IGNITE LIMITED — AGM Information 2019

Nov 18, 2019

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IGNITE LIMITED

Annual General Meeting 19 November 2019

Agenda

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Overview

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Strategy Update

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FY19 Year in Review Lloyd Morgan China

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FY20 Trading Update

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Q&A

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1 | Overview

Operations Across Australia & New Zealand

>$145 million

Revenues

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Quality clients

Diversified by size and sector (Government, corporates and SME)

7

Offices

120 Employees

Office Operations

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Business Divisions

Specialist Recruitment

1

▪ Contingent labour ▪ Permanent recruitment On Demand IT Services 2

▪ Delivery of information technology skills

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People Services

• Outsourced recruitment and human resource consulting services

Sale of Lloyd Morgan China enables 100% focus on the core Australian & New Zealand business.

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2 | Strategy Update

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Strategic Focus

Highlights of Key Initiatives

▪ Retain existing clients and grow our share of “customer wallet”. ▪ Focus on acquiring commercially viable customers. ▪ Grow into new complementary industry sectors and functional verticals that are matched with our capabilities. ▪ 100% focus on Australian & New Zealand operations and opportunities. ▪ Restructure of the Australian leadership team. ▪ Sale of Lloyd Morgan China to enable an undivided focus on the core Australian Specialist Recruitment, On Demand IT Services and People Services divisions. ▪ Ongoing review of operating costs and overheads. ▪ People Services pursuing opportunities in markets outside ACT. ▪ Search for an industry experienced CEO is ongoing.

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(1 of 2) 3 | FY19 Year in Review

Profit and Loss and Cashflow Metrics

• Revenue decreased 16.1% to $152,900k

(2018: $182,203k)

• Gross profit decreased 18.5% to $25,832k

• (2018: $31,700k)

• Gross profit margin reduced to 16.9% from 17.4%

• After tax loss increased 126.5% to $5,812k

• (2018: $2,566k loss)

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Balance Sheet Metrics

• Net assets decreased 37.0% to $8,872k from $14,075k

• Cash balance declined 53.7% to $1,287k

  • (2018: $2,782k)

• Debtor finance facility drawdown increased 823.2% to $5,798k (2018: $628k)

• Reduction in net trade receivables by 23.8%

• Reduction in trade and other payables 26.9%

• Net operating cash outflow of $1,232k (2018: net operating cash inflow $1,492k)

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(2 of 2) 3 | FY19 Year in Review

Specialist Recruitment

ACT

• Another exceptional year of strong performance with FY19 profit (before corporate overheads) up 80.3% on last year.

• Strong momentum continuing into FY20.

NSW

• Underperformed despite the leadership change in mid-2018. New General Manager appointed in late October 2019, an industry recognized specialist with over 20 years experience.

• Ongoing industry wide challenge in attracting quality consultants.

• Victoria

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On Demand People Services IT Services

• ▪

• FY19 revenue grew Record profit (before 15.9%. corporate overheads) up

• ▪ 90.5% on the prior year. Profit (before corporate ▪

• overheads) was up FY19 revenue flat but 24.0% on the prior year. improved margins.

• ▪ ▪ Relationships with tier Healthy sales pipeline one system integrators underpins strong underpin a promising and business momentum growing pipeline of sales into FY20. opportunities for FY20.

• Underperforming prior to the departure of the General Manager in June 2019. Negotiations underway with potential new General Manager.

QLD

• Trading profitably with the organisation restructure now completed.

• WA

• Trading profitably.

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4 | Lloyd Morgan China

FY19 FY20 ▪ ▪ Very challenging with Weak trading conditions revenue declining by have continued with YTD 37.8% on prior year. loss of $895k. ▪ ▪ Moved to loss of $966k Likely to result in large due to poor trading and unsustainable ▪ Higher than anticipated operating losses going costs and delays in forward. rebuilding the offices in Beijing and Guangzhou.

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• Divestment

• ▪ An internal review recommended divestiture of the China business.

• ▪ A complex legal and regulatory environment with heightened business risk.

• ▪ The operations consumed a disproportionate amount of senior leadership time.

• ▪ Size of future trading losses likely to impact the Group’s financial resources going forward.

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5 | FY20 Trading Update

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• ACT continuing to deliver and enjoying strong business momentum.

• ▪ New NSW General Manager appointed and expected to make a significant contribution.

• Specialist ▪ New VIC General Manager to be appointed.

• Recruitment ▪ QLD profitable with various options currently being evaluated.

• ▪ WA profitable.

• On Demand ▪ Promising and growing pipeline of sales opportunities with tier 1 system integrators. IT Services ▪ A core focus on profitably converting the sales opportunities. ▪

• People Services Strong business momentum underpinned by a healthy and growing sales pipeline.

• Sale of Lloyd Morgan China eliminates a significant major business distraction and enables 100% focus on the core Australian & New Zealand business.

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Thank you. Questions?

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