REG-Hydro Hotel, Eastbourne, Plc: Half-yearly Report

HYDRO HOTEL, EASTBOURNE, PLC

Interim Report and Accounts

Half Year ended 30 April 2009

YOUR CHAIRMAN'S LETTER

Dear Shareholder,

SIX MONTHS TO 30 APRIL 2009

The company was not immune from the effects of the recession during the half
year to 30 April 2009, and turnover decreased by 7.4% on the same period last
year. Management are working hard to market the hotel to best advantage through
traditional media and online. Currently forward accommodation bookings to the
company's financial year end on 31 October 2009 are back up to the same level
as last year but this is not sufficient to make up the reduction in the first
six months. The loss for the period was £238,528 compared to £30,561 loss last
year.

As part of the planned refurbishment programme we incurred repair expenses
during the period of GBP 135,265, compared to GBP 86,117 last year. The
principal areas of expenditure were the refurbishment of most of the bedrooms
and bathrooms on the third floor, and the re-roofing of the kitchen and
restaurant area.

We were adversely affected by increased energy costs during the half year, with
gas nearly double last year's cost. During the current six months we have
negotiated a new gas supply reducing the cost by more than a third, and we are
in the process of obtaining detailed plans to replace the 20 year old hot water
and central heating boilers with much more efficient modern plant.

The new Orangery was completed towards the end of the period and is now on sale
for functions, and to provide added capacity to our restaurant operation.

I am pleased to welcome James Penn, our new Head Chef. James is a very
experienced professional chef who was previously head chef at the Powder Mills
hotel near Battle which has a large function trade. I am also pleased to report
that Ian Turnbull has obtained the Institute of Leadership Management level 5
Award in Management.

Yours sincerely,

Graeme C King, MA, CA

9 July 2009

PROFIT AND LOSS ACCOUNT

FOR THE HALF YEAR ENDED 30 APRIL 2009

Half year to Half year to Year ended

30 April 2009 30 April 2008 31 October 2008

(Unaudited) (Unaudited) (Audited)

GBP GBP GBP

TURNOVER 1,483,243 1,600,830 3,608,092

OPERATING (LOSS)/PROFIT (257,913) (63,930) 240,276

NET INTEREST RECEIVABLE 19,385 33,369 70,516

(LOSS)/PROFIT ON ORDINARY (238,528) (30,561) 310,792
ACTIVITIES BEFORE TAXATION

TAXATION ON (LOSS)/PROFIT

ON ORDINARY ACTIVITIES - - (65,088)

(LOSS)/PROFIT FOR PERIOD GBP (238,528) GBP (30,561) GBP 245,704

(Loss)/Earnings per share (39.75)p (5.09)p 40.95p

There are no recognised gains or
losses other than those shown in
the Profit and Loss Account above.

SUMMARY BALANCE SHEET

AT 30 APRIL 2009

30 April 2009 30 April 2008 31 October 2008

(Unaudited) (Unaudited) (Audited)

GBP GBP GBP

FIXED ASSETS

Tangible Assets 2,826,050 2,660,825 2,678,022

CURRENT ASSETS

Stocks 40,074 39,614 42,464

Debtors 121,345 121,907 125,492

Investments -liquid resources 1,000,000 500,000 1,100,000

Cash at bank and in hand 7,949 860,729 471,721

1,169,368 1,522,250 1,739,677

CREDITORS

Amounts falling due within one year (620,390) (692,176) (642,143)

NET CURRENT ASSETS 548,978 830,074 1,097,534

TOTAL ASSETS LESS

CURRENT LIABILITIES 3,375,028 3,490,899 3,775,556

PROVISION FOR LIABILITIES (79,855) (71,463) (79,855)

GBP 3,295,173 GBP 3,419,436 GBP 3,695,701

CAPITAL AND RESERVES

Ordinary Shares - Authorised and
Issued:

600,000 Shares of GBP 1 each fully 600,000 600,000 600,000
paid

Revaluation Reserve 437,740 443,667 437,740

Profit and Loss Account 2,257,433 2,375,769 2,657,961

GBP 3,295,173 GBP 3,419,436 GBP 3,695,701

CASH FLOW STATEMENT

FOR THE HALF YEAR ENDED 30 APRIL 2009

Half year to Half year to Year ended

30 April 2009 30 April 2008 31 October 2008

(Unaudited) (Unaudited) (Audited)

GBP GBP GBP

NET CASH (OUTFLOW)/INFLOW

FROM OPERATING ACTIVITIES (288,625) 26,661 452,911

RETURNS ON INVESTMENT

AND SERVICING OF FINANCE 19,385 33,369 70,516

TAXATION - - (49,760)

CAPITAL EXPENDITURE

Payments to acquire tangible fixed (252,532) (180,845) (263,490)
assets

(521,772) (120,815) 210,177

EQUITY DIVIDENDS PAID (42,000) (42,000) (162,000)

MANAGEMENT OF LIQUID RESOURCES 100,000 (3,000) (603,000)

(463,772) (165,815) (554,823)

FINANCING - (13,332) (13,332)

(DECREASE) IN CASH GBP (463,772) GBP (179,147) GBP (568,155)

NOTES ON THE CASH FLOW STATEMENT

NET CASH INFLOW/(OUTFLOW)

FROM OPERATING ACTIVITIES

Operating (loss)/profit (257,913) (63,930) 240,276

Depreciation 101,004 90,825 184,393

Loss on disposal 3,500 739 1,491

Decrease/(Increase) in Stocks 2,390 (1,071) (3,921)

Decrease in Debtors 4,147 13,406 12,064

(Decrease)/Increase in Creditors (141,753) (13,308) 18,608

GBP (288,625) GBP 26,661 GBP 452,911

NOTES TO THE ACCOUNTS

1. The results are prepared on the basis of the accounting policies set out in
the Company's Annual Report and Accounts for the year ended 31 October
2008.

2. The earnings per share are based on a loss of GBP 238,528 being the loss on
ordinary activities after taxation.

3. A copy of the interim report and accounts, which was approved by the Board
of Directors on 9 July 2009, will be posted to all registered shareholders
shortly thereafter.

4. The financial information set out above does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985. Statutory
accounts for the year ended 31 October 2008, on which the report of the
auditors was unqualified and did not contain a statement under section 237
of the Companies Act 1985, have been filed with the Registrar of Companies.

5. The Company's auditors PKF (UK) LLP have reviewed these unaudited interim
results, and this announcement has been approved for the purposes of the
Financial Services and Markets Act 2000 by PKF (UK) LLP, Farringdon Place,
20 Farringdon Road, London, EC1M 3AP, who are authorised by the Financial
Services Authority for investment business.

END