RPMGlobal : Appendix 4D - Half Yearly Results - 31 December 2021

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APPENDIX 4D

The information contained in this report is for the half year ended 31 December 2021 and the previous corresponding period ended 31 December 2020 for RPMGlobal Holdings Limited and its controlled entities.

This report is presented in Australian dollars. The report has been subjected to independent review and is not subject to qualification.

Results for announcement to the market
$'000		1H22			1H21			Movement
Revenues from ordinary activities	40,498	30,242	33.9%
Profit/(Loss) from ordinary activities after tax	1,340	(178)			n/a
Profit for the period	1,860	898	107.1%
Dividend information
		Amount per			Franked Amount			Conduit Foreign
					Income Amount
		Share (cents)		per Share (cents)
					per Share
Interim dividend		-		-		-
Brief explanation to figures reported above
Refer to review of operations on page 1.
					31 Dec 2021			31 Dec 2020
Net tangible assets per security (cents)					15.4			14.8

Details of entities over which control has been gained or lost during the period

Control was gained over Nitro Solutions Pty Ltd and Blueprint Environmental Strategies Pty Ltd during the period. Refer to note 5 "Business Combinations" on page 12. Control was lost over GeoGAS Pty Ltd which was divested in August 2021.

RPMGLOBAL HOLDINGS LIMITED // HALF YEAR FINANCIAL REPORT // 31 December 2021

For personal use only

DIRECTORS' REPORT

Your Directors present their report on RPMGlobal Holdings Limited and its subsidiaries for the half year ended 31 December 2021 (referred to hereafter as "RPM" and the "Group").

Directors

The directors of RPMGlobal Holdings Limited at any time during or since the end of the period are:

Non-executive

Stephen Baldwin - Chairman

Angeleen Jenkins - effective 1 July 2021

Paul Scurrah

Ross Walker

Executive

Mr Richard Mathews - CEO & Managing Director

Review and Results of Operations
				Six months	Variance	Six months	Variance
		Six months
		ended		ended	to	ended	to
		31 Dec 2021		30 Jun 2021	30 Jun	31 Dec 2020	31 Dec
			2021	2020
		$m		$m	$m
Software Division			%	%
	27.8		26.3	5.7%	22.5	23.6%
Advisory Division		12.7		9.9	28.3%	7.7	64.9%
Revenue		40.5		36.2	11.9%	30.2	34.1%
Direct costs		(2.4)		(2.2)	9.1%	(1.0)	140.0%
Net Revenue		38.1		34.0	12.1%	29.2	30.5%
Operating Expenses		(34.2)		(33.3)	2.7%	(28.1)	21.7%
Operating EBITDA*		3.9		0.7	457.1%	1.1	254.5%
Depreciation & Amortisation		(3.0)		(3.5)	-14.3%	(3.4)	-11.8%
Foreign exchange gain/(loss)		0.3		0.7	-57.1%	(1.0)	n/a
Government subsidies		1.0		0.4	150.0%	3.3	-69.7%
Net finance costs		(0.1)		(0.1)	-	-	n/a
Profit/(Loss) before Tax		2.1		(1.8)	n/a	-	n/a

• Operating Earnings before Interest, Tax, Depreciation, Amortisation, Government Subsidies and Foreign exchange is a non- IFRS disclosure. In the opinion of the Directors, the Group's EBITDA reflects the results generated from ongoing operating activities and is calculated in accordance with AICD/Finsia principles. The non-operating adjustments outlined above are considered to be non-cash and/or non-recurring in nature. These items are included in the Group's consolidated statutory result but excluded from the underlying result. Operating EBITDA has not been audited or reviewed.

Revenue

For the half year ended 31 December 2021, the Group's Revenue was $40.5 million a 34.1% increase over the previous corresponding six month period (December 2020: $30.2 million). This increase was due to a $5.3m (23.6%) increase in Software revenue and $5.0m (64.9%) increase in Advisory revenue.

RPMGLOBAL HOLDINGS LIMITED // HALF YEAR FINANCIAL REPORT // 31 DECEMBER 2021 |1

DIRECTORS' REPORT

For personal use only

Review and Results of Operations (Continued)
Software Division
		Six months	Variance to	Six months	Variance to
	Six months
	ended	ended	30 Jun 2021	ended	31 Dec
	31 Dec	30 Jun 2021	%	31 Dec	2020
	2021	$m		2020	%
	$m			$m
Subscriptions	11.5	9.1	26.4%	6.4	79.7%
Perpetual Licence Sales	1.3	3.4	-61.8%	1.8	-27.8%
Maintenance Support	8.6	8.4	2.4%	9.5	-9.5%
Consulting	6.4	5.4	18.5%	4.8	33.3%
Software Revenue	27.8	26.3	5.7%	22.5	23.6%
Cost of Sales	(0.8)	(0.4)	100.0%	(0.3)	166.7%
Net Revenue - Software	27.0	25.9	4.2%	22.2	21.6%

Net Revenue from the Software division increased to $27.0 million a 21.6% increase on the prior corresponding half (December 2020: $22.2 million).

Revenue from software subscriptions for the period ending 31 December 2021 grew 79.7% on the prior corresponding period.

The Total Contracted Value (TCV) of software subscriptions sold during H1 2021 was $24.2m, $0.9m of which was recognised in the half year. TCV outstanding as at 31 December 2021 that is yet to be recognised as revenue and will be in future periods was $78.9m, up 20.0% from 2H2021 (June 2021: $65.7m).

Operating Expenses
		Six months	Variance to	Six months	Variance
	Six months
	ended	ended	30 Jun 2020	ended	to
	31 Dec 2021	30 Jun 2021	%	31 Dec 2020	31 Dec
	$m	$m		$m	2020
					%
Software	(12.8)	(13.2)	3%	(10.5)	-22%
Advisory	(9.3)	(7.8)	-19%	(6.8)	-37%
Software Development	(7.3)	(7.0)	-4%	(6.2)	-18%
Corporate	(4.8)	(5.3)	9%	(4.6)	-4%
Operating Expenses	(34.2)	(33.3)	-3%	(28.1)	-22%

Advisory costs increased in the last six months due to the acquisition of two ESG businesses. As previously announced, the Group is accelerating the move of its software solutions into the cloud which has resulted in an increase in development costs.

Profit for the period

The reported profit after tax of $1.9 million is an 107% increase over the comparative first half of last year (December 2020: $0.9 million).

RPMGLOBAL HOLDINGS LIMITED // HALF YEAR FINANCIAL REPORT // 31 DECEMBER 2021 |2

DIRECTORS' REPORT

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Review and Results of Operations (Continued)

Financial Position

On 31 December 2021, the Group had net assets of $65.8 million (June 2021: $61.4 million), including cash of

$32.4 million (June 2021: $44.6 million) and no debt.

As most of the software maintenance support revenue is invoiced at the start of the calendar year (and paid in the second half of the company's financial year) the first half years' operating cash outflow is traditionally lower than the second half which was again the case during this period.

Business Acquisitions

During the half year, the Group acquired two Australian Environmental and Social Governance (ESG) advisory consulting services companies with $3.9 million paid by the Group in completion payments for those acquisitions during the half year.

On 1 July 2021, the Group acquired 100% of the issued share capital of Nitro Solutions Pty Ltd (Nitro) located in Brisbane, to establish an ESG division in its Advisory business.

On 30 September 2021, the Group acquired 100% of the issued share capital of Blueprint Environmental Strategies Pty Ltd (Blueprint), an ESG company located in Perth to increase the size of its Advisory ESG division.

Software Acquisitions

In December 2021 the Group paid $0.25m for a copy of the software code from Eden Suite Pty Ltd for its Environmental Data Management and Reporting Software. The acquisition provided the Group with exclusive worldwide rights to the intellectual property in the Eden Suite software for use in the mining and quarrying industries along with the ability to extend and integrate use of the software inside the Group's suite of software products.

In December 2021, the Group acquired the rights to three mine planning optimisation software products as part of a three year collaborative research partnership with Sudbury, Canada based MIRARCO, an innovative solution research provider for the mining industry and research arm of Laurentian University, a leading Canadian mining University. Total consideration for this transaction is expected to be approximately $0.165m.

Outlook

While the COVID-19 Omicron variant continues to spread around the world we are seeing a gradual reopening of international borders. We believe that the impact of Omicron on the business will reduce as the year progresses and hope that by the start of the new financial year in July most things will have returned to normal.

Our new ESG Advisory division continues to go from strength to strength and represents most of the 37% increase in revenue of the Advisory division over the corresponding prior period. We expect to see this business continue to grow.

In terms of changes to the competitive market landscape in which the company operates, during calendar year 2021 two relatively small private mine scheduling software companies were acquired and consolidated by private equity and in the first quarter of calendar 2022 another larger player in the design and mine scheduling space will be acquired by one of the major OEM's.

The company is making slow and steady progress in moving its products to a Software as a Service (SaaS) model. We expect development costs to rise again in H2 as we push to complete this programme of work over the next 18 months.

We have made excellent progress on our four large new software products, three of which will be released in H2 2022.

RPMGLOBAL HOLDINGS LIMITED // HALF YEAR FINANCIAL REPORT // 31 DECEMBER 2021 |3

DIRECTORS' REPORT

For personal use only

Rounding of Amounts

RPMGlobal Holdings Limited is a company of a kind referred to in ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191 and in accordance with that Instrument amounts in the Financial Report and Directors' Report have been rounded off to the nearest thousand dollars, unless otherwise stated.

Signed in accordance with a resolution of the board of directors of RPMGlobal Holdings Limited.

Stephen Baldwin

Chairman

Brisbane

Dated: 21 February 2022

RPMGLOBAL HOLDINGS LIMITED // HALF YEAR FINANCIAL REPORT // 31 DECEMBER 2021 |4