Logistics Dev Regulatory News (LDG)

9 Aug 2006 07:01

Legacy Distribution Group Inc09 August 2006 9 August 2006 LEGACY DISTRIBUTION GROUP, INC. ("Legacy" or "the Company") TWO MAJOR CONTRACT EXTENSIONS Legacy Distribution Group, Inc. (AIM: LDG), one of Arizona's leading grocerieswholesalers and distributors, announces that it has won further extensions toits contracts to supply two current customers, the QDN Corporation, a USnational wholesale distribution service provider and Albertsons Inc., one of thelargest retail food and drug chains in the world. Both contracts are significantto the Company in terms of revenue going forward. QDN CorporationLegacy will now supply 75 Marriott branded hotel properties in the WesternUnited States with all of their retail product needs. Namely, supplying thehotel gift shops with anything that a consumer/guest would usually purchase,including health and beauty supplies such as aspirin, toothpaste etc. This contract increases Legacy's mandate with QDN by over 30% and follows theannouncement, in April this year, that the Company had won its first contractfrom QDN to supply candy and snacks to over 200 retail locations includingcustomers such as the world's largest bookseller, Barnes & Noble, Host Marriott(airport retail) and Staples. Legacy will be one of only six distributors in theUnited States supplying Marriott locations. Albertsons Inc.In addition to supplying cigarettes to all of Albertsons' retail locations inthe Arizona and New Mexico area, amounting to over 100 outlets in total, Legacywill now also fulfil all of Albertsons' other tobacco needs. This will includeproducts such as loose tobacco, smokeless tobacco and cigars. Albertsons is one of the largest retail food and drug chains in the world withover 2,500 stores in 37 US states and this is the second extension of itscontract with Legacy, since its commencement in March 2006. Commenting Frank Patton, CEO of Legacy, said: "For organisations such asAlbertsons and QDN to have significantly extended their remits with us, soshortly after the initial contract wins, is a strong endorsement of our abilityto fulfil the retail requirements of large high profile clients. Not only will they be significant in terms of revenue, it shows that ourinvestment to improve our distribution and other logistical systems is beginningto bear fruit. It is also a clear demonstration that we are able to deliver onour strategy of increasing the amount of non-tobacco related goods we supply." For further information: Frank Patton Richard Sunderland/Rachel DrysdaleCEO Legacy Distribution Group, Inc. Tavistock Communications+ 1 602 344 6750 + 44 (0) 20 7920 3150 Legacy is primarily engaged in the distribution of tobacco, cigarettes, candyand grocery products to retailers, serving approximately 1,300 customers in over2,200 retail locations. Customers comprise almost all of the major grocerychains in the state of Arizona as well as independent grocery stores, liquorstores, smoke shops, convenience stores, petrol stations and licensed casinosoperated by Native American Tribes. It also serves businesses in the states ofArizona, Nevada and New Mexico. In 2004, the Company was acquired by new management and investors who areimplementing a multi facetted growth strategy which includes: • Focussing on increasing sales of non tobacco related products • Growing sales in convenience stores • Improving sales to its existing customer and channel base • Expanding the business through acquisition • Continuing to improve working capital management and reduce cost • Capitalising on the market conditions created by the 1998 Tobacco Master Settlement Agreement which has significantly reduced licensed distributors. In the year to 31 December 2004 Legacy grew operating profit 31 per cent. to$465,000 (2003: $355,000) on a turnover which had increased to $57.01 million(2003: $51,453 million). The six months to 30 June 2005 already show thebenefits of the Group's shift in operations and reorganisation, with turnoverfor period at $34.05 million and both operating profit and profit after tax at$328,000 and $176,000 respectively. Legacy floated on AIM on 16 March 2006 and is currently valued at just over £9.5million. About QDN Corporation The QDN Corporation has established a network of sales distributors to provide awholesale distribution service throughout the United States. It contracts withnational chain accounts and then works with regional distributors, such asLegacy, to service the accounts on a sole supplier basis from local warehouses.Customers benefit from their ability to receive the cost and logisticaladvantages of dealing with a national distributor, while enjoying local serviceand regional knowledge. About Albertsons Inc. Albertsons is one of the largest retail food and drug chains in the world withover 2,500 stores in 37 US states. Legacy signed its initial contract withAlbertsons just prior to its flotation in March 2006, with supply beginning onthe 5 April 2006. This information is provided by RNS The company news service from the London Stock Exchange