RNS Number:1321A
Home Entertainment Corporation PLC
25 June 2004





Home Entertainment Corporation ("HEC") - trading update


FRIDAY, 25 June 2004 -- On 27 January 2004, when HEC announced interim results
for the 28-week period ended 13 December 2003, Chairman Iain Muspratt said:


"We believe that underlying demand for both DVD sell thru and rental remains
strong although there is no question that consumers are exercising more caution.
We face the future with confidence, determination and a range of initiatives but
we would benefit from the weather in our favour (i.e. rain) during the critical
trading weeks around Easter and Whitsun".

Trading for the second half of the year started satisfactorily and the company
achieved, for the period overall, sales growth slightly better than in the first
half and a further increase in gross margin. However, the fine, warm spell that
prevailed for most of the last 5 weeks of the year adversely affected rental
revenues.


In addition, the company has incurred start-up costs (which have been fully
written off) of recently re-launched Movie Choices, formerly choicesErental. It
has also incurred duplicated costs associated with the transfer to one location
(to be completed in August 2004) of its warehousing and distribution activities
in Peterborough.


As a consequence of these factors, the company expects profit before tax for the
year ended 5 June 2004 to be approximately #4.7 million which is lower than
current market expectations.


Despite the difficult trading environment, HEC has continued to invest in the
business and to prepare for the next phase of growth, whilst cash flow has
remained strong. Having upgraded its management and financial systems, including
the installation of a new EPOS system across the group, the company is now
embarking on a range of marketing and sales initiatives and has resumed the
expansion of the Choices Video chain.


Management expects to be able to continue its progressive dividend policy and to
propose a final dividend for the year of 4.4 pence per share (2003: 4.2 pence
per share).


The company will announce preliminary results for the year ended 5 June 2004 on
Tuesday, 31 August 2004. There will be an analysts' meeting at 0900hrs on that
day at the offices of Bankside Consultants, 123 Cannon Street, London EC4N 5AU.


ENDS


For further information contact


Simon Bloomfield, Bankside Consultants

Tel: 0207 444 4140 (office) or 07771 758517 (mobile)








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