DATA#3 LIMITED — Interim / Quarterly Report 2003

Mar 2, 2003

Data^#3 buries "Powerlan issue" and restores dividends

Records strongest ever first half result prior to accounting for 'Powerlan loss'

Monday, 3 March 2003 - The Board of Directors of Data^#3 Limited today announced an interim dividend of 2.5 cents per share following the strongest ever first half EBITDA of \$3.04 million prior to accounting for the loss attributable to the receivership and administration of Powerlan (Old). After taking the loss of \$2,141 million into account. EBITDA for the half was \$899,000 and after tax profit was \$66,000.

"The record underlying result has allowed us to account for the full loss due to the receivership and administration of Powerlan (Qld), our partner in the joint ventures Queensland Desktop Services and Queensland Software Services and still record a profit after tax" said Richard Anderson, Chairman of Data^#3.

"Mitigating against this loss, in the second half we will receive an estimated contribution of \$600,000 as an additional benefit flowing from the contracts previously held by the joint ventures and now held directly by Data*3," he said. "In addition, under the Deed of Company Arrangement struck by Powerlan Limited and the Powerlan (Old) administrators there is potential recovery of between \$700,000 and \$1,000,000 over the next two financial years.

"Reflecting the strong underlying result and the positive outlook that we see for the second half, the Directors are pleased to declare an interim dividend of 2.5 cents per share", Mr Anderson said.

	June to December 2002	June to Decemben 医红色黄质	% Change
Total Revenue	\$84,375,000	\$83,503,000	$+1\%$
Product sales	\$67,279,000	\$70,821,000	- 5%
Services	\$16,954,000	\$12,550,000	+ 35%
Other	\$142,000	\$132,000	$+8%$
Services as % Rev.	20%	15%	$+33%$
Total Operating Expenses	(\$81,948,000)	(\$81,918,000)	$0\%$
Cost of sale-related	(\$64,863,000)	(\$65,166,000)	$-0.5\%$
Internal staff-related	(\$13,169,000)	(\$12,918,000)	$+2\%$
Other	(\$3,916,000)	(\$3,834,000)	$+2\%$
EBITDA before Powerlan loss	\$3,040,000	\$2,460,000	$+24%$
Powerlan Loss	(\$2,141,000)
EBITDA after Powerlan loss	\$899,000	\$2,460,000	- 63%
NPBT and after Powerlan loss	\$366,000	\$1,77,000	- 79%
NPAT and after Powerlan loss	\$66,000	\$1,336,000	- 95%
Net Earnings per share	$0.5$ cents	9.2 cents	- 95%
Dividend per share	2.5 cents	0.0 cents
# staff at period end	380	360	$+5%$

Result Highlights

• Strong performance by the Technology Solutions business particularly in the Queensland operation and in the Enterprise and Licensing businesses and significant improvement over the previous corresponding period from the New South Wales. Victorian and Managed Services businesses
• Improvement in the Applications and Recruitment businesses over the previous corresponding period
• A decline in revenues in the Procurement business primarily due to the uncertainties in the initial stages of the HP Compag merger and due to the inability to operate the QDS joint venture for a period of around 3 months
• Substantial growth in services revenue (+ 35%) and margin over the corresponding previous period
• Substantial reduction in borrowing costs compared to the previous corresponding period
• Continued reduction in cost per transaction in the logistics and warehousing area, and improvements in order turnaround time compared to the previous corresponding period

"Getting the Powerlan issue completely behind us in this first half thereby eliminating it as a distraction for the future was a major achievement," Data*3's Chief Executive Officer, John Grant said. "This would not have been possible without the cooperation and understanding of our major partners - the Queensland Government. Microsoft. Hewlett Packard. Tech Pacific and Ingram Micro and I thank them once again for their support.

"The growth in services revenue, the continuing powerful result in our core technology business and the positive steps to strengthen earnings in under-performing areas of our business give a strong outlook for 2H and augur well for the full year result" Mr Grant said.

-ends-

Media Contact - for questions and clarification please contact:

John Grant Chief Executive Officer Data^#3 Limited Tel: (07) 3371 8088 Mob: (0411) 429 930

Brem Hill Chief Financial Officer Data*3 Limited Tel: (07) 3371 8088 Mob: (0411) 887 182