SCHOOLBLAZER LIMITED — Interim / Quarterly Report 2012

Mar 15, 2012

Level 11 280 George Street Sydney NSW 2000 GPO Box 4406 Sydney NSW 2001 www.hgl.com.au P +612 9221 7155 F +612 9233 2713

HGL Limited abn 25 009 657 961

Profit and dividend update

Underlying profit for the half year ended 31 March 2012 is estimated to be in the range $0.75 million to $1.25 million (2011: $4.1 million).

In common with most non mining related enterprises we are experiencing very difficult trading conditions. Australian business confidence is low and consumer sentiment is weak.

For the five months to the end of February 2012 sales from continuing operations excluding Biante, which was restructured at the end of 2011, fell 10% from $53 million to $48 million.

This disappointing result for the five months to February 2012 reflects the challenging business environment and a number of specific circumstances:

• Sales of architectural lighting by JSB are 34% down on what was an exceptional result in the corresponding period last year. This decline in sales follows a slowdown in building fit outs and generally softer business confidence. To counter this external weakness we are increasing our presence in the key Melbourne market.

• SPOS provides solutions for marketing at point of purchase and is by nature a project business. It is subject to greater swings in profitability between reporting periods than other business units due to the timing of projects. The value of projects under development is higher than it was six months ago but the value of projects invoiced year to date has been disappointing leading to domestic sales being 10% below the corresponding period last year.

• Over half of Anitech sales derive from the sale of consumables to the specialist CAD printing, design, graphic arts and sign industry; it is therefore pleasing that sales of these consumables are up a healthy 7% on prior year. However Anitech’s earnings were reduced through the loss of a major service contract late last year. A number of personnel changes have been made within the business.

The shortfalls in JSB, SPOS and Anitech make up approximately 80% of the expected reduction in half year earnings.

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In the other major business units:

• Mountcastle sales are up 16% predominantly through the successful expansion into the school uniform and school bag market. This business unit was historically a contract supplier of hats into a variety of markets including defence, police, industry and schools. Over the past few years Mountcastle has capitalised on its market strength in the school’s market and now supplies uniforms and bags in addition to its traditional hat ranges.

• Leutenegger sales are up 10% following the appointment of a new Chief Executive for this business unit last September. The new CEO has in turn made a number of senior appointments to further strengthen Leutenegger and is expanding Leutenegger into markets adjacent to its traditional sewing and craft focus.

Throughout HGL we continue to increase the sales footprint through moving into adjacent markets, broadening our product offering and increasing our geographical reach. To enable us to successfully execute this strategy we are increasing the skill level of existing employees and bringing into our business units very capable and experienced people from outside HGL.

Across our business units we have built and trained teams to create growth. We have kept these teams together despite reducing expenses, in continuing operations excluding Biante, by 9% from the corresponding period last year. Consideration has been given to reducing costs by a greater amount however the Board believes this would be detrimental to the longer term growth plans of the Group.

HGL remains in a strong financial position with net cash of $9 million (September 2011: $6.6 million) and $10 million of unutilised borrowing facilities. The board remains confident about the underlying strength of HGL and anticipates, subject to unforseen events, the interim dividend for 2012 will be 4.0 cents fully franked a share (2011: 6.0 cents).

I thank all our employees for their resilience and dedication in what are very difficult times for the economy.

Peter Miller Chairman 16 March 2012

For further information:

Michael Mahoney, Chief Executive 02 9221 7155 or 0410 285 318

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