Pineapplehead looks firmer

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    Company Announcement Article

    PNH - ASX Company Announcement

    6 May 2002
    Part 1/1
    HOMEX - Melbourne
    Review of direction of company - Update
    In the statement dated 15 March 2002 accompanying the release of
    Pineapplehead's financial results for the 6 months to December 31,
    2001, Directors announced that a review of the future direction of
    the Company was being undertaken and that an announcement of the
    outcome of this review would be made within 4-6 weeks.
    This review is still proceeding incorporating action on a number of
    Since December 2001 the benefits of action taken in the December
    quarter to reduce costs, as outlined in the above statement, have
    made a significant impact on operating performance. Average monthly
    operating costs (excluding depreciation and amortisation) in the
    March 2002 quarter were $250,000 per month lower than average monthly
    operating costs in the 6 months to December 2001.
    In the March 2002 quarter, the Company, as a result of these cost
    reductions and improved sales, recorded a small loss at the EBITDA
    level. Cash balances have fluctuated in the $1.0-$1.5M range over the
    last 3 months. Future Reality showed an improvement in sales to
    levels commensurate with expectations at the time of acquisition.
    This resulted in Future Reality contributing positively to earnings
    in the March quarter.
    We have decided to concentrate the company on its sports strategy -
    ie a provider of graphics and virtual reality applications for
    broadcasting of major sports in Australia and overseas. This was the
    original driver for the listing of the company and whilst growth of
    interactive and digital TV has been much slower than anticipated, we
    still consider there is worthwhile potential for the Company's
    technology in the medium to longer term.
    Over the last 2 years the Company has successfully grown sports
    revenues both domestically and internationally. Major cricket
    contracts have been won with Channel 9 in Australia and Channel 4 in
    the UK, and more recently golf contracts have been won with The Golf
    Channel and NBC in the USA, to add to the golf contract with Channel
    7 in Australia. In addition to the cricket and golf contracts the
    Company has recently procured, horse racing contracts with the Racing
    Network in the UK and with World Series Racing covering horse racing
    events in Asia, Europe, North America and Australia, It has also
    procured a contract for rugby with Channel 7 in Australia in 2002.
    In parallel with our concentration on sports broadcasting we have
    been actively seeking ways to redeploy funds from our other
    businesses. In the short term this is likely to lead to the
    divestment of Future Reality and divestment options are under review.
    We will keep shareholders informed of progress on implementing our
    restructuring plans.
    For further information contact:
    Evan Kourambas
    Pineapplehead Ltd
    Phone (03) 9852 7444

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