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Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise that it’s new Aura Ai-X fibre optic sensing technology has been selected to protect a critical European border.

This contract marks the first sale of Aura Ai-X – the Company’s latest generation, data driven intrusion detection system. Aura Ai-X has an embedded deep learning engine that enhances system performance by referencing algorithm upgrades backed by the Group’s global data library.

With unrivalled performance and exceptional event classification accuracy, Aura Ai-X delivers a Probability of Detection (POD) combined with lowest Nuisance Alarms Rate (NAR).

The contract, valued at approximately US$1.5 million (A$2.2 million), is for the installation of detection software and equipment as well as a five-year commitment to provide software upgrades and support. Delivery of the detection software and equipment is expected to occur during Q4 FY23.

Ava Risk Group CEO, Mal Maginnis commented: “Securing this contract is a vote of confidence in what we believe to be the most advanced perimeter intrusion detection technology on the market.”

“We are confident that Aura Ai-X will fast become the solution of choice for the smart protection of critical infrastructure worldwide.”

Approved for release by the Board of Directors.

For further information, please contact:

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 – Detect, Access and Illuminate. The Detect segment 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. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of   illuminators, ANPR cameras and perimeter detectors.  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 Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) announces its half year results for the six months ended 31 December 2022.

Highlights

• Group revenue grew by 50% to $13.6m ($9.1m for 1H FY2022)
• Gross margins maintained at ~66%, resulting in increased gross profit
• Group EBITDA of $1.2m ($0.2m for 1H FY2022) and margins have expanded to 9% vs 3% in the prior year
• Additional contracts won in the North American energy sector and initial commercial orders for Aura IQ
• Acquired UK-based security technology supplier GJD, providing a complimentary product and technology footprint and go-to-market capability in the UK and western Europe
• Investments made to support growth of market leading position in AI
• Cash balance of $7.1m as at 31 December 2022

In line with a growth in sales order intake, Ava Group reported strong financial performance for the first half, with Group revenue of $13.6 million, up 50%. Significant revenue growth was recorded in both the Detect and Access segments, and further accelerated by the addition of the Illumination segment during the period.

The Group has been organised into the following three operating segments:

Ava Risk Group CEO Mal Maginnis said: “These strong results reflect significant momentum during the first half, with an uplift in sales order intake flowing through to over 50% in revenue growth. We also ramped up investment in our market leading AI capability to drive improved system performance and a compelling customer upgrade path, and ensuring we remain well placed to support our major global distribution partners.

“We continue to build our position as a global leader in risk management technology with our strategy focused on increasing market share and developing new and adjacent verticals. We see catalysts for future growth in each operating segment and we are well placed to grow in the remainder of the second half and beyond.”

In August 2022 Ava Group acquired GJD, a leading UK based security technology supplier specialising in illumination and detection applications and creating Ava’s Illumination segment. GJD provides Ava with a complimentary product and technology footprint as well as an established go-to-market capability in the UK and western Europe.

The Company maintained its gross margin at around 66%, even with the addition of the lower margin Illumination segment. Revenue and gross profit growth has resulted in improved EBITDA of $1.2 million ($0.2 million for 1H FY2022) as the Company has leveraged its cost and technology base. Resultant EBITDA margins have expanded to 9% compared to 3% in the prior year.

During the first half Ava continued investing in its AI technology, building on its Aura IQ and perimeter detection platforms. This investment is critical to growing the Company’s market leading position in AI, driving improved system performance and providing a compelling customer upgrade path.

Net loss from continuing operations was $0.2 million (1H FY2021 was a net loss of $0.9 million) reflecting improved EBITDA, partly offset by higher depreciation charges. The Company has a cash balance at 31 December 2022 of $7.1 million.

Outlook

As stated in the Q2 FY2023 announcement, management reaffirms that it expects revenue to exceed the first half during the second half of the financial year. Further revenue guidance for the second half of the year will be provided in the Q3 FY2023 Trading Update based on Q3 sales order intake.

Investor webinar

Chairman David Cronin, CEO Mal Maginnis and CFO Neville Joyce will host a Zoom webinar to present the results at 9am AEDT today. To register for the webinar, please select the following link:

https://us06web.zoom.us/webinar/register/WN_rR_Iic5kRfKKEb1bKfKYLw

Review 1H FY23 Results Presentation

Review Appendix 4D and Interim Financial Report

ENDS

Approved for release by the Board of Directors.

 For further information, please contact:

 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 – Detect, Access and Illumination. The Detect segment 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. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of   illuminators, ANPR cameras and perimeter detectors.  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 Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) will release its first half results for the six
months ended 31 December 2022 on Friday, 24 February 2023.

Ava Risk Group is a global leader in providing technologies and services to protect critical and high value assets and infrastructure.

Chairman David Cronin, CEO Mal Maginnis and CFO Neville Joyce will host a Zoom webinar to present the results at 9am AEDT on Friday, 24 February.

To register for the webinar, please follow the link below.

Date & Time: Friday 24 February 2023 at 9am AEDT
Zoom link: https://us06web.zoom.us/webinar/register/WN_rR_Iic5kRfKKEb1bKfKYLw

ENDS

This announcement is authorised for release by the Chief Financial Officer.

For further information, please contact:

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 three business segments – Detect, Access and Illumination. The Detect segment 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. Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors. 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 Limited (ASX:AVA) (“Ava Risk Group” or “the Company”) is holding investor briefings in Melbourne and Sydney over the course of the week.

In accordance with the Listing Rules, the Company attaches a copy of the presentation for release to the market.

Review the presentation here.

ENDS

Approved for release by the Board of Directors.

For further information, please contact:

 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 – Detect, Access and Illumination.  The Detect segment 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.  Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors.  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 Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to provide the following update on its Q2 FY2023 trading performance:

• Expected H1 FY2023 revenue of $13.6 million, within guidance range and up 50% compared to the prior year continuing operations.
• Q2 sales order intake of $6.5 million, resulting in H1 sales order intake of $14.4 million. This was up 47% compared to the prior year, and up 16% excluding Illumination orders from GJD (acquired in August 2022).
• Confirmed sales order backlog of $2.6 million for fulfilment predominantly during Q3 FY2023.
• Receipt during Q2 of strategically important orders relating to the Company’s conveyor monitoring solution and further expansion in the North American energy market.
• Continued strengthening of the senior management team with Mal Maginnis commencing in the role of Group CEO in January 2023.

Following the acquisition of GJD in August 2022 the Group has three operating segments:

Incoming Ava Group CEO Mal Maginnis commented: “I’m delighted to have joined the Ava Group and look forward to accelerating growth in both revenue and earnings. These results illustrate the momentum being generated in the business, highlighted by the significant uplift in sales order intake which has translated into revenue growth. Sales order growth was achieved in both our Access and Detect businesses and was further accelerated by the addition of our Illumination business following the acquisition of GJD. The technology platform underpinning the Company’s customer solutions is market-leading and I am very confident that with continued customer focus we can deliver sustainable revenue growth and operating leverage during the second half year and beyond.”

Q2 FY2023 confirmed sales orders
Sales performance during the second quarter remained strong with order intake of $6.5 million.  This has resulted in sales order intake of $14.4 million for the first half, representing growth of 47% on the prior comparative period, 16% if current year orders from GJD are excluded.   Pleasingly, sales order intake for both the Access and Detect business segments grew by 21% and 15% respectively, demonstrating continued progress on Ava’s strategy of expanding the sales pipeline in key markets and improving conversion rates. The addition of Illumination segment sales following the acquisition of GJD in August 2022 has accelerated the growth in sales order intake during the first half.

Sales orders received during Q2 included a number of strategically important milestones:

• An additional order for Aura-IQ, one of the Company’s advanced deep learning solutions focussed on conveyor monitoring, for deployment at Ferroport, Brazil, a joint venture between Anglo American and Pruma Logistica responsible for the operation of an iron ore terminal at the Port of Acu. It builds on the first order received for Aura IQ during Q1 from a leading global conveyor manufacturer and illustrates the global reach of the solution.
• An additional order for deployment of Ava’s Fibre Optic Detection System to protect a third critical asset at a major North American energy facility, replacing a competitor’s existing technology as part of an upgrade program. Further orders from this facility are expected during the second half, demonstrating the strength of the Company’s solutions and validating its strategy to focus on the North American energy sector.

As at the end of December 2022, Ava carried an order backlog of $2.6 million which represents sales orders received that are still to be fulfilled.  It is anticipated that most of these orders will be fulfilled during Q3 FY2023.

Chart 1 – Sales Order Intake

Outlook
Management reaffirms that it expects revenue during the second half of the financial year to exceed the first half due to:

• Six-month contribution from GJD compared to five months during the first half which will drive increased revenue in the Illumination business.
• Growth in OEM / distribution channel revenue for the Access business.
• Growth in the Detect business attributable to improving sales pipeline conversion and expansion of condition monitoring opportunities.

Further revenue guidance for the second half of the year will be provided in the Q3 FY2023 Trading Update based on Q3 sales order intake.

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 three business segments – Detect, Access and Illumination.  The Detect segment 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.  Access is a specialist in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illumination specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors.  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 Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise it has secured an additional 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$0.4 million (A$0.6 million) and the supply of material is expected to be fulfilled in the first half of the current financial year.

This is the third critical asset at the same energy facility where Ava’s advanced sensing solution is being deployed, replacing a competitor’s technology. It builds on the successful installation of previous systems announced on 6 June 2022 and 16 August 2022, taking the total contract value to US$1.4 million to date. Further systems are also expected to be awarded as part of an ongoing upgrade program at the site.

Commenting on the contract, Ava Risk Group CEO, Rob Broomfield, said “It is pleasing to build momentum in the North American energy sector following our significant business development investment and given that we identified this as a key growth market. The fact that our sensing technology is replacing a competitor’s existing technology as part of an upgrade program demonstrates the strength of our sensing solutions in protecting critical infrastructure assets.”

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 three business segments – Future Fibre Technology (FFT), BQT Solutions (BQT) and GJD Manufacturing (GJD). 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 manufacture 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

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to announce that Pietro Corsaro has been appointed to the newly created position of Vice President of Condition Monitoring Solutions, commencing on 1 November 2022.

The appointment of Pietro to this role will accelerate Ava’s growth in condition monitoring, including conveyor monitoring solutions as well as broader situational awareness applications.  Prior to joining Ava, Pietro was Vice President Sensing and CEO of NKT Photonics GmbH since early 2019, where he was heavily involved with Ava’s sensing technologies including successfully deploying our Aura Ai technology. Pietro held previous roles including Chief Technology Officer of Brugg Cable AG and numerous senior technical and commercial positions with Pirelli Cables (now Prysmian), where much of his work focussed on developing and promoting condition monitoring solutions.

Pietro holds a master’s degree in Nuclear Engineering and a PhD in Energetics both from the Polytechnic of Turin, Italy and is based in Germany.  His role is a key appointment to Ava’s Senior Management Team.

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 (GJD).  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 manufacture 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

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to provide the following update on its Q1 FY2023 trading performance:

• Record sales order intake during Q1 of $7.8 million, including a two month contribution from GJD. This represents growth of 55% on the prior year, and growth of 28% excluding GJD orders.
• Acquisition of GJD Manufacturing, a leading UK based security technology supplier, on 1 August 2022. GJD provides Ava with a complementary product and technology portfolio with access to an established go-to-market capability in the U.K. and Western Europe.
• Receipt of the first commercial order for the Company’s conveyor monitoring solution during Q1.
• Continued strengthening of Ava’s senior management team with Mal Maginnis appointed to the role of Group CEO and Pietro Corsaro as head of Global Condition Monitoring Solutions.
• Management provides first half revenue guidance of $13.0 million to $15.0 million. Second half year revenue is expected to be stronger than the first half.

Ava Group CEO Rob Broomfield commented: “Ava Group has entered the new financial year with great momentum.  It is pleasing to note record sales order intake in Q1 for the combined FFT and BQT segments.  It is also pleasing to see the immediate impact that the addition of GJD has created, both in terms of sales order intake as well as complementing our product and technology offering. Our first commercial order for our conveyor monitoring solution from a leading conveyor manufacturer was a significant milestone for the Company and I am confident of additional conveyor monitoring orders during the first half of the financial year.

“The appointments of Mal and Pietro are a show of confidence in the strategic direction of the Group and will help accelerate the growth of the business.  This will be driven by the strength of our OEM and distribution channels, our condition monitoring solutions, the continued integration of GJD and growing our recurring revenue base.  Our first quarter performance demonstrates that we are positively progressing against these drivers.  Notwithstanding some potential lumpiness in product orders, I am confident that the business is well placed to continue its growth trajectory over the remainder of FY2023.”

Q1 FY2023 confirmed sales orders
The Company continued its strong upward sales trajectory during Q1 resulting in total orders received of $7.8 million.  Order intake during the quarter included $1.4 million relating to GJD for the two-month period since 1 August 2022.  The Group received orders of $6.4 million relating to the FFT and BQT divisions which is the highest quarterly order intake since the onset of the COVID-19 disruption.

Total order intake of $7.8 million represented 55% growth on the corresponding period in the prior year, and 28% growth when GJD orders are excluded.  Pleasingly, sales orders during the quarter included a number of strategically important milestones:

• The first commercial order for Aura-IQ from a leading global conveyor manufacturer;
• The first order for a combined FFT and GJD product solution for a Singapore based customer;
• Continued growth in the North American energy sector for the Group’s Fibre Optic Intrusion Detection Systems, with an additional two sites contracted during the quarter.

As at the end of September 2022, Ava carried an order backlog of $3.4 million which represents sales orders received that are still to be fulfilled.  It is anticipated that $3.0 million of the backlog will be fulfilled during Q2 FY2023.

Chart 1 – Sales Order Intake

Acquisition of GJD Manufacturing
As advised on 1 August 2022, Ava acquired a leading UK security technology supplier, GJD Manufacturing.  GJD is an award-winning security equipment developer and manufacturer, specialising in optical based intrusion detection systems.  It counts some of the UK and Europe’s most security conscious end users as customers and has a growing OEM channel across multiple sectors.

The transaction is an important driver of future growth and unlocks significant strategic value for both FFT and BQT, by providing a complementary product and technology portfolio while also providing access to an established go-to-market capability in the UK and Western Europe.  Ava received the first order for a combined FFT and GJD solution during the quarter, highlighting the opportunity for GJD to complement Ava’s existing solutions.

Appointment of Group CEO and head of Global Condition Monitoring
On 4 October 2022, Ava announced the retirement of Rob Broomfield and appointment of Mal Maginnis as its new CEO.  Mal will commence in this role in January 2023.  Mal brings extensive experience as a leader of global technology businesses with more than 35 years of experience in the defence, security, safety and technology industries.  He is exceptionally well regarded within the industry and will be valuable in strengthening the Company’s partnerships, developing strategic alliances and expanding Ava’s international sales presence.

After developing Aura-IQ over a number of years and successfully completing Proof of Value trials at multiple mine sites, the Company is well placed to accelerate growth in condition monitoring, including conveyor monitoring solutions as well as broader situational awareness applications. To this end, Ava is pleased to announce the appointment of Pietro Corsaro to the newly created position of head of Global Condition Monitoring Solutions.  Pietro brings more than 25 years of deep global expertise of the high voltage cable industry and condition monitoring technologies.  In addition he has a number of years direct experience of FFT’s Aura platform being applied to condition monitoring applications. Pietro will commence with Ava during November 2022.

The appointments of Mal and Pietro further enhances the Group’s skills and expertise and will help accelerate its growth ambitions.  The ability to attract such high calibre executives provides considerable confidence in the strategic direction of the Group.

Outlook
Based on the existing order intake and expected sales pipeline conversion, management provides revenue guidance for the first half year in the range of $13.0 million – $15.0 million.

Revenue guidance has not been provided for the full year at this time due to the uncertainty on the timing of product orders.  However, management expects that second half revenue will exceed the first half due to:

• Six-month contribution from GJD compared to five months during the first half
• Growth in OEM / distribution channel revenue
• Growth in condition monitoring orders based on successful proof of value trials and sales pipeline.

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 three business segments – Future Fibre Technology (FFT), BQT Solutions (BQT) and GJD Manufacturing (GJD).  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 manufacture 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

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) is pleased to advise Mr. Mal Maginnis will join the Company on 9 January 2023 as Chief Executive Officer, replacing Mr. Rob Broomfield, who will retire as CEO and Director. Mr. Maginnis will join the Board of Directors in due course.

Mal Maginnis is a seasoned leader of global technology-enabled businesses with more than 35 years of experience in the defence, security, safety and technology industries. Mal most recently served as President of Rapiscan Systems from July 2017 until September 2022. Rapiscan is a US-headquartered global manufacturer of security equipment and systems designed for checkpoints, cargo, vehicle, baggage, parcel and air cargo security inspection. Its FY22 revenues were US$662 million (circa A$988 million).

Ava Risk Group Chairman, David Cronin, said: “Having first met Mal more than 15 years ago, I am very confident that he is the right leader to drive the growth phase of our business. Exceptionally well-regarded within the industry, Mal’s extensive technology, security and defence experience as well as his business development skills will be most valuable in strengthening our partnerships, developing new strategic alliances and expanding our international sales presence. We believe his strong leadership experience will greatly enhance and accelerate Ava’s growth strategy.”

Prior to joining Rapiscan, Mal Maginnis was the head of Iveagh Technology a technology development company based in Singapore and one of the owners of SX Technologies, a Sydney-based detection company. He was also President of Smiths Detection, based in London, from 2011 to 2014. In his 14 years at Smiths, Mal held several other senior positions including Head of Technology, Programs and Products and also oversaw the global military and emergency responder business unit. He holds a Bachelor of Arts (Hons) degree from the Faculty of Military Studies, University of NSW and is a Graduate of the UK Command Staff College.

“I am proud and pleased to be handing the reins over to Mal, who brings significant industry and commercial experience to Ava,” said Rob Broomfield. “With our strong and scalable global growth platform in place the business will benefit from the direction of a very capable international industry leader. I will continue to support the company as much as is needed during the transition period and remain a committed shareholder of Ava.”

Rob Broomfield will retire when Mal joins as CEO on 9 January 2023, however will remain available to the Company via a consulting arrangement for up to 12 months.

“Over the past 17 years, Rob has made an enormous contribution to Ava in several important roles,” David Cronin added. Most recently, he led a significant reshaping of Ava’s technology related businesses, namely FFT and BQT, and was instrumental in commercialising multiple world leading technology innovations across the Group. He has successfully grown our international footprint, expanded the brand across multiple new platforms and overseen a wide-ranging reset of the core Ava technology business strategy. He was also at the helm of the company when we won the Australian Prime Minister’s Global Exporter of the Year Award. On behalf of the Board and management team, I would like to acknowledge Rob’s dedicated service and thank him for all of his exceptional efforts and achievements during his tenor at the Company.”

Commenting on his appointment, Mal Maginnis said: “I am very excited to be working with the team to execute their mission for growth. Ava is in a strong position with its world leading set of products, some of the very best blue-chip customers, and importantly, a dedicated and talented workforce that uniquely positions it to capitalise on the large and growing markets that its products address.”

A summary of the Key Terms & Conditions of employment are contained in the Appendix to this announcement.

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

Appendix
Summary of Key Terms of Employment Agreement

Ava Risk Group Limited (ASX: AVA) (“Ava” or “the Company”) announces its financial results for the year ended 30 June 2022.

Review Annual Report
Review Appendix 4E
Review Appendix 4G and Corporate Governance Statement
Review Investor Presentation

Highlights

• Successful divestment of the Services Division in October 2021, resulting in net proceeds of $41.9m
• Cash distribution of $38.8m to shareholders during the year, via a capital return and special dividend
• 13% growth in total sales order intake of $18.0m compared to $15.9m in FY21 (excluding IMOD orders)[1]
• Group revenue and other income of $19.0m and Group EBITDA of $1.4m, driven by increased order intake for FFT. Underlying EBITDA of $0.8m when adjusted for the impact of unrealised foreign exchange variations
• Strong sales uplift in the US reflecting investment in business development capabilities
• dormakaba global framework agreement to distribute BQT products internationally
• First commercial Aura IQ order following successful completion of proof of value trials on operating mine sites
• Long-term support agreements for 52 systems, an increase of 48 systems compared to the prior year.
• Further development of Ava’s Machine Learning Capability to improve system performance for detection rates and reduce nuisance alarms
• Strong financial position with consolidated net cash balance of $15.2m (FY21: $17.3m) and no debt
• Post year-end acquisition of GJD manufacturing, with complementary product offering and growing OEM sales channel across multiple sectors

Ava produced a strong operational and financial performance in FY22, notwithstanding the protracted business interruptions related to Covid-19 and critical supply chain and project related delays. Sales order intake for FFT grew by 16% on the previous year, excluding the Indian Ministry of Defence (IMOD) contract, bolstered by significant investment in the Company’s business development capabilities. Ava continues to deploy FFT’s perimeter detection technology to critical infrastructure assets, with contracts secured for a large North American power plant and a European offshore windfarm during FY22.

The cash position of the Company remains strong with a cash balance of $15.2 million at 30 June 2022 (FY21: $17.3 million). Cash flow from operations of $2.3 million were supplemented by the proceeds from the disposal of the International Valuable Logistics business of $36.5 million, net of adjustments and transaction costs. Ava distributed $38.8 million to shareholders via a capital return and special dividend.

Ava Risk Group CEO Rob Broomfield commented: “It has been an important year for Ava with significant investment committed to accelerate growth. Following the divestment of our Services Division we have been developing our world leading fibre sensing and access control technologies to ensure we continue to grow our market share.

“The team has been working on system improvements to our Machine Learning to provide an even more compelling product proposition to our end customers. We have also been building our business development and sales capability, particularly in North America, and are already seeing positive results with our FFT sales order intake up by 16% with multiple new contracts, many in the energy sector.

“Ava Group is well placed to accelerate growth in the year ahead, with market leading technology in both our fibre sensing and access control markets, a strong balance sheet and the organisational capability to execute our plans. We will aggressively pursue opportunities in the perimeter security segment, leveraging our increased business development capability in North America, and we will continue to pursue long term support contracts with our existing customer base to grow recurring revenue. Following the financial year-end, we were excited to announce the acquisition of GJD, an important accelerator of growth for Ava.”

Group revenue and other income was $19.0 million, which was $6.3 million lower than the previous year (FY21: $25.3 million). The financial results in the prior year included licence revenues from IMOD of $7.8 million and government grants associated with COVID-19 support of $0.6 million. When adjusted for IMOD and government grants, revenue in FY22 grew by 12%, driven by increased order intake in FFT. Gross margin grew slightly to 65%, a pleasing outcome against a backdrop of significant supply chain constraints. Underlying EBITDA declined slightly reflecting the investment in sales and business development capability as well as increased marketing related expenditure post COVID-19.

Ava continued to develop its Machine Learning capability, which will improve system performance for detection rates and nuisance alarms. This will become a compelling feature of long-term support contracts to the existing customer base. At 30 June 2022 there were 52 systems signed to support agreements and the Company expects to further develop its support offering to grow this opportunity.

As reported during the year, significant progress was made on the development roadmap for Aura IQ, Ava’s condition monitoring solution. At the request of a leading global mining company, Ava completed integration with a fire detection fibre optic cable, which improves ease of deployment. A number of proof of value trials for Aura IQ were completed at operating mine sites, with the first commercial order for Aura IQ received in July 2022. The Company is well placed to progress the deployment of Aura IQ within the mining industry and will also look to expand the application to opportunities in adjacent markets such as telecommunications.

BQT revenue was impacted in Q1 FY22 by Covid-19 related lockdowns, particularly in the Australian market.  As these restrictions eased, performance of BQT improved substantially and it exited FY22 with significant momentum. The Company continued to develop smart locking solutions and signed a global framework agreement with dormakaba International GmbH, a global leader in security access control systems. BQT’s smart locking solutions are unique in the market and Ava will look to grow sales volume via channel partners. The first order under the agreement was fulfilled during FY22 with further growth expected from FY23.

The Company successfully navigated the challenges posed by the lingering business interruption associated with Covid-19 to ensure timely sales order fulfilment. The beginning of FY22 was impacted by lockdowns in Australia which negatively affected the timing of some orders and also impacted some proof of value trials for Aura IQ. The Company has been successful in securing critical components and managing supplier costs, however management expects this to remain a challenge in FY23.

In August 2022, Ava announced its acquisition of GJD Manufacturing, a leading UK security technology supplier and manufacturer specialising in intrusion detection systems. Its product offering is complimentary to FFT’s fibre-based intrusion detection systems and its channel management and proven go to market capability in the UK and Western Europe is complimentary to BQT’s presence in North America and the Asia-Pacific. The Company will use Ava’s existing capability to grow GJD sales in these regions while using GJD’s capability to increase FFT and BQT’s market share in the UK and Western Europe.

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

https://us06web.zoom.us/webinar/register/WN_GE48bRGeSUKTAD40RJELlg

ENDS

Approved for release by the Board of Directors.

 For further information, please contact:

Investor Enquiries
Matthew Gregorowski
Citadel-MAGNUS
mgregorowski@citadelmagnus.com
+61 422 534 755

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

[1] Excluding orders against the Indian Ministry of Defence (IMoD) contract