2009 Annual Report

I am pleased to present to you this overview of the operations of Amalgamated Holdings Limited and its controlled entities ("Group") for the year ended 30 June 2009. For a detailed account of the activities of the Group and a review of the performance for the year, I commend to you the Managing Director's Review of Operations by Division contained within this Annual Report.

Results

The Group's normalised net profit, being profit before discontinued operations and individually significant items, was $71.0 million compared to $54.1 million in the previous year, an increase of 31%. The increase in normalised net profit was mostly attributable to the entertainment segment, with an uplift in profit from both the domestic and international businesses.

The total net profit was $69.5 million compared to $99.4 million in the previous year, a decrease of 30%. The prior year's net profit benefited from individually significant items totalling $42.7 million, including the profit on the sale of the Group's previously equity accounted interest in Roadshow Distributors Pty Limited, which was sold to Village Roadshow Limited in August 2007.

The Board continues to carefully monitor domestic and international economic environments and, whilst the ongoing uncertainty within the global economy has cause for concern, there is considerable comfort in acknowledging that the Group has been able to achieve what can only be described as an outstanding result.

Property

As mentioned in previous years, the Group's property portfolio is a significant asset component of the Group. The Group aims to maximise the available returns from the existing property portfolio both through enhanced management and, where appropriate, development.

During the year, the Group added two properties to the Group's portfolio. The Gold Coast International Hotel, a 296 room hotel located in Surfers Paradise, was acquired for the purchase price of $56.5 million in September 2008 and the Rydges Sabaya Resort in Port Douglas, which comprises 104 apartments and associated resort facilities, was acquired for the purchase price of $20.6 million in June 2009. These acquisitions reflect the Group's policy to build the existing property portfolio when suitable opportunities arise.

The Group also continues to explore avenues to unlock the capital potential of certain Group sites. Construction is nearing completion on a seven level commercial office development at the former cinema site in Canberra and the Bass Hill Drive-In site is being sub-divided for residential purposes. Thredbo, the Gowings and State Theatre building sites and selected redundant cinema sites are subject to ongoing assessment to identify appropriate development potential.

Corporate Governance and Board of Directors

The Board is aware of the important role that it must undertake in maintaining and upholding corporate governance standards. The Board will, as has always been the case, endeavour to achieve the highest levels of accountability and transparency in all aspects of its reporting. The 2009 Corporate Governance Statement included within this Annual Report has been expanded to clearly set out the extent to which the Group complies with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations.

Recently, there have been two changes to the composition of the Board. Ms Meredith Hellicar, who had been a Board member since 2003, resigned on 23 April 2009. Mr Peter Coates AO was appointed to the Board on 10 July 2009. Mr Coates' appointment was recommended to the Board by the Nomination and Remuneration Committee, and his breadth of experience, background and skills complement those of the Board.

Dividends and Capital Management

The continuing strength of the earnings capacity of the Group has enabled the Board to recognise shareholders with an increase in the dividend declared for the year. Directors have declared a final dividend of 21 cents per share which, in addition to the 11 cents per share dividend that was paid on 19 March 2009, brings the total dividend paid for the year to 32 cents per share. This equates to an increase of 7% over the previous year's dividend of 30 cents and is the eighth consecutive year of increased total dividend.

In declaring the dividend, the directors continue to be mindful of the current trading environment in which the Group is operating, together with its ongoing cash requirements. The directors are continuing to abide by a dividend policy that will not only address the short term needs of shareholders and the Group, but hopefully be at a level to provide longer term continuity of earnings for both the Group and shareholders.

Capital management has always been, and remains, an important issue for the Board. Capital management initiatives are periodically assessed and have been incorporated into the Group's annual strategic planning review. All capital management initiatives applicable to the Group are assessed in the context of relevant factors such as the Group's longer term strategic plans as well as external conditions, including the capital market environment and debt and equity markets.

The Future

The Board believes the Group is in a strong position at the commencement of the new financial year.

Whilst the market segments in which the various businesses operate will, from time to time, undergo changes, the businesses comprising the Group are robust and, notwithstanding variable operating conditions and external factors, we can assure shareholders that management will continue to pursue opportunities that will allow long term earnings growth for the Group.

Alan G Rydge
Chairman
Amalgamated Holdings Limited