• $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.