NEXION : NNG Appendix 4D and Half-Year Financial Report to Dec-21

For personal use only

APPENDIX 4D - HALF YEAR REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

28 February 2022

DETAILS OF THE REPORTING PERIOD

This report details the consolidated results of Nexion Group Ltd, ABN: 48 628 415 887 ("NNG" or "Company") and its controlled entities ("Group") for the half-year ended 31 December 2021. Comparatives are for the half-year ended 31 December 2020.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

				2021	2020
				$'000	$'000
2.1	Revenue from ordinary activities	Up	189%	2,945	1,018
2.2	Profit/(Loss) from ordinary activities after tax attributable to	Down	77%	(2,285)	(1,287)
	members
2.3	Net profit/(loss) for the year attributable to members	Down	77%	(2,285)	(1,287)

	Cents	Cents
2.4 Net Tangible assets per security - at the end of the period	1.744	(0.845)

OPERATING RESULTS

For commentary on the financial results please refer to the information provided in the Directors Report in the attached interim financial report. The half-year report should be read in conjunction with the most recent annual report.

DIVIDENDS

No dividends have been paid or declared since the start of the financial half-year by the Company. The directors do not propose to pay either a final or an interim dividend. The Company does not have a dividend reinvestment plan.

DETAILS OF ENTITIES OVER WHICH CONTROL HAS BEEN GAINED OR LOST DURING THE PERIOD

The Group gained control over BlueSky Telecom Pty Ltd on 23 August 2021. Details of the acquisition are contained in the consolidated half-year financial report. BlueSky Telecom Pty Ltd directly contributed $168,161 towards the loss from ordinary activities for the half-year ended 31 December 2021. In addition to that, the Group recognised a material amount of indirect expenses related to the acquisition of BlueSky Tel Pty Ltd.

DETAILS OF ASSOCIATES AND JOINT VENTURE ENTITIES

The Group did not have any associates or participate in any joint ventures during the half-year ended 31 December 2021.

AUDIT OF FINANCIAL STATEMENTS

This report is based on the attached half-year financial report which has been reviewed by our auditors.

For personal use only

NEXION GROUP LTD

ACN 628 415 887

Consolidated Half-Year Financial Report to 31 December 2021

For personal use only

Contents
Directors' report.........................................................................................................................	1
Auditor's independence declaration..........................................................................................	3
Condensed consolidated statement of profit or loss and other comprehensive income .........	4
Condensed consolidated statement of financial position..........................................................	5
Condensed consolidated statement of changes in equity .........................................................	6
Condensed consolidated statement of cash flows.....................................................................	7
Notes to the condensed consolidated financial statements......................................................	8
Directors' declaration...............................................................................................................	20
Independent auditor's review report.......................................................................................	21

For personal use only

NEXION GROUP LTD

ACN 628 415 887

DIRECTORS' REPORT

Directors' report

Your Directors present their report, together with the financial statements, on NEXION Group Ltd ("Company" or "NEXION") and the entities it controlled ("Consolidated Entity" or "Group") at the end of, or during, the half-year ended 31 December 2021.

Directors

The following persons were Directors of the Group during the whole of the financial half-year and up to the date of this report:

• Mr Peter Christie - Non-Executive Chairman
• Mr Paul Glass - Managing Director and Chief Executive Officer
• Mr Chris Daly - Non-Executive Director
• Mr Kevin Read - Alternate Director for Paul Glass

Principal activities

NEXION provides advanced technology solutions incorporating Cloud, Networks, Security and Satellite. Our Hybrid Cloud infrastructure is used by corporations to host their core business systems. Hybrid Cloud describes the combined use of dedicated private compute infrastructure with publicly available Cloud services to optimise the price and performance of corporate IT systems. NEXION also delivers local and global network services using fibre, SD- WAN and satellite communications technology to connect customers to the Cloud.

Review of operations

NEXION Group Ltd (ASX:NNG), the fast emerging, global Cloud service provider is pleased to announce a solid half year report with revenue up from $1,018,317 for the half year ended 31 December 2020 to $2,944,909 for the half year ended 31 December 2021, a 189.19% increase in total revenue compared to same period last year. NEXION continues to diversify its customer base and build a strong sales pipeline heading into the second half of the financial year.

The addition of experienced senior sales and technical personnel has seen the team focused on developing enterprise opportunities in new sectors such as Health, Mining, Oil and Gas as well as Education. Strong growth and higher utilisation of its core Hybrid Cloud infrastructure as more customers come on board has driven gross margins up to 42.5%, a 14.5% increase on the 37.1% gross margin for the previous corresponding period.

The first half of this financial year saw NEXION complete the acquisition and integration of BlueSky Telecom Pty Ltd, adding strategically valuable technical capability in the satellite communications sector and high margin recurring revenue. The Group's net loss for the half- year ended 31 December 2021 was $2,285,399 (31 December 2020: $1,287,756 loss).

The Group monitors debt recovery and does not expect an increase in the probability that customers will not pay or will delay payments and has therefore not increased the allowance for expected credit losses as at 31 December 2021.

NEXION's team continued to focus on building hybrid cloud solutions and is continuing to explore opportunities to expand both in Australia and overseas. With travel restrictions easing, the executive team hopes to build on the east coast Australian revenue and accelerate international expansion throughout the 2022 financial year and beyond.

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For personal use only

NEXION GROUP LTD

ACN 628 415 887

DIRECTORS' REPORT

Significant events and transactions during the half year

During the half-year ended 31 December 2021, the Group has acquired 100% of the issued share capital of BlueSky Telecom Pty Ltd for a cash consideration of $2,000,000. The Group issued an additional 16,562,500 shares during the reporting period to raise $2,650,000 (before costs).

Events occurring after the reporting period

The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not had a material impact on the Group up to 31 December 2021, it is not practicable to estimate the potential impact, positive or negative, after the reporting date, particularly as the pandemic evolves within Australia.

On 4 February 2022, the Group issued an additional 625,000 shares raising $100,000 and 8,593,749 free options exercisable at $0.30 each and expiring on 4 February 2025.

There are no other significant events that have arisen since the end of the half-year which may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after the Directors' report.

Signed in accordance with a resolution of the Board of Directors.

Director

28 February 2022

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