CTI LOGISTICS LIMITED — Earnings Release 2007

Aug 29, 2007

CTI Logistics Limited

ABN 69 008 778 925

Appendix 4E Preliminary final report

For the year ended 30 June 2007

For announcement to the market

Extracts from this report for announcement to the market				\$A'000
Revenue		up	7.8% to	59,674
Profit after tax attributable to members		up	48%	4,599 to
Net profit for the period attributable to members		up	48%	4,599 to
Dividends			Amount per security	Franked amount per security
Final dividend	Current year		3.0 cents	3.0 cents
	Previous corresponding period		3.0 cents	3.0 cents
Interim dividend	Current year		3.0 cents	3.0 cents
	Previous corresponding period		2.0 cents	2.0 cents
+ Record date for determining entitlements to the dividend				1 November 2007

Income Statement for the Year Ended 30 June 2007

	Consolidated
	2007	2006
	\$	\$
Revenue	59,673,866	55,337,492
Other income	527,425	667,383
Changes in inventories of finished goods and work in progress	453,689	144,645
Raw materials and consumables used	(9,812,055)	(9,548,539)
Employee benefits expense	(17,312,919)	(16,117,375)
Subcontractor expense	(15,706,898)	(14, 204, 606)
Depreciation and amortisation expense	(3,222,508)	(3,848,442)
Motor vehicle and transport costs	(3,051,740)	(3,010,487)
Property costs	(211, 965)	(920, 584)
Finance costs	(1,027,845)	(928, 567)
Other expenses	(3, 746, 173)	(3,332,682)
Shares of net profit of joint venture partnership	161,666	209,313
Profit before income tax	6,724,543	4,447,551
Income tax expense	(2,125,464)	(1, 351, 782)
Profit for the year	4,599,079	3,095,769
	Cents	Cents
Earnings per share for profit attributable to the ordinary equity holders of the Company as adjusted
for the 3 for 1 shares split on 18 December 2006
Basic and Diluted Earnings per share	13.44	6.71

The above income statement should be read in conjunction with the accompanying notes.

Balance sheet as at 30 June 2007

	Consolidated
	2007	2006
	\$	\$
ASSETS
Current assets
Cash and cash equivalents	2,884	520,418
Trade and other receivables	11,691,621	9,682,076
Inventories	2,302,237	1,848,548
Total current assets	13,996,742	12,051,042
Non-current assets
Investments accounted for using the equity
method	191,254	229,589
Available-for-sale financial assets	78,966	65,168
Property, plant and equipment	20,251,402	18,834,481
Investment properties	4,201,972	2,281,755
Deferred tax assets	977,684	864,546
Intangible assets	712,089	881,314
Total non-current assets	26,413,367	23,156,853
Total assets	40,410,109	35,207,895
Current liabilities
Trade and other payables	7,726,647	6,892,609
Borrowings	3,965,238	2,172,149
Current tax liabilities	1,304,672	1,391,090
Total current liabilities	12,996,557	10,455,848
Non-current liabilities
Borrowings	9,516,992	9,922,404
Provisions	244,822	497,472
Total non-current liabilities	9,761,814	10,419,876
Total liabilities	22,758,371	20,875,724
Net assets	17,651,738	14,332,171
EQUITY
Contributed equity	6,785,807	6,838,090
Reserves	(42, 467)	(51,084)
Retained profits	10,908,398	7,545,165
Total equity	17,651,738	14,332,171

The above balance sheet should be read in conjunction with the accompanying notes.

Statement of changes in equity for the year ended 30 June 2007 $\mathbf{r}$ and $\mathbf{r}$ u.

Lonsolidated
2007	2006
\$	\$
14,332,171	21,771,028
8,617	(51,084)
4,599,079	3,095,769
4,607,696	3,044,685
	(10,091,800)
(1, 235, 846)	(391, 742)
17,651,738	14,332,171
	(52, 283)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Cash flow statement for the year ended 30 June 2007

	Consolidated
	2007	2006
	\$	\$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)	65,491,655	62,745,691
Payments to suppliers and employees (inclusive of goods and
services tax)	(56, 862, 998)	(53, 993, 623)
Dividends received	3,864	5,520
Interest received	24,066	180,038
Joint venture partnership distribution received	200,000	156,000
Interest paid	(831,901)	(741, 322)
Income tax refund received	33,371	75,668
Income taxes paid	(2,362,086)	(427, 079)
Net cash inflow from operating activities	5,695,971	8,000,893
Cash flows from investing activities
Payments for property, plant and equipment	(1,075,796)	(1,255,632)
Payments for investment property	(2,210,245)
Payments for intangibles	(2, 912)	(42, 641)
Payments for investment in available-for-sale financial assets	(14, 485)
Deferred payment for purchase of business		(83, 333)
Proceeds from sale of property, plant & equipment	745,091	261,908
Proceeds from sale of available-for-sale financial assets	12,900
Deferred proceeds from sale of business		1,196,070
Net cash (outflow)/inflow from investing activities	(2,545,447)	76,372
Cash flows from financing activities
Proceeds from borrowings		3,025,000
Repayment of borrowings	(2, 923, 985)	(1,986,201)
Payments for shares bought back	(52, 283)	(10,091,800)
Dividends paid to company's shareholders	(1, 235, 846)	(391, 742)
Net cash (outflow) from financing activities	(4,212,114)	(9, 444, 743)
Net (decrease) in cash and cash equivalents	(1,061,590)	(1,367,478)
Cash and cash equivalents at the beginning of the financial year	520,418	1,887,896
Cash (deficit) and cash equivalents at the end of the financial
year	(541, 172)	520,418

The above cash flow statement should be read in conjunction with the accompanying notes.

I. BASIS OF PREPARATION OF PRELIMINARY FINAL REPORT

This preliminary final report has been prepared in accordance with the recognition and measurement requirements of Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRSs). Compliance with AIFRSs ensures that the consolidated financial statements and notes of the Company comply with International Financial Reporting Standards (IFRSs).

This preliminary final report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the last annual report and any public announcement to the market made by the Company during the reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the listing rules of the Australian Stock Exchange.

The accounting policies adopted are consistent with those of the previous financial year.

Historical cost convention

This preliminary final report has been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets at fair value.

Comparatives

Comparative information is reclassified where appropriate to enhance comparability.

$\overline{2}$ . DIVIDENDS

Details of dividends declared or paid during or subsequent to the year ended 30 June 2007 are as follows:

	Payment date	Amount per security	Total dividend	Franked amount per security	Foreign sourced dividend amount per security
Final dividend - Current year (fully
franked at 30%)	15 November 2007	3.0 cents	\$1,025,472	3.0 cents
Final dividend - Previous year (fully
franked at $30\%$ )	December 2006	3.0 cents	\$310,873	3.0 cents
Interim dividend - Current year
(fully franked at 30%)	4 May 2007	3.0 cents	\$930,973	3.0 cents
Interim dividend - Previous year
(fully franked at 30%)	26 May 2006	2.0 cents	\$228,717	2.0 cents

DIVIDENDS NOT RECOGNISED AT YEAR END $(a)$

Since the end of the year the directors have declared a final dividend of 3 cents per ordinary share, fully franked at 30%. The aggregate amount of the dividend payable on 15 November 2007 out of retained profits at 30 June 2007, but not recognised as a liability at year end is \$1,025,472 (2006 - \$342,374).

The Dividend Re-investment Plan and Bonus Share Plan are currently suspended.

$\mathbf{3}$ CONTROLLED ENTITIES ACQUIRED OR DISPOSED OF

There were no acquisitions or disposals of controlled entities during the current period.

$\overline{4}$ . DISPOSAL OF BUSINESS

There were no disposals of business during the current and previous period.

	Consolidated
5. CONSOLIDATED STATEMENT OF RETAINED PROFITS	2007	2006
	\$	\$
Retained profits at the beginning of the financial period	7,545,165	4,841,138
Profit for the year	4,599,079	3,095,769
Dividends paid or payable	(1, 235, 846)	(391, 742)
Retained profits at end of financial period	10,908,398	7,545,165
6. NET TANGIBLE ASSETS PER SHARE
Net tangible assets per share	\$0.50	\$0.39
7. NON-CASH FINANCING AND INVESTMENT ACTIVITIES
Acquisition of plant and equipment by means of hire purchase	3,767,606	1,400,176
8. EARNINGS PER SHARE
	number	number
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted earnings per share	34,212,649	46,160,170

$9.$ COMMENTARY ON RESULTS FOR THE PERIOD

Profit attributable to the members of the Company was \$4,599,079 compared to \$3,095,769 in the previous corresponding period. Revenue was \$59,673,866, compared to \$55,337,492. Net cash flows from operating activities was \$5,695,968 down from \$8,000,893 in the prior year mainly due to a higher tax payment of \$1,935,007.

The improvement in reported results is due to a combination of successfully managing certain loss making transport and warehousing operations back into profit, and a buoyant economy which has boosted second half profitability in excess of expectations.

$10.$ SEGMENT INFORMATION

The Group operates predominantly in Australia and is involved in the production and sale of the following products and services:

• Logistics and transport services includes the provision of courier, taxi truck, parcel distribution, fleet management, warehousing and distribution and document storage services.
• Manufacturing, security and other services includes the provision of printing, manufacturing of plastic products and security services.

2007	Logistics and Transport \$	Manufacturing, Security and Other \$	Intersegment Eliminations \$	Consolidated \$
Sales to external customers	31,979,543	26,842,028		58,821,571
Intersegment sales	356,827	39,766	(396, 593)
Total sales revenue	32,336,370	26,881,794	(396, 593)	58,821,571
Share of net profit of joint venture
partnership				161,666
Other revenue/income				1,379,720
Total segment revenue/income				60,362,957
Segment result	5,282,016	3,559,817	(50, 245)	8,791,588
Unallocated revenue less expenses				(2,067,045)
Profit before income tax expense				6,724,543
Income tax expense				2,125,464
Profit for the year				4,599,079
Segment assets	12,617,442	23,574,481	(4,304,337)	31,887,586
Unallocated assets				8,522,523
Total assets				40,410,109
Segment liabilities	2,025,646	3,888,004	(122, 592)	5,791,058
Unallocated liabilities				16,967,313
Total liabilities				22,758,371
Investment in joint venture partnership	191,254			191,254
Depreciation and amortisation expense	989,999	1,901,687		2,891,686
unallocated				330,822
Total depreciation and amortisation expense				3,222,508

10. SEGMENT INFORMATION (continued)

2006	Logistics and Transport	Manufacturing, Security and Other	Intersegment Eliminations	Consolidated
	\$	\$	\$	\$
Sales to external customers	29,633,265	25,431,315		55,064,580
Intersegment sales	299,065	35,150	(334,215)
Total sales revenue	29,932,330	25,466,465	(334,215)	55,064,580
Share of net profit of joint venture partnership				209,313
Other revenue/income				940,295
Total segment revenue/income				56,214,188
Segment result	4,692,246	2,238,992	(150, 011)	6,781,227
Unallocated revenue less expenses				(2, 333, 676)
Profit before income tax expense				4,447,551
Income tax expense				(1, 351, 782)
Profit for the year				3,095,769
Segment assets	12,482,475	18,389,024	(815, 306)	30,056,193
Unallocated assets				5,151,702
Total assets				35,207,895
Segment liabilities	2,124,100	3,989,912	(146, 457)	5,967,555
Unallocated liabilities				14,908,169
Total liabilities				20,875,724
Investment in joint venture partnership	229,589			229,589
Depreciation and amortisation expense	866,425	2,660,530		3,526,955
unallocated				321,487
Total depreciation and amortisation expense				3,848,442

Notes to and forming part of the segment information $(a)$

$(i)$ Accounting policies

Segment information is prepared in conformity with the accounting policies of the entity as disclosed in note I and accounting standard AASB 114 Segment Reporting.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant and equipment and goodwill and other intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade and other creditors, employee benefits and provision for service warranties. Segment assets and liabilities do not include income taxes.

$10.$ SEGMENT INFORMATION (continued)

$(ii)$ Inter-segment transfers

Segment revenues, expenses and results include transfers between segments. Such transfers are priced on an "arm's-length" basis and are eliminated on consolidation.

COMPLIANCE STATEMENT

• This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent $\mathbf{L}$ Issues Group Consensus Views or other standards acceptable to ASX.
• $2.$ This report, and the accounts upon which the report is based use the same accounting policies.
• $3.$ This report does give a true and fair view of the matters disclosed.
• $4.$ This report is based on accounts which are in the process of being audited.
• 1. The entity has a formally constituted audit committee.

David Mellor Company Secretary

29 August 2007