PPK GROUP LIMITED — AGM Information 2009

Nov 24, 2009

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25-27 Waratah Street KirraWee NSW 2232

PO BOx 3006, KirraWee DeLiVerY CeNtre NSW 2232

teL: 61 (2) 9521 8444 ◙ Fax: 61 (2) 9521 4561

24 November 2009

Company Announcements Office Australian Securities Exchange Limited

For Immediate Release to the Market

CHAIRMAN’S ADDRESS 2009 ANNUAL GENERAL MEETING

Overview of Performance

Like almost all other companies and businesses in Australia, PPK Group Limited ( PPK ) was affected by the global financial crisis. In addition, the significant volatility in the Australian share market directly impacted on investments held by PPK and thereby on the overall performance of PPK for the year ended 30 June 2009.

After recording a loss of $524,000 for the first half year, PPK generated an after tax profit of $1.064 million for the second half.

Profit after tax for the full year was $540,000, equating to an earnings per share of 0.9 cents.

The full year’s results include:

• a non cash write down of $2.755 million in the value of listed shares and derivatives held by PPK as at 30 June 2009;

• profit before tax of $3.084 million from trading operations comprising rental income and earnings by Rambor Pty Ltd (“Rambor”);

• net operating cash flows of $2.966 million (5.1 cents per share).

The Rambor manufacturing business delivered an improved performance in the 2009 year. Sales increased from $4.251 million to $4.867 million and profit before tax from $650,000 to $1.062 million. Overall the Rambor business has improved significantly over the last 2 years increasing sales from $2.8 million to $4.867 million and profit from $189,000 to $1.062 million.

Rambor continues to introduce new products to the market and is expected to continue to deliver a strong contribution to PPK’s future earnings.

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ChairMaN’S aDDreSS 2009 aNNuaL geNeraL MeetiNg

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2009 Year Dividend

PPK paid a fully franked interim dividend of 1.5 cents per share in March 2009 and a fully franked final dividend of 1.0 cent on 20 November 2009 a total dividend of 2.5 cents, fully franked, for the year ended 30 June 2009.

The Board will continue to monitor and respond to the effect of economic conditions on PPK’s future earnings and dividends will be assessed on the basis of PPK's performance in future periods.

Subsequent Events

Properties

Options to release two PPK properties have not been exercised by the tenant and these leases expired on 31 August 2009. One of these properties located in Virginia, Queensland was sold on 16 November 2009 for $5.2 million, resulting in a profit of $2.1 million before tax. PPK is currently in negotiations for the lease of the other property.

In addition, the company is involved in a lease dispute with the tenant of its Arndell Park property in New South Wales. The dispute relates to whether there exists a binding lease in respect of the property after 31 August 2009. The matter is currently before the Court. In the interim by agreement between PPK and the tenant, PPK is able to take steps to re-let the premises and has now appointed property agents to release the building.

Investments

On 13 July 2009, PPK Investment Holdings Pty Ltd (“PPK Investments”) and Frigrite Limited (“FFR”) entered into a Placement Agreement for the issue of convertible notes and an Underwriting Agreement in relation to a share rights issue by FRR.

Pursuant to the terms of the Placement Agreement, PPK Investments was issued 2,000,000 FRR convertible notes at $1.00 each. Each note converts to 5 ordinary shares and pays an interest rate of 12.5% per annum. Each note has 5 attaching options exercisable at 20 cents per option within 3 years from the date of issue.

Pursuant to the terms of the Underwriting Agreement and as a result of PPK Investment’s entitlements under the rights issue, PPK Investments subscribed for and was issued 13,862,864 FRR shares at 12 cents per share and a total cost of $1,663,000.

The issue of these shares on 26 August 2009 has increased PPK Investment’s shareholding in FRR to approximately 32%. In accordance with the relevant Accounting Standards, FRR has become an associate of PPK and PPK will be required to recognise and record its relevant share of FRR profits or losses from 26 August 2009.

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ChairMaN’S aDDreSS 2009 aNNuaL geNeraL MeetiNg

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The same accounting treatment will also apply to PPK’s other substantial investment in Cool or Cosy Limited (Cool or Cosy).

On 20 November 2009, at the Cool or Cosy Annual General Meeting its Chairman reported:

• (a) a profit before tax of $1.359 million for the first 4 months of this financial year, an improvement of $2.006 million compared to the previous corresponding period; and

• (b) that Cool or Cosy has submitted an application to the Office of Renewable Energy Regulator (“ORER”) for inclusion of the first of its solar hot water system products, using its proprietary energy saving technology, on the register of energy efficient solar hot water systems and is in the process of:

  • preparing for the commencement of comprehensive in-field trials of its first product in anticipation of a market release date in early 2010;

  • exploring a range of commercialisation opportunities; and

  • preparing additional applications to ORER relating to subsequent iterations of product arising from the Cool or Cosy owned inventions in anticipation of subsequent rounds of renewable energy certificate allocation.”

It is anticipated an announcement will be made by FRR tomorrow at its Annual General Meeting in relation to its 2010 year to date earnings.

Current Trading

Despite a reduction in revenue from PPK's portfolio of industrial buildings, profits from PPK’s normal trading activities are currently exceeding budget expectations and the prior year comparative performance for the first 3 months of the financial year.

A profit of $1.849 million before tax has been recorded for the first quarter ended 30 September 2009 compared to $830,000 for the corresponding period of the previous year.

PPK has taken advantage of an improving share market and exercised options and sold shares in Industrea Limited and other share investments during the first quarter.

In addition, there will be added to the earnings for the first half the profit of $2.1 million before tax from the sale of the industrial property at Virginia together with further share sale profits of $350,000 earned in October 2009.

The overall impact of accounting for profits or losses from Frigrite and Cool or Cosy in respect of the half year ended 31 December 2009 will not be known to PPK until these entities report on their respective performance during this period.

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ChairMaN’S aDDreSS 2009 aNNuaL geNeraL MeetiNg

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The value of PPK's investments in shares and derivatives will also continue to be subject to any prolonged or substantial movements in the market price of these investments which will need to be valued as at 31 December 2009.

As stated in PPK's "Earnings Update" announcement lodged with the ASX on 18 November 2009, subject to the factors set out above and in the announcement, PPK anticipates reporting a profit, after tax, in the range of $3.1 million to $3.5 million for the 2010 first half.

Change in Board Structure

On 7 September 2009, Mr David Hoff retired as Managing Director and as a Director of PPK. He will continue to act as a consultant to the Company and is responsible for the oversight of the continuing operations of Rambor, managing the Company’s investment properties and working on special projects as directed by the Board.

Mr Glenn Molloy has been appointed as an Executive Director and is responsible for the supervision of the day to day public company activities of the PPK Group and its ASX listed investments.

The Board would like to take this opportunity to thank David Hoff for his contribution to PPK over the past 11 years and looks forward to working with him in his new role.

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Colin Ryan Chairman

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