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HOMELEISURE LIMITED STOCK EXCHANGE ANNOUNCEMENT 3 November 2003

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HOMELEISURE LIMITED STOCK EXCHANGE ANNOUNCEMENT 3 November 2003 Powered By Docstoc
					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
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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.

				
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Description: HOMELEISURE LIMITED STOCK EXCHANGE ANNOUNCEMENT 3 November 2003