- $4.4m positive operating cash flows for the quarter
- Increased cash holdings, consolidated net cash position of $13.4m
Ava Risk Group Limited (ASX: AVA), (“Ava Group” or “the Company”), a market leader of risk management services and technologies, today releases its cash flow report (Appendix 4C) and provides an update on the key areas of activity for the quarter ended 31 December 2020.
Ava Group is a security technology and services company, that develops and commercialises a range of high security perimeter and access control products to protect military, government, industrial and commercial critical assets and infrastructure. These products are sold through its Future Fibre Technologies (FFT) and BQT Solutions (BQT) brands. In addition, the Company operates Ava Global, its international secure logistics division, delivering clients with reliable secure delivery for bank notes, precious metals, and other valuables.
On 14 January 2021, Ava Group announced its unaudited revenue and profit growth for the first half of FY2021:
Cash at bank as at 31 December 2020 of $13.4 million
Key areas of activity during the second quarter of the 2021 financial year related to:
- The total contract value for this project is estimated at US$11.9m (A$15.6m) inclusive of income tax credits. Having already recognised $4.8m in FY2020 and $3.6m of revenue in Q1 FY2021, the Company recognised a further $4.1m of revenue in Q2 FY2021. Added to the revenues are income tax credits under the Australian Indian DTAA which are also available to the company to offset income tax payable. To the end of December 2020, 1,400 units have been shipped to the end user with another 500+ units completed awaiting shipment. We expect the balance of project deliveries to occur during H2 FY2021. Ava Group holds a Bank Guarantee as security for ~US$2.1m (~A$2.9m),to cover payments when due.
- The Services Division continued to provide a full range of services to all of its customers, despite the continued reduction in air freight capacity around the world due to COVID-19. These restrictions allowed Ava Global the opportunity to innovate and offer a range of bespoke cargo and charter aircraft solutions to ensure that it could continue to deliver currency, precious metals and other valuable goods for its customers. Client activity has significantly increased during FY2021, with the addition of both new clients, a number of new contract wins and a wider breadth of services offered as a result. This has been ably facilitated thanks to the depth of skills and experience within the Services Division and further supported by 3 additional new hires in USA, Germany and Singapore.
- For the Technology Division, both FFT and BQT continued their COVID-19 control measures to maintain production and order fulfilment. Although the ability to deliver site services was restricted for FFT we did receive initial orders for the multi-year Comprehensive Maintenance offering introduced that includes remote monitoring. The FFT Aura IQ conveyor health monitoring solution “Proof of Value” Trials continued despite delays from COVID-19 travel restrictions during the quarter. FFT successfully commissioned its latest Machine Learning configuration at two major high security projects internationally and demonstrated increased levels of intrusion sensitivity along with significant reductions in nuisance alarms. During the quarter BQT successfully completed the current program order of readers for the contract from the Australian Department of Defence (DoD) under the larger Australian Government.
- Operating cash outflows for the quarter of $11.6m was mostly comprised of product manufacturing and operating costs ($7.7m), staff costs ($3.0m), and administration and corporate costs ($0.6m).
- During the quarter the Company made payments of approximately $201,000 to Directors and their associates. This includes all Executive Directors and Non-executive fees, salaries, cash bonuses, and consultancy and service fees paid to related or associated parties of Directors including in respect of subsidiary operations whereby directors are related parties.
Commentary on Appendix 4C Cash Flow Report
Net operating cashflows in the quarter were positive $4.4m an increase of $0.7m on the previous quarter, and a $4.6m improvement on the same time last year. This was due to an increase in cash collections from customers compared the prior quarter, up $2.4m, and up $7.4m on the same time last year. Operating costs were circa $2.2m higher than the prior quarter, and $2.9m higher than the same time last year driven by higher payments for product manufacturing and operating costs which increased $0.9m quarter on quarter and $2.2m compared to the same time last year as a result of increased sales. The Group also continued development of the Aura Ai and Aura IQ platforms, continuing its R&D spending and intellectual property spending during the quarter, at a slightly higher level compared to the previous quarter.
Cash receipts from customers in Q2 included $2.6m from the Indian MoD project. The next payment from this project is expected during March, being an amount of USD$1.9m (A$2.6m), in line with the 120 days project payment terms.
At 31 December 2020 the Company had $13.4m cash at bank.
Approved for release by the Board of Directors.
For further information, please contact:
|Rob Broomfield, CEO & Executive Director||Leigh Davis, CFO & Company Secretary|
|Ava Risk Group Ltd||Ava Risk Group Ltd|
|+61 3 9590 3100||+61 3 9590 3103|
About Ava Group
The Ava Group, comprising world leading technology divisions Future Fibre Technologies (FFT) and BQT Solutions (BQT), and international secure logistics services division Ava Global, is a market leader in the provision of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.
The Group features a range of complementary solutions including intrusion detection for perimeters, pipelines and data networks, biometric and card access control as well as the secure international logistics and storage of high value assets. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.
Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to deliver first class services and technologies that surpass the expectations of our partners and end users.
Forward Looking Statements
Information in this release is for general information purposes only. Certain statements in this document regarding the Company’s financial position, business strategy and objectives, contain forward-looking statements (rather than being based on historical or current facts) and as such, are not able to be verified.
All forward-looking statements are based on the current views of the Company’s management as well as reasonable assumptions made by, and information currently available to the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that some or all of the underlying assumptions will prove to be valid. If assumptions are invalid this is likely to have an impact on the accuracy of the statement itself.
All data presented in this document reflects the current views of the Company with respect to future events. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Forward looking statements are also subject to external matters outside the control of the Company.
To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward looking statements) in this presentation to reflect any change to expectations or assumptions; and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content.