Interim Results for period ended 28 September 2008

Coffee Republic plc

3 December 2008

INTERIM RESULTS FOR THE PERIOD ENDED 28 SEPTEMBER 2008

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT

When Stephen Bartlett and I joined the Board two years ago we said that we wanted Coffee Republic to be free of bank borrowings. At that time, bank borrowings amounted to ₤3.3m. We progressively reduced those borrowings to ₤1.5m at the end of this half year (28 September). As of yesterday (Tuesday 2 December) I'm pleased to be able to say the company became free of bank debt.

This position was arrived at following agreement with our bank for the elimination of our borrowings provided they were paid a reduced amount promptly. With the benefit of a share placing and the approval of resolutions at an Extraordinary General Meeting on 1 December the Company has complied with the terms of the agreement and hence has now redeemed in full its bank obligations. The placing comprised 2,272,665 ordinary shares at 30 pence each which amounted to £681,799.50.

Stephen and I both through related parties participated in the placing and (with connected parties) now own 30.37%. This has been cleared by the Takeover Panel and was ratified at an EGM on Tuesday 2 December.

The repayment results in the elimination of interest and charges approaching ₤200,000 a year and that effect, combined with a steadily improving trading position across the broad portfolio, gives me confidence that the Company is likely to be operationally cash flow positive, and may indeed be earnings positive, by the end of the current financial year - I believe for the first time in the Company's history.

For the six months ended 28 September 2008, the loss reported on an IFRS basis was ₤527,000 a reduction of 40 percent on the same period last year (2007: ₤895,000). On an adjusted basis the loss was ₤296,000 (2007: ₤550,000).

A material factor in this loss was the cost associated with the return to company ownership of a number of poorly trading franchise stores. The possibility of more stores being returned must remain an area of concern for all franchise businesses in the current economic environment but the raising of standards required of franchise proposals should reduce this problem in future.

Sales at UK coffeeshops, including Coffee Republic, are currently showing resilience in the face of the generally depressed retail environment. Like for like network sales are flat although after taking account of new openings sales are up by 33 percent compared with a year ago. Also, store expansion continues satisfactorily but, nonetheless, we intend to proceed warily.

I am pleased to report that there are now 200 Coffee Republic outlets worldwide (see Note 4) compared with 42 (in the UK only) two years ago when Stephen and I organised the shareholders' revolt to rescue the company by taking control of the management.

I look forward to announcing results for the full year to 29 March 2009. Unforeseen circumstances excepted, and taking account of the continuing uncertainty of the current economic circumstances, I believe that those results will justify the confidence of shareholders and underpin your Board's faith in the future of our Brand and our Company.

Coffee Republic Plc Preliminary Results

29th August 2008


PRELIMINARY RESULTS

Coffee Republic PLC, the independent coffeehouse franchisor and operator, announces its preliminary results for the year to 30 March 2008


Key Points:

• The number of total outlets has more than quadrupled, to 193 since the beginning of the 2008 financial year (26 march 2007) driven by a large growth in concession outlets.

• The number of franchise units has doubled, to 53, in the same period. There are now 69 full service stores, including company owned, in the UK.

• There are ten international stores now open, principally in the Middle East and Eastern Europe with roll out commitments for more than 200 stores over the next 5 years.

• CEO to move to vice - chairman and maintains major shareholding as the business enters a phase of consolidation and refinement.

• Like for like sales for the total network for the quarter ended 29 June 2008 are 2.5% positive driven by a strong performance from the franchise bar portfolio.

Preliminary Results - Financial

• Financial results show a net loss of £2.50 million (2007: £2.42million) with £0.7m of fixed asset impairments and loss on disposal.

• Reported sales down 39.8% to £5.8 million following the conversion to franchising. Total network sales grew 9.0%, based on UK franchises and Company stores.

• A further £620,000 repaid to the bank during the year.

• Operating losses stable at £1.6m with the company absorbing unexpected costs of circa £200,000 and taking a bad debt impairment of £191,000.

Commenting Peter Breach, Chairman, said:

'This has been a year of significant change with the brand now represented across the UK and in twelve countries overseas.

We are still in a turnaround period and our costs have continued to outpace our income as we vigorously invest in the future of this global brand.

I continue to be impressed by the strength of the brand and I am convinced that our focus on Company owned bars, UK and International franchising and concessions is the most effective way to deliver profits to our shareholders in the medium term.'

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Interim Results

19 December 2007


Highlights

• LFL growth: 4.2%
• Cineworld: 73 'Co-brand' locations to open in the UK from early 2008
• 'Co-brand' locations: 27 in operation
• Newly franchised bars: 17 (including 5 converted from 'Company owned')
• Overseas Expansion: 8 countries contracted.

After just over a year as Chairman I am pleased to announce that the strategy
adopted by the Board over the last year has resulted in a marked improvement in
the operational and financial performance although there is still much work to
do.

I am pleased to announce that Coffee Republic has won a contract with Cineworld
UK to introduce its' 'Coffee Republic Served Here' concept into all its 73 UK
sites, continuing the growth of brand exposure across the UK. These concessions
are being rolled out from early 2008 and the benefits of this achievement will
be seen in next year's financial statements.

I am also pleased to announce the appointment of James Cameron Muirhead to the
board of directors as finance director. James, aged 36, qualified as a
Chartered Accountant with PricewaterhouseCoopers in 1998 and has worked with a
number of high growth multi-site, leisure businesses including Novus Leisure Ltd
(the operator of the Tiger Tiger nightclub brand) and Esporta Plc (Health Club
operator). There are no further disclosures to be made in respect of James
Muirhead under Schedule 2(g) of the AIM Rules.

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