EXPERIENCE CO LIMITED — Interim / Quarterly Report 2018

Feb 11, 2018

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ACN 167 320 470

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FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN 167 320 470

Half Year Report for the period ended 31 December 2017

Contents

Directors' Report	1
Consolidated Statement of Profit or Loss and Other Comprehensive Income	4
Consolidated Statement of Financial Position	5
Consolidated Statement of Changes in Equity	6
Consolidated Statement of Cash Flows	7
Notes to the Consolidated Financial Statements	8
Directors’ Declaration	15
Independent Auditor's Review Report	16
Auditor's Independence Declaration	18

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Appendix 4D for the half year ended 31 December 2017

Results for Announcement to the Market

Results for Announcement to the Market
	Half-year ended	Half-year ended
	31-Dec-17	31-Dec-16	Variance
	$'000	$'000	%
Revenue from ordinary activities	59,239	39,098	51.5%
Earnings before interest, taxes, depreciation and amortisation (EBITDA)*	11,197	8,173	37.0%
Net profit before tax	6,072	5,133	18.3%
Net profit after tax attributable to members of the parent entity	4,641	3,626	28.0%

Significant Events

On 6 October 2017 the name of the Company was changed from Skydive the Beach Group Limited to Experience Co Limited.

On 10 October 2017 30,304,000 shares were issued at $0.66 each to institutional investors and on 3 November 2017 1,515,152 shares were issued at $0.66 each, both share issues were part of the GBR Helicopters Pty Ltd acquisition.

On 4 December 2017 77,102,361 shares were issued at $0.74 each to institutional investors on the basis of 3 shares for every 17 shares held, and 5,255,901 shares were issued at $0.74 each to retail investors on the basis of 3 shares for every 17 shares held. Both share issues were part of the Big Cat Green Island Cruises Pty Ltd, Tropical Journeys business and the Calypso Reef Charters Pty Ltd acquisitions.

Experience Co Limited acquired the following adventure businesses from 1 July 2017 to 31 December 2017:

• On 21 July 2017, acquired 100% of the ordinary shares in Byron Bay Ballooning Pty Ltd.

• On 18 September 2017, acquired 100% of the ordinary shares in Air Vistas Pty Ltd (trading as Wine Country Ballooning).

• On 1 November 2017, acquired 100% of the ordinary shares in GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd.

• On 28 November 2017, acquired 100% of the ordinary shares in Blue Ocean Productions Pty Ltd.

• On 13 December 2017, acquired 100% of the ordinary shares in Big Cat Green Island Cruises Pty Ltd.

• On 19 December 2017, acquired the business Tropical Journeys, and 100% of the ordinary shares in Calypso Reef Charters Pty Ltd.

Commentary on the Results

Experience Co Limited operates 18 skydiving drop zones throughout Australia and 3 in New Zealand and a leading eco-tourism adventure business throughout Australia offering white water rafting, hot air ballooning, canyoning, sea kayaking, air and sea tours to the Great Barrier Reef and Daintree tours.

Presented in the directors' report is a summary of historical and current financial performance information which shows that revenue increased by 51.5% compared to the same period last year and EBITDA* increased by 37.0% compared to the same period last year.

• EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items. The directors consider EBITDA to reflect the core earnings of the consolidated entity. A reconciliation between EBITDA and profit after income tax for the half year ended 31 December 2017 is included in the directors' report.

Dividends

On 29 September 2017, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2017, amounting to $4,348,777.

There have been no other dividends paid or declared during the period.

Net Tangible Assets

Net Tangible Assets
	31-Dec-17	30-Jun-17
Net assets per share	0.32	0.22
Net tangible assets per share	0.16	0.11

Half Year Report

The half year report of Experience Co Limited for the half year ended 31 December 2017 is attached.

Audit Status

The accounts were reviewed by the Group's auditors whose report is attached as part of the half year ended 31 December 2017.

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Anthony Boucaut Managing Director 12 February 2018

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Anthony Ritter Chief Executive Officer

1

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Directors' Report

The directors present their report on the consolidated entity (referred to herein as the Group) consisting of Experience Co Limited (formerly Skydive The Beach Group Limited) and its controlled entities for the half year ended 31 December 2017. The Company has changed its name from Skydive The Beach Group Limited to Experience Co Limited with effect from 6 October 2017.

The following persons were directors of Experience Co Limited during or since the end of the period up to the date of this report:

William Beerworth Non-Executive Director and Chairman Anthony Boucaut Executive Director and Managing Director Anthony Ritter Executive Director and Chief Executive Officer Colin Hughes Non-Executive Director John Diddams Non-Executive Director

Principal Activities

The principal activities of the consolidated group during the period was the provision of adventure tourism and leisure experiences to the public in Australia and New Zealand. A number of acquisitions were made in the 6 months to 31 December 2017, adding to the Group's product portfolio.

Other than the acquisitions listed on pages 8 and 9 of the financial report, there were no significant changes in the nature of the consolidated group's principal activities during the period.

Operating Results and Review of Operations

In the 6 months to 31 December 2017, Experience Co Limited recorded strong revenue and EBITDA growth from existing operations, as well as being driven by the following acquisitions:

• On 21 July 2017, acquired 100% of the ordinary shares in Byron Bay Ballooning Pty Ltd.

• On 18 September 2017, acquired 100% of the ordinary shares in Air Vistas Pty Ltd (trading as Wine Country Ballooning).

• On 1 November 2017, acquired 100% of the ordinary shares in GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd.

• On 28 November 2017, acquired 100% of the ordinary shares in Blue Ocean Productions Pty Ltd.

• On 13 December 2017, acquired 100% of the ordinary shares in Big Cat Green Island Cruises Pty Ltd.

• On 19 December 2017, acquired the business Tropical Journeys, and 100% of the ordinary shares in Calypso Reef Charters Pty Ltd.

Presented below is a summary of historical and current operating statistics and financial performance information, including a comparison of actual results for the period ended 31 December 2017 against the same period last year.

	Half-year	ended
	31-Dec-17	31-Dec-16	%
	Actual	Actual	Variance
Revenue from ordinary activities	59,239	39,098	51.5%
Earnings before interest, taxes, depreciation and amortisation (EBITDA)*	11,197	8,173	37.0%
Net profit before tax	6,072	5,133	18.3%
Net profit after tax attributable to members of the parent entity	4,641	3,626	28.0%

• EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items. The directors consider EBITDA to reflect the core earnings of the consolidated entity. A reconciliation between EBITDA and profit after income tax for the half year ended 31 December 2017 is included below.

2

Reconciliation of EBITDA to NPAT

Earnings before interest, taxes, depreciation and amortisation (EBITDA) Deduct: Depreciation and amortisation Deduct: Finance costs Net profit before tax Income tax expense Net profit after tax	31-Dec-17 31-Dec-16 $'000 $'000 11,197 8,173 (4,231) (2,635) (894) (405) Half-year ended
	6,072 5,133 (1,431) (1,507)
	4,641 3,626

Dividends

On 29 September 2017, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2017, amounting to $4,348,777.

There have been no other dividends paid or declared during the period.

Significant Changes in State of Affairs

On 6 October 2017 the name of the Company was changed from Skydive the Beach Group Limited to Experience Co Limited.

On 10 October 2017 30,304,000 shares were issued at $0.66 each to institutional investors and on 3 November 2017 1,515,152 shares were issued at $0.66 each, both share issues were part of the GBR Helicopters Pty Ltd acquisition.

On 4 December 2017 77,102,361 shares were issued at $0.74 each to institutional investors on the basis of 3 shares for every 17 shares held, and 5,255,901 shares were issued at $0.74 each to retail investors on the basis of 3 shares for every 17 shares held. Both share issues were part of the Big Cat Green Island Cruises Pty Ltd, Tropical Journeys business and the Calypso Reef Charters Pty Ltd acquisitions.

Experience Co Limited acquired the following adventure businesses from 1 July 2017 to 31 December 2017:

• On 21 July 2017, acquired 100% of the ordinary shares in Byron Bay Ballooning Pty Ltd.

• On 18 September 2017, acquired 100% of the ordinary shares in Air Vistas Pty Ltd (trading as Wine Country Ballooning).

• On 1 November 2017, acquired 100% of the ordinary shares in GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd.

• On 28 November 2017, acquired 100% of the ordinary shares in Blue Ocean Productions Pty Ltd.

• On 13 December 2017, acquired 100% of the ordinary shares in Big Cat Green Island Cruises Pty Ltd.

• On 19 December 2017, acquired the business Tropical Journeys, and 100% of the ordinary shares in Calypso Reef Charters Pty Ltd.

Events Subsequent to the End of the Reporting Period

No material events subsequent to end of the reporting period.

Rounding of Amounts

The Company is an entity to which ASIC Corporations (Rounding in Financial/Director's Reports) Instrument 206/191 issued by ASIC relating to rounding off applies, amounts in the financial statements and directors’ report have been rounded to the nearest thousand dollars.

Auditor's independence declaration

A copy of the auditor's independence declaration as requested under section 307 c of the Corporation Act 2001 is set out on page 20.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

Signed on behalf of the directors

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Anthony Boucaut Managing Director Dated : 12 February 2018

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Anthony Ritter Chief Executive Officer

3

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

ACN: 167 320 470

Consolidated Statement of Profit or Loss and Other Comprehensive Income for the half year ended 31 December 2017

Revenue Cost of sales Gross profit Other income Administration expenses Occupancy expenses Depreciation and amortisation expenses Marketing, advertising and agents commission Repairs and maintenance expenses Finance costs Net profit before income tax Income tax expense Other comprehensive income: Items that will be reclassified to profit or loss when specific conditions are met: Exchange differences on translation of foreign operations Total other comprehensive income Total comprehensive income for the period Earnings per share From continuing operations: Basic earnings per share (cents) Diluted earnings per share (cents) Net profit after tax attributable to members of the parent entity	Half Year Ended Half Year Ended 31 December 2017 31 December 2016 $000 $000 59,239 39,098 (34,879) (22,812) Consolidated Group
	24,360 16,286 500 220 (10,287) (6,217) (1,594) (995) (4,231) (2,635) (1,291) (939) (491) (182) (894) (405)
	6,072 5,133 (1,431) (1,507)
	4,641 3,626 208 89
	208 89
	4,849 3,715
	2.03 1.75 1.94 1.71

.

The accompanying notes form part of these financial statements.

4

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

ACN: ACN 167 320 470

Consolidated Statement of Financial Position as at 31 December 2017

Note ASSETS Current assets Cash and cash equivalents 2 Trade and other receivables Inventories Other current assets Current tax assets Total current assets Non-current assets Trade and other receivables Property, plant and equipment 5 Intangible assets 6 Other non current assets Deferred tax assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Deferred revenue Borrowings 11 Provisions Current tax liabilities Total current liabilities Non-current liabilities Borrowings 11 Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital 7 Retained earnings Reserves Total equity	As at As at 31 December 2017 30-Jun-17 $000 $000 14,465 9,490 12,724 4,340 4,204 2,525 3,408 3,705 252 - Consolidated Group
	35,053 20,060
	1,175 1,153 122,724 70,370 89,043 47,959 1,037 38 2,294 -
	216,273 119,520
	251,325 139,580
	14,738 6,596 1,179 891 7,974 5,692 2,195 1,490 1,518 1,338
	27,604 16,007
	33,031 23,932 11,404 4,962 783 183
	45,218 29,077
	72,822 45,084
	178,503 94,496
	167,828 84,321 12,500 12,208 (1,825) (2,033)
	178,503 94,496

The accompanying notes form part of these financial statements.

5

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Consolidated Statement of Changes in Equity for the half year ended 31 December 2017

Note Consolidated Group Balance at 1 July 2016 Comprehensive income Profit for the period Other comprehensive income Total comprehensive income Transactions with owners, in their capacity as owners Issued shares Transaction costs, net of tax impact Distributions paid or provided for Movement in share options reserve Total transactions with owners Balance as at 31 December 2016 Balance at 1 July 2017 Comprehensive income Profit for the period Other comprehensive income Total comprehensive income Transactions with owners, in their capacity as owners Issued shares 7 Transaction costs, net of tax impact Distributions paid or provided for 3 Total transactions with owners Balance as at 31 December 2017	Issued Capital Retained Earnings Asset Revaluation Reserve Common Control Reserve Share Option Reserve Foreign Currency Translation Reserve Total $000 $000 $000 $000 $000 $000 $000 65,231 6,689 2,386 (4,171) 13 (101) 70,047 - 3,626 - - - - 3,626 - - - - - 89 89
	- 3,626 - - - 89 3,715
	19,627 - - - - - 19,627 (1,033) - - - - - (1,033) - (3,963) - - - - (3,963) - - - - 3 100 103
	18,594(3,963) - - 3 100 14,734
	83,825 6,352 2,386(4,171) 16 88 88,495
	84,321 12,208 2,386 (4,171) 18 (266) 94,496 - 4,641 - - - - 4,641 - - - - - 208 208
	- 4,641 - - - 208 4,849
	86,946 - - - - - 86,946 (3,438) - - - - - (3,438) -(4,349) - - - -(4,349)
	83,507(4,349) - - - - 79,159
	167,828 12,500 2,386(4,171) 18(58) 178,503

The accompanying notes form part of these financial statements.

6

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Consolidated Statement of Cash Flows for the half year ended 31 December 2017

Note Cash flows from operating activities Receipts from customers (inclusive of GST) Interest received Payments to suppliers and employees (inclusive of GST) Finance costs Income tax paid Net cash provided by operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for business acquisitions Loans to related parties Investments in related parties Cash acquired in business acquisitions Net cash used in investing activities Cash flows from financing activities Proceeds from issued capital Transaction costs associated with share issue Dividends paid Repayment of borrowings Proceeds from borrowings Net cash provided by financing activities Net increase / (decrease) in cash held Cash at beginning of the period Effects of exchange rate on cash and cash equivalents Cash at end of the period 2	Half Year Ended Half Year Ended 31 December 2017 31 December 2016 $000 $000 65,295 37,697 37 106 (56,877) (29,092) (894) (405) (2,538) (1,767) Consolidated Group
	5,022 6,539
	(15,825) (11,673) (69,558) (15,922) (500) - (500) - 1,897 610
	(84,486) (26,985)
	80,946 19,626 (3,438) (1,033) (4,349) (3,963) (2,071) (1,213) 13,447 4,579
	84,535 17,996
	5,071 (2,450) 9,490 12,819 (96) -
	14,465 10,369

The accompanying notes form part of these financial statements.

7

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the consolidated financial statements for the half year ended 31 December 2017

1 Significant Accounting Policies

Statement of compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company's 30 June 2017 annual financial report for the financial year ended 30 June 2017. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Critical Accounting Judgements, Estimates and Assumptions

The preparation of the interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the amount of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. All critical accounting estimates and judgements are consistent with those applied and included in the annual financial report for the year ended 30 June 2017.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current period.

The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group's accounting policies and did not have any significant impact on the amounts reported for the current or prior periods.

Provisional amounts in respect of acquisitions

During the half year period ended 31 December 2017, Experience Co Limited made a number of acquisitions as disclosed in note 4. AASB 3, Business Combinations, confirms that if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete.

The initial accounting and Purchase Price Allocation for the acquisition remains incomplete and consequently the Board has resolved to include provisional amounts in respect of the acquisition for the half year ended 31 December 2017. The actual results may differ materially for these original estimates for the Provisional Amounts.

nciliation of Cash and Cash Equivalents at the end of the period as shown in the statement of cashflows is reconciled to the items in the statement ncial position as follows: Cash on hand Cash at bank	31-Dec-17 30-Jun-17 $000 $000 41 26 14,424 9,464 Consolidated Group
	14,465 9,490

2 Reconciliation of Cash and Cash Equivalents

Cash at the end of the period as shown in the statement of cashflows is reconciled to the items in the statement of financial position as follows:

3 Dividends

A final fully franked dividend of $0.01 per share was paid on 29 September 2017 out of retained profits at 30 June 2017, amounting to $4,348,777

No other dividends have been paid or declared.

4 Acquisition of Controlled Entities

(i) On 21 July 2017, Experience Co Limited acquired Byron Bay Ballooning Pty Ltd, being a company registered and trading within Australia, for the consideration of $800,000.

Fair value of purchase consideration: Cash Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities Goodwill and other intangible assets	$000
	800
	6 52 (126)
	(68)
	868

(ii) On 18 September 2017 Experience Co Limited acquired Air Vistas Pty Ltd (trading as Wine Country Ballooning), being a company registered and trading in Australia, for the consideration of $350,000.

Fair value of purchase consideration: Cash Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities - Non-current liabilities Goodwill and other intangible assets
	350
	10 70 - (40)
	40
	310

Goodwill and other intangible assets

8

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the consolidated financial statements

for the half year ended 31 December 2017

4 Acquisition of Controlled Entities (continued)

(iii) On 1 November 2017, Experience Co Limited, acquired GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd, being two companies registered and trading within Australia, for the consideration of $19,600,000, including the purchase of loan accounts of $8,352,525.

Fair value of purchase consideration:

Cash Shares issued in Experience Co limited Deferred Consideration Working Capital Adjustment Loans acquired Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities - Non-current liabilities Goodwill and other intangible assets	16,600 1,000 2,000 (1,853) (8,353)
	9,394
	2,596 14,418 (5,053) (6,383)
	5,578
	3,816

(iv) On 28 November 2017 Experience Co Limited acquired Blue Ocean Productions Pty Ltd, a company registered in Australia. Consideration for the acquisition was $350,000.

Fair value of purchase consideration: Cash Assets held at acquisition date - non current assets Goodwill and other Intangible Assets
	350
	25
	325

(v) On 13 December 2017, Experience Co Limited acquired Big Cat Green Island Cruises Pty Ltd, being a company registered and trading within Australia, for the consideration of $38,070,000.

Fair value of purchase consideration:

Cash Shares issued in Experience Co limited Working Capital Adjustment Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities - Non-current liabilities Goodwill and other intangible assets	33,070 5,000 608
	38,678
	3,651 11,680 (2,572) (3,416)
	9,343
	29,335

(vi) On 19 December 2017, Experience Co Limited acquired the business Tropical Journeys, a business trading within Australia, for the consideration of $18,000,000, including the purchase of loan accounts of $4,659,959. The acquisition included the purchase of Calypso Reef Charters Pty Ltd.

Fair value of purchase consideration:

Cash Loans acquired Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities - Non-current liabilities Goodwill and other intangible assets	18,000 (4,660)
	13,340
	1,533 11,999 (6,191) (720)
	6,621
	6,719

(vii) On 1 September 2017, Experience Co Limited paid an amount of $468,537 to the vendors of Reef Magic Cruises Pty Ltd. This payment was a fulfillment of an obligation in accordance with the sale and purchase agreement for Reef Magic Cruises Pty Ltd, which was acquired on 1 May 2017.

9

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the consolidated financial statements for the half year ended 31 December 2017

5 Property, Plant and Equipment

Plant and equipment: At cost Accumulated depreciation Leasehold improvements: At cost Accumulated depreciation Aircraft: At revalued amounts Accumulated depreciation Motor vehicles: At cost Accumulated depreciation Office equipment: At cost Accumulated depreciation Land and buildings: At cost Accumulated depreciation Vessels: At cost Accumulated depreciation Floating Docks At cost Accumulated depreciation

Total property, plant and equipment

Consolidated	Group
As at	As at
31-Dec-17	30-Jun-17
$000	$000
11,681	9,647
(3,101)	(2,305)
8,580	7,342
2,780	1,986
(886)	(616)
1,894	1,370
72,169	48,773
(7,388)	(5,667)
64,781	43,105
5,290	4,019
(1,159)	(900)
4,131	3,119
1,424	1,179
(771)	(648)
653	531
9,793	4,189
(128)	(70)
9,665	4,119
31,846	9,285
(496)	(134)
31,350	9,151
1,793	1,656
(122)	(22)
1,670	1,634
122,724	70,370

a) Movements in Carrying Amounts

Additions through business combinations Closing balance Additions Depreciation expense Opening balance	Plant & Equipment Leasehold Improvements Aircraft Motor Vehicles Office Equipment Land and buildings Vessels Floating Docks Total 7,342 1,370 43,105 3,119 531 4,119 9,151 1,634 70,370 747 706 14,290 508 103 1,600 22,467 51 40,472 1,287 88 9,107 763 142 4,004 94 85 15,570 (796) (270) (1,721) (259) (123) (58) (362) (99) (3,688)
	8,580 1,894 64,781 4,131 653 9,665 31,350 1,670 122,724

6 Intangible Assets

Goodwill: Cost Accumulated impaired losses Leases & Licences: Cost Accumulated amortisation and impairment losses

Trademarks: Cost Accumulated amortisation and impairment losses Computer software: Cost Accumulated amortisation and impairment losses Customer relationships and other intangible assets: Cost Accumulated amortisation Total intangibles

Consolidated	Group
As at	As at
31-Dec-17	30-Jun-17
$000	$000
30,917	18,828
-	-
30,917	18,828
15,389	6,131
(198)	(198)
15,191	5,933
15,594	9,805
-	-
15,594	9,805
1,328	1,207
(962)	(839)
367	368
28,436	14,073
(1,462)	(1,048)
26,974	13,025
89,043	47,959

10

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

ACN: 167 320 470

Notes to the consolidated financial statements for the half year ended 31 December 2017

6 Intangible Assets (Continued)

a) Movements in Carrying Amounts

Opening balance Additions through business combinations Additions Amortisation expense Closing balance Transfers between classes	Goodwill Leases & Licences Trademarks Computer Software Customer relationships and other Total $000 $000 $000 $000 $000 $000 18,828 5,933 9,805 368 13,025 47,959 11,689 9,658 5,734 - 14,293 41,374 - - 55 128 70 253 400 (400) - - - - - - - (129) (414) (543)
	30,917 15,191 15,594 367 26,974 89,043

7 Issued Capital

Issued Capital
At the beginning of the reporting period Balance at the end of the reporting period On 3 November 2017 1,515,152 shares were issued at $0.66 each as part of the GBR Helicopters Pty Ltd acquisition. 555,811,840 (June 2017: 434,877,669) fully paid ordinary shares On 10 October 2017 30,304,000 shares were issued at $0.66 each to institutional investors. Shares issued during the period	As at As at 31-Dec-17 30-Jun-17 $000 $000 167,828 84,321 Consolidated Group
	No. No. 434,877,669 396,301,350 120,934,171 38,576,319
	555,811,840 434,877,669

On 4 December 2017 77,102,361 shares were issued at $0.74 each to institutional investors on the basis of 3 shares for every 17 shares held.

On 4 December 2017 5,255,901 shares were issued at $0.74 each to retail investors on the basis of 3 shares for every 17 shares held.

On 13 December 2017 6,756,757 shares were issued at $0.74 each as part of the Big Cat Green Island Reef Cruises Pty Ltd acquisition.

8 Segment information

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 (who are identified as the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Group's financial performance is examined primarily from an activities perspective and operating segments have therefore been determined on the same basis.

The Group has identified the following reportable operational segments:

• Skydive Operations

• Other Adventure Experiences

The following is an analysis of the Group's revenue and results by reportable operating segment for the period under review:

(i) Operating Segment information

31 December 2017	Skydiving Other Adventure Experiences Intersegment eliminations / unallocated $000 $000 $000	Total $000
Revenue Sales to external customers Inter-segment sales Total sales revenue Other income Total Revenue EBIDTA Depreciation and amortisation Finance costs Net profit before tax from continuing operations Reconciliation of segment result to group net profit/loss before tax Segment net profit from continuing operations before tax Unallocated items: Shared services costs Net profit before tax from continuing operations	38,724 20,497 19 - - -	59,240 -
	38,724 20,497 19	59,240
	113 387 -	500
	38,837 20,884 19	59,740
	12,211 4,839 - (3,379) (852) - (894) - -	17,050 (4,231) (894)
	7,938 3,987 -	11,925
	7,513 4,412 -	11,925
		5,853
		6,072

11

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the consolidated financial statements for the half year ended 31 December 2017

8 Segment information (continued)

31 December 2016	Skydiving Other Adventure Experiences Intersegment eliminations / unallocated $000 $000 $000	Total $000
Revenue Sales to external customers Inter-segment sales Total sales revenue Other income Total Revenue EBIDTA Depreciation and amortisation Finance costs Net profit before tax from continuing operations Reconciliation of segment result to group net profit/loss before tax Segment net profit from continuing operations before tax Unallocated items: Shared services costs Net profit before tax from continuing operations	36,378 2,720 - - - -	39,098 -
	36,378 2,720 -	39,098
	89 25 -	114
	36,467 2,745 -	39,212
	12,106 588 - (2,569) (65) - (405) - -	12,694 (2,634) (405)
	9,132 523 -	9,655
	9,142 513 -	9,655
		4,522
		5,133

Shared services costs are primarily head office costs borne by the group that are not allocated to operating segments as they are deemed costs that can not be accurately allocated. They include head office payroll costs, sales & marketing costs, travel expenses, acquisition costs and advisory fees.

31 December 2017	Skydiving Other Adventure Experiences Total $000 $000 $000
Segment Assets Segment Liabilities 30 June 2017	224,362 26,964 251,325
	51,379 21,442 72,822
	Skydiving Other Adventure Experiences Total $000 $000 $000
Segment Assets Segment Liabilities	129,716 9,864 139,580
	37,966 7,118 45,084

9 Segment information Identification of reportable segments

The Group has identified two geographical segments, Australia and New Zealand.

The following is an analysis of the Group's revenue and non current assets per geographical segment for the period under review:

Segment performance 31 December 2017	Australia New Zealand Total $000 $000 $000
Revenue Sales to external customers 31 December 2016	46,258 12,981 59,239
	46,258 12,981 59,239
Revenue Sales to external customers Non Current Segment Assets 31 December 2017
	27,147 11,951 39,098
Non Current Segment assets 30 June 2017	190,244 26,028 216,273
	190,244 26,028 216,273
Non Current Segment assets	91,889 27,631 119,520
	91,889 27,631 119,520

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

Notes to the consolidated financial statements for the half year ended 31 December 2017

ACN: 167 320 470

10 Fair Value Measurements

The Group measures and recognises the aircraft assets at fair value on a recurring basis after initial recognition.

The Group subsequently measures some items of freehold land and buildings at fair value on a non-recurring basis.

(a) Fair value hierarchy

AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows:

Level 1

Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3

Measurements based on unobservable inputs for the asset or liability.

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.

Valuation techniques

The Group elects to use external valuation experts where possible. The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:

• Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.

• Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.

• Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data are not available and therefore are developed using the best information available about such assumptions are considered unobservable.

The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy.

categorisation within the fair value hierarchy.
Recurring fair value measurements Non-financial assets Aircraft Vessels Total non-financial assets recognised at fair value on a recurring basis Total non-financial assets recognised at fair value	Level 1 Level 2 Level 3 Total $000 $000 $000 $000 - - 64,781 64,781 - - 31,846 31,846 31 December 2017
	- - 96,627 96,627
	- - 96,627 96,627

(b) Valuation techniques and inputs used to measure Level 3 fair values

Fair Value ($) Description Non-financial assets Aircraft equipment Vessels	at 31 December 2017 Valuation technique(s) Inputs used 64,781 31,846 96,627 Market approach using recent observable market data for similar assets Make and model of vessels, aircraft frame, engines and other key components, maintenance status, damage history

The fair value of aircraft equipment and vessels is expected to be determined at least every three years based on valuations by an independent valuer. At the end of each intervening period, the directors review the independent valuation and, when appropriate, update the fair value measurement to reflect current market conditions using a range of valuation techniques, including recent observable market data.

There were no changes during the period in the valuation techniques used by the Group to determine Level 3 fair values.

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the consolidated financial statements for the half year ended 31 December 2017

11 Borrowings

owings
Total borrowings Total non-current borrowings Total current and non-current secured liabilities: Bank loan Current Bank loans Finance lease liabilities Vendor finance loan Total current borrowings Non-Current Bank loans Finance lease liabilities Finance lease liabilities Vendor finance loan	As at As at 31-Dec-17 30-Jun-17 $000 $000 3,756 87 2,014 3,401 2,204 2,204 Consolidated Group
	7,974 5,692
	16,497 15,137 16,534 8,795
	33,031 23,932
	41,005 29,624
	20,253 15,224 18,548 12,196 2,204 2,204
	41,005 29,624

12 Contingent Assets and Contingent Liabilities

The Group had no contingent assets or contingent liabilities as at 31 December 2017.

13 Events After the End of the Period

No events after end of the period.

14 Company Details

The registered office and principal place of business is: 1/51 Montague Street NORTH WOLLONGONG NSW 2500

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

ACN 167 320 470

Directors’ Declaration

In accordance with a resolution of the directors of Experience Co Limited, the directors of the company declare that:

1. The financial statements and notes, as set out on pages 4 to 1 4 :

2. (a) comply with Accounting Standard AASB 134: Interim Financial Reporting; and

(b) give a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and of its performance for the period ended on that date.

1. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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Anthony Boucaut Managing Director Dated: 12 February 2018

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Anthony Ritter Chief Executive Officer

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INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF

EXPERIENCE CO LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Experience Co Limited which comprises the statement of financial position as at 31 December 2017, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the consolidated entities are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Experience Co Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations act 2001 , which has been given to the directors of Experience Co Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Experience Co Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

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RSM AUSTRALIA PARTNERS

Sydney, NSW Dated: 12 February 2018

G N SHERWOOD Partner

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the review of the financial report of Experience Co Limited for the half year ended 31 December 2017, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii) any applicable code of professional conduct in relation to the review.

RSM AUSTRALIA PARTNERS

G N Sherwood Partner

Sydney, NSW Dated: 12 February 2018

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