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XREF LIMITED Interim / Quarterly Report 2021

Jul 5, 2021

66097_rns_2021-07-05_a0ee8938-123e-405b-8c82-43e4f1a63265.pdf

Interim / Quarterly Report

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ASX�Announcement�Press�Release���6th�July�2021 Xref�Limited��ASX�XF1�

Q�a��e����U�da�e��X�ef�Achie�e��P������i�h������Sa�e�G����h�i��Q�

  • Sa�e� ���6�4�million

  • Xref�Credits��5�1�million��104��growth

  • Rapid�ID�Gross�Sales��1�3�million�6����growth

  • Ca�h�E��e��e� ���3�4�million

  • Ca�h�Recei��� ���5���million

  • Re�e��e ���3���million

  • P�����Bef��e�Ta� ���0���million

Xref Limited �ASX�XF�� �the human resources technology company�today reports a record fourth quarter of trading�Unaudited results show record sales of �6�3�million�and strong cash receipts at �5��3�million��Credit�usage�also�reached��3��3�million for�the�quarter�

New clients introduced during this time included RACV�NIB Group�Prospa and General Pants Group in Australia�Ministry of Health in New Zealand�Brighton �Hove Albion FC and Ferrovial Construction in the United Kingdom�and Eurofins Scientific and Mott Macdonald in the USA�Further information about these�new�clients�follows�as�an�appendix�

Ca�h�F����B�ea��E�e�

Operating cash outflows for the June quarter were �3�43 million�while cash receipts reached a record �5��3 million�Cash receipts from sales were up by 14��on the previous corresponding quarter�Xref was able to achieve an operating cash surplus of �2�5 million for the quarter�After allowing for development�costs�and�interest�the�full�quarter�cash surplus�was��1��5�million�

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Cash at bank on 30 June 2021 was ���1�million compared to �2��4 million in June 2020�including receipt of net proceeds from the new debt facility of �4��million in July 2020�Xref achieved an

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operating cash surplus of �1��1 million for the year and a maiden full year cash flow surplus after including�all�development�costs��funding�acquisition costs�and�interest�costs�of��0�25�million�

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�Excludes�R�D�grants�and�COVID�1��subsidies�

S����g�Sa�e��G����h

COVID�1�has accelerated the global demand for remote working and�as a result�employers�desire to improve governance is increasing�Accordingly�organisations are seeking better ways to perform candidate verification�Xref can now acquire clients via its self�serve platform�its in�house enterprise sales teams or via its 30 channel partners�As a result�Xref�s reliance on outbound�direct sales activities is fast being replaced by inbound�marketing�led demand�During the quarter�Xref witnessed a rise in inbound leads from�in the most part�channel partner integrations�an improved global digital strategy and�the�network�effect�generated�through�the�numerous sectors�and�global�regions�Xref�is�used�in�

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Group sales reached �6�3�million during the quarter�up 140�on the previous corresponding quarter �Q4 FY20�and 61�when compared to Q3 FY21�Newly acquired clients accounted for 21�of Xref sales� while 11�6�came from Xref�s international offices in Europe and North America and 20�5�from RapidID�

2

Sales from North America grew 150�to �0�6m when compared to the previous corresponding quarter �Q4 FY20�and 115�when compared to Q3 FY21�Sales �gross revenue�by RapidID grew by 6���when compared�to�the�previous�corresponding�quarter��Q4 FY20�and�3���when�compared�to�Q3�FY21��

Clients who joined Xref prior to FY1�accounted for 2��2�of sales during Q4 FY21 despite significant sales growth since then�demonstrating Xref�s ability to retain and grow clients over time�Clients that joined within FY21 represented 25�of total sales during the quarter�demonstrating Xref�s ability to also acquire�new��high�value�clients�

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G�����Re�e��e��C�edi��U�age�

Xref credits used during the quarter totalled �3�21 million and�together with RapidID�s net revenue of �0�52 million�contributed to a record quarterly revenue of �3��3 million�Xref credit usage grew ���and RapidID�s�net�revenue�grew�4�2��on�the�previous�corresponding quarter��Q4�FY20��

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���Xref�credits�are�recognised�as�revenue�when�used

  • ���RapidID�Net�Revenue�is�gross�revenue�less�the�cost of�3rd�party�checks

P��d�c��I��e���e��

Although Xrefs markets continue to be adversely impacted by the effects of COVID�1��Xref is preparing for the growth that is anticipated to come from millions of returning workers globally�Xref is working with some of its largest global clients to expand the current platform and support their future requirements�The enhanced platform will dramatically increase the global addressable market

3

through the provision of additional services�allow for an entirely digital new client acquisition process and add a subscription�based ARR to the current credit�based model�During the quarter�Xref capitalised�a�proportion�of�internal�and�external development�costs�related�to�these�platform�features�

P�����Bef��e�Ta�

The�profit�before�tax�for�the�quarter�was��0��m��

�Unaudited�management�accounts

A���i���e����f�N���E�ec��i�e�Di�ec�����Li�a�Wi����

On 2nd June 2021 Xref announced the appointment of Lija Wilson as a Non�Executive Director of the Company�effective 2nd June 2021�Mrs Wilson�s appointment is to be confirmed by shareholders at the 2021�Annual�General�Meeting��AGM��in�November�2021�

B��i�e���U�da�e���I��e�����Ca�������h�J���

Chief Executive Officer�Lee�Martin Seymour�will host an investor call to discuss Xref�s Q4 FY21 results on Tuesday�6th July 2021 at 11�00am AEST�The number for Australian investors is 1�00 0�3 431 and for international investors is �61 2 �04��3�3�The conference ID is 6�2�015���For a full list of toll free international�dial�in�numbers�for�all�regions�please click HERE�

Ma�age�e���C���e����

E�ec��i�e di�ec����CEO Lee�Ma��i�Se������aid� �The extreme unpredictability of market conditions in FY21�meant it was one of our most challenging financial years to date�However�we are proud of the many strategic decisions we made�which resulted in us emerging from the pressures of the pandemic in our strongest position to date�Over recent years we have focussed on building Xref�s online brand presence�third party ratings and self�serve products�This digital�first approach has been vital to our growth in 2021 as global employers search online for better ways to verify and measure talent�Our results not only reflect the critical nature and demand for the Xref platform but demonstrate the brilliance and professionalism of the Xref team�The year ahead will bring new products�sustained profitability�and�continued�growth��We�are�all�very excited�to�discover�what�FY22�will�hold

Chai��a��B�ad R���e��aid ��Having committed to achieving both growth and profitability during FY21�it is exciting to share these record results�Xref�s ability to retain clients while acquiring new customers�at all levels and via many channels�is exemplary�Now�the business is at an inflection point� positioned�well�for�scale�and�has�the�resources�to take�full�advantage�of�the�opportunity�ahead

A��e�di���C�i�e����e���a�a��������e

As required by listing rule 4��C�3�the amount of �140�000 shown at item 6 within this quarter�s 4C is payment�of�directors�fees�and�salaries�to�executive directors��plus�statutory�entitlements�

For�Further�information�

X�ef�Li�i�ed Media���I��e�����E���i�ie� Lee�Martin�Seymour The�Capital�Network Founder��CEO��Director Julia�Maguire E� lee�xref�com E� julia�thecapitalnetwork�com�au M���61�43��5�6624 M���61�2������36��

Authorised�by�the�Board��Xref�Limited��ASX���XF1�

4

Ab����X�ef

Xref is a reference checking and identity verification platform that empowers organisations worldwide to�make�great�people�decisions�

Xref�s fully automated online reference checking platform allows employers to request one or multiple references in minutes and receive fast�honest feedback within 24 hours�Xref also enables employers to�know�who�a�candidate�really�is�with�RapidID��Xref�s biometric�identity�verification�solution�

Xref is the reference checking platform of choice globally�The company understands the talent and human resources markets and is currently working with some of the largest organisations in the world to�develop�new�products�that�will�provide�unique�employment insights�

In the future�Xref plans to extend its platform across the full hire to retire journey�dramatically increasing its addressable market and allowing organisations to reap the benefits of Xref across their businesses�

To�learn�more��please�visit�

Website� xref�com

Investor�Centre�and�Presentation� xf1�com Twitter� �xf1 Email� investors�xf1�com

Xref�Limited��Suite�13��13�Hickson�Road��Dawes�Point�Sydney�NSW�2000�Australia

5

A��e�di����Ne��c�ie���

A����a�ia���Ne��Zea�a�d

RACV �has more than 3000 employees and over 2 million members and operates in the areas of motoring�home�leisure�travel and retail�They provide products and services such as roadside assistance��insurance��leisure�and�travel�services and�home�security

nib Group �founded in 1�52�nib Group provides health and medical insurance to over 1�4 million Australian and New Zealand residents�They also provide health insurance to almost 200�000 international students and workers in Australia and are Australia�s third largest travel insurer and global distributor�of�travel�insurance��nib�has�1500�employees�

Prospa �founded in 2012 with the vision of changing the way small business owners experience finance�and today has over 200 employees and a network of over 10�000 distribution partners across Australia�and�New�Zealand�

General Pants Group �is an Australian fashion retailer operating 54 stores across Australia and over 600 employees�

The Ministry of Health in New Zealand ��Māori�Manatū Hauora�is the public service department of New Zealand responsible for healthcare in New Zealand�It came into existence in its current form in 1��3�and�currently�has�over�1100�employees�

U�i�ed�Ki�gd��

Brighton �Hove Albion FC �is an English professional football club based in the city of Brighton and Hove��They�compete�in�the�Premier�League��the�top tier�of�the�English�football�league�system�

Ferrovial Construction �is a Spanish multinational company involved in the design�construction� financing�operation �DBFO�and maintenance of transport infrastructure and urban services�Ferrovial employs�over�100�000�people�across�50�countries�and has�revenues�of��12�billion�

N���h�A�e�ica

Eurofins Scientific �is an international group of laboratories headquartered in Luxembourg�providing testing and support services to the pharmaceutical�food�environmental�agriscience and consumer products industries�1��2�and to governments�Eurofins Group has an international network of more than �00 laboratories across 50 countries Eurofins employs over 50�000 people across 50 countries and has revenues�of��6�billion�

The Mott Macdonald Group �USA��is a construction consultancy headquartered in the United Kingdom� It employs 16�000 staff in 150 countries� Mott MacDonald is one of the largest employee�owned�companies�in�the�world�

6

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A������� 4C

Q�������� ���� ���� ������ ��� �������� ������� �� L������ R��� 4.7B

N��� �� ������

N��� �� ������ N��� �� ������ N��� �� ������ N��� �� ������ N��� �� ������
Xref Limited
ABN
34 122 404 666
Q������ ����� (�������� ��������)
30 J�ne 2021
C����������� ��������� �� ���� ����� C������ �������
$A�000
Y��� �� ����
(12 ������)
$A�000
1.
C��� ����� ���� ��������� ����������
1.1
Receipts from c�stomers
1.2
Pa�ments for
(a)
research and de�elopment
(b)
prod�ct man�fact�ring and operating
costs
(c)
ad�ertising and marketing
(d)
leased assets
(e)
staff costs
(f)
administration and corporate costs
1.3
Di�idends recei�ed (see note 3)
1.4
Interest recei�ed
1.5
Interest and other costs of finance paid
1.6
Income ta�es paid
1.7
Go�ernment grants and ta� incenti�es
1.8
Other (pro�ide details if material)
-
Upfront ann�al s�bscriptions paid
-
GST for the period
-
Net foreign e�change
1.9
N�� ���� ���� / (���� ��) ���������
����������
5,929
(12)
(843)
(114)
(66)
(1,862)
(226)
-
1
-
-
11
(20)
(293)
(1)
14,787
(41)
(2,153)
(490)
(434)
(8,326)
(853)
-
10
-
-
656
(409)
(857)
23
2,504 1,913

Xref Limited - J�ne Q�arter 2021 Appendi� 4C

Page 1

A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B

2.
C��� ����� ���� ��������� ����������
2.1
Pa�ments to acq�ire:
(a)
entities
(b)
b�sinesses
(c)
propert�, plant and eq�ipment
(d)
in�estments
(e)
intellect�al propert�
(f)
other non-c�rrent assets - Website
2.2
Proceeds from disposal of:
(a)
entities
(b)
b�sinesses
(c)
propert�, plant and eq�ipment
(d)
in�estments
(e)
intellect�al propert�
(f)
other non-c�rrent assets
2.3
Cash flo�s from loans to other entities
2.4
Di�idends recei�ed (see note 3)
2.5
Other (pro�ide details if material)
2.6
N�� ���� ���� / (���� ��) ���������
����������
-
-
(2)
-
-
(454)
-
-
-
-
-
-
-
-
23
-
-
(33)
-
-
(1048)
-
-
-
-
-
-
-
-
26
(433) (1,055)
3.
C��� ����� ���� ��������� ����������
3.1
Proceeds from iss�es of eq�it� sec�rities
(e�cl�ding con�ertible debt sec�rities)
3.2
Proceeds from iss�e of con�ertible debt
sec�rities
3.3
Proceeds from e�ercise of options
3.4
Transaction costs related to iss�es of
eq�it� sec�rities or con�ertible debt
sec�rities
3.5
Proceeds from borro�ings
3.6
Repa�ment of borro�ings
3.7
Transaction costs related to loans and
borro�ings
3.8
Di�idends paid
3.9
Other (pro�ide details if material)
3.10
N�� ���� ���� / (���� ��) ���������
����������
-
-
-
-
-
-
-
-
(125)
-
-
-
-
5,000
-
(235)
-
(375)
(125) 4,390

Xref Limited - J�ne Q�arter 2021 Appendi� 4C

Page 2

A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B

4.
N����������/ (��������) ���������
���� ����������� ��� ��� ������
4.1
Cash and cash eq�i�alents at beginning of
period
4.2
Net cash from / (�sed in) operating
acti�ities (item 1.9 abo�e)
4.3
Net cash from / (�sed in) in�esting acti�ities
(item 2.6 abo�e)
4.4
Net cash from / (�sed in) financing acti�ities
(item 3.10 abo�e)
4.5
Effect of mo�ement in e�change rates on
cash held
4.6
C��� ��� ���� ����������� �� ��� ��
������
4.
N����������/ (��������) ���������
���� ����������� ��� ��� ������
4.1
Cash and cash eq�i�alents at beginning of
period
4.2
Net cash from / (�sed in) operating
acti�ities (item 1.9 abo�e)
4.3
Net cash from / (�sed in) in�esting acti�ities
(item 2.6 abo�e)
4.4
Net cash from / (�sed in) financing acti�ities
(item 3.10 abo�e)
4.5
Effect of mo�ement in e�change rates on
cash held
4.6
C��� ��� ���� ����������� �� ��� ��
������
6,239
2,504
(433)
(125)
-
2,937
1,913
(1,055)
4,390
-
8,185 8,185
5.
R������������� �� ���� ��� ����
�����������
at the end of the q�arter (as sho�n in the
consolidated statement of cash flo�s) to the
related items in the acco�nts
C������ �������
$A�000
P������� �������
$A�000
5.1
Bank balances
5.2
Call deposits
5.3
Bank o�erdrafts
5.4
Other (pro�ide details)
5.5
C��� ��� ���� ����������� �� ��� ��
������� (������ ����� ���� 4.6 �����)
8,151
34
-
-
6,205
34
-
-
8,185 6,239
6.
P������� �� ������� ������� �� ��� ������ ��� �����
����������
C������ �������
$A'000
6.1
Aggregate amo�nt of pa�ments to related parties and their
associates incl�ded in item 1
6.2
Aggregate amo�nt of pa�ments to related parties and their
associates incl�ded in item 2
140
-
7.
F������������������
N��e: �he �e�� �facili��� i�cl�de� all f���� �f fi�a�ci�g
a��a�ge�e��� a�ailable �� �he e��i��.
Add ���e� a� �ece��a�� f�� a� ��de���a�di�g �f �he
����ce� �f fi�a�ce a�ailable �� �he e��i��.
T���� ��������
������ �� �������
���
$A�000
A����� ����� ��
������� ���
$A�000
7.1
Loan facilities
5,000
7.2
Credit standb� arrangements
-
7.3
Other (please specif�)
-
7.4
T���� ��������� ����������
5,000
7.5
U����� ��������� ���������� ��������� �� ������� ���
5,000
-
-
5,000
5,000
-
-
5,000
-

Xref Limited - J�ne Q�arter 2021 Appendi� 4C

Page 3

A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B

  • 7.6 Incl�de in the bo� belo� a description of each facilit�abo�e, incl�ding the lender, interest rate, mat�rit� date and �hether it is sec�red or �nsec�red. If an� additional financing facilities ha�e been entered into or are proposed to be entered into after q�arter end, incl�de a note pro�iding details of those facilities as �ell.

$5m f�ll� dra�n facilit� �ith PURE Asset Management. 4-�ear term. 9.95% interest rate, interest to be paid e�er� 3 months. No principal amortisation, repa�able at mat�rit�. Sec�red against assets of Xref Limited & s�bsidiaries. ASX release 31 J�l� 2020

8.
E�������� ���� ��������� ��� ������ ��������� ����������
$A�000
8.1
Net cash from / (�sed in) operating acti�ities (Item 1.9)
2,504
8.2
Cash and cash eq�i�alents at q�arter end (Item 4.6)
8,185
8.3
Un�sed finance facilities a�ailable at q�arter end (Item 7.5)
-
8.4
Total a�ailable f�nding (Item 8.2 + Item 8.3)
8,185
8.5
E�������� �������� �� ������� ��������� (I��� 8.4 ������� ��
I��� 8.1)
N/A
N��e: if �he e��i��ha��e����ed ���i�i�e �e���e�a�i�g ca�h fl���i�i�e� 1.9, a���e�i�e� 8.5 a��N/A�. O�he��i�e, a
fig��e f�� �he e��i�a�ed ��a��e�� �f f��di�g a�ailable ���� be i�cl�ded i� i�e� 8.5.
2,504
8,185
-
8,185
N/A
  • 8.6 If Item 8.5 is less than 2 q�arters, please pro�ide ans�ers to the follo�ing q�estions:

  • 8.6.1 Does the entit� e�pect that it �ill contin�e to ha�e the c�rrent le�el of net operating cash flo�s for the time being and, if not, �h� not?

Ans�er: N�� A��licable

  • 8.6.2 Has the entit� taken an� steps, or does it propose to take an� steps, to raise f�rther cash to f�nd its operations and, if so, �hat are those steps and ho� likel� does it belie�e that the� �ill be s�ccessf�l?

Ans�er: N�� A��licable

  • 8.6.3 Does the entit� e�pect to be able to contin�e its operations and to meet its b�siness objecti�es and, if so, on �hat basis?

Ans�er: N�� A��licable

N��e: �he�e i�e� 8.5 i� le�� �ha� 2 ��a��e��, all �f ��e��i��� 8.6.1, 8.6.2 a�d 8.6.3 ab��e ���� be a���e�ed.

Xref Limited - J�ne Q�arter 2021 Appendi� 4C

Page 4

A������� 4C Q�������� ���� ���� ������ ��� �������� ������� ��L������ R��� 4.7B

C��������� ���������

  • 1 This statement has been prepared in accordance �ith acco�nting standards and policies �hich compl� �ith Listing R�le 19.11A.

  • 2 This statement gi�es a tr�e and fair �ie� of the matters disclosed.

Date: 6 J�l� 2021

A�thorised b�: The B�a�d �f Di�ec���� �f X�ef Li�i�ed

Xref Limited - J�ne Q�arter 2021 Appendi� 4C

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