Proposed Acquisition of the Issued Share Capita...

13 October 2011

                        TRAFALGAR NEW HOMES PLC ("Trafalgar" or the "Company")

     Proposed Acquisition of the Issued Share Capital of Combe Bank Homes Ltd ("Combe Bank") (the
                                            "Acquisition")

Introduction

The Directors of Trafalgar (the "Directors") are pleased to announce that the Company has entered into
a conditional agreement with Christopher Johnson and Alexander Johnson (the "Vendors" or the "Proposed
Directors")  to  acquire  the  entire  issued share capital of  Combe  Bank  for  a  consideration  of
approximately £2,250,000 to be satisfied through the issue to the Vendors of 186,817,671 new  ordinary
shares  in  Trafalgar representing approximately 87 per cent of the issued share capital after  issue.
Completion  of the Acquisition will constitute a "reverse takeover" under the PLUS Rules  for  Issuers
and  is  conditional,  inter  alia,  on  approval  of the  Company's  shareholders.  A  circular  (the
"Circular"),  which  constitutes a PLUS Admission Document, is today being posted to  shareholders  of
Trafalgar.  The  Circular  gives full details of the Acquisition and contains  a  Notice  convening  a
General Meeting for 8 November 2011 at which resolutions will be proposed, inter alia, to approve  the
Acquisition. It is expected that completion of the Acquisition ("Completion") will occur  as  soon  as
practicable following passing of the resolutions. Re-Admission will be conditional, inter alia, on the
completion of the administration process.

Shareholders  owning approximately 61.5 per cent of the existing issued share capital of  the  Company
have  entered  into  voting commitments to vote or procure votes in favour of the  Acquisition.  These
shareholders  include  Mr  Andrew  Moore,  the Non-Executive  Chairman  of  Trafalgar  and  Mr  Robert
McKendrick, a non-executive director.

Background to the Acquisition

Trafalgar  has  been  a small house builder which encountered financial difficulties,  principally  in
relation  to  its development at Mitcham, Surrey. On 7 July 2010 Trafalgar announced that dealings  in
its  ordinary  shares  on  PLUS-quoted  had  been suspended  at  the  request  of  the  Board  pending
clarification of the Company's financial position. On 12 July 2010 the Company announced that  it  had
filed  a  notice  to  appoint Administrators at Court. On 16 November 2010 the Company  announced  the
convening of a Creditors' and General Meeting of the Company for the consideration of proposals by the
administrator  for  a  Company Voluntary Arrangement ("CVA") of the Company and on  30  November  2010
Trafalgar  announced  that  at  the  Creditors' meeting and the general  meeting  held  that  day  all
resolutions were passed and that, as such, the CVA had been approved. On 8 August 2011 under the terms
of  the  CVA,  10,000,000  ordinary shares were allotted to creditors in satisfaction  of  outstanding
debts,  and 2,000,000 ordinary shares were allotted to Central Corporate Finance, a limited  liability
partnership  controlled  by Andrew Moore, in relation to work performed on of  the  Company  Voluntary
Arrangement.  On  13  September  2011  Trafalgar  announced  that  the  Company  was  no   longer   in
administration.

The  Directors  regard the Acquisition of Combe Bank, with its established development  portfolio  and
banking and other financial arrangements to be a logical step in taking the enlarged group forward.

Combe Bank

Combe  Bank  was  incorporated on 20 November 2006 to undertake residential development  in  both  new
build,  conversions and refurbishment. The founders, Christopher and Alexander Johnson, together  with
their support staff, have direct experience in the residential housing sector.

Combe  Bank currently owns eight residential development sites. In common with many newly formed house
building companies, activity in the first two years centred on land and property acquisition  and  the
commencement of the development of sites acquired.

The  Proposed  Directors believe that land acquisition, at the right price, is key to the  success  of
residential  development. Combe Bank intends to concentrate on smaller unit number sites in  order  to
avoid  having  to  compete with larger developers, and acquire sites out of the  reach  of  the  small
jobbing builder. Combe Bank's principal area of operation is the south-east of England i.e. the south-
east M25 ring, Kent and East Sussex.

Combe  Bank's  modus  operandi is to outsource the majority of its activities to  third  parties.  All
building and construction work is also outsourced.

Combe  Bank's development programme is concentrated in Kent and embraces new build of detached,  semi-
detached,  terraced and apartment units. The gross development value of the portfolio is estimated  by
the  Proposed Directors, but is supported by valuations carried out on behalf o Combe Bank's banks.  A
summary of Combe Bank's development programme is set out below:

Oakhurst Manor and Oakhurst Lodge, Hildenborough, Kent.

This is Combe Bank's principal site, having been acquired in January 2007 with planning permission for
residential  development. The existing residential development was in the course of being improved  by
their  predecessors  in  title. The current application was continued with and  resulted  in  planning
permission for 18,000 sq.ft. of residential development being granted, to be built on the footprint of
a former nursing home, out of a total site area of some four acres. The development is under way.

In  view  of  the fact that the Local Planning Authority, when granting the latest consent,  requested
that  Combe  Bank  submit  an  affordable housing scheme for the  site,  the  Proposed  Directors,  in
consultation  with  Combe Bank's architects and planning consultant, have drawn up  a  revised  scheme
covering  the entire site with approximately 80 affordable housing units, consisting of one,  two  and
three  bedroom  flats and houses. The 80 unit scheme will provide for some 280 habitable  rooms  which
will represent a substantial enhancement of the land value for the site.

The   application  for  permission  for  the  revised  scheme  was  recently  refused.  Following  the
recommendation  of  the planning consultant the Proposed Directors are considering lodging  an  appeal
against  the  refusal and, in the light of the advice received, believe the appeal will be successful.
Should planning permission for the revised scheme not be granted, which the Proposed Directors do  not
believe will be the case, Combe Bank will continue with the development on the basis of the permission
already  obtained  for  18,000  sq  ft  of residential units. In this  event  the  Proposed  Directors
anticipate that the development's revenues should not be significantly affected.

67 High Street, Edenbridge, Kent

Combe  Bank  acquired this property with the benefit of planning permission for  nine  new  build  two
bedroom  apartments  and  a  studio  together with a cottage for re-furbishment  and  a  retail  shop.
Development work is under way.

The Engineer Public House, Dover, Kent

As  the  name  implies the site consists of a public house which was acquired with  the  intention  of
conversion into four apartments after obtaining planning permission. Permission was obtained not  only
for the apartments but also for a small detached property in the rear yard. Construction was completed
in 2009. The completed development is fully let, pending future sale.

Square Hill Road, Maidstone, Kent

This  development of six apartments was completed in 2009 and is currently fully let,  pending  future
sale.

Sheerness, Kent

This  site  was acquired with planning permission for five one bedroom houses. Combe Bank submitted  a
revised  planning application and has received consent for six two bedroom units on the  site  thereby
increasing the land value. Development of this site will commence in the near future.

Ravenscourt Road, Deal, Kent

This  site was acquired with the benefit of planning permission for three units, being a pair of semi-
detached  houses  and a detached house of 2,900 sq.ft. in total. Combe Bank has achieved  consent  for
enhanced planning permission to provide for six semi-detached units which have been completed. Four of
the  units  have  been sold, and it is expected that the two remaining units will be sold  during  the
current financial year.

Fermor Road, Crowborough, East Sussex

Combe Bank acquired a site with planning permission for one detached and a pair of semi-detached units
in January 2010. Development work is complete and all three properties have been sold.

Stanhope Road, Dover, Kent

This  site  consists  of  a  number of garages for which Combe Bank has been successful  in  obtaining
permission  for the construction of a small block of two apartments. On completion of the  development
the property was let, pending future sale.

Chalk Pit Hill, Chatham, Kent

Combe Bank has obtained planning permission for the construction of a small block of three town houses
on  this site. The site originally consisted of a small industrial unit used as a car repair shop  and
the  price  paid  on acquisition reflected this. Development of this site will commence  in  the  near
future.

In  addition  to  the developments referred to above, Combe Bank owns one other property  situated  at
Stanhope  Road, Dover, Kent. This property was acquired to facilitate the grant of planning permission
for  the  adjoining site referred to above. The property is tenanted at a rent reflecting a return  in
excess  of  the  Combe Bank's borrowing cost. It is proposed that the property will  be  sold  in  due
course.

The  funding  for  the  acquisition and development of land and property has typically  been  provided
through the Combe Bank's bankers who, subject to valuation, typically provide 60 per cent of the value
of  land  and  60  per  cent of the building cost, with the remainder being typically  funded  through
Christopher  Johnson's  own resources. Combe Bank has facilities with its banks  which  enable  it  to
purchase  land  and  property, with or without planning permission. Where sites are  acquired  without
planning  permission, separate facilities are granted by Combe Bank's banks to finance the development
of  the  site  once planning permission has been granted and the development of the  site  is  due  to
commence.

Combe  Bank  does  not  have an overdraft facility and all of its bank loans are  site  specific.  The
balance of funding required over and above that provided by the Combe Bank's bank for site acquisition
and development and to service overheads is provided by Christopher Johnson and other sources.

The Board of Directors Trafalgar (the "Board")

The  Board  currently  comprises Andrew Moore, Robert McKendrick and  James  Reid.  On  Completion  Mr
McKendrick and Mr Reid will stand down and Mr Christopher Johnson and Mr Alexander Johnson  will  join
the Board as Executive Chairman and Sales and Marketing Director respectively. Mr Moore will remain as
a non-executive director.

Christopher  Johnson is qualified as a solicitor. During the 1990s he established his own  residential
property development company which was floated on the OFEX Market in 1999 and subsequently on  AIM  in
2001. The company was sold through a public offer for approximately £9.4 million in 2004. He then  set
up  another  house  building  company  which was sold for  £3  million  in  December  2006,  prior  to
establishing Combe Bank.

Alexander Johnson is Christopher Johnson's son. He worked as a manager in an estate agency until  2002
when  he joined his father in his residential property development company as sales director.  He  has
subsequently  been  involved  in  the  development of Christopher  Johnson's  residential  businesses,
including the establishment of Combe Bank.

Further information on the Proposed Directors is set out in the Circular.

Current Trading and Prospects

Combe  Bank's  land  and property portfolio falls into three categories. The first consists  of  those
sites  which have been fully developed and which have been retained following a decision not to market
them  in  a declining market. Construction work on these sites situated at Maidstone (six units),  the
Engineer  Public House, Dover (five units), Stanhope Road, Dover, (two maisonettes), and houses  at  1
Stanhope  Road, Dover, and Oakhurst Lodge, Bank Lane, Hildenborough, Kent was completed  in  2009  and
2010.  All  these units have been let and generate income. At the appropriate time it is the intention
of the Proposed Directors to offer these properties for sale.

Properties  in the second category consist of those which have been developed in the past year,  which
have  been  offered for sale or sold, and should contribute to the Company's trading  results  in  the
current  financial year. These properties are two units at Aylesford, three units at  Crowborough  and
six  at Deal. All the units at Aylesford and Crowborough have been sold. Construction of the units  at
Deal  has  been completed. Four of the units have been sold, and it is expected that the two remaining
units will be sold during the current financial year.

The  third  category  consists  of  four sites which have been retained  for  development.  Of  these,
construction  work has been commenced on twelve units at Oakhurst Manor, Bank Lane, Hildenborough  and
eleven units and a shop at High Street, Edenbridge.

Combe Bank has also obtained planning permission for six units in Sheerness and three units in Chatham
where it is anticipated construction work will commence during the current year.

In  the  financial information on Combe Bank set out in the Circular, the Profit and Loss Account  for
the  year ended 30 November 2010 reflected a loss of £903,100, principally resulting from a write-down
in the value of Oakhurst Manor, following a professional valuation of the site carried out in 2009. As
referred to above, the site is currently being developed.

Also  included in the Circular are the audited results of Combe Bank for the six months ended  31  May
2011 which reflect a profit for the financial period of £329,495 on turnover of £645,000.

The City Code on Takeovers and Mergers (the "City Code")

On  Completion,  Christopher and Alexander Johnson (who together constitute a concert  party  for  the
purposes  of the City Code) will hold 186,815,803 ordinary shares representing 87.14 per cent  of  the
ordinary  share  capital and 1,868 ordinary shares representing 0.01 per cent of  the  ordinary  share
capital  respectively,  or  87.15 per cent of the Company's issued share  capital  in  aggregate.  The
members  of the concert party would normally be required to make a general offer under Rule 9  of  the
City  Code.  The  Panel  on  Takeovers and Mergers (the "Panel") will  normally  agree  to  waive  the
obligation  to  make a general offer that would otherwise arise through the issuance  of  new  shares,
subject  to the approval of independent shareholders on a poll at a general meeting. In this  instance
the Panel has agreed to grant a waiver from the requirements for the Vendors to make a Rule 9 offer to
the  shareholders following the provision of certain confirmations by independent shareholders holding
in  excess of 50 per cent of the existing ordinary share capital of Trafalgar. Full details  of  these
confirmations and the Panel waiver are set out in the Circular.

Notice of General Meeting

A  Circular,  constituting a PLUS Admission Document, is expected to be posted to shareholders  today.
The  formal notice convening the General Meeting, to be held at 12:00 noon on 8 November 2011 will  be
enclosed with the Circular, alongside an accompanying form of proxy. The General Meeting will be  held
at  the offices of SVS Securities Plc, 21 Wilson Street, London, EC2M 2SN. Subject, inter alia, to the
passing of the General Meeting Resolutions application will be made for the enlarged share capital  of
Trafalgar  to  be  admitted to PLUS-quoted. Dealings in the enlarged share  capital  are  expected  to
commence  as  soon  as  practicable  after  the passing of  the  resolutions  and  completion  of  the
Acquisition.

Copies of the Circular, the notice convening the General Meeting and the form of proxy may be obtained
from  the  offices of SVS Securities PLC, 21 Wilson Street, London EC2M 2SN for a period of one  month
from the date of this announcement.

Undertakings in respect of Voting Intentions and Recommendation

Shareholders including Mr R McKendrick and Central Corporate Finance, a limited liability  partnership
controlled  by  Mr  Andrew  Moore  who hold, in aggregate, 12,777,861  ordinary  shares  in  Trafalgar
representing 61.56 per cent of the existing ordinary share capital have irrevocably undertaken to vote
in  favour  of  the  resolutions to be proposed at the General Meeting.  The  Directors  of  Trafalgar
consider the proposals set out in the circular to be fair and reasonable and in the best interests  of
the  Company  and its shareholders as a whole. The Directors who hold in aggregate 8,527,861  ordinary
shares  representing approximately 41.08 per cent of the issued ordinary share capital of the  Company
have  irrevocably committed to the Vendors to vote in favour of the resolutions to be proposed at  the
General Meeting set out in the Notice of Meeting contained in the Circular. The Directors of Trafalgar
unanimously  recommend shareholders to vote in favour of the resolutions set  out  in  the  Notice  of
General  Meeting as they have irrevocably undertaken to do in respect of their own beneficial holdings
of ordinary shares.

THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILTY FOR THE CONTENTS OF THIS ANNOUNCEMENT

Enquiries:

Trafalgar New Homes PLC
Andrew Moore
Tel: [phone]

PLUS Corporate Adviser
SVS Securities PLC
Peter Ward/Alex Brearley
Tel: [phone]

Trafalgar New Homes Plc