MFS Expands Tourism Operations In New Zealand

MFS Limited
ABN 90 107 863 436

ASX AND MEDIA ANNOUNCEMENT

April 6, 2005

MFS Expands Tourism Operations In New Zealand

Trans Tasman finance, tourism and funds management group MFS Limited (ASX: MFS) is expanding its New Zealand operations, with newly acquired resort operator BreakFree gaining a presence in South Island adventure capital Queenstown.

BreakFree this week entered into an unconditional contract for the $2.1 million purchase of management letting rights (MLRs) for the new Alpine Village resort in Queenstown.

Stage one of Alpine Village is nearing completion with the first 40 units expected to be operational by next month and the remaining 120 coming on line by May, 2006.

BreakFree also has an unconditional contract for the MLR of The Point Apartments in Queenstown for $1.1 million, with settlement set for June 1, 2005.

The Point is a small boutique apartment complex with 25 luxury 3 and 4 bedroom apartments.

The acquisition of the management rights for the two properties is the first step in BreakFree’s expansion plans across the Tasman, with a further four new MLRs in Queenstown expected to follow this financial year.

It is expected the group will control over 300 units in Queenstown once Alpine Village is completed.

Queenstown is a popular destination for ski holidays in winter, hikers, golfers and trout fishermen in summer, and adventure seekers all year round.

BreakFree General Manager Mark Frawley said BreakFree would use its new association with MFS, which already controls the Mt Hotham and Falls Creek ski resorts in Australia, to grow its resort network substantially across the Tasman and boost occupancy levels in its Queenstown resorts.

“MFS’s proven ability in managing alpine resorts has helped pave the way for us to enter this exciting new expansion phase in New Zealand,’’ Mr Frawley said.

BreakFree and MFS are in the final stages of completing a merger which was announced in January.

As the largest MLR group in Australia, BreakFree presently manages 36 resorts in close to 20 coastal locations from Lorne on Victoria’s Great Ocean Road to Port Douglas in Tropical North Queensland.

The push into Queenstown puts BreakFree well on track to achieve its goal of expanding its apartments under management from more than 3,100 currently to over 4,000 by June 30, 2005.

MFS also recently acquired luxury accommodation group Peppers Leisure Limited which controls approximately 810 rooms in 18 separate luxury resorts and retreats in prime scenic locations in Australia and New Zealand.

MFS Joint Managing Director Phil Adams said BreakFree’s expansion into Queenstown was a prime example of the benefits outlined to shareholders as part of the merger of the two companies.

“We will continue to work towards controlling a diverse range of holiday and accommodation assets covering the beaches, the snow and luxury getaways both in Australia and New Zealand,” he said.

ENDS

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