BWY Broadway Industries Limited

Broadway Industries Limited announces that a subsidiary has signed a conditional sale and purchase agreement to purchase the business and assets of Inmotion Engineering.

Inmotion Engineering manufactures and supplies innovative conveyor and materials handling systems from premises in Brisbane, Australia. The business will complement the activities of Mercer Stainless Limited and Mercer Technologies Limited.

Information on Inmotion Engineering is available on the company's web site at www.inmotion.net.au

I F Farrant
Chairman

The Directors of Broadway Industries Limited report an operating surplus before taxation for the six months ended 31 December 2006 of $413,000 (2005 $401,000). Revenue was $21.5 million compared to $19.6 million for the comparable period.

Set out below is an analysis of the trading performance of the businesses for each six month period

Sales $'000 Surplus before tax $'000
Dec 2006 Dec 2005 Dec 2006 Dec 2005
H E Perry 8,272 7,996 430 451
Mercer 13,258 11,641 141 194

The New Zealand based activities recorded a 9% increase in revenue and a 27% increase in operating surplus. Sales for HE Perry, which imports and distributes photographic equipment, increased 3.5% and HE Perry achieved an operating result consistent with last year. NZ Sales for the Mercer businesses increased from $11.6 million to $13.0 million, an 12.2% increase and operating results increased for the period from $299,000 to $522,000.

A focus for Mercer in the current financial year has been the continuing development of its overseas businesses. Their results for the first six months were disappointing reflecting establishment costs. The second half year will show an improvement.

Mercer Middle East has secured substantial orders to supply equipment to hospitals in UAE. Sales for the full year are expected to be in excess of $3 million which is pleasing progress after two years. The company has participated in major trade shows / conferences in Dubai in September 2006 and January 2007 in order to continue to promote the Mercer name in this market.

Mercer Products Pty is now supplying kitchen, bathroom and laundry products to NSW and Queensland customers directly instead of through independent distributors. Sales are increasing into Australia, albeit more slowly than the Company would like. Direct sales into Victoria will commence shortly.

The other important element of Mercer's stategy for growth is product development. The first cartonless cheese plant developed in conjunction with Tetra Pak Tebel BV and Murray Goulburn Co-Operative Co Limited has been successfully installed and commissioned. The development priority now is on-farm milk evaporation equipment.

The Directors commented in the 2006 report that they anticipated a modest improvement in the trading performance for Broadway Industries Group in the 2007 year. The directors now anticipate a full year pre tax operating surplus above $1.5 million, compared to $1.2 million for the 2006 year.

Net asset backing per share remains at $0.95 ($0.95 at 30 June 2006).

The ratio of shareholders' funds to total assets is 59.6% (67.9% at 30 June 2006).

The interim dividend will be maintained at 2 cents per share, to be paid on 27th April 2007.

Chairman's report

Broadway Industries Limited

BWY

29 Aug, 2007, 15:32

FLLYR

Broadway Industries Limited - Full Year Result to 30.6.07

BROADWAY INDUSTRIES LIMITED
Results for announcement to the market

Reporting Period Year to 30 June 2007
Previous Reporting Period Year to 30 June 2006

Amount (000s) Percentage change
Revenue from ordinary activities 46,821 +20.8%
Profit (loss) from ordinary activities after tax attributable to security holder 2,295 +86.9%
Net profit (loss) attributable to security holders 1,071 +32.5%

Interim / Final Dividend Amount per security Imputed amount per security
Final 2 cents No imputation credits attached

Record Date 19th October 2007
Dividend Payment Date 26th October 2007

Comments See Chairman's comments set out below

The Directors of Broadway Industries Limited report an operating surplus before taxation for the year ended 30 June 2007 of $2.295 million (2006 $1.228 million). Revenue was $46.821 million compared to $38.75 million for the comparable period last year.

The operating surplus included a gain arising on the June 2007 sale of the property occupied by a subsidiary at 45 Lunns Rd, Christchurch amounting to $1.09 million and is stated after writing down a development asset for impairment. The property that was sold will continue to be occupied by the subsidiary.

The after tax result was a surplus of $1.071 million (2006 $0.808 million). This was impacted by the requirement to write down the future tax benefit amount to the new NZ company tax rate of 30%, effective 1 April 2008.

Set out below is an analysis of the performance of the businesses:

Sales $'000 Surplus before tax $'000
2007 2006 2007 2006
H E Perry 16,190 14,246 813 584
Mercer 30,631 24,504 1,675 984

Sales for HE Perry, which imports and distributes photographic equipment, increased 13.6% resulting in an improved operating result. The subsidiary is budgeting similar sales levels for 2007/08.

The Mercer businesses had a mixed year.

Mercer Building Products which supplies kitchen, bathroom and laundry products in NZ and Australia experienced a 7% increase in sales. This is largely attributable to the decision to distribute in Australia directly rather than through independent distributors. The drive for sales growth in Australia will continue to be a focus for this business. Mercer Building Products has also had growth in production volumes from the Robinhood supply contract which was secured in July 2006.

Mercer Stainless workshops in Christchurch and New Plymouth had a good year with good factory loadings in Christchurch. Sales increased by 43% to approximately $16 million and sales for the 2007/08 year are expected to be at similar levels.

Mercer Technologies sales declined this year, down from $9.8 million to $7.7 million, reflecting the absence of a repeat order for the successful Cartonless Cheese product this year, the difficulty of selling capital equipment in NZ and overseas when the NZD is so high. Also many of the company's products are designed for the meat industry which has experienced tough times in NZ and Australia.

Mercer Middle East which distributes hospital sterilization / washing / disinfection equipment in UAE has continued to make good progress. It achieved sales this year of $2.3 million and is budgeting for further sales growth.

The other important element of Mercer's stategy for growth is product development. The first pilot Cartonless Cheese plant developed in conjunction with Tetra Pak Tebel BV and Murray Goulburn Co-Operative Co Limited was successfully installed and commissioned in September 2006. The performance of the plant is being evaluated with a view to making the decision to commercialise the product for sale to other customers. The other development priorities are on-farm milk evaporation equipment and a new technology for medical equipment sterilization.

The Directors commented in the 2006 report that they anticipated a modest improvement in the trading performance for Broadway Industries Group in the 2007 year and this has been delivered. The outlook for 2007/08 is for continuing modest growth in earnings.

On 23rd April 2007 the company announced that a subsidiary has signed a conditional sale and purchase agreement to purchase the business and assets of Inmotion Engineering Pty Limited. This business purchase was completed in June 2007. Inmotion Engineering manufactures and supplies conveyor and materials handling systems from premises in Brisbane, Australia.

Net asset backing per share is $0.96 ($0.95 at 30 June 2006).

At 30 June 2007 the ratio of shareholders' funds to total assets is 48.4% (67.9% at 30 June 2006). This ratio improved in August 2007 to 53.8% on settlement of the property sale.

The interim dividend will be maintained at 2 cents per share, to be paid on 26th October 2007.

I F Farrant
Chairman
29/8/07