Advantage happily discloses profit

By DANIEL RIORDAN

A bullish Advantage Group has lifted its skirts, revealing for the first time how each of its divisions is performing as it reported its full-year results.

The technology company, which recently joined the NZSE40 index and is preparing to list on the Australian Stock Exchange, yesterday reported a net profit of $6.7 million for the year to June, up from the previous year's $3.4 million and in line with market expectations.

The latest profit figure excluded amortisation costs of $3.7 million.

Revenue was up from $21.2 million to $63.9 million, reflecting the six acquisitions the company made during the year. Earnings per share rose from 7.9c to 11.1c.

Chief executive Greg Cross forecast revenue growth of 72 per cent in the current year, to $110 million, and said profit growth would be in line with that rate of increase.

Most of that growth will come from the company's web-services division. As more institutions invest in the company, the pressure on Advantage for greater financial disclosure has been increasing.

The company's web-services division reported a gross profit of $8.9 million on revenue of $16.5 million; payment solutions a gross profit of $5.8 million on revenue of $12.6 million; retail solutions $11 million on $20.6 million and portable technologies $5.6 million on $13.8 million.

Mr Cross said gross profit measured profit excluding the costs of sales and software development.

It was not possible to break down revenues and profits within divisions, given the integration of the companies they contained.

Web services' revenue was expected to leap from $16.5 million to $46.5 million in the year to June 2001, accounting for 42 per cent of total revenue compared with 26 per cent in the year just finished.

Mr Cross said the company had no plans to pay any dividends, but would continue to reinvest profits. Advantage shares closed 9c down at 297c, but well above its closing low this year of 260c recorded last month.