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Advantage Group - Quarterly Report


Advantage Q4 Up 38% On Forecast

Delivers $3.41 Million Downpayment for FY99

Auckland - 31 August 1999 - Advantage Group Limited (NZSE: ADV) today announced a fourth quarter profit of $970,000 on revenues of $5.75 million, a result up 38% on forecast. This compares with a loss of $1.37 million on revenues of $4.8 million for the corresponding period last year. Condensed statement of financial performance (audited)

Fourth quarter ended June (millions)


Total Revenues $5.75 $4.8

Net Profit (Loss) $.97 $(1.37)

"The result was delivered on the back of an outstanding performance from retail software solutions," said CEO Greg Cross. "This division's success in the Australian and South East Asian oil industry was supported by a solid contribution from Advantage's traditional retail equipment division." The 1999 year closed with a profit of $3.41 million on revenues of $21.16 million for the year ended 30 June 1999. This compares with an actual loss of $8.43 million on revenues of $31.4 million the previous year. Condensed statement of financial performance (audited)

Financial year ended June (millions)

1999 1998 Total Revenues $21.16 $31.4 Net Profit (Loss) $3.41 $(8.43)

Downpayment On Future Performance "This is the first full year result for Advantage Group since we began restructuring the business, and it confirms the substantial improvement the company has made in all areas: organisational, operational, structural and financial," said chairman Evan Christian. "Not only has management resurrected an ailing organisation, turned it around and delivered a great result, it has also restructured and repositioned the business, redirected its focus and set it on a new path. When you look at the state the company was in twelve months ago, this is a milestone achievement." "The profit of $3.41 million is only a downpayment on Advantage's future," said Greg Cross. "It does not reflect the potential for growth arising out of our acquisitions of Computer Enhancements, PEC Retail and Glazier Systems." Growth Strategy "Since we began restructuring we have had four quarters of sound profitability, with the last three showing signs of growth. And that's the critical point," said Greg Cross. "Our strategy for Advantage is and will continue to be one of growth. With Internet use lifting e-commerce to unprecedented levels - IDC expects online purchases in business-to-business and business-to-consumer worldwide will grow from $2.6 billion today to exceed $1 trillion in the next three years - we took the strategic decision to ready Advantage for the opportunities in the business-to-business category. "We approached it in two phases. First, we had to get the basics right. We stripped the business back to its essentials, focusing on the balance sheet and exiting non-core businesses and assets. We then moved to leverage our core strengths in the market. By consolidating our market share in hardware operations, historically the backbone of the business, and refocusing our distribution channel, we grew shipments and improved margins. We also began to see some returns on software development, with sales into the Australian and South East Asian oil industry." "From there we focused on returning value to our shareholders by growing the business. Restructuring the company into three interconnected business divisions gave us the opportunity to build on our existing strengths in business-to-business e-commerce, retail solutions, and POS equipment. Thus POS equipment is strengthened by the acquisition of Computer Enhancements, retail solutions by PEC Retail and, most recently, business-to-business e-commerce by Glazier. "Going forward, Advantage remains focused on driving its emergence as an e-commerce company. We are intent on becoming the pre-eminent business-to-business e-commerce solutions company." Company Background Advantage Group Limited, an NZSE listed company, is a leading supplier of e-commerce and transaction processing solutions in New Zealand, Australia and throughout the Southern Hemisphere. The company has three business units: business-to-business e-commerce, retail solutions and point-of-sale equipment. It provides web development capabilities, software development, transaction processing and funds transfer capabilities to enable end-to-end e-commerce solutions.


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