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Cadmus International Sales Deliver on Q1 Promise

Cadmus International Sales Deliver on Q1 Promise

Growth in both export and domestic markets

Cadmus Technology Limited (NZSE: CTL), today announced unaudited earnings before interest, tax, depreciation, share of associate company losses, and amortisation (EBITDA) of $700,389, based on revenues of $4,092,792 for the three months ended 30 September, 2002. This is after accounting for R & D expenditure ($143,000) and all costs incurred in the marketing of the First Secured Notes for the first quarter.

Taking into account all costs, depreciation and other items the company made a bottom line profit of $236,707 for the quarter.

"This result reflects the initial value of export initiatives undertaken by Cadmus in the 2002 year. The level of positive EBITDA (and EBIT) achieved clearly demonstrates that the Company's growth strategy is being executed effectively and will, over the course of the year, enhance shareholder value in a sustainable manner," says Cadmus Managing Director, Ian Bailey.

Overall, Cadmus recorded sales for Q1 275 percent higher than the corresponding period last year and, combined with current confirmed orders, is set to meet its targets for the financial year.

This level of performance also means the Company is well on track to meet the Full Year $2,900,000 EBITDA target established last month with institutional investor, JB Were New Zealand Private Equity No.1 Fund Limited. The Fund has agreed to increase its shareholding, by way of a further investment of $1,000,000, in the Company from an initial 8.85 percent to 13.8 percent shareholding, subject to Cadmus' meeting this audited EBITDA performance level and share price targets for the FY 2003. "Our aim is to be New Zealand's largest exporter of payment solutions (EFTPOS terminals)," says Mr Bailey. "Last year, we delivered a total of approximately 3,300 units, with the majority destined for the domestic market. However, for this year we have already delivered in excess of 2,300 units, with almost 50 percent of these exported to customers in the Asia Pacific region.

"The Company is focusing on both the domestic and international markets and we see the international market as being the catalyst for our growth. Results to date indicate this strategy is correct and it is expected that this will provide the company with the opportunities it needs to succeed."

"Initially our business focus was restricted to the New Zealand market," adds Mr Bailey. "The export orders won recently in Australia, Malaysia and Singapore have enabled us to expand the total size of opportunities available to us in larger, high growth markets."

While Cadmus' primary focus is the export market, growth achieved there has not been at the expense of domestic market share.

"Domestic sales have also increased substantially. By comparing our own sales volumes with known figures for the total New Zealand market, we estimate that we have increased our share of the domestic market to between 25 percent and 30 percent over the past year - a gain of approximately 10 percent," said Bailey.

The focus on its own product suite has also meant that Cadmus is currently reviewing its relationship with Keycorp. Any change will include the ongoing ability of Cadmus to continue to support its existing customer base for the foreseeable future.

Highlights and milestones for Q1 include the appointment of Keith Phillips as the new Chairman of Cadmus, securing the Company's first Institutional Investor, establishment of higher volume manufacturing facilities and achieving bank certification for its payment terminals with leading banks in Malaysia.

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