USC Announces Half Year Result

1 March 2001

Highlights

Profit before tax of $50.0m (up 3,288%)
Net profit after tax of $42.6m (up 2,719%)
Earnings per share of 40.9 cents (up 1,848%)
Book net assets per share of 70.5 cents (up 161%)
Additional interim dividend of 2 cents per share
Result
Utility Services Corporation Limited (USC) today announced a half year profit of $42.6 million which included an abnormal profit from the sale, in December 2000, of MITS, its information technology arm. This result is after a tax expense of $7.4 million, profit before tax was $50 million.

Dividend
Directors advised that, given the good profit performance and prospects for the Company, it was appropriate to reward shareholders with a further unfranked dividend payment of 2 cents per share. 5 cents per share was paid in December 2000 bringing the total half year dividend to 7 cents. The record date for this 2 cent dividend will be 29 March 2001 and payment will be made on or about 5 April 2001.

Directors anticipate that a final dividend will be paid with the amount determined based on the full year result.

Net Asset Backing
Book net assets per share at 31 December 2000 were 70.5 cents. The Directors point out that the value of the book net assets does NOT take into account the value of:

the company’s intellectual property (Percipience and the MOSAIC real time data base),
the people access agreement with Logica which could have a benefit of up to $19.6m over the six year term
the market value of the businesses that USC currently owns.
Taking these items into account the Directors consider the realistic net asset backing of the Company is in excess of $1 per share.

Buy back
In line with the approval at the AGM the company continues to buy back shares in the market at a maximum price of $0.68. To date 1,483,811 shares have been purchased.

Future Strategy
The Company has reclassified its operations into three groups.

E-business. The vision for the Company is to be a leading provider of E-business services and the funds on hand will be used to fulfill this vision. Already two businesses have been earmarked for purchase and final due diligence is being performed. These will be announced as soon as completed. Several other business acquisitions are also being actively investigated.
Utility Services. The former divisions of Infrastructure and Business Services have been integrated into a new group with an annual turnover of approximately $30 million and 300 employees. The group comprises the power distribution, meter reading, industrial design and Vodafone channel manager businesses.
Technology Investments. This group currently holds two major investments.
The investment in Percipience Software, a US company based in Delaware that has the mandate to commercialise the MOSAIC database for E-business applications;
The investment in ILID, the unique remote labelling technology that is working successfully in a major Melbourne K-Mart store and is currently being installed in a further K-Mart store.
The Company is now focused on rebuilding the business and particularly in rounding out its vision for the E-business group.

For further information

Geoff Lord
Executive Chairman
Utility Services Corporation Limited
Tel: (03) 9941 3100