EVZ LIMITED — Annual Report 2011

Aug 28, 2011

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29 August 2011

The Manager Company Announcements Office Australian Stock Exchange Limited 20 Bridge Street SYDNEY NSW 2000

Dear Sir/Madam

EVZ Reports its 2011 Full-Year Results (Appendix 4E – Preliminary Final Report)

EVZ Limited (ASX: EVZ) today announced its results for the twelve months ended 30 June 2011 (FY11).

Results overview

• Operating revenue of $79.7 million (FY10: $77.0 million)

• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $2,323k (FY10: $2,369k)

• Earnings before interest and tax (EBIT) of $1,249k (FY10: $1,332k)

• Net profit before tax (NPBT) of $364k (FY10: $371k)

• Earnings per share of 0.10 cents per share (FY10: 0.12 cents per share)

• Improved gearing, with net debt to equity down to 15% (30 June 2010: 17%)

Commenting on the FY11 results, EVZ Chief Executive Officer, Mr Andrew Powis, said:

“EVZ’s results for the 2011 financial year reflected very challenging operating conditions that saw two very different halves. During the first half we experienced heightened activity as demand for EVZ’s services increased. The second half was characterised by weakening conditions in the building and construction sector, as well as the completion of older projects that generated little or no margin.

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“We made the strategic decision twelve months ago to grow EVZ’s exposure to the resources and mining sectors and diversify our end markets. We have been successfully executing this strategy with new contracts awarded from BHP in Port Hedland, Parsons Brinckerhoff at the Bengalla Mine (Muswellbrook, NSW), and additional work being won with Exact Mining for Bemax and Newcrest Mining at East Cadia.

“Over the past twelve months we have been very actively and successfully marketing our services and products. Forward orders stand at $44.3 million at 30 June 2011, with a strong pipeline of enquiries and tenders pending. Importantly, our forward order work is profitable work that places us in an attractive position to grow.

“In addition to focusing on building a growing forward order book, we have restructured and streamlined our operations, as well as enhancing controls across the Company’s businesses.”

From 1 July 2011, Danum has been fully merged into Brockman, which is generating operational efficiencies and cost savings going forward. The combined Brockman operation has forward orders in hand of $20 million at 30 June, having won a number of new projects including Barwon Water, Yarra Valley Water, and BHP Billiton at Port Hedland.

Syfon Systems continues to have an extremely strong level of forward orders in hand, with $10 million in Australia and Asia at 30 June. Current projects include the Penang Airport in Malaysia, Melbourne Markets (Vic), Fiona Stanley Hospital (WA) and Townsville Stocklands Shopping Centre (Qld). Syfon Systems’ growing presence in Asia has seen opportunities open up in Vietnam.

Senior management at National Engineering was restructured following a poor performance by this business in the second half of 2011. These changes have led to in excess of $15 million of profitable new projects won since the changes were implemented including work with East Cadia Mine (Newcrest) and Bengalla Mines (Rio Tinto and Wesfarmers). The addition of professional project and construction staff has improved the prospects of this business.

TSF is expanding on its power solutions services. EVZ has incorporated EVZ Energy to hire power generation equipment and ancillary services with a specific focus on the mining and resource sector. The Company is excited about the opportunities for this new business and the cross-fertilisation opportunities that exist across EVZ’s businesses. TSF is currently manufacturing three large generators and acquiring a further $0.5 million of equipment for EVZ Energy’s use.

EVZ’s gearing continues to remain comfortable, with net debt to equity reducing to 15% from 17% twelve months earlier. The Company’s banking provider continues to be very supportive of the strategies being put in place by management.

As EVZ continues to rebuild and position itself for growth, the Directors have determined that it would be financially prudent to continue to not pay a dividend. The Board’s goal of delivering a sustainable and growing dividend stream reflecting the earnings profile and capital needs of the Company remains a top priority.

Commenting on the outlook for EVZ, Mr Powis said:

“Current business conditions remain challenging. However, the operational initiatives implemented over FY11 have put EVZ in a better position to respond to market conditions.

“The strategies we have implemented, including a merged Brockman/Danum and a restructured management team at National Engineering, continue. The Board is committed to act to improve the quality of its businesses.

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“With the benefits of the restructuring initiatives to start flowing through from FY12 and a sound forward order portfolio, subject to there being no material deterioration in EVZ’s end markets, the Company is well placed to grow and increase shareholder value.”

For further information, please contact:

Andrew Powis Chief Executive Officer EVZ Limited Tel: +61-3 9545 5288 Mobile: +61-418 564 466 Email: andrew.powis@evz.com.au

About EVZ Limited (ASX: EVZ)

EVZ is an industrial group with a portfolio of specialist businesses in the engineering services sector. EVZ operates in the areas of engineering, power and water through its businesses – Brockman, National, Syfon Systems, TSF Engineering/Maintenance and the recently established EVZ Energy. These businesses have strong positions in their respective markets with attractive growth opportunities.

For further information, please visit: www.evz.com.au

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2011

Revenue Cost of sales Gross profit Other income Administration costs Business development costs Corporate costs Results from operating activities Net finance costs Profit before income tax Income tax expense Profit for the year Overall operations Basic earnings per share Diluted earnings per share Continuing operations Basic earnings per share Diluted earnings per share	Economic Entity 2011 $ 2010 $ 79,664,960 77,045,804 (66,021,219) (63,737,531)
	13,643,741 13,308,273 155,227 69,021 (9,664,043) (9,099,482) (1,423,611) (1,482,233) (1,462,311) (1,463,147)
	1,249,003 1,332,432 (884,711) (961,019)
	364,292 371,413 (156,892) (111,915)
	207,400 259,498
	Cents per share Cents per share 0.10 0.12 0.10 0.12 0.10 0.12 0.10 0.12

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

Profit for the year Other comprehensive income: Exchange differences arising on translation of foreign operations Total comprehensive income for the year attributable to owners of the company	Economic Entity 2011 $ 207,400 2010 $ 259,498 (190,710) 3,874
	16,690 263,372

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Financial assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Plant and equipment Deferred tax assets Intangible assets Financial assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short-term borrowings TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term borrowings Deferred tax liabilities Other long term provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	Economic Entity 2011 $ 2010 $ 4,210,546 4,442,384 17,502,083 18,048,029 1,855,800 2,083,117 - 11,795
	23,568,429 24,585,325
	372,550 383,691 6,029,408 6,038,887 2,077,202 2,094,247 29,342,776 29,342,776 111,232 -
	37,933,168 37,859,601
	61,501,597 62,444,926
	12,746,828 11,909,523 6,947,950 12,246,718
	19,694,778 24,156,241
	3,709,740 222,987 18,068 16,859 177,319 163,837
	3,905,127 403,683
	23,599,905 24,559,924
	37,901,692 37,885,002
	46,023,159 46,023,159 27,162 217,872 (8,148,629) (8,356,029)
	37,901,692 37,885,002

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

Balance at 1 July 2010 Total comprehensive income for year Profit for year Foreign currency translation reserve Total comprehensive income for year Transactions with owners, recorded directly in equity Shares Issued Dividends Balance at 30 June 2011 Balance at 1 July 2009 Total comprehensive income for year Profit for year Foreign currency translation reserve Total comprehensive income for year Transactions with owners, recorded directly in equity Shares issued Dividends Balance at 30 June 2010	Issued Capital $ Accumulated Losses $ Capital Reserves $ Foreign Currency Translation Reserve $ Total $ 46,023,159 (8,356,029) 198,700 19,172 37,885,002
	- 207,400 - - 207,400 - - - (190,710) (190,710)
	- 207,400 - (190,710) 16,690
	- - - - - - - - - -
	46,023,159 (8,148,629) 198,700 (171,538) 37,901,692
	46,023,159 (8,095,678) 198,700 15,298 38,141,479
	- 259,498 - - 259,498 - - - 3,874 3,874
	- 259,498 - 3,874 263,372
	- - - - - - (519,849) - - (519,849)
	46,023,159 (8,356,029) 198,700 19,172 37,885,002

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Income tax paid Interest received Finance costs NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of plant and equipment Purchase of plant and equipment NET CASH FLOWS USED BY INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid by parent entity Repayment of loans Proceeds from lease financing Payments for lease financing NET CASH FLOWS USED BY FINANCING ACTIVITIES NET DECREASE IN CASH HELD Cash at beginning of financial year CASH AT END OF FINANCIAL YEAR	Economic Entity 2011 $ 2010 $ 88,126,217 85,890,867 (84,394,100) (82,455,497) (182,840) (908,244) 183,229 182,545 (1,067,940) (1,143,564)
	2,664,566 1,566,107
	61,607 102,070 (1,145,996) (907,856)
	(1,084,389) (805,786)
	- (1,039,698) (1,937,500) (1,750,000) 123,230 177,625 (123,542) (113,329)
	(1,937,812) (2,725,402)
	(357,635) (1,965,081) 3,809,502 5,774,583
	3,451,867 3,809,502

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

BASIS OF PREPARATION OF PRELIMINARY FINANCIAL STATEMENTS

The preliminary report has been prepared on an accruals basis and is based on historical costs modified, where appropriate, by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

The accounting policies applied in this preliminary report are consistent with applicable accounting standards.

PROFIT

(a) OTHER INCOME Sundry income (b) EXPENSES Movement in employee benefits Bad debts Impairment – receivables Impairment - inventories Total employee costs Foreign exchange losses / (gains) Losses / (profits) on sale of plant and equipment Operating lease payments Depreciation of plant and equipment (c) NET FINANCE COSTS Finance costs Interest income		Economic Entity 2011 $ 2010 $ 155,227 69,021
		155,227 69,021
		50,550 35,770 26,811 314,199 8,522 (8,900) (61,506) (81,404) 32,681,264 29,263,954 83,712 (69,526) (4,743) 4,265 1,280,297 1,251,114 1,074,209 1,036,776
		1,067,940 1,143,564 (183,229) (182,545)
		884,711 961,019

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

INCOME TAX

(a) The prima facie tax on profit before income tax is reconciled to income tax as follows: Profit before Income Tax Income tax calculated at 30% (2010: 30%) Tax effect of permanent differences Under provision/(over provision) in prior years Taxation expense - offshore subsidiary Income tax expense The applicable weighted average effective tax rates are as follows: (b) The components of tax expense comprise: Current tax Deferred tax Under provision/(over provision) in prior years	Economic Entity 2011 $ 2010 $ 364,292 371,413
	109,288 111,424 61,333 35,663 (34,890) (77,656) 21,161 42,484
	156,892 111,915
	43% 30%
	209,171 67,869 (17,389) 121,702 (34,890) (77,656)
	156,892 111,915

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

ISSUED CAPITAL Issued and paid up 207,420,868 ordinary shares (2010: 207,368,245 ordinary shares) 518,546 fully paid employee shares (2010: 571,169 ordinary shares) (a) Issued and fully paid up ordinary shares Opening balance Conversion of employee shares Closing balance – 30 June 2011 Opening balance Conversion of employee shares Closing balance – 30 June 2011 (b) Fully paid employee shares Opening balance Conversion of employee shares Closing balance – 30 June 2011 Opening balance Conversion of employee shares Closing balance – 30 June 2011	Economic Entity 2011 $ 2010 $ 45,757,195 45,730,205 265,964 292,954
	46,023,159 46,023,159
	45,730,205 45,720,208 26,990 9,997
	45,757,195 45,730,205
	2011 No. 2010 No. 207,368,245 207,348,755 52,623 19,490
	207,420,868 207,368,245
	2011 $ 2010 $ 292,954 302,951 (26,990) (9,997)
	265,964 292,954
	2011 No. 2010 No. 571,169 590,659 (52,623) (19,490)
	518,546 571,169

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

ACCUMULATED LOSSES Accumulated losses at the beginning of the financial year Net profit Dividends paid/declared Accumulated losses at the end of the financial year EARNINGS PER SHARE Weighted average number of ordinary shares outstanding during the year used in calculation of Basic Earnings per Share Weighted average number of ordinary shares outstanding during the year used in calculation of Diluted Earnings per Share INTANGIBLE ASSETS Goodwill on consolidation Less impairment Goodwill on acquisition Less Impairment	Economic Entity 2011 $ 2010 $ (8,356,029) (8,095,678) 207,400 259,498
	(8,148,629) (7,836,180) - (519,849)
	(8,148,629) (8,356,029)
	2011 No. 2010 No. 207,939,414 207,939,414
	207,939,414 207,939,414
	2011 $ 2010 $ 3,282,532 3,282,532 - -
	3,282,532 3,282,532
	27,513,731 27,513,731 (1,453,487) (1,453,487)
	26,060,244 26,060,244
	29,342,776 29,342,776

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

STATEMENT OF CASH FLOWS (i) Cash balances comprise: Cash on hand Bank overdraft Closing cash balance (ii) Reconciliation of the operating profit after tax to net cash flows from operations: Operating profit after tax Gain/loss on sale of plant and equipment Depreciation - plant & equipment Foreign currency translation Impairment - receivables Impairment - inventories Changes in assets and liabilities adjusted for effects of acquisition/disposal of operations during financial year Increase/(Decrease) in provisions for employee entitlements (Increase)/Decrease in inventories (Increase)/Decrease in trade and other receivables (Increase)/Decrease in deferred tax assets Increase/(Decrease) in payables Increase/(Decrease) in current tax payable Increase/(Decrease) in deferred tax liabilities Net cash provided by operating activities	Economic Entity 2011 $ 2010 $ 4,210,546 4,442,384 (758,679) (632,882)
	3,451,867 3,809,502
	207,400 259,498 (4,743) 4,265 1,074,209 1,036,776 (166,308) (59) 8,522 (8,900) (61,506) (81,404) 50,550 35,770 288,823 1,002,786 449,128 1,404,945 17,045 117,184 800,237 (1,356,441) - (856,124) 1,209 7,811
	2,664,566 1,566,107

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

SEGMENT REPORTING:

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision-makers) in assessing performance and determining the allocation of resources.

Operating segments are managed primarily on the basis of product category and service offerings.

Executive management monitors segment performance based on EBIT.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted:

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision-makers with respect to operating segments are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

Inter-segment transactions:

All such transactions are eliminated on consolidation for the Group’s financial statements.

Comparative information:

This is the first year in which the Group has segmented its operations and therefore no comparative information is applicable.

Primary Reporting

30 June 2011 REVENUE External sales Inter-segment sales Total segment revenue Reconciliation of segment revenue to group revenue Inter-segment elimination Total group revenue Segment net profit before tax Reconciliation of segment result to group net profit before tax Unallocated items Net finance costs Net profit before tax from continuing operations	Engineering Power Water Corporate $ $ $ $ 50,037,810 16,977,480 12,649,670 - 5,300 - - -	Total $ 79,664,960 5,300
	50,043,110 16,977,480 12,649,670 -	79,670,260
	445,108 1,576,341 689,865 (1,462,311)	(5,300)
		79,664,960
		1,249,003
		(884,711)
		364,292

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

Secondary Reporting Geographical Segment External Segment Revenue Segment assets by location of assets Acquisition of non-current assets	Australia Australia Asia Asia Economic Entity Economic Entity 2011 $ 2010 $ 2011 $ 2010 $ 2011 $ 2010 $ 77,936,517 74,644,593 1,728,443 2,652,777 79,664,960 77,297,370 59,489,955 58,851,086 2,011,642 3,593,840 61,501,597 62,444,926 1,141,639 846,835 4,357 61,021 1,145,996 907,856

SUBSEQUENT EVENTS:

There have not been any matters or circumstances, other than that referred to in the financial statements or notes thereto, that have arisen since the end of the financial year, that have significantly affected, or may significantly affect, the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years after the financial year.

ADDITIONAL INFORMATION:

Reporting period

The applicable reporting period is 1 July 2010 to 30 June 2011.
The previous corresponding reporting period was 1 July 2009 to 30 June 2010.
Net tangible assets
	30 June 2011	30 June 2010
Net tangible assets per ordinary share	4.12 cents	4.11 cents
Details of entities over which control has been gained or
lost during the period
Name of entity	Not applicable
Control gained/lost
Dividends and Distributions
Date on which each dividend or distribution is
payable
Amount per security of foreign sourced dividend
or distribution	Not applicable
Details of dividend or distribution
reinvestment plans
Not applicable

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EVZ Limited Appendix 4E Preliminary final report Year Ended 30 June 2011

Material interests in entities which are not controlled entities

Not applicable.

Compliance Statement:

The accounts are in the process of being audited.

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