STEALTH GROUP HOLDINGS LTD — Interim / Quarterly Report 2022

Feb 27, 2022

==> picture [40 x 40] intentionally omitted <==

Appendix 4D – Half Year Report

Report for the half-year ended 31 December 2021 – Stealth Global Holdings Ltd and its controlled entities

ACN 615 518 020

Report for the half-year ended 31 December 2021

This report presents the results for Stealth Global Holdings Ltd and its controlled entities, for the half year ended 31 December 2021 (current period) compared with the half-year ended 31 December 2020 (prior period).

Results for announcement to the market

==> picture [497 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2020 31 Dec 2021
$ $
----- End of picture text -----

Revenues from continuing ordinary activities	Up	54.7%	from	28,653,271	to	44,321,899
Net proft before tax	Up	590.1%	from	175,878	to	1,213,663
Proft from ordinary activities after tax attributable to the owners	Down	89.8%	from	171,226	to	17,411
Proft for the year attributable to the owners	Down	89.8%	from	171,226	to	17,411

Operating and financial review

The detailed Operating and Financial Review (OFR) is contained in the Directors’ Report within the Interim Financial Report. The results and major factors contributing to the results are:

• Record consolidated revenue of $46.5m from combined continuing and discontinued operations, up $16.1m (53%) on 1H FY2021 and up $7.1m (18%) on 2H FY2021.

• Record revenue of $44.3m from continuing operations, up $15.7m (55%) on 1H FY2021 and up $6.3m (16%) on 2H FY2021, including contributions from acquisitions of C&L Tools (C&L) (1 December 2020) and Skipper Transport Parts (STP) (15 August 2021).

• Gross Profit margin of 29.8%, up from 27.7% in 1H FY2021 and marginally down on 30.0% in 2H FY2021.

• Underlying EBITDA[1] of $1.73m up 243% on $0.50m for 1H FY2021.

• Statutory EBITDA of $0.99m up 5% on $0.94m for 1H FY2021.

• Statutory Net Profit After Tax of $0.82m up 412% from $0.16m in 1H FY2021.

• Statutory Net Profit After Tax attributable to Members of $0.02m, compared to $0.17m in 1H FY2021 and $0.39m in 2H FY2021.

Australia Trading

Sales in Australia from continuing operations increased by 55% to $44.3m in 1H FY2022, up $15.7m (55%) compared to 1H FY2021 and up $6.3m (16%) compared to 2H FY2021. The revenue contributions from the acquisitions of C&L (1 December 2020) and of STP (15 August 2021) were key components driving these increases, with STP to contribute a full six months of revenue in 2H FY2022.

The Group’s growing scale has seen it expand into Queensland through the acquisition of C&L and expand its footprint across Western Australia through the acquisition of STP, adding four regional branches, expanded MRO product range and increased on-site service capability. The announcement at the Group’s AGM in November 2021 in relation to new customer contracts worth ~$18m annualised revenue is confirmation that the Group’s growing scale, product offering and capability is providing new, larger sales opportunities for Stealth.

Subsequent events post 31 December 2021 will see further expansion to the Group’s Australian trading in 2H FY2022 through the acquisition of United Tools Limited, one of Australia’s largest buying & distribution co-operatives of independent retailers.

1 Underlying EBITDA is a non-IFRS term representing Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), which has not been subject to review but has been determined using information presented in the Group’s interim financial report and is determined after adding back unusual costs and Job Keeper income to the Statutory EBITDA.

International Trading

BSA Brands (UK) a 50/50 joint venture with Bisley Workwear, delivered underling trading revenue of $1.25m for 1H FY2021, up 15% ($0.16m) compared to 1H FY2021 revenue of $1.09m, and up 34% ($0.32m) compared to 2H FY2021 revenue of $0.93m.

Other Sales into Africa were $0.89m for the half year compared to $0.64m in 1H FY2021 and $0.36m in 2H FY2021.

These operations are now disclosed as discontinued operations as of the current reporting period.

Major Investments and Acquisitions

A key area in Stealth’s strategy is making complementary value generating acquisitions. Stealth identified and assessed several potential acquisitions of scale, investing significant management time and working with external advisors to undertake due diligence and assessment of strategic fit to the Company’s disciplined criteria.

Stealth completed the $3.93m acquisition of Skipper Transport Parts (STP) on 15 August 2021. Expenditure on acquisition and integration costs were $0.42m for the period.

1H FY2022 included a full six-months contribution from its acquisition of C&L Tool Centre (C&L) on 1 December 2020, compared to one month contribution to 1H FY2021. C&L has outperformed to the original acquisition targets (annual sales by 22% and annual EBITDA by 57%).

In January 2022, Stealth announced the acquisition of United Tools Limited, which will contribute 4 months of revenue to the 2H FY2022 performance.

The Group continues to advance its eCommerce digital platforms, including its Online e-store websites for business and retail customers in Australia. This is expected to deliver increased sales across the group from having a world-class capability to fully integrate systems with business customers, suppliers and partners complete with comprehensive Online sales platforms to business and retail customers with full data analytics. This was instrumental in the Group being awarded new customer contracts worth ~$18m annualised revenue as announced at the Group’s AGM in November 2021.

Net Tangible Assets

Net Tangible Assets	31 Dec 2021	30 Jun 2021
Net tangible asset backing per ordinary security (cents per share)	4.40c	4.19c

Details of entities over which control has been gained during the period

There were no entities over which control was gained during the period. The acquisition of the business assets of STP during the period was by the Group’s existing 100% owned and controlled subsidiary Heatley Sales Pty Ltd.

Details of entities over which control has been lost during the period

There were no entities over which control has been lost during the period.

Dividends

There were no dividends paid, recommended or declared during the current financial period.

The condensed financial report has been reviewed by BDO Audit (WA) Pty Ltd and is not subject to dispute or qualification.

Authorisation of release

This announcement was authorised to be given to the ASX by the Board of Directors of Stealth Global Holdings Ltd.

Date of Release

28 February 2022

Stealth Global Holdings Appendix 4D

B

==> picture [39 x 39] intentionally omitted <==

==> picture [596 x 243] intentionally omitted <==

Interim Financial Report

For the half-year ended 31 December 2021

Stealth Global Holdings Ltd | ABN 25 615 518 020

An Australian Distribution Group

Corporate Directory

Directors

Mr Christopher Wharton AM Non-Executive Chairman

Mr Michael Arnold Managing Director

Mr Giovanni (John) Groppoli Non-Executive Director

Mr Simon Poidevin AM OAM Non-Executive Director (appointed 15 October 2021)

Mr Alan Cransberg Non-Executive Director (resigned 15 October 2021)

Share Registry

Computershare Investor Services Level 11, 172 St Georges Terrace Perth WA 6000 Telephone: 1300 850 505 (within Australia) Telephone: +61 3 9415 4000 (overseas)

Company Auditor

BDO Audit (WA) Pty Ltd Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000

Bankers

Company secretary

Ms Jessamyn Lyons

Commonwealth Bank of Australia 300 Murray Street Perth WA 6000

Key Management Personnel

Mr Luke Cruskall Group Chief Operating Officer

Mr John Boland Group Chief Financial Officer

Accountants and Taxation Advisors

Gooding Partners The Quadrant, Level 9, 1 William Street Perth WA 6000

Solicitors

MDS Legal Irwin Chambers, Level 2, 16 Irwin Street Perth WA 6000

Principal and Registered Office

Unit 10, 43 Cedric Street Stirling WA 6021 Australia Telephone: +61 8 6465 7800 Email: investors@stealthgi.com Website: www.stealthgi.com

ASX code: SGI

Stealth Global Holdings Interim Financial Report 2021

2

Contents

Contents
Corporate Directory	2
Directors’ Report	4
Auditor’s Independence Declaration	9
Consolidated Statement of Proft or Loss and Comprehensive Income	10
Consolidated Statement of Financial Position	11
Consolidated Statement of Changes in Equity	12
Consolidated Statement of Cash Flows	13
Notes to the Consolidated Financial Statements	14
Directors’ Declaration	26
Independent Auditor’s Review Report	27

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by Stealth Global Holdings Ltd during the interim reporting period in accordance with the continuous disclosure requirements arising under the Australian Securities Exchange Listing Rules and the Corporations Act 2001.

Stealth Global Holdings Interim Financial Report 2021

3

Directors’ Report

==> picture [596 x 240] intentionally omitted <==

Stealth Global Holdings Interim Financial Report 2021

4

The Directors present their report together with the consolidated financial statements of Stealth Global Holdings Ltd ( Stealth or Company ) and its controlled entities ( Consolidated Entity or Group ) for the half year ended 31 December 2021 and the auditor’s report thereon.

Directors

The following persons were directors of the Company during the whole of the half year ended 31 December 2021 and up to the date of this report unless otherwise stated:

Christopher Scott Wharton AM Independent Non-Executive Chairman Michael Alan Arnold Managing Director Giovanni (John) Groppoli Non-Executive Director Simon Poidevin AM OAM Non-Executive Director (appointed 15 October 2021) Alan John Cransberg Non-Executive Director (resigned 15 October 2021)

Principal Activities

The Company is an Australian multinational distribution group headquartered in Perth, Western Australia. The Company operates a fully connected network in Australia as its primary market and other select international markets based on strategic activities. 2022 will see the Company cease to operate in the United Kingdom and Africa post the sale of its 50% interest in the BSA Brands (UK) Limited JV to its JV partner Bisley.

We are a broad-line business-to-business (B2B) and business-to-consumer (B2C) distributor of industrial, maintenance, repair, operating (MRO), safety, workplace supplies and other related products and services.

Through a omnichannel approach, we serve customers of all sizes focusing on customers needs, combined with an expansive in-stock product offering, value-add solutions and multichannel proposition including Sales Team, In-Store, On-Site, Online, Delivery options and Click & Collect.

With more than 5,500 business customers and 34,000 retail customers of all sizes, we provide customers with purchasing options and fulfilment solutions that are necessary in their everyday requirements.

Customers range from a broad collection of industries including commercial, mining, resources, industrial, government, transport, automotive, agriculture, building, construction, manufacturing, engineering, trade and retail consumers.

Business Customers represent a broad collection of industries that place orders through our sales representatives, in-store at our branches, online, on-site, and over the phone and by email with our internal sales team. Retail Customers order online or in-store at our branches.

Operating and Financial Review

Financial Performance

Stealth achieved record consolidated revenue of $46.5m from combined continuing and discontinued operations, up $16.1m (53%) on 1H FY2021 and up $7.1m (18%) on 2H FY2021. The Group’s trading performance from continuing operations in 1H FY2022 saw it achieve record half-year revenue of $44.3m, up 54.7% on 1H FY2021 and 16.4% on 2H FY2021, as it continues to execute on its growth strategy, which included the acquisition of C&L Tools (C&L) on 1 December 2020 and Skipper Transport Parts (STP) on 15 August 2021, with the acquisition of United Tools Limited scheduled for 2H FY2022.

1H FY2022 also saw the Group’s UK operations reclassified as discontinued operations due to the sale in February 2022 of its investment in BSA Brands (UK) Limited joint venture with Bisley Workwear. This sale was to Stealth’s partner in this joint venture and arose as a consequence of the acquisition of Bisley by PIP Inc. The sale of this investment will see all the Group’s UK employees transfer to BSA Brands (UK) Limited and consequently result in the Group ceasing its wholly owned UK operations in the coming months too.

The Group achieved gross profit from continuing operations for the half-year of $13.2m, up 66.5% on 1H FY2021 and 15.7% on 2H FY2021, as the increased activity levels drive increasing operational contributions, with the Group maintaining a gross profit margin % of 30% in 1H FY2022, being consistent with 2H FY2021 and up 2.1% on 1H FY2021.

The Group benefitted in 1H FY2021 from Job Keeper contributions totalling $1.38m received, which provided important support during that COVID-19 impacted period, but were not received in 1H FY2022.

The results (from continuing operations) and the major factors contributing to the results are:

• Record revenue of $44.3m, up $15.7m (55%) on 1H FY2021 and up $6.3m (16%) on 2H FY2021, including contributions from acquisitions of C&L (1 December 2020) and STP (15 August 2021).

• Record gross profit of $13.2m, up $5.3m (44%) on 1H FY2021 and up $1.8m (16%) on 2H FY2021.

• Gross Profit margin of 29.8%, up from 27.7% in 1H FY2021 and marginally down on 30.0% in 2H FY2021.

• Underlying EBITDA[1] of $1.73m up 243% on $0.50m for 1H FY2021.

• Statutory EBITDA of $0.99m up 5% on $0.95m for 1H FY2021.

• Statutory Net Profit After Tax attributable to Members of $0.02m, compared to $0.17m in 1H FY2021 and $0.39m in 2H FY2021.

• 1 Underlying EBITDA is a non-IFRS term representing Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), which has not been subject to audit or review but has been determined using information presented in the Group’s interim financial report and is determined after adding back unusual costs to the Statutory EBITDA.

Stealth Global Holdings Interim Financial Report 2021

5

A reconciliation of Underlying EBITDA[1] from continuing operations to the reported profit before tax in the consolidated statement of profit or loss and other comprehensive income is shown in the following table:

Reconciliation – half-year interim fnancial results	31 Dec 2021 $’000	31 Dec 20202 $’000
Underlying EBITDA1from continuing operations	1,727	504
Unusual Items:
Transaction costs – due diligence, acquisition analysis, bank refnance and other related
professional fees	(714)	(347)
Appointment of Senior Personnel, redundancies and fnal tenure payments to Heatleys
management relating to acquisition in September 2018	(19)	(593)
EBITDA exclusive of Job Keeper income received	994	(436)
Job Keeper income	-	1,382
Statutory EBITDA(inclusive of Job Keeper income received)	994	946
Less: Depreciation	(1,217)	(754)
Less: Net Finance Costs	(313)	(171)
Proft/(Loss) for the period before tax attributable to Members – Continuing Operations	(536)	21
Proft/(Loss) for the period before tax Discontinuing Operations	1,749	155
Proft for the period before tax	1,213	176
Minority Interest before tax (BSA Brands (UK) Limited)	(1,060)	13
Proft for the period before tax attributable to Members	153	189

1 Underlying EBITDA is a non-IFRS term representing Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), which has not been subject to audit or review but has been determined using information presented in the Group’s interim financial report and is determined after adding back unusual costs to the Statutory EBITDA.

2 PCP (31 Dec 20) figures restated to exclude discontinued operations.

The group had five operating businesses during 1H FY2022, Heatleys Safety and Industrial, BSA Brands (UK), C&L Tools, ISG (Industrial Supply Group) and Skipper Transport Parts (STP), delivering in support of the goal to build a compelling world class sales and distribution organisation. Post 31 December 2021, BSA Brands (UK) has been divested and will not be an operating brand in 2H FY2022.

Australia Trading

Revenue in Australia increased by 55% to $44.3m in 1H FY2022, up $15.7m compared to 1H FY2021 and up $6.3m (16%) compared to 2H FY2021. The revenue contributions from the acquisitions of C&L (1 December 2020) and of STP (15 August 2021) were key components driving these increases, with STP to contribute a full six months of revenue in 2H FY2022.

The Group’s growing scale has seen it expand into Queensland through the acquisition of C&L and expand its footprint across Western Australia through the acquisition of STP, adding four regional branches, expanded MRO product range and increased on-site service capability. The announcement at the Group’s AGM in November in relation to new customer contracts worth ~$18m annualised revenue is confirmation that the Group’s growing scale, product offering and capability is providing new, larger sales opportunities for Stealth. Subsequent events post 31 December 2021 will see further expansion to the Group’s Australian trading in 2H FY2022 through the acquisition of United Tools Limited.

International Trading

BSA Brands (UK) a 50/50 joint venture with Bisley Workwear, delivered underling trading revenue of $1.25m for 1H FY2021, up 15% ($0.16m) compared to 1H FY2021 revenue of $1.09m, and up 34% ($0.32m) compared to 2H FY2021 revenue of $0.93m.

Other Sales into Africa were $0.89m for the half year compared to $0.64m in 1H FY2021 and $0.36m in 2H FY2021 FH .

These operations are now disclosed as discontinued operations as of the current reporting period.

Stealth Global Holdings Interim Financial Report 2021

6

Major Investments and Acquisitions

A key area in Stealth’s strategy is making complementary value generating acquisitions. Stealth identified and assessed several potential acquisitions of scale, investing significant management time and working with external advisors to undertake due diligence and assessment of strategic fit to the Company’s disciplined criteria.

Stealth completed the $3.93m acquisition of Skipper Transport Parts (STP) on 15 August 2021. Expenditure on acquisition and integration costs were $0.42m for the period.

1H FY2022 included a full six-months contribution from its acquisition of C&L Tool Centre (C&L) on 1 December 2020, compared to one month contribution to 1H FY2021. C&L has outperformed to the original acquisition targets (annual sales of $14m and annual EBITDA of $1.3m).

In January 2022, Stealth announced the acquisition of United Tools Limited, one of Australia’s largest buying & distribution co-operatives of independent retailers, which will contribute to the 2H FY2022 performance.

The Group continues to advance its eCommerce digital platforms, including its Online e-store websites for business and retail customers in Australia. This is expected to deliver increased sales across the group from having a world-class capability to fully integrate systems with business customers, suppliers and partners complete with comprehensive Online sales platforms to business and retail customers with full data analytics.

COVID-19

The first half of the financial year continued to be affected by the impact from COVID-19, as well as the necessary measures implemented by the Company, its customers and suppliers, and governments locally and internationally to manage the risk posed to human life.

The Company continues to successfully take several proactive measures to ensure the long-term sustainability of the business and to protect the safety and wellbeing of its employees, customers, and the communities in which it operates.

The Company continues to monitor and proactively manage ongoing impacts from COVID-19. The situation is constantly evolving and may impact earnings in the future.

Balance Sheet and Cashflow Commentary

• Strong balance sheet maintained, providing stability and growth funding capacity.

• Cash of $5.19m as of 31 December (including discontinued operations), up by $2.08m on 30 June 21.

• Net working capital from continuing operations of $11.66m (Receivables + Inventory – Payables), up from $9.34m on 30 June 21, reflecting acquisition of STP.

• Net Debt of $9.67m as of 31 December, up by $5.45m on 30 June 21. Includes $3.93m consideration on acquisition of STP in August 2021, $0.9m capital investment (including $0.5m relating to STP acquisition on warehousing and IT, and $0.3m eCommerce), $0.2m finance lease funding and $0.4m net working capital less acquisition funding repayments during the half year.

Operating cashflow

• Operating cash inflow of $0.25m for the half-year, compared to operating cash inflow of $0.66m for half-year ended 31 December 2020.

Investment cashflow

• Purchase of STP business, plus investment in STP business post acquisition.

• Investment in eCommerce digital platforms.

Changes in the state of affairs

Changes to the state of affairs of the Company during the half year ended 31 December 2021 were as follows:

• Acquisition of STP on 15 August 2021.

• Refer to subsequent events since 31 December 2021 for changes to the state of affairs occurring between 1 January 2022 and 28 February 2022.

Stealth Global Holdings Interim Financial Report 2021

7

Subsequent Events since 31 December 2021

In January 2022, the Group announced that it would acquire United Tools Limited (UTL), one of Australia’s largest buying & distribution co-operatives of independent retailers, subject to UTL shareholder approval. This shareholder approval was granted in February 2022 and completion is expected 1 March 2022.

In February 2022, the Group announced that it had divested its 50% interest in the BSA Brands (UK) JV to Bisley, arising from the acquisition of Bisley by PIP.

Other than the matters noted above there has not been during the period between 31 December 2021 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future reporting periods.

Future Developments

Stealth has a diversified business portfolio and a growing customer base, which the acquisitions of C&L and STP have not only contributed to but also offer a growing opportunity for cross-selling between existing customers across their operations. The vast nature of the wide-ranging products Stealth sells is expected to provide a steady flow of repeat sales activity in future periods, whilst new integrated supply chain service offerings will generate new income and profit streams.

Stealth continues to make good progress on its strategy, despite the interruption caused by COVID-19. The Company is well positioned to capitalise on growth both organically and by acquisition, together with the advancement of its Online e-stores tailored for customers in trade, retail and business and its e-business platform specifically for business customers.

The integration and financial performance of the recent STP acquisition, noting that transaction costs for 1H FY2022 included $0.42m relating to this acquisition, will see the completion of the on-boarding phase and commencement of the operational phase occurring in early Q4 FY2022. This, together with the upcoming acquisition of United Tools and the increased activity from the new customer contracts (~$18m annualised, refer AGM presentation, November 2021), are expected to also support a stronger second half of FY2022 and beyond, subject to any further disruptions because of COVID-19 restrictions. The exit from the Group’s UK operations will impact 2H FY2022, however this will not be a material impact.

While the global economic outlook in the wake of COVID-19 remains uncertain, in Australia, trading conditions are positive for Stealth’s business and expected to provide Stealth with growth over coming years, particularly from the resources, construction, building, transportation, infrastructure, trade sectors and Online buying from general retail consumers. Successful recent capital raisings for junior and intermediate mining companies supported by strengthening commodity prices has resulted in new contract awards to ‘services contracting’ firms delivering strong levels of tendering activity for Stealth.

The Company remains on track for longer term growth targets. Organic growth-related programs and further acquisitions will be integral to achieving this.

Risk

The primary risks that the business is exposed to have not changed from the risk analysis presented in the latest Annual Report (page 31-33, FY2021 Annual Report).

Dividends

There were no dividends paid or recommended during the financial half year ended 31 December 2021 (2020: nil).

Auditor’s Independence Declaration

The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 9 of the interim financial report and forms part of this Directors’ Report.

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

On behalf of the Directors

Michael Arnold Group Managing Director Perth, 28 February 2022

Stealth Global Holdings Interim Financial Report 2021

8

Auditor’s Independence Declaration

==> picture [66 x 25] intentionally omitted <==

Tel: +61 8 6382 4600 Level 9, Mia Yellagonga Tower 2 Fax: +61 8 6382 4601 5 Spring Street www.bdo.com.au Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia

DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF STEALTH GLOBAL HOLDINGS LTD

As lead auditor for the review of Stealth Global Holdings Ltd for the half-year ended 31 December 2021, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Stealth Global Holdings Ltd and the entities it controlled during the period.

==> picture [109 x 26] intentionally omitted <==

Glyn O'Brien

Director

BDO Audit (WA) Pty Ltd

Perth, 28 February 2022

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

1

Stealth Global Holdings Interim Financial Report 2021

9

Consolidated Statement of Profit or Loss and Comprehensive Income

For the six months ended 31 December 2021

==> picture [497 x 569] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 31 Dec 2020
Note $ $
Continuing Operations
Sales revenue 44,321,899 28,653,271
Cost of sales (31,112,279) (20,721,932)
Gross Profit 13,209,620 7,931,339
Other income 620 363
Personnel expenses (7,646,258) (4,736,867)
Administration expenses (3,705,540) (1,467,597)
Occupancy expenses (131,824) (123,389)
Transaction costs (733,090) (658,082)
Depreciation and amortisation expense (1,216,730) (753,675)
Finance costs (312,554) (170,814)
Profit / (Loss) from continuing operations before income tax (535,756) 21,278
Income tax credit D1 138,243 16,775
Profit / (Loss) after tax from continuing operations (397,513) 38,053
Profit after tax from discontinued operations F4 1,215,932 123,651
PROFIT FOR THE HALF-YEAR 818,419 161,704
Profit / (Loss) for the half-year is attributable to:
Owners of the company 17,411 171,226
Non-controlling interests 801,008 (9,522)
818,419 161,704
COMPREHENSIVE INCOME
Profit for the half-year 818,419 161,704
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation gains/(losses) of international subsidiaries 10,039 (37,682)
TOTAL COMPREHENSIVE INCOME FOR THE HALF-YEAR 828,458 124,022
Total comprehensive income / (loss) for the half-year is attributable to:
Owners of the company 27,450 133,544
Non-controlling interests 801,008 (9,522)
828,458 124,022
Earnings per share for profit attributable to the ordinary equity holders of the company Cents Cents
Basic earnings per share (cents) E3 0.02 0.18
Diluted earnings per share (cents) E3 0.02 0.18
----- End of picture text -----

The consolidated statement of profit or loss and comprehensive income should be read in conjunction with the accompanying notes.

Stealth Global Holdings Interim Financial Report 2021

10

Consolidated Statement of Financial Position

As at 31 December 2021

==> picture [498 x 648] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021
Note $ $
CURRENT ASSETS
Cash and cash equivalents 4,348,532 3,111,382
Trade and other receivables 12,640,710 11,422,934
Inventories 13,967,092 10,746,059
Other assets 1,090,203 987,970
Asset held for sale F4 3,383,968 -
Total Current Assets 35,430,505 26,268,345
NON-CURRENT ASSETS
Property, plant and equipment 2,212,444 1,178,833
Right-of-use assets C3 9,485,017 5,057,312
Intangible assets C1 10,316,250 9,639,501
Deferred tax assets D2 1,122,460 1,613,030
Other assets 1,100 1,100
Total Non-Current Assets 23,137,271 17,489,776
TOTAL ASSETS 58,567,776 43,758,121
CURRENT LIABILITIES
Trade and other payables 14,947,023 12,825,984
Current tax liabilities 59,200 309,307
Lease liabilities C3 2,056,701 1,431,784
Financial liabilities C2 12,302,602 6,608,333
Provisions 2,203,152 1,535,734
Liabilities held for sale F4 1,321,876 -
Total Current Liabilities 32,890,554 22,711,142
NON-CURRENT LIABILITIES
Lease liabilities C3 7,822,869 3,852,240
Financial liabilities C2 2,864,583 2,901,012
Deferred tax liabilities D2 56,754 61,431
Provisions 230,818 413,392
Total Non-Current Liabilities 10,975,024 7,228,075
TOTAL LIABILITIES 43,865,578 29,939,217
NET ASSETS 14,702,198 13,818,904
EQUITY
Issued capital E1 13,528,699 13,528,699
Accumulated funds 493,211 475,800
Reserves 432,940 368,065
Capital and reserves attributable to owners of Stealth Global Holdings Ltd 14,454,850 14,372,564
Non-controlling interests 247,348 (553,660)
TOTAL EQUITY 14,702,198 13,818,904
----- End of picture text -----

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

Stealth Global Holdings Interim Financial Report 2021

11

Consolidated Statement of Changes in Equity

For the six months ended 31 December 2021

==> picture [497 x 370] intentionally omitted <==

----- Start of picture text -----

Attributable to owners of Stealth Global Holdings Ltd
Issued Accumulated Non-controlling
Capital Reserves Funds Total Interests Total Equity
$ $ $ $ $ $
Balance as at 1 July 2020 13,048,699 321,507 (81,877) 13,288,329 (553,704) 12,734,625
- -
Profit for the period 171,226 171,226 (9,522) 161,704
- - -
Other comprehensive income for the period (37,682) (37,682) (37,682)
-
Total comprehensive income for the period (37,682) 171,226 133,544 (9,522) 124,022
Transactions with Equity Holders in their
capacity as Equity Holders
Issue of ordinary shares as consideration - - -
480,000 480,000 480,000
for business combination
Share Based Payments – Long Term
Incentives - 16,837 - 16,837 - 16,837
Balance as at 31 December 2020 13,528,699 300,662 89,349 13,918,710 (563,226) 13,355,484
Balance as at 1 July 2021 13,528,699 368,065 475,800 14,372,564 (553,660) 13,818,904
- -
Profit for the period 17,411 17,411 801,008 818,419
- - -
Other comprehensive income for the period 10,039 10,039 10,039
-
Total comprehensive income for the period 10,039 17,411 27,450 801,008 828,458
Transactions with Equity Holders in their
capacity as Equity Holders
Share Based Payments – Long Term -
Incentives 54,836 - 54,836 - 54,836
Balance as at 31 December 2021 13,528,699 432,940 493,211 14,454,850 247,348 14,702,198
----- End of picture text -----

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

Stealth Global Holdings Interim Financial Report 2021

12

Consolidated Statement of Cash Flows

For the six months ended 31 December 2021

==> picture [498 x 464] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 31 Dec 2020
Note $ $
Cash flows from operating activities
Receipts from customers 45,380,065 28,466,108
Payment to suppliers and employees (44,808,310) (27,247,886)
Interest paid (253,821) (169,667)
Income tax paid (67,124) (386,736)
Net cash inflow from operating activities 250,810 661,819
Cash flows from investing activities
Payments for plant & equipment (839,751) (184,638)
-
Proceeds from the sale of plant & equipment 45,241
Interest received 620 363
-
Payment for intangible assets (251,232)
-
Payment for acquisition of business, net of cash acquired (3,928,812)
-
Payment for acquisition of subsidiary, net of cash acquired (1,735,250)
Net cash (outflow) from investing activities (5,019,175) (1,874,284)
Cash flows from financing activities
Principal elements of lease payments (966,919) (555,909)
Proceeds from financial liabilities 7,686,416 3,283,976
Net cash inflow from financing activities 6,719,497 2,728,067
Net increase in cash and cash equivalents 1,951,132 1,515,602
Cash and cash equivalents at 1 July 3,111,382 1,076,716
Impact of cash held by subsidiary reclassified as held for sale (610,499) (235,126)
Cash flows of subsidiary reclassified as discontinued operation (103,483) 91,690
Cash and cash equivalents at 31 December 4,348,532 2,448,882
----- End of picture text -----

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

Stealth Global Holdings Interim Financial Report 2021

13

Notes to the Consolidated Financial Statements

For the six months ended 31 December 2021

Section A: Significant Changes in the Current Reporting Period

Stealth has a diversified business portfolio and a growing customer base. The vast nature of the wide-ranging products it sells is expected to provide a steady flow of repeat sales activity in future periods, whilst new integrated supply chain service offerings will generate new income and profit streams.

Stealth continues to make good progress on its strategy seeing positive growth in Revenue and Gross Profit as it focuses on expanding and integrating all parts of the business, despite the interruption caused by COVID-19.

The Company is very encouraged by stronger trading conditions expected in the second half of FY2022 and is well positioned to capitalise on growth organically (including several new customer contracts with annual value ~$18m, AGM presentation November 2021), by acquisition (including recent acquisition of Skipper Transport Parts and C&L Tool Centre Pty Ltd and upcoming United Tools Limited), together with the advancement of its Online e-stores tailored for customers in trade, retail and business and its e-business platform specifically for business customers.

The Group continues to be supported by CBA through expanded acquisition-specific and increased working capital to support its operating activities and ongoing investments.

The financial position and performance of the Group was particularly affected by the following events and transactions during the six months to 31 December 2021:

• Record half-year revenue of $44.3m from continuing operations, up 54.7% ($15.7m) from 1H FY2021.

• Record half-year gross profit of $13.2m from continuing operations, up 66.5% ($5.3m) from 1H FY2021.

• Acquisition of Skipper Transport Parts (STP) on 15 August 2021. STP is a strategic fit and highly complementary to Stealth’s existing operations, allowing cross-sell to ~75% of Stealth’s existing subsidiary customers and STP’s customers with widerange product offering and high-touch solution models across the collective WA sales network.

• Acquisition of C&L Tool Centre Pty Ltd (C&L) on 1 December 2020. C&L operates in a complementary market to the Group’s existing operations and provides a new geographic location in Queensland with an east coast distribution hub to better serve customer expansion.

• Divestment of the Group’s investment in BSA Brands (UK) Limited JV in February 2022 has resulted in the Group’s UK operations being classified as discontinued operations.

Subsequent to the end of the reporting period:

• In January 2022, the Group announced it has reached agreement to acquire United Tools Limited (UTL), one of Australia’s largest buying & distribution co-operatives of independent retailers. The acquisition was approved by UTL shareholders in February 2022 and completion is expected 1 March 2022.

• In February 2022, the Group announced the sale of its 50% investment in BSA Brands (UK) Limited JV to its JV partner Bisley Workwear as a result of the acquisition by PIP Inc. of Bisley Workwear. The Group will receive approximately A$2.0 million of cash. $1.7 million payable on completion and the balance payable during 2022.

For a detailed discussion about the Group’s performance and financial position, please refer to the Operating and Financial Review on pages 5 to 7 of this interim financial report.

Stealth Global Holdings Interim Financial Report 2021

14

Section B: Business Performance

B1 Operating Segments

The Consolidated Entity results are reported as three business areas based on geographic regions (by management location), which are reviewed regularly by the Board of Directors. The principal results reviewed for each area are revenue and adjusted operating profit.

The Board of Directors’ view is that there were three reportable segments during the current reporting period, being the business areas of Australia, UK and Rest of the World. However, subsequent to the current reporting period, the Group announced (refer note G1) the sale of its shares in BSA Brands and the resultant closure of its UK operations that will follow, which will complete in the second half of FY2022 and seen these operations disclosed as discontinued operations (refer note F4) in the current reporting period.

Unless stated otherwise, all amounts reported to the Board of Directors with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Consolidated Entity.

All intersegment transactions are eliminated on consolidation of the Consolidated Entity’s financial statements. Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. Usually, segment assets are clearly identifiable based on their nature and physical location. Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. The following items of revenue and expenses are not allocated to operating segments as they are not considered part of the core operations of any segment: Finance expense and Income tax expense/(credit).

Revenue includes revenue from services amounting to $Nil earned during the reporting period (2020: $513) which is recognised over time. The remaining revenue is derived from the sale of goods which is recognised at a point in time.

==> picture [498 x 33] intentionally omitted <==

----- Start of picture text -----

Rest of Discontinued
Australia the World Corporate Total Operations Group Total
Half year ended 31 December 2021 $ $ $ $ $ $
----- End of picture text -----

Revenue	44,258,668	-	63,231	44,321,899	2,133,037	46,454,936
Other Income	-	-	-	-	1,679,663	1,679,663
Total revenue and other income	44,258,668	-	63,231	44,321,899	3,812,700	48,134,599
Adjusted operating proft /(loss)	2,050,012	(13,617)	(1,526,507)	509,888	1,809,930	2,319,818
Transaction costs	-	-	(733,090)	(733,090)	(30,186)	(763,276)
Operating proft /(loss)	2,050,012	(13,617)	(2,259,597)	(223,202)	1,779,744	1,556,542
Finance expense				(312,554)	(30,325)	(342,879)
Proft /(loss)before income tax				(535,756)	1,749,419	1,213,663
Income tax expense						(395,244)
Proft /(loss)for the year						818,419
Less: Non-controlling interests (proft)
/ loss						(801,008)
Proft / (Loss) for the half-year
attributable to owners of the company						17,411
Total segment assets
31 December 2021	47,566,057	213,563	7,404,188	55,183,808	3,383,968	58,567,776
30 June 20211	33,320,858	201,664	6,353,530	39,876,052	3,882,069	43,758,121
Total segment liabilities
31 December 2021	25,001,665	21,754	17,520,283	42,543,701	1,321,876	43,865,578
30 June 20211	17,458,568	22,146	9,475,094	26,955,808	2,983,409	29,939,217

Note 1 – Prior period asset and liability comparatives of UK Operations shown in discontinued column.

Stealth Global Holdings Interim Financial Report 2021

15

==> picture [497 x 32] intentionally omitted <==

----- Start of picture text -----

Rest of Discontinued
Australia the World Corporate Total Operations Group Total
Half year ended 31 December 2020 $ $ $ $ $ $
----- End of picture text -----

Revenue	28,653,271	-	-	28,653,271	1,736,526	30,389,797
Adjusted Operating proft /(loss)	1,688,571	(16,941)	(821,456)	850,174	184,471	1,034,645
Transaction costs	-	-	(658,082)	(658,082)	-	(658,082)
Operating proft /(loss)	1,688,571	(16,941)	(1,479,538)	192,092	184,471	376,563
Finance expense				(170,814)	(29,871)	(200,685)
Proft /(loss)before income tax				21,278	154,600	175,878
Income tax expense						(14,174)
Proft /(loss)for the year						161,704
Less: Non-controlling interests (proft)
/ loss						9,522
Proft / (Loss) for the half-year
attributable to owners of the company						171,226
Total segment assets
31 December 20201	31,427,001	227,078	5,796,900	37,450,979	3,262,252	40,713,231
30 June 20201	26,564,125	276,114	535,556	27,375,795	3,027,760	30,403,555
Total segment liabilities
31 December 20201	22,856,752	18,850	1,959,190	24,834,792	2,522,955	27,357,747
30 June 20201	14,803,816	23,633	492,094	15,319,543	2,349,387	17,668,930

Note 1 – Assets and liabilities of UK Operations shown in discontinued column.

Stealth Global Holdings Interim Financial Report 2021

16

Section C: Operating Assets and Liabilities

C1 Intangible Assets

==> picture [497 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021
$ $
----- End of picture text -----

Opening balance – Goodwill	8,688,112	7,149,616
Arising on acquisition of Skipper Transport Parts (August 2021)	40,856	-
Arising on acquisition of C&L Tool Centre Pty Ltd (December 2020)	460,016	1,555,442
Exchange diferences	6,032	(16,946)
Closing balance – Goodwill	9,195,016	8,688,112

Refer note F2 for further information on the acquisitions of Skipper Transport Parts and C&L Tool Centre Pty Ltd.

==> picture [497 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021
$ $
----- End of picture text -----

Opening balance – Internally Generated Software(eCommerce)	951,389	-
Additions – internal development	211,516	951,389
Transferred to assets held for sale	(41,671)	-
Closing balance – Internally Generated Software(eCommerce)	1,121,234	951,389
Total Intangible Assets	10,316,250	9,639,501

Impairment

The Consolidated Entity has assessed each CGU for indicators of impairment as of 31 December 2021 (including acquisition of STP in August 2021). For the purpose of impairment testing, the recoverable amount of each Cash Generating Unit (CGU) was based on its value in use, determined by discounting the future cash flows to be generated from the continuing use of each CGU.

• Key assumptions applied in the estimation of value in use were the same across each CGU, being a pre-tax discount rate applied to the cash flow projections of 12% (FY2021: 12%) based on a weighted average cost of capital; revenue growth rate of 0% (FY2021: 0%) and a terminal value growth rate of 2% (FY2021: 2%).

• The value in use assessment was calculated based on the present value of the cash flow projections over a five-year period and include a terminal value at the end of year five based on a growth rate of 2%. The cash flow projections over the fiveyear period are based on the Group’s performance and growth over the forecast periods based on the Group’s plans and management’s assessment of the impacts of underlying economic conditions, past performance and other factors on each CGU’s financial performance.

The calculated recoverable amount for each CGU was determined to be greater than its carrying amount and therefore no impairment adjustment is required to be recognised.

Stealth Global Holdings Interim Financial Report 2021

17

C2 Financial Liabilities

==> picture [497 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021
$ $
----- End of picture text -----

Current:
Borrowings
CBA facility	11,640,833	5,883,333
Total current borrowings	11,640,833	5,883,333
Other fnancial liabilities
Deferred consideration – C&L Tool Centre Pty Ltd	661,769	725,000
Total current other fnancial liabilities	661,769	725,000
Total current fnancial liabilities	12,302,602	6,608,333
Non-current:
Borrowings
CBA facility	2,864,583	1,250,000
Total non-current borrowings	2,864,583	1,250,000
Other fnancial liabilities
Funds contribution – non-controlling interest Joint Venture partner	-	1,651,012
Total non-current other fnancial liabilities	-	1,651,012
Total non-current fnancial liabilities	2,864,583	2,901,012

In July 2021 (note H3, FY2021 Annual Report) the Group completed renegotiation of its loan facility with CBA to finance the acquisition of Skipper Transport Parts. The total available amount under the facility was increased by $5.25m split between acquisition-specific funding and increased working capital facility.

Subsequent to the end of the reporting period, in February 2022, the Group further increased the available working capital facilities by $2,000,000.

The CBA facility is secured by first charge over the assets of the Group’s Australian operations. The interest rate is variable and was 1.80% p.a. as of 31 December 2021 (30 June 2021: 1.76%).

The amount of $661,769 is the final deferred settlement consideration relating to the acquisition of C&L Tool Centre Pty Ltd and was paid in January 2022.

The funds contribution from the non-controlling interest partner in BSA Brands (UK) Limited was forgiven by the noncontrolling interest partner in December 2021 in conjunction with the sale by Stealth of its shares in BSA Brands (UK) Limited in February 2022.

Stealth Global Holdings Interim Financial Report 2021

18

C3 Lease Liabilities

==> picture [497 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021
$ $
----- End of picture text -----

Current:
Lease liabilities – AASB 16	1,911,570	1,346,219
Finance leases	145,131	85,565
Total current leases	2,056,701	1,431,784
Non-current:
Lease liabilities – AASB 16	7,612,239	3,734,288
Finance leases	210,630	117,952
Total non-current fnancial liabilities	7,822,869	3,852,240

The acquisition of Skipper Transport Parts resulted in the recognition of a total additional AASB 16 lease liability of $3,253,421, and the recognition of corresponding Right of Use assets of $3,253,421 (of the increase in Right of Use assets of $4,427,705).

C4 Net Debt

==> picture [498 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021 31 Dec 2020
$ $ $
----- End of picture text -----

Total current borrowings	11,640,833	5,883,333	5,631,553
Total non-current borrowings	2,864,583	1,250,000	-
Finance leases due within 1 year	145,131	85,565	105,773
Finance leases due after 1 year	210,630	117,952	157,627
Total borrowings including fnance leases	14,861,177	7,336,850	5,894,953
Cash on hand(including discontinued operations)	(5,186,393)	(3,111,382)	(2,448,882)
Net debt	9,674,784	4,225,468	3,446,071
Includes:
C&L Tool Centre acquisition debt	1,616,667	2,033,333	2,450,000
STP acquisition debt	2,843,750	-	-
Movement in net debt
Acquisition of STP (note F3)	3,929,912	-
Capital investment	938,364	627,569
Finance leases	208,724	-
Working capital and other	372,317	151,827
Movement in net debt	5,449,317	779,396

• Acquisition debt in C&L Tool Centre and STP are net of debt payments made subsequent to initial advances. These payments totalled $822,916 (30 June 2021: $416,667) in the current reporting period.

• $3.93m paid for acquisition of STP (refer note F2 Business Combinations), comprising acquisition-specific debt ($3.25m gross before repayments) and balance from working capital facilities.

• Capital investment of $0.94m in 1H FY2022, including STP warehouse and IT investment ($0.52m).

Stealth Global Holdings Interim Financial Report 2021

19

Section D: Taxation

D1 Income Tax Expense

Income tax expense is recognised based on management’s estimate of the effective annual income tax rate expected for the full financial year.

==> picture [497 x 24] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 30 Jun 2021
$ $
----- End of picture text -----

(a)Income tax(expense)/ credit
Current tax	90,651	(447,352)
Deferred tax	(485,895)	666
	(395,244)	(446,686)
(b)Income tax(expense)/credit is attributable to:
Proft from continuing operations	138,243	16,775
Proft from non-continuing operations	(533,487)	(463,461)
	(395,244)	(446,686)
(c)Current tax liabilities
Income tax payable	59,200	309,307

D2 Deferred Tax Balances

Deferred tax balances are presented in the consolidated statement of financial position as follows:

	31 Dec 2021 $	30 Jun 2021 $
Deferred tax assets
Receivables	22,848	23,898
Property, plant and equipment	9,452	9,452
Payables, accruals and provisions	715,551	623,144
Carried forward tax losses	-	470,305
Capital costs deductible over fve years	210,517	281,454
Borrowing costs deductible over term of facility	61,767	70,051
Provision for inventory obsolescence	224,747	114,331
Other items	2,551	20,395
ACA adjustment on subsidiary joining tax Group	(124,973)	-
	1,122,460	1,613,030
Deferred tax liabilities
Accrued income	73,183	72,935
Other items	3,908	8,833
Unrealised foreign exchange gains	(20,337)	(20,337)
	56,754	61,431
	31 Dec 2021 $	31 Dec 2020 $
Reconciliation between tax(expense)/ credit and pre-tax net proft /(loss)
Proft / (loss) from continuing operations before income tax	(535,756)	21,278
Proft / (loss) from discontinued operations before income tax	1,749,419	154,599
Income tax expense @ 30% (2020: 30%)	(364,099)	(52,763)
Efect of diferent tax rates of subsidiaries operating in other jurisdictions	20,552	26,056
Non-deductible items	(37,889)	1,097
Other	(13,808)	11,436
	(395,244)	(14,174)

Stealth Global Holdings Interim Financial Report 2021

20

Section E: Capital Structure

E1 Issued Capital

	31 Dec 2021 $	30 Jun 2021 $
Balance at the beginning of the period	13,528,699	13,528,699
Ordinary shares – issued	-	-
Balance at the end of the period	13,528,699	13,528,699
	31 Dec 2021 Number of shares	30 Jun 2021 Number of shares
Balance at the beginning of the period	99,700,000	99,700,000
Ordinary shares – issued	-	-
Balance at the end of the period	99,700,000	99,700,000

No other equity securities or options were issued during or since the half-year ended 31 December 2021.

Performance rights made available under the Performance Rights Plan

A share-based expense of $54,836 has been recognised in the half-year ended 31 December 2021 (2020: $16,837).

E2 Dividends

There were no dividends paid or recommended during the half year ended 31 December 2021 (2020: $nil).

E3 Earnings Per Share

==> picture [497 x 44] intentionally omitted <==

----- Start of picture text -----

Half-year to Half-year to
31 Dec 2021 31 Dec 2020
Statutory Earnings per Share $ $
Profit used in the earnings per share calculation 17,411 171,226
----- End of picture text -----

Statutory Earnings per Share Proft used in the earnings per share calculation	31 Dec 2021 $ 17,411	31 Dec 2020 $ 171,226
Weighted average number of ordinary shares (Basic)	99,700,000	95,294,521
Weighted average number of ordinary shares (Diluted)	99,700,000	95,294,521
Basic Earnings Per Share (cents)	0.02	0.18
Diluted Earnings Per Share (cents)1	0.02	0.18

1 The number of options on issue is 4,994,737. These are not considered dilutive as the exercise price of the options (25 cents) exceeds the average market price of the ordinary shares.

Stealth Global Holdings Interim Financial Report 2021

21

Section F: Group Structure

F1 Controlled Entities

The subsidiaries of the parent entity are disclosed in the consolidated financial statements of the Group as of 30 June 2021. There were no other changes of control during the half-year.

F2 Business Combination

(a) Current Period

During the current period the Group acquired the business Skipper Transport Parts (“STP”) via the Group’s subsidiary Heatley Sales Pty Ltd (“Heatleys”). The acquisition occurred on the 15[th ] of August 2021 with Heatleys acquiring the inventory, certain Property, Plant & Equipment, four store leases and employees and their ongoing service liabilities. The acquisition is complementary to the Group’s existing business with a similar customer base, suppliers and services.

Details of the purchase consideration, provisional goodwill and provisional net assets of STP are as follows:

==> picture [497 x 16] intentionally omitted <==

----- Start of picture text -----

Purchase consideration: $
----- End of picture text -----

Cash paid	3,929,912
Total purchase consideration	3,929,912
Fair Value of Assets and liabilities recognised as a result of the acquisition:
Cash	1,100
Inventories – net of provisions	3,558,481
Right-of-use assets	3,253,421
Property, plant and equipment	476,662
Deferred tax assets	213,115
Total identifable assets acquired	7,502,779
Other payables	(25,000)
Provisions for employee entitlements	(290,302)
Provision for make good	(45,000)
Lease liabilities	(3,253,421)
Total net identifable assets acquired	3,889,056
Goodwill – STP acquisition	40,856

The goodwill is attributable to the complementary market position and product mix of STP with Stealth’s existing operations, and the synergies expected to arise from the acquisition. As the acquisition only executed in August 2021, the fair values of goodwill and other intangible assets are provisional at the half-year, pending final provisioning and fair value reviews focused on Receivables, Inventory and Property Plant and Equipment and any associated taxation implications.

Business combinations are initially accounted for on a provisional basis. If new information obtained within one year of date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.

Acquisition and integration-related costs of $0.42m are included in transaction costs in profit or loss.

The acquired business contributed revenues of $6.1m and net loss after tax of $0.4m for the period 15 August 2021 to 31 December 2021. If the acquisition had occurred on 1 July 2021, consolidated revenue from continuing operations and consolidated loss after tax attributable to members for the half-year ended 31 December 2021 would have been $46.4m and $0.1m respectively.

(b) Prior Period

On 1 December 2020, the Group acquired C&L Tool Centre. Note F2 of the Group’s interim financial statements for the halfyear ended 31 December 2020 (being ~1 month post acquisition) disclosed provisionally accounted goodwill of $1,555,442. This was unchanged as of 30 June 2021 (note F3 of the Group’s FY2021 Annual Report). The final goodwill on acquisition after completion of the provisional accounting period (being twelve months post acquisition, ending 1 December 2021) is $2,014,458, an increase of $460,016. The increase was attributed to reductions in the fair value of inventory ($298,617) and deferred tax asset ($75,277), plus increases to other payables ($51,127) and current tax liability ($34,995).

Stealth Global Holdings Interim Financial Report 2021

22

F3 Financial Instruments

The Company holds no Level 1 or Level 2 financial instruments as of 31 December 2021, nor at 30 June 2021.

As of 30 June 2021, the fair value of the Group’s financial assets and liabilities was not materially different to their carrying value. As of 31 December 2021, the fair value of the Group’s financial instruments continue not to be materially different to their carrying value.

Deferred consideration of $0.66m (30 June 2021: $0.72m) relates to the acquisition of C&L in December 2020 is recognised on the Group’s Balance Sheet, being a Level 3 fair value measurement. This is the final deferred consideration payable and was settled in January 2022. It comprised $0.45m for C&L achieving a minimum EBITDA of $1.3m plus 25% of net profit before tax earned above $0.9m for the twelve months post acquisition.

F4 Discontinued Operations And Assets Held For Sale

(a) Description

The Group held a 50% shareholding in BSA Brands (UK) Limited, with the other 50% held by Bisley Workwear. In December 2021, Bisley Workwear announced that it was to be acquired by Protective Industrial Products Inc. (PIP). In February 2022, in consequence of this acquisition, a formal share purchase agreement was signed between the Group and Bisley Workwear, under which Bisley Workwear acquired Stealth’s 50% shareholding in BSA Brands (UK) Limited, with change of control occurring effective 1 January 2022.

The associated assets and liabilities of BSA Brands (UK) Limited are consequently presented as held for sale in the Group’s statement of financial position as at the half-year ended 31 December 2021, and the financial performance of BSA Brands (UK) Limited as a discontinued operation for the six months ended 31 December 2021.

The divestment of the Group’s 50% shareholding in BSA Brands (UK) Limited will also result in the Group’s 100% subsidiary Stealth Global Industries (UK) Limited ceasing to trade during the 2022 calendar year, and accordingly, its financial performance is also disclosed as a discontinued operation for the six months ended 31 December 2021. It’s associated assets and liabilities are not presented as held for sale in the Group’s statement of financial position as at the half-year ended 31 December 2021.

(b) Financial performance and cash flow information

==> picture [498 x 25] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021 31 Dec 2020
$ $
----- End of picture text -----

Sales revenue	2,133,037	1,736,013
Service revenue	-	513
Other income	1,679,663	-
Expenses	(2,063,281)	(1,581,926)
Proft before income tax	1,749,419	154,600
Income tax expense	(533,487)	(30,949)
Proft after tax from of discontinued operations	1,215,932	123,651
Net cash inflow/(outflow) from operating activities	299,798	(170,974)
Net cash inflow/(outflow) from investing activities	(13,829)	1,773
Net cash inflow/(outflow) from fnancing activities	(162,089)	25,764
Net Increase in cash generated by the discontinued operations	123,880	(143,437)

Other income relates to the forgiveness by the non-controlling JV partner of their fund contribution to BSA Brands (UK) Limited. Stealth will receive cash of $1.68m against loans owed to it by BSA Brands (UK) Limited as of 31 December 2021.

Stealth Global Holdings Interim Financial Report 2021

23

(c) Assets and liabilities of disposal group classified as held for sale

The following asset and liabilities were reclassified as held for sale in relation to the discontinued operation, BSA, as of 31 December 2021:

==> picture [497 x 26] intentionally omitted <==

----- Start of picture text -----

31 Dec 2021
$
----- End of picture text -----

Assets Classifed as held for sale
Cash	837,861
Inventories	1,527,005
Trade and other receivables	852,723
PP&E	124,708
Intangible eCommerce assets	41,671
Total assets held for resale	3,383,968
Liabilities directly associated with assets classifed as held for sale
Trade creditors	(1,101,255)
Other payables	(220,621)
Total liabilities of disposal group held for sale	(1,321,876)
Net assets	2,062,092

Section G: Other Information

G1 Subsequent Events

In January 2022, the Group announced the acquisition of United Tools Limited (UTL), one of Australia’s largest buying & distribution co-operatives of independent retailers, subject to UTL shareholder approval. This shareholder approval was granted in February 2022 and completion is expected 1 March 2022.

In February 2022, the Group announced the sale of its 50% investment in BSA Brands (UK) Limited JV to its JV partner Bisley Workwear as a result of the acquisition by PIP Inc. of Bisley Workwear. The sale included the Group receiving cash of $1.68m against loans owed by BSA Brands (UK) Limited.

Other than the matters noted above there has not been during the period between 31 December 2021 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future reporting periods.

Stealth Global Holdings Interim Financial Report 2021

24

Section H: About This Report

H1 Reporting Entity

Stealth Global Holdings Ltd (“Stealth” or “the Company”) is a limited company incorporated in Australia. The consolidated interim financial report for the half year ended 31 December 2021 comprise the Company and its subsidiaries (together referred to as “the Group” and individually as the “Consolidated Entity”).

H2 Basis Of Preparation

(a) Statement of compliance

This consolidated interim financial report for the half-year ended 31 December 2021 is a general purpose financial report which has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by Stealth during the interim reporting period in accordance with the continuous disclosure requirements arising under the Australian Securities Exchange Listing Rules and the Corporations Act 2001 .

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. There were no changes arising from the adoption of new and amended standards as set out below.

The consolidated financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The consolidated financial statements are prepared on an accruals basis and are based on historical costs except where otherwise stated. The financial statements were approved by the Board of Directors on 28 February 2022.

(b) Functional and presentation currency

These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.

(c) Use of estimates and judgements

The preparation of these interim financial statements requires management to use judgement, estimates and assumptions that affect the application of accounting policies and hence the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 June 2021. Estimates and underlying assumptions are reviewed on an ongoing basis and any required revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

H3 Significant Accounting Policies

The Consolidated Entity has adopted all the new, revised or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the estimation of income tax.

New, revised or amending Accounting Standards and Interpretations adopted

A number of new or amended standards became applicable for the current reporting period. The Consolidated Entity did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

Stealth Global Holdings Interim Financial Report 2021

25

Directors’ Declaration

FOR THE HALF YEAR ENDED 31 DECEMBER 2021

Stealth Global Holdings Ltd and its controlled entities

ACN 615 518 020

The directors of the company declare that:

1. The financial statements, comprising the consolidated statement of profit or loss and comprehensive income, consolidated statement of financial position, consolidated statement of cash flow, consolidated statement of changes in equity and accompanying notes are in accordance with the Corporations Act 2001 and:

2. (a) Comply with Accounting Standards including AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 and other mandatory professional reporting requirements after 2001; and

3. (b) Give a true and fair view of the consolidated entity’s financial position as at 31 December 2021 and of its performance for the half year ended on that date.

4. 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.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by.

Michael Arnold Managing Director

Perth, 28 February 2022

Independent Auditor’s Review Report

==> picture [67 x 25] intentionally omitted <==

Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au

Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia

INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Stealth Global Holdings Ltd

Report on the Half-Year Financial Report

Conclusion

We have reviewed the half-year financial report of Stealth Global Holdings Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the halfyear ended on that date, a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of the Group does not comply with the Corporations Act 2001 including:

• (i) Giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its financial performance for the half-year ended on that date; and

• (ii) Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to the audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 which has been given to the directors of the Company, would be the same terms if given to the directors as at the time of this auditor’s review report.

Responsibility of the directors for the financial report

The directors of the Company 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 gives a true and fair view and is free from material misstatement, whether due to fraud or error.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

1

==> picture [66 x 25] intentionally omitted <==

Auditor’s responsibility for the review of the financial report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether 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 Group’s financial position as at 31 December 2021 and its financial performance for the half-year ended on that date and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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.

BDO Audit (WA) Pty Ltd

==> picture [101 x 34] intentionally omitted <==

Glyn O’Brien

Director

Perth, 28 February 2022

==> picture [34 x 34] intentionally omitted <==

Stealth Global Holdings Ltd ACN 615 518 020

Unit 10, 43 Cedric Street Stirling WA 6021 Telephone: +61 8 6465 7800 Email: investors@stealthgi.com www.stealthgi.com