Cobra Holdings PLC : Trading update

COBRA Holdings PLC

Trading update

15 March 2012

Since the announcement on 28 November 2011 of the structural re-organisation of the COBRA Group and the announcement on 8 December 2012 of the sale of COBRA Corporate Solutions Limited ("CCS"), the COBRA Group has continued to pursue its strategy of focussing on its core revenue areas whilst carrying out a cost reduction programme in relation to its holding company and overhead costs in order to reflect the smaller size of its operating base.

COBRA's disposal of CCS and of its broking operations in Caterham and Alton, all in late 2011, resulted in the receipt of initial cash consideration of approximately £6 million which has reduced the Group's borrowings, strengthening its financial position. Deferred consideration arising from the disposals, the amount of which will depend on trading performance, is expected to result in further cash receipts of c.£2.7 million, which will be applied in December 2012 and December 2013 to further reduce the Group's borrowings. At 28 February 2012 the Group held cash balances of approximately £3.3 million (2011: £0.8 million) and had borrowings of approximately £12.0 million (2011: £15.0 million).

The disposals in the current financial year represented approximately 30% of the aggregated EBITDA of the operating components of the COBRA Group, on an annualised basis, prior to the allocation of holding company and overhead costs. The steps taken to reduce the Group's holding company and overhead costs to reflect the smaller size of its operating base will not significantly benefit the Group's financial results in the year ending 31 March 2012 and, as a result, the full year results will therefore reflect a disproportionally high level of such overhead compared to the aggregated EBITDA of the remaining operating components of the Group, the impact of which will be material.

In the financial year ended 31 March 2011 the COBRA Group reported an adjusted EBITDA of £2.4 million (2010: £3.2 million) and an operating loss of £175k as a result of a provision of £1.5 million for goodwill impairment, primarily associated with the post balance sheet disposal of the broking operations in Caterham and Alton. The Directors expect that further non-cash charges for goodwill impairment will be required in the year ending 31 March 2012 resulting from the on-going structural re-organisation of the COBRA Group. The Directors also anticipate that restructuring costs will have a further negative impact at the operating level on the results of the COBRA Group in the year ending 31 March 2012.

Enquiries:

COBRA Holdings PLC

David Stanley, Finance Director Tel:[phone]

Fairfax I.S. PLC Nominated Adviser

David FloydTel:020 7598 5368