Interim Results

Legacy Distribution Group Inc
28 September 2006


28 September 2006



                        Legacy Distribution Group, Inc.

                          ('Legacy' or 'the Company')

               Interim Results for the Six Months to 30 June 2006



DELIVERING THE GOODS

Legacy Distribution Group, Inc., (AIM: LDG), the Arizona based wholesaler and
distributor of tobacco and grocery products to the convenience store market,
today announces its interim results for the six months ended 30 June 2006. The
results show a significant improvement over 2005 and solid progress made in the
implementation of the Company's strategy for growth.


Highlights of the results include:

   •Gross profit up over 38.8% to US$2.4 million (2005: US$1.7 million) with
    a gross margin of 10.8% (2005: 5.0%)

   •Operating profit increased to US$0.5 million (2005: US$0.03 million)

   •Earnings before tax increased to US$0.3 million (2005: loss US$0.1
    million) with net margin growth to 0.9%

   •Turnover was US$22.3 million (2005: US$34.4 million) reflecting the
    Company's strategy of rationalising unprofitable clients

   •Basic earnings per share improved to 0.3c (2005: loss 0.2c)

   •Successful IPO and admission to AIM in March 2006 raising US$2.0 million net

   •Two significant contracts won and then extended with major clients,
    Albertsons and the QDN Corporation

   •Convenience store market share increased from less than 1% to 4% in the
    Arizona /Nevada market

   •Fred Gretsch and Tim Riedel appointed to the Board as Chief Financial
    Officer and Chief Marketing Officer respectively, providing further strength
    and depth to the senior management team

   •Gary Nelson appointed as Vice President of Non Tobacco Category
    Management in August 2006, continuing commitment to growth of non tobacco
    products division growth

   •Trading in second half combined with healthy order book and opportunity
    pipeline leads to a positive outlook for the full year.


Commenting on the results, Legacy's chairman, Michael Mills said: 'The results
for our first half year are extremely encouraging and I am convinced that Legacy
is 'delivering the goods' in both senses. We have significantly improved both
gross margin and operating profit and progressed our transformation from being a
niche supplier of tobacco products to a business that is rapidly growing market
share in the wider convenience store market.


'To date, our growth has been achieved organically, helped particularly by the
contracts with Albertsons and QDN. We remain committed to looking for suitable
acquisition opportunities and I hope to be able to make further announcements on
this in the coming months.'




For further information:

Legacy Distribution Group Inc.:                 Tel: [phone]
Frank Patton (CEO)/Fred Gretsch (CFO)

Tavistock Communications:                      Tel: [phone]
Richard Sunderland/Rachel Drysdale

Corporate Synergy Plc:                         Tel: [phone]
Oliver Cairns/Romil Patel




CHAIRMAN'S STATEMENT

During the period the Company has successfully managed the transition from a
private to a public company whose shares are quoted on the AIM market of the
London Stock Exchange. Since the start of the year, management has concentrated
on its stated strategy of generating improved margins by diversifying the
Company's product mix and the customer base.


As laid out in the strategy set out at the time of our IPO, we are moving away
from being a niche distributor of purely tobacco products to becoming a
wholesale convenience store distributor. To that end, the Company is
relinquishing low margin and unprofitable business in order to concentrate on
more appropriate types of customers. Although this has resulted in lower sales
revenue in the short term, it has allowed us to not only improve gross margins
dramatically but also to provide a better quality and more efficient service to
other clients, new and old. This strategy has already resulted in substantial
contract wins, as evidenced by the recent announcements regarding QDN and
Albertsons, and, going forward, we expect this to translate into increased
sales.


We will continue to focus on profitable sales growth by utilizing our long
standing core competency of distributing tobacco products to solicit and win
convenience store customers in the Arizona and Nevada marketplaces and beyond.
We are also confident that our focus on a broader product range and specific
customer sectors will yield significant shareholder return in the near term.


To further develop the non tobacco side of the business, we appointed Gary
Nelson in August 2006 as Vice President of Non Tobacco Category Management.
Formerly a senior category manager at Winn Dixie, the multi-billion dollar US
grocery chain, his responsibilities include key account management, as well as
overall responsibility for all non tobacco products in the Legacy portfolio.


During the period, Legacy also appointed Fred Gretsch to the Board as Chief
Financial Officer. Fred brings with him over 30 years of financial management
experience and will be a tremendous asset to the Company. Additionally, Legacy
appointed Tim Riedel, the Chief Marketing Officer, to the Board. This
appointment was a priority, given the key role that he plays in our business
strategy.


In addition to the organic growth strategy outlined above, the Company is
developing a sound acquisition strategy to generate rapid sales and earnings
growth. We have identified a number of potential opportunities and expect that,
with access to capital markets via AIM, we can progress these in the near term;
adding geographic reach and/or providing us with a platform to manage additional
large national customers. We expect these to have a positive impact on both the
Company's income statement and balance sheet and result in a continual
improvement in shareholder value over the next three to five years.


Michael Mills
Chairman
27 September 2006




CHIEF EXECUTIVE OFFICER'S REVIEW


We have achieved a number of milestones in the last six months, Legacy's
admission to AIM in March 2006 being of particular note. We have also won, and
subsequently extended, sizable contracts from Albertsons and QDN and grown the
convenience store segment of our business, which has flowed through into greatly
improved gross margins and an increase in earnings.


Legacy's biggest objective is to make the transition from being a narrowly
focused niche distributor to a broad line convenience store distributor and we
continue to make solid progress in this area. The results of the last six months
clearly illustrate the type of improvements that can be achieved in our core
markets with the correct product mix and the right team working towards a common
objective. Both Legacy's gross margin percentage and gross margin dollars have
significantly improved during the first six months.


We have made good inroads into our strategy of rationalizing some unprofitable
customers, which, although resulting in lower turnover, when compared to last
year, has allowed us to increase the gross margin dollars by $0.7 million by
focusing on customers with a higher mix of non tobacco products.


Legacy's reputation for operational excellence in terms of reliability, customer
service and ease of use will drive further organic sales growth in our
convenience store division, as evidenced over the past twelve months by an
increase in Legacy's share of this market from less than 1% to 4%.


Current and potential customers generally choose their supplier on the basis of
operational excellence rather than just price. We are confident that Legacy's
reputation, based on its 50 plus year history, and our focus on customer service
will continue to provide contract wins, such as the significant new contracts we
have already announced. To achieve even higher levels of operational excellence,
the Company will invest in a next generation Enterprise Resource Planning (ERP)
platform along with a new handheld ordering device. These systems will allow the
Company to better forecast demand whilst providing customers with real time
inventory information.


Over 3,000 independent convenience stores, representing an annual sales value of
$450 million, exist in the markets Legacy serves. The projected growth of these
markets during the next five years is estimated to be between 5% and 8%, which
is directly attributable to the population growth in Arizona and Nevada
projected by the US Government.


The appointments of Fred Gretsch and Gary Nelson are big steps forward for
Legacy. They will both play key roles in our growth strategies. Gary provides
the disciplines necessary to allow Legacy to maximize gross margins from all the
non tobacco categories. Legacy must stay focused on finding results oriented,
customer focused employees in order to achieve the committed goals. Legacy's
managers and employees will be the defining difference between the Company and
its competition.


As a direct result of our growth in the convenience stores, Legacy has
introduced a number of new product lines including hanging bag candy, automotive
products, beverages and prepared foods. The additions of the automotive and
beverage products were critical to our convenience store growth for the period.
These products represent 5% to 7% of the annual sales volume and 15% of profit
for a convenience store owner. During the period, Legacy also expanded its snack
product portfolio by transitioning to a direct buying relationship with Frito
Lay.


The successful completion of our IPO is a major step forward, providing us with
additional capital to pursue our strategic expansion plans both organically and
via acquisition. Legacy has developed, and is pursuing, an acquisition strategy
to increase geographical reach and to diversify the type of customers that we
service; improving turnover, gross margin dollars and earnings in the short
term.


We continue to make solid progress across all aspects of the business and I look
forward to the future with confidence.


Frank Patton
Chief Executive Officer
27 September 2006





Profit and Loss statement for the six month period ended 30 June 2006
---------------------------------------------------------------------

                                           Unaudited      Audited        Audited
                                             30 June      30 June    31 December
                                                2006         2005           2005
                                            US$ '000     US$ '000       US$ '000

Turnover                                      22,299       34,404         64,574
Gross Profit                                   2,408        1,734          3,546
Operating Profit/(Loss)                          512           26          (586)
Profit/(Loss) before tax                         329        (133)          (911)
Net Profit/(Loss)                                194        (133)          (711)
Basic earnings/(Loss) per share (US Cents)       0.3        (0.2)          (1.0)

Diluted earnings/(Loss) per share (US Cents)     0.3        (0.2)          (1.2)





Balance Sheet as of 30 June 2006
--------------------------------

                                           Unaudited      Audited        Audited
                                             30 June      30 June    31 December
                                                2006         2005           2005
                                            US$ '000     US$ '000       US$ '000

ASSETS
CURRENT ASSETS
Cash and cash equivalents                         39            -              -
Accounts receivable                            1,430        2,405          1,671
Inventory                                      2,600        1,934          1,701
Due from shareholders/related parties              -          459            459
Recoverable income taxes                         380            -            270
Deferred income taxes                              -           44              -
Other current assets                             364          175            403
                                           -------------------------------------
TOTAL CURRENT ASSETS                         4,813        5,017          4,504
                                           -------------------------------------
Property and equipment, net                    1,140          967          1,265
Deposits                                          62          126             46
Goodwill                                       1,502        1,502          1,502
                                           -------------------------------------
TOTAL ASSETS                                   7,517        7,612          7,317
                                           =====================================



LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks drawn in excess of cash                   -           24             48
Line of credit                               2,500        1,750          3,000
Accounts payable                               923          925            787
Accrued expenses                                 2           88              -
Cigarette and tobacco taxes payable            609        1,219              -
Income tax payable                              57           72             72
Current portion of notes payable               460          242            467
Holdback note payable                            -          405            430
                                         -------------------------------------
TOTAL CURRENT LIABILITIES                    4,551        4,725          4,804
                                         -------------------------------------
Notes and leases payable, net of current
portion                                      1,504        1,615          1,793
Deferred income taxes                          260          235            260
Commitments and contingencies                    -            -              -
                                         -------------------------------------
TOTAL LIABILITIES                            6,315        6,574          6,857
                                         =====================================



STOCKHOLDERS'/MEMBERS' EQUITY
Members' Capital                                   -        1,150          1,150
Common stock, par value .001                      73            -              -
Additional paid-in capital                     1,623            -              -
Retained earnings                              (495)        (112)          (689)
                                           -------------------------------------
TOTAL STOCKHOLDERS'/MEMBERS EQUITY             1,202        1,038            460
                                           -------------------------------------
TOTAL LIABILITIES AND EQUITY                   7,517        7,612          7,317
                                           =====================================




Cashflow statement for the six months ended 30 June 2006
--------------------------------------------------------

                                             Unaudited    Audited        Audited
                                               30 June    30 June    31 December
                                                  2006       2005           2005
                                               US$'000    US$'000        US$'000

NET INCOME/(LOSS)                                 194       (133)          (711)
Adjustments to reconcile net income to net 
cash flow provided by (used in) operating
activities:
 Depreciation and amortization                     126         89            269
 Loss (gain) on sale of assets                       -          -             20
 Provision for bad debts                             -        125            187
 Provision for deferred income taxes                 -          -             70
Changes in Operating Assets and Liabilities
 Accounts receivable                              240     (1,328)          (656)
 Deposits                                         (16)          -              -
 Inventory                                       (898)        138            371
 Property and equipment                             -           -              -
 Other current assets                              40       (126)          (545)
 Recoverable income taxes                        (110)          -              -
 Accounts payable and accrued expenses            138         538             42
 Cigarette and tobacco tax payable                609         540          (679)
 Income taxes payable                             (15)          -              -
 Other liabilities                                   -         64              -
                                               ---------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES                                        308        (93)        (1,249)
                                               ---------------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                 -       (191)          (228)
Note due to seller                                  -           -             25
Note due from investor                              -        (20)           (20)
                                               ---------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING 
ACTIVITIES                                          -       (211)          (223)
                                               ---------------------------------


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of Common Stock           1,478          -              -
Payment of Offering Costs                         (303)         -              -
Borrowings on lines of credit                      510      5,887         10,941
Payments on line of credit                      (1,687)   (5,531)        (9,335)
Proceeds from related party note                     -          -            100
Payment of seller holdback note                   (430)         -              -
Collection of loan to related party                459          -              -
Payments on long-term debt                       (295)      (121)          (279)
                                               ---------------------------------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES                                        (268)       235          1,427
                                               ---------------------------------


NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS                                         39        (69)          (45)

CASH AND CASH EQUIVALENTS - Beginning of Period      -         45             45
                                               ---------------------------------
CASH AND CASH EQUIVALENTS - End of Period           39        (24)             -
                                               =================================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest                             183        136            325
Fixed assets purchased under leases or for debt      -          -            461
                                               =================================


Notes to the Interim Results


1. Basis of Preparation
The results for the six months ended 30 June 2006 are unaudited. They have been
prepared on an accounting basis and policies that are consistent with those used
in the preparation of the audited financial statements of the Company for the 12
months ended 31 December 2005 and the 6 months ended 30 June 2005, which were
prepared in accordance with US Generally Accepted Accounting Principles (US
GAAP). As a requirement of the Company's admission to AIM, the results for the
six months ended 30 June 2005 were audited.


2. Earnings per Share
Earnings per share has been calculated based on 73,596,328 (75,799,718 fully
diluted) ordinary shares for the six months ended 30 June 2006 and 73,596,328
(75,799,718 fully diluted) ordinary shares for the six months ended 30 June
2005.


3. Name change and merger
On 2 February 2006 Best Holdings Acquisition Company LLC, an Arizona corporation
was merged into Legacy Distribution Group, Inc., a Delaware corporation, in a 
tax free exchange.


4. Admission to trading on AIM
On 16 March 2006, Legacy Distribution Group, Inc. was admitted to the London
Stock Exchange on the AIM which included issuing new shares and exchanging old
shares of existing shareholders for restricted shares subject to Regulation S.







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