ALY.L Regulatory News (ALY)

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

22 August 2018

Sale of Property in Singapore

The Company announces that it has entered into a conditional agreement to sell, through its wholly-owned subsidiary, Laura Ashley (Asia) Pte Ltd, its commercial property in Singapore located at No.29, New Industrial Road ("Property"), to SB (29NIR) Investment PTE.LTD ("Purchaser") for a cash consideration of SGD$54.5million (£30.3 million) to be paid on completion ("Disposal").

Completion of the Disposal is conditional on Shareholders' approval and therefore a circular will be published setting out details of the proposed transaction and including a notice of General Meeting in order to seek Shareholders' approval of the Disposal ("Circular"). It is expected that the General Meeting will be held on 16 October 2018 and that completion of the Disposal will occur on or around 15 November 2018.

Laura Ashley is primarily a UK focused retail company with 160 stores in its UK property portfolio as at 30 June 2018. Whereas international business continues to be important for the Group, and now accounts for approximately 7% of total Group revenue, the Group's primary market continues to be the UK. The property in Singapore was initially purchased with a view to having an Asian headquarters based there to help expand into the Asian market, including China and India. Whilst expansion into the Asian market continues to be the Group's strategy, the retail environment, both domestically and internationally, has changed and the Board believes that this is an appropriate time to dispose of the property in Singapore.

Pursuant to a valuation report on the Property which will be set out in the Circular, the Property has been valued at SGD$56 million (£31.1 million). The Board therefore conducted a thorough marketing exercise for the Property and after, taking into account the above and the interest received in the Property, the board has concluded that acceptance of the offer received from the Purchaser would be in the best interests of the Company and Shareholders as a whole.

Upon completion of the Disposal, the value of the Group's fixed assets will decrease by £30.3 million, cash balances will increase by £9.8 million and liabilities will decrease by £20.5 million. As the carrying value of the Property on the balance sheet is SGD$62.4 million (£34.6 million), an impairment charge of £4.7 million (including costs of the Disposal) has been recorded in the Group Statement of Comprehensive Income for the year ended 30 June 2018 in respect of the proposed Disposal.

Sale proceeds from the Disposal will be used to repay the existing mortgage on the Property of £20.1 million as at 30 June 2018 and to strengthen the Company's balance sheet.

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The exchange rate used throughout this document is SGD:1.8004 : GBP:1