Strategic Update

RNS Number:5558C
Home Entertainment Corporation PLC
08 May 2006


Press Release
IMMEDIATE, Monday, 8 May 2006

Home Entertainment Corporation PLC- Strategic Update

Since the company announced interim results on 24 January 2006, Home
Entertainment Corporation has traded in line with market expectations, in a
challenging business environment.

So far, in the second half of the current financial year, which includes the
Christmas and Easter periods, the company sales levels have been encouraging,
reflecting the restructuring of the company's product range and re-branding of
ChoicesUK stores, as well as continuing progress in the convenience store sector
and fulfilment activities.

In addition management has acted decisively to eliminate loss-making activities,
reduce costs and improve cashflow through streamlining the organisation.

The latest phase of its central overhead reduction programme has resulted in
annualised savings of approximately #2 million. In addition, the company is in
the process of disposing of the leases of a number of unopened non-trading
stores, expecting, in due course, to achieve a further annualised saving of
approximately #600,000.

ChoicesUK TV, the company's teleshopping business launched in August 2005, has
been closed following a poor sales performance. The Channel is currently being
operated in association with a third party and all related costs will cease by
the end of July 2006. The total losses incurred will be no more than #1.35
million, of which #833,000 was provided in the first half of the year.

The decision has been taken to exploit the existing film rights of Mosaic
Entertainment and cease further programme acquisitions. It now operates as part
of the ChoicesUK Local business which supports convenience stores and other
retailers.

On 13 April 2006, the company acquired the stock and certain tangible assets
from the receiver of Andromeda Entertainment PLC. As a result, the company has
significantly strengthened its position in computer games, particularly in the
fulfilment market with mail order companies.

Following the successful introduction of the ChoicesUK brand to all operating
divisions, the board is recommending that the company name be changed to
ChoicesUK plc.

Anthony Skitt, Chief Executive, said: "As a result of the actions we have taken,
the ChoicesUK business has developed a new momentum, and is in excellent shape
to succeed in a highly competitive market. We will continue to look for ways of
generating cash flow and shareholder value, improving efficiency and boosting
sales through our existing infrastructure."

END

Contacts
Simon Bloomfield
Bankside Consultants (Tel: [phone])




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