Babylon Pump & Power : Quarterly Update and Appendix 4C

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28 July 2022

Babylon Quarterly Update and Appendix 4C

Delivers positive operating cashflow, $1M cost savings from structural

& organisational changes

Highlights1

• Positive operational cashflow of $0.3M in the quarter with positive operational cashflow recorded in four of the last five reporting periods
• Positive operational cashflow of $0.2M for full FY22
• Receivables of $4.3M due from blue-chip client base
• $4.2M of cash and undrawn debt at the end of the quarter
• $1M in annual recurring costs already eliminated following structural and organisational changes
• Strong ongoing demand and growth opportunities across all divisions

Specialist resources services provider Babylon Pump & Power Limited ("Babylon" or "the Company") (ASX: BPP) is pleased to present a quarterly update and quarterly cash flow report for the period ended 30th June 2022.

The Company is pleased to report cash receipts of $7.3M and positive operational cashflow of $0.3M for the quarter which represents 105% increase over the corresponding Q4 FY21. Babylon has recorded positive operational cashflow of $0.2M for full FY22 and has now recorded positive operational cashflow in four of the last five reporting periods.

Positive operational cashflow continues to be driven by a reduction in inventory whilst continuing to record increasing revenue. The Company also has $4.2M of cash and undrawn debt facilities at the end of June to support growth initiatives.

Commenting on the results, Managing Director Michael Shelby said: "To report positive operational cash flow for four of the last five reporting periods is a major achievement for our company and builds on the continuing increase in revenue and inventory reduction. I am also happy to report that Babylon's refocus towards higher margin speciality equipment rental and services and pull back in maintenance services is already bearing significant benefits with $1 million in annual recurring costs so far eliminated from the business.

"Our focus is also to grow both organically and from potential acquisition opportunities in the rental and water management sector. With the addition of Mr James Cullen as Non- Executive Chairman during the quarter, we now have a highly experienced board and management team to drive these initiatives. I look forward to updating investors as we continue to reposition our company to maximise shareholder value."

1 All revenue and financial figures provided in this announcement are unaudited.

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Operations Update

Concurrent with the appointment of Jamie Cullen as non-executive Chairman, a strategic review and repositioning of the company was commenced to refocus on higher margin specialty equipment rental and services. Babylon has a significant base to build from and work continues in this area. The Company's review will continue into Q1 FY23 and structural and organisational changes to date have eliminated c.$1.0M in annual recurring costs.

Specialty Rental

Babylon continues to invest and grow its rental asset fleet through cost effective sourcing of used units and purchase of new assets for long term projects. During the period, five additional pump units were purchased, added to the fleet and immediately put on hire. The Company has also received a 12-month contract from a multinational gold miner for hire of a new specialty high wall pump unit to be mobilised in Western Australia in Q3 FY23.

Babylon is progressing potential acquisitions in the rental and water management sector. Multiple opportunities have been identified and a nonbinding indicative offer is in place for an asset acquisition expected to complete in Q1 FY23.

Specialty Services

Industrial services capabilities continue to grow with the addition of a 1000HP high pressure to the Ausblast fleet. Headcount has increased as additional tradesmen have joined the team to support increased asset utilisation. June was a record month of revenue for Ausblast since acquisition with the division providing works for a variety of clients across southwest W.A, Pilbara and metro Perth. Several long-term projects are expected to mobilise in Q1 FY23 as well multiple scheduled short-term shutdown works with existing clients.

Maintenance Services

Refocus on specialty equipment rental and services has initiated a review of maintenance services. During the year, stock and inventory has been reduced by 29% to $4.5M. The Company expects to fulfill current contracts while continuing to reduce overall exposure to this lower margin segment.

Summary and Outlook

The Company's Board is confident in the ongoing growth in current service offerings and is focused on growing the more profitable specialty services and rental revenue streams whilst conducting an ongoing evaluation on improving operational efficiencies and profitability in maintenance services.

The Company's Appendix 4C follows for the quarter ended 30 June 2022.

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For more information, please contact:
Michael Shelby	Media - David Tasker
Executive Chairman	Chapter One Advisors
[phone]	[phone]
[e-mail]	[e-mail]

For personal use only

Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Babylon Pump & Power Limited
ABN	Quarter ended ("current quarter")
47 009 436 908	30 June 2022

Consolidated statement of cash flows	Current quarter	Year to date
			$A'000	(...12....months)
				$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	7,257	29,956
1.2	Payments for
	(a)	research and development
	(b) product manufacturing and operating	(4,264)	(18,082)
		costs
	(c)	advertising and marketing	(4)	(31)
	(d)	leased assets
	(e)	staff costs	(2,022)	(8,476)
	(f) administration and corporate costs	(497)	(2,189)
1.3	Dividends received (see note 3)
1.4	Interest received
1.5	Interest and other costs of finance paid	(265)	(1,000)
1.6	Income taxes paid
1.7	Government grants and tax incentives
1.8	Other (provide details if material)	114	(17)
1.9	Net cash from / (used in) operating	317	161
	activities
2.	Cash flows from investing activities
2.1	Payments to acquire or for:
	(a)	entities
	(b)	businesses	-	(475)
	(c) property, plant and equipment	148	(1,179)
	(d)	investments
	(e)	intellectual property
	(f) other non-current assets

ASX Listing Rules Appendix 4C (17/07/20)	Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.

For personal use only

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter	Year to date
			$A'000	(...12....months)
				$A'000
2.2	Proceeds from disposal of:
	(a)	entities
	(b)	businesses
	(c)	property, plant and equipment	(59)	257
	(d)	investments
	(e)	intellectual property
	(f)	other non-current assets
2.3	Cash flows from loans to other entities
2.4	Dividends received (see note 3)
2.5	Other (provide details if material)
2.6	Net cash from / (used in) investing	89	(1,397)
	activities

3. Cash flows from financing activities

3.1 Proceeds from issues of equity securities

(excluding convertible debt securities)

968

968

3.2 Proceeds from issue of convertible debt securities

3.3 Proceeds from exercise of options

3.4 Transaction costs related to issues of equity securities or convertible debt securities

3.5	Proceeds from borrowings	10,012	14,734
3.6	Repayment of borrowings	(10,416)	(13,256)

3.7 Transaction costs related to loans and borrowings

3.8 Dividends paid

3.9 Other (provide details if material)

3.10 Net cash from / (used in) financing	564	2,446
activities

4. Net increase / (decrease) in cash and cash equivalents for the period

4.1 Cash and cash equivalents at beginning of

	period	1,272	1,032
4.2	Net cash from / (used in) operating	317	161
	activities (item 1.9 above)
4.3	Net cash from / (used in) investing activities	89	(1,397)
	(item 2.6 above)

ASX Listing Rules Appendix 4C (17/07/20)	Page 2
+ See chapter 19 of the ASX Listing Rules for defined terms.