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Hirequip New Zealand Limited - NZX Announcement

NZX Announcement 10 February 2004

Hirequip New Zealand Limited

Last year, Hirequip announced that it had entered into a conditional contract to sell its 30 percent shareholding in the Northwood Supa Centa at Belfast, north of Christchurch. This sale has now gone unconditional with the transaction resulting in a profit of $3.0 million to Hirequip.

“The sale of our holding in the Supa Centa, in a buoyant property market, has enabled the company to dispose of what is now a non-core residual asset, and is consistent with our intention to materially grow our hire equipment business.”

Hirequip New Zealand Limited today also announced that its appeal to the High Court, contesting an earlier Environment Court decision not to grant the plan change approval for the Waimakariri Employment Park, has been unsuccessful.

Hirequip applied to have 45 hectares of rural land adjoining Christchurch’s Northern Motorway, north of the Waimakariri Bridge, rezoned to allow a mixed-use commercial development, including a motorway service area. Following the Environment Court’s decision to decline the application, the company lodged an appeal to the High Court.

Hirequip’s Executive Chairman Graeme Wong said, “The High Court’s decision effectively means that this development cannot now proceed as we had originally envisaged.”

While this was a disappointment, the company’s contingency plan, in the event the land wasn’t rezoned, has always been to subdivide the land into some nine or ten lifestyle blocks of around 4 hectares each.

“Planning is underway on this subdivision, which we intend to bring it to the market in the near future. He noted that three houses owned by the Company situated adjacent to the development property have already been sold.”

Mr Wong said that the net asset value of this development would be written down by an expected $3 million in the interim result, which is due later this month. This will be offset by the profit on the
Supa Centa transaction.

In December, Hirequip bought Ready Hire with 13 branches throughout the Waikato, Bay of Plenty, Hawkes Bay, Manawatu-Wanganui and Thames Valley and has just concluded negotiations to buy a Christchurch general hire business, Hamill Hire, which operates from Hornby in Christchurch.

“Acquisitions made over the last six months will see a 30 percent increase in the company’s hire business revenues,” Mr Wong said.

“Integration of the Ready Hire business is progressing well. Hirequip is the largest general hire business in New Zealand with annual revenue of some $65m and nationwide coverage with branches from Whangarei to Invercargill.

“Further investment in the hire equipment business can be funded in the short-term by the company’s unutilised debt capacity and longer term by the sale of non-core assets when they reach maturity or the right opportunity is forthcoming.

“Looking ahead, we intend further growing Hirequip through branch expansion, the development of complementary equipment hire business activities, and the acquisition of smaller equipment hire providers such as Hamill Hire that have a strong local presence,” Mr Wong said.

ENDS

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