Joyce posts half year net profit growth of 171.6%

O'Connor-based manufacturer Joyce Corporation posted a net profit after tax of $3.3 million, up 171.6 per cent on the previous corresponding period.

The company reported revenues from ordinary activities of $23.6 million, down 24.6 per cent, while an interim dividend of 6 cents was paid on the 3rd February 2006.

At market close, the company's share price was $1.03.

Below is the full Director's Report:

DIRECTORS' REPORT
Your directors submit the financial report of the Consolidated entity for the half-year ended 31 December
2005.

Directors

The names of directors who held office during or since the end of the half-year:

Mr D A Smetana
Mr J F Ries
Mr F J van Gogh

Review of Operations
Operations for the first six months of the financial year have been affected by the sale of the foam businesses at the end of November. This sale produced a profit before tax of $6,082k and profit after tax of $3,764k. The following comments about operations are limited to the business results for the five months preceding the sale.

Total sales for the five months were $23,635k, down 11.7% on the previous year. Profit after interest was $125k, compared to $1,212k in the previous year. Profits were significantly affected by increased material costs, price competition and the reduction in sales volume as a consequence of reduced consumer spending. Profits were also affected by redundancy costs, as employee numbers were adjusted to the lower sales volume as well as costs associated with the disposal of the Company's Foam Businesses.

Net operating profit before tax was $5,610k and net profit after tax was $3,292k after providing $500k for environmental remediation and other costs relating to the Bedshed acquisition and other re-organisation costs.

After the sale of Joyce's Foam Businesses Joyce Corporation Ltd continues to own properties in Sydney, Brisbane, and Adelaide, these properties have been leased to the new owners of the Foam business; Joyce also continues to hold a 49% investment in the Bedshed National Franchising operation.

Joyce Corporation Ltd appointed an Independent Expert (BDO) to prepare a valuation report on Bedshed Franchising of which Joyce Corporation holds 49%. The valuation was calculated using a discounted cashflow based on future cash flows and a discount rate between 15.83 and 18.68%. The result valued the 49% investment in the Bedshed franchising Pty Ltd business between $5.03 million and $5.68 million; the value shown in the Joyce Corporation Ltd balance
sheet is $226k (acquisition cost).

The independent experts report was prepared in anticipation of Joyce making an offer to acquire all or part of the 51% ownership of Bedshed Franchising that it presently does not own. An extraordinary General meeting has been called for April 6 for shareholders to consider the acquisition (refer Note 12).

As a consequence of the sale of the Foam activities for approximately $16 million Joyce Corporation Ltd has repaid $10.3 million in borrowings. The balance of surplus cash has been placed on deposit pending the outcomes of investment activities. Adoption of Australian Equivalents to IFRS

This interim financial report has been prepared under Australian equivalents to IFRS. A reconciliation of differences between previous GAAP and Australian equivalents to IFRS has been included in Note 2 of this report.

Rounding of Amounts

DIRECTORS' REPORT
The Consolidated entity has applied the relief available to it in ASIC Class Order 98/100 and accordingly certain amounts in the financial report and the directors' report have been rounded off to the nearest $1,000.

Auditor's Declaration

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 3 for the half year ended 31 December 2005.

This report is signed in accordance with a resolution of the Board of Directors.

Director

D A Smetana