ENERGY ACTION LIMITED — Annual Report 2021

Aug 30, 2021

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APPENDIX 4E – UNAUDITED PRELIMINARY FINAL REPORT YEAR ENDED 30 JUNE 2021

Energy Action Limited (ASX: EAX) – ACN 137 363 636

1. Results for announcement to the market

	% change	30-Jun-21	30-Jun-20
Revenue from ordinary activities	-27%	14,359,111	19,781,729
Statutory Profit/(Loss) after tax attributable to members	60%	(1,000,258)	(2,486,756)
Operating Profit/(Loss) after tax attributable to members	-1,852%	(419,560)	23,953
Basic earnings per share (Statutory)	61%	(3.71c)	(9.58c)
Diluted earnings per share (Statutory)	61%	(3.71c)	(9.58c)
Basic earnings per share (Operating)	-1784%	(1.55c)	0.09c
Diluted earnings per share (Operating)	-1784%	(1.55c)	0.09c

2. Dividends

	Cents per share	Franked amount per share	Payment date	Record date
2021 final dividend	NIL	NIL

Brief Explanation of Statutory and Operating Profit

Statutory Profit / (Loss) and Statutory Earnings per share are prepared in accordance with Australian Accounting Standards and the Corporations Act.

Statutory Loss after tax of $1,000,258, was improved by 60% as compared to the FY20 Statutory Loss of $2,486,756. FY20 Statutory Loss after tax included $2,510,709 of Significant Items, while FY21 statutory loss include $580,698 of Significant Items. Operating Loss after tax for the year ended 30 June 2021 was $419,560, lower than the prior year Operating Profit after tax of $23,953.

Operating Profit after tax is defined as Statutory Loss excluding significant items and is reported to give information to shareholders that provide a greater understanding of operating performance by removing Significant Items and facilitating a more representative comparison of performance between financial periods.

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3. Net tangible assets

	30 June 2021	30 June 2020
Net tangible assets per share^	$0.04	$0.08*

^ Excludes internally generated software and Right of Use Asset. Net tangible assets totalling $1.2 million as at 30 June 2021 ($2.0 million as at 30 June 2020). *Corrected from prior year published results of ($0.10).

4. Status of audit

This Unaudited Preliminary Final Report is based on the attached Financial Report for the Year ended 30 June 2021 which is in the process of being audited. At the date of this Unaudited Preliminary Financial Report, the Company is not aware of any matter that would impact the reported results or that would lead to the independent audit report being subject to modified opinion, emphasis of matter or other matter paragraph.

Please also refer to the ASX results announcement.

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Unaudited Financial Report for the Year Ended 30 June 2021

Table of Contents

Financial Statements ........................................................................................................................................... 6 Consolidated Statement of Comprehensive Income ........................................................................................... 6 Consolidated Statement of Financial Position ..................................................................................................... 7 Consolidated Statement of Changes in Equity .................................................................................................... 8 Consolidated Statement of Cash Flow ................................................................................................................ 9 Notes to the Financial Statements for year ended 30 June 2021 ..................................................................... 10 Note 1: Revenue, Other Income and Expenses ............................................................................................................ 10 Note 2: Earnings per Share ........................................................................................................................................... 12 Note 3: Cash and Cash Equivalents .............................................................................................................................. 12 Note 4: Other Assets ..................................................................................................................................................... 13 Note 4(a): Right-of-use Assets ...................................................................................................................................... 13 Note 5: Loans and Borrowings ...................................................................................................................................... 14 Note 6: Issued Capital and Reserves ............................................................................................................................ 15 Note 7: Events After the reporting period....................................................................................................................... 15

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Corporate information

ACN: 137 363 636

Directors

Murray Bleach - Non-Executive Chairman Nitin Singhi – Independent Non-Executive Director Paul Meehan – Non-Executive Director Bruce Macfarlane – Non-Executive Director (appointed 25 February 2021)

Company Secretary

Kim Bradley-Ware

Registered Office and principal place of business

Level 5, 56 Station Street Parramatta NSW 2150

Share Register

Link Market Services Limited Level 12 680 George Street Sydney NSW 2000

Energy Action Limited shares (EAX) are listed on the Australian Securities Exchange (ASX)

Solicitors

DLA Piper No 1 Martin Place Sydney NSW 2000

Bankers

Commonwealth Bank of Australia Level 3, 101 George Street Parramatta NSW 2150

Auditors

RSM Australia Partners Level 13, 60 Castlereagh Street Sydney, NSW 2000

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2021 Financial Performance

A reconciliation of the Group’s Statutory NPAT to Operating NPAT and EBITDA is shown in the table below:

		NPAT			EBITDA
$	30-Jun-21	30-Jun-20	Variance	30-Jun-21	30-Jun-20	Variance
Statutory results	(1,000,258)	(2,486,756)	60%	(506,502)	(1,491,768)	66%
Add back Significant Items after tax:
Restructuring cost	333,022	328,265	-1%	450,029	452,780	-1%
Accelerated D&A1	-	148,423	100%	-	-	-
Impairment of Intangibles2	374,524	2,618,365	86%	506,113	3,611,538	86%
Other significant items	14,237	23,394	39%	19,239	32,269	40%
Government Assistances3	(599,664)	(607,738)	-1%	(810,357)	(838,260)	-3%
Onerous contracts & leases4	458,580	-	-100%	619,703	-	-100%
Operating profit after tax	(419,560)	23,953	-1,852%	278,225	1,766,558	-84%

1 Accelerated Depreciation & Amortisation on specific items of Software

2 Impairment of Right of Use Asset (FY21) , customer and contract management platform in CRM (FY20) 3 Jobkeeper, Cashboost & payroll tax relief

4 Onerous Contracts relating to technology infrastructure and rental premises

Revenues

Revenue $	FY21	FY20	vs FY20 $	vs FY20 %
Procurement	5,490,400	6,544,171	-1,053,771	-16%
Managed Services	7,511,386	11,012,682	-3,501,296	-32%
Retail Services	1,334,067	1,339,394	-5,327	-0%
Other	23,258	885,482	-862,224	-97%
Total Revenue	14,359,111	19,781,729	-5,4223,618	-27%

The consolidated unaudited financial statements and notes represent those of Energy Action Limited and its Controlled Entities (the “consolidated group” or “group” or ‘’EAX’’) for the year ended 30 June 2021. The Company did not gain or lose control over any entities during the period.

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Unaudited Financial Statements

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2021

Note	Consolidated Group 2021 2020 $ $	Consolidated Group 2021 2020 $ $
Revenue Total Revenue 1.1 Cost of goods and services sold Employee benefits expense 1.2 Rental expense Travel costs Administration expenses 1.3 Impairment of Intangible Assets Restructuring cost Onerous contracts & leases Depreciation and amortisation expense 1.4 Accelerated Depreciation and amortisation expense 1.5 Financing costs 1.6 Profit/(Loss) before income tax Income tax (expense)/credit Loss for the period attributable to owners of the parent entity Other comprehensive loss net of income tax that may be reclassified subsequently to profit and loss Exchange differences on translation of foreign operations Total comprehensive loss for the period attributable to owners of the parent entity Loss per share: Basic loss per share for the year attributable to ordinary equity holders of the parent 2 Diluted loss per share for the year attributable to ordinary equity holders of the parent 2	14,359,111 14,359,111	19,781,729 19,781,729
	(600,936) (9,318,086) (385,067) (42,884) (2,942,795) (506,113) (450,029) (619,703) (556,645) - (282,617)	(1,573,075) (10,558,047) (709,090) (185,513) (4,151,188) (3,611,538) (485,046) - (1,369,955) (204,722) (339,773)
	(1,345,764) 345,506	(3,406,218) 919,462
	(1,000,258)	(2,486,756)
	(1,654)	(1,152)
	(1,001,913)	(2,487,908)
	Cents (3.71) (3.71)	Cents (9.58) (9.58)

The accompanying notes form part of these financial statements

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Consolidated Statement of Financial Position

For the year ended 30 June 2021

Note	Consolidated Group 2021 2020 $ $
ASSETS CURRENT ASSETS Cash and cash equivalents 3 Trade and other receivables Current Tax Asset Other assets 4 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Property, plant and equipment Other assets 4 Other Intangible assets Deferred tax asset Right of Use Asset 4(a) TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short-term provisions Loans & Borrowings 5 Lease liability TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Trade and other payables Other long-term provisions Loans and Borrowings 5 Deferred tax liability Lease liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 6 Share based payments reserve Retained earnings Dividend profit reserve Foreign currency translation reserve TOTAL EQUITY	2,423,004 3,195,898 1,431,227 2,402,416 152,695 21,450 4,458,581 4,231,544
	8,465,507 9,851,308
	69,141 81,948 101,609 137,057 3,003,618 2,983,425 1,028,219 514,695 281,473 85,989 264,766 640,519
	4,748,826 4,443,633
	13,214,333 14,294,941
	2,308,409 3,354,514 630,228 743,709 230,226 - 447,806 336,896
	3,616,669 4,435,119
	65,692 - 185,042 173,828 6,731,783 6,176,175 - - 133,970 336,126
	7,116,487 6,686,129
	10,733,156 11,121,248
	2,481,177 3,173,693
	6,837,906 6,537,906 175,072 167,832 (11,256,519) (10,256,261) 6,723,064 6,723,064 1,654 1,152
	2,481,177 3,173,693

The accompanying notes form part of these financial statements

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Consolidated Statement of Changes in Equity

For the year ended 30 June 2021

Consolidated Group Note	Ordinary Issued Share Capital $	Share Based Payments Reserve Retained Earnings Dividend Profit Reserve Foreign currency translation reserve Interest Swap Reserve $ $ $ $	Total $
Balance at 30 June 2019 Profit/(Loss) attributable to owners of parent entity Foreign currency translation reserve Total comprehensive income Dividend profit reserve Interest rate hedging reserve Share based payments Dividends paid or provided for Balance at 30 June 2020 Balance at 30 June 2020 Profit/(Loss) attributable to owners of parent entity Foreign currency translation reserve Total comprehensive income Issue of share capital Dividend profit reserve Interest rate hedging reserve Share based payments Dividends paid or provided for Balance at 30 June 2021	6,537,906 - -	170,833 (1,006,800) - 1,430 (9,610) - (2,486,756) - - - - (39,641) - (278) -	5,693,759 (2,486,756) (39,918)
	- - - - -	- (2,526,397) - (278) - - (6,723,064) 6,723,064 - - - - - - 9,610 (3,001) - - - - - - - - -	(2,526,674) - 9,610 (3,001) -
	6,537,906	167,832 (10,256,261) 6,723,064 1,152 -	3,173,693
	6,537,906 - -	167,832 (10,256,261) 6,723,064 1,152 - - (1,000,258) - - - - - - 502 -	3,173,693 (1,000,258) (502)
	- 300,000 - - - -	- (1,000,258) - 502 - - - - - - - - - - - - - - - - 7,240 - - - - - - - - -	(999,756) 300,000 - - 7,240 -
	6,837,906	175,072 (11,256,519) 6,723,064 1,654 -	2,481,177

The accompanying notes form part of these financial statements

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Consolidated Statement of Cash Flow

For the year ended 30 June 2021

Note	Consolidated Group 2021 2020 $ $*	Consolidated Group 2021 2020 $ $*
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Restructuring costs Government assistance Onerous Contracts Interest received Interest paid Income tax (paid)/refunded Net cash (used in) / provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Software development costs Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Capital raised 6 Repayment of Lease Liability Bank loan drawn down/(repayment) Net cash (used in) / provided by financing activities Net (decrease)/increase in cash held Cash (including restricted cash) at beginning of financial year Cash (including restricted cash) at end of financial year 3	16,811,386 (17,662,305) (225,973) 1,103,500 (407,470) 1,065 (208,324) 18,777	22,964,303 (19,212,767) (619,568) 545,117 - 4,611 (316,265) 18,517
	(569,344)	3,383,948
	(69,299) (757,128)	(36,599) (1,866,030)
	(826,427)	(1,902,629)
	300,000 (477,123) 800,000	- (370,215) 476,279
	622,877	106,064
	(772,894) 3,195,898	1,587,383 1,608,515
	2,423,004	3,195,898

The accompanying notes form part of these financial statement

*restated

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Notes to the Financial Statements for year ended 30 June 2021

Note 1: Revenue, Other Income and Expenses

Year-ended 30-Jun-21	Procurement $	Managed Service Retail services Others $ $ $	Total $
Revenue from Contract with Customer Year-ended 30-Jun-20	5,490,400 5,490,400	7,511,386 1,334,067 23,258 7,511,386 1,334,067 23,258	14,359,111 14,359,111
	Procurement $	Managed Service Retail services Others $ $ $	Total $
Revenue from Contract with Customer	6,544,171	11,012,682 1,339,394 885,482	19,781,729
	6,544,171	11,012,682 1,339,394 885,482	19,781,729

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Note 1: Revenue, Other Income and Expenses (continued)

Note 1: Revenue, Other Income and Expenses (continued)
Note	Consolidated Group 2021 2020 $ $
1.2 Employee benefits Salaries Commissions Superannuation Share based payment expenses Other Government assistance Total Employment benefits 1.3 Administrative costs Accounting, audit and tax fees Advertising Legal and professional fees Telephone and internet Computer maintenance costs Bad debt expense Recruitment Costs Insurance Costs Subscription Entertainment & sustenance costs FBT expense Consulting Other expenses Total Administrative costs 1.4 Depreciation and amortisation Depreciation Lease depreciation Amortisation - Software Total Depreciation & Amortisation 1.5 Accelerated Depreciation and amortization and write down Accelerated Amortisation – Right of use asset Accelerated Amortisation – Software Accelerated Depreciation - Furniture and Fitting Total Depreciation & Amortisation 1.6 Financing costs / (income) Interest income Interest expenses Borrowing costs Lease interest Total Financing costs / (income)	8,424,651 235,471 848,532 16,131 603,658 (810,357)	9,192,017 460,656 954,276 (3,001) 792,359 (838,260)
	9,318,086	10,558,047
	185,339 303,426 71,242 24,809 1,189,396 20,332 54,377 227,522 111,609 60,271 57,767 190,006 446,699	202,062 286,334 87,378 90,146 2,081,979 22,005 91,917 166,366 138,622 84,307 107,400 152,589 640,083
	2,942,795	4,151,188
	104,726 208,313 243,606	156,824 351,846 861,285
	556,645	1,369,955
	- - -	- 204,722 -
	-	204,722
	(1,065) 210,732 25,746 47,204	(4,611) 276,187 17,324 50,873
	282,617	339,773

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Note 2: Earnings per Share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic diluted earnings per share computations:

	2021 $	2020 $
Net profit / (loss) attributable to ordinary equity holders of the parent from continuing operations Net profit / (loss) attributable to ordinary equity holders of the parent for basic earnings Net profit / (loss) attributable to ordinary equity holders of the parent adjusted for the effect of dilutions Weighted average number of ordinary shares for basic earnings per share Effect of dilution: Performance rights Weighted average number of ordinary shares adjusted for the effect of dilution Basic earnings / (loss) per share (Statutory) Diluted Earnings / (loss) per share (Statutory)	(1,000,258) (1,000,258)	(2,486,756) (2,486,756)
	(1,000,258) 2021 No. 26,988,600 -	(2,486,756) 2020 No. 25,954,117 -
	26,988,600	25,954,117
	(3.71) (3.71)	(9.58) (9.58)

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.

Under the accounting standards, losses are not diluted.

Note 3: Cash and Cash Equivalents

Note	Consolidated Group 2021 2020 $ $	Consolidated Group 2021 2020 $ $
Cash at bank Restricted cash* Total Cash	2,415,726 7,278	3,181,876 14,022
	2,423,004	3,195,898

*Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

**Refers to cash held in the Energy Action Employee Share Trust; an entity used to manage employee equity plans as well as cash bank guarantee held by the bank.

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Note 4: Other Assets

Note 4: Other Assets
	Consolidated Group 2021 2020 $ $
CURRENT Prepayments Other receivables Work in progress Revenue not invoiced NON CURRENT Other receivables Revenue not invoiced*	465,100 240,165 333,835 3,419,481	283,062 293,143 470,111 3,185,228
	4,458,581	4,231,544
	246,598 2,757,020	- 2,983,425
	3,003,618	2,983,425

• These represents conditional contract asset

Note 4(a): Right-of-use Assets

Note 4(a): Right-of-use Assets
	Consolidated Group 2021 2020 $ $
NON CURRENT Opening Balance Additions Depreciation Impairment Closing Balance	640,519 338,673 (208,313) (506,113)	992,365 - (351,846) -
	264,766	640,519

During the year the company entered into a lease agreement in Melbourne for a period of 3 years ending 31 July 2023.

Due to COVID the premises in Sydney, Brisbane and Melbourne were unoccupied for the majority of the fiscal period and with flexible working from home arrangement now in place, the Right-of-use Assets were assessed as being impaired in all locations to the value of $506,113.

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Note 5: Loans and Borrowings

Note 5: Loans and Borrowings
Note	Consolidated Group 2021 2020 $ $
CURRENT Market Rate Loan Facility Less capitalised debt establishment fees NON CURRENT Market Rate Loan Facility Less capitalised debt establishment fees	250,000 (19,774)	- -
	230,226	-
	6,750,000 (18,217)	6,200,000 (23,825)
	6,731,783	6,176,175

Utilisation of the facility is summarised in the following table:

Financing facilities

	Consolidated Group 2021 2020 $ $	Consolidated Group 2021 2020 $ $
Loan facilities (excluding corporate card facility) Amounts utilised Borrowings Bank guarantees – non-cash Total amounts utilised Total amounts unutilised	7,300,000 7,000,000 145,347	7,300,000 6,200,000 176,670
	7,145,347	6,376,670
	154,653	923,330

As at 30 June 2021, Energy Action had utilised $7.0 million of market rate loan and $0.15 million bank guarantees. The carrying value of the loans and borrowings materially approximate fair value. Funds advanced under the facility are secured by a charge over the assets of the Group and includes Interest Cover, Gearing ratio and asset covenants.

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Note 6: Issued Capital and Reserves

Note 6: Issued Capital and Reserves	Note 6: Issued Capital and Reserves
		Consolidated Group 2021 2020 $ $
Fully paid ordinary shares		6,837,906	6,537,906
		6,837,906	6,537,906
		Consolidated Group 2021 2020 No. No.
a.	Ordinary Shares (number) At the beginning of the reporting period: Movement in the year: - Shares issued At the end of the reporting period	25,954,117 1,034,483	25,954,117 -
		26,988,600	25,954,117
		Consolidated Group 2021 2020 $ $
b.	Ordinary Shares ($) At the beginning of the reporting period: Movement in the year - Shares issued At the end of the reporting period	6,537,906 300,000	6,537,906 -
		6,837,906	6,537,906

Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of shares held.

Note 7: Events After the reporting period

No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years.

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