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Watch AVA’s 1H FY2024 Results Webinar Passcode: #71j8nft

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) announces its half year results for the six months ended 31 December 2023.

Highlights

• Record group sales order intake of $19.7 million, up 37% on the previous year
• Group revenue of $14.2 million grew 4% on the previous year
• Significant orders in major infrastructure projects in Australia and Latin America secured
• Major supply agreement with Telstra Group announced in February 2024
• Group gross margins of 61% in line with expectations
• Group EBITDA of $(0.9) million following successful investment in technology and commercial capabilities yielding record sale order intake

Ava’s record sales order intake for the half reflects its strategy to grow revenue from its market leading technologies by increasing market share and developing new and adjacent applications. The Group reported record sales order intake of $19.7m, up 37% on the previous year, underpinned by the investment made in its technology and commercial capability.

Review Appendix 4D and H1FY2024 Financial Report

Review H1FY2024 Investor Presentation

Ava Risk Group CEO Mal Maginnis said: “In the first half, we have pursued growth and this forward investment has paid off nicely, producing record sales orders and a very solid backlog. Whilst our cost base has increased, this has been necessary to right size the business ahead of the execution of large scale opportunities, including with Telstra and UGL. We are pleased with the strong sales momentum in the first half, which provides confidence in the outlook for FY24 and beyond. We secured a number of important orders during the half, including major infrastructure projects in Australia and Latin America, demonstrating the versatility of our market-leading fibre sensing technology. Early in the second half we were delighted to announce the supply agreement with Telstra, the culmination of extensive collaboration and successful product trials, and a clear demonstration of the adaptability of the Group’s technology to adjacent applications – opening significant new markets to Ava.”

“We are also demonstrating the benefit of the changes made to our commercial team and product offering over the past year to drive growth. While there is a lag in the conversion of sales orders to revenue, we are building a solid confirmed order backlog in the Detect business which will improve the predictability of future revenue. I believe we are well placed to continue our growth trajectory during H2 FY2024.”

Total revenue of $14.2m grew 4% on the previous year ($13.6m for H1 FY23). Total revenue reflects lower Detect revenue (down $0.8 million compared to the prior year) which was offset by improved performance in Access.

The Detect segment continued to see strong sales order intake. Aura Ai-X, the Company’s latest generation fibre sensing technology, continues to be developed to improve system performance and meet market needs.  Since its launch in March 2023, Aura Ai-X has been critical to Ava’s success in key large scale contract awards such as a transport infrastructure project in Australia and a mine site application in Chile, which were both won during the first half. While lower revenue primarily in Q1 was affected by the timing of sales order intake, strong Q2 sales order intake leaves Detect well placed for a stronger H2.

In the Access segment growth in sales order intake of 80% and revenue growth of 60% on the prior year was underpinned by the completion of product certifications for the Cobalt series locks, which has resulted in stocking orders from dormakaba under its global framework agreement. Initial orders from dormakaba North America and Europe were received during the first half and fulfilled by January 2024.

The Illuminate segment has performed well with an improvement in domestic orders in the UK and a continued focus on new export markets leveraging the Company’s sales capability in Australia and North America. A new “LoRa” product has been developed which will enable the seamless integration of a number of the Company’s devices in a common solution. It is expected that “LoRa” will be launched in the second half of the year.

 Chart 1 – Sales Orders

Financial Summary

Gross margins within each operating segment remain in line with expectations and are expected to improve at a consolidated level as Detect revenue increases. The decline in gross margin at a consolidated level was due to the change in revenue mix, with lower revenue in the higher margin Detect segment offset by increased revenue in the lower margin Access segment during H1. The EBITDA loss was attributable to the upfront impact of technology and commercial capability investments which were not offset by incremental revenue during H1.

The Company had a cash balance of $1.8 million at 31 December 2023. Stronger cash generation is expected in H2 based on improved revenue and sales order intake in Q2 FY24.

Outlook

We forecast H2 FY24 revenue of $16-20 million, dependent on the timing of project fulfilment. Further revenue guidance for the second half of the year will be provided in the Q3 FY24 Trading Update based on Q3 sales order intake.

Investor Webinar

Chairman David Cronin, CEO Mal Maginnis and CFO Neville Joyce will host a Zoom webinar to present the results at 10.30am AEDT today. To register for the webinar, please select the following link:

https://us06web.zoom.us/webinar/register/WN_3K-6ZUH6QwiIqPBZsfvpig

ENDS

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries
Alexandra Abeyratne
Citadel-MAGNUS
aabeyratne@citadelmagnus.com
+61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates three business segments – Detect, Access and Illumination. The Detect segment manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of   illuminators, ANPR cameras and perimeter detectors.  Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise that it has signed a Telstra Supply Agreement (“TSA”) with Telstra Group, establishing a substantial opportunity within the large and globally addressable telecommunications vertical.

The TSA represents a significant milestone for the Company and is the culmination of 10 months of collaboration, including product trials with Telstra and its customers. It is a clear demonstration of the adaptability of the Company’s technology to adjacent applications, such as telecommunications, which opens significant new markets to the Company.

Ava Risk Group successfully completed a number of trials with Telstra, including monitoring of its urban fibre network in metropolitan Melbourne and the subsea fibre cables in the Port of Darwin. The trials demonstrated the superior ability of our sensing technology to be deployed to Telstra’s existing fibre network to detect events and provide appropriate classification and reporting. It provides a rich source of data to Telstra, and effectively turns the existing fibre network into sensors.
In addition, our fibre sensing technology provides continual monitoring and asset protection for the network, helping to protect it against potential fibre cable strikes. An initial area of commercial focus will be on the fibre optic assets of Telstra InfraCo, which is responsible for 250,000 kilometres of fibre optic cable, 8,200 mobile towers, 10,000 exchanges, two data centres and access to 400,000 kilometres of subsea cable.

Ava Risk Group CEO, Mal Maginnis commented: “Signing a preferred supplier agreement with Telstra is a very significant milestone for Ava Risk Group. It underscores the strength of our market-leading solutions and is testament to our commitment to innovation to meet the evolving needs of our global client base. It clearly demonstrates that our sensing technology, which has evolved from security solutions, can be deployed to multiple applications. This collaboration cements our position as a trusted supplier, and we look forward to working extensively with Telstra.”

“With more than 5 billion kilometres of fibre optic cable deployed globally (as at 2022), the agreement with Telstra Group represents the entry into a large and attractive market vertical for Ava Risk Group’s technology.”

Approved for release by the Board of Directors.

For further information, please contact:
Investor Enquiries
Alexandra Abeyratne
Citadel-MAGNUS
aabeyratne@citadelmagnus.com
+61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates three business segments – Detect, Access and Illuminate. The Detect segment manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.theavagroup.com

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to provide the following update on its Q2 FY2024 trading performance:

• Record Q2 sales order intake of $12.0 million, resulting in H1 sales order intake of $19.7 million, up 37% on the prior year.
• Strategically important orders received in Q2 relating to major infrastructure projects in Australia and Latin America, and strong growth in new verticals in North America.
• Confirmed sales order backlog of $8.9 million, reflecting strong Q2 sales order intake. Most of the sales order backlog is expected to convert to revenue through calendar year 2024 as key projects are delivered.
• Expected H1 FY2024 revenue of $14.2 million, within the guidance range. Second half revenue is expected to be substantively stronger than the first half.

Ava Group CEO Mal Maginnis commented: “Our record sales performance in Q2 which gives us great confidence in the outlook for FY2024 and beyond. We are particularly pleased to have secured significant orders during Q2 on major infrastructure projects in Australia and Latin America, demonstrating the versatility of our market-leading fibre sensing technology.”

“Coupled with the strong performance in the Access segment during Q1, we are demonstrating the benefit of the changes made to our commercial team and product offering over the past year to drive growth. While there is a lag in the conversion of sales orders to revenue, we are building a very solid confirmed sales order backlog in the Detect business which will improve the predictability of future revenue. I believe we are well placed to continue our growth trajectory during H2 FY2024.”

Q2 FY2024 confirmed sales orders

Sales performance during Q2 was extremely strong with confirmed orders of $12.0 million. The resultant sales order intake for the first half of $19.7 million represents growth of 37% on the prior year. Pleasingly this includes significant growth in both the Detect and Access segments of 39% and 80% respectively, highlighting the progress on Ava’s strategy of expanding the sales pipeline in key markets and improving conversion rates.

• Detect: Q2 sales order intake of $9.4 million, first-half order intake of $12.9 million, up 39% on the previous year. The strong performance was underpinned by significant orders including a major Australian transport infrastructure project ($2.3 million), protection of a key pipeline at one of the world’s largest copper mines in Chile ($2.7million) and a number of orders across multiple market verticals in North America ($1.8 million) including securing correctional facilities and energy infrastructure. All orders are for the deployment of Aura Ai-X, demonstrating the versatility of the Company’s market leading, data-driven fibre sensing technology.
• Access: Total Q2 order intake of $0.9 million, first-half order intake of $3.7 million, up 80% on the same period last year. The significant increase is driven by stocking orders from dormakaba under its global framework agreement following the successful completion of product certifications for the Cobalt series locks in Q1. The fulfilment of existing orders was completed in early January and we are working with dormakaba to ensure that the current orders move efficiently through their distribution network to drive further orders during H2 FY2024.
• Illuminate: Q2 order intake of $1.8 million, resulting in first-half order intake of $3.1 million, in line with the prior year. Order intake in Q2 was 30% higher than Q1 and reflects improved in domestic orders in the U.K. and the continued focus on new export markets leveraging the Company’s sales capability in Australia and North America. The Company remains confident of growing orders in this segment during H2 FY2024.

At the end of Q2 FY2024, the Company carried an order backlog of $8.9 million which represents sales orders received that are still to be fulfilled. Of the backlog, $6.8 million relates to project delivery and is expected to convert to revenue during calendar year 2024. The remainder of the backlog relates to the provision of related services and multi-year service contracts.

Chart 1 – Sales Order Intake

H1 FY2024 Results

Ava Risk Group will release its financial results for the half year ending 31 December 2023 on Monday 26 February 2024.  Details of an investor webcast will be provided to the market in due course.

ENDS

Approved for release by the Board of Directors.

 For further information, please contact:

Investor Enquiries
Alexandra Abeyratne
Citadel-MAGNU
aabeyratne@citadelmagnus.com
+61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates three business segments – Detect, Access and Illuminate. The Detect segment manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors.  Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise it has recently been awarded a number of important contracts for its market leading fibre optic sensing solutions.  Combined with earlier contract wins, the Company expects total sales order intake for Q2 FY2024 to exceed A$10.0 million, the highest quarterly order intake in the Company’s history.

The contracts are across a number of its key geographies and are all utilising Aura Ai-X, the Company’s latest generation, data-driven fibre sensing technology which delivers market leading system performance through an embedded deep learning engine. Details relating to the recent contract wins are as follows:

Major copper mine in Chile (US$1.8m):

A contract at one of the world’s largest copper mines, located in central Chile, valued at US$1.8m (A$2.7m) for the protection of a key pipeline and associated services at the site. The project is expected to commence in 2024 with the delivery of most of the equipment to occur during the second half of the calendar year.

US state-based department of corrections (US$0.5m):

A contract for the delivery of perimeter detection systems to four sites operated by a state-based corrections agency in the US. This award builds on the success of an initial site, which was delivered to the state’s Department of Corrections earlier in the year. The contract value is US$0.5m (A$0.7m) and system delivery is expected to occur during the first half of calendar year 2024.

Eastern European expansion (US$0.3m):

Two contracts for the protection of critical infrastructure and military facilities in Kazakhstan. These contracts continue the Company’s focus on Europe in response to global security events. The contract value is US$0.3m (A$0.4m) and system delivery is expected to occur during the first half of calendar year 2024.

US LNG terminal (US$0.2m):

A contract to provide detection systems to the expanded perimeter of a liquified natural gas terminal located in the Gulf of Mexico in the US, Golden Pass LNG which is owned by affiliates of Qatar Energy and Exxon Mobil.  The contract value is approximately US$0.2m (A$0.3m) and system delivery is expected to occur during the first half of calendar year 2024.

Ava Risk Group CEO, Mal Maginnis commented: “We’re pleased to demonstrate the success of our growth strategy, based on deploying our market leading technologies to drive global sales orders, resulting in Q2 orders in excess of A$10m. These orders highlight the success of the new commercial team as well as the superior performance and competitive advantages of our fibre optic sensing technology.”

“Since launching Aura Ai-X at the beginning of the year, we have won significant new contracts in Europe, Australia and now both North America and Latin America demonstrating its suitability to large scale, complex projects. We look forward to the continued growth of Aura Ai-X as the fibre optic sensing solution of choice in all of our key markets for years to come.”

This Company will provide an update on its FY2024 Q2 trading activities in January 2024.

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries
Alexandra Abeyratne
Citadel-MAGNUS
aabeyratne@citadelmagnus.com
+61 438 380 057

About Ava Risk Group

Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates three business segments – Detect, Access and Illuminate. The Detect segment manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of   illuminators, ANPR cameras and perimeter detectors.  Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise that it has been awarded a major contract from UGL Limited for the implementation of its market leading fibre optic sensing systems on a Sydney transportation project. The contract is valued between A$2 and $3 million. Delivery and implementation of the systems is expected to occur during calendar year 2024.

The project will utilise Aura Ai-X to address critical safety requirements on the transport infrastructure. Aura Ai-X is the Company’s latest generation, data-driven fibre sensing technology which delivers market leading system performance through an embedded deep learning engine. The contract includes ongoing support services for two years following system implementation.

Commenting on the contract, Ava Risk Group CEO, Mal Maginnis said: “We are extremely pleased to partner with UGL Limited to deliver sophisticated detection capability which addresses safety on transport infrastructure. The award of this contract further demonstrates the strength of our Aura Ai-X platform and its market leading capability. The versatility of our technology is highlighted by its recent deployment to varied applications such as border protection, airport perimeter security and now transport infrastructure.”

“It is also pleasing to be awarded such a significant contract to protect large Australian infrastructure projects. As an Australian owned business, we are proud of our global footprint, but look forward to deploying our technology to the protection of Australian infrastructure and working with trusted partners such as UGL Limited.”

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries
Alexandra Abeyratne
Citadel-MAGNUS
aabeyratne@citadelmagnus.com
+61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates three business segments – Detect, Access and Illuminate. The Detect segment manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise that it has signed a five-year support agreement with Sydney Trains valued at approximately A$0.5 million.

Ava Risk Group’s perimeter intrusion detection technology has been protecting Sydney Trains’ maintenance centres and stabling yards against unauthorised intrusions, theft and vandalism for more than a decade. These sites not only provide vital storage for critical maintenance equipment, but house much of the city’s rolling stock including the inter-urban train fleet.
This agreement is a further example of the Company growing its recurring revenue base via long term relationships with key customers.

Ava Risk Group CEO, Mal Maginnis commented: “We are pleased to extend our relationship with Sydney Trains with this new support agreement. The long term relationships we enjoy with many of our customers are a testament to our market leading solutions and our support team who optimise system performance day in, day out. Agreements of this type are designed to meet the unique needs of each customer and provide assurance that their facilities and infrastructure are protected to the highest level of operational effectiveness.”

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries
Alexandra Abeyratne
Citadel-MAGNUS
aabeyratne@citadelmagnus.com
+61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates three business segments – Detect, Access and Illuminate. The Detect segment manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com