Schrole : Appendix 4E and Annual Report

For personal use only

Appendix 4E

Preliminary Final Report to the Australian Securities Exchange

1. Company Details

Name of Entity:	Schrole Group Ltd
ABN:	27 164 440 859
Reporting period:	for the year ended 31 December 2021
Previous period:	for the year ended 31 December 2020

2. Results for Announcement to the Market

The current year financial results represent the consolidated entity comprising Schrole Group Ltd ('Schrole Group', 'Company') and its wholly owned subsidiaries for the year ended 31 December 2021.

	2021	2020
	$	$	%
Sales revenue
- Software	3,976,976	4,696,199	-15%
- Training	1,286,761	979,138	31%
Total sales revenue	5,263,737	5,675,337	-7%
Other revenue	210,032	469,265	-55%
Total revenue	5,473,769	6,144,602	-11%
EBITDA	(2,035,304)	(1,033,235)	-97%
Net profit/(loss)	(2,438,844)	(2,177,382)	-12%
Cash and cash equivalents	4,964,008	5,107,987	-3%
Net current assets / (deficiency)	2,409,626	1,547,796	56%
Net assets / (deficiency)	3,694,983	2,189,108	69%
Net cash (used in) operating activities	(1,769,217)	(1,000,811)	-77%

• Finished FY21 with a strong cash position of $5.0m, reflecting a combination of the capital raise undertaken during the year and increasing customer numbers, improving margins in the software business and higher training sales, generating improving net cash from operations.
• Continued investment to bring forward delivery of high quality additional Schrole HR product modules saw the launch of Schrole Connect 3.0 and Schrole Events 1.0 during the year, with Schrole Engage 1.0 delivered subsequent to year end. All Schrole HR modules are now in market, expanding cross-sell and up-sell opportunities. Investment made in an expanded sales and account management team mid 2021 to support continued strong customer renewal rates, sales of the expanded product suite to existing customers and sales to new customers, particularly in the new markets of Europe and the Americas. Supported by the improving cashflow from operations and the capital raise in Q4 2021 (net proceeds $2.5m), 2022 will see continued investment in these areas and additional marketing of the full Schrole HR product suite across the globe.

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• FY21 sales revenue fell by 7% to $5.3m with training revenues continuing post-pandemic recovery whilst software revenues were impacted by the amended ISS agreement (the change was to record 50% of Connect/Advantage renewal revenue with no distributions to ISS, from previously recording 100% of those revenues, with more than 50% then distributed to ISS). Gross margins improved as a result of this amendment.

Please refer to the attached Annual Report to Shareholders for further commentary.

3. Net Tangible Assets

2021 2020

Cents Cents

Net tangible assets/(deficit) per ordinary security

0.2

0.1

The net tangible assets per ordinary security is calculated based on 1,729,276,990 ordinary shares on issue as at 31 December 2021 (31 December 2020: 1,473,183,763 ordinary shares).

4. Audit Qualification or Review

Details of audit/review dispute or qualification (if any):

An unqualified opinion relating to the financial statements has been issued by the Company's Auditor and is included in the Annual Report to shareholders.

5. Attachments

Details of attachments (if any):

For the year ended 31 December 2021:

• Annual Report to Shareholders for the year ended 31 December 2021
• Corporate Governance Statement
• Appendix 4G

6. Signed

_____________________________________

Rob Graham Managing Director Date: 25 February 2022

For personal use only

Schrole Group Ltd

ABN 27 164 440 859

Annual Report

31 December 2021

Corporate Directory

For personal use only

Directors	Stuart Carmichael
	Robert Graham
	James King
	Guy Perkins
	Colm O'Brien
Company secretary	Benjamin Donovan
Registered office	Ground Floor, 142 Hasler Road
	Osborne Park	WA	6017
	AUSTRALIA
	Telephone: [phone]
Principal place of business	Ground Floor, 142 Hasler Road
	Osborne Park	WA	6017
	AUSTRALIA
	Telephone: [phone]
Share register	Link Market Services Limited
	Locked Bag A14
	Sydney South	NSW	1235
	AUSTRALIA
	Telephone: [phone]
Auditor	BDO
	Level 9, Mia Yellagonga Tower 2, 5 Spring Street
	Perth	WA	6000
	AUSTRALIA
	Telephone: [phone]
Solicitors	Hamilton Locke
	Suite 4201, Level 42, Australia Square, 264 George Street
	Sydney	NSW	2000
	AUSTRALIA
	Telephone: [phone]
Bankers	National Australia Bank
	Level 14, 100 St Georges Terrace
	Perth	WA	6000
	AUSTRALIA
	Telephone: 13 22 65
Stock exchange listing	Schrole Group Ltd shares are listed on the Australian Securities Exchange
(ASX code: SCL)
Website	www.schrole.edu.au
Corporate Governance Statement	https://legal.schrole.edu.au/

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Directors' Report

For personal use only

Your Directors present their report, together with the financial statements of Schrole Group Ltd ("the Company") and controlled entities ("the Group") for the financial year ended 31 December 2021.

Directors

The names and the particulars of the Directors of the Company during or since the end of the financial year are:

	Name	Role	Appointed	Resigned
	Stuart Carmichael	Non-Executive Chairman	5 October 2017
	Robert Graham	Managing Director	5 October 2017
	James King	Non-Executive Director	29 November 2019
	Guy Perkins	Non-Executive Director	27 October 2020
	Colm O'Brien	Non-Executive Director	20 October 2021
	Shaun Hardcastle	Non-Executive Director	5 October 2017	18 May 2021

The principal continuing activities of the Group during the year was the provision of software solutions primarily to the education sector, and the provision of training services.

Dividends

There were no dividends paid or recommended during the financial year ended 31 December 2021 (2020: Nil).

Review of operations

Schrole Group Ltd reported a loss for the year ended 31 December 2021 of $2,438,844 (2020: $2,177,382 loss).

The net assets of the Group as at 31 December 2021 were $3,694,983 (2020: $2,189,108).

The Group's cash and cash equivalents as at 31 December 2021 were $4,964,008 (2020: $5,107,987).

Significant changes in the state of affairs

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

Highlights during the year

Schrole is successfully moving towards realising its ambition of being a complete HR SaaS solution for teachers and educational organisations. Two additional modules of the Group's Schrole HR platform were successfully launched in the second half of the year with Schrole Connect 3.0 launched on 15 July 2021 and Schrole Events launched on 21 September 2021. In addition, subsequent to year end a third module, Schrole Engage 1.0, was launched on 21 February 2022, ahead of time and within cost expectations. The release of Schrole Engage 1.0 means that all Schrole HR modules are now in market, significantly expanding cross-sell and up-sell opportunities. The delivery of the new software represents a significant strategic opportunity, with the full Schrole HR solution available for sale to the international schools sector and adjacent markets.

On 8 July 2020, Schrole announced that it had agreed to terminate its agreement in June 2022 with International Schools Services, Inc ('ISS") for sales of the ISS-Schrole Advantage product ('Advantage'). Up to

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