ASHLEY SERVICES GROUP LIMITED — Interim / Quarterly Report 2021

Feb 24, 2021

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Labour Hire Recruitment |

Training

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FIRST HALF 2021 RESULTS

Thursday 25 February 2021

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Positive trends evident across all financial performance metrics for H1 FY21

• Revenue of $186.0 million, h$2.6m or 1.4% on pcp* (H1 FY21 26wk v H1 FY20 27wk)

• h$8.4m or 4.7% on pcp excl. additional week in prior year ($5.8m)

• EBITDA of $6.8 million, h$0.7m or 12.4% on pcp

• NPAT of $4.2 million, h$0.8m or 23.5% on pcp

• EPS of 2.73 cents per share, up 0.53 cents or h24.0% on pcp

Acquisitions making a positive contribution to our organisation

• CCL Group delivered both Revenue and EBITDA growth, delivering upon our expectations underlying the acquisition business case

• The Instruction Company was acquired mid-Sept with full financial year effect and has delivered a first half in line with expectations

Increased working capital requirement due to significant Action Workforce revenue growth

• Operating Cash Flow an out flow of $7.0 million due primarily to Action Workforce significant revenue growth across November-December (December growth 33%), so a positive story

• Increased Borrowings and reduced Cash balances fund this timing difference

Return to twice yearly dividends

• Delivered on our previously announced intention to return to twice yearly dividend payments

• The interim dividend of 1.8 cents per share represents a level that is 67% of the FY20 full year dividend

Impressive Safety Record continues

• The impressive safety performance of our company continues to represent world’s best practice

* Prior corresponding period (pcp), being H1 FY20

REVENUE FY16 - FY21 (H1)

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400.0
350.0 332.8 336.8
314.7
287.6
300.0 276.9
250.0
200.0 186.0
150.0
100.0
50.0
-
FY16 FY17 FY18 FY19 FY20 H1FY21
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EBITDA FY16 - FY21 (H1)

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12.0
9.7
10.0 9.1
8.0
8.0 6.8
5.7
6.0
4.0
2.0
0.0
FY16 FY17 FY18 FY19 FY20 H1 FY21
(2.0)
(4.0)
(6.0)
(8.0)
(7.7)
(10.0)
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• FY19 decline due to exit of a major, marginally profitable, Action Workforce contract (FY18 $59.2m)

NPAT FY16 - FY21 (H1)

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6.0 5.4
5.1
4.6 4.8
4.2
4.0
2.0
-
FY16 FY17 FY18 FY19 FY20 H1 FY21
-2.0
-4.0
-4.6
-6.0
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EBITDA % FY16 - FY21 (H1)

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4.00% 3.67%
3.17%
2.89%
3.00%
2.40%
1.81%
2.00%
1.00%
0.00%
FY16 FY17 FY18 FY19 FY20 H1 FY21
-1.00%
-2.00%
-3.00%
-2.78%
-4.00%
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• FY16 & FY17 reflects Underlying EBITDA & Underlying NPAT

• Labour Hire H1 FY21 Revenue $181.7m, h$2.7m (1.5%) on pcp (H1 FY21 26wk v H1 FY20 27wk)

• h$8.4m (4.7%) on pcp excl. additional week in prior year ($5.8m)

• Action Workforce, CCL Group and Concept Retail all produced year on year revenue growth

• Concept Engineering and Concept Recruitment Specialists both declined on pcp

• Training H1 FY21 Revenue $4.3m i$0.1m (-2.5%) with $0.8m from The Instruction Company

• Labour Hire H1 FY21 EBITDA $7.5m, h$0.3m with all brands delivering positive EBITDA contributions ▪ CCL Group, Concept Retail and Concept Recruitment Specialists all had EBITDA increases on the pcp

• Action Workforce saw a slight contraction in margin over the half

• Concept Engineering was down on pcp on lower revenues

• Training H1 FY21 EBITDA $1.4m, h$0.6m on pcp, with $0.2m coming from The Instruction Company

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REVENUE by Division FY16 - FY21 (H1)

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400.0
350.0
7.3
6.7
300.0 25.5
8.0
28.3
250.0
200.0 4.3
326.1 329.5
150.0 289.2 279.6
248.6
100.0
181.7
50.0
-
FY16 FY17 FY18 FY19 FY20 H1FY21
Labour Hire Training
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EBITDA by Division FY16 - FY21 (H1)

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15.0
0.0 1.0 0.8
10.0
2.9
1.4
11.8 11.5 12.5
5.0
7.8 7.5
4.9
0.0
FY16 FY17 FY18 FY19 FY20 H1 FY21
(5.0) (6.9) (3.8) (3.4) (3.6) (2.0)
(5.0)
(10.0) (5.7)
(15.0)
Labour Hire Training CCL Corporate
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• FY16 & FY17 reflects Underlying EBITDA

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253 Internal Staff up 43 or 20%

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1
4
1
2
4
1 1
9
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Offices 2 New: Junee & Beresfield 23

366 Customers up 16 or 5%

[Weekly Workers] 5,600[+] up 600 or 12% 2 5.4 Years Tenure Top 20 Customers up 0.8 years Fully Integrated Labour Hire & Training provider

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• Merchandising ▪ Permanent ▪ Construction Staff Recruitment Labour

• ▪ Retail Staff ▪ Fixed term ▪ Specialist Labour ▪ Fitout & Project Contract ▪ Labourers, Trades, Works ▪ Executive Search Plant Operators, ▪ HR & IR Steel Fixers Consulting ▪ Traffic

• ▪ Payrolling Services Management Services

• ▪ Council permits ▪ Authority approvals

• Transport & ▪ Trades Merchandising Logistics ▪ Engineering Staff

• ▪ Production / ▪ Technical ▪ Retail Staff Process ▪ Maintenance ▪ Fitout & Project

• ▪ Manufacturing ▪ Construction Works

• Horticulture

Our Multi Branded Labour Hire division covers all of our Customer’s Temporary Labour & Recruitment needs

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ASH Pty Ltd Australian Institute of (RTO 20749) Vocational Development Pty Ltd

• Business, Business Admin

(RTO 40596)

• Early Childhood Education and Care

• Early Childhood Education and Care

• Individual Support

• Ageing Support

• Individual Support

• Disability

• Ageing Support

• Health Services Assistance

• Disability

• Food Processing

• Health Services Assistance

• Warehousing Operations/Supply Chain Operations

• Building & Construction

• Civil Construction

• Telecommunications

• Civil Construction Plant Operations

  • Technology

• Data & Voice Communications

• Telecommunications Technology

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• Data & Voice Communications

• Foundation Skills

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Vocational Training The Instruction Company Australia Pty Ltd Pty Ltd (RTO 90804) (RTO 20928)

• Rail Infrastructure

• Early Childhood Education and Care

• Track Protection

• Individual Support

• Shunting

• Warehousing ▪ Operations/Supply Chain ▪ Rail Driving Operations ▪ Rail Track Surfacing

• Rail Track Vehicle Driving

• Rail Structures

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• Rail Signalling

• Terminal Train Driving

• Rail Network Control

Tracmin Pty Ltd (RTO 51895)

• Train Driving

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• Civil Construction Plant Operations

• Ageing Support

• ▪ Disability

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Our pre-existing Training division has 16 qualifications on scope, delivered through 4 Registered Training Organisations across three states: Victoria, Western Australia and Queensland The Instruction Company operates 11 qualifications nationally

	Consolidated Statement of Profit or Loss and Other Comprehensive Income	Consolidated Statement of Profit or Loss and Other Comprehensive Income	Consolidated Statement of Profit or Loss and Other Comprehensive Income	Consolidated Statement of Profit or Loss and Other Comprehensive Income	Consolidated Statement of Profit or Loss and Other Comprehensive Income
	For the six months ending 3 January 2021
			6 months to	6 months to
			03-Jan-21	05-Jan-20
			$000	$000
		Revenue	185,977	183,380
		Other income	358	429
		Employment costs	(176,146)	(174,287)
		Depreciation and amortisation expense	(936)	(1,174)
		Finance costs	(324)	(379)
		Other expenses	(3,233)	(3,395)
		Profit before income tax from continuing operations	5,696	4,574
		Income tax expense	(1,459)	(1,143)
		Profit from continuing operations	4,237	3,431
		Profit/ (loss) for the period from discontinued	-	-
		Profit for the period	4,237	3,431
		Other comprehensive income	-	-
		Total comprehensive Income for the period	4,237	3,431
		Total comprehensive income for the half year is
		attributable to:
		Owners of Ashley Services Group Limited	3,924	3,165
		Non-controlling interests	313	266
			4,237	3,431
8

	Consolidated Statement of Financial Position	Consolidated Statement of Financial Position	Consolidated Statement of Financial Position	Consolidated Statement of Financial Position
	As at 3 January 2021
			03-Jan-21	05-Jul-20		03-Jan-21	05-Jul-20
			$000	$000		$000	$000
		Assets			Liabilities
		Current assets			Current liabilities
		Cash and cash equivalents	1,499	8,063	Trade and other payables	24,332	18,517
		Trade and other receivables	45,910	29,418	Borrowings	1,662	-
		Contract assets	697	154	Current tax payable	2,447	1,634
		Other assets	2,586	1,745	Dividends payable	-	400
		Total current assets	50,692	39,380	Lease liabilities	932	723
		Non-current assets			Other liabilities	2,317	1,412
		Property, plant and equipment	1,102	1,060	Provisions	2,944	2,453
		Right-of-use assets	2,002	2,345	Total current liabilities	34,634	25,139
		Deferred tax assets	5,273	4,694	Non-current liabilities
		Intangible assets	10,855	9,322	Borrowings	4,998	-
		Other assets	-	92	Deferred tax liabilities	625	764
		Total non-current assets	19,232	17,513	Lease liabilities	1,110	1,716
		Total assets	69,924	56,893	Other liabilities	1,973	2,762
					Provisions	404	682
					Total non-current liabilities	9,110	5,924
					Total liabilities	43,744	31,063
					Net assets	26,180	25,830
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Purpose and Date: This presentation contains general background information about the activities of Ashley Services Group Limited ABN 92 094 747 510 (“ASH”) as at 25 February 2021 (“Presentation Date”).

No financial advice: The information in this presentation does not constitute financial product advice and does not take into account the investment objectives, financial situation, taxation position or particular needs of any particular person. The information in this presentation should not be relied upon by any person as the sole basis for any decision regarding ASH securities. A person should obtain independent professional advice before making any investment decision regarding ASH securities.

No offer of securities: This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy or sell any ASH securities. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and accordingly any person in such jurisdictions should inform themselves about, any observe and comply with, any such restrictions.

Forward looking statements: This presentation contains certain forward looking statements and comments about future events, conditions and circumstances and expectations about the future financial performance of ASH. Forward looking statements can generally be identified by the use of words such as ‘expect’, ‘expected’, ‘anticipate’, ‘scheduled’, ‘ likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’ and variations of such words and phrases or state that certain actions, events, circumstances or results ‘may, ‘could’, ‘would’, ‘might’, or ‘will’ be taken, occur or be achieved. Indications of, and guidance on, future earnings or financial position or performance are also forward looking statements. All estimates and projections contained in this presentation are illustrative only and ASH’s actual results may be materially affected by changes in economic or other circumstances which cannot be foreseen. The forward looking statements contained in this presentation are not guarantees or predictions of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond ASH’s control and which may cause actual results to differ materially from those expressed in the statements contained in this presentation. Accordingly all forward looking statements contained in this presentation should not be relied on as an indication or guarantee of future performance. Nothing in this presentation is, or should be relied on as, a promise or representation either as to future results or events or as to the reasonableness of any assumption or view expressly or impliedly contained in this presentation.

None of ASH, its directors or officers can give any assurance that the results implied by any of the forward looking financial information contained in this presentation will be achieved. Events and outcomes might differ in quantum and timing from the assumptions with material consequential impacts on such forward looking financial information.

No warranty: None of ASH or its related bodies corporate or any of their directors, officers, employees and advisers makes any representation or warranty (express or implied) in relation to the accuracy and completeness or likelihood of fulfilment of any forward looking statement or information contained in this presentation. None of the forward looking statements contained in this presentation will be updated for events that occur after the Presentation Date. While all due care and attention has been taken in the preparation of this presentation, any person reading this presentation should note that there are inherent risks and uncertainties involved in estimating future financial performance.