PEL.L Regulatory News (PEL)

Date: 7 March 2013

On behalf of: Paragon Entertainment Limited ("Paragon" or "the Company")

Embargoed until: 0700hrs

Paragon Entertainment Limited

("Paragon" or "the Company")

Pre-close Trading Update

Paragon Entertainment Limited (AIM: PEL), the visitor attractions business is today providing a trading update for the twelve month period to 31 December 2012

Highlights

·; Design and Build division completed a number of high profile projects in the year and is experiencing an acceleration in project wins and pipeline expansion:

o Delivered more revenue and profits from larger projects than in any previous year

o £9.4 million of contracted work for delivery in 2013 as of today

o Over £20 million of additional project work for delivery in 2013 and 2014 tendered for

o Capacity augmented to accommodate increased workflow: with 32,000 square feet of additional space in York; new equipment; and expertise in sales, marketing and design added in the year

·; Attractions division saw its first owned and operated visitor attractions opened in November 2012 at Westfield's Merry Hill Shopping Centre, Birmingham under the Quest brand. The site will be home to six attractions and ancillary revenue streams by Easter 2013

·; First licensed attraction opened and significant IP secured in the year:

o Quest branded attraction opened in Istanbul by third party under license from Paragon

o Sole licence secured with Hasbro to build and operate Nerf themed attractions

o Exclusive world-wide licence secured to build and operate Hammer attractions

Trading Update

The Company expects to report full-year revenue of £6.1m, a growth of 40% against revenue for the 12 month period ended 31 August 2011. Thanks to the acceleration in workflow experienced by the business this equates to revenue growth in excess of 65% for the six months ended 31 December 2012 versus the six months ended 30 June 2012. Adjusted EBITDA for the period is expected to be £0.3m, reflecting that the business has scaled successfully in the year.

Design and Build

The Design and Build division has performed exceptionally well and continues to exceed expectations.

Significant projects in the period include Titanic (Belfast), The Olympic Museum (Lausanne), Eureka! The National Children's Museum (Halifax), Weblab for Google at The Science Museum (London), Thinktank Science Museum (Birmingham), Chocolate (York) and Wallace and Gromit Thrill-O-Matic (Blackpool Pleasure Beach).

The strong conversion of an ever increasing project pipeline, which stood at over £60 million at the year end, provides great confidence that the Company can continue to grow significantly in this core area.

Attractions

In November 2012, the Company opened its first visitor attractions in Westfield's Merry Hill Shopping Centre near Birmingham. The mall is amongst the largest and most popular in the UK, with the following attractions offered under the Company's flagship Quest Brand:

·; Extreme High Ropes, the largest indoor ropes course in the UK

·; Outdoor ice rink and festive market

·; Nerf Blaster Target Range and retail unit

·; Quest Café offering food and beverages

The second phase opened on 16 February 2013 and increases the offering at Merry Hill to include:

·; Quest for Adventure under 7's (soft play and a specially designed ropes course)

·; Quest for Golf minigolf

A third phase is due to open ahead of Easter 2013 to complete the offering and will include:

·; Nerf Combat Arena

·; Improved soft play featuring the UK's first Yu-Kids soft play system

When the full complement of Merry Hill attractions are open they will address all age groups which management believe will further strengthen the reach and appeal of the location to customers. Results for the financial year ended December 2012 will be announced on 26 March 2013.

7 March 2013

Ends

For further information please contact:

Ivonne Cantu (Nomad)

Alex Aylen / Julian Morse