Half Year Report FOR THE HALF YEAR ENDED 31 DECEMBER Calibre Group Limited ABN

Transcription

1 Half Year Report FOR THE HALF YEAR ENDED 31 DECEMBER Calibre Group Limited ABN

2 Contents Corporate information... 1 Directors report... 2 Directors declaration... 5 Auditor s independence declaration... 6 Condensed consolidated statement of profit or loss and other comprehensive income... 7 Condensed consolidated statement of financial position... 8 Condensed consolidated statement of changes in equity... 9 Condensed consolidated statement of cash flows Notes to the financial statements Independent Auditor s report CALIBRE GROUP LIMITED HALF YEAR REPORT

3 Corporate infor mation Corporate information Calibre Group Limited ABN Directors Geoff Tomlinson (Chairman) Brian MacDonald Peter Massey Anne McIntyre Ray Munro Graham Smith Dod Wales Company Secretary Tara Dennis Registered Office Calibre Group Limited Level 7, 601 Pacific Highway St. Leonards NSW 2065 Share Registry Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Auditors Deloitte Touche Tohmatsu Grosvenor Place 225 George Street Sydney NSW 2000 Solicitors Herbert Smith Freehills 250 St Georges Terrace Perth WA 6000 Bankers National Australia Bank 255 George Street Sydney NSW

4 Directors report Directors report The Directors of Calibre Group Limited (Calibre, the Company or the consolidated entity) present their report and consolidated financial report for the half-year ended (half-year) as follows: The names of Directors in office at any time during or since the end of the half-year are: Geoff Tomlinson Brian MacDonald Peter Massey Anne McIntyre Ray Munro Graham Smith Dod Wales Chairman Non-Executive Director Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director The above Directors were in office for this entire period unless otherwise stated. Principal activities Calibre is a leading diversified provider of engineering, consulting, project delivery, construction, maintenance and asset management services within Australasia offering clients an integrated range of services, from early-stage asset evaluation and project feasibility studies, through design and delivery, to ongoing support and optimisation of the resources, infrastructure, utilities, urban development, defence and transport sectors. Operating & Financial Review Financial overview Calibre s revenue for the six months ended was $306.3m, up 42% on revenue of $215.8m for the previous corresponding period. Operating cash flow for the six month period was $12.2m, an increase of $8.7m from the prior corresponding period, reflecting a strong focus on working capital management. Net capital expenditure during the period was $2.8m. For the half year ended, Calibre reported a 9% increase in an underlying EBITDA to $5.7m. Similar to, Calibre s first half results are traditionally impacted by seasonal events relating to the start of the new financial year, calendar year-end holidays and timely ramp up of new projects. Reflecting the $92.9m increase in revenue in the Construction & Maintenance business, reported EBITDA for this business was up $5.4m to $6.9m. At the same time, an increasingly competitive market and continuing challenges in the resources sector contributed to the $4.6m decline in EBITDA for the Professional Services business to $0.3m. The Group s underlying EBITDA excluded a gain in fair valuing contingent consideration of $0.2m ( 2016: $7.0m), restructuring expenses of $0.2m ( 2016: $1.7m) and business acquisition costs of $0.6m (31 December 2016: $1.0m). For the six months ended Calibre generated a net loss before tax of $6.1m, reflecting $7.7m in depreciation and amortisation charges and $3.6m of net financing costs. A decline of $0.9m from the prior corresponding period, depreciation and amortisation for the period reflects lower capital expenditure programs in place across the business. The $0.9m increase in financing costs reflects the higher costs associated with new preference shares and convertible note arrangements. Liquidity Calibre s net borrowings as at was $57.2m (30 June : $58.5m), after offsetting cash and cash equivalents of $25.1m (30 June : $16.7m). Current borrowings declined from $72.5m at 30 June to $32.6m at, reflecting the outcome of the new four year senior bank facility arrangements completed during the period. During the period ended, Calibre made $4.4m of scheduled debt repayments. At Calibre s total borrowings comprised bank borrowings of $76.0m (30 June : $70.0m), finance and hire purchase liabilities of $6.2m (30 June : $5.2m), convertible notes and preference share liabilities of $27.5m (30 June : $1.7m) and deferred acquisition consideration of $0.3m (30 June : $30.5m). New bank borrowings of $5.0m and convertible notes of $25.0m were secured during the period to fund the final earn out payments of $30.0m in relation to the acquisition of the Diona business in CALIBRE GROUP LIMITED HALF YEAR REPORT 2

5 Directors report (continued) Taxation Income tax expense for the period is $nil. Net deferred tax assets of $15.7m arise from deductible timing differences and tax losses. Deferred tax assets of $19.4m relating to carry forward income tax losses and research & development credits that are available for offset against future taxable profits are not recognised. Business Line Performance Calibre provides services through two key segments being Professional Services and Construction & Maintenance. A summary of each business line s performance during the period is set out below. Construction & Maintenance (CM) CM operates as the Diona civil engineering business servicing the east coast infrastructure market and the G&S Engineering business providing maintenance and construct services to the resources sector. CM revenue for the half year was $223.6m, an increase of 71% from the prior corresponding period. Personnel costs across the business increased during the period, as it positions a number of the teams for the next phases of growth and to ensure the appropriate client and risk management profiles are in place. Diona reported revenue of $114.9m, 56% ahead of the prior year, with the main projects contributing to the revenue and earnings increases include the delivery of design and construct Powells Creek Bank Renewals, Woolloomooloo Sewer Separation and Canterbury Town Centre Works. Work on hand during the period increased with major new projects awarded during the period including the Transgrid TRNG 330kv cable project, Ausgrid Canterbury to Summerhill 33kv cable project and West Connex 630 Water Main. Diona has a strong order book and pipeline, and is continuing to project strong growth into future financial years. Revenue for G&S Engineering business increased by 90% to $108.7m. This increased revenue was due to improving market conditions in the Australian coal market driving increased work activities in both the major projects and maintenance sectors. Revenue from maintenance activities also was up $22.0m to $75.0m due to increased shutdown and maintenance spend in the Bowen Basin. Revenue in major projects was up $29.0m to $33.0m from the previous corresponding period, reflecting the progress made on the joint venture EPC contract with DRA for the Mt Pleasant CHPP. The project has just passed through the 50% completion and is ramping up to peak site workforce as construction activities accelerate. The project has not yet delivered to financial plan or outcomes, with a number of commercial matters currently being assessed, contributing to the Group s decline in gross margins. Order book remained relatively steady during the period, with key awards granted during the period at Caval Ridge and securing a role on the BHP Iron Ore Construction Panel. G&S Engineering was also successful in negotiating renewals or extensions of key maintenance agreements within Queensland. Professional Services (PS) Revenue for the PS business was relatively steady at $84.2m, down $1.3m, from the prior corresponding period. The PS business settled down a number of aspects of its organisational restructure during the period, including appointing a number of new key management roles. The outlook in many of PS markets are improving significantly, particularly in WA, as the iron ore and other sectors evaluate both new brownfield and greenfield opportunities. The buoyant east coast urban development and infrastructure markets are also contributing to stronger market outlook. A new division called Building and Renewable was set up to provide complementary services to existing client base and expansion into the different market. Management are implementing many of their operational plans to address the increasingly competitive nature of many of PS markets and operational inefficiencies that have contributed to a decline in gross margins in the period. Since 31 December, the current run-rate on new work awards, earnings performance improvements and a full management team are expected to result in a significantly improved second half. Significant events after the balance date Subsequent to the end of the reporting period, the Directors have confirmed, as part of the Company s strategic review and in light of being informed of the desire of First Reserve to exit its shareholding in Calibre, that the Company will start to progress with two independent processes to sell the G&S Engineering business to one party, and the combined Calibre Professional Services and Diona businesses to another. The Professional Services business is a separate reportable segment, whilst the G&S Engineering and Diona businesses form the consolidated entity s Construction & Maintenance reportable segment. As a result, Calibre is subsequent to the reporting period in advanced discussions with various bidders in relation to the G&S Engineering business, and negotiations have entered a due diligence phase with a view to a final offer being made shortly to the Company. CALIBRE GROUP LIMITED HALF YEAR REPORT 3

6 Directors report (continued) Significant events after the balance date (continued) Calibre has also commenced a second process by a consortium who has expressed an interest in acquiring the Calibre Professional Services and Diona businesses. The consortium consists of a private equity bidder and the former owners of the Diona business, who also hold convertible loan notes that were issued by the Company in late. To facilitate this second process, the Company has granted an eight-week exclusivity period commencing on 15 March 2018 to allow due diligence and sale and purchase terms to be agreed. The current convertible noteholders have agreed to a number of modifications to the terms of the notes to facilitate this second process to occur seamlessly. Significant changes in the state of affairs There have been no significant changes in the state of affairs during the half year. Indemnification and insurance of officers and auditors During or since the financial period, the Company has paid premiums in respect of a contract insuring all directors and the officers which indemnifies them against claims made against them subject to the conditions contained within the insurance policy. Further disclosure required under section 300(9) of the Corporations Act 2001 is prohibited under the policy terms. No indemnities have been given or insurance paid for the auditors of the Company. Auditor s independence declaration The auditor s independence declaration is included on page 6 of the half-year financial report. Dividends No dividend has been declared in respect of the half year ended ( 2016: nil). Rounding The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) and where noted ($ 000) under the option available to the Company under ASIC Instrument 2016/191. The Company is an entity to which the Instrument applies. This Directors Report is signed in accordance with a resolution of Directors made pursuant to section 306(3) of the Corporations Act On behalf of the Directors Geoff Tomlinson Chairman 16 March 2018 CALIBRE GROUP LIMITED HALF YEAR REPORT 4

7 Directors declaration Directors de claration The Directors declare that: (a) in the Directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and (b) in the Directors opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity. Signed in accordance with a resolution of the Directors made pursuant to section 303 (5) of the Corporations Act On behalf of the Directors Geoff Tomlinson Chairman 16 March 2018 CALIBRE GROUP LIMITED HALF YEAR REPORT 5

8 Auditor s indepe ndence declaration Auditor s independence declaration Deloitte Touche Tohmatsu ABN Grosvenor Place 225 George St Sydney NSW 2000 PO Box N250 Sydney NSW 2000 Australia Tel: +61 (0) Fax: +61 (0) The Board of Directors Calibre Group Limited Level 7, 601 Pacific Highway St. Leonards, NSW March 2018 Dear Board Members Calibre Group Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Calibre Group Limited. As lead audit partner for the review of the financial statements of Calibre Group Limited for the halfyear ended, I declare that to the best of my knowledge and belief, there have been no contraventions of: Yours sincerely (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and (ii) any applicable code of professional conduct in relation to the review. DELOITTE TOUCHE TOHMATSU Suzana Vlahovic Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited CALIBRE GROUP LIMITED HALF YEAR REPORT 6

9 Condensed consolidated statement of profit or loss and other comprehensive income Condensed consolidated state ment of profit or loss and other comprehe nsive income for half-year ended Note 2016 CONTINUING OPERATIONS Revenue 306, ,820 Cost of providing services (254,999) (170,978) Gross profit 51,341 44,842 Administration costs 3(a) (39,038) (32,634) Occupancy costs (6,475) (6,837) Depreciation and amortisation 3(b) (7,740) (8,633) Finance costs (3,627) (2,752) Acquisition and restructuring costs 3(c) (599) 4,260 Loss before income tax (6,138) (1,754) Income tax benefit / (expense) 4 - (153) Loss after income tax (6,138) (1,907) OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (174) (43) Total comprehensive loss for the period (6,312) (1,950) Loss after income tax attributable to: Members of the Company (6,138) (1,907) Non-controlling interests - - (6,138) (1,907) Total comprehensive loss attributable to: Members of the Company (6,312) (1,950) Non-controlling interests - - (6,312) (1,950) Basic loss per share (cents per share) (1.83) (0.58) Diluted loss per share (cents per share) (1.83) (0.58) The above condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. CALIBRE GROUP LIMITED HALF YEAR REPORT 7

10 Condensed consolidated statement of financial position Condensed consolidated state ment of fi nancial position as ASSETS Current assets Note 31 Dec 30 June Cash and cash equivalents 25,094 16,726 Trade and other receivables 89, ,443 Work in progress 23,157 17,040 Current tax assets 21 - Total current assets 138, ,209 Non-current assets Other receivables Property, plant and equipment 5 30,378 33,043 Goodwill 6 126, ,441 Other intangible assets 6 10,749 10,081 Investments Deferred tax assets 15,723 15,715 Total non-current assets 183, ,620 Total Assets 321, ,829 LIABILITIES Current liabilities Trade and other payables 95,612 87,989 Borrowings 7 32,583 72,511 Deferred acquisition consideration ,522 Provisions 20,353 18,078 Total current liabilities 148, ,100 Non-current liabilities Borrowings 7 77,154 4,359 Provisions 20,579 25,222 Total non-current liabilities 97,733 29,581 Total Liabilities 246, ,681 Net Assets 75,198 81,148 EQUITY Issued capital 9 151, ,479 Reserves 2,732 2,544 Accumulated losses (79,013) (72,875) Equity attributable to owners of the parent 75,198 81,148 Non-controlling interests - - Total Equity 75,198 81,148 The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes. CALIBRE GROUP LIMITED HALF YEAR REPORT 8

11 Condensed consolidated statement of changes in equity Condensed consolidated state ment of changes i n equity for the half-year ended Ordinary shares Foreign currency Accumulated translation losses reserve Contribution by equity participants reserve Share based payment reserve Available for sale reserve Noncontrolling interests Total Balance at 1 July ,138 (72,955) ,004 (1,168) (64) 77,614 Loss for the period - (1,907) (1,907) Other comprehensive loss - - (43) (43) Total comprehensive loss for the period - (1,907) (43) (1,950) Acquisition of non-controlling interest - (64) (64) Balance at ,138 (74,926) ,004 (1,168) - 75,664 Balance at 1 July 151,479 (72,875) ,186 (1,168) - 81,148 Loss for the period - (6,138) (6,138) Other comprehensive loss - - (174) (174) Total comprehensive loss for the period - (6,138) (174) (6,312) Share based payment transactions Balance at 151,479 (79,013) ,548 (1,168) - 75,198 The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes. CALIBRE GROUP LIMITED HALF YEAR REPORT 9

12 Condensed consolidated statement of cash flows Condensed consolidated state ment of ca sh fl ows for the half-year ended Note 2016 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) 363, ,346 Payments to suppliers and employees (inclusive of GST) (340,397) (227,991) GST paid (11,393) (9,102) Income tax refund/(paid) Net cash generated from operating activities 12,155 3,483 CASH FLOWS FROM INVESTING ACTIVITIES Payment of deferred acquisition consideration (30,000) (16,544) Interest received Purchase of property, plant, equipment and software (2,974) (2,944) Proceeds from sale of property, plant, equipment and software 141 1,575 Net cash used in investing activities (32,712) (17,820) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 5,000 - Interest paid (4,969) (1,580) Proceeds from borrowings 107,675 20,000 Repayment of borrowings (78,781) (6,348) Net cash generated from financing activities 28,925 12,072 Net increase / (decrease) in cash and cash equivalents 8,368 (2,265) Cash and cash equivalents at beginning of period 16,726 22,086 Cash and cash equivalents at the end of the period 25,094 19,821 The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes. CALIBRE GROUP LIMITED HALF YEAR REPORT 10

13 Notes to the financial statements Notes to the financial stateme nts for the half-year ended 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Statement of compliance The half-year financial report of Calibre Group Limited and the entities it controlled at the end of the half-year (the Company or the consolidated entity) is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include all of the notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report. b) Basis of preparation The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors Reports) Instrument2016/191, the Directors have chosen to round amounts in this Directors Report and the accompanying half year financial report to the nearest hundred thousand dollars, unless otherwise indicated. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the consolidated entity s annual financial report for the financial year ended 30 June, except for the impact of the Standards and Interpretations in note 12. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Where applicable, comparative information has been reclassified or restated where there has been a retrospective application of an accounting policy, a retrospective restatement, or reclassification of items in the financial statements in order to comply with current period disclosure requirements. c) Going concern The financial report for half-year ended has been prepared on the going concern basis, which assumes the consolidated entity will be able to realise its assets and discharge its liabilities in the normal course of business. The consolidated entity had net operating cash inflows for the half-year ended of $12.2m, and the Directors are forecasting continuing net operating cash inflows. The consolidated entity generated a net loss after tax of $6.1m after depreciation and amortisation charges of $7.7m and $3.6m of net financing costs which translates to a positive EBITDA of $5.7m. The Directors were able to successfully refinance $131.5m in borrowings of the consolidated entity during the period, through a combination of four year senior bank facility, three year convertible preference shares and three and one year convertible notes. The convertible notes and convertible preference shares have contributed to higher financing costs during the period. At, the consolidated entity s current liabilities exceed its current assets by $10.7m (30 June : net current liability position of $74.9m). The net current liability position is a result of the consolidated entity s one year convertible notes reaching maturity on 31 October Accordingly, the amount outstanding in respect of the convertible notes of $15.5m has been classified as a current liability as at. Calibre is experiencing an increase in client and project enquiries and growth in its forward order book, particularly in its key infrastructure and resources end markets. The consolidated entity s growth in revenues and operations is placing working capital demands on the business, with management having activated and continuing to explore a range of options to assist in managing this position. In an effort to best position Calibre and its businesses to take advantage of its growth and to enable the redemption of the convertible notes prior to maturity, the Directors continue to review the consolidated entity s business portfolio and capital management, particularly in light of being informed of the desire of First Reserve to exit its shareholding in Calibre. Subsequent to the reporting period, the Directors have confirmed that the Company will progress with two independent processes to sell G&S Engineering segment to one party, and the combined Calibre Professional Services and Diona segments to another. As a result, Calibre is currently in advanced discussions with various bidders in relation to the G&S Engineering business, and negotiations have entered a due diligence phase with a view to a final offer being made shortly. CALIBRE GROUP LIMITED HALF YEAR REPORT 11

14 Notes to the financial statements (continued) c) Going concern (continued) Calibre has also commenced a second process by a consortium who has expressed an interest in acquiring the Calibre Professional Services and Diona businesses. To facilitate this second process, the Company has granted an eight-week exclusivity period starting today to allow due diligence and sale and purchase terms to be agreed. The current convertible noteholders have agreed to a number of modifications to the terms of the notes to facilitate this second process to occur seamlessly. The consortium have proposed a fixed floor price for the Professional Services and Diona businesses, with the current intention of the Board to accept a final offer from the consortium if it is made at or above the fixed floor price, and to use the proceeds from the sale to repay bank debt and redeem the convertible notes. If the Professional Services and Diona businesses are sold for the fixed floor price, the Board expects that there will be sufficient cash to repay all debt while still retaining a cash surplus. However, given the uncertainty as to the outcomes of options being advanced by the Company and the level and timing of funds available to redeem the one year convertible notes maturing on 31 October 2018, the combined circumstances give rise to a material uncertainty as to the ability of the consolidated entity to continue as a going concern and therefore the consolidated entity s ability to realise its assets and discharge its liabilities in the ordinary course of business. CALIBRE GROUP LIMITED HALF YEAR REPORT 12

15 Notes to the financial statements (continued) 2. SEGMENT INFORMATION The consolidated entity s operating segments are based on the information that is available to the chief operating decision maker and the Board of Directors. The segment results and segment assets include all items directly attributable to each of the segments and any transaction, asset or liability that can be allocated on a reasonable basis. Unallocated items comprise predominantly of expenses that are not specific to the performance of an individual operating segment. The following are the reportable segments: Construction & Maintenance This segment provides construction, operations maintenance, and asset management services to the resources, energy, infrastructure and utility sectors. Professional Services This segment is responsible for the delivery of integrated services across the asset lifecycle to the resources, urban development and infrastructure markets. The accounting policies used by the consolidated entity in reporting internally are the same as those contained in the notes to the financial statements except for the unallocated items detailed below. The following items and associated assets and liabilities are not allocated to the operating segment as they are not considered part of the core operations: Restructuring expenses; Interest receivable and payable; and Depreciation and amortisation of intangible assets. Following is an analysis of the Group s revenue and results from continuing operations by reportable segment. Reportable segment revenues and results Segment Revenue 2016 Segment Profit (Loss) 2016 Construction & maintenance 223, ,717 6,947 1,460 Professional services 84,185 85, ,883 Other (1,431) (322) (1,496) (1,086) Segment revenue and results for the period 306, ,820 5,724 5,257 Acquisition and restructuring expenses (599) 4,260 Depreciation and amortisation (7,740) (8,633) Interest income Finance costs (3,627) (2,752) Income tax benefit/(expense) - (153) Loss after tax for the period (6,138) (1,907) Segment Assets Segment Assets 30 June Construction & maintenance 126, ,928 Professional services 157, ,830 Other 37,494 37,071 Consolidated total assets 321, ,829 CALIBRE GROUP LIMITED HALF YEAR REPORT 13

16 Notes to the financial statements (continued) 3. EXPENSES 2016 a) Administration costs Administrative costs 13,389 13,285 Personnel costs 24,852 19,003 Share based payment expense Marketing costs ,038 32,634 b) Depreciation and amortisation Depreciation and amortisation 6,081 6,498 Amortisation of customer relationship intangible assets 1,659 2,135 7,740 8,633 c) Acquisition and restructuring Fair value gains on contingent consideration (199) (7,000) Acquisition costs 602 1,032 Restructuring costs 196 1, (4,260) Share-based payments transactions During the financial year ended 30 June, the Company adopted an employee share plan known as the Employee Growth Investment Plan (EGIP). Pursuant to the EGIP, during the period, the Company provided 4.52m shares to employees at $nil consideration. The shares granted have no vesting conditions. The fair value of shares provided was determined by an independent valuation. This value was derived using a capitalised earnings method adjusted for normalisation adjustments. During the half-year ended, the Company granted 3.4m performance rights to employees, subject to satisfying specific service conditions. 4. INCOME TAXES The income tax (expense)/benefit for the half-year can be reconciled to the accounting loss as follows: 31 Dec 31 Dec 2016 Loss before income tax (6,138) (1,754) Income tax benefit/(expense) at 30% 1, Change in fair value of deferred consideration 60 2,100 Deferred tax assets brought to accounts (1,754) (2,151) Other (147) (628) Income tax benefit/ (expense) recognised in profit or loss - (153) CALIBRE GROUP LIMITED HALF YEAR REPORT 14

17 Notes to the financial statements (continued) 5. PROPERTY, PLANT & EQUIPMENT Plant & Equipment Computer Hardware Motor Vehicles Leasehold Improvements Assets under Construction Total Balance at 1 July ,138 3,231 6,519 4,459 2,738 37,085 Additions 3,087 1, ,238 7,529 Disposals (509) (24) (303) (1,227) - (2,063) Depreciation expense (4,842) (1,901) (1,880) (876) - (9,499) Foreign exchange differences (3) (3) (1) (2) - (9) Balance at 30 June 17,871 2,579 5,143 2,474 4,976 33,043 Cost 53,183 17,590 14,326 7,740 4,976 97,815 Accumulated depreciation (35,312) (15,011) (9,183) (5,266) - (64,772) Net carrying amount 17,871 2,579 5,143 2,474 4,976 33,043 Balance at 1 July 17,871 2,579 5,143 2,474 4,976 33,043 Additions 2, (788) 2,116 Disposals (190) (35) (53) - - (278) Depreciation expense (2,355) (732) (844) (534) - (4,465) Foreign exchange differences (15) (4) (2) - (17) (38) Balance at 31 Dec 17,350 2,449 4,244 2,164 4,171 30,378 Cost 53,389 17,179 14,089 7,739 4,171 96,567 Accumulated depreciation (36,039) (14,730) (9,845) (5,575) - (66,189) Net carrying amount 17,350 2,449 4,244 2,164 4,171 30, INTANGIBLE ASSETS AND GOODWILL Customer Software Licenses Relationship Goodwill Total Balance at 1 July , , , ,639 Additions 2, ,224 Disposals Amortisation expense (3,071) - (4,270) - (7,341) Balance at 30 June 3, , , ,522 Cost 17, , , ,572 Accumulated amortisation (14,631) - (90,419) - (105,050) Net carrying amount 3, , , ,522 Balance at 1 July 3, , , ,522 Additions 3, ,943 Disposals Amortisation expense (1,616) - (1,659) - (3,275) Balance at 31 Dec 5, , , ,190 Cost 16, , , ,794 Accumulated amortisation (11,526) - (92,078) - (103,604) Net carrying amount 5, , , ,190 CALIBRE GROUP LIMITED HALF YEAR REPORT 15

18 Notes to the financial statements (continued) 7. BORROWINGS Current borrowings 30 June Bank borrowings 12,925 70,000 Lease liabilities 4,157 2,511 Convertible notes 15,501-32,583 72,511 Non-current borrowings Bank borrowings 63,100 - Lease liabilities 2,093 2,700 Convertible notes 10,267 - Preference shares 1,694 1,659 77,154 4,359 Total borrowings 109,737 76,870 On 30 June Calibre executed an agreement for the refinancing of $96.5m of its senior bank facilities. On 3 October, Calibre raised $25.0m from a number of convertible notes agreements, also raising an additional $5.0m in funding from NAB. With the completion of all these agreements on 31 October, the new four-year senior bank facility has commenced and the appropriate amount of the longer term components of these borrowings are classified as noncurrent borrowings. Of the total convertible notes of $25.0m, $15.0m of the convertible notes are redeemable in one year which have a 20% p.a. coupon with the reminder redeemable in three years which have a 16% p.a. coupon. These notes have a conversion option that the holder may exercise. Financing facilities available At the reporting date, the following senior bank facilities were in place: 30 June Bank guarantee facility 22,000 - Working capital revolver facility 37,000 75,000 Term debt facility 36,300 - Acquisition facility 5, ,000 Assets finance facility 6,249 5,211 Total facilities 106, ,211 Bank guarantee facility used (19,818) (21,164) Working capital revolver facility used (34,725) (10,000) Term debt facility used (36,300) - Acquisition facility used (5,000) (60,000) Assets finance facility used (6,249) (5,211) Facilities used at (102,092) (96,375) Facilities unused at 4, ,836 CALIBRE GROUP LIMITED HALF YEAR REPORT 16

19 Notes to the financial statements (continued) 8. DEFERRED CONSIDERATION Deferred consideration movements 30 June Balance at 1 July 30,522 42,345 Acquisitions - - Finance costs - 1,066 Change in fair value (199) 3,204 Payments (30,000) (16,093) Balances at ,522 During the period, Calibre settled the final earn-out liability of $30.0m in respect of the Diona Pty Limited acquisition by issuing $25.0m of convertible notes and raising an additional $5.0m of funding from NAB. Details relating to convertible notes are discussed in note ISSUED CAPITAL 30 June 338,023,176 ordinary shares (30 June : 333,503,176) 148, ,138 33,333,334 preference shares (30 June : 33,333,334) 3,341 3, , ,479 Ordinary shares entitle the holder to participate in dividends and the proceeds on winding-up of the consolidated entity in proportion to the number of shares held. Every ordinary Shareholder present at a meeting of the shareholder, in person or by proxy, is entitled to one vote per share. Reconciliation of fully paid ordinary shares No of shares 30 June No of shares Number of shares on issue 340,969, ,969,545 Treasury shares (2,946,369) (7,466,369) Reportable number of shares 338,023, ,503,176 Movement in shares in issue Fully paid ordinary shares No of shares Balance at 1 January 331,074, ,138 Release of treasury shares 2,428,475 - Balance at 30 June 333,503, ,138 Release of treasury shares 4,520,000 - Balance at 338,023, ,138 Preference shares No of shares Balance at 1 January - - Issue of shares 33,333,334 3,341 Balance at 30 June 33,333,334 3,341 Issue of shares - - Balance at 33,333,334 3,341 CALIBRE GROUP LIMITED HALF YEAR REPORT 17

20 Notes to the financial statements (continued) 10. DIVIDENDS No dividend has been declared in respect of the half year ended ( 2016: nil). 11. EVENTS AFTER BALANCE SHEET DATE Subsequent to the end of the reporting period, the Directors have confirmed, as part of the Company s strategic review and in light of being informed of the desire of First Reserve to exit its shareholding in Calibre, that the Company will start to progress with two independent processes to sell the G&S Engineering business to one party, and the combined Calibre Professional Services and Diona businesses to another. The Professional Services business is a separate reportable segment, whilst the G&S Engineering and Diona businesses form the consolidated entity s Construction & Maintenance reportable segment. As a result, Calibre is subsequent to the reporting period in advanced discussions with various bidders in relation to the G&S Engineering business, and negotiations have entered a due diligence phase with a view to a final offer being made shortly to the Company. Calibre has also commenced a second process by a consortium who has expressed an interest in acquiring the Calibre Professional Services and Diona businesses. The consortium consists of a private equity bidder and the former owners of the Diona business, who also hold convertible loan notes that were issued by the Company in late. To facilitate this second process, the Company has granted an eight-week exclusivity period commencing on 15 March 2018 to allow due diligence and sale and purchase terms to be agreed. The current convertible noteholders have agreed to a number of modifications to the terms of the notes to facilitate this second process to occur seamlessly. 12. APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS Standards and Interpretations in issue not yet adopted At the date of authorisation of the financial statements, the Standards and Interpretations that were issued but not yet effective are listed below. Standard/interpretation Effective for annual reporting periods beginning on or after Expected to be initially applied in the financial year ending AASB 9 Financial Instruments, and the relevant amending standards 1 January AASB 15 Revenue from Contracts with Customers, AASB Amendments to Australian Accounting Standards arising from AASB 15, AASB Amendments to Australian Accounting Standards Effective Date of AASB 15, and AASB Amendments to Australian Accounting Standards Clarifications to AASB 15 1 January AASB 16 Leases 1 January AASB Amendments to Australian Accounting Standards Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, AASB Amendments to Australian Accounting Standards Effective Date of Amendments to AASB 10 and AASB 128 and AASB -5 Amendments to Australian Accounting Standards Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections AASB Amendments to Australian Accounting Standards Recognition of Deferred Tax Assets for Unrealised Losses AASB Amendments to Australian Accounting Standards Classification and Measurement of Share-based Payment Transactions AASB -2 Amendments to Australian Accounting Standards - Further Annual Improvements Cycle 1 January January 1 January January CALIBRE GROUP LIMITED HALF YEAR REPORT 18

21 Notes to the financial statements (cont) Standard/interpretation Effective for annual reporting periods beginning on or after Expected to be initially applied in the financial year ending AASB -7 Long-term Interests in Associates and Joint Ventures (Amendments to AASB 128) AASB Interpretation 23 Uncertainty Over Income Tax Treatments, AASB - 4 Amendments to Australian Accounting Standards Uncertainty over Income Tax Treatments 5 1 January January CALIBRE GROUP LIMITED HALF YEAR REPORT 19

22 Independe nt Auditor s re port Independ ent Auditor s Report to the memb ers of Calibre Group Limited Deloitte Touche Tohmatsu ABN Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1219 Australia DX: 10307SSE Tel: +61 (0) Fax: +61 (0) Independent Auditor s Review Report to the members of Calibre Group Limited We have reviewed the accompanying half-year financial report of Calibre Group Limited, which comprises the condensed statement of financial position as at, and the condensed statement of profit or loss and other comprehensive income, the condensed statement of cash flows and the condensed statement of changes in equity for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 5 to 19. Directors Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity s financial position as at and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As the auditor of Calibre Group Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Auditor s Independence Declaration In conducting our review, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Calibre Group Limited, would be in the same terms if given to the directors as at the time of this auditor s review report. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited CALIBRE GROUP LIMITED HALF YEAR REPORT 20

23 Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Calibre Group Limited is not in accordance with the Corporations Act 2001, including: (a) (b) giving a true and fair view of the consolidated entity s financial position as at and of its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations Material Uncertainty Related to Going Concern We draw attention to Note 1 in the half-year financial report, which indicates that the consolidated entity s current liabilities exceeded its current assets by $10,700,000 as at. As stated in Note 1, this condition along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the consolidated entity s ability to continue as a going concern. Our conclusion is not modified in respect of this matter. DELOITTE TOUCHE TOHMATSU Suzana Vlahovic Partner Chartered Accountants Sydney, 16 March 2018 CALIBRE GROUP LIMITED HALF YEAR REPORT 21