on track to realise 3.2 million earnings forecast

31 October 2006
LV LIVING ON TRACK TO REALISE $3.2 MILLION EARNINGS FORECAST
LV Living has signed a heads-of-agreement with Retirement Plus Australia (RPA) to roll out a series of aged care
projects that will pave the way for LV Living to realise its forecast $3.2 million profit for the 2007 financial year.
LV Living Chairman, Norman Anderson-Bell, said “these profit forecasts and their underlying assumptions, have
been verified by independent accounting advisors”.
The RPA agreement involves, he said, a number of initiatives and would result in the company taking a 51 per
cent stake in RPA, a company led by Stan Manning, OAM, one of Australia’s foremost authorities on retirement
living and care and housing of the aged.
RPA have successful, market-leading projects underway at Mango Hill in Brisbane and Tweed Heads on the Gold
Coast.
“RPA has a solid track record and expertise in providing unique and individual community environments for
mature Australians with high quality and flexible services, hospitality and care options,” Mr. Anderson-Bell said.
“Our company’s respective business models provide a strategic fit that will ensure our earnings forecast will be
met, not only this year but in the next forecast year as well”.
“This agreement demonstrates LV Living’s evolution towards a more stable and mature business which will add
real shareholder value and earnings confirmation”.
The key points of the agreement include:
1. Upgrading and management of stage-one of a 50 unit supported living development in
Toowoomba
Through an agreement between LV Living, RPA and Aged Care Properties the upgrade, marketing and
management of stage-one of a supported living residential facility which will provide profits to LV Living of
between $800,000 to $1 million, to be realised by December 2007.
This facility will provide a higher level of care as a supported living community, providing a blend of the best
attributes of both retirement villages and aged care facilities, targeted at the boom in demand for appropriate
housing designed for frailer retirees.
The facility is currently being developed by Aged Care Properties and is due for handover in December 2006.
2. Development of stage-two of a further 50 unit extra-care development in Toowoomba
Toowoomba stage-two, comprising a further 50 units, will be developed during 2007 to the higher specification
level, resulting in a further $900,000 to $1.1 million profit for the company.
The company’s housing division, Lotus Living Homes, exclusively use the unique SEETEK Building System
already being employed in housing developments in regional Queensland. SEETEK delivers building options in
less than half the time of traditional building methods, providing high quality, structurally superior and energy
efficient housing – ideally suited to the Toowoomba project.
LV Living will also retain an ongoing share of the DMF annuity income, anticipated to add a further $5million to
the company’s asset base and revenue well into the future, further strengthening LV Living’s balance sheet and
confirming the $6.5 million 2008 target earnings guide. This, as to underlying profit assumptions, has also been
independently verified.
3. 51 per cent ownership of RPA
Subject to due diligence, LV Living will issue 35 million shares to RPA to acquire a 51 per cent stake in RPA. The
agreement is conditional upon RPA successfully delivering forecast profits of the Toowoomba development as
well as final DA approval on a proposedMaryborough project.
With the completion of this acquisition, LV Living has the capabilities to expand group operations in the high
demand “extra-care” aged living segment, which provides attractive margins that will have long term benefit to the
company.
4. 370 unit retirement aged care development in Maryborough
The site is situated on 15 hectares in a high quality suburb in the centre of Maryborough. The site currently has a
Development Approval for residential housing however RPA are seeking amendment to the current approval to
produce a Seniors Master Planned Community. With the proposed development changes the Maryborough
Seniors Master Planned Community is set to include:
o 150 Self Contained Apartments
o 100 Supported Living Apartments
o 120 Residential Aged Care Facility
o Small Retail Centre
Construction for the Maryborough Seniors Master Planned Community is scheduled to begin in early 2007.
RPA will jointly develop and manage the 370 unit community, forecast to provide $7 million in development profits
over four years and a DMF value of $40 million.
5. $3 million capital raising
Within the next three months, after the appointment of corporate advisers, a $3 million capital raising will be
issued and used to progress the Maryborough (and other) developments.
“This is a genuine turnaround situation for LV Living, mainly evidenced through the close working relationship
between the chief executive officer David Brown and myself” Mr. Anderson-Bell said.
“As chairman I have received substantial shareholder support and endorsement of the company’s direction for
this strategy”.
6. MyMurra Update
On the 24 August 2006 the Directors announced that:
“It is apparent that MyMurra will not deliver completed Development Service Agreements by the deadline
specified under a Transaction Deed”.
This deadline was the 8 September 2006 and it was not met by MyMurra.
Accordingly the matter is now set down for arbitration for the 6 December 2006.
The directors have formed the opinion, on legal advice, that having regard to the history of non-performance by
MyMurra, including as referred to above, LV Living will be seeking that the result of this arbitration process be that
the 20 Million shares held by MyMurra will be cancelled, [adding back to LVL’s capital base $1million] and that LV
Living take steps to recover from MyMurra and its directors any loss and damage suffered by it
7. Further cost reductions
Today the CEO Mr. David Brown offered, and the Company accepted, with immediate effect, a 50% reduction in
his remuneration to $150,000, plus a performance agreement based on net profit results of the SEETEK™
Building System. Mr. Anderson-Bell said “this reflects David’s confidence in the future of the LV Living”.
For more information please call
Norman Anderson-Bell
0429 853 523