HALFYR: SGL: Speirs Group Ltd Results for the 6 Months ended 31/12/09

16 Mar 2010 4:45 pm

SGL 16/03/2010 HALFYR

REL: 1645 HRS Speirs Group Limited

HALFYR: SGL: Speirs Group Ltd Results for the 6 Months ended 31/12/09

Speirs Group Limited Results for announcement to the market

Reporting Period Six Months Ended 31 December 2009 Previous Reporting Period Six Months Ended 30 September 2008

Amount (000s) Percentage change Revenue from ordinary activities $NZ6,469 (69.70%) Profit (loss) from ordinary activities after tax attributable to security holders $NZ(1,202) (21.08%) Net profit (loss) attributable to security holders. $NZ(1,202) (121.23%)

Interim/Final Dividend Amount per security Imputed amount per security It is not proposed to pay an interim dividend $N/A

Record Date Not Applicable Dividend Payment Date Not Applicable

Comments: Directors' Commentary The economic upheaval that New Zealand has experienced over the past two to three years has led to a government strategic review of all parts of our economy. Speirs Group has been profoundly affected not only by the economic upheaval, but also by the consequent reactions of both the public and the government.

Food product innovation and science is at the heart of our Government's challenge to the New Zealand food industry: that Kiwis' combined ingenuity should take new and exciting food products from New Zealand to the global marketplace. Not only is Speirs Group in the fresh food business; we are domiciled in the New Zealand heartland of food science and food industry research excellence.

Responding to our government's challenge, Speirs Group has been repositioning itself within the fresh food industry - to provide even higher quality products and to bring new products to market, both within New Zealand and globally.

Our response has called for a considerable period of change that is not yet complete. Following the sale of our finance business in the latter part of 2008, Speirs Group was faced with restructuring costs arising from downsizing our governance and top management structure. At the same time, the Group has been working to provide a much stronger platform to enable a return to adequate profitability by Speirs Foods while simultaneously absorbing very heavy establishment costs associated with its fledgling partly owned subsidiary, Speirs Nutritionals Partners LP.

We have been undertaking the repositioning with the future in mind: our prime objective is to advance the medium and long term interests of both the company and its shareholders. Repositioning, new product development and new business start-ups are costly exercises: these have been the principle contributors to the loss incurred by the group in the six-month period under review. Further costs will be incurred during the remainder of the financial year so as to establish a dependable base for profitable trading and growth in the coming years.

During the six months period:

$'000 Speirs Foods returned to a modest profit of 27 Our share of costs associated with Speirs Nutritionals (the omega-3 start-up business) amounted to (757) Costs associated with corporate governance amounted to (472) Resulting in an overall loss attributable to our shareholders of (1,202)

In particular, during the six months to December 2009 and in the period since that date, the Speirs Group entities have:

- bedded-in long term funding of more than $6.3 million by way of a mix of new equity, convertible redeemable preference shares and term debt:

- repaid all bank debt and other short term debt;

- completed a significant capital expenditure programme at Speirs Foods' Marton premises to ensure enhanced quality control;

- reviewed all Speirs Foods' systems and commenced an operations upgrade programme to provide improved operational efficiency, costing and manufacturing controls;

- enhanced operational efficiency and quality, and overcome 'start-up issues' at Speirs Nutritionals' (omega-3) new plant to meet global market requirements;

- worked closely with Croda Europe in the early stage establishment of omega-3 markets in both Europe and North America;

- completed the first, albeit modest, supplies of omega-3 processed emulsion to Europe;

By the close of this current financial year in June 2010 the group expects to be well advanced in providing:

- separate senior management to both Speirs Foods and Speirs Nutritionals - as Speirs Nutritionals 'comes of age' and begins commercial production and sales of processed omega-3 emulsion ;

- in association with Croda Europe, an expanding export market for the fledgling Speirs Nutritionals' omega-3 emulsion products; and

- a first class operational platform that will allow Speirs Foods to return to satisfactory profitability in the short to medium term.

For and on behalf of the Directors

Nelson Speirs Chairman of Directors, Speirs Group Limited 16 March, 2010 End CA:00192553 For:SGL Type:HALFYR Time:2010-03-16:16:45:13

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