HRL Holdings Limited
Level 8 Waterfront Place, 1 Eagle Street
Brisbane Queensland 4000, Australia
GPO Box 216
Brisbane Queensland 4001, Australia
Tel +61 7 3105 5960
Email [email protected]
31 July 2015
ASX Announcement
Appendix 4C - Quarterly Report for Entities Admitted on the Basis of Commitments
Please find attached HRL Holdings Limited's (ASX:HRL) Appendix 4C for the quarter ending June 2015.
Quarter Highlights
Acquisition of Precise Consulting and Laboratory Limited
On 1 April 2015, HRL acquired Precise Consulting and Laboratory Limited (Precise Consulting). Operating out of Christchurch, New Zealand, Precise Consulting offers a number of services similar to those provided by OCTIEF, to assist companies with the identification and remediation of risks posed to health and safety of both humans and the environment.
Precise Consulting provide a range of services and analysis including:
contaminated land analysis;
soil sampling;
dust monitoring;
mould analysis;
air quality monitoring; and
asbestos auditing and building contamination assessment.
These studies are carried out in laboratories accredited by IANZ, which is part of the Testing Laboratory
Registration Council and New Zealand's premier accreditation body.
Precise Consulting also offers a number of specialised environmental services, including the identification, monitoring and testing of asbestos materials and other occupational hygiene issues.
New Facilities
During April, Precise Consulting secured new premises in Christchurch to facilitate further growth and expanded into the Wellington region. Wellington and the surrounding regions are home to a large number of commercial and government organisations. Precise Consulting has already been offered work by a number of these organisations and operations are beginning to ramp up quickly.
Chorus Contract
During April OCTIEF Limited (NZ), was awarded a significant contract by Chorus New Zealand Limited (Chorus) to carry out HAZMAT surveys across its extensive property portfolio throughout all of New Zealand.
Chorus is New Zealand's largest fixed line communications infrastructure company owning, operating and maintaining an open access network predominantly made up of local telephone exchanges, cabinets and copper and fibre cables, supplying about 90% of all fixed network connections to retail service providers.
OCTIEF Limited (NZ) will conduct surveys on over 800 assets across both the North and South Islands of New Zealand. The contract is expected to be completed by the end of calendar year 2015 under the original scope of works. A test program was completed in May and the full program began in June.
www.hrlholdings.com | ABN 99 120 896 370 | ASX Code: HRL
Fourth Quarter Trading Update
Queensland
Australian operations saw some modest improvement during the quarter. A significant portion of OCTIEF's revenue has been traditionally derived from asbestos auditing of Queensland public sector assets, with the bulk of this work occurring in the second half of the year. The well documented delays in establishing a new Queensland Government had the negative flow on effect of placing this remediation work on hold. To date we are yet to see the Government Departments return to the normal level of workflow, however there are signs of growth returning and the Company remains cautiously optimistic that workflow will increase towards the back end of 2015 as the Government Departments attempt to catch up for lost time.
Northern Territory
Since opening the new laboratory in Darwin, OCTIEF has secured a steady stream of workflow. The bulk of contracts have come from the NT Department of Infrastructure but more and more new opportunities are arising from other sources. OCTIEF have been shortlisted on two substantial tenders which should be awarded within Q1 of FY2016. Whilst the Darwin operation will always remain smaller than the Brisbane laboratory, it is expected to remain a profitable branch of the Group and provides geographical coverage not only around the Darwin area, but also across the more remote centres of the Northern Territory.
New Zealand
Recognising the slowdown in the Queensland and wider Australian market, HRL focussed on moving into the high growth New Zealand market as quickly as possible. Octief Limited (OCTIEF NZ) commenced operations in New Zealand for the first time during November, performing asbestos audits for the University of Canterbury.
Following on its initial successful project with the University of Canterbury, OCTIEF NZ was awarded a significant contract by Chorus New Zealand Limited to carry out HAZMAT surveys across its extensive property portfolio throughout all of New Zealand. The project commenced in May and is expected to continue through until at least the end of 2015.
Precise Consulting has been the outstanding performer for the HRL Group. Taking full advantage of the rebuild activities in the Christchurch region, Precise Consulting has greatly increased both revenue and profitability over the last 12 months. Precise Consulting positioned itself for future growth during the quarter by upgrading its facilities in Christchurch and establishing a new laboratory in the Wellington region for the first time. HRL continues to evaluate further geographical expansion opportunities in New Zealand.
Fourth Quarter Cashflows
During the quarter, HRL had $71K in net cash outflows from operating activities. This result was significantly less than the actual operating profit result for the quarter as cash flows were impacted by various timing issues on debtors and creditors and several large annual payments such as group insurances.
HRL invested $83K in new assets during the period, primarily relating to the equipping of the facilities in Wellington and Christchurch.
HRL paid $396K in capital raising costs during the quarter which relate to the $5M capital raise completed late in quarter 3.
The Group had $859K in cash at the end of the quarter and $3.5M in undrawn loan facilities.
www.hrlholdings.com | ABN 99 120 896 370 | ASX Code: HRL
For further information contact:
Investor and media:
Mr Darren Anderson Executive Director Ph: +61 417 791 903
[email protected]
Mr Steven Dabelstein
CEO
Ph: +61 405 770 166 [email protected]
www.hrlholdings.com | ABN 99 120 896 370 | ASX Code: HRL
Appendix 4C Quarterly report for entities
admitted on the basis of commitments
Appendix 4C
Quarterly report for entities admitted
on the basis of commitments
Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10
Name of entity
HRL Holdings Limited
Rule 4.7B
ABN Quarter ended ("current quarter")
99 120 896 371 June 2015
Consolidated statement of cash flows
Cash flows related to operating activities
1.1 Receipts from customers
1.2 Payments for (a) staff costs
(b) advertising & marketing
(c) research & development
(d) leased assets
(e) other working capital
1.3 Dividends received
1.4 Interest and other items of a similar nature received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
Net operating cash flows
+ See chapter 19 for defined terms.
17/12/2010 Appendix 4C Page 1
Appendix 4C
Quarterly report for entities
admitted on the basis of commitments
Current quarter
$A'000
|
Year to date
(12 months)
$A'000
|
1.8 Net operating cash flows (carried forward)
|
(71)
|
(427)
|
Cash flows related to investing activities
1.9 Payment for acquisition of:
(a) businesses (item 5) (b) equity investments (c) intellectual property
(d) physical non-current assets
(e) other non-current assets
1.10 Proceeds from disposal of: (a) businesses (item 5)
(b) equity investments
(c) intellectual property
(d) physical non-current assets
(e) other non-current assets
1.11 Loans to other entities
1.12 Loans repaid by other entities
1.13 Other - Net cash on acquisition of HRL1
- Cash on acquisition of Precise
Net investing cash flows
1.14 Total operating and investing cash flows
|
-
-
-
(83) (30)
-
-
-
-
-
-
-
-
200
|
(4,895)
-
-
(138) (30)
-
-
-
-
-
-
-
1,731
200
|
Cash flows related to investing activities
1.9 Payment for acquisition of:
(a) businesses (item 5) (b) equity investments (c) intellectual property
(d) physical non-current assets
(e) other non-current assets
1.10 Proceeds from disposal of: (a) businesses (item 5)
(b) equity investments
(c) intellectual property
(d) physical non-current assets
(e) other non-current assets
1.11 Loans to other entities
1.12 Loans repaid by other entities
1.13 Other - Net cash on acquisition of HRL1
- Cash on acquisition of Precise
Net investing cash flows
1.14 Total operating and investing cash flows
|
87
|
(3,105)
|
Cash flows related to investing activities
1.9 Payment for acquisition of:
(a) businesses (item 5) (b) equity investments (c) intellectual property
(d) physical non-current assets
(e) other non-current assets
1.10 Proceeds from disposal of: (a) businesses (item 5)
(b) equity investments
(c) intellectual property
(d) physical non-current assets
(e) other non-current assets
1.11 Loans to other entities
1.12 Loans repaid by other entities
1.13 Other - Net cash on acquisition of HRL1
- Cash on acquisition of Precise
Net investing cash flows
1.14 Total operating and investing cash flows
|
16
|
(3,532)
|
Cash flows related to financing activities
1.15 Proceeds from issues of shares, options, etc.
1.16 Share issue costs
1.17 Proceeds from borrowings
1.18 Repayment of borrowings
1.19 Precise pre-acquisition dividends to vendors
1.20 Other (provide details if material)
Net financing cash flows
|
- (396)
106
(2) (119)
|
5,085 (650)
115
(13) (119)
|
Cash flows related to financing activities
1.15 Proceeds from issues of shares, options, etc.
1.16 Share issue costs
1.17 Proceeds from borrowings
1.18 Repayment of borrowings
1.19 Precise pre-acquisition dividends to vendors
1.20 Other (provide details if material)
Net financing cash flows
|
(411)
|
4,418
|
Net increase (decrease) in cash held
1.21 Cash at beginning of quarter/year to date
1.22 Exchange rate adjustments to item 1.20
1.23 Cash at end of quarter
|
(395)
1,303 (49)
|
886
8 (35)
|
Net increase (decrease) in cash held
1.21 Cash at beginning of quarter/year to date
1.22 Exchange rate adjustments to item 1.20
1.23 Cash at end of quarter
|
859
|
859
|
1 On 15 September HRL Holdings (HRL) shareholders approved the acquisition of OCTIEF Pty Ltd. The acquisition resulted in
OCTIEF Pty Ltd shareholders holding a controlling interest in HRL after the transaction.
The consolidated statement of cash flows of the Combined Entity represents a continuation of the financial statements of OCTIEF Pty Ltd, based the principles and guidance on reverse acquisitions as set out in AASB 3.
Cash at the beginning of the year represents the cash reserves of OCTIEF Pty Ltd at that time. Net inflow of cash arising from acquisition represents the recognition of HRL cash balances on the acquisition date 15 September 2014. This amount is inclusive of the proceeds received by HRL from the rights issue in September.
+ See chapter 19 for defined terms.
Appendix 4C Page 2 17/12/2010
Appendix 4C Quarterly report for entities
admitted on the basis of commitments
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.24 Aggregate amount of payments to the parties included in item 1.2 434
1.25 Aggregate amount of loans to the parties included in item 1.11 -
1.26 Explanation necessary for an understanding of the transactions
Executive and Non-Executive Directors remuneration and fees ($132K)
Lead Underwriting fee paid to a Director related entity ($250K) - an entity associated with Mr Kevin Maloney acted as Lead Underwriter for the $5 million capital raising completed in late March 2015. The Lead Underwriter then arranged for non-related parties to sub- underwrite part of the capital raising and will have settled these sub-underwriting fees directly with the sub-underwriters.
Rental payments to a Director related entity ($25K) in relation to premises rented by OCTIEF Pty Ltd and Software consulting payments to a Director related entity ($28K). These fees are contracted under normal terms and conditions.
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest
Financing facilities available
Add notes as necessary for an understanding of the position.
3.1 Loan facilities
3.2 Credit standby arrangements
+ See chapter 19 for defined terms.
17/12/2010 Appendix 4C Page 3
Appendix 4C
Quarterly report for entities
admitted on the basis of commitments
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Acquisitions and disposals of business entities
5.1 Name of entity
5.2 Place of incorporation or registration
5.3 Consideration for acquisition or disposal
5.4 Total net assets
5.5 Nature of business
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act.
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 31 July 2015 (Company secretary)
Print name: Paul Marshall
+ See chapter 19 for defined terms.
Appendix 4C Page 4 17/12/2010
Notes
Appendix 4C Quarterly report for entities
admitted on the basis of commitments
1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in this report.
3. Accounting Standards. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
+ See chapter 19 for defined terms.
17/12/2010 Appendix 4C Page 5