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Ava acquires leading UK security business, GJD Manufacturing

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise it has today entered into a Sale and Purchase Agreement to acquire 100% of the shareholding of MTD Holdings Limited, the parent company of GJD Manufacturing Limited (“GJD”).  The Company further advises that completion has subsequently occurred today.

GJD is an award-winning, UK-based security equipment designer and manufacturer, specialising in security space detection and intruder detection systems. Its products include professional grade external detector equipment as well as infrared and white-light LED illuminators and Automatic Number Plate Recognition cameras. GJD counts some of the UK and Europe’s most security conscious end users as customers and has a growing OEM sales channel across multiple sectors, including well-known multinational engineering and technology companies.

Key transaction terms:

  • £5.9 (circa A$10.25) million headline enterprise value
  • £4.5 (circa A$7.82) million equity value purchase price to be paid 60% in cash and 40% in Ava shares
  • Shares issued as consideration will be subject to a staggered escrow period, such that one third of the shares will be released after 12 months, one third after 18 months and the remaining third after 24 months.

The cash consideration will be funded out of Ava’s existing cash resources. Its cash balance at 30 June 2022 was circa A$15.2 million. Approximately 11.8 million consideration shares will be issued within Ava’s securities issuance capacity pursuant to ASX Listing Rule 7.1.

GJD FY2021 (year-end 30 September) highlights include:

  • £4.6 (circa A$7.95) million revenue
  • £0.92 (circa A$1.6) million EBITDA*
  • Gross Profit Margin of 46%
  • Domestic UK sales were approximately 50% and mainland Europe sales were approximately 37% (of total revenue). International and other revenue accounting for the balance of 13% of total sales.
  • OEM sales, which include Automatic Number Plate Recognition camera technology, grew 50% from FY2020 to £1.9 million (accounting for 41% of total sales).

Commenting on the acquisition, Ava Risk Group Chief Executive Officer, Rob Broomfield, said “We are delighted to welcome the GJD management team, employees and shareholders to the Ava Group. The acquisition is an exciting opportunity to increase our global reach and access to new customers, particularly in the large markets of the UK and Europe. Our combined product portfolio is highly relevant to our respective end customers, and we can turbo charge their distribution by combining GJD’s go-to-market access with Ava’s current growth strategy. Importantly, this transaction represents significant strategic value for both FFT and BQT and is complementary to their existing growth initiatives.”

GJD Chairman, and major shareholder, Mark Tibbenham, said “Our strategic fit with Ava has been obvious for some time and we are very pleased to have found a world class home for GJD’s employees and customers. We will continue to capitalise on the growing global demand for our award-winning products. I am very excited to be a shareholder in Ava and about the value we can create as a combined business.”

GJD Products
GJD’s product offering falls into three categories:

Notice pursuant to Section 708A(5)(e) of the Corporations Act
This notice is provided by AVA Risk Group Limited (AVA) for the purposes of Section 708A(5)(e) of the Corporations Act 2001 (Corporations Act).

AVA today issued 11,807,894  fully paid ordinary shares (Shares) pursuant to the Sale and Purchase Agreement the subject of this announcement.  It is noted that the shares are issued in partial consideration (GBP1,802,000) of completion under the Sale and Purchase Agreement.

For the purposes of Section 708A(5)(e) of the Corporations Act, the Company gives notice of the following in respect of Shares:

  1. The Shares were issued without disclosure to investors in accordance with Part 6D of the Corporations Act.
  2. The Company, as at the date of this notice, has complied with:
    • the provisions of Chapter 2M of the Corporations Act as they apply to it; and
    • Section 674 of the Corporations Act.
  3. There is no excluded information, as defined in sections 708A(7) and 708A(8) of the Corporations Act, as at the date of this notice.

Approved for release by the Board of Directors.

For further information, please contact:

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

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

 

Q4 FY2022 Trading Update

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to provide the following update
on its Q4 FY2022 Trading performance:

  • Strong uplift in sales order intake with confirmed orders of $5.5m during Q4 FY2022. This represents the strongest quarterly sales performance since the onset of COVID-19 related business disruptions.
  • Full year confirmed sales order intake of $18.0m for FFT and BQT, 13% increase on FY2021 confirmed orders.
  • Confirmed sales order backlog of $3.2m of which $1.2m is expected to be fulfilled in Q1 FY2023.
  • FY2022 revenue guidance of $29.8m to $30.2m, slightly below previous guidance of $31.3m to $33.3m
    reflecting the timing delay of certain expected orders, including Aura IQ.
  • Secured the first commercial order for Aura IQ in July; additional sales orders anticipated in H1 FY2023.
  • Strong financial position with consolidated net cash of $15.2m and no debt at 30 June 2022 after distribution
    of $39.2m to shareholders during Q4 via special dividend and capital return.

Commenting on the trading performance, Ava Group CEO, Rob Broomfield, said: “As anticipated, sales momentum grew during Q4 and we recorded our strongest quarterly performance since before the pandemic. While the quarter was exceptionally strong, a number of additional sales orders which we anticipated in Q4 were delayed to Q1 FY2023, which has impacted our FY2022 revenue outcome. We received our initial Aura IQ order in early July, and we expect the other delayed orders, including additional Aura IQ contracts, to be finalised over the remainder of the 2022 calendar year.”

Q4 FY2022 confirmed sales orders
There was a significant uplift in sales order intake during the quarter with confirmed sales orders of $5.5 million, resulting in full year sales orders of $18.0 million for FY2022.  Orders received in Q4 represent the highest order intake since the COVID-19 disruption began and builds on Ava’s recent market momentum.  The full year order intake for FY2022 represents growth of 13% on FY2021, driven by increased orders in FFT and strong H2 performance in BQT.

The sales pipeline remains very strong, and a number of opportunities that were expected to close in Q4 FY2022 have since closed or are anticipated to close in H1 FY2023.  There is continued focus on providing long term support contracts to the FFT installation base – at the end of June 52 systems had been signed to these agreements. The Company carries a sales order backlog of $3.2 million, representing sales orders that have been received but have not yet been fulfilled.  It is anticipated that $1.2 million of the backlog will be fulfilled in Q1 FY2023.  The backlog does not include any additional sales orders under the Indian Ministry of Defence contract.

Ava’s first order for Aura IQ from a leading global conveyor manufacturer was received in early July 2022.

 

 

 

 

 

 

Update on Aura IQ
The Company achieved a significant strategic milestone in early July when it received the first commercial order for the FFT Aura IQ solution. The order, for the supply and installation of Aura IQ with a leading global manufacturer of conveyor systems, had been expected during Q4 FY2022 but was delayed pending internal procurement approvals with the end user. Receipt of the order was the culmination of a series of successful proof of value trials on operating mine sites.

Integration of Aura IQ with a fibre-optic fire detection system was completed at the request of a major global mining company during Q3 FY2022 and was successfully tested during Q4. Additional sales orders with the mining company are progressing through purchasing approvals and are expected to be finalised over the remainder of the 2022 calendar year.

FY2022 Financial Performance
Management provides full year revenue guidance for FY2022 in the range of $29.8 million to $30.2 million. Full year revenue from FFT and BQT is expected to be in the range of $18.7 million to $19.1 million.

Full year revenue guidance is slightly lower than the previously advised range of $31.3 million to $33.3 million due to a number of anticipated sales orders being delayed until Q1 FY2023.

Ava Risk Group will release its financial results for the year ending 30 June 2022 on Friday 26 August 2022. Details on an investor webcast will be provided to the market in due course.

ENDS

Approved for release by the Board of Directors.

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

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT). FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

 

Ava secures first Aura IQ contract with leading global conveying systems manufacturer

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise it has secured a contract for the supply and installation of its Aura IQ solution with a leading global manufacturer of conveyor systems.  The order is for approximately €0.2 million (A$0.3 million) and customs approval and delivery is expected to be finalised by the end of July.

Receipt of this order represents a significant strategic milestone in the development roadmap of Aura IQ, the Company’s condition monitoring solution for conveyor applications. It is the first commercial order for the FFT Aura IQ solution following the successful completion of a number of proof of value trials on operating mine sites.

Aura IQ is built on Ava’s Aura fibre optic sensing platform. The solution was initially developed with world leading mining research organisation, Mining3, and uses advanced analytics and acoustic detection via fibre optic cable to improve conveyor efficiency and safety.  It provides instant, real time information on the state of wear on conveyor roller bearings, helping to reduce downtime and the risk of major damage from failed roller bearings.  The solution provides an important alternative to existing conveyor belt fault detection methods, which are often manual and prone to error.

Commenting on the contract, Ava Risk Group Chief Executive Officer, Rob Broomfield, said “We are excited to receive the first commercial order for Aura IQ, our world leading fibre optic technology, which is the culmination of extensive product development efforts over a number of years.  In addition, securing the contract with a global conveyor manufacturer really validates the effectiveness of the solution and we continue to develop Aura IQ to expand its deployment into other applications.  Additional contracts, based on successful proof of value trials within the mining industry, are progressing through procurement processes and are expected over the remainder of calendar year 2022.”   

Approved for release by the Board of Directors.

For further information, please contact:

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

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT).  FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks.  BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

 

Ava Risk Group CEO Rob Broomfield | Presenting at Coffee MicroCaps forum

Ava Risk Group Limited (ASX: AVA) CEO, Rob Broomfield, will provide an introduction to Ava Risk Group as part of a Coffee MicroCaps forum tomorrow, Thursday 23 June at 9.00am AEST.

If you are interested in attending, please register via the Zoom Webinar link below. The presentation and Q&A will run for 30 minutes.

https://us02web.zoom.us/webinar/register/WN_b0L7vPdvRtKD_BHOWa7OlA

Review presentation here.

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

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT). FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

 

Contract to supply and install Fibre Optic Intrusion Detection System at major North American energy facility

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise it has secured a contract for the supply and installation of a Fibre Optic Intrusion Detection System at a major North American energy facility. The order is for approximately US$0.5 million (A$0.7 million) and the supply of material is expected to be fulfilled in the current financial year.

It is the largest energy sector sales order the Company has won and represents a significant strategic milestone in expanding its advanced sensing solutions to the energy industry. Detection performance, reliability and flexible integration were all important considerations in the customer selecting Ava Risk Group’s solution.

Commenting on the win, Ava Risk Group Executive Vice President Global Security, Jim Viscardi, said “This contract further validates the quality of our advanced sensing solutions in safeguarding critical energy assets. We are aggressively pursuing opportunities in the energy sector and expanding our presence in North America, our largest target market, where we continue to build out our sales infrastructure and capability.”

The order affirms the investment Ava Risk Group has made to grow its business development capability in targeted sectors and regions, building on first half successes in solar installations and offshore wind farms. This includes the first European submarine power cable for an offshore wind farm, resulting in current year sales orders in energy of more than A$1.8 million.

Jim Viscardi was recently appointed as Group Executive Vice President Global Security having previously been Vice President Americas. This reflects the Company’s focus on targeting the largest global markets for its advanced sensing solutions, as well as Jim’s proven capability in leading sales and business development teams in the Security industry.

ENDS

Approved for release by the Board of Directors.

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

 

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT). FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Q3 FY2022 Trading Update

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to provide the following update on its Q3 FY2022 Trading performance:

  • Q3 FY2022 confirmed sales orders of $2.8m, resulting in year to date (“YTD”) sales orders of $13.0m (up 17% on the prior year, excluding prior year orders from the Indian Ministry of Defence (“IMoD”) contract)
  • Confirmed sales order backlog of $5.0m of which $2.6m is expected to be fulfilled during Q4 FY2022
  • Aura IQ successfully integrated with fire detection solution and purchasing approvals within the global mining company anticipated to be completed within Q4.
  • BQT sales orders boosted by post lockdown recovery and anticipated acceleration of new dormakaba Global Framework Agreement
  • Approval granted at Extraordinary General Meeting for return of capital of approximately $7.566m or $0.03114 per share
  • Management reaffirms FY2022 revenue guidance of $31.3m to $33.3m due to a strong pipeline and expected performance in Q4.

Ava Group CEO Rob Broomfield commented: “Though Q3 was slightly quieter in terms of sales order intake, we remain confident in the quality of our sales opportunity pipeline and expected performance in Q4 and into FY2023.  In the near term, we look forward to receiving our first commercial order for Aura IQ following the successful integration of our conveyor monitoring solution with existing fire detection capability. We also continue to manage supply chain availability, particularly for components sourced from China.

During March, we exhibited at the ISC West Trade Show in the United States, one of the largest security trade shows in the world. After the trade show had been impacted by Covid-19 in the previous two years, this show reaffirmed our belief of significant growth in the sector. It was very successful in terms of reconnecting in person with our customer base for both the FFT and BQT segments as well as showcasing our enhanced solutions to prospective customers. For BQT in particular, the show provided an opportunity to meet with dormakaba’s global leadership team to accelerate implementation of the Global Framework Agreement signed in December 2021”.

Q3 FY2022 confirmed sales orders
During Q3 FY2022 the Technology Division received confirmed sales orders of $2.8 million, resulting in YTD sales orders of $13.0 million.  YTD sales order intake reflects growth of 17% on the prior year (excluding prior year orders from the IMoD contract), driven primarily by increased sales orders from FFT.  Sales orders received during Q3 were not as strong as the previous two quarters attributable in part to a seasonal slowdown in the US security market in January and slight delays in the timing of some expected orders.  Q4 has started strongly and the Company is confident that order intake in Q4 will align with the run rate during the first two quarters.

During Q3 FY2022 we increased the number of FFT systems signed to maintenance contracts.  As at the end of Q3, a total of 49 systems have been signed to maintenance agreements using the existing sales and support team.

The Company carries an order backlog of $5.0 million which represents sales orders received that will be fulfilled in the future.  It is anticipated that $2.6 million of the backlog will be fulfilled during Q4 FY2022.  The backlog does not include any additional sales orders under the IMoD contract, or sales orders expected to be received and fulfilled in Q4. As previously advised, the Company is not expecting any contribution from the IMoD contract in FY2022.

Chart 1 – Technology Division Sales Orders

Chart 2 – Sales Order backlog fulfillment (excluding IMoD)

 

Update on Aura IQ
As advised in February 2022, FFT has been requested by a global mining company to integrate its advanced conveyor condition monitoring solution with a fibre optic-based fire detection solution. Ava is pleased to advise that the qualification of Aura IQ with the fire detection fibre optic cable was successfully completed by the end of Q3.  Based on the successful integration, purchasing approvals within the global mining company have recommenced and are expected to be completed within Q4.

Testing of the integrated condition monitoring and fire detection solution is scheduled to commence with a second major mining company in May.  The outcome of the testing will result in qualification of the solution on underground conveyors. The integrated condition monitoring and fire detection capability continues to generate significant commercial opportunities for global partnerships to support the mining industry.

Update on Global Framework Agreement with dormakaba
As advised in December 2021, the Company signed a Global Framework Agreement with dormakaba for the supply of BQT products and services. During Q3, BQT received an initial stock order to provide inventory for the launch of BQT products across dormakaba’s global network. Planning is advanced with dormakaba for the global launch including appropriate training and supporting documentation for the product range.  The initial stock order is expected to be fulfilled in Q4, with subsequent orders to generate incremental growth into FY2023.

Return of Capital
Ava Risk Group Limited held an Extraordinary General Meeting (“EGM”) on 22 April 2022 where shareholder approval was sought for a capital return of $7.567 million or $0.03114 per fully paid ordinary share.  Shareholders approved the resolution, and the Company will return capital to its shareholders based on a:

  • record date of 28 April 2022; and a
  • payment date of 5 May 2022.

The Company also paid a special dividend of $0.13 per eligible share on 10 March 2022 (approximately $31.585 million).

Outlook for FY2022
Management confirms its full year revenue guidance for FY2022 in the range of $31.3 million to $33.3 million. Full year revenue from the Technology Division is expected to be in the range of $20.2 million to $22.2 million.  It is noted that the attainment of forecast revenue is contingent on the fulfilment of orders expected to be received during Q4 and that supply chains remain unimpeded. To date the Company has successfully managed supplier related issues though it is recognised that the environment continually changes particularly in light of recent lockdowns in some provinces in China.

ENDS

Approved for release by the Board of Directors.


For further information, please contact:

Investor Enquiries

Vanessa Beresford

Media Enquiries

Alexandra Abeyratne

Citadel-MAGNUS Citadel-MAGNUS
vberesford@citadelmagnus.com aabeyratne@citadelmagnus.com
+61 451 422 892 +61 438 380 057

 About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT).  FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks.  BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Notice of Extraordinary General Meeting – 22 April 2022

Notice is hereby given that Ava Risk Group (the “Company”) will hold its Extraordinary General Meeting virtually at 11:00am (AEST) on Friday, 22 April 2022 for the purpose of transacting the business set out in this Notice.

Due to continuing circumstances relating to COVID-19, the Meeting is being held by way of a virtual meeting (electronically) using the Lumi AGM technology. Shareholders are urged to attend and vote at the meeting electronically using the Lumi AGM technology or vote by lodging the proxy form attached to this Notice.

Download Notice of EGM here.

Ava Risk Group announces 1H FY22 Results

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) announces its half year results for the six months ended 31 December 2021.

Review Investor Presentation

Review Appendix 4D and 1H FY2022 Financial Report

Highlights

  • Successful divestment of the Services division in October 2021, delivering cash proceeds of $41.9m
  • Group revenue of $20.2m and Group EBITDA of $2.2m, both in line with guidance
  • Technology Division revenue (excluding the IMoD contract) increased 9.6% compared to an average six months’ revenue in FY21, reflecting an increase in order intake
  • Technology Division sales order intake of $10.2m, up 42% compared to the prior year period (pcp)
  • dormakaba global framework agreement signed in December to distribute BQT products internationally, particularly to the US and Europe
  • First Secure Fence licensing agreement signed in Latin America with revenues expected in 1H FY23
  • Global supply chain constraints effectively managed to ensure timely sales order fulfilment
  • Strong financial position with consolidated net cash of $55.4m and no debt as at 31 December 2021
  • FY22 Guidance: Group Revenue of $11.2m to $13.2m for 2H FY22 excluding any contribution from IMoD

Group revenue and EBITDA comparisons to the prior year are distorted by the divestment of the Services Division and revenues from the Indian Ministry of Defence (IMoD). The revenue decline in 1H FY22 compared to 1H FY21 is largely attributable to the Services Division divestment (-$7.3m) and the Indian Ministry of Defence (IMoD) revenue in the prior year (-$7.7m). Although there is no revenue from IMoD in 1H FY22, a further $2.5m remains to be realised on this contract. Similarly, a large part of the EBITDA decline is attributable to the Services divestment (-$1.8m) and IMoD (-$7.7m).

Looking at the Technology Division, excluding revenue from the Indian Ministry of Defence (IMoD) contract, revenue was $9.1m, up 9.6% compared to the average half revenue in FY21, reflecting improved sales performance from FFT. Revenue growth from BQT was impacted by COVID-19 lockdowns in NSW and Victoria and is expected to improve on the back of the lockdowns lifting and the signing of the dormakaba agreement. Importantly, the Company continues to generate positive cash flow from operations. Coupled with the proceeds from the Services Division divestment, Ava is in a strong financial position with cash of $55.4 million and no debt.

The Technology Division’s total sales order intake of $10.2m in 1H FY22, was up 42% compared to the prior year period, driven by increased orders in FFT. The chart on the next page outlines the Technology Division’s sales orders over the past six quarters. Order backlog is $4.2 million, excluding $2.5 million from IMoD. As advised on 22 December 2021, due to COVID-19 related impacts affecting the timing of certain government programs as well as extending global procurement times, the Company is not forecasting any material contribution to revenues in FY22 from IMoD.

Ava Risk Group CEO Rob Broomfield commented: “We are excited about the growth momentum building in our Technology Division which is essentially our business going forward. FFT has shown strong growth in sales orders in 1H FY22 resulting from our investments in business development in the US. Growth in BQT is forecast to recover now the COVID lockdown restrictions have lifted, and further improve as we see traction from the new global dormakaba partnership agreement.

“The scope of the initial Aura IQ orders is being reworked, at the customer’s request, to include integration with fire detection solutions. While this has delayed the receipt of initial orders, we are very encouraged that the integration work will reduce the time and cost to implement our technology during planned conveyor shutdowns. We expect this will accelerate growth opportunities for Aura IQ.

“Our focus during the second half of the year is on the continued growth of our high margin Technology Division solutions. Specific growth initiatives include: completing the integration of Aura IQ with fire detection solutions to drive the commercialisation of our technology; leveraging our global framework agreement with dormakaba to expand BQT solutions in major markets in the U.S. and Europe; and pursuing new licensing opportunities particularly in developing markets in South America and India. Coupled with continued opportunities with our blue chip customer base, we expect these initiatives to grow our revenue to $11.2m to $13.2m in 2H FY22.”

Update on capital return

On 16 August 2021, Ava Risk Group announced its plan to distribute $39.2 million of excess cash to shareholders as a capital return, subject to a favourable class ruling from the ATO. As announced on 22 February 2022, the ATO has subsequently indicated that it plans to treat $7.567 million as capital in nature. Based on this advice, the Board has proposed to make two distributions: a special dividend of $31.585m ($0.13/share) and a capital return of $7.567m ($0.03114/share).

The $0.13/share special dividend, unfranked, is to be paid on 10 March 2022 with a record date of 28 February 2022. The capital return is subject to shareholder approval at an Extraordinary General Meeting on 22 April 2022. Ava Risk Group also undertook an on-market buyback of $1.3 million of its shares during 1H FY22.

Investor webinar

Chairman David Cronin, CEO Rob Broomfield and CFO Neville Joyce will host a Zoom webinar to present the results at 11am AEDT today. To register for the webinar, please select the following link: https://zoom.us/webinar/register/WN_rswh5jB8SjqfjaOWwf9X8w

ENDS

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries
Vanessa Beresford Citadel-MAGNUS
vberesford@citadelmagnus.com +61 451 422 892

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

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT). FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Return of Capital Update & Payment of Dividend

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) todays provides the following update on the previously proposed Return of Capital and the payment of a dividend.

On 16 August 2021, the Company announced its intent to distribute excess cash of $39.2 million to shareholders. The Company proposed that the funds were returned to shareholders as a capital return subject to shareholder approval and the receipt of a favourable class ruling from the Australian Tax Office (“ATO”). The ATO has recently responded to our class ruling application and has indicated that it would be willing to treat $7.567 million of the proposed $39.2 million as capital in nature.

The Board considered a number of options to return excess funds to shareholders and after careful consideration has decided to make two distributions as follows:

  • Special Dividend of $0.13 per share (distribution of approximately $31.585 million)
  • Capital Return of $0.03114 per share (distribution of approximately $7.567 million)

Ava Group Special Dividend

The Company is pleased to announce a Special Dividend. Shareholders at the Record Date of 28 February 2022 will receive an unfranked dividend of $0.13 per share, paid on 10 March 2022.

Capital Return

The Company will seek shareholder approval to reduce the ordinary share capital of the Company by approximately $7,567,000 and such reduction in capital to be effected by the Company paying to each registered holder of a fully paid ordinary share the amount of $0.03114 per share. Shareholder approval will be sought at an Extraordinary General Meeting on 22 April 2022. Further details relating to Capital Return, Record Date and timetable will be provided within a Notice of Meeting which will be issued to shareholders in the near future.

ENDS

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries
Vanessa Beresford Citadel-MAGNUS
vberesford@citadelmagnus.com +61 451 422 892

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

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT). FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com

Q2 FY2022 Trading Update

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to provide the following update on its 1H and Q2 FY2022 Trading performance:

  • Reaffirming 1H FY2022 Guidance: Group Revenue of $20.2 million to $21.2 million and Group EBITDA of $2.2m to $2.5m[1]
  • Strong financial position with consolidated net cash of $55.4 million and no debt at 31 December 2021
  • COVID-19: Varied operational impact with delays in delivery and decision-making partly offset by the ability to provide innovative customer solutions, highlighting diverse global footprint and product portfolio
  • Sustained momentum in sales order activity in the Technology Division through Q2 resulting in total sales orders of $4.9 million (year to date = $10.2 million)
  • Completion of a Global Framework Agreement for the supply of BQT products and services with dormakaba International Holding GmbH
  • Successful divestment of the Services division in October 2021, delivering cash proceeds of $41.9 million.

[1] 1H FY2022 guidance assumes no change to the exchange rate at 30 September 2021 with A$1 equal to US$0.74. 1H FY2022 guidance only includes an estimated contribution from the Services Division until 18 October 2021, reflecting the divestment date.

Q2 FY2022 confirmed Technology Division sales orders
During Q2 FY2022 the Technology Division received confirmed sales orders of $4.9 million, resulting in YTD sales orders of $10.2 million.  Order intake for Q2 continued Ava Risk Group’s recent market momentum and represents growth of 63% on the comparable period in FY2021 (42% growth on the prior YTD), driven by increased orders in FFT.

Pleasingly there has been significant growth in FFT sales order intake in the United States.  Total sales orders received in the U.S. during the first half of the year grew by more than 150% compared to the prior year, reflecting the additional investment that the Company has made in sales capability in North America.  Growth in order intake is also well balanced across key industry segments, with particular growth in military installations and solar farm applications.

At the completion of Q2, the Company carried a confirmed sales order backlog of $4.2 million (excluding the Indian Ministry of Defence (“IMOD”) contract).  The backlog reflects confirmed sales orders that are pending fulfillment.  The anticipated fulfillment of the sales orders is set out below:

The Company also maintains an order backlog under the IMOD contract for the licencing of further systems and fulfillment of a seven year maintenance program.  As advised via the ASX on 22 December 2021, due to COVID-19 related impacts, affecting the timing of certain government programs as well as extending global procurement times, the Company is not forecasting any material contribution to revenues in FY2022 from IMOD at this stage.

Global Agreement for the supply of BQT products and services to dormakaba International
At the end of December 2021 Ava Risk Group signed a Global Framework Agreement for the supply of products and services with dormakaba International Holding GmbH. Dormakaba is a global leader in the supply of security access control systems, locks and digital locking systems with sales representatives in 130 countries.

The agreement is effective from 1 January 2022 and enables BQT to sell its products in all jurisdictions in which dormakaba operates, including new markets in the United States and Europe.  An initial order for the provision of stock is expected by the end of January 2022.

Successful divestment of the Services division
As confirmed via the ASX on 19 October 2021, Ava Group completed the sale on its non-core Services division, Ava Global, to TTG Bidco Limited, an entity backed by funds advised by Phoenix Equity Partners (United Kingdom).

The Company received net cash proceeds of US$31.1 million (A$41.9 million) after closing adjustments and settlement of management incentives.  Financial results for the Services division prior to the divestment will be consolidated and reported in the Ava Group financial statements for the six months ending 31 December 2021.

Update on Return of Capital
The Company is still awaiting receipt of a draft Class Ruling from the Australian Taxation Office (“ATO”) prior to progressing the Return of Capital announced on 30 August 2021 and pursuant to Resolution 5 approved by the Shareholders at the Annual General Meeting on 28 October 2021. The Company will provide a further update in respect of the Return of Capital and associated timetable upon receipt of the formal response from the ATO.  The Company re-affirms its intention to distribute $39.2 million (circa 16 cents per share) to its shareholders.

Ava Group CEO Rob Broomfield commented: “During Q2, sales order intake remained strong underpinned by demand for FFT products and services.  COVID-19 continues to have some impact on both FFT and BQT, particularly on supply chains and access to international freight.  Nonetheless, the easing of travel restrictions in New South Wales resulted in an uplift in orders for BQT in November and we expect that momentum to continue into the second half of the financial year.

“Following the successful divestment of the Services Division in October 2021, the Group is focused on delivering its growth strategy in the Technology Division.  The sales opportunity pipeline is strong with a focus on recurring revenue, product licencing and Aura-IQ opportunities.  We continue to invest in our sales capability and the Global Framework Agreement with dormakaba opens access to new markets for BQT products.  Coupled with the existing sales order backlog, the Company is well placed to pursue growth in 2H FY2022.”

Ava Risk Group will release its financial results for the half year ending 31 December 2021 and outlook for the remainder of FY2022 on 25 February 2022.

ENDS

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries

Vanessa Beresford

Media Enquiries

Alexandra Abeyratne

Citadel-MAGNUS Citadel-MAGNUS
vberesford@citadelmagnus.com aabeyratne@citadelmagnus.com
+61 451 422 892 +61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure. It operates two business segments – Future Fibre Technology (FFT) and BQT Solutions (BQT).  FFT manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks.  BQT is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Ava Risk Group products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world. www.avariskgroup.com