On 16 June 2008, destra Corporation Ltd provided market guidance that the company’s estimate of earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended 30 June 2008 (“FY 2008”) would be between $2.5M and $3.5M before impairment charges, which were likely to be material. The company now advises that impairment calculations are substantially complete and will result in impairment charges of approximately $69.5M for FY 2008. These charges have arisen primarily in relation to goodwill in the Entertainment division (comprising the Music and Vision businesses) and include write-downs of other specific assets such as intellectual property and investments. As detailed in the announcement of 16 June, the Entertainment division has been adversely impacted by the current retail environment and a disappointing performance from the theatrical release films business. In addition, the global structural decline in the CD market and maturing DVD market, both of which have negatively impacted the company, have not yet been offset by growth in the corresponding digital businesses. As a result of the FY 2008 performance and the impact of equity issues, the timing of the utilisation of tax losses has been deferred to future years. Accordingly the company will de-recognise prior year tax losses in the accounts for the year ended 30 June 2008. This will result in a non-recurring charge to income tax expense of $3.7M. As announced to the market in April 2008, the board has commissioned a comprehensive review of the company’s strategy and business activities. As a result of this review, the board has determined to exit all of the businesses within the Entertainment division during the current financial year. Further details of the review and future strategy for the company will be contained in the market announcement accompanying the FY 2008 audited results.
Further information: Mr David Gordon Executive Chairman destra Corporation Limited (02) 9270 0800 Richard Wingrove Company Secretary destra Corporation Limited
DES Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
