BCA baycorp advantage limited

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    Baycorp Advantage Ltd has provided the following media release:

    SECOND HALF IMPROVEMENT PROVIDES MOMENTUM FOR EARNINGS GROWTH

    SYDNEY, 28 August 2003. Baycorp Advantage Ltd (BCA) today said its improved
    performance in the second half of FY03 helped it deliver a net profit for
    the year ended 30 June 2003 of $18.7 million before significant items and
    amortisation of goodwill.

    Earnings before interest and tax (excluding significant items, write-downs
    and amortisation of goodwill) increased from $15.2 million in the first
    half of the financial year to $21.4 million in the latter half, an
    improvement of 41%. The company is now well-placed to capitalise on its
    market presence and improve revenues and earnings.

    After taking account of significant items ($25.0 million) and the
    amortisation of goodwill ($13.1 million), the company reported a net loss
    of $19.4 million. This compares with a net loss of $300 million in the
    previous period.

    The Group’s credit bureau consolidated its position as the company’s
    powerhouse, accounting for $94.6 million or 52% of total group revenues, at
    an EBITA margin of 44%. The company’s improving position stands to gain
    further momentum from its bureau transformation project – a three-year
    initiative that will greatly increase the size and scale of the range of
    products it offers to customers.

    Notable results for the year include:

    • Business Information Services revenues increased 10% to $94.6
    million, an increase of $9.0 million;
    • Collection Services revenues increased 14% to $38.8 million, an
    increase of $4.7 million;
    • Purchased Debt Ledgers revenues increased 100% to $24.2 million, an
    increase of $12.1 million; and
    • Marketing Solutions revenues increased 27% to $8.8 million, an
    increase of $1.9 million.

    Baycorp Advantage’s Managing Director, Keith McLaughlin, said today that he
    was confident that investors would see the strength of the company’s
    underlying operational performance reflected in the second half,
    underpinned by the core credit bureau and receivables management
    businesses.

    The Group’s operating cash flow remained strong, increasing 43% on the
    previous year to $64.4 million, before one-off items.


    The company’s operating cost to revenue ratio progressively reduced over
    the year, falling from 57% of revenues in the first half, to 51% of
    revenues in the second half. Expectations are that costs will continue to
    decline as a percentage of revenues over the coming year. However, Mr
    McLaughlin said that further reducing costs remained the standout
    challenge.

    Significant items, which have previously been announced, include the
    Killorgan litigation, settlement and costs, executive share plan write-down
    and a number of asset write-downs, company restructuring, integration and
    employee termination costs. Consequently no final dividend has been
    declared for the year.

    Mr McLaughlin said the results were in line with market expectations and
    were underpinned by the company’s ability to maintain growth in both
    revenues and operational cash flows.

    Baycorp Advantage's Chairman, Glenn Barnes said “it is pleasing to see the
    upturn in the company’s performance in the second half of the year, which
    was fuelled by the continued strong performance of the credit bureau and
    improvements in the performance of Receivables Management. The company has
    realigned its businesses and put in place the building blocks to deliver
    sustainable earnings benefits.”
 
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