Joyce Corporation profits fall 29% in 2006-07

The net profit of Joyce Corporation Ltd, property investors and operators of Bedshed Franchising Pty Ltd, has fallen 29 per cent to $3.2 million, from $4.5 million in the previous financial year, the company has announced.

The company said in an announcement that the reported profit fall came after allowing for significant one-off costs relating to the restructuring and development of the group's national bedding and bedroom furniture retailing activities including the write-off of goodwill and appropriate provisioning.

The full text of a company announcement is pasted below

The Directors of Joyce Corporation Ltd. (ASX : JYC) today announced a profit after tax of $3.197 million for the year ended 30 June 2007. The reported profit is after allowing for significant one-off costs relating to the restructuring and development of the group's national bedding and bedroom furniture retailing activities including the write-off of goodwill
and appropriate provisioning.

Joyce Corporation Ltd.'s substantial national industrial property portfolio performed strongly under-pinned by the robust property market nationally. The company has received offers to purchase each of its property holdings at levels well above the valuations that have been used in our annual results which bodes well for the future.

Aside from its property portfolio, Joyce Corporation Ltd.'s other core business is retailing through Bedshed Franchising Pty. Ltd. a wholly owned subsidiary. Bedshed is one of Australia's largest specialty bedding and bedroom furniture retailers with approximately 40 stores in Western Australia, Victoria, South Australia and Queensland.

Bedshed's national retail sales for the year were a buoyant 28% like for like increase and a 31% increase in overall terms over the previous year. Bedshed's unique retail recipe has proven a highly successful retail formula during its 27 year history.

Outlook

Bedshed expects double digit like for like sales and profit growth from its existing network of stores in the coming years on the back of strong trading performance and increasing market penetration in Queensland, Victoria and South Australia.

Bedshed also expects significant additional income from its aggressive store opening program. The company is planning to have 80 stores within 5 years and has developed its pipe-line of projects to feel confident this will be achieved. In the 2007-2008 financial year Bedshed expects to open a minimum of 6 stores including its most recent opening at Clarkson in Western Australia earlier this week.

Significantly Bedshed has also decided that in future it will run a combination of Company owned and operated stores as well as support its network of franchised stores. This move is in order to access the strong retail margin available as a result of Bedshed's strong supply chain and operating model. To date Bedshed has 4 company owned and operated stores with more to follow.

Joyce Corporation Ltd. has now concluded a strategic review and has identified a number of additional significant business opportunities it will pursue. Whilst some of these opportunities have direct synergies with its Bedshed operation, other options are not connected to Bedshed but leverage off Joyce Corporation Ltd.'s core competencies of retailing, importing and supply chain management.

Joyce Corporation Ltd. anticipates additional set-up costs associated with developing its store growth strategy and developing some of the other identified opportunities in the financial year 2007-2008 but believes that the income from its property portfolio and Bedshed trading operations will off-set these costs. This should see Joyce Corporation Ltd. report a level of profit in the coming year no less than that reported for the 2006-2007 year whilst establishing the platform for strong income and profit performance thereafter. The company is investing to grow and the benefits will become more evident in the 2008-2009 year.

The Company has robust financial wherewithal with a very strong asset base which it is planning to leverage for growth. Net tangible assets, excluding deferred tax liabilities on recent revaluations is $1.41 per share.

The Chairman, Mr. Dan Smetana, observed that the results, coupled with the company's strong financial position and the identified business growth opportunities present a robust future for the company and its shareholders.

Dividends

The Directors have announced today a final unfranked dividend of 3 cents per share will be paid in November 2007. This will bring the total dividends for the year to 6.5 cents per share.