16th January 2009    

INSTORE PLC

INTERIM MANAGEMENT STATEMENT 

The Board of Instore plc today gave the following update on trading. This statement constitutes the Company's Interim Management Statement issued in accordance with the Disclosure and Transparency Rules:  

As has been well documented, the Christmas trading period was an extremely challenging one across the retail sector. In particular the value sector has been significantly affected by the heavy discounting undertaken by the administrators of Woolworths throughout the run up to Christmas.

Total sales for the 18 weeks ending 3rd January 2009 were up 0.52% on last year  and down 0.70% on a like-for-like basis.  For the final 5 weeks of this period, total sales were the same as last year and down 1.92% on a like-for-like basis

Within these figures our food and toiletries offer has performed well across our core estate, and the pilot of the new store layout, which is now in 19 outlets, has shown an encouraging sales performance. In addition, we have continued to renegotiate our cost prices through direct sourcing and to significantly reduce the cost base.    As such, progress towards restoring the longer term profitability of the Company's core business continues and the Board remains confident, despite the current difficult trading environment, of the longer term outlook.  

If the Ponden Mill stores are excluded, the Board expects to report a similar level of loss pre exceptionals for the year as was reported for the year ending 1st March 2008. 

The performance of the Ponden Mill stores, acquired in December 2007, has been disappointing. Of the 33 stores originally acquired, 13 have now been closed and the Board is considering various options for the future operation of this part of the Group.

Given the performance of the Ponden Mill stores, and although there remain six weeks of trading before the year end on 28th February, the Board now expects to report a full year loss for the Group of between £4.5m and £5.0m.   

Finally, the Board is pleased to report that the Company's banking partners remain supportive of the initiatives being taken to restore the Company to longer term profitability.

For further information, please contact

Ebrahim Suleman    Group Finance Director                                  01484 431444