XTEK : 2017 Appendix 4E

Manager,‌

Company Announcements Office Australian Securities Exchange Exchange Centre

Level 4, 20 Bridge Street

SYDNEY NSW 2000 31 August 2017

By Electronic Lodgement

Dear Sir/Madam,

In accordance with the Listing Rules, please find attached the Preliminary Final Report (Appendix 4E) for XTEK Limited (XTE) for the financial year ended 30 June 2017.

Should you require any further information in respect to this matter please contact the Managing Director, Mr Philippe Odouard at Philippe@xtek.nett or 02 61635588 in the first instance.

Yours sincerely,

Lawrence A. Gardiner Company Secretary

Attachment: Appendix 4E - 2017 Preliminary Final Report for XTEK Limited.

ABN 90 103 629 107

APPENDIX 4E

PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

GIVEN TO THE ASX UNDER LISTING RULE 4.3A

Current period: 1July 2016 to 30 June 2017

Prior corresponding period: 1July 2015 to 30 June 2016

Dividends

Amount per security

Franked amount per

security

Final dividend Nil Nil

Interim dividend Nil Nil Record date for determining entitlements to dividend Not applicable

Profit/(loss) per share attributable to the ordinary equity holders of

the company

Notes

2017

$

2016

$

Basic profit/(loss) per share 5 0.002 (0.073)

Diluted profit/(loss) per share 5 0.002 (0.073)

Net tangible asset backing per share

Notes

2017

$

2016

$

Net tangible asset backing per share 5 0.193 0.076

• XTEK Group returns to profitability in FY17

• Group revenue of $9.023 million - a $5.7m increase from FY16

• Group net profit of $61,225 - a $1.6m increase from FY16 results

  XTEK is pleased to announce that it has recorded a very strong second half performance. Revenue for Financial Year 2017 from the sale of goods and services increased by 166% to $9m (2016: $3.3m) and a net profit of $61,225 compared to a loss of $1.5m in FY16 and a loss of $1.3m in the first half of FY17. The significant rise in revenue for FY17, reflects increased business sales for both Value Added Reseller Products and In-house Products.

  The simplified Income Statement for the financial year ended 30 June 2017 is outlined below:

  1st Half				2nd Half				Full Year
  Dec-16 Dec-15 $'000		Change $'000 %		Jun-17 Jun-16 $'000		Change $'000 %		Jun-17 Jun-16 $'000		Change $'000 %
  Revenue: sale of goods and services - Reseller products
  	187	1,099	(912)	-83%	2,928	430	2,498	581%	3,115	1,529	1,586	104%
  - In-house products	609	391	218	56%	1,832	106	1,726	1628%	2,441	497	1,944	391%
  - Logistics engineering & maintenance	293	355	(62)	-17%	2,857	463	2,394	517%	3,150	818	2,332	285%
  Grants and other revenue	41	313	(272)	-87%	276	196	80	41%	317	509	(192)	-38%
  Total revenue	1,130	2,158	(1,028)	-48%	7,893	1,195	6,698	561%	9,023	3,353	5,670	169%
  Gross profit Gross profit %	137 12%	626 29%	(489) 17%	-78% 58%	3,360 43%	644 54%	2,716 11%	422% 21%	3,497 39%	1,270 38%	2,227 -1%	175% -2%
  Other income Total expenses	329	264	65	25%	267	265	2	1%	596	529	67	13%
  	(1,806)	(1,598)	(208)	13%	(2,226)	(1,789)	(437)	24%	(4,032)	(3,387)	(645)	19%
  (Loss) / profit before tax	(1,340)	(708)	(632)	89%	1,401	(880)	2,281	259%	61	(1,588)	1,649	104%
  Income tax	-	-	-	-	-	-	-	-	-	-	-	-
  Total (loss)/profit after tax	(1,340)	(708)	(632)	89%	1,401	(880)	2,281	259%	61	(1,588)	1,649	104%

  The Group had a successful capital raise of $3.1m during June 2017. The Group also ended the financial year without debt as a result of its successful trading performance. Please refer to the commentary on results for the period and preliminary financial statements for further explanation regarding the above results.

  COMMENTARY ON THE RESULTS FOR THE PERIOD

  Agency Sales

  The XTEK business covers a range of products, equipment solutions and maintenance services:

• Value Added Reseller Products

  • Unmanned Aerial Systems (UAS)

  • Explosive Ordnance Disposal (EOD) equipment

  • Tactical weapons and protective equipment

  • Forensic equipment and products

• In-House Development and Manufactured Products

  • XTatlasTM digital imagery

  • Ballistic Plates and Helmets produced with XTclave™

  • Weapon systems (rifles)

• Logistic Engineering and Maintenance

  • Service and repairs

  • Training

There was an increase in capital expenditure during the second half, by Federal and State Governments to meet upgraded defence and homeland security requirements. The Group responded strongly to meet these new demands of Government, through the provision of specialist defence and homeland security products and services. Accordingly, this resulted in significant sales of EOD equipment and tactical weapon systems over the reporting period, through the sale of unmanned ground vehicles, bomb response equipment and Tac2 Sniper Rifle Systems.