AMBERTECH LIMITED — Annual Report 2021

Aug 25, 2021

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Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000

26 August 2021

RE: PRELIMINARY FINAL REPORT

In accordance with Listing Rule 4.3A, please find following our Appendix 4E for the year ended 30 June 2021.

On Behalf of the Board of Ambertech.

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Robert Glasson Company Secretary Ambertech Limited

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Ambertech Limited and Controlled Entities ACN 079 080 158 Appendix 4E Preliminary Final Report Year Ended 30 June 2021

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Highlights
Revenue	$80.1M
EBIT	$6.4M
NPAT	$5.1M
Final Dividend	1.6 cents

Authorised for immediate release by the Board in accordance with ASX Listing Rule 4.3A.

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Results for Announcement to the Market

For the year ended 30 June 2021

Key Information

The following information is provided to the ASX under listing rule 4.3A.

	2021	2020	Movement	Movement
	$’000	$’000	$’000	%
Revenue from ordinary activities	80,145	58,720	21,425	36.5
Profit after income tax attributable to members	5,090	784	4,306	549.2

Dividends
	Cents Per Share	Franked
Year Ended 30 June 2021:
Final Dividend	1.6	100%
Interim Dividend	1.5	100%
Year Ended 30 June 2020:
Final Dividend	0.3	100%
Final Dividend Dates
Record Date for determining entitlement to the final dividend		20 September 2021
Payment Date of final dividend		5 October 2021
Election Date for determining participation in the DRP		21 September 2021

Dividend Reinvestment Plan (DRP) Details

The Company’s DRP will operate in respect of the final dividend for the year ended 30 June 2021.

Shares will be allotted at a 3% discount to the volume weighted average ex-dividend market price of the shares traded on the record date and the three business days following the record date.

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Results for Announcement to the Market continued

For the year ended 30 June 2021

Key Ratios	2021	2020
Net tangible assets per security	14.6 cents	10.5 cents
Basic Earnings Per Share	6.7 cents	1.4 cents
Diluted Earnings Per Share*	6.6 cents	1.4 cents

• Adjusted for the dilutionary effect of Potential Shares (Options).

Basis of Presentation

The Preliminary Final Report has been prepared in accordance with ASX Listing Rule 4.3A and is based on accounts which are in the process of being audited.

The preliminary financial report has been prepared in accordance with Australian Accounting Standards and Interpretations as issued by the Australian Accounting Standards Board and the Corporations Act 2001 as appropriate for-profit oriented entities. The preliminary financial report does not include all the notes of the type normally included in an annual financial report.

Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2020 and any public pronouncements made by the consolidated entity during the year in accordance with the continuous disclosure requirements of the Corporations Act 2001. Accounting policies have been consistently applied by the entities in the group and are consistent with those applied in the 30 June 2020 annual report.

Further Explanation

Further information on the results of the company follows in the attached commentary.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2021

	2021 $'000 Revenues 80,145 Cost of sales (54,405)
	Gross Profit 25,740
	Other income 178 Employee benefits expense (13,538) Distribution costs (1,664) Marketing costs (350) Premises costs (588) Travel costs (123) Depreciation and amortisation expense (1,569) Finance costs (1,147) Other expenses (1,540) Acquisition and restructure costs (100)
	Profit before income tax 5,299 Income tax (expense)/benefit (209)
	Profit after income tax for the year 5,090
	Other comprehensive income Exchange differences on translation of foreign operations (1)
	Total comprehensive income for theyear 5,089
	Earnings per share Basic earningsper share(cents) 6.7
	Diluted earnings per share (cents) 6.6

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Consolidated Statement of Financial Position

As at 30 June 2021

		2021 $'000 CURRENT ASSETS Cash and cash equivalents 1,788 Trade and other receivables 14,804 Inventories 12,900
		TOTAL CURRENT ASSETS 29,492
		NON-CURRENT ASSETS Plant and equipment 435 Right-of-use asset 5,647 Intangible assets 1,118 Deferred tax assets 3,118
		TOTAL NON-CURRENT ASSETS 10,318
		TOTAL ASSETS 39,810
		CURRENT LIABILITIES Trade and other payables 7,323 Financial liabilities 2,676 Contract liabilities 1,428 Lease liabilities 1,199 Provisions 2,306 Current tax liabilities 703
		TOTAL CURRENT LIABILITIES 15,635
		NON-CURRENT LIABILITIES Contract liabilities 174 Provisions 235 Lease liabilities 8,345 Deferred tax liabilities 9
		TOTAL NON-CURRENT LIABILITIES 8,763
		TOTAL LIABILITIES 24,398
		NET ASSETS 15,412
		EQUITY Share capital 15,947 Reserves (10) Accumulated losses (525)
		TOTAL EQUITY 15,412

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Consolidated Statement of Changes in Equity

For the year ended 30 June 2021

	Economic Entity Balance as at 30 June 2019 Profit for the year Exchange differences on translation of foreign operations Total comprehensive income for the year Transactions with equity holders: Share issue net of transaction costs Costs of share based payments Balance as at 30 June 2020	Economic Entity Balance as at 30 June 2019 Profit for the year Exchange differences on translation of foreign operations Total comprehensive income for the year Transactions with equity holders: Share issue net of transaction costs Costs of share based payments Balance as at 30 June 2020	Economic Entity Balance as at 30 June 2019 Profit for the year Exchange differences on translation of foreign operations Total comprehensive income for the year Transactions with equity holders: Share issue net of transaction costs Costs of share based payments Balance as at 30 June 2020
	Profit for the year
	Exchange differences on translation of
		foreign operations	- (1) - - (1)
	Total comprehensive income for the year
	Transactions with equity holders:
		Share issue net of transaction costs
	Costs of share-based payments
		Dividends	- - - (1,379) (1,379)
	Balance as at 30 June 2021

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Consolidated Statement of Cash Flows

For the year ended 30 June 2021

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Receipts from government grants Payments to suppliers and employees Interest received Interest and other costs of finance paid Goods and services tax remitted Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment Payment for intangible assets Payment for the acquisition of business Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings Repayment of borrowings Repayment of leases Proceeds from share issue Dividends paid Net cash (used in)/ provided by financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Effect of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies at the beginning of the financial year Cash and cash equivalents at end of year

2021 $’000 87,350 1,526 (76,159) 5 (1,147) (6,048) 5,527 (253) (224) - (477) 332 (2,426) (802) 25 (1,379) (4,250)

800 989 (1) 1,788

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Cash Flow Information

For the year ended 30 June 2021

	2021	2020
	$'000	$'000
Cash Flow Information
Cash and cash equivalents
Cash and cash equivalents included in the statement of cash flows are
comprised of the following amounts:
Cash on hand	3	3
At call deposits with financial institutions	1,785	986
Total cash and cash equivalents	1,788	989
Reconciliation of profit after income tax to net cash provided by
operating activities
Profit for the year	5,090	784
Adjustments for:
Depreciation and amortisation	1,569	1,358
Foreign exchange (gain)	(166)	(369)
Net (profit) on sale of plant and equipment	(1)	-
Non-cash share-based payments	-	1
Changes in operating assets and liabilities
Decrease/(Increase) in trade and other receivables	313	(1,978)
(Increase) in prepayments	(690)	(842)
Decrease/(Increase) in inventories	4,011	(803)
(Decrease) in payables	(3,073)	(538)
(Decrease)/Increase in contract liabilities	(1,903)	3,505
Increase in provisions	169	525
Increase in income taxes payable	703	-
(increase) in deferred taxes	(495)	(316)
Net cash provided by operating activities	5,527	1,327
Non-Cash Financing and Investing Activities
There were no non-cash financing or investing activities during the
financial year.

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Further Explanation of the Results

For the year ended 30 June 2021

Key Results Data

A summary of the results compared to the previous corresponding period, along with a half on half year analysis of the trends of the business is presented below:

			Half on	Half			Year on	Year
		1H F2020	2H F2020	1H F2021		2H F2021	FY 2020	FY 2021
		$M	$M		$M	$M	$M	$M
	Revenue	25.6	33.1		38.9	41.2	58.7	80.1
	EBIT	(1.0)	3.0		3.8	2.6	1.9	6.4
	NPBT	(1.8)	2.3		3.2	2.1	0.5	5.3
	Jobkeeper Normalised NPBT	- (1.8)	1.1 1.2		1.1 2.1	- 2.1	1.1 (0.6)	1.1 4.2
	NPAT						0.8	5.1
	Dividend Payout						0.2	2.4
	Payout Ratio						25%	47%

Revenue

The second half of the financial year saw a continuation of the half on half revenue growth trend. The chart below shows the segment contribution to the growth year on year:

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Further Explanation of the Results (continued)

For the year ended 30 June 2021

Revenue (continued)

The major drivers of revenue growth were:

• Full year contribution of the brands acquired from the Hills AV business in December 2019;

• Successful supply of communication solutions to the defence industry;

• Sales to musical instrument retailers with strong on-line offerings during the COVID-19 pandemic; and

• Success of the introduction of Philips branded projectors in the consumer electronics retail market.

The business continues to achieve success across each of the markets for which we source, supply and support technology solutions. Opportunity to grow this revenue organically remains once COVID-19 impacted markets such as live entertainment and tertiary education are able to recover.

Normalised NPBT

The chart below shows half on half profit before tax, as reported, and adjusted for the impact of the JobKeeper program. The chart demonstrates that the business was able to maintain the underlying level of profit in the second half of the financial year.

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Underlying vs Reported NPBT ($M)
1H F2020 2H F2020 1H F2021 2H F2021
4.0
3.0
1.1
2.0 -
1.1
1.0 2.1 2.1
1.2
- -
(1.0) (1.8)
(2.0)
(3.0)
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Further Explanation of the Results (continued)

For the year ended 30 June 2021

NPAT and Dividend Ratio

The reported results for the business have significantly improved since the successful acquisition of the Hills AV division in December 2019. This acquisition was a step in a strategic plan to become leaders in each of the markets in which we operate. The chart below shows the impact that this has had on our ability to leverage the infrastructure the business has in place.

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NPAT ($M)
FY 2019 FY 2020 FY 2021
6.0
5.0
5.1
4.0
3.0
2.0
1.0
0.8
-
(1.0) (1.3)
(2.0)
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The strong result has enabled the Board to reward shareholders with a total dividend payout of 3.1c per share in relation to the year ended 30 June 2021 (final dividend 1.6c). This equates to a payout ratio of 47%, which is in the target range of 45%-55% of net profit after tax. Investors should take note that all accumulated tax losses of the business have now been used and the entity will be back to paying tax in relation to the 2021 financial year.

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Further Explanation of the Results (continued)

For the year ended 30 June 2021

Segment Results

The table and charts below show the contribution from each of the primary business segments to revenue and profits for the year, compared to the prior year.

Segment Revenue

	FY 2021 $'000	FY 2020 $'000		Retail	Retail		Segment Revenu Integrated Solutions	Segment Revenu Integrated Solutions	e	Professional	Professional
Sales
Retail	11,282	9,041					41%	14%
Integrated Solutions	36,298	23,942
Professional	32,565	25,724						45%
Total Sales Revenue	80,145	58,707
Results
Retail	721	(186)
Integrated Solutions	3,548	1,212			Segment Result Contribution
Professional Segment Contribution	4,049 8,318	731 1,757			Retail		Integrated Solutions				Professional
Unallocated	(303)	1,537
EBITDA	8,015	3,294						9%
Depreciation & Amortisation	(1,569)	(1,358)				49%					42%
EBIT	6,446	1,936
Net Interest	(1,147)	(1,467)
NPBT	5,299	469
Income Tax Expense/Benefit	(209)	315
NPAT	5,090	784

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Outlook for the business

Whilst the return of the COVID-19 pandemic in delta form has created some uncertainty and variability of trading results in the short term, the general outlook for the 2022 financial year remains positive. Ambertech is well placed to continue to grow by enhancing results from our existing agencies, and through further exploring acquisition opportunities to cement our place as market leaders in each of our chosen markets.

The diversity of our business, leadership positions in certain segments and financial resources are strengths in the current climate. They position us to capitalise on opportunities that may arise.

Further information on the results will be contained in the Annual Report when it is released, and we will update the market further on results for the new financial year at the company’s Annual General Meeting later in the year.

On behalf of the Board

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Robert Glasson Company Secretary

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For further information, please contact our Company Secretary, Mr Robert Glasson.

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