JCurve : Half Year Accounts for period ended 31 December 2021

For personal use only

JCurve Solutions Limited Half Year Report 31 December 2021

JCurve Solutions Limited

ABN 63 088 257 729

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For personal use only

Contents

Directors' Report

Auditor's Independence Declaration

Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors' Declaration

Independent Auditor's Review Report

JCurve Solutions Limited

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The information contained in the half year financial report should be read in conjunction with the Company's Annual Financial Report for the year ended 30 June 2021.

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JCurve Solutions Limited

DIRECTORS' REPORT

Your directors present their report on the consolidated entity (referred to hereafter as "Jcurve") consisting of JCurve Solutions Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2021.

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Directors

The names of directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mark Jobling	Non-Executive Chairman
Bruce Hatchman	Non-Executive Director
Graham Baillie	Non-Executive Director
Martin Green	Non-Executive Director
David Franks	Company Secretary

Principal Activities

During the half year, the principal continuing activities of Jcurve consisted of:

1. the sale, implementation and support of Enterprise Resource Planning (ERP) solutions, which consisted of:
2. 1. the Oracle NetSuite mid-market and enterprise editions (in Australia, New Zealand and South East Asia);
   2. the exclusively licensed small business edition of Oracle NetSuite, JCurveERP (in Australia and New Zealand);
3. the sale and support of proprietary Telecommunications Expense Management Solutions;
4. the continued development of quicta (formerly Riyo), Jcurve's proprietary owned Service Management Platform including the sale and support of the platform to paying customers; and
5. the sale of digital marketing services.

Review of Operations

Summarised financial result and position

The first half of the financial year result saw significant growth across multiple business divisions, culminating in a record half year of sales of $6.7m, a 37% increase on the comparative result from 31 December 2020. The growth was achieved both organically (23%) and from acquisitions in June 2021 and July 2021.

Business expenditure excluding cost of sales, depreciation and amortisation for the half year period ended 31 December 2021 increased by 23% from $4.3m in the corresponding comparative period to $5.3m. This increase in business expenditure was inclusive of $0.25m relating to the recognition of the interim deferred payment payable on the acquisition of Rapid Thailand as an employee benefit expense. The primary driver for the increase in business expenditure was an increase in salaries and wages with head count increasing by 48% over the past six months as the business expands into new markets and solution offerings.

Jcurve recognised a net profit after tax of $118,500 for the half year period ended 31 December 2021 (2020: $129,310 loss).

Net cash inflows from operating activities for the 6-month period ended 31 December 2021 totalled $0.1m (2020 comparative half year period: $0.7m operating cash inflows).

At 31 December 2021, Jcurve held cash reserves of $4.5m. During 1HY2022 Jcurve paid S$300,000 as the completion payment for the business and assets of Rapid e-Suite Thailand. The 1HY2022 cash outflow and increased level of unearned income over the period reflects the seasonality of the Jcurve business and the increased timeline to complete projects as the mix of larger projects sold continues to grow. The record level of unearned income at $4.1m is expected to strongly flow into statutory profit in 2HY2022 as open projects are delivered.

In addition to holding strong cash reserves, Jcurve continues to remain debt free, providing the opportunity for both further organic growth and growth by acquisition in future periods.

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JCurve Solutions Limited

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DIRECTORS' REPORT (continued)

The underlying EBITDA for the half year period ended 31 December 2021 was $1,013,445 (2020: $354,929), which has been determined as follows:

		Half-year
		2021	2020
		$	$
Statutory profit/(loss) after income tax for the half year period	118,500	(129,310)
Add back: non-cash expenses:
Depreciation / amortisation	544,023	426,442
Total non-cash expenses
544,023	426,442
Income tax expense	298,047	40,672
Interest income	(2,304)	(2,968)
Finance costs	55,178	20,093
Underlying EBITDA profit for the half year period
1,013,444	354,929

Underlying EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (AAS) and represents the profit under AAS adjusted for specific items. The table above summarises key items between the statutory loss after tax and underlying EBITDA. The directors use underlying EBITDA to assess the performance of Jcurve.

Underlying EBITDA has not been subject to any specific review procedures by our auditor but has been extracted from the accompanying auditor reviewed financial report.

Strategic Priorities

Jcurve is focused on achieving the following four strategy priorities.

1. Profitably grow Jcurve in Asia Pacific from our existing operations, new product and service lines, as well as through acquisition

We will achieve our strategic priority by focusing on:

• Continuing to win mid-market new customers in Australia;
• Growing our sales team in Singapore and the Philippines;
• Elevating the customer experience delivered to improve our customer retention levels and customer advocacy;
• Growing our Philippines delivery centre of excellence to control our costs as we scale; and
• Continuing to look for business management solution M&A opportunities.

1. Rapidly grow our Quicta subscriber numbers and focus on product enhancements

We will achieve our strategic priority by focusing on:

• Releasing Quicta Zero Touch, a version of Quicta that complements the current enterprise solution that has been growing in strength across a range of verticals and companies across multiple countries;
• Further development of the platform with more verticalisation of the solution so we can tackle specific industries;
• Establishing a channel referral network and channel partnerships;
• Increase the integrations with ERP and other point solutions;
• Increased levels of marketing campaigns; and
• Rapidly growing our user numbers.

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JCurve Solutions Limited

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(iii) Expand our Business Consulting and Advisory service (Vyzeri).

We will achieve our strategic priority by focusing on:

• Rapidly building business consulting sales and delivery capabilities in Australia, Singapore and the Philippines through recruitment of experienced consulting resources and retraining existing talent; and
• Promoting the importance of digital transformation as businesses recover from the COVID-19 pandemic.

(iv) Markedly increase shareholder value

We will achieve our strategic priority by focusing on:

• Delivering an exponential growth in sales from existing operations;
• Focusing on complementary technology business merger and acquisition opportunities;
• Enhancing our customer experience to be the best in the space; and
• Building investor relations.

Significant changes in the state of affairs

On 9 July 2021, Jcurve purchased the business assets of Rapid E-Suite Pte Ltd's Thailand operations resulting in the expansion of operations into Thailand, a market which Jcurve has assessed to have significant digital transformation opportunities, opportunities which have been further accelerated by the COVID pandemic.

There were no other significant changes in the state of affairs of Jcurve during the half year ended 31 December 2021.

Auditor's Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, Grant Thornton Audit Pty Ltd, to provide the directors of Jcurve with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 6 and forms part of this directors' report for the half-year ended 31 December 2021.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to s.306(3) of the

Corporations Act 2001.

Mark Jobling

Chairman

Dated 23 February 2022

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