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Advantage’s E-commerce Growth Strategy Delivers

eServices Focus Sees Revenues Up 202%, Earnings Up 97%, EPS up 41%

Auckland – 9 August 2000 – Advantage Group Limited (NZSE: ADV) today announced a strong financial result following its first full year of trading as an e-Commerce business. The company reported normalised profit of $6.7 million for the twelve months ended 30 June 2000, up 97% on profit of $3.1 million for the corresponding period last year. This represents earnings per share of 11.1¢, up 41% on last year’s EPS of 7.9¢ per share.

The profit was achieved on revenues of $63.9 million, up 203% on revenues of $21.2 million for the corresponding period last year.
“While it has been a year of fluctuating fortunes for Internet companies, Advantage continues to deliver revenue growth and profitability despite our rapid growth,” says Chief Executive, Greg Cross.
Condensed statement of financial performance
(audited)
Financial year ended June
(millions)

2000 1999
Total Revenues $63.9 $21.2
Normalised Profit $6.7 $3.4

Revenues and gross profit by division (unaudited)
(millions)

Revenues Gross Profit
Web Services $16.5 $8.9
Payment Solutions $12.6 $5.8
Retail Solutions $20.6 $11
Portable Technologies $13.8 $5.6

Each operating unit made a significant contribution to the result and increased in profitability. Web Services accounted for 26% of revenues; Payment Solutions for 20%; Retail Solutions, 32%; and Portable Technologies, 22%.
“Over the last twelve months we have transformed Advantage from a New Zealand-based EFTPOS company into an end-to-end eServices company with international operations.

Highlights and milestones for the reporting period included:
 The acquisition and successful integration of six businesses including Glazier Systems, WebMasters, Aldridge Punter and Campbell Pope
 The establishment of a strong, experienced executive team to manage the company’s future growth
 A total realignment of the company’s activities around the delivery of eServices. Every business unit in the company now has it as a clear focus to develop eServices capabilities, build eServices platforms, and drive eServices revenues.
 Building Web Services from 3 to over 300 people, and adding $7.1 million of organic revenue growth to the $9.1 million revenue streams of acquired businesses
 Investing $1.8 million in growth-related training and development
“We have often spoken of Advantage supplying the bricks and shovels for the Internet economy,” says Cross. “It is perhaps more illuminating to say we’re building the infrastructure – the ports, railway terminals, airports, interchanges, markets and shopping malls – of the Internet.

“In this environment Advantage is still growing rapidly. Our earnings base is strong and diversified. And above all, we are a profitable e-commerce company, operating in one of the fastest growing sectors of that market.

“What sets Advantage apart is a combination of several factors. Firstly we have scale: we have grown to become one of the largest eServices companies in Asia Pacific. Accompanying that is our end-to-end capability: we are one of the few eServices providers able to deliver the consulting, integration and implementation services necessary to manage large-scale e-commerce projects.
“We currently hold the number one position in every market that we contest,” says Cross.

“Our aim is to consolidate that lead, and our core strategies for achieving this are to realign every operating unit within the company as an eServices business.

“We are converting hardware based businesses into service provision businesses based on our ability to deliver end-to-end e-commerce services. We will improve our customers’ performance, operating integration and efficiency by integrating XML capability throughout all operating units. As an e-commerce infrastructure provider we are delivering Internet solutions one customer at a time.”

Company Background
Advantage Group Limited, an NZSE 40 company, is a leading supplier of eServices throughout the Asia Pacific region. Advantage employs over 400 full time people supporting customers in 15 international locations. For more information, visit http://www.advantagegroup.co.nz.

ENDS

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