LaserBond : December 2021 Appendix 4D & Financial Report

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Financial Report

F o r t h e H a l f Y e a r E n d e d D e c e m b e r 2 0 2 1

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only	Appendix 4D &
Half-Yearly Financial Report LaserBond Limited
ABN 24 057 636 692
	Half Year Information given to the ASX under Listing Rule 4.2A
use	For half-year ended 31st December 2021
CONTENTS PAGE
personal
Chairman's Letter
	Section 1: Appendix 4D
	Section 2: Half Yearly Financial Report
	Directors' Report
	Directors' Declaration
	Auditor's Independence Declaration
	Independent Auditor's Review Report
For	Condensed Statement of Profit or Loss and Other Comprehensive Income
Condensed Statement of Financial Position
	Condensed Statement of Cash Flows
	Condensed Statement of Changes in Equity
	Notes to the Condensed Financial Statements

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CHAIRMAN'S LETTER

Dear Shareholder

I believe that after the past two years of upheaval to businesses across the globe, LaserBond has earnt its place as a resilient, robust and agile company given its ability not only to preserve its earnings but grow parts of its business to such a level that they have compensated for other more adversely affected parts, enabling material increases in all key total earnings metrics. Furthermore, I believe that without the disruption to the wider economy and our business, we would have met our stated $40 million revenue target.

On behalf of the Board, I am pleased to present the company's results for the half-year ended 31 December 2021. The table below provides a snapshot of increased performance at every level with material gains over the previous corresponding period. Total revenue grew by 13.4% underpinned by the continued revenue growth in the Products division, offsetting the difficulties experienced by the Technology division in accessing vital offshore markets with new technologies. Confirming our strong performance in a new paradigm, net profit before tax rose by 9.7% while net profit after tax increased by 28.1%.

Performance Highlights

	1H22		1H21
Revenue from Continuing Operations	$13.378	M	Up 13.4% from	$11.798	M
EBITDA	$3.367	M	Up 8.8% from	$3.096	M
Net Profit Before Tax	$1.863	M	Up 9.7% from	$1.698	M
Net Profit After Tax	$1.522	M	Up 28.1% from	$1.188	M

The most significant impact of Covid has been the inability to travel both domestically and internationally, curbing our sales efforts in various markets and delaying the introduction of proprietary products and technologies in large, lucrative markets offshore. However, we have concentrated on the domestic marketplace and worked around the constraints as best we can to build other areas of our business, such as the Products division. We continue to feel the impacts that result from employees and/or their families contracting Covid, although we do not believe that the overall financial and operational performance of the business will be materially affected.

During these difficult years, we have remained focused on our growth targets, seeking out potential acquisition businesses which augment or complement our suite of products and services and deliver a considerable leap in revenue. In January this year, we announced the acquisition of the assets and business of QSP engineering, a bolt-on specialised surface engineering company that has serviced the Queensland and northern New South Wales markets for more than 40 years. With our new laser cladding cell now operational in Victoria as well as the new laser cladding facility in Queensland, we can now offer customers superior laser cladding services without the lead times that were inevitable when equipment had to travel interstate for work to be performed. Our expanded footprint underpins the organic growth of our services business with more facilities in more locations that are closer to customer operations.

In December 2021, we raised $10 million via an institutional placement and a further $1.127 million under a share purchase plan to all shareholders in January 2022. The total $11.127 million was raised largely to fund the purchase of the Queensland acquisition with a small amount reserved for increased working capital.

We have also continued to invest in our innovation program with numerous projects underway to test the integrity of our products and technologies with a range of customers and research institutions. We value the market position we have built up over the years with our constant focus on innovation and doing what we do better, and believe we can now realise the value of that sustained, long-term investment in R&D.

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Outlook

For a number of years, we have reiterated our intention to achieve a revenue target of $40 million by the end of financial year 2022. Clearly, when we made that commitment, we did not consider the ramifications of a global pandemic that brought about extended travel restrictions and lockdowns and meant that we were unable to fully prosecute our domestic and offshore expansion plans. In November last year, we amended that forecast to approximately $35 million, notwithstanding any contributions from bolt-on acquisitions over the year. However, while we are no different to the many businesses across the country, and indeed the world, who have been affected, we have continued to grow our revenue and profit, turning a greater focus on domestic growth and building up our products sales that are not so heavily reliant on travel to carry us through the difficulties experienced by the Technology division and, to a lesser extent, by the Services division. Our year-on-year growth comes from a constant review and assessment of the operating conditions, the risks to our business and the framework for growth that we have in our strategic plan. With the extension of the plan to 2025, we expect to be able to grow LaserBond's operations to achieve a revenue target in excess of $60 million. This forecast is based on assumptions about both acquisitive and organic growth in a mix of domestic and international markets.

We are also cognisant that the relaxing of state border restrictions, the opening up of international travel and the increasing acceptance of coronavirus as part of the disease landscape in Australia will ameliorate the trading difficulties of the last couple of years and enable us to execute our broader global expansion strategy.

Dividend

In recognition of our favourable half-year result, positive outlook, and strong balance sheet, the Directors have declared an interim dividend of 0.6 cents per share fully franked. This is in line with the interim dividend for FY21 and is equal to the final dividend. It reflects the sound financial and operating performance delivered for this first half as well as the Board's confidence for the business and its growth prospects over the medium-term, balanced by the need for capital to fund such growth.

I would like to thank our shareholders for continuing to believe in our vision and our plans to achieve it. We intend to remain a viable and profitable asset for you into the future. I am happy to note that shareholders who invested more than 12 months ago have enjoyed a 30% increase in their investment over the year, reflecting LaserBond's compound earnings increase of 26% per annum since 2017.

Lastly, I would like to acknowledge again the achievements of the LaserBond team, at every level of the organisation. The current trading environment has confirmed that we have the right team in place to meet the daily challenges brought about by the pandemic in creative and resourceful ways. Their relationships with our customers and suppliers have also helped us to manage business risk and deliver products and services to a range of essential services business.

I look forward to keeping you updated on the innovations underway in a business that has proven its worthiness over the past few difficult years.

Philip Suriano

Chairman

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RESULTS FOR ANNOUNCEMENT TO THE MARKET

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Revenues from ordinary activities

Net profit from ordinary operating activities after tax attributable to members

Net profit for the period attributable to members

Earnings per share (cents) from profit attributable to members Net tangible assets per ordinary share (NTA Backing - cents)

Half year ended		Half year ended
31st December		31st December
2021		2020
$13,378,138	Up 13.4% from	$11,798,110
$1,522,122	Up 28.1% from	$1,188,349
$1,522,122	Up 28.1% from	$1,188,349
1.57	Up 26.6% from	1.24
25.48	Up 88.6% from	13.51

For personal use

Net tangible assets includes right of use assets with a carrying value of $3,937,436 as at 31 December 2021 (31 December 2020: $4,414,947)

Dividend Information

Dividends	Amount Per	Total	Franked	Record Date	Payment Date
Share (cents)	Amount
2021 Final	0.6	$576,332	100%	10 September 21	8 October 21
2022 Interim	0.6	$654,558	100%	11 March 22	8 April 22

The Board has resolved to pay a fully franked interim dividend of 0.6 cent per share. With the forecasted continued growth, the Board expects to be able to continue to pay dividends in the future. As the Board resolution regarding dividends was made after 31st December 2021, the dividend will be paid from retained earnings but is not recognised as a liability in the half-year financial statements.

Dividend Reinvestment Plans

During the period LaserBond Limited had a Dividend Reinvestment Plan (DRP) in operation. Under the DRP shareholders may elect to have dividends on some or all of their ordinary shares automatically reinvested in additional LaserBond shares, at a discount to the market price. Full details of the operation of the DRP are contained in the Terms and Conditions available on the LaserBond website: www.laserbond.com.au.

The Board has resolved to offer the DRP for the FY2022 interim dividend. The discount applied to determine the market price in accordance with the DRP terms and conditions will be 5%.

Brief Explanation of Results

Further detail on operating performance and outlook is held in the Director's Report as well as the ASX release lodged in conjunction with the Report.

Details of Subsidiaries

During the period from 1st July 2021 to 31st December 2021, LaserBond Limited has not gained or lost control over any entities.

Details of Associates and Joint Venture Entities

During the period from 1st July 2021 to 31st December 2021, LaserBond Limited has no interest in any Associates or Joint Venture Entities.