CLEAR's results reflect investment

Media statement

Friday, 25 August 2000

CLEAR posts loss but returns to profit ahead of targets

Midway through a major re-positioning of the company, CLEAR Communications has reported a $30 million loss for the year to the end of March 2000, but has returned to profitability ahead of forecasts on the back of cost reductions and strong growth in its eBusiness services.

Chief Executive Tim Cullinane said the result reflected the costs associated with locking in strategies to transform CLEAR from a voice-based company into a leading eBusiness provider.

CLEAR had already returned to profit, said Mr Cullinane.

"We have made the hard decisions, taken action, and we are now seeing the results of that work," he said. "The first quarter of the current financial year was profitable for CLEAR and results continue to be ahead of budget. Significantly, we are seeing growing cashflows and customer numbers from the emerging new revenue streams in local services, data and Internet products."

Revenues from CLEAR's Internet Services had grown by 60 percent year-on-year, while local service line numbers had increased by 120 percent. Reflecting CLEAR's switch from a residential to a business focus, business markets now accounted for 76 percent of revenues. Mr Cullinane also said that restructuring and associated productivity improvements had taken $15 million annually out of the company's costs.

Mr Richard Slogrove, President, Operations of BT Ignite, of which CLEAR is a part, stated that the result was ahead of the targets agreed with CLEAR at the time BT acquired 100 percent of its shares. Mr Slogrove was "pleased with CLEAR's financial turn-around and with the gains in productivity and performance over the past 12 months.

"I am also very impressed with the transition of CLEAR into an online provider. We have seen some significant developments in this area, for example the performance of ZFree, CLEAR's new free Internet Service Provider, which is New Zealand's fast-growing ISP and now has in excess of 150,000 customers," said Mr Slogrove.

CLEAR has a substantial FY01 capital expenditure plan, the key element of which was a (previously announced) further investment of $120million in network rollout. "This will considerably enhance our ability to deliver advanced products and services to our customers," said Mr Cullinane. CLEAR's investments in its network access strategy were already producing dividends, with business customer growth exceeding forecasts.

ENDS

For further information contact Ross Inglis Public Affairs Manager CLEAR Communications Ph: (09) 912 4400 Office Ph: (021) 636 228 Mobile

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