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Quarterly Report March 2015
255 Hay St, Subiaco, Western Australia 6008.
C/ - Maxim Hall Chadwick
,
www.libertyresources.com.au
MD + 61407737973
Company Sec +61 411558940
Registered Office:
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CIRRUS NETWORKS HIGHLIGHTS
Cirrus achieved record unaudited revenue of $4.1 million for the quarter
This represents a revenue growth rate of over 250% on last year’s audited third
quarter revenue of $1.57million.
Cirrus has been recognized as Australia’s second fastest growing technology
company
Cirrus has secured new contracts worth circa $4.6 million in the March 2015 quarter
alone
LBY CORPORATE HIGHLIGHTS
Option to acquire 100% of the issued capital of Cirrus Networks Pty Ltd (“Cirrus”)
exercised in January 2015
Preparation of documentation for Shareholder meeting to approve the acquisition of
Cirrus and Prospectus required for a compliance re-list on ASX 90% complete
LBY Board size reduced to 3
Fixed costs reduced by a further $300,000 per annum
EGM to approve the acquisition of Cirrus is to be held on 22 May
MINING ASSETS
Negotiations for the disposal of all the Company’s remaining mining assets well
advanced
Sales will occur subject to all necessary approvals and completion of the Cirrus
acquisition.
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CORPORATE
The Company was required to hold a “Spill Meeting”, in January 2015. The Chairman Ian Smith, and non-executive director Horst Hueniken were not re-elected and the Board wishes to thank them for the years of service to the Company and wishes them both well in future endeavors.
The Board now comprises 3 Directors, Acting Chairman Andrew Haythorpe, Charles Thomas and Patrick Glovac, all of whom are now focused on completing the Cirrus acquisition.
CIRRUS ACQUISITION
On 27 January 2015, Liberty exercised its option to acquire 100% of the issued capital of information
technology company Cirrus, subject to all shareholder and other required approvals.
The acquisition of Cirrus will constitute a change to the nature and scale of Liberty’s activities and as
a result Liberty will be required to obtain the approval of its Shareholders to these changes. Liberty
will also be required to re-comply with Chapters 1 and 2 of the Listing Rules.
Preparation of the documentation required for the Shareholders’ meeting to approve the acquisition
of Cirrus; as well as the Prospectus required for a compliance re-list on ASX is well advanced and the
Notice of Meeting has been dispatched, with the Shareholders’ meeting to be held on 22 May 2015.
About Cirrus
Cirrus is a Western Australian based Information Technology (“IT”) solutions integrator which assists both corporations and governments reduce costs and improve services. Cirrus provides and implements state of the art hardware and software systems for its clients.
From commencement of operations in 2012, Cirrus recorded audited revenue of $5.9m in its first full
year of operation (to June 2014). Cirrus’ rapid growth is driven by its expertise in enabling clients to
do “more with less” through innovative, leading edge technology solutions that drive efficiency and
profits.
Cirrus has contracts in place with some $22m worth of work “in pipe” with some of Australia’s
premier companies including;
Argyle Diamonds
Western Australia Police
Roy Hill Iron Ore
LandCorp
Independence Group NL
Tronox Ltd
Emeco Holdings Ltd; and
Keystart Home Loans
As announced on 30 March 2015, Cirrus has also secured three major new contracts totalling
approximately $4.6 million in revenue, which will support its expansion into new target industries.
These new contracts are as follows (all values approximate):
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$2.1 million EMC storage contract with Western Australia’s largest locally
operated bank
$1.75M – iiNet’s VMware Enterprise Licencing Agreement
$750,000 Curtin University’s next generation Palo Alto security solution
Cirrus has achieved substantial success in identifying revenue and profit growth opportunities across
Australia with corporations and government agencies who strive to reduce operating costs and
increase profits or services through better use of technology.
Terms of the Acquisition
There is no cash consideration involved in the purchase.
The proposed transaction involving the following (as varied in two aspects by agreement between
the parties – see ASX release made on 20 March 2015 and below):
1. Cirrus shareholders initially being issued that number of Liberty shares that equates to
52.6% of Liberty’s then issued capital (“Initial Shares”);
2. The number of Initial Shares being conditional on Liberty having a cash balance of at
least $3,000,000 (net of all fees associated with a capital raising and re-compliance
costs, at completion), but with the 52.6% shareholding to reduce proportionally in the
event that Liberty has a greater cash balance at that time;
3. The issue of further shares to Cirrus shareholders upon the meeting of certain
milestones, namely:
a. If Cirrus achieves AUD$12,000,000 in gross revenue with a minimum Gross Profit
of 10% within a period of 2 years from the settlement date (“Milestone 1”), then
50,000,000 ordinary shares in Liberty;
b. If Cirrus achieves AUD$2,000,000 in EBIT during any rolling period of 12 months
within a period of 3 years from the Settlement Date (“Milestone 2”), then
25,000,000 ordinary shares in Liberty; and
c. If Cirrus achieves AUD$4,000,000 in EBIT during any rolling period of 12 months
within a period of 3 years from the Settlement Date (“Milestone 3”), then
17,500,000 ordinary shares in Liberty.
Prior to the agreed change, these clauses referred to parcels of shares to certain values on the
achievement of the Milestones. The change was made to permit the Company to obtain waivers
from ASX to allow for the issue of these Milestone shares later than the 3 months post-meeting time
period otherwise imposed by the ASX Listing Rules.
The transaction includes the appointment of three new Directors, being Cirrus founder, Frank
Richmond (as Managing Director), Andrew Milner (as Non-Executive Chairman) and Matthew
Sullivan (as a Non-Executive Director), with Charles Thomas and Andrew Haythorpe stepping down
from the Board. Patrick Glovac will remain as a Non-Executive Director.
Information on the proposed new Directors is as follows:
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Frank Richmond
Frank Richmond has over 17 years’ experience in the technology business, having started his career
in the UK, where he had success in both large and small Network Integrators, helping drive strategy
and delivering exceptional growth to revenues.
Latterly in the UK he was part of the management team for Scalable Communications in the role of
director for Strategic and New Business and was responsible for evolving the business into one of
the most successful Juniper Networks partners in the UK with revenue growth of over 100%. In that
role he was also instrumental in initiating negotiations that eventuated in the successful buyout of
the business by Alternative Networks (LSE code AN.)
From there Frank forged a successful sales career at F5 Networks that brought him to Australia in
2011 before moving to Dell to run their Large Enterprise business in 2012 and achieving its Top
Achiever award in his first year.
Frank is a customer focused sales expert and a natural leader and has taken Cirrus from an
embryonic idea and founding in 2012 to one of the fastest growing Technology Solutions providers
in Australia, coming 2nd in the Deloitte Fast 50 Tech Companies– Rising Star category in its first full
year of trading.
As a consequence of his post roles in both the UK and in Australia, Mr Richmond has strong
relationships throughout the industry with a proven ability to develop and sustain key relationships
up to board level. He is an innovative and effective team builder who delivers world class customer
service.
Andrew Milner
Andrew Milner is a veteran of the Australian Information Communications Technology industry and
has more than 20 years experience in managing successful high-growth technology businesses.
Founding Wantree Internet (“Wantree”) in 1995 (which became one of Australia’s first commercial
Internet Service Providers (“ISPs”), he was appointed to the iiNet board when Wantree was vended
into the iiNet IPO in 1999. Mr Milner spent 9 years with that company in a variety of executive and
non-executive roles. iiNet has grown to a $1.4billion market capitalization with over 2,000 staff and
$1 billion in annual revenue, and is now the second largest ADSL broadband supplier in the
Australian market after Telstra.
From 2004 Mr Milner was co-founder and non-executive Chairman of L7 Solutions, one of WA’s
fastest growing systems integrators, with a turnover of $55m at the time of its acquisition by Amcom
Telecommunications in 2011.
Mr Milner is currently non-executive Chairman of digital marketing business Roobix Pty Ltd.
Matthew Sullivan
Matthew Sullivan has more than 20 years experience in the Information Technology (“IT”) industry
and has held various executive roles within strong performing and high growth IT organisations in
Australia and was CEO and co-founder (with Mr Milner) of L7 Solutions in 2004 until its 2011
acquisition by Amcom.
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During this time the company was awarded numerous industry accolades including:
5th fastest growing WA company in 2007 (WA Business News);
18th fastest growing Australian company in 2008 (BRW Fast 100);
2005 Cisco A/NZ Partner of the Year; and
2010 EMC WA partner of the Year.
Mr Sullivan was also a 2005 and 2008 winner of the WA Business News "40 under 40" and Western
Region finalist in the 2010 Ernst & Young Entrepreneur of the Year.
Most recently Mr Sullivan has been Chief Solutions Officer of Amcom.
MINING ASSETS
Subject to completion of the Cirrus acquisition and subject to Shareholder approval, the Company
intends to dispose of the Company’s remaining mining assets, via the disposal of the 3 wholly owned
subsidiaries that hold the same, namely:
Urea Corp of Australia Pty Ltd - Proposed low cost gas and fertiliser projects
Rhodes Resources Pty Ltd - Western Australian Exploration Licence Application
Boab Energy Pty Ltd – EPC 1949 Coking coal JV in Queensland’
The Company will update the market with further releases about these matters during the current
Quarter.
The Company has lodged an application with the Ontario, Canada Ministry of Government Services
to dissolve its wholly owned Canadian subsidiary LibertyCAN Inc, which has a nil balance sheet and
which dissolution has been approved in writing by the Ontario Ministry of Finance.
Details of all Liberty Permits and Applications are set out in the following tables:
Permits:
Tenement Grant Date Location Sub Blocks *Area Km2
Basin
EPC1949 - 40% 16-June-13 138 Km South West of Mackay, Qld
9 38 Bowen
MDL446 28-Oct-13 35km North West of Injune, Qld
25 87 Denison For
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Applications:
TENEMENTS ACQUIRED BY THE COMPANY DURING THE QUARTER
NIL
TENEMENTS DISPOSED OF DURING THE QUARTER
NIL
For enquiries please contact:
Andrew Haythorpe
Managing Director
T: + 61 407737973
Further information on Liberty Resources Limited can be obtained from its web site at
www.libertyresources.com.au
Tenement Location Sub
Blocks
*Area Sq.
Km
Basin
MDLA 479
E 66/89
30km North west of Injune, Qld
60km North of Northampton, Ajana, WA
25
32
87
72
Denison
North
Perth
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APPENDIX 5B
MINING EXPLORATION ENTITY AND OIL AND GAS EXPLORATION ENTITY QUARTERLY
REPORT
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013
Name of entity
Liberty Resources Ltd
ABN Quarter ended (“current quarter”)
98 103 348 947 31 March 2015
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows related to operating activities
Current quarter $A’000
Year to date (9 months) $A’000
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration
(59) (275)
(425) (877)
1.3 Dividends received 1.4 Interest and other items of a similar nature
received 1 6
1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (Refunds – Tax Related) - 627
Net Operating Cash Flows
(333) (669)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets
1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets
1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material)
Net investing cash flows
1.13 Total operating and investing cash flows (carried forward)
(333) (669)
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Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. - 601 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) - (25)
Net financing cash flows
- 576
Net increase (decrease) in cash held
(333) (93)
1.20 Cash at beginning of quarter/year to date 935 695 1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter 602 602
PAYMENTS TO DIRECTORS OF THE ENTITY, ASSOCIATES OF THE DIRECTORS, RELATED ENTITIES OF
THE ENTITY AND ASSOCIATES OF THE RELATED ENTITIES
Current quarter
$A'000
1.23
Aggregate amount of payments to the parties included in item 1.2 117
1.24
Aggregate amount of loans to the parties included in item 1.10
1.25
Explanation necessary for an understanding of the transactions
Payments include director’s salaries, director’s fees and director’s superannuation
NON-CASH FINANCING AND INVESTING ACTIVITIES
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
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2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
FINANCING FACILITIES AVAILABLE Add notes as necessary for an understanding of the position.
Amount available $A’000
Amount used $A’000
3.1 Loan facilities
3.2 Credit standby arrangements
ESTIMATED CASH OUTFLOWS FOR NEXT QUARTER
$A’000
4.1 Exploration and evaluation
20
4.2 Development
4.3 Production
4.4 Administration
250
Total
270
RECONCILIATION OF CASH
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Current quarter $A’000
Previous quarter $A’000
5.1 Cash on hand and at bank 554 849
5.2 Deposits at call 48 86
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22)
602 935
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CHANGES IN INTERESTS IN MINING TENEMENTS AND PETROLEUM TENEMENTS
Tenement reference and location
Nature of interest (note (2))
Interest at beginning of quarter
Interest at end of quarter
6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements and petroleum tenements acquired or increased
ISSUED AND QUOTED SECURITIES AT END OF CURRENT QUARTER Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per security (see note 3) (cents)
Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description)
7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions
7.3 +Ordinary securities
287,449,326 287,449,326
7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs
7.5 +Convertible debt securities (description)
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7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor)
No. 6,000,000 9,000,000 12,000,000 2,400,000 1,000,000 20,000,000 14,000,000 Total: 64,400,000
Exercise price 15.0c 15.0c 9.0c 9.0c 9.0c 2.0c 4.0c
Expiry date 31/12/2016 31/12/2017 31/12/2018 31/12/2018 31/12/2018 01/04/2015 31/12/2019
7.8 Issued during quarter
7.9 Exercised during quarter
7.10 Expired during quarter
2,000,000 200,000
15.0c 9.0c
31/12/2016 31/12/2018
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)
COMPLIANCE STATEMENT
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ............................................................ Date: ......20/4/15......................
(Company secretary)
Print name: ...........Catherine Anderson..............................................
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NOTES
1 The quarterly report provides a basis for informing the market how the entity’s activities have
been financed for the past quarter and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes attached to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining
tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the
entity is involved in a joint venture agreement and there are conditions precedent which will change its
percentage interest in a mining tenement or petroleum tenement, it should disclose the change of
percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1
and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources
and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting
Standards for foreign entities. If the standards used do not address a topic, the Australian standard on
that topic (if any) must be complied with.
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