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Continued trend of positive operating profit

MEDIA RELEASE
FOR IMMEDIATE RELEASE

Cadmus continues trend of positive operating profit

Payment solutions and data management services provider, Cadmus Technology Limited (NZSE: CTL), today announced unaudited operating profit of $1,194,000 for the nine months YTD -- an increase of 177 per cent compared to the corresponding period last year. The result was achieved on sales revenues of $10,537,000, up 122 per cent from $4,749,000 last year.
The result included one-off capital raising costs of $333,000 for the First Secured Notes which closed 31st March, 2003. After Depreciation and Interest, the result was a net deficit of -$259,000.
Cadmus Technology Limited
Condensed statement of financial performance for the nine months ended 31 March, 2003
(unaudited)
(NZ$000)

2003 2002
Revenues 10,537 4,749
Operating Profit 1,194 431
Depreciation, interest and share of associate company losses (1,453) (1,914)
Net deficit (259) (1,483)


“This is a particularly strong result taking the recent holiday period into account -- which is traditionally the slowest sales period for the payment solutions industry,” says Cadmus Managing Director, Ian Bailey. “If retailers haven’t invested in new systems prior to Christmas, they generally wait until they have reviewed holiday trading results before committing to capital expenditure.”
“However, despite this, we have achieved a combined growth in revenues and operating profit -- resulting primarily from expanding our sales into the international market,” adds Bailey.

“The distribution channels we have established over the past 12 months have substantially increased our geographic footprint, while the manufacturing arrangements we have concluded have improved our ability to meet the demand generated.

“That said, we still have considerable scope for further improving our performance in both areas. While much of our focus has been on export sales, we have also increased our segment share in New Zealand, which remains an important market for us, both in terms of the revenue it generates and the role it plays in new product development.

Our business model of developing and proving product in New Zealand, manufacturing domestically and distributing internationally, via an in-country distribution network, continues to prove successful as we move into our next phase of growth.”

Cadmus’ recent announcement of year-on-year forecast growth in the Asia Pacific region is based on changes to the current credit and debit card standards (called EMV – Europay, Mastercard, Visa) which will require businesses, including New Zealand based ones, to either upgrade or replace non-smart card capable terminals.

The total upgrade or replacement market equates to 35,000,000 terminals world-wide, and it is estimated that a large number of these will need to be replaced/upgraded over the next few years.

“We plan on also continuing to innovate and bring new technologies to the point-of-sale process, via our Research and Development division. This includes advanced high-end EFTPOS payment terminals and smart card compliant terminals developed here in New Zealand,” adds Bailey.

“These will be marketed under Cadmus’ export business strategy, providing additional sales growth opportunities for our Company.”


ENDS


About Cadmus
Cadmus Technology Limited (NZSE: CTL) designs, develops and implements innovative point-of-sale payment solutions for merchant businesses worldwide. The company is moving towards being New Zealand’s largest manufacturer and exporter of payment terminals, which it sells into rapidly growing markets internationally. The company offers payment and data management solutions, including EFTPOS and data capture terminals, loyalty programs and customer relationship management solutions. Cadmus also provides end-to-end payment solution and data management services for retail, business payment and transactional processing requirements.
Clients include Bank of New Zealand, TAB, Wellington Combined Taxis, Bartercard Australia Pty Ltd, OnQ Business Systems Pty Ltd, eScience Systems Malaysia and Paysys (M) SDN BHD.

For more information, please visit www.cadmustechnology.com

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