2006 Media Releases

Deutsche Bank has initiated coverage of taxi hire industry stock Cabcharge (ASX: CAB), with a Buy recommendation.

Research analyst, Douglas Farrell initiated coverage with an A$9.50 price target.

Mr Farrell said “Since Cabcharge dominates the taxi industry with a penetration rate of more than 96 percent we believe breaking the monopoly it enjoys will not be an easy task for competitors.

“Over the past 5 years, Cabcharge has enjoyed consistent growth in taxi hire revenue of around 9 percent annually. More recently, revenue growth has been accelerating, driven primarily by growth in third party and bank issued card transactions,” he noted.

Cabcharge is a taxi charge account system facilitating non-cash customer payment for hiring taxis, cars, buses and water taxis, and is the largest domestic player in Australia’s taxi hire industry.

The company derives most of its revenues from a 10% commission paid by customers on non-cash taxi fares, and accordingly Australian taxi meter rates represent a key driver to Cabcharge earnings.

Deutsche Bank forecasts include the following estimates:

• fare increases of 3.2 percent over the next 12 months;
• an increasing proportion of non cash payments in taxis; and
• the near term outlook for high income earners, the group who most use taxi travel,

remaining relatively good given strong labour markets and tax reductions.

• Buy: 10% or more over a 12-month period
• Hold: between -10% and 10% over a 12-month period
• Sell: -10% or worse over a 12-month period

For further information, please call:

Cathy Knezevic 612 8258 2792
Kate Abrahams 612 8258 2416