I have pleasure in presenting to our shareholders the report and accounts for the year ended 29th September 2012.

During the year the Company has made very good progress.

The Company began the year with an unchanged estate of eight freehold pubs. Seven of these were operated by us and one was leased. We also continued to manage The White Swan at Twickenham on behalf of its owner.

In April we completed the sale of The Tea Clipper and in July we terminated the agreement to manage The White Swan. The remainder of our estate remained unchanged.

We therefore continue to operate and manage The Barley Mow (now repositioned and renamed as The Lamb Brewery), The Botanist, The Clifton, The Crown & Anchor, The Mitre and The Pakenham Arms. We also continue to lease The Hansom Cab. Additionally we now manage The Tea Clipper on behalf of the new owners.

Key Financial Results
• Turnover at £5.1m was marginally ahead of the prior year. This was despite losing nearly half a year of
sales from The Tea Clipper after its sale in April.
• Consequently like-for-like sales from our managed estate grew by 10%.
• Margins on food and drink were up by 3.1% and 0.5% respectively.
• Pub EBITDA at £1.69m was up by 9.9% with like-for-like being up by 22.4%.
• After the sale of The Tea Clipper the Company was able to reduce its level of debt from £6m to £2.6m.
Thus during the year interest charges fell by 57.9% to £115k and gearing was reduced from 50% to 19%.
• PBT for the year grew by 111% to just under £1m.
• During the year NAV has grown from 75.5p to 79.5p.

After allowing for profit on the sale of The Tea Clipper, which was spread over the past two years, PBT on the operating business grew by 107%.

The Company has continued to invest in the estate.

The renovation of The Mitre and the creation of its eight new bedrooms was completed in July. Industry reports suggest that the effect of the Olympic Games on the pub sector was broadly neutral. However, by securing a contract to host the Saudi Arabian equestrian team at The Mitre, the Company was able to record a period of strong growth in August.

The new micro-brewery at The Botanist, which went into operation in September 2011, has been much admired. The performance of the pub has also greatly improved. Turnover is ahead by 33% and the pub’s EBITDA has improved by 53%. This result has motivated us to reposition The Barley Mow as our second brewpub. We have renamed it as The Lamb Brewery after a former brewery of that name which had brewed in Chiswick until 1922. The new Lamb Brewery has now been brewing since the end of September. We are pleased with the quality of the beers that are being produced in both brewpubs; a number of awards have already been won.

Current Trading and Future Plans

Despite the exceptionally wet weather since the beginning of October, and also taking into account our need to target a different clientele at The Lamb Brewery (formerly The Barley Mow), the current year has started well. After the first nine weeks, turnover on a like-for-like basis (and therefore excluding The Tea Clipper), is ahead by 9.7%. Please refer to the CEO’s Statement for a fuller resume of the Company’s performance together with an outline of our future trading prospects.

Outlook and Board Composition

In February we engaged a Rule Three adviser to assist us in reviewing our long-term options. This work is ongoing. We are committed to finding a route to liquidity as soon as the appropriate conditions will allow us to do so.

As you know David Bruce decided to step down from the board in July. I am happy to report that, in his place, Jane Vinson joined us on 26th October. Jane is a chartered management accountant. She has over fifteen years experience in portfolio management and holds non-executive directorships in a number of small and medium sized companies. Holding, as she does, a senior executive position within the Octopus Ventures team she is ideally qualified to help us refine our corporate strategy as well as being able to strengthen shareholder representation on the board.

The Company continues to be managed by Kris Gumbrell and his company Eclipse Business and Management Services Ltd (“Eclipse”). Since Kris took over the management of the business in 2008 the Company has been transformed from a loss making entity to an enterprise of increasing profitability. Given the on-going commitment of Kris and his team, the Board is confident that the present arrangement remains in the best interest of the Company.

Dividend

For the time being the Company is maintaining its policy of not paying a dividend.

Summary

During the year under review the Company has made good progress. The UK market remains fragile but we are fortunate to be operating in London where economic conditions are more favourable. The Company is well managed. We have invested in the estate which is now in good shape. Profitability is growing and we are getting closer to rebuilding original shareholder value. For this I am indebted to not only the leadership of Kris Gumbrell and his team at Eclipse but also to our dedicated managers and staff as well as the support of the board. May I encourage shareholders to keep in touch with the ongoing developments of the Company by visiting the website www.conviviallondonpubs.com

D Maxwell Scott
Chairman

Date: 13 December 2012

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