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Vertex Predicts Profit, Revenue Increases

10/06/02

Vertex Group Holdings Ltd, which launched its prospectus today for an initial public offering of shares, recorded increased operating revenue and a profit for the year ended 31 March 2002, the first full year under current ownership.

The directors are expecting further increases in the March 2003 and March 2004 years.

In the March 2002 year the company and its subsidiaries announced profit on an operating EBITDA of $15.5 million, up 21.1% on the previous year's $12.8 million. Operating revenue increased from $80.4 million to $85.9 million.

For the March 2003 year operating revenues are forecast to increase to $90.7 million, and operating EBITDA to increase by 13.5% to $17.6 million.

The directors intend to make dividend payments of $1.95 million and $2.60 million in December 2002 and June 2003. This represents an annualised dividend of approximately 14.2 cents per share based on forecasted results to 31 March 2003.

LEADING MANUFACTURER

Vertex Group Holdings Ltd is the parent company of Vertex Pacific Ltd, owner of a long established plastics products and packaging business purchased from Carter Holt Harvey Ltd in October 2000 by the current shareholders.

Private equity vehicles Pacific Equity Partners and Bain Capital and entities associated with those vehicles who hold more than 90% of the shares, are offering all their shares in the IPO process and will not own any shares in Vertex following the sale. None of these entities are guaranteeing the shares being offered.

Vertex Pacific is the leading New Zealand manufacturer of plastics-based moulding and packaging products.

The company has manufacturing plants at Auckland, Hamilton, Hawkes Bay and Wellington, and employs some 400 staff.

It holds significant market shares in its core packaging markets of food processing, industrial processing and retail distribution.

Its products range from food and industrial containers to specialty silicone medical health masks and complex agricultural products.

Some 20% of the company's production (by value) is exported to overseas customers in Australia, the Pacific and the United States. The company has a sales office in Sydney.

New Zealand packaging customers include exporters in the meat, dairy and fruit businesses, such as Zespri International.

Vertex Pacific has the exclusive agency for New Zealand, Australia and Asia for the "Securefresh" low oxygen chilled meat packaging system, which has significant growth potential.

Vertex Pacific is actively involved in using recycled plastic as a raw material for the manufacture of drums, buckets, piping and containers. The company works closely with local authorities on recycling schemes.

DIRECTORS

Mr Jon Hartley, Chairman of Sky City Entertainment Group Ltd, succeeds Mr Simon Pillar, Managing Director of Pacific Equity Partners Pty Ltd, as chairman of Vertex. Mr Pillar remains on the board.

Mr Doug Mckay, a former Chief Operating Officer and a director of Goodman Fielder, Sydney, joins the board. He has held senior executive positions in consumer goods, food and packaging industries in Australia and New Zealand.

Mr Barry Watts, who has held senior management roles in the packaging industry, most recently as Executive General Manager, Packaging Group, Southcorp Ltd, also joins the board.

Managing Director Paddy Boyle continues as a director.

OFFER TERMS

In addition to the Pacific Equity Partners and Bain Capital shares being offered for sale, the company is issuing 490,694 new shares for subscription. Management of Vertex Pacific will retain approximately 6.9% of the shares. None of those members of management are guaranteeing the shares being offered. Total shares on issue after the IPO will be 32.05 million. These shares will all be fully paid. Paid up capital immediately after the offering will be $21,000,000.

A total of 29,755,944 million shares are being offered in the IPO at $2.05 per share in minimum parcels of 1000 shares through the company, any member of the NZ Stock Exchange or JB Were (NZ) Ltd, the Lead Manager and Underwriter of the issue. UBS Warburg New Zealand Ltd is the Co-Lead Manager. There will be no public pool.

Members of the public who wish to apply for shares are advised to contact their sharebroker to obtain a copy of the registered prospectus and investment statement.

The offer opens today and closes on June 28. There is no provision to accept over-subscriptions.

The securities have been accepted for listing by the New Zealand Stock Exchange and will be quoted upon completion of allotment procedures. However, the Exchange accepts no responsibility for any statement in this advertisement.

-ends-

Issued by Vertex Group Holdings Ltd Monday June 10.


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