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Cadmus Posts Double Revenues and Profits

Continued Export Growth Sees Cadmus Post Double Revenues and Profits

Payment solutions and data management services provider, Cadmus Technology Limited (NZSE: CTL), today announced unaudited operating earnings before interest, tax, depreciation, share of associate Company losses, and amortisation (EBITDA) of $1,056,000, for the half year ended 31 December, 2002 - an increase of 155% on EBITDA of $414,000 for the corresponding period last year.

The result was achieved on sales revenues of $7,610,000, up 117% from $3,508,000 last year. After depreciation, amortisation of goodwill and other non-cash items, the Company recorded a net surplus of $102,000 (2001: -$894,000) Based on current forecasts (with losses carried forward) there is not expected to be a tax liability at year-end.

Cadmus Technology Limited
Condensed statement of financial performance (unaudited) (NZ$000)

2002 2001
Revenues 7,610 3,508
Earnings before interest, tax, depreciation & amortisation (EBITDA) 1,056 414

Net surplus (deficit) before tax 102 (894)

Net cashflow (456) 164
Cash at beginning of half year 141 462
Cash at end of half year 331 416

“The substantial growth in revenues over the first half of the year reflect both the results of our expanding sales into the Australian market and the greater Asia Pacific region, plus the gains we have made in the New Zealand payment solutions market,” says Cadmus Managing Director, Ian Bailey.

“We are increasingly attracting recognition from distributors in markets offshore, where our payment expertise, advanced technologies, product quality and speed to market have allowed us to make a successful entry into high growth market sectors,” adds Mr Bailey.

“With sales increasing substantially over the last six months, we have also seen a rise in accounts receivable and inventory to meet the higher demand, and this has had an impact on cashflows.”

Cadmus’ export business model is based on developing and proving product in New Zealand, manufacturing domestically and distributing internationally via an in-country distribution network.

“Our Company is now New Zealand’s largest exporter of payment solution products,” adds Mr Bailey.

“With current orders on the books for over $5,000,000 and further agreements pending, we are on track with our Asia Pacific expansion strategy, and are well placed for the second half of the year.

“We also expect to benefit from further growth in the Asia Pacific region as the coming changes to the current credit and debit card standards will require either upgrade or replacement of a large number of the 35,000,000 terminals installed world-wide. In this regard Cadmus’ product development, testing and certification programme gives us a clear and immediate advantage.”

Recent highlights and milestones for the period include: Signing a $2.4million deal to supply its new AC4500 G EFTPOS terminals to major Australian corporates, Coles Myers and Caltex Australia.

Securing an agreement to supply an initial 1,000 units of its new Cadmus CP02 SCR pinpads, to Malaysian distributor, eScience Systems Malaysia. Announcement of JBWere New Zealand Private Equity No.1 Fund Limited as a major investor and shareholder.

Certification of the Cadmus product to meet the new “EMV” (Europay, Mastercard and Visa) standard of smart card based systems.

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