HLL Hill Station

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

FURTHER ISSUE OF LOAN STOCK, RELATED PARTY TRANSACTION, ACQUISITION AND TRADING
                                    UPDATE                                     

The Board of Hill Station, the Cwmbran based ice cream manufacturer, announces
that it is raising additional working capital of �720,000 by way of an issue
for cash of new Loan Stock (the "July 2007 Loan Stock") to the Directors, VCTs
administered by Electra Quoted Management Limited ("Electra") and Rathbone
Investment Management Limited ("Rathbone"). Each of Rathbone and Electra and
Bill Mapstone (the Chairman of the Company) are existing shareholders in the
Company. In addition, as announced on 6 June 2007, the Board is continuing with
its discussions with a view to a further fundraising to provide additional
working capital for the existing group and also to provide acquisition funding.
The Board also announces that it has exchanged contracts to acquire the
business and assets of So Real Ice Company Limited ("Real Ice").

On 28 November 2006, the Company issued �2 million of Loan Stock with an
attached redemption premium of �4 million to certain of the Company's
shareholders, a former director and certain private investors (the "November
2006 Loan Stock"). The November 2006 Loan Stock Instrument provided, inter
alia, for interest to accrue at 15% per annum, payable on full or partial
redemption of the Loan Stock and also for a redemption premium of 200% of the
issue price. The November 2006 Loan Stock does not contain specific rights to
enable conversion into ordinary shares in the Company.

The Company has agreed with holders of the November 2006 Loan Stock to vary the
Loan Stock Instrument such that the 200% Redemption will be cancelled and the
interest rate will be, from the date of issue reduced to 10% per annum.

The July 2007 Loan Stock is convertible into ordinary shares at any time, will
be secured on trading stock of the Company, bear fixed interest of 10% per
annum and will be redeemable on the fifth anniversary of the date of issue. On
conversion or redemption, the July 2007 Loan Stock will be entitled to a
premium of 100% of its par value.

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 �300,000 of July 2007 Loan
Stock and this is therefore a Related Party Transaction as defined in the AIM
Rules for Companies.

The Directors are also subscribing for �120,000 of July 2007 Loan Stock and
this is also a Related Party Transaction. These funds will be injected into the
Company as soon as practicable.

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.
The Directors consider, having consulted with CFA, the Company's Nominated
Adviser, 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.

As all of the Directors are subscribing for July 2007 Loan Stock there are no
independent directors. CFA consider that the terms of the related party
transaction with the Directors (as described above) are fair and reasonable
insofar as the Company's shareholders are concerned.

The July 2007 Loan Stock will be converted on such terms and at such price as a
majority of the stockholders and the Company shall agree.

ACQUISITION

On 9 July 2007, the Company entered into an asset purchase agreement in
relation to the acquisition of the business of the manufacture, distribution
and sale of ice cream carried on by Real Ice for the sum of approximately �
750,000. The Company has today paid a deposit of �100,000 with the balance of
the consideration of �650,000 being payable as to �550,000 in cash and �100,000
in new ordinary shares in the Company. Pending raising additional monies
required for the acquisition, the Company has secured Real Ice trading stock
equivalent to the amount of the deposit. Completion is conditional upon, inter
alia, shareholder approval and the Company being in cleared funds to satisfy
the balance of the consideration.

The acquisition agreement provides for additional consideration to be paid or
repaid following production of completion accounts. Consideration is further
adjustable downwards if gross margins of Real Ice at completion are less than
50% as defined in the agreement. Normal warranties and indemnities have been
provided by the vendors.

In addition, a director and the company secretary of Real Ice have agreed to
act as consultants to the Company for a 3 year period. The consultants will be
paid an annual fee and will be entitled to additional fees dependent upon the
turnover of Real Ice.

In the period 1 July 2006 to 30 April 2007 Real Ice's sales were �1.7 million
and it made a loss before taxation of �189,000.

The acquisition of Real Ice will extend Hill Station's portfolio of branded ice
creams and customer base. The Board believes that it should be able to achieve
synergistic benefits though the acquisition.

TRADING UPDATE

As reported in the announcement of 6 June 2007, the Company advised that in the
first quarter of 2007, raw material prices increased significantly, in
particular milk products, which are clearly key components in ice cream
manufacture. Furthermore, publicity associated with funding problems in the
second half of 2006 gave rise to important customer losses and, in addition,
low/negative margin sales have been identified and eliminated and the number of
product lines reduced, creating additional working capital needs.

Sales in April 2007 were above expectations due to the warm weather experienced
in that month. In May and June 2007 weather conditions have not been favourable
resulting in an adverse sales variance of approximately 10%. This additional
factor has required the need for an injection of the July 2007 Loan Stock as
outlined above to satisfy working capital needs over and above the requirements
indicated in the announcement of 6 June 2007.

As indicated above, discussions are continuing with existing and potential
investors to fund additional working capital for the Company.

Further details will be announced as soon as practicable.

Enquiries:

Hill Station plc

Bill Mapstone, Chairman

Tel: 01633 833 000

Nominated Adviser

City Financial Associates Limited

Tony Rawlinson

Tel: 020 7090 7800



END

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