Brand Architek. Regulatory News (BAR)

Swallowfield plc

("Swallowfield" or the "Company")

Trading Update

Swallowfield plc, a market leader in the development, formulation, and supply of personal care and beauty products; whose customers include many of the world's leading brands, today provides an update on trading for the year ending 30th June 2014 prior to entering its close period.

The board is pleased to announce that following a year of stabilisation and re-focus we anticipate a return to full year profitability in line with market expectations.

The Group has made good progress across its 4 strategic pillars (Product Category Focus, Cost Base Optimisation, New Product Development, Emerging New Category) in line with our new strategy as outlined in the interim results.

Particularly pleasing has been the positive impact achieved on contribution margin as a result of executing our Product Category Focus and continuing to improve our cost base. This performance has offset a slight softness in sales revenues versus expectations. This softness has been due to the challenging retail market which has resulted in a slow-down in volumes from some of our brand customers.

Despite this, overall revenues in the 53 weeks are expected to show growth of 3% (1% on a 52 week basis), with the prior year comparative including £2m of sales lost due to previously advised changes in sourcing strategy from a small number of major customers. Underlying sales growth excluding these sales is just over 7% (5% on a 52 week basis).

Our balance sheet also continues to strengthen with tight control of inventories and cash leading to an improvement in our net debt position to £5.1m, versus prior year £5.7m.

Outlook

We expect the challenging retail market conditions currently being experienced in the UK and Europe to continue in the short and medium term.

However, the Board remains confident that the new strategy outlined earlier this year will gain further momentum, improve profitability and continue to build shareholder value. In addition, the new financial year will benefit from improved run rate profitability, further efficiencies, tighter control of working capital and new product developments already progressed in the 2013/14 financial year.

The Company expects to announce its results for the year-ended 30th June 2014 on 18th September 2014.

For further information please contact:

Swallowfield plc

Chris How Chief Executive Officer 01823 662 241

Mark Warren Group Finance Director 01823 662 241

Jonny Franklin-Adams/

Jen Boorer N+1 Singer 0207 496 3000

Alan Bulmer Investor Focus International 07831 654744

Chris Lawrance JBP Public Relations 0117 907 3400