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RMG CEO, Paul Cooney

Wednesday 28th March 2001

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Following is a ShareChat Investor Interview Receivables Management Group (NZSE: RMG) CEO, Paul Cooney. This interview was conducted during February/March 2001 and posted on ShareChat on March 28th, 2001.

Note: Paul Cooney resigned from his position as CEO in May 2001. The company's new CEO is former Baycorp executive, Jim Boult.

  1. SC Investor: What has been the biggest challenge you have faced as CEO so far in getting the company up and running? What will be the biggest challenge in the coming year?

    Paul Cooney The biggest challenge has been the establishment of a management team focused on delivering industry leading outcomes.

    The biggest challenge for the coming year is to deliver the results that the business is capable of while maintaining a focus of continuous improvement in our collection performance.

  2. SC Investor: How big a part do you see the Asian markets playing in RMG's future?

    Paul Cooney Asia will be important as part of our role with Strategic Partners in other parts of the world. They expect RMG to have some representation in the region, however we remain focussed on the opportunities in the Australian and NZ markets as our prime source of growth.

  3. SC Investor: There has been a lot of comparison in New Zealand between RMG and Baycorp. What are the similarities or differences between your two companies and is it fair for shareholders to compare them so closely?

    Paul Cooney Comparisons seem to have focussed on the cost to Baycorp of our activities in NZ. This has misdirected the focus from the message we spread on our establishment last year. Baycorp is a well established and significant operator. In NZ we will take some market share and overtime will establish a business to rival them. At present our NZ revenues are 10% of our Group total and we expect that recent initiatives in the NZ market will grow that revenue base. The comparison of our emerging position in the NZ market is very different to that of the well established market leader.

  4. SC Investor: Do you think Baycorp now view you as a formidable competitor?

    Paul Cooney I would be surprised if they did. While it's clear that they are not ignoring us, we have not yet done any real damage to their revenue base, but this will continue to change.

  5. SC Investor: Baycorp has "web-enabled" their company, taking advantage of many of the benefits the Internet offers. What is RMG doing in this area?

    Paul Cooney RMG has a well defined position in relation to the delivery of our services via the web. We already use the medium to interface with Clients, offer on-line access and reporting via the Web and will continue to innovate in this area.

  6. SC Investor: Getting all of the power companies on board in New Zealand was quite a coup, congratulations. Will you be targeting other similar "nationwide" industries or does Baycorp have them all sewn up?

    Paul Cooney We are marketing to other Groups with similar profiles and have received instrumental attention for the innovation in the Power company initiative. We expect this process will be duplicated in other sectors, and that the dominance of the central database model will consequently be reduced. There remain a number of fertile opportunities for us to duplicate the model.

  7. SC Investor: In view of the fact that RMG appears to be generating a lot of new business and making a number of new acquisitions, the share price has failed to respond, particularly if you compare it to Collection House which has more than trebled since its initial IPO. Where do you see the share price in the next 2/3 years providing the current momentum is maintained?

    Paul Cooney RMG's strategy of acquisition in 2000 has been replaced with a strategy of consolidation and productivity management in 2001. We have assembled a business which has substantial potential for growth both in its own right and as a consequence of market changes. We would expect that the sector will continue to attract growth interest from investors and that RMG will be treated more consistently with the others in sector in the months ahead, following our recently released results for the year to 31/12. The results clear the way for improved performance.

  8. SC Investor: I am concerned at the large number of shares on issue, and the number of script takeovers, which has also put pressure on the share price. Does the company plan some form of consolidation at some future time or will you continue your acquisition drive?

    Paul Cooney While acquisitions are not off the agenda, we will be careful to ensure that add value. A consolidation is being discussed and will be considered after the expiry of the options exercisable in June.

  9. SC Investor: I think that the market is confused about what RMG actually is and how many companies are under its umbrella. What plans are in place to help dispel this confusion?

    Paul Cooney All of the acquired and merged businesses now operate as part of the one group. I am sure once we have the first Annual Report available and we are able to talk to some actual numbers this confusion will dissipate.

  10. SC Investor: One of the issues first talked about when RMG listed was the time it would take to streamline all of RMG's operations. Can you give a progress report on how this is going?

    Paul Cooney All of the acquired and merged businesses are operating as part of one group, in each of our business stream. It is now apparent that the merge process took longer than expected, contributed to by the acquisitions subsequent to the original merger, however the process is almost complete.

    IT integration will be completed by July 01 but all other aspects of the businesses are now integrated.

  11. SC Investor: As a small shareholder in RMG, I think you guys have done a terrific job to date but am worried about the lack of news recently. When is your Full Year report going to be due, and does it look like you will achieve your forecasts?

    Paul Cooney Statutory returns were lodged with the ASX and NZSE on March 16 and updated forecasts for the June half will be provided to all stakeholders in conjunction with a more detailed report with the Annual Report next month. The Board have taken the view to focus on getting our business right, rather than pursuing publicity.

  12. SC Investor: Has RMG been able to spark interest from Australian sharebrokers and fund managers? I never see you mentioned in the Australian press at all (I read the AFR every day).

    Paul Cooney I think it would be fair to say that Bay and Collection House receive similar coverage. The recent success of CLH has however lead a number of brokers to make contact and support is growing.

  13. SC Investor: How many of RMG's shares are currently held in escrow? When are the trading restrictions going to be lifted?

    Paul Cooney Currently 337 million shares are subject to Escrow expiring on June 20, 2001. Discussions are currently being held among some of the Vendors to determine what action they will take on this subject.

  14. SC Investor: Do you expect to start paying dividends any time soon?

    Paul Cooney That decision will be made by the Board based on the information available to it at the time. The dividend policy was not included in the Prospectus, and it is not likely that a dividend will be paid on year 1 results.

  15. SC Investor: If you were to list a couple of reasons for a shareholder to invest in your company against putting their money elsewhere, what would you tell them?

    Paul Cooney The receivables management sector is an emerging one in the Australian and NZ markets. Following many years of unquestioned dominance in NZ, the Baycorp model is being challenged by us. The sector has a strong history in other parts of the world, and the growth prospect in both countries are strong.

    As a product of the merger of our 22 companies, RMG is at its least valuable at the beginning of its business life and comparisons with others in the sector, supports the view that substantial upside is available.

ShareChat thanks Paul Cooney for taking part in this Investor Interview.

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