Marlwood Plc
LSE : MARL KY

February 01, 2011 08:00 ET

Trading Update period ended 31 December 2010

MARLWOOD PLC
TRADING UPDATE FOR PERIOD ENDED 31 DECEMBER 2010


Marlwood  plc  ("Marlwood, the Company or the Group") (CSX:MARL KY), a group specialising in  the  licensed
goods business today announces its trading update for the quarter ended 31 December 2010.

Key features

*       Difficult trading conditions continued throughout Q4 due in the main to a lack of working capital
        available to the Group during October, November and early December.  December saw an improvement in trading
        once funds were received however the impact was marginal.

*       Receipt of stock for resale into the trading entities was slow delaying fulfilment of customer
        orders which led to some significant cancellations.

*       Raw material costs and increases in wage costs in China continued to have a negative impact.

*       A successful equity placing during December 2010 and continued support from current funders were
        major achievements in the quarter.

*       The order book for 2011 delivery continued to grow with the majority of orders being with major UK
        retailers.

Business review

As  a  holding company of two trading entities 2010 proved to be an exceptionally difficult year  with  the
trading  entities  suffering severely from a lack of working capital.  Improved debt funding  late  October
alleviated some of the immediate pressure however with limited stock and limited funds available  for  most
of the year the negative impact was significant.

The  products and brands continued to be appealing to our customer base and orders continued to  be  placed
for  delivery throughout 2011.  Brand development with a number of our licensors will improve  the  product
offering  going  forward. Further brands are being considered for 2011/12 which  will  add  to  our  direct
business.

Unaudited  turnover for the year was GBP 4.5m (2009 GBP 4.2m) against a revised forecast in  the  quarter
ended  30 September 2010 trading update of GBP 5m (2009 GBP 8m - forecast as per CSX admission document).
Gross  profit  margins  were affected by increased costs in China and the UK.  The board  is  expecting  to
report  significant  trading  losses for the year albeit offset by a gain on  the  sale  of  the  clearance
business in July 2010.

Future prospects

The board of directors are aware of the negative impact on customers of a second year of poor trading.  The
board  is  working hard to ensure customer continuity for 2011 working closely with customer brand managers
and buyers to provide an exceptional product offering to be able to meet the ever increasing demands of  UK
retailers.

Costs  continue  to be monitored and controlled effectively.  The preliminary results are  expected  to  be
announced on Thursday 31 March 2011.

The Directors of the Company take responsibility for this announcement.

For further information, please contact:

Marlwood plc                                                   
Pam Hulme, Managing Director                                   +44 161 487 5130
                                                               
Corporate Advisor                                              
Nick Michaels, Alfred Henry Corporate Finance Limited          +44 207 251 3762
                                                               
Broker                                                         
Robert Tannahill, Cenkos Channel Islands Limited               +44 1481 732 766


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