C.H. Bailey Plc Regulatory News (BLEY)

Date: Wednesday 19 September 2012

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

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 2012.

2012 Preliminary Results

"The Company in the year under review made a net profit after tax of £7.7m, which largely is due to the profit on the sale of part of our hotel assets in Malta that we announced last September. While this has had a significant impact on our net results, I am pleased to report further improvements in the group's underlying performance. During the year, our operating profit, although modest, improved for a third consecutive year, as did the operating gross margin. Also, the group's income from operations increased for a second year running."

Charles Bailey, Chairman

Enquiries:

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

Statement by the Chairman, Charles Bailey

The Company in the year under review made a net profit after tax of £7.7m, which largely is due to the profit on the sale of part of our hotel assets in Malta that we announced last September. While this has had a significant impact on our net results, I am pleased to report further improvements in the group's underlying performance. During the year, our operating profit, although modest, improved for a third consecutive year, as did the operating gross margin. Also, the group's income from operations increased for a second year running.

2012 marks our 50th anniversary in Tanzania, and our operations there accounted for some £1.8m of gross group income from continuing operations (excluding profit on asset disposals) in the period under review. We are benefiting from increased levels of economic activity due, in part, to significant natural resources discoveries in the region.

Our single remaining UK non-services business, Bailey Industrial Engineering, has benefited from the economic downturn in Europe as our clients have sought to repair machinery and equipment rather than invest in new, as well as certain of our clients expanding their business in light of increased environmental considerations. Turnover has increased 29% over the previous year, and we have seen profitability improve for the third consecutive year.

Results

The group's consolidated pre-tax profit for the year was £8.9m, compared to -£0.5m in the previous year which is, of course, due in large part to the profit on the part disposal of the group's Maltese assets.

Our underlying operating profit, which excludes profit on the sale of assets and depreciation, was -£0.3m. This shows an improvement over the previous year's figure (2011: -£0.5m).

Group comprehensive total income increased from -£0.6m in 2011 to £6.4m this year, and this is after spending some £960,509 on buying back our own shares during the capital reorganisation that took place in January. The 727,658 ordinary shares purchased are retained as treasury shares.

The group's cash holdings grew to £6.8m from £1.4m in 2011. This will give us a greater ability to plan and to make strategic longer term acquisitions.

Net debt to equity improved from 48.8% in 2011 to 19.9% in 2012, and the loss per share of -7.12p improved to a profit per share of 93.99p.

Tanzania

Total Group income derived from our businesses in Tanzania increased from £1.2m in 2011 to £1.8m this year, and now represents 41% of total group income, testifying to the significance of our diverse businesses there. We expect this percentage should increase in the coming period.

In the tourism sector, we continue to own and operate niche, high-end properties at The Oyster Bay, our hotel in Dar es Salaam, and Beho Beho, our safari camp in the Selous Game Reserve. We also operate Mikumi Wildlife Camp, which provides a safari experience for educational groups and for "Visiting Friends & Relatives" of expatriates based in Dar es Salaam.

Gross income from our hospitality operations in Tanzania fell 2% to $372,000 (2011: $379,000). Given the adverse economic conditions in our major markets, we consider this to be a reasonable result.

During the year, we completed the construction of a second block of serviced offices on the Oyster Bay site, facing the Indian Ocean on the Msasani Peninsular in Dar es Salaam. This building takes our investment in serviced commercial office space to 8,199m2. Its prime location and quality of construction was reflected in the

building being fully let prior to completion to good quality global corporations. The offices should produce in 2013 a net rental yield of 12.6%. These figures exclude 153 underground car parking spaces that are rented out to tenants at $123,000 per annum.

Our Oyster Bay Hotel shops continue to be profitable. With just under 1,900m2 of serviced retail space, we achieved an average occupancy of 94.6%. We will be adding some 250 m2 of retail space this coming year, at a rent in excess of the current average.

To capitalise on our reputation locally for providing high end hospitality, and serviced commercial and retail space, we have begun construction of a further building of some 6,000 m2 on the corner of the Oyster Bay Hotel site, facing the Indian Ocean. With spacious luxury suites and studios, The Oyster Bay Club & Spa will offer the business community a new venue for short and medium term accommodation. The building will also contain retail space and serviced offices. The Club is scheduled to open in Q4 of 2013.

As a post balance sheet event, we announced, on the 11 June 2012, the acquisition of approximately 24 acres of prime, undeveloped beach front property, 45 minutes south of Dar es Salaam. As The Oyster Bay Club & Spa will be the final development on our Dar es Salaam site, this purchase offers an exciting opportunity to provide guests with a beach-based hospitality facility to complement Beho Beho and the Oyster Bay Hotel. The size of the site will allow consideration of other development opportunities that might arise in the future as Dar es Salaam grows.

Malta

Hotel operations continue on a reduced scale, due to the sale of part of the property. Because of this, turnover in 2012 was down some 27% on the previous year, and a small operating loss was made in the year of -£19,000 (2011: £107,000).

As announced on the 11 June 2012, we recently purchased for 1.2m Euros a "heritage property" - equivalent to a listed townhouse in London - in a prime location in Valletta, with uninterrupted views of the Grand Harbour. It is being renovated and we expect that it will be offered for sale in Q4 of this calendar year.

The United Kingdom

Bailey Industrial Engineering, while operating on a modest scale, continues to go from strength to strength. Total income increased during the year by 29% to £1.8m, with operating profit increasing to £46,000 (2011: £15,000).

This is a very pleasing result under any circumstances, and reflects the hard work of the BIE Board and the team in Wales, for which I congratulate them.

Board & senior management matters

Since the end of the period under review, Rod Reynolds has joined your board as a non-executive director and brings with him experience gained globally over many years in financial services and investment. Rod will chair the Remuneration Committee, and succeeds Sir William McAlpine as your senior independent director. Rod will also serve on the Audit & Risk Committee.

Guy Leadbeater joins the senior management team as Chief Operating Officer. Guy has worked both in London and abroad for Coopers & Lybrand (now PwC) and KPMG in their management consulting divisions. In these roles, he gained extensive experience of working in emerging economies, especially in Africa, where he lived in Tanzania for a number of years. More recently, Guy worked for well-known family offices in London, holding positions in corporate advisory and, latterly, as finance director. We are pleased to have him on board.

In addition to these appointments, we have taken steps to strengthen our subsidiaries' boards further. We hope to continue this process during the coming year.

Annual General Meeting and proposed special dividend

I had stated previously that a dividend from the sale of the Maltese assets would be considered after the second part of the sale of the Maltese property was completed in 2015.

However, in light of both the group's cash reserves and improved trading, which I believe to be sustainable, we will be asking shareholders at the Annual General Meeting on the 12 October 2012 for their approval to pay a special dividend of 5p per share to Members on the share register as at 26 October 2012. The shares will become ex-dividend on 24 October 2012.

Outlook

We expect that income and net profits from our Tanzanian operations will improve again in 2013, due to the Oyster Bay Hotel shops and serviced offices being fully let. With the continuing economic downturn in our principal tourist markets, we have budgeted for reduced occupancies and profitability in our hospitality division.

In respect of ongoing operations in Malta, we expect again that a small loss will be made. However, during the year we will be developing in greater detail our business model for new ventures on the island. With Malta as a springboard, we also will be looking at one or two opportunities within the Mediterranean basin.

We anticipate that Bailey Industrial Engineering will continue to increase its turnover and profit this coming year.

The sale of our principle Maltese asset has acted as a catalyst that, over the past few years, has allowed the group to restructure organisationally and operationally. With this almost complete, we now are focussed on future growth and adding value to the business. I believe that we face a very exciting and rewarding decade.

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

C. H. Bailey plc

18 September 2012

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

*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 2012

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

Consolidated Statement of Changes in Equity

for the year ended 31 March 2012

There were no transactions with owners recorded directly in equity during the year ended 31 March 2012.

C. H. Bailey plc

Preliminary Results for the year ended 31 March 2012

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 2012 Annual Report.

2. Segmental information

3. Investment activities and other income

4. Profit (loss) before taxation

The following have been charged (credited) in arriving at the profit (loss) 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 26% 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 Euros was paid by the purchaser. On completion a further 28,301,867 Euros was to be paid giving a total consideration of 29,117,167 Euros.

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 Euros. 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 Euros remains unchanged. Therefore, the consideration payable for the remaining property will be 13,743,283 Euros.

The amount received as per the cash flow was 14,337,688 Euros (£12,415,560) which was made up of the agreed price of 15,373,884 Euros less the original deposit of 815,300 Euros and sale cost of 220,896 Euros.

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 8,192,267 (2011: 8,335,413) which excludes own shares held. There are no share options, convertible equity or debt instruments in issue.

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 2012 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, is being posted to shareholders today and will be available for viewing and download on the Group's website, from today.

The statutory financial statements for the year ended 31 March 2011, 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.