ASHLEY SERVICES GROUP ANNUAL REPORT 2024
1
Appendix 4E
Year Ended 30 June 2024
Lodged with the ASX under Listing Rule 4.3A
29 August 2024
The following information should be read in conjunction with the attached Annual Report.
1. DETAILS OF REPORTING PERIODS:
The consolidated statement of profit or loss and other comprehensive income and consolidated statement of
financial position relates to Ashley Services Group Limited (“ASH”) and its controlled entities (“the Group”). The
current reporting period is the twelve months from 1 July 2023 to 30 June 2024. The previous corresponding
reporting period was from 4 July 2022 to 30 June 2023.
2. RESULTS FOR ANNOUNCEMENT TO THE MARKET:
Results:
Change %
Change
Amount
$’000
Revenue from ordinary activities
Up
1.3%
To
556,538
Profit after tax for the year
Down
88.2%
To
1,350
Profit after tax for the year attributable to shareholders
Down
87.5%
To
1,350
Refer to Chairman and Managing Director’s review in the Annual Report and separate results presentation for
commentary on the results.
Control gained over entities:
Not applicable.
Loss of control over entities:
Not applicable.
Details of interests in significant joint ventures and associates:
1. A non-controlling 49% interest in Dardi Munwurro Labour and Traffic Management Pty Limited, a
company providing Indigenous labour hire in Victoria;
2. A non-controlling interest of 49% in Yalagan Infrastructure Pty Limited, a company
supporting Indigenous labour hire in New South Wales; and
3. A non-controlling interest of 49% in EWP Services Pty Limited, a company supporting
Indigenous labour hire in the Pilbara Region within Western Australia.
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
Dividend re-investment plans:
Not applicable.
Dividends:
Record
Payment
Cents per
Franked Amount
Date
Date
Share
per Share (Cents)
Interim Dividend - 2024
5 March 2024
15 March 2024
0.50
0.50
Final Dividend - 2024
5 September 2024
19 September 2024
0.24
0.24
Additional Information:
2024
2023
Net tangible assets ($000)
6,8671
5,2981
Shares on Issue
143,975,904
143,975,904
Net tangible assets per share ($)
0.048
0.037
Note:
1.
Right-of-use assets are included for the purposes of the Net Tangible Assets calculation.
Audit qualification or review:
The audited financial statements are attached.
Ross Shrimpton
Managing Director
Sydney, 29 August 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
Ashley Services Group Limited Annual Report 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
4
CHAIRMAN AND MANAGING DIRECTOR’S REVIEW ------------------------------------------------------------------ 5
DIRECTORS’ REPORT --------------------------------------------------------------------------------------------------------- 9
AUDITOR’S INDEPENDENCE DECLARATION -------------------------------------------------------------------------- 23
CORPORATE GOVERNANCE STATEMENT ----------------------------------------------------------------------------- 24
CONSOLIDATED ENTITY DISCLOSURE STATEMENT ----------------------------------------------------------------- 25
DIRECTORS’ DECLARATION----------------------------------------------------------------------------------------------- 28
INDEPENDENT AUDITOR’S REPORT ------------------------------------------------------------------------------------ 29
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ------------- 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ----------------------------------------------------------- 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------------ 37
CONSOLIDATED STATEMENT OF CASH FLOWS --------------------------------------------------------------------- 38
NOTES TO THE FINANCIAL STATEMENTS ----------------------------------------------------------------------------- 39
ASX ADDITIONAL INFORMATION --------------------------------------------------------------------------------------- 79
CORPORATE DIRECTORY -------------------------------------------------------------------------------------------------- 81
Chairman and Managing Director’s Review
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
5
MR IAN PRATT AND MR ROSS SHRIMPTON
The financial year ended 30 June 2024 (“FY24”) has been challenging, with a disappointing outcome from the
acquisition of Linc Personnel Pty Ltd (“Linc”) and specific negative factors affecting our key market sectors.
The Net Profit After Tax (“NPAT”) result includes non-recurring expenses of $3.2 million, primarily relating to the
non-cash write-down of customer relationships and goodwill associated with the purchase of Linc. As with all
acquisitions, there was risk associated with the purchase of Linc. The Group had 18 months to renew the major
customer contract or secure new customers and expand within the higher margin Oil and Gas sector. As
announced on 31 October 2023, Linc was unsuccessful renewing its key customer contract and as of today, has
no employees. The value of acquired customer relationships has been written off in full throughout FY23 and
FY24, with goodwill also fully impaired during FY24.
The expected growth in the warehousing, logistics, retail and manufacturing sectors did not occur in FY24.
Underlying hours in these sectors were down 6%, with economic activity and casual labour demand reduced
across the existing customer base. The Group has not lost any significant customers. We have secured longer
term contracts with several key customers and gained new customers. Hours delivered to the new customers
were minor in FY24, but are expected to increase in FY25. Margins continued to decline due to the negative
impact of fixed hourly margins in the current inflationary environment, the general competitive nature of the
labour hire industry and the decrease in benefits received from government support programmes for trainees.
We believe both demand and margins in these market sectors have now stabilised and the Group is focused on
improving efficiencies through continuing system and process improvements.
Hours worked, revenue and margin in the construction and engineering sectors reduced due to industrial
relation challenges and project delays in Victoria. The Group’s focus is to expand in both sectors outside Victoria
and, within Victoria, to diversify its customer base.
Profitability from Owen Pacific Workforce (“OPW”) has been below expectations due to increasing flight costs
not recoverable from workers. The Department of Workplace Relations (“DEWR”) has issued a more favourable
flight recovery matrix, effective from 1 August 2024. OPW has now been merged with the horticultural business
previously existing within the Group and improved delivery structures, processes and systems will enable the
Group to better service customers, with expected growth moving forward.
Positively, the Training division continued to deliver improved results.
The Group’s strategy remains to diversify outside the lower margin base within the supply chain, logistics, retail
and manufacturing sectors by broadening our geographical and industry footprints in growing, more profitable
sectors, whilst maintaining our focus on high value service. Initiatives to grow in construction and engineering
outside Victoria, as well as mining and horticulture have progressed, but at a slower pace than anticipated.
Chairman and Managing Director’s Review
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
6
Staff numbers have been reduced from a peak of 347 internal staff to 288 and I thank the team who continue
to achieve excellence in their customer service and remain critical for delivery of continued expansion over the
coming years.
On 14 July 2023, the Group acquired the remaining 20% of the CCL Group. The purchase consideration for the
20% interest is payable in two instalments, with the first payment of $0.886 million made in October 2023 (based
upon actual FY23 EBITDA) and the final instalment to be paid in October 2024 (based actual FY24 EBITDA).
DISCUSSION ON RESULTS
Earnings
NPAT for the financial year ended 30 June 2024 (“FY24”) was $1.35 million (FY23: $11.4 million).
Key elements within the result include:
Revenues
Group Revenue at $556.5 million increased by $7.3 million (1.3%) from the comparative period.
Labour Hire revenue at $538.3 million was 1% above the prior year. Revenue includes a full year of sales of $62.8
million from OPW, acquired 6 February 2023. Excluding OPW, revenues were 6% below prior period with total
hour worked down 8%, due to reduced existing customer demand across all key sectors. The decreased activity
has been partly offset by inflationary increases in underlying wages.
Training revenues at $18.25 million were up $2.25 million (14%), with growth achieved across both the Ashley
(“ASH”) and The Instruction Company (“TIC”) training businesses, as new courses continued to be added to scope
and both businesses increased geographic coverage.
Earnings before interest taxes depreciation and amortisation (“EBITDA”)
Group EBITDA for the financial year was $8.6 million, down by $11.5 million (57%) on the prior corresponding
period (FY23: EBITDA of $20.1 million). EBITDA includes non-recurring expenses of $3.2 million, primarily
relating to the write-down of customer relationships and goodwill associated with the purchase of Linc
Personnel Pty Ltd (“Linc”).
Labour Hire division EBITDA of $13.2 million, was down $8.3 million (38.6%) on the prior corresponding period
(FY23: $21.5 million). Labour Hire margin reduced 159 basis points (“bps”) to 2.45%. Linc contribution in FY24
was negligible following the loss of the Inpex contract, down $1.4 million from the prior period.
Training division EBITDA of $4.0 million was up $0.3 million or 8.1% on the prior corresponding period (FY23:
$3.7 million), following the revenue increase. EBITDA margin was 21.9%.
Corporate overheads (excluding interest, depreciation and amortisation), at $5.3 million were up $0.2 million
on prior corresponding period (FY23: $5.1 million), due to underlying inflation.
Chairman and Managing Director’s Review
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
7
Non-cash, non-recurring expense/(income) of the year
FY24
$m
FY23
$m
Linc customer relationship - impairment
1.80
-
Linc goodwill - impairment
2.58
-
Total non-cash impairment expense - EBITDA & NPAT impact
4.38
-
Reduction in redemption liabilities to purchase the remaining 25% of
Linc (acquired 31 January 2024 for $0.244 million) and the remaining
20% of the CCL Group (acquired 14 July 2023).
(1.14)
-
Net EBITDA & NPAT expense impact
3.24
-
Statement of financial position
Net assets at $30.45 million were down $3.8 million from the financial year ended 30 June 2023 position of $34.3
million, largely in line with the NPAT of $1.35 million for the year, reduced by the dividend payments of $5
million.
Noteworthy balance sheet movements include:
▪ Trade and other receivables down $11.6 million to $45.5 million. This reflects both reduced revenues for
the month of June ($8.6 million or 19% below the prior period), but also an overall reduction in payment
terms with customers.
▪ Trade and other payables were down $8.2 million to $33.8 million reflecting the reduced June activity.
▪ Property, plant and equipment increased $1.0 million to $5.3 million, with net capital additions of $2.5
million, $1.0 million above depreciation of $1.5 million.
▪ Intangible assets decreased $5.4 million to $23.6 million, due mainly to the $4.4 million impairment of Linc
goodwill and customer relationships, but also $1 million of customer relationship amortisation,
representing an ongoing $0.75 million for OPW customer relationships and $0.25 million for Linc
amortisation from 1 July 2023 to 31 December 2023.
▪ Borrowings increased $4.4 million and cash decreased $2.4 million, with total net debt increasing $6.8
million to $12.5 million as of 30 June 2024.
Cash Flow
Operating cash flow was stronger in the 2nd half of the financial year, with an inflow of $4.3 million ($0.8 million
outflow in the first half of the year), bringing the full year operating cash flow to $3.5 million (FY23: $22.8
million). Operating cash flow before income taxes and interest was $11.5 million, slightly below the $11.9 million
EBITDA (excluding non-cash, non-recurring expenses). Tax payments were $6.0 million, with $4.6 million of net
payments made in relation to FY23. Net interest payments were $1.96 million.
The overall outflow from investing activities of $3.8 million includes the first instalment payment made ($0.886
million) to acquire the remaining 20% of the CCL Group, the 2nd instalment paid in relation to the prior year
acquisition of OPW ($1.8 million) and the payment to acquire the final 25% interest in Linc ($0.244 million). Net
underlying capital expenditures were $2.5 million (down $0.7 million from the prior year), primarily to fund
vehicle and equipment purchases to replace leased assets in the traffic management business in Victoria.
Associated entities repaid $1.65 million in loans during FY24.
The overall outflow from financing activities of $2.1 million was primarily due to the combined $5.0 million
dividend payments covering the 2023 final dividend ($4.3 million) and the 2024 interim dividend ($0.7 million).
Lease payments were $1.5 million and gross borrowings increased $4.4 million.
Overall, cash and cash equivalents declined $2.4 million in FY24 (FY23: $0.8 million inflow).
Chairman and Managing Director’s Review
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
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DIVIDEND
On 29 August 2024, the Group declared a fully franked final dividend of 0.24 cents in relation to the financial
year ended 30 June 2024 (Ex-div: 4 September 2024; Payment: 19 September 2024). Together with a fully
franked interim dividend of 0.5 cents previously declared on 27 February 2024, this brings the full year dividend
for the financial year ended 30 June 2024 to a total of 0.74 cents (FY23: 6.0 cents), representing a payout ratio
for FY24 equivalent to 79% of available Group NPAT.
EVENTS SUBSEQUENT TO BALANCE DATE
Other than the dividend announcement on 29 August 2024 outlined above, no matters or circumstances have
arisen since the end of the financial year which significantly affected or could significantly affect the operations
of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
Ian Pratt
Ross Shrimpton
Chairman
Managing Director
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
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The Directors present their annual financial report on the consolidated entity, being Ashley Services Group
Limited (the “Company”) and its controlled entities (the “Group”) for the financial year ended 30 June 2024.
1. GENERAL INFORMATION
a. Directors
The names of the Directors in office at any time during, or since the end of the year are:
Table 1: Director Details
Names
Appointed / Resigned
Mr Ian Pratt
Chairman
Appointed 1 October 2015
Mr Ross Shrimpton
Managing
Director
Appointed 12 Oct 2000; Managing Director (“MD”) to 15 Feb 2016, Non-
Executive Director 15 Feb 2016 to 23 Jan 2017 and Managing Director from
23 Jan 2017
Mr Paul Brittain
Executive Director
Appointed 25 July 2022
Directors’ Information
•
Mr Ian Pratt | Non-Executive Chairman (since 1 October 2015)
Qualifications | CA
Experience | Ian has over 40 years’ experience in the accounting profession and is a
Director of a number of Public and Private companies. During this time, he has been
involved in the recruitment, finance and property industries, and advises on income tax
and related matters. Currently Ian is a Partner at Pratt Partners and was previously a
Director of Charter Hall Direct Property Management Limited.
Ian Pratt is a Member of Chartered Accountants Australia and New Zealand.
Ian is Chairman of the Nominations, Audit & Risk Management and Remuneration
Committees.
•
Mr Ross Shrimpton | MD (since 23 January 2017) (previously Non-Executive Director
from 15 February 2016 to 23 Jan 2017 and MD to 15 February 2016)
Qualifications | BComm (UNSW), CA, MAICD
Experience | Ross is the founder and Managing Director of Ashley Services Group and
has been instrumental in the overall growth and strategic direction of Ashley Services.
Ross has over 40 years’ experience in finance and management across a number of
large international organisations such as CSR/Humes and David Brown, originally
commencing his professional career with Deloitte Touche Tohmatsu. Overall, Ross has
over 20 years of relevant experience in the labour hire and training industries.
Ross is a Member of Chartered Accountants Australia and New Zealand and a member
of the Australian Institute of Company Directors.
Ross is a member of the Nominations, Audit & Risk Management and Remuneration
Committees.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
10
•
Mr Paul Brittain | Executive Director (from 25 July 2022)
Qualifications | BSc (Exeter, UK), CA, AMP (Wharton)
Experience | Paul was appointed Chief Financial Officer and Executive Director of
Ashley Services Group on 25 July 2022. Paul, a chartered accountant, worked with
Touche Ross in the UK and Deloitte in Sydney, before spending nearly 30 years in large
divisional CFO and M&A roles in the Construction Materials Industry (Rinker and Boral)
and the Engineering and Industrial Sectors (UGL and Coates Hire), working throughout
both Australia and the USA. Most recently Paul was the EGM Finance for Boral
Australia. Paul was also previously CFO of Ashley Services Group from December 2014
to February 2017.
Paul is a Member of Chartered Accountants Australia and New Zealand.
Paul is a member of the Nominations, Audit & Risk Management and Remuneration
Committees.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
11
Interests in shares and options
As at the date of this report, the interests of the directors in the shares of Ashley Services Group Limited were:
Table 2: Shares Held by Directors
Names
•
Number
of Shares Held
Shareholding
•
%
Mr Ian Pratt
15,060
0.01
Mr Ross Shrimpton
84,279,030 58.54
Mr Paul Brittain
-
0.00
Directorships of other listed companies
Directorships held in other listed companies by the Directors in the three years immediately before the end of
the financial year are as follows:
Table 3: Other Directorships of listed entities
Name
Company
Date from
Date to
Mr Ian Pratt
Nil
-
-
Mr Ross Shrimpton
Nil
-
-
Mr Paul Brittain
Nil
-
-
a. Principal activities
The principal activities of the Group during the financial year were the provision of labour hire (including
recruitment) and training services.
Directors’ meetings
Details of meetings of directors (including committees of directors) held in the financial year and attendances by
each director are shown in the following table:
Table 4: Meeting Attendance
Board Meetings
Audit & Risk
Management
Committee
Meetings
Remuneration
Committee
Meetings
Nomination
Committee
Meetings
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Mr Ian Pratt
10
10
3
3
2
2
0
0
Mr Ross Shrimpton
10
10
3
3
2
2
0
0
Mr Paul Brittain
10
10
3
3
2
2
0
0
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
12
1. BUSINESS REVIEW
a. Operating results
The consolidated profit of the Group attributable to
equity holders after providing for income tax
amounted
to
$1,350,000
(2023:
profit
$11,402,000).
b. Review of operations
Information on the operations and financial
position of the Group and its business strategies and
prospects is set out in the Chairman and Managing
Director’s Review.
c. Future developments
Likely developments in the operations of the
consolidated entity in future years and the expected
results of those operations are referred to generally
in the Chairman and Managing Director’s Review.
d. Events subsequent to reporting date
There have been no matters or circumstances that
have arisen since the end of the year that would
have significantly affected the group’s operations in
financial year 2024 except as follows:
On 29 August 2024 the Group declared a fully
franked final dividend of 0.24 cents in relation to the
financial year ended 30 June 2024, with a payment
date of 16 September 2024.
e. Ongoing Litigation
Ashley Services Group Limited (ASH) has no current
ongoing litigation.
2. OTHER INFORMATION
a.
Options
There are no unissued ordinary shares that are
either under option at the date of this report or
have been exercised during the year.
b. Non-audit services
The Group may decide to employ the auditor on
assignments additional to their statutory audit
duties where the auditor’s expertise and experience
with the Group are important.
The current auditor, HLB Mann Judd Assurance
(NSW) Pty Ltd, did not provide any non-audit
services during the year ended 30 June 2024.
Details of the amounts paid to HLB Mann Judd
Assurance (NSW) Pty Ltd for audit services provided
during the year are outlined in Note 4 to the
financial statements.
c. Auditor’s independence declaration
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act
2001 is set out on page 23 and forms part of this
report.
d. Environmental issues
The Group’s operations are not regulated by any
significant environmental regulation under a law of
the Commonwealth or of a state or territory.
e. Indemnifying officers or auditors
Insurance of officers
During the financial year, Ashley Services Group
Limited paid a premium to insure the directors,
secretaries and officers of the Group and its
Australian entities.
The insurance policies prohibit disclosure of the
premiums payable under the policies and details of
the insured liabilities.
f. Proceedings on behalf of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene
in any proceedings to which the Group is a party, for
the purpose of taking responsibility on behalf of the
Group for all or part of those proceedings.
g. Rounding off of amounts
In accordance with ASIC Corporations (Rounding in
Financial/ Directors’ Reports) Instrument 2016/191,
amounts in the financial report are rounded off to
the nearest thousand dollars unless otherwise
indicated.
3. REMUNERATION REPORT – AUDITED
The directors of Ashley Services Group Limited
present the remuneration report for Non-Executive
Directors, Executive Directors and other key
management personnel, prepared in accordance
with
the
Corporations
Act
2001
and
the
Corporations Regulations 2001.
The remuneration report is set out in the following
main headings:
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
13
▪ key management personnel;
▪ principles used to determine the nature and
amount of remuneration;
▪ Non-Executive Director remuneration;
▪ details of executive remuneration;
▪ executive service agreements;
▪ share-based compensation; and
▪ additional information.
a.
Key management personnel
The following persons acted as Directors of the
Group or as key management personnel during the
financial year:
Executive Directors:
▪ Ross Shrimpton
▪ Paul Brittain.
Non-Executive Directors:
▪ Ian Pratt.
Other key management personnel:
▪ Glen Everett (Chief Operating Officer).
Key management personnel include both the
Directors and other key management personnel
named above.
b.
Principles used to determine the nature and
amount of remuneration
The objective of the Group’s executive reward
framework
is
to
ensure
that
reward
for
performance is competitive and appropriate for the
results delivered. The framework seeks to align
executive reward with achievement of strategic
objectives
and
the
creation
of
value
for
shareholders.
The Board seeks to ensure that executive reward
satisfies the following key criteria for good reward
governance practices:
▪ competitiveness and reasonableness;
▪ acceptability to shareholders;
▪ performance linkage / alignment of executive
compensation;
▪ transparency; and
▪ capital management.
Alignment of shareholders’ interest
▪ focuses on sustained growth in shareholder
wealth, consisting of dividends and growth in
share price, and delivering a return on assets as
well as focusing the executive on key non-
financial drivers of value; and
▪ attracts and retains high-calibre executives.
Alignment to program participants’ interests
▪ rewards capability and experience;
▪ provides a clear structure for earning rewards;
and
▪ provides recognition for contribution to the
business.
The framework provides a mix of fixed and variable
pay, including a blend of short and long-term
incentives.
The Board has established a Remuneration
Committee which provides advice on remuneration
and incentive policies and practices and specific
recommendations on remuneration packages and
other terms of employment for executives and
Directors. The Corporate Governance Statement
provides further information on the role of this
committee.
Executive pay
The executive pay and reward framework has three
components:
•
base pay and benefits, including
superannuation;
•
short-term performance incentives, provided
in cash; and
•
Long-term performance incentives, provided
through participation in the Ashley Services
Group Performance Rights Share Plan.
The combination of these comprises the executive’s
total remuneration.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
14
Table 5: Key components of senior executive remuneration framework in place during the year ended 30 June 2024.
Remuneration Elements
Fixed Remuneration/Base Pay
Short Term Incentive (STI)
Long Term Incentive (LTI)
▪
Base pay is determined by
reference to appropriate
benchmark information, taking
into account an individual’s
responsibilities, performance,
qualifications and experience,
the broad objective being to
pitch fixed remuneration at
median market levels.
▪
‘At risk’ award opportunity for
the achievement of annual
performance objectives linked to
annual financial targets and non-
financial goals set by individual.
▪
‘At risk’ award opportunity for the
achievement of performance hurdles
over
two
different
measurement
periods:
-
Tranche 1 – up to 5 years from 30
June 2022;
-
Tranche 2 – up to 10 years from
30 June 2022.
▪
Base pay is structured as a
package, which may be delivered
as a mix of cash and other
benefits, such as the provision of
a motor vehicle, at the
executive’s discretion.
▪
Financial targets in line with
budgets set for the individual’s
area of influence for the
financial year, coupled with non-
financial key performance
measures.
▪
The performance hurdles are achieving
greater than target Profit Before Tax
(“PBT”) in any financial year up to 30
June 2027 for Tranche 1 or any financial
year up to 30 June 2032 for Tranche 2.
▪
There are no guaranteed base
pay increases in any executives’
employment contracts.
▪
Paid in cash within 30 days of
finalisation of Audited Annual
Report.
▪
No value is derived unless the Group
exceeds the PBT targets.
▪
For Tranche 1, the PBT target is $24.5
million, excluding any intangible
amortisation associated with
acquisitions after 1 July 2022 or any
accounting expense or cost relating the
LTI performance Rights Plan.
▪
For Tranche 2, the PBT target is $36.5
million, excluding any intangible
amortisation associated with
acquisitions after 1 July 2022 or any
accounting expense or cost relating the
LTI performance Rights Plan
▪
Vesting will take place on 1 September,
following the financial year in which the
PBT target is achieved and provided the
executive is still employed at the date
of vesting.
▪
Grant of equity awards aligns
shareholder and executive interests,
enhances retention of key talent and
focuses executives on long term
sustainable business performance.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
15
Table 6: Key features of the senior executive STI plan for FY24
Table 7: Key features of the senior executive LTI plan
Overview of the LTI plan
Who participates in
the Senior Executive
LTI?
The Chairman, the Chief Financial Officer and the Chief Operating Officer.
The Managing Director does not participate in the LTI plan.
What was awarded
under the LTI plan in
FY23?
On 22 May 2023, senior executives received an LTI award of 7,588,734 performance rights, the
vesting of which is subject to the performance conditions outlined below. The number of rights
awarded was approved by shareholders at an Extraordinary General Meeting held on 30 Match
2023.
Each performance right converts into one share of ASH if the vesting criteria are met, at no cost to
the participants.
What are the
performance
conditions?
Senior executive LTI awards are earned only upon achievement of performance hurdles:
▪
Tranche 1: 4,535,240 performance rights - 60% of the LTI grant - PBT target is $24.5 million,
excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any
accounting expense or cost relating the LTI performance Rights Plan.
▪
Tranche 2: 3,023,494 performance rights - 40% of the LTI grant - PBT target is $36.5 million,
excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any
accounting expense or cost relating the LTI performance Rights Plan.
Overview of the senior executive STI plan
Who participates in the
Senior Executive STI plan?
Senior executives, other than the MD, participate in the senior executive STI plan.
How much can executives
earn?
STI opportunity for senior executives ranges from zero to 100% of target STI for significant out-
performance.
Thresholds and performance conditions
Is there a threshold
level of performance
required?
Yes. There are threshold levels for divisional EBIT or Group NPAT, as applicable, that must be
met to receive an STI payment. Achievement of the thresholds does not automatically entitle
executives to an STI award.
What
are
the
performance
conditions?
Measures
Senior Executives
Financial measures
(80% of STI opportunity)
Non-Financial measures
(20% of STI opportunity)
Assessed against:
▪
Budget EBIT or Budget NPAT for the individual’s area of influence
for the financial year.
▪
20% payable for achievement of 80% of budget. Remaining 80%
payable on a straight-line pro rata basis for performance from 80%
to 130% of budget.
▪
Individually set Key Performance Indicators.
Setting and assessing performance
Who sets and
assesses
performance?
The MD sets and assesses performance and short-term incentive outcomes for senior executives
with guidance from the Remuneration Committee.
How is the STI
delivered?
100% of any STI award is paid in cash within 30 days of finalisation of the audited Annual Report.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
16
Overview of the LTI plan
Over what period is
performance
measured?
The Board has determined that the LTI plan will be subject to the performance conditions over the
following periods:
▪
Tranche 1 – 5 years from 30 June 2022 - any financial year up to 30 June 30 June 2027;
▪
Tranche 2 – 10 years from 30 June 2022 - any financial year up to 30 June 2032.
How are the
performance
conditions
assessed?
The performance will be assessed by the Remuneration Committee (excluding participants) by
reference to the Company’s absolute profit before tax (“PBT”) in a financial year based upon the
Appendix 4E and Annual Report and other financial information, excluding any intangible
amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost
relating the LTI performance Rights Plan.
Why were the
performance
measures
chosen?
A PBT growth hurdle:
▪
Links executive reward to a fundamental indicator of financial performance that is directly
connected to shareholders; and
▪
Links directly to ASH’s long-term objectives of improving and maintaining earnings performance.
The PBT targets represents a 50% improvement on the actual PBT for FY22 (for tranche 1) and 125%
increase on the FY22 base (for tranche 2).
Is performance
subject to retesting?
No, retesting of performance is not permitted.
Who assesses
performance
against targets?
The Remuneration Committee (excluding any participants in the plan) based on audited financial
information.
Does the executive
receive dividends
and voting rights on
unvested awards?
No, there are no voting rights or entitlements to dividends on unvested awards under the LTI plan.
What happens in
the event of a
change of control?
Upon a change of control event, the Board may determine to vest some or all of the LTI awards. In
making this determination, the Board will consider all relevant circumstances, including the
performance against the PBT measure up to the date of the change of control event and the portion
of the performance period that has expired.
What happens in
the event of
cessation of
employment?
In general, unvested LTI awards are forfeited.
In limited circumstances, such as upon a senior executive’s death, serious injury or incapacity during
the performance period or other reason approved by the Board, any unvested performance shares
will vest at the end of the performance period if the relevant performance conditions have been
satisfied.
When can
participants dispose
of shares issued?
Shares issued upon vesting of Performance Rights may not be disposed of by participants within 12
months of their issue. Additionally, all shares are always subject to the Company’s Share Trading
Policy.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
17
STI and LTI plans for the financial year ending 30 June 2025
The remuneration committee has approved a similar Short-Term Incentive (STI) plan for the year ending 30 June
2025, based upon budget targets for that annual period.
The participants and targets for the LTI plan remain place for FY25 and through to the financial year ended 2032.
c.
Non-executive Director remuneration and Board performance review
Non-executive Directors’ remuneration are reviewed annually and are determined by the Board based on
recommendations from the Remuneration Committee. In making its recommendations, the Remuneration
Committee takes into account remuneration paid to other non-executive Directors of comparable companies
and where necessary will seek external advice. No remuneration consultants were used during the financial year.
In accordance with the Company’s Constitution, the Directors are entitled to receive an annual fee and for
participation in Board sub-committees. For non-executive Directors, fees are not linked to performance.
The Company does operate an equity plan for the non-executive Director, the LTI Performance Rights Plan.
Non-executive Directors are entitled to statutory superannuation included as part of their Directors’ fees. There
are no other schemes for retirement benefits for non-executive Directors.
d.
Details of executive remuneration
Details of remuneration of the Directors and other key management personnel of Ashley Services Group are set
out in the tables on pages 17 to 21.
The key management personnel of Ashley Services Group are listed in the table below. The key management
personnel have authority and responsibility for planning, directing and controlling activities of the Group.
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel
are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set
out below:
Table 8: Executive and Key Management Personnel Service Agreements
Name
Base Salary $
Target STI %1
Target LTI %2
Term of
agreement
Notice Period
Ross Shrimpton
450,000
-
-
Ongoing
6 months
Paul Brittain
475,000
30
No fixed % - see
LTI plan details
in this report
Ongoing
6 months
Glen Everett3
475,000
30
No fixed % - see
LTI plan details
in this report
Ongoing
6 months
Note:
1.
Maximum annual award as a percentage of annual salary.
2.
Details of the LTI plan are included in this Remuneration Report.
3.
Include $25,000 car allowance.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
18
Table 9: Statutory key performance indicators of the group over the last five years
2024
2023
2022
2021
2020
Profit / (Loss) for the year attributable to shareholders ($000)
1,350
10,794
11,315
8,923
4,667
Basic earnings per share (cents)
0.94
7.50
7.86
6.20
3.24
Dividends declared ($000)1
1,065
8,639
8,639
6,047
3,887
Dividend payout ratio (%)
78.9
80.0
76.3
67.8
83.3
Increase / (decrease) in share price (%)2
(64.8)
7.6
43.4
92.3
0.0
Total KMP incentives as percentage of profit/(loss) for the year
(%)
(9.6)
3.8
(0.1)
3.9
4.1
Note:
1. 2024 Final Dividend declared 28 August 2024 in relation to the 2024 financial year, with payment date of 16 September 2024.
2024 Interim Dividend declared 27 February 2024 in relation to the 2024 financial year, with payment date of 15 March 2024.
2023 Final Dividend declared 28 July 2023 in relation to the 2023 financial year, with payment date of 16 September 2023
2023 Interim Dividend declared 10 February 2023 in relation to the 2023 financial year, with payment date of 17 March 2023.
2022 Final Dividend declared 28 July 2022 in relation to the 2022 financial year, with payment date of 16 September 2022.
2022 Interim Dividend declared 2 February 2022 in relation to the 2022 financial year, with payment date of 17 March 2022.
2021 Final Dividend declared 27 July 2021 in relation to the 2021 financial year, with payment date of 17 September 2021.
2021 Interim dividend declared 28 January 2021 in relation to the 2021 financial year, with payment date of 18 March 2021.
2020 Dividend declared 27 July 2020 in relation to the 2020 financial year, with payment date of 11 September 2020.
2. Increase / (decrease) in share price (%) is year-end share price relative to prior year-end.
Table 10: 2024 – Remuneration of Key Management Personnel calculated in line with Australian Accounting Standards
2024
ST1 employee benefits
PE2
benefits
LT3
employee
benefits
Total4
Performance
based
Remuneration
Name
Cash salary
& fees
$
ST Bonus1
$
Other
payments5
$
Super-
annuation
$
$
$
%
Non-executive Directors
Ian Pratt
205,479
-
-
22,603
(6,170)
221,912
(2.8)
Executive Director
Ross Shrimpton
422,601
-
-
27,399
-
450,000
-
Paul Brittain
447,601
-
-
27,399
(61,695)
413,305
(14.9)
Other key management personnel
Glen Everett
422,601
- 25,000
27,399
(61,695)
413,305
(14.9)
Total
1,498,282
-
25,000
104,800
(129,560) 1,498,522
(8.6)
Note:
1. ST – Short-term. No short-term incentive expense was recognised in the Profit and Loss account for FY24, given that financial
targets for FY24 were not met.
2. PE – Post-employment.
3. LT – Long-term. Performance Rights valued using Black-Scholes modelling. Accounting expense recognised based upon probability of
vesting and performance periods - separately for Tranche 1 and Tranche 2. Given the decline in FY24 profits, it is currently deemed
unlikely that performance criteria for vesting under the LTI plan will be met and no expense has been recognised in the Profit and Loss
account for FY24. Additionally, the prior period expense of $0.130 million has been credited to profit in the year ended 30 June 2024.
4. Amounts included in the above table include amounts expensed within the Profit or Loss account for the year.
5. Car allowance.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
19
Table 11: 2024 – Remuneration payments for Key Management Personnel
2024
ST1 employee benefits
PE2
benefits
LT3
employee
benefits
Total
4
Performance
based
Remuneratio
n
Name
Cash salary
& fees
$
ST Bonus1
$
Other
payments5
$
Super-
annuation
$
$
$
%
Non-executive Directors
Ian Pratt6
205,479
-
-
22,603
-
228,082
-
Executive Director
Ross Shrimpton7
422,601
-
-
27,399
-
450,000
-
Paul Brittain
447,601
142,500
-
27,399
-
617,500
23.1
Other key management personnel
Glen Everett
422,601
135,000 25,000
27,399
-
610,000
22.1
Total
1,498,282
277,500
25,000
104,800
- 1,905,582
14.6
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term.
4. Amounts included in the above table include amounts paid during the financial year.
5. Car allowance.
6. During the year taxation fees of $153,710 have also been paid to Pratt Partners (in which Ian Pratt is a partner).
7. During the year rent and outgoings for the office at Arndell Park of $153,046 have been paid to Shrimpton Holdings Pty Limited as
trustee for the Shrimpton Family Trust (an entity controlled by Ross Shrimpton).
Table 12: 2023 – Remuneration of Key Management Personnel calculated in line with Australian Accounting Standards
2023
ST1 employee benefits
PE2
benefits
LT3
employee
benefits
Total4
Performance
based
Remuneration
Name
Cash salary
& fees
$
ST Bonus1
$
Other
payments5
$
Super-
annuation
$
$
$
%
Non-executive Directors
Ian Pratt
205,479
-
-
21,575
6,170
233,224
2.6
Ron Hollands6
5,000 - -
525
-
5,525
-
Executive Director
Ross Shrimpton
424,708
-
-
25,292
-
450,000
-
Paul Brittain7
420,880
142,500
150,000
24,093
61,695
799,168
25.6
Other key management personnel
Glen Everett8
424,708 135,000 -
25,292
61,695
646,695
30.4
Total
1,480,775
277,500
150,000
96,777
129,560
2,134,612
19.1
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term. Performance Rights valued using Black-Scholes modelling. Accounting expense recognised based upon probability of
vesting and performance periods - separately for Tranche 1 and Tranche 2.
4. Amounts included in the above table include amounts expensed within the Profit or Loss account for the year.
5. Sign-on bonus paid following retention period.
6. For the period from 1 July 2022 to 25 July 2022.
6. Commenced 25 July 2022.
7. Commenced 7 March 2022.
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
20
Table 13: 2023 – Remuneration payments for Key Management Personnel
2023
ST1 employee benefits
PE2
benefits
LT3
employee
benefits
Total4
Performance
based
Remuneration
Name
Cash salary
& fees
$
ST Bonus1
$
Other
payments5
$
Super-
annuation
$
$
$
%
Non-executive Directors
Ian Pratt9
205,479
-
-
21,575
-
227,054
-
Ron Hollands6,10
5,000 - -
525
-
5,525
-
Executive Director
Ross Shrimpton11
424,708
-
-
25,292
-
450,000
-
Paul Brittain7
420,880
-
150,000
24,093
-
594,973
-
Other key management personnel
Glen Everett8
424,708 33,750 -
25,292
-
483,750
7.0
Total
1,480,775
33,750
150,000
96,777
-
1,761,302
1011.9
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term.
4. Amounts included in the above table include amounts paid during the financial year.
5. Sign-on bonus paid following retention period.
6. For the period from 1 July 2022 to 25 July 2022.
7. Commenced 25 July 2022.
8. Commenced 7 March 2022.
9. During the year taxation fees of $53,232 have also been paid to Pratt Partners (in which Ian Pratt is a partner).
10. During the year company secretarial fees of $26,052 have also been paid to the Ron Hollands Family Trust (in which Ron Hollands Pty
Ltd is the trustee).
11. During the year rent and outgoings for the office at Arndell Park of $147,316 have been paid to Shrimpton Holdings Pty Limited as
trustee for the Shrimpton Family Trust (an entity controlled by Ross Shrimpton).
Other transactions with key management personnel
Information on share-based payments and other transactions with key management personnel is set out on the
previous pages. Related party transactions are disclosed in Note 35.
e.
Shares held by key management personnel
The number of ordinary shares in the Company during the 2024 reporting period held by each of the Group’s key
management personnel, including their related parties are set out below:
Table 14: Shares held by Key Management Personnel
Name
Balance at start of
the period
Shares Disposed
Shares acquired Balance at end of the period
Ian Pratt
15,060
-
-
15,060
Ross Shrimpton
80,279,030
-
4,000,000
84,279,030
Paul Brittain
-
-
-
-
Glen Everett
-
-
-
-
Total
80,294,090
-
4,000,000
84,294,090
f.
Performance Rights held by key management personnel
The number of performance rights in the Company during the 2024 reporting period held by each of the Group’s
key management personnel, including their related parties are set out below:
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
21
Table 15: Performance Rights held by Key Management Personnel
Name
Balance at
start of the
period
Rights
acquired
Rights
Vesting
Balance at
end of the
period
Grant date
Fair value of
grant $’000
Expected
conversion
date
Ian Pratt - Tranche 1
215,964
-
-
215,964
30/3/23
109,062
1/9/2027
Ian Pratt - Tranche 2
143,976
-
-
143,976
30/3/23
48,808
1/9/2032
Ian Pratt - Total
359,940
-
-
359,940
157,870
Ross Shrimpton
-
-
-
-
Ron Hollands
-
-
-
-
Paul Brittain – Tranche 1
2,159,638
-
-
2,159,638
30/3/23
1,090,620
1/9/2027
Paul Brittain – Tranche 2
1,439,759
-
-
1,439,759
30/3/23
488,080
1/9/2032
Paul Brittain - Total
3,599,397
-
-
3,599,397
1,578,700
Glen Everett – Tranche 1
2,159,638
-
-
2,159,638
30/3/23
1,090,620
1/9/2027
Glen Everett – Tranche 2
1,439,759
-
-
1,439,759
30/3/23
488,080
1/9/2032
Glen Everett - Total
3,599,397
-
-
3,599,397
1,578,700
Total
7,558,734
-
-
7,558,734
3,315,270
g.
Executive service agreements
On appointment to the Board, all non-executive Directors sign a letter of appointment with the Company. The
letter summarises the terms including compensation, relevant to the office of Director.
All contracts with executives may be terminated by either party with a notice period as outlined in Table 8.
Executives are typically restricted for twelve months after termination from conducting or engaging in competing
businesses and from solicitation of customers and employees of the Company.
End of audited Remuneration Report.
FUTURE PROSPECTS AND MATERIAL BUSINESS RISKS
The Group anticipates continued competitive conditions in the labour hire market in the financial year ending 30
June 2025 (“FY25”). Our construction-exposed labour hire brands face continuing uncertainty in Victoria and we
expect profit in this sector to be minimal during the first quarter of FY25. First quarter profits for ASH training
will also be reduced with lower public funding available in Victoria.
Our focus remains to diversify revenues, particularly in higher margin sectors and to optimise efficiency. More
specifically:
•
Growing the technical services division. We are expanding in both the construction and engineering
sectors outside Victoria and diversifying the customer base within Victoria. We also expect a positive
contribution in FY25 from the EWP Services joint venture, with business to commence in mining in the
Pilbara;
•
Growing the horticulture sector. The Group has recently secured several new customers, leveraging the
OPW acquisition;
•
Capitalising on strengths within our Training division by continuing to expand qualifications on scope,
geographic coverage and private fee for service training;
•
Solidifying margins in the core supply chain, retail and construction labour hire sectors. 3-year contracts
are now in place with most key customers;
•
Improving efficiencies and lowering cost through continuing system and process improvements. Solid
progress was achieved by the team in FY24, with efficiencies and cost reductions being delivered across
all areas of service delivery and supporting administration; and
Directors’ Report
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
22
•
Commercialisation of our industry leading labour management systems, through licensing to potential
overseas customers.
We believe margins have now stabilised in our core warehousing, logistics, retail and manufacturing sectors
(following two years of declines) and our growth initiatives will contribute more significantly in FY25.
As with any organisation, our future prospects may be impacted by risks.
Changes in the regulatory environment have the potential to create challenges for our business. This includes
federal and state legislative changes relating to employment and award conditions, and also those relating to
employment and training benefits and subsidies, as well as changes to the Seasonal Worker Programme. With
the majority of this legislation being foreshadowed in advance of any implementation, we continue to closely
monitor any such changes and their likely implications for our business.
The pace of labour law changes, particularly in relation to casual workforces, has recently increased. Our core
offering is the provision of high value contingent work force solutions for our customers. Our customers are
almost exclusively large, blue-chip clients in industries and sectors which experience variable manning
requirements. They use Ashley Services Group because we provide the flexibility to manage their cost bases
efficiently and effectively, particularly to deal with business peaks and troughs.
The key components of recent legislation changes surround casual and permanent work forces, as well as the
Same pay, same job legislation. We already operate within the casual versus permanent environment. Many of
our casual employees become permanent workers both with our host customers and ourselves. Regarding Same
pay, same job legislation, we believe legislative changes will continue to be manageable within the general course
of business. Nonetheless, continuing changes to operating hour requirements, employee flexibility and award
terms make it more difficult to optimise productivity and put pressure on margins.
Employment market supply and demand tensions create both challenges and opportunities for our business
model. Sourcing staff to supply the extra demands being created and the availability of candidates to fill this
demand can create challenges in fulfilment, but the scarcity of suitable workers, in many ways, drives the demand
from our customers. Our investment in technology, both candidate- and client-facing, is being utilised to mitigate
risk in this area and deliver high quality candidates to our clients.
Borrowing risk. The acquisition facility expires 28 December 2025, when the remaining debt of up to $9 million
would be payable. As planned, discussions with our lender will commence shortly to extend the term for this
facility.
System outage risks. The Group’s key systems are cloud based third-party maintained systems. The Group has
Service Level Agreements in place with those providers, but if those systems are impacted by global outages, the
Group’s ability to pay its workers and invoice customers could be temporarily impacted. The Group has multiple
payroll and invoicing systems in place and manual contingency plans for payroll payments, but sustained outages
within key systems would impact service delivery.
Signed in accordance with a resolution of the Board of Directors made pursuant to section 298(2) of the
Corporations Act 2001.
Ian Pratt
Chairman
Sydney, 29 August 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
23
Auditor’s Independence Declaration
To the directors of Ashley Services Group Limited:
As lead auditor for the audit of the consolidated financial report of Ashley Services Group Limited for the year
ended 30 June 2024, I declare that, to the best of my knowledge and belief, there have been no contraventions
of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit;
and
(b)
any applicable code of professional conduct in relation to the audit.
This declaration is in relation to Ashley Services Group Limited and the entities it controlled during the period.
Sydney, NSW
K L Luong
29 August 2024
Director
Corporate Governance Statement
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
24
A Corporate Governance Statement has been
adopted by the Board on 29 August 2024 and can be
found at
http://www.ashleyservicesgroup.com.au/investor-
centre/corporate-governance/
The Board has adopted a suite of governance
materials which are available in the Corporate
Governance section of the Company’s website
(www.ashleyservicesgroup.com.au), under “Investor
Centre”. The governance materials have been
prepared and adopted on the basis that corporate
governance procedures can add to the performance
of the Company and the creation of shareholder
value, and help to engender the confidence of the
investment market.
Diversity
To date, the board have actively pursued diversity
standards across the Group and has set measurable
objectives for further enhancing gender diversity and
assess annually the company’s progress in achieving
them.
The key measurable objectives are:
1. Board: a minimum of 1 in 5 or 20% of
directors be female. The board currently
consists of 3 members, all males.
2. Direct Reports of CFO and COO: a minimum
of 40% should be female. CFO direct reports
are currently 60% female. COO direct
reports are currently 43% female.
3. Remainder of the company - equal male and
female participation. Currently females
comprise 58% of the Group.
The company will review its targets annually and
continue to work on initiatives to obtain its
objectives.
The Company provides the following information on
the proportion of women employees in the whole
organisation.
During the financial year ended 30 June 2024 the
Company submitted its annual report to the
Workplace Gender Equality Agency and is again
compliant with the Workplace Gender Equality Act
2012 (Act).
The performance of the Board and Senior Executives
in the 2024 financial year has been reviewed against
both quantitative and qualitative measures and
Directors and Senior Executives provided feedback on
the discharge of their responsibilities.
Female
Male
Directors & Senior Management
38%
62%
Corporate & Administration
82%
18%
Labour Hire
60%
40%
Recruitment
100%
0%
Training
52%
48%
Total
58%
42%
Consolidated Entity Disclosure Statement as at 30 June 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
25
Basis of preparation
This consolidated entity disclosure statement has been prepared in accordance with the s295(3A)(a) of the
Corporations Act 2001 and includes the required information for Ashely Services Group Limited and the entities
it controls in accordance with AASB 10 Consolidated Financial Statements.
Tax residency
S295(3A)(vi) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax
Assessment Act 1997. The determination of tax residency may involve judgement as there are different
interpretations that could be adopted and which could give rise to different conclusions regarding residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
Current legislation and judicial precent has been applied, including having regard to the Tax Commissioner's
public guidance.
Foreign tax residency
Where appropriate, independent tax advisers have been engaged to assist in the determination of tax residency
to ensure applicable foreign tax legislation has been complied with.
Trusts and partnerships
Australian tax law generally does not contain residency tests for trusts and partnerships and these entities are
typically taxed on a flow-through basis. Additional disclosures regarding the tax status of trusts and partnerships
have been included where relevant.
Name of the entity
Entity type
Trustee, partner,
or participation
in joint venture
Country of
incorporation
% of
share
capital
Australian or
foreign tax
resident
Foreign
jurisdiction of
foreign residents
Action Arndell Park Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Botany Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action James (Qld) Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action James NSW Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action James Parramatta Pty Limited Body Corporate
n/a
Australia
100
Australia
n/a
Action James WA Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Retail NSW Pty Ltd (formerly
Action James Western Suburbs Pty
Limited)
Body Corporate
n/a
Australia
100
Australia
n/a
Action Job Support Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action MMX Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce ACT Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce COL1 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Healthcare Pty Ltd (formerly
Action Workforce COS1 Pty Limited)
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce COT Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce IMT Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce NSW Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Horticulture Pty Ltd (formerly
Action Workforce OS Pty Limited)
Body Corporate
n/a
Australia
100
Australia
n/a
Consolidated Entity Disclosure Statement
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
26
Name of the entity
Entity type
Trustee, partner,
or participation
in joint venture
Country of
incorporation
% of
share
capital
Australian or
foreign tax
resident
Foreign
jurisdiction of
foreign residents
Action Workforce OST Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce T1 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce T2 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce VER1 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce Victoria Pty Limited Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce VM Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Action Workforce VPS Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
ADV Services Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
ADV2 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
ADV3 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
ADV6 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Advance Exchange Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Advance GW Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Advance MIX Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Advance Recruitments Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
AIVD Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
ASG Electrical Contracting Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Ash Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Ashley Institute Holdings Pty Limited Body Corporate
n/a
Australia
100
Australia
n/a
Australian Institute of Vocational
Development Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
AWF Training 3 Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
BCC Labour Solutions Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Cantillon Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
CCL Group Holdings Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
CCLTS Group Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
College of Innovation and Industry
Skills Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Complete Traffic Services (VIC) Pty
Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Concept AWF Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Electrical Resources Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Employment (Aust) Pty
Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Concept
Engineering
(Aust)
Pty
Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Total Rail Holdings Pty Ltd (formerly
Concept
Engineering
Contracting
Holdings Pty Ltd)
Body Corporate
n/a
Australia
100
Australia
n/a
Total Rail Pty Ltd (formerly Concept
Engineering Contracting Pty Ltd)
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Power Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Consolidated Entity Disclosure Statement
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
27
Name of the entity
Entity type
Trustee, partner,
or participation
in joint venture
Country of
incorporation
% of
share
capital
Australian or
foreign tax
resident
Foreign
jurisdiction of
foreign residents
Concept
Project
Resources
Pty
Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Rail Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Recruitment Specialists Pty
Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Concept Retail Solutions Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Construction Contract Labour (VIC)
Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
DMLT Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
EWPY Holdings Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
EWPY Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Executive
Careers
Australia
Pty
Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Global Education and Training Group
Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Integracom Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
James Personnel Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
James Warehousing Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Linc Personnel Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Logistics People Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
OGR Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Owen Pacific Workforce Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Qualitas Education Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Silk Group Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
TBRC Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
The
Blackadder
Recruitment
Company Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
The Instruction Company Holdings
Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
The Instruction Company Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Track Safety Australia Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Tracmin Holdings Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Tracmin Pty Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Australian Traffic & Labour Services
Pty Ltd (formerly VIC Traffic and
Labour Solutions Pty Ltd)
Body Corporate
n/a
Australia
100
Australia
n/a
Vocational Training Australia Pty
Limited
Body Corporate
n/a
Australia
100
Australia
n/a
Y I Group Holdings Pty Ltd
Body Corporate
n/a
Australia
100
Australia
n/a
Directors’ Declaration
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
28
1.
In the opinion of the Directors of Ashley Services Group Limited:
a.
The consolidated financial statements and notes of Ashley Services Group Limited are in
accordance with the Corporations Act 2001, including:
i.
Giving a true and fair view of its 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 and the Corporations Regulations 2001;
b.
There are reasonable grounds to believe that Ashley Services Group Limited will be able to pay its
debts as and when they become due and payable; and
c.
At the date of this declaration, there are reasonable grounds to believe that the members of the
Extended Closed Group 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 described in note 33 to the financial
statements.
d.
The information disclosed in the consolidated entity disclosure statement is true and correct.
2.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Managing Director and Chief Financial Officer for the financial year ended 30 June 2024.
3.
Note 1 confirms that the consolidated financial statements also comply with International Financial
Reporting Standards.
Signed in accordance with a resolution of the Directors.
Ian Pratt
Chairman
Sydney, 29 August 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
29
Independent Auditor’s Report to the Members of Ashley Services Group Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Ashley Services Group Limited (“the Company”) and its controlled
entities (“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, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
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 financial
performance for the year then ended; 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 (“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.
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
30
Key Audit Matter
How our audit addressed the key audit matter
Revenue Recognition
Refer to Note 1 (Accounting policies) and Note 2 (Revenue and other income)
Labour hire revenue is the most significant account
balance in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income.
Total revenue and other income of $556.9 million
comprises a number of streams including:
•
labour hire revenue ($538.3 million); and
•
training revenue ($18.3 million);
We focussed on this matter due to the size and
magnitude of labour hire revenue, as well as the
higher level of inherent risk due to the manual
processes for inputting, calculating, reviewing, and
recording of the labour hire revenue.
Our audit procedures included the following:
•
Documenting the design of the key revenue
systems and processes and testing of the key
controls.
•
Assessing whether the Group’s accounting
policies were in compliance with Australian
Accounting Standards and specifically whether
revenue had been recognised in accordance
with Accounting Standard AASB 15 Revenue
from Contracts with Customers.
•
Testing a sample of revenue transactions to
assess appropriate revenue recognition under
the Group’s accounting policy and Australian
Accounting Standards.
•
Performing analytical review over revenue and
costs of sales.
•
Analysis of revenue transactions using data
analysis techniques.
•
Comparing the accuracy of hours on billed as
labour hire revenue to amounts paid to
employees.
•
Testing the correct cut-off and accrual of
labour hire revenue at year end.
Employment Costs
Refer to Note 1 (Accounting policies)
Employment costs, both internal and allocated
externally, is one of the most significant account
balances in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income.
Total employment costs amount to $534.3 million.
We focussed on this matter due to the size and
magnitude of employment costs, as well as the
higher level of inherent risk due to the manual
processes for the volume of inputting, calculating,
reviewing, and recording of the employment costs.
Our audit procedures included the following:
•
Documenting the design of the key revenue
systems and processes and testing of the key
controls (for Labour Hire and OPW
employees).
•
Testing a sample of employment costs
recognised in the period by agreeing to
timesheets, payroll reports, and amounts
subsequently paid.
•
Performing analytical review over the labour
hire margins.
•
Analysis of payroll transactions using data
analysis techniques.
•
Testing the correct cut-off and accrual of
employment costs at year end.
Carrying Value of Intangible assets
Refer to Note 16 (Intangible assets) and Note 17 (Impairment)
The Group has a total Intangible assets balance
of $23.6 million including a Goodwill balance of
$17.6 million as at 30 June 2024 in relation to the
Labour Hire, Training, Linc and OPW’s cash
generating units (“CGU”). The Goodwill arose on
Our audit procedures included but were not limited
to the following:
•
Assessed the identification and determination
of the Group’s CGUs based on our
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
31
acquisition of subsidiary companies in prior years
for Labour Hire, Training, Linc and OPW.
As required by Australian Accounting Standards
the Group tested the Intangible assets for
impairment, at 30 June 2024.
During the period, Linc did not succeed in
renewing its contract with Inpex, leading to the
complete write-down of goodwill associated with
this contract, amounting to $2.6 million, and the
customer relationship asset recognised at
acquisition date, amounting to $1.8 million.
The Group determined the recoverable amount
using value in use calculations for the relevant
CGU listed above, which involved a significant
level of judgement in respect of factors such as:
•
Estimated future revenues and costs;
•
Discount rates; and
•
Terminal values.
We considered this to be a key audit matter due
to the significant judgement involved in estimating
the recoverable amount of the Intangible assets
and the potentially material impact on the financial
report.
understanding of the nature of the Group’s
business.
•
Tested the integrity and mathematical
accuracy of the discounted cash flow models
used by management for value in use
assessments.
•
Evaluated and assessed key assumptions and
methodologies applied to the underlying
cashflow forecasts with reference to
representations from management,
documented business plans and historical
results of the business operations.
•
Assessed the Group’s assumptions in
developing the discount and terminal growth
rates with reference to external sources.
•
Performed sensitivity analysis and evaluated
whether a reasonably possible change in
assumptions could cause the carrying amount
of a CGU to exceed its recoverable amount.
•
Assessed the adequacy of disclosures
included in Note 17 to 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 accordingly 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 (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
32
b) 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 ability of the Group 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 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
33
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 21 of the directors’ report for the year
ended 30 June 2024.
In our opinion, the Remuneration Report of Ashley Services Group Limited for the year ended 30 June 2024
complies with section 300A of the Corporations Act 2001.
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.
HLB Mann Judd Assurance (NSW) Pty Ltd
K L Luong
Chartered Accountants
Director
Sydney, NSW
29 August 2024
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the financial year ended 30 June 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
34
Note
30 Jun 2024
$000
30 Jun 2023
$000
Revenue
2
556,538
549,219
Other income
2
316
87
Fair value gain on redemption liabilities
21
1,144
-
Share of (losses)/profits from associated entities
13,14
(91)
198
Employment costs
(534,298)
(517,981)
Depreciation and amortisation expense
3
(3,797)
(3,159)
Finance costs
3
(2,401)
(1,646)
Impairment expenses
3
(4,376)
-
Other expenses
(9,896)
(10,793)
Profit before income tax
3,139
15,925
Income tax expense
5
(1,789)
(4,523)
Profit for the year
1,350
11,402
Other comprehensive income
-
-
Total comprehensive income for the year
1,350
11,402
Total comprehensive income for the year is attributable to:
Shareholders of Ashley Services Group Limited
1,350
10,794
Non-controlling interests
-
608
1,350
11,402
Basic earnings per share (cents)
26
0.94
7.50
Diluted earnings per share (cents)
26
0.89
7.40
The accompanying notes form part of these financial statements.
Consolidated Statement of Financial Position
As at 30 June 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
35
Note
30 Jun 2024
$000
30 Jun 2023
$000
Assets
Current assets
Cash and cash equivalents
7
137
2,520
Trade and other receivables
8
45,522
57,150
Current tax receivable
18
460
14
Contract assets
9
2,410
1,417
Loans to associated entities
12
162
1,744
Other assets
10
3,602
1,317
Total current assets
52,293
64,162
Non-current assets
Property, plant and equipment
11
5,311
4,256
Investments in associated entities
14
307
398
Loans to associated entities
12
761
999
Right-of-use assets
15
2,884
3,361
Deferred tax assets
18
4,694
9,844
Intangible assets
16, 17
23,582
28,970
Other assets
10
291
306
Total non-current assets
37,830
48,134
Total assets
90,123
112,296
Liabilities
Current liabilities
Trade and other payables
19
33,843
42,043
Borrowings
22
8,201
8,189
Current tax payable
18
-
4,660
Lease liabilities
20
914
1,188
Other liabilities
21
3,310
2,674
Provisions
23
4,122
5,042
Total current liabilities
50,390
63,796
Non-current liabilities
Borrowings
22
4,375
-
Deferred tax liabilities
18
1,970
6,220
Lease liabilities
20
2,117
2,362
Other liabilities
21
-
4,836
Provisions
23
822
814
Total non-current liabilities
9,284
14,232
Total liabilities
59,674
78,028
Net assets
30,449
34,268
Consolidated Statement of Financial Position
As at 30 June 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
36
Note
30 Jun 2024
$000
30 Jun 2023
$000
Share capital
24
148,815
148,815
Common control & other reserves
25
(59,261)
(59,131)
Accumulated losses
(59,105)
(55,844)
Non-controlling interest
-
428
Total equity
30,449
34,268
The accompanying notes form part of these financial statements.
Consolidated Statement of Changes in Equity
For the financial year ended 30 June 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
37
Share
Capital
$000
Common
control &
other
reserves
$000
Accumulated
losses
$000
Non-
controlling
Interest
$000
Total
$000
For the year ended 30 June 2024
Balance at 1 July 2023
148,815
(59,131)
(55,844)
428
34,268
Profit for the year
-
-
1,350
-
1,350
Other comprehensive income for the year
-
-
-
-
-
Total comprehensive income for the year
-
-
1,350
-
1,350
Dividends paid
-
-
(5,039)
-
(5,039)
Share based payment reserve
-
(130)
-
-
(130)
Impact of change in ownership of consolidated
entities
-
-
428
(428)
-
Balance at 30 June 2024
148,815
(59,261)
(59,105)
-
30,449
For the year ended 30 June 2023
Balance at 4 July 2022
148,815
(59,261)
(57,999)
(16)
31,539
Profit for the year
-
-
10,794
608
11,402
Other comprehensive income for the year
-
-
-
-
-
Total comprehensive income for the year
-
-
10,794
608
11,402
Dividends paid
-
-
(8,639)
(278)
(8,917)
Share based payment reserve
-
130
-
-
130
Non-controlling interest on acquisition of Linc
-
-
-
114
114
Balance at 30 June 2023
148,815
(59,131)
(55,844)
428
34,268
The accompanying notes form part of these financial statements.
Consolidated Statement of Cash Flows
For the financial year ended 30 June 2024
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
38
Note
30 Jun 2024
$000
30 Jun 2023
$000
Operating activities
Receipts from customers
624,160
608,658
Payments to suppliers and employees
(612,678)
(580,152)
Interest received
200
31
Interest paid
(2,156)
(1,640)
Income taxes paid
(5,995)
(4,099)
Net cash from operating activities
28
3,531
22,798
Investing activities
Payments for property, plant and equipment
(2,744)
(3,167)
Payments for intangibles
-
(142)
Proceeds from sale of property, plant and equipment
243
95
Loans from/(to) associated entities
1,654
(2,781)
Payments for businesses, net of cash acquired
21
(2,941)
(8,688)
Net cash used in investing activities
(3,788)
(14,683)
Financing activities
Net proceeds from external borrowings
4,387
2,884
Repayment of leasing liabilities
(1,474)
(1,302)
Dividends paid
(5,039)
(8,916)
Net cash used in financing activities
(2,126)
(7,334)
Net increase/(decrease) in cash and cash equivalents
(2,383)
781
Cash and cash equivalents at beginning of the financial year
2,520
1,739
Cash and cash equivalents at end of the financial year
7
137
2,520
The accompanying notes form part of these financial statements.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
39
Table of Contents
1.
MATERIAL ACCOUNTING POLICIES --------------------------------------------------------------------------- 41
2.
REVENUE AND OTHER INCOME ------------------------------------------------------------------------------- 47
3.
EXPENSES ----------------------------------------------------------------------------------------------------------- 48
4.
AUDITOR’S REMUNERATION ---------------------------------------------------------------------------------- 48
5.
INCOME TAX EXPENSE ------------------------------------------------------------------------------------------ 49
6.
KEY MANAGEMENT PERSONNEL DISCLOSURES ---------------------------------------------------------- 49
7.
CASH AND CASH EQUIVALENTS ------------------------------------------------------------------------------- 50
8.
TRADE AND OTHER RECEIVABLES ---------------------------------------------------------------------------- 50
9.
CONTRACT ASSETS ----------------------------------------------------------------------------------------------- 50
10.
OTHER ASSETS ---------------------------------------------------------------------------------------------------- 51
11.
PROPERTY, PLANT AND EQUIPMENT ------------------------------------------------------------------------ 51
12.
LOANS TO ASSOCIATED ENTITIES ---------------------------------------------------------------------------- 52
13.
DETAILS OF ASSOCIATED ENTITIES --------------------------------------------------------------------------- 52
14.
INVESTMENT IN ASSOCIATED ENTITIES --------------------------------------------------------------------- 53
15.
RIGHT-OF-USE ASSETS ------------------------------------------------------------------------------------------ 53
16.
INTANGIBLE ASSETS --------------------------------------------------------------------------------------------- 54
17.
IMPAIRMENT ------------------------------------------------------------------------------------------------------ 55
18.
TAX BALANCES ---------------------------------------------------------------------------------------------------- 58
19.
TRADE AND OTHER PAYABLES -------------------------------------------------------------------------------- 59
20.
LEASE LIABILITIES ------------------------------------------------------------------------------------------------- 59
21.
OTHER LIABILITIES------------------------------------------------------------------------------------------------ 60
22.
BORROWINGS ----------------------------------------------------------------------------------------------------- 61
23.
PROVISIONS ------------------------------------------------------------------------------------------------------- 61
24.
SHARE CAPITAL --------------------------------------------------------------------------------------------------- 62
25.
COMMON CONTROL AND OTHER RESERVES -------------------------------------------------------------- 63
26.
EARNINGS PER SHARE ------------------------------------------------------------------------------------------- 64
27.
SEGMENT INFORMATION -------------------------------------------------------------------------------------- 65
28.
CASH FLOW INFORMATION ----------------------------------------------------------------------------------- 66
29.
FAIR VALUE MEASUREMENT ---------------------------------------------------------------------------------- 67
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
40
30.
CONTROLLED GAINED OVER ENTITIES ---------------------------------------------------------------------- 69
31.
CONTROLLED ENTITIES AND ASSOCIATES ------------------------------------------------------------------ 69
32.
PARENT ENTITY DISCLOSURES -------------------------------------------------------------------------------- 71
33.
DEED OF CROSS GUARANTEE --------------------------------------------------------------------------------- 72
34.
RELATED PARTY TRANSACTIONS ----------------------------------------------------------------------------- 75
35.
SECURED AND CONTINGENT LIABILITIES ------------------------------------------------------------------- 75
36.
FINANCIAL INSTRUMENTS ------------------------------------------------------------------------------------- 75
37.
EVENTS AFTER THE REPORTING DATE ---------------------------------------------------------------------- 78
38.
DIVIDENDS --------------------------------------------------------------------------------------------------------- 78
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
41
1.
MATERIAL ACCOUNTING POLICIES
a.
General information
The financial statements for the financial year
ended 30 June 2024 cover Ashley Services
Group Limited and its controlled entities
(“Ashley Services” or the “Group”). Ashley
Services Group is a public Company listed on
the Australian Securities Exchange (trading
under the symbol “ASH”), incorporated and
domiciled in Australia.
The following is a summary of the material
accounting policies adopted by the Group in the
preparation of the consolidated financial
statements. The accounting policies have been
consistently applied unless otherwise stated.
b.
Statement of compliance
The consolidated financial statements are
general purpose financial statements which
have been prepared in accordance with the
Corporations
Act
2001
and
Australian
Accounting
Standards
adopted
by
the
Australian Accounting Standards Board. The
consolidated financial statements of the Group
also comply with International Financial
Reporting Standards (‘IFRS’) adopted by the
International Accounting Standards Board. The
Group is a for-profit entity for the purposes of
preparing the financial statements.
The consolidated financial statements were
authorised for issue by the Board of Directors
on 29 August 2024.
c.
Basis of preparation
Historical cost
The consolidated financial statements have
been prepared on an accruals basis and are
based on historical costs, except for the
measurement at fair value of selected non-
current assets, financial assets and financial
liabilities as disclosed in this note. Cost is based
on the fair values of the consideration given in
exchange for assets. All amounts are presented
in Australian dollars, unless otherwise noted.
Rounding
In
accordance
with
ASIC
Corporations
(Rounding in Financial / Directors’ Reports)
Instrument 2016/191, amounts in the financial
report are rounded off to the nearest thousand
dollars unless otherwise indicated.
d.
Going concern
The consolidated financial statements have
been prepared on a going concern basis.
e.
Adoption of new, revised or amending
Accounting Standards and Interpretations
The Group adopted all of the new, revised or
amended
Accounting
Standards
and
Interpretations issued by the Australian
Accounting Standards Board (“AASB”) that are
mandatory for the current reporting period.
During the current reporting period the Group
adopted
AASB
2021-6
Amendments
to
Australian Accounting Standards - Disclosure of
Accounting Policies: Tier 2 and Other Australian
Accounting Standards. The application of these
amendments did not have a material impact on
the Group's financial statements but has
changed the disclosure of accounting policy
information in the financial statements. There
were no other Accounting Standards and
Interpretations adopted during the current
reporting period that had a significant impact
on the financial performance or position of the
Group.
f. New, revised or amending Accounting
Standards and Interpretations issued but
not yet mandatory
Any new, revised or amending Accounting
Standards and Interpretations that have been
published and are not mandatory for 30 June
2024 reporting periods and have not been early
adopted by the Group.
These new, revised or amending Accounting
Standards and Interpretations are not expected
to have any material impact on the Group’s
financial report in future reporting periods
based on the Group’s current activities.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
42
g.
Revenue and other income
Revenue for both labour hire and training
services is recognised at an amount that
reflects the consideration to which the Group is
expected to be entitled in exchange for
transferring services to a customer. For each
contract
with
a
customer,
the
Group
undertakes the following:
i.
Identifies the contract with a customer
ii.
Identifies the performance obligations in
the contract
iii.
Determines the transaction price which
considers
estimates
of
variable
consideration and time value of money
iv.
Allocates the transaction price to the
separate performance obligations based
on the relative stand-alone selling price of
each distinct service to be delivered
v.
Recognises revenue when, or as, each
performance obligation is satisfied in a
manner that depicts the transfer to the
customer of the services promised.
All revenue is stated net of the amount of GST.
Labour hire revenue
Labour hire revenue comprises the sourcing,
engagement and placing of both temporary and
permanent
contractors.
The
sourcing,
identification, submission and acceptance of
contractors for specified roles at the customer
are not considered to be distinct performance
obligations from the contractor being engaged
by ASH for an agreed period of time and
deployed at the customer sites and are
therefore,
accounted
for
as
a
single
performance obligation. As explained in
accounting
policy
Note
m.
“Significant
management
judgement
in
Applying
Accounting Policies”, management has made a
significant judgement to determine that the
Group acts as principal in providing labour hire
services to customers over the duration of
contracts.
Labour hire revenue is recognised upon
delivery of the service to the customers or in
the instance of placement fees at the time the
employee has been placed. Revenue from a
contract to provide labour hire services is
recognised over time as services are rendered
based predominantly on an hourly rate.
Training revenue
Revenue from a contract to provide training
services is recognised over time as the services
are rendered using the percentage of
completion method that depicts the transfer to
the customer of the services rendered.
Other income
Other income primarily includes State funding
employer rebates earned in relation to
specified categories of individuals.
h.
Income tax
Tax consolidation
Ashley Services Group Limited and its wholly
owned Australian subsidiaries have formed an
income tax consolidated group under tax
consolidation legislation. Each entity in the
group recognises its own current and deferred
tax assets and liabilities. Such taxes are
measured using the ‘standalone taxpayer’
approach to allocation. Current tax liabilities
(assets) and deferred tax assets arising from
unused tax losses and tax credits in the
subsidiaries are immediately transferred to
head entity. The group notified the Australian
Taxation Office that it has formed an income
tax consolidation group to apply from 1 July
2003. The income tax consolidated group has
entered a tax funding arrangement whereby
each company in the Group contributes to the
income tax payable by the Group in proportion
to their contributions to the Group’s taxable
income.
Differences between the amounts of net tax
assets and liabilities derecognised and the net
amounts recognised pursuant to the funding
arrangement are recognised as either a
contribution by, or distribution, to the head
entity.
i.
Contract assets
Contract assets are recognised when the Group
has transferred goods or services to the
customer but where the Group is yet to
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
43
establish
an
unconditional
right
to
consideration. Contract assets are treated as
financial assets for impairment purposes.
j.
Property, plant and equipment
The depreciable amount of fixed assets is
depreciated on a straight line basis, over the
useful asset’s life to the Group commencing
from the time the assets are held ready for use.
The annual depreciation rates used for each
class of depreciable assets are:
•
Class of fixed assets
Depreciation
rate
Computer equipment
20 - 33%
Office equipment
20 - 33%
Furniture and fittings
10%
Motor vehicles
14 - 25%
Training equipment
33%
Leasehold improvements
20 - 50%
In the case of leasehold improvements,
expected useful lives are determined by
reference to comparable owned assets or over
the term of the lease, if shorter.
k.
Intangible assets
Goodwill
Goodwill is initially recognised as the difference
between the fair value of consideration, and
the fair value of net assets acquired less any
accumulated impairment losses.
The value of goodwill is recognised on
acquisition of the business.
The Group adopts the full goodwill method.
The fair value of the interests in the business is
determined using valuation techniques which
make the maximum use of market information
where available. Under this method, goodwill
attributable to the interests of the business is
recognised in the financial statements.
Other intangibles
Intangibles acquired by the Group are stated at
cost less accumulated amortisation and
impairment losses. Amortisation is charged to
the profit or loss on a straight-line basis over
the estimated useful life.
Estimated useful life of intangibles is as follows:
Customer relationships
5-10 years
Licenses
5 years
Intellectual property
-
Course material
5-7 years
Intangible assets, such as Brands, which are
deemed to have an indefinite useful life are not
amortised, but are assessed for impairment
annually, within the CGU to which they are
attributed. Where impairment is recognised, it
is recorded in the profit or loss in the period the
impairment is identified.
l.
Impairment of assets
At the end of each reporting period, the Group
assesses whether there is any indication that an
asset may be impaired.
The assessment will include considering
external sources of information and internal
sources of information including dividends
received from subsidiaries, deemed to be out of
pre-acquisition profits. If such an indication
exists, an impairment test is carried out on the
asset by comparing the recoverable amount of
the asset, being the higher of the asset’s fair
value less costs to sell, and its value in use, to
the asset’s carrying amount. Any excess of the
asset’s carrying value over its recoverable
amount is recognised immediately in profit or
loss, unless the asset is carried at a revalued
amount. Any impairment loss of a revalued
asset is treated as a revaluation decrease.
Where it is not possible to estimate the
recoverable amount of an individual asset, the
Group estimates the recoverable amount of the
cash-generating unit to which the asset
belongs.
Impairment testing is performed at least
annually for goodwill and intangible assets with
indefinite lives.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
44
m.
Significant management judgement in
applying accounting policies
When preparing the financial statements,
management
undertakes
a
number
of
judgements, estimates and assumptions about
the recognition and measurement of assets,
liabilities, income and expenses.
Significant management judgement
The following are significant management
judgements in applying the accounting policies
of the Group that have the most significant
effect on the financial statements.
Revenue recognition
The main area of judgement in revenue
recognition relates to the recognition of labour
hire arrangements where the Group acts on a
principal (gross) basis rather than an agent
(net) basis. The factors considered by the
Directors, on a contract-by-contract basis,
when concluding that the Group is acting as
principal rather than agent are as follows:
▪ The customer has a direct relationship with
the Group;
▪ The Group has the primary responsibility for
providing the services to the customer and
engages and contracts directly with the
contractor; and
▪ The Group has latitude in establishing rates
directly or indirectly with all parties.
Determination of Cash Generating Units for
purpose of impairment reviews
Determination of the Cash Generating Units
(“CGUs”) for purpose of impairment reviews is
a key judgement made by management.
Management
has
undertaken
a
formal
assessment of what constitutes the CGUs, by
identifying the smallest identifiable group of
assets that generates cash inflows that are
largely independent of the cash inflows from
other assets or group of assets, being Training,
Labour Hire, Linc and OPW.
Recognition of deferred tax assets
The extent to which deferred tax assets can be
recognised is based on an assessment of the
probability of the Group’s future taxable
income against which the deferred tax assets
can be utilised.
Estimation uncertainty
Information about estimates and assumptions
that have the most significant effect on
recognition and measurement of assets,
liabilities, income and expenses is provided
below. Actual results may be substantially
different.
Business Combinations
Business combinations are initially accounted
for on a provisional basis. The fair value of
assets acquired, liabilities and contingent
liabilities assumed are initially estimated by the
Group taking into consideration all available
information at the reporting date. Fair value
adjustments on the finalisation of the business
combination
accounting
is
retrospective,
where
applicable,
to
the
period
the
combination occurred and may have an impact
on the assets and liabilities, depreciation and
amortisation reported.
Impairment
In
assessing
impairment,
management
estimates the recoverable amount of each
asset or cash-generating unit based on
expected future cash flows and uses an interest
rate to discount them. Estimation uncertainty
relates to assumptions about future operating
results and the determination of a suitable
discount rate. Both future operating results
and discount rates are discussed in Note 17.
Useful lives of depreciable assets
Management reviews its estimate of the useful
lives of depreciable assets at each reporting
date, based on the expected utility of the
assets. Uncertainties in these estimates relate
to technical obsolescence that may change the
utility of certain software and IT equipment.
Allowance for expected credit losses
The allowance for expected credit losses
assessment requires a degree of estimation and
judgement. It is based on the lifetime expected
credit loss, grouped based on days overdue,
and makes assumptions to allocate an overall
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
45
expected credit loss rate for each group. These
assumptions include recent sales experience
and historical collection rates.
Long service leave provisions
In determining the provision for employees’
long service leave, consideration is given to the
probability an employee may not satisfy vesting
requirements. In doing this, management
considers the likelihood of employees reaching
a qualifying period of service and adjust the
valuation for these estimated probabilities.
Long term incentive plan
In determining the provision and annual
accounting expense for senior management’s
long term incentive plan, the Performance
Rights issued were valued using the share price
on 30 March 2023 (the date upon which
Shareholders approved the LTI plan and the
issuance of Performance Rights by ASG),
discounted using Black Scholes modelling,
which essentially discounts value for future
dividends receivable by ordinary shareholders,
but
not
attributable
to
the
unvested
Performance Rights.
Workers Compensation Provisions
In certain states premiums payable in relation
to workers compensation insurance can vary
and be retrospectively adjusted, up to a period
of five years, by the insurer based on the annual
wages, number of claims made and a range of
other factors. In determining the worker
compensation insurance provision (included in
trade and other payables) at balance date
consideration is given to the previous years’
premium rates, retrospective adjustments and
the current year gross wages.
n.
Share-based payments
Equity-settled and cash-settled share-based
compensation
benefits
are
provided
to
employees.
Equity-settled transactions are awards of
shares, or options over shares, that are
provided to employees in exchange for the
rendering of services. Cash-settled transactions
are awards of cash for the exchange of services,
where the amount of cash is determined by
reference to the share price.
The cost of equity-settled transactions are
measured at fair value on grant date. Fair value
is independently determined using either the
Binomial or Black-Scholes option pricing model
that takes into account the exercise price, the
term of the option, the impact of dilution, the
share price at grant date and expected price
volatility of the underlying share, the expected
dividend yield and the risk free interest rate for
the term of the option, together with non-
vesting conditions that do not determine
whether the consolidated entity receives the
services that entitle the employees to receive
payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions is
recognised as an expense with a corresponding
increase in equity over the vesting period. The
cumulative charge to profit or loss is calculated
based on the grant date fair value of the award,
the best estimate of the number of awards that
are likely to vest and the expired portion of the
vesting period. The amount recognised in profit
or loss for the period is the cumulative amount
calculated at each reporting date less amounts
already recognised in previous periods.
The cost of cash-settled transactions is initially,
and at each reporting date until vested,
determined by applying either the Binomial or
Black-Scholes option pricing model, taking into
consideration the terms and conditions on
which the award was granted. The cumulative
charge to profit or loss until settlement of the
liability is calculated as follows:
▪ during the vesting period, the liability at
each reporting date is the fair value of the
award at that date multiplied by the expired
portion of the vesting period.
▪ from the end of the vesting period until
settlement of the award, the liability is the
full fair value of the liability at the reporting
date.
All changes in the liability are recognised in
profit or loss. The ultimate cost of cash-settled
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
46
transactions is the cash paid to settle the
liability.
Market conditions are taken into consideration
in determining fair value. Therefore, any
awards subject to market conditions are
considered to vest irrespective of whether or
not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a
minimum an expense is recognised as if the
modification has not been made. An additional
expense is recognised, over the remaining
vesting period, for any modification that
increases the total fair value of the share-based
compensation benefit as at the date of
modification.
If the non-vesting condition is within the
control of the Group or employee, the failure to
satisfy the condition is treated as a cancellation.
If the condition is not within the control of the
Group or employee and is not satisfied during
the vesting period, any remaining expense for
the award is recognised over the remaining
vesting period, unless the award is forfeited. If
equity-settled awards are cancelled, it is
treated as if it has vested on the date of
cancellation, and any remaining expense is
recognised immediately. If a new replacement
award is substituted for the cancelled award,
the cancelled and new award is treated as if
they were a modification.
o.
Dividends
A liability is recognised for the amount of any
dividend
declared,
being
appropriately
authorised and no longer at the discretion of
the entity, on or before the end of the financial
year but not distributed at balance date.
p.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by
dividing the profit attributable to equity
holders of the Company, after deducting any
costs of servicing equity other than ordinary
shares, by the weighted average number of
ordinary
shares
outstanding
during
the
financial year, adjusted for bonus elements in
ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures
used in determination of basic earnings per
share to take into account the after income tax
effect of interest and other financing costs
associated with dilutive potential ordinary
shares and the weighted average number of
shares assumed to have been issued for no
consideration in relation to dilutive potential
ordinary shares.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
47
2.
REVENUE AND OTHER INCOME
2024
$000
2023
$000
Operating activities:
Labour hire revenue
538,287
533,228
Training revenue
18,251
15,991
556,538
549,219
Other income:
Interest received
200
31
Sundry income
116
56
316
87
a.
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
2024
Labour Hire
$000
Training
$000
Total
$000
Revenue
From external customers
538,287
18,251
556,538
Timing of revenue recognition
Services transferred over time
529,146
18,251
547,397
Services transferred at a point in time
9,141
-
9,141
538,287
18,251
556,538
2023
Labour Hire
$000
Training
$000
Total
$000
Revenue
From external customers
533,228
15,991
549,219
Timing of revenue recognition
Services transferred over time
519,146
15,991
535,137
Services transferred at a point in time
14,082
-
14,082
533,228
15,991
549,219
All revenue is derived from Australia for the financial years ended 30 June 2024 and 30 June 2023.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
48
3.
EXPENSES
Profit before income tax from continuing operations includes the following specific expenses:
2024
$000
2023
$000
Share-based payment expense
Share-based payment expense
(130)
130
Depreciation
Motor vehicles
611
452
Office equipment
537
413
Leasehold improvements
298
156
Land and buildings right-of-use assets
1,339
1,232
2,785
2,253
Amortisation
Customer contracts and relationships
1,012
812
Course material
-
94
1,012
906
Finance costs
Interest and finance charges paid/payable on borrowings
1,804
958
Interest and finance charges paid/payable on lease liabilities
93
97
Bank fees
504
591
2,401
1,646
Impairment Expense
Linc customer relationship (see note 17)
1,800
-
Linc goodwill (see note 17)
2,576
-
4,376
-
4.
AUDITOR’S REMUNERATION
2024
$
2023
$
Auditor of the parent entity
Audit and review of financial reports under the Corporations Act 2001
- HLB Mann Judd Assurance (NSW) Pty Ltd
231,000
229,500
Total Remuneration
231,000
229,500
Other entities
In addition to the above, the related entities detailed in Note 31 have also
paid fees to the auditor(s) as follows:
Audit of financial reports
- HLB Mann Judd Assurance (NSW) Pty Ltd
94,500
103,000
94,500
103,000
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
49
5.
INCOME TAX EXPENSE
a.
Components of tax expense
2024
$000
2023
$000
Current tax expense
981
10,624
Deferred tax – origination and reversal of temporary differences
900
(5,863)
Under / (over) provision of tax in prior year
(92)
(238)
Income tax expense
1,789
4,523
b.
Reconciliation of prima facie tax on profit from ordinary activities to income tax expense
2024
$000
2023
$000
Net profit before tax from continuing operations
3,139
15,925
Prima facie tax expense on net profit from ordinary activities before income tax
at 30% (FY23: 30%)
942
4,777
Add / (less) Tax effect of:
– Entertainment
15
20
– Other
(6)
22
– Impairment
1,312
(58)
– Fair value gain on redemption liabilities
(343)
-
– Share based payment reserve
(39)
-
– Under/(Over) provision of tax in prior year
(92)
(238)
Income tax expense
1,789
4,523
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when
compared with the previous reporting period.
6.
KEY MANAGEMENT PERSONNEL DISCLOSURES
a.
Key management personnel compensation for the year was as follows:
2024
$
2023
$
Short-term employee benefits
1,523,282
1,908,275
Post-employment benefits
104,800
96,777
Long-term employee benefits
(129,560)
129,560
Total
1,498,522
2,134,612
b.
Individual director and key management personnel disclosures
Detailed remuneration disclosures are included in the Directors’ Report. The relevant information can be found
in the Remuneration section of the Directors’ Report on pages 12 to 21, Tables 5 to 15.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
50
7.
CASH AND CASH EQUIVALENTS
2024
$000
2023
$000
Cash on hand
5
2
Cash at bank
132
2,518
137
2,520
8.
TRADE AND OTHER RECEIVABLES
2024
$000
2023
$000
Current
Trade receivables
38,335
45,060
Allowance for expected credit losses
(253)
(346)
Other receivables
7,440
12,436
45,522
57,150
a.
Ageing of trade receivables (before allowing for impairment of receivables) at year end is detailed below
2024
$000
2023
$000
Current
33,262
37,774
Past due 0 – 30 days (not considered impaired)
2,863
3,830
Past due 31 – 60 days (not considered impaired)
1,000
1,901
Past due 60+ days (not considered impaired)
957
1,209
Past due 60+ days (considered impaired (b))
253
346
38,335
45,060
b.
The movement in the allowance for expected credit losses in respect of trade receivables is detailed below
2024
$000
2023
$000
Balance at beginning of year
346
599
Increase in allowance recognised in profit or loss
185
199
Amounts written-off
(278)
(452)
Balance at end of year
253
346
9.
CONTRACT ASSETS
2024
$000
2023
$000
Current
Contract assets
2,410
1,417
2,410
1,417
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
51
a.
Reconciliation of contract assets
2024
$000
2023
$000
Opening balance
1,417
777
Payments received
(13,539)
(10,560)
Accruals
14,532
11,200
Closing balance
2,410
1,417
10. OTHER ASSETS
2024
$000
2023
$000
Current
Prepayments
3,565
1,233
Deposits
21
-
Bank guarantee1
16
84
3,602
1,317
Non-current
Loans from related parties
-
81
Deposits
224
225
Bank guarantee1
67
-
291
306
Note:
1. As at balance date the Group had bank guarantees of $58,864 (2023: $66,219) relating to property leases. The $84,004 (2023: $84,004)
represents a restricted bank account to cover the Group’s total available guarantee facility with BankWest of $84,004 (2023: $84,004).
11. PROPERTY, PLANT AND EQUIPMENT
2024
$000
2023
$000
Motor vehicles
Cost
4,785
3,783
Accumulated depreciation
(1,464)
(1,179)
3,321
2,604
Office equipment
Cost
4,750
5,651
Accumulated depreciation
(3,421)
(4,451)
1,329
1,200
Leasehold improvements
Cost
2,578
2,070
Accumulated depreciation
(1,919)
(1,635)
659
435
Capital works in progress
Cost
2
17
2
17
Total property, plant and equipment
5,311
4,256
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
52
a.
Movement in carrying amounts of property, plant and equipment
2024
Motor
vehicles
$000
Office
equipment
$000
Leasehold
improvements
$000
Capital work
in progress
$000
Total
$000
Balance at 1 July 2023
2,604
1,200
435
17
4,256
Additions/(transfers)
1,538
679
542
(15)
2,744
Disposals
(210)
(13)
(20)
-
(243)
Depreciation expense
(611)
(537)
(298)
-
(1,446)
Balance at 30 June 2024
3,321
1,329
659
2
5,311
2023
Motor
vehicles
$000
Office
equipment
$000
Leasehold
improvements
$000
Capital work
in progress
$000
Total
$000
Balance at 4 July 2022
686
1,018
307
39
2,050
Additions/(transfers)
2,267
629
293
(22)
3,167
Additions through business combinations
135
20
-
-
155
Disposals
(33)
(54)
(8)
-
(95)
Depreciation expense
(451)
(413)
(157)
-
(1,021)
Balance at 30 June 2023
2,604
1,200
435
17
4,256
The Group’s property, plant and equipment are encumbered by a General Security Agreement as security for the group’s Invoice Financing
capital facility (Refer Note 22).
12. LOANS TO ASSOCIATED ENTITIES
2024
$000
2023
$000
Current
162
1,744
Non-current
761
999
923
2,743
Note:
1. On 19 April 2022 the Group acquired a non-controlling interest of 49% in Dardi Munwurro Labour and Traffic Management Pty Limited,
a company providing indigenous labour hire in Victoria, for $49. The loan represents lending to fund the working capital requirements
of the associated entity to 30 June 2024. The loan has no set maturity date, is not secured and is interest bearing at ASG’s borrowing
rate, as disclosed in Note 36. $1.7 million was repaid in FY24.
13. DETAILS OF ASSOCIATED ENTITIES
Reporting entity’s % holding
Contribution to profit/(loss)
As at 30 June
2024 %
As at 30 Jun
2023 %
2024
$000
2023
$000
Group's aggregate share of associated entities
profit/loss before tax:
Dardi Munwurro Labour & Traffic Management Pty Ltd
49%
49%
(23)
283
Yalagan Infrastructure Pty Ltd
49%
49%
(19)
(67)
EWP Services Pty Ltd
49%
49%
(87)
30
Profit/(loss) from ordinary activities before income tax
(129)
246
Income tax on operating activities
38
(48)
Profit/(loss) from ordinary activities after tax
(91)
198
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
53
14. INVESTMENT IN ASSOCIATED ENTITIES
2024
$000
2023
$000
Carrying value of investment in associates
307
398
307
398
2024
EWP Services Pty Ltd
$000
Dardi Munwurro
Labour and Traffic
Management Pty
Ltd
$000
Yalagan
Infrastructure
Pty Ltd
$000
Total
$000
Balance at 1 July 2023
186
259
(47)
398
Share of loss after income tax
(61)
(17)
(13)
(91)
Balance at 30 June 2024
125
242
(60)
307
2023
EWP Services Pty Ltd
$000
Dardi Munwurro
Labour and Traffic
Management Pty
Ltd
$000
Yalagan
Infrastructure
Pty Ltd
$000
Total
$000
Balance at 4 July 2022
-
-
-
-
Acquisition
200
-
-
200
Share of profits/(losses) after income tax
(14)
259
(47)
198
Balance at 30 June 2023
186
259
(47)
398
15. RIGHT-OF-USE ASSETS
2024
$000
2023
$000
Land and buildings
6,120
6,007
Accumulated depreciation
(3,236)
(2,646)
2,884
3,361
Note:
1.
Additions to the right-of-use assets during the year were $1,004,777 (2023: $1,283,558).
2. The Group leases land and buildings for its offices under agreements of between 1 to 5 years with, in some cases, options to extend.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
54
16. INTANGIBLE ASSETS
2024
$000
2023
$000
Goodwill
Cost
82,674
73,212
Acquisition OPW and Linc
-
9,462
Accumulated impairment (note 17)
(65,050)
(62,474)
Net carrying value
17,624
20,200
Customer relationships/Licences
Cost
9,958
2,062
Acquisition OPW and Linc
-
7,896
Accumulated impairment (note 17)
(2,717)
(918)
Accumulated amortisation
(2,969)
(1,956)
Net carrying value
4,272
7,084
Brand names
Cost
6,040
4,640
Acquisition OPW
-
1,400
Accumulated impairment (note 17)
(4,640)
(4,640)
Net carrying value
1,400
1,400
Intellectual property – course materials
Cost
8,701
8,701
Accumulated impairment (note 17)
(3,896)
(3,896)
Accumulated amortisation
(4,519)
(4,519)
Net carrying value
286
286
Total intangible assets
23,582
28,970
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
55
a.
Intangible assets – detailed reconciliation
2024
Goodwill
$000
Customer
Relationships
and Licences
$000
Brand
Names
$000
Intellectual
Property
$000
Total
$000
Balance at 1 July 2023
20,200
7,084
1,400
286
28,970
Additions
-
-
-
-
-
Impairment
(2,576)
(1,800)
-
-
(4,376)
Amortisation
-
(1,012)
-
-
(1,012)
Balance at 30 June 2024
17,624
4,272
1,400
286
23,582
2023
Goodwill
$000
Customer
Relationships
and Licences
$000
Brand
Names
$000
Intellectual
Property
$000
Total
$000
Balance at 4 July 2022
10,738
-
-
238
10,976
Additions
-
-
-
142
142
Additions through business combinations
9,462
7,896
1,400
-
18,758
Amortisation
-
(812)
-
(94)
(906)
Balance at 30 June 2023
20,200
7,084
1,400
286
28,970
17. IMPAIRMENT
a.
Impairment
The consolidated entity tests whether goodwill and other intangible assets have suffered any impairment on an
annual basis, or more frequently, if required.
During FY24, following the loss by Linc of its major customer contract, goodwill and customer relationships were
fully impaired. Goodwill was written down by $2.576 million to zero, as a non-cash impairment expense. Linc
customer relationships were amortised from 1 July 2023 to 31 December 2023 ($0.26 million), with the remaining
$1.8 million written off during December 2023 as a non-cash impairment expense.
There were no indicators of impairment in relation to either the Labour Hire division (excluding Linc and OPW),
Linc, OPW or the Training division at 30 June 2024.
Labour Hire division (excluding Linc and OPW)
The recoverable amount of the Labour Hire division (excluding Linc and OPW) has been determined based on a
value in use calculation. That calculation uses cash flow projections based on financial forecasts approved by
management for FY25 and covering detailed forecasts for a further four years, followed by an extrapolation of
expected cash flows for the units’ remaining useful lives using the growth rates determined by management.
The present value of the expected after-tax cash flows has been determined by applying a suitable after-tax
discount rate of 14 per cent. Cash flows after year 5 have been held constant, reflecting the competitive nature
of the industry.
Management’s key assumption is that revenue for the Labour Hire division (excluding any acquisitions post 30
June 2024) will increase by approximately 1% in FY25. Hours worked with existing customers were 12% below
the prior corresponding period in H2 of FY24, due to declining requirements for casual labour across most
sectors. Market demand is expected to stabilise, with offsetting additional workers and hours required by new
customers secured in FY24. From FY26 to FY29, revenue is forecast to increase at 5% per annum, representing
wage inflation and some growth of 1% to 1.5% each year. EBITDA margin (before corporate overhead allocations)
is forecast to stabilise at 2%, increasing in FY26 and beyond to 2.2%.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
56
Linc
No intangible asset carrying value remains in the Linc cash generating unit (“CGU”) following the impairment of
the goodwill and customer relationships.
OPW
The recoverable amount of OPW has been determined based on a value in use calculation. That calculation uses
cash flow projections based on financial forecasts approved by management for FY25 and covering detailed
forecasts for a further four years, followed by an extrapolation of expected cash flows for the units’ remaining
useful lives using the growth rates determined by management. The present value of the expected after-tax cash
flows has been determined by applying a suitable after-tax discount rate of 15 per cent. Cash flows after year 5
have been held constant, reflecting the competitive nature of the industry.
Management’s key assumption is that revenue for OPW in FY25 will increase by 2% compared with the year-
ended 30 June 2024, representing largely expected inflationary increases in underlying cost passed onto
customers, a reduction in volumes in berry picking and an offsetting growth in volumes from customers secured
primarily in Avocados, Grapes and Citrus. EBITDA margin (before corporate overhead allocations) is forecast to
increase to 3.5%, with losses from worker expenses minimised following the recent release of the revised flight
matrix. Revenues are forecast to increase 25% to $80 million in FY26, with substantial growth possible with
existing and new customers in Citrus and Table Grapes. Long term EBITDA margins are forecast to be 4%, closer
to the historic levels of 5%.
Training division
The recoverable amount of the Training division has been determined based on a value in use calculation. That
calculation uses cash flow projections based on financial forecasts approved by management for FY25 and
covering detailed forecasts for a further four years, followed by an extrapolation of expected cash flows for the
units’ remaining useful lives using the growth rates determined by management. The present value of the
expected after-tax cash flows has been determined by applying a suitable after-tax discount rate of 15 per cent.
Cash flows after year 5 have been held constant, reflecting the competitive nature of the industry.
Management’s key assumption is that revenue for the Training division will be flat in FY25. Additional courses
continue to be added to scope and we expect to increase fee for service revenues, but these increases are offset
by expected reduced public funding, particularly in Victoria. From FY26 to FY29, revenue increases are forecast
to return to 5% per annum, representing to underlying growth and stable public funding. EBITDA margin (before
corporate overhead allocations) is forecast to remain at just under 22%.
Long term growth rates after the forecast period and discount rates used were as follows:
Terminal Growth rates
Post-tax discount rates
30 Jun 2024
30 Jun 2023
30 June 2024
30 Jun 2023
Labour Hire (excluding Linc and OPW)
0%
0%
14.0%
12.7%
Linc
0%
0%
16.2%
16.2%
OPW
0%
0%
15.0%
15.1%
Training
0%
0%
15.0%
12.7%
The growth rate reflects management’s view of longer-term average growth rates for the respective sectors. The
discount rate reflects appropriate adjustments relating to market risk and specific risk factors of each unit.
b. Impairment charges
As a result of the analysis, all intangible assets within the Linc CGU were written down to zero in FY24. There is
no need for any impairment charges in the FY24 results within the other CGUs. The same analysis in the prior
year resulted in no impairment charge being recorded in the FY23 results.
Movements in the net carrying amount of goodwill and other intangibles are presented in note 16.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
57
The amount of goodwill, brand names and other intangibles remaining by CGU and subject to future
impairment testing is as follows:
2024
Goodwill
$’000
Customer
Relationships/
Licences
$’000
Brand Names
$’000
Intellectual
Property
$’000
Total
$’000
Training
1,654
-
-
286
1,940
Labour Hire (excluding Linc and OPW)
9,084
-
-
-
9,084
Linc
-
-
-
-
-
OPW
6,886
4,272
1,400
-
12,558
Total
17,624
4,272
1,400
286
23,582
2023
Goodwill
$’000
Customer
Relationships/
Licences
$’000
Brand Names
$’000
Intellectual
Property
$’000
Total
$’000
Training
1,654
-
-
286
1,940
Labour Hire (excluding Linc and OPW)
9,084
-
-
-
9,084
Linc
2,576
2,056
-
-
4,632
OPW
6,886
5,028
1,400
-
13,314
Total
20,200
7,084
1,400
286
28,970
c.
Sensitivity analysis
Management has also run various sensitivity scenarios, primarily reviewing sensitivity of outcomes to FY25
EBITDA forecasts, long term growth rates and discount rates. In respect of reasonably possible changes in the
key assumptions, with all other assumptions remaining constant, major sensitivities are summarised as follows:
Change in VIU
Labour hire CGU
$’M
Impairment
$’000
Training CGU
$’M
Impairment
$’000
Sustainable EBITDA margin; +/- $0.5
million each CGU
+/-2.5
-
+/-2.3
-
1% increase or decrease in long term
growth rate
+/-0.7
-
+/-0.4
-
1% increase or decrease in post-tax
discount rate
+/-2.1
-
+/-0.8
-
Change in VIU
Linc CGU
$’M
Impairment
$’000
OPW CGU
$’M
Impairment
$’000
Sustainable EBITDA margin; +/- $0.5
million each CGU
n/a
-
+/-2.4
(1.9)
1% increase or decrease in long term
growth rate
n/a
-
+/-0.5
-
1% increase or decrease in post-tax
discount rate
n/a
-
+/-1.0
(0.5)
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
58
18. TAX BALANCES
2024
$000
2023
$000
Current assets
Income tax receivable
460
14
Non-current assets
Deferred tax assets (a)
4,694
9,844
Current tax liabilities
Income tax payable
-
4,660
Non-current liabilities
Deferred tax liabilities (a)
1,970
6,220
a. Deferred tax assets and liabilities
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
2024
Balance at
Beginning
of the Year
$000
Recognised in
Other
Comprehensive
Income
$000
Recognised
in Business
Combination
$000
Recognised
in Profit &
Loss
$000
Balance
at End of
the Year
$000
Current assets
Trade, other receivables and other assets
(3,492)
-
-
1,260
(2,232)
Contract assets
(425)
-
-
(259)
(684)
Non-current assets
Intangible assets
(2,125)
-
-
843
(1,282)
Property, plant and equipment
(859)
-
-
356
(503)
Right-of-use assets1
-
-
-
44
44
Current liabilities
Trade and other payables
8,267
-
-
(2,960)
5,307
Provisions
1,791
-
-
(182)
1,609
2024 Tax loss carried forward
Tax losses
467
-
-
(2)
465
Total
3,624
-
-
(900)
2,724
Note:
1. This amount is net of lease liabilities.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
59
2023
Balance at
Beginning
of the Year
$000
Recognised in
Other
Comprehensive
Income
$000
Recognised
in Business
Combination
$000
Recognised
in Profit &
Loss
$000
Balance
at End of
the Year
$000
Current assets
Trade, other receivables and other assets
(3,600)
-
(628)
736
(3,492)
Contract assets
(233)
-
-
(192)
(425)
Non-current assets
Intangible assets
-
-
(2,369)
244
(2,125)
Property, plant and equipment
(142)
-
(47)
(670)
(859)
Right-of-use assets1
40
-
-
(40)
-
Current liabilities
Trade and other payables
2,384
-
825
5,058
8,267
Provisions
1,399
-
121
271
1,791
2023 Tax loss carried forward
Tax losses
11
-
-
456
467
Total
(141)
-
(2,098)
5,863
3,624
19. TRADE AND OTHER PAYABLES
2024
$000
2023
$000
Current
Trade payables
5,518
5,550
Accrued expenses
9,893
9,570
GST payable
4,556
5,846
Workers’ compensation
-
4,211
Sundry creditors
13,876
16,866
33,843
42,043
Average credit period on purchases of products and services is 30 days. No interest is charged on trade payables.
The Group has financial risk management policies in place to ensure payables are paid within credit time frame.
20. LEASE LIABILITIES
2024
$000
2023
$000
Current
914
1,188
Non-current
2,117
2,362
3,031
3,550
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
60
21. OTHER LIABILITIES
2024
$000
2023
$000
Current
OPW Deferred Consideration payable October 2024
2,975
1,838
Redemption liability CCL
335
836
Other liabilities (Current)
3,310
2,674
Non-current
Redemption liability CCL
-
1,137
Redemption liability Linc
-
636
OPW Deferred consideration payable October 2024
-
3,063
Other liabilities (Non-current)
-
4,836
Redemption Liability CCL
The redemption liability CCL is a Put Option which represented a contractual obligation to purchase the
remaining non-controlling interests in the CCL Group and originated from a previous business combination to
acquire the CCL Group.
The Put Option was exercised on 30 June 2023, with ASH acquiring the remaining 20% of the CCL Group on 14
July 2023. The purchase consideration for the 20% interest is payable in two instalments, the first in October
2023 (based upon the actual audited FY23 EBITDA) and the final instalment in October 2024 (based upon the
actual audited FY24 EBITDA). The payment in October 2023 was $0.886 million. Based upon the actual FY24
results, the remaining redemption liability will be $0.335 million. $0.752 million was credited to profit in FY24,
as fair value gain, representing the reduced payments required versus the original estimated redemption liability
of $1.973 million.
Redemption Liability Linc
The redemption liability Linc was a Put Option which represented a contractual obligation to purchase the
remaining non-controlling interest and originates from the current year business combination to acquire Linc.
The liability was a financial liability and was measured at the present value of the redemption amount or the put
option consideration amount in accordance with the underlying Linc Share Sale and Purchase Agreement.
On 31 January 2024, the Ashley Services Group acquired the remaining 25% of Linc for consideration of $0.244
million, representing 25% of the net assets of Linc on that date or other entitlements foregone by minority
shareholders. The prior period redemption liability of $0.636 million was reduced to the amount paid on 31
January 2024, resulting in a $0.392 million credit to profit in the period.
OPW Deferred Consideration
The OPW purchase price was determined based upon the higher of the actual EBITDA for FY23 or $3.4 million
normalised annual EBITDA. Payment takes place in three instalments:
i)
The initial completion payment of $7.1 million;
ii)
A second payment payable in October 2023, bringing cumulative payments to 75% of total purchase
price; and
iii)
A third payment payable in October 2024, representing the final 25% of the purchase price. The
third payment may be reduced if revenue for OPW for FY24 falls below $60 million.
During FY24, the second instalment payment of $1.8m was settled. Revenue for OPW for FY24 exceeded $60
million and the third instalment of $2.975 million will be paid in October 2024.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
61
22. BORROWINGS
2024
Available facility
$000
Facility used
$000
Remaining facility
$000
Invoice Financing
25,000
4,201
20,799
Acquisition facility
15,000
8,375
6,625
Balance at 30 June 2024
40,000
12,576
27,424
2023
Available facility
$000
Facility used
$000
Remaining facility
$000
Invoice Financing
25,000
3,349
21,651
Acquisition facility
18,000
4,840
13,160
Balance at 30 June 2023
43,000
8,189
34,811
Facilities
The acquisition facility expires 28 December 2025, with the capacity reducing progressively over a term of 3
years, with repayment requirements of $1 million per quarter. $4 million of the facility has been classified as a
current liability along with the $4.2 million of the invoice facility.
The Westpac facilities are subject to a Security which includes, but is not limited to the following:
•
1st ranking General Security Agreement over the assets and undertakings of the Borrower and its
Guarantors (Ashley Services Group and its trading controlled entities);
•
A fully interlocking guarantee and indemnity of the Borrower and its Guarantors (Ashley Services Group
Limited and its trading-controlled entities; and
•
Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd, Construction Contract Labour (VIC)
Pty Ltd and Concept Engineering (AUST) Pty Ltd and CCLTS Group Pty Ltd for Invoice Finance Facility
collections.
As at 30 June 2024, the combined facilities were drawn to $12.576 million (30 June 2023: $8.189 million).
23. PROVISIONS
2024
$000
2023
$000
Current
Employee benefits (a)
4,090
5,004
Make good provisions for leases
32
38
Total
4,122
5,042
Non-current
Employee benefits (a)
707
685
Make good provisions for leases
115
129
Total
822
814
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
62
a. Reconciliation of employee provisions
2024
$000
2023
$000
Opening balance
5,689
4,431
Acquired through business combination - Linc
-
251
Acquired through business combination - OPW
-
402
Less: leave taken during the year
(6,178)
(5,014)
Add: leave provided for during the year
5,286
5,619
Closing balance
4,797
5,689
24. SHARE CAPITAL
The Company does not have any share options on issue as at the date of this report. Details of share capital of
the Group are as follows:
2024
$000
2023
$000
143,975,904 (FY23: 143,975,904) fully paid ordinary shares
154,234
154,234
Share issue costs
(5,419)
(5,419)
Share capital
148,815
148,815
7,558,734 (FY23: 7,558,734) performance rights
-
-
Performance Rights
-
-
a.
Ordinary shares
Ordinary shares confer on their holders the right to participate in dividends declared by the Board. Ordinary
shares confer on their holders an entitlement to vote at any general meeting of the Company.
b.
Performance Rights
On 30th March 2023, Group granted and issued 7,558,734 Performance rights to two key management
employees as detailed in the Remuneration Note within the Directors’ Report – tables 5 and 7. Tranche 1,
representing 4,535,240 Performance Rights were granted with a fair value of 50.5 cents per Right. Tranche 2,
representing 3,023,494 Performance Rights were granted with a fair value of 33.9 cents per Right.
Management have assessed the probability of the performance hurdles for Tranche 1 and Tranche 2 being met
and determined that vesting is unlikely. No expense has therefore been recognised in FY24 and the prior
period expense of $0.129 million has been credited to profit in the year ended 30 June 2024.
c.
Capital Risk Management
The consolidated entity’s objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial year.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
63
25. COMMON CONTROL AND OTHER RESERVES
2024
$000
2023
$000
Common control reserve
(59,261)
(59,261)
Share-based payments reserve
-
130
Common control and other reserves
(59,261)
(59,131)
Common control reserve
The common control reserve has arisen following the adoption of the pooling of interests method used to
account for the acquisition of the following entities since 1 July 2014:
▪
ADV Services Pty Limited;
▪
Ashley Institute Holdings Pty Limited;
▪
TBRC Holdings Pty Limited;
▪
Tracmin Pty Limited; and
▪
Australian Institute of Vocational Development Pty Limited; and
▪
CCL Group (Construction Contract Labour (VIC) Pty Ltd, Complete Traffic Services (VIC) Pty Ltd and
Australian Traffic & Labour Services Pty Ltd.
Share-based payments reserve
A Long-Term Incentive plan has been established by the Group and approved by shareholders at a general
meeting, whereby the Group may, at the discretion of the Board of Directors, grant performance rights over
ordinary shares in the company to certain key management personnel of the Group. The performance rights
are issued for nil consideration and are granted in accordance with performance guidelines established by the
Board of Directors.
On 22 May 2023, senior executives received an LTI award of 7,588,734 performance rights, the vesting of which
is subject to the performance conditions outlined below. The number of rights awarded was approved by
shareholders at an Extraordinary General Meeting held on 30 Match 2023.
Each performance right converts into one share of ASH if the vesting criteria are met, at no cost to the
participants. Those performance rights have been split into 2 tranches:
▪
Tranche 1: 4,535,240 performance rights - 60% of the LTI grant - PBT target is $24.5 million, excluding any
intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost
relating the LTI performance Rights Plan.
▪
Tranche 2: 3,023,494 performance rights - 40% of the LTI grant - PBT target is $36.5 million, excluding any
intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost
relating the LTI performance Rights Plan.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
64
Those performance rights have been valued by using a Black-Scholes methodology, with inputs as follows:
Grant date
Share price at
grant date Exercise price
Expected life
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
Tranche 1
30/03/2023
$0.72
$nil
4.3
8.3%
3.1%
$0.505
Tranche 2
30/03/2023
$0.72
$nil
9.3
8.3%
3.4%
$0.339
Total share-based payments expense recorded in the profit or loss for the year ended 30 June 2023 amounted
to $0.13 million.
During FY24, due to the profit decline and after assessing prevailing market conditions, management have re-
assessed the probability of the performance hurdles for Tranche 1 and Tranche 2 being met and determined
that vesting is unlikely. No accounting expense has been recognised in FY24 and the prior period expense of
$0.13 million has been credited to profit in the year ended 30 June 2024.
26. EARNINGS PER SHARE
2024
2023
Profit after tax for the year attributable to shareholders ($’000)
1,350
10,794
Weighted number of ordinary shares outstanding during the year used in
calculating basic earnings per share (EPS)
143,975,904
143,975,904
Weighted number of ordinary shares outstanding during the year used in
calculating diluted earnings per share (EPS)
151,534,638
145,896,908
Basic earnings per share (cents)
0.94
7.50
Diluted earnings per share (cents)
0.89
7.40
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
65
27. SEGMENT INFORMATION
The Group’s management identifies two operating segments, Labour Hire and Training, representing the main
products and services provided by the Group. During the financial year ended 30 June 2024, there have been no
changes from prior periods in the measurement methods used to determine operating segments and reported
segment profit or loss. The revenues and profit generated by each of the Group’s operating segments are
summarised as follows:
2024
Labour Hire
$000
Training
$000
Total
$000
Revenue
From external customers
538,287
18,251
556,538
Segment revenue
538,287
18,251
556,538
Other income
141
2
143
Employment costs
(519,025)
(12,244)
(531,269)
Depreciation and amortisation expense
(1,586)
(1,053)
(2,639)
Finance costs
(517)
(31)
(548)
Other expenses
(5,873)
(1,997)
(7,870)
Segment Profit
11,427
2,928
14,355
Fair value gain on redemption liabilities
1,144
Impairment Expense
(4,376)
Unallocated items
(7,984)
Profit before income tax
3,139
Income tax expense
(1,789)
Profit after income tax
1,350
Other comprehensive income
-
Total comprehensive income for the year
1,350
2023
Labour Hire
$000
Training
$000
Total
$000
Revenue
From external customers
533,228
15,991
549,219
Segment revenue
533,228
15,991
549,219
Other income
82
2
84
Employment costs
(504,455)
(10,579)
(515,034)
Depreciation and amortisation expense
(1,256)
(978)
(2,234)
Finance costs
(615)
(31)
(646)
Other expenses
(6,985)
(1,693)
(8,678)
Segment Profit
19,999
2,712
22,711
Unallocated items
(6,786)
Profit before income tax
15,925
Income tax expense
(4,523)
Profit after income tax
11,402
Other comprehensive income
-
Total comprehensive income for the year
11,402
No segments assets or liabilities are disclosed because there is no measure of segments assets or liabilities
regularly reported to Management and to the Board.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
66
a.
Information about major customers
Included in revenues from external customers are revenues of $243.4 million (2023: $217.1 million) which arose
from sales to 3 (2023: 3) of the Group’s customers whose individual revenue exceeds 10% of total revenue in the
Labour Hire segment. Sales to these 3 customers were $89.3 million, $85.0 million and $69.1 million respectively
(2023: $92.1 million, $63.5 million and $61.5 million respectively).
There are no customers whose individual revenue exceeded 10% of total revenue in the Training segment in
either financial year.
28. CASH FLOW INFORMATION
Reconciliation of cash flow from operations to profit after income tax
2024
$000
2023
$000
Profit for the year
1,350
11,402
Cash flows excluded from profit attributable to operating
activities
Adjustments for non-cash items:
- Depreciation and amortisation expense
3,797
3,159
- Expected credit losses
185
199
- Lease liability non-cash expense
93
97
- LTI non-cash expense, share based payment reserve
(130)
130
- Share of associated company profits
91
(198)
- Provision against associated company debts
166
- Fair value gain on redemption liabilities
(1,144)
-
- Impairment expense
4,376
-
Changes in assets and liabilities
- Decrease/(increase) in trade and other receivables
11,443
4,190
- Decrease/(increase) in contract assets
(993)
(641)
- Decrease/(increase) in other assets
(2,270)
1,429
- Decrease/(increase) in deferred tax assets
5,150
(5,686)
- Decrease/(increase) in current tax receivable
(446)
1,627
- (Decrease)/increase in trade and other payables
(8,202)
1,952
- (Decrease)/increase in provisions
(911)
535
- (Decrease)/increase in other liabilities
(114)
121
- (Decrease)/increase in current tax liabilities
(4,660)
4,660
- (Decrease)/increase in deferred tax liabilities
(4,250)
(178)
Net cash from operating activities
3,531
22,798
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
67
29. FAIR VALUE MEASUREMENT
Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a three-
level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Consolidated 30 June 2024
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Assets:
Total Assets
-
-
-
-
Liabilities:
Redemption liability
-
-
335
335
OPW deferred consideration
-
-
2,975
2,975
Total Liabilities as at 30 June 2024
-
-
3,310
3,310
Consolidated 30 June 2023
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Assets:
-
-
-
-
Total Assets
-
-
-
-
Liabilities:
Redemption liability
-
-
2,609
2,609
OPW deferred consideration
-
-
4,901
4,901
Total Liabilities as at 30 June 2023
-
-
7,510
7,510
There were no transfers between levels during the year.
The Fair values of the Group’s remaining assets and liabilities are approximately equal to their carrying values.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the
current market interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 3
The redemption liabilities arose:
1.
as a result of a previous business combination for the CCL Group. The liability was originally valued at the
present value of the redemption amount for the put option consideration amount in accordance with the
underlying CCL Group Share Sale and Purchase Agreement. The Put Option was exercised on 30 June 2023,
with ASH acquiring the remaining 20% of the CCL Group on 14 July 2023. The purchase consideration for
the 20% interest is payable in two instalments, with the first payment of $0.886 million (based upon the
actual audited FY23 EBITDA) made in October 23. Based upon the actual FY24 results, the remaining
redemption liability will be $0.335 million. $0.749 million was credited to profit in FY24, as fair value gain,
representing the reduced payments required versus the original estimated redemption liability of $1.973
million.
2.
as a result of the business combination in the current year for Linc. The liability was originally valued at
the present value of the redemption amount for the put option consideration amount in accordance with
the underlying Linc Share Sale and Purchase Agreement, also taking into account the likelihood that put
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
68
option conditions may or may not be met. The Group acquired the final 25% interest for consideration of
$0.244 million on 31 January 2024, representing 25% of the net assets of Linc on that date or other
entitlements foregone by minority shareholders. No redemption liability remains at 30 June 2024.
The deferred consideration has arisen:
i)
The OPW purchase price was determined based upon the higher of actual EBITDA for FY23 or $3.4 million
normalised annual EBITDA. Payment takes place in three instalments:
a.
The initial completion payment of $7.1 million;
b.
A second payment of $1.8 million paid in October 2023, bringing cumulative payments to 75% of
total purchase price; and
c.
A third payment payable in October 2024, representing the final 25% of the purchase price. The
third payment may be reduced if revenue for OPW for FY24 falls below $60 million.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current year are set out below:
Consolidated 30 June 2024
Redemption
Liability
$000
Deferred
Consideration
$000
Total
$000
Balance at 30 June 2023
2,609
4,901
7,510
Acquisition of OPW
-
(1,811)
(1,811)
Acquisition remaining 20% of CCL
(886)
-
(886)
Acquisition remaining 25% of Linc
(244)
-
(244)
Fair value adjustment
(1,144)
(115)
(1,259)
Balance at 30 June 2024
335
2,975
3,310
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Unobservable inputs
EBITDA Range
(weighted
average)
Sensitivity
Redemption
liability CCL
The put option was exercised in FY23. $0.886
million was paid in October 23 based upon the
actual FY23 result and the remainder will be paid in
October based upon the actual FY24 result (estimate
$0.335 million).
967,686
10% change would
increase/decrease fair
value by $33,453.
Redemption
liability Linc
The remaining 25% interest in Linc was purchased in
FY24 for $0.244 million. No redemption liability
remains.
n/a
n/a
Deferred
Consideration
OPW
$3.4 million normalised annual EBITDA. 75% of
purchase price was paid by October 23, with the
remaining 25% payable in October 24, reduced if
FY24 revenues fall below $60 million. FY24 revenues
exceeded $60 million, so the October 24 payment
will be $2.975 million.
n/a
Nil.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
69
30. CONTROLLED GAINED OVER ENTITIES
There were no acquisitions or business combinations in the current reporting period, other than the acquisition
of the remaining 20% interest in the CCL Group and the remaining 25% interest in Linc. Both entities were
already controlled entities.
31. CONTROLLED ENTITIES AND ASSOCIATES
Set out below are the controlled entities and associates of Ashley Services Group Limited:
Country of
incorporation
2024 percentage
owned
%
2023 percentage
owned
%
Action Arndell Park Pty Limited
Australia
100
100
Action Botany Pty Limited
Australia
100
100
Action James (Qld) Pty Limited
Australia
100
100
Action James NSW Pty Limited
Australia
100
100
Action James Parramatta Pty Limited
Australia
100
100
Action James WA Pty Limited
Australia
100
100
Concept Retail NSW Pty Ltd (formerly Action James Western
Suburbs Pty Limited)
Australia
100
100
Action Job Support Pty Limited
Australia
100
100
Action MMX Pty Limited
Australia
100
100
Action Workforce ACT Pty Limited
Australia
100
100
Action Workforce COL1 Pty Limited
Australia
100
100
Action Healthcare Pty Ltd (formerly Action Workforce COS1
Pty Limited)
Australia
100
100
Action Workforce COT Pty Limited
Australia
100
100
Action Workforce IMT Pty Limited
Australia
100
100
Action Workforce NSW Pty Limited
Australia
100
100
Action Horticulture Pty Ltd (formerly Action Workforce OS
Pty Limited)
Australia
100
100
Action Workforce OST Pty Limited
Australia
100
100
Action Workforce Pty Limited
Australia
100
100
Action Workforce T1 Pty Limited
Australia
100
100
Action Workforce T2 Pty Limited
Australia
100
100
Action Workforce VER1 Pty Limited
Australia
100
100
Action Workforce Victoria Pty Limited
Australia
100
100
Action Workforce VM Pty Limited
Australia
100
100
Action Workforce VPS Pty Limited
Australia
100
100
ADV Services Pty Limited
Australia
100
100
ADV2 Pty Limited
Australia
100
100
ADV3 Pty Limited
Australia
100
100
ADV6 Pty Limited
Australia
100
100
Advance Exchange Pty Limited
Australia
100
100
Advance GW Pty Limited
Australia
100
100
Advance MIX Pty Limited
Australia
100
100
Advance Recruitments Pty Limited
Australia
100
100
AIVD Holdings Pty Limited
Australia
100
100
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
70
Country of
incorporation
2024 percentage
owned
%
2023 percentage
owned
%
ASG Electrical Contracting Pty Ltd
Australia
100
100
Ash Pty Limited
Australia
100
100
Ashley Institute Holdings Pty Limited
Australia
100
100
Australian Institute of Vocational Development Pty Limited
Australia
100
100
AWF Training 3 Pty Limited
Australia
100
100
BCC Labour Solutions Pty Ltd
Australia
100
100
Cantillon Holdings Pty Limited
Australia
100
100
CCL Group Holdings Pty Ltd
Australia
100
100
CCLTS Group Pty Limited
Australia
100
100
College of Innovation and Industry Skills Pty Limited
Australia
100
100
Complete Traffic Services (VIC) Pty Ltd
Australia
100
80
Concept AWF Pty Limited
Australia
100
100
Concept Electrical Resources Pty Ltd
Australia
100
100
Concept Employment (Aust) Pty Limited
Australia
100
100
Concept Engineering (Aust) Pty Limited
Australia
100
100
Total Rail Holdings Pty Ltd (formerly Concept Engineering
Contracting Holdings Pty Ltd)
Australia
100
100
Total Rail Pty Ltd (formerly Concept Engineering Contracting
Pty Ltd)
Australia
100
100
Concept Power Pty Ltd
Australia
100
100
Concept Project Resources Pty Limited
Australia
100
100
Concept Rail Pty Ltd
Australia
100
100
Concept Recruitment Specialists Pty Ltd
Australia
100
100
Concept Retail Solutions Pty Ltd
Australia
100
100
Construction Contract Labour (VIC) Pty Ltd
Australia
100
80
Dardi Munwurro Labour and Traffic Management Pty Limited
Australia
49
49
DMLT Holdings Pty Limited
Australia
100
100
EWPY Holdings Pty Ltd
Australia
100
100
EWPY Pty Ltd
Australia
100
100
EWP Services Pty Ltd
Australia
49
49
Executive Careers Australia Pty Limited
Australia
100
100
Global Education and Training Group Pty Limited
Australia
100
100
Integracom Holdings Pty Limited
Australia
100
100
James Personnel Pty Limited
Australia
100
100
James Warehousing Pty Limited
Australia
100
100
Linc Personnel Pty Ltd
Australia
100
75
Logistics People Pty Limited
Australia
100
100
OGR Holdings Pty Limited
Australia
100
100
Owen Pacific Workforce Pty Ltd
Australia
100
100
Qualitas Education Pty Limited
Australia
100
100
Silk Group Holdings Pty Limited
Australia
100
100
TBRC Holdings Pty Limited
Australia
100
100
The Blackadder Recruitment Company Pty Limited
Australia
100
100
The Instruction Company Holdings Pty Ltd
Australia
100
100
The Instruction Company Pty Ltd
Australia
100
100
Track Safety Australia Pty Ltd
Australia
100
100
Tracmin Holdings Pty Limited
Australia
100
100
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
71
Country of
incorporation
2024 percentage
owned
%
2023 percentage
owned
%
Tracmin Pty Limited
Australia
100
100
Australian Traffic & Labour Services Pty Ltd (formerly VIC
Traffic and Labour Solutions Pty Ltd)
Australia
100
80
Vocational Training Australia Pty Limited
Australia
100
100
Y I Group Holdings Pty Ltd
Australia
100
100
Yalagan Infrastructure Pty Ltd
Australia
49
49
32. PARENT ENTITY DISCLOSURES
a.
Financial position
2024
$000
2023
$000
Assets
Current assets
26,150
8,764
Non-current assets
44,019 43,870
Total assets
70,169
52,634
Liabilities
Current liabilities
(408)
(5,122)
Non-current liabilities
(20,790) (10,492)
Total liabilities
(21,198)
(15,614)
Net assets
48,971
37,020
Equity
Share capital
148,815
148,815
Accumulated losses
(99,844)
(111,795)
Total equity
48,971
37,020
b.
Statement of profit or loss and other comprehensive income
2024
$000
2023
$000
Profit/(Loss) for the year
16,988
51,851
Total comprehensive income
16,988
51,851
c.
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The Parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company
guarantees the debts of the others. No deficiencies of assets exist in any of these subsidiaries.
d.
Contingent liabilities of the Parent Entity
The Parent entity had no other known material contingent liabilities as at 30 June 2024 (30 June 2023: Nil).
e.
Commitments for expenditure for the Parent entity
The Parent entity had Nil committed expenditure as at 30 June 2024 (30 June 2023: Nil).
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
72
33. DEED OF CROSS GUARANTEE
The following entities have entered into a deed of cross guarantee dated 22 February 2018 under which each
company guarantees the debts of the others:
▪
Ashley Services Group Limited
▪
Action Workforce Pty Limited
▪
ADV6 Pty Limited
▪
Ashley Institute Holdings Pty Ltd
▪
Concept Engineering (Aust) Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare
financial statements and directors' reports under Corporations Instrument 2016/785 issued by the Australian
Securities and Investments Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there
are no other parties to the deed of cross guarantee that are controlled by Ashley Services Group Limited, they
also represent the 'Extended Closed Group'.
a.
Statement of profit or loss and other comprehensive income
Extended Closed Group
2024
$000
2023
$000
Revenue
357,934
369,378
Other Income
23
36
Employment costs
(345,476)
(349,470)
Depreciation and amortisation expense
(581)
(551)
Finance costs
(55)
(235)
Other expenses
(2,850)
(4,002)
Profit before income tax
8,995
15,156
Income tax expense
(2,771)
(2,986)
Profit after income tax
6,224
12,170
Other comprehensive Income
-
-
Total comprehensive income for the year
6,224
12,170
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
73
b.
Statement of Financial position
Extended Closed Group
2024
$000
2023
$000
Assets
Current assets
Cash and cash equivalents
51
51
Trade and other receivables
25,554
29,821
Other assets
2,920
316
Income tax receivable
460
-
Loans to associated entities
152
1,744
Total current assets
29,137
31,932
Non-current assets
Intercompany loans receivable
102,870
125,173
Loans to associated entities
-
11
Property, plant and equipment
306
402
Deferred tax assets
2,230
3,599
Right-of-use assets
1,276
1,376
Other assets
36
17
Total non-current assets
106,718
130,578
Total assets
135,855
162,510
Liabilities
Current liabilities
Trade and other payables
23,667
26,728
Current tax payable
-
24,112
Lease liabilities
529
769
Provisions
1,493
1,979
Total current liabilities
25,689
53,588
Non-current liabilities
Lease liabilities
815
724
Provisions
360
392
Total non-current liabilities
1,175
1,116
Total liabilities
26,864
54,704
Net assets
108,991
107,806
Equity
Share capital
148,815
148,815
Accumulated losses
(39,824)
(41,009)
Total Equity
108,991
107,806
c.
Equity – retained profits
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
74
Extended Closed Group
2024
$000
2023
$000
Accumulated losses at the beginning of the financial year
(41,009)
(44,263)
Profit after income tax expense
6,224
12,170
Dividends paid
(5,039)
(8,916)
Accumulated losses at the end of the financial year
(39,824)
(41,009)
d.
Contingent liabilities of the Extended Closed Group
The Extended Closed Group had no other known material contingent liabilities as at 30 June 2024 (30 June 2023:
Nil).
e.
Commitments for expenditure for the Extended Closed Group
The Extended Closed Group had Nil committed expenditure as at 30 June 2024 (30 June 2023: Nil).
f.
Going Concern and Financial Support
The directors have provided a letter of financial support confirming that each of the below listed companies
within the Ashley Services Group Limited and controlled entities agrees to provide whatever financial support is
necessary to ensure each entity will be able to continue as a going concern and pays its debts as and when they
fall due and payable.
The financial support covers the following entities:
▪
Ashley Services Group Limited;
▪
Action Workforce Pty Limited;
▪
Concept Engineering (Aust.) Pty Ltd;
▪
ASH Pty Ltd;
▪
Vocational Training Australia Pty Ltd;
▪
Australian
Institute
of
Vocational
Development Pty Ltd;
▪
Tracmin Pty Ltd;
▪
The Instruction Company Pty Ltd;
▪
Concept Retail Solutions Pty Ltd;
▪
Adv Services Pty Limited;
▪
Complete Traffic Services (VIC) Pty Ltd;
▪
Concept Recruitment Specialists Pty Limited;
▪
Construction Contract Labour (VIC) Pty Ltd;
▪
The Blackadder Recruitment Company Pty
Limited;
▪
Track Safety Australia Pty Ltd;
▪
Australian Traffic & Labour Services Pty Ltd;
▪
Linc Personnel Pty Ltd; and
▪
Owen Pacific Workforce Pty Ltd.
The financial support includes but is not limited to the actions as noted below:
▪
not calling on related party loans;
▪
agreeing to any cost re-allocations or management fee re-charges; and
▪
agreeing to debt forgiveness with any related entity.
The undertaking remains current until the date on which the directors approve the financial statements of the
Group for the financial year ending 30 June 2025. The directors are satisfied that collectively the Group has the
financial ability to provide this support.
g.
Security Offered
The Westpac facility (see Note 22) is subject to a Security which includes:
▪
1st ranking General Security Agreement over the assets and undertakings of the Borrower and its
Guarantors (Ashley Services Group Limited and its trading-controlled entities);
▪
A fully interlocking guarantee and indemnity of the Borrower and its Guarantors (Ashley Services Group
Limited and its trading-controlled entities); and
▪
Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd, Construction Contract Labour (VIC) Pty
Ltd, Concept Engineering (AUST) Pty Ltd and CCLTS Group Pty Ltd for Invoice Finance Facility collections.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
75
34. RELATED PARTY TRANSACTIONS
a.
Parent company
There is no ultimate parent company for Ashley Services Group Limited.
b.
Transactions with related entities
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
Transactions with related parties are as follows:
20241
$
20231
$
Rent and outgoings paid or payable to Shrimpton Holdings Pty Limited as trustee for the
Shrimpton Family Trust, an entity which is controlled by Mr Ross Shrimpton for an office at
Arndell Park, New South Wales
153,046
147,316
Fees payable to Pratt Partners (of which Ian Pratt is a partner) for taxation services
153,710
53,232
Fees payable to Ron Holland Family Trust (of which Ron Hollands is Trustee) for Company
Secretarial Services
30,000
26,025
Note:
1. All amounts as shown are exclusive of GST
Loans receivable from related parties are disclosed in Note 12.
35. SECURED AND CONTINGENT LIABILITIES
For assets pledged as security for borrowing facilities see Note 22.
The Group had no other known contingent liabilities at 30 June 2024 (30 June 2023: Nil).
36. FINANCIAL INSTRUMENTS
a.
Material accounting policies
Details of the material accounting policies and methods adopted, including the criteria for recognition, the basis
of measurement and the basis on which income and expenses are recognised, in respect of each class of financial
asset and financial liability are disclosed in Note 1 to the financial statement.
b.
Financial risk management objectives
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s financial
management framework. The Board has an established Audit and Risk Management Committee which is
responsible for developing and monitoring the Group’s financial management policies.
The Audit and Risk Management Committee oversees how management monitors compliance with risk
management policies and procedures and reviews the adequacy of the risk management framework in relation
to the risks.
The main risks arising from the Group’s financial instruments are market risk (including interest rate risk), credit
risk and liquidity risk. The Board reviews and approves policies for managing each of these risks.
The Audit and Risk Management Committee oversees how management monitors compliance with risk
management policies and procedures and review the adequacy of the risk management framework in relation
to the risks. The Group does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purpose.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
76
c.
Market risk
Interest rate risk
The Group is exposed to interest rate risk associated with borrowed funds at floating interest rates. During the
financial year, risks associated with interest rate movements were monitored by the Board; however, no hedging
instruments were considered necessary to manage the risk.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.
Interest rate sensitivity
The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting
date and the stipulated change taking place at the beginning of the financial year and held constant throughout
the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk internally
to key management personnel and represents management’s assessment of the possible change in interest
rates.
At the reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held
constant, the effect on the Group would be as follows:
2024
$000
2023
$000
Change in profit
Increase in interest rates of 1%
(125)
(54)
Decrease in interest rates of 1%
125
54
Change in equity
Increase in interest rates of 1%
(125)
(54)
Decrease in interest rates of 1%
125
54
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the
financial condition of accounts receivable.
The carrying value of trade receivables recorded in the financial statements, net of any expected credit losses,
represents the Group’s maximum exposure to credit risks.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the counter parties
are a reputable bank with high quality external credit ratings.
The maximum credit risk exposure of financial assets is their carrying amount in the financial statements.
d.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Managing Director and Board of Directors,
who have built an appropriate liquidity risk management framework for the management of the Group’s short,
medium and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities by continuously comparing actual cash flows with forecasts and matching the maturity profiles of
financial assets and liabilities. Included in Note 22 is a listing of additional undrawn facilities that the Group has
at its disposal to further reduce liquidity risk.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
77
Liquidity and interest risk tables
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities.
The table has been presented based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group may be required to pay. The table includes both interest and principal cash flows.
Financial assets
2024
Weighted average
effective interest
rate %
Within 1 year
$000
1 to 5 years
$000
Over 5 years
$000
Total
$000
Cash and cash equivalents
n/a
137
-
-
137
Trade and other receivables
n/a
45,522
-
-
45,522
Contract assets
n/a
2,410
-
-
2,410
Loans to associated entities
5.98%
162
761
-
923
Total
48,231
761
-
48,992
2023
Weighted average
effective interest
rate %
Within 1 year
$000
1 to 5 years
$000
Over 5 years
$000
Total
$000
Cash and cash equivalents
n/a
2,520
-
-
2,520
Trade and other receivables
n/a
57,150
-
-
57,150
Contract assets
n/a
1,417
-
-
1,417
Loans to associated entities
5.48%
2,743
-
-
2,743
Total
63,830
-
-
63,830
Financial liabilities
2024
Weighted average
effective interest
rate %
Within 1 year
$000
1 to 5 years
$000
Over 5 years
$000
Total
$000
Trade and other payables
n/a
33,843
-
-
33,843
Borrowings
6.25%
8,201
4,375
-
12,576
Lease liabilities
3.00%
914
2,117
-
3,031
Other liabilities
n/a
3,310
-
-
3,310
Total
46,268
6,492
-
52,760
2023
Weighted average
effective interest
rate %
Within 1 year
$000
1 to 5 years
$000
Over 5 years
$000
Total
$000
Trade and other payables
n/a
42,043
-
-
42,043
Borrowings
5.96%
8,189
-
-
8,189
Lease liabilities
3.00%
1,188
2,362
-
3,550
Other liabilities
n/a
2,674
4,836
-
7,510
Total
54,094
7,198
-
61,292
Fair value of financial instruments
Refer to Note 29 for details on the fair value of financial instruments.
Notes to the Financial Statements
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
78
37. EVENTS AFTER THE REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial years, except for the following:
On 29 August 2024, the Group declared a fully franked final dividend of 0.24 cents in relation to the financial year
ended 30 June 2024.
38. DIVIDENDS
a.
Ordinary shares
On 29 August 2024, the Group declared a fully franked final dividend of 0.24 cents in relation to the financial year
ended 30 June 2024. With a fully franked interim dividend of 0.5 cents previously declared on 27 February 2024,
this brings the full year dividend for the financial year ended 30 June 2024 to a total of 0.74 cents (FY23: 6.0
cents).
b.
Franking credits
2024
$000
2023
$000
Franking credits available for subsequent financial years based on a tax rate of 30%
(2023: 30%)
5,723
4,823
The balance of the franking accounts includes:
▪
franking credits that will arise from the payment of the amount of the provision for income tax;
▪
franking debits that will arise from the refund of the amount of the provision for income tax;
▪
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date;
and
▪
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting
date.
ASX Additional Information
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
79
Set out below is additional information as required by the ASX Limited Listing Rules and not disclosed elsewhere
in this report. This information is effective as at 26 August 2024.
Number of security holders and securities on issue
Quoted equity securities
Ashley Services has on issue 143,975,904 fully paid ordinary shares which are held by 1,199 shareholders.
Voting rights
Quoted equity securities
The voting rights attached to fully paid ordinary shares are that on a show of hands, every member present, in
person or proxy, has one vote and upon a poll, each share shall have one vote.
Distribution of security holders
Quoted equity securities
Ordinary fully paid ordinary shares
Holding
Number of shareholders
Number of shares
%
1 – 1,000
216
150,056
0.10
1,001 – 5,000
316
807,964
0.56
5,001 – 10,000
147
1,184,430
0.82
10,001 – 100,000
419
15,153,777
10.53
100,001 and over
101
126,679,677
87.99
Total
1,199
143,975,904
100.00
Unmarketable parcel of shares
The number of shareholders holding less than a marketable parcel of Fully Paid Ordinary shares is 340 with a
total number of shares held is 316,778.
Substantial Shareholders
The number of securities held by substantial shareholders and their associates are set out below:
Fully Paid Ordinary Shares
Name
Number
%
Ross Shrimpton
84,279,030
58.54%
Unquoted equity securities
There are no unquoted shares.
On-market buy-back
There is no current on-market buy-back.
ASX Additional Information
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
80
Largest shareholders
Fully paid ordinary shares
Details of the 20 largest shareholders of quoted securities by registered shareholding are:
Name
Number of shares
%
Mr Ross Shrimpton
80,279,030
55.76%
JP Morgan Nominees Australia Pty Limited
4,654,508
3.23%
BNP Paribas Nominees Pty Ltd
4,274,241
2.97%
Shrimpton Holdings Pty Limited
4,000,000
2.78%
Mr Marc Shrimpton
1,500,000
1.04%
Super Wide Pty Ltd
1,417,873
0.98%
Mr Andrew Douglas Shrimpton
1,115,000
0.77%
Dr Anthony Francis Chan
1,102,659
0.77%
Velkov Funds Management Pty Ltd
1,100,000
0.76%
Mr Peter John Stirling and Mrs Rosalind Verena Sterling
1,000,000
0.69%
Stirling Superannuation Pty Ltd
920,000
0.64%
Emerald Ruby Pty Ltd
867,830
0.60%
HBD Services Pty Ltd
783,817
0.54%
Bond Street Custodians Limited
750,000
0.52%
HSBC Custody Nominees (Australia) Limited
710,697
0.49%
BNP Paribas Nominees Pty Ltd
654,364
0.45%
Mr Brenton Fletcher
624,262
0.43%
HJN & HJN Superannuation Pty Ltd
609,418
0.42%
Mr Garry Anthony John Butler
604,243
0.42%
Finclear Services Pty Ltd
603,419
0.42%
Total
107,571,361
74.71%
Annual General Meeting
The annual general meeting of the Company will be held at the company’s offices at Level 10, 92 Pitt Street
Sydney NSW 2000 at 11.00am on Tuesday 26 November 2024. Shareholders who are unable to attend the
meeting are encouraged to complete and return their proxy form that will accompany the notice of meeting.
Corporate Directory
ASHLEY SERVICES GROUP ANNUAL REPORT 2024
81
Non-Executive Directors
Mr Ian Pratt (Chairman)
Executive Directors
Mr Ross Shrimpton – Managing Director
Mr Paul Brittain – Chief Financial Officer
Company Secretary
Mr Ron Hollands
Registered Office
Level 10
92 Pitt Street
Sydney NSW 2000
Australian Company Number
094 747 510
Australian Business Number
92 094 747 510
Auditors
HLB Mann Judd Assurance (NSW) Pty Ltd
Level 5
10 Shelley Street
Sydney NSW 2000
Telephone: + 61 2 9020 4000
Facsimile: + 61 2 9020 4190
Legal Adviser
Addisons Lawyers
Level 12
60 Carrington Street
Sydney NSW 2000
Telephone: + 61 2 8915 1000
Facsimile: + 61 2 8916 2000
Bankers
Westpac
Level 18
275 Kent Street
Sydney NSW 2000
Telephone: + 61 2 9155 7700
Facsimile: + 61 2 8253 4128
Website: www.westpac.com.au
Share Registry
Link Market Services Limited
Central Park, Level 4
152 St Georges Terrace
Perth WA 6000
Telephone: +61 1300 554 474
Facsimile: +61 2 9287 0303
Website: www.linkmarketservices.com.au
Website
www.ashleyservicesgroup.com.au
ASX Code
ASH