Property Transaction Volumes down 20-30%

The Property Services business delivers valuable services to its clients through the quality of its people, industry best practices and industry leading technology. These services include information brokerage, property enquiries and settlement services to leading financial institutions and legal clients. The domestic property and lending markets are a key driver of activity for the business. These markets have experienced a decline in activity as a result of the turbulence in global and local financial markets and broader economic slowdown, where the volume of transactions is, by most measures, 20-30% below activity levels of a year ago. Espreon is not sheltered from the impacts on these markets. The Australian Government has implemented a range of economic stimulus initiatives and the Reserve Bank has lowered interest rates substantially in recent months. In October 2008, housing finance posted its first increase in 9 months, although there remains uncertainty within the community about the future and there appears to be a lack of consumer and business confidence. As we move into 2009 it is hoped confidence begins to turn around. Espreon’s revenues have been impacted by the economic downturn but not to the same extent as the overall market decline. Through this difficult period Espreon has maintained its overall market position and secured new business. It is now well placed to increase its level of business in the event of an improvement in market conditions or a further increased flow of work from clients and improve profitability over the long term. Iain will cover this in more detail shortly. In addition, opportunities exist for the extension of services to current clients and for growth through strategic acquisitions and new product innovation.

Source Espreon Chairman's Address