Cubus Lux plc (the “Company”) – Half-yearly Report for the six months to 30 September 2010

Cubus Lux plc, the operator and developer of premier tourism and leisure facilities in Croatia and Montenegro,

announces its results for the half year ended 30 September 2010.

KEY HIGHLIGHTS

• Negotiations on financing options for projects at an advanced stage and new financing opportunities becoming
• offered.
• Montenegrin Parliament has approved the detailed plan for the Valdanos resort subject to contract.
• Casino business to be disposed of in preference to focus on managed resorts and other leisure related tourism
• facilities.
• Preparation of contingency plans to ensure, in the absence of funding, that the Company remains in a secure
• financial position.
• Revenues of £679,000 (2009 – £965,000)
• Pre-tax loss of £1.4 million (2009 – pre-tax loss £0.6 million)
• Net loss per share of 7.11p (2009 – loss per share of 3.2p)
• £646,000 additional equity raised during the year.

Commenting on the results, executive chairman Dr. Gerhard Huber said;

“With the combination of Croatian’s progress towards EU membership and the focussed emphasis by the Government to

push forward with projects involving high quality leisure facilities that will extend the tourism season, Cubus Lux, after

ten years of development and operation in Croatia, appears to have first mover opportunities for new projects.

The financial and credit markets show some improvement but overall still remain at a slower pace to 2008 which is

giving us challenges in securing necessary finance. However, the Board remains committed to its vision of becoming the

number one leisure and tourism company in this region.

We are negotiating on several financing options and would hope for at least one of these to be finalised early in the New

Year. In the event that financing is delayed we have contingency plans to streamline the Company and to maintain a

healthy liquidity which will guarantee our continued operation in the meantime. We look forward to providing

appropriate updates in due course.”

For further information about the Company and the complete interim report please see www.cubuslux.com or contact:

Cubus Lux plc Steve McCann +44 (0) 7787 183 184

Northland Capital Partners

Ltd

Luke Cairns and Rod Venables +44 (0) 20 7492 4750

CHAIRMAN’S STATEMENT

REPORT AND FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

I am pleased to present the results for the six months ended 30 September 2010

Overview

2

The Company continues to explore new leisure related project opportunities in Croatia and Montenegro to further our

vision of becoming the number one leisure and tourism company in this region. We are engaged in the development of

numerous projects but, as we have commented previously, all are subject to financing.

The Company has advanced in its discussions with a number of parties to provide the funding that will allow the

Company to progress its various projects. Whilst the directors remain optimistic of finalising one or more of these, to

date, none have yet come to fruition.

The Company currently has term sheets for financing from, the equivalent of, €100,000,000 to €200,000,000 although

there can be no guarantee that these will be formalised. In the absence of the necessary funding in the near term the

directors are considering a number of alternative options to ensure that the Company remains liquid as funding continues

to be sought.

Although our main focus is Olive Island Resort and the funding, we have made considerable progress on Valdanos and

the marina expansion programme. The Montenegrin Parliament, at the end of November 2010, finally approved the

Detailed Plan for Valdanos and we have now been invited to sign the Purchase Agreement which we expect to do shortly

after the New Year. In addition, we are very close to agreeing terms on two of our marina targets.

Cubus Lux d.o.o. – the gaming company

The casino is largely dependent on the local trade and Italian tourists. As previously reported, the numbers of Italian

tourists visiting Croatia this year have been much lower than in previous years and, in addition, the trade at the Hotel

housing the casino has not yet recovered to the levels achieved prior to the start of the Hotel’s refurbishment. As a result,

trading during the summer proved quite disappointing and resulted in a loss. The Company has therefore decided to

refurbish the casino with a view to the disposal of the gaming business, which would enable the Company’s management

to concentrate on resort management and real estate projects.

Plava Vala d.o.o. – the marina company

As previously outlined, our goal is to have a string of marinas, with some level of real estate development, connecting

our principle resorts. We have made good progress in identifying further marinas that would both enhance our business

but also meet the Croatian Government’s objective of extending the tourism season through top quality leisure facilities.

However, all are subject to having sufficient funds to acquire and develop them and as such the Company is currently

restricted as to how far it can advance these plans. We would look to finance the expansion through our own sources but

would also consider involving a partner as appropriate.

As previously announced, we have also been assessing the viability of increasing the number of berths at our current

marina at Sutomiscica but this expansion is restricted to our cash resources. As highlighted above, in the absence of third

party funding, the Company is reviewing its own asset base and its ability to realise some value and, in respect of our

overall strategy, we are reviewing possible disposal opportunities for the marina at Sutomiscica.

Real estate

Our Molatska development is progressing well and on course for completion by May 2011. As previously reported we

have reduced the book value to a pre-agreed disposal price should we leave this project before completion, which we

would have to do in the absence of funding. As a result of the initial delayed start of construction, the Hypo Alpe Adria

Bank loan which was originally due for repayment 1 October 2010 has been extended to 31 December 2011. This will

allow the final draw-downs and enable the project to be fully completed.

Although credit market conditions do still remain difficult for large-scale projects such as ours we are more confident

that we will be able very soon to close the purchase contract in respect of Olive Island Resort, our primary focus. In the

event that appropriate funding is not secured then the directors would release the Company’s interest in the Project and

pursue the Municipality for deposits currently paid which amount to €1.7m. The Company needs approximately €70m to

complete the land purchase and phase one development for the Olive Island Resort and Hotel.

Our Valdanos project is now approved, subject to signing the purchase agreement and we can focus further on its

development and financing (full development costs would be in the region of €135m) and a further announcement will be

made when the agreement is signed.

Financial

For the six months ended 30 September 2010 the Company reports revenue of £679,000 and a pre tax loss of £1,411,000.

Loss per share amounted to 7.11p

Provided by: www.cubuslux.com/download/Half-yearly Report 2010