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VECTION TECHNOLOGIES LTD — Annual Report 2024
Aug 29, 2024
66017_rns_2024-08-29_d9987885-5e92-4b2b-bb17-62c13328144a.pdf
Annual Report
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30 August 2024, Australia
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ASX RELEASE
VECTION REPORTS UNAUDITED FY24 RESULTS
UNAUDITED FINANCIAL HIGHLIGHTS:
-
FY24 Total Revenue of ~$34m, up 31% vs pcp.
-
Net cash from operating activities of ~$2m up 126% from ~$(7)m in FY23.
-
FY24 EBITDA of ~$(4)m up by 53% vs $(10)m pcp (inclusive non-cash impairment and share-based of $2m).
-
FY24 underlying EBITDA (non-IFRS) of ~$(0.8)m up by 45% vs $(1.5)m pcp.
-
Borrowings down by ~$4m (33%) from 30 June 2023 to ~$9m at 30 June 2024.
-
Cash of ~$8m at 30 June 2024.
OPERATIONAL HIGHLIGHTS:
-
Focus on market expansion and client relationships across nine industrial sectors.
-
Strategic acquisitions and partnerships, including Invrsion and MYR. (ASX: 7 June 2023, 8 August 2023)
-
• Generative AI Acquisition of TDB, adding $10m in revenue and $1m in EBITDA on unaudited FY24 basis. (ASX: 29 August 2024)
-
Expansion of INTEGRATED XR[Ò] ecosystem to various industrial sectors, with AI enhancements.
-
Technological advancements, including ShelfZone 2.0, X-RHEA, 3DFrame, and Enworks.
-
High-value contracts secured, reinforcing market position and driving revenue growth.
-
Organisational restructuring and corporate governance enhancements
OVERVIEW:
Vection Technologies Ltd (ASX:VR1, OTC:VCTNY), ("Vection" or the "Company"), the INTEGRATED XR[Ò] company, today released its financial results for the year ended 30 June 2024.
Managing Director Gianmarco Biagi highlighted:
“The fiscal year 2024 has been transformative, marked by remarkable progress and strategic advancements that position us strongly for future growth.”
Expanding and Refining Our Ecosystem:
“This year, our focus has been on expanding and refining our comprehensive end-to-end spatial computing ecosystem. Our solutions are designed to bridge the physical and digital worlds, from hardware to advanced software, driving innovation across various sectors.
Our strategic acquisitions have played a pivotal role in this journey. The acquisition of Invrsion S.r.l. and MYR have significantly bolstered our offerings in the fashion and retail sectors. These moves align with our vision to
VECTION TECHNOLOGIES LTD
ASX:VR1; OTC:VCTNY | ACN: 614 814 041
WEBSITE
www.vection-technologies.com
GLOBAL OFFICES
PERTH | SYDNEY | SAN FRANCISCO | MILAN | BOLOGNA | ROME | BARI | ABU DHABI | AHMEDABAD
REGISTERED OFFICE
Level 4, Building C, Garden Office Park, 355 Scarborough Beach Road, Osborne Park WA 6017 - Australia
V
INTEGRATED XR
Page 1
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integrate 3D and mixed reality solutions, creating a robust INTEGRATED XR[Ò] suite tailored to our customers' needs.”
Innovation at the Core:
“Innovation remains at the heart of Vection. This year, we made significant advancements in AI and spatial computing, enhancing user interactivity and experience. Driven by valuable customer feedback, we have focused on improving the realism and interactivity of our virtual environments. Our platforms have seen substantial enhancements, making them more user-friendly and intuitive, which is vital for spatial computing applications. We have upgraded our remote assistance tools with advanced hardware, incorporating enhanced spatial computing capabilities to improve our service offerings significantly.”
Strategic Focus on High-Impact Projects:
“Our strategic focus on high-impact, technology-driven projects has yielded impressive results. We have secured several high-value contracts across various sectors, demonstrating our ability to deliver cutting-edge solutions that meet our clients' evolving needs. These contracts reflect our commitment to driving revenue growth and reinforcing our market position through innovative and impactful solutions.”
Seizing Opportunities and Driving the 3D Digital Revolution:
“Our strategy centres on seizing low-hanging opportunities to establish customer relationships and drive the 3D digital revolution, commencing with ICT and progressing to intricate 3D, AR, VR, and AI solutions. As adoption widens, the percentage of the upfront custom segment diminishes in our overall business composition. This strategic approach is advantageous for customers as it enables the gradual integration of advanced technologies while leveraging their existing ICT framework. Our value proposition lies in providing a seamless pathway towards immersive experiences, enhancing operational efficiency, and future-proofing their digital investments. This aligned strategy ensures sustained growth and technological empowerment for our customers and investors.”
Local Presence for Global Success:
“Our strategic investment in establishing a local presence within key markets amplifies our customer-focused strategy and underpins their sustained global triumph. This tactical move empowers us to grasp market intricacies, customise solutions, and offer rapid assistance. Proximity fosters agility, cultural alignment, and synergistic collaborations. This localised dedication underscores our commitment to customer satisfaction worldwide and fortifies lasting relationships that drive mutual success.”
Financial Performance and Strategic Acquisitions:
“Our financial performance for FY24 demonstrates the success of our strategic initiatives. Total revenue rose to ~$34 million, up 31% versus pcp. Our cash position remained strong throughout the year, with cash and cash equivalents totalling ~$8 million.
Following the period's end, we announced the proposed acquisition of The Digital Box ( TDB ), representing a strategic alignment with our focus on enterprise customers. TDB's generative AI capabilities will enhance our product offerings, creating significant cross-sell and growth opportunities. This acquisition is expected to be
VECTION TECHNOLOGIES LTD
ASX:VR1; OTC:VCTNY | ACN: 614 814 041
WEBSITE
www.vection-technologies.com
GLOBAL OFFICES
PERTH | SYDNEY | SAN FRANCISCO | MILAN | BOLOGNA | ROME | BARI | ABU DHABI | AHMEDABAD
REGISTERED OFFICE
Level 4, Building C, Garden Office Park, 355 Scarborough Beach Road, Osborne Park WA 6017 - Australia
V
INTEGRATED XR
Page 2
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value accretive, further strengthening our financial position and market presence. In FY24, TDB reported $10 million in unaudited revenue and $1 million in unaudited EBITDA. The acquisition is expected to be value accretive for Vection shareholders, with settlement anticipated in Q2 FY25, pending customary closing conditions.” (ASX: 29 August 2024)
Welcoming Industry Leadership:
“I am particularly excited to welcome Marco Landi, the former global COO of Apple Computer, to our board of directors as part of the TDB acquisition. Marco's extensive experience and proven track record in leading technological innovations at a global scale will be invaluable to Vection. His expertise will significantly contribute to our strategic direction, fostering further growth and enhancing our capabilities to deliver cutting-edge solutions to our customers.”
Looking Ahead:
“Vection remains committed to innovation and sustainability. Our focus on integrating AI and spatial computing technologies supports our customers' ESG (Environmental, Social, and Governance) objectives, driving operational improvements and cost reductions.”
“As we move into FY25, Vection is well-positioned to capitalise on market opportunities and technological advancements. Our comprehensive end-to-end spatial computing ecosystem will continue to drive growth, enhance customer value, and maintain our leadership in the global marketplace. I am confident that our strategic vision and operational excellence will deliver exceptional value to our shareholders.”
UNAUDITED FINANCIAL PERFORMANCE HIGHLIGHTS:
FY24 total revenue of ~$34m was up 31% vs pcp.
Vection reported an EBITDA loss of ~$(4)m after a ~$1m impairment and ~$1m share-based payment, vs ~$(10)m in PcP.
Net operating cashflow of ~$2m before net investment in intangible of ~$(3)m and net financing cashflow of ~$(3)m (repayment of borrowings).
Borrowings of ~$9m at 30 June 2024, down 33% from 30 June 2023. The Company had a closing cash balance of ~$8m and net assets of ~$10m at 30 June 2024.
Other financial liabilities of ~$6m relate to a non-cash liability related to 1 performance right, which will convert into up to 62M shares issued as consideration of the acquisition of Invrsion Srl. (25 September 2023)
Trade and other payables of $19m include accruals for $5m.
OUTLOOK:
Looking ahead to FY25, Vection is strategically poised to seize emerging market opportunities and leverage cutting-edge technological advancements. The company's robust end-to-end spatial computing ecosystem is designed to foster sustained growth, significantly enhance customer value, and solidify our global leader
VECTION TECHNOLOGIES LTD
ASX:VR1; OTC:VCTNY | ACN: 614 814 041
WEBSITE
www.vection-technologies.com
GLOBAL OFFICES
PERTH | SYDNEY | SAN FRANCISCO | MILAN | BOLOGNA | ROME | BARI | ABU DHABI | AHMEDABAD
REGISTERED OFFICE
Level 4, Building C, Garden Office Park, 355 Scarborough Beach Road, Osborne Park WA 6017 - Australia
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INTEGRATED XR
Page 3
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position. By continuously innovating and refining our solutions, we aim to provide superior, immersive experiences that meet the evolving needs of our diverse clientele. With a clear strategic vision and a commitment to operational excellence, we can deliver substantial long-term value to our shareholders. We will focus on expanding our market presence, developing strategic partnerships, and driving technological innovation to support our growth objectives in the coming fiscal year.
AUTHORISATION:
This ASX release is authorised by the Board of Directors of Vection Technologies Limited.
ENDS
INVESTOR RELATIONS CONTACT DETAILS:
Gianmarco Biagi - Managing Director (Europe Based) Email: [email protected] Phone: +39 051 014 2248
Gianmarco Orgnoni – Non-Executive Director (Australia Based) Email: [email protected] Phone: +61 8 6380 7446
ABOUT VECTION TECHNOLOGIES:
Vection Technologies is a growing enterprise-focused company that helps businesses bridge the physical and digital worlds. We help organisations leverage their 3D data via powerful extended reality (XR) interfaces that foster collaboration and learning, grow sales and more.
Vection Technologies is listed on the Australian Securities Exchange (ASX) with ticker code VR1, and trades on the U.S. over-the-counter (OTC) markets under the symbol VCTNY.
For more information, please visit: www.vection-technologies.com
FORWARD-LOOKING STATEMENTS:
Certain statements made in this release are forward-looking statements. These forward-looking statements are not historical facts but rather are based on Vection Technologies' current expectations, estimates and projections about the industry in which Vection Technologies operates, and beliefs and assumptions. Forwardlooking statements can generally be identified by the use of forward-looking words such as 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'will', 'could', 'may', 'target', 'plan' and other similar expressions within the meaning of securities laws of applicable jurisdictions. Indications of, guidance, or outlook on future earnings, distributions, financial position, or performance are also forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the control of Vection Technologies, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-
VECTION TECHNOLOGIES LTD
ASX:VR1; OTC:VCTNY | ACN: 614 814 041
WEBSITE
www.vection-technologies.com
GLOBAL OFFICES
PERTH | SYDNEY | SAN FRANCISCO | MILAN | BOLOGNA | ROME | BARI | ABU DHABI | AHMEDABAD
REGISTERED OFFICE
Level 4, Building C, Garden Office Park, 355 Scarborough Beach Road, Osborne Park WA 6017 - Australia
V
INTEGRATED XR
Page 4
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looking statements. The Company cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of Vection Technologies only as of the date of this release. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements. The forward-looking statements made in this release relate only to events as of the date on which the statements are made. Vection Technologies has no obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this release except as required by law or by any appropriate regulatory authority.
VECTION TECHNOLOGIES LTD
ASX:VR1; OTC:VCTNY | ACN: 614 814 041
WEBSITE
www.vection-technologies.com
GLOBAL OFFICES
PERTH | SYDNEY | SAN FRANCISCO | MILAN | BOLOGNA | ROME | BARI | ABU DHABI | AHMEDABAD
REGISTERED OFFICE
Level 4, Building C, Garden Office Park, 355 Scarborough Beach Road, Osborne Park WA 6017 - Australia
V
INTEGRATED XR
Page 5
Vection Technologies Ltd Appendix 4E Preliminary final report
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1. Company details
Name of entity: Vection Technologies Ltd ABN: 93 614 814 041 Reporting period: For the year ended 30 June 2024 Previous period: For the year ended 30 June 2023
2. Results for announcement to the market
| $'000 | |||
|---|---|---|---|
| Revenues from ordinary activities | up | 30.2% to | 32,994 |
| Loss from ordinary activities after tax attributable to the owners of Vection | |||
| Technologies Ltd | down | 21.3% to | (8,514) |
| Loss for the year attributable to the owners of Vection Technologies Ltd | down | 21.3% to | (8,514) |
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Supplementary information
This Appendix 4E - Preliminary final report is lodged with Australian Securities Exchange ('ASX') under Listing Rule 4.3A. This report is to be read in conjunction with any public announcements made by the Company for further commentary on the results for the year ended 30 June 2024, in accordance with continuous disclosures of the Corporations Act 2001 and ASX.
Comments
The loss for the Group after providing for income tax and non-controlling interest amounted to $8,514,000 (30 June 2023: $10,821,000).
Earnings before interest, taxation, depreciation, and amortisation ('EBITDA') and underlying EBITDA are financial measures that the Australian Accounting Standards do not prescribe. Underlying EBITDA represents the Group's underlying earnings from its operations. It is determined by adjusting the statutory net loss after tax for items that are non-cash or non-operating in nature. The Directors consider EBITDA and underlying EBITDA to represent the core earnings of the Group. The table below reconciles net loss before tax, EBITDA, and underlying EBITDA.
| Revenue Other income and interest revenue Total revenue Total expenses Loss before income tax expense |
2024 $'000 32,994 1,463 |
2023 $'000 25,332 968 |
Change Change $'000 % 7,662 30% 495 51% 8,157 31% (5,504) 15% 2,653 (24%) |
|---|---|---|---|
| 34,457 | 26,300 | ||
| (42,772) | (37,268) | ||
| (8,315) | (10,968) |
Vection Technologies Ltd Appendix 4E Preliminary final report
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| Loss before income tax expense Add: Depreciation and amortisation expense Add: Finance costs Less: Interest revenue EBITDA Share-based payments expense Impairment of assets Acquisitions costs Non-operating and discontinued costs Underlying EBITDA (non-IFRS) |
2024 $'000 (8,315) 2,786 976 (25) |
2023 $'000 (10,968) 1,217 240 (212) |
2023 $'000 (10,968) 1,217 240 (212) |
Change $'000 2,653 1,569 736 187 |
Change $'000 2,653 1,569 736 187 |
Change % (24%) 129% 307% (88%) (53%) (51%) (75%) - (66%) (45%) |
|---|---|---|---|---|---|---|
| (4,578) | (9,723) | 5,145 | ||||
| 903 787 981 1,083 |
1,860 3,205 - 3,156 |
(957) (2,418) 981 (2,073) |
||||
| (824) | (1,502) | 678 | ||||
| 3. Net tangible assets Net assets Less: Intangibles Less: Right-of-use (ROU) assets Add: Lease liabilities - current Add: Lease liabilities - non-current Net tangible assets Number of ordinary shares on issue Net tangible assets per ordinary security |
2024 $'000 |
2023 $'000 19,191 (15,463) (322) 211 164 |
||||
| 11,644 | ||||||
| (23,470) | ||||||
| (135) | ||||||
| 145 | ||||||
| 18 | ||||||
| 3,781 | ||||||
| (11,798) | ||||||
| Number of shares 2024 1,126,588,969 Reporting period Cents (1.05) |
Number of shares 2023 1,126,588,969 Previous period Cents 0.34 |
|||||
| (1.05) | ||||||
| 4. Control gained over entities Name of entities (or group of entities) Invrsion Srl Date control gained 25 September 2023 |
Refer to note 8 'Business combinations' for further details.
5. Loss of control over entities
Not applicable.
Vection Technologies Ltd Appendix 4E Preliminary final report
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6. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
7. Dividend reinvestment plans
Not applicable.
8. Details of associates and joint venture entities
Not applicable.
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
Currently all accounting policies of the Group are consistent with those adopted by its ultimate holding company, Vection Technologies Ltd.
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements are in the process of being audited and an unqualified opinion is expected to be issued. The auditor's report will include a paragraph addressing a material uncertainty related to going concern.
11. Attachments
Details of attachments (if any):
The Unaudited Preliminary Financial Report of Vection Technologies Ltd for the year ended 30 June 2024 is attached.
12. Signed
Signed _________
Date: 30 August 2024
Mr Gianmarco Biagi Managing Director and CEO
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Vection Technologies Ltd
ABN 93 614 814 041
Unaudited Preliminary Financial Report - 30 June 2024
Vection Technologies Ltd Contents 30 June 2024
Consolidated statement of profit or loss and other comprehensive income 2 Consolidated statement of financial position 3 Consolidated statement of changes in equity 4 Consolidated statement of cash flows 5 Notes to the consolidated financial statements 6
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1
Vection Technologies Ltd Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2024
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| Note Revenue 2 Other income Interest revenue calculated using the effective interest method Expenses Changes in inventories Variable cost of sales Employee benefits expense Consulting and professional fees Depreciation and amortisation expense Impairment of assets 3 Share-based payments 3 Other expenses 3 Finance costs 3 Total expenses Loss before income tax expense Income tax expense Loss after income tax expense for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Other comprehensive income for the year, net of tax Total comprehensive income for the year Loss for the year is attributable to: Non-controlling interest Owners of Vection Technologies Ltd Total comprehensive income for the year is attributable to: Non-controlling interest Owners of Vection Technologies Ltd Basic earnings per share 9 Diluted earnings per share 9 |
2024 $'000 |
2023 $'000 25,332 756 212 (564) (18,716) (5,820) (2,065) (1,217) (3,205) (1,860) (3,581) (240) |
|---|---|---|
| 32,994 | ||
| 1,438 | ||
| 25 | ||
| 341 | ||
| (24,634) | ||
| (6,712) | ||
| (2,014) | ||
| (2,786) | ||
| (787) | ||
| (903) | ||
| (4,301) | ||
| (976) | ||
| (42,772) | (37,268) | |
| (10,968) (55) |
||
| (8,315) | ||
| (336) | ||
| (11,023) 389 |
||
| (8,651) | ||
| 201 | ||
| 389 | ||
| 201 | ||
| (10,634) | ||
| (8,450) | ||
| (202) (10,821) |
||
| (137) | ||
| (8,514) | ||
| (11,023) | ||
| (8,651) | ||
- (10,634) |
||
| - | ||
| (8,450) | ||
| (10,634) | ||
| (8,450) | ||
| Cents | Cents (2.399) (2.399) |
|
| (0.756) | ||
| (0.756) |
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
2
Vection Technologies Ltd Consolidated statement of financial position As at 30 June 2024
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| Note Assets Current assets Cash and cash equivalents Trade and other receivables 4 Inventories Total current assets Non-current assets Intangibles assets 5 Property, plant and equipment Right-of-use assets Financial assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 6 Borrowings 7 Lease liabilities Employee benefits Income tax payable Total current liabilities Non-current liabilities Borrowings 7 Lease liabilities Employee benefits Deferred tax liabilities Other financial liabilities 8 Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Equity attributable to the owners of Vection Technologies Ltd Non-controlling interest Total equity |
2024 $'000 |
2023 $'000 11,359 13,648 676 |
|---|---|---|
| 7,602 | ||
| 13,952 | ||
| 2,317 | ||
| 23,871 | 25,683 | |
| 15,463 550 322 84 |
||
| 23,470 | ||
| 536 | ||
| 135 | ||
| 52 | ||
| 24,193 | 16,419 | |
| 42,102 | ||
| 48,064 | ||
| 10,969 8,114 211 72 16 |
||
| 19,351 | ||
| 7,503 | ||
| 145 | ||
| 100 | ||
| 391 | ||
| 27,490 | 19,382 | |
| 2,194 164 544 627 - |
||
| 1,370 | ||
| 18 | ||
| 725 | ||
| 617 | ||
| 6,200 | ||
| 8,930 | 3,529 | |
| 22,911 | ||
| 36,420 | ||
| 19,191 | ||
| 11,644 | ||
| 46,592 7,221 (33,911) |
||
| 46,592 | ||
| 5,454 | ||
| (39,554) | ||
| 12,492 | 19,902 (711) |
|
| (848) | ||
| 19,191 | ||
| 11,644 |
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
3
Vection Technologies Ltd Consolidated statement of changes in equity For the year ended 30 June 2024
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| Balance at 1 July 2022 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Issued share capital, net of transaction cost Shared-based payments Performance rights vested Performance rights expired De-recognition of non-controlling interest Balance at 30 June 2023 Balance at 1 July 2023 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Share-based payments Options expired Balance at 30 June 2024 |
Issued capital $'000 44,611 - - |
Reserves $'000 11,181 - 389 |
Accumulated losses $'000 (27,336) (10,821) - |
Non- controlling interest $'000 (479) (202) - |
Total equity $'000 27,977 (11,023) 389 |
|---|---|---|---|---|---|
| - 126 - 1,855 - - |
389 - 1,734 (1,855) (4,228) - |
(10,821) - - - 4,216 30 |
(202) - - - - (30) |
(10,634) 126 1,734 - (12) - |
|
| 46,592 | 7,221 | (33,911) | (711) | 19,191 | |
| Issued capital $'000 46,592 |
Reserves $'000 7,221 |
Accumulated losses $'000 (33,911) |
Non- controlling interest $'000 (711) |
Total equity $'000 19,191 |
|
| - | - | (8,514) | (137) | (8,651) | |
| - | 201 | - | - | 201 | |
| - | 201 | (8,514) | (137) | (8,450) | |
| - | 903 | - | - | 903 | |
| - | (2,871) | 2,871 | - | - | |
| 46,592 | 5,454 | (39,554) | (848) | 11,644 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
4
Vection Technologies Ltd Consolidated statement of cash flows For the year ended 30 June 2024
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| Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Interest paid Income taxes paid Net cash from/(used in) operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles 5 Transactions costs in purchase of subsidiary Proceeds from disposal of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Net cash (used in)/from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year |
2024 $'000 |
2023 $'000 19,866 (27,258) 212 (240) (58) |
|---|---|---|
| 36,201 | ||
| (32,924) | ||
| 25 | ||
| (976) | ||
| (346) | ||
| (7,478) | ||
| 1,980 | ||
| (404) (2,677) (7) - |
||
| (168) | ||
| (3,666) | ||
| - | ||
| 485 | ||
| (3,088) | ||
| (3,349) | ||
| 9,258 (2,563) (3) |
||
| 15,532 | ||
| (18,088) | ||
| (212) | ||
| 6,692 | ||
| (2,768) | ||
| (3,874) 14,869 364 |
||
| (4,137) | ||
| 11,359 | ||
| 380 | ||
| 11,359 | ||
| 7,602 |
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
5
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 1. Operating segments
Identification of reportable operating segments
During the year ending 30 June 2024, in line with the Board’s new strategy, the Board started to monitor its operations based on region. This has been reflected in the management accounts that were part of the Board pack as submitted to the Board in June 2024. Consequently, the Board (who is identified as the Chief Operating Decision Makers ('CODM')) has determined that the Group's segment information should be disclosed based on two geographic locations being Europe, Middle East, Africa and America ('EMEA') and Asia-Pacific ('APAC').
The Group has restated the previously reported segment information which was; IT software development, outsourced services and corporate, for the year ended 30 June 2024.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
Types of products and services
The principal products and services of each of these operating segments are as follows: EMEA Integrated XR APAC 3D Services, ICT and IoT
Intersegment transactions
Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on consolidation.
Operating segment information
| 2024 Revenue Sales to external customers Other revenue Total revenue EBITDA Depreciation and amortisation Impairment of assets Share-based payments expense Finance costs Interest revenue Loss before income tax expense Income tax expense Loss after income tax expense Assets Segment assets Intersegment eliminations Total assets Liabilities Segment liabilities Intersegment eliminations Total liabilities |
EMEA $'000 |
APAC $'000 |
Total $'000 |
|---|---|---|---|
| 29,146 | 3,848 | 32,994 | |
| 1,409 | 54 | 1,463 | |
| 30,555 | 3,902 | 34,457 | |
| 681 | (3,569) | (2,888) | |
| (2,553) | (233) | (2,786) | |
| (787) | - | (787) | |
| - | (903) | (903) | |
| (920) | (56) | (976) | |
| 2 | 23 | 25 | |
| (3,577) | (4,738) | (8,315) | |
| (336) | |||
| (8,651) | |||
| 39,373 | 26,442 | 65,815 | |
| (17,751) | |||
| 48,064 | |||
| 37,526 | 11,149 | 48,675 | |
| (12,255) | |||
| 36,420 |
6
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 1. Operating segments (continued)
| EMEA 2023 - Restated $'000 Revenue Sales to external customers 21,227 Other revenue 649 Total revenue 21,876 EBITDA (1,356) Depreciation and amortisation (1,062) Impairment of assets (3,205) Share-based payments expense - Finance costs (206) Interest revenue 4 Loss before income tax expense (5,825) Income tax expense Loss after income tax expense Assets Segment assets 26,117 Intersegment eliminations Total assets Liabilities Segment liabilities 25,467 Intersegment eliminations Total liabilities Note 2. Revenue Revenue from contracts with customers Disaggregation of revenue The disaggregation of revenue from contracts with customers is as follows: Major product lines INTEGRATEDXR® solutions and services Geographical regions EMEA represents the geographical area composed by Europe, Middle East, Africa and America. APAC represents the geographical area composed by Australia and the Asia-Pacific region Timing of revenue recognition Goods transferred at a point in time Services transferred over time |
EMEA $'000 21,227 649 |
APAC $'000 4,105 319 |
Total $'000 25,332 968 |
|---|---|---|---|
| 21,876 | 4,424 | 26,300 | |
| (1,356) (1,062) (3,205) - (206) 4 |
(3,302) (155) - (1,860) (34) 208 |
(4,658) (1,217) (3,205) (1,860) (240) 212 |
|
| (5,825) | (5,143) | (10,968) (55) |
|
| 26,117 | 33,582 | ||
| (11,023) | |||
| 59,699 (17,597) |
|||
| 25,467 | 8,935 | ||
| 42,102 | |||
| 34,402 (11,491) |
|||
| 2024 $'000 |
|||
| 22,911 | |||
| 2023 $'000 25,332 |
|||
| 32,994 | |||
| 2024 $'000 |
2023 $'000 25,332 |
||
| 32,994 | |||
| 21,227 4,105 |
|||
| 29,146 | |||
| 3,848 | |||
| 25,332 | |||
| 32,994 | |||
| 25,092 240 |
|||
| 29,982 | |||
| 3,012 | |||
| 25,332 | |||
| 32,994 |
7
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 3. Expenses
| Loss before income tax includes the following specific expenses: Impairment of assets Goodwill Intellectual property Software and development costs Expected credit losses Total impairment of assets Other expenses Advertising and marketing expenses Corporate and administrative expenses Rent expenses Net foreign exchange losses Total other expenses Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs expensed Share-based payments expense Vesting of performance rights relating to business combination Director performance rights expenses Issued shares to employees Total share-based payments expense Note 4. Trade and other receivables Current assets Trade receivables Less: Allowance for expected credit losses Other receivables Prepayments |
2024 $'000 |
2023 $'000 973 1,892 318 22 |
|---|---|---|
| 761 | ||
| - | ||
| 26 | ||
| - | ||
| 3,205 | ||
| 787 | ||
| 1,127 1,933 419 102 |
||
| 733 | ||
| 2,983 | ||
| 585 | ||
| - | ||
| 3,581 | ||
| 4,301 | ||
| 240 - |
||
| 976 | ||
| 28,117 | ||
| 240 | ||
| 29,093 | ||
| 1,225 509 126 |
||
| 394 | ||
| 509 | ||
| - | ||
| 1,860 | ||
| 903 | ||
| 2024 $'000 |
2023 $'000 12,026 (231) |
|
| 10,743 | ||
| (189) | ||
| 10,554 | 11,795 | |
| 1,352 501 |
||
| 2,102 | ||
| 1,296 | ||
| 3,398 | 1,853 | |
| 13,648 | ||
| 13,952 |
8
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 5. Intangibles
| Non-current assets Goodwill - at cost Less: Impairment Intellectual property - at cost Less: Impairment Patents and licences - at cost Less: Accumulated amortisation Other intangible assets (software and development costs) - at cost Less: Accumulated amortisation Less: Impairment |
2024 $'000 |
2023 $'000 8,682 (973) |
|---|---|---|
| 10,078 | ||
| (1,734) | ||
| 8,344 | 7,709 | |
| 2,825 (1,892) |
||
| 2,825 | ||
| (1,892) | ||
| 933 | 933 | |
| - - |
||
| 2,223 | ||
| (234) | ||
| 1,989 | - | |
| 10,473 (2,401) (1,251) |
||
| 17,105 | ||
| (3,624) | ||
| (1,277) | ||
| 12,204 | 6,821 | |
| 15,463 | ||
| 23,470 |
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
| Balance at 1 July 2022 Additions Exchange differences Impairment of assets Amortisation expense Balance at 30 June 2023 Additions Additions through business combinations (note 8) Exchange differences Impairment of assets Amortisation expense Balance at 30 June 2024 |
Goodwill $'000 8,671 - 11 (973) - |
Intellectual property $'000 2,811 13 1 (1,892) - |
Patent and licences $'000 - - - - - |
Other intangibles $'000 5,545 2,668 (3) (318) (1,071) |
Total $'000 17,027 2,681 9 (3,183) (1,071) |
|---|---|---|---|---|---|
| 7,709 | 933 | - | 6,821 | 15,463 | |
| - | - | - | 3,666 | 3,666 | |
| 1,351 | - | 2,223 | 3,873 | 7,447 | |
| 45 | - | - | - | 45 | |
| (761) | - | - | (26) | (787) | |
| - | - | (234) | (2,130) | (2,364) | |
| 8,344 | 933 | 1,989 | 12,204 | 23,470 |
As at 31 December 2023, goodwill impairment expense of $761,000 and other intangibles impairment of $1,565,000 was recorded for the Mindesk CGU.
As at 30 June 2024, the Group assessed whether there is any indication that an impairment loss recognised in prior periods other than goodwill may no longer exist or may have decreased. Since such indication existed, management estimated the recoverable amount of the Mindesk CGU and concluded that it had fully recovered and therefore the other intangible assets impairment of $1,565,000 was reversed.
9
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 6. Trade and other payables
| Current liabilities Trade payables Sundry creditors and accruals |
2024 $'000 |
2023 $'000 10,212 757 |
|---|---|---|
| 14,116 | ||
| 5,235 | ||
| 10,969 | ||
| 19,351 |
Note 7. Borrowings
| Current liabilities Bank loans Insurance premium funding Non-current liabilities Bank loans |
2024 $'000 |
2023 $'000 8,114 - |
|---|---|---|
| 7,338 | ||
| 165 | ||
| 8,114 | ||
| 7,503 | ||
| 2,194 | ||
| 1,370 | ||
| 10,308 | ||
| 8,873 |
Note 8. Business combinations
Invrsion Srl
On 25 September 2023, the Company issued 1 performance right, which will convert into up to 62M shares on achievement of milestones, as consideration of the acquisition of Invrsion Srl ('the Business'). The Business operates in the virtual reality market and is a prominent technology company specialising in 3D and mixed reality solutions for the fashion, retail, consumer goods and real estate sectors, which was acquired to enhance the Company’s position as a leader in the integrated-extended reality (' XR ') technology space, providing customers with innovative XR solutions and unlocking new organic growth opportunities. The goodwill of $1,351,000 represents the expected synergies from merging this business with the wider Vection Group. The acquired Business contributed revenues of $983,458 and loss after tax of $709,268 to the Group for the period from 25 September 2023 to 30 June 2024. If the acquisition occurred on 1 July 2023, the contributions for the year ended 30 June 2024 would have been revenues of $1,430,104 and loss after tax of $956,045.
The consideration transferred is represented by the performance right, which converts into fully paid ordinary shares in VR1 (' Shares ') subject to Matteo Esposito (' Invrsion CEO ') remaining employed until 30 June 2026 (' Performance Right ').
The terms of the contingent consideration are as follows:
Vection will issue one Performance Right which will convert into a number of shares that is equal to the lesser of:
(i) The total of:
-
a) 0.95 times the audited revenue for the Business for the financial year ending 30 June 2023;
-
b) 2 times the audited revenue for the Business for the financial year ending 30 June 2024;
-
c) 2 times the audited revenue for the Business for the financial year ending 30 June 2025; and
-
d) 1.5 times the audited revenue for the Business for the financial year ending 30 June 2026;
and
- (ii) EUR 4,000,000;
10
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 8. Business combinations (continued)
divided by the greater of $0.10 and the volume-weighted average price ('VWAP') 10 days prior of the revenue results being announced to the market. The FX rate will be at the average RBA rate, capped at EUR1 to AUD1.55.
The Performance Right will only convert into shares if alternatively;
-
Matteo Esposito (Invrsion CEO) remains employed or engaged by Invrsion S.r.l. or Vection until 30 June 2026; or
-
Matteo Esposito ceases employment with Invrsion S.r.l. but is not a bad leaver.
Schedule 3 of the Acquisition Agreement contains a copy of a separate Employment Agreement for Matteo Esposito.
Taking into an assessment of the range of possible outcomes noted above, the fair value of the above contingent consideration has been provisionally determined as $6,200,000.
Details of the acquisition are as follows:
| Cash and cash equivalents Trade and other receivables Plant and equipment Intangible assets Trade and other payables Employee benefits Borrowings Net assets acquired Goodwill Acquisition-date fair value of the total consideration transferred Representing: Right issued as consideration |
Fair value $'000 4 452 54 6,096 (1,073) (85) (599) |
|---|---|
| 4,849 1,351 |
|
| 6,200 | |
| 6,200 |
The Business’s assets and liabilities' fair value have been measured provisionally. If new information is obtained within one year of the date of the acquisition about facts and circumstances that existed at the date of acquisition resulting in adjustments to the amount above, the accounting for the acquisition will be revised.
Note 9. Earnings per share
| Loss after income tax Non-controlling interest Loss after income tax attributable to the owners of Vection Technologies Ltd Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share |
2024 $'000 (8,651) 137 (8,514) Number |
2023 $'000 (11,023) 202 |
|---|---|---|
| (10,821) | ||
| Number 451,116,632 |
||
| 1,126,588,969 | ||
| 451,116,632 | ||
| 1,126,588,969 | ||
| $ Cents (0.756) (0.756) |
$ Cents (2.399) (2.399) |
11
Vection Technologies Ltd Notes to the consolidated financial statements 30 June 2024
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Note 9. Earnings per share (continued)
32,500,000 (2023: 59,006,452) options and 23,295,611 (2023: 23,295,611) performance rights over ordinary shares are not included in the calculation of diluted earnings per share because they are anti-dilutive for the year ended 2024. These options could potentially dilute basic earnings per share in the future.
Note 10. Share-based payments
Shares are granted under the Long Term Incentive Plan ('LTIP'), which has been established by the Group. Subject to the ASX listing rules and under the terms of the LTIP, the Board may grant options and/or performance rights (options with a zero exercise price and performance conditions) to eligible participants (‘awards’). Each award granted represents a right to receive one share once the award vests and is exercised by the relevant participant. The vesting of the options are contingent upon various company performance and term-of-service metrics.
No performance rights were granted during the financial year ended 30 June 2024, other than Invrsion performance rights under business combination (refer note 8). The share based payment expense recognised during the period in profit or loss was $903,000 (2023: $1,860,000).
Options
Options are issued to employees under the Company’s LTIP, vesting upon the achievement of performance and term-of service related criteria.
Set out below are summaries of options granted under the plan:
| Outstanding at the beginning of the financial year Expired Outstanding at the end of the financial year Exercisable at the end of the financial year |
Number of options Weighted average exercise price 2024 2024 |
Number of options Weighted average exercise price 2023 2023 59,006,452 $0.098 - $0.000 59,006,452 $0.098 59,006,452 $0.098 |
|---|---|---|
| 59,006,452 $0.098 |
||
| (26,506,452) $0.110 |
||
| 32,500,000 $0.250 |
||
| 32,500,000 $0.250 |
Performance rights
Performance rights are issued to directors and corporate advisor under the Company’s LTIP for nil consideration, vesting upon the achievement of performance and term-of-service related criteria. Refer to note 8 'Business combinations' for further details on the performance rights granted during the financial year ended 30 June 2024.
Set out below are summaries of performance rights granted under the plan:
| Outstanding at the beginning of the financial year Granted (refer note 8) Vested Lapsed Outstanding at the end of the financial year Exercisable at the end of the financial year |
Number of rights Weighted average exercise price 2024 2024 |
Number of rights Weighted average exercise price 2023 2023 85,893,417 $0.000 - $0.000 (11,377,791) $0.000 (51,220,015) $0.000 23,295,611 $0.000 - $0.000 |
|---|---|---|
| 23,295,611 $0.000 |
||
| 1 $0.000 |
||
| - $0.000 |
||
| - $0.000 |
||
| 23,295,612 $0.000 |
||
| - $0.000 |
12