Renaissance Reaps $1M A Week In Internet Sales

MEDIACOM-RELEASE-RENAISSANCE-CORPORATION

RENAISSANCE REAPS E-BUSINESS BENEFITS. $1M A WEEK IN INTERNET SALES

Attention business editors

Renaissance Corporation Ltd traded strongly in the six months to 30 June 2000 with its sales up 25% to $73 million and its unaudited net surplus 77 per cent ahead at $626,000.

The Company's Chairman Richard Ebbett says the period was a rewarding one for the company with benefits continuing to flow from the extensive re-engineering of the business over the last three years.

"Renaissance Distribution enjoyed an excellent six months. Sales records were set and productivity targets in the credit department and warehouse operations were exceeded.

"The sales increase of 25% was achieved with operating costs only 2.3% higher. It also came from a largely unchanged product range in a tight IT market. Our share of the distribution market has grown and the brands we represent remain the market leaders."

He says that in late 1999 management was tasked with increasing the percentage of business transacted electronically. This was achieved through an Air New Zealand Air Points program and other initiatives, which resulted in our on-line store, renaissance, handling 30% of our total distribution business in the June 2000 quarter.

"We believe this site to be the largest e-Business site in New Zealand, handling $1 million in sales each week. Electronic transaction processing is set to take a further step forward in August with the commissioning of a translation package which will allow our `back-office' systems to connect directly with those of our major customers.

He says the company is now moving rapidly forward with the process of selling e-Business products and services to outside parties.

"We have now launched these products and services under the Conduit banner and they are continuing to gain wide market acceptance.

"We have demonstrated that our skills in supply chain integration and e-Business processes are applicable to almost any `business to business' situation. We are now providing services to 22 companies through 35 hosted web-sites. Significantly most of our current prospects are from outside the IT industry.

He says revenues from these customers were not significant in the period under review but are expected to increase rapidly over coming months as their sites become fully operational. Staff levels have necessarily been increased, ahead of the emergence of this revenue.

"Conduit's launch will enable us to more effectively pursue e- Business opportunities both in New Zealand and overseas and discussions are currently taking place with prospective business partners in high growth overseas markets.

"The opportunities in this area are unprecedented and have the potential to significantly change your company." (More details on Conduit can be found at www.thewebconduit.com).

He says Renaissance has increased its share of the education IT spend, with Apple Computer in particular recording very strong sales to this sector in the period.

"The decentralised management of New Zealand schools results in a very protracted sales process when new products are introduced to the market.

"The RM suite of educational, network management, and school administration products have now been adapted to meet the needs of the New Zealand curriculum and are performing well in the pilot projects we have installed.

"This product is still in its investment phase and although it recorded a loss in the period, the directors are more confident than ever that this technology, which is a market leader in the United Kingdom, will deliver a positive outcome for shareholders in the near term."

He says the outlook for Renaissance is very positive across all of its divisions and in a time of general business pessimism it is continuing to invest in each of them.

"Our distribution business needs to be bigger, and to have a broader base of products. The growth achieved in the first half may be difficult to sustain in what is expected to be a tough second half.

"Growth by acquisition is seen as being the most effective means of achieving this and we expect to be able to make an announcement in this regard in the near future. Distribution will remain a `numbers' game, but is one in which we have the operational and financial resources to be competitive."

He says the Government is very aware of the role education will play in its objective of `closing the gap' between the various socio-economic groups in New Zealand.

"We would argue that there is an equally important gap, a digital divide, opening up between New Zealand and the more developed countries of the OECD. Our dedicated education staff and range of products places us in a unique position to play a major role in the education initiative to close these gaps."

"Our formal launch of Conduit in June has given us an entity through which we will market our proven, world class business to business solutions.

"We have built up considerable expertise in supply chain integration and business process, and have a range of fully hosted and managed e-Business products that can be readily tailored to customers needs.

In line with last year the directors anticipate paying a dividend at the year end. In the full year to December 31, 1999, the company's audited net surplus was $439,000.

MEDIA RELEASE FROM RENAISSANCE CORPORATION

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