Logistics Dev Regulatory News (LDG)

3 Apr 2006 07:02

Legacy Distribution Group Inc03 April 2006 Embargoed until 0700, 3 April 2006 Legacy Distribution Group Inc. NEW CONTRACT WON WITH LEADING US DISTRIBUTION NETWORK -Commencement of contract with one of world's largest retailers- Legacy Distribution Inc. ("Legacy" or the "the Company") (AIM: LDG), whichfloated on AIM earlier this month and is one of Arizona's leading grocerieswholesalers and distributors, announces that today it has signed an exclusivecontract with the QDN Corporation, a US national wholesale distribution serviceprovider which supplies retailers across the United States, to serve as the solesupplier to 200 new retail locations. QDN CorporationLegacy will now supply customers such as the world's largest bookseller, Barnes& Noble, Host Marriott (through which Legacy will supply one of the largestairport retail businesses in the US, as well as several major concessionaires atnational parks in the Southwest of the US) and Staples across the Arizona,Nevada, New Mexico and California (bordering Arizona) market areas. The majorityof the products Legacy will supply will be candy and snacks, underlining theCompany's strategy of growing its non-tobacco related sales. The QDN Corporation is an electronic network of distributors that provides anational wholesale distribution service throughout the United States. Itcontracts with national chain accounts and then works with a team ofdistributors, such as Legacy, to service the accounts on a sole supplier basisfrom local warehouses. Customers benefit from the ability to receive the costand logistical advantages of dealing with a national distributor, while enjoyinglocal service and regional knowledge. AlbertsonsThe Company also announces that on 5 April 2006, further to the contract winannounced at the time of its flotation, Legacy will begin to supply cigarettesexclusively to all of Albertsons' convenience stores and its OSCO drug stores inthe Arizona and New Mexico area; amounting to over 150 outlets in total. Albertsons is one of the largest retail food and drug chains in the world withover 2,500 stores in 37 US states and the contract was signed just prior to theCompany's flotation. Commenting Frank Patton, chief executive, said: "These contracts are animportant step for Legacy. They validate our strategy of improving ourdistribution and other logistical systems with a view to taking on larger andmore high profile contracts, whilst at the same time delivering an improved andmore flexible service to our smaller customers. These deals are also significantfor the Company in terms of revenue and it is great to be able to announce a newcontract win so soon after our AIM flotation." Jack M. Berdy, Chief Operating Officer of QDN, added: "We at QDN are excited atthe decision of Legacy-Best to become part of the QDN network. We believe thatas market leaders in the Southwest Legacy-Best will allow QDN to better meet theneed of our customers in their markets. We look forward to significant businessopportunities together." For further information:Frank Patton, CEO, Legacy Distribution Inc.: +1 602 344 6750 Richard Sunderland/Rachel Drysdale, Tavistock Communications Limited: 020 7920 3150 Notes to editors: About Legacy Legacy, founded in 1955, has a track record of over 20 years of profitabilityand in August 2004 was acquired by the current new management team and investorgroup. They recognised a significant opportunity to both increase the Group'smarket presence and improve revenues and earnings by introducing a sophisticatedand scaleable management system. These offer a more diverse product range andflexible delivery system, which has enabled the Company to take on largerinstructions, such as the new contracts detailed above. 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 ofNevada and New Mexico. 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 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. Legacy floated on AIM on 16 March 2006 and is currently valued at just over £10million. This information is provided by RNS The company news service from the London Stock Exchange