FINANCIAL PERFORMANCE
The Group's surplus after tax was $25.232m a 20.1% increase on last year's surplus. Total operating revenue increased from $350.184m to $377.554m a 7.8% increase.

The New Zealand retail segment achieved a same store sales decrease of 2.5% and an increased segment result of NZ$14.697m up from NZ$13.570m the previous year.

The Australian retail segment achieved same store sales growth of 0.1% in Australian dollars and a segment result of NZ$24.397m compared to NZ$20.723m the previous year.

The Canadian same store sales decreased 1.8% for the year in Canadian dollars. Total sales increased 28.6% to NZ$32.131m with the operating loss in Canada increasing from NZ$5,000 to NZ$44,000. However, the company entered the Ontario market in East Canada in July 2007 and the 5 stores opened in Ontario during the twelve months did not contribute fully for the period. The existing West Canada operation experienced solid growth for the twelve months with an operating profit of C$0.890m compared to C$0.019m for the corresponding period last year.

The directors are pleased with the result for the group which was achieved with a focus on margin management and cost control.

CASH FLOW
The Group has reported net operating cash flows of $7.763m for the twelve months, compared to $41.114m for the previous year. The reduced surplus from operations, compared to last year, is a direct result of increased investment in inventory both for new stores and to fund extended diamond ranges consistent with our brand strategy.

Net cash outflow relating to investing activities was up by $0.777m to $11.638m.

Net cash inflow from financing activities was $4.610m compared to a net outflow of $25.413m last year. The increased net inflow was due to the company increasing borrowings with the bank for expansion and increased inventory ranges.

BALANCE SHEET
Net assets increased from $72.504m at the end of the previous year to $91.001m. Long term borrowings increased to $50.927m from $18.396m last year. The equity ratio at year end was 44.4% compared to 47.0% last year. Total assets increased from $154.340m to $205.035m due principally to inventories increasing by $42.116m. The working capital ratio increased from 1.9:1 last year to 2.6:1 at 30 June 2008.

EVENTS AFTER BALANCE DATE
There were no events after balance sheet date requiring disclosure.

SHAREHOLDERS RETURN

• Declared dividends total 3.2 cents per share up from 2.6 cents in 2006-07.
• Shares traded between a high of $1.22 and a low of $0.72 ending the year at $0.72.
• Return on average equity was 30.9% compared to 28.5% last year.
• Return on average total assets was 14.0% compared to 12.8% last year.