- Positive operating cash flows of $1.1m for the quarter
- Consolidated net cash position of $3.7m
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 March 2020.
Ava Group is a security services and technologies 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 third quarter of the 2020 financial year related to:
- Across the Ava Group, and outside of usual business activity, preparing for and dealing with the impacts of COVID-19 took significant time and effort during Q3. The business took sweeping action to educate our employees and implement appropriate health and hygiene measures, including reducing the need for people to come into our offices across the globe, based on local conditions. The health and safety of our staff and customers remains a paramount priority for the business.
- The Services Division continued to provide a full range of services to all of its customers, despite the 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 Q3, 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 implemented additional 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. Early March saw FFT’s new Aftermarket Sales Manager join the business, with his immediate focus on the rollout of FFT’s online remote technical support platform. This was particularly good timing for us, given all of the various travel restrictions, quarantine and isolation measures in place around the world, and meant that FFT was well positioned during the period to be able to capitalise on delivering online remote technical support capabilities to its customers. FFT also continued its marketing efforts of its Aura IQ conveyor health monitoring solution, with several “Proof of Value” Trials commencing around the world during the quarter. During the quarter BQT also completed the signing of a new Master Distribution Agreement for the supply of its locking products to a leading international locking products wholesaler in Europe.
Commentary on Appendix 4C Cash Flow Report
Net operating cashflows in the quarter were positive $1.1m an improvement of $1.3m on the previous quarter. This was due to increased cash collections from customers compared the prior quarter, up $0.4m, and lower operating costs, down $0.8m compared to the prior quarter. The Group also continued development of the Aura Ai and Aura IQ platforms, increasing its R&D spending and intellectual property spending during the quarter, compared to the previous quarter.
Noticeably cash receipts from customers in Q3 did not yet include any receipts from the Indian MoD project. The first payment from this project was received as expected during April, being an amount of USD$0.9m (A$1.5m), in line with the 120 days project payment terms.
At 31 March 2019 the Company had $3.7m cash at bank and no debt.
An update on guidance for Ava’s FY2020 forecast will be issued separately to this 4C.
Approved for release by the Board of Directors.
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