re: phl -super lab opens soon Seems it has taken a while for...

re: phl -super lab opens soon Seems it has taken a while for 'something to happen'.

I was given 'the tip' by a south seas fishing expert & wine taster a couple of weeks back & bought a few PHl which is firming up on the buy side with not many on the sell. Recent issue at 5c .

Chairman’s Address AGM 19th November 2004 The text of my address to the AGM should be read in conjunction with the printed report in the Annual Report. Only key developments since that report will be referred to. The September quarter has produced a 27% increase in EBITDA compared to the same period last year. Excluding the metropolitan Sydney labs which continue to struggle the group EBITDA for this period is up 40%. We remain confident these labs will continue to perform strongly in the second quarter. A great deal of work is being put into the rationalization of our Sydney labs. The necessary departure of four lab principals has had its inevitable effect with loss of some work and destabilization. At the same time we have been rationalizing the lab sites. We now have two sites compared to four last year. We remain confident the Sydney labs will come good after we have worked through the difficulties. Of the 23 labs acquired by Pearl we have reduced the number of sites to 15. While this process can produce short term problems it affords long term gains. Pearl will open its first “super lab” in Perth commencing February 2005. This will see the combined operations of three of our Western Australia based laboratories under one roof. As you are aware, our business is a fixed cost business, the combination of these three labs will achieve significant overhead reductions. As previously we have not been pursuing acquisitions during the year preferring to focus on the rationalization process and cost reduction through supplier agreements. In this latter case we have concluded agreements with seven of our major suppliers. We now feel we can again actively look for new acquisitions and a number of discussions are under way. When we announced the interim management structure last year Wes Truscott agreed to defer his plans to establish his own training business for six months. The Board is indebted to Wes for his support. At his request he will be going part time from January with a view to leaving Pearl around the middle of the year. The Board has commenced a search for a CEO. In the interim and prior to the new CEO starting Greg Plummer has agreed to take on the role of Executive Chairman. Greg is currently a non executive director as well as a major shareholder. I will remain as a non executive director along with Louis Niederer. The new committee structure announced last year is working well and is providing the Board and Management with broad based advice. Paul Wingate felt it was no longer necessary for a lab principal to be on the Board and that he could more effectively contribute by devoting himself to the integration of the SA labs. Over the last two months, the Board, Management and Lab Principal Committee members have been working with an external consultant to develop a coordinated marketing and business strategy for the group.
Our successful Burwood Road lab in Newcastle has entered into a preferred provider arrangement with a large dental practice in Newcastle and Sydney. We believe these sort of arrangements will become more widespread and this trial will it is hoped be the benchmark model. The Board has announced a ‘share purchase plan’ which will give existing shareholders an opportunity to acquire up to $5,000 of shares without any associated costs and at a 6% discount to the market price. The proceeds will be used to reduce our bank debt and to fund our capital expansion. While Pearl has had some difficulties in its early life the Directors are confident the group now has strong underlying performance as demonstrated by the improved results in the September quarter. We also believe there are good opportunities for growth both organic and inorganic. Dr Barry R. Catchlove 19th November 2004