ASX RELEASE

28 January 2021

ASX: SW1

SWIFT Delivers Growth in Core Verticals, Positive Cashflow and Strengthens Balance Sheet to Support Accelerated Growth Strategy

Q2 FY21 RESULTS AND 4C CASH REPORT

Swift Media Ltd ("Swift", "the Company") is pleased to announce the business update and Appendix 4C Cash Report for the quarter ended 31 December 2020.

Highlights

  • Strong revenue1 growth in core verticals for H1 FY21 vs prior corresponding period ("pcp"): Mining and Resources up 12% and Aged Care up 9%
  • H1 FY21 EBITDA2 up 122% vs pcp. Focus on margin improvement delivering results; 3% in H1 FY21 vs -12% pcp
  • Positive Q2 Cash flow from operations $1.953M, significant improvement compared to -$71K in Q1
  • Good progress in Q2 - delivered on the next stage in the Company's accelerated growth strategy - strengthen Swift's financial position. Successful completion of fully subscribed Placement and SPP of $5 Million.
  • $7m net cash balance at 31 December 2020
  • Improved financial base enables progression to execute next strategic priorities: growth investments in expanded sales capacity, new product development, disciplined M&A, and launch into new complementary adjacencies ahead of plan.

Pippa Leary, CEO said, "We are making progress in strengthening Swift for faster growth and greater scale in our core verticals. We are pleased to deliver strong revenue growth in the half in Mining and Resources and Aged Care, despite five major mining contract decisions being deferred into Q3 and Covid-19 continuing to impact Aged Care. Nevertheless, with over 75% of group revenues recurring, we have a solid base to support further growth. The partnership with Uniting also gives us much stronger traction in Aged Care. This will start to generate revenues in Q3. I am also pleased to report that we have signed over 5,600 new rooms for our market leading Swift Plus technology as well as starting to build out our footprint in the complementary adjacency, Retirement Living a year ahead of plan. While our restructuring initiatives have

ASX RELEASE

28 January 2021

ASX: SW1

ensured the profitability of Health and Wellbeing, we are evaluating further opportunities to realise value in this business. With our strengthened balance sheet, we can carefully invest in new sales capabilities product development and disciplined M&A to support long term growth."

Q2 FY21 Highlights

  • H1 FY21 Revenue in the key Mining and Resources vertical $7.4m, up 12% vs pcp. Project revenue +71%, recurring revenue stable at c$5m.
  • H1 FY21 Aged Care Revenue $0.9m, up 9% on pcp3. Gaining market traction with new contract with Uniting NSW.ACT contributing revenues in H2 FY21.
  • Q2 Group revenues $5.7m, -17% on pcp - reflects deferrals of 5 major mining project confirmations and -41% decline vs pcp in Health and Wellbeing revenue. Restructuring initiatives ensured profitability in Q2 in this business. Review underway to realise value.
  • Focus on Gross Margin in Q2 resulted in an increase to 41% up from 37% in Q1.
  • H1 FY21 EBITDA up 122% vs pcp. Focus on margin improvement delivering results; 3% in H1 FY21 vs -12% pcp
  • Focus on driving accelerated sales growth
  1. Expansion into complementary adjacencies commenced - Retirement Living, Quarantine camps and Government facilities
  1. 24% increase in the volume of proposals for the quarter year on year

Cashflow Commentary

$000s

Q2 vs Q1 FY21 cash flow from

operations

$3,000

$2,000

Increase of $2.0m

$1,953

$1,000

$(71)

-

$(1,000)

Q1 FY21

Q2 FY21

$(2,000)

$(3,000)

$000s

H1 FY21 vs H1 FY20 cash flow from

operations

$3,000

$2,000

Increase of $4.6m

$1,906

$1,000

-

$(2,650)

$(1,000)

H1 FY20

H1 FY21

$(2,000)

$(3,000)

Net cash from operating activities for the current quarter was $1.953 million, an increase of $2.024 million over the prior quarter. The increase over the prior quarter was a result of the management of working capital balances, the deployment of technical and product teams towards longer term development

ASX RELEASE

28 January 2021

ASX: SW1

activities, and the net proceeds from the settlement and early exit of a partner contract ($1.3m). Administration and corporate costs increased over the prior quarter due to the timing of certain supplier payments.

Net cash from operating activities for the 6 months ended December 31 was $1.906 million, an increase of $4.555 million over prior comparable period as the business realised the benefits of its strategic re- focus which included the rationalisation of business lines and resources.

Net cash used in investing activities for the current quarter was $0.624 million, primarily for the redeployment of IT and product teams towards product development activities over the current quarter. Net cash used in investing activities for the 6 months ended December 31 was $0.620 million, a reduction of $2.105 million versus the pcp reflecting the business' streamlined focus on investments in the Aged Care and Mining and Resources verticals.

Net cash from financing activities for the current quarter was $3.698 million which included $4.655 million from the recent placement and shareholder purchase plan (net of costs). All directors and senior management team participated in the raise. Lease repayments of $0.957 million increases over the prior quarter as COVID-19 payment deferrals were reinstated and the business settled on the exit of its North Sydney office lease ($0.2m).

Payments to directors for wages, and related parties in respect of an office property leased from a director were $0.3m for the current quarter. This represented an increase over the prior quarter in part due to the reinstatement of payments previously deferred as part of the management of working capital around COVID-19 disruption.

Cash and cash equivalents at the end of the period was $6.959 million, an increase of $5.027 million over the prior quarter. The net cash from / (used in) operating activities by major operating segment is provided in the following table.

Year to date (6 months)

Swift

Health and

Total

($000, items may not add due to rounding)

Wellbeing

Receipts from customers

10,103

1,785

11,887

Operating expenditure payments

(8,770)

(1,212)

(9,982)

Net cash from / (used in) operating activities

1,333

572

1,906

ASX RELEASE

28 January 2021

ASX: SW1

Business Highlights

Mining and Resources

  • $2m in Total Contract Value from three new contracts and one extension including a government facility, quarantine camp, and mining companies Mineral Resources and Tronox Gingko
  • Volume of tenders up 24% for the quarter compared to prior year
  • 98% retention rate of existing clients
  • Stakeholder mapping, engagement plan and innovation workshops with key clients
  • Site visits and audits generating new revenue opportunities for infrastructure upgrades and entertainment solutions

Aged Care

  • Won new contracts in Aged Care totaling 4,300 rooms
  • Partnered with Uniting NSW.ACT to roll out Swift Plus into 1,986 rooms across 25 Residential Aged Care homes
  • Contract extension with McKenzie across 17 sites in 1,883 rooms
  • Announced launch into Retirement Living, signing fourth client taking the total to 900. The Retirement Living market has over 140,000 dwellings*, providing scope for long term growth.

Health and Wellbeing

  • Revenues impacted by SME depressed advertising market due to Covid
  • Identified new 'geo-local' sales channel
  • Review underway to evaluate options to realise shareholder value

New technology developments

  • Swift Plus now adapted to and rolled out to 5,600 rooms across Aged Care, Retirement Living, rail, road and mobile camps in Mining and Resources and quarantine camps.
  • Evolved My Family My Community app to fit with Swift Plus
  • Completed development of advanced scheduling of notices and video in Swift Plus
    • Source: ACSA Retirement Villages Fact Sheet Dec 2017.

Notes:

  1. All financial disclosures and references to financial information in this document are based on unaudited results.
  2. EBITDA (earnings before interest, income tax expense, depreciation and amortisation) is a financial measure which is not prescribed by Australian Accounting Standards ('AAS') nor International Financial Reporting Standards ('IFRS') and represents the profit/(loss) under AAS/IFRS which has been adjusted to eliminate the effects of tax, depreciation and amortisation, fair value adjustments, impairment expenses, loss on disposal of assets and other one-off items including restructuring costs.
  3. Excludes discontinued Lifestyle Networks business

END

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

Swift Media Limited published this content on 28 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2021 22:37:01 UTC.