EVZ LIMITED — Annual Report 2019

Aug 26, 2019

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Appendix 4E Preliminary Final Report Results for Announcement to the Market

27 August 2019, Melbourne : EVZ Limited (ASX: EVZ) has delivered its Preliminary Final Results for the year ending 30 June 2019. The Directors are pleased to confirm Revenue and EBITDA results are in line with guidance provided to the market in July 2019.

Results Summary FY2019 FY2018 Change Change $ $ $ %	Results Summary FY2019 FY2018 Change Change $ $ $ %	Results Summary FY2019 FY2018 Change Change $ $ $ %	Results Summary FY2019 FY2018 Change Change $ $ $ %	Results Summary FY2019 FY2018 Change Change $ $ $ %
Revenue from ordinary activities	78,042,293	64,928,395	13,113,898	20%
EBITDA	2,887,673	3,775,167	(887,494)	-24%
Profit before finance costs and income tax	2,140,373	3,104,532	(964,159)	-31%
Profit from ordinary activities before tax	1,728,418	2,484,811	(756,393)
Profit from ordinary activities after tax	1,624,975	2,341,980	(717,005)
Earnings per share (cents)	1.73	3.16

The financial information provided in this report remains subject to finalisation of the audit process.

COMMENTARY

The Directors are pleased to report the following significant achievements were concluded successfully during the financial year:

• Profitable trading during all periods of the financial year to deliver a $2.9M EBITDA.

• Growth in revenue as a result of successful delivery of projects and recurrent revenue contracts to a range of clients.

• Successful raising of $3.5M new equity through an institutional placement in August 2018.

• Reduction in interest bearing debt to $3.3M from $6.0M.

• EVZ is now well positioned to further grow revenues and profits by utilising the talented management team and skilled technical resource base in conjunction with the strengthened balance sheet in specialist engineering sectors.

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OUTLOOK

EVZ Limited operates three business subsidiaries that are well positioned in their chosen markets to establish further growth and profitability.

BROCKMAN ENGINEERING

Brockman is one of Australia’s leading and most capable specialist mechanical contractors servicing the oil and fuel industry; providing unsurpassed bulk storage tank and pipework design and construction services in addition to shutdown maintenance services for critical repair and plant improvement.

Brockman currently has a consistent workload for the ensuing six months including a wide range of tank construction projects and is actively bidding and providing advisory roles on new and upcoming larger scale projects in the fuel terminal and refinery sector. Currently delivering projects for ExxonMobil, Viva Energy, and Yarra Valley Water, further projects are expected to be secured in 2020 to underpin sales in 2HFY20 and FY21.

The outlook for Brockman is consistency aligning with the predicted higher level of activity in the oil industry as the fuel supply chain continues to respond to rising population activity and government policy in response to Australia’s liquid fuel security limitations. Brockman are seeking to exploit a market opportunity as a mid-tier provider of value-added services to the fuel industry.

SYFON SYSTEMS

Syfon Systems is the leading syphonic roof stormwater drainage company in Australia and South East Asia. Holding greater than 75% market share in Australia and Malaysia, Syfon remains committed to expanding in Vietnam and subsequent other Asian countries to continue a progressive geographic expansion strategy.

The outlook for Syfon in Australia is growth aligning with the building and construction sector cycle and increased market share. Syfon is consistently appointed in major construction projects across the region. Growth outlook in Asia is expected to be more consistently expanding gaining from the dual dimensions of growing building and construction sector activity and conversion of the industry from traditional gravity drainage to syphonic drainage.

TSF POWER

TSF Power is a specialist provider of technical services to the distributed power generation sector. TSF Power provide value for money independent power generation maintenance and operations service to the renewable waste gas and diesel generation markets. Offering specialist technical advice, parts supply and value for money service to Australia’s largest power generation asset owners.

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TSF Power provides service through multi-year contracts to Australia’s large infrastructure operators, data network providers in addition to utilities, healthcare and large-scale corporate office complexes. Outlook for power reliability maintenance services in these sectors is expected to grow as the need for greater reliability and community expectations of uptime availability grow.

Additional financial information is provided in the enclosed Appendix 4E: Preliminary Final Report.

EVZ Limited is an industrial group with a portfolio of specialist businesses in the engineering services sector. EVZ operates in the areas of specialist mechanical services including bulk storage tank and pipework design and construction, syphonic stormwater and roof drainage systems and power generation maintenance through subsidiaries; Brockman Engineering, Syfon Systems and TSF Maintenance. Additional information can be obtained from our website www.evz.com.au

For further information contact Scott Farthing, CEO +613 9545 5288

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EVZ Limited Appendix 4E Preliminary Final Report

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Consolidated statement of profit or loss Notes For the year ended 30 June 2019 Continuing Operations Revenue Cost of Sales Gross Profit Other Income 2 Administration and business development costs Corporate costs Debt Forgiveness Impairment of other assets Impairment of plant and equipment Profit before finance costs and income tax Net finance costs 2 Profit before income tax from continuing operations Income tax (expense)/benefit 3 Profit/(Loss) for the year attributed to members after tax Earnings Per Share Overall Operations: Basic earnings per share 4 Diluted earnings per share 4 Continuing Operations: Basic earnings per share 4 Diluted earnings per share 4	2019 2018 $ $ 78,042,293 64,928,395 (65,643,997) (51,793,049) Economic Entity
	12,398,296 13,135,346 72,777 96,694 (8,965,536) (8,700,181) (1,365,164) (1,427,327) - - - - - -
	2,140,373 3,104,532 (411,955) (619,721)
	1,728,418 2,484,811 (103,443) (142,831)
	1,624,975 2,341,980
	Cents Cents 1.735 3.155 1.708 3.093 1.735 3.155 1.708 3.093

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EVZ Limited Appendix 4E Preliminary Final Report

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Consolidated statement of comprehensive income Notes For the year ended 30 June 2019 Profit/(Loss) for the year after tax Other comprehensive income: Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations Total comprehensive income for the year attributable to owners of the company	2019 2018 $ $ 1,624,975 2,341,980 35,647 203,941 Economic Entity
	1,660,622 2,545,921

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EVZ Limited Appendix 4E Preliminary Final Report

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Consolidated statement of financial position Notes For the year ended 30 June 2019 Current Assets Cash and cash equivalents Trade and other receivables Inventories Financial assets Deferred tax assets Total current assets Non-current assets Trade and other receivables-non current Plant and equipment Deferred tax assets-non current Intangibles 5 Total non-current assets Total Assets Current liabilities Trade and other payables Tax liabilities Short-term borrowings Provisions Total current liabilities Non-current liabilities Long-term borrowings Deferred tax liabilities Provisions-non current Total non-current liabilities Total Liabilities Net Assets Equity Issued Capital 6 Reserves Accumulated losses Total Equity	2019 2018 $ $ 2,772,182 1,706,883 19,696,161 16,939,999 2,313,984 1,971,101 189,612 178,570 - - Economic Entity
	24,971,939 20,796,553
	1,612,075 1,587,673 4,870,664 3,869,464 2,604,954 2,632,131 12,072,010 12,072,010
	21,159,703 20,161,278
	46,131,642 40,957,831 15,437,440 12,233,514 31,335 103,542 3,372,272 511,529 2,926,188 2,986,944
	21,767,235 15,835,529
	284,397 6,000,000 50,549 49,200 41,527 121,903
	376,473 6,171,103
	22,143,708 22,006,632
	23,987,934 18,951,199 56,457,180 52,972,129 277,171 241,524 (32,746,417) (34,262,454)
	23,987,934 18,951,199

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EVZ Limited Appendix 4E Preliminary Final Report

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Consolidated statement of changes in equity Ecomomic Entity As at 30 June 2019 Balance at 30 June 2018 Adjustment on adoption of AASB 9 Balance at 1 July 2018 Total comprehensive profit for period Profit/(loss) for period Foreign currency translation reserve Total comprehensive income for period Transactions with owners, recorded directly in equity: Shares issued Share Issue Costs Dividends Balance at 30 June 2019 As at 30 June 2018 Balance at 1 July 2017 Total comprehensive profit for period Profit/(loss) for period Foreign currency translation reserve Total comprehensive income for period Transactions with owners, recorded directly in equity: Shares issued Share Issue Costs Dividends Balance at 30 June 2018	Issued Capital Accumulated Losses Share Options Reserve Foreign Currency Translation Reserve Total $ $ $ $ 52,972,129 (34,262,454) 300,000 (58,476) 18,951,199 - (108,938) - - (108,938)
	52,972,129 (34,371,392) 300,000 (58,476) 18,842,261 - 1,624,975 - - 1,624,975 - - - 35,647 35,647
	- 1,624,975 - 35,647 1,660,622
	3,681,061 - - - 3,681,061 (196,010) - - - (196,010) - - - - -
	56,457,180 (32,746,417) 300,000 (22,829) 23,987,934
	Issued Capital Accumulated Losses Share Options Reserve Foreign Currency Translation Reserve Total $ $ $ $ 50,434,876 (36,604,434) - (262,417) 13,568,025
	- 2,341,980 - - 2,341,980 - - - 203,941 203,941
	- 2,341,980 - 203,941 2,545,921
	3,282,506 - - - 3,282,506 (745,253) 300,000 (445,253) - - - - -
	52,972,129 (34,262,454) 300,000 (58,476) 18,951,199

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EVZ Limited Appendix 4E Preliminary Final Report

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Consolidated statement of cash flows Notes For the year ended 30 June 2019 Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Finance costs Income tax paid Net cash provided by / (used in) operating activities Cash flows from investing activities Proceeds from sale of plant and equipment Purchase of plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from equity raising Share issue costs Proceeds from / (repayment) of other loans Procceds from / (repayment) of finance leases Net cash provided/(used) by financing activities Net increase/(decrease) in cash held Cash at beginning of the period Cash at end of the period 7	2019 2018 $ $ 82,525,701 65,230,179 (79,501,810) (65,944,908) 9,090 3,999 (421,046) (623,720) (147,125) (78,735) Economic Entity
	2,464,810 (1,413,185)
	5,169 (1,208) (1,738,659) (762,961)
	(1,733,490) (764,169)
	3,484,850 2,982,506 (196,010) (145,253) (3,248,951) (448,950) 294,090 (56,036)
	333,979 2,332,267
	1,065,299 154,913 1,706,883 1,551,970
	2,772,182 1,706,883

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019

1. 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.

Notes to the consolidated financial statements For the year ended 30 June 2019 2. Profit/(loss) from continuing operations (a) Other income Sundry income (b) Expenses Bad debts Impairment - receivables Total employee costs Defined contribution superannuation expense Foreign exchange losses/(gains) (Profit) / Loss on sale of plant and equipment Operating lease payments Depreciation of plant and equipment Impairment - Work in Progress Impairment - plant and equipment (c) Net finance costs: Finance costs Interest income Net finance costs from continuing operations	2019 2018 $ $ 72,777 96,694 Economic Entity
	72,777 96,694 - (36,651) 108,628 46,195 32,246,006 31,814,107 2,730,708 2,450,151 (83,132) 203,941 (5,169) 3,846 1,143,125 1,143,273 747,300 670,637 - - - - 421,045 623,720 (9,090) (3,999)
	411,955 619,721

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019 3. Income tax (a) The prima facie tax on profit before income tax from continuing operations is reconciled to income tax as follows: Profit/(Loss) before Income Tax Income tax calculated at 30% (2018: 30%) Tax effect of permanent differences Under provision/(over provision) in prior years Recognition of additional tax losses Taxation expense - offshore subsidiary Income tax expense/(benefit) The applicable weighted average effective tax rates are: (b) The components of tax expense comprise: Current tax Deferred tax Under provision/(over provision) in prior years Recognition of additional tax losses	2019 2018 $ $ 1,728,418 2,484,811 Economic Entity
	518,525 745,443 8,652 (272,010) 0 266,820 (500,000) (703,731) 76,266 106,309
	103,443 142,831
	6% 6% 604,091 595,715 (648) (15,973) 0 266,820 (500,000) (703,731)
	103,443 142,831

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019 4. Earnings per share (a) Weighted average number of ordinary shares outstanding during the year used in calculation of Basic Earnings per Share (b) Weighted average number of ordinary shares outstanding during the year used in calculation of Diluted Earnings per Share	2019 2018 $ $ 93,662,110 74,223,880 Economic Entity
	95,162,110 75,723,880
5. Intangible assets Goodwill on consolidation – at cost Less accumulated impairment Goodwill on acquisition – at cost Less accumulated impairment Total Intangible assets	3,282,532 3,282,532 - -
	3,282,532 3,282,532
	24,606,758 24,606,758 (15,817,280) (15,817,280)
	8,789,478 8,789,478
	12,072,010 12,072,010

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements Notes For the year ended 30 June 2019 6. Issued capital Issued and paid up 2019: 96,116,734 ordinary shares (2018: 83,027,195 ordinary shares) Issued and fully paid up ordinary shares Opening balance Shares issued Share issue costs Closing balance Opening balance Shares issued Closing balance Share options Opening balance Options issued Closing balance Dividends Interim fully franked ordinary dividend Final fully franked ordinary dividend Total dividends Balance of franking account	2019 2018 $ $ 56,457,180 52,972,129 Economic Entity
	56,457,180 52,972,129
	52,972,129 50,434,876 3,681,061 2,682,506 (196,010) (145,253)
	56,457,180 52,972,129
	No. of shares No. of shares 83,027,195 67,881,014 13,089,539 15,146,181
	96,116,734 83,027,195
	No. of options No. of options 1,500,000 1,500,000 - -
	1,500,000 1,500,000
	- - - -
	- -
	1,813,797 1,813,797

1,500,000 Unlisted Options were issued in connection with the Capital Raising during the 2017 financial year. The Unlisted Options were issued for nil cash consideration. The Unlisted Options are exercisable at $0.20 per share and expire 4 years after their issue date (7 June 2017).

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019 7. Consolidated statement of cash flows Cash balances comprise: Cash on hand Bank overdraft Closing cash balance 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 Debt forgiveness (Gain)/loss on foreign currency translation Share based payments Impairment/(write back) - receivables Impairment - work in progress Gain on acquisition of fixed assets 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 tax liabilities Net cash provided/(used) by operating activities	2019 2018 $ $ 2,772,182 1,706,883 - - Economic Entity
	2,772,182 1,706,883
	1,624,975 2,341,980 (5,169) 3,846 747,300 670,637 - - (83,132) 203,941 196,211 - - 46,195 - - - - (41,129) (44,434) (342,883) (363,357) (2,791,607) (5,780,211) 28,525 40,524 3,203,926 1,444,122 (72,207) 23,572
	2,464,810 (1,413,185)

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements

For the year ended 30 June 2018

Segment Reporting Continuing Operations:

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 based on 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.

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019

8. Segment Reporting - Continuing Operations
(a) Twelve months ended 30 June 2019:	Engineering Energy Water Corporate $ $ $ $	Total $
Revenue External sales Total segment revenue Reconciliation of segment revenue to group revenue: Total group revenue Segment net profit /(loss) before interest and tax Reconciliation of net profit before interest and tax to group net profit/(loss) before tax Unallocated items Net finance costs from continuing operations Net profit/(loss) before tax from continuing operations Included in segment net profit before interest and tax: Depreciation Impairment: Receivables	53,091,236 5,271,972 19,679,085 -	78,042,293
	53,091,236 5,271,972 19,679,085 -	78,042,293
	53,091,236 5,271,972 19,679,085 -	78,042,293
	2,550,624 (461,509) 1,416,421 (1,365,163)	2,140,373 (411,955)
		1,728,418

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements

For the year ended 30 June 2019

Segment Reporting - Continuing Operations
(b) Twelve months ended 30 June 2018:	Engineering Energy Water Corporate Total $ $ $ $ $
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 /(loss) before interest and tax Reconciliation of net profit before interest and tax to group net profit/(loss) before tax Unallocated items Other non-operating Net finance costs from continuing operations Net profit/(loss) before tax from continuing operations Included in segment net profit before interest and tax: Depreciation Impairment: Receivables	37,833,603 5,573,629 21,521,163 - 64,928,395 - - - - -
	37,833,603 5,573,629 21,521,163 0 64,928,395
	- - - -	-
	37,833,603 5,573,629 21,521,163 -	64,928,395
	2,237,539 (228,540) 2,672,858 (1,577,325)	3,104,532 - (619,721)
		2,484,811

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019

9. Secondary Segment Reporting -Including Discontinued Operations	9. Secondary Segment Reporting -Including Discontinued Operations
(a) Twelve months ended 30 June 2019:	Engineering Energy Water Corporate	Total
Segment Assets Segment Assets Inter-segment elimination Total Group Assets Segment asset increases for the period: Capital Expenditure Segment Liabilities Segment liabilities Inter-segment elimination Total Group Liabilities	25,050,443 2,069,816 22,403,573 8,259,141	57,782,973 (11,651,331)
	1,396,530 178,474 100,164 63,491
		46,131,642
		1,738,659
	1,396,530 178,474 100,164 63,491	1,738,659
	16,744,777 4,447,458 4,455,857 3,660,520	29,308,612 (7,164,904)
		22,143,708
(b) Twelve months ended 30 June 2018:	Engineering Energy Water Corporate	Total
Segment Assets Segment Assets Inter-segment elimination Total Group Assets Segment asset increases for the period: Capital Expenditure Segment Liabilities Segment liabilities Inter-segment elimination Total Group Liabilities	20,064,479 1,954,531 19,385,680 32,636,880	74,041,570 (33,083,739)
	493,100 109,092 145,133 15,636
		40,957,831
		762,961
	493,100 109,092 145,133 15,636.00	762,961
	22,059,758 24,217,449 4,697,870 6,681,543	57,656,620 (35,649,988)
		22,006,632

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements

For the year ended 30 June 2019

10. Revenue by Geographical Segment

Revenue, including revenue from discontinued operations, attributable to external customers is disclosed below, based on the location of the external customer:

	Economic	Entity
	2019	2018
	$	$
Australia	72,248,972	57,486,001
Asia	5,793,321	7,442,394
Total Revenue	78,042,293	64,928,395

11. Assets by Geographical Segment

The location of segment assets by geographical location of the assets is disclosed below:

	Economic	Entity
	2019	2018
	$	$
Australia	37,590,460	32,776,818
Asia	8,541,182	8,181,013
Total Assets	46,131,642	40,957,831

12. Subsequent Events

There have not been any other 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.

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes to the consolidated financial statements For the year ended 30 June 2019 13. Net Tangible Assets Net Tangible Assets per ordinary share (cents per share)	2019 2018 12.40 8.29 Economic Entity

14. Additional Information

Reporting period

The applicable reporting period is 1 July 2018 to 30 June 2019.

The previous corresponding reporting period was 1 July 2017 to 30 June 2018

Details of entities over which control has been gained or lost during the period
Name of entity	Not applicable
Date of the control gained or lost	Not applicable
Contribution of entity to reporting entity’s profit from ordinary activities during the period	Not applicable
Loss of entity during the whole of the previous corresponding year	Not applicable
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
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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