Advanced Braking Technology : 1H FY22 Appendix 4D and Half Year Report

			Appendix 4D
only		Half year report
Name of Entity:	Advanced Braking Technology Ltd
		ABN:	66 099 107 623
use	Reporting period:	Half-year ended 31 December 2021
Previous corresponding period: Half-year ended 31 December 2020
		Results for announcement to the market
personal
	Net tangible assets						31 December	31 December
						2021	2020
								2021	2020
								$A'000	$A'000
		Revenue from ordinary activities			Up	8.4%		5,563	5,133
		Profit / (Loss) from ordinary activities after		Down	44.2%		134	240
		income tax attributable to members
		Net Profit / (loss) for the period attributable to		Down	44.2%		134	240
		members
		Dividends
		No dividends have been declared for the half-year ended 31 December 2021 or for the previous
		corresponding period.
								31 December	31 December
For								cents	cents
	Net tangible asset backing per ordinary share				1.05	0.85

This information should be read in conjunction with the 2021 Annual Report and the Half Year Report for the period ended 31 December 2021.

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Highlights

The highlights for the half-year to 31 December 2021 and subsequent period to this report include:

• Operating revenue of $5.32m and gross margin of 44.5% for the half year to 31 December 2021.
• Operating revenue increase of 11.8% on the prior comparison period, the half year to 31 December 2021.
• Gross margin of 44.5%, a small decrease on the prior corresponding period margin of 44.7%, representing a 0.2% margin decrease.
• ABT has continued its financial turnaround achieved by improved sales and consistent margins, in conjunction with controlled costs, contributing to an after tax, net profit for the half-year of $0.13m, in addition to being cash flow positive from operating activities of $0.31m for the half-year.
• Strategy of customer and industry diversification continues to make good progress with further sales being made into the civil construction, defence, waste management and the electric and autonomous light vehicle market for use within the mining industry.
• the Company is substantially debt free, with an improving working capital position.

Financial Performance

Revenue from continuing operations for the first half of FY22 was $5.32m (H1 FY21 $4.76m), representing a 11.8% increase on the prior corresponding period for FY21. The Company has maintained a focus on operational efficiencies and achieved a gross margin of 44.5%, representing a 0.2% decrease in margin from the prior corresponding period for FY21.

Expenses for the first half of FY22 totalled $2.48m (H1 FY21: $2.26m), representing a 9.6% increase in expenses compared to the prior year. This cost increase is in line with improved sales and is primarily an increase in corporate overheads related to inorganic growth activities and new business systems implementation, which has resulted in an after tax, net profit for the half-year of $0.13m.

During the first half of FY22, the Company has been able to increase its cash balance to the improved cash position of $1.57m as at 31 December 2021 (30 June 2021: $1.4m, 31 December 2020: $1.48m). Revenue growth has contributed to positive net operating cash flows of $0.31m for the half year.

Operations

During the period the Company observed strong sales performance of its core product, Failsafe, with December year-to-date product sales being materially higher than the prior period.

Operating revenue of $5.32m for the period was predominantly made up of Failsafe sales. Failsafe continues to remain a key product within our product portfolio and with further diversification of both customers and industries, is expected to achieve further sales growth in the future.

ABT has entered into a Technology Licence Agreement with VEEM Ltd for VEEM to manufacture and supply ABT's specialised park brake mechanism for Thales' Hawkei Protected Mobility Vehicle - Light project. The customer, Thales Australia Limited is part of the Thales Group, the world leading aerospace, defence, transport and security technology company headquartered in Paris, France. To date, ABT has supplied components for approximately 90% of the 1,100 park brake mechanisms to be manufactured and supplied by VEEM. In addition to component sales, ABT has also generated licence and engineering support fees resulting from VEEM's supply of completed brake mechanisms to Thales.

During the period, the strategic initiative to diversify has continued. This strategy has resulted in diversification of products, customers, industries and geographic regions which has helped the Company mitigate the risk

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of being solely reliant on customers within the mining industry. This strategy has allowed the Company to generate revenues from the civil construction, defence, and waste management industries.

Terra Dura is successfully being used within the mining industry, however the Company believes that the technology can be incorporated into transport solutions of the future, not only within mining but within any industry where the protection of the environment and the safety of people and equipment are paramount.

In addition to product development and sales, the Company continues to work on the intangible aspects of the business including corporate culture, systems and processes and stakeholder management, all of which improves business performance and creates the foundation to allow the Company to implement its growth strategy.

Outlook

The outlook for ABT remains positive, as the Company continues to build the financial performance and a strengthened financial position, in order to successfully execute its growth strategy and pursue strategic opportunities.

The strategy of diversification will continue, as ABT looks to continually improve its product portfolio to allow the Company further growth opportunities with new customers, industries and geographic regions.

Failsafe will continue to be our core product in the near term, however this will be supplemented by Terra Dura with the release to market of the metal cover, Terra Dura X, for more robust applications.

The short to medium term market for Terra Dura is likely to remain in mining. However, given the sealed brake technology that has been designed and patented, we believe there will be opportunities for this technology to be used in on-highway applications in the future, in markets where the environmental impact of brake dust emissions are well understood and where sustainable transport solutions of the future are being developed.

ABT has established a solid foundation for growth with quality products and service, underpinned by a culture which prioritises both safety and the environmental impact of the business. The Company is focused on strategic growth opportunities and are currently assessing key initiatives to drive scale revenue diversification and enhance innovation for the business. The Company has taken the strategic steps needed to position itself for the future and actively participate in the automotive megatrends of automated, electric and connected vehicles. As we look to grow the business through organic growth, the Company will also continue to investigate opportunities that will allow it to achieve size and significantly upscale the business through acquisitions, strategic partnerships or joint ventures.

Corporate

On 8 November 2021, the Company issued 5,958,109 unlisted options to an employee and key management personnel, Mr Andrew Booth pursuant to the Company's share option plan approved by shareholders at the Company's AGM held 27 November 2019. The terms of the options are:

Number	Exercise Price	Vesting condition	Expiry Date
1,489,527	$0.04	1 Year Vesting	30 June 2024
1,489,527	$0.04	2 Year Vesting	30 June 2024
2,979,055	$0.04	3 Year Vesting	30 June 2025

Details of entities over which control has been gained or lost

There were no entities over which control was gained or lost during the period.

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Details of associates and joint ventures

Not applicable. The Company has not engaged in the acquisition of associates, nor has it engaged in joint ventures in the half year ended 31 December 2021.

Accounting Standards

The information compiled in this report has been prepared on using the Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board.

Auditor's review report

This report is based on the financial statements for the half year ended 31 December 2021. The financial statements have been subject to a review by an independent auditor, Moore Australia Audit (WA) and the review is not subject to qualification.

This release is authorised by the Board of Directors

Sign here:	Company secretary	Date: 28 February 2022
Print name:	Kaitlin Smith

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ADVANCED BRAKING TECHNOLOGY LTD

AND CONTROLLED ENTITIES

ABN 66 099 107 623

HALF-YEAR REPORT

31 DECEMBER 2021