Issue of Loan Stock and Trading Update

    HILL STATION PLC ("HILL STATION" OR THE "COMPANY")               

                TRADING UPDATE, FURTHER ISSUE OF LOAN STOCK AND                

                           RELATED PARTY TRANSACTION                           

TRADING UPDATE

The Company last updated the market on 13 November 2007. Since then, trading in
November 2007 and December 2007 has been in line with management expectations.

The current sales outlook for the first quarter of 2008 is encouraging with
sales to new customers having commenced earlier in the month. The Company is
optimistic that it can develop relationships with certain other leading
retailers with a view to developing both the Company's brands and retailer own
labels.

Following the new appointments to the management team, the Company will
continue its comprehensive business review, including a stringent reassessment
of ongoing costs. The Board believes that the introduction of the new
management team will greatly assist in establishing the Company as a leading
ice cream manufacturer.

Despite progress in these areas, the Company nevertheless has an immediate
requirement for additional working capital in order to fund existing working
capital requirements and growth that has been achieved by new customers.

ISSUE OF LOAN STOCK

The Board has explored a number of options to meet its financing requirements
and has concluded that the only option available in the present circumstances
is the further issue of loan stock. Accordingly, the Board today announces that
it has raised additional working capital of �902,500 by way of an issue for
cash of new Loan Stock (the "January 2008 Loan Stock") to the Directors, the
proposed directors, VCTs administered by Invesco Perpetual, Electra Quoted
Management Limited ("Electra") and Rathbone Investment Management Limited
("Rathbone"). Of this sum, �730,000 has been received in cash by the Company's
solicitor, with the balance of �172,500 due to be received on Wednesday 23
January 2008.

The Directors, including the new CEO and the new Finance Director, but
excluding Peter Salter are subscribing for �47,500 of January 2008 Loan Stock,
comprised as follows:

Director                         January 2008
                                   Loan Stock
                                             
                                            �
                                             
Bill Mapstone                          15,000
                                             
Cliff Carter                           11,500
                                             
Robert Alstead                          5,000
                                             
Gwyn Jones                             10,000
                                             
John Dixon                              6,000
                                             
Total                                  47,500

Peter Salter has indicated that he will invest �10,000 in January 2008 Loan
Stock immediately upon his return from overseas on or around the end of January
2008. Each of Invesco Perpetual, Rathbone, Electra, Bill Mapstone, Peter Salter
and Gwyn Jones are existing shareholders in the Company.

The terms of the January 2008 Loan Stock provide, inter alia, for interest to
accrue at 10 per cent. per annum and also for a redemption premium of 200 per
cent. of the issue price. The Loan Stock is redeemable on the fifth anniversary
of its issue. The January 2008 Loan Stock is not convertible into Ordinary
Shares.

RELATED PARTY TRANSACTION

Rathbone and Electra, together with their respective underlying funds have been
deemed to be substantial shareholders for the purposes of this transaction.
Each of Rathbone and Electra has subscribed for �345,000 of January 2008 Loan
Stock and this is therefore a Related Party Transaction as defined in the AIM
Rules for Companies.

Where a company whose shares are listed on AIM enters into a Related Party
Transaction, AIM Rule 13 requires the directors of the Company to consider,
having consulted with the Company's nominated adviser, that the terms of the
transaction are fair and reasonable insofar as its shareholders are concerned.

As all of the Directors are subscribing for January 2008 Loan Stock there are
no independent directors. Taking into account the Directors' commercial
assessments and the Company's urgent need for additional working capital, CFA,
the Company's Nominated Adviser, considers that the terms of the related party
transaction with each of Rathbone and Electra are fair and reasonable insofar
as the Company's shareholders are concerned.

Enquiries:-

Hill Station plc

Bill Mapstone, Chairman

Tel: 01633 833 000

Nominated Adviser to Hill Station plc

City Financial Associates Limited

Tony Rawlinson, Chairman

Tel: 020 7492 4777

Broker to Hill Station plc

JMFinn Capital Markets

Charlie Cunningham, Associate Director

Tel: 020 7600 1658



END
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