Investment

RNS Number:5145N
Innobox PLC
14 July 2003


                           Innobox Plc (the "Company")

                                   
14 July 2003

                   Investment in Moss Cottage Hotels Limited

Further to the recent change in the Company's investment strategy, as detailed
in the announcement made on 16 May 2003 and approved by shareholders at an
Extraordinary General Meeting on 9 June 2003, the directors are pleased to
announce that contracts have been exchanged for the Company's first investment.

A new company, Moss Cottage Hotels Limited ("MCHL"), has been formed
specifically for the purpose of acquiring a public house known as the Moss
Cottage public house in Ripley, Derbyshire ("Moss Cottage"). The Company has
subscribed for 8,000 #1 shares at par in MCHL, which represents 80 per cent. of
the share capital in MCHL. Mr Michael Smith has subscribed for 2,000 #1 shares
at par in MCHL, which represents the remaining 20 per cent. of the share
capital. Arthur Baker, Russell Stevens and Michael Smith are the directors of
MCHL.

Moss Cottage is currently owned by Drayton Estates 1999 Limited ("Drayton
Estates"), which itself is wholly owned by Mr Smith.

MCHL has exchanged contracts to acquire Moss Cottage from Drayton Estates for a
sum of #450,000, plus stock at cost and associated costs. The acquisition price
of #450,000 is supported by a valuation of the business from Christie & Co, the
valuers of licensed properties. A cash deposit of #45,000 was paid to Drayton
Estates by MCHL on exchange of contracts and this deposit was funded by the
#10,000 share capital as described above, an unsecured loan from Mr Smith of
#8,000 and an unsecured loan from the Company of #27,000. The balance, due on
completion, will be funded by a further unsecured loan from Mr Smith of #90,000,
a further unsecured loan from the Company of #65,000 together with a mortgage
from Barclays Bank Plc of #275,000. Completion will take place when the mortgage
is available for draw down, which is expected to be within the next ten days.

Barclays Bank Plc will also provide a working capital overdraft facility of
#40,000 to MCHL. The mortgage and the working capital facility are to be secured
by a first legal charge on the freehold property together with a guarantee from
the Company.

Upon completion and in accordance with the announcement made on 16 May 2003, the
accrued directors remuneration payable to Russell Stevens and Mark Jones
amounting to #27,000 and #18,000 respectively, will be paid.

Moss Cottage is a public house with a restaurant and had a turnover in the year
ended 31 March 2003 of #228,340 and operating profits of #1,173. Historically
Moss Cottage has achieved turnover of in excess of #500,000 and operating
profits of in excess of #100,000.

The main attraction of the investment is that Moss Cottage has the benefit of
planning permission for an extension to the existing dining area and for twelve
letting bedrooms to be constructed on the site. The directors intend to carry
out this development work as soon as possible as there is currently no similar
hotel room facility in the whole of Ripley and they believe the development will
increase the profitability of the business significantly and in addition,
increase the value of the business as a whole. The estimated cost of the
development work is #500,000 and the directors have secured a further facility
from Barclays Bank Plc in respect of this development work. Barclays Bank Plc
will fund 50 per cent. of the development cost up to #250,000. The Company will
make its investment available first through an unsecured loan to MCHL of up to
#250,000.

Commenting on the acquisition, Arthur Baker, Chairman of the Company said: "The
acquisition of Moss Cottage is the first of several acquisitions which will
enable Innobox to develop a small niche group in the licensed trade sector"


Enquiries:

Arthur Baker                            07850 276928
Chairman, Innobox Plc                   [e-mail]

David Simmons                           0161 214 6540
Brown, Shipley & Co. Limited            [e-mail]

Trevor Phillips                         020 7929 5599
Holborn Public Relations Limited        [e-mail]





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