Charlie’s Group Delivers Record Sales

18 July 2007

CHARLIE’S GROUP LIMITED MARKET UPDATE

Charlie’s Group Delivers Record Sales

Listed beverage maker Charlie’s Group Limited (“Charlie’s Group” or the “Group”) has delivered a substantial lift in unaudited gross sales for the year ended 30 June 2007 to a record $26.9 million, an increase of 56.4 percent or $9.7 million on gross sales for the previous 12 months.

The result includes 12 months’ trading from parent company, Charlie’s Group Limited, Charlie’s Trading Company and Phoenix Organics Group. The Group’s previous reporting period was for the 15 months to June 30, 2006. Adjusted sales figures representing Group sales for the 12 months ending 30 June 2006 have been provided for a comparison to the 2007 sales result.

Charlie’s Group will release its final audited results announcement for the year ending 30 June 2007 in mid August together with a full commentary on earnings and developments during the period.

Overview

12 months ended 30 June 2007 Unaudited $000s 12 months ended 30 June 2006 Adjusted $000s 15 months ended June 30, 2006 Audited $000s
Gross sales 26,901 17,195 19,707

The strong increase in sales for 2007 is attributed to rising demand across the Group’s product range under both brands, Charlie’s and Phoenix Organics, as a result of investment in sales systems in the grocery channel, an enhanced product offering in the route channel and distribution growth in export markets.

There continues to be a global trend toward premium beverage brands, with consumers willing to pay for high quality products that are better for them. Both of the Group’s brands have benefited substantially from this trend over the past 12 months and are well placed to capitalize on it in the future in each of the Group’s distribution channels.

Channel update

Grocery channel

The Group’s retail sales in supermarkets experienced growth well ahead of the market. In the chilled juice category, Charlie’s retail sales revenue grew at 32.8% in comparison to growth of the chilled market of 5.6% [Source: Nielsen - MAT periods to 17th June 07]. Charlie’s and Phoenix Organics ambient juice [Excluding deleted lines] retail sales revenue grew at 25.0%, while the total ambient market grew at 3.8%.

The grocery sales team performance has been the driver of success in this channel. A high performance sales team and new systems were put in place in September 06 resulting in improved sales execution. Phoenix Organics is sold in 12.7% more stores than a year ago and is moving into the mainstream beverage aisle in supermarkets, following international trends of organic products becoming more available to everyday consumers.

Route channel

Operating revenue in the route channel grew 17% from the previous 12 month period. This growth has been driven by increased distribution across the Group’s product range as a result of the opening of new accounts and the Group’s ability to offer a full premium beverage range to customers. Growth continues in fridge placements in the New Zealand market with an overall 47% increase.

Export channel

Export markets continued a strong year of growth with gross sales in Australia, the Group’s main export market, growing 36% from the previous 12 month period. The strong performance in Australia was primarily driven by fridge placements in the route trade more than doubling (up 125%).

New Products

The Group continues to build on its success by developing products that enhance the Charlie’s and Phoenix Organics range. In May 2007, the Group launched a new range of drinks, Charlie’s Old Fashioned Quenchers, to meet growing demand from consumers and reflect global trends. Quenchers are manufactured at the Group’s Henderson plant in West Auckland. Quenchers were met with immediate adoption by the market, quickly cementing strong additional sales for the Group and now account for 10.7% of the Charlie’s chilled range in Supermarkets [Source: Nielsen What’s In Store - 4 weeks to 8th July 07].

In June 2007, Charlie’s Group increased the Phoenix Hot Beverage range from 1 to 4 products. Initial customer feedback has been very positive and the Group is confident the new additions will make an important contribution to sales in the current year. The success of the existing Hot Beverage offering, Phoenix Chai, and growing consumer demand for natural coffee alternatives led to the development of the range to compliment the Group’s cold beverage offering, and balance strong summer sales.

Commentary

Chairman Ted van Arkel said the increase in gross sales reflected strong demand for Charlie’s and Phoenix’s brands and underscored the importance of the acquisition of Phoenix Organics Group in 2005 and the Group’s investment for growth strategy.

“We are delighted by the level of brand loyalty demonstrated by consumers and trade clients showing there is strong consumer demand for our premium beverages.”

Chief Executive Stefan Lepionka, said “What can’t be underestimated is the importance of our iconic brands. The latest gross sales figures confirm their value to the group and reflect the company’s decision to invest in our brands as a key part of its investing for growth strategy.”

ENDS

Note to editors: Charlie’s Group Limited is a leading manufacturer, marketer, and distributor of a range of premium juices and beverages under its proprietary brands, Charlie’s and Phoenix Organics. In 2005, Charlie’s Group doubled in size with the acquisition of the Phoenix Organics Group. Charlie’s Group is listed on NZSX market of the New Zealand Exchange.

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