Press Release

Questionable supermarket policy needs investigation: Greens

Allegations that supermarket giant Progressive Enterprises is applying pressure to its suppliers adds further impetus to the Green Party's call for a Commerce Commission inquiry into industry practices, and a code of conduct for supermarkets, Safe Food Spokesperson Sue Kedgley says.

According to a news report, grocery suppliers will be penalised for having their products promoted in rival supermarkets at or around the same time as Progressive's own advertised promotions. If this occurs, suppliers would be charged for the differential on the price offered in the opposition supermarket.

"These are precisely the kind of tactics that penalise small independent growers and suppliers who are already struggling in a highly competitive environment," Ms Kedgley says. "Progressive allegedly wants details of suppliers' supermarket specials with trade competitors - in advance - and will not accept promotions for inclusion in its mailers where there is a clash with a competitor's promotion arranged by the supplier," Ms Kedgley says.

Ms Kedgley says she is alarmed at reports that, while suppliers are furious about these practices, they fear if they don't play ball, their products would be left off supermarket shelves.

"Why should a farmer who grows and supplies broccoli to Progressive and the local New World be punished by a retrospective cut on their payment from Progressive because New World decides to have a special on broccoli in the same week?

"Most farmers and manufacturers have nowhere else to sell their produce than the two supermarket chains that control 96 percent of New Zealand's grocery market. An investigation would clarify whether there is any truth to the allegations that Progressive may be misusing its position to force small farmers and business people to take cuts in their margins.

"It would also determine whether this practice breaches the restrictive trade practices under the Commerce Act.

"New Zealanders spent $16 billion in supermarkets last year. They are a huge business, and it is essential that there are clear rules governing the trade, which prevent unfair trading practices occurring in the sector. That's why we need a Commerce Commission Inquiry into the sector and a code of conduct for supermarkets, such as exists in the United Kingdom," Ms Kedgley says

Discussion around Easter trading restrictions is being encouraged through a document launched today by Labour Minister Trevor Mallard and Justice Minister Annette King.

"Easter trading continues to attract a range of opinions, and the Labour-led government is conscious of the requirement to balance the needs of a wide variety of organisations and individuals with different beliefs and preferences," Trevor Mallard said.

"The Easter Trading and Holidays Legislation discussion document we have released today considers the different legislation that affects Easter Trading and proposes a number of options for possible change in three key areas."

The key question areas are:

• what should happen to the Shop Trading Hours Act Repeal Act 1990 and Sale of Liquor Act 1989, particularly in regard to Easter Sunday
• what should happen with the status of Easter Sunday
• whether the enforceability and penalty regime for the Shop Trading Hours Act Repeal Act 1990 needs amendment, and the issue of adequate employee/leaseholder protection against the compulsion to work/trade on Easter Sunday.

Trevor Mallard noted that none of the options proposed reducing the holiday weekend.

Annette King said officials would collect and analyse submissions and present a comprehensive set of recommendations for consideration.

The discussion document has been sent to a wide variety of individuals (including those who made submissions on Jacqui Dean’s and Steve Chadwick’s shop trading bills last year), businesses, social partners and a number of public service organisations for comment.

"This issue has been the focus of public attention for a number of years and we recognise the requirement to consult as widely as possible. We strongly encourage employers, unions, industry groups, individuals and other groups in society to consider this discussion document and provide their views," Annette King said.

The deadline for submissions is December 14.

A summary of the key options follows. The full discussion document is available now at www.dol.govt.nz/consultation/shoptrading

The options proposed for public consideration and comment reflect the differing views on how to recognise the significance of the four day Easter weekend. For example, whether continuing to recognise the significance of the Easter weekend involves ensuring that retailers and retail workers have time off work to be with their families, or whether it is about enabling shops to trade to meet tourist and consumer demand, or about preserving the religious significance of the weekend by restricting trading.

The first decision area focuses on what should happen to the Shop Trading Hours Act Repeal Act 1990 and Sale of Liquor Act 1989, particularly in regard to Easter Sunday. Three options are presented in relation to this issue, these are:

• Option 1: Retain the status quo.
• Option 2: Reinstate the exemption-making provision for shop trading to exempt specific areas from trading restrictions and enable sale of liquor exemptions to be considered at the same time.
• Option 3: Remove the trading restrictions under the Shop Trading Hours Act Repeal Act 1990 and Sale of Liquor Act 1989 for Easter Sunday.

The second decision area focuses on what should happen with the status of Easter Sunday, and four options are presented in relation to this issue, these are:

• Option 1: Retain the status quo.
• Option 2: Increase the number of public holidays to 12 by making Easter Sunday the 12th public holiday.
• Option 3: Maintain the number of public holidays at 11 by making Easter Sunday a public holiday, subject to ‘mondayisation’ arrangements similar to Christmas and New Year holidays when they fall on Sunday .
• Option 4: Treat Easter Sunday as if it were a public holiday for employees of businesses affected by new amendments to the Shop Trading Hours Act Repeal Act 1990 or the Sale of Liquor Act 1989. This would not apply to those that are currently able to trade under an exemption or exception.

The third decision area focuses on:

• whether the enforceability and penalty regime for the Shop Trading Hours Act Repeal Act 1990 needs amendment, and
• on the issue of adequate employee/leaseholder protection against the compulsion to work/trade on Easter Sunday.

NB: The full discussion document is available now at www.dol.govt.nz/consultation/shoptrading

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In its first full year as a publicly listed company, Goodman Fielder has recorded another solid earnings performance with most businesses performing above expectations.

Net profit for the year was $243.2 million, an increase of $45.7 million or 23% on the previous year. The company's businesses generally performed well with revenue increasing by 2% from the prior year to $2,426.7 million. Earnings before interest, tax, depreciation and amortisation also grew, up by 7.5% to $444.1 million.

The result includes restructuring and integration costs of $13.0 million (post tax) and foreign exchange gains of $34.1 million (post tax). This delivers a normalised NPAT of $222.1 million.

FY2007; FY2006; Variation
Revenue: $2,426.7m;$2,379.0m;+2.0%
EBITDA: $444.1m;$413.1m;+7.5%
EBIT: $388.9m;$360.1m;+8.0%
NPAT(incl. OEI): $243.2m;$197.5m;+23.1%
EPS: 18.1c;14.7c;+23.1%
Dividend: 13.5c;5.5c (1/2 year)

The year was marked by particularly strong performances from the company's Fresh Baking and Commercial divisions, continuing the momentum established over the past two years. The company's Home Ingredients division performed well in Australia but overall was held back by a weaker first half performance in New Zealand.

A highlight of the year was the company's robust management of considerably increased commodity costs. Substantial increases in commodity prices increased the company's cost base significantly, however these increases were actively managed with margins being maintained following successful cost recovery in the marketplace.

Another highlight was the good progress made on the company's growth strategy with a number of value adding acquisitions and their successful integration into the existing business.

Businesses and brands acquired during the year included, in Australia, Country Life Bakery, Flinders Bread, Moores and Early Harvest Specialty Breads, and the Copperpot dips, yoghurt and pate business. In New Zealand, the company acquired Northern Bakeries, River Mill Bakeries and Canterbury Flour Mills during the year. Since year end Goodman Fielder has acquired the dairy business of the New Zealand company IDP Mainland Limited.

The company made significant progress during the year on its plan to increase manufacturing efficiency by consolidating its manufacturing assets across its portfolio. The company closed a number of older plants and is progressively restructuring its production platform to become the lowest cost manufacturer in the industry.

Our New Zealand dairy business made a slow start to the year following a disappointing performance in the previous financial year. As a result, the business was substantially restructured to create a more focused management structure under new leadership. These changes began to take effect in the second half and the business finished the year in a much improved position.

GF Fresh Baking

The GF Fresh Baking business experienced strong earnings improvement for the 2007 financial year, with the business returning EBITDA of $175.9 million, an increase of 22% on the prior year.

FY2007;FY2006;Variation
Sales: $960.9m;$919.7m;+4.5%
EBITDA: $175.9m;$144.7m;+21.6%
EBIT: $150.9m;$125.0m;+20.7%

The company's Fresh Baking division had an excellent year and returned a fourth successive year of double digit EBITDA growth. Although commodity costs rose to record levels during the year and the company incurred cost increases in fuel, packaging, oils and labour costs, all increases were recovered through a combination of price increases and internal cost reductions.

In Australia, the manufacturing function was reorganised under new leadership and the company is moving to a production platform focused on high volume, low complexity plants supported by a number of specialised plants to cater for more complex lower volume products. During the year a number of new products were launched into the market and several existing products were extended into new regions. A major private label contract had its duration and scope extended.

Market shares in loaf bread in the supermarket chains remained solid during the financial year and the company enjoyed steady growth in the supermarket sector. The trend to healthier eating alternatives continued during the year with the company's share of these higher margin categories increasing over the period in a growing market segment. This trend sustains the strong category value growth trend.

In New Zealand the GF Fresh Baking business had a relatively poor start to the year but experienced a better second half, finishing the year strongly. As in Australia, commodity and other costs rose steeply with business results being negatively affected, but price increases and cost reduction strategies were successfully implemented. Two non-essential manufacturing plants were closed.

Going forward the focus will be on new product development, with a renewed emphasis on innovation and launches of several new products planned. The focus on business efficiency and cost reduction will continue.

GF Home Ingredients

The GF Home Ingredients business performed well in Australia during the year, but was held back by its New Zealand performance. The business returned EBITDA of $91.1 million, up 3% on the prior year.

FY2007;FY2006;Variation
Sales: $367.6m;$342.5m;+7.3%
EBITDA: $91.1m;$88.7m;+2.7%
EBIT: $89.0m;$87.3m;+1.9%

In Australia the business has performed strongly during the year and increased its market share significantly as well as outperforming the market.

The company continues to leverage off the strength of its existing brands by extending their reach into new products. The business also concentrated on forging and maintaining strong retail partnerships.

In New Zealand, the business did not perform up to expectations in the first half of the year. However a reorganisation early in the second half resulted in an improved performance with the business ending the year strongly.

The Copperpot business was acquired during the year and has now been fully integrated. This acquisition will provide the business with a competence in shorter shelf life and chilled products which can be leveraged into other areas.

Going forward there will be a continuing emphasis on the ambient and frozen product segments to maintain market share growth in these categories. Incrementally to this, the company will pursue expansion in the supermarket chiller with spreadable butter, dips and expanded yoghurt offerings to complement the existing spreads business.

GF Commercial

The GF Commercial business continued to perform solidly during the year. EBITDA was $82.4 million, up 11% on the prior year.

FY2007; FY2006; Variation
Sales: $524.5m;$498.6m;+5.2%
EBITDA: $82.4m;$74.6m;+10.5%
EBIT: $69.2m;$58.4m;+18.5%

This result follows a similar solid performance in the prior year, maintaining the momentum established over the past three years despite increases in commodity costs.

Commodity prices over the period were at historically high levels with some reaching all time highs. Despite these cost pressures, the business was able to recover the increases in the market place through quarterly price reviews and through operational improvements, particularly in the supply chain.

In Australia and New Zealand the focus continues to be on developing and marketing healthy oils and a number of lower saturated fat and virtually trans-free products were developed during the year.

Exports into Asia increased strongly continuing the recent trend. However returns from the region were impacted by the strengthening Australian dollar.

Pacific

The Pacific business returned a solid EBITDA of $33.3 million for the year, an increase of 5% on the prior year.

FY2007;FY2006; Variation
Sales: $180.3m;$178.4m;+1.1%
EBITDA: $33.3m;$31.7m;+5.0%
EBIT: $29.3m;$27.4m;+6.9%

This result follows a similar performance in the prior year. The major developments during the year were the acquisition of La Biscuitiere, a leading baking business in New Caledonia, and the divestment of a non-core stockfeed business.

The Fiji business returned a solid result despite the impact of the military coup during the year, while in Papua New Guinea the company's flour milling operations performed strongly.

GF Fresh Dairy

The GF Fresh Dairy business in New Zealand delivered an EBITDA of $61.4 million for the year, a decrease of 25% on the prior year.

FY2007; FY2006; Variation
Sales: $393.4m;$439.8m;-10.6%
EBITDA: $61.4m;$82.2m;-25.3%
EBIT: $50.5m;$70.8m;-28.7%

The business did not perform to expectations in the first half of the financial year but, following an operational reorganisation midway through the year, it closed the year in a much improved position. The restructure resulted in greater accountability with the New Zealand dairy assets being split out as a stand alone division under new leadership.

During the year the fresh milk business experienced difficult conditions with considerable downward pressure on retail pricing. This followed a substantial reduction in retail pricing of supermarket house brand milk and a significant increase in raw milk pricing. Despite these pressures brand share remained stable.

Since year end, the company announced that it had entered into an agreement to acquire the business of IDP Mainland Limited (IDP), which will increase Goodman Fielder's presence in the route trade where IDP sells its Cow & Gate brand milk. The company has also been awarded a major milk supply contract with one of New Zealand's largest supermarket chains.

In the chilled dairy category, the company performed strongly and recorded a significant increase in market share following a successful relaunch of its yoghurt range and the success of Activate, a functional food probiotic yoghurt. Going forward the company will be pursuing growth in all of its key categories with a new yoghurt production line to be installed to meet market demand and considerable effort in new product development resulting in the launch of several new products and new packaging formats. The company will also be entering new segments leveraging off the strength of its leading brands.

Dividend

Directors announced a final dividend of 7.5 cents per share, bringing the full year dividend to 13.5 cents per share. The final dividend is payable on 31 October 2007. Books close on 28 September 2007.

Board appointments and elections

During the year the Board appointed two new independent non - executive Directors, Mr Gavin Walker and Mr Clive Hooke. Mr Walker has a background in investment banking at chief executive level and has extensive business experience in New Zealand. Mr Hooke is a former Chief Financial Officer of a publicly listed food company and has broad experience in the Australian corporate environment. Mr Walker and Mr Hooke will stand for election by shareholders at the company's Annual General Meeting.

Outlook

The company is performing solidly in the first quarter of the new financial year and is well positioned to deliver further profit improvement for the 2007/08 year (compared with the normalised 2006/07 result).

*****

The FY 2006 results presented in this statement have been prepared on a pro forma basis so as to include a full 12 month performance. The pro forma numbers have not been audited. They have also been re-segmented to align the divisional results with the FY 2007 organisation structure. Divisional results have been normalised to exclude the impact of significant and one-time items.

• SALES FROM CONTINUING OPERATIONS $42.3 BILLION UP 12.6%
• EARNINGS BEFORE INTEREST AND TAX $2,111.3 MILLION UP 22.6%
• NET PROFIT AFTER TAX $1,294.0 MILLION UP 27.5%
• EARNINGS PER SHARE UP 19.7%
• DIVIDEND PER SHARE UP 25.4% TO 74 CENTS

“Overall this has been a successful year with strong results in all divisions. Our team continues to deliver on our strategy. We are continually looking for ways to improve our business by reinvesting the proceeds of our growth into even greater value, service levels and quality for our customers. We believe we are very well positioned for future growth.” Michael Luscombe

The Board of Woolworths Limited today released the profit
and dividend announcement of Woolworths Limited and its controlled entities for the 52 weeks ended 24 June 2007.

Woolworths Limited Managing Director and CEO, Michael Luscombe said, “Today we are pleased to report a net profit increase of 27.5% to $1,294.0m. This result would not be possible without the many years of hard work in establishing the foundations for the positive momentum that we are currently experiencing. Our focus on the customer, the quality of our people and the successful execution of our business strategies, highlighted by the supply chain transformation in our Supermarket Group, have all contributed to this result. We believe we are very well positioned for future growth.”

Commenting on the result, the Chairman of Woolworths Limited, James Strong said, “This result is a real credit to the people within Woolworths. The results reflect the strength of the Woolworths team and their ability to deliver sustainable profitable growth. Backed by these strong results, Woolworths is in a great position to continue to reinvest in the business, and continue to reinvigorate and enhance our offering to customers.

The 25.4% increase in Dividend Per Share (DPS) to 74 cents (1H: 35 cents, 2H: 39 cents) from 59 cents in 2006 reflects the confidence that the Board has in the company’s operations, results and the continued drive to increase future shareholder returns.”

In summary, Woolworths’ results for the year ended 24 June 2007 are as follows:

• Sales up 12.6% from continuing operations
• Total sales for this year compared with last year up 12.6% to $42,477 million
• Earnings before interest, taxation, depreciation and amortisation (EBITDA) up 20.3% to $2,700.6 million
• Earnings before interest and taxation (EBIT) up 22.6% to $2,111.3 million
• Net operating profit after tax up 27.5% to $1,294.0 million
• Earnings per share (EPS) up 19.7% to 108.8 cents
• Final dividend per share (DPS) 39 cents to bring total DPS for the year to 74 cents, up 25.4% with total dividend paid and proposed for the year amounting to approximately $892.5 million
• EBIT margins improved from 4.56% in 2006 to 4.97% in 2007.

Other highlights:

• Average return on funds employed (ROFE) was 27.1%. Normalising for the timing of acquisitions in 2006, ROFE (average) increased from 24.2% to 27.1%.
• Reduction in average inventory days from 32.7 days to 32.5 days, a reduction of 0.2 days.

Hellaby Result Reflects A Challenging Year

Press Release by Hellaby Holdings at 9:22 am, 27 Aug 2007

• * Decline in profitability due to difficult trading conditions and one-off transactions, including impairment of BBQ Factory goodwill and brands
• * Strategic review of businesses undertaken
• * Tightened investment performance criteria for all assets
• * FY2008 target for EBITDA adjusted for one-offs of around the $45 million achieved in recent years

Investment company Hellaby Holdings Limited today reported a decline in profitability for the financial year to 30 June 2007.

Hellaby's trading surplus before interest, tax, depreciation, amortisation and one-off transactions was $34.0 million, 28% lower than last year's
$47.6 million.

Hellaby Chairman Bill Falconer said the company was understandably disappointed in the result. "As we reported earlier this year, all of the company's divisions - Automotive, Industrial, Retail and Diversified - simultaneously experienced difficult trading conditions during the first half of the year. While most businesses improved performance and met their targets during the second half, all divisions returned lower trading surpluses for the year compared to the previous financial year. "

This result has been further impacted by a number of one-off costs, plus the non-recurrence of one-off gains achieved in the year to 30 June 2006, and an $18.8 million goodwill and brands impairment booked for retail subsidiary BBQ Factory. Consequently, the company has recorded a tax-paid deficit of $9.8 million, compared with last year's $23.1 million surplus.

Included in the result to 30 June 2007 are the following one-off costs:

• * $2.4 million of costs associated with forward exchange contracts required to be expensed in accordance with IAS 39 and stock adjustments;
• * $0.9 million of costs incurred in conducting a strategic review of the retail businesses;
• * $0.4 million of costs associated with the previous Chief Executive's retirement.

This result represents an after tax return of (10%) on average shareholders funds employed (last year 21%), and net asset backing of $1.61 per share (last year $2.29 per share).

In recognition of the poor results achieved, the Board of Directors had resolved not to distribute a final dividend for the year. Hellaby's total distribution for the year will be the interim dividend of 10 cents, fully imputed, and paid on 20 April 2007.  Mr Falconer said that the past year's performance had resulted in the group comprehensively reviewing its future direction. "On a positive note, this has confirmed that our core businesses are sound and can be expected to be resilient in the current economic uncertainty. There are some businesses we will divest for the right price, and there are some where value can be added before divestment would be considered. Overall however, the decks are being cleared, and the company is moving forward with a strong focus on operational performance."

The company's second half performance improved markedly in several of the businesses, compared to the same period in the previous year. The Brake & Transmission EBIT was 16% higher in the second half (excluding acquisitions during the year), the AB Equipment/AB Rental EBIT was 10% higher, and the No 1 Shoes EBIT was 20% higher in the second-half year-on-year.  Mr Falconer also advised that the strategic review of Hellaby's footwear retail division was nearing completion. "Following a detailed evaluation of our options, the Board believes that we have two excellent and well-managed assets, both of which have the potential for further profit growth. Hellaby will retain ownership of these businesses for the time being."

Recently-appointed Hellaby Chief Executive John Williamson said that a range of factors contributed towards the lower performance of the various divisions. "The Automotive and Industrial Divisions were constrained by slower than planned expansion into the Australian market, a downturn in the agricultural sectors on both sides of the Tasman, equipment supply issues due to worldwide equipment demand, and negative hedging adjustments," he said.

"Our retail businesses, like most in their sector, experienced extremely poor summer trading conditions which were not sufficiently offset by an improved performance during the second half of the year, while BBQ Factory's performance remained unsatisfactory throughout. Our new automotive investments in batteries and brake parts did not start to make their contribution to group performance until later in the year."

Mr Williamson said that while market conditions had improved for most divisions, further performance improvements were also being sought. "The majority of our companies have been performing to expectations for the past three to four months, which is a positive trend. However, we have also recently introduced a number of comprehensive operational improvement initiatives across the Hellaby group to capture more value from our businesses"

"We know we have to improve performance significantly and to this end, capital discipline and working capital efficiency has become a key focus across all business units."

Mr Williamson said that the integration of the two recently acquired packaging businesses, Wellington-based PPL Corporation and Christchurch-based Chequer Packaging (in Receivership) into the new Elldex packaging division was progressing satisfactorily. Both businesses were acquired in July 2007 subsequent to year-end. "Hellaby's packaging sales revenue and profits are on track to more than double for the year to 30 June 2008," he said.

"Importantly, we believe that this expansion in packaging represents a standard template for future investment by Hellaby. Our strategy over time will be to develop further divisions through the carefully-researched initial acquisition or development of a platform business, and subsequent growth through a combination of market development and 'bolt-on'
acquisitions."

While Hellaby continued to focus on the turnaround of the BBQ Factory, Mr Williamson said that recent initiatives, which include new outlets and refurbishments, had not yet gained traction. "Following a review of the business, the Board of Directors has concluded that it will take further time to complete, and that the Group should recognise an $18.8 million goodwill and brands impairment for the BBQ Factory in the year to 30 June 2007."

Mr Williamson noted that since the time of its acquisition by Hellaby, BBQ Factory has returned EBIT losses of $2.0 million in the year to 30 June 2007, similar to the previous year. Mr Williamson said that performance since the time of acquisition indicated that Hellaby had overpaid for the BBQ Factory. "Although measures are in place to improve performance, directors believe an impairment expensing of the full remaining goodwill and brands value is the most appropriate decision at this time," he said.

Looking ahead, Mr Falconer said that the Hellaby Board's overriding objective was to restore investor confidence in Hellaby, by driving company performance and improving total shareholder returns. "We know we have to improve performance significantly - and chase free cash flow hard. Capital discipline and efficient use of working capital has become a key focus across all business units. Assets are likely to be divested if they are not performing, if we are unable to grow them, or if we can better add value for our shareholders by investing elsewhere."

"In summary, the year to 30 June 2008 will be a year of consolidation. Our immediate priorities are achieving Hellaby group EBIT targets, improving our group net working capital efficiency, and successfully turning around the BBQ Factory. We intend to finish the next financial year with a stronger balance sheet, and are targeting revenue and profit growth in all our business units for the year to 30 June 2008."

Current expectations are that in the financial year to 30 June 2008 Hellaby's trading surplus before interest, taxation, depreciation, amortisation and one-off transactions will be around the $45 million achieved in recent years.

Mainfreight Group Limited Financial result for the three months ended June
2007 (Unaudited)

Press Release by Mainfreight Limited at 10:08 am, 21 Aug 2007

This quarterly result is reported under the NZIFRS accounting standards for the first time.  Prior period information has been restated accordingly.

The Mainfreight Group is pleased to report a net surplus of $67.3 million During this reporting quarter, the Group divested its interests in Lep and Pan Orient, with an abnormal gain on sale (after tax) of $61.2 million.  Excluding abnormals and divested operations, the net surplus was $5.8 million compared to $5.5 million in the same quarter last year.

For the continuing businesses, EBITDA performance improved 6.1% to $11.9 million. After taking foreign exchange effects into account, this increase is 10.8%.  Trading conditions during the reported quarter were challenging, however all divisions continued their profit improvement performance.  Consolidated revenues for the period were $210.4 million compared to $2337 million last year.  When comparing revenues from continuing operations these were slightly reduced to $178.0 million compared to $180.5 million Excluding foreign exchange adjustments, continuing revenues increased 4.0%.

Divisional Performance

New Zealand Domestic
In what is traditionally our quietest quarter, and in what we consider to be a challenging economic environment, revenues were reduced by 2.2%, largely as a result of reduced fuel adjustment factors.  EBITDA improved 102%, which included a one off property gain on sale of $0.6 million.
Trading remains flat into the second quarter.

New Zealand International
Revenues were significantly affected by the high New Zealand dollar impacting export volumes, however EBITDA performance was in line with last year.  Import volumes continue to increase and contribute to improving performance into the second quarter.

Australian Domestic
Excluding foreign exchange, revenues continued to improve to AU$27.7 million; an increase of 13.7%.  EBITDA, excluding foreign exchange, remained in line with last year.  EBITDA growth was affected by higher warehousing occupation costs as capacity is increased to cope with future confirmed increased tonnage.

Australian International
Revenues continued to improve, up 10.0% from AU$24.6 million to AU$27.0 million.  EBITDA improved 24.9% to AU$0.74 million.

USA International
Revenues improved 19.1% to US$21.2 million; EBITDA improved to US$1.3 million, up 22.2%.  USA acquisition activity remains intense with due diligence proceeding on schedule.

Asia International
During the quarter this business traded as an associate, where our share of earnings rose 25.7% (excluding foreign exchange) to NZ$0.3 million.  As announced previously, agreement has been reached to purchase the remaining shares not already owned by Mainfreight, and this business will in future report as a fully-owned subsidiary.

Group Operating Cash Flows
Operating cash flows were slightly ahead of last year.  The sale of our interests in Lep and Pan Orient allowed the full repayment of long-term loans, which sees the Group in a positive net cash position of $18.6 million.

Capital Expenditure in the quarter totalled $4.0 million.  The EBITDA improvement of 10.8% in the continuing businesses is satisfactory in what is our quietest quarter.  We expect Group earnings to continue their improvement as the financial year progresses despite tough trading conditions in New Zealand.

ENDS

Fisher & Paykel Appliances Holdings Limited
FPA Stock Exchange Release ASX/NZX 15 August 2007

Electronics Factory Relocation to Thailand for Fisher & Paykel Appliances

Fisher & Paykel Appliances (FPA) today announced plans to relocate its Auckland based Electronics factory operation to Thailand.  Production facilities for the manufacture of electronic circuit boards for use in Fisher & Paykel built appliances would be located in Rayong, Thailand on the same site as the proposed new Laundry plant.

After consultation with the Engineering, Printing & Manufacturing Union, the relocation of the facility will be completed by December 2008. Additional inventory will be manufactured in order to cover the lead times for the transfer and re-commissioning of the plant. This will amount to an additional temporary working capital value of between $2 and $3 million. Required capital expenditure is estimated at $3 million.

Once the line is fully operational, the expected financial benefits are in the vicinity of $6 million per annum, at a one-off cost in the order of $5 million, both at a pre-tax level. From the initial indications regarding the sourcing of local components for the Laundry factory, additional cost savings are also expected to arise from the sourcing of electronic components from local vendors in Thailand.

"In recent times it has become obvious that the future of Electronics lay with being located close to its major customer, Laundry" said John Bongard, Chief Executive Officer and Managing Director. "With the experience we have gained in the short time we have been in Thailand we are confident that these ongoing savings will be quickly realised."

The relocation will lead to an estimated reduction in the Auckland based work force of approximately 96 positions. As is the case with the Laundry announcement, the Company will endeavour to relocate as many staff as possible to other areas of the existing business as vacancies arise over the next 16 months.  Plant and equipment is expected to be shifted during the 2008 calendar year and will be housed in an 1800 sq metre air-conditioned building adjacent to the office complex on the Rayong site. Progress on the Thailand Laundry facility was celebrated with a ground turning ceremony last week and currently plans are on track for production to commence in March 2008.

Contacts:
John Bongard or Paul Brockett
Fisher & Paykel Appliances Holdings Limited
Phone +64 9 273 0600

MEDIA RELEASE
For immediate release: Friday 6 July

Director’s Fees on the Rise But Still Lag Australia,
Survey Finds Board Fee Gaps Far Exceed Executive Pay Differentials

6 July, 2007

New Zealand’s non-executive directors are remunerated far below their Australian counterparts, despite receiving a healthy increase over the past year, according to a recently released survey by HR consultancy, Sheffield Ltd.

The survey found in comparably sized businesses in Australia, non-executive directors were receiving 50 – 150% higher fees than their New Zealand counterparts. In addition, the great majority of Australian firms offer share purchase or share option schemes as well as generous superannuation benefits.

Across its database of 259 New Zealand organisations, Sheffield’s annual Director Remuneration Survey found that over the past year the median base fee paid to non-executive directors was $27,861 and the median increase in those base fees was 15.6%. For board chairs, the median base fee was $52,000 with a median base fee increase of 14.3%.

Sheffield Senior Reward Consultant Sherry Maier says these percentage rises in director fees greatly exceed New Zealand’s 2006 pay increases for executives, which ranged between 5% and 6% medians, as identified in Sheffield’s annual executive surveys.  “These annual gains were achieved during a period in which virtually no increases were received by directors and chairs on the boards of almost 50 state and crown entities in our database, which suggests the private sector was making even more dramatic moves.  “The question is how these triple-digit gaps with Australia can be explained. Surely, nobody believes that Australian directors are working twice as hard, face twice the liabilities or are making contributions twice as valuable as their New Zealand counterparts in similar-sized businesses.

“In our view, besides minimal movements in the state sector, another factor that depresses fee levels is the different profile of directors here versus Australia. Unlike Australia, where a professionally trained, highly selective and well-paid director class has developed largely from corporate origins, New Zealand has traditionally tended to rely more on a large and steady supply of partially retired individuals who enjoy the involvement and service aspects of serving on boards, but who are generally not wholly reliant on the income. Such individuals are less likely to exert pressure to raise board fees to more appropriate and competitive levels,” says Ms Maier.

She says it is good news the gap between the fees paid in Australia and New Zealand is narrowing marginally - New Zealand’s 14% and 15% year-on year increases compare to the 9% to 11% increases experienced in Australia in 2006.  “But there is clearly still a long way to go.  “This also raises a related issue. We find the level of disparity in executive pay levels between the two countries – again between comparably-sized businesses - is inconsequential when compared to the enormous gaps seen in board pay. The often-cited 20% to 40% pay gaps with Australia do exist at general staff and middle manager positions, but we find that with Trans-Tasman executive mobility, such gaps have largely eroded for top corporate jobs.

“How can a New Zealand business justify the inconsistency of paying a top executive team at highly competitive Trans-Tasman levels to attract and retain the best talent, while paying substantially below regional market fees to the board of that same business?”  “Robust corporate governance is critical and demands that the many contributions of directors be valued properly.”

The survey also found the time commitment and workload expected from board members had increased, with 78% of boards now meeting monthly, up from 65% a year ago. Additionally, the typical median time commitment involved in a single directorship was 29 days per year, up from 25 days a year ago, with chairs’ time reported as approximately double that.

“Our respondents told us that an increasing amount of work is being done in committees – such as audit and remuneration committees – yet only a third of the surveyed organisations paid separate committee fees. We advocate the payment of committee fees as a best practice, since such ‘unbundling’ may better reflect actual time commitment and workload.”

Ms Maier says that consistent with past surveys, 75% of all respondents indicated growing risk exposure involved in directorships over the past five years, with a striking 26% reporting they had had a negative experience in just the past year.  “Boards are increasingly under media, shareholder and stakeholder scrutiny and operate squarely in the public spotlight. Everyone can easily name high profile cases where board performance and judgment has been called into question.”

Ms Maier says some strong correlations continue within this year’s data.  “Director fee levels correlate well with organisation size, especially revenues. Also, as in the past, chairs are consistently paid at twice the level of a non-executive director, reflecting the greater time, responsibility and accountability involved.”

She says one of the overall key survey findings was that only 17% of non-executive directors and 6% of board chairs were female. Board diversity is an area where the public sector has long shown notable leadership, where females represent 32% of non-executive directors.

Other key findings of the survey include:

• Geographically, non-executive directors of Auckland-based organisations are paid at the highest levels with a median of $35,500 per annum, compared to $25,000 in Wellington and $24,500 in Christchurch. For the first time, Christchurch is the lowest of all locations surveyed. Of course, Auckland tends to have the largest businesses, so this is an expected result.
• Given their typically larger size and complexity, publicly-listed companies are paid – not surprisingly - the highest median fees at $37,724, nearly 50% higher than the $25,000 paid by privately-owned businesses and $21,750 in the public sector.
• Non-executive directors on the boards of companies in the hospitality/tourism sector earn the highest base fees. Non-profit and educational organisations pay the least.

The Sheffield Director Remuneration Survey is in its third year. 259 organisations took part in the 2007 survey. 40% were publicly-listed companies, 31% were public sector organisations and 29% were privately-owned businesses.

ENDS

Sheffield sells this Survey in both CD-rom and hard copy format for $550 and $645 respectively.

The Warehouse Group Limited ("WHS") today announced that it has reached an unconditional agreement to sell its 50% interest in "The Base" retail complex at Te Rapa to Tainui Group Holdings Limited ("TGH") for a gross consideration of NZ$37.4million.

The Warehouse entered into a 50/50 joint venture in 2003 with TGH, the commercial arm of Waikato- Tainui, to develop "The Base", a 60,000 square metre retail complex, north of Hamilton.

Commenting on the acquisition by Tainui Group Holdings, Mike Pohio, Chief Executive said "we would like to take this opportunity to thank The Warehouse Group for the very positive and constructive relationship we have had with their board and management team over the past four years".

In commenting on the sale, Ian Morrice, Managing Director of The Warehouse Group said "The Base development has been a successful venture for The Warehouse, and is the site for development of our existing store into the third Warehouse Extra. We thank Tainui Group Holdings for their professionalism and support in successfully establishing The Base as a significant retail destination in the Waikato area".

The settlement is scheduled to take place in July 2007. The Warehouse Group will report an after tax surplus on divestment of between NZ$11.8 and NZ$12.4 million in the 2007 financial year.

The Mainfreight Group is pleased to report another record net surplus after taxation before abnormals of $36.4 million for the twelve months of the 2007 financial year.  This represents a $7.4 million, or 25% increase when compared to the same period last year.

A further $19.2 million of abnormal gains is added to our net surplus as previously discussed, bringing total net surplus for the year to $55.6 million.

Consolidated revenues (sales) increased to $968 million from $887 million; an increase of $81 million.  Excluding foreign exchange this is an increase of 5.5%.

This is a very satisfactory performance, where all divisions in all countries contributed positively to the result.

Our global interests have performed exceptionally well, particularly Australia and the United States.  In both markets this performance will continue to strengthen as we develop market share across the supply chain.

While trading conditions in New Zealand were challenging, we have been able to improve on our last year's performance and are confident of continuing to do so.

In this past year we have been able to achieve good organic growth as well as divesting our interests in four businesses, three subsequent to balance date, which has allowed us to considerably strengthen our balance sheet, pay increased dividends to shareholders, and position ourselves for substantial future growth, assisted in the short-term by acquisition.

Net surplus earnings before abnormals from outside of New Zealand now exceed 54% of our group total, and will continue to grow in significance.

Divisional Performance

New Zealand
Trading conditions in the New Zealand economy were certainly more difficult in the past six months, where domestic freight volumes were markedly decreased and export volumes diminished on the back of the New Zealand currency appreciation.

Our Domestic contributions are satisfactory in light of trading conditions, where EBIT improved 5% on static revenue growth.

The benefits of the Owens and Mainfreight International merger and increased improvement in LEP performance saw EBIT improve 43% to $3.8 million on revenue growth of 3%.  Post year end "Owens" has been removed from the brand.

In our domestic operations we continue to build our range of service offerings utilizing the intensity of our network and warehousing capability.  These will provide further opportunities for us to grow our business, increasing the range of services for our customers across the supply chain.

With our International business, our focus continues on growth in our import products and airfreight capability.  This directly reflects the changing New Zealand trade patterns.  Our regional presence has been strengthened and we expect to open two new branches in Hamilton and Dunedin.

During the year we significantly increased our airfreight growth in both perishable and dry products further enhancing our number one IATA ranking

Australia
Our growth and presence in Australia continues to rise.  Domestically our operations maintained their momentum of the past year, with EBIT improving in excess of 137% to $9.9 million, on a revenue increase of 25%.

In our international divisions our overall result was dampened by the lumpy performance of the projects division, Pan Orient.  However EBIT still improved to $13.9 million, up 8% on a revenue increase of 11% to $309 million. Of greater significance was the performance of Mainfreight International where EBIT improved 34% to $6.1 million and revenues increased 11% to $140 million.

Domestically, our high quality, next day transport services in the express freight market continue to attract customers.  We have established a very good network in all state capital cities and continue to expand into the smaller regional centres.  While some of these branches are yet to be profitable, in Mainfreight fashion we see this as further opportunity for growth.  As we intensify our network we are poised to expand our current small niche market position to offer a greater range of services.  This is likely to include a dangerous goods delivery product to complement our warehouse operations which have already expanded into this arena.

Our Logistics business is expanding at the fastest rate we have seen, with demand for warehousing operations unprecedented in our history.  We continue to focus on small to medium-sized customers offering a finely tuned combination of quality, technology-based warehousing services.

In our international sector, we have expanded our service offering to include bulk liquids in the food and chemical sectors and further enhanced the perishable supply chain.  Airfreight growth remains a high priority and we have now established licensed airfreight bond stores in each state.  We are expecting our airfreight revenues to grow exponentially and likely to match seafreight revenues within three years.

With a relatively small market share in all three sectors, our opportunities remain strong to grow these businesses in the near term.

USA
We continue to increase market share and improve margins and returns in the USA.  Our EBIT improved 50% to $6 million, on revenue growth of 25% to $111 million.

During the year two new branches were opened in San Francisco and Boston and, while yet to be profitable, they remain key to our overall strategy of establishing stronger networks throughout each country where we have a presence.

Our ability to load direct containers from each branch to worldwide destinations rather than via gateway branches has improved margins and assisted trade-lane growth.

Associates
Just satisfactory returns were received from our associated businesses in Asia contributing $1.1 million, an increase of $0.1 million or 10% from the previous year.  The potential from these markets remains unfulfilled and we are focused on increasing our shareholding in current activities and expanding our presence in the greater Asian area through acquisition.

The Hirepool investment, divested in July 2006, contributed $0.5 million in the four months of trading.

Group Operating Cash Flows

Operating cash flows were at similar levels to last year; $47.9 million compared with $47.4 million.  Higher tax payments and slightly reduced cash collection performance impacted this area.

During the year net capital expenditure totalled $34.3 million.  Property development accounted for $27.3 million of this.

Hirepool funds of $22.7 million were received with a further $4.7 million expected subsequent to balance date.  These proceeds were distributed to shareholders by way of special dividend in December 2006.

Net debt increased to $67.4 million from $61.7 million.

Dividends

The Directors have approved a final dividend of 8 cents per share fully imputed with the books closing on 13 July 2007; payment will be made on 20 July 2007.  This takes the full dividend for the year to 15 cents per share plus the special dividend of 28 cents per share paid in December 2006  Last year's total dividend was 12 cents per share.

Acquisitions
We are pleased with the momentum achieved in our current search for suitable companies to acquire in the USA and Asia.  A number of opportunities in the USA have been explored, and negotiations are underway with three target businesses.

Divestments
Post year-end, and as previously advised, LEP Australasia and Pan Orient were divested to LEP's agent and minority shareholder Agility.  It is expected that this sale will be unconditional by 31 May 2007.

Outlook
This past year has been significant in its achievements and performance. Trading during the first two months of this year continues to see improvement by our offshore interests.  In New Zealand the environment remains challenging in what is traditionally a quarter of low activity for us. We remain confident about our growth potential in the near term. Acquisition activity is very positive, divestment funds will further strengthen our balance sheet and we remain committed to taking Mainfreight to the world.