ASX Announcement
Acrow Limited. 2A Mavis Street, Revesby NSW 2212
Page 1
27 September 2024
FY24 ANNUAL REPORT RELEASE
Acrow Limited (ASX: ACF) (“Acrow” or “the Company”) is pleased to release the Annual Report for
Financial Year 2024.
As noted at the time of the FY24 results release (21 August 2024), the new financial year has
commenced very strongly both in terms of secured new hire contracts and pipeline.
We look forward to providing an update at the Annual General Meeting, to be held on the 12th of
November 2024.
This release was approved by the Acrow Board of Directors.
-ENDS-
About Acrow
Acrow Limited (ASX: ACF) is a leading provider of smart integrated construction systems across
formwork, industrial services and commercial scaffolding in Australia. Enhancing our portfolio are
falsework and shoring, screen solutions, Jacking Systems (also known as Jumpform), and internal
engineering capabilities.
With over 80 years of experience, Acrow has grown from a small local business to a national leader in
the construction industry. Our journey is marked by continuous innovation, expansion, and a vision to
set the national standard in engineered industrial and construction services. We’re committed to
removing barriers to success for construction and industrial professionals through our smart solutions,
can do attitude, and strong partnerships.
Operating in 10 locations with over 60,000 tonnes of equipment, Acrow aims to expand its presence in
Australia’s civil infrastructure market. Our national network with local expertise ensures efficient project
delivery while adhering to best practices. To learn more, please visit: www.acrow.com.au
For further information, please contact:
Steven Boland
Andrew Crowther
Managing Director
Chief Financial Officer
Ph: +61 (02) 9780 6500
Ph: +61 (02) 9780 6500
Annual
Report 2024
20
21
22
23
24
87.3
105.7
148.3
168.5
215.8
20
21
22
23
24
19.5
24.3
36.3
53.2
74.6
20
21
22
23
24
4.0
4.9
7.2
11.6
11.5
Total Revenue $215.3m
+28%
+40%
-1%
EBITDA $74.6m
Earnings per Share 11.5c
Cover: Cross River Rail, Albert Street station jumpform
P1: Wee Hur student village, Redfern, Sydney showing
jumpform jacks. Up to 60 (yellow) jacks can run
simultaneously.
Raising the Standard
Acrow is a leading provider of
smart integrated construction
systems across formwork,
industrial services and
commercial scaffolding in
Australia. Enhancing our portfolio
are falsework and shoring, screen
solutions, Jumpform, and internal
engineering capabilities.
Contents
1
2024 Highlights
2 Chairman’s Report
4 Managing Director’s Report
10 Business Overview
13 Safety
14 Board of Directors
16 Financial Report
80 Directors’ Declaration
81 Independent Auditor’s Report
85 Shareholder Information
Revenue by Business Unit
Revenue by Geography
● Formwork 56.3%
● Industrial services 33.5%
● Commercial scaffold 10.2%
● QLD 53.1%
● NSW 19.5%
● VIC 14.0%
● TAS 2.2%
● SA 5.1%
● WA 6.1%
Acrow Annual Report 2024 | 1
FY24 was a year in which Acrow delivered outstanding
performance. This was driven by organic growth in our core
business, positive returns from product development and
complemented by acquisitions that have furthered the
company’s strategic expansion.
Acquisitions position Acrow
for success
We made the formational acquisition of
MI Scaffold, a leading provider of scaffolding,
rigging and access solutions in north and
central Queensland for a consideration of
$36.4 million, comprising cash of $26.4 million
and earnings-based payments of up to
$9.9 million, in November 2023.
This was the company’s first significant
acquisition in the industrial services sector and
an important step in the diversification of our
earnings and revenue streams. Our services
strengthened with the March 2024 purchase
of Benchmark Scaffolding, a Townsville-based
access solutions provider, for $9.0 million.
The attraction of our industrial services
expansion is the predictable earnings stream
that it provides, characterised by medium
to long term contracts with recurring major
industrial works such as shutdowns and strong
relationships with blue-chip clients.
This industrial services business is ‘capital light’
requiring a blend of assets and labour skills.
We can exploit our engineering expertise and
unique products to achieve improved margins.
Both recent acquisitions are exceeding
pre‑acquisition forecasts and our
acquisition‑led strategy has been hugely
successful, with the businesses being smoothly
integrated into Acrow. Starting with our initial
acquisition of Natform’s screen business on
listing in 2018, we have established a track
record of bedding down acquisitions and
extracting significant benefits early.
Our business aims to leverage its competitive
advantages across our engineering skills,
product innovation, geographic capability
and quality of people. We continue to seek out
Chairman’s Report
The strength of our engineering team continues to grow and prosper. Our
mission is to have the best people in the business throughout the company, and
we have invested in our people and supporting systems. Peter Lancken, Chairman
further acquisitions to strengthen our national
network and expedite growth.
Strategy
Acrow is a leading provider of smart integrated
construction systems across formwork,
industrial services and commercial scaffolding
in Australia. We are participating in significant
and growing markets, particularly the Australian
civil infrastructure market. The total spending
on Australian major public infrastructure which
represents a substantial source of work for
Acrow, is valued at $230 billion over the five
years from FY23 to FY271. Across our business we
maintain a record volume of contracts and work.
Our growth in the industrial services sector,
which now provides one-third of the company’s
revenue, further enhances the diversification
and sustainability of the business. The industry
dynamics are distinct to those of infrastructure
markets which require the constant winning of
new work. We have developed a clear roadmap
which identifies key opportunities for the future.
We are delighted with our success in the
jump form market which we entered through
acquisition of a world-leading technology.
The product we have developed is used
to construct the lift shaft core of high-rise
buildings. The speed of adoption of this
computer-controlled system has been
impressive and has already secured repeat
customers. Cross-selling with our premium
screens business has enabled us to ‘package’
our products and expand sales nationally.
National rebrand
Our new ‘One Acrow’ brand has elevated
perceptions of our national capability and
services and reflects the overall transformation
of the company. The holistic brand has been
well received by clients. The company’s
corporate name also simplified with a change
to Acrow Ltd during the year.
Strong financial performance
Acrow again delivered a high-quality result
in FY24, benefiting from increased scale and
diversification. Underlying net profit was a
Underlying
NPAT
$33m
up 8%
5.9c
Dividend per
share up 33%
on FY23
1
Infrastructure Australia, Infrastructure Market Capacity 2023 Report, p6
2 | Acrow Annual Report 2024
record $33.0 million, compared with $30.5 million
in FY23. Net profit on a statutory basis was
$25.6 million, compared with $23.5 million.
That this was achieved despite an increase in
Acrow’s effective tax rate to 30%, compared to
8% in FY23, demonstrated the growing strength
and scale of Acrow’s platform. At the time of
its ASX listing the company held accumulated
losses and could benefit from a low tax rate.
We have grown faster than we anticipated,
and the high margins and returns on investment
achieved has contributed to the consumption
of these tax losses, with the benefit that the
company now has franking credits which enable
payment of fully franked dividends. To place this
growth in perspective, FY24 underlying net profit
was up 266% compared to $9.0 million in FY20.
Return on equity remained strong at 27.1% in
FY24 compared to 32.7% in the previous year.
This decrease mostly reflected the higher
effective tax rate as, on a like-for-like tax basis,
return on equity increased from 25.0% in FY23.
The company maintains a strong balance
sheet and continues to be managed prudently.
A $15.0 million capital raising from institutions
that provided partial funding for the MI Scaffold
acquisition was completed in November 2023.
Our strong operating cash flow enabled us to
continue to invest in the business, pay down
debt and deliver healthy shareholder returns.
Dividends
Acrow paid a final dividend of 3.0 cents, fully
franked, up 11% on the previous final dividend
of 1.7 cents per share, 85% franked. Full year
dividends were 5.9 cents, fully franked, up 33%
on 4.4 cents per share, 94% franked.
Investing in our people
The strength of our engineering team continues
to grow and prosper. Our mission is to have
the best people in the business throughout
the company, and we have invested in our
people and supporting systems. We know the
difficulty of recruiting skilled talent and have
created internal programs to train our people
to high standards. This includes a cadet system,
developed with Queensland University of
Technology and University of Technology, Sydney.
Positive results from our professional
development programs have led to their
expansion from training engineers to
management and sales executives. We are
establishing a Centre of Excellence in Mackay
to support our concept of best practice
industrial services business.
A strong back office
We have also invested in a suite of technology
products that supports our engineering
capability, enabling us to provide market
leading plans and designs. This technology
supports our thrust to provide clients with
knockout services, faster and more effectively.
This represents an investment in both the
backbone of the business and our future,
ensuring our systems are efficient. We are at
the starting gates of implementing a new
enterprise resource planning (ERP) system to
manage our ‘back of house’ operations. This
will be a tried and tested platform with which
we are familiar.
Looking ahead
We are benefiting from cross-selling and taking
our suite of products nationwide, experiencing
organic growth across Australia. The formwork
business is performing well and, overall, the
company is very well positioned in the civil
and commercial infrastructure sectors with a
pipeline of potential work that has never been
greater. We are preparing to bid for substantial
infrastructure and related works. Across the
industrial services business we have significant
expansion opportunities.
In conclusion, I would like to thank our
shareholders for their support. You can have
great confidence in the future of this company,
which is driven by Steven Boland and his very
capable executive team and employees. Their
efforts ensure that shareholders will continue
to benefit.
Peter Lancken AM Chairman
Return on Equity
27%
Above: Metro Tunnel,
Melbourne, Victoria
Zero Harm
Improvement
44%
Acrow Annual Report 2024 | 3
This was another great year of growth for Acrow, with an
excellent result across all categories. Underlying EBITDA
increased 40% to $74.6 million, up from $53.2 million in the
previous year, which included eight months’ contribution
from MI Scaffold and three months from Benchmark
Scaffolding businesses, acquired during the year.
We experienced benefits from increased
scale, product innovation and focus on clients,
and EBITDA margin improved to 34.7%, up
3.1 percentage points.
Profit before finance costs and tax increased
38% to $46.1 million, demonstrating the benefits
of scale and that our asset acquisition program
is working well.
Revenue grew 28% to $215.3 million, driven by
strong growth in the Group’s market-leading
formwork and growing industrial services
divisions. Market share increased in every state,
strengthening our national network. Formwork
had a fantastic year, with total revenue up 19%
to $121.1 million, while Industrial Services total
revenue increased 78% to $72.1 million, which
included both acquisitions and organic growth.
A highlight was our ability to secure margins
which support the ongoing growth of our
business. While the short-term contracts
favoured by formwork clients enable higher
margin, our industrial services business offers
highly predictable recurring revenues forged by
long-term relationships with blue-chip clients.
Total sales contribution increased 28% to
$133.8 million, with the uplift largely from
new equipment hire. Margins grew across
all divisions although, as the proportion of
industrial services sales increased, overall
contribution margin was consistent at 62.1%.
Cash flow from operations, which includes
proceeds from sale of hire equipment
and recoveries from lost equipment ,
Managing Director’s Report
During the year we secured our largest single equipment supply contract,
a formwork package on the Melbourne North-East Link project valued at
$5 million. Steven Boland, CEO
was $62.4 million, representing an 84%
conversion rate.
Following acquisitions and capital investment
initiatives, total assets have increased to
$312.4 million from $218.5 million. While net
debt also grew to $68.6 million, an increase of
$22.3 million, the company’s gearing remained
relatively steady and the net debt/EBITDA
ratio was 1.1, up 6% from 1.0. We maintain tight
control of costs.
We apply a growth hurdle for capital
expenditure of 40%. It is pleasing that this
has been exceeded repeatedly. Return
on investment was over 50% in FY24. Total
capital expenditure was $30.4 million after
hire equipment replacement costs. Capital
expenditure on growth was $25.3 million, largely
related to our jacking business Jumpform and
product development such as Acrowdeck.
We completed the financial year with cash
of $5.6 million and total funds available of
$21.2 million. We are in the final stages of
restructuring our debt to reduce amortisation
on acquisition loans, reduce cost and, with
the addition of a new acquisition facility,
provide headroom with certainty of funding for
possible acquisitions.
Benefiting from a broad range
of products
Fresh revenue streams and cross selling
opportunities have been provided by recently
launched products including jumpform, used to
construct lift shafts in high-rise buildings, and
Acrowdeck, a modular slab formwork system.
Last year we entered the $150 million jumpform
market with new technology that expedites
project delivery and market leading safety
which brought new clients to our business.
Since launch, we have secured 24 system wins
across 16 projects. We won projects valued at
$7.8 million in FY24 and are well on the way to
39%
increase in
pre-tax profit
Industrial
services now
33%
of group
revenue
1
Included in Acrow’s statement of cash flows as proceeds from disposal of property, plant and equipment and under
note 5, other income on page 54.
4 | Acrow Annual Report 2024
our target of making this a $20 million business.
Cross-selling facilitated seven screen hire
contracts including three in Western Australia,
opening a new market for Acrow.
Marketing of Acrowdeck secured 12 projects,
sales exceeding $2 million and deployment of
more than 15,000 square metres of the system
across five states of Australia.
These products increase our ability to provide
clients with a one-stop offering. Innovation
creates value as we own the intellectual
property and can capitalise on our supply
chain. Our flexible products have multiple
uses which allow cross selling and continued
year‑on-year returns.
Leading the formwork market
Formwork product hire and sales grew as our
national sales platform, broad product set
and reputation for quality, safety and service
in major civil and commercial infrastructure
products has enabled us to become the market
leader. In this sector we bid for packages of
work on a regular basis, which may include
several packages on stages of a project over
several years.
Some marquee civil infrastructure projects
we participate in include Sydney Metro West
railway, which has generated total sales and
hire revenue of $5.3 million to date, and the
Snowy Hydro 2.0 renewable energy project,
valued at $23 million, in New South Wales. In
Victoria, our work includes the Westgate Tunnel,
valued at $16 million, and Metro Tunnel valued
at $24 million. Queensland projects include
Cross River Rail, valued at $15 million, and
early stages of the Coomera Connector road
corridor valued at $2.7 million.
During the year we secured our largest single
equipment supply contract, a formwork
package on the Melbourne North-East Link
project valued at $5 million.
Formwork generated 56% of group revenues. In
New South Wales we increased market share
and have doubled formwork revenue in the
past two years. Similarly in Victoria we have
increased revenue fourfold over four years, and
South Australian revenue is up four times over
two years, from a lower base.
In Queensland, where our potential pipeline
of work remains the largest in Acrow’s history,
we experienced a temporary deferral of
projects. We anticipate renewed growth as
Above: West Gate Tunnel
project, Melbourne,
Victoria
EBITDA increase
to $74.6m
40%
Revenue for
FY24, up 28%
$215.3m
Acrow Annual Report 2024 | 5
the Queensland government’s $9.78 billion
investment in new hospitals and Capacity
Expansion Program is scheduled to deliver
around 2,200 additional beds between 2024
and 2028.
Our Western Australian operations have
experienced steady organic growth. A key
factor has been bringing our innovative
products to these markets and demand has
driven tremendous growth.
Overall hire contracts won grew 17% to
$78.3 million, and at 30 June 2024 our pipeline
of potential new work was $189.0 million. In
June 2024, we secured contracts valued over
$12 million, our strongest month so far. This
includes premium screen contracts, as our
acquisitions have enabled us to take larger
projects. Our Jumpform pipeline exceeded
$42 million.
Hire contracts are a key lead indicator for our
business’ future performance, as contracts won
provide revenue when they commence. Our
increasing capability has consistently enabled
us to bid for higher value work.
Our screens business now provides both
light- and heavy-duty screens, and revenue
reached a record $15.9 million in FY24. We
won 57 projects across five states of Australia,
particularly in New South Wales where we
also secured our first contract for premium
screens. Another landmark was our largest
screens package to date valued at $2.5 million,
providing premium screens for a large high-rise
on the Gold Coast.
Industrial services acquisitions
boost labour capability
Another highlight was the acquisition of
the MI Scaffold and Benchmark Scaffolding
businesses on earnings multiples of 3.8 to 4.0
times EBITDA, representing good value. These
businesses, based in Queensland, are highly
complementary, servicing large scale projects
across the industrial, infrastructure, mining
and marine markets and across Far North and
Central Queensland.
They bring new capabilities to the Acrow
group, including modern Layher technology for
complex scaffolding projects. The businesses
significantly boost our pool of available talent,
enhancing our ability to provide services for
hospitals and large projects and furthering
our strategic aim to broaden recurring
revenue streams.
Substantial contract wins included renewal
of Acrow’s Visy Tumut contract for five years
valued at $16 million, and our Ampol refinery
contract was upgraded to about $13 million.
The Benchmark business won a Sun Metals zinc
refinery contract valued at $3 million per annum
at the time of acquisition. The MI Scaffold
business secured contracts at Kidston Hydro
Project in North Queensland and Abbot Point
Coal Terminal, both valued in the vicinity of
$5 million, shortly after acquisition.
Sales contribution surged by 81% to $27.5
million, with margins improving slightly to 38.2%.
Commercial scaffold
Commercial Scaffold revenue was $22.1 million.
While the market was driven by a shortage of
supply in the previous year, conditions have
stabilised at higher than historic levels. The
strategic exit from labour hire contracts led to
improved margins of 73.3%.
The Acrow Way
We have evolved into a full-service engineering
solutions provider, with 50 engineers across our
business. One quarter are chartered engineers.
We believe that it is vital to ‘grow our own’
people and culture. A major focus of our cadet
program is to bring young people into the
business. We nurture future engineers with
hands-on training, ensuring that they develop
well-rounded expertise and have practical
experience in real world projects.
Our plan is to build professional development
programs across all levels of the business as
part of ‘The Acrow Way’. A particular focus is
on senior management teams. Completion
of external professional development is an
essential part of rounding out their experience.
We provide sales training for people coming
into the business, familiarising them with the
Acrow Way to allow consistent, excellent
customer service.
Training has been instrumental in our achieving
leadership in formwork, and we aim to follow a
similar path for industrial services. This involves
a ‘best of breed’ approach that leverages
knowledge of Acrow’s industry‑leading
high-quality products and services. Through
the Mackay training centre which we are
establishing, we intend to provide a high
standard of scaffold training underpinned by
an urge to outperform competitors.
Managing Director’s Report (continued)
50
Engineers
on staff
11
Chartered
Engineers
50%
engineers
are customer
facing
Internally
developed
new products
in market
Expanding
3D design
offerings
6 | Acrow Annual Report 2024
System Used: Acrow Jacking Systems Jumpform
Acrow provided the design and supply of
the Jumpform system for Brisbane’s Albert
Street main station entrance building on
Lot 1.
This was Acrow’s largest Jumpform
system project to date. Its execution was
extremely complex as the system started
40 metres below street level, gradually
climbing through six large ground shoring
struts at multiple levels throughout
the excavation.
Once the Jumpform was above ground
level, it was adjusted to continue
its further stages 40 metres above
street level.
The system has proved its effectiveness,
demonstrating the simplicity of using
electric jacking controls which is the main
benefit of the system.
$15m
Acrow Project
value
2026
Planned
opening
10.2km
New rail line
5.9km of
twin tunnels
CASE STUDY:
Cross River Rail, Albert Street,
Lot 1
Acrow Annual Report 2024 | 7
Photo: Cross River
Rail – Albert Street
Station
Managing Director’s Report (continued)
Another example of our leadership is the Kidron
testing facility, which we set up several years
ago to improve product safety and reliability.
Our products are designed for stringent
Australian standards which can provide a
significant competitive advantage.
Our engineering team’s use of 3D modelling
software allow clients significant time savings.
We are skilled at creating 3D models with
automated drawing, enabling them to visualise
sections and elevations accurately.
Acrow’s safety record improved, with one lost
time injury during the year despite a significant
increase in the number of hours worked
across the business including recent industrial
services acquisitions.
Outlook
Over the medium term, the civil and
commercial construction sectors that we serve
expect significant growth over the next five to
ten years.
Some of these projects include Victoria’s ‘big
build’ which includes the North East Link tunnels
to support Melbourne’s freeway network, on
which Acrow has secured further contracts, and
the 90km suburban rail loop. In South Australia,
the 10km Torrens to Darlington project is valued
at $15.4 billion. In New South Wales, Acrow has
received its first contract for the Aerotropolis
station valued at $1 million and continues
activity on Sydney Metro West.
The Coomera Connector represents a potential
source of revenue similar to the Bruce Highway
project for Acrow in Queensland. Hospital
upgrades more than $8 billion are to be
awarded, as well as work on Brisbane Olympics
2032 venues with a total value over $3 billion.
Three months into the new year, our total
formwork hire pipeline exceeds $200 million
and is the strongest we have seen. We also
expect to benefit from the design and delivery
of proprietary new equipment for the Australian
formwork market.
While there has been some uncertainty around
the Australian economy, we are serving large
and growing markets. The industrial services
business we are building provide high certainty
of revenue, strong annuity earnings and
blue‑chip clients. We are focused on increasing
its national strength through organic growth
and potentially acquisitions, encouraged
by better than expected performance from
the MI Scaffold and Benchmark Scaffolding
businesses which have extended our
capabilities to new markets. We believe
we are on a trajectory which can deliver
exceptional growth.
Looking ahead, we anticipate that revenue will
increase in the vicinity of 20% above the FY24
result and EBITDA will experience double digit
growth. This is based on record secured hire
contract wins of $78.3 million, a record pipeline,
full year contributions from the MI Scaffold and
Benchmark Scaffold acquisitions and returns
from the Group’s capital expenditure programs.
We have a clear growth strategy and
believe that with our outstanding products,
engineering skills, professional culture and
national network, Acrow is well positioned to
exploit its leading position and participation in
major projects across Australia.
In closing, I would like to thank our every
one of our employees for their hard work
and dedication in providing our clients with
competitive, leading services.
Steven Boland CEO
Right: MI Scaffold internal
tank access, Gladstone,
Queensland
8 | Acrow Annual Report 2024
Acrow Annual Report 2024 | 9
Formwork
●Leading provider of formwork systems
in Australia
●Provides a range of wall forming panel, soffit
forming and conventional systems for large
and small construction equipment
●Dry hires formwork equipment and provides
the product that forms the temporary
mould to support concrete structures
during construction
Industrial Services
●Highly experienced team and customer
service ethic
●Generates revenue from wet hire
agreements including hire, transport, labour
and consumables
●At the forefront of scaffold service providers
in Australia to the industrial sector
Commercial Scaffold
●Premier provider of scaffolding systems
in Australia
●Provides access solutions to builders
and building contractors when working
at heights
●Generates revenue through both dry hire
and wet hire agreements
Screens
●Leading designer and hirer of heavy‑duty
and versatile screen systems for the
construction industry
●Provides screen-based formwork systems
which support the construction of
commercial high-rise buildings and civil
infrastructure, including bridges, roadworks
and train stations
FY24 Commentary
●Record revenue up 19%
●Record pipeline of $189 million including
Jumpform $42 million
FY25 Strategy
●New product development strengthening
sales nationally
●Continued expansion of Jumpform and
cross-sell opportunities
FY24 Commentary
●Organic growth and growth driven
by MI Scaffold and Benchmark
Scaffolding acquisitions
●Sales contribution up 81%
FY25 Strategy
●Capitalise on recent contract wins
●Active M&A pipeline to increase
market share
FY24 Commentary
●Strategic exit from labour-hire contracts
●After period of short supply, volumes and
pricing stabilised above historic levels
FY25 Strategy
●Disciplined capital management
●No additional capital investment
FY24 Commentary
●Record screens revenue
●57 projects nationally
FY25 Strategy
●Synergies with Jumpform driving
opportunities
●15 projects awarded and starting in first half
of FY25
Business Overview
Acrow is a leading provider of smart integrated construction
systems across formwork, industrial services and commercial
scaffolding in Australia.
10 | Acrow Annual Report 2024
Complete solution provider
A typical high-rise building offers synergies between Acrow’s
products and systems.
JUMPFORM
Jumpform system forms
the walls for the lift shaft
and stair core of the
building
COLUMN FORMWORK
SCREENS
Edge protection
screens provide
perimeter safety
for the top 3-5 levels
of the structure
HANDRAIL
Perimeter
handrail where
facade to be
installed
ACROW
LOADING BAY
Loading Bay to
accept loads
from cranes on
each floor level
Typical building cross section
SCAFFOLD
Perimeter scaffold to the
lower building
FALSEWORK
BACKPROPPING
Props below the
Acrowdeck to
transfer load
ACROWDECK
Acrow deck slab
support system
forms horizontal
concrete floors
The system climbs
with computer
controlled jacking
Acrow Annual Report 2024 | 11
System Used: Bespoke Steel Formwork
Acrow provided the design and supply of
custom steel bespoke column forms.
This project showcases Acrow’s ability to
design and supply proprietary formwork
support its customers a custom solution.
This project involved multiple unique
columns and headstocks solutions, and
Acrow provided a singular solution that
formed both elements concurrently.
Our engineering team delivered a fully
detailed design, including fabrication
and site assembly drawings, while our
site team conducted a full-scale trial
assembly in our facility to confirm the
system worked before delivery to the site.
$425m
Coomera
Connector
Stage 1 North
package
Expected
completion
2025
1 of
three new
stations on
Queensland’s
Gold Coast
CASE STUDY:
Hope Island Station
Photo: Hope Island
Station, Queensland
showing three stages
of the formwork
process
12 | Acrow Annual Report 2024
Acrow’s safety culture is built on collaboration and shared
responsibility, ensuring that all personnel are trained and
follow industry-leading safe work practices. Employees have
access to health and safety information from Arrow’s Health
and Safety team, Head of People & Culture, and through
the Acrow intranet.
Our Lost Time Injury frequency rate reduced from 2.9
in FY23 to 1.1 in FY24, an improvement of 62%. This was
achieved despite working an additional 185,378 hours
compared to FY23, following the acquisitions of MI Scaffold
and Benchmark Scaffolding. Our total recordable injury
frequency rate (TRIFR) fell from 10.0 to 5.7, an improvement
of 44%.
Key safety initiatives and programs in FY24 included:
●Implemented a comprehensive and ongoing safety
training program that equips employees with
the knowledge and skills necessary to fulfill their
safety responsibilities
●Continuous professional development and growth of the
Safety team
●Regular updates on health and safety developments for
the CEO and Executive Leadership team
●Expanded monthly safety awareness program featuring
in-depth discussion and presentation on various safety
topics from across the organisation to collaborate on
safety initiatives and sharing of best practice.
Safety
Acrow has a strong commitment to safety, prioritising the health and
well‑being of its employees, customers, and subcontractors.
20
21
22
23
24
23.8
26.8
20.7
10.0
5.7
20
21
22
23
24
11
14
14
7
5
20
21
22
23
24
2.4
11.5
3.9
2.9
1.1
20
21
22
23
24
1
6
4
2
1
Total recordable injury frequency rate
Total recordable injuries
Lost time injury frequency rate
Lost time injuries
Acrow Annual Report 2024 | 13
Board of Directors
Mr Peter Lancken AM
NON-EXECUTIVE CHAIRMAN
Peter Lancken is non-executive
Chairman of Acrow Limited and a
non-executive director at the Kennards
Group. He transformed Kennards Hire
into a premier equipment hire firm
during his 15-year tenure as Managing
Director and CEO. Peter has held
various c-suite roles at GKN and served
on the boards of Propertylink Group
and CMA Corporation. He is also a
dedicated advocate for the hire and
rental industry, serving as President
of the NSW Hire Association, Vice
President, and board member of the
National HRIA.
Peter has a Bachelor of Engineering
(Civil) from UNSW, a Graduate Diploma
in Business from Bathurst University, and
is a Fellow of the Institute of Engineers
(FIE) and a Member of the Institute
of Civil Engineers (MICE). He is also
a fellow of the Australian Institute of
Company Directors. He was awarded
the Life Membership of HRIA in 2006,
a Meritorious Service Award by the
American Rental Association in 2007,
and a Member of the Order of Australia
(AM) award in 2020 for his contributions
to the industry and community.
Mr Steven Boland
EXECUTIVE DIRECTOR
Steve’s 30 year executive career
includes extensive experience in
operational management and
leadership spanning waste, sports
management and hire in both Australia
and the United Kingdom.
Steven joined Acrow in 2013 and since
then has served as its Chief Executive
Officer. Steven was previously the CEO
of the Melbourne Rebels Rugby Club
and was responsible for the start-up
phase of a Super Rugby professional
sporting team. Previously, from 2004
to 2010, Steven served as the Global
Executive Director (Recycling) of Visy
Industries, and from 2002 to 2004,
Steven was the Executive Director
(Commercial Waste) of Veolia
Environment UK.
Mrs Melanie Allibon
NON-EXECUTIVE DIRECTOR
Melanie has an extensive background
in human resources and operating
risk primarily in the industrial services,
mining, manufacturing and FMCG
sectors. She has held senior executive
roles with Newcrest Mining, Seven
Group Holdings, Amcor, Pacific Brands
and Foster’s Group with responsibility
spanning Australia, USA, Asia and
the UK.
Melanie has been a non-executive
director for over 10 years including with
Melbourne Water and Boom Logistics.
Melanie is currently a director at Salta
Properties, a member of Chief Executive
Women, International Women’s Forum,
a member of World Vision’s business
advisory council and AICD.
14 | Acrow Annual Report 2024
Mr David Moffat
NON-EXECUTIVE DIRECTOR
David has a career spanning 40 years
in the construction industry. During his
29 years of employment with Lipman,
David was the Construction Director
from 2000 to 2013, which led to his
appointment as Managing Director of
Lipman Group of Companies from 2013
to 2018.
In 2019 David founded Cornerstone
(NSW) Pty Ltd where he continues
to provide strategic business
planning and advisory services to
Subcontractors, Head Contractors,
Clients and Development Managers
within the property and construction
industry. David brings with him
key competencies in Leadership,
Construction Management,
Innovation and Safety. He holds a
Bachelor of Engineering Degree (Civil)
from The University of Technology,
Sydney (“UTS”).
Ms Laurie Lefcourt
NON-EXECUTIVE DIRECTOR
Laurie has an extensive background
in financial, strategic and risk
management, particularly in
the resources, construction, and
infrastructure sectors. She has held
senior management and executive
roles across Rio Tinto, Queensland Rail,
Sinopec Oil and Gas, and Wiggins
Island Coal Terminal.
Laurie has been a non-executive
director for the past 6 years and is
a non-executive director and audit
and risk committee chair for Stanwell
Limited. Laurie is a past member on the
boards of Tamawood Ltd (ASX: TWD),
Advance NanoTek Ltd (ASX:ANO),
and SenterpriSYS Ltd (NSX: SPS). In
2013, Laurie founded Sage Strategies
Pty Ltd where she provides support
to organisations in developing and
executing strategy.
Laurie holds a bachelor’s degree
in finance and administration, is a
fellow of the Institute of Chartered
Accountants of Australia and New
Zealand, as well as a graduate
of the Australian Institute of
Company Directors.
Acrow Annual Report 2024 | 15
Financial Report
Contents
17
Directors’ Report
21
Auditor’s Independence
Declaration
22 Remuneration Report – Audited
42 Financial Statements
46 Notes to the Consolidated
Financial Statements
79 Consolidated Entity Disclosure
Statement
80 Directors’ Declaration
81
Independent Auditor’s Report
85 Shareholder Information
87 Corporate Directory
Photo: Wee Hur student
village, Redfern
16 | Acrow Annual Report 2024
Directors’ Report
For the year ending 30 June 2024
The Directors present their report, together with the Annual Financial Report for Acrow Limited (Acrow
or the Company) and its controlled entities, for the year ended 30 June 2024, and the Auditor’s
Report thereon.
This report has been prepared in accordance with the requirements of the Corporations Act 2001 and the information below
forms part of this Directors’ Report:
DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
●Peter Lancken (Chairman)
●Steven Boland (Chief Executive Officer)
●David Moffat
●Melanie Allibon
●Laurie Lefcourt
Information on the current directors and shareholdings are presented in the Annual Report on pages 14 to 15 and pages 34
to 38 respectively. This information includes the qualifications, experience, and special responsibilities of each director.
DIRECTORS’ MEETINGS
The number of directors’ meetings and number of meetings attended by each of the directors of the Company during the
financial year ending 30 June 2024 are:
Board of
Directors
Remuneration
Nomination Committee
Audit and Risk
committee
No. held
No. attended
No. held
No. attended
No. held
No. attended
Peter Lancken (Chairman)
11
11
1
1
4
4
Steven Boland (Chief Executive Officer)
11
11
–
–
–
–
David Moffat
11
11
1
1
4
4
Melanie Allibon
11
11
1
1
–
–
Laurie Lefcourt
11
11
–
–
4
4
COMPANY SECRETARY
Lee Tamplin was company secretary until
25th September 2023.
Max Crowley and Shelby Coleman were joint company
secretaries of Acrow from 25th September 2023 to
25th March 2024. Shelby Coleman was sole company
secretary from 25th March 2024.
Lee Tamplin was appointed company secretary with effect
from 1st September 2024.
PRINCIPAL ACTIVITIES
Acrow operates in the Australian construction and
industrial services sectors. The construction services
work includes hiring formwork, falsework, scaffolding and
screen equipment and undertaking sales of formwork and
scaffolding related consumables. In the industrial services
sector. Acrow also operates hire, sales and labour in the
industrial services sector.
The formwork operation involves the supply of the
temporary mould that supports concrete structures in their
construction, whilst falsework equipment is used to support
suspended horizontal structures during construction.
Acrow perimeter screens support the construction of civil
infrastructure, commercial and residential projects, providing
an edge protection and perimeter access solution for
these structures.
The industrial services operation supplies an industrial
labour service to compliment the scaffolding hire to the
energy, industrial and mining sectors.
The smaller scaffolding operation supplies scaffolding
equipment and access solutions to builders and building
contractors when working at heights.
OPERATING AND FINANCIAL REVIEW
The Acrow business performed strongly for the 12 months to
30 June 2024.
The business strategy prioritised expansion of its Industrial
Services division both organically and through acquisition
which translated to a large increase in profit during the year.
The construction services sector of the business continued
to re-base towards the value added, highly engineered civil
Acrow Annual Report 2024 | 17
Acrow Annual Report 2024 | 17
Acrow Annual Report 2024 | 17
Directors’ Report (continued)
For the year ending 30 June 2024
formwork solutions market as well as an increased focus
on equipment sales. In addition, it expanded its Jumpform
business within construction services.
Financial performance:
The Company strengthened its position and continued its
momentum in the 12 months to 30 June 2024. The Group
continues its strategy of growing scale in engineered
systems and services including industrial services both
organically and through specific acquisitions and
capital expenditure.
The business is continuing to grow in the value added, highly
engineered civil formwork solutions including the expanded
Jumpform business and Industrial Services markets.
For strategic and management decision-making purposes,
non-IFRS measures are used, where non-operational
and one-time expenses such as share-based payments,
business acquisition-related restructuring, and process
integration costs are excluded to present “underlying”
profit measures. These adjustments aim to improve the
comparability of financial results, enabling readers to
concentrate on routine business activities and providing
investors and stakeholders with a clearer view of
everyday operations.
On an underlying basis, the key highlights for the
year included:
●Group revenue up 28% on prior comparative period (pcp)
to $215.3m. This growth was driven by a robust trading
performance, primarily from organic growth, with the
Formwork division up 19% and the Industrial Services
division up an impressive 78% on pcp.
●The Group continues to enhance its recurring revenue
through the Industrial Services division, which accounted
for 33% of total group revenue. The acquisition of MI
Scaffold contributed for eight months, while Benchmark
Scaffold added four months of revenue.
●Sales contribution of $133.8m, up 28%, with 71% of uplift
generated from increased equipment hire. Margins
across all divisions were up, with group margin steady at
62.1%, due to increased Industrial Services contribution.
●Overhead costs increased 15%, due to increased activity
levels. 73% of the growth in sales contribution found
its way to the EBITDA. Expected credit loss expense
declined by $1m to $2m.
●Underlying EBITDA of $74.6m, up 40%, with EBITDA
margin up 3.1 ppts to 34.7%, resulting from benefits
associated with scaling operations.
●Underlying NPAT increased 8% to $33.0 million, despite
an effective tax rate of 30%, compared to 8% in FY23.
●Underlying Earnings Per Share decreased by 1% to
11.5 cents, influenced by the higher effective tax rate and
increased share capital.
●Full year dividend per share up from 4.40 cents per share
to 5.85 cents per share, fully franked.
●Return on Equity (ROE) decreased by 6 ppts to 27.1%,
due predominantly to the higher effective tax rate. On a
like‑for-like tax basis, ROE increased from 25.0%.
Financial position:
●Net Current Assets: There was a significant improvement
in net current assets, increasing from $5.7 million to
$13.7 million. This improvement reflects a stronger liquidity
position, with the company better equipped to meet its
short-term obligations.
●Net Debt: Net debt increased from $46.4 million in 2023
to $68.6 million in 2024. This increase was primarily
due to:
– Significant capital expenditure of $40.2 million
($9.8m being replacement of ex-hire gear) to foster
growth in the infrastructure market by diversifying
supply chains and product offerings, such as
investing in new equipment like Acrow Deck and
Jump Forms.
– Asset acquisitions of $41.5 million, which were
financed through a combination of cash, share issues
and debt.
●Net Gearing: The net gearing ratio (net debt / (net debt
+ equity)) increased from 31.1% to 32.7%. Net debt to
EBITDA remains on par and unchanged from last year.
●Property, Plant, and Equipment: The value of property,
plant, and equipment increased from $131.6 million
to $170.4 million. This increase was driven by capital
expenditure and acquisitions, offset by depreciation and
asset disposals.
●Total Working Capital: Total working capital increased
by $11.0 million to $50.6 million. This increase was due to:
– An increase in trade receivables by $14.6 million,
consistent with the rise in revenue.
– An increase in inventories by $2.6 million.
– An increase in prepayments and other assets by
$0.5 million.
– Offset by an increase in trade payables by
$6.6 million.
●Trade Receivables: The trade receivables turnover
improved, with debtor days reducing from 60 days to
57 days (net of negotiated sales).
Operating results:
Refer to the Managing Director’s Report on pages 4 to 8 of
this Annual Report.
DIVIDENDS
The Company paid a 2.70 cents fully franked dividend per
share being a total of $7.35m for the financial year ending
30 June 2023 on 30 November 2023. Shares totalling 837,432
were issued under the Dividend Reinvestment Plan at
$0.8406 including a 2.5% discount.
18 | Acrow Annual Report 2024
The Company paid an interim 2.85 cents fully franked
dividend per share being a total of $8.38m for the financial
year ending 30 June 2024 on 31 May 2024. Shares totalling
633,826 were issued under the Dividend Reinvestment Plan
at $1.1445 per share including a 2.5% discount.
Subsequent to balance date, the Directors declared
a dividend of 3.0 cents per share, fully franked on
21 August 2024 to be paid on 29 November 2024. The
dividend has not been provided for in this financial report.
ENVIRONMENTAL REGULATIONS
Acrow’s operations are not subject to significant
environmental regulations under the Commonwealth of
Australia and State/Territory legislation. The Board believes
that Acrow has adequate systems in place to manage
its environmental responsibilities and is not aware of any
breach of regulations.
Prior to the disposal of Noble Mineral Resources Ghana
Limited, the Group was also subject to environmental
regulation in respect of its exploration activities in Ghana
but not aware of any breach of those regulations.
NO OFFICERS ARE FORMER AUDITORS
No officer of the Company has been a partner in an audit
firm, or a director of an audit company, that is an auditor
of the Company during the year or was such a partner or
Director at a time when the audit firm or the audit company
undertook an audit of the Company.
NON-AUDIT SERVICES
All non-audit services were subject to the corporate
governance procedures adopted by the Group and have
been reviewed by the Audit and Risk Committee to ensure
that they do not impact the integrity and objectivity of
the auditor.
All the non-audit services provided do not undermine the
general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants,
as they did not involve reviewing or auditing the auditor’s
own work, acting in a management or decision-making
capacity for the Group, acting as an advocate for the
Group or jointly sharing risks and rewards.
Details of the amounts paid or payable to the auditor of the
Group, Grant Thornton and their related practices for audit
and non-audit services during the year are set in note 27.
SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
There were no significant changes in the Group’s state
of affairs.
REMUNERATION REPORT
The remunerations report forms part of the directors’ report
and can be found on pages 22 to 41. It has been audited in
accordance with section 300A of the Corporations Act.
SHARE RIGHTS
At the date of this report, Acrow had no share options
outstanding relating to grants of deferred equity to
employees under the previous Long-Term Incentive Plan.
The last 300,000 units vested and exercised during 2024.
8,677,881 Performance Rights were issued during the year
with vesting periods at the end of the financial years 2024,
2025 and 2026. If the vesting conditions are met each
Performance Right can be exercised into one Fully Paid
Ordinary Share at the holder’s discretion until the expiry
date of 30 December 2038. The Performance Rights were
issued to executives and senior managers of the Company
under the Company’s Rights Plan and form part of the new
Long Term Variable Remuneration (LTVR) of the employees.
Performance Rights issued to KMP’s are included in
this balance.
5,404,102 Performance Rights vested during the year
after meeting vesting criteria for the measurement
period to 30 June 2023 and 6,250,025 (including carried
forward vested but unexercised) units were exercised into
ordinary shares. This includes KMP Performance Rights
detailed above.
Balance of outstanding rights and options as at year end:
Quantity
outstanding
Expiry date
Options
–
Not applicable
Performance rights
14,930,881
31 July 2035 to 20 December 2038
For further details, refer to note 24 of this Annual Report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
For information about likely developments and expected results in the operations of the Company, refer to the Chairman’s
and Managing Director’s Reports on pages 2 to 8 of this Annual Report.
Acrow Annual Report 2024 | 19
Acrow Annual Report 2024 | 19
Directors’ Report (continued)
For the year ending 30 June 2024
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the terms of Article 35 of the Company’s Constitution, and to the extent permitted by law, the Company has
indemnified the directors of the Company named in this Directors’ report, the Company Secretaries, and other persons
concerned in or taking part in the management of Acrow. The indemnity applies when persons are acting in their capacity
as officers of the Company in respect of:
●Liability to third parties (other than the Company or related bodies corporate), if the relevant officer has acted in good
faith; and
●Costs and expenses of successfully defending legal proceedings in which relief under the Corporations Act 2001 is
granted to the relevant officer.
The Group has not made any indemnity payment during the year.
INSURANCE PREMIUMS
During the financial year, the Company paid a premium of $181,659 excluding GST for Directors’ and Officers’ Liability
Insurance policy. The insurance provides cover for the Directors named in this Directors’ Report, the Company Secretary, and
officers and former Directors and officers of the Company. The insurance also provides cover for present and former Directors
and officers of other companies in the Group.
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance practices in place throughout the financial year and can be referred
to on the Acrow Group website: https://www.acrow.com.au/investors/.
EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 21 August 2024 the Directors declared a 100% franked dividend of 3.0 cents per share to be paid on 29 November 2024.
Dividend Reinvestment Plan is available for election. The dividend has not been provided for in this financial report as it was
not declared until after 30 June 2024.
Other than the above events, there has not otherwise arisen between 30 June 2024 and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Group, to affect significantly
the operations of the Group, the results of those operations, or the state of the affairs of the Group in future financial years.
ROUNDING OF AMOUNTS
Acrow Limited is a company of the kind referred to in the Australian Securities and Investments Commission (ASIC)
Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016 and in accordance with
that Legislative Instrument, amounts in the Consolidated Financial Statements and this Directors’ Report have been rounded
off to the nearest dollar, unless stated otherwise.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration made under section 307C of the Corporations Act 2001 is set out on page 21
of the Annual Report and forms part of the Directors’ Report for the financial year ended 30 June 2024.
Signed in accordance with a resolution of the Directors:
Peter Lancken
Steven Boland
Chairman
Director, Chief Executive Officer
Sydney, 27 September 2024
Sydney, 27 September 2024
20 | Acrow Annual Report 2024
Auditor’s Independence Declaration
For the year ending 30 June 2024
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Auditor’s Independence Declaration
To the Directors of Acrow Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Acrow Limited for the year ended 30 June 2024, I declare that, to the best of my knowledge and belief, there
have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
N P Smietana
Partner – Audit & Assurance
Sydney, 27 September 2024
Acrow Annual Report 2024 | 21
Acrow Annual Report 2024 | 21
Remuneration Report – Audited
For the year ending 30 June 2024
1.
Letter from the Chair of the
Remuneration Committee
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present
the Remuneration Report of Acrow Limited for the financial
year ending 2024. This report outlines our approach to
executive remuneration, detailing the policies and practices
that underpin our compensation framework, and how these
align with the long-term interests of our shareholders.
As a company listed on the Australian Stock Exchange (ASX),
we are committed to maintaining the highest standards of
transparency and accountability. Our remuneration strategy
is designed to attract, retain, and motivate talented
individuals who are essential to driving the company’s
success. We believe that a well-structured remuneration
framework is crucial in fostering a performance-oriented
culture that aligns with our strategic objectives and delivers
sustainable value to our shareholders.
This year, we have undertaken a comprehensive review of
our remuneration policies to ensure they remain competitive
and aligned with market best practices. We have also
considered feedback from our shareholders and other
stakeholders to refine our approach and enhance the clarity
and effectiveness of our remuneration disclosures. To this
end, we engage with specialised remuneration advisors and
major shareholders as part of this process.
The report provides detailed information on the
remuneration of our key management personnel, including
the fixed and variable components of their compensation,
performance metrics, and the alignment of their incentives
with the company’s performance. We are confident that
our remuneration framework supports our goal of creating
long-term value for our shareholders while ensuring that
our executives are rewarded fairly and appropriately for
their contributions.
We appreciate your continued support and look forward
to engaging with you on this important aspect of our
corporate governance.
Melanie Allibon
Independent Non-Executive Director
Chair of the Remuneration Committee
2.
Scope of the Remuneration Report and
Individuals Classed as KMP
The Remuneration Report sets out the prescribed key
management personnel (KMP) remuneration information
and details in accordance with section 300A of the
Corporations Act and associated regulations, including
policies, procedures, governance, and factual practices
as required.
In addition, Acrow Limited (Acrow, the Company) has
decided to set out such further information as shareholders
may require for them to obtain an accurate and complete
understanding of the Company’s approach to the
remuneration of KMP.
KMP are the non-executive directors, the executive directors
and employees who have authority and responsibility for
planning, directing and controlling the activities of the
consolidated entity, directly or indirectly during any part
of the financial year. On that basis, the following roles/
individuals are addressed in this report:
Non-executive Directors (NEDs)
●Mr Peter Lancken, independent non-executive Chairman
since 27 March 2018.
●Mr David Moffat, independent non-executive director
since 19 September 2019.
●Ms Melanie Allibon, independent non-executive director
from 1 September 2021 and Chair of Remuneration
Committee.
●Ms Laurie Lefcourt, independent non-executive
director since 1 October 2021 and Chair of Audit & Risk
Committee.
Senior Executives Classified as KMP During the
Reporting Period
●Mr Steven Boland, Chief Executive Officer (CEO) &
Executive Director since 27 March 2018.
●Mr Andrew Crowther Chief Financial Officer (CFO) since
8 July 2019.
3.
Context of KMP Remuneration for
FY2024 and into FY2025 – unaudited
3.1
Context for Remuneration Governance
during FY2024
The KMP remuneration structures that appear in this report
are largely those that prevailed over FY2024, as is required
by regulation, but also address expectations for FY2025 to
FY 2026, to some extent.
The Board has further developed remuneration governance,
policies and practices applied to KMP of the Company, as
well as other employees as the business has and continues
to mature. The following outlines important context for the
decisions that were made in relation to remuneration for/
during FY2024, the outcomes of which are presented in
this report.
●A total of 8,677,881 performance rights were issued in
FY2024, including 1,229,568 units to Steven Boland (CEO)
and 483,703 units to Andrew Crowther for 2025 and
2026 plans; and 6,964,610 units to Senior Managers for
2024, 2025 and 2026 plans. The issues have three-year
measurement periods.
●The Company is focussed on delivering value for
shareholders by executing on strategy including:
– Being the leading engineered formwork sales
and hire equipment solutions provider in Australia
including expanding its Jumpform presence
22 | Acrow Annual Report 2024
– Become the leading engineered solutions provider to
the Australian Industrial Services market
– Concentrating on profitable organic growth
– Actively pursuing strategically sensible acquisitions
in the industrial services sector to accelerate
profitable growth
– Target high ROI organic growth opportunities across
all states.
4.
Overview of Acrow’s Remuneration
Governance Framework & Strategy
4.1
Transparency and Engagement
The Company seeks input regarding the governance of KMP
remuneration from a wide range of sources, including:
●Shareholders and other stakeholders,
●Remuneration Committee Members,
●External remuneration consultants (ERCs),
●Other experts and professionals such as tax advisors
and lawyers, and
●Company management to understand roles and issues
facing the Company.
The following outlines a summary of Acrow’s Remuneration
Framework, including policies and practices to the extent
developed. Shareholders can access a number of the
related documents by visiting the investors portal on the
Company website www.acrow.com.au. It is recommended
that shareholders, proxy advisors and other interested
parties consider all the available information.
4.2
Remuneration Committee Charter
The Remuneration Committee Charter (the Charter)
governs the operation of the Remuneration Committee
(the Committee). It sets out the Committee’s role and
responsibilities, composition, structure and membership
requirements. The purpose of the Committee is to assist the
Board by:
●Establishing appropriate processes regarding the review
of the performance of directors, committees and the
Board, and implementing them,
●Reviewing and making recommendations to the Board
in relation to the remuneration packages of Senior
Executives and non-executive directors, equity-based
incentive plans and other employee benefit programs,
●Developing policies, procedures and practices that will
allow the Company to attract, retain and motivate high
calibre executives, and
●Ensuring a framework for a clear relationship between
key executive performance and remuneration.
The Committee has the authority to obtain outside legal
or other professional advice or assistance on any matters
within its terms of reference.
Acrow recognises the importance of ensuring that any
recommendations given to the Committee provided by
remuneration consultants are provided independently
of those to whom the recommendations relate. Further
information about the parameters under which external
remuneration consultants are engaged is provided below.
4.3
Senior Executive Remuneration Policy
The Company’s senior executive remuneration policy may
be summarised as follows:
●Remuneration for senior executives should be
composed of:
– Fixed Package inclusive of superannuation,
allowances, benefits and any applicable
fringe benefits,
– Variable remuneration which is at-risk, creating
opportunity for the Company to pay less than the
potential variable remuneration when performance
expectations have not been met, and which is partly
an incentive to reward executives for meeting or
exceeding expectations, including:
•
Short-term Incentive (STI) or Bonus opportunity
which provides a reward for performance against
annual objectives, and
•
Long Term Variable Remuneration (LTVR)
which provides an equity-based reward for
performance against indicators of shareholder
benefit or value creation, over a multi-year
period, and
– In total the sum of the elements will constitute a total
remuneration package (TRP).
●Both internal relativities and external market factors
should be considered,
●Total remuneration packages (TRPs, which include
Fixed Package and incentives) should be structured
with reference to market practices, the practices of
competitors for talent, and the circumstances of the
Company at the time,
●Remuneration will be managed within a range to allow
for the recognition of individual differences such as the
calibre of the incumbent and the competency with
which they fulfil a role (a range of +/- 20% is specified in
line with common market practices), and
●Termination benefits will generally be limited to the
default amount allowed for under the Corporations Act
(without shareholder approval).
Changes to remuneration resulting from annual reviews are
generally to be determined in relation to:
●external benchmarking, and/or market movements,
●whether current remuneration for the incumbent is above
or below the policy midpoint/benchmark – those below
the midpoint will tend to receive higher increases,
Acrow Annual Report 2024 | 23
Acrow Annual Report 2024 | 23
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
●the competence of the incumbent in fulfilling their role
which determines their positioning within the policy
range – higher calibre incumbents are intended to be
positioned higher in the range, and
●any changes to internal relativities related to role/
organisation design that have occurred since the
previous review.
4.4
Non-executive Director Remuneration Policy
The Non-executive Director remuneration policy applies
to non-executive directors (NEDs) of the Company in their
capacity as directors and as members of committees, and
may be summarised as follows:
●Remuneration may be composed of:
– Board fees,
– Committee fees,
– Superannuation,
– Other benefits, and
– Equity (if appropriate at the time)
●Remuneration will be managed within the aggregate fee
limit (AFL) or fee pool approved by shareholders of the
Company, noting that equity does not count towards
the AFL unless cash remuneration is sacrificed for a grant
of equity, refer section 9,
●The Board may seek adjustment to the AFL in the case
of the appointment of additional NEDs, or should the AFL
become insufficient to attract or retain the appropriate
calibre of NEDs,
●Remuneration should be reviewed annually,
●Committee fees may be used to recognise additional
contributions to the work of the Board by members of
committees in circumstances that the workload of the
Board is not equally shared, and
●The Board Chair fee will be set as a multiple of the fees
payable to other NEDs, in recognition of the additional
workload associated with this role.
4.5
Short-Term Incentive Policy
The short-term incentive policy of the Company is
that an annual component of executive remuneration
should be at-risk and allow the Company to modulate
the cost of employment to align with individual and
Company performance while motivating value creation
for shareholders:
●The STI should be paid in cash and deferral should
not apply since there is a separate component of
remuneration (the LTVR) which is intended to address
long term outcomes,
●Non-executive directors are excluded from participation,
●A termination of employment will trigger a forfeiture of
some or all of unearned STI entitlements depending
upon the circumstances of the termination. The Board
retains discretion to trigger or accelerate payment
or vesting of incentives provided the limitation on
termination benefits as outlined in the Corporations Act
are not breached, and
●Short-term awards are linked to the main drivers of
value creation at the Group, business unit or individual
level, as may be appropriate to the role and subject to
Board decision.
4.6
Long-Term Incentive Policy
The long-term incentive policy of the Company is that a component of remuneration of executives should be at-risk and
linked to equity in the Company to ensure that the interests of executives are aligned with those of shareholders, and share
risk with shareholders:
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan Rules, Offers and Comments
Purpose
The LTVR Plan’s purpose is to provide an element of at-risk remuneration that constitutes
part of a market competitive total remuneration package and aims to ensure that Senior
Executives have commonly shared goals related to producing relatively high returns for
Shareholders. Other purposes of the LTVR Plan are to assist Senior Executives to become
Shareholders, provide a component of remuneration to enable the Company to compete
effectively for the calibre of talent required for it to be successful and to help retain
employees, thereby minimising turnover and stabilising the workforce such that in periods
of poor performance the cost is lesser (applies to non-market measures under AASB2).
As at balance date, the Company had Performance Rights only for the purposes of
the LTVR.
24 | Acrow Annual Report 2024
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan Rules, Offers and Comments
Form of Equity
The current plan in operation at balance date includes the ability to grant the following
Rights to Eligible Employees which include the Managing Director and employees as
nominated by the Board:
●Share Awards,
●Performance Rights, which are subject to performance related vesting conditions, and
which may be settled upon exercise by new issues or on market purchase of ordinary
fully paid Shares,
●Options, which are subject to an exercise price, and which typically have no intrinsic
value when granted (exercise price is around the Share price), creating an incentive
to increase Share price and grow shareholder value. The Options may be settled as
“Cashless Exercise” in which case on exercise of the Options the Company will only allot
and issue or transfer that number of Plan Shares to the Participant that are equal in
value to the difference between the Exercise Price otherwise payable in relation to the
Options and the then market value of the Plan Shares as at the time of the exercise.
Options may also be subject to performance related vesting conditions, and
No dividends accrue to unvested Rights or Options, and no voting rights are attached.
Plan Limit
Unless prior Shareholder Approval is obtained, the number of Awards which may be
granted under this Plan (assuming all Options and Performance Rights were exercised)
must not at any time exceed in aggregate 10% of the total Issued Capital of the Company
at the date of any proposed new Awards.
LTI Value
The Board retains discretion to determine the LTVR to be offered each year. The Board may
also seek shareholder approval for grants to Directors at its discretion.
FY2024 Invitations
Steven Boland (CEO) was granted 1,229,568 performance rights over four tranches with a
total fair value of $624,244. These have potential vestings in 2025 and 2026. Two years were
issued in 2024 due to a delay in the 2025 issue.
Andrew Crowther (CFO) was granted 483,703 performance rights over four tranches with a
total fair value of $246,436. These have potential vestings in 2025 and 2026. Two years were
issued in 2024 due to a delay in the 2025 issue.
Eligible senior employees were granted 6,964,610 performance rights over six tranches with
a total fair value of $3,701,915. These have potential vesting in 2024, 2025 and 2026.
Measurement Period
Three-year Measurement Periods combined with annual grants will produce overlapping
cycles that will promote a focus on producing long term sustainable performance/value
improvement and mitigates the risk of manipulation and short-termism (continuous
improvement). Because of the timing of grants, the life of the Right may be less than 3 years
at times, however this does not impact the Measurement Period over which performance
is measured.
Performance, Vesting and
Forfeiture Conditions
The Board has discretion to set Vesting, Performance and Forfeiture Conditions and for
each Invitation. When such conditions are not met, the entitlement lapses.
FY2024 Invitations
Except as indicated below, a participant must remain employed by the Company during
the Measurement Period and the performance conditions must be satisfied for LTVR
to vest.
Retesting
Retesting is not contemplated under the Plan Rules.
Acrow Annual Report 2024 | 25
Acrow Annual Report 2024 | 25
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan Rules, Offers and Comments
Amount Payable for Grants
The target value of LTVR is included in assessments of remuneration benchmarking and
policy positioning. No amount is payable by participants for grants of Performance
Rights. An Acquisition Price will apply in respect of grants of Loan Funded Shares (with an
accompanying loan) and may also apply to grants of Share Awards, which may or may not
have Vesting Conditions. Any loan must be repaid prior to the end of the Loan Term, up to
the Market Value of the Loan Funded Shares (non-recourse).
Exercise of Grants
Participants will be required to submit an Exercise Notice in respect of Performance Rights
and Options, in order to convert them to Shares, as well as the payment of the Exercise
Price in respect of each Option exercised. No amount is payable on the exercise of
Performance Rights.
Disposal Restrictions etc.
Options and/or Performance Rights granted under this Plan may not be assigned,
transferred, encumbered with a Security Interest in or over them, or otherwise disposed of
by a Participant, unless the consent of the Board is obtained, or due to the force of law in
the case of the death of a Participant. The Board has discretion to determine the disposal
restrictions attaching to Share Awards, Loan Funded Shares or Plan Shares (resulting from
vesting and exercise of grants) as part of the Invitation terms.
Cessation of Employment
In the event of cessation of employment in the circumstances of a “Bad Leaver”
(resignation or termination for cause), all unvested entitlements will be forfeited. In other
circumstances, the treatment of unvested awards will be dealt with as determined by
the Board.
Change of Control of the
Company (CoC)
If in the opinion of the Board a change of control event has occurred, or is likely to occur;
a) Performance Rights granted will vest to the extent that the performance period has
elapsed, and to the extent performance conditions have been met (may involve a
pro‑rata calculation), with the remainder lapsing,
b) Options may be subject to accelerated vesting in the sole discretion of the Board, and
c) Share Awards or Loan Funded Shares which do not vest will automatically be
surrendered by the Participant, and any that do not lapse, and which are subject to
an outstanding loan will be subject to the requirement of the loan being repaid by the
date of the CoC.
Fraudulent or Dishonest
Actions
If the Board takes the view that a Participant has acted fraudulently, dishonestly, or wilfully
breaches their duties to the Group, the Board has discretion to determine that unvested or
unexercised awards are forfeited.
●The LTVR should be based on Performance Rights
or Options (which may include Loan Funded Shares
arrangements) that produce a benefit for Participants
when performance objectives are met (which may
include increasing Share price),
●The measurement period for long term incentives should
be at least two years,
●A termination of employment will trigger a forfeiture
of some, or all of the long-term incentives held by an
executive in respect of which performance conditions
and hurdles have not yet been met, depending upon
the circumstances of the termination. The Board retains
discretion to trigger or accelerate payment or vesting of
incentives provided the limitation on termination benefits
as outlined in the Corporations Act are not breached.
4.7
Securities Trading Policy
The Company’s Securities Trading Policy applies to Directors
and executives classified as KMP (including their relatives
and associates), those employees working closely with KMP,
employees nominated by the Board, or any other employee
holding inside information. It sets out the guidelines for
dealing in any type of Company Securities by persons
covered by the policy, and the requirement for the Company
to be notified within 2 business days of any dealing. It
also summarises the law relating to insider trading which
always applies to everyone. Under the current policy, those
covered by the policy may not trade during a “blackout
period” or when they hold inside information (subject to
exceptional circumstances arrangements, see the policy on
the Company website). The following periods in a year are
“blackout periods” as defined in the policy:
26 | Acrow Annual Report 2024
●From the half year balance date until 24 hours following the release of the Company’s half year results,
●From the financial year balance date until 24 hours following the release of the Company’s preliminary full year results
(Appendix 4E),
●Within 24 hours of release of price sensitive information to the market, and
●another date as declared by the Board (“ad-hoc”).
4.8
Executive Remuneration Engagement Policy and Procedure
The Company has adopted an executive remuneration engagement policy and procedure to manage the interactions
between the Company and external remuneration consultants, to ensure their independence and that the Remuneration
Committee will have clarity regarding the extent of any interactions between management and the external remuneration
consultants. This policy enables the Board to state with confidence whether the advice received has been independent,
and why that view is held. The Policy states that external remuneration consultants are to be approved and engaged
by the Board before any advice is received, and that such advice may only be provided to a non-executive director.
Interactions between management and the external remuneration consultants must be approved and will be overseen by
the Remuneration Committee when appropriate. Refer to section 13.
4.9
Variable Executive Remuneration – The Short-Term Incentive Bonus Plan
Short-term Incentive Plan (STIP)
Aspect
Plan, Offers and Comments
Purpose
The short-term incentive bonus plan’s purpose is to give effect to an element of
remuneration. This element of remuneration reinforces a performance focussed culture,
encourages teamwork and co-operation among executive team members and maintains
a stable executive team by helping retain key talent. These objectives aim to be achieved
by a simple plan that rewards participants for their performance during a 12-month period.
Measurement Period
The Company’s financial year (12 months). For the year ended 30 June 2024, the
measurement period was from 1 July 2023 to 30 June 2024.
Award Opportunities
The CEO was offered an opportunity of up to 40% of Fixed Package which is based on
achieving a range of measurable KPI’s which are predominately based on achieving Profit
before Tax targets and strategic goals and meeting safety standards. For other KMP
Executives, their individual KPI’s are determined by the CEO in collaboration with the Board.
Performance Assessments
and Award Outcomes
Performance assessments are undertaken by the CEO in relation to other Senior Executives
who then make recommendations to the Board, and by the Board in relation to the CEO.
The Board has discretion to vary the recommendations of the CEO in determining final
award outcomes.
Award Payment
Assessments and award determinations are performed following the end of the
Measurement Period and the auditing of Company accounts. Awards will generally be paid
in cash in the September following the end of the Measurement Period. They are to be paid
through payroll with PAYG tax deducted as appropriate. There are limited situations where
awards may be satisfied through the issue of equity. Deferral has not been introduced due
to the mix of short-term and long-term incentives being appropriately weighted.
Cessation of Employment
During a Measurement
Period
In the event of cessation of employment due to dismissal for cause, all entitlements in
relation to the Measurement Period are forfeited.
In the event of cessation of employment due to resignation, all entitlements in relation to
the Measurement Period are forfeited, unless the termination is classified as “good leaver”
in the discretion of the Board, in which case the Board may make an award at the time of
the termination, or assess outcomes at the normal time, following the termination.
Change of Control
In the event of a Change of Control including a takeover, the Board has discretion
regarding the treatment of short-term incentive bonus opportunities.
Fraud, Gross Misconduct etc.
If the Board forms the view that a Participant has committed fraud, defalcation or gross
misconduct in relation to the Company then all entitlements in relation to the Measurement
Period will be forfeited by that participant.
Acrow Annual Report 2024 | 27
Acrow Annual Report 2024 | 27
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
4.10 Variable Executive Remuneration – Long Term Variable Remuneration Plan (LTVR) – Performance Rights
The LTVR plan is an annual performance rights plan to which selected executives and KMP are invited to participate at
the Board’s discretion. The Company currently has three LTVR plans running which share the same method but differ
slightly in their hurdles and vesting criteria detailed in the table below. All of the 2024, 2025 and 2026 plans were granted
in the form of performance rights directly linked to the performance of the Company, the returns generated, and relative
increases in shareholder wealth. This structure was used to ensure appropriate alignment to shareholder value over a
specified timeframe.
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan, Offers and Comments
Instrument
Performance rights being a right to receive a share subject to performance and
vesting conditions.
Purpose
To motivate executives to achieve the long-term performance targets.
Plan limit
Performance rights issued to CEO and senior executives for 2024, 2025 and 2026 rely on
Corporations Act Section 708 relief – “Senior Managers”.
LTVR Value
The Board retains discretion to determine the LTVR to be offered each year
2023 plan vested
The measurement period of the 2023 plan finished on 30 June 2023. The performance
outcome resulted in 100% of the rights on issue vesting, which amounted to a total of
5,404,102 units vested in FY2024; all but 286,326 being exercised into ordinary shares as at
the date of this report. The KMP vestings are below:
KMP Steven Boland vested 1,074,294 rights and subsequently exercised into shares.
KMP Andrew Crowther vested 418,664 rights and subsequently exercised into shares.
2024 plan Invitations
A total of 6,038,995 performance rights were granted in FY2023 to the 2024 plan.
KMP Steven Boland has been issued 1,074,294 performance rights in this plan with a total
fair value of $567,261.
KMP Andrew Crowther has been issued 426,426 performance rights in this plan with a total
fair value of $172,576.
2025 plan Invitations
A total of 4,159,690 performance rights were granted in FY2024 to the 2025 plan.
KMP Steven Boland has been issued 641,968 performance rights in this plan with a total fair
value of $442,235.
KMP Andrew Crowther has been issued 254,821 performance rights in this plan with a total
fair value of $175,539.
2026 plan Invitations
A total of 3,870,764 performance rights were granted in FY2024 to the 2026 plan.
KMP Steven Boland has been issued 587,600 performance rights in this plan with a total fair
value of $182,009.
KMP Andrew Crowther has been issued 228,882 performance rights in this plan with a total
fair value of $70,896.
Dividends
No dividends are paid or accrued on unvested awards.
28 | Acrow Annual Report 2024
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan, Offers and Comments
Tranches
2024 to 2026 Plans:
– 50% issue measured on Earnings per share (EPS) criteria specifically “NPAT / Weighted
average number of shares on issue”
– 50% issue measured on Total Shareholder return (TSR) criteria. This compares the share
price and dividends through the measurement period to the ASX small industrials index.
Performance hurdles
The vesting of the TSR Performance Rights will be determined by reference to the following
scale, in relation to the Measurement Period:
Performance Level
Company’s Annulised TSR Compared
to the Annualised TSR of the ASX
Small Industrials Total Return Index
% of Tranche
Vesting
Stretch & Above
Index TSR + 160% TSR CAGR
100%
Between Target and Stretch
> 130% Index TSR,
< 160% TSR CAGR
Pro-rata
Target
130% Index TSR
50%
Between Threshold and Target
> Index TSR, < 130% TSR CAGR
Pro-rata
Threshold
Index TSR
0%
Below Threshold
< Index TSR
0%
TSR is the sum of Share price appreciation and dividends (assumed to be reinvested in
Shares) during the Measurement Period. It is annualised for the purposes of the above
vesting scale. CAGR is Compound Annual Growth Rate. The Company’s annualised TSR will
be compared with the annualised TSR of the Index.
The vesting of EPS Performance Rights will be determined by reference to the following
scale, in relation to the Measurement Period:
Performance Level
Earnings Per Share (EPS) CAGR
% of Tranche
Vesting
Stretch & Above
25%
100%
Between Target and Stretch
> 15%, < 25%
Pro-rata
Target
15%
50%
Between Threshold and Target
> 10%, < 15%
Pro-rata
Threshold
10%
0%
Below Threshold
< 10%
0%
EPS growth will be calculated as the CAGR required for the EPS in the year immediately
prior to the commencement of the Measurement Period to equal the EPS achieved in the
final year of the Measurement Period. The EPS will be calculated as follows for each year of
the calculation:
Acrow Annual Report 2024 | 29
Acrow Annual Report 2024 | 29
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan, Offers and Comments
Performance hurdles
(continued)
NPAT EPS ÷ Time Weighted Average Issued Shares
●NPAT in any period relating to the plan will be signed off by the Board. This will also
include “base” capex budgeted to achieve the budgeted NPAT.
●Any capex acquired above budget will require the target NPAT adjusted for the relevant
measurement years at a required return of 40% weighted post tax for the time available
(i.e. above budget capex 40% return time available during year).
●If any M&A activity occurs, the NPAT will be adjusted in consultation with the Board.
●The Board has discretion regarding whether or not to approve adjustments relating to
NPAT at each measurement period.
At the start of 2024, Andrew Crowther held 300,000 units of options with an exercise price
of 40 cents per unit. During the year, these options vested and were converted through a
cashless exercise into 166,071 units of ordinary shares. There are no remaining outstanding
options for him or the Group.
Gateway
TSR and EPS Performance Rights are not subject to a gate, however, vesting above Target
in any years will be subject to the Boards discretionary approval.
Measurement Period and
vesting dates
2024 plan: 1 July 2021 to 30 June 2024 (3 years)
2025 plan: 1 July 2022 to 30 June 2025 (3 years)
2026 plan: 1 July 2023 to 30 June 2026 (3 years)
Each grant is tested on the grant performance hurdles criteria at the end of the
measurement period.
Vesting for each successful tranche occurs only after the signed audited financial
statements are lodged with the Australian Stock Exchange relevant to each plan.
Retesting
Retesting is not contemplated under the Plan Rules.
Amount payable for grants
No amount is payable by participants for grants of Performance Rights.
Exercise of Grants
Participants will be required to submit an Exercise Notice in respect of vested performance
rights in order to convert them to Shares. Each Right has a Term of 15 years from the Grant
Date and if not exercised within that Term the Rights will lapse.
Performance Assessments
and Award Outcomes
At the end of each performance period, the Remuneration and Nomination Committee
assesses the relevant performance measures and determines the extent to which the
awards should vest. Payment is made by the issuing or transfer of shares.
Cessation of Employment
During a Measurement
Period
In the event of cessation of employment due to dismissal for cause, all entitlements in
relation to the Measurement Period are forfeited.
In the event of cessation of employment due to resignation, all entitlements in relation to
the Measurement Period are forfeited, unless the termination is classified as “good leaver”
in the discretion of the Board, in which case the Board may make an award at the time of
the termination, or assess outcomes at the normal time, following the termination.
Change of Control
If a change of control occurs prior to the vesting of an award, then the Board may
determine in its absolute discretion whether all or some of a participant’s unvested award
vest, lapse, is forfeited, or continues.
30 | Acrow Annual Report 2024
5.
Proforma Executive Remuneration for FY2024 (non-statutory disclosure) – unaudited
The disclosures required under the Corporations Act (including regulations) and prepared in accordance with applicable
accounting standards, do not provide shareholders with an understanding of the intended remuneration in a given year.
For example, the LTVR disclosed is not reflective of the remuneration opportunity for the year being reported on, due
to the requirements of AASB2. Therefore, the following table is provided to ensure that shareholders have an accurate
understanding of the Board’s intention regarding the remuneration offered to executives during FY2024. The values
presented reflect the remuneration for a full year i.e. ignoring any part-year reporting impact.
Position
Incumbent
Year
Fixed Package
including Super1
Target STI2
LTVR
Opportunity
Total Value of
Package
Executive Director
and Chief Executive
Officer
Steven Boland
2024
$632,350
$252,940
$567,261
$1,452,551
2023
$555,243
$221,053
$602,889
$1,379,185
Chief Financial
Officer
Andrew Crowther
2024
$370,996
$111,299
$172,576
$654,871
2023
$337,355
$101,206
$209,104
$647,665
1 Package includes car allowance and superannuation.
2 With Steven Boland (CEO), STI is capped at 40% of his package; with Andrew Crowther (CFO) STI is capped at 30% of his package subject to
achieving individual KPIs and performance targets.
Acrow Annual Report 2024 | 31
Acrow Annual Report 2024 | 31
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
6.
Vested/Awarded Incentives and Remuneration Outcomes in Respect of the Completed FY2024 Period
(non-statutory disclosure) – UNAUDITED
The statutory disclosure requirements and accounting standards make it difficult for shareholders to obtain a clear understanding of what the actual remuneration
outcomes for executives were in relation to a given reporting period. The following table brings these outcomes back to the year of performance outcome to which
the award outcome relates, and which is the reporting period, i.e. LTI is presented as being part of the remuneration for the year during which performance testing
was completed.
STI and LTI Outcomes
Position
Incumbent
Year
Fixed
Package
Including
Super1
Total STI Awarded Following Completion of
the Financial Year (cash)2
LTVR Value3
Total
Remuneration
Package (TRP)
Gains/Losses
on Vested LTI
from Change
in Value
During Vesting
Period4
Amount
Amount
Vested %
Forfeited %
Amount
Executive Director
and Chief Executive
Officer
Steven Boland
2024
$632,350
$214,500
85%
15%
$602,889
$1,449,739
$345,713
2023
$555,243
$160,000
72%
28%
$240,195
$955,438
$293,448
Chief Financial
Officer
Andrew Crowther
2024
$370,996
$67,800
61%
39%
$209,104
$647,900
$230,388
2023
$337,355
$75,570
75%
25%
$112,069
$524,994
$510,872
1 Package paid includes car allowance and superannuation.
2 This is the value of the total STI award calculated and payable in the next reporting year.
3 This is the value of LTIs that vested in the reporting year. For Steven Boland, 1,074,294 units of performance rights vested; and for Andrew Crowther, 300,000 units of options and 418,664 performance
rights vested in FY2024.
4 This is the number of LTI units that exercised in the reporting year, multiplied by the 5-day VWAP share price on the date of vesting less exercise price and the value of LTIs when granted.
Details regarding the assessments of performance that gave rise to the short-term incentive bonus outcomes for FY2024 are given below.
32 | Acrow Annual Report 2024
7.
Performance Outcomes for FY2024
7.1
Company Performance
The following outlines the performance of the Company over the FY2016 and FY2024 period in accordance with the
requirements of the Corporations Act:
Corporate Performance Measures
FY End Date
Revenue
Profit/(loss)
after Tax
Share Price
Change in
Share Price
Total
Dividend
per Share1
Short Term Change
in Shareholder Value
Over 1 Year
(SP Increase + Dividends)
Amount
%
30-Jun-24
$215,256,023
$25,559,299
$1.065
$0.285
$0.056
$0.341
44%
30-Jun-23
$168,494,966
$23,457,040
$0.780
$0.275
$0.032
$0.307
61%
30-Jun-22
$148,345,521
$15,694,168
$0.505
$0.130
$0.024
$0.154
41%
30-Jun-21
$105,743,523
$3,962,998
$0.375
$0.060
$0.018
$0.078
25%
30-Jun-20
$81,681,600
$3,013,023
$0.315
$0.015
$0.010
$0.025
8%
1 Dividends paid are the cash amount (post franking).
7.2
Links Between Performance and Reward
Including STI and LTVR Determinations
The remuneration of executive KMP is intended to be
composed of three parts as outlined earlier, being:
●Fixed Package, which is not intended to vary with
performance, but which tends to increase as the scale of
the business increases (i.e. following success),
●STI which is intended to vary with indicators of annual
Company and individual performance, and
●LTVR which is also intended to deliver a variable
reward based on long-term measures of
Company performance.
If STI is achieved, it is paid after the end of the financial
period it related to. This level of potential award was
considered appropriate under the STI process as it stood at
the time, and strongly linked to performance.
Following the end of FY2024, reports on the Company’s
activities during the year were prepared for the Board. The
Board then assessed the extent to which expectations had
been met or exceeded in relation to the Company and each
role, to calculate the total award payable. This included
assessed NPAT, underlying EBITDA and EPS growth.
During the reporting period, grants of equity were made
in relation to the LTVR scheme as part of remuneration
for FY2024 but did not vest due to the presence of the
long‑term measurement period and vesting conditions that
are yet to be completed/assessed.
7.3
Links Between Company Strategy
and Remuneration
The Company intends to attract the superior talent required
to successfully implement the Company’s strategies at a
reasonable and appropriately variable cost by:
●positioning Fixed Packages (the fixed element) around
relevant market data benchmarks when they are
undertaken, and
●supplementing the Fixed Package with at-risk
remuneration and incentives that motivate executive
focus on:
– short to mid-term objectives linked to the strategy
via annual performance assessments, and
– long term value creation for shareholders by linking a
material component of remuneration to those factors
that shareholders have expressed should be the
long-term focus of executives and the Board, such as
share price appreciation.
To the extent appropriate, the Company links strategic
implementation and measures of success of the strategy,
directly to incentives in the way that performance
is assessed.
Acrow Annual Report 2024 | 33
Acrow Annual Report 2024 | 33
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
8.
KMP Equity
8.1
Number of equities granted as remuneration
Only selected employees have been granted performance rights under the long-term variable remuneration (LTVR) plan during the year, changes during the year and
the balance held at reporting date are as follows.
Executives:
FY2024
Name
Instrument
Number
Held at
1 July 2023
Granted FY 24
Forfeited
Vested and
Exercised
Vested and
Remaining
Unexercised
Purchase /
(Disposal)
Others
Number
Held at 30
June 2024
Number
Date
Granted
Number
Number
Number
Number
Number
Number
Number
Steven Boland
Performance
Rights
2,148,588
21-Aug-23 &
20-Dec-23
1,229,568
–
(1,074,294)
–
–
–
2,303,862
Unrestricted
Shares
5,813,474
–
–
–
1,074,294
–
(1,870,000)
–
5,017,768
Andrew
Crowther
Options
300,000
–
–
(133,929)
(166,071)
–
–
–
–
Performance
Rights
845,090
21-Aug-23 &
20-Dec-23
483,703
–
(418,664)
–
–
–
910,129
Unrestricted
Shares
1,006,652
–
–
–
584,735
–
(600,000)
–
991,387
TOTALS
10,113,804
1,713,271
(133,929)
–
–
(2,470,000)
–
9,223,146
34 | Acrow Annual Report 2024
FY2023
Name
Instrument
Number
Held at
1 July 2022
Granted FY 23
Forfeited
Vested and
Exercised
Vested and
Remaining
Unexercised
Purchase /
(Disposal)
Others
Number
Held at 30
June 2023
Number
Date
Granted
Number
Number
Number
Number
Number
Number
Number
Steven Boland
Loan Shares
510,000
–
–
–
(510,000)
–
–
–
–
Performance
Rights
1,102,000
15-Nov-22
2,148,588
(34,713)
(1,067,287)
–
–
–
2,148,588
Unrestricted
Shares
4,524,562
–
–
–
1,577,287
–
(288,375)
–
5,813,474
Andrew
Crowther
Options
1,200,000
–
–
(436,894)
(463,106)
–
–
–
300,000
Performance
Rights
1,395,090
–
–
(17,325)
(532,675)
–
–
–
845,090
Unrestricted
Shares
260,574
–
–
–
995,781
–
(249,703)
–
1,006,652
TOTALS
8,992,226
2,148,588
(488,932)
–
–
(538,078)
–
10,113,804
NED’s:
No NED have been granted options in FY2024.
Name
Instrument
Number
Held at
1 July 2023
Granted FY 24
Forfeited
Vested and
Exercised
Vested and
Remaining
Unexercised
Purchase /
(Disposal)
Others
Number
Held at 30
June 2024
Number
Date
Granted
Number
Number
Number
Number
Number
Number
Number
Peter Lancken
Unrestricted
Shares
11,770,826
–
–
–
–
625,000
–
12,395,826
David Moffat
Unrestricted
Shares
416,208
–
–
–
–
–
25,000
–
441,208
Melanie Allibon
Unrestricted
Shares
200,000
–
–
–
–
–
–
–
200,000
Laurie Lefcourt
Unrestricted
Shares
10,000
–
–
–
–
–
–
–
10,000
TOTALS
12,397,034
–
–
–
–
–
650,000
–
13,047,034
Acrow Annual Report 2024 | 35
Acrow Annual Report 2024 | 35
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
No NED have been granted options in FY2023.
Name
Instrument
Number
Held at
1 July 2022
Granted FY 23
Forfeited
Vested and
Exercised
Vested and
Remaining
Unexercised
Purchase /
(Disposal)
Others
Number
Held at 30
June 2023
Number
Date
Granted
Number
Number
Number
Number
Number
Number
Number
Peter Lancken
Loan Shares
525,000
–
–
–
(525,000)
–
–
–
–
Unrestricted
Shares
11,112,493
–
–
–
525,000
–
133,333
–
11,770,826
David Moffat
Unrestricted
Shares
416,208
–
–
–
–
–
–
–
416,208
Melanie Allibon
Unrestricted
Shares
200,000
–
–
–
–
–
–
–
200,000
Laurie Lefcourt
Unrestricted
Shares
10,000
–
–
–
–
–
–
–
10,000
TOTALS
12,263,701
–
–
–
–
–
133,333
–
12,397,034
36 | Acrow Annual Report 2024
8.2
Value of equities granted as remuneration
Executives
Only selected employees have been granted performance rights under the long-term variable remuneration (LTVR) plan during the year which were valued at costs as
shown in the below table.
FY2024
2024 Equity Grants
Type
Grant Date
Expiry
Date
Fair Value
per Unit
Number
of units
Total Value
at Grant
Value
Expensed
in Previous
Years
Value
Expensed
in FY 24
Max Value
to be
Expensed
in Future
Years
Min Value
to be
Expensed
in Future
Years
Name
Role
Steven Boland
Executive
Director
and Chief
Executive
Officer
Performance
Rights
15-Nov-22
30-Jun-37
0.5608
537,147
$301,206
$301,206
$0
$0
$0
15-Nov-22
30-Jun-37
0.5616
537,147
$301,683
$301,683
$0
$0
$0
15-Nov-22
30-Jun-37
0.5228
537,147
$280,826
$107,500
$173,326
$0
$0
15-Nov-22
30-Jun-37
0.5333
537,147
$286,435
$109,647
$176,788
$0
$0
Performance
Rights
21-Aug-23
21-Aug-38
0.6292
320,984
$201,962
$0
$93,396
$108,566
$108,566
21-Aug-23
21-Aug-38
0.7485
320,984
$240,272
$0
$111,113
$129,159
$0
20-Dec-23
20-Dec-38
0.4813
293,800
$141,414
$0
$29,568
$111,846
$111,846
20-Dec-23
20-Dec-38
0.1382
293,800
$40,596
$0
$8,490
$32,106
–
Andrew
Crowther
Chief Financial
Officer
Options
16-Jul-19
16-Jul-24
0.0361
300,000
$10,843
$10,843
$0
–
–
16-Jul-19
16-Jul-24
0.0561
300,000
$16,816
$16,816
–
–
–
16-Jul-19
16-Jul-24
0.0710
300,000
$21,301
$21,301
–
–
–
16-Jul-19
16-Jul-24
0.0826
300,000
$24,782
$24,510
$272
$0
$0
Performance
Rights
01-Jun-22
30-Jun-37
0.4289
209,332
$89,788
$89,788
$0
$0
$0
01-Jun-22
30-Jun-37
0.4516
209,332
$94,534
$94,534
$0
$0
$0
01-Jun-22
30-Jun-37
0.3801
213,213
$81,034
$42,010
$39,024
$0
$0
01-Jun-22
30-Jun-37
0.4293
213,213
$91,542
$47,457
$44,085
$0
–
Performance
Rights
21-Aug-23
21-Aug-38
0.6292
127,411
$80,167
$0
$37,073
$43,094
$43,094
21-Aug-23
21-Aug-38
0.7485
127,410
$95,373
$0
$44,104
$51,269
$0
20-Dec-23
20-Dec-38
0.4813
114,441
$55,080
$0
$11,517
$43,563
$43,563
20-Dec-23
20-Dec-38
0.1382
114,441
$15,816
$0
$3,307
$12,509
–
TOTALS
5,906,949
$2,471,470
$1,167,295
$772,063
$532,112
$307,069
Acrow Annual Report 2024 | 37
Acrow Annual Report 2024 | 37
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
FY2023
2023 Equity Grants
Type
Grant Date
Expiry
Date
Fair Value
per Unit
Number
of units
Total Value
at Grant
Value
Expensed
in Previous
Years
Value
Expensed
in FY 24
Max Value
to be
Expensed
in Future
Years
Min Value
to be
Expensed
in Future
Years
Name
Role
Steven Boland
Executive
Director
and Chief
Executive
Officer
Loan Shares
27-Mar-18
27-Mar-23
0.1071
510,000
$54,621
$54,621
–
–
–
Performance
Rights
30-Nov-20
31-Jul-35
0.2321
275,500
$63,944
$63,944
–
–
–
30-Nov-20
31-Jul-35
0.2226
826,500
$183,979
$183,979
($7,727)
–
–
30-Nov-20
31-Jul-35
0.2352
275,500
$64,798
–
–
–
–
30-Nov-20
31-Jul-35
0.2181
826,500
$180,260
$108,156
–
–
–
Performance
Rights
15-Nov-22
30-Jun-37
0.5608
537,147
$301,206
–
$301,206
–
–
15-Nov-22
30-Jun-37
0.5616
537,147
$301,683
–
$301,683
–
–
15-Nov-22
30-Jun-37
0.5228
537,147
$280,826
–
$107,500
$173,326
$173,326
15-Nov-22
30-Jun-37
0.5333
537,147
$286,435
–
$109,647
$176,788
–
Andrew
Crowther
Chief Financial
Officer
Options
16-Jul-19
16-Jul-24
0.0361
300,000
$10,843
$10,843
–
–
–
16-Jul-19
16-Jul-24
0.0561
300,000
$16,816
$16,816
–
–
–
16-Jul-19
16-Jul-24
0.0710
300,000
$21,301
$20,990
$311
–
–
16-Jul-19
16-Jul-24
0.0826
300,000
$24,782
$18,319
$6,191
$271
$271
Performance
Rights
31-Jul-20
31-Jul-35
0.1727
137,500
$23,746
$23,746
–
–
–
31-Jul-20
31-Jul-35
0.1696
412,500
$69,960
$69,960
($2,938)
–
–
31-Jul-20
31-Jul-35
0.1744
137,500
$23,980
–
–
–
–
31-Jul-20
31-Jul-35
0.1668
412,500
$68,805
$41,283
–
–
–
Performance
Rights
01-Jun-22
30-Jun-37
0.4289
209,332
$89,788
$6,615
$83,173
–
–
01-Jun-22
30-Jun-37
0.4516
209,332
$94,534
$6,950
$87,584
–
–
01-Jun-22
30-Jun-37
0.3801
213,213
$81,034
$3,092
$38,918
$39,024
$39,024
01-Jun-22
30-Jun-37
0.4293
213,213
$91,542
$3,497
$43,961
$44,085
–
TOTALS
8,007,678
$2,334,883
$632,811
$1,069,509
$433,494
$212,621
NED’s
No NED has granted options since FY2022.
38 | Acrow Annual Report 2024
9.
NED Fee Policy Current Rates for and Fee Limit
The Remuneration and Nominations Committee took advice from an external remuneration consultant that was not the auditor, and these adjustments have been
implemented to ensure we continue to attract the highest talent in the Director pool.
The following table outlines the NED fee policy rates that were applicable since September 2023 year.
Director
Directors Fees/Executive Remuneration
Chairperson
$150,000
Other
$90,000
Chair of Audit & Risk Committee
Additional $12,000
Chair of Remuneration Committee
Additional $12,000
10.
Remuneration Records for FY2024 – Statutory Disclosures
10.1
Senior Executive Remuneration
The following table outlines the remuneration received and receivable by Senior Executives of the Company prepared according to statutory disclosure requirements
and applicable accounting standards:
FY2024
Name
Role
Short Term
Sub-total
Post
employ-
ment
Other long
term
Share based payments
Total
%
performance
based
Salary
STI
Non-cash
Rights
Options
Steven Boland
Executive Director
and Chief Executive
Officer
$604,951
$214,500
$20,942
$840,393
$27,399
$89,637
$592,681
–
$1,550,110
52%
Andrew
Crowther
Chief Financial
Officer
$343,597
$67,800
$512
$411,909
$27,399
$37,050
$179,110
$272
$655,739
38%
Total KMP
$948,548
$282,300
$21,454
$1,252,302
$54,798
$126,687
$771,791
$272
$2,205,849
STI of $282,300 for FY2024, payable in FY2025.
Acrow Annual Report 2024 | 39
Acrow Annual Report 2024 | 39
Remuneration Report – Audited (continued)
For the year ending 30 June 2024
FY2023
Name
Role
Short Term
Sub-total
Post
employ-
ment
Other long
term
Share based payments
Total
%
performance
based
Salary
STI
Non-cash
Rights
Options
Steven Boland
Executive Director
and Chief Executive
Officer
$529,951
$160,000
$8,974
$698,925
$25,292
$65,559
$812,309
–
$1,602,085
61%
Andrew
Crowther
Chief Financial
Officer
$312,063
$75,570
$0
$387,633
$25,292
$45,180
$250,697
$6,502
$715,304
46%
Total KMP
$842,014
$235,570
$8,974
$1,086,558
$50,584
$110,739
$1,063,006
$6,502
$2,317,389
STI of $235,570 is for FY2023, payable in FY2024.
10.2
NED Remuneration
Remuneration received by non-executive directors in FY2024 and FY2023 are disclosed below:
FY2024
Name
Role
Short Term
Share based payments
Total
%
performance
based
Board Fees
Rights
Options
Peter Lancken
Chairman
$147,667
–
–
$147,667
–
David Moffat
Independent NED
$88,333
–
–
$88,333
–
Melanie Allibon
Independent NED
$100,000
–
–
$100,000
–
Laurie Lefcourt
Independent NED
$100,000
–
–
$100,000
–
Total KMP
$436,000
–
–
$436,000
–
FY2023
Name
Role
Short Term
Share based payments
Total
%
performance
based
Board Fees
Rights
Options
Peter Lancken
Chairman
$135,993
–
–
$135,993
–
David Moffat
Independent NED
$80,000
–
–
$80,000
–
Melanie Allibon
Independent NED
$90,000
–
–
$90,000
–
Laurie Lefcourt
Independent NED
$90,000
–
–
$90,000
–
Total KMP
$395,993
–
–
$395,992
–
40 | Acrow Annual Report 2024
Employment Terms for Key Management Personnel
10.3
Service Agreements
A summary of contract terms in relation to executive KMP is presented below:
Name
Position Held at Close
of FY22
Employing
Company
Duration of
Contract
Period of Notice
Termination
Payments
From
Company
From KMP
Steven Boland
Executive Director and
Chief Executive Officer
Acrow Limited
Open-ended
6 months
6 months
Up to 6
months Total
Remuneration*
Andrew
Crowther
Chief Financial Officer
Acrow Limited
Open-ended
6 months
6 months
Up to 6
months Total
Remuneration*
*
The treatment of incentives in the case of termination is addressed in separate sections of this report that give details of incentive design.
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a
letter of appointment. The letter summarises the Board policies and terms, including compensation relevant to the office of
the director. No contracts apply to the appointment of non-executive KMP.
11.
Other Remuneration Related Matters
The following outlines other remuneration related matters that may be of interest to stakeholders, in the interests of
transparency and disclosure:
●Other than in the case of grants of Loan Funded Shares, there were no loans to Directors or other KMP at any time during
the reporting period, and
●Other transactions with KMP:
12.
External Remuneration Consultant Advice
During the reporting period, the Board engaged external remuneration consultants to provide KMP remuneration
recommendations relating to long-term variable remunerations.
The Board reviewed the recommendations from the external remuneration advisor directly and independent of executive
management and are satisfied the recommendations were made free of undue influence of the relevant KMP’s.
The Board has adopted a policy to govern any such future engagements, the details of which will be disclosed in future
Remuneration Reports should they arise.
End of audited Remunerations Report.
Acrow Annual Report 2024 | 41
Acrow Annual Report 2024 | 41
Statement of Profit or Loss and other Comprehensive Income
For the year ending 30 June 2024
In dollars
Note
2024
2023
Continuing operations
Revenue
4
193,114,919
149,814,345
Other income
5
15,037,150
12,024,427
Personnel expenses
(80,623,830)
(55,775,184)
Sub-contract labour costs
(10,846,322)
(15,469,758)
Inventory purchased, net of changes in finished goods
(29,878,964)
(28,012,325)
Depreciation
(20,027,484)
(15,222,956)
IT and telecommunication expenses
(2,288,128)
(1,858,760)
Freight costs
(3,003,585)
(1,914,389)
Insurance expenses
(2,112,241)
(1,216,688)
Expected credit loss provision and bad debt expense
(2,053,183)
(3,145,000)
Amortisation of other intangible assets
(899,400)
–
Other expenses
6
(10,384,775)
(5,932,869)
Profit before net finance costs and income tax
46,034,157
33,290,843
Finance costs
7
(7,558,627)
(4,481,063)
Net finance costs
(7,558,627)
(4,481,063)
Profit before income tax
38,475,530
28,809,780
Income tax expense
8
(13,120,987)
(5,352,740)
Profit from continuing operations
25,354,543
23,457,040
Profit from discontinued operations
204,756
–
Profit for the period
25,559,299
23,457,040
Other comprehensive income
Items that may be reclassified to profit / (loss)
Foreign operations – foreign currency translation differences
(53,803)
(1,939)
Total comprehensive income for the year
25,505,496
23,455,101
Earnings per share from continuing operations
Basic EPS (cents per share)
25
8.94
8.96
Diluted EPS (cents per share)
25
8.66
8.69
The above statement should be read in conjunction with the accompanying notes.
42 | Acrow Annual Report 2024
Statement of Financial Position
As at 30 June 2024
In dollars
Note
2024
2023
Current assets
Cash and cash equivalents
10
5,593,504
4,939,396
Trade and other receivables
11
53,735,780
39,178,433
Inventories
12
14,009,225
11,397,484
Contract assets
13
43,299
42,814
Prepayments and other assets
13
4,370,251
3,850,665
Total current assets
77,752,059
59,408,792
Non-current assets
Property, plant and equipment
14
170,421,375
131,589,548
Right-of-use lease assets
15
28,061,115
20,088,885
Goodwill
16
19,971,167
7,428,704
Other intangible assets
16
16,239,924
–
Total non-current assets
234,693,581
159,107,137
Total assets
312,445,640
218,515,929
Current liabilities
Bank overdraft
10
3,597,901
–
Trade payables and accrued expenses
17
21,535,436
14,890,123
Other payables
17
1,737,880
3,000,000
Employee benefits
18
7,903,481
6,186,367
Lease liabilities
15
5,727,741
6,375,328
Loans and borrowings
19
21,485,595
21,907,696
Current tax liabilities
21
2,029,461
1,348,072
Total current liabilities
64,017,495
53,707,586
Non-current liabilities
Other payables
17
3,980,903
4,000,000
Employee benefits
18
778,061
628,024
Lease liabilities
15
26,734,220
17,537,389
Loans and borrowings
19
49,147,807
29,382,836
Provisions
20
569,274
469,274
Deferred income tax liability
21
26,257,568
9,907,149
Total non-current liabilities
107,467,833
61,924,672
Total liabilities
171,485,328
115,632,258
Net assets
140,960,312
102,883,671
Equity
Issued capital
89,458,912
61,809,122
Reserves
4,674,077
4,076,017
Retained earnings
46,827,323
36,998,532
Total equity
140,960,312
102,883,671
The above statement should be read in conjunction with the accompanying notes.
Acrow Annual Report 2024 | 43
Acrow Annual Report 2024 | 43
Acrow Annual Report 2024 | 43
Statement of Changes in Equity
For the year ending 30 June 2024
In dollars
Share capital
Share based
option
payments
reserve
Foreign
currency
translation
reserve
Retained
earnings
Total equity
Balance at 30 June 2022
58,310,046
3,003,681
55,742
21,949,512
83,318,981
Total comprehensive income for
the period
Profit for the year
–
–
–
23,457,040
23,457,040
Other comprehensive income
–
–
(1,939)
–
(1,939)
Total comprehensive income
–
–
(1,939)
23,457,040
23,455,101
Transactions with owners of the company
Options & performance Rights forfeited,
written back to P&L
–
(261,821)
–
–
(261,821)
Options & performance Rights failed to
meet market condition
–
(7,426)
–
7,426
–
Dividends paid to shareholders
–
–
–
(8,415,446)
(8,415,446)
Shares issued under dividend reinvestment
plan ("DRP"), net of costs
1,036,828
–
–
–
1,036,828
Equity settled share base payments
–
3,478,692
–
–
3,478,692
Transfer of option reserves to share capital
2,190,912
(2,190,912)
–
–
–
Proceeds from exercise of options,
net of costs
271,336
–
–
–
271,336
Total transactions with owners of
the company
3,499,076
1,018,533
–
(8,408,020)
(3,890,411)
Balance at 30 June 2023
61,809,122
4,022,214
53,803
36,998,532
102,883,671
Total comprehensive income for
the period
Profit for the year
–
–
–
25,559,299
25,559,299
Other comprehensive income
–
–
(53,803)
–
(53,803)
Total comprehensive income
–
–
(53,803)
25,559,299
25,505,496
Shares issued net of transaction costs
21,717,785
–
–
–
21,717,785
Shares issued as consideration on business
combination, net of cost
2,000,000
–
–
–
2,000,000
Dividends paid to shareholders
–
–
–
(15,730,508)
(15,730,508)
Shares issued under dividend reinvestment
plan ("DRP")
1,429,359
–
–
–
1,429,359
Listing costs
(121,264)
–
–
–
(121,264)
Equity settled share base payments
–
3,275,773
–
–
3,275,773
Transfer of option reserves to share capital
2,623,910
(2,623,910)
–
–
–
Total transactions with owners of
the company
27,649,790
651,863
–
(15,730,508)
12,571,145
Balance at 30 June 2024
89,458,912
4,674,077
–
46,827,323
140,960,312
The above statement should be read in conjunction with the accompanying notes.
44 | Acrow Annual Report 2024
Statement of Cash Flows
For the year ending 30 June 2024
In dollars
Note
2024
2023
Cash flows from operating activities
Receipts from customers
93,216,7519
70,425,037
Receipts on lease revenue
103,806,520
80,641,924
Payments to suppliers and employees
(156,828,902)
(118,240,226)
Cash generated from operations
40,194,369
32,826,735
Income tax paid
(7,652,062)
(2,956,964)
Net cash inflow from operating activities
32,542,307
29,869,771
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
5
22,197,226
18,680,621
Purchase of property, plant and equipment
(40,210,211)
(44,941,533)
Consideration paid for controlled entities, net of cash acquired
9
(30,985,697)
–
Net cash outflow from investing activities
(48,998,682)
(26,260,912)
Cash flows from finance activities
Proceeds from issue of shares
21,717,785
–
Capital raising costs
(121,264)
–
Proceeds from exercise of options, net of costs
–
263,597
Proceeds from borrowings
47,706,226
49,451,920
Repayment of borrowings
(28,363,357)
(31,011,363)
Repayment of lease liabilities
15
(6,224,654)
(5,831,150)
Dividends paid net of DRP
(14,301,149)
(7,370,832)
Finance costs paid
(6,901,008)
(4,181,064)
Net cash inflow from financing activities
13,512,579
1,321,108
Net increase in cash and cash equivalents
(2,943,796)
4,929,967
Cash and cash equivalents as at 1 July
4,939,396
9,428
Effect of exchange rate fluctuations on cash held
3
1
Cash and cash equivalents at the end of the year
1,995,603
4,939,396
The above statement should be read in conjunction with the accompanying notes.
Acrow Annual Report 2024 | 45
Acrow Annual Report 2024 | 45
Acrow Annual Report 2024 | 45
Notes to the Consolidated Financial Statements
For the year ending 30 June 2024
Contents
1
Reporting entity
2
Basis of preparation
3
Material accounting policies
4
Revenue
5
Other income
6
Other expenses
7
Finance costs
8
Income tax expense
9
Acquisitions
10
Cash and cash equivalents
11
Trade and other receivables
12
Inventories
13
Contract assets, prepayments and
other assets
14
Property, plant and equipment
15
Leases
16
Intangible assets
17
Trade and other payables
18
Employee benefits
19
Loans and borrowings
20
Provisions
21
Deferred income tax liability and current
income tax liability
22
Issued capital
23
Capital management
24
Share-based payments
25
Earnings per share
26
Capital commitments and contingencies
27
Reconciliation of cash flows from
operating activities
28
Remuneration of auditors
29
Key management personnel and
related parties
30
Financial risk management
31
Group entities
32
Deed of cross guarantee
33
Parent entity disclosures
34
Operating segments
35
Subsequent events
1.
Reporting entity
Acrow Limited (Acrow or the Group), formerly known as
Acrow Formwork and Construction Services Limited, is a
limited company incorporated in Australia. Its shares are
traded on the Australian Securities Exchange under the
issuer code “ACF”.
The name change took effect in November 2023. This new
rebranding is part of the company’s strategy to simplify its
name and better reflect its broad range of services beyond
just formwork and construction. The new name, Acrow
Limited, aligns with the Group’s vision to set the national
standard in engineered industrial and construction services.
The consolidated financial statements of Acrow for the
year ended 30 June 2024 comprise of the Company and its
controlled entities (the Group).
The Group is a for-profit entity and is primarily involved in
the hire and sale of falsework, formwork, scaffolding and
screen equipment, and other construction services.
Acrow’s Annual Reports for prior reporting periods are
available upon request from the Group’s registered office
located at 2A Mavis Street, Revesby NSW 2212, Australia or
at www.acrow.com.au.
2.
Basis of preparation
(a)
Basis of accounting
The consolidated financial statements are general
purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (AASBs)
adopted by the Australian Accounting Standards Board
(AASB) and the Corporations Act 2001.
The consolidated financial statements comply with
International Financial Reporting Standards (IFRS) adopted
by the International Accounting Standards Board (IASB)
and were authorised for issue by the Board of Directors on
27 September 2024.
Details of the Group’s material accounting policies are
included in note 3.
(b)
Basis of measurement
The consolidated financial statements have been prepared
on accrual basis and are based on historical costs, modified
where applicable by the measurement at fair value.
(c)
Functional and presentation currency
The consolidated financial statements are presented in
Australian dollars, which is the Group’s functional currency.
(d)
Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the
application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
46 | Acrow Annual Report 2024
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised
and in any future periods affected.
In particular, information about significant areas of
estimations, uncertainties and critical judgements in
applying accounting policies that have the most significant
effect on the amounts recognised in the consolidated
financial statements include the following:
Accounting estimate and judgements
Note
Revenue
4
Income tax expense
8
Acquisitions
9
Trade and other receivables
11
Inventories
12
Property, plant and equipment
14
Leases
15
Intangible assets
16
Employee benefits
18
Provisions
20
Deferred income tax liability and current income
tax liability
21
Share-based payments
24
The accounting policies below have been applied
consistently to all periods presented in these consolidated
financial statements and have been applied consistently by
the Group.
(e)
Comparative information
Where applicable, comparative information is reclassified
to comply with disclosure requirements and improve
comparability.
(f)
Rounding
Acrow is a company of the kind referred to in the Australian
Securities and Investments Commission (ASIC) Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191, dated 24 March 2016 and in accordance with
that Legislative Instrument, amounts in these consolidated
financial statements have been rounded off to the nearest
dollar and are shown as such, unless stated otherwise.
3.
Material accounting policies
(a)
Basis of consolidation
The consolidated financial statements have been prepared
by aggregating the financial statements of all the entities
that comprise the Group, being Acrow Limited and its
controlled entities.
All inter-entity balances and transactions are eliminated in
these consolidated financial statements.
(i)
Business combinations
Business combinations are accounted for using the
acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
Control is the power to govern the financial and
operating policies of an entity so as to obtain benefits
from its activities. In assessing control, the Group takes
into consideration potential voting rights that currently
are exercisable.
The Group measures goodwill at the acquisition date as:
●the fair value of the consideration transferred; plus
●the recognised amount of any non-controlling interests
in the acquiree; plus, if the business combination is
achieved in stages, the fair value of the existing equity
interest in the acquiree; less
●the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in the statement of profit or loss.
The consideration transferred does not include amounts
related to the settlement of pre-existing relationships. Such
amounts are generally recognised in the statement of profit
or loss.
Costs related to the acquisition, other than those
associated with the issue of debt or equity securities that
the Group incurs in connection with a business combination
are expensed as incurred.
Any deferred consideration payable is recognised at
fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured,
and settlement is accounted for within equity, otherwise
subsequent changes to the fair value of the contingent
consideration are recognised in the statement of profit
or loss.
Where an asset only purchase is made and deferred
consideration is contingent to certain conditions being met,
the amount payable is assumed to be at the maximum
probable level, such that the capitalisation of assets
includes the full value of the purchase price. Any reduction in
final deferred consideration paid are to be recognised in the
statement of profit or loss as when the conditions resulting in
the reduction in deferred consideration have occurred.
(ii)
Subsidiaries
Subsidiaries are entities controlled by the Group. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that
control commences until the date that control ceases.
(b)
Foreign currency
Transactions in foreign currencies are translated to the
functional currency of the Group at exchange rates at the
dates of the transactions.
Acrow Annual Report 2024 | 47
Acrow Annual Report 2024 | 47
Acrow Annual Report 2024 | 47
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date.
The foreign currency gain or (loss) on monetary items is
the difference between amortised cost in the functional
currency at the beginning of the period, adjusted for
effective interest and payments during the period, and
the amortised cost in foreign currency translated at the
exchange rate at the end of the year.
Foreign currency differences arising on retranslation
are recognised in the statement of profit or loss,
except for qualifying cash flow hedges to the extent
the hedge is effective, which are recognised in other
comprehensive income.
(c)
Financial instruments
(i)
Non-derivative financial assets
The Group initially recognises receivables on the date
that they are originated. All other financial assets
(including assets held at fair value through profit or loss)
are recognised initially on the trade date at which the
Group becomes a party to the contractual provisions of
the instrument.
The Group derecognises a financial asset when the
contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows
on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset
are transferred. Any interest in transferred financial assets
that is created or retained by the Group is recognised as a
separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and
only when, the Group has a legal right to offset the amounts
and intends to either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets:
receivables and cash and cash equivalents.
Receivables
A receivable is recognised when performance obligations
are met or as lease income is earned as this is the point in
time that the consideration is unconditional because only
the passage of time is required before the payment is due.
Receivables are financial assets with fixed or determinable
payments that are not quoted in an active market. Such
assets are recognised initially at the transaction price plus
any directly attributable transaction costs. Subsequent
to initial recognition, receivables are measured at
amortised cost using the effective interest method, less any
impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank,
overdraft and cash equivalents. Cash equivalents
represent highly liquid investments which are readily
convertible to cash.
(ii)
Non-derivative financial liabilities
The Group initially recognises debt securities issued on the
date that they are originated. All other financial liabilities
(including liabilities held at fair value through profit or loss)
are recognized initially on the trade date at which the
Group becomes a party to the contractual provisions of
the instrument.
The Group derecognises financial liability when its
contractual obligations are discharged or cancelled
or expire.
Financial liabilities are recognized initially at fair value plus
any directly attributable transaction costs.
Subsequent to initial recognition, financial liabilities are
measured at amortized cost using the effective interest
rate method.
Financial liabilities comprise loans and borrowings, trade
and other payables.
Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included
as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
(iii)
Issued capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity,
net of any tax effects.
(d)
Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at
cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to
the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour,
any other costs directly attributable to bringing the assets
to a working condition for their intended use, the costs of
dismantling and removing the items and restoring the site
on which they are located, and capitalised borrowing costs
(see below).
Cost also may include transfers from other comprehensive
income of any gain or (loss) on qualifying cash flow hedges
of foreign currency purchases of property, plant and
equipment. Purchased software that is integral to the
3.
Material accounting policies (continued)
48 | Acrow Annual Report 2024
functionality of the related equipment is capitalised as part
of that equipment.
When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant
and equipment.
The gains and (losses) on disposal of an item of property,
plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of
property, plant and equipment and are recognised net
within other income or other expenses in the statement of
profit or loss.
(ii)
Subsequent costs
The cost of replacing a component of an item of property,
plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits
embodied within the component will flow to the Group,
and its cost can be measured reliably. The carrying amount
of the replaced part is derecognised. The costs of the
day‑to-day servicing of property, plant and equipment are
recognised in the statement of profit or loss as incurred.
(iii)
Depreciation
Depreciation is based on the cost of an asset less its
residual value. Significant components of individual assets
are assessed and if a component has a useful life that is
different from the remainder of that asset, that component
is depreciated separately.
Depreciation is recognised in the statement of profit or
loss on a straight-line basis over the estimated useful
lives of each component of an item of property, plant
and equipment.
Right-of-use lease assets are depreciated over the shorter
of the lease term (including any contractual extensions
that are expected to be exercised) and useful life, on a
straight‑line basis, unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term.
The expected useful lives for depreciation purposes are
as follows:
●Hire equipment
2 – 33 years
●Leasehold improvements
over the lease term
●Plant and equipment
2 – 20 years
Depreciation methods, useful lives and residual values
are reviewed at each financial year end and adjusted
if appropriate.
(iv)
Hire equipment loss provision
A hire equipment loss provision is recognised to cover the
expected loss of equipment on hire. The provision is based
on historical experience of unrecoverable losses incurred on
the return of hire equipment from customers.
(e)
Intangible assets
(i)
Goodwill
All business combinations are accounted for by applying
the acquisition method. Goodwill represents the difference
between the cost of the acquisition and the fair value of the
net identifiable assets acquired. Goodwill is stated at costs
less any accumulated impairment losses.
Other intangible assets
Customer relationships and brand names, acquired during
business combinations, are valued at cost. They are
amortised on a straight-line basis over an estimated useful
life of 12 years and 10 years, respectively.
(f)
Inventories
Inventories are measured at the lower of cost and net
realisable value.
The cost of inventories is based on the weighted average
cost principle, and includes expenditure incurred in
acquiring the inventories, production or conversion costs
and other costs incurred in bringing them to their existing
location and condition.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and selling expenses.
(g)
Impairment
(i)
Non-derivative financial assets
Non-derivative financial assets comprise trade and other
receivables and cash and cash equivalents.
Non-derivative financial instruments excluding financial
assets are recognised initially at fair value plus transaction
costs. Subsequent to initial recognition, non-derivative
financial assets are measured at amortised cost less
impairment losses.
A financial asset is recognised if the Group becomes a party
to the contractual provisions of the asset.
Financial assets are derecognised if the Group’s contractual
rights to the cash flows from the financial assets expire
or if the Group transfers the financial asset to another
party without retaining control or substantially all risks and
rewards of the asset.
The Group recognises its financial assets at either amortised
cost or fair value, depending on the contractual cash flow
characteristics of the financial assets.
The classification of financial assets that the Group held at
the date of initial application was based on the facts and
circumstances of the financial assets held at that date.
Financial assets recognised at amortised cost are measured
using the effective interest method, net of any impairment
loss. Financial assets other than those classified as financial
assets recognised at amortised cost are measured at
Acrow Annual Report 2024 | 49
Acrow Annual Report 2024 | 49
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
fair value with any changes in fair value recognised in the
statement of profit or loss.
Receivables
For trade receivables, the Group conducts an ongoing
assessment of expected credit losses (ECL) by analysing
actual loss experience of the Group, arrears, and other
inputs such as exposure or timing. The assessment is broken
down into 4 sectors including Industrial Services, Civil
Infrastructure, Commercial, and Residential. These sectors
are then analysed in a set of 5 stages ranging from currently
due receivables to above 90-days due receivables. The
Group also separately quantifies receivables due from
entities in liquidation/default.
The Group provides for a loss allowance equivalent to the
lifetime expected credit losses from initial recognition of
those receivables.
Losses are recognised in the statement of profit or loss and
other comprehensive income and reflected in an allowance
account against trade receivables.
When a subsequent event causes the amount of
impairment loss to decrease, the decrease is reversed
through the statement of profit or loss and Other
Comprehensive Income.
(ii)
Non-financial assets
The carrying amounts of the Group’s non-financial assets,
other than inventories and deferred tax assets, are reviewed
at each reporting date to determine whether there is any
indication of impairment, and if any such indication exists,
then the asset’s recoverable amount is estimated.
For intangible assets, namely goodwill that have
indefinite useful lives or that are not yet available for use,
the recoverable amount is estimated each year at the
same time.
An impairment loss is recognised if the carrying amount of
an asset or its related cash-generating unit (CGU) exceeds
its estimated recoverable amount.
The recoverable amount of an asset is the greater of its
value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset.
For the purpose of annual impairment testing applicable
to goodwill, such intangible assets that cannot be tested
individually are grouped together into the smallest group of
assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets.
Impairment losses are recognised in the statement of profit
or loss.
Impairment losses recognised in prior periods are assessed
at each reporting date for any indications that the loss has
decreased or no longer exists.
An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had
been recognised.
(h)
Employee benefits
(i)
Defined contribution plans
A defined contribution plan is a post-employment benefit
plan under which an entity pays fixed contributions into
a separate entity and will have no legal or constructive
obligation to pay further amounts.
Obligations for contributions to defined contribution
plans are recognised as an employee benefit expense in
the statement of profit or loss in the periods during which
services are rendered by employees.
Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in future payments
is available.
Contributions to a defined contribution plan that are due
more than 12 months after the end of the period in which
the employees render the service are discounted to their
present value.
(ii)
Other long-term employee benefits
The Group’s net obligation in respect of long-term employee
benefits other than defined benefit plans is the amount
of future benefit that employees have earned in return for
their service in the current and prior periods plus related
on‑costs.
The benefit is discounted to determine its present value, and
the fair value of any related assets is deducted.
The discount rate is the yield at the reporting date on
high quality corporate bonds that have maturity dates
approximating the terms of the Group’s obligations.
The calculation is performed using the projected unit
credit method.
(iii)
Termination benefits
Termination benefits are recognised as an expense when
the Group is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to either
terminate employment before the normal retirement date, or
to provide termination benefits as a result of an offer made
to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are
recognised as an expense if the Group has made an offer
3.
Material accounting policies (continued)
50 | Acrow Annual Report 2024
of voluntary redundancy, it is probable that the offer will
be accepted, and the number of acceptances can be
estimated reliably.
If termination benefits are payable more than 12 months
after the reporting period, the termination benefits are
discounted to their present value.
(iv)
Short-term benefits
Short-term employee benefit obligations are measured on
an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid
under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to
pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
(v)
Share-based payments
The Group provides benefits to selected employees in
the form of share-based payment transactions, whereby
employees render services in exchange for options and/or
performance rights over ordinary shares.
The cost of the share-based payments is measured by
reference to the fair value at the date at which they are
granted and amortized over the expected vesting period
with a corresponding increase in share capital reserve.
If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on
the best available estimate of the number of share options
expected to vest.
Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is
any indication that the number of share options expected
to vest differs from previous estimates. Any adjustment to
cumulative share-based compensation resulting from a
revision is recognised in the current period. The number
of vested options ultimately exercised by holders does
not impact the expense recorded in any period. Upon
exercise of share options, the proceeds received, net of
any directly attributable transaction costs, are allocated to
share capital.
The fair value of share-based payments is appraised
at grant date in accordance with AASB 2 Share-based
Payments. These are independently determined using a
pricing model that considers the exercise price, the terms
of the payment, the vesting and performance criteria, the
impact of the dilution, the non-tradeable nature of the
payment, the share price at grant date, the expected
price volatility of the underlying share, the comparative
share market indices, the expected dividend yield and
the risk‑free interest rate for the term of the share-based
payment.
(i)
Provisions
A provision is recognised if, as a result of a past event, the
Group has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks
specific to the liability.
The unwinding of the discount is recognised as finance cost.
(i)
Restructuring
A provision for restructuring is recognised when the Group
has approved a detailed and formal restructuring plan,
and the restructuring either has commenced or has been
announced publicly.
Future operating losses are not provided for.
(ii)
Onerous contracts
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from a
contract are lower than the unavoidable cost of meeting its
obligations under the contract.
The provision is measured at the present value of the lower
of the expected cost of terminating the contract and the
expected net cost of continuing with the contract.
Before a provision is established, the Group recognises any
impairment loss on the assets associated with that contract.
(iii)
Make good
A provision for make good is measured at the present value
of the cost of restoring leased properties to their original
condition, at the conclusion of the lease.
(j)
Revenue
Acrow is predominately a provider of falsework, formwork,
scaffolding and screen equipment for hire or sale with
revenue primarily generated via dry hire, project hire or sale.
The company generates revenue via provision of
equipment hire, services and the sales of product. Revenue
generated from hire of equipment only is referred to as “dry
hire” revenue.
Project hire or “wet hire” revenue includes “dry hire” revenue
plus labour services, cartage services, consumable sales
and/or other services which are recognised over time as
services can be staged progressively as they are rendered.
To determine whether to recognise revenue, the Group
follows a 5-step process:
1) Identifying the contract with a customer
2) Identifying the performance obligations
3) Determining the transaction price
Acrow Annual Report 2024 | 51
Acrow Annual Report 2024 | 51
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
4) Allocating the transaction price to the
performance obligations
5) Recognising revenue when/as performance obligation(s)
are satisfied.
(i)
Hire of equipment
Falsework, formwork, scaffolding and screen equipment
are rented to customers under operating leases with rental
periods averaging six months to less than one year.
The rental can be arranged as dry hire where only
equipment is provided to the customer and revenue is
recognised at fixed rates over the period of hire; or as part
of a project hire where Acrow supplies labour and cartage
services between warehouse and building sites.
Revenue recognition on equipment hire commences once
falsework, formwork, scaffold or screen equipment is either
collected by the customer, delivered to the customer or
once a scaffolding structure has been certified to be safe
and access granted to customers or control otherwise
passes to a customer.
Revenue is recognised over straight-line bases over the life
of the hire agreements per AASB 16 Leases.
(ii)
Labour and cartage services
Revenue from providing scaffolding labour in installation
and dismantling, and equipment cartage, being transport
to and from the customer, are recognised at one or more
points in time as services can be staged progressively as
they are rendered.
Revenue is recognised based on the actual service provided
to the end of the reporting period because the customer
receives and uses the benefits simultaneously.
Labour and cartage services revenue are recognised over
time under AASB 15 Revenue from Contracts with Customers.
(iii)
Consumable sales and other services
Revenue from sales is measured as the transaction price net
of returns, trade discounts and volume rebates.
Revenue is recognised when control of the goods or services
are transferred to customers which is generally upon delivery
to or collection by the customer depending on the contract
with the customer.
Discounts are recognised as a reduction in revenue until
management determine that it is highly probable that no
significant reversal of revenue will occur.
Revenue recognition of consumable sales and other services
are at a point in time when control passes which is typically
upon delivery or collection as under AASB 15 Revenue from
Contracts with Customers.
(k)
Finance income and finance costs
Finance income comprises interest income on funds
deposited. Interest income is recognised as it accrues
in the statement of profit or loss, using the effective
interest method.
Finance costs comprise interest expenses on loans and
borrowings, lease liabilities and, where material, the
unwinding of the discount on provisions.
Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset
are recognised in the statement of profit or loss using the
effective interest method.
(l)
Tax
Tax expense comprises current and deferred tax. Current
and deferred tax are recognised in the statement of profit or
loss, except to the extent that it relates to items recognised
directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on
the taxable income or (loss) for the year, using tax rates
enacted or substantively enacted at the reporting date,
and any adjustment to tax payable in respect of previous
years. Current tax payable also includes any tax liability
arising from the declaration of dividends.
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised
for temporary differences on the initial recognition of
assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit or loss.
Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively
enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses,
tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be
available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
3.
Material accounting policies (continued)
52 | Acrow Annual Report 2024
(m)
Goods and services tax
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation
authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of
the expense.
Cash flows included in the statement of cash flows are on a
gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from
or payable to the Australian Taxation Office, are classified
as operating cash flows.
(n)
Lease accounting
The Group as a lessee
The Group makes the use of leasing arrangements
principally for the provision of the warehouse/office space,
forklift equipment, motor vehicles and printers. The Group
does not enter into sale and leaseback arrangements.
All the leases are negotiated on an individual basis and
contain a wide variety of different terms and conditions
such as purchase options and escalation clauses. The
Group assesses whether a contract is or contains a lease at
inception of the contract. A lease conveys the right to direct
the use and obtain substantially all of the economic benefits
of an identified asset for a period of time in exchange
for consideration.
Only motor vehicle lease contracts contain both lease and
non-lease components. These non-lease components are
usually associated with servicing and repair contracts.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a
right-of-use asset and a lease liability in its consolidated
statement of financial position. The right-of-use asset
is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle
and remove the asset at the end of the lease, and any lease
payments made in advance of the lease commencement
date (net of any incentives received).
The Group depreciates the right-of-use asset on a
straight‑line basis from the lease commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term including any lease
extensions that are likely to be exercised.
The Group also assesses the right-of-use asset for
impairment when such indicators exist. At the
commencement date, the Group measures the lease liability
at the present value of the lease payments unpaid at that
date, discounted using the Group’s incremental borrowing
rate because as the lease contracts are negotiated with
third parties it is not possible to determine the interest rate
that is implicit in the lease.
The incremental borrowing rate is the estimated rate that
the Group would have to pay to borrow the same amount
over a similar term, and with similar security to obtain an
asset of equivalent value.
Lease payments included in the measurement of the
lease liability are made up of fixed payments (including in
substance fixed), variable payments based on an index or
rate, amounts expected to be payable under a residual
value guarantee and payments arising from options
reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be
reduced by lease payments that are allocated between
repayments of principal and finance costs. The finance cost
is the amount that produces a constant periodic rate of
interest on the remaining balance of the lease liability.
The lease liability is reassessed when there is a change
in the lease payments. Changes in lease payments
arising from a change in the lease term or a change
in the assessment of an option to purchase a leased
asset. The revised lease payments are discounted using
the Group’s incremental borrowing rate at the date of
reassessment when the rate implicit in the lease cannot be
readily determined.
The amount of the remeasurement of the lease liability is
reflected as an adjustment to the carrying amount of the
right-of-use asset. The exception being when the carrying
amount of the right-of-use asset has been reduced to zero
then any excess is recognised in profit or loss.
Payments under leases can also change when there is
either a change in the amounts expected to be paid
under residual value guarantees or when future payments
change through an index or a rate used to determine those
payments, including changes in market rental rates following
a market rent review.
The remeasurement of the lease liability is dealt with by a
reduction in the carrying amount of the right-of-use asset
to reflect the full or partial termination of the lease for lease
modifications that reduce the scope of the lease. Any gain
or loss relating to the partial or full termination of the lease is
recognised in profit or loss.
The right-of-use asset is adjusted for all other lease
modifications. The Group has elected to account for
low‑value assets using the practical expedients. These
leases relate to mobile IT devices such as computer
monitors, laptops and mobile telephones. Instead of
recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense
in profit or loss on a straight-line basis over the lease term.
The Group as a lessor
As a lessor the Group classifies its leases as either operating
or finance leases. A lease is classified as a finance lease if it
Acrow Annual Report 2024 | 53
Acrow Annual Report 2024 | 53
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
transfers substantially all the risks and rewards incidental to ownership of the underlying asset and classified as an operating
lease if it does not.
(o)
Accounting standards and interpretations issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2024
reporting period and have not been early adopted by the Company.
AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants. This standard
is not expected to have material impact on the entity in the current or future reporting periods and on foreseeable
future transactions.
4.
Revenue
In dollars
2024
2023
Revenue from contracts with customers
Labour services transferred over time
49,929,174
30,173,235
Cartage services transferred over time
7,770,923
6,424,309
Consumable sales and other services transferred at a point in time
41,045,258
39,905,960
98,745,355
76,503,504
Revenue from operating leases
Hire of equipment
94,369,564
73,310,841
193,114,919
149,814,345
There has never been any revenue from discontinued operation.
5.
Other income
In dollars
2024
2023
Disposal of property, plant and equipment
Ex-hire equipment
Proceeds
22,141,104
18,592,503
Written down value
(7,125,478)
(6,647,546)
15,015,626
11,944,957
Non-hire equipment
Proceeds
56,122
88,118
Written down value
(34,598)
(8,648)
21,524
79,470
Net gain on disposal of property, plant and equipment
15,037,150
12,024,427
3.
Material accounting policies (continued)
54 | Acrow Annual Report 2024
6.
Other expenses
In dollars
2024
2023
From continuing operations
Acquisition, rebranding and other significant costs
(3,165,796)
(1,062,401)
Audit, tax and legal expenses
(1,202,058)
(975,831)
Property costs
(1,157,746)
(473,438)
Utilities
(981,943)
(890,752)
Travelling expenses
(881,977)
(931,428)
Other leases
(709,490)
–
Repair & maintenance
(693,230)
(423,731)
Plant & equipment operating expenses
(468,322)
(430,646)
Motor vehicle expenses
(392,923)
(286,300)
Others
(579,260)
(378,547)
(10,232,745)
(5,853,074)
From discontinued operations
Cost of divestment
(152,030)
(79,795)
(152,030)
(79,795)
Total other expenses
(10,384,775)
(5,932,869)
7.
Finance costs
In dollars
2024
2023
Finance costs
Unwinding interest on deferred consideration
(657,618)
–
Interest expense on financial liabilities
(4,685,934)
(2,937,522)
Interest expense on leases
(1,689,667)
(1,327,157)
Borrowing costs
(525,408)
(216,384)
Net finance costs from continuing operations
(7,558,627)
(4,481,063)
Acrow Annual Report 2024 | 55
Acrow Annual Report 2024 | 55
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
8.
Income tax expense
In dollars
2024
2023
Current income tax expense
(12,053,238)
(7,692,833)
Deferred income tax expense
(1,018,816)
(1,862,236)
Under provision for income tax in prior year
(48,933)
(96,140)
Initial recognition of previously unrecognised deferred income tax expense
–
4,298,469
Income tax expense attributable to profit*
(13,120,987)
(5,352,740)
In dollars
2024
2023
Profit before income tax
38,475,530
28,809,780
Income tax (expense) using the Group’s domestic tax rate (30%)
(11,542,659)
(8,642,934)
Income tax effects of amounts which are not deductible / (taxable) in calculating
taxable income:
Non-deductible losses on overseas entities
–
(46,396)
Non-deductible share-based payment expense
(982,731)
(965,061)
Non-deductible acquisition expense
(269,192)
–
Non-deductible impairment expense
(46,758)
(17,782)
Other non-deductible expenses
(385,277)
(26,919)
(Under) provision for income tax in prior year
(48,933)
(96,140)
Recognition of previously unrecognised deferred tax not brought to account
–
4,298,469
Difference in tax rate on acquisition of base rate entities
(260,000)
–
Utilisation of prior year tax losses not previously recognised
414,563
144,023
Income tax expense attributable to profit
(13,120,987)
(5,352,740)
9.
Acquisitions
MI Scaffold Pty Ltd (“MI Scaffold”)
On 10 November 2023, Acrow acquired 100% of the issued
shares of MI Scaffold Pty Ltd (ACN 158 507 021). As agreed
between the sellers and Acrow. For practical reasons
the effective acquisition date is 31 October 2023 for
accounting purposes.
MI Scaffold Pty Ltd is a leading provider of scaffolding,
rigging and access solutions throughout the North
and Central Queensland market, its business is highly
complementary to Acrow’s existing portfolio of specialised
industrial services and engineering solutions across
Australia. MI Scaffold Pty Ltd has a highly recurring,
long‑standing, blue-chip client base, predictable revenues
and has a strong focus on the energy, mining and
industrial sectors.
Purchase price allocation was completed during the year.
The fair values of purchase considerations, tangible and
intangible assets, and liabilities assumed were determined
and set out in the following tables.
The consideration comprises a $15,000,000 Completion
Payment on 10 November 2023, followed by a Deferred
Payment of $11,500,000 on 30 November 2023, and two
tranches of Contingent Considerations of up to $4,950,000
each, provided MI Scaffold Pty Ltd’s EBITDA exceeds
$6,600,000 for each of the Earn Out Periods. The First Earn
Out Period is the 12 months commencing on the first day
immediately following the acquisition date, and the Second
Earn Out Period is the 12 months commencing on the first
day immediately following the First Earn Out Period. At the
reporting date, Contingent Considerations are valued at
$2,127,417 and $3,365,858 respectively when discounted to
present value, based on estimated EBITDA outcomes at
Acrow’s pre-tax cost of debt.
An anticipated working capital adjustment, currently
estimated at $900,000 is expected to bring the total
purchase consideration to $31,056,257 at the reporting date.
Acquisition costs are included in note 6 Other expenses,
amounting to $1,248,893 for the year. ERP and process
integrations are ongoing, with more expenses expected
next year.
56 | Acrow Annual Report 2024
MI Scaffold Pty Ltd
In dollars
Completion payment
15,000,000
Deferred payment
11,462,982
First contingent payment
2,127,417
Second contingent payment
3,365,858
Net working capital adjustment
(900,000)
Total consideration at fair value
31,056,257
Assets
Cash and cash equivalents
1,915,335
Trade and other receivables
5,890,238
Prepayments and other assets
767,811
Property, plant and equipment
11,507,510
Right-of-use lease assets
570,725
Other intangible assets
17,139,324
Total assets
37,790,943
Liabilities
Trade payables
5,619,926
Employee benefits
791,452
Loans and borrowings
400,039
Current tax liabilities
790,313
Lease liabilities
570,725
Deferred income tax liabilities
8,126,217
Total liabilities
16,298,672
Fair value of net assets acquired
21,492,271
Purchase consideration transferred
31,056,257
Less: Fair value of net identifiable
assets acquired
(21,492,271)
Goodwill on acquisition
9,563,986
Consideration transferred in cash
26,500,000
Cash acquired net of loan
(1,515,296)
Net cash outflow on acquisition
24,984,704
Estimates and judgments were made to determine the fair
value of intangibles, plant and equipment by engaging two
qualified and specialised valuers to assess these values.
The valuation of intangibles, including branding and
customer relationships, was determined using a
combination of income and cost approaches, with the
Multi-Period Excess Earnings Method being the predominant
driver. Key assumptions used in determining the fair values
included revenue associated with customer contracts,
contract renewal periods, customer royalty rates and
discount rates.
For plant and equipment, another valuer was engaged to
determine the depreciated replacement cost of the assets.
The depreciated replacement costs reflect adjustments
for physical deterioration, as well as functional and
economic obsolescence.
Trade and other receivables have a fair value of $5,890,238,
comprised of a gross contractual amount of $6,390,238 and
an amount of $500,000 expected to be uncollected.
The Statement of profit or loss and Other Comprehensive
Income includes the following revenue and net profit
resulting from the acquisition made since 31 October 2023:
Revenue
23,601,224
Net profit after tax
2,264,709
If the acquisition had taken place at the beginning of the
financial year (1 July 2023), the following revenue and net
profit after tax would have been included:
Revenue
38,113,904
Net profit after tax
3,985,935
MI Scaffold typically experience higher demand during
September to October when many customers have
scheduled outages for maintenance work, whereas
between November to February demands soften due
to storms in summer seasons. The above figures are not
seasonally adjusted.
Benchmark Scaffolding & Edge Protection Pty Ltd
(“Benchmark”)
On 1 March 2024, Acrow acquired 100% of the issued shares
of Benchmark Scaffolding & Edge Protection Pty Ltd (ACN
163 412 888).
Benchmark predominantly operates from Townsville, in the
far north Queensland region with a satellite office in Yatala,
southeast of Brisbane. It is a leading provider of access
solutions for complex applications in the industrial, mining
and infrastructure sectors. The operations of Benchmark
are highly complementary to Acrow’s industrial services
business, particularly the recently acquired MI Scaffold, with
both businesses utilising Layher Scaffolding equipment.
Preliminary and provisional details of the consideration
and the fair value of identified assets acquired, liabilities
assumed and goodwill estimated are set out in the following
tables. These values are preliminary and provisional as
the final determination of the fair value of assets acquired
and performance-based milestones that form part of the
consideration are yet to be determined. Amendments may
be made to these values up to 12 months following the date
of acquisition if new information is obtained about facts
and circumstances that existed at the acquisition date
and, if known, would have affected the measurement of the
amounts recognised as of that date.
The consideration is comprised of a $1,000,000 completion
cash payment, $5,400,000 deferred payment, $2,000,000
issuance of ordinary shares (1,773,994 units, valued at $1.1274
per share) on the acquisition date, and two tranches of
contingent considerations of $300,000 each, payable
12 months and 24 months after completion. At the reporting
date, contingent considerations are valued at $267,072 and
Acrow Annual Report 2024 | 57
Acrow Annual Report 2024 | 57
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
$237,835 respectively when discounted to present value
based on Acrow’s discount rate.
Benchmark’s acquisition costs, currently at $274,470,
are included in note 6 Other expenses. ERP and process
integrations are ongoing, with more expenses expected
next year.
Benchmark Scaffolding & Edge Protection Pty Ltd
In dollars
Completion payment
1,000,000
Second instalment
5,400,000
Share issues
2,000,000
First contingent payment
267,072
Second contingent payment
237,835
Total consideration
8,904,907
Assets
Cash and cash equivalents
400,382
Trade and other receivables
1,178,617
Prepayments and other assets
30,000
Property, plant and equipment
7,500,000
Right-of-use lease assets
309,444
Total assets
9,418,443
Liabilities
Trade payables
(86,816)
Employee benefits
521,655
Loans and borrowings
1,375
Current tax liabilities
796,745
Lease liabilities
309,444
Provision for made-good
100,000
Deferred income tax liabilities
1,849,610
Total liabilities
3,492,013
Fair value of net assets acquired
5,926,430
Purchase consideration transferred
8,904,907
Less: Fair value of net identifiable
assets acquired
(5,926,430)
Preliminary goodwill on acquisition
2,978,477
Consideration transferred in cash
6,400,000
Cash acquired net of loan
(399,007)
Net cash outflow on acquisition
6,000,993
Although these are provisional accounts and acquisition
accounting is still on-going, management estimates that
trade and other receivables have a fair value of $1,178,617,
this is comprised of a gross contractual amount of $1,528,617
and an amount of $350,000 expected to be uncollectable.
The Statement of profit or loss and Other Comprehensive
Income includes the following revenue and net profit
resulting from the acquisition made since 29 February 2024:
Revenue
3,493,816
Net profit after tax
354,406
If the acquisition had taken place at the beginning of the
financial year (1 July 2023), the following revenue and net
profit after tax would have been included:
Revenue
10,148 ,139
Net profit after tax
1,258,164
9.
Acquisitions (continued)
58 | Acrow Annual Report 2024
10. Cash and cash equivalents
In dollars
2024
2023
Cash at bank
5,593,504
4,939,396
Bank overdraft
(3,597,901)
–
1,995,603
4,939,396
11.
Trade and other receivables
In dollars
2024
2023
Trade receivables
57,695,819
41,668,122
Expected credit loss provision
(3,960,039)
(2,489,689)
53,735,780
39,178,433
Movement in the expected credit loss provision:
In dollars
2024
2023
At 1 July
Opening balance
(2,489,689)
(1,458,939)
Recognised in business combination
(850,000)
–
Expected credit loss recognised during the year
(2,050,000)
(3,145,000)
Receivables written off during the year
1,429,650
2,114,250
Balance at 30 June
(3,960,039)
(2,489,689)
Current
More than
30 days
More than
60 days
More than
90 days
Default
Total
2024
Expected credit loss rate
0.01%
0.08%
0.57%
22.13%
100.00%
Gross carrying amount
37,030,724
8,468,598
3,326,491
6,344,335
2,525,670
57,695,819
Lifetime expected credit loss
4,484
6,849
18,953
1,404,083
2,525,670
3,960,039
2023
Expected credit loss rate
0.03%
0.20%
1.26%
27.71%
100.00%
Gross carrying amount
21,286,667
9,270,500
2,163,810
8,102,604
844,541
41,668,122
Lifetime expected credit loss
6,386
18,541
27,264
1,592,957
844,541
2,489,689
12. Inventories
In dollars
2024
2023
Finished goods
14,009,225
11,397,484
14,009,225
11,397,484
13. Contract assets, prepayments and other assets
In dollars
2024
2023
Current
Contract assets
43,299
42,814
43,299
42,814
Other receivables
183,272
935,144
Prepayments
4,186,979
2,915,521
4,370,251
3,850,665
Acrow Annual Report 2024 | 59
Acrow Annual Report 2024 | 59
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
14. Property, plant and equipment
In dollars
Land and
buildings
Plant and
equipment
Hire
equipment
Total
Cost
Balance at 1 July 2022
475,989
14,049,536
111,157,906
125,683,431
Acquisition through business combinations
–
–
–
–
Additions
45,025
464,888
51,431,620
51,941,533
Disposals
–
(39,323)
(8,405,822)
(8,445,145)
Balance at 30 June 2023
521,014
14,475,101
154,183,704
169,179,819
Cost
Balance at 1 July 2023
521,014
14,475,101
154,183,704
169,179,819
Acquisition through business combinations
67,588
7,915,356
20 ,345,463
28,328,407
Additions
27,166
1,374,371
40,099,121
41,500,658
Disposals
–
(42,413)
(10,230,995)
(10,273,408)
Balance at 30 June 2024
615,768
23,722,415
204,397,293
228,735,476
Depreciation and impairment losses
Balance at 1 July 2022
391,231
11,435,297
18,366,467
30,192,995
Acquisition through business combinations
–
–
–
–
Depreciation for the year
18,171
512,133
8,655,923
9,186,227
Disposals
–
(30,675)
(1,758,276)
(1,788,951)
Balance at 30 June 2023
409,402
11,916,755
25,264,114
37,590,271
Balance at 1 July 2023
409,402
11,916,754
25,264,114
37,590,270
Acquisition through business combinations
11,027
2,560,601
6,749,270
9,320,898
Depreciation for the year
19,837
1,012,532
12,193,449
13,225,818
Disposals
–
(7,815)
(1,815,070)
(1,822,885)
Balance at 30 June 2024
440,266
15,482,072
42,391,763
58,314,101
Carrying amounts
At 1 July 2022
84,758
2,614,239
92,791,439
95,490,436
At 30 June 2023
111,612
2,558,346
128,919,590
131,589,548
At 1 July 2023
111,612
2,558,346
128,919,590
131,589,548
At 30 June 2024
175,502
8,240,343
162,005,530
170,421,375
Property, plant and equipment are at times sold prior to the
end of its useful life either at the request of the customers
or due to loss. “Loss on Hire” revenue are charged as Other
Income (see note 5) where the customers are liable. On
acquisition of property plant and equipment there is no
intention to dispose through sale.
15.
Leases
The Acrow group leases various properties, forklifts, motor
vehicles and printers. Property lease terms are up to 10 years
and often include extension options, forklift lease terms are
up to 7 years, motor vehicle lease terms are from 1 to 3 years,
whilst all printers are for a 5-year lease term.
Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions. The
lease agreements do not impose any covenants, but leased
assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the leased asset
is available for use by the Group.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the statement
of profit or loss and other comprehensive income over the
lease period to produce a constant periodic rate of interest
on the remaining balance of the liability for each period.
The right-of-use asset is depreciated over the shorter of the
asset’s useful life and the lease term on a straight-line basis.
Payments on IT equipment including laptops and mobile
devices have been treated as low-value assets and are
recognised on a straight-line basis as an expense in the
statement of profit or loss and other comprehensive income.
60 | Acrow Annual Report 2024
Lease amounts recognised in the Statement of Financial Position:
In dollars
2024
2023
Right-of-use assets
Properties
25,121,006
18,215,522
Forklifts and office equipment
2,411,475
1,521,853
Motor vehicles
528,634
351,510
Total right-of-use assets
28,061,115
20,088,885
Lease liabilities
Current
5,727,741
6,375,328
Non-current
26,734,220
17,537,389
Total lease liabilities
32,461,961
23,912,717
Additions to the right-of-use assets during FY2024 were $13,674,854 (FY2023: $1,820,753).
Lease amounts recognised in the Statement of profit or loss and Other Comprehensive Income:
In dollars
2024
2023
Depreciation charge for right-of-use assets:
Properties
5,898,848
4,920,155
Forklifts and office equipment
627,702
731,223
Motor vehicles
275,117
385,351
Total depreciation charge for right-of-use assets
6,801,667
6,036,729
Lease payments include:
●Variable lease payments that are based on an index or rate;
●Amounts expected to be payable by the lessee under residual value guarantees;
●The exercise price of a purchase option if Acrow is reasonably certain to exercise that option;
●Fixed payments (including in-substance fixed payments), less any lease incentives receivable; and
●Payment of penalties for terminating the lease, if the lease term reflects Acrow exercising that option.
Lease payments are discounted using the interest rate implicit in the lease, if determinable or at the Group’s incremental
borrowing rate.
In dollars
2024
2023
Lease amounts included in the Statement of cash flows
Lease payments
6,224,654
5,831,150
Interest expense (included in finance costs)
1,689,666
1,327,157
Total amount paid
7,914,320
7,158,307
Expenses relating to low value asset leases
133,188
135,688
Acrow Annual Report 2024 | 61
Acrow Annual Report 2024 | 61
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
Lease payments not recognised as liabilities
The Group has elected not to recognise a lease liability for low value leases (where an asset is valued at AUD10,000).
Payments for these are recognised on a straight-line basis as an expense in the statement of profit or loss.
Low value assets are predominately portable IT and telecommunication equipment. The undiscounted cash flows on the
remaining lease term at the reporting date are as follow:
In dollars
2024
2023
Less than one year
95,324
94,536
Between one and five years
16,253
100,425
111,577
194,961
15.
Leases (continued)
16.
Intangible assets
Goodwill
Goodwill represents the excess of the cost of acquisition
over the fair value of the identifiable assets and liabilities
acquired. It is not amortised but is tested annually.
These tests are performed by assessing the recoverable
amount at each reporting period, which is calculated using
discounted cash flows expected to arise from the assets.
Management judgment is required to forecast future
cash flows and to determine an appropriate discount
rate to calculate their present value. If an impairment loss
is identified, it is recognised in the statement of profit or
loss when the carrying amount of an asset exceeds its
recoverable amount.
The calculations use cash flow projections based on a
one-year budget that has been approved by the board
of directors, followed by a four-year forecast approved
by management. Cash flows beyond the five-year period
are estimated using a terminal growth rate appropriate to
the CGU.
Impairment testing on Acrow Screen companies
Key assumptions for FY2025 include organic sales growth
through geographical expansion and the addition of
Premium Screens to the product range. These initiatives
have enhanced both Acrow Screen’s and the Group’s overall
capacities and capabilities. Acrow Screens is expected to
achieve a 22.4% increase in earnings before interest and
taxes (EBIT) next year, followed by neutral growth over the
subsequent four years.
Goodwill of $7,301,902 was recorded on 31 August 2018 with
respect to the acquisition of Acrow Screens Pty Ltd (formerly
known as Natform Pty Ltd) and Acrow Screens (QLD) Pty Ltd
(formerly known as Natform (QLD) Pty Ltd.
Impairment testing on MI Scaffold
The increase in EBIT from 2024 to 2025 is expected to
be 63%, with the following four years averaging 9.6% per
year. The significant rise in 2025 is attributed to the fact
that trading in 2024 was consolidated over only eight
months from acquisition instead of a full year. Strong
growth is anticipated due to diversification in product
offerings, enhanced capital funding and greater market
representation across the industrial sector in the north
Queensland region.
Goodwill of $9,563,986 was recorded on 1 November 2023
with respect to the acquisition of MI Scaffold Pty Ltd.
Other intangible assets
Other intangible assets acquired through business
combination, are measured at fair values as of the
acquisition date. These assets are comprised of brand
names and customer relationships, have defined useful
lives of tens and twelve years respectively. These amortise
on a straight-line basis in the Statement of profit or loss
and Other Comprehensive Income under Amortisation of
other intangible assets, amounting to $899,400 from date
of acquisition.
62 | Acrow Annual Report 2024
Goodwill
2024
2023
Average growth rate 1 – 5 years – Acrow Screens
4.1%
14.7%
Average growth rate 1 – 5 years – MI Scaffold
9.6%
–
Terminal growth rate – Acrow Screens
1.4%
1.0%
Terminal growth rate – MI Scaffold
2.25%
–
Post-tax discount rate
12.8%
11.8%
The discount rate incorporates the perspective of market participants, including their expectations about future
economic conditions and the risks associated with the pricing of assets and liabilities. The terminal growth rate reflects the
management’s outlook on growth.
In dollars
2024
2023
Opening goodwill balance
7,428,704
7,428,704
Additions
12,542,463
–
Reductions
–
–
Closing balance
19,971,167
7,428,704
Goodwill allocation to CGU Groups
In dollars
2024
2023
Acrow Screens companies
7,301,902
7,301,902
Unispan Group of companies
126,802
126,802
MI Scaffold Pty Ltd
9,563,986
–
Benchmark Scaffolding & Edge Protection Pty Ltd
2,978,477
–
Total Goodwill
19,971,167
7,428,704
Other intangible assets
In dollars
2024
2023
Opening balance
–
–
Customer relationship
14,069,696
–
Branding
3,069,628
–
Accumulated amortisation
(899,400)
–
Closing Balance
16,239,924
–
All business combinations are accounted for by applying
the acquisition method. Goodwill represents the difference
between the cost of the acquisition and the fair value of the
net identifiable assets acquired.
Goodwill is stated at costs less any accumulated
impairment losses.
Acrow annually tests goodwill for impairment. An asset that
does not generate independent cash flows is tested for
impairment as part of a cash generating unit (CGU).
Where there is an impairment loss, it is recognised in the
statement of profit or loss when the carrying amount of
an asset exceeds its recoverable amount. The asset’s
recoverable amount is estimated based on the higher of its
value-in-use and fair value less costs to sell.
The recoverable amount of a CGU is determined based on
a value-in-use calculation. The calculations use cash flow
projections based on a one-year budget that has been
approved by the board of directors and then a four-year
forecast approved by the management. Cash flows beyond
the five-year period are extrapolated using the cash flows
for year 5 and the estimated long-term growth rates.
Sensitivity
Management has made judgements and estimates in
respect of impairment testing of goodwill. Should these
judgements and estimates not occur, the carrying value
of goodwill may vary. Any reasonable change in the key
assumptions on which the estimates and/or the discount
rate are based would not cause the carrying amount of the
CGU to exceed the recoverable amount.
Acrow Annual Report 2024 | 63
Acrow Annual Report 2024 | 63
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
17.
Trade and other payables
In dollars
2024
2023
Current trade payables
Trade payables
9,921,557
9,565,151
Accrued expenses
11,613,879
5,324,972
21,535,436
14,890,123
Other payables
MI Scaffold deferred consideration
1,459,742
–
Benchmark deferred consideration
278,138
–
Deferred consideration on asset acquisitions
–
3,000,000
1,737,880
3,000,000
Non-current
Other payables
MI Scaffold deferred consideration
3,732,609
–
Benchmark deferred consideration
248,294
–
Deferred consideration on asset acquisitions
–
4,000,000
3,980,903
4,000,000
Other payables represent the net present values of deferred considerations and completion adjustments on the acquisition
of MI Scaffold and Benchmark at balance date.
18. Employee benefits
In dollars
2024
2023
Current
Annual leave
3,394,848
2,175,165
Long service leave
2,342,376
1,949,972
Other employee benefits
2,166,257
2,061,230
7,903,481
6,186,367
Non-current
Long service leave
778,061
628,024
All employees have defined contribution plans for superannuation and the expense recognised during the year was
$5,016,540 (2023: $3,731,993).
64 | Acrow Annual Report 2024
19.
Loans and borrowings
In dollars
2024
2023
Current
21,485,595
21,907,696
Non-current
49,147,807
29,382,836
70,633,402
51,290,532
Borrowings are represented by the following finance facilities:
Secured amortising business loan of $4,125,000 commenced in July 2022, refinanced into a
new consolidated loan in November 2023.
–
2,860,000
Secured interest only business loan of $16,000,000 commenced in March 2023, refinanced
into a new consolidated loan in November 2023.
–
16,000,000
Secured amortising business loan of $18,168,000 commenced in May 2021 as part of loan
restructuring, refinanced into a new consolidated loan in November 2023.
–
8,543,000
Secured amortising business loan of $47,363,000 commenced on 29th of November
2023 as part of debt consolidation and refinancing of previous business loans and
MI Scaffold Pty Ltd acquisition financing. Refinanced again on the 10th of April 2024 for the
Benchmark acquisition, loan maturing November 2026.
44,767,000
–
Equipment finance facility, revolving 3-year limit of $27.0m (Jun 23: $22.0m)
22,573,556
14,869,132
Headroom
4,426,444
7,130,868
Trade finance facility, revolving 180-day limit of $3.5m (Jun 23: $9.02m)
3,292,846
9,018,400
Headroom
207,154
–
Working capital facility, $16.5m (Jun 23: $11.0m) including $2.0m bank guarantee
(Jun 23: $2.0m) and $14.5m bank overdraft (Jun 23: $9.0m)
5,574,485
1,976,583
Headroom
10,925,515
9,023,417
Borrowings utilised
76,207,887
53,267,115
Headroom
15,559,113
16,154,285
Total accessible borrowing amount
91,767,000
69,421,400
Borrowings utilised and committed
76,207,887
53,267,115
Less: Bank overdraft recognised separately
(3,597,902)
–
Less: Bank guarantee utilised not drawn
(1,976,583)
(1,976,583)
Total Loans and Borrowings
70,633,402
51,290,532
All borrowings are secured by interlocking guarantees where each company within the Group jointly and severally
guarantees the repayment of loans to the lending institution. All loans are secured over the assets and inventory of
the Group.
Covenants are reviewed half-yearly with the lender. The Group has complied with all the respective borrowing covenants
throughout the year ended 30 June 2024. The covenant measures include Debt Service Cover ratio, Equity ratio and
Financial Debt to EBITDA ratio.
Interest rates on Equipment finance are fixed but variable on all other loans and facilities. All are dependent on prevailing
market rates and bank margins.
All borrowing costs incurred in the year have been expensed.
Acrow Annual Report 2024 | 65
Acrow Annual Report 2024 | 65
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
20. Provisions
In dollars
2024
2023
Make good provision movement during the year:
Opening balance at 1 July
469,274
469,274
Recognised in business combination
100,000
–
Closing balance at 30 June
569,274
469,274
A provision for make good is measured at the present value of the cost of restoring leased properties to their original
condition at the conclusion of the lease. No long term (greater than 12 months) new property lease had been entered into
during the year that require further addition.
21. Deferred income tax liability and current income tax liability
In dollars
2024
2023
Deferred income tax liability movement during the year:
Opening balance at 1 July
9,907,149
6,990,415
Previously deferred income tax liability unrecognised
–
(4,298,469)
Recognised in business combination
9,975,826
Changes to estimates from prior years
628,694
374,674
Provisions
(214,518)
(394,104)
Accruals
247,277
(98,200)
Property, plant and equipment
1,255,877
2,354,539
Intangibles
(269,820)
–
Revenue tax loss
4,727,083
4,978,294
Closing balance at 30 June
26,257,568
9,907,149
Unrecognised deferred tax assets
Deferred tax assets not recognised for the following items:
Revenue tax losses
1,030,613
1,351,811
Capital losses
913,333
411,923
Temporary differences
374,256
181,384
2,318,202
1,945,118
While tax losses and temporary differences do not expire under current tax legislation, deferred tax assets have not been
recognised in respect of these items as certain subsidiaries have experienced a number of years without taxable income
and therefore recovery is not considered probable. The tax losses do not expire under current tax legislation.
The potential benefit of the deferred tax asset in respect of tax losses carried forward will only be obtained if:
(i) The subsidiaries continue to derive future assessable income of a nature and an amount sufficient to enable the benefit
to be realised;
(ii) The subsidiaries continue to comply with the conditions for deductibility imposed by the law;
(iii) No changes in tax legislation adversely affect the subsidiaries in realising the asset and;
(iv) The subsidiaries pass the continuity of ownership test, or the same business test as outlined by the Australian
Taxation Office.
(v) Net deferred tax asset of Acrow Formwork & Scaffolding Pty Ltd were previously unrecognised due to uncertainty of
realisation, however it has been able to derive assessable income and meet the above four conditions in recent years
that enable the benefit from the tax loss to be realised.
66 | Acrow Annual Report 2024
22. Issued capital
In units
2024
2023
Number of shares
On issue of 1 July
266,339,056
252,952,199
Issue of shares for cash (i)
25,395,663
–
Issue of DRP shares (ii)
1,471,258
1,844,018
Issue of shares on acquisition of Benchmark (iii)
1,773,994
–
Shares issued through conversion of performance rights (iv)
6,250,025
7,128,149
Exercise of share options (v)
166,071
2,220,190
Issue of loan funded shares
–
2,194,500
301,396,067
266,339,056
(i) 18,750,000 units of ordinary shares were issued at $0.80 per share in November 2023; 6,645,663 units were issued through dividend underwriting at
$1.14 per share in May 2024.
(ii) 837,432 units of ordinary shares were issued at $0.8406 per share following the FY2023 final dividend declaration pursuant to the Dividend
Reinvestment Plan (DRP); 633,826 units of ordinary shares were issued at $1.14 per share following the FY2024 interim dividend declaration also
pursuant to the DRP.
(iii) 1,773,994 units of ordinary shares were issued on 1 March 2024 as purchase consideration to Benchmark & Edge Protection Pty Ltd’s seller. These
were fair valued at $2,000,000 and placed under escrow for a period of 12 months from completion of sales.
(iv) 6,250,025 units of ordinary shares were issued during the year through conversion of performance rights granted under the Long-Term Variable
Remuneration (LTVR) plan.
(v) 166,071 units of shares were issued during the year against 300,000 units of options exercised without cash, forfeiting 133,929 units of options at
market price.
The holders of these shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at general meetings of the Group.
Net tangible assets per ordinary share for the year ended 30 June 2024 are 43.34 cents (2023: 39.31 cents). Net tangible
assets per share is calculated as net assets attributable to Acrow Limited shareholders, being $131.0m (2023: $105.4m)
divided by the number of issued ordinary shares of 302.3m units (2023: 268.0m units).
Dividends
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been
approved prior to the reporting date.
The following dividends were declared and paid by the Group during the year:
In dollars
2024
2023
Dividends on ordinary shares declared and paid:
Final dividend in respect of the previous reporting period:
FY 23: 2.70 cents per share (FY22: 1.5 cents per share)
- Paid in cash
6,647,372
3,270,403
- Paid via DRP
703,945
628,190
Interim dividend for the current reporting period:
FY 24: 2.85 cents per share (FY23: 1.70 cents per share)
- Paid in cash
7,653,777
4,100,428
- Paid via DRP
725,414
416,425
15,730,508
8,415,446
A 100% franked dividend of $7,351,317 for the year ended 30 June 2023 was paid on 30 November 2023 at 2.7 cents per share
with 837,432 new shares issued at 84.06 cents each as part of the DRP.
A 100% franked interim dividend of $8,379,191 for FY 2024 was paid on 31 May 2024 at 2.85 cents per share with 633,826 new
shares issued at $1.1445 as part of the DRP.
Subsequent to the balance date, the Directors declared a dividend of 3.0 cents per share, 100% franked on 21 August 2024.
Franking credit balance was $3,867,505 on 30 June 2024 (2023: $833,029).
Acrow Annual Report 2024 | 67
Acrow Annual Report 2024 | 67
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising on translation of the Group entities
that do not have functional currency of AUD dollars and have been translated for presentation purpose.
No reserve is required at end of June 2024 as the only foreign operation held by Acrow, Noble Mineral Resources Ghana
Limited was disposed in January 2024.
Share-based payments reserve
The share-based payments reserve is used to recognise the grant date fair value of shares issued to employees and
directors that have not yet vested.
23. Capital management
Management monitors the capital of the Group, in order to maintain a good debt to equity ratio, provide the shareholders
with adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and borrowings.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt levels,
distributions to shareholders and share issues.
24. Share-based payments
The cost of share-based payments is recorded under Personnel expenses in the Consolidated statement of profit or loss and
other comprehensive income. For FY2024, this totalled to $3,275,773 (2023 : $3,216,871).
Options
During the period 300,000 units were exercised at 40 cents per share by forfeiting 133,929 units at market prices for the issue
of 166,071 units of ordinary shares.
No further options had been granted in the reporting year, total number of outstanding units on 30 June 2024 were nil
(2023: 300,000).
Balance of all outstanding options at balanced date are as follow:
Grant date
Expiry date
2024
2023
Exercise price
Number of
options
Exercise price
Number of
options
16 July 2019
16 July 2024
$0.40
–
$0.40
300,000
Balance at 30 June
–
300,000
Reconciliation of outstanding share options:
2024
2023
Number
Weighted
average
exercise price
Number
Weighted
average
exercise price
Outstanding at 1 July
300,000
$0.40
6,860,000
$0.47
Granted during the year
–
–
–
–
Exercised during the year
(166,071)
$0.40
(5,060,000)
$0.47
Forfeited during the year
(133,929)
–
(1,500,000)
$0.50
Outstanding at 30 June
–
–
300,000
$0.40
22. Issued capital (continued)
68 | Acrow Annual Report 2024
Performance Rights
Carried forward from FY2023, there were a total of 12,503,025 units of Performance Rights outstanding which were granted
based on Earnings Per Share (EPS) and Total Shareholder Return (TSR) performance hurdles over FY2021 to FY2023 periods.
Current year movements are summarised as follows:
Long term variable incentives
Measurement period
FY2021-23
FY2024
FY2025
FY2026
Total
Vesting status on 30 June 2024
Vested
Unvested
Unvested
Unvested
Outstanding as of 1 July 2023
7,111,457
5,391,568
–
–
12,503,025
Grants / (cancellations) of issues (i)
–
647,427
4,159,690
3,870,764
8,677,881
Unvested or forfeiture
–
–
–
–
–
Vested and exercised as ordinary shares (ii)
(6,250,025)
–
–
–
(6,250,025)
Balance outstanding at 30 June 2024
861,432
6,038,995
4,159,690
3,870,764
14,930,881
(i) A total of 8,677,881 units of LTVRs had been granted in FY2024, of which 647,427 units on FY2024 measurement period were granted to senior
managers; 4,159,690 units on FY2025 were granted to executives and senior managers and 3,870,764 units on FY2026 were granted to executives
and senior managers during the first half year reporting period. These were granted based on Earnings Per Share (EPS) and Total Shareholder
Return (TSR) performance hurdles over each measurement period.
(ii) 6,250,025 units were exercised, these include some of the 5,404,102 units on FY2023 LTVRs that became vested and exercisable (vesting outcome
were 100% on both TSR and EPS issues). Balance on all vested and exercisable LTVRs remaining were 861,432 units on balance date.
Total number of outstanding performance rights
on 30 June 2024 were 14,930,881 units (30 June 23:
12,503,025 units).
Performance rights granted in FY2023 and FY2024 have the
following terms:
(i) Exercise price: nil;
(ii) Conversion: upon vesting, conversion to shares on a 1 for
1 basis;
(iii) Dividends: not entitled until performance rights are
exercised;
(iv) Vesting hurdles:
a. 50% of each issue measured on Earnings per share
(EPS) criteria specifically “Net profit after tax /
Weighted average number of shares on issue”.
i.
A threshold cumulative return of 10% is required
below which no vesting will occur.
ii. A target return of 15% will vest 50% of
performance rights and pro rata between 10%
and 15%
iii. Above 15% return up to a maximum of 25% return
the balance of the performance rights will vest on
a pro rata basis.
b. 50% of each issue measured on Total Shareholder
return (TSR) criteria. This compares the share price
and dividends through the measurement period to
the ASX Small Industrials Index.
i.
A threshold cumulative return equal to the market
is required below which no vesting will occur.
ii. A target return of 130% of the index TSR will vest
50% of performance rights and pro rata between
index return and 130% of index return.
iii. Above 130% of index return up to a maximum of
160% index return the balance of the performance
rights will vest on a pro rata basis.
c. The performance rights will be measured between
1 July 2021 and 30 June 2024 for the 2024 issue,
1 July 2022 and 30 June 2025 for the 2025 issue and
1 July 2023 and 30 June 2026 for the 2026 issue.
The model inputs for the performance rights vesting FY2024
granted to senior managers on the 21 August 2023 included:
a) Exercise price: nil
b) Share price at grant date of 21 August 2023 was $0.91
c) Expected price volatility between 16.2% and 35.6% –
based on comparable companies
d) Expected dividend yield 4.8%
e) Risk-free interest rate 4.3%
f) Grant date fair values were 78.40 cents per unit on TSR
grants and 78.56 cents per unit on EPS grants
The model inputs for the performance rights vesting
FY2025 granted to executives and senior managers on the
21 August 2023 included:
a) Exercise price: nil
b) Share price at grant date of 21 August 2023 was $0.91
c) Expected price volatility between 18.0% and 37.3% –
based on comparable companies
d) Expected dividend yield 4.8%
e) Risk-free interest rate 4.3%
Acrow Annual Report 2024 | 69
Acrow Annual Report 2024 | 69
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
f) Grant date fair values were 62.92 cents per unit on TSR grants and 74.85 cents per unit on EPS grants
The model inputs for the performance rights vesting FY2026 granted to executives and senior managers on
20 December 2023 included:
a) Exercise price: nil
b) Share price at grant date of 20 December 2023 was $0.99
c) Expected price volatility between 17.2% and 35.8%- based on comparable companies
d) Expected dividend yield 5.5%
e) Risk-free interest rate at 3.7%
f) Grant date fair values were 48.13 cents per unit on TSR grants and 13.82 cents per unit on EPS grants
25. Earnings per share
Basic EPS is calculated by dividing profit for the year attributable to ordinary equity holders of the Parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the net profit attributable to ordinary equity holders of the Parent by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that
would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and diluted EPS computations:
In dollars
2024
2023
Earnings from continuing and discontinuing operations
Profit excluding significant items
32,999,572
30,488,289
Net share-based payments and significant items
(7,440,273)
(7,031,249)
Net profit after tax
25,559,299
23,457,040
*
Significant items are comprised of share-based payments, acquisition and rebranding costs as in note 6 and amortisation of intangibles; and for
FY2023, significant items are comprised of share-based payments, significant costs in restructuring, preparation of new yards and others as in
note 6 and the initial recognition of deferred tax of Acrow Formwork & Scaffolding Pty Ltd $2.6m.
2024
2023
Number of ordinary shares
Weighted average number of ordinary shares used in the calculation of basic EPS
285,910,110
261,861,124
Weighted average number of ordinary shares used in the calculation of diluted EPS
294,996,650
269,961,010
Basic EPS excluding significant items (cents per share)
11.54
11.64
Diluted EPS excluding significant items (cents per share)
11.19
11.29
Basic EPS (cents per share)
8.94
8.96
Diluted EPS (cents per share)
8.66
8.69
In dollars
2024
2023
Earnings from continuing operations
Profit excluding significant items
32,794,816
30,488,289
Net share-based payments and significant items
(7,288,243)
(6,951,454)
Net profit after tax
25,506,573
23,536,835
Basic EPS (cents per share)
8.92
8.99
Diluted EPS (cents per share)
8.65
8.72
24. Share-based payments (continued)
70 | Acrow Annual Report 2024
26. Capital commitments and contingencies
In dollars
2024
2023
Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities
as follows:
Plant and equipment
6,893,981
5,920,251
27. Reconciliation of cash flows from operating activities
In dollars
2024
2023
Cash flows from operating activities
Profit
25,354,543
23,457,040
Adjustments for:
●Depreciation and impairment
13,225,818
9,186,227
●Depreciation on right-of-use assets
6,801,667
6,036,729
●Amortisation of other intangible assets
899,400
–
●(Gain) on disposal of assets
(15,037,150)
(12,024,427)
●Share-based payment
3,275,773
3,216,871
●Profit on disposal of discontinued business
204,755
–
●Foreign currency reserve
(53,802)
(1,939)
Net changes in working capital:
●Trade and other receivables
(7,488,278)
(4,815,566)
●Inventories
(2,611,741)
3,474,702
●Contract assets
(485)
69,113
●Prepayments and other assets
278,011
1,225,167
●Assets held for sale
–
72,579
●Trade and other payables
(5,887,798)
(6,593,955)
●Provisions and employee benefits
554,043
209,949
●Liabilities associated with assets held for sale
1
(67,063)
●Current income tax liabilities
(905,669)
(520,959)
●Deferred income tax liabilities
6,374,592
2,916,734
●Lease termination
–
(152,495)
Cash generated from operating activities
24,983,680
25,688,707
Finance costs
7,558,627
4,181,064
Net cash from operating activities
32,542,307
29,869,771
Acrow Annual Report 2024 | 71
Acrow Annual Report 2024 | 71
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
28. Remuneration of auditors
During the year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd (GT) as the
auditor of the parent entity.
In dollars
2024
2023
Audit and review of financial reports
Group and controlled entities
504,716
463,485
Total audit and review of financial reports
504,716
463,485
Other assurance services
237,284
21,169
Tax compliance services
185,760
211,788
Total other non-audit services
423,044
232,957
Total services provided by GT
927,760
696,442
29. Key management personnel and related parties
Key management personnel are those persons having authority and responsibility of planning, directing and controlling the
activities of the Group, directly or indirectly, including any director, whether executive or otherwise, of the Group.
In dollars
2024
2023
Key management personnel compensation for the period:
●Short term employment benefits
1,688,302
1,482,551
●Long term employment benefits
126,687
110,739
●Post-employment benefits
54,798
50,584
●Share-based payments
772,063
1,069,508
Total compensation paid to key management personnel
2,641,850
2,713,382
Other related party transactions
All intercompany transactions between the parent entity
and the subsidiaries and amongst the subsidiaries have
been eliminated on consolidation.
30. Financial risk management
Risk management objectives and policies
The Group’s activities expose it to a variety of financial
risks: market risk (including foreign exchange risk, interest
rate risk), credit risk and liquidity risk. The Group’s overall risk
management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse
effects on the financial performance of the Group.
The Group uses different methods to measure different
types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, foreign
exchange and other price risks, and aging analysis for
credit risk.
There was no open foreign exchange contract at
30 June 2024 and 30 June 2023.
Fair value hierarchy
The fair value of financial assets and financial liabilities
must be estimated for recognition and measurement or for
disclosure purposes.
Fair value inputs are summarised as follows:
Level 1: The fair value of financial instruments traded in
active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on
quoted market prices at the end of the reporting period.
Level 2: The fair value of financial instruments that are not
traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which
maximise the use of observable market data and rely as
little as possible on entity specific estimates. If all significant
inputs required to fair value an instrument are observable,
the instrument is included in Level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included in
Level 3.
The fair value hierarchy was not applicable for the year
ended 30 June 2024, as the Group held no financial assets
or liabilities that required valuation.
Fair value hierarchy is re-assessed annually for any change
in circumstance that may suggest a revised level be
assigned to a type of balance measured at fair value.
The Group’s risk management is coordinated by
management, in close cooperation with the Board of
Directors, and focuses on actively securing the Group’s short
to medium-term cash flows by minimising the exposure to
financial markets.
72 | Acrow Annual Report 2024
The Group does not actively engage in the trading of financial assets for speculative purposes. The most significant financial
risks to which the Group is exposed are described below.
Market risk analysis
The Group is exposed to market risk through its use of financial instruments and specifically to interest rate risk and certain
other price risks, which result from its operating activities.
Exposure to currency risk
As at 30 June 2024 the Group held the below AUD equivalent of foreign currency risks in USD, EUR and HKD:
30 June 2024
30 June 2023
USD
EUR
HKD
USD
EUR
HKD
Trade payables
5,406,605
391,655
20,977
4,796,939
682,466
20,880
Purchase orders at 30 June
8,591,008
1,152,708
657,180
11,695,444
2,524,055
359,140
Net exposure
13,997,613
1,544,363
678,157
16,492,383
3,206,521
380,020
Foreign currency sensitivity
A possible strengthening/(weakening) of the USD, EUR or the HKD at 30 June would have affected profit or loss by the
amounts (in AUD) shown below. This analysis assumes that all other variables remain constant and ignores the impact of
forecast purchases.
Profit or loss
In dollars
Strengthening
Weakening
USD (10% movement)
1,272,765
(1,555,602)
EUR (10% movement)
140,397
(171,596)
HKD (10% movement)
61,651
(75,351)
Interest rate risk
Interest rate risk is the risk that changes in interest rates impact the Group’s financial performance or the value of its
financial instruments.
The Group’s interest rate risk arises from its overdrafts, term loans and when new equipment or trade finances are drawn.
Draw down and increase in overdraft under the current debt facility are priced using a floating interest rate plus a
fixed margin.
The Group does not currently use interest rate hedges. However, management regularly reviews its funding arrangements
to ensure loans are competitively priced and access are maintained to necessary liquidity levels to service the Group’s
operational activities.
At 30 June 2024 the Group has the following exposure to interest rates on borrowings:
2024
2023
Fixed rate instruments
Loans and borrowings
25,866,402
23,887,532
Variable rate instruments
Loans and borrowings
44,767,000
27,403,000
Overdraft
3,597,901
–
Interest Rate Sensitivity
At 30 June 2024, the Group held interest bearing loans of $70,633,402 (2023: $51,290,532) and a bank overdraft of $3,597,901
(2023: nil).
An increase of 100 basis points in interest rates on variable instruments at the reporting date would have a negative impact
of $393,621 (2023: $186,571) on the net profit, whereas a decrease of 100 basis points would have a positive impact of
$388,728 (2023: $189,867) on the net profit.
Acrow Annual Report 2024 | 73
Acrow Annual Report 2024 | 73
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge
an obligation to the Group. The Group is exposed to this risk
principally through receivables from customers. The Group
leases hire equipment and provides services to consumers
pursuant to policies and procedures that are intended to
ensure that there is no concentration of credit risk with any
particular individual, company or other entity.
The Group’s exposure to credit risk is influenced mainly by
the individual characteristics of each customer. However,
management also considers the factors such as market
segment, financial profile, default risk of the industry
sector and credit history of the customers. To manage
this risk, the Group has a policy for establishing credit
approvals and limits under which each new customer is
analysed individually for creditworthiness before standard
payment terms and limits are granted. Where available
at reasonable cost, external credit ratings and/or reports
on customers and other counterparties are obtained and
used. The Group’s policy is to deal only with creditworthy
counterparties. The summary of the Group’s trade
receivables is available in note 11.
The Group conducts an ongoing assessment of expected
credit losses (ECL) by analysing actual loss experience of the
Group, arrears, and other inputs such as exposure or timing.
The assessment is broken down into 4 sectors including
Industrial Services, Civil Infrastructure, Commercial, and
Residential. These sectors are then analysed in a set of 5
stages ranging from currently due receivables to receivables
due in over 90 days. The Group also separately quantifies
receivables due from entities in liquidation/default.
Macroeconomic Scenarios
Expected credit losses (“ECL”) are a probability‑weighted
estimate of credit losses over the expected life of
the financial instrument. The Group has a process for
incorporating forward looking economic scenarios and
determining the probability weightings assigned to
each scenario in determining the overall ECL. The Group
prepares a base, best and worst-case scenarios based on
economic variables.
The Group has incorporated this by use of a management
overlay or economic risk reserve.
Write-off policy
The Group writes off financial assets in whole or in part,
when it has exhausted all practical recovery efforts and
has concluded there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation
of recovery include (i) ceasing enforcement activity and
(ii) where the Group’s recovery method is foreclosing on
collateral and the value of the collateral such that there is
no reasonable expectation of full recovery.
Liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to
meet its obligations.
The Group manages its liquidity needs by monitoring
scheduled debt servicing payments for long-term financial
liabilities as well as forecast cash inflows and outflows due
in day-to-day business. The data used for analysing these
cash flows is consistent with that used in the contractual
maturity analysis below.
Liquidity needs are monitored in various time bands, on a
day-to-day and week-to-week basis, as well as on a rolling
30-day projection. Long-term liquidity needs for a 180-day
and a 360-day lookout period are identified monthly.
Net cash requirements are compared to available borrowing
facilities to determine headroom or any shortfalls. This
analysis shows that available borrowing facilities are
expected to be sufficient over the lookout period. Refer to
note 19 for undrawn borrowing facilities.
The Group’s objective is to maintain cash to meet its liquidity
requirements for 30-day periods at a minimum. Funding
for long-term liquidity needs is additionally secured by an
adequate amount of committed credit facilities.
The Group considers expected cash flows from financial
assets in assessing and managing liquidity risk, notably its
cash resources and trade receivables.
30. Financial risk management (continued)
74 | Acrow Annual Report 2024
The following liquidity risk disclosures reflect all contractually fixed repayments and interest resulting from recognised
financial liabilities and derivatives as of 30 June 2024. The timing of cash flows for liabilities is based on the contractual
terms of the underlying contract.
Contractual cash flow
Carrying
Amount
Total
1 year or less
1 to 5 years
Over 5 years
2024
Non-derivative financial liabilities
Deferred considerations
5,718,783
(5,887,252)
(1,689,560)
(4,197,692)
–
Trade payables and accrued expenses
21,535,436
(21,535,436)
(21,535,436)
–
–
Loans and borrowings
70,633,402
(79,179,408)
(26,023,208)
(53,156,200)
–
Lease liabilities
32,461,961
(38,885,252)
(7,280,278)
(22,016,578)
(9,588,396)
130,349,582
(145,487,348)
(56,528,482)
(79,370,470)
(9,588,396)
2023
Non-derivative financial liabilities
Trade payables and accrued expenses
14,890,123
(14,890,123)
(14,890,123)
–
–
Loans and borrowings
51,290,532
(54,213,736)
(24,098,777)
(30,114,959)
–
Lease liabilities
23,912,717
(27,132,178)
(6,525,646)
(16,246,407)
(4,360,125)
90,093,372
(96,236,037)
(45,514,546)
(46,361,366)
(4,360,125)
31. Group entities
The consolidated financial statements include the financial statements of the following wholly-owned subsidiaries:
Place of
incorporation
% Equity
interest
Acrow Holdings Pty Limited (a), (b)
NSW
100%
Acrow Formwork and Scaffolding Pty Ltd (a), (b)
NSW
100%
Acrow Screens Pty Ltd (a), (b), (c)
NSW
100%
Acrow Screens (QLD) Pty Ltd (a), (b), (c)
QLD
100%
Acrow Industrial Group Pty Ltd (a), (b), (c)
QLD
100%
Uni-span Height Safety Pty Ltd (a), (b)
QLD
100%
Unispan Australia Pty Ltd (a), (b)
QLD
100%
Uni-span Formwork Solutions Pty Ltd (a), (b)
QLD
100%
MI Scaffold Pty Ltd (a), (b)
QLD
100%
Benchmark Scaffolding & Edge Protection Pty Ltd (a), (b)
QLD
100%
Acrow Group Investments Pty Ltd (a), (b)
NSW
100%
Noble Mineral Resources Ghana Limited (d)
Ghana
0%
(a) These subsidiaries have been granted relief from the necessity to prepare financial reports under the option available to
the Group under ASIC Corporations (Wholly Owned Companies) Instrument 2016/785.
(b) These subsidiaries, along with Acrow Limited (the parent entity of the Group), form the Deed of Cross Guarantee Group
described further from note 31.
(c) Names of these subsidiaries had been changed in FY2024 as part of corporate rebranding, no change to Australian
Business Numbers:
– Acrow Screens Pty Ltd, formerly known as Natform Pty Ltd
– Acrow Screens (Qld) Pty Ltd, formerly known as Natform (QLD) Pty Ltd
– Acrow Industrial Services Group Pty Ltd, formerly known as Uni-span Group Pty Ltd
(d) The Group disposed this subsidiary on 29 January 2024.
Acrow Annual Report 2024 | 75
Acrow Annual Report 2024 | 75
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
32. Deed of cross guarantee
Acrow Limited, Acrow Holdings Pty Limited, Acrow Formwork and Scaffolding Pty Ltd, Acrow Screens Pty Ltd, Acrow Screens
(QLD) Pty Ltd, Acrow Industrial Group Pty Ltd, Uni-span Height Safety Pty Ltd, Unispan Australia Pty Ltd, Uni-span Formwork
Solutions Pty Ltd and Acrow Group Investments Pty Ltd are parties to a deed of cross guarantee (‘the Deed’) under which
each company guarantees the debts of the others. By entering into the Deed, the wholly owned entities have been
relieved from the requirement to prepare a financial report and Directors’ Report under ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785.
In FY2024, newly acquired MI Scaffold Pty Ltd and Benchmark Scaffolding & Edge Protection Pty Ltd have been added to
the Deed.
The above companies represent a ‘closed group’ for the purpose of the Class Order, and as there are no other parties to the
Deed that are controlled by Acrow Limited, they also represent the ‘extended closed group’.
The following statement of profit or loss and statement of financial position comprises Acrow and its controlled entities which
are party to the Deed of Cross Guarantee, after eliminating all transactions between parties to the Deed.
Statement of profit or loss
For the year ended 30 June 2024
In dollars
2024
2023
Revenue
193,114,919
149,814,345
Other income
15,037,150
12,024,427
Personnel expenses
(80,623,830)
(55,699,125)
Sub-contract labour costs
(10,846,322)
(15,469,758)
Inventory purchased, net of changes in finished goods
(29,878,964)
(28,012,324)
Depreciation
(20,027,484)
(15,222,956)
IT and telecommunication expenses
(2,288,128)
(1,858,760)
Freight costs
(3,003,585)
(1,914,389)
Insurance expenses
(2,112,241)
(1,216,688)
Expected credit loss provision and bad debt expense
(2,053,183)
(3,145,000)
Amortisation of other intangible assets
(899,400)
–
Other expenses
(10,384,775)
(5,854,273)
Profit before net finance costs and income tax
46,034,157
33,445,499
Finance costs
(7,558,627)
(4,481,063)
(7,558,627)
(4,481,063)
Profit before income tax
38,475,530
28,964,436
Income tax expense
(13,120,987)
(5,352,740)
Profit from continuing operations
25,354,543
23,611,696
Profit from discontinued operations
204,756
–
Profit for the period
25,559,299
23,611,696
76 | Acrow Annual Report 2024
Statement of Financial Position
As at 30 June 2024
In dollars
2024
2023
Current assets
Cash and cash equivalents
5,593,504
4,939,277
Trade and other receivables
53,735,780
39,178,433
Inventories
14,009,225
11,397,484
Contract assets
43,299
42,814
Prepayments and other assets
4,370,251
3,850,665
Total current assets
77,752,059
59,408,673
Non-current assets
Property, plant and equipment
170,421,375
131,589,548
Right-of-use lease assets
28,061,115
20,088,885
Goodwill
19,971,167
7,428,704
Other intangible assets
16,239,924
–
Total non-current assets
234,693,581
159,107,137
Total assets
312,445,640
218,515,810
Current liabilities
Bank overdraft
3,597,901
–
Trade payables and accrued expenses
21,535,436
14,739,052
Other payables
1,737,880
3,000,000
Employee benefits
7,903,481
6,186,367
Lease liabilities
5,727,741
6,375,328
Loans and borrowings
21,485,595
21,907,696
Current tax liabilities
2,029,461
1,348,072
Total current liabilities
64,017,495
53,556,515
Non-current liabilities
Other payables
3,980,903
4,000,000
Employee benefits
778,061
628,024
Lease liabilities
26,734,220
17,537,389
Loans and borrowings
49,147,807
29,382,836
Provisions
569,274
469,274
Deferred income tax liability
26,257,568
9,907,149
Total non-current liabilities
107,467,833
61,924,672
Total liabilities
171,485,328
115,481,187
Net assets
140,960,312
103,034,623
Equity
Issued capital
89,458,912
61,809,122
Reserves
4,674,077
4,022,213
Retained earnings
46,827,323
37,203,288
Total equity
140,960,312
103,034,623
Acrow Annual Report 2024 | 77
Acrow Annual Report 2024 | 77
Notes to the Consolidated Financial Statements (continued)
For the year ending 30 June 2024
33.
Parent entity disclosures
In dollars
2024
2023
Results of the parent entity
Profit for the period
11,264,631
4,257,926
Total comprehensive income for the period
11,264,631
4,257,926
Financial position of the parent entity at year end
Current assets
30,174
42,940
Non-current assets
84,714,269
54,889,773
Total assets
84,744,443
54,932,713
Current liabilities
6,168,956
193,003
Total liabilities
6,168,956
193,003
Net assets
78,575,487
54,739,710
Equity
Issued capital
89,458,912
61,809,122
Reserves
4,674,077
4,022,213
Retained earnings
(15,557,502)
(11,091,625)
78,575,487
54,739,710
Accounting policies of the parent company Acrow Limited are consistent with the Group and subsidiaries.
Investments in subsidiaries are accounted for at cost in the financial statements of the parent entity, these are reviewed
annually for recoverability at the reporting date.
34. Operating segments
The Group’s operating segment is based on the internal reports that are reviewed and used by the Board of Directors
and the executive management team (being the Chief Operating Decision Makers (“CODM”)) in assessing the financial
performance and in determining the allocation of resources. The Group operates in the building construction market,
providing falsework, formwork, scaffolding, screens and related material for hire and sales. There are no operating segments
for which discrete financial information exists.
The information reported to the CODM, on at least monthly basis, is the consolidated results as shown in the statement of
profit or loss and other comprehensive income and statement of financial position.
35. Subsequent events
On 21 August 2024 the Directors declared a 100% franked dividend of 3.0 cents per share to be paid on 29 November 2024.
Dividend Reinvestment Plan is available for election. The dividend has not been provided for in this financial report as it was
not declared until after 30 June 2024.
Other than the above events, there has not otherwise arisen between 30 June 2024 and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Group, to affect significantly
the operations of the Group, the results of those operations, or the state of the affairs of the Group in future financial years.
78 | Acrow Annual Report 2024
Consolidated Entity Disclosure Statement
As at 30 June 2024
Type of Entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business /
country of
incorporation
Australian
resident
or foreign
resident
Foreign
jurisdiction
of foreign
residents
Parent entity
Acrow Limited
Body
corporate
–
100%
Australia
Australia
n/a
Subsidiaries
Acrow Holdings Pty Limited
Body
corporate
–
100%
Australia
Australia
n/a
Acrow Formwork and
Scaffolding Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Acrow Screens Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Acrow Screens (QLD) Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Acrow Industrial Group Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Uni-span Height Safety
Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Unispan Australia Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Uni-span Formwork Solutions
Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
MI Scaffold Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Benchmark Scaffolding &
Edge Protection Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Acrow Group Investments
Pty Ltd
Body
corporate
–
100%
Australia
Australia
n/a
Basis of preparation
This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001
and includes information for each entity that was part of the consolidated entity as at the end of the financial year in
accordance with AASB 10 Consolidated Financial Statements.
Acrow Annual Report 2024 | 79
Acrow Annual Report 2024 | 79
Directors’ Declaration
For the year ending 30 June 2024
The directors of Acrow Limited (the Group) declare that :
(a) With regard to the consolidated entity disclosure statement (on page 79), the statement is true and correct and complies
with the requirements of Section 295 of the Corporations Act 2001.
(b) The consolidated financial statements and notes set out on pages 42 to 78 and the Remuneration Report in the
Directors’ Report, set out on pages 22 to 41 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance, for the financial
year ended on that date; and
(ii) complying with Australian Accounting Standards, International Financial Report Standards and the Corporations
Regulations 2001;
(c) There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
(d) There are reasonable grounds to believe that Acrow Limited and its controlled entities identified in note 30 will be able
to meet any obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee
between Acrow Limited and its controlled entities pursuant to ASIC Corporations (Wholly-owned Companies) Instrument
2016/785.
(e) The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief
Executive Officer and the Chief Financial Officer for the financial year ended 30 June 2024.
Signed in accordance with a resolution of the Directors:
Peter Lancken
Steven Boland
Chairman
Director, Chief Executive Officer
Sydney, 27 September 2024
Sydney, 27 September 2024
80 | Acrow Annual Report 2024
Independent Auditor’s Report
For the year ending 30 June 2024
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Independent Auditor’s Report
To the Members of Acrow Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Acrow Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of
profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including material accounting policy information, the consolidated entity disclosure statement
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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Independent Auditor’s Report (continued)
For the year ending 30 June 2024
Grant Thornton Australia Limitedtd 2
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Carrying value of goodwill (Note 16)
Intangible assets comprise goodwill totalling $20m,
relating to the acquisition of MI Scaffold Pty Ltd
($9.6m) and Benchmark Scaffolding & Edge Protection
Pty Ltd ($3.0m), as well as historical balances relating
to previous acquisitions of Acrow Screens ($7.3m) and
Uni-Span ($127k).
In accordance with AASB 136 Impairment of Assets,
the Group is required to test the carrying value of
goodwill annually unless impairment indicators are
present earlier.
Management has tested goodwill for impairment by
comparing the carrying value of the assets related to
this cash-generating unit to a valuation model based on
the value in use of these assets.
We have determined this is a key audit matter as this
assessment requires the exercise of significant
judgement about forecasting future revenues and
expenses, including discount rates applied to cash
flows.
Our procedures included, amongst others:
•
Enquiring with management to obtain and document
an understanding of the processes and controls
related to the assessment of impairment, including
the calculation of the recoverable amount;
•
Obtaining management’s value-in-use calculations
to:
− Test the mathematical accuracy;
− Evaluate management’s ability to perform
accurate estimates by comparing historical
forecasting to actual results;
− Test forecast cash inflows and outflows; and
− Assess the discount rates applied to forecast
future cash flows;
•
Evaluating the value in use model against the
requirements of AASB 136, including consultation
with our internal valuation experts;
•
Performing sensitivity analysis on the significant
inputs and assumptions made by management in
preparing the calculation; and
•
Assessing the appropriateness of the disclosures
included in the financial report.
Expected credit loss (Note 11)
The Group’s expected credit loss provision amounts to
$4.0m.
In accordance with AASB 9 Financial Instruments, the
Group is required to prepare an estimation of expected
credit losses as at 30 June 2024.
We have determined this is a key audit matter due to
the inherent subjectivity involved in the Group making
forward looking judgements in relation to the recovery
of credit risk exposures. We further note there is an
increased risk in relation to the recoverability of trade
receivables in the current year due to the unstable
environment in the construction industry resulting from
the insolvency risk that may impact the Group’s
customers.
Our procedures included, amongst others:
•
Assessing the Group’s expected credit loss model at
year end with respect to the requirements of the
accounting standard AASB 9;
•
Reviewing management’s accounting paper and
assessing the reasonableness of key assumptions
used in their expected credit loss model;
•
Testing the trade receivables ageing profile
prepared by the Group for the purpose of placing
reliance on the trade receivables ageing profile for
our analysis;
•
Assessing the Group’s identification of credit
impaired trade receivables including the basis
adopted by the Group in the identification;
•
Challenging the identified trade receivables by
taking into account past payment trends, industry
82 | Acrow Annual Report 2024
Grant Thornton Australia Limitedtd 3
Key audit matter
How our audit addressed the key audit matter
data and observable data specific to the relevant
customers and to customers that are more than 90
days past due; and
•
Assessing the appropriateness of the disclosures
included in the financial report.
Acquisition Accounting – MI Scaffold Pty Ltd (Note
9)
The Group acquired 100% of the ordinary shares of MI
Scaffold Pty Ltd (“MI Scaffold”) on 10 November 2023,
for a total consideration of $31.0m. The value of
goodwill on acquisition totalled $9.6m.
In accordance with AASB 3 Business Combinations
(AASB 3), acquisition accounting of a business
involves the recognition and measurement of
identifiable assets and liabilities at their fair value.
As a result, this is a key audit matter due to the
complexity and judgements involved within the
assessment of AASB 3 and the estimation involved in
the valuation of the acquired assets and the valuation
of the deferred and contingent considerations.
•
Obtaining the purchase agreement, and bank
statements to confirm the terms of the contract and
agreeing payments to the bank statement;
•
Obtaining the financial information of MI Scaffold
and agreeing material balances to supporting
information;
•
Assessing the appropriateness of the accounting
treatment of the acquisition in accordance with
AASB 3;
•
Assessing the competence, capabilities and
objectivity of the independent experts engaged by
management to perform the valuation;
•
Assessing the accounting treatment of contingent
and deferred considerations and the underlying
calculations of these liabilities;
•
Assessing the reasonableness of the useful lives of
the acquired assets; and
•
Evaluating the appropriateness of the disclosure of
the acquisition in the financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2024, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of:
a the financial report that gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 (other than the consolidated entity disclosure statement); and
b the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
Acrow Annual Report 2024 | 83
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Independent Auditor’s Report (continued)
For the year ending 30 June 2024
Grant Thornton Australia Limitedtd 4
for such internal control as the directors determine is necessary to enable the preparation of:
i
the financial report that gives a true and fair view and is free from material misstatement, whether due
to fraud or error; and
ii
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
N P Smietana
Partner – Audit & Assurance
Sydney, 27 September 2024
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June
2024.
In our opinion, the Remuneration Report of Acrow Limited for the year ended 30 June 2024 complies with
section 300A of the Corporations Act 2001.
84 | Acrow Annual Report 2024
Shareholder Information
For the year ending 30 June 2024
Additional Information for Listed Entities
The additional information set out below, in accordance with ASX Listing Rule 4.10, was applicable as at 16 September 2024.
Substantial Holders1
Name
Shares
%
Perennial Value Asset Management
25,467,210
9.57
1
As disclosed in the most recent substantial holder notices given to the Company under the Corporations Act.
Distribution of equity securities
Fully Paid Ordinary Shares
Unlisted Performance Rights
No. of holders
% of securities
No. of holders
% of
securities
1 to 1,000
1,789
0.10%
–
–
1,001 to 5,000
995
0.93%
–
–
5,001 to 10,000
701
1.87%
–
–
10,001 to 100,000
1,845
20.81%
4
1.80%
100,001 and over
355
76.27%
33
98.20%
Total no. of holders
5,685
37
No. of holders holding less than a marketable parcel
1,520
–
Total no. of securities
301,411,067
14,915,881
Voting Rights
Fully Paid Ordinary Shares – on a show of hands every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share have one vote.
Performance Rights – do not have voting rights.
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Shareholder Information (continued)
For the year ending 30 June 2024
Top Holders
20 Largest Holders of Fully Paid Ordinary Shares
Position Holder Name
No. of
securities
held
% of total
securities
on issue
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
35,759,276
11.86%
2
CITICORP NOMINEES PTY LIMITED
21,451,167
7.12%
3
KENECO PROPERTY PTY LTD
13,086,667
4.34%
4
MARGARET ANNA PROKOP
7,126,209
2.36%
5
NETWEALTH INVESTMENTS LIMITED
7,063,149
2.34%
6
UBS NOMINEES PTY LTD
6,426,310
2.13%
7
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
6,022,862
2.00%
8
MRP PROPERTY PTY LTD
5,376,043
1.78%
9
11 BELGRAVIA PTY LTD
4,026,837
1.34%
10
CONCHORD PTY LTD
3,853,044
1.28%
11
MR ANDREW HAROLD KENNARD & MRS PRUDENCE ALICE KENNARD
3,039,474
1.01%
12
MALCOLM & JUNE ROSS INVESTMENTS PTY LTD
2,700,364
0.90%
13
BNP PARIBAS NOMINEES PTY LTD
2,582,370
0.86%
14
JOSAMBA PTY LTD
2,500,000
0.83%
15
DRACKA PTY LTD
2,396,626
0.80%
16
WHOOSHKA NOMINEES PTY LTD
2,184,976
0.72%
17
BOND STREET CUSTODIANS LIMITED
2,000,000
0.66%
18
CUSTOM SCAFFOLD DESIGNS PTY LTD
1,773,994
0.59%
19
BNP PARIBAS NOMINEES PTY LTD
1,705,180
0.57%
20
BRUNDEE INVESTMENTS PTY LTD
1,701,820
0.56%
Total
132,776,368
44.05%
Total Issued Capital
301,411,067
100.00%
There are no holders of more than 20% of any of the classes of unquoted securities.
Restricted Securities or securities subject voluntary escrow
Securities
Type of restriction/escrow
No. of
securities
End date of
restriction/
escrow
Fully Paid Ordinary Shares
Voluntary escrow
1,773,994
1 March 2025
Other Information
The Company’s securities are not quoted on any other stock exchange.
The Company is not currently conducting an on-market buy-back.
The Company has not sought approval to issue any securities for the purposes of item 7 of section 611 of the Corporations
Act 2001 (Cth).
The Company has not purchased any securities on-market under or for the purposes of an employee incentive scheme,
or to satisfy the entitlements of the holders of options or other rights to acquire securities granted under an employee
incentive scheme.
86 | Acrow Annual Report 2024
Corporate Directory
For the year ending 30 June 2024
COMPANY
Acrow Limited
BOARD OF DIRECTORS
Mr Peter Lancken AM | Non-Executive Chairman
Mr Steven Boland | Executive Director
Mrs Melanie Allibon | Non-Executive Director
(Chair of the Remuneration and Nomination Committee)
Ms Laurie Lefcourt | Non-Executive Director
(Chair of the Audit and Risk Committee)
Mr David Moffat | Non-Executive Director
CHIEF FINANCIAL OFFICER
Mr Andrew Crowther
COMPANY SECRETARY
Mr Lee Tamplin
REGISTERED OFFICE
2A Mavis Street, Revesby NSW 2212
Phone: 02 9780 6500
SHARE REGISTRY
Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
Phone: 1300 288 664
AUDITOR
Grant Thornton Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW Australia 2000
ASX CODE
ACF
ACN
124 893 465
Back cover: WOVA Woden Valley
residential project, Canberra
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www.acrow.com.au
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