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• $3.7m positive operating cash flows for the quarter
• Increased cash holdings, consolidated net cash position of $11.6m

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 30 September 2020.

Review the full Appendix 4C here.
 
Principal Activities
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.

Key areas of activity during the first quarter for the 2021 financial year related to:

• The total contract value for this project is estimated at US$11.9m (A$16.7m). We recognised $3.6m of revenue in Q1, and a total of $4.8m in FY2020, with a further $0.8m in income tax credits under the Australian Indian DTAA to date. To the end of September 2020, 800 units have been shipped to the end user with another 300+ units completed awaiting shipment. We expect the balance of circa $6.6m, excluding tax credits, to be recognised as revenue in 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 Q1, with the addition of both new clients, 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.
• For the Technology Division, both FFT and BQT continued COVID-19 control measures to enable us to continue production at our factories, ship and deliver orders, and to provide service support to keep products running smoothly.  FFT continued its marketing efforts of its Aura IQ conveyor health monitoring solution, with three “Proof of Value” Trials completed and another six underway around the world during the quarter.  During the quarter BQT supplied the majority of readers for the contract from the Australian Department of Defence (DoD) for the supply of its security products to a number of DoD sites around Australia. FFT expanded it productisation and marketing of new multi-year Comprehensive Maintenance Agreements including remote services.
• Operating cash outflows for the quarter of $10.2m was mostly comprised of product manufacturing and operating costs ($6.8m), staff costs ($2.5m), and administration and corporate costs ($0.6m).
• During the quarter the Company made payments of approximately $380,000 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 $3.7m a small decrease of $0.3m on the previous quarter, but a $2.8m improvement on the same time last year. This was due to a decrease in cash collections from customers compared the prior quarter, down $1.5m, but up $4.5m on the same time last year, and lower payments for operating costs, which were circa $1.1m lower than the prior quarter, and $1.7m higher than the same time last year driven by higher payments for product manufacturing and operating costs which increased $1.7m 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, but at a reduced level compared to the previous quarter.  

Cash receipts from customers in Q1 included $1.3m from the Indian MoD project.  The next payment from this project is expected during November, being an amount of USD$1.9m (A$2.6m), in line with the 120 days project payment terms.

At 30 September 2020 the Company had $11.6m cash at bank.

ENDS.

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
rob.broomfield@theavagroup.com	leigh.davis@theavagroup.com
+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.

Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) is pleased to confirm continued strong growth in the first quarter of FY2021:

• Sales Revenues increased by 73% compared to the same period last year to $17.0 million
• EBITDA improved by 522% compared to the same period last year to $7.7 million
• Cash as at 30 September 2020 increased by 50% from 30 June 2020 balances to $11.6 million

Services Division – Q1 FY2021 Snapshot

• Revenue of $8.1 million
• EBITDA $1.6m
• Whilst there has been some normalisation of pricing due to the lifting of certain COVID-19 air freight restrictions, the underlying revenue trend remains very strong
• Industry consolidation continues to provide customer additional revenue opportunities
• Due to increasing economies of scale, Gross Margin improved to 33% on a YTD basis (vs. 25% for the whole of FY2020)
• New General Manager Asia, based in Singapore, appointed with further key appointments to be announced in Q2
• Management incentive scheme extended to the end of FY2021 (previously expired February 2021)

Technology Division – Q1 FY2021 Snapshot

• Revenue of $8.9 million
• EBITDA $6.1 million
• Despite Covid-19 restrictions continuing to delay certain orders due to travel restrictions and office shutdowns, our Technology Division has continued to operate and deliver systems to both current and new customers including deliveries for major defence programs
• Indian Ministry of Defence revenue for the large-scale data network protection program (FFT’s SecureLink product) was $3.6 million for the quarter with $1.3 million cash received for payment of good delivered in prior periods
• Strong commercial interest in our new conveyor health monitoring solution (Aura IQ) with multiple Proof of Value trials completed and/or underway
• Increasing activity with our assurance sensing solutions for terrestrial and sub-sea power cables and roads infrastructure
• First shipment of the latest version of our FOSS platform – with Machine Learning software which is the completion of the first step in our roadmap of innovative solutions that will be offered to our customers on a SaaS revenue model.

Ava Group CEO, Rob Broomfield said “Our strong Q1 FY2021 results have demonstrated that our streamlined and highly scalable cost structure, along with our diverse customer base and revenue streams, are able to show continued growth even in times as disruptive as the current COVID-19 period.”

For further information, please contact:

Rob Broomfield, Group CEO	Leigh Davis, Group CFO & Company Secretary
rob.broomfield@theavagroup.com	leigh.davis@theavagroup.com
+61 408 243 582	+61 3 9590 3103

Please refer to Note 1 below.

Approved for release for and on behalf of the Board of Directors by:

Leigh Davis
Company Secretary

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.

Note 1

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.

Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) today provides the following market update with respect to its previously announced guidance for its expectations for Q4 and FY2020:

• Q4 revenue now forecast at $12.3m, exceeding previous guidance by +$1.8m
• H2 revenue forecast of approximately $24.6m, more than $2m higher than previous guidance
• FY2020 revenue now forecast to be approximately $45m
• FY2020 EBITDA now forecast be circa $6.8m, and $1.8m higher than previously expected
• Q4 IMOD revenue now forecast at $1.3m, exceeding previous guidance by $0.8m

Services Division
The Services Division has continued to perform strongly during Q4 and has increased its revenue, margin and customer diversification during the quarter. Despite Covid-19 related global challenges within the air freight sector, the Services Division has successfully managed to maintain and increase its full suite of services to its customer base.

Technology Division
During Q4 the Technology Division has been impacted by approximately $2.5m of order delays associated with the global Covid-19 situation. Supply chains have experienced some delays, a majority of employees have been working from home on reduced hours and pay whilst international travel for commissioning systems and attending to maintenance services remains challenging. Some of our major systems integrator customers have been delayed in their own programs to deploy our systems at end user sites. Whilst we have seen some improvement to these challenges in June, we will continue to monitor the situation and adapt our operating strategy appropriately.

As previously announced, manufacturing for our large-scale supply of FFT’s SecureLink technology to protect data communications cables for the Indian Ministry of Defence (IMOD) recommenced during Q4.

Ava Group has recognised revenue for additional licences during Q4 of circa $1.3m, an increase of approximately $0.8m on previously announced guidance.

Senior Management Update
After joining Ava Group in March 2019 Mr. Scott Basham will retire from his position as Group CEO and Executive Director. Mr. Basham joined Ava Group to lead a transformation strategy to right size the cost base, optimise the operating structure of BQT Solutions, and drive top line sales growth and implement process changes within the sales and business development teams across the Group’s Technology Division. Scott also established a new division focussing on recurring service revenues. With the business returning to profits in FY20 and having largely completed its transformation exercise Scott leaves the Company in very good shape and well positioned for further success in FY21 and beyond.

David Cronin, Chairman of Ava Group said “Scott bought the drive and energy that we needed during the execution of our transformation strategy. Under Scott’s leadership, our revenues have grown, and we have returned the business to profits. A lot has been achieved during the past 16 months and we thank Scott for his valuable and important contributions and service to the Company, and wish him well in his future endeavours.”

Mr. Basham said “It has been a pleasure working with the Ava team, driving change and executing strategies to leverage their world class product portfolio. We have had a lot of wins in the past 16 months and I am pleased to move on to other challenges knowing that the Company is now in great shape to leverage off the strategy that has been implemented.”

As we strive to improve and optimise our business units the Board has worked closely with its senior management team to agree a change of management within its Technology Division. The position of CEO of Ava Group will be filled by experienced executive Rob Broomfield (current Technology Division COO), who will also continue to lead the Technology Division. Mr. Broomfield’s terms of employment are attached in Appendix A.

The Company’s realignment of having its Services Division report directly to the main board has worked well. The division is led by three of the most experienced people in the industry, with Mike McGeever as Chairman, Chris Fergus as CEO and Grant Angwin, Director and Senior Precious Metals Advisor.

For further information, please contact:

Rob Broomfield, CEO & Executive Director	Leigh Davis, CFO & Company Secretary
Ava Risk Group Ltd	Ava Risk Group Ltd
rob.broomfield@theavagroup.com	leigh.davis@theavagroup.com
+61 3 9590 3100	+61 3 9590 3103

Please refer to Note 1 below.

Approved for release for and on behalf of the Board of Directors by:

Leigh Davis
Company Secretary

About the Ava Group 
The Ava Group, comprising world leading technology divisions Future Fibre Technologies (FFT) and BQT Solutions (BQT) 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 (Ava Global) 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. 

Note 1
All figures for the financial year ended 30 June 2020 (FY2020) are unaudited and are management estimates only.

IMOD Contract Background:
Ava has received and accepted a Purchase Order for US$11.9m (A$17.0m) of licencing income from its in-country manufacturing partner, SFO Technologies Private Limited (SFO).

Financial Year ended 30 June 2020, Ava has recognised $5.0m in revenue against the IMOD contract.

Ava has received a US$2.1m (A$3.0m) Bank Guarantee from SFO as security for SFO payment obligations to Ava under the contract.

Post completion of the deployment of equipment into service with IMOD, Ava anticipates additional revenues will follow from a subsequent 7-year spares and maintenance contract for this project, which has an estimated value of a further US$3.4m (A$4.9m).

Further information on the IMOD project is available via previous market announcements (see www.asx.com.au)

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.

APPENDIX A

Key Terms Group Chief Executive Officer Employment Contract
Mr. Robert Broomfield is employed via an Employment Agreement with Ava Risk Group Limited on a permanent, full-time basis. Rob commences his position as Group Chief Executive Officer on 10 July 2020. His fixed remuneration is A$282,735 p.a. (inclusive of superannuation). He has a notice period of 4 months.

In addition to his fixed remuneration, Rob is eligible to participate in a performance-based incentive scheme and the Company’s performance share rights plan (PSR). For the 12 month period ending 30 June 2021, Rob will be entitled to a maximum bonus of up to 40% of his fixed remuneration being A$113,094 based on successful achievement of pre-defined KPI’s. The bonus (if any) will be paid 50% in cash (or shares at Rob’s election) and 50% as PSRs vesting equally at 12 and 24 months periods after the end of the FY2021 year.

Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) today provides the following market update with respect to the large-scale supply of FFT’s SecureLink technology to protect data communications cables for the Indian Ministry of Defence (IMOD):

• Last 200 units from the first tranche of 600 (25% of total order) now completed
• FAT successfully completed
• Now awaiting shipment to end user

Ava is pleased to advise, that it has received notification that the remaining units from the last batch of 200 units have now been completed, and that the entirety of this batch has passed Factory Acceptance Testing (“FAT”). 

This means that all units of tranche 1 (~25% of the IMOD project) have been manufactured, and that all of these have successfully passed FAT.

Ava now looks forward to receiving notification of the shipment of these 200 units from it’s in-country partner’s warehouse, which will be the trigger to start the 120 days payment terms for the ~$1.5m value of this batch.

Ava Group CEO Scott Basham said: “Confirmation that all 200 units from the last batch of Tranche 1 have successfully passed FAT is great news, and further builds upon the earlier news we have received about the momentum really picking up again on this IMOD project.  With all COVID-19 related manufacturing backlog now cleared,  we’re looking forward to receiving confirmation of the balance of Tranche 1 leaving the warehouse so that we can start the timer on receiving our next ~$1.5m payment.”

For further information, please contact:

Scott Basham, CEO & Executive Director	Leigh Davis, CFO & Company Secretary
Ava Risk Group Ltd	Ava Risk Group Ltd
scott.basham@theavagroup.com	leigh.davis@theavagroup.com
+61 3 9590 3100	+61 3 9590 3103

Please refer to Note 1 below.

Approved for release for and on behalf of the Board of Directors by:

Leigh Davis
Company Secretary

About the Ava Group 
The Ava Group, comprising world leading technology divisions Future Fibre Technologies (FFT) and BQT Solutions (BQT) 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 (Ava Global) 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. 

Note 1
IMOD Contract Background:

The total contract value to Ava for this project is estimated at US$11.9m (A$17.1m).

All 600 units (~25% of project) have now been built by Ava’s in-country partner SFO: 

• The first 200 units passed FAT and shipped in late Dec 2019. 
• The second 200 units passed FAT in late Jan 2020 and shipped in May 2020.
• The last 200 units of this batch are now been completed, have passed FAT, and await onward shipping.

In H1 FY2020, Ava recognised ~US$1.0m (~A$1.5m) of the order, being ~US$0.9m (~A$1.3m) as top line sales revenue, and ~US$0.1m (~A$0.2m) as an income tax credit.  In Q3 FY2020 Ava recognised a further ~US$1.4m (~A$2.3m) as top line sales revenue and ~US$0.14m (~A$0.23m) as an income tax credit.  Whilst Ava will generate at least ~A$0.6m in additional revenues from the finalisation of this remaining batch of Tranche 1 in Q4 FY2020, given the COVID-19 disruptions and delays, Ava expects that the balance of this project will be recognised as revenue in FY2021. 

SFO’s Bank Guarantee to Ava for ~US$2.1m (~A$3.0m), tocover the 120 days payment terms remains in place.

Further information on the IMOD project is available via previous market announcements (see www.asx.com.au)

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.

AVA Risk Group Limited (ASX: AVA) has been included in the Financial Times Top 500 APAC High Growth Companies 2020.

Making the list at number 313, this new accolade follows Ava’s inclusion in AFR’s Fast 100 announced last month.

Commenting at the time, Ava Group CEO Scott Basham said, “Ava continues to go from strength to strength, and this recognition is a testament to the successful implementation of our growth strategy for the group.”

Read the report here.

Download the report here.

AVA Risk Group Limited (ASX: AVA) has been included in the 2020 AFR Fast 100 – with annualised revenue growth of 30% over past four financial years.

Commenting in the listing, Ava Group CEO Scott Basham said, “Being recognised as one of the AFR’s Fast 100 is a great accolade for Ava Risk Group Limited. Ava continues to go from strength to strength, and this recognition is a testament to the successful implementation of our growth strategy for the group.”

Dear Valued Customer,

This week, the World Health Organisation declared COVID-19 a global pandemic. We want to assure you that Ava Group have a robust COVID-19 Pandemic Crisis Management Plan in place to protect the health and wellbeing of our employees, whilst ensuring that we continue to deliver a high-level of service to our customers.

We are currently on high-alert and the Ava Group management team is meeting regularly to ensure that we are able to react quickly in the event of a worsening situation and to ensure that all employees receive ongoing education and information on best hygiene practises. Utilising the information available from the World Health Organisation and the Federal Department of Health, we have already implemented the following measures:

• All work-related international travel is restricted and requires CEO approval
• All work-related interstate travel to be reviewed on a case by case basis
• Employees that holiday overseas in ‘high-risk’ areas are required to self-quarantine for 14 days prior to returning to work
• Where possible, employees have been encouraged to work from home using laptops and mobile phones to remain in regular contact

The safety of our employees is paramount as is ensuring the capacity to deliver a high-level of ongoing service to our customers. BQT’s manufacturing supply chains are not currently impacted significantly by COVID-19 and BQT maintains inventories of component parts and finished goods that are sufficient to meet current customer demand and our expected production forecasts for the coming period. We are in constant communication with key suppliers and should this situation change we will ensure to update you further as promptly as possibly at that time.

With BQT manufacturing based in New Zealand we are at least geographically isolated which may lessen the impact of our workforce being unable to attend work. For now this threat remains low but as the pandemic continues the potential for delay in supply grows. We will monitor and react as needed but would encourage you to review your own stock levels and customer demand now.

If you have any further questions in relation to the Ava Group’s COVID-19 Pandemic Crisis Management Plan, please do not hesitate to contact me.

Yours Sincerely,

Matthew Nye-Hingston
Head of BQT Technology & Director BQT Operations

Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) today provides the following market update with respect to the large scale supply of FFT’s SecureLink technology to protect data communications cables for the Indian Ministry of Defence (IMOD):

As previously advised to the ASX in December, Ava has received and accepted a Purchase Order for US$11.9m (A$17.5m) of licencing income from its in-country manufacturing partner, SFO Technologies Private Limited (SFO) and has received a US$2.1m (A$3.1m) Bank Guarantee from SFO as security for SFO payment obligations to Ava under the contract.

• Ava also previously advised that Manufacturing of the first batch of 600 systems, representing circa 25% of total contract volume, had commenced and on 18 December 2019, Ava advised the ASX that SFO had successfully completed the FAT for the first 200 systems.
• Ava can now confirm that the shipment of the first 200 systems from SFO to the end user was successfully achieved prior to end of December 2019.
• As a result Ava confirms that it expects to recognise revenue (licencing income) of circa A$1.5m in Q2.
• Production of the next 200 systems, expected to be shipped in January 2020, is well underway, with approximately half of these units now built and ready for dispatch by month end.
• The remaining 200 units from this first 25% of the project are expected be built and shipped in February 2020.
• As a result, Ava expects at least A$3m of the remaining A$16m in IMOD revenues to be recognised in Q3 FY2020, and the entire project to be delivered before the end of CY2020.
• Ava anticipates additional revenues will follow from a separate subsequent 7-year spares and maintenance contract for this project, which has an estimated value of a further US$3.4m (A$5.0m).

Ava will provide an update on our H1 FY2020 results and guidance later this month.

Approved for release for and on behalf of the Board of Directors,

Leigh Davis

Company Secretary

Please refer to Note 1 below.

About the Ava Group 

The Ava Group, comprising world leading technology divisions Future Fibre Technologies (FFT) and BQT Solutions (BQT) 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 (Ava Global) 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. 

Note 1

Further information on the IMOD project is available via previous market announcements (see www.asx.com.au)

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.

Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) is pleased to confirm that its Technology Division has received additional orders for Future Fibre Technologies’ (FFT) world leading perimeter detection systems from exisiting government clients:

• A$630k of purchase orders for FFT’s Aura Ai-2 platform have been received to protect sensitive US Government sites.
• A$350k of purchase orders for FFT’s SecureFence platform have been received to protect military installations in a South East Asian country.
• It is anticipated that around 55% of the value of the above mentioned purchase orders will ship and be booked as revenue in the current quarter.

Ava Group Chief Executive, Scott Basham said, “In a world of heightened security, our customers are looking to Ava to harden their security and improve their risk management processes. More than half of the value of the purchase orders are for upgrading sites protected by FFT’s legacy technology. The receipt of these purchase orders further demonstates the superior nature of our products and the large addressable market to upgrade the 1,900 systems already installed within our large global customer base.

Ava remains on track to achieve our guidance of A$9m or more for Q2, and A$19m or better for H1 FY2020 for the underlying business – excluding any contribution from the Indian MOD (IMOD) project.”

Please refer to Note 1 below.

About the Ava Group 

The Ava Group, comprising world leading technology divisions Future Fibre Technologies (FFT) and BQT Solutions (BQT) 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 (Ava Global) 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. 

Note 1

Further information on the IMOD project is available via previous market announcements (see www.asx.com.au)

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.

Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) today provides the following market update with respect to the large scale supply of FFT’s SecureLink technology to protect data communications cables for the Indian Ministry of Defence (IMOD):

• Ava has received and accepted a Purchase Order for US$11.9m (A$17.5m) of licencing income from its in-country manufacturing partner, SFO Technologies Private Limited (SFO).
• Ava has received a US$2.1m (A$3.1m) Bank Guarantee from SFO as security for SFO payment obligations to Ava under the contract.
• Manufacturing of the first batch of 600 systems, representing circa 25% of total contract volume, has commenced.
• IMOD Factory Acceptance Test (FAT) has been scheduled for the first 200 systems in mid December 2019. It is expected that deliveries of systems will commence within 30 days of successful completion of the FAT. 
• Ava expects additional revenue from a subsequent 7-year spares and maintenance contract for this project, which has an estimated value of a further US$3.4m (A$5.0m).

Ava Group Chief Executive, Scott Basham said, “The receipt of this A$17.5m purchase order and A$3.1m bank guarantee are fantastic milestones for Ava in relation to this large scale project, and we are pleased that the manufacturing is now well underway for the first significant portion of the program. 

Our production and engineering staff are working hand in glove with the SFO team, providing technical advice and guidance on site in India, as they ramp up production volumes for the first tranche of systems, to ensure the smoothest possible execution of the manufacturing plan, and the successful achievement of the first FAT with the end user in mid-December. 

Ava’s Future Fibre Technologies business is clearly a global leader in the provision of best practice cybersecurity solutions for the protection of critical national data network infrastructure, and this 40,000km data network project for the Indian MOD is a clear testament to that fact.

Ava remains on track to achieve our guidance of A$9m or more for Q2, and A$19m or better for H1 FY2020 for the underlying business – excluding any contribution from the Indian MOD project – and this purchase order and bank guarantee now lock us in for a fantastic FY2020 and beyond.”

Please refer to Note 1 below.

About the Ava Group 

The Ava Group, comprising world leading technology divisions Future Fibre Technologies (FFT) and BQT Solutions (BQT) 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 (Ava Global) 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. 

Note 1

Further information on the IMOD project is available via previous market announcements (see www.asx.com.au)

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.