FFI HOLDINGS LIMITED — M&A Activity 2003

Jun 3, 2003

FFI HOLDINGS LTD ANNOUNCEMENT TO THE ASX

FFI Holdings Ltd ("FFI") has entered into a contract to purchase certain assets and business operations of Sunrise Confectioners from the Cadbury Schweppes Group. The operations relate to the cake toppings, boiled sweets and chocolate confectionery division of Sunrise.

Sunrise Confectioners was established in 1941. Over the years this business division has provided a range of products including chocmint crunch. humbugs, barley sugar, bulls eyes, 100's & 1,000's, cake decoration toppings, and chocolate licorice bullets.

The Business presently operates from the Melbourne suburb of Prahran. FFI, in accordance with the terms of the purchase contract, will relocate the business operations to its premises at Jandakot, Perth, Western Australia and merge the operations with its wholesale chocolate and cake toppings products division "Chocolate Products of Australia".

The installation of the "Sunrise" equipment will be coordinated with an upgrade and enhancement program for the existing FFI plant.

This purchase together with the relocation and upgrade costs, will require an investment by FFI of approximately \$1.6 million which will be funded from internal sources and existing credit lines.

The purchase will provide a number of benefits to FFI. Gross revenue from the new business is expected to exceed \$3 million per annum and the rationalisation of the combined operations is expected to improve profit margins. In addition the acquisition will provide FFI with access to new customers and a larger market for other products. The acquisition is not expected to have any material effect on current year earnings.

The Directors are confident that this further acquisition will enhance the FFI operations and provide increased shareholder value.

Rodney Moonen Chairman of Directors $4^{\text{th}}$ June 2003