All posts in ASX Announcement

• $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.

Review Appendix 4C

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.

Ava Group Achieves Record Result for H1 FY2021

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.

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 announce  revenue and profit growth in the first half of FY2021:

• Sales Revenues have increased by approximately 70% compared to the sae period last year to be in excess of $35.0 million for the half year.
• EBITDA has improved by circa 450% compared to the same period last year, to exceed $12.0 million for the half year.
• All business units are profitable for the half-year.
• Cash at bank as at 31 December 2020 of $13.4 million.

Services Division – H1 FY2021 Snapshot

• H1 FY2021 Revenue approximately $18.4m (With Q2 FY2021 revenues more than $2.2m+ above Q1 FY2021)
• Gross Margin to be maintained at around 34%, considerably above the 25% in FY2020
• H1 FY2021 EBITDA to exceed $3.5m (versus $2.4m for the whole of FY2020)
• New contract awarded in the wholesale banknote sector, with annual revenue in excess of $1m, commencing Jan 2021
• New operational staff in Frankfurt and Miami, supporting recent and anticipated growth in the Americas and EMEA, in addition to the New General Manager Asia, based in Singapore, appointed in Q1 FY2021
• Whilst there has been some normalisation of pricing due to the lifting of certain COVID-19 air freight restrictions, the underlying revenue and gross margin trend remains strong
• Industry consolidation continues to provide additional revenue opportunities with current and prospective customers

Technology Division – H1 FY2021 Snapshot

• 1H FY2021 Revenue approximately $16.6 million
• 1H FY2021 EBITDA in excess of $8.5 million
• Q2 FY2021 EBITDA was adversely impacted compared to Q1 FY2021 EBITDA by FX losses on a strengthening Australian dollar, the completion of the BQT Australian DoD project early in Q2 FY2021, and the cessation of government incentives income (combined impact of circa $3.2 million vs. Q1). We had previously estimated an FX benefit of circa $0.4 million in Q1. Our latest review of the combined Q1 and Q2 FX impact has resulted in a revised estimate of circa $0.9 million FX loss for 1H FY2021
• Indian Ministry of Defence revenue for the large-scale data network protection program (FFT’s SecureLink product) is expected to be approximately $7.7m for H1 FY2021
• Despite Covid-19 restrictions continuing to delay certain orders due to travel restrictions and office shutdowns, our Technology Division has continued to operate, and delivered systems to both current and new customers including deliveries for major defence programs
• Growing 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
• First shipments of the latest version of our FOSS platform delivered during the half year – 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 record H1 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 global pandemic period”.

For further information, please contact:

Rob Broomfield, Group CEO	Leigh Davis, Group CFO & Company Secretary
rob.broomfield@theavagroup.com	leigh.davis@theavagroup.com
+61408243582	+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

The above preliminary results for 1H FY2021 are unaudited and are subject to adjustment.

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 and clarifications with respect to the large-scale supply of FFT’s SecureLink technology to protect data communications cables for the Indian Ministry of Defence (IMOD):

• Large scale supply of FFT’s SecureLink technology to protect more than 40,000kms of data communications cables for the Indian Ministry of Defence
• FFT licenced technology to in-country manufacturing partner SFO Technologies Private Limited (SFO)
• Total contract value estimated at US$11.9M+
• SFO’s Bank Guarantee to Ava for US$2.1m (A$3.0m),tocover the 120 days payment terms remains in place.
• Contract establishes FFT technology in growing cyber security market
• Fulfilment and licencing model providing low working capital, low risk and high margin GTM approach

FY2020 Recap:

• US$3.2 (A$4.8) million in revenue recognised
• US$0.1 (A$0.2) million in tax credits recognised
• US$1.0 (A$1.5) million in cash received

Q1 FY2021 (unaudited):

• US$2.4 (A$3.6) million in revenue recognised
• US$0.3 (A$0.4) million in tax credits recognised
• US$1.0 (A$1.3) million in cash received

Updated Forecast:

• Contract balance of circa US$5.9 (A$8.2) million (revenue and tax credits)
• Q2 FY2021 revenue expected to be A$3.3 – A$3.8 million
• US$1.8 (A$2.6) million in cash due to be received within Q2 FY2021
• Additional revenue from subsequent seven-year spares and maintenance contract with an estimated value of a further US$3.4M (A$4.8M)

Historical A$ amounts are based on actual USD/AUD exchange rates achieved. Forecast $A amounts are based on the current USD/AUD exchange rate at time of release. Actual final A$ amounts achieved may differ depending on exchange rates achieved at the time.

For further information, please contact:

Rob Broomfield, Group 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. 

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

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.

Review AVA AGM presentation and speeches here.

• $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) is pleased to announce that its Services Division, Ava Global, has continued its growth trajectory from Q4 FY2020 into Q1 FY2021.

Following the new client wins announced in Q4 FY2020, a further five clients, across various sectors, have entered into agreements with Ava Global:

• Mining                                      2
• Precious Metals Refining        2
• Banking                                   1

Unaudited revenue for the month of July 2020 was more than $3m with further Gross Margin improvement and EBITDA in excess of 15% (+6% vs FY2020 full year EBITDA of circa 9%),

Ava Global CEO, Chris Fergus, commented “We are delighted with the trajectory of the business and its financial performance since its inception in 2016. FY2020 was in many ways a transformational year with particularly strong Q4 FY2020 growth in the Americas, Europe and Africa, despite the logistical challenges posed by the COVID-19 pandemic. Building on our growing market opportunity, we are further investing in our business development capability in key client sectors and in the Asian region to further leverage our strong and scalable operational capability, as well as our growing reputation.”

For the sake of clarity, please note the above refers only to the Services Division and excludes any activities and results of Ava Group’s Technology Division.

For further information, please contact:

Chris Fergus, CEO – Services Division	Leigh Davis, Group CFO & Company Secretary
chris.fergus@theavagroup.com	leigh.davis@theavagroup.com
+971 4 4210665	+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.

• $4.0m positive operating cash flows for the quarter
• Increased cash holdings, consolidated net cash position of $7.9m

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 June 2020.

Review complete Appendix 4C

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 final quarter of the 2020 financial year related to:

• Our strategies for delivering profitable growth and generating positive cashflow produced an increase of $4.1m in net cash holdings as at 30 June 2020, reflective of a growth in revenues, customer cash collections and positive EBITDA performance.

• During Q4 we received a $1.5m payment relating to the IMOD contract for FFT’s data network security technology, and as announced via the ASX, the Company will receive additional IMOD payments of circa$1.3m  in September and circa $2.6m in November 2020. The total contract value for this project is estimated at US$11.9m (A$16.7m). We recognised $1.3m of revenue in Q4, and a total of $5.0m in FY2020. To date, 800 units have been shipped to the end user, generating a total of $5.3m in revenue. We expect the balance of circa $10m, 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 payment.

• The Company conducted a performance review of its Senior Management Team along with an employee survey to track and benchmark certain KPI’s and improvement programs that we have rolled out over the past 18 months.

• Several strategy sessions and a strategic review of the Technology Group formed the basis for our FY21 budget and focussed our strategic goals for the coming year.

• Services Division saw the benefits of our strategy implemented in the past 12 months, including to broaden out our customer base and service offerings.

• Across the Ava Group, and outside of usual business activity, managing the impacts of COVID-19 was a key focus of the board and management during Q4.  The business continued its programme initiated in Q3 to educate our employees and to maintain appropriate COVID-19 hygiene measures, including supporting work from home infrastructure and support 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 Company applied for and received A$333k in loan funding under the US federal government’s coronavirus support programme, the “Payroll Protection Programme (PPP)”. Ava Group expects to satisfy the government’s criteria during H1 FY2021 for these loans to be forgiven, and the proceeds recognised as other income.

• 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 Q4, 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.  FFT continued its marketing efforts of its Aura IQ conveyor health monitoring solution, with several “Proof of Value” Trials underway around the world during the quarter.  During the quarter BQT received a significant new contract from the Australian Department of Defence (DoD) for the supply of its security products to a number of DoD sites around Australia. Deliveries started in June with further deliveries for the remainder of the order expected during H1 FY2021. FFT also released it latest update of its proprietary event classification software, FOSS, targeted for use in the Pipeline monitoring market with customer acceptance trials underway with promising results to date.

• Operating expenditure for the quarter of $11.7m was mostly comprised of product manufacturing and operating costs ($7.6m), staff costs ($2.9m), and administration and corporate costs ($0.9m).

• During the quarter the Company made payments of approximately $203,000 to Directors and their associates. This includes all Executive Directors and Non-executive fees and salaries, 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 $4.0m an improvement of $2.9m on the previous quarter. This was due to increased cash collections from customers compared the prior quarter, up $6.7m, with much of this coming from improved trading by the Services Division. Associated operating costs were circa $3.8m higher compared to the prior quarter, driven by higher product manufacturing and operating costs which increased $2.8m compared to the prior quarter.  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 Q4 included $1.5m from the Indian MoD project.  The next payment from this project is expected during September, being an amount of USD$0.9m (A$1.3m), in line with the 120 days project payment terms.

At 30 June 2020 the Company had $7.9m 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) 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):

• Balance of 200 units from tranche 1 and 200 units from tranche 2, a total of 400 units, have been shipped to the End User
• US$1.9m (A$2.6m) due to be received by Ava Group in November 2020

Ava Group is pleased to advise, that it has received notification that the remaining units from tranche 1 have now been shipped to the End User. This means that all 600 units of Tranche 1 (~25% of the IMOD project) have been manufactured, successfully passed Factory Acceptance Testing, and have been shipped to the End User. Manufacturing has continued in July 2020 and to date we have issued licences for an additional 50 systems generating a further US$0.2m (A$0.3m) in revenue.

Ava Group CEO Rob Broomfield said: “Confirmation that all units from the last batch of Tranche 1 have been shipped along with a further 200 units to the End User is great news. This will provide Ava Group with a circa A$2.6m boost in November to our already strong cash position. Furthermore, the supply chain has been activated and manufacturing activities have commenced for Tranche 2 which we expect will all be fulfilled within FY2021, generating a further US$5.4m (A$7.5m) in revenues.”

For further information, please contact:

Rob Broomfield, Group 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), 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 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

IMOD Contract Background:
The total contract value to Ava for this project is estimated at US$11.9m (A$16.7m).

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 July 2020.
• The last 200 units of this batch passed FAT in July 2020 and shipped in July 2020.

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 H2 FY2020 Ava recognised a further ~US$2.3m (~A$3.4m) as top line sales revenue and ~US$0.2m (~A$0.3m) as an income tax credit. 

SFO’s Bank Guarantee to Ava for ~US$2.1m (~A$2.9m), 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) (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.