EVZ LIMITED — Interim / Quarterly Report 2020

Aug 30, 2020

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

31 August 2020, Melbourne : EVZ Limited (ASX: EVZ) has delivered its Preliminary Final Results for the year ending 30 June 2020. The Directors are pleased to confirm Revenue and EBITDA results are in line with guidance provided to the market on 6 August 2020.

Results Summary FY2020 FY2019 Change Change $ $ $ %	Results Summary FY2020 FY2019 Change Change $ $ $ %	Results Summary FY2020 FY2019 Change Change $ $ $ %	Results Summary FY2020 FY2019 Change Change $ $ $ %	Results Summary FY2020 FY2019 Change Change $ $ $ %
Revenue from ordinary activities	66,224,710	78,042,293	(11,817,583)	-15%
EBITDA	(445,815)	2,887,673	(3,333,488)	-115%
Profit/(loss) before finance costs and income tax	(2,037,772)	2,140,373	(4,178,145)	-195%
Profit/(loss) from ordinary activities before tax	(2,759,936)	1,728,418	(4,488,354)
Profit/(loss) from ordinary activities after tax	(2,751,440)	1,624,975	(4,376,415)
Earnings per share (cents)	(2.86)	1.74

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

COMMENTARY

The Directors provide the following comments for the financial year:

• Following a disappointing first half to FY2020 result (EBITDA loss - $1.6M) the group recovered to deliver a profitable second half and record a consolidated full year EBITDA loss of $0.4M. Included in this result is settlement of the outstanding negotiated claims on the Victorian Crude Tank project that were resolved and paid upon successful completion of the project in June 2020.

• Sales revenue reduced from FY2019 due to the completion of larger projects and the slower commencement of new larger projects in the liquid fuels sector.

• The company agreed with Commonwealth Bank an extension of its existing banking facility on the same terms until 31 October 2021.

• The impact of COVID-19 on project delivery timelines and customer site access peaked in April and May before returning to conditions more closely aligned to normal

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operations by mid-June 2020. The group was able to access to the Jobkeeper Payment for Q2 and Q3 2020.

OUTLOOK

EVZ Limited operates three business subsidiaries that are well positioned in their chosen markets.

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 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 United Energy, Viva Energy, and Melbourne Water, further projects are expected to be secured in 2021 to underpin sales in 2HFY21 and FY22.

The outlook for Brockman is aligned with the predicted 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 when international movement restrictions are lifted 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 limited in the short term until all international travel restrictions are lifted. In the medium term this business will continue the consistent expansion derived from the dual dimensions of a growing building and construction sector activity in the region and conversion of the industry from traditional gravity drainage to syfonic 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, waste gas to energy providers, 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 business expectations rise.

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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Notes Continuing operations Revenue Cost of sales Gross profit Other Income 2 Administration and business development costs Corporate costs Profit/(loss) before finance costs and income tax Net finance costs 2 Profit/(loss) 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	2020 2019 $ $ 66,224,710 78,042,293 (59,347,320) (65,643,997) Consolidated entity
	6,877,390 12,398,296 1,757,443 72,777 (9,348,065) (8,965,536) (1,324,540) (1,365,164)
	(2,037,772) 2,140,373 (722,164) (411,955)
	(2,759,936) 1,728,418 8,496 (103,443)
	(2,751,440) 1,624,975
	Cents Cents (2.863) 1.740 (2.863) 1.712 (2.863) 1.740 (2.863) 1.712

Due to the net loss for the 30 June 2020 period, dilutive earnings per share is the same as basic earnings per share.

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes 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	2020 2019 $ $ (2,751,440) 1,624,975 (31,271) 35,647 Consolidated entity
	(2,782,711) 1,660,622

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes Current assets Cash and cash equivalents Trade and other receivables Contract assets Inventories Financial assets Total current assets Non-current assets	2020 2019 $ $ 5,869,679 2,772,182 10,659,607 16,540,057 2,014,330 3,156,104 2,317,810 2,313,984 306,441 189,612 Consolidated entity
	21,167,867 24,971,939
Trade and other receivables	1,092,338 1,612,075
Plant and equipment	7,522,609 4,870,664
Deferred tax assets	2,610,870 2,604,954
Intangibles 5 Total non-current assets Total assets Current liabilities Trade and other payables Contract liabilities Tax liabilities Short-term borrowings Short-term lease liabilities Provisions Total current liabilities Non-current liabilities Long-term lease liabilities Deferred tax liabilities Provisions-non current Total non-current liabilities Total liabilities Net assets Equity Issued capital 6 Reserves Accumulated losses Total equity	12,072,010 12,072,010
	23,297,827 21,159,703
	44,465,694 46,131,642
	11,258,671 13,853,414 1,578,399 1,584,027 - 31,335 4,337,430 3,300,000 698,921 72,272 3,184,008 2,926,188
	21,057,429 21,767,236
	2,097,427 284,397 49,623 50,549 55,992 41,526
	2,203,042 376,472
	23,260,471 22,143,708
	21,205,223 23,987,934
	56,457,180 56,457,180 245,900 277,171 (35,497,857) (32,746,417)
	21,205,223 23,987,934

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EVZ Limited Appendix 4E Preliminary Final Report

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Consolidated entity As at 30 June 2019	Issued capital Accumulated losses Share options reserve Foreign currency translation reserve Total $ $ $ $
Balance at 30 June 2019 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 Balance at 30 June 2020	56,457,180 (32,746,417) 300,000 (22,829) 23,987,934 - (2,751,440) - - (2,751,440) - - - (31,271) (31,271)
	- (2,751,440) - (31,271) (2,782,711)
	- - - - - - - - - -
	56,457,180 (35,497,857) 300,000 (54,100) 21,205,223
Consolidated entity	Issued capital Accumulated losses Share options reserve Foreign currency translation reserve Total
As at 30 June 2018	$ $ $ $
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 Balance at 30 June 2019	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

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EVZ Limited Appendix 4E Preliminary Final Report

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Notes 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 loans Procceds from / (repayment) of finance leases Net cash provided by financing activities Net increase/(decrease) in cash held Cash at beginning of the period Cash at end of the period 7.	2020 2019 $ $ 79,753,999 82,525,701 (75,165,348) (79,501,810) 694 9,090 (685,428) (421,046) (30,505) (147,125) Consolidated entity
	3,873,412 2,464,810
	32,367 5,169 (903,853) (1,738,659)
	(871,486) (1,733,490)
	- 3,484,850 - (196,010) 1,000,000 (3,248,951) (904,429) 294,090
	95,571 333,979
	3,097,497 1,065,299 2,772,182 1,706,883
	5,869,679 2,772,182

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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 2020

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.

2. Profit/(loss) from continuing operations (a) Other income Sundry income Job keeper subsidy (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 (c) Net finance costs: Finance costs Interest income Net finance costs from continuing operations	2020 2019 $ $ 160,993 72,777 1,596,450 - Consolidated entity
	1,757,443 72,777
	94,883 - (4,316) 204,691 31,483,365 32,246,006 1,726,320 2,730,708 (27,212) (83,132) (32,367) (5,169) 113,691 1,143,125 1,591,957 747,300
	722,858 421,045 (694) (9,090)
	722,164 411,955

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EVZ Limited Appendix 4E Preliminary Final Report

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3. Income tax
(a) The prima facie tax on profit/(loss) before income tax from
continuing operations is reconciled to income tax as
follows:
Profit/(loss) before income tax (2,759,936) 1,728,418
Income tax calculated at 30% (2019: 30%) (827,981) 518,525
Tax effect of permanent differences 97,298 8,652
-
Recognition of additional tax losses (500,000)
-
Current year tax losses not booked 724,767
Taxation expense / (benefit) - offshore subsidiary (2,580) 76,266
Income tax expense/(benefit) (8,496) 103,443
The applicable weighted average effective tax rates are: 0% 6%
(b) The components of tax expense comprise:
Current tax (2,580) 604,091
Deferred tax (5,916) (648)
Recognition of additional tax losses - (500,000)
(8,496) 103,443
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EVZ Limited Appendix 4E Preliminary Final Report

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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	2020 2019 $ $ 96,116,734 93,406,203 Consolidated entity
	96,116,734 94,902,104

Due to the net loss for the 30 June 2020 period, dilutive earnings per share is the same as basic earnings per share.

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 6. Issued capital (a) Issued and paid up 2020: 96,116,734 ordinary shares 2019: 96,116,734 ordinary shares (b) Issued and fully paid up ordinary shares Opening balance Shares issued Share issue costs Closing balance (c) No. of shares Opening balance Shares issued Closing balance (d) Share options Opening balance Options issued Closing balance	2020 2019 $ $ 56,457,180 56,457,180 Consolidated entity
	56,457,180 56,457,180
	56,457,180 52,972,129 - 3,681,061 - (196,010)
	56,457,180 56,457,180
	No. of shares No. of shares 96,116,734 83,027,195 - 13,089,539
	96,116,734 96,116,734
	No. of options No. of options 1,500,000 1,500,000 - -
	1,500,000 1,500,000

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 of 7 June 2017.

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EVZ Limited Appendix 4E Preliminary Final Report

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7. Consolidated statement of cash flows Cash balances comprise: Cash on hand 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 Interest Accrued (Gain)/loss on foreign currency translation Share based payments 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	2020 2019 $ $ 5,869,679 2,772,182 Consolidated entity
	5,869,679 2,772,182
	(2,751,439) 1,624,975 (32,367) (5,169) 1,591,957 747,300 37,430 - (27,212) (83,132) - 196,211 273,109 (41,129) (3,825) (342,883) 7,425,131 (2,791,607) (6,842) 28,525 (2,600,371) 3,203,926 (32,159) (72,207)
	3,873,412 2,464,810

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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 2020

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 2020

8. Segment reporting - continuing operations

(a) Twelve months ended 30 June 2020:	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	37,413,130 7,175,772 21,635,808 - 66,224,710
	37,413,130 7,175,772 21,635,808 - 66,224,710
	37,413,130 7,175,772 21,635,808 - 66,224,710
	(1,842,515) (287,339) 1,416,622 (1,324,540) (2,037,772) (722,164) (2,759,936) 823,013 226,494 500,769 41,681 1,591,957 - -(47) -(47)

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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 2020

8. Segment Reporting - continuing operations (continued)

(b) Twelve months ended 30 June 2019:	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	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) 1,728,418 469,924 72,146 201,117 4,113 747,300 - - 204,691 - 204,691

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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 2020

9. Secondary segment reporting - including discontinued operations

(a) Twelve months ended 30 June 2020:	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	22,563,013 3,247,537 23,256,002 7,796,765	56,863,317 (12,397,623)
		44,465,694
	126,675 60,875 779,794 (63,491) 903,853
	16,500,478 5,936,391 4,028,301 4,745,678	31,210,848 (7,950,377)
		23,260,471
(b) 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 63,491.00	1,738,659
	16,744,777 4,447,458 4,455,857 3,660,520	29,308,612 (7,164,904)
		22,143,708

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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 2020

**10(a) **	Revenue by category: Engineering Energy Water Corporate Total All revenue is recognised over time $ $ $ $ $
	For the year ended 30 June 2020 Revenue Construction contracts 37,413,130 - 21,635,808 - 59,048,938 Services revenue - 7,175,772 - 7,175,772
	Total revenue from contracts 37,413,130 7,175,772 21,635,808 - 66,224,710
	For the year ended 30 June 2019 Revenue Construction contracts 53,091,236 - 19,677,312 - 72,768,548 Services revenue - 5,273,745 - 5,273,745
	Totalgroup revenue 53,091,236 5,273,745 19,677,312 - 78,042,293
**10(b) **	Revenue by geographical locations: Engineering Energy Water Corporate Total $ $ $ $ $
	For the year ended 30 June 2020 Revenue Australia 37,413,130 7,175,772 16,698,959 - 61,287,861 Asia - - 4,936,849 - 4,936,849
	Total revenue from contracts 37,413,130 7,175,772 21,635,808 - 66,224,710
	For the year ended 30 June 2019 Revenue Australia 53,091,236 5,273,745 13,884,095 - 72,249,076 Asia - - 5,793,217 - 5,793,217
	Totalgroup revenue 53,091,236 5,273,745 19,677,312 - 78,042,293
11.	Assets by geographical locations: Consolidated entity 2020 2019 $ $
	Australia 37,483,135 37,950,629 Asia 6,982,559 8,181,013
	Total assets 44,465,694 46,131,642

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EVZ Limited Appendix 4E Preliminary Final Report

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12. Subsequent Events

On 6[th] July 2020, the economic entity formally executed an extension to its existing bank debt facility to 31 October 2021.

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 2020 13. Net tangible assets Net tangible assets per ordinary share (cents per share)	2020 2019 6.79 12.40 Consolidated entity

14. Additional Information

Reporting period

The applicable reporting period is 1 July 2019 to 30 June 2020. The previous corresponding reporting period was 1 July 2018 to 30 June 2019

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	Not applicable
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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