Ann: Half Yearly Report and Accounts, page-2

Where to from here?


The highlights for the December 2014 half include:

- Core debt reduced by $1.75 million (or 35%) from 30 June 2014, funded primarily through the proceeds from the 2 for 5 Share Entitlement Issue in December and surplus asset sales during the half.

We have secured a three year extension to our banking facilities and terminated an unfavourable fixed rate loan (incurring a break cost), but which has now secured around a 50% reduction in future financing costs (measured on an annualised basis);

- The launch of our proprietary Ironman Hybrid steel and concrete temporary barrier solution has contributed to growth in our Rental barrier offering (up 8% on pcp);

- Our Public Lighting portfolio sales have increased (up 11% on pcp) with growth from our existing core customer base as well as new customer opportunities, reflecting our value in providing a comprehensive service to the electrical contracting market;

- Expenses have reduced $1.1 million (or 31%) on pcp, as we have further rationalised our business model and its support base to generate greater efficiencies and effectiveness;

- Positive operating cash flows generated in the half, even after financing costs, reflecting the rigorous focus on maintaining adequate working capital and ensuring customers pay in a timely manner;

- Generated around $0.4 million in proceeds from the sale of surplus assets pertaining to our former Civil Services portfolio, realising a profit of $22,323 for the half. Proceeds were utilised to reduce bank debt.

Our balance sheet has strengthened through the abovementioned Share Entitlement issue and the subsequent core debt reduction. We continue to work on securing an acceptable commercial offer for the Rental barrier assets.

During the past six months we have progressively retrofitted our existing Ironman fleet and successfully secured our first deployments of our new Ironman Hybrid temporary safety barrier solution.

The interest in this innovative product is growing and customer feedback has been extremely favourable.

We believe this market response will strengthen our position in securing a sale of these assets to one of the major providers in this market space.