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Palandri heading home after best financial year yet

Palandri Limited will seek a listing on the Australian Stock Exchange after the passage of an AGM resolution to cancel the company's admission on London's Alternative Investment Market (AIM).

Palandri has decided to move to the more regulated Australian public company environment so that its stock gains greater liquidity and better reflects its growing net asset base.

The resolution to de-list from AIM will be presented to shareholders at the company's AGM in Sydney on Friday, 24th November 2006.

Palandri's intention is to relist on the ASX in the first half of the 2007. It has been listed on the AIM since June 2004.

Chief Executive Officer Darrel Jarvis said the AIM listing had proved invaluable in giving the company early legitimacy in the UK market, providing access to capital and generally assisting with its rapid development.

"We have grown into a mature business with consistently strong revenues and our need for greater liquidity and a share price that properly reflects our value is better served by being on the ASX and giving Australians an opportunity to invest in one of their leading local wine businesses."

The company's financial results were released to the AIM today and show total equity has grown to $40.9 million (+ 11%). Total assets increased to $95.6 million (+12%).

The company recorded strong financial results for 2005/06 with a 445% growth in profit after tax to $4.15 million. Pre-tax profit was $6.4 million (+234%).

The results were Palandri's seventh consecutive full year profit since its establishment in 1999.

The company recorded significantly increased revenues of $42.76 million (+37%). Wine sales alone jumped 92%.

Palandri has been in temporary suspension from the AIM since late September pending the completion of its full year accounts. The suspension is lifted with the submission of the results.

Mr Jarvis said the strong results displayed the steady maturing of the business into a major player in the local and international wine industry with strong brand recognition being backed by improved sales performance ranging from products to investments.

Palandri, via its associated entities, is now the largest exporter of West Australian wines, with individual orders of up to 80,000 cases being received from British customers last year.

Mr Jarvis said the company was already undertaking new plantings of Semillon and Sauvignon Blanc in the Franklin/Mt Barker regions in readiness for the industry's predicted grape shortage in 2009/2010.

"Well run wine businesses with access to capital will be preparing for this shortage right now as waiting another year will mean new plantings are not producing in time for 2009/2010," said Mr Jarvis.

Mr Jarvis said Palandri was already seeing signs of shortages in Semillon and Sauvignon blanc with product becoming hard to source in Western Australia so the time to act is now.

"We are also undertaking plantings of Shiraz and Chardonnay in the Harvey region as part of our strategy to produce wines at a range of price points."

Among the other notable events recorded during the year were: • Restructuring of the managed investment schemes into a unit trust called the Margaret River Wine Business Trust • Reducing administration costs • Sale of Palandri intellectual property to the Trust so that it has full ownership of the brand for the full range of business development needs • Commencing a change in banking arrangements following Maple Finance's decision to exit the Australian corporate lending market. The new banking arrangements are nearly finalised.

Mr Jarvis said a listing of Palandri on the ASX would make it one of a small group of public wine businesses and allow investors more long-term exposure to the sector.

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