PPK GROUP LIMITED — Annual Report 2007

Aug 29, 2007

APPENDIX 4E

PRELIMINARY FINAL REPORT

PPK GROUP LIMITED

ABN 65 003 964 181

FINANCIAL YEAR ENDED 30 JUNE 2007

HIGHLIGHTS OF RESULTS FOR ANNOUNCEMENT TO THE MARKET

(figures are in A$000s)

TOTAL REVENUES AND OTHER INCOME	DOWN	57.9 %	TO	41,741
PROFIT FROM CONTINUING OPERATIONS BEFORE INCOME TAX	UP	220.5 %	TO	6,099
PROFIT BEFORE INCOME TAX	UP	462.6 %	TO	16,760
PROFIT AFTER TAX ATTRIBUTABLE TO MEMBERS	UP	135.6 %	TO	10,111
EARNINGS PER SHARE	UP	152.4 %	TO	15.9 cents

	CurrentYear	PreviousYear
Special Dividend	5.0 cents
Interim Dividend	3.25 cents	2.75 cents
Final Dividend	3.25 cents	3.75 cents
	11.5 cents	6.5 cents

RECORD DATE FOR DETERMINING ENTITLEMENT TO SPECIAL AND FINAL DIVIDEND TOTALLING 8.25 CENTS PER SHARE 14-Sep-07

COMMENTARY ON RESULTS

The financial information contained in this report has been seperated into Continuing Operations and Discontinued Operations as a result of the sale by the Company of its plastic manufacturing businesses and AIFRS requirements.

Discontinued Operations information relates to the plastic packaging business and York Precision Plastics Pty. Ltd. (YPP). The sale of these businesses effect a departure by the Group from plastics manufacturing.

The rationale for the sale of the plastic packaging business was detailed in the prior year's report commentary. During the current period it became clear that the YPP business was being subjected to the same forces that applied to the packaging business, especially volatile plastic pricing and the subsequent pressure on margins. The Company completed the sale of YPP on 31st May, 2007 for $9.25 million in a leveraged buyout by the current management. The Company retained the industrial property at Riverwood in Sydney and entered into a long term lease with the new owners on commercial terms.

During the reporting period total revenue declined by 57.9% to $41.7 million. This decrease was primarily due to the sale of the plastic packaging business.

Profit before Tax increased to $16.8 million with Continuing Operations (Properties, Rambor and Investments) contributing $6.1 million.

Profit after tax increased by 136% to $10.1 million (15.9 cents per share) with Continuing Operations contributing $4.6 million (7.2 cents per share).

The Directors have resolved to pay a fully franked final dividend of 3.25 cents per share plus a special fully franked dividend of 5 cents per share, a total of 8.25 cents per share for the 6 months ended 30th June 2007.

This will represent a total fully franked dividend of 11.5 cents per share for the year.

CONSOLIDATED INCOME STATEMENT

	CURRENT YEAR$000s	PRIOR YEAR$000s
Sales Revenue from continuing operations	2,837	3,016
Cost of sales	(1,683)	(1,633)
GROSS PROFIT	1,154	1,383
Interest Received	257	144
Gain on sale of assets	1,305	3
Foreign exchange (losses)	(55)	(53)
Rental Income from investment properties	3,555	2,101
Other income	3,719	302
Warehouse & Distribution expenses	(15)	(13)
Selling Expenses	(188)	(208)
Administrative expenses	(3,487)	(1,071)
Writedown of investments	-	(220)
Finance costs	(146)	(465)
PROFIT FROM CONTINUING OPERATIONSBEFORE INCOME TAX EXPENSE	6,099	1,903
Income tax (expense) / credit attributable to profit from Continuing operations	(1,478)	1,546
PROFIT AFTER INCOME TAX FROMCONTINUING OPERATIONS	4,621	3,449
Profit after income tax from discontinued operations	5,490	843
PROFIT AFTER INCOME TAX	10,111	4,292
Earnings per share
Continuing operations	7.2 cents	5.1 cents
Discontinuing operations	8.7 cents	1.2 cents
Total	15.9 cents	6.3 cents
Diluted Earnings per share	15.9 cents	6.3 cents
INDIVIDUALLY SIGNIFICANT ITEMS - Gains or ( losses )
Sale of Plastics Packaging business	10,708	(970)
Sale of York Precision Plastics	(159)	-
Sale of rental property	1,295	-
Fair value adjustment on derivatives	2,644	-
Sale of Advanced Power	-	171
Write down in investment in EZI Automation	-	(220)
	14,488	(1,019)
DEPRECIATION AND AMORTISATION COSTS
Depreciation & amortisation of property, plant & equipment	1,597	5,273
Amortisation of intangibles	14	110
	1,611	5,383

CONSOLIDATED BALANCE SHEET

		30-Jun-07$000s	30-Jun-06$000s
Current Assets
	Cash	624	218
	Receivables	915	6,295
	Inventories	741	5,550
	Derivatives	-	13
	Other	2,362	991
		4,642	13,067
	Assets classified as held for sale	-	57,153
	Total Current Assets	4,642	70,220
Non Current Assets
	Available-for-sale financial assets	6,697	265
	Investment Property	41,256	-
	Other Property Plant & Equipment	2,187	46,665
	Intangibles	913	2,511
	Tax Assets	1,276	3,251
	Derivatives	890	-
	Other	5,612	781
	Total non current assets	58,831	53,473
TOTAL ASSETS		63,473	123,693
Current Liabilities
	Payables	1,164	3,010
	Borrowings	1,374	5,291
	Tax Liabilities	3,254	-
	Provisions	357	545
	Other	343	-
		6,492	8,846
	Liabilities directly associated with
	assets classified as held for sale	-	22,700
	Total Current Liabilities	6,492	31,546
Non Current liabilities
	Borrowings	8,434	45,001
	Tax Liabilities	1,117	85
	Provisions	471	723
	Total Non Current liabilities	10,022	45,809
TOTAL LIABILITIES		16,514	77,355
NET ASSETS		46,959	46,338
Equity
	Contributed equityReserves	33,573567	38,88532
	Retained profits	12,819	7,270
	Equity attributable to members
	of the parent entity	46,959	46,187
	Outside equity interests	-	151
TOTAL EQUITY		46,959	46,338

CONSOLIDATED CASH FLOW STATEMENT

	Year Ended30-Jun-07$000s	Year Ended30-Jun-06$000s
Cash flows related to operating activities
Receipts from customers	37,664	109,551
Payments to suppliers and employees	(38,074)	(95,645)
Other Revenue	3,883	620
Interest Revenue	257	149
Income taxes paid	(175)	(902)
Other	(851)	(1,849)
Net Operating Cash Flows	2,704	11,924
Cash flows related to investing activities
Payment for purchases of property, plant and equipment	(755)	(761)
Proceeds from sale of property, plant and equipment	3,707	174
Payment for purchases of equity investments net of cash acquired	(4,567)	(219)
Proceeds from sale of Subsidiaries	52,075	797
Purchase of minority interest	-	(1,087)
Payment for intangibles	(364)	(445)
Net Investing cash flows	50,096	(1,541)
Cash flows related to financing activities
Proceeds from issues of securities (shares, options, etc)	-	112
Payment for buyback of shares	(5,312)	-
Proceeds from borrowings	-	3,600
Repayment of borrowings	(40,413)	(5,672)
Dividends paid	(4,562)	(4,425)
Interest and costs of borrowings	(1,503)	(4,077)
Net financing cash flows	(51,790)	(10,462)
Net increase (decrease) in cash held	1,010	(79)
Cash at beginning of period	(1,387)	(1,308)
Cash at end of period	(377)	(1,387)
Reconciliation of cash
Reconciliation of cash at the end of the period (as shown inthe consolidated statement of cash flows) to the related items
in the accounts is as follows.
Continuing operations
Cash on hand and at bank	624	218
Bank Overdraft	(1,001)	(1,649)
Continuing operations	(377)	(1,431)
Discontinuing operationsCash on hand and at bank		44
Bank Overdraft		-
Discontinuing operations	-	44
Total cash at end of period	(377)	(1,387)
Non Cash Financing and Investing Activities		$000s

Fair value adjustments in Derivatives - increase in value 2,644

Earnings per security (EPS)

Details of basic and diluted EPS reported separately in accordance with paragraph 9 and 18 of AASB 1027 : Earnings per share are as follows:

		2007	2006
Earnings used in the calculation of basic EPSEarnings used in the calculation of diluted EPS		10,111,00010,111,000	4,292,0004,292,000
Weighted average number of ordinary shares outstandingDuring the year used in the calculation of:
Basic EPSDiluted EPS		63,783,32663,783,326	68,067,42068,067,420
Basic EPS - CentsDiluted EPS - Cents		15.915.9	6.36.3
NTA Backing	Current period		Previous correspondingperiod
Net tangible asset backing per share	75.3 cents		61.1 cents

DIVIDENDS

Special dividend resolved to be paid	5.0 cents / share fully franked
Date dividend is payable	21 September 2007
Record date	14 September 2007
Ex dividend date	10 September 2007
Final dividend resolved to be paid	3.25 cents / share fully franked
Date dividend is payable	21 September 2007
Record date	14 September 2007
Ex dividend date	10 September 2007
	CurrentYear	PreviousYear
Special Dividend	5.0 cents
Interim Dividend	3.25 cents	2.75 cents
Final Dividend	3.25 cents	3.75 cents
	11.5 cents	6.5 cents

The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist or will arise after payment of income tax in the next year in respect to the 2007 year is $16,529,090. We anticipate that dividends will be fully franked for the foreseeable future.

	CurrentYear$000s	PriorYear$000s
Amount of special dividend payable - fully franked	3,059
Amount of final dividend payable - fully franked	1,989	2,556

Both current and prior year dividends were fully franked.

CONSOLIDATED RETAINED PROFITS	CurrentYear$000s		PriorYear$000s
Retained profits at the beginning of the financial year	7,271		7,404
Net profit attributable to members	10,111		4,292
Dividends paid	(4,563)		(4,425)
Retained profits at the end of the financial year	12,819		7,271
ORDINARY SHARES ON ISSUE		NUMBER
Number of securities on issue at beginning of year		68,153,105
Shares repurchased through approved buyback scheme		(6,966,878)
		61,186,227

OPTIONS

There were 900,000 options outstanding as at balance date.

These consisted of:

• 900,000 non-executive director options with an exercise price of $1.65

POST BALANCE DATE EVENTS

No matters or circumstances have arisen since the end of the financial year which significantly affected the operations of the economic entity, the results of those operations or the state of affairs of the economic entity in subsequent periods.

AUDIT STATUS

The accounts are currently in the process of being audited.