VERIS LIMITED — Annual Report 2018

Aug 29, 2018

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ASX/MEDIA RELEASE - VRS

30 August 2018

PRELIMINARY FINAL REPORT, YEAR ENDED 30 JUNE 2018

• EBITDA from continuing operations $11.2m, up 96%

• Surveying EBITDA up 27%

• Significant acquisition of Elton – foundation for Veris Professional and Advisory Pillar

• Elton Consulting contributed EBITDA of $1.1m at a run rate of 20% in its first quarter

• Net Profit after Tax before Amortisation from continuing operations $1.8m

• Strong organic growth achieved

• Cash at bank $5.6m

• Integration of 8 surveying businesses into 1 surveying entity completed

• Third Consecutive Fully Franked Dividend of 0.5 cents per share

Veris Limited (ASX code: VRS) has today reported its financial results for the financial year ending 30 June 2018 (FY2018).

EBITDA for the Group for FY2018 was $11.2 million. Net Profit After Tax Before Amortisation (NPATBA) was $1.8 million. These results were achieved by the continuing growth of the national surveying professional service business which delivers survey and geospatial solutions under the Veris Brand, together with the professional & advisory and communications divisions.

Veris continued to grow its surveying business with the acquisition of LANDdata during the year in addition to establishing its professional and advisory division with the March 2018 acquisition of Elton Consulting Group.

Veris has a Cash Balance of $5.6 million. This was achieved after $16.0 million was used to fund acquisitions in the period, $4.6 million was used to repay borrowings and cash from operating activities used to fund organic growth. This balance sheet, coupled with a Group project to reduce lock-up in Debtors and Work in Progress plus access to additional debt funding enable Veris to continue its growth strategy and further extend its business both nationally and into complementary professional & advisory, and geospatial segments.

In September 2017 Veris paid its second Fully Franked Dividend whilst a third consecutive Fully Franked Dividend will be paid in September 2018.

Perth

Level 12, 3 Hasler Road T 08 9317 0600 Locked Bag 9 F 08 9317 0611 Osborne Park WA 6017 Veris.wa@veris.com.au Australia veris.com.au

Office Locations Over 20 offices Veris Limited across Australia ABN 80 122 958 178 veris.com.au/contactus

Version: VRS-TMP-113_5

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Veris Managing Director, Adam Lamond said :

• “2018 saw Veris embark on a purposeful and considered strategy to achieve three targeted objectives:

1. Complete the integration of our surveying group into one company and align shared services and systems 2. Ensure continued growth across the business both organically and through the acquisition of Elton Consulting expanding our professional and advisory services

3. Continue to grow the Veris brand.

We have worked relentlessly to achieve these objectives in addition to delivering EBITDA of $11.2m.

The group completed two acquisitions in the period. Elton Consulting was acquired in March 2018 and expanded the national professional and advisory service pillar which complements our surveying business. In July 2017 LANDdata was acquired completing the national geographic expansion of the surveying business with entry into the ACT market.

In FY19 the Veris focus will be on continuing to deliver strong EBITDA results through the bedding down of the new National Operating Model as part of our surveying business.

There will be a strong focus on purposeful growth through synergistic benefits of the surveying and professional and advisory pillars and potential further acquisitions in the second half of the financial year.”

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

Date: 30 August 2018 Time: 12.30 AEST Duration: Approximately 60 Minutes

Dial: 1800 896 323 Passcode: 9412245054

(Please click here for International Dial Participant information)

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

About Veris

Veris is a professional service business delivering surveying, professional and advisory, and geospatial services to the infrastructure, property, energy, mining and resource, defence, agribusiness, tourism, leisure and government sectors throughout Australia.

For further information please contact

Corporate Office Veris Limited Tel (08) 9317 0628

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PRELIMINARY FINAL REPORT YEAR ENDED 30 JUNE 2018

Results for announcement to the market

A summary of the overall results for the year ended 30 June 2018.

Veris Limited		$000
Surveying Revenue	34% to	89,402
Communications Revenue	82% to	12,290
Professional and Advisory Revenue	100% to	5,143
Revenue from ordinary activities	45% to	106,834
Underlying EBITDA from continuing operations1	96% to	11,189
Net Profit After Tax Before Amortisation (NPATBA)2	22% to	1,811
Loss from continuing operations after tax	26% to	(1,056)
Statutory Loss for the period attributable to members	2,817% to	(1,304)
Loss per share (basic)	2,050% to	(0.39) cents
NTA Backing	30 June 2018	30 June 2017
Net tangible asset backing per ordinary security	$0.03	$0.08

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. The % increase from the prior period is the increase in EBITDA from continuing operations.

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:

Profit (Loss) from continuing operations Add back: Amortisation Tax benefit on amortisation (30%) Net Profit after Tax Before Amortisation (NPATBA) Tax expense (benefit) excluding amortisation Net finance expense Share-based payment Restructuring costs Acquisition costs Depreciation Underlying EBITDA	30 June 2018 $000 30 June 2017 $000 (1,056) (1,431) 4,096 4,168 (1,229) (1,250)
	1,811 1,487 358 (2,542) 1,006 618 1,031 298 1,770 914 1,628 1,192 3,585 3,737
	11,189 5,704

Dividends declared

On 15 September 2017 the Company declared a fully franked dividend for 2017 of 0.5 cents per share.

Veris Limited has declared after the balance sheet date that it will pay a fully franked dividend for 2018 of 0.5 cents per share in September 2018. As in prior years the Dividend Reinvestment Plan will be available for this dividend.

Preliminary financial report

This report is based on accounts that have been audited.

Net Assets and Cash Position

Veris has $5.6 million cash at 30 June 2018. FY2018 net cashflow from operating activities was $1.0 million. Veris repaid $4.6 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 business and assets of LANDdata Survey Pty Ltd (31 July 2017) and the entity, Elton Consulting Group Pty Ltd (29 March 2018).

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2018

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) from discontinued operations, net of tax 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 Earnings per share – continuing operations Basic earnings/(loss) per share - cents per share Diluted earnings/(loss) per share - cents per share	2018 2017 $000 $000 106,834 73,516 (95,645) (67,812)
	11,189 5,704 (3,585) (3,737) (4,096) (4,168) (1,628) (1,192) (1,770) (914) (1,031) (298)
	(921) (4,605) 18 42 (1,024) (660)
	(1,006) (618)
	(1,927) (5,223) 871 3,792
	(1,056) (1,431)
	(248) 1,479
	(1,304) 48
	(1,304) 48
	(0.39) 0.02 (0.39) 0.02 (0.32) (0.46) (0.32) (0.46)

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 2018

Cash and cash equivalents Trade and other receivables Work in progress Other current assets 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	2018 2017 $000 $000 5,588 14,574 30,932 15,983 10,538 4,616 1,705 1,118
	48,763 36,291
	15,242 11,049 58,598 40,525 6,275 7,636
	80,115 59,210
	128,878 95,501
	17,532 7,291 2,386 1,544 6,381 2,593 9,505 5,481 533 613
	36,337 17,522
	19,647 8,935 3,625 1,200 1,066 907
	24,338 11,042
	60,675 28,564
	68,203 66,937
	40,887 37,283 2,349 1,747 24,967 27,907
	68,203 66,937

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 2018

Balance at 1 July 2017 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 2018 Balance at 1 July 2016 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 (net of costs) Dividends paid Share based payment transactions Balance at 30 June 2017	Share Capital Share-based Payment Reserve Retained Earnings Total Equity $000 $000 $000 $000
	37,283 1,747 27,907 66,937
	- - (1,304) (1,304)
	- - (1,304) (1,304)
	3,604 - - 3,604
	- - (1,636) (1,636)
	- 602 - 602
	40,887 2,349 24,967 68,203
	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

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 2018

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 loans 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	2018 2017 $000 $000 101,980 121,709 (101,021) (114,737)
	959 6,969 14 272 (1,133) (901) 22 55
	(138) 6,395
	3,828 395 (1,844) (822) (1,928) (2,545) (14,071) (7,500)
	(14,015) (10,472)
	(1,258) (1,060) (4,575) (5,578) 11,000 - - 12,321
	5,167 5,683
	(8,986) 1,606 14,574 12,968
	5,588 14,574

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 2018

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 Annual Report for the year ended 30 June 2018, 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
	2018	2017
Earnings used to calculate basic EPS - $000	(1,304)	48
Weighted average number of ordinary shares outstanding during the
period used in calculating basic EPS	331,684,479	309,734,798
Basic earnings/(loss) per share - cents per share	(0.39)	0.02
Weighted average number of ordinary shares outstanding during the
period used in calculating Diluted EPS	331,684,479	312,601,525
Diluted earnings/(loss) per share - cents per share	(0.39)	0.02

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Note 3: Segment Note

The Group has three 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 – examine and record the features of a piece of land or infrastructure in order to create maps, plans, detailed descriptions and to facilitate construction

• Communications – provides specialised ICT and Communications services

• Professional and Advisory – provide expert advice to businesses, governments and not-for-profit organisations to support them to make considered and informed decisions on policy, strategy, city-making and service delivery.

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 Communications Professional & Advisory Total
	2018 2017 2018 2017 2018 2017 2018 2017 $000 $000 $000 $000 $000 $000 $000 $000 94,214 68,831 12,430 6,741 5,143 - 111,786 75,572 (4,812) (2,056) (140) - - - (4,952) (2,056)
	89,402 66,775 12,290 6,741 5,143 - 106,834 73,516 (82,191) (59,394) (11,530) (6,660) (4,110) - (97,831) (66,054) 4,812 2,056 140 - - - 4,952 2,056
	(77,379) (57,338) (11,390) (6,660) (4,110) - (92,878) (63,998) 12,023 9,437 900 81 1,033 - 13,956 9,518 (3,440) (3,531) (38) (72) (26) - (3,503) (3,603) (3,848) (4,168) - - (248) - (4,096) (4,168)
	4,735 1,738 862 9 759 - 6,357 1,747 2018 2017 2018 2017 2018 2017 2018 2017 $000 $000 $000 $000 $000 $000 $000 $000 92,012 69,301 6,378 5,074 22,891 - 121,281 74,375 (29,558) (15,018) (5,149) (1,628) (3,010) - (37,716) (16,646)

* 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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