O'Connor-based Joyce Corporation Ltd has announced the acquisition of the remaining 51 per cent of the Bedshed Unit Trust was passed by shareholders at today's extraordinary general meeting.
O'Connor-based Joyce Corporation Ltd has announced the acquisition of the remaining 51 per cent of the Bedshed Unit Trust was passed by shareholders at today's extraordinary general meeting.
Joyce director and chairman of the meeting Frank van Gogh said an independent expert's report indicated the cost of acquiring the outstanding interest in Bedshed for up to $3.125 million would be worth over $5 million subject to the approval and growth plans.
"Joyce has had an investment in Bedshed for over 25 years," he said.
"However the existing structure of Bedshed, being a Unit Trust and accordingly requiring distribution of 100 per cent of its profits, does not cater for sufficient reserves of funding capacity to fund the planned and prospective expansion opportunities," he said.
"Accordingly, with no internal capacity to fund and insufficient banking capacity to support the growth plans, it falls to Joyce, which has the wherewithal to fund the growth plans."
At market close, shares in Joyce were at $1.02.
Below is the full chairman's address:
CHAIRMAN'S ADDRESS
Joyce Corporation Ltd
EGM 6 April 2006
Welcome to you all, at what is the start of a new era in the 120 year history of our company. We find ourselves in a very strong financial position with no debt, cash in the bank, 3 very valuable unencumbered properties in New South Wales, Queensland and South Australia and very significant growth prospects in Bedshed.
Bedshed has had substantial growth in recent years from its two main focuses of attention, namely national retailing and bed and bedroom furniture importing.
Projections indicate similar levels of profitability for Joyce in the future with significant scope for further growth and profitability, after some specific and potential growth plans, are implemented. The growth plans are based upon existing organic growth nationally, which will be material, whilst additional growth will come from industry reorganisation, new acquisitions and possible property involvement as well as expanded import activities.
Future dividends are projected to be no less than in the recent past with the prospect that they will be increased in the future.
Now turning to the motion that will be put before you today, that is, to acquire up to the 51% of Bedshed, which the company does not presently hold: First of all, Joyce has had an investment in Bedshed for over 25 years. However the existing structure of Bedshed, being a Unit Trust and accordingly requiring distribution of 100% of its profits, does not cater for sufficient reserves of funding capacity to fund the planned and prospective expansion opportunities.
Accordingly, with no internal capacity to fund and insufficient banking capacity to support the growth plans, it falls to Joyce, which has the wherewithal to fund the growth plans. However your Directors would not support the funding of these growth plans while Joyce is not in control of the ownership, hence the motion to be put to shareholders to-day.
I should advise that of the 51% that is outstanding, 48%, that is 94% of 51% have already conveyed their acceptance, subject to the outcome of to-day's meeting. I would also like to remind shareholders that the independent experts report that you all received, indicated that the cost of acquiring the outstanding interest in Bedshed for up to $3.125 million will be worth over $5 million subject to approval to-day and the moving ahead of existing growth plans. Shareholders will also gain from the imputed increase in value of the company's existing holdings.
Accordingly I commend your support to-day for the acquisition of the remaining 51% of the Bedshed Unit Trust.
