Preliminary Results - Year ended 31 March 2014

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2014

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 2014.

Group Financial Summary

CH Bailey plc

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

Arden Partners plc

Richard Day, Ciaran Walsh

+44 (0) 207 614 5900

Chairman's Statement

Your company in the year under review made a net loss after tax of £1.4m (2013: loss £0.2m). Despite the disappointing operating results, principally from the traditional industrial division and investment activities, the group has made progress in its ongoing objective of achieving ongoing profitability to provide a sustainable return to shareholders whilst continuing to reinvest and grow shareholder value. The main focus of the group is to develop and operate hospitality facilities providing high end accommodation and serviced office and retail space.

Results

Revenue has fallen by 17.5% to 4.4m (2013: £5.3m) reflecting the falls in the industrial division of £0.7m and Malta of £0.2m.

The group made a gross profit of £1.2m (2013: £1.4m) with an increased gross profit margin of 27.3% (2013: 26.5%).

The group made an operating profit before exceptional items, investment activities and depreciation of £13k (2013: £320k).

The overall loss per share was 18.41p (2013: 2.76p).

The group continues to generate positive cash flows. Net cash inflow from operating activities was £766k (2013: £347k).

The group invested £3.4m on fixed assets, primarily on the latest East African development, the Oyster Bay Hotel Residence (Phase III), which will be completed and fully operational in September 2014.

The hotel in Malta, St Georges Bay Hotel, and safari park in Tanzania, Mikumi Wildlife Camp, have been transferred to "assets classified as held for sale" at the combined book value of £2,338,960. Conditional agreements have been made for the sale of these assets totalling £11.5m net of sale costs.

Africa

Revenue derived from our businesses in Tanzania was £2,582,661 (2013: £2,625,134) and revenue from this region of East Africa now represents 59% (2013: 49%) of total group revenue. The operating profit in Tanzania was £391,209 (2013: £302,473). Following the completion the Oyster Bay Hotel Residence (Phase III) in September 2014, this is expected to increase further in the current year.

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. As stated above, the construction of the final building on our Oyster Bay site, the Oyster Bay Hotel Residence (Phase III), will be completed in September 2014. The building comprises of some 6,000m2 of serviced accommodation and commercial office and retail space.

Our Oyster Bay Hotel shopping centre continues to be profitable. With some 2,000 m2 of serviced retail space, average occupancy of over 90% (2013: 95%) was achieved.

With our focus on the higher end of the market, the decision was taken to sell our Mikumi Wildlife Camp. A conditional agreement has been made for the sale and it has been transferred from fixed assets to "assets classified as held for sale" at its book value of £205,179. We have now received a deposit with a further balance due in October and completion by the end of the current year.

The group is exploring various development opportunities in respect of the development site of 28 acres of beach front land, 45 minutes south of Dar es Salaam.

African Corporate Social Responsibility

As part of a CSR programme we have engaged in a number of projects in Tanzania with different local and overseas organisations.

We are now working with the Selous Emergency Elephant Programme (SEEP) to help preserve and rebuild the stock of elephants left in the Selous Game Reserve, which is estimated as 13,000, from some 70,000 five years ago. The assistance here is to have more feet on the ground patrolling the reserve and education of the communities surrounding the Selous to provide and offer an alternative to poaching.

With READ international and the HMT trust, we have rehabilitated schoolrooms and provided libraries, desk and chairs for 2 schools and we are looking to upgrade further classrooms and libraries in Kisaki near Selous and Kimbiji, south of Dar es Salaam.

With Children in Crossfire and Tumaini La Maisha we are continuing our support of the Muhimbili Children`s Cancer Oncology unit, which is now starting a Masters programme to train new doctors and specialist nurses.

Malta

Revenue derived from our businesses in Malta has fallen to £361,854 (2013: £512,347). The operating loss in Malta was £269,055 (2013: profit £13,369).

As a conditional agreement has been made for the sale of the hotel in Malta, St Georges Bay Hotel, it has been transferred from fixed assets to "assets classified as held for sale" at its book value of £2,133,781. Under the conditional agreement, the purchaser has until 30 March 2015 to complete on the sale of the hotel for €13,743,283 on which a deposit of €400,000 has been received.

The renovation of the heritage property overlooking the Grand Harbour was completed during the year.

Industrial

Revenue derived from our industrial division in the United Kingdom was £1,309,556 (2013: £2,037,309). The operating loss was £274,033 (2013: profit £37,313). Bailey Industrial Engineering Limited, the group's specialist heavy engineering operation, experienced a severe fall in revenue in, part due to one of its major customers being sold and the transition period resulting in a 50% reduction in orders being placed with BIE. This transition period is over and sales for the current year are growing but are not expected to reach previous levels in the short term.

Principal objectives and strategy

The group principal objective is to continue to develop and operate hotel and hospitality facilities providing high end accommodation and serviced office and retail space. The primary strategy is to achieve profitability from the existing asset base in order to reinvest where opportunities arise and provide a sustainable return to shareholders and to grow shareholder value.

Future development of business

As the latest development becomes operational, the group aims to maximise revenues whilst carefully controlling its cost base to ensure that acceptable levels of profit can be achieved. The group will also consider further projects in Africa or Europe including potential opportunities to develop the 28 acres of beach front land, 45 minutes south of Dar Es Salaam.

The board believes that the African revenue and operating profits will increase as the Oyster Bay Hotel Residence (Phase III) becomes operational in September 2014. The board remain optimistic for prospects in this region which is experiencing high growth stimulated by natural resources discoveries.

Significant new customers have been brought into the industrial business and the board has every confidence that the industrial revenues will increase in the current year to help make a positive contribution to overall group performance.

The board anticipates completing the conditional agreements for the sales of both St Georges Bay Hotel in Malta and Mikumi Wildlife Camp in Tanzania for a combined £11.5m net of sale costs during the current year.

Board and senior management matters

David Orchard has decided not to stand for re-election as a director due to personal and work related commitments, leaving him not enough time to commit to his position. He has served the board with distinction, particularly with his experience in the industrial operations. The board would like to thank him for his significant contribution. Rod Reynolds will take over as chairman of the audit and risk committee. As the company continues to grow its asset base and operations, it is looking to strengthen its board with complementary skills and experience.

Dividend

Based on the results, the board will not be recommending the payment of a final dividend for the year (2013: 5 pence per ordinary share).

The board aims to resume dividends in the future and have put in place measures in order to achieve the principal objectives and strategy of the group, which is profitability and providing a sustainable return to shareholders.

People

The success of the group is down to the hard work and dedication of the staff. I take this opportunity to thank the team, on the board's behalf, for their efforts over the last year.

Outlook

The group continues to face a number of challenges, however, continues to invest in its asset base. We remain confident in our strategy of achieving profitability to provide a sustainable return to shareholders whilst continuing to reinvest as opportunities arise in order to grow shareholder value.

Charles Bailey

29 July 2014

Consolidated Income Statement

for the year ended 31 March 2014

*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 2014

Balance Sheets

as at 31 March 2014

Consolidated Cash Flow Statement

for the year ended 31 March 2014

Consolidated Statement of Changes in Equity

for the year ended 31 March 2014

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2014

Notes to the Statements

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. Therefore these financial statements comply with the AIM rules.

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 2014 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 23% as follows:

6. Profit on the sale of property

On the 9 October 2009, St George's Bay Hotel Limited entered in to a conditional agreement to sell the majority of the group's hotel complex in Malta. A deposit of €815,300 was paid by the purchaser. On completion a further €28,301,867 was to be paid giving a total consideration of €29,117,167.

On 9 September 2011, the agreement was varied and pursuant to the variation, completion took place on the sale of part of the hotel complex for €15,373,884. Pursuant the variation, it was also agreed that the purchaser has until 30 March 2015 to complete the purchase of the remaining property. The total consideration of €29,117,167 remains unchanged. Therefore, the consideration payable for the remaining property will be €13,743,283. A deposit of €400,000 has been paid by the purchaser. This deposit at 31 March 2014 is £330,464 (2013: £343,984).

7. 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 (2013: 7.607,755) which excludes own shares held. The share options in issue have no dilutive effect on the weighted average number of ordinary shares.

8. Cash generated from operations

9. 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 2014 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 TW6 3AF on the 9th September 2014 at 2.00pm, is being posted to shareholders and can be expected to be received by 11th August 2014. 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 2013, 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.