GO2 People : March 2022 Quarterly Report & 4C

ASX ANNOUNCEMENT

29 April 2022

For personal use only

Appendix 4C: Operations Update & Quarterly Cashflow Report

Quarter Ended 31 March 2022

The GO2 People Ltd (ASX:GO2) ("GO2" or the "Company") is pleased to release its quarterly 4C Cashflow Report and Operations Update for Q3 FY2022.

Quarterly Highlights

• • Advanced Traffic Management (ATM) contract commenced.

• • Increased margins in renegotiation of contract with Apprentice Host Employer.

• • Successful tender contract with Department of Education, Skills and Employment.

• • Mr. Steven Richards appointed as Chief Financial Officer (CFO) effective immediately.

Operations Update

The focus of the business moving forward is to leverage from foundation/transformational work completed over the previous 2 quarters and deliver outcomes that underpin a sustainable and profitable business.

On 9 February 2022, the Company announced an exclusive services agreement to service the human resources and training requirements of the Advanced Traffic Management group of companies ("ATM").

GO2 estimates that the labour hire component of the Services Contract with ATM could represent approximately $22 million in new revenue in the first year alone, based on ATM's projected labour requirements through to 30 June 20231. It is also anticipated that additional revenue will be generated from recruitment, traineeship and training services over the course of the contract term.

1 This estimate assumes that Skill Hire provides labour hire personnel to meet at least ATM's projected labour requirement to 30 June 2023, including that in the first year ATM requires an average of 270 employees working 5 days per week, at an average of 8.75 hours per day, plus 70 employees working 8 hours per day on both weekend days. The actual revenue amount may differ materially from this estimate if ATM's requirements change over the course of the Services Contract, including if the Services Contract is terminated.

The GO2 People Ltd

Level 2, 182 St Georges Terrace Perth WA 6000

ASX: GO2

ACN: 616 199 896

www.thego2people.com.au

For personal use only

The Company commenced its first payroll of traffic controllers on 10 March 2022 and within 4 weeks has already achieved a run rate of approximately 70% of the estimated monthly contract value, and the Company is on track to report the full value by the end of this financial year.

Renegotiation of rates with the Company's largest Apprentice Host, who currently supports 65 apprentices in WA, will result in improved apprenticeship margins, and is indicative of a whole-of-business focus on improving margins across the existing client base.

GO2's apprenticeship business was impacted in January and February 2022 by seasonal holidays, Covid vaccination mandates and apprentices leaving the industry. Overall, apprentices have maintained a positive headcount, with renewal growth in this area, which will provide a positive impact to the Q4 2022 results.

Total labour hire revenue was impacted by the flood events in Queensland with a number of mining employees unable to work for several weeks.

During Q3 GO2 and its subsidiary Skill Hire WA Pty Ltd received tender award results for contracts with the Department of Education, Skills and Employment, (Refer ASX Release dated 23 March 2022). Whilst the Company was successful in several tender wins for long-term government contracts, it was not successful in securing growth into other states outside of WA. A plan exists to grow the JobReady Services business with innovative product design to service Workplace Australia contract holders. Many encouraging partnership conversations are progressing, and the Company will be in a position to update on the outcome of these in early FY 2023.

Broadly the business is operating in a buoyant market with many exciting opportunities. The Boosting Apprenticeship Commencement (BAC) government grants for new Apprentices and Trainees has been extended until 30 June 2022.

High demand for recruitment services exists in all serviced markets, and the Company is experiencing a large appetite from its existing client base for its value proposition of helping to "build their workforces" with GO2's vertically integrated service offering.

The GO2 People Ltd

Level 2, 182 St Georges Terrace Perth WA 6000

ASX: GO2

ACN: 616 199 896

www.thego2people.com.au

For personal use only

Cashflow Update

Net cash outflows from operations were $297K for the quarter. Cash receipts fell by $4.29 million compared to Q2 FY22. Flooding in Queensland and holiday periods in January impacted labour services with reduced billing over the period. This was offset by lower operating costs ($2.45 million lower) and lower staff costs ($2.3 million lower) compared to the previous quarter.

Net cashflows from financing activities were -$759K, of which $424k was a net repayment in the amount drawn under the ScotPac debtor financing facility.

At 31 March 2022 the Company had available cash of $3.64 million, in addition to a $1.025 million bank overdraft facility for general working capital (currently undrawn).

The Appendix 4C accompanies this announcement.

Superannuation Guarantee Liability

As Announced to ASX on 17 January 2022, the Company has lodged further superannuation guarantee statements with the ATO for the period 1 July 2018 to 30 June 2021, disclosing a potential further liability of $2.66 million. As the potential liability is self-reported, GO2 intends to make submissions seeking remission of any additional penalties or charges. The Company has fully provided for the SGC liability and subject to approvals, intends to work with the ATO to make the repayments out of excess working capital over a period of time.

People

On 30 March 2022, the Company announced the appointment of Mr. Steven Richards as its new Chief Financial Officer (CFO) effective immediately.

Mr. Richards is a Chartered Accountant and highly experienced CFO having worked in a number of ASX-listed entities. He has an undergraduate honours degree in Accounting Cum Laude, and a Master of Business Administration (MBA).

The GO2 People Ltd

Level 2, 182 St Georges Terrace Perth WA 6000

ASX: GO2

ACN: 616 199 896

www.thego2people.com.au

For personal use only

Corporate

During the quarter 25,426,418 GO2 fully paid ordinary shares were released from voluntary escrow. The shares are quoted on the ASX and were issued as Initial Consideration for the acquisition of Hunter Executive Search Consultants Pty Ltd completed in March 2021.

The Company has 406,638,254 fully paid ordinary shares on issue 31 March 2022, of which 181,919,208 are held in voluntary escrow.

Related Parties Payments During the Quarter

For the purposes of ASX Listing Rule 4.7C.3, payments of $122k to related parties as disclosed at Item 6 of the Appendix 4C relate to payments to Directors for agreed Directors' salaries, fees and superannuation.

Commentary

GO2 Board Chair Darren Cooper said,

"GO2 Group has been through significant changes over the past 9 months following the acquisition of Skill Hire. Elements of the current quarter's operating result indicate we have made significant operational improvements and are on a sustainable growth path.

We continue to work through legacy issues, and investors will note that we have now completed our superannuation reconciliation and self-reporting to the ATO.

As a Company, we have strengthened our Board and Executive team to ensure we are well-positioned for future growth."

For more information, please contact:

Darren Cooper

Board Chairinvestor@thego2people.com.au

Issued by: The GO2 People Ltd

Approved by: The Board of The GO2 People Ltd

The GO2 People Ltd

Level 2, 182 St Georges Terrace Perth WA 6000

ASX: GO2

ACN: 616 199 896

www.thego2people.com.au

For personal use only

About The GO2 People Ltd

The GO2 People Ltd (ASX:GO2) is a leading provider of recruitment and training services to industry throughout Australia.

The day-to-day operations of the company are underpinned by strong core values and an ethical approach to business principles which drive innovation, collaboration and an ongoing commitment to continuous improvement.

To learn more please visit:www.thego2people.com.au

The GO2 People Ltd

Level 2, 182 St Georges Terrace Perth WA 6000

ASX: GO2

ACN: 616 199 896

www.thego2people.com.au

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