HANSEN TECHNOLOGIES LIMITED — Annual Report 2003

Sep 11, 2003

ASX RELEASE

12 September 2003

Hansen Technologies positioned for growth

Hansen Technologies Limited (ASX:HSN) today announced its results for the year to 30 June 2003, in which the company completed its transition into a leader in billing systems for telecommunications and utilities companies and a significant provider of IT facilities management. Revenue increased to \$58.7 million from \$46.3 million in the previous vear, and the net loss was \$6.7 million. compared with a loss of \$60.5 million in 2002 when there was a \$52.8 million write-down of goodwill.

The results for the year include restructuring costs of \$1.3 million and a \$1.0 million write-off of development costs on a non-core product, which were expensed in the second half.

Results for year to 30 June	2003 \$A million	2002 \$A million
Sales revenue	58.7	46.3
EBITDA - pre write-down	2.4	2.4
Depreciation and amortisation	(7.1)	(4.3)
EBITA - pre write-down	(4.7)	(1.9)
Goodwill amortisation	(1.1)	(4.0)
EBIT - pre write-down	(5.8)	(5.9)
Net interest income/(expense)	(0.1)	0.0
Profit before tax - pre write-down	(5.9)	(5.9)
Write-down	(1.0)	(55.0)
Tax credit/(expense)	0.2	0.4
Net profit	(6.7)	(60.5)
Cash balance	4.7	4.1

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News Refease Hansen Technologies results for the year to 30 June 2003

Mr Andrew Hansen, managing director, said: 'We achieved a great deal during the year and now are well positioned to win a growing share of the billing market as more countries deregulate their utilities sectors and introduce retail contestability. Australia is a leader in deregulation, and our experience here is opening up considerable opportunities for Hansen overseas.

'During the past two years. Hansen's business has been re-orientated from dependence on two major telecommunications customers and declining revenue from the EIS gas systems business acquired in 1999. These three sources contributed over 65 per cent of the company's revenue in 2001, but less than 20 per cent in 2003; while at the same time we have more than trebled other core billing systems and IT outsourcing revenue to \$45 million.

'We now have a more stable revenue stream, with a higher proportion of annuity revenue. During the year, we renewed significant contracts with long-term, established customers, and we also signed licence agreements with new customers which are leaders in their industries and will vield revenue in future vears.

'We continue to invest in developing our systems to expand our service offering and provide a broader range of data to our customers', said Mr Hansen.

In March, Hansen raised \$3.3 million through a rights issue of 18.6 million shares at 18 cents per share, providing further working capital to support the company's planned growth. At 30 June 2003, the company had cash reserves of \$4.7 million, debt totalling \$0.6 million and equity of \$27.8 million.

Billing Systems Software and Services

Revenue from Hansen's billing systems business was \$29.7 million (2002: \$33.3 million), with the EIS gas systems business contributing \$3.4 million (2002: \$7.1 million), all of which was in the first half.

The industry expertise acquired with the EIS gas systems business has enabled Hansen to develop the gas module for its proprietary Hub billing system which originally was developed for the telecommunications industry. HubFM a managed billing service based on Hub, was chosen by Energy Australia for its entry into the Victorian retail gas and electricity market in May 2003, confirming Hansen as a significant supplier of billing systems to the energy industry.

Also in May, Hansen supplied a bill consolidation system to TXU. In an Australian first, the system enables TXU to provide customers with a single combined account for their electricity and gas usage, and the contract demonstrates Hansen's ability to meet the evolving billing needs of the deregulated energy market. This contract followed a fve year contract, signed in October 2002, to supply TXU with a consumption data management and metering system.

Hub's potential in the water industry was shown in March when Hansen won a contract to supply a customer information and convergent billing system to Australian Inland, which provides energy and water services to customers in New South Wales.

Sales to the telecommunications sector were again constrained as companies limited their investment in new systems. In December, however, Hansen signed a contract with Marshall Islands National Telecommunications Authority to provide a Hub system for mobile, fixed line and internet services.

In July 2003. Telecom New Zealand renewed its contract to use Hansen's workforce management product. ResourcePro, of which a new version is due to be released in September. Revenue from the contract is expected to be NZ\$3 million over the next three vears.

Hansen continued to invest in the development of overseas markets, where there are growing opportunities for its products and services. Distributors were appointed in several Asian countries, including Toshiba in Japan where full contestability will take place by 2005 and a Japanese version of Hub has been developed.

In Europe, contracts were signed with a number of emerging telecommunications companies and there is an increasing interest in Hub. The cost base in the region was reduced through rationalisation of the UK operations and the sale of the company's loss making operation in Stockholm in June.

Hansen North America's revenue increased in \$US, but in \$A was lower at \$5.5 million (2002: \$5.8 million) due to the strengthening \$A. The business, which was cash flow positive, is positioned to expand the market for Hub as the US economy strengthens.

Outsourcing

Hansen's outsourcing and facilities management business, which has data centres in Doncaster, Victoria, and in North Ryde, New South Wales, achieved revenue of \$26.1 million.

The growth of this business and our increasing expertise in the financial services industry have reduced the company's exposure to any future downturn in the utilities and telecommunications markets. The integration of Syntegra's outsourcing division with Hansen's facilities management business in 2002 has been very successful, all contracts planned for renewal during the year were renewed, and a significant new contract to provide host administration and management, disaster recovery and application support services was signed with an international forest products group.

Hansen Technologies Outsourcing is now well established in the middle tier of the market and provides a platform for the expansion of HubFM from Victoria to New South Wales.

Outlook

Mr Hansen said: 'We are confident that our current business model will result in significant revenue growth and improved earnings performance over the coming vears. Long-term contracts with our customers enable us to predict much of our revenue, and we have already locked in significant revenue for 2004, when we will also benefit from cost savings of approximately \$2.0 million following the company's restructuring in 2003.

'Following the end of our revenue from the EIS gas systems business and its successful replacement with annuity business, we expect the company's first half revenue in the current year to be in line with the first half of 2002/3. With our current pipeline of new business prospects and the lower cost base, there are likely to be marked improvements in revenue and earnings in the second half of the year and a stronger result for the full year'.

ends

About Hansen

The Hansen Technologies Group is an information technology systems and services provider. It develops, integrates and supports billing system software for the utilities and telecommunications industries and also provides outsourcing and facilities management services. Founded in 1971, Hansen employs around 400 staff in Australia, the United Kingdom and Europe, the United States, Colombia, Malaysia and New Zealand. Its key clients include Telstra, AGL, Southwestern Bell (US) and British Telecom. It is listed on the ASX (company code HSN).

For further information contact:

Mr Andrew Hansen Managing Director Hansen Technologies Limited (613) 9840 3000

Mr Grant Lister Chief Financial Officer Hansen Technologies Limited (613) 9840 3000