VERBREC LIMITED — Annual Report 2014

Aug 26, 2014

ASX Announcement 27 August 2014

LogiCamms Delivers 2014 Full Year Results In Line With Guidance

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• EBITDA of $6.7 million, in line with guidance

• Revenue of $127.9 million, in line with $129.5 million in FY13

• NPAT represents earnings per share of 7.2 cents, down from 16.6 cents in FY13

• Final dividend of 3.5 cents per share, fully franked, down from 4.5 cents

• Strong cash flow and financial position with a year-end cash balance of $12.2 million

• Share Buy Back Program of up to $2.0 million commencing 11 September 2014

• Significant cost reductions achieved, expected to deliver net savings of $5.0 million in FY15

• Growth in hydrocarbons and asset performance services continues Record work in hand

Professional engineering and consulting services company, LogiCamms Limited , announces a 2014 full year net profit after tax (NPAT) of $5.0 million (1H FY14: $2.1 million), in line with previously announced guidance.

The Company reported revenue of $127.9 million, in line with the previous corresponding period (pcp). During the reporting period, 57% of revenue was derived from hydrocarbons customers (FY13: 30%), reflecting the Company’s increasing momentum in this sector compared with a tightening of project activity in the minerals and metals sector. LogiCamms’ top 20 customers contributed over 60% of revenue, representing a continued balance in exposure.

Earnings before interest, tax, depreciation and amortisation (EBITDA), of $6.7 million, including restructuring costs of $3.9 million. This figure also includes the release of a $2.3 million provision made at the time of the acquisition of ITL Engineering for earn out targets. Despite solid earnings performance in New Zealand the provision release was realised due to earnings growth in New Zealand for FY14 being below defined outperformance targets established at the time of acquisition. The total provision made on acquisition was NZD 5.0 million (AUD 4.2 million) and following the release of AUD 2.3 million, AUD 1.9 million remains in place for potential payments to the vendors of ITL Engineering for FY15 financial outperformance.

Operating cash flow for the full year remained strong with positive cash flow from operating activities of $5.6 million. The Company maintains a solid balance sheet with no outstanding borrowings and a net cash position of $12.2 million as at 30 June 2014. LogiCamms extended its financing facilities with National Australia Bank to $17.9 million during the year, which now includes a $7.0 million bank guarantee facility and a $10.0 million multi option funding facility which remains undrawn as at 30 June 2014.

The Board has declared a final dividend of 3.5 cents per share, which brings the full year dividend to 5.5 cents per share, fully franked. This equates to a payout ratio of 79%, ahead of the Company’s stated policy of 40-60 per cent of NPAT, having regard to the one off nature of transition program restructuring costs, a strong cash flow and enhanced visibility of performance into FY15. The record date for the final dividend is 11 September 2014 with a payment date of 25 September 2014.

The Company announces that it is initiating a share buy-back program to commence on 11 September 2014. The buy-back program is for an amount of up to $2 million of the Company’s issued share capital over a 12 month period. The timing and actual number of shares to be purchased will depend on market conditions.

Engineering Consultancy | Project Delivery | Asset Performance

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

Share Registry Computershare Investor Services Tel. +61 3 9415 4000 www.investorcentre.com

The buy-back will operate as an effective method to return capital to shareholders and will be earnings per share accretive. The Company has a strong cash position and the share buy-back program does not impact on the Company’s strategic growth initiatives.

In May 2014, LogiCamms initiated a transition program of targeted strategic initiatives and cost reductions to streamline the business and establish a cost competitive organisational structure. This program cost $3.9 million in FY14, and without taking into account the potential for further cost efficiency is expected to deliver net benefits for FY15 of $5.0 million.

The Company is confident that it is in a strong position to continue building on the strategic initiatives and ongoing efficiency measures to counter the mixed conditions that exist across the Company’s core markets. In FY14, pressure was experienced particularly in the minerals and metals sector, with a significant contraction in the amount of available consulting services work. However, the brownfield hydrocarbons market remains strong and LogiCamms has continued its growth in this area with increased services and work levels.

Managing Director, Matthew Adamo said, “The speed of change within our markets has intensified and market conditions are increasingly competitive, but we are encouraged by LogiCamms’ start to the 2015 financial year. Our transition program to reduce our cost base and invest in growth initiatives continues to produce results. Our strategy is being validated by our continued expansion in the hydrocarbons sector and the firming up of work on the back of core capabilities in the minerals and metals sector. Within the current market environment we are particularly pleased to be entering FY15 with work in hand at a record level for LogiCamms.”

Key Awards and Customers

LogiCamms has commenced the new financial year with a record level of work in hand. A substantial portion of revenue from these recent key awards is expected to be realised in FY15. The breadth of LogiCamms’ key awards and customers during the reporting period includes:

• Epic Energy: engineering, procurement and construction (EPC) services to deliver strategic brownfield projects along the Moomba to Adelaide Pipeline;

• Samsung C&T: engineering and procurement services for the mine site control system at the greenfield Roy Hill iron ore development;

• Chevron Australia: expanded team for the delivery of asset performance services in support of the Gorgon LNG project;

• Oil Search: expanded scope of engineering and asset performance services, particularly Competency Training, for facilities in Papua New Guinea;

• Origin Energy: upstream sustaining capital projects in Queensland;

• BHP Billiton: ongoing process control system support in South Australia;

• Santos: upstream sustaining capital projects in Queensland;

• Methanex (NZ): engineering consulting and sustaining capital projects; and

• Ballance Agri-Nutrients (NZ): ammonium plant turnaround project and ongoing engineering services.

Commenting on a selection of key awards, Mr Adamo said, “The award of a strategically significant EPC project for Epic Energy acknowledges our credentials in gas production and delivery infrastructure plus our project delivery capability. We also continue to cement our position as a leading control systems integrator, demonstrated by the award of the Roy Hill mine site control system contract in Q4 FY14. In addition our Asset Performance services, which focus on optimising the performance of facilities and workforces, continue to present opportunities for the Company across all core markets.”

Engineering Consultancy | Project Delivery | Asset Performance

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

Share Registry Computershare Investor Services Tel. +61 3 9415 4000 www.investorcentre.com

Competency Training and Assurance

The Company’s training business grew by approximately 40% on the previous corresponding period, driven by demand for specialised training and assurance services from a diverse spectrum of customers. Nearly 6,000 people were trained by Competency Training in Australia and New Zealand, with a customer base including BHP Billiton, Rio Tinto, Oil Search, Woodside, Origin Energy, Santos and QGC. Further service offerings are in development to meet market opportunities with new and existing customers.

People and organisation

Staff numbers within LogiCamms were adjusted during the reporting period as part of the transition program to align the Company’s resource profile with market conditions. Staff numbers were reduced by approximately 5% however the Company has continued to recruit staff into high growth areas, such as Asset Performance. As such, the Company’s workforce is currently around 610 people (FY13: 640).

LogiCamms is also pleased to report a Total Recordable Injury Frequency Rate (TRIFR) of zero per 1 million hours worked, for the second consecutive year. This result reflects the emphasis placed on health and safety through our organisational culture, systems and processes.

Strategy and outlook

Targeted growth initiatives aimed at extending and enhancing LogiCamms’ market position and competitiveness are now in place. These initiatives include extensions to the Asset Performance service offering, front end technical consulting services, and an enhanced capability in cost effective delivery of scaled EPC projects. The Company is also actively pursuing collaborative partnerships and value accretive investment opportunities, with a focus on expanding capabilities and geographic reach. The current appetite for capital investment in infrastructure assets across Australia and New Zealand has also been recognised strategically as a longer term opportunity for LogiCamms to extend services into this market.

“LogiCamms has prioritised the implementation of key growth initiatives and the transition program that is resetting the business for high performance within a challenging market environment. With a record level of secured work in hand and steady opportunity pipeline, our start to the 2015 financial year is encouraging. LogiCamms’ leaner organisational design and empowerment of our people will support an environment of collaboration and responsiveness – the key strengths of our business as defined by our customers.

“With a strategic framework guided by the three principles of Enhance, Extend, Collaborate we continue to look for opportunities to improve our services offering and value to our customers and consider partnership and investment opportunities focused on capability and geographic expansion in line with our strategy.

“Based on strong work in hand, a lean organisational design and a focused program of strategic initiatives the Company forecasts revenue growth and an EBITDA margin of 8 to 10% for FY15.” said Mr Adamo. - Ends -

Further information Media enquiries Mr Matthew Adamo Mr Paul Bowker Mr Alasdair Jeffrey Managing Director Chief Financial Officer Rowland Tel. +61 7 3058 7000 Tel. +61 7 3058 7000 Tel. +61 7 3229 4499

About LogiCamms

LogiCamms is engineering breakthroughs in asset performance. Working with leading owners and operators of minerals and metals, hydrocarbons and infrastructure assets, the Company works to reduce costs, increase efficiencies, and enhance the value of customers’ operations. LogiCamms’ core business units include engineering consulting, project delivery, and asset performance services. LogiCamms is an Australian Securities Exchange listed Company (ASX:LCM) with offices across Australia and New Zealand. LogiCamms’ Vision is to be a market leader delivering outstanding customer solutions.

Engineering Consultancy | Project Delivery | Asset Performance

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

Share Registry Computershare Investor Services Tel. +61 3 9415 4000 www.investorcentre.com