Ferrets Stock to Watch: PACIFICA GROUP LIMITED09:50, Monday, 31...

Ferrets Stock to Watch: PACIFICA GROUP LIMITED
09:50, Monday, 31 July 2006

BID A MATTER FOR SHAREHOLDERS TO DECIDE OR IS IT TOO LATE

Sydney - Monday - July 31: (RWE Aust Business News)
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OVERVIEW
********

After the fall in Pacifica Group Ltd's (ASX:PBB) shares on
Friday, chairman Jerry Ellis should tell shareholders the identity of the
"unnamed party" mentioned in its latest, and previous, reports to the
Australian Stock Exchange.

Prior to the start of trading on Friday the company announced
that it had ended discussions with an unnamed party after rejecting a
"conditional and non-binding" proposal of $2.40 per share.

"The proposal was to acquire all Pacifica shares through a scheme
of arrangement, subject to negotiation of an implementation agreement,"
Mr Ellis said.

"The Pacifica Board terminated discussions after reaching the
conclusion that the proposal did not represent an adequate control
premium for the company and the refusal by the party to lift its offer".

What must be upsetting some loyal and long-suffering shareholders
was that the share price gradually slid from $2.85 a day after the
initial announcement on April 10 to as low as $2.08 mid-June.

Already two former major shareholders have cashed in their chips
in apparent exasperation.

Shareholders can judge for themselves why on earth the chairman
didn't come out with all the details in his address to shareholders at
the AGM on May 5, particularly the identity of the bidder which market
talk suggested was Robert Bosch.

SHARE PRICE MOVEMENTS
*********************

Shares of Pacific Group fell 35c to $2.12 on Friday and touched a
low of $2.07. Rolling high for the year has been $2.85 and low $1.51.
Dividend is 7c to yield 3.3 per cent. EPS is 8.6 and p/e ratio 24.65. The
company has 135.6 million shares on issue with a market cap of $335.1
million.

In Friday's statement the company said its half-yearly results
will be announced next Thursday, August 3.

"The half year result will be significantly improved over the
result for the same period in the prior year and broadly in line with the
company's expectations," said managing director John MacKenzie.

On February 3, Pacifica Group announced a profit after tax and
before individually significant items of $24.2 million for the year to
December 31.

This outcome was towards the upper end of the company's
previously advised guidance of $20-25 million before significant items,
and incorporated a modest second-half improvement over the opening six
months of the year.

Profit after significant items was $11.7 million, and is after
$12.5 million of significant post-tax costs.

These comprise $7.2 million of previously announced restructuring
costs, a $2.5 million impairment in relation to the receivables exposure
to Delphi Corporation following its entering Chapter 11 protection in the
US, and a $2.8 million impairment recognised in respect of the 49 per
cent investment in the poorly performing FMP Australia.

Sales of $803.8 million compared to $872.1 million in 2004.

Final dividend of 3c, franked to 34 per cent, which brings the
full-year dividend to 7c.

BACKGROUND
**********

Pacifica listed on the Australian Stock Exchange as Pacific BBA
in 1989 as a manufacturer of brake and clutch systems and components,
industrial plastics and textiles.

The company is an Australian-based, world-leading automotive
brake technology company.

Throughout the 1990's, the company developed as a diversified
manufacturer, adding specialised construction products to the range of
activities.

Pacifica grew organically and through acquisition, expanding its
activities in Australia, Asia, North America and the UK.

When Pacifica first listed, BBA Plc, the UK-based friction
materials company, held around 58 per cent of the ordinary shares.

BBA sold all its equity in the Australian business in 1993 in
order to concentrate its activities in the northern hemisphere.

In 2001, in order to concentrate on those areas in which the
company had strategic and sustainable competitive advantage, Pacifica
announced its intention to transform from a diversified industrial into
an automotive technology company.

As a result, almost all activities other than those based on
superior automotive technology have now been divested.

Today the company, headquartered in Melbourne, employs around
2,000 people in eight countries almost exclusively via its automotive
subsidiary PBR.

PBR is a leading supplier of brake systems and technologies to
several of the world's automotive manufacturers.

It is best known for lightweight calipers, park brakes, drum
brakes and disc rotors.

Many of PBR's products have world patents and are recognised for
their innovative qualities - lightness, superior performance, durability
and longevity.

PBR supplies replacement product to some 45 countries and has
developed performance brake upgrade products for the growing
sports/performance market.

The business has been consistently profitable and now supplies a
high proportion of braking systems on General Motors vehicles built in
North America. The company also supplies Ford in North America and more
recently DaimlerChrysler.

The company's strategy is to place greater focus on the design
and development of products and processes to further enhance its position
as a technology solution provider.

ENDS