Rule 4.7B

For personal use only

OVATO LIMITED

ABN 39 050 148 644

Appendix 4C - 31 DECEMBER 2021

Company Update & Quarterly cash flow report

for entities

subject to Listing Rule 4.7B

27 January 2022: Ovato Limited ("Ovato") (ASX: OVT) lodges the attached Appendix 4C for the three-month period ended 31 December 2021.

About Ovato Limited

The principal activity of Ovato is commercial printing and associated services.

Activities update

Following extensive restructuring initiatives, which included the sale of the Marketing Services and Retail Distribution businesses and the closure of the Residential Distribution business last year, the primary focus of Ovato continues to be on driving further cost efficiencies in its core printing operations. This has resulted in a positive impact on cash flows from operating activities for the current quarter, with the net cash loss of $4.3M being significantly lower than the prior quarter of $23.2M.

Ovato continues to be adversely impacted financially and operationally by the ongoing COVID-19 restrictions in Australia and in New Zealand. This has had a significant effect on retail activity and supply chain management.

The impacts of COVID are also flowing through to our retail customers, where continuity of supply is likely to influence their future advertising decisions.

Delivery timelines for both paper and ink supplies for Ovato have also been disrupted as well, with significant price increases being incurred for these materials. These disruptions and price increases have had an adverse effect on operating cash flow.

During the last quarter, Ovato undertook the capital management initiatives of a minimum holding share buyback and a share consolidation.

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

Ovato continues to be grateful for the continued support of its customers and suppliers, and are pleased that major recurring contracts have been renewed.

Cashflow commentary

Cash from operations for the second quarter of FY22 was negative A$4.3M and net cashflow from investing activities was positive A$0.8M.

Cash and equivalents at December 31 2021 was $9.3M.

Name of entity

Ovato Limited

ABN

Quarter ended ("current quarter")

39 050 148 644

31 December 2021

Consolidated statement of cash flows

Current quarter

Year to date (6

$A'000

months)

$A'000

1.

Cash flows from operating activities

1.1

Receipts from customers

91,775

215,931

1.2

Payments for

(a)

research and development

-

-

(b) product manufacturing and operating

(60,101)

(160,217)

costs

(c)

advertising and marketing

(36)

(72)

(d)

leased assets

(3,443)

(4,991)

(e)

staff costs

(27,325)

(63,392)

(f) administration and corporate costs

(2,844)

(5,551)

1.3

Dividends received (see note 3)

-

-

1.4

Interest received

215

323

1.5

Interest and other costs of finance paid

(1,049)

(2,047)

1.6

Income taxes paid/received

(13)

(39)

1.7

Government grants and tax incentives

-

-

1.8

Other

-

-

(a)

AASB16 lease interest payments

(1,514)

(3,154)

1.9

Net cash from / (used in) operating

(4,335)

(23,209)

activities

ASX Listing Rules Appendix 4C (17/07/20)

Page 2

+ 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 (6

$A'000

months)

$A'000

2.

Cash flows from investing activities

2.1

Payments to acquire or for:

(a)

entities

-

-

(b)

businesses (cash in liquidated entities)

-

-

(c) property, plant and equipment

(292)

(557)

(d)

investments

-

-

(e)

intellectual property

-

(16)

(f)

other non-current assets

-

-

2.2

Proceeds from disposal of:

(a)

entities

-

-

(b)

businesses

-

-

(c) property, plant and equipment

140

218

(d)

investments

-

-

(e)

intellectual property

-

-

(f)

other non-current assets

-

-

2.3

Proceeds from Sales of Non-core

-

27,515

Business's

2.4

Dividends received (see note 3)

-

-

2.5

Other (Receipts from sub-leases excluding financing

998

1,507

component)

2.6

Net cash from / (used in) investing

847

28,668

activities

3.

Cash flows from financing activities

3.1

Proceeds from issues of equity securities

-

-

(excluding convertible debt securities)

3.2

Proceeds from issue of convertible debt

-

-

securities

3.3

Proceeds from exercise of options

-

-

3.4

Share Buy-back

(129)

(129)

3.5

Proceeds from borrowings

4,435

4,435

3.6

Repayment of borrowings

(1,253)

(9,847)

3.7

Transaction costs related to loans and

-

-

borrowings

3.8

Dividends paid

-

-

ASX Listing Rules Appendix 4C (17/07/20)

Page 3

+ See chapter 19 of the ASX Listing Rules for defined terms.

Appendix 4C Quarterly cash flow report for entities subject to Listing Rule 4.7B

For personal use only

Consolidated statement of cash flows

Current quarter

Year to date (6

$A'000

months)

$A'000

3.9 Other

(a)

AASB 16 lease principal payments

(4508)

(9,236)

(b)

Cash backing ANZ G'tee's and other

1,431

1,676

facilities

3.10 Net cash from / (used in) financing

(24)

(13,101)

activities

  • Proceeds & Repayments for the Receivables Facility are determined by the net movement in the quarter of the receivables funding.

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

4.1

Cash and cash equivalents at beginning of

12,836

16,852

period

4.2

Net cash from / (used in) operating

(4,335)

(23,209)

activities (item 1.9 above)

4.3

Net cash from / (used in) investing activities

847

28,668

(item 2.6 above)

4.4

Net cash from / (used in) financing activities

(24)

(13,101)

(item 3.10 above)

4.5

Effect of movement in exchange rates on

(59)

55

cash held

4.6

Cash and cash equivalents at end of

9,264

9,264

period

5.

Reconciliation of cash and cash

Current quarter

Previous quarter

equivalents

$A'000

$A'000

at the end of the quarter (as shown in the

consolidated statement of cash flows) to the

related items in the accounts

5.1

Bank balances

9,264

12,836

5.2

Call deposits

-

-

5.3

Bank overdrafts

-

-

5.4

Other (provide details)

-

-

5.5

Cash and cash equivalents at end of

9,264

12,836

quarter (should equal item 4.6 above)

ASX Listing Rules Appendix 4C (17/07/20)

Page 4

+ 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

6.

Payments to related parties of the entity and their

Current quarter

associates

$A'000

6.1

Aggregate amount of payments to related parties and their

976

associates included in item 1

6.2

Aggregate amount of payments to related parties and their

-

associates included in item 2

Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.

Included in the cash flow report are payments made to Rathdrum Properties Pty Ltd (Rathdrum) and SBM Group of companies (SBM) of which a Non-Executive Director and Managing Director are related parties. The company leases properties from Rathdrum and obtain marketing services from SBM.

Payments for the quarter ended 31st December 2021 excluding GST;

-

Rathdrum

$0.75M

-

SBM

$0.06M

Salaries and superannuation paid to related parties and their associates $0.17M.

ASX Listing Rules Appendix 4C (17/07/20)

Page 5

+ See chapter 19 of the ASX Listing Rules for defined terms.

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Ovato Limited published this content on 26 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2022 00:08:04 UTC.