Bendigo Telco : Financial Statements 31-12-2021

Interim Financial

Report

for the Half-year ended

31 December 2021

Bendigo Telco Limited and Controlled Entities

ABN 88 089 782 203

Interim Financial Report for the Half-Year Ended 31 December 2021

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DIRECTORS' REPORT

Your directors submit the interim financial report of Bendigo Telco Limited and Controlled Entities (the Group) for the half-year ended 31 December 2021.

Directors

The names of directors who held office during or since the end of the half-year:

Robert George Hunt	Kevin Gerard Dole
Donald James Erskine	Jonathon David Selkirk
Rodney David Payne	Gregory Douglas Gillett
Nicole Therese Rooke

Review of Results and Operations

Operational Review

The Bendigo Telco Group has recorded an after-tax profit of $121,487 for the half year ended 31 December 2021. This is a substantially reduced result when compared to the previous year's first half result (31 December 2020: $666,803). The result reflects the challenging Telco environment and the change in products and services utilised by our Customers in today's market. It also reflects our modified priorities and the new investments applied across the business to ensure our services remain relevant and valued by our Customers and Communities.

The Groups first half result demonstrates the impact of reduced revenues and margins on our legacy voice and data products offered to our customers over the past years. While the decline in these legacy revenues is in line with our projections and experienced across the entire telco industry, it has impacted this half year result. Our Business expects this trend of declining revenues on these legacy products will continue through this financial year, however we continue to invest in products and services that will contribute to replacement revenues.

The Group has also experienced a decrease in mobile revenues primarily attributed to a reduction in the number of mobile services taken up by our consumer customer base. During the past reporting period we have taken the opportunity to renegotiate our supply arrangement and have since re-launched our mobile suite of products.

As part of ongoing market and technology changes the Group directed its priorities, strategic approach, and core operating model to the new opportunities in the market. The leadership team believe that by focusing on improving the accessibility and delivery of technology, combined with helping customers adopt technology to support their needs, the business will be able to position itself for future sustainable growth and ongoing creation of shareholder value.

Our strategic framework ensures we continue to maintain a balance across our five key focus areas, People, Customer, Community, Operations and Financial, which will ensure the appropriate priority and level of attention is given to the growth opportunities available across our markets.

The Board remains convinced that the Group can add value technically and strategically for both our customers and the communities we serve, therefore effectively employing our shareholder capital. We continue to look for investment opportunities which will enhance the Groups prospects of success.

Impact of COVID-19

The pandemic continues to impact the community and economy. The Group continues to follow all Government directives, focusing on the protection of our staff and ensuring that we continue to deliver service and support to our customers and communities. The duration of the pandemic remains uncertain as at the date of this report.

The events relating to COVID-19 have not had an adverse impact on either the operations or financial performance of the Group during this period. The Group continues to offer support to its customers as required.

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Bendigo Telco Limited and Controlled Entities

ABN 88 089 782 203

Interim Financial Report for the Half-Year Ended 31 December 2021

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Reported Results

The Group generated a net profit before tax of $199,354 and a net profit after tax of $121,487 for the half year ended 31 December 2021. This compares to a net profit before tax of $975,120 and a net profit after tax of $666,803 in the prior year.

Earnings before interest, tax, depreciation and amortisation ("EBITDA") for the period was $1,414,043, representing a decrease of $805,266 (36.3%) compared to the prior year (2020: $2,219,309).

Total Group's revenue decreased by 13.2% over the corresponding prior period to $13,480,166 (2020: $15,531,703). This decrease is substantially due to the loss of traditional fixed voice, traditional data and mobile revenues.

At the end of the period, the net assets of the Group were $7,521,762 (30 June 2021: $7,982,109). The Group continued to generate strong cash flows from operating activities and maintained a sound working capital with current assets exceeding current liabilities by $1,283,502 (30 June 2021: $1,516,909).

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Bendigo Telco Limited and Controlled Entities

ABN 88 089 782 203

Interim Financial Report for the Half-Year Ended 31 December 2021

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Auditor's Independence Declaration

The lead auditor's independence declaration under s 307C of the Corporations Act 2001 is set out on page 4 for the half-year ended 31 December 2021.

This directors' report is signed in accordance with a resolution of the Board of Directors.

Robert Hunt, Chairman

Donald Erskine, Director

Dated this 23rd day of February 2022

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Bendigo Telco Limited and Controlled Entities

ABN 88 089 782 203

Interim Financial Report for the Half-Year Ended 31 December 2021

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Lead auditor's independence declaration under section 307C of the Corporations Act 2001 to the Directors of Bendigo Telco Ltd

I declare that, to the best of my knowledge and belief, for the half-year ended 31 December 2021, there have been no contraven�ons of:

1. the auditor independence requirements of the Corporations Act 2001 in rela�on to the review; and
2. any applicable code of professional conduct in rela�on to the review.

Andrew Frewin Stewart	Joshua Griffin
61 Bull Street, Bendigo Vic 3550	Lead Auditor
Dated this 23rd day of February 2022

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