MUBL.L Regulatory News (MUBL)

31 January 2011

MBL Group plc 

("MBL" or the "Company")

Trading update and Board changes

The Board of MBL, the UK distributor of home entertainment products, is today making a trading update.

Further to the interim results announcement on 9 December 2010, where it was reported that trading continued to be challenging, trading conditions have continued to deteriorate and the Company has experienced both volume and margin pressure during its busiest period in the run up to Christmas. Consequently, profit for the year ending 31 March 2011 is expected to be substantially behind management's revised expectations.

As stated in the interim results announcement on 9 December 2010, the existing contracts to supply Morrisons are due to expire at the beginning of September 2011. As a result of the continuing negotiations with Morrisons, the Company has now been invited to enter into a competitive tender process for the provision of home entertainment product logistics services. The outcome of the tender process should be known by the end of March, at which point the Board will provide a further trading update. Morrisons has confirmed to the Company that it will assume responsibility for the stock held by MBL on its behalf during the remaining period of the existing contracts. This stock commitment represents a significant proportion of the stock held by the Company.

Management has continued to develop diversified income streams, but, as previously stated, this has led to accelerated cash absorption and higher expenses in the formative period. The Company has traded through the period within its existing bank facility and, with the transfer of stock to Morrisons, expects to generate additional cash balances.

The Board is pleased to announce the appointment of Steven Walsh-Hill as Finance Director. Steven is replacing Lisa Clarke who will now assume the role of Chief Operating Officer. In her new role, Lisa will assume responsibility for the day to day executive operations of the business allowing Trevor Allan, Chief Executive, to focus on the strategic direction of the business and the identification and control of business opportunities. We are confident that these changes will strengthen the management of the Company. A further announcement regarding Steven Walsh-Hill's appointment to the Board will be made later today in order to comply with the disclosure requirements of AIM Rule 17 and Schedule 2(g) of the AIM Rules.

The Board can also confirm that, whilst the strategic review process announced on 5 October 2010 continues, the Board is not in any discussions that may lead to an offer for the Company and therefore under the rules of the Takeover Code the Company is no longer in an offer period.

Dealing Disclosure Requirements

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

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About MBL Group

MBL is the UK's leading distributor of home entertainment products, supplying category management services to a number of major retail customers. Listed on the AIM (AIM 'MUBL'), MBL has grown rapidly over recent years and now offers its client base a suite of retail solutions across in-store, online and digital. MBL works with clients in the UK, Middle East and US.