RNS Number:9055R
Home Entertainment Corporation PLC
29 September 2005



                    HOME ENTERTAINMENT CORPORATION PLC

                                 AGM STATEMENT

THURSDAY, 29 September 2005 -- At the annual general meeting of Home
Entertainment Corporation PLC being held today, Chairman Iain Muspratt will make
the following statement to shareholders:

"The overriding objective of Home Entertainment Corporation is to deliver the
best quality, service and range of pre-recorded screen entertainment in whatever
way suits our customers.

"Since HEC floated in 2001, the company has been transformed whilst we have
responded to substantial shifts in the home entertainment market. We are a
substantially larger business, with sales last year up 68% on 4 years
previously.

"HEC is a sales-driven organisation and is no longer the predominantly rental
business it was. The introduction of the DVD format and the growth in our games
business have resulted in a long-term growth in sales, which accounted for 61%
of total revenue last year, and this trend will continue to be reflected in our
revenue mix.

"We have also established new channels to market, responding to the growth in
consumer use of the Internet, as well as launching a new TV shopping channel
last month.

"Over the same period, the number of our stores has increased from 172 to 225
and we have increased the average store size whilst continuing to expand our
product range which now includes music. We have invested heavily, successfully
implementing a new EPOS system throughout the business and combining the
operations at Peterborough at a single location.

"Having established a solid foundation for growth, the management team is now
taking HEC into the next phase of development.

"A key element of our strategy for the future is to have a single brand across
all activities that will put the company at the forefront of the UK's home
entertainment retail and distribution market. Earlier this year, we decided to
focus on the ChoicesUK brand and we are now making good progress with
re-branding the group.

"ChoicesUK, our own retail group, has opened one new store and closed four. Two
stores have traded under the new style for the majority of the period and have
outperformed others. By the end of October, 75 stores will have been rebranded
internally and externally and will be offering substantially increased product
ranges. We have already achieved a better-than-expected market share in the new
Playstation Portable ("PSP") disc format.

"ChoicesUK local, which services the UK convenience store sector, continues to
add new sales business and to increase market share.

"ChoicesUK Direct and ChoicesUK.com have grown overall business during the
period and ChoicesUK.com will launch its new website and a series of other new
activities next month.

"Our relationship with LOVEFiLM, to which we sold our online DVD rental business
at the end of 2004, continues to work well.

"ChoicesUK TV, the new TV shopping channel launched on August 15, is now
broadcasting 24 hours a day, 7 days a week on Sky 697, changing to 670 in late
November. Early trading performance has been as expected and there are signs
that it is benefiting sales in ChoicesUK stores.

"During a period of substantial progress and change, the company has faced a
number of major challenges, the most important being piracy which is plaguing
the entire home entertainment industry worldwide. The negative impact of piracy
on all our activities cannot be understated and the lack of urgency in the
response of the authorities is a cause of continuing frustration to everyone in
our industry.

"Industry-wide initiatives to counter piracy are increasing with Trading
Standards Officers and Police at last beginning to enforce the law. Although
these measures are starting to have some effect against organised crime, the
problem remains serious and continues to affect our business and that of others,
including cinemas.

"We have now completed 16 weeks of our current financial year during which group
sales activities increased by 7%, but video and DVD rental activities declined
by 10.5%. Sales activities now account for 64% of total turnover (2004: 60%)
with video and DVD rental accounting for 36% (2004: 40%). On a like-for-like
basis, DVD sales in our own stores grew by 21%. ChoicesUK Direct sales increased
by 13%. Overall group turnover was flat but, despite that, the net loss for the
period was as anticipated.

"Trading conditions remain very challenging, but the rate at which we are
initiating and embracing change has accelerated and is either on, or ahead of,
schedule. We have no doubt that the remainder of the year will be tough. Our
objective is to be a strong, profitable and growing business and we believe that
we are making good progress towards our aim of providing 'entertainment
shopping' at our customers' convenience to the benefit of shareholders."

END

Contact for further information

Simon Bloomfield or Samantha Kinghorn
Bankside Consultants
Tel: 020 7367 8888 or 07771 758517
e-mail: simon.bloomfield@bankside.com or samantha.kinghorn@bankside.com



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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