Company Update



17 JUNE 2011

MBL Group plc 

("MBL" or "the Group")

COMPANY update

Further to the announcements made on 18 March and 6 April 2011, the Board of MBL Group plc ("Board") would like to provide a progress update to shareholders.

The negotiations with Morrisons Supermarket plc ("Morrisons") in relation to the contractual matters requiring resolution are continuing. Whilst significant progress has been made by MBL in reducing the level of exposure to Morrisons in terms of debtors and allocated stocks, there remains a residual asset "lock up", which is the subject of continuing work in progress and dispute dialogue. The Board has been disappointed that a conclusion has not yet been reached and a further update will be provided with the Preliminary Announcement, which will be released on Thursday 11 August 2011.

The previously announced downsizing of the operations of the Group has largely been completed. Regrettably this has resulted in a significant number of job losses with an overall reduction of approximately 50% of the employee base. This will result in some exceptional costs being taken in the financial year to 31 March 2011. 

Discussions are also ongoing with regard to a proposed exit from MBL's investment in U-Explore and its obligations in relation to the proposed lease of the new distribution centre. Again, the Board expect to be able to report further on the outcome of these negotiations in the near future.

The business continues to trade in line with the Board's expectations. The Board is in the process of reviewing the detailed Business Plan based on the business activities and opportunities which presently prevail.

The Board can also confirm that, further to the announcement made on 15 March 2011, the Board is not in any discussions that may lead to an offer for the entire Company and therefore under the rules of the Takeover Code the Company is no longer in an offer period.

-END-