The Fijian Holdings Group recorded its highest operating result to date for the year ended June 30 2006. The FHL Group's consolidated profit before tax increased by 52% during the year to $24.392 million and net profit after tax expanded by 37% to $16.990 million. The Holding Company recorded a net profit after tax of $5.773 million in 2006 compared to $4.757 million in 2005. In announcing the result, the FHL Group Chairman Mr Lyle Cupit said that the Group's record performance was driven by growth in revenue, which increased by 26% in 2006 with significant contribution from Fiji Industries Limited (FIL) and Basic Industries Limited (BIL), reflective of the buoyant construction sector. "Merchant Finance & Investment Limited posted another record result and exceeded most finance-industry benchmarks" he said. FHL Group Managing Director, Mr Sitiveni Weleilakeba outlined some of the operating highlights as follows:

• BIL was the key performer for FY06 and was the leading contributor to Group results. Generating a 45% year-on-year growth in operating revenue, BIL posted its highest results to date of $8.4 million profit before tax and $5.5 million net profit after tax.
• Driven by portfolio growth, Merchant Finance Limited continued its' record-breaking performance for the fifth successive year.
• FIL enjoyed the first full year of operation under the new production process, assisting the company to capture the 12% growth in cement production during the year.
• Blue Lagoon Cruises registered a 2% growth in revenue during the year, whilst net earnings fell due to the continuing surge in fuel prices.
• Investment in properties (HFL & FPT) and financial services (FHTML & FHLS) made positive contributions in FY06. Group consolidation also benefited from capital profits realised from the voluntary liquidation of HFL. One-off adjustments were carried for Clariti and Compac, which affected their performance during the year.

According to Mr Weleilakeba, the focus during the last two years has been creating value internally through a combination of the Group Convergence strategy and structural improvements to our key subsidiaries to enhance their longevity. "The outcome of these strategies is bearing the desired organic growth and has put the Group in a stronger platform to pursue a robust acquisition strategy in future", he explained. Looking ahead, Mr Weleilakeba said that the challenge for the FHL Group is to sustain the current performance into the future. "Our portfolio is very sensitive to economic changes and sustaining our growth into an outlook of a weak economic environment would be very challenging," he said. He concluded that FHL would be aggressively looking at new sources of investments such as acquisitions to drive value in the future.

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