SIMONDS GROUP LIMITED — Capital/Financing Update 2016

Jul 25, 2016

ASX ANNOUNCEMENT

MARKET UPDATE AND FY16 PRELIMINARY RESULTS

Melbourne, 26[th] July 2016: Simonds Group (Simonds) (ASX: SIO) today provides an update on the preliminary financial results for the year ended 30 June 2016 (FY16).

Unaudited FY16 proforma earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to be in the range of $13.0 million - $14.5 million.

Simonds expects this amount to be reduced by the impact of impairments to certain assets and other one-off adjustments, the amounts of which are currently being finalised with our auditors.

Madisson Business Closure Review

The most significant of the anticipated one-off adjustments will be the Madisson business (medium density construction business) closure costs. As advised to the market on 21 January 2016, the Madisson business is to be discontinued once the current projects have been completed.

In January 2016 the impact of the Madisson closure was estimated to be a $7.0 million - $8.5 million after tax net loss. It is now estimated that this impact will be a $12 million - $14 million after tax net loss.

The increase in the estimated loss is primarily due to delays and increased costs to complete the remaining projects, including penalty costs incurred for late delivery and increased additional resources required to complete the projects. Cost estimates have been revised to ensure they include all anticipated costs in FY16 and FY17 in relation to the completion and future maintenance of those projects, all of which are in the final stages of completion.

There are three projects remaining;

1) Horizon Townhouses, Maribyrnong

32 townhouses – 95% complete and due to be completed in August 2016.

2) Bush Boulevard, Mill Park

21 apartments and 1 retail shop – 98% complete and due to be completed in August 2016.

3) Mason Point, Mill Park

39 apartments, 15 townhouses and 3 retail shops – 85% complete and due to be completed by October 2016.

Operations Update

Simonds is pleased to report that site starts for Simonds Homes Australia (SHA) totalled 2,545 for the 12 months to 30 June 2016, and 53 new display homes were opened during the period. New housing demand remains strong in all SHA’s key markets and the sales pipeline at 30 June 2016 was 2,397 homes.

Full Year Results Announcement

Simonds expects to release its audited results for the year ended 30 June 2016 on Tuesday, 30[th] August 2016.

ENDS

For more information, please contact:

Media Miche Paterson Partner Newgate Communications +61 400 353 762 miche.paterson@newgatecomms.com.au

Investors Matthew Chun Managing Director and CEO Simonds Group +61 3 9682 0700