DATA#3 LIMITED — Interim / Quarterly Report 2005

Mar 9, 2005

for the 6 months to 31 December 2004

"In a relatively buoyant but competitive market, we reported first half earnings at the top end of our advice. The interim dividend represents a 25% increase on the previous corresponding period and we are well placed for another strong year"

The Data^*3 Team

The pictures throughout capture some of the Dataf3 team at work.

In July 2004, Data*3 restructured to enable our six areas of specialisation to operate nationally through our state based offices. These areas of specialisation are:

• 38 Licensing Solutions volume software licensing and software asset management
• ※ Microsoft Application Solutions integrated ebusiness through internet-based solutions
• IT Services consulting, integration and managed services
• Enterprise Infrastructure Solutions high performance solutions for 'data centre' operations
• 38 Server, Networking and Personal Systems competitively priced hardware and software
• 38 Recruitment Solutions contract and permanent IT staff

Each of these areas is focused discretely on developing market leading expertise in technologies from global vendors that are driving the industry, and in services that underpin their specialisation. Their engagement with customers is facilitated by our Customer Solutions Group whose responsibility is to understand our customers' needs and ensure the appropriate expertise is applied in an integrated fashion to meet these needs.

The business is supported by a range of Corporate Services. functions and the company has permanent staff located in Townsville, Rockhampton, Gladstone, Brisbane, Sydney, Canberra, Melbourne and Adelaide.

RAT SYLVING MODERN STATE

Overall, revenues for the first half of the current financial year totalled \$94.9 million compared to \$88.3 million in the corresponding previous half, an increase of 7.5%. Product revenue increased from \$73.1 million to \$76.3 million and services revenue increased from \$14.9 million to \$18.1 million.

The first half product revenue consisted of the following elements:

W Server, Networking and Personal Systems		\$33.5 million
a Software Licensing		$$27.7$ mHm
M Enterprise Infrastructure		\$15.1 million

The 4% increase in total product revenue reflected no change in server, networking and personal systems revenues, very strong growth in licensing revenue and a decline in enterprise. infrastructure revenue (mainly due to timing issues) compared. to the corresponding previous half.

The first half services revenue consisted of the following elements:

			W IT Services										$$10.7$ million
			S Recruitment										\$6.1 million
					M Application services								$$1.3$ million

The 22% increase in services revenue was exceptional and due to growth in general IT services, particularly in outsourcing, and inrecruitment services. This increase offsets a reduction in application services revenues following the divestment or closure of most of our applications business.

As reported previously, contribution at the gross margin level and the relativity of expenses to this are our measures of growth and performance. The overall gross margin percentage remained virtually unchanged during the half, producing an increase over the previous corresponding period of approximately 5% in total gross margin generated. Staff expenses as a percentage of gross margin contribution decreased over the previous year and ended the half ahead of target.

Data'3 Interim Shareholder Report

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Continuing strong cash management resulted in an underlying net operating cash inflow of approximately \$1.5 million for the half. Aged debtors' balances and days' sales outstanding remained on target, and interest bearing debt remained minimal.

Internally, the expenses associated with the Corporate Services functions of the Board, finance and accounting, human resources and organisational development, internal IT systems and corporate marketing increased by approximately 10% over the previous period, as per expectations set in the 2004 Annual Report.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were \$3.102 million compared with \$2.749 million in the previous corresponding period, representing an increase of 13% and consistent with the profit guidance provided at the Annual General Meeting in November 2004.

Net profit before tax was \$2.685 million compared with \$2.330 million in the previous corresponding period, an increase of 15%. Net profit after tax was \$1,802 million as compared to \$1.552 million previously, an increase of 16% and earnings per share were 11.9 cents. A fully franked dividend of 7.5 cents per share has been declared.

Our business model, which focuses on customer acquisition through the specialist areas, introduced a significant number of new customers in the first half including Coca Cola Amatil, DaimlerChrysler, Metcash Trading, Sandvik, Time Warner Entertainment and Virgin Mobile. We will look to grow our commercial relationship with these customers in the second half and bevond. In association with one of our key vendors we signed long-term procurement contracts at Queensland Health and Ergon, underpinning server, networking and personal systems revenues, and a new contract for support services with Queensland Health, underpinning IT Services outsourcing revenues.

We exceeded our profit targets in the first half due to performance in our outsourcing and managed services areas. Pleasingly also, our investment in the technical expertise that will underpin the repositioning we are seeking generated revenues that met our targets. In the second half we will enhance our resourcing model in service delivery to increase services margins in this area.

Data 3 Interim Shareholder Report

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38 "Increased contribution from server, networking and personal systems product sales through the Customer Solutions Group, presuming we can hold our position in Queensland"

We have held our contracted revenue position in Queensland and expect to meet our expectations for the full year.

38 "A further improvement in contribution from Recruitment Solutions given an expansion of the operation outside Queensland and a more buoyant recruitment market"

We are ahead of plan for the first half and anticipate our expectations for the full year will be exceeded.

At the 2004 Annual General Meeting we indicated our expectation of a bias in profitability toward the second half as returns on first half investments flowed. While our levels of investment were in line with plan, we were able to deliver first half performance ahead of plan. For the second half of the financial year we are projecting performance at least in line with the first half.

Financial Summary Manuscript

Half-Year Half-Year Change 2003 to 2004 2003 \$'000 \$'000 2004 Consolidated Statement of Financial Performance For the half-year ended 31 December 2004 Sales revenue $-$ Products 76,331 73,146 $+$ 4% - Services 14,859 $+22%$ 18,116 Other revenue 284 461 Total revenue 94,908 88,289 $+7.5%$ EBITDA [Earnings before interest, tax, depreciation $+ 13%$ and amortisation expense] $3,102$ 2,749 Profit from ordinary activities before income tax expense 2,685 2,330 $+ 15%$ Net profit after income tax 1,802 1,552 $+ 16%$ Earnings per share 11.9 cents 10.5 cents $+ 13%$ Dividends per share 7.5 cents 6.0 cents $+25%$

SHARE REGISTRY ASX Perpetual Registrars Level $22$ 300 Queen Street

BRISBANE QLD 4000

GPO Box 2537 BRISBANE QLD 4001 T. (02) 8280 7454 F. (07) 3228 4999

DATA'S REGISTERED OFFICE Level 5 National Bank House

255 Adelaide Street BRISBANE QLD 4000

ABN NUMBERS

Data^*3 Limited ABN: 31 010 545 267

Data'3 Business Systems Pty Ltd ABN: 31 010 500 642

Gratesand Pty Ltd ABN: 49 002 725 171

ACN NUMBER 010 545 267

Data'3 Interim Shareholder Report

MAR

ASX CODE

DTL

for the 6 months to 31 December 2004

CORPORATE HEAD OFFICE Brisbane Level 2 Data^-3 Centre 80 Jephson Street TOOWONG QLD 4066 P.O. Box 551 INDOOROOPILLY QLD 4068 T: (07) 3371 8088 F: (07) 3371 0188 E: info@data3.com.au W: www.data3.com.au

Paging Service: (07) 3309 1477 WAREHOUSE AND SERVICE CENTRES

Milton

67 Castlemaine Street MILTON QLD 4064 T: (07) 3371 8088 F: (07) 3371 0188

Silverwater Unit 4 8 Millennium Court SILVERWATER NSW 2141 T: (02) 9648 3217 F: (02) 9737 8281

BRANCH OFFICES Sydney Level 2 107 Mount Street NORTH SYDNEY NSW 2060

P.O. Box 426 NORTH SYDNEY NSW 2059 T: (02) 9081 9500 F: (02) 9081 9510 Paging Service: (02) 9962 9339

Melbourne Level 2 785 Toorak Road HAWTHORN EAST VIC 3123 T: (03) 8823 2000 F: (03) 8823 2099

Gladstone

Shop 3 93 Goondoon Street GLADSTONE QLD 4680 T: (07) 4970 0200 F: (07) 4972 4674 Paging Service: (07) 3309 1477