a loss of -£0.3m in the previous period to £0.8m in this period. In 2011, EBITDA was -£0.5m.

2013 2012 2011

Revenue from continuing operations £ 5.3m £ 4.3m £ 4.3m

Gross profit from continuing operations £ 1.4m £ 1.2m £ 1.1m

Operating profit from continuing operations £0.3m £64,000 £40,000

EBITDA £0.8m (£ 0.3m) (£ 0.5m)

Pre-tax profit/(loss) before tax (£ 0.2m) £ 8.9m (£ 0.5m)

The group's cash holdings have reduced to £4.6m (2012: £6.8m) reflecting an active investment programme during the period, which is largely reflected in the balance sheet (Note 13) as an increase of £4.2m in freehold and leasehold land and buildings during the period under review, including exchange differences (2013: £13.6m 2012: £9.4m). These cash holdings of £4.6m will continue to give us an ability to make strategic longer term acquisitions as well as allow us to weather any economic storms or downturns.

The net loss per share (based on the weighted average number of shares) after tax was -2.76p (2012: 93.99p).

Tanzania

Total group income derived from our businesses in Tanzania increased again during the period under review (2013: £2.6m 2012: £1.8m), and represents 49% (2012: 41%) of total group income, testifying again to the significance of our businesses there. Given our additional investment in income producing assets here this past year, we expect this percentage to increase further in the coming period.

In the tourism sector, we continue to own and operate niche, high-end properties at The Oyster Bay Hotel, our hotel in Dar es Salaam, and Beho Beho, our safari camp in the Selous Game Reserve.

Hospitality revenues in Tanzania continue to be lower than expected, due to the recovery in the high end tourist market being weaker than we had hoped, and because Mikumi Wildlife Camp was closed for refurbishment for the second half of the year under review. Having increased the rack rates for our other properties, we were not surprised by the small overall reduction in revenue, with gross income falling by 11% to US$0.8m (2012: US$0.9m). Forward bookings for the current year suggest that we will experience a stronger recovery this season, with higher levels of income per person.

I noted in my statement last year that we had begun the construction of the final building on our Oyster Bay Hotel site, which we call Phase III - The Oyster Bay Hotel Club & Spa. The development, I believe, will consolidate our reputation locally for providing high end serviced accommodation and commercial offices and retail space. The building will offer a mixed use of some 6,000m2, of serviced accommodation and commercial office space. There will be some retail space, which will be an extension to the services provided by the Oyster Bay Hotel facilities.

Our Oyster Bay Hotel shopping centre continues to be profitable. With some 2,000m2 of serviced retail space, we achieved an average occupancy of 95% at the current market rates. This occupancy level reflects the churn of some tenants during the year, which has resulted in new retail businesses now operating in the centre.

In June 2012, we announced the acquisition of approximately 24 acres of prime, undeveloped beach front property, 45 minutes south of Dar es Salaam. I am pleased to confirm that during the year we have been able to acquire an additional 4 acres adjoining our plot on the beach, and some further land which provides a buffer and better access from the nearest public road. This increased acreage affords us a greater number of development options, which we will begin to consider once Phase III at the Oyster Bay Hotel has been completed and is open.

Malta

Gross income from hotel operations are reduced, due to the sale of part of the property. In 2011, gross turnover was down some 9% on the previous year to £517,000 (2012: £568,000). This reduction, combined with a small increase in administrative expenses, resulted in an operating loss of -£124,000 (2012: -£34,000).

We did receive during the period a long outstanding compensation payment of £116,000 from the Maltese Government. This payment was the principal factor in turning the operating loss into a net profit after tax of £27,000 (2012: £8.5m).

As announced previously, the purchaser of our Maltese property has, as per the contract agreed in 2011, paid a deposit of €400,000 for the sale of the balance of the property held by St. George's Bay Hotel Limited, which is scheduled for completion on the 30th March 2015.

The renovation of the heritage property overlooking the Grand Harbour that we purchased last year is nearing completion. The work and our presence in Valletta has led to further properties being offered to the company. We are considering, therefore, investing in additional properties of a similar high quality in Valletta, which will be the European Capital of Culture in 2018. These properties could provide serviced accommodation, office space and one particular property is being considered as a boutique hotel.

The United Kingdom

Bailey Industrial Engineering ("BIE") has had another good year, with gross income increasing by 14% to £2.0m (2012: £1.8m). Although very difficult trading conditions for our clients in the UK, and in South Wales especially, have put pressure on our margins, the business remains profitable 2013: £37,000 (2012: £47,000).

Given current market conditions, this is a very pleasing result and it reflects the commitment of the BIE board and the whole team in South Wales, which has now provided the group with a third consecutive year of profits.

Board and senior management matters

Rod Reynolds joined your board in June 2012 as a non-executive director and brings with him experience gained globally over many years in financial services and investment. He chairs the Remuneration Committee and will also serve on the Audit & Risk Committee. He succeeds Sir William McAlpine as your senior independent director.

There have been no others changes to the board for the period under review, but, during the year, we have taken steps to strengthen our subsidiaries' boards and senior management, particularly in respect of those concerned with our Tanzanian operations.

A new Chief Operating Officer has been appointed In Tanzania, which will allow more time to look for further opportunities to drive the business forward in both East Africa and elsewhere. We will look for projects that are in in accordance with our strategy of enhancing the underlying value of assets already held and considering new opportunities that would strengthen the revenue stream and bottom line.

Dividend

In light of both the group's cash reserves and operating position, which we believe to be sustainable, we will be asking shareholders at the Annual General Meeting for their approval to pay a special dividend of 5p per share to Members on the share register as at 25 October 2013. The shares will become ex-dividend on 23 October 2013.

Outlook

We expect further growth with greater income and profits in Tanzania in 2014, due principally to the opening of the Phase III development at the Oyster Bay Hotel. There are signs which appear to herald a more positive outlook for our hospitality division, but I must remain cautiously optimistic given the past 2 years' results and the continued fragility of the global economy.

The board continues to believe that the natural resources discoveries in the region will continue to make prospects in Tanzania exciting for the group as we continue to provide services to many companies involved in the natural resources sector, and we are evaluating a number of investment opportunities, including those presented by our existing clients as they expand operations in the region.

The on-going hospitality operations in Malta will continue either at breakeven or show a small loss. This loss should be considered in conjunction with the successful redevelopment of our heritage property and sale of the St. George's Bay Hotel site, which will impact on both the local and global business model for new ventures both on Malta and elsewhere.

We believe that Bailey Industrial Engineering will continue to grow both its turnover and profits, although the challenges facing its customer base should not be ignored. Recent appointments hopefully will impact positively on the company, through a wider customer base with increased sales and productivity.

We continue to consider investment in high quality assets in geographical areas in which we have long term experience or trusted business partners. Our reputation as a niche, quality developer and operator providing excellent service to guests and customers is evidenced by strong interest in our new developments at the Oyster Bay Hotel and in Malta.

I remain an eternal, passionate, yet cautious, optimist - and believe that the group's prospects in the short and long term are sustainable and exciting. We will continue to increase the focus of our investment project evaluation process to ensure we continue to enhance the existing value of the portfolio and the strength of its income stream.

I take this opportunity to thank all our staff for their continued hard work, commitment and enthusiasm.

Charles Bailey

24 July 2013

Consolidated Income Statement

for the year ended 31 March 2013

*Earnings before interest, taxation, depreciation, profit on sale of plant and equipment and profit on sale of property.

Consolidated Statement of Comprehensive Total Income

for the year ended 31 March 2013

Balance Sheets

as at 31 March 2013

Consolidated Cash Flow Statement

for the year ended 31 March 2013

Consolidated Statement of Changes in Equity

for the year ended 31 March 2013

There were no transactions with owners recorded directly in equity during the year ended 31 March 2013.

Notes to the Accounts

1. General information

Basis of preparation

These financial statements have been prepared in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Companies Act 2006. These financial statements, therefore, comply with the rules of the Alternative Investment Market of the London Stock Exchange (the "AIM").

The financial statements are prepared using the historical cost basis of accounting except for:

·; Properties held at the date of transition to IFRS which are stated at deemed cost; and

·; Assets held for sales which are stated at the lower of fair value less anticipated disposal costs and carrying value.

Going concern

The directors have prepared these financial statements on the fundamental assumption that the group is a going concern and will continue to trade for at least 12 months following the date of approval of the financial statements.

Further information explaining why the directors believe the group is a going concern is given in the financial review section of the Directors' Report contained in the 2013 Annual Report.

2. Segmental information

3. Investment activities and other income

4. (Loss) profit before taxation

The following have been charged (credited) in arriving at the (loss) profit before taxation:

The profit on the sale of property arises on the sale of part of the hotel complex in Malta.

5. Taxation

The tax charge for the financial year can be reconciled to the profit before tax per the income statement multiplied by the standard applicable corporation tax rate in the UK of 24% as follows:

6. Earnings (loss) per share

The earnings per share has been calculated by reference to the weighted average number of ordinary shares of 10p each in issue of 7,607,755 (2012: 8,192,267) which excludes own shares held. There are no share options, convertible equity or debt instruments in issue.

7. Cash generated from operations

8. Preliminary Statement

This preliminary statement will not be posted to shareholders; however, a copy will be available on the Company's website, www.chbaileyplc.co.uk. This preliminary announcement does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The annual report and accounts for the year ended 31 March 2013 and the comparatives under IFRS have not yet been filed with the Registrar of Companies.

The full Annual Report & Financial Statements, together with the notice convening the company's the annual general meeting to be held at the Hilton London Heathrow Airport, Terminal 4, Heathrow Airport, Hounslow, Middlesex, on 10th September at 2pm , is being posted to shareholders and can be expected to be received by 10 August 2013. However, it will be available for viewing and download on the Group's website from today.

The statutory financial statements for the year ended 31 March 2012, prepared under adopted IFRS, have been reported on by the group's auditors and delivered to the registrar of companies. The auditors' report was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

This announcement contains forward looking statements which are made in good faith based on the information available at the time of its approval. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward looking statement which could cause actual results to differ materially from those currently anticipated.