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Commsoft Group Results For Year Ended 30th June 20

COMMSOFT GROUP RESULTS FOR YEAR ENDED 30th JUNE 2002

Second half operating loss reduced to $1.7m; profitability expected for current year

CommSoft Group Ltd (ASX/ NZSE:CSG) reports an operating loss of $5.5m for the year ended 30th June 2002 (2001: $17.3m loss). The operating loss for the 6 months ending 30th June was $1.7m, compared to a loss for the first half of $3.8m. The full result, including adjustments to asset values and provision for surplus property, was $6.4m loss (2001: $21.8m loss). Revenues for the year were $2m, down from $4.6m for the 15 months ended June 2001. (All figures are Australian dollars.)

FY 2002 2001

Operating revenue 2m 4.6m (15 months)

Operating profit (loss) (5.5m) (17.3m)

Profit (loss) (6.4m) (21.8m)

Earnings (loss) per share (7c) (46c)

All figures are unaudited and in Australian dollars.

Speaking about the results, Mark Lunt, Group Managing Director, commented “After last year’s $22m loss, we can report a much improved result this year. Operating losses for the year have been reduced to $5.5m, and the second half operating loss of $1.7m is a big improvement upon the loss of $3.8m for the first half. While the result shows that real progress has been made the Group did not achieve its objective of a break even result for the second half of the year. The dramatic worldwide downturn in demand for information technology products and services meant that – like most others in the sector - our revenues were reduced compared to the equivalent period last year. However, continued focus on the cost base and steady, month on month, increases in revenue have meant that trading results have consistently improved over the past seven months and with a continuation of this trend the Directors expect to report a small profit for the current year.”

In Australia and New Zealand improved management of existing sales channels and the appointment of some high quality new distributors for the Group’s CallMaster and NetMaster products, combined with better management of and service to our key Brains customers, is resulting in improved revenues.

The UK market has in the past been the source of the vast majority of the Group’s problems and its losses. During the year the Group closed its UK office and appointed an exclusive United Kingdom distributor who has subsequently signed an agreement under which the Group will receive a minimum of $750,000 in the current year without incurring any costs in the region.

The Group also closed its subsidiary in South Africa after consistently disappointing results and has appointed a local distributor.

CommSoft Group Chairman Trevor Kennedy commented: “The Group has made great progress and has reduced losses from $22m to $6m despite extremely difficult conditions in the Information Technology sector. We are disappointed that the second half did not produce the break even result we were seeking but believe that a further dramatic reduction in losses and improvement in trading performance was nevertheless a creditable result. Further reductions in the cost base were made in the second half and these combined with modest increases in revenues from New Zealand, Australia and under the new agreement with the Group’s UK distributor are expected to produce a small profit in the current year. This has been a tough year for the Group and we thank our management and staff for their continued hard work and dedication.”

ENDS


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