HOMELEISURE LIMITED STOCK EXCHANGE ANNOUNCEMENT 3 November 2003 Acquisition Central Station Group The Board of HomeLeisure is pleased to announce that on 31 October 2003 its wholly owned subsidiary Mastertech Pty Limited signed unconditional agreements to acquire Central Station Pty Limited and Central Station Holdings Pty Limited ("Central Station"). Central Station is a significant independent creator and supplier of dance music products in Australia and New Zealand. HomeLeisure considers that there will be significant benefits from merging the business operations of Central Station and MRA Entertainment Group Pty Limited ("MRA") which heads the existing HomeLeisure entertainment division. Central Station has a long history of profitable trading and franking credits in excess of $5 million on a tax paid basis. The acquisition price paid for Central Station is $11.785 million. This is payable by: • the issue of 8 million HomeLeisure shares at 50¢ each to the Vendors; and • the balance in cash. The consideration shares will vest in the Vendors progressively over a two year period in accordance with the terms of their consultancy arrangements with HomeLeisure. The acquisition is effective from 1 July 2003 and Central Station is expected to contribute an estimated $1 million to HomeLeisure's pre-tax profit in the final six months to 31 December 2003. HomeLeisure Limited - Year End 2003 Forecasts On completion of the September quarter, the Directors of HomeLeisure consider it appropriate to provide an update on the full year forecasts for the Company. On the basis of current trading, the Directors anticipate that HomeLeisure will report Earnings before Interest Tax Depreciation and Amortisation (EBITDA) of between $9.2 million and $9.4 million. This is as compared to $7.8 million EBITDA for the year ended 31 December 2002. C:\Temp Files\ASX Announcements\3 November Prelim.doc - RAS -2- Projections for the year in relation to Depreciation, Amortisation and Interest are as follows: Depreciation and Amortisation $2.6 million Interest $0.9 million Impacting on the full year's profit before tax will be restructuring costs of approximately $1.6 million. When announcing our interim results for the 6 months ended 30 June 2003, the Directors detailed the significant restructuring undertaken in amalgamating the housewares and hardware operations of Prestige, Reko and Addis and transition to an offshore/import model. This restructuring is progressing well and is now approximately 60% completed. The rise in the AUD$ has reinforced the appropriateness of the transition to an offshore/import model. The restructuring has involved significant disruption to the houseware and horticultural businesses through the amalgamation of warehousing and brands, stock writedowns, stock clearances and movement of operating plant to China and staff retrenchments. However, all of these have been undertaken in a structured and orderly fashion. Notwithstanding the disruptions resulting from the restructuring the housewares and horticultural divisions have continued to trade profitably. Although their short term trading results are effected it is considered this will be more than offset by the significant benefits expected to accrue in the 2004 year. The MRA entertainment division and the Skansen giftware division are trading very well and their earnings are ahead of their earnings for the comparable period in the 2002 year. Current trading and profit projections for the full year currently clearly support the previously stated proposal to declare a final dividend of 1.75 cents per share thereby increasing the full year dividend payments to 3 cents per share. -3- CENTRAL STATION PTY LTD A.B.N. 96 073 153 705 14 HOLT STREET, McMAHONS POINT NSW 2060, AUSTRALIA P.O. BOX 7126, McMAHONS POINT NSW 2060, AUSTRALIA TEL: 61 2 9957 2938 FAX: 61 2 9957 2040 HomeLeisure Ltd (‘HomeLeisure’) has announced its acquisition of Central Station Pty Ltd, (‘Central Station’), an independent record label specialising in popular/dance music. Central Station emerged, in the early 1990's from the Central Station Records music retail chain, with stores in Sydney, Melbourne, Brisbane, Adelaide, Perth and Auckland. Central Station Records was established in Melbourne in 1975, by its present CEO, Giuseppe Palumbo. The Central Station record label has released cd's by international artists, with recent examples being: Vengaboys, Darude, DJ Sammy, as well as Australian artists : Nick Skitz, Isaac James and Blizzard Brothers. Additionally, Central Station has released the popular WILD and SKITZMIX cd compilations which are typically among the top sellers in the official ARIA sales charts. Central Station's future cd releases, and its expansion into DVD releases, will be marketed and distributed by MRA Entertainment Group Pty Ltd (‘MRA’) which heads the existing entertainment division of HomeLeisure. To address the current challenges facing the music industry, Central Station will diversify into profitable new directions as a fully owned subsidiary of HomeLeisure. While its core business will remain as a music label, Central Station will diversify into music and ‘youth lifestyle’ DVD releases. DVD titles to be released are intended to be a mixture of international as well as Australian productions. An extreme sports series and a motor racing series will be the first Australian productions. The Australian DVD titles will also be marketed internationally and will complement MRA's locally produced karaoke titles which have achieved good export results. Additionally, Central Station will take advantages of the synergies afforded by the diversified HomeLeisure group to expand its merchandise range. Branded clothing, giftware and accessories will complement its traditional audio products. These ranges will be manufactured, marketed and distributed by appropriate divisions within the HomeLeisure group. The WILD and Central Station brands, associated with cutting edge music and night-club culture, appeal to an 'under 30's' demographic and appropriate branded merchandise ranges will be designed to target this high disposable income market segment. -4- HomeLeisure is confident that it will achieve considerable cost efficiencies through the merging of marketing, administration and distribution functions in respect of its MRA and Central Station audio and DVD assets and looks forward to continued growth in these profitable businesses.