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Orchard Furniture (OFU)

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Friday 28 April, 2000

Orchard Furniture

Interim Results - to 31 Dec 1999 & Open Offer

Orchard Furniture PLC
28 April 2000

                              ORCHARD FURNITURE PLC


                           OPEN OFFER TO SHAREHOLDERS

The Directors of Orchard Furniture PLC ('Orchard' or 'the Company') announce the
Interim Results for the period ended 31 December 1999.

The Directors further announce the Company has today posted a document to
shareholders containing full details of the Open Offer announced on 6 April

Nabarro Wells & Co. Limited, as agent for and on behalf of the Company, is
offering 1,018,388,753 new Ordinary Shares to Qualifying Shareholders on the
Register on the Record Date, 17 April 2000, on the basis of:

1 new Ordinary Share for every 1 Ordinary Share held at lp per new Ordinary


The results for the six months ended 31 December 1999, which show a loss before
tax of £165,000, cover a period when Orchard had no trading business. As has
already been reported to Shareholders, Orchard's furniture operations were sold
on 19 June 1999 in view of the Company's weak financial position. The  sale
proceeds of £1.5 million enabled the repayment of  bank  borrowings and the
redemption of part of the 9% Convertible Loan Stock, but the Company was left
with no assets, no income and significant liabilities.

During the period under review, the priority of the Board was to endeavour to
establish some value for both creditors and Shareholders.  This led to a
proposed Company Voluntary Arrangement ('CVA'), which was duly approved on 10 
January 2000.  Under the terms of the CVA up to 18,000,000 Ordinary Shares  have
 been reserved for the settlement of creditors' claims. Subsequently,  the
Company raised £1.1 million before expenses through a placing of 550,000,000 
Ordinary Shares at a price of 0.2p per share, which enabled its shares to be
re-admitted to trading on AIM on 25 January. On 6 April, the Company announced
that it had placed  310,000,000 new Ordinary Shares at a price of lp per  share,
 raising  £3.1 million before expenses, as well as a further 310,000,000 new
Ordinary Shares at 1p subject to shareholder consent at an Extraordinary Meeting
convened for 2 May  2000. Existing Shareholders are also being given the right
to subscribe for additional  shares  at lp per share, on the basis of 1 new
Ordinary Share for every 1 Ordinary Share held, under the Open Offer.
Shareholders should note that the  balance  sheet at 31 December 1999 has been
drawn up before the CVA and subsequent placings and Open Offer.

When the Company's shares were requoted on AIM, the Directors stated that it was
the intention of the Board to identify suitable  investments  or  a  single
acquisition with a view to enhancing shareholder value.  Since that time, a
number of opportunities have been examined. The Board believes that the Company
will be better able to take advantage of opportunities available by  raising
additional capital. The Board intends either to make a number of investments  or
to acquire control of a single company or to combine both of these investment

                                         31.12.99        30.6.99
                                             £000          £000

 Current assets

      Cash                                     30           5
                                              ---         ---
                                               30           5
      Amounts falling due within
      one year                                (442)      (293)
                                              -----      ----

      Net liabilities                         (412)      (288)

      Capital and reserves
      Called up share capital                 5,079      5,079
      Share premium account                   6,330      6,330
      Other reserves                            557        557
      Profit and loss account               (13,270)   (13,105)
                                             ------     ------

      Equity Shareholders' funds             (1,304)    (1,139)
                                              -----      -----
      Non equity share capital

      Convertible secured loan stock            892        851
                                                ---        ---
      Total Shareholders' funds                (412)      (288)

                                      Notes     6 Months ended   Year Ended
                                                      31.12.99      30.6.99
                                                           £000        £000

TURNOVER                                 1                 -           54

Operating costs                                         (166)      (2,036)

Operating loss from continuing 

Excluding exceptions                              (166)        (420)
Exceptional items                                   -        (1,562)

                                                        (166)      (1,982)
Interest                                                   1          (72)

Loss on ordinary activities before tax                  (165)      (2,054)

Tax on loss on ordinary activities       2                 -           -

Loss for the financial period/year                      (165)      (2,054)

Loss per share before exceptional items  3              (0.4)p      (1.2)p

Basic loss per share                     3              (0.4)p      (5.8)p

There were no recognised gains or losses other than disclosed above  and  there
have been no discontinued activities or acquisitions in the current or preceding

                                          Notes       31.12.99       30.6.99
                                                          £000          £000
Net cash outflow from
the operating activities                   4               (17)       (1,609)

Returns on investments and servicing 
of Finance
Interest paid                                                1           (72)

Taxation                                                     -             -

Capital expenditure and financial investment
Receipts from sales of tangible fixed assets                 -         1,100

Net cash outflow before financing                          (16)         (581)

Repayment of bank loan and overdraft                         -          (460)
Repayment of Convertible Secured Loan Stock                  -          (149)
Proceeds from new share issue                                -           195
Proceeds from issue of Convertible Secured Loan Stock       41         1,000
                                                          ----         -----
                                                            41           586

Increase in cash                                            25             5


1. Basis of preparation

The interim financial information for the six months ended 31 December 1999 is
unaudited and was approved by the directors on 27 April 2000.

The interim financial information has been prepared in accordance with the 
accounting policies detailed in the financial statements for the year ended 
30 June 1999.

The comparative figures for the year ended 30 June 1999 are the company's 
statutory  accounts for that financial year.  Those accounts have  been 
reported on by the company's auditors and delivered to the Registrar  of
Companies. The report of the auditors was unqualified and did not contain  a 
statement under section  237(2) or (3) of the Companies Act 1985.

2. Tax

No charge to corporation tax arises as a result of losses in this period and the
previous year.

3. Loss per share
                                             6 Months to    12 Months to
                                                31.12.99         30.6.99
                                                   £000             £000

   Loss for the financial period / year        (164,649)      (2,054,000)
   Number of Ordinary Shares in issue 
    (weighted average)                       44,895,753       35,045,753
   Basic loss per Ordinary Share                  (0.4)p           (5.8)p
   Exceptional items per share                      -              (4.5)p
   Loss per share before exceptional items        (0.4)p           (1.2)p

4. Reconciliation of operating loss to net cash inflow/(outflow) from
   operating activities

                                             6 Months to     12 Months to
                                                31.12.99          30.6.99
                                                    £000             £000
   Operating loss                                   (166)          (1,982)
   Depreciation                                        -               39
   Loss on disposal of fixed assets                    -              173
   Decrease in working capital                       149              161
                                                     (17)          (1,609)

5. Contingent liabilities

The Company had entered into cross guarantees with various suppliers to its  
subsidiary companies and following the liquidation of these companies  these 
guarantees will crystalise.  It is not possible to quantify  the value of these
claims since many will be settled  by  the liquidators of the appropriate
companies and some guarantees are under dispute.  The directors consider that
the amount payable under these guarantees will be £662,309 but the final figure
may be slightly less.  This sum has not been provided for in these accounts, but
since the 31 December 1999 this potential liability has been dealt with under
the terms of the CVA

Information on the Open Offer

Application may only be made on the Application Form, which is personal to the
Qualifying Shareholder(s) named therein and may not be assigned, transferred  or
split  except to satisfy bona fide market claims. The latest time for  splitting
Application Forms is 3.00 p.m., 18 May 2000 and the latest time for receipt of
completed Application  Forms is 3.00p.m., 22 May 2000. Qualifying Shareholders
who have sold or transferred all or part of their registered holdings are
advised to consult their stockbroker, bank or other agent through or by whom the
sale or transfer was effected as soon as possible since the benefits arising
under the Open Offer may be claimed from them by purchasers under the rules  of
the  London Stock Exchange. The Application Form represents a right to apply for
new  Ordinary  Shares. It is not a document of title and cannot be  traded.  Any
rights to subscribe for new Ordinary Shares under the Open Offer which are not
exercised will lapse.

Application will be made for the new Ordinary Shares to be admitted to AIM.  
It is expected that Admission will become effective and that dealings will
commence in the new  Ordinary Shares on 23 May 2000 The new Ordinary Shares
will,  when issued and fully paid, rank pari passu in all respects with the
existing Ordinary Shares,  including  the right to receive all dividends and 
other  distributions thereafter declared, made or paid.


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