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Cadmus Reports Earnings Growth

9 February 2005

Cadmus Reports Earnings Growth and Profitability in First Half

Payment solutions company, Cadmus Technology Limited (NZX: CTL), today announced revenues of $9.2 million for the six months ended 31st December 2004, up 60 percent on the previous year. The company delivered unaudited earnings before interest, tax, and depreciation and amortisation (EBITDA) of $1.424M while cashflow from operating activities for the period was $734,000 compared to $38,000 recorded for the same period last year. The net profit after tax for the period was $933,000 compared to the prior year of ($165,000). This result includes abnormal items of $721,000, following the sale of Cadmus EFTPOS rental assets in December 2004.

According to Cadmus Technology, Managing Director, Ian Bailey “Cadmus continues to focus on the research and development of innovative payment technologies to meet niche needs within the international and domestic marketplace. Our ability to rapidly design, manufacture, and bring quality products to market remains one of the company’s key strengths.”

The company is also planning on taking a significant portion of New Zealand’s replacement market of approximately 80,000 EFTPOS terminals that need replacement or upgrade to meet the new EMV compliance standards.

In the international market we have been successful in obtaining new business from Bank of Bendigo and we expect to see further orders from this market over the next few months. We continue to develop this market along with other significant opportunities in other international regions.

In addition to the marketing of its payment products, Cadmus is continuing to develop its Network Systems Division. This division providing on-going, transactional based data processing and network services to users of the both Cadmus and competitors products, provides ongoing annuity type revenue streams for the company. It is planned to further develop this division with the recruitment of new management and operational staff over the next few months. This division already provides corporate services such as bill payment, loyalty programs, third party card processing, network services, and remittance advice processing.

To capture the optimum share of this market, Cadmus moved to strengthen its distribution capability in the Wellington, Auckland and South Island markets with the previously announced acquisitions of majority holdings in various EFTPOS dealerships. Bailey says, “These extensions to our channel complement other initiatives which include: buying back IP (avoiding royalty payments for each unit sold), increasing sales and engineering staff (both domestically and internationally), expanding warehousing space and establishment of our manufacturing facilities. Taken together this establishes a strong foundation for Cadmus to address the wider international opportunity.

In the second half year Cadmus is expected to announce further initiatives that will consolidate its revenues, increase its market reach and provide additional international business.


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