AMBERTECH LIMITED — Interim / Quarterly Report 2017

Aug 28, 2017

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Ambertech Limited and Controlled Entities ACN 079 080 158

APPENDIX 4E – PRELIMINARY FINAL REPORT

Year Ended 30 June 2017

For Immediate Release 29 August 2017

Results for Announcement to the Market Further Explanation of the Results Outlook for the business

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

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Results for Announcement to the Market

For the year ended 30 June 2017

Key Information

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

	2017	2016	Movement	(Down)
	$’000	$’000	$’000	%
Revenuefrom ordinary activities	48,176	54,681	(6,505)	(11.9)
(Loss)/Profit after income tax for the period attributable to
members	(633)	237	(870)	(367.1)

Dividends

The Board has announced that no final dividend will be paid in respect of the year ended 30 June 2017.

Dividend History

There were no dividends paid or declared during the year ended 30 June 2017.

	2017	2016
Net Tangible Assetsper security	29.5c	31.7c

Further Explanation of the results follows in the attached commentary.

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2017

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For the year ended 30 June 2017
	2017	2016
	$’000	$’000
Revenue	48,176	54,681
Cost of sales	(32,721)	(38,337)
Gross profit	15,455	16,344
Other income	94	87
Employee benefits expense	(9,110)	(8,910)
Distribution costs	(1,558)	(1,298)
Marketing costs	(1,306)	(1,481)
Premises costs	(1,984)	(1,992)
Depreciation and amortisation expenses	(259)	(266)
Finance costs	(686)	(865)
Travel costs	(465)	(486)
Other costs	(844)	(897)
(Loss)/Profit before income tax expense	(663)	236
Income tax benefit	30	1
(Loss)/Profit for the year	(633)	237
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations	1	64
Total comprehensive income for the year	(632)	301
Earnings per share
Basic earnings per share (cents)	(2.1)	0.8
Diluted earnings per share (cents)	(2.1)	0.8

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes.

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

Consolidated Statementof Financial Position
As at 30 June 2017
	2017	2016
	$’000	$’000
ASSETS
CURRENT ASSETS
Cash and cash equivalents	1,014	948
Trade and other receivables	7,728	8,084
Inventories	12,045	12,942
TOTAL CURRENT ASSETS	20,787	21,974
NON‐CURRENT ASSETS
Plant and equipment	987	1,153
Intangible assets	‐	7
Deferred tax assets	1,202	1,174
TOTAL NON‐CURRENT ASSETS	2,189	2,334
TOTAL ASSETS	22,976	24,308
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	6,600	8,134
Other financial liabilities	4,393	3,534
Provisions	1,614	1,580
TOTAL CURRENT LIABILITIES	12,607	13,248
NON‐CURRENT LIABILITIES
Provisions	143	200
Deferred tax liabilities	18	20
TOTAL NON‐CURRENT LIABILITIES	161	220
TOTAL LIABILITIES	12,768	13,468
NET ASSETS	10,208	10,840
EQUITY
Share capital	11,138	11,138
Reserves	32	31
Accumulated losses	(962)	(329)
TOTAL EQUITY	10,208	10,840

The consolidated statement of financial position is to be read in conjunction with the attached notes.

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

Consolidated Statement of Changes in Equity

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For the year ended 30 June 2017

Consolidated Statementof Changes in Equity For the year ended 30 June 2017
Balance as at 30 June 2015 Loss for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with equity holders: Costs of share based payments Balance as at 30 June 2016 Loss for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with equity holders: Costs of share based payments Balance as at 30 June 2017	Share Capital Foreign Currency Translation Reserve Retained Earnings Total Equity $'000 $'000 $'000 $'000 11,138 (33) (566) 10,539 ‐ ‐ 237 237 ‐ 64 ‐ 64
	‐ 64 237 301 ‐ ‐ ‐ ‐ 11,138 31 (329) 10,840 ‐ ‐ (633) (633) ‐ 1 ‐ 1
	‐ 1 (633) (632) ‐ ‐ ‐ ‐ 11,138 32 (962) 10,208

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

Consolidated statementof Cash Flows
For the year ended 30 June 2017
	2017	2016
	$'000	$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers	52,979	58,891
Payments to suppliers and employees	(49,350)	(53,177)
Interest received	18	17
Interest and other costs of finance paid	(686)	(865)
Income taxes refunded	‐	1
Net goods and services tax remitted	(3,669)	(4,148)
Net cash (used in)/provided by operating activities	(708)	719
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment	(85)	(45)
Net cash (used in) investing activities	(85)	(45)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	893	368
Repayment of borrowings	(34)	(1,600)
Net cash provided by/(used in) financing activities	859	(1,232)
Net increase/(decrease) in cash and cash equivalents held	66	(558)
Cash and cash equivalents at beginning of year	948	1,521
Effect of exchange rate changes on the balance of cash and cash equivalents held in
foreign currencies at the beginning of the financial year	‐	(15)
Cash and cash equivalents at end of year	1,014	948

The consolidated statement of cash flows is to be read in conjunction with the attached notes.

Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

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Notes to the Consolidated Financial Statements

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1. Basis of Preparation

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 2016 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 2016 annual report.

and are consistent with those applied in the 30 June 2016 annual report.
	2017	2016
	$'000	$'000
2. Revenue
Sale of goods and services	48,158	54,664
Interest received	18	17
Total	48,176	54,681
3. Expenses
Additional information on the nature of expenses
Inventories
Cost of sales	32,721	38,337
Movement in provision for inventory obsolescence	131	(35)
Employee benefits expense
Salaries and wages	8,779	8,753
Employee termination expense	331	157
	9,110	8,910
Depreciation and amortization
Plant and equipment	61	62
Furniture and fittings	31	33
Leasehold improvements	144	146
Leased plant and equipment	16	16
Website costs	7	9
	259	266
Bad and doubtful debts	32	128
Rental expense on operating leases
Minimum lease payments	1,463	1,431

Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

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Notes to the Consolidated Financial Statements

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Notes to the Consolidated Financial Statements
	2017	2016
	$’000	$’000
4. Cash Flow Information
(i) Cash and cash equivalents
Cash and cash equivalents included in the statement of cash flows are comprised of
the following amounts:
Cash on hand	4	3
At call deposits with financial institutions	1,010	945
Total cash and cash equivalents	1,014	948
(ii) Reconciliation of loss after income tax to net cash provided by operating activities
(Loss)/Profit for the year	(633)	237
Adjustments for:
Depreciation and amortization	259	266
Net profit on disposal of plant and equipment	(1)	‐
Foreign exchange (gain)	(83)	(87)
Changes in operating assets and liabilities
Decrease/(increase) in trade and other receivables	485	(723)
(Increase)/decrease in prepayments	(23)	18
Decrease in inventories	896	2,054
(Increase) in deferred taxes	(30)	(1)
(Decrease) in payables	(1,555)	(931)
(Decrease) in provisions	(23)	(114)
Net cash (used in)/provided by operating activities	(708)	719

(iii) Non Cash Financing and Investing Activities

There were no non‐cash financing or investing activities during the financial year.

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

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Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements
	2017	2016
5. Earnings Per Share
Basic earnings per share (cents)	(2.1)	0.8
Weighted average number of ordinary shares (number)	30,573,181	30,573,181
Earnings used to calculate basic earnings per share ($,000)	(633)	237
Diluted earnings per share (cents)	(2.1)	0.8
Weighted average number of ordinary shares (number)	30,573,181	30,573,181
Earnings used to calculate diluted earnings per share ($,000)	(633)	237

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

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Further Explanation of the results

For the year ended 30 June 2017

Result for the year

esultfor the year
			Change
	2017	2016	(down)
	$’000	$’000	%
EBIT	5	1,084	(99.5)
Net finance costs	(668)	(848)
(Loss)/Profit before income tax	(663)	236	(381)
Income tax income	30	1
(Loss)/Profit for the year	(633)	237	(367)

The result for the 2017 financial year was a departure from the recent trend of improved EBIT and profit performance. With a reduction in revenue for the year of approx. $6.5M the business reported a loss after tax of $633,000 for the year. Despite these results. The Board believe that the underlying results of the business continue to be on a growth path.

Further explanation of the result is included in the Segment Results below.

Segment Results

egmentResults
	Lifestyle	Entertainment			Professional		New Zealand
	2017	2016	Change	2017	2016	Change	2017	2016	Change
			(down)			(down)			up
	$’000	$’000	%	$’000	$’000	%	$’000	$’000	%
Sales to external customers	25,663	28,563	(10.2)	18,897	22,722	(16.8)	3,598	3,379	6.5
Segment EBIT	208	977	(78.7)	(44)	499	(108.8)	(143)	(256)	44.1

Lifestyle Entertainment

Our Lifestyle Entertainment group reported a reduced EBIT result despite our ongoing successes with products sold into the major retail market. Whilst revenue derived from sales to the major retailers remained strong, our dealer channel in the residential installation market experienced difficult trading conditions. These conditions would appear to be influenced by concerns over domestic housing prices, historically low household disposable income and concerns over international politics.

Whilst the residential installation market was difficult, we are seeing some gains from our introduction of new brands into the commercial installation market and we are confident of further growth in this area in coming reporting periods.

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au

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Professional Segment

Results from our Professional Segment were impacted by reduced sales activity in our media systems group. Projects expected to be completed with a major broadcaster were put on hold and this deferred any revenue and profits from these projects into future reporting periods. Management continues to focus on growth areas including law enforcement, defence and mining with communications systems.

The professional products area continues to be a consistent performer. We have recently added new brands into this group which will drive growth in future periods.

New Zealand

Ambertech’s New Zealand operation continues to be refined in order to return this group to profits. We are beginning to see success from increased support from the Australian sales team in an effort to win back project based business were market share has been lost. Additionally, we continue to review operations for opportunities to reduce costs and achieve improved business efficiency.

Outlook for the business

The Board of Ambertech (“the Board”) and senior management continue to adapt and improve on the strategy for growth in place for the business. The 2017/18 financial year has begun well, with a strong forward order book likely to drive results for the first half. At this early stage the Board is unable to provide guidance on potential results with any certainty, although we expect to be able to update investors by the time of holding the company’s AGM in November.

The Board and management remain focused on utilising the traditional strengths of the Ambertech business as a technical distributor to bring new products and brands to market and to redefine the methods and channels in which the business operates. We are continuing to progress these initiatives which are the key drivers of future revenue and profit growth.

On behalf of the Board of Ambertech Limited

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Robert Glasson

COO, Company Secretary Sydney, 29 August 2017

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Ambertech Limited ACN 079 080 158. Corporate Media Contact: Robert Glasson (02) 9998 7600 email: rglasson@ambertech.com.au web: www.ambertech.com.au or www.amberonline.com.au