<p><a name="_MailOriginal"><strong>From:</strong></a> James McCulloch &lt;james@harcourtinns.co.uk&gt;<br />
<strong>Sent:</strong> 20 May 2020 08:50<br />
<strong>To:</strong> James McCulloch &lt;james@harcourtinns.co.uk&gt;<br />
<strong>Subject:</strong> COVID-19</p>

<p><strong>Shareholder Update</strong></p>

<p>Following the closure of all pubs in late March, employees were enrolled onto the Government Furlough scheme. This has helped provide security for staff during these difficult times.</p>

<p>We have negotiated short term interest and capital holidays with lenders and a temporary break on financial covenants.</p>

<p>Unfortunately the hospitality sector was the first into lockdown and will be the last out of lockdown. Businesses will need to share the cost burden of the furlough scheme from August 2020 and the scheme will end entirely from October 2020. The biggest concern in the hospitality sector is the impact of reopening in a low revenue environment driven by Government forced and demand-led social distancing measures in the pubs and a structural shift from office to working from home with the latter having a particularly significant impact on central London pubs. Combined with low consumer spending and a decline in tourism in the medium term we expect a considerable negative impact on trading performance until 2022-23 and a loss of investor appetite until 2025 in line with the GFC.</p>

<p>Following Government guidance, the management team will take a view as to how the pub should reopen in 2020 after the Government has ended lockdown as social distancing and an unprecedented fall in demand could well make the pubs unsustainable in the next 12-18 months.&nbsp;</p>

<p>We intend on circulating P&amp;L and cash flow forecasts by 29th May and following this we intend on developing a strategy on how to proceed in this new climate including disposal or restructuring if required. &nbsp;&nbsp;</p>

<p>In terms of formal EIS approval for Maida Vale Leisure Limited the general feeling from our tax advisers is that this should hopefully be forthcoming by either late June or early July. Despite the extremely long enquiry into the operations of MVLL our tax advisers are confident that the business is independent and hence EIS qualifying and the &ldquo;fishing exercise&rdquo; by HMRC is part of a larger concerted effort by HMRC to reduce what they regard more complicated EIS arrangements but in this case without merit.</p>

<p>We will be in touch shortly.</p>

<p>Regards,</p>

<p>&nbsp;</p>

<p>James McCulloch</p>

<p>Managing Director</p>

<p>Harcourt Inns</p>

<p>Tel: 07904910301</p>

<p><a href="mailto:james@harcourtinns.co.uk">Email: james@harcourtinns.co.uk</a></p>

<p>Post: 139 Ladbroke Grove, Notting Hill, London W10 6HJ</p>

<p>&nbsp;</p>

<p><img src="data:image/png;base64,[encoded data, 108972 characters]" style="height:153px; width:811px" /></p>