VERIS LIMITED — Annual Report 2017

Aug 16, 2017

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ASX/MEDIA RELEASE - VRS

16 August 2017

PRELIMINARY FINAL REPORT, YEAR ENDED 30 JUNE 2017

• EBITDA $9.8m

• Surveying Professional Services EBITDA up 16%

• Net Profit after Tax before Amortisation $3.0m

• Cash generated from operations $7.0m

• Cash at bank $14.6m

• Second Consecutive Fully Franked Dividend of 0.5 cents per share

• Revenue on Surveying Professional Services up 40%

• Four new acquisitions in the year and one post year end

Veris Limited (ASX code: VRS) has today reported its financial results for the financial year ending 30 June 2017 (FY2017).

EBITDA for the Group for FY2017 was $9.8 million. Net Profit After Tax Before Amortisation (NPATBA) was $3.0 million. These results were achieved by the continuing growth of the national surveying professional service business which delivers planning, urban design, survey and geospatial solutions under the Veris Brand, and the infrastructure construction business of OTOC Australia.

Veris continues to extend its service offerings and national coverage with the recent financial year acquisitions of Lawrence Group, WKC Spatial, Goodwin Midson and Lester Franks. Subsequent to year end LANDdata joined the group.

Veris continues to maintain a strong balance sheet with Cash Reserves of $14.6 million. This was achieved after $7.5 million was used to fund four acquisitions in the period. In addition CBA continued its support of Veris’ strategy and approved an increased total facility of $36.8m which was over 100% increase on the previous facility. This strong balance sheet and access to additional funding enables Veris to continue its growth strategy and further extend its business both nationally and into complementary planning & urban design, and geospatial segments.

In September 2016 Veris paid its first Fully Franked Dividend. In September 2017 the second company dividend will be paid, this will also be Fully Franked.

Veris Managing Director, Adam Lamond said :

“2017 has seen continued growth in both the property and infrastructure sectors on the East Coast of Australia; further underpinning our strategy to create a national professional services business focused on survey, urban design, planning and geo spatial solutions, as we close the chapter on our traditional construction business.

Perth Office Locations Level 12, 3 Hasler Road T 08 9317 0600 Over 20 offices Veris Limited Locked Bag 9 F 08 9317 0611 across Australia ABN 80 122 958 178 Osborne Park WA 6017 Veris.wa@veris.com.au veris.com.au/contactus Australia veris.com.au

Version: VRS-TMP-113_5

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Through the exposure to the east coast over the last year, our business has continued to grow. We have added to this growth by continuing to acquire the best businesses in our industry.

The decision to discontinue the OTOC Australia construction division brings to the end an amazing chapter of our company’s history which started in 2003. This decision provides a platform for the more sustainable company we are today, with a business more aligned to sustainable earnings and population growth.

Moving forward, there is a very clear focus within the professional services business to fully implement our National operating model and finish FY18 as one company with one brand as we continue to grow the culture of our national business.”

Veris invite you to join a conference call at which, Managing Director, Adam Lamond and CFO, Brian Mangano will be presenting these results.

Call details are as follows:

Date: 17 August 2017 Time: 11:15am AEST Duration: Approximately 60 Minutes Dial: 1800 896 323 Passcode: 9412245054

Participants will be asked to state their name upon entry. Press *1 when prompted to ask a question during Q&A.

(Please click here for International Dial Participant information)

About Veris

Veris is a national professional service business delivering town planning, urban design, survey and spatial solutions to the infrastructure, property and resource markets throughout Australia. For further information please contact

Corporate Office Veris Limited Tel (08) 9317 0600

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PRELIMINARY FINAL REPORT YEAR ENDED 30 JUNE 2017

Results for announcement to the market

A summary of the overall results for the year ended 30 June 2017.

Veris Limited		$000
Surveying Professional Services Revenue	40% to	66,775
Infrastructure Construction Revenue	44% to	41,100
Revenue from ordinary activities	11% to	107,875
Underlying EBITDA1	39% to	9,814
Net Profit After Tax Before Amortisation (NPATBA)2	86% to	2,966
Statutory Profit from ordinary activities after tax attributable to members	100% to	48
Statutory Profit for the period attributable to members	100% to	48
Earnings per share (basic)	100% to	0.02 cents

	30 June
NTA Backing	2017	30 June 2016
Net tangible asset backing perordinary security	$0.0811	$0.0805

1 Underlying EBITDA is defined as earnings before depreciation, amortisation, interest, tax, impairment, restructuring, sharebased payments and acquisition costs and is an unaudited non-IFRS measure

2 Net Profit After Tax Before Amortisation (NPATBA) is an unaudited non-IFRS measure.

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A reconciliation between statutory results and underlying results is provided below:

Statutory profit (loss) after tax Add back: Tax expense/ (benefit) on amortisation (30%) Amortisation Net Profit after Tax Before Amortisation (NBATBA) Tax expense (benefit) excluding amortisation Net finance expense Share-based payment Restructuring costs Acquisition costs/(benefit) Depreciation Underlying EBITDA	30 June 2017 $000 30 June 2016 $000 48 19,698 (1,250) (912) 4,168 3,040
	2,966 21,826 (884) (8,838) 846 751 298 1,050 1,309 173 1,192 (1,336) 4,087 2,550
	9,814 16,176

Dividends declared

Veris Limited paid its first dividend of 0.5 cents per share on 12 September 2016. This dividend was fully franked. A second consecutive dividend of 0.5 cents per share is approved for payment in September 2017 out of 2017 financial year profits. This dividend will be fully franked. The record date for determining entitlements to the dividend will be 1 September 2017. This dividend has been declared after the Balance Sheet date for FY17 and has not been provided for in the FY17 Financial Statements.

Dividends or distribution reinvestment plan

In FY16 Veris adopted a Dividend Reinvestment Plan (DRP) that applied to this dividend. The DRP will also be available for the dividend in September 2017.

Preliminary financial report

This report is based on accounts that have been audited.

Net Assets and Cash Position

Veris has $14.6 million in cash at 30 June 2017. FY2017 net cashflow from operating activities was $6.4 million. Veris repaid $5.6 million in borrowings and lease liability payments during the year.

Control gained or lost over entities in the financial period

During the year, Veris acquired the following businesses and their assets; Lawrence Group Pty Ltd (29 July 2016); WKC Spatial (“WKC”) (5 August 2016); Hillmir Pty Ltd trading as Goodwin Midson (“Goodwin Midson”) (2 November 2016); and Lester Franks Survey & Geographic Pty Ltd (1 December 2016). LANDdata Survey Pty Ltd was purchased subsequent to 30 June 2017.

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017

Revenue Operating Expenses Depreciation Amortisation Acquisition Costs Restructuring Costs Share-based payment Results from operating activities Finance income Finance costs Net finance costs Profit (loss) before income tax Income tax benefit Profit (loss) from continuing operations Profit (loss) for the year Total comprehensive income (loss) for the year Earnings per share Basic earnings/(loss) per share - cents per share Diluted earnings/(loss) per share - cents per share	2017 2016 $000 $000 107,875 120,858 (98,061) (104,682)
	9,814 16,176 (4,087) (2,550) (4,168) (3,040) (1,192) 1,336 (1,309) (173) (298) (1,050)
	(1,240) 10,699 55 69 (901) (820)
	(846) (751)
	(2,086) 9,948 2,134 9,750
	48 19,698
	48 19,698
	48 19,698
	0.02 7.40 0.02 7.40

The accompanying notes form an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

Cash and cash equivalents Trade and other receivables Work in progress Other current assets Current tax asset Total current assets Non-current assets Plant and equipment Intangible assets Deferred tax asset Total non-current assets Total assets Current liabilities Trade and other payables Deferred vendor payments Loans and borrowings Employee benefits Current tax liability Total current liabilities Non-current liabilities Loans and borrowings Deferred vendor payments Employee benefits Total non-current liabilities Total liabilities Net assets Equity Share capital Share based payment reserve Retained earnings Total equity	2017 2016 $000 $000 14,574 12,968 15,983 14,353 4,616 6,750 1,118 1,856 - 42
	36,291 35,969
	11,049 8,048 40,525 31,844 7,636 6,716
	59,210 46,608
	95,501 82,577
	7,291 10,384 1,544 2,700 2,593 7,799 5,481 4,092 613 -
	17,522 24,975
	8,935 3,593 1,200 300 907 411
	11,042 4,304
	28,564 29,279
	66,937 53,298
	37,283 22,622 1,747 1,449 27,907 29,227
	66,937 53,298

The accompanying notes form an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017

Balance at 1 July 2016 Total comprehensive profit for the year Profit for the year Total comprehensive profit for the year Transactions with owners, recorded directly in equity Issue of ordinary shares (net of costs) Dividends paid Share based payment transactions Balance at 30 June 2017 Balance at 1 July 2015 Total comprehensive income for the year Profit for the year Total comprehensive income for the year Transactions with owners, recorded directly in equity Issue of ordinary shares Share based payment transactions Balance at 30 June 2016	Share Capital Share-based Payment Reserve Retained Earnings Total Equity $000 $000 $000 $000
	22,622 1,449 29,227 53,298
	- - 48 48
	- - 48 48
	14,661 - - 14,661
	- - (1,368) (1,368)
	- 298 - 298
	37,283 1,747 27,907 66,937
	Share Capital Share-based Payment Reserve Retained Earnings Total Equity $000 $000 $000 $000 22,155 399 9,529 32,083 - - 19,698 19,698 - - 19,698 19,698 467 - - 467 - 1,050 - 1,050 22,622 1,449 29,227 53,298

The accompanying notes form an integral part of these consolidated financial statements.

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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2017

Cash flow from operating activities Receipts from customers Payments to suppliers and employees Cash generated from operations Tax received Interest paid Interest received Net cash from operating activities Cash Flows from investing activities Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Deferred Vendor Payment Acquisition of subsidiaries net of cash acquired Net cash (used in) investing activities Cash flow from financing activities Dividends paid Repayment of borrowings and lease liabilities Proceeds from share issues (net of costs) Net cash from (used in) financing activities Net increase in cash held Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June	2017 2016 $000 $000 121,706 130,133 (114,737) (113,765)
	6,969 16,368 272 160 (901) (820) 55 69
	6,395 15,777
	395 547 (822) (1,348) (2,545) (2,400) (7,500) (3,158)
	(10,472) (6,359)
	(1,060) - (5,578) (6,632) 12,321 -
	5,683 (6,632)
	1,606 2,786 12,968 10,182
	14,574 12,968

The accompanying notes form an integral part of these consolidated financial statements.

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Notes to the Financial Statements

For the year ended 30 June 2017

Note 1: Statement of significant accounting policies

This preliminary financial report has been prepared in accordance with Australian Securities Exchange Listing rules as they relate to Appendix 4E and in accordance with the measurement requirements of Australian Accounting Standards and Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. As such, this preliminary financial report does not include all the notes of the type included in the annual financial report and accordingly, should be read in conjunction with the Interim Financial Report for the six months ended 31 December 2016, and with any public announcements made by Veris Limited during the reporting period in accordance with the disclosure requirements of the Corporations Act 2001.

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instruments 2016/191 issued by the Australian Securities and Investment Commission, relating to the ”rounding off” of amounts in the Directors’ Report and financial statements. Amounts have been rounded off to the nearest thousand dollars in accordance with that Class Order.

The accounting policies have been consistently applied to all years presented.

Note 2: Earnings per share

ote 2: Earnings per share
	2017	2016
Earnings used to calculate basic EPS - $000	48	19,698
Weighted average number of ordinary shares outstanding during the
period used in calculating basic EPS	309,734,798	264,625,881
Basic earnings/(loss) per share - cents per share	0.02	7.40
Weighted average number of ordinary shares outstanding during the
period used in calculating Diluted EPS	312,601,525	266,786,587
Diluted earnings/(loss) per share - cents per share	0.02	7.40

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Note 3: Segment Note

The Group has two reportable segments that are managed separately by the service provided. Internal management reports on the performance of these reportable segments are reviewed at least monthly by the Managing Director who is the Chief Operating Decision maker (CODM) of the Group. The operations in each of the Group’s reportable segments are:

• Surveying – provides planning, design, survey and spatial solutions nationally.

• Infrastructure – provides turnkey construction and installation services to the resources and infrastructure sectors.

Information regarding the results of each reportable segment is detailed below. Comparative segment information has been presented in conformity with the requirement of AASB 8 Operating Segments.

Revenues Inter-segment revenues External revenues Costs Inter-segment costs External costs EBITDA Depreciation Amortisation EBIT* Segment assets Segment liabilities	Surveying Professional Services Infrastructure Construction Total
	2017 2016 2017 2016 2017 2016 $000 $000 $000 $000 $000 $000 68,831 49,382 42,414 73,080 111,245 122,462 (2,056) (1,565) (1,314) (39) (3,370) (1,604)
	66,775 47,817 41,100 73,041 107,875 120,858 (59,394) (39,960) (38,223) (61,920) (97,617) (101,880) 2,056 267 1,314 1,337 3,370 1,604
	(57,338) (39,693) (36,909) (60,583) (94,247) (100,276) 9,437 8,124 4,191 12,458 13,628 20,582 (3,531) (1,986) (422) (552) (3,953) (2,538) (4,168) (3,040) - - (4,168) (3,040)
	1,738 3,098 3,769 11,906 5,507 15,004 2017 2016 2017 2016 2017 2016 $000 $000 $000 $000 $000 $000 69,301 52,777 8,807 18,043 78,108 70,820 (15,018) 11,988 (4,587) 10,736 (19,605) 22,724

* EBITDA is defined as earnings before depreciation, amortisation, interest, tax, impairment, restructuring, share-based payments and acquisition costs and is an unaudited non-IFRS measure. ** EBIT is defined as earnings before interest, tax, impairment, restructuring, share-based payments and acquisition costs and is an unaudited non-IFRS measure.

– Ends –

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