2020
Annual Report
Annual General
Meeting
Boom Logistics will hold
its 2020 Annual General
Meeting at 11.00am on Friday,
27 November 2020.
boomlogistics.com.au
01 About Boom
01 2020 Highlights
02 Chairman’s Report
04 Business Overview
ABN 28 095 466 961
42 Auditor’s Independence Declaration
43 Consolidated Statement of Comprehensive Income
44 Consolidated Statement of Financial Position
45 Consolidated Statement of Cash Flows
06 Managing Director’s Report
46 Consolidated Statement of Changes in Equity
14 Operating and Financial Review
47 Notes to the Consolidated Financial Statements
20 Our Health, Safety, Environment & Quality
79 Directors’ Declaration
22 Our People & Systems
80 Independent Audit Report
24 Board of Directors and
Key Management Team
27 Directors’ Report
84 ASX Additional Information
87 Company Directory
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At BOOM, we deliver safe lifting solutions,
with scale and precision, every time.
Managing risk and complexity with
confidence – that’s the promise we make
to our customers.
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Revenue $m
Trading EBITDA* $m
183.1
182.7
185.5
21.1
20.1
152.3
150.1
13.3
11.2
10.6
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2017
2018
2019
2020
2016
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2018
2019
2020
Operating Cash Flow* $m
Net Debt* $m
16.4
49.2
45.1
13.2
11.5
8.3
6.3
37.3
36.6
19.6
2016
2017
2018
2019
2020
2016
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2018
2019
2020
* non-IFRS financial measure, presented on a pre AASB16 like-for-like basis
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Boom Logistics Annual Report 2020
The company generated solid free cash
flows in FY20, increasing to $18.8 million
compared to $8.8 million in FY19 (on a
like for like, pre-AASB16 basis).
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The company had a disappointing net loss
after tax of $17.0 million for the year ended
30 June 2020 (FY20). The main reasons for the
negative result were fourfold:
● COVID-19 related delays to projects and
shutdown maintenance,
● One-off, $4.45 million franking deficit tax
expense and the decision to defer a tax
payment until FY21/22,
● $1.9 million impairment ahead of the
planned sale of smaller underutilised travel
tower assets, and
● $7.5 million loss on a Tasmanian wind
farm project due to delays, adverse
weather and reduced scope of work and
provision for amounts unresolved. We are
actively pursuing unresolved claims for
costs. Strengthened risk management
procedures and contract review processes
have been implemented.
In response to the economic slowdown, the
company has sought to improve management
of risk, reduce debt, strengthen cash flows
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Boom Logistics Annual Report 2020
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cranes in all sizes,
from 5 tonne up
to 750 tonne
and position the business to further diversify revenue
streams in the coming years.
The loss-making Cattle Hill project was completed in
March 2020. In light of this, we revised internal controls
for operational management, contract risk and pricing
decisions to help preserve margin and manage cost on
future projects.
During the period, the company purchased 11.4 million
shares via the on-market share buy-back, spending
$1.7 million in FY20. Leading on from the COVID-19 crisis,
Boom decided to protect its cash reserves. It deferred
the interim dividend until 2 October 2020 and the board
and a number of executives reduced their remuneration
for the fourth quarter of FY20. We continue to monitor
the impact of the pandemic.
The company has negotiated an interest free 24 month
payment plan with the Australian Taxation Office to
progressively repay a one-off $4.45 million tax expense
over the forthcoming period.
The company generated solid free cash flows in FY20,
increasing to $18.8 million compared to $8.8 million
in FY19 (on a like for like, pre-AASB16 basis). This has
enabled the company to reduce net debt to $19.6 million
from $36.6 million. At 30 June 2020, net tangible
assets per share were 27 cents, substantially above the
company’s current stock exchange valuation.
We are leveraging our presence on major mining sites
in central Queensland to secure work from major mine
operators, mining equipment and other subcontractors
on site and boost revenue in the state.
Our wind farm pipeline of construction and maintenance
opportunities is supported by successful projects, such
as the recent Coopers Gap wind farm and our learnings
from Cattle Hill.
In Western Australia we have had a significantly
improved performance following the appointment of an
experienced general manager to lead a new sales team
and re-open a depot in Western Australia’s north-west
to expand our revenues and opportunities in the state.
Travel towers are benefiting from a more streamlined
structure with management clear on its direction and
accountability. We have shut depots, are continuing to
sell smaller, older, less utilised travel towers and have
focus on key markets. The division is now leaner with
lower overheads and since the restructure has improved
performance and is well positioned to grow and improve
profitability while supporting its core customers in the
buoyant telecommunications and power sectors.
COVID-19 has delayed some projects, particularly in
civil engineering and wind farm construction. Our
readi business – the source of shut-down labour for
Boom – has been most affected with social distancing
requirements reducing the number of personnel allowed
on sites. The federal government’s response to the
economic consequences of the pandemic have reduced
the impact on our operations. Access to JobKeeper
support payments has helped us stay connected
to our readi workforce. We expect this business to
make a significant turnaround once the effects of the
pandemic subside.
Across each division of the business, we have laid the
foundations for Boom’s future growth underpinned by
low corporate debt and strong cash flows. Our strategy
to diversify operations and revenue streams, with a
greater focus on maintenance work, will improve the
company’s profitability over the coming years.
Finally, I thank my fellow directors for their guidance
during a difficult year. I would also like to acknowledge
the efforts of our team who continue to deliver a high
level of service, despite the challenges the pandemic has
brought to us.
We look forward to Boom capitalising on its considerable
expertise and strong reputation in the markets we serve
to improving returns to shareholders.
Maxwell J Findlay
Chairman
27 August 2020
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Boom Logistics Annual Report 2020
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Key Operations
● Mining maintenance services
● Engineered specialised lifts
● Shutdown, industrial and
programmed maintenance
services
● Major clients are in the
mining sector
Key Operations
● Wind farm construction projects
● Bridge installations, rail and
infrastructure construction
● Wind farm maintenance
programs
Key Operations
● Major power grid interconnector
infrastructure project works
● Telecommunications – 5G
installations and roll-out
● Wind farm transmission
‘string-line’ works to
sub-stations
● High voltage transmission
line maintenance
Key Operations
● Mining shutdown and
maintenance labour
● Oil and Gas maintenance
service contracts
● Construction, heavy industry
labour and specialised skills in
wind farm sector
Boom Logistics Annual Report 2020
Achievements
● Revenue of $94.4 million in FY20
● Central Queensland revenue
increased 8% on additional work
from BMA, Coronado, Glencore and
Anglo American mines
● Renewed the Glencore contract,
which includes Bulga in the New
South Wales’ Hunter Valley and Hail
Creek in Queensland
● New maintenance contract won in
Western Australia
Achievements
● Growth in wind farm, bridge
installation, infrastructure and
construction projects
● Revenue up 8%, contributing
$38.0 million
● Queensland’s Coopers Gap wind
farm progressed with additional
work through to May 2020,
generating an additional $6 million
of revenue
Outlook
In FY21 we are re-establishing in the Moranbah
region, where we are already seeing interest
from miners. We are also expanding our service
offering to our major customer at Olympic Dam in
South Australia, where another major shutdown
is planned.
We now expect operations in our new Port Hedland
depot in north west Western Australia to start in
the first quarter of FY21.
Outlook
Projects cranes are targeting large civil infrastructure
work around the capital cities, such as rail works and
level crossing removals in Melbourne, as well as large
bridge and tunnel boring projects.
The larger cranes are increasingly used on national wind
farm maintenance work, a high growth area. Work has
commenced on a wind farm in Victoria on an equipment
hire and labour rate model for the first half.
A contract for work on the Parramatta light rail
infrastructure project is expected to commence in the
first quarter. The recently signed contract to support
work on the Snowy 2.0 project will also boost revenues.
Achievements
● Margins increased following a
restructure in FY19 to focus on larger
travel tower assets
● Revenue was 8% higher to
$26.8 million
● The restructure of the business
Outlook
Solid business volumes in the telecommunications
market are forecast. There is also potential for more
high voltage line stringing and interconnector work
over the next five years, largely due to the increase
in renewable energy projects and upgrades to the
electricity grid.
delivered cost savings and improved
performance in FY20
New high voltage transmission line works in the
Pilbara region of WA commenced in August 2020.
Achievements
● Revenue from Boom and readi
contracts was $26.3 million
● Recruited a new general manager
to drive growth
● readi’s customers include Fulton
Hogan, UGL and Esso
Outlook
readi is making progress with external customer
opportunities in the mining, construction and
infrastructure sectors.
While COVID-19 was a challenge in the second half
of FY20, we believe this business will strengthen
after the pandemic. readi has stayed connected
with its workforce and this will allow the business
to ramp up services when the crisis subsides.
Revenue $m
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95.6
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2020
Revenue $m
38.0
35.1
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Revenue $m
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2019
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Revenue $m
27.1
24.1
26.3
2018
2019
2020
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Boom Logistics Annual Report 2020 I
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We progressed on a number of strategic goals
as we continue to diversify and target new
recurring revenue streams and position the
company to grow profitably in the future.
FY20 was a challenging year for Boom Logistics,
with COVID-19 affecting several parts of our
business and one-off wind farm project costs
impacting trading earnings before interest,
tax, depreciation and amoritisation (EBITDA)
of $13.3 million1, down from $20.1 million
in the previous year. Revenue increased to
$185.5 million, up 1.5% from $182.7 million,
reflecting the group’s strategy to broaden its
revenue base.
1 Trading EBITDA is a non-IFRS financial measure,
presented on a pre-AASB16 like-for-like basis.
We progressed on a number of strategic goals
as we continue to diversify and target new
recurring revenue streams and position the
company to grow profitably in the future.
At the heart of everything we do is the safety
of our customers and employees throughout
our operations. We undertook a safety “reset”
last year to reinforce the safety priority and
behaviours, which will drive the company
towards our zero-harm goal.
Our Total Recordable Injury Frequency Rate
decreased to 8.0 from 8.6 the previous year.
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Boom Logistics Annual Report 2020
We undertook a safety re-set to increase the focus on
safety interactions. The number of safety observations
improved by 65% year-on-year. Further details of our
HSEQ procedures, which are embedded in our culture,
are on pages 20-21 of this report.
Strategy Focus
We continued to diversify our revenue base
into infrastructure, wind energy, utilities,
telecommunications and labour hire. The combined
contribution of these sectors represented 53% of total
revenue, with mining services contributing the balance
47% of total revenue. Diversification is supported by
longer term mining services contracts together with the
growth opportunity available from short term projects.
The adoption of a flexible asset rental model to fund
growth assets has helped capital management, keeping
capital expenditure low, while protecting the balance
sheet. It has allowed progressive reduction of debt
and ensures rental commitments are matched against
project or contract opportunities. The business also
continued to benefit from equipment sales in FY20, with
$4.6 million in obsolete assets sold.
We are confident our prudent capital management
strategy, together with our focus on diversification,
recurring revenue streams and targeted growth markets,
will lead to improved shareholder returns.
Divisions
Crane Services
Our lifting solutions cover a diverse range of industries
and activities, with mining maintenance and shutdowns
the main sectors we service.
Crane Services’ revenue of $94.4 million was similar
to last year, with Central Queensland providing a solid
foundation. We are leveraging our reputation in the
region to secure additional work from major mine
operators and mining services contractors operating
at the mine sites of our major clients, including BMA,
Coronado, Glencore and Anglo – improving revenues by
8% on last year. In FY21 we are re-establishing in the
Moranbah region, where we are already seeing interest
from miners.
In New South Wales, we successfully renewed the
Glencore contract which includes Bulga in the Hunter
Valley and Hail Creek in Queensland. This was followed in
the second half with an agreement to supply services to
another major coal miner in the Hunter Valley.
In South Australia, we are expanding our service offering
to our major customer at Olympic Dam where another
major shutdown is being planned. This has involved
moving a new fleet of assets to our on-site facility and
releasing the existing assets to service other regions.
In Western Australia, we restructured our operations in
the first half, adding a new general manager and sales
team. In the second half of the year, the team increased
revenue by winning a new maintenance contract and
project work in the south west, improving revenues by
6% on last year.
Due to COVID-19, the establishment of a new
Port Hedland depot to cover the north-west was
delayed, but we now expect operations there to start in
the first quarter of FY21.
readi
Our readi labour hire business focuses primarily on
supplying skilled labour for mining shutdowns, oil
and gas maintenance, and the construction and
infrastructure sectors. Direct labour hire revenue from
Boom and readi contracts was $26.3 million in FY20.
COVID-19 was a challenge in the second half of the year,
as social distancing requirements impacted our industrial
maintenance and oil and gas customers. The labour
market tightened, as mine shutdowns were reduced
and projects were delayed due to the coronavirus. readi
is an opportunity to diversify our revenue base further
and we believe this business will return in strength after
the pandemic.
Travel Towers
Our Travel Towers business operates primarily in the
power transmission, telecommunications and wind
energy sectors. The division’s margins increased during
the year following its restructure at the end of FY19
and its focus on larger travel tower assets. Revenue, at
$26.8 million, was 8% higher than the previous year.
The rationalisation of the travel tower business delivered
significant cost savings in FY20 and asset utilisation
increased from the rebalanced fleet. Boom’s results
include an impairment charge of $1.9 million against
35 smaller and obsolete travel towers that will be
auctioned in the first half of FY21. Further rationalisation
of the travel towers business occurred with the
closure of the underperforming Newcastle depot from
1 July 2020.
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travel towers,
from 12 metres
up to 70 metres
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Boom Logistics Annual Report 2020 Boom’s project footprint in Western
Australia was consolidated last year with
works supporting the construction of power
transmission lines north of Perth. This has
provided the opportunity for Boom to showcase
its expertise on a larger project.
Y Western Australia: Boom powers on in the North West
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The company has now been contracted to
provide the travel towers for the completion
of a 220kv transmission line running between
mines in the Pilbara region of Western Australia.
Our service includes the supply of six Bronto
travel towers and specialised labour. This major
infrastructure project is anticipated to run for up
to 12 months.
These projects in the North West illustrate our
progression into high demand regions across
Australia where we are increasing our profile
and winning project work. We have a proven
track record of delivering critical infrastructure
projects in remote regions and the supply of
specialised resources and assets to the utilities
and resources sectors.
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Growth is expected to continue in the
telecommunications and power utility
sectors. Solid business volumes in the
telecommunications market are forecast to
continue, with potential for more high voltage
line stringing and interconnector work over the
next five years, largely due to the increase in
renewable energy projects and upgrades to the
electricity grid.
Boom Projects
Boom’s participation in wind farm, bridge
installation, infrastructure and construction
projects continues to grow. These are
high-growth markets, with revenue from the
sectors contributing $38.0 million, an 8%
increase on FY19.
Our Queensland wind farm project at Coopers
Gap progressed well throughout the year and
we were awarded additional work through
to May 2020. This generated an additional
$6 million of revenue for the financial year.
Unfortunately, we experienced material changes,
including major delays, to the Cattle Hill wind
farm contract in Tasmania. The delays were
caused by extreme weather conditions which
resulted in lower productivity and this led to
project cost increases and losses. We are actively
pursuing unresolved claims for costs.
The experience with Cattle Hill has changed
our approach to contracting and pricing future
construction projects. We have taken steps
to add further due diligence to our contract
review process. We have solid wind farm project
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Boom Logistics Annual Report 2020
bookings through the first half of FY21, which are
based on an equipment hire and labour rate model for
services performed.
We are targeting large civil infrastructure work around
the capital cities, such as rail works and level crossing
removals in Melbourne, as well as large bridge and
tunnel boring projects. The larger cranes in our fleet also
assist in national wind farm maintenance work, which is
increasing across the sector.
This business unit will benefit from a contract for
work on the Parramatta light rail infrastructure project
expected to commence in the first quarter and the
recently signed contract to support work on the Snowy
2.0 project, which commenced in August 2020.
COVID-19 Response
We responded rapidly to the emerging COVID-19
pandemic in line with advice from the Government
and World Health Organisation. This included
working closely with customers to ensure all health
requirements were met, while we developed an action
plan to keep our people safe and manage impacts on
our business.
We were early to implement travel restrictions in March
and introduced stricter cleaning processes. This required
sourcing cleaning and sanitation products, establishing
social distancing protocols and introducing thermal
scanning devices to conduct temperature checks
at depots.
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Boom Logistics Annual Report 2020 E
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Y Infrastructure projects
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Boom is working on a number of important
infrastructure projects across Australia.
Projects over the last year have included
work on the Albion Bypass project south of
Wollongong in New South Wales and rail
level crossing removals in the Melbourne
metropolitan area.
Boom is a market leader in complex
engineered lifts with a reputation for
working safely to tight timelines, providing
lift planning expertise and specialised lifting
equipment. Our Liebherr LTM-1750 hydraulic
cranes, with 750 tonne lifting capacity, are
perfectly suited to infrastructure projects
which regularly involve a long lift radius and
heavy loads.
In early 2020, Boom crews worked
on three level crossing removals at
Pakenham, Lyndhurst and Cheltenham in
Melbourne, Victoria.
A key advantage of Boom’s choice of the
LTM-1750 for these projects is its broad
capability across configurations which
enables placement of 60 tonne girders with
the crane positioned outside the rail line.
This means the crane can be set up and
ready to lift before the rail line is closed.
The company’s 750 tonne mobile hydraulic
cranes are servicing customers across
Australia in mining and wind farms as well
as infrastructure projects.
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The company made a number of decisions
to preserve cash, introducing additional cost
controls to minimise expenditure. Major
suppliers were approached to extend credit
terms and employees were directed to take
leave during the last quarter.
Outlook
While challenges lie ahead, Boom is in a stable
position for FY21, with strong cash flows,
conservative net debt and a solid balance sheet.
We are well placed to take advantage of new
revenue opportunities, such as expanding
services in mining maintenance and entering
new growth regions such as Western Australia’s
north-west iron ore market.
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The infrastructure and construction sectors look
positive with solid opportunities in the pipeline
across Australia. There is considerable potential
for travel towers to assist with increasing power
infrastructure and telecommunications work,
and recurring revenue streams from the wind
farm sector.
The impact of COVID-19 remains a challenge
in some areas. It has disrupted our operations
with border closures affecting travel between
regions, temporary delays in infrastructure, wind
farm projects and mining maintenance work.
There is a degree of uncertainty surrounding
the pandemic and we are actively monitoring
the situation.
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Boom Logistics Annual Report 2020
I would like to take this opportunity to thank all our
customers, suppliers, debt providers and shareholders
who have supported us through this past challenging
financial year.
In conclusion, I would also like to thank and
acknowledge the efforts of our people, who have shown
dedication and remained focused on safety in the
face of the pandemic. We have loyal and committed
employees who are key to Boom’s success.
Tony Spassopoulos
Managing Director
27 August 2020
The Boom values are an uncompromising foundation of our
organisation, guiding our decisions, our behaviours and the way
we do business to maximise returns for our shareholders.
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SAFETY ALWAYSContinue our journey towards zero harmRESPECTFor each other and all stakeholdersINNOVATIONLooking for new ways to do thingsTEAM WORKWorking together to achieve our bestDEVELOPING OUR PEOPLECommittment to our futureCUSTOMER FOCUSEverything begins with the customerBoom Logistics Annual Report 2020
EQUIPMENT
● A comprehensive and diverse fleet aligned to customer requirements in mining
and resources, wind, energy, utilities, infrastructure, industrial maintenance and
telecommunications.
customers, build shareholder value and ensure safety excellence. We
continue to build our leading reputation in the market as a trusted lifting,
construction and maintenance solutions partner. Boom’s customer
value proposition is based on total lifting solutions and specialised
labour services.
N As a large-scale lifting specialist, we seek to deliver innovation for our
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existing and new customers. It currently supplies support to key Boom contracts
and continues to focus on expanding its offering of multiple trades and skills to
external customers.
OPERATIONAL CAPABILITY
● Highly experienced and trained workforce of supervisors, crane operators, riggers
● Operational resources and infrastructure to support customers in our core markets.
● Well maintained fleet with maintenance records and Key Performance Indicator
● Planned and configured services involving operators, cranes, transport, travel
● The readi labour hire business delivers an integrated labour solution to both
towers and other assets to meet complex customer requirements.
and travel tower operators.
reporting for customers.
ENGINEERING EXPERTISE
● Pre-lift customer site survey and analysis.
● Detailed engineering lift studies to drive safety, efficiency and
cost effectiveness.
● Project planning and project management.
● Wind farm construction including lifting, mechanical and electrical installation
and maintenance.
SAFETY & QUALITY SYSTEMS
● Cultural alignment with our customer base, with an uncompromising
safety focus.
● AS/NZS ISO 4801:2001 certification and transition to AS/NZS ISO 9001:2015
achieved.
● Investment to drive continuous improvement in our safety systems, processes
and organisation.
The Group’s distinctive and comprehensive value proposition provides a
solid platform for future growth to maximise returns to shareholders.
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Boom Logistics Annual Report 2020
Powering ahead with wind
farm maintenance
Boom is increasingly engaged to perform wind
farm maintenance works in addition to our
engineering and construction activities in the
wind renewables sector. Over the past 12 months
Boom has performed maintenance work across a
number of wind farms.
The renewables team has been collaborating
with our wind farm customers to provide
engineering advice, perform critical maintenance
and major component change outs on wind farms
across Australia.
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Successful execution of wind farm maintenance
relies on a partnership approach, coupled with a
strong focus on safety, engineering compliance,
fit for purpose cranes and highly skilled project
teams. Boom is a trusted supplier to many of
the world’s leading wind turbine manufacturers.
Often under challenging weather conditions and
at heights above 100 metres, our maintenance
activities include removal and replacement of
gear boxes, generators and blades. Boom also
provides a range of travel towers and resources
to support tower maintenance.
In the main pictured lift, Boom cranes and
personnel removed a nacelle lid and completed
a gear box exchange at a height of 110 metres,
with a total under hook weight of 32.6 tonnes.
We continue to expand and diversify our
service model to deliver scheduled wind farm
maintenance programs.
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Boom Logistics Annual Report 2020
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Overview
The Group reported a net loss after tax of $17.0 million for the year ended 30 June 2020 (FY19:
net loss after tax of $5.3 million). Operating cash flow was strong in the year, delivering cash
flow from operations of $28.8 million. The results for the year were disappointing with strong
results in some segments overshadowed by the continued financial impact of a loss-making wind
farm construction project in Tasmania, which completed in March 2020. Since the outbreak of
COVID-19, deferrals in mining maintenance and shutdown programs and delays to infrastructure
and wind farm projects also impacted results. The Group was nevertheless able to generate
strong cash flows that enabled a material reduction in net debt over the year. Boom retained its
focus on capital management with efficient equipment sourcing to match commitments with
contracted businesses.
Income Statement
The FY20 year saw the adoption of the AASB16: Leases accounting standard that has had a
material impact on the Group’s reported numbers. For ease of comparison to the prior year the
statutory reported numbers have been reconciled to a directly comparable (pre AASB16) number to
the prior year (which is not restated for the impact of AASB16).
30-Jun-20
$’m
30-Jun-20
$’m
30-Jun-19
$’m
Statutory
AASB16 ADJ
Pre AASB16
Like-for-Like
185.5
(156.1)
29.4
(31.9)
(2.5)
(4.4)
(6.9)
0.0
(4.1)
0.4
(1.9)
(12.5)
(17.0)
(8.1)
23.8
0.7
(16.8)
(16.1)
15.2
(0.9)
1.4
0.5
0.0
(0.1)
0.0
0.1
0.5
0.5
(0.9)
(16.1)
186.2
(172.9)
13.3
(16.7)
(3.4)
(3.0)
(6.4)
0.0
(4.2)
0.4
(1.8)
(12.0)
(16.5)
(9.0)
7.7
182.7
(162.6)
20.1
(17.3)
2.8
(3.7)
(0.9)
1.6
(2.0)
(2.0)
(2.0)
(5.3)
(5.3)
(1.6)
15.7
Revenue
Operating Costs
Trading EBITDA
Depreciation
Trading EBIT
Net Borrowing Costs
Trading Net Loss Before Tax
Non-Trading Income
Non-Trading Expenses
Profit/(Loss) on Sale of Assets
Impairment to Property, Plant and
Equipment
Net Loss Before Tax
Net Loss After Tax
Statutory EBIT
Statutory EBITDA
14
Boom Logistics Annual Report 2020
Financial Performance
Revenue
Reported revenue of $185.5 million (FY19: $182.7 million)
was marginally up on the prior year with Boom
delivering strong revenue growth in the wind, energy
and utilities sector from wind farm construction and
maintenance projects and a growing portfolio of work
in power projects. The mining and resources sector
remained steady. The telecommunications sector was
affected by bush fires. Industrial maintenance was
impacted later in the year by the COVID-19 pandemic.
Revenue in the infrastructure and construction segment
decreased as a result of assets being deployed to
wind, energy and utility projects during the first half
of the year with project delays then being experienced
throughout the last quarter.
Earnings
Statutory earnings before interest expense, tax,
depreciation and amortisation (EBITDA) was
$23.8 million (FY20 on a pre AASB16 like for like basis:
$7.7 million; FY19: $15.7 million). Statutory earnings
before interest expense and tax (EBIT) was a loss of
$8.1 million (FY20 on a pre AASB16, like for like basis:
loss of $9.0 million ;FY19: loss of $1.6 million).
In terms of trading EBIT the Group reported a trading
EBIT loss of $2.5 million for FY20 (FY20 trading EBIT
loss of $3.4 million on a pre AASB16, like for like basis)
compared with trading EBIT of $2.8 million in the
prior year.
Trading EBIT is before recognising the following non-
trading expenses:
● Non-trading expenses of $4.1 million comprising:
● $2.7 million relating to an onerous wind
farm construction project. The contract has
completed with post contract negotiations
now occurring to resolve outstanding claims
in dispute.
● $0.8 million of redundancy costs in relation
to a reduction in support roles, largely in
the corporate head office in addition to
redundancies in the underperforming NSW
business and the now closed Newcastle travel
tower depot.
● $0.6 million relating to insurance excess
payable following damage incurred
to equipment.
● Impairment expense of $1.9 million comprising:
● $1.8 million to the carrying value of
35 underutilised small capacity travel towers
and 25 pieces of access equipment that have
been identified as surplus to requirements and
available for immediate sale.
● $0.1 million relating to the onerous lease on the
property lease for the now closed Newcastle travel
tower depot.
● Profit on sale of $0.4 million relating to the sale of a
number of redundant crane, transport and ancillary
assets during the year.
Taxation
A tax expense of $4.45 million was incurred in FY20 (FY19:
$nil) relating to a historic franking deficit tax liability that
was allowed to crystallise at 30 June 2020. The company
has negotiated an interest free repayment plan with the
ATO that will allow the liability to be settled progressively
over 24 monthly instalments, commencing in August 2020.
The amount of franking deficit tax to be paid is not a
penalty and may be used against any future tax liability (in
addition to the income tax losses carried by the company).
FY20 Review of Operations
A number of businesses within the Group had solid results
for the year:
– Central Queensland – the customer base in the region
is predominantly metallurgical coal and demand for
services was strong. Boom continued to grow revenue
and profit. The Group renewed a 3 year contract
with a major customer in the region and extended
its customer base through expanding operations to
new mines and working with contractors on site.
Outlook remains positive in the area and the Group will
continue to grow operations by expanding its customer
footprint into the Moranbah region.
– Western Australia – the first half of FY20 was slow
but significant momentum was gained in the second
half of the year following a change of local leadership
and a reinvigoration of the business development
resource. Profitable project work was won across the
south west and a new maintenance contract was
secured. The new contract will add ‘base recurring
revenue’ to the existing major contracts in the south
west of the state.
14
Depots across
Australia
15
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The COVID-19 restrictions did however
cause the Group to delay its planned
expansion into the north-west as the
movement of workers and equipment
became constrained. The Group is however
well advanced in its preparations and will
commence operation in and around Port
Hedland in the first quarter of FY21.
– Travel Towers – the restructured national
travel towers business had a much
improved year. The business benefitted
from its reduced cost base and increased
focus on business development.
Significant new work was won during
the year in the electricity power sector.
Demand grew for assets to work on
major grid upgrade projects and work
connecting new renewable energy sites
back to substations. This new work was
an important supplement to the on-going
work in the telecommunications sector
that remains a focus for the business as
the 5G network is rolled out.
Continued improvement from the business
is expected in FY21 in the power and
telecom sectors using the larger capacity
assets. The fleet will be further divested
of smaller assets to rationalise costs
and allow the business to focus on its
core markets. As such the Newcastle
depot has closed (following the closure
of the Newcastle crane depot in FY19). In
addition 35 underutilised smaller assets
across the business have been identified
for sale. A $1.8 million impairment charge
was recognised against these assets at
30 June 2020 as they were moved into
assets held for sale. The sale of these
assets will reduce on-going running costs
and further improve the return on capital
generated by the business.
– Coopers Gap wind farm construction
project – work was successfully completed
on the 123 turbine Coopers Gap wind farm.
Boom successfully completed the main
installation of 82 of the turbines and
completed the electrical and mechanical
scope on 62 of the towers.
Net debt down to
$19.6m
16
Unfortunately these results were offset by
disappointing outcomes elsewhere:
– Cattle Hill wind farm construction project –
in contrast to other wind farm construction
projects completed, this project located
in remote Tasmania was beset with
issues. Inclement weather and site delays,
difficulty maintaining skilled crews and
construction challenges, all impacted the
project. A reduction in project scope and
a requirement for additional night crews
to complete the project resulted in a
significant EBIT loss of circa $7.5 million in
the year.
This project had a significant negative
financial impact on the year. The loss
making Cattle Hill wind farm project
led the company to strengthen its risk
management procedures and contract
review processes.
The outlook for the wind farm business
remains strong. Boom is contracted to a
wind farm construction project in the first
half of FY21 working on a schedule of rates
rather than a fixed sum and the project
pipeline remains solid. The Group is also
increasingly turning its focus to the wind
farm maintenance market and increasing
the number of services it provides in this
growing sector.
– New South Wales – the business in the
Hunter Valley was slow to return after a
period of industrial disruption in FY19. The
customer base was slower to come back
than expected and some clients were lost
following the closure of the unprofitable
Newcastle crane business in FY19. The
Group did begin work for a major new
customer in the Hunter Valley during the
second half of FY20. The thermal coal
market however remains very competitive
with tight margins.
– Project delays – the second half of the
year was affected by a number of project
delays that impacted the reported results
for FY20. A major wind farm construction
project that was expected to commence
around March 2020 was delayed. The
infrastructure project that was scheduled
for the Group’s 750t crawler crane was also
delayed until the 2021 calendar year.
Whilst the timing of certain projects
remains uncertain the outlook for FY21 has
strengthened. The Group has secured work
on the Snowy 2.0 project commencing
Boom Logistics Annual Report 2020
mid August and the pipeline of work in the
infrastructure sector is strengthening.
Cash Flow
Cash flow was strong in the year delivering cash flow
from operations of $28.8 million. FY20 cash from
operations on a like for like basis (pre AASB16) was
$16.4 million (FY19: $13.2 million). This is a very strong
cash flow result reflecting sound working capital
management and a positive response to the challenges
posed by the economic uncertainty in the latter part
of FY20.
The Group responded proactively and quickly to preserve
cash as the uncertainty created by the COVID-19
situation emerged. The executive and the Board reduced
their remuneration for the fourth quarter of FY20, the
Group renegotiated extended payment terms with
major suppliers, deferred rental payments on some
depot leases and crane assets and deferred eligible
payroll tax payments. Consequently there is circa
$1.6 million of cash deferrals in the FY20 cash flow that
will need to be paid through FY21.
In addition the Group elected to crystallise the franking
deficit liability by not prepaying a tax instalment of
$4.45 million by 30 June 2020 as it has historically been
required to do. Capital expenditure remained restrained
during the year with investment in new crane assets
being made via the flexible rental model. Capital
expenditure of $2.2 million was limited to routine ten
year inspections of equipment and sundry support
assets. Proceeds on the sale of equipment were realised
from the sale of a number of obsolete older crane and
transport assets realising proceeds of $4.6 million at
a profit on sale of $0.4 million. The Group also expects
to realise circa $3 million in the first half of FY21 from
the disposal of assets identified as held for sale at
30 June 2020.
The resulting free cash flow of $18.8 million on a like
for like basis (pre AASB16) compared favourably to free
cash of $8.8 million generated in FY19.
Surplus cash generated was primarily applied to debt
reduction in the period.
Capital Management
The Group adopted a prudent approach to
capital management given the uncertain
economic environment.
$28.8m
Cashflow from
operations
With the buy back program
completed, at the half year, the
Board resolved to pay a 0.5 cent per
share dividend to shareholders on
the register at 31 March 2020. With
the COVID-19 situation developing
the Board subsequently made the
decision to defer the payment date
of the dividend from 21 April 2020 to 2 October 2020. The
decision was considered prudent to preserve cash in what
was an unprecedented and fast developing situation.
The focus on the second half of the year was cash
preservation and debt reduction. The Group’s net debt
position has been successfully reduced to $19.6 million on
a like for like basis (FY19: $36.6 million) and Gearing (net
debt/ equity) has reduced to 17% (FY19: 27%). Allowing for
the additional lease liabilities recognised in accordance with
AASB 16, the Group’s balance sheet gearing ratio was 34%.
Given the on-going COVID-19 situation the Group will
defer any decision with regard to any capital management
initiative until later in the year when the economic
outlook is clearer. The Group remains focussed on tight
capital management and placing the Group in the best
possible position for growth as the economy recovers and
confidence returns.
Balance Sheet
Net assets at 30 June 2020 were $115.3 million down from
$133.9 million at 30 June 2019.
Return on capital employed (trading EBIT/ capital
employed) was negative 1.4% compared with 1.5% return in
the prior year. The Group expects a significant improvement
in returns in FY21 as a result of improving profitability
following completion of the loss making wind farm
contract in FY20, further rationalisation of obsolete smaller
travel towers and the continued use of the Group’s asset
rental model.
The use of the asset rental model will continue to reduce
the requirement for capital expenditure, protect free cash
flow and enable the Group to retain a conservatively geared
balance sheet. This will enable the Group to be in a position
to capitalise on profitable growth opportunities as they
arise in FY21.
Operating Environment
The operating environment was impacted by COVID-19
across all the Group’s key industry sectors.
In the first half of the year the Group purchased
11.4 million shares for a consideration of $1.7 million
under the on-market share buy back program. In total
47.1 million shares were acquired and cancelled over the
course of FY19 and FY20, comprising a total of 10% of
the share capital of the company.
Mining and Resources
Revenue in mining and resources was marginally down
by $0.8 million on the prior year. The results from the
sector were mixed. Strong growth was experienced from
metallurgical coal customers in Queensland. Increased
17
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volumes were also realised from work
performed for other contractors on customer
sites which improved returns from assets. The
continued growth of the Queensland business
was pleasing with further opportunities in the
Moranbah market expected for FY21.
The Group is contracted to a wind farm
construction project in the first half of
FY21 working on a schedule of rates and has a
number of opportunities for the second half.
Growth in wind farm maintenance work will
also be a focus.
The growth in Queensland was offset by
a reduction in demand from thermal coal
customers in the Hunter Valley in NSW. This
remains a challenging market with high labour
costs and tight margins and accounts for circa
8% of Boom revenues. Work with a major
new customer in the region commenced in the
second half of FY20.
Revenue from Boom’s long term contract at
Olympic Dam in South Australia reduced in
the second half of the year as border closures
and restrictions on FIFO workers impacted
Boom’s operations at the site. Volumes are
expected to return to normal levels as COVID-19
restrictions ease.
Revenue from the Group’s major maintenance
contracts in the south west of WA were
also impacted by COVID-19 restrictions with
shutdown programs decreasing in size and cost
cutting being undertaken by customers. These
decreases were offset by the success in winning
a new customer maintenance contract to build
scale to the operation.
FY20 results were impacted by the delay to the
Group’s planned expansion back into the north-
west which was delayed due to COVID-19 travel
restrictions. This is now expected to occur in
FY21 as the Group returns to the important iron
ore market.
The Group continued its success in tenders in
the sector by renewing the major Queensland
and NSW Glencore contract for a further
three years, commenced work at a major new
customer in Hunter Valley and won a new
maintenance contract in WA.
Wind, Energy and Utilities
Significant revenue growth of $14.2 million was
experienced in this sector in FY20. Growth in
this sector is a key part of diversifying group
revenue. Key sources of revenue growth were:
● Completion of two major wind farm
construction projects;
● Growing revenue base from the increasing
wind farm maintenance market;
● Growing revenue from electricity grid
upgrade projects and high voltage line
stringing projects – principally using the
Group’s travel tower assets.
The travel tower division has worked hard to
diversify its revenue base and is increasingly
winning work on electricity power projects.
The Group will have a number of large assets
deployed to the north-west throughout
FY21 working on a major power line project in
the region.
Infrastructure and Construction
Revenue in this sector was down $6.5 million
being impacted by COVID-19 related delays in
the fourth quarter and a greater utilisation of
the assets on wind farm work in the first half
of the year. The NSW infrastructure market
was subdued in the second half of the year and
several major projects were delayed. This was
partially offset by work commencing in the
Melbourne market which will remain a focus
in FY21 with level crossing removals and civil
infrastructure projects.
The sector is improving with the Snowy 2.0
project contracted for the first half of the year
commencing August 2020 and additional
works on NSW and Victorian infrastructure
projects targeted. The speed of recovery in this
segment is however somewhat dependent on
the COVID-19 outlook and resulting confidence
in supply chains and project commencement
dates being confirmed.
Industrial Maintenance
Revenue in this sector was down $2.7 million
partly due to the non-repeat of a major
shutdown in the first half of the prior year by
a customer in the Latrobe Valley and partly
due to a general slow down in the sector
over the second half of the year. The Group’s
revenue from the Esso offshore contract was
particularly decreased as social distancing
requirements reduced the labour required to
service the contract throughout the second half.
Telecommunications
Revenue in this sector decreased by
$1.3 million. The telecommunication market is
serviced mainly by the travel tower business
and is an important revenue base for the
business. Activity has remained solid outside of
this time with 5G upgrades continuing across
the network.
18
Boom Logistics Annual Report 2020
Large assets will be deployed to
the north-west of WA in FY21
to work on a major power line
project in the region
Boom’s national presence is a key advantage in this market
allowing customers to deal with one equipment supplier
nationally as the 5G and network upgrades continue.
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Our HSEQ Goals
Boom’s three year HSEQ strategic plan sets out the following goals for the company:
● To exceed client and other stakeholders’ HSEQ expectations by consistently
providing benchmarked high quality and incident free services.
● To establish a positive and proactive safety culture with well-trained and competent
people who demonstrate Boom’s values and exceptional safety leadership.
● To continue to develop and use excellent HSEQ processes and systems.
● To uphold best practice environmental standards.
Highlights
● Boom reported a Total Recordable Injury Frequency Rate (TRIFR) of 8.0 at the end
of FY20.
● Boom personnel completed a Certificate IV Leadership and Management and
Training course from a range of positions and vocations across the organisation.
● The company completed a National Safety Reset for all staff, including a refresher
on Boom’s Lifesaving Rules and a review of all significant incidents within the
business and the industry at large.
● Following a safety re-set, there was a 65% increase in the Safe Act Observation
Frequency Rate (SAOFR) performance to 6,450 from 3,888 in the prior year.
● The company maintained safety standard certifications for AS/NZS 4801:2001,
OHSAS 18001:2007 and ASNZS ISO 9001:2015. Boom is transitioning to the new
international safety standard ISO 45001.
● Compliance with environmental management obligations continues.
Total Recordable Injury
Frequency Rate (TRIFR)
Safe Act Observation
Frequency Rate (SAOFR)
6,450
4,525
3,888
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Safety Leadership Structure
The company takes a four-tiered approach to safety leadership:
Health, Safety, Environment & Quality (HSEQ) Committee
The HSEQ Committee, a sub-committee of the Board, meets quarterly and considers all
aspects of Boom’s safety environment. A summary of the committee’s responsibilities is set
out in the Corporate Governance Statement.
20
2018201920209.08.68.0Boom Logistics Annual Report 2020
The focus of the three-year HSEQ Strategic Plans
(2018-2020) is on leadership, assurance and employee
wellbeing. The “One BOOM” HSEQ Management System
continues to be developed and enhanced.
The HSEQ Strategic Plan actions include:
● System improvements in the areas of lifting
operations, verification of competency, training,
assurance, inductions and transport.
● A cultural improvement and leadership program
consistent with Boom’s belief that excellent
leadership improves all aspects of our business
including HSEQ performance.
● A wellbeing program aimed at improving and
maintaining the health of employees.
● Review of the Boom approach to sustainability
and community.
● Review of the existing maintenance system
documentation.
● Improved use of the hazard module in the myosh
incident management software.
Environment
Boom continues to meet its legal and community
obligations in environmental management. We comply with
the National Greenhouse and Energy Reporting Act 2007.
● Boom’s environmental impact is managed through
procedures mostly directed at waste management.
Disposal of waste oil, batteries and tyres is undertaken
by licensed disposal agents.
● Boom has procedures and equipment to manage runoff
and spills. Onsite work is conducted in accordance with
client procedures and regulations.
● Energy usage minimisation initiatives are in place.
● The current three-year HSEQ Strategic Plan includes
a review to ensure Boom meets the expectations of
ISO14001, but there is currently no plan to be certified
to this standard.
Quality
The Company has continued Certification to AS/NZS ISO
9001:2015.
Safety Leadership Team (SLT)
The Safety Leadership Team is chaired by Boom’s Chief
Executive Officer and includes the General Managers
from each business unit, senior management and the
HSEQ leadership team.
The SLT prioritises and monitors the safety
environment and safety improvement activities. The
SLT is supported by the Safety Management Team of
safety professionals who operate nationally.
Personal Commitment
All operational managers commit to a range of
consultative and interactive activities which reinforce
their personal commitment and our corporate
commitment to Health and Safety.
Training
Boom’s operational training program contains a
significant safety leadership element for frontline
supervisory personnel and management which works
to embed good workplace safety as an operational
discipline. The training emphasises the importance
of sustained and visible leadership through employee
engagement and safety interactions.
Key metrics are measured and recorded in the
corporate HSEQ management database and included
in the monthly HSEQ Report to the Board.
Measurable activities include:
● Safe Act Observations and Safety Interactions
which are an informal risk management and
assurance activity which generates positive
safety-related discussions with employees in
the field.
● HSEQ Internal Audits, which include consultation
and discussion with employees.
● Involvement in consultative meetings (such as
Safety Committees), delivering toolbox talks and
pre-start meetings.
Safety
Boom’s safety performance continues to be a key
operational focus, with emphasis on risk management,
leadership and assurance. Our goal is to ensure
employees, customers and the general public are free
from harm when delivering lifting solutions in complex
and diverse operating environments.
The company’s ongoing emphasis on safety leadership,
best practice safety systems and “Safety Always”
culture builds confidence and trust with our customers
and employees around the predictable, reliable and
consistent delivery of high value lifting solutions.
21
Boom Logistics Annual Report 2020
Boom continues to invest in our people to
deliver efficiencies and develop leadership
across the business.
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Boom’s total workforce exceeded 1,100 during
FY20. We have 398 permanent employees,
80% of whom directly provide services to
customers – including operators, supervisors,
safety professionals, engineers and sales
personnel, while the remainder comprise
management and functional support to
the business.
Our flexible workforce of over 700 employees
engaged through readi during the year enabled
the company to provide a workforce for projects
and maintenance shutdowns for our clients.
1,100
Employees. 398
permanent and
700 flexible
workforce
22
A vital element of our company culture and drive
for responsible growth is ensuring that Boom
is a great and safe place to work. We recognise
and reward performance, create opportunities
for our staff to develop and provide support so
they continue to thrive.
Boom recognises that people are critical to
its success and continues to invest to deliver
efficiencies and develop leadership capability
across the organisation through internal and
external training and development activities.
Our workforce is well-trained and on-boarded
so all employees work in a safe and professional
manner to the standard and expectations of
Boom and its customers.
The company invests in the development
of its business leaders to maximise their
management potential. Training and
development of operational staff ensures
operating tickets are maintained, safety
standards are upheld, customer site inductions
are current and verification of competency is
undertaken to meet the needs of our customers.
Boom Logistics Annual Report 2020
Indigenous Program
We recognise the traditional rights of Indigenous
peoples and acknowledge their right to maintain their
cultures, identities, traditions and customs.
Boom will continue to support communities and its
customers in developing Indigenous programs in
remote locations of Australia. Our National Indigenous
Employment Framework provides a basis for localised
strategies to generate work opportunities and support
Indigenous communities.
Training and Development
Through the year, we continued to provide Certificate
IV Leadership and Management training to employees
across the business. The program provided practical skills
to develop strong and effective leaders for the future
covering subjects including safety, client engagement,
business processes and leadership.
Boom’s e-Learning Centre provides on-line induction
and on-boarding through its Life Saving Rules and
Compliance training. Our Employee Survey invites
employees to provide candid feedback on their
experience in the workplace.
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Maxwell John
Findlay
Tony
Spassopoulos
Melanie Jayne
Allibon
Jean-Pierre
Buijtels
BEcon, FAICD
(Independent,
Non-executive
Chairperson)
(appointed
18 July 2016)
Mr. Findlay was
Managing Director
and Chief Executive
of industrial
services company
Programmed Group
from 1990 until his
retirement from
executive life in
2008. Since retiring
as an executive,
Mr. Findlay has
engaged in various
non-executive roles
in industrial services,
engineering and
government. He is
currently Chairman of
the Snowy Mountains
Engineering
Corporation and was
previously Director
of EVZ Limited and
The Royal Children’s
Hospital. During the
past three years, Mr.
Findlay has held ASX
listed public company
Directorship with
EVZ Limited (2008
to 2017). Mr. Findlay
is Chairperson of the
Boom Logistics Risk
Committee.
BBus (Management),
MBA (Managing
Director) (appointed
20 September 2018)
Mr. Spassopoulos
has over 30 years
experience in the
equipment hire,
industrial services,
and the pallet/
container pooling
industries. Prior to
joining the Company,
Mr. Spassopoulos
was Director/
General Manager of
CHEP Asia Pacific
– Reusable Plastics
Containers business
and held other
senior management
positions during
his 19 years in the
Brambles Group. He
joined the Company
in 2008 and served
as Director of Sales
and Marketing
and more recently
Chief Operating
Officer prior to his
appointment as
Managing Director.
During the past
three years, Mr.
Spassopoulos has not
held any other ASX
listed public company
Directorships.
MAICD
(Independent,
Non-executive
Director) (appointed
19 June 2019)
Ms. Allibon has an
extensive background
in human resources
and operating risk,
primarily in the
manufacturing,
FMCG, mining
and industrial
services sectors.
Ms. Allibon has
held Non-executive
Director positions
with the Australian
Mines and Metals
Association,
Melbourne Water
Corporation. She is
currently a member
of World Vision’s
Business Advisory
Council, Chief
Executive Women
and the International
Women’s Forum.
Since the date of
appointment, Ms.
Allibon has not held
any other ASX listed
public company
Directorships. Ms.
Allibon is Chairperson
of the Boom
Logistics Nomination
& Remuneration
Committee.
MSc (International
Business)
(Non-independent,
Non-executive
Director) (appointed
2 June 2017)
Mr. Buijtels is the
portfolio manager of
Gran Fondo Capital,
a Dutch mutual
fund. He is also
involved in private
equity investments
at Strikwerda
Investments. Since
2007 he has been
investing in private
equity and public
equity at 3i, Gimv
and Strikwerda
Investments. He
has been involved
at board level at
several companies,
currently as observer
at Constellation
Software Netherlands
Holding Coöperatief
U.A (a subsidiary
of Constellation
Software Inc. and
the indirect owner
of Total Specific
Solutions). During
the past three years,
Mr. Buijtels has not
held any other ASX
listed public company
Directorships.
Boom Logistics Annual Report 2020
Tim Rogers
Malcolm Peter Ross
Chief Financial
Officer, MArts (Hons)
(Economics & Law)
MPhil
Tim joined BOOM in
July 2015. Prior to joining
BOOM, Tim was the Group
Chief Financial Officer
for Crowe Horwath. An
ASX listed Company with
over 100 office locations,
Crowe Horwath is the
5th largest accounting
services group in
Australasia. Prior to
joining Crowe Horwath,
Tim was the Director of
Audit & Assurance at
Deloitte Touche Tomatsu.
Tim has a wealth of
finance and strategy
experience.
BBus, LLB, LLM,
GradDipACG,
FGIA (appointed
Company Secretary
22 September 2014)
Mr Ross joined the
Company on 7 November
2011 as General Counsel
and in addition to
those responsibilities
was appointed
Company Secretary on
22 September 2014.
Following admission as a
solicitor in Victoria in 1997,
he worked with Harwood
Andrews and then Hall &
Wilcox Lawyers. In 2002,
he joined InterContinental
Hotels Group Plc (FTSE-
listed) based in Singapore
where his final position
was Vice-President and
Associate General Counsel
with responsibility for
leading the legal function
across Asia Australasia.
Terrence Charles
Francis
Terence Alexander
Hebiton
(Independent,
Non-executive
Director) (appointed
22 December 2000)
Mr. Hebiton commenced
his commercial career
in the rural sector. In
1989, he acquired various
business interests
associated with land
and property rental
developments. He is
currently a Director of
a number of private
companies. He was
a principal of Alpha
Crane Hire, one of the
founding entities of
Boom Logistics. Mr.
Hebiton was the CEO
of Boom Logistics at its
formation and ceased
being an Executive
Director in 2004. During
the past three years, Mr.
Hebiton has not held any
other ASX listed public
company Directorships.
Mr. Hebiton is Chairperson
of the Health, Safety,
Environment & Quality
Committee.
DBus (hon. causa),
BE (Civil), MBA,
FIE Aust, FAICD,
FFin (Independent,
Non-executive
Director) (appointed
13 January 2005)
Mr. Francis has over
20 years experience
as a Non-executive
Director of infrastructure
development companies
including Infrastructure
Specialist Asset
Management Limited,
NBN Limited, Southern
and Eastern Integrated
Transport Authority,
Emergency Services
Telecommunications
Authority. He also advises
business and government
on infrastructure
development. Previously
Mr. Francis was Executive
Director of Deutsche
Bank Australia, and Chief
Executive Officer of Bank
of America in Australia.
During the past three
years, Mr. Francis has
not held any other ASX
listed public company
Directorships. Mr. Francis
is Chairperson of the
Boom Logistics Audit
Committee.
25
Boom Logistics Annual Report 2020 30 Remuneration Report
42 Lead Auditor’s Independence Declaration
43 Consolidated Statement of
Comprehensive Income
44 Consolidated Statement of Financial Position
45 Consolidated Statement of Cash Flows
46 Consolidated Statement of
Changes in Equity
T 27 Directors’ Report
R
O
P
E
R
L
A
I
C
N
A
N
I
F
Notes to the Consolidated Financial Statements
47 About This Report
47 COVID-19 Impact on the Group
Section A: Financial Performance
49 1 Segment Reporting
51 2 Revenue from Contracts with Customers
52 3 Other Income and Expenses
53 4 Income Tax
55 5 Earnings Per Share
56 6 Dividends
Section B: Operating Assets and Liabilities
56 7 Property, Plant and Equipment
57 8 Impairment Testing of Assets
58 9 Reconciliation of the Net Cash Flows from
Operations with Net Loss After Tax
59 10 Other Provisions and Liabilities
Section C: Funding Structures
59 11 Debt
61 12 Financial Risk Management
66 13 Contributed Equity
Section D: Other Disclosures
67 14 Subsidiaries
67 15 Deed of Cross Guarantee
70 16 Parent Entity
70 17 Key Management Personnel
71 18 Share-based Payments
73 19 Contingencies
74 20 Auditor’s Remuneration
74 21 Subsequent Events
75 22 New Accounting Policies and Standards
79 Directors’ Declaration
80 Independent Auditor’s Report
84 ASX Additional Information
26
Boom Logistics Annual Report 2020
DIRECTORS’ REPORT
for the year ended 30 June 2020
Your Directors present their report on the consolidated entity (referred to hereafter as “the Group”) consisting of
Boom Logistics Limited (“Boom Logistics” or “the Company”) and the entities it controlled for the financial year ended
30 June 2020.
Directors
The Directors of the Company at any time during or since the end of the financial year are:
Maxwell John Findlay
Qualifications and biographies (see previous page).
Terrence Charles Francis
Qualifications and biographies (see previous page).
Tony Spassopoulos
Qualifications and biographies (see previous page).
Terence Alexander Hebiton
Qualifications and biographies (see previous page).
Melanie Jayne Allibon
Qualifications and biographies (see previous page).
Jean-Pierre Buijtels
Qualifications and biographies (see previous page).
Company Secretary
Malcolm Peter Ross
Qualifications and biographies (see previous page).
27
Boom Logistics Annual Report 2020 Directors’ Interests in the Shares and Options
of the Company
As at the date of this report, the interests of the Directors in the shares, rights and options of Boom Logistics Limited were:
Name
M.J. Findlay
T. Spassopoulos
M.J. Allibon
J.J.A.M. Buijtelsa
T.C. Francis
T.A. Hebiton
Shares
Rights
Options
250,000
–
–
1,500,000
1,691,758
11,505,377
100,000
–
185,745
547,995
–
–
–
–
–
–
–
–
a Mr. Buijtels is employed by Rorema Beheer B.V., the fund manager (the Fund Manager) of the fund Gran Fondo Capital (the Fund) which holds
35,380,342 shares in Boom Logistics Limited (the Company). Mr. Buijtels' remuneration is partly linked to the performance of the Fund, which
is influenced by the performance of the shares of the Company as long as the Fund holds shares in the Company. Mr. Buijtels holds a minority
economic interest of less than 5% of the units of the Fund and thereby indirectly an economic interest in the Company as long as the Fund holds
shares in the Company. The Fund is open-ended and Mr. Buijtels can redeem his units in the Fund against their net asset value minus redemption
fee at each transaction day of the Fund. Mr. Buijtels is not a director of the Fund Manager, and does not have the power to exercise votes, control
the exercise of votes, dispose of or control the disposal of the Fund's shares in the Company. However, he can influence the decision-making
process of the director of the Fund Manager in his capacity as its portfolio manager.
Directors Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of
meetings attended by each Director was as follows:
Board of Directors
Audit Committee
Nomination and
Remuneration
Committee
Health, Safety,
Environment &
Quality Committee
Risk Committee
Name of director
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
M.J. Findlay
T. Spassopoulos
M.J. Allibon
J.J.A.M. Buijtels
T.C. Francis
T.A. Hebiton
15
15
15
15
15
15
15
15
15
15
15
15
6
–
–
–
6
6
6
–
–
–
5
6
1
1
1
1
1
1
1
1
1
1
1
1
4
4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
3
3
3
3
3
3
Corporate Structure
Boom Logistics is a company limited by shares that is incorporated and domiciled in Australia. Boom Logistics Limited has
prepared a consolidated financial report incorporating the entities that it controlled during the financial year, which are listed
in note 14 to the financial statements.
28
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Indemnification and
Insurance
Significant Changes in
the State of Affairs
The Company has entered into Deeds of Access, Indemnity
and Insurance with each of the Directors and the Company
Secretary, under which the Company indemnifies, to the
extent not precluded by law from doing so, those persons
against any liability they incur in or arising out of discharging
their duties. No indemnity has been granted to an auditor of
the Group in their capacity as auditor.
During the financial year, the Company has paid an insurance
premium for the benefit of the Directors and officers of the
Company in accordance with common commercial practice.
The insurance policy prohibits disclosure of the liability
insured and the amount of the premium.
Nature of Operations
and Principal Activities
During the year, the principal activity of the Group was the
provision of lifting solutions and specialised labour services.
Operating and
Financial Review
A review of Group operations and results for the financial
year ended 30 June 2020 is set out in the operating and
financial review section of the Annual Report and in the
accompanying financial statements.
Corporate Governance
The Group recognises the need for the highest standards
of corporate behaviour and accountability. The Directors
of Boom Logistics have accordingly followed the
recommendations set by the ASX Corporate Governance
Council. For further information on corporate governance
policies adopted by Boom Logistics Limited, refer to our
website: www.boomlogistics.com.au/about-us/corporate-
governance and annual reports.
There have been no significant changes in the state of
affairs other than that reported in the Operating and
Financial Review section disclosed above.
Significant Events
After the Balance Date
The Board resolved to pay an unfranked interim dividend of
0.5 cents per share on 26 February 2020 with a record date
of 31 March 2020. The dividend payment date, originally
scheduled for 21 April 2020, was deferred to 2 October
2020 as a prudent measure to preserve cash as a result
of the uncertainty created by the COVID-19 situation
at that time. The record date for the deferred payment
remains 31 March 2020 and the estimated liability based
on the number of ordinary shares on issue at that date is
$2.1 million. The dividend has not been provided for in the
30 June 2020 year end financial statements.
The Group has entered into a twenty four month, interest
free payment plan with the ATO to settle the franking
deficit tax liability of $4.447 million that existed at balance
date. The Group will make monthly instalments of $185,308
commencing on 24 August 2020 and completing on
25 July 2022.
On 2 August 2020, the Victorian government declared a
state of disaster and announced stage 4 restrictions for
Melbourne and stage 3 restrictions for regional Victoria.
Given the dynamic nature of these circumstances, the
economic impact on the Victorian economy is not known.
However, as at the date of this report the impact on the
Group is not expected to be material.
The Group operates a travel tower business in Melbourne
which is a supplier to essential services, telecommunications
and energy customers. This business has been able to
continue trading during the stage 4 restrictions albeit at a
reduced volume. The Group operates a business in the Latrobe
Valley that has not been materially impacted by the stage 3
restrictions to date with major customers being designated
as essential services allowing trading to continue at similar
volumes to normal. Project work in the state has also
continued under stage 3 restrictions throughout the period.
The impact of these restrictions will be reflected in the
Group’s 2021 interim and annual financial statements.
29
Boom Logistics Annual Report 2020 Likely Developments
and Expected Results
The Directors expect performance to improve with an
unprofitable contract completed in FY20 to be replaced with
new profitable project work in FY21. The Group expects to
grow its revenue and customer base in its core markets and
expand its operations into the north west during FY21. The
Group also maintains focus on its cost structure leading to
improving margins.
The economic conditions created by COVID-19 remain a
challenge. There is consequently a degree of uncertainty
surrounding the pandemic and its impact. The Directors are
vigilant to this and are actively monitoring the situation.
The Directors are cognisant of the requirement to
continuously disclose material matters to the market. At
this time, other than the matters addressed in this financial
report there are no matters sufficiently advanced or at a
level of certainty that would require disclosure.
Environmental
Regulation and
Performance
The Board confirms that the Group has adequate systems
and processes in place to manage and comply with
environmental regulations as they apply to the Group. This
includes the National Greenhouse and Energy Reporting Act
2007 which requires the Group to report energy consumption
and greenhouse gas emissions for the 12 months ended
30 June 2020 and future periods. There have been
no significant known breaches of any environmental
regulations to which the Group is subject.
Remuneration Report
– Audited
The Directors of Boom Logistics Limited present the
Remuneration Report for the Company and the Group for
financial year ended 30 June 2020 (“FY20”). This report
outlines the remuneration arrangements in place for non-
executive directors (“NEDs”) and the Managing Director and
Senior Executives (“Executive KMP”).
Key management personnel (“KMP”) are those persons who,
directly or indirectly, have authority and responsibility for
planning, directing and controlling the major activities of the
Company and Group.
Principles of Remuneration
Practices
The Group’s remuneration practices are designed to
maintain alignment with business strategy, shareholder
interests and business performance whilst ensuring
remuneration is appropriate. The Executive KMP
remuneration framework and KMP remuneration is reviewed
annually by the Board with the assistance of the Nomination
& Remuneration Committee.
In conducting the Executive KMP remuneration review, the
following principles are applied:
● Monitoring against external competitiveness, as
appropriate using independent market survey data
comparing the Group’s remuneration levels against
industry peers in terms of comparable job size
and responsibility;
● Internal equity, ensuring Executive KMP remuneration
across the Group is based upon a clear view of the
scope of individual positions and the respective
responsibilities;
● A meaningful “at risk” component with entitlement
dependent on achieving Group and individual
performance targets set by the Board of Directors and
aligned to the Group’s strategy; and
● Reward for performance represents a balance of annual
and longer term targets.
Nomination and
Remuneration Committee
The Group is committed to ensuring remuneration is
informed by market data and linked to the Group’s strategy
and performance. In doing so, the Board of Directors
rely on the advice provided by the Nomination and
Remuneration Committee including the review and making
recommendations:
● With regard to remuneration policies applicable to the
Directors, Executive KMP and employees generally;
● In relation to the remuneration of Directors and
Executive KMP;
● Of general remuneration principles, including incentive
schemes, bonuses and share plans that reward individual
and team performance;
● With regard to termination policies and procedures for
Directors and Executive KMP;
● In relation to the Group’s superannuation
arrangements; and
30
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 ● To the Board of Directors for the inclusion of the Remuneration Report in the Group’s annual report.
The Nomination and Remuneration Committee comprises a majority of independent directors. From time to time, the
Nomination and Remuneration Committee also draws upon advice and market survey data from external consultants in
discharging its responsibilities.
Details of Key Management Personnel
The tables below set out the KMP and their movements during FY20.
Key Management Personnel (Executive)
Name
Title
Tony Spassopoulos
Chief Executive Officer & Managing Director
Tim Rogers
Malcolm Ross
Chief Financial Officer
General Counsel & Company Secretary
Key Management Personnel (Non-executive Directors)
Period as a KMP
All of FY20
All of FY20
All of FY20
Name
Maxwell Findlay
Melanie Allibon
Positiona
Chairperson
Non-executive Director
Jean-Pierre Buijtels
Non-executive Director
Committees
Audit
Nomination &
Remuneration
Health, Safety,
Environment
& Quality
Risk
Member
Member
Member
Chairperson
–
–
Chairperson
Member
Member
Member
Member
Member
Member
Member
Member
Member
Terrence Francis
Terence Hebiton
Non-executive Director
Chairperson
Non-executive Director
Member
Member
Chairperson
a All non-executive directors are independent, except for Jean-Pierre Buijtels who is not independent.
Remuneration Arrangements of Executive Key Management Personnel
In the normal course of business, remuneration comprises fixed remuneration (fixed annual reward) and variable or “at risk”
remuneration incentives. The Group’s remuneration structure for the Executive KMP comprises two main components:
Fixed annual reward
This element comprises base salary, any fringe benefits (e.g. motor vehicle allowance) and employer contributed
superannuation. Executive KMP have scope to vary the components that make up their FAR and can tailor their salary
package to suit individual requirements.
a) Salary sacrifice rights plan
Eligible executives will be permitted to salary sacrifice a portion of their pre-tax fixed annual remuneration to acquire
equity in the form of rights to fully paid ordinary shares in the Company.
Each right is a right to acquire one ordinary share in the Company. The exact number of rights to be granted is based on
the amount of salary sacrificed and the 5 day volume weighted average price prior each month. Rights do not carry any
dividend or voting rights. Rights will be granted twice a year following the announcement of the half-year and full-year
results or in any event, within twelve months of the Annual General Meeting (“AGM”). Rights will have a twelve month
exercise restriction commencing from the relevant grant dates. The rights to ordinary shares equivalent to the amount
salary sacrificed in the period from the most recent grant date will be granted following the announcement of the
full-year results.
31
Boom Logistics Annual Report 2020
Variable remuneration
The Group has a number of variable remuneration
arrangements as follows:
b) Short term incentive plan
Eligible executives will have the opportunity to receive
short term incentives subject to meeting performance
hurdles over the financial year. 50% of the STIP outcome
achieved for the financial year will be delivered in cash
and 50% will be delivered in equity in the form of rights
to ordinary shares in the Company.
Each right is a right to acquire one ordinary share in the
Company. The exact number of rights to be granted is
based on 50% of the STIP outcome divided by the 5
day volume weighted average price after the release
of full year results. Rights do not carry any dividend
or voting rights. Rights will be granted following the
announcement of the full-year results or in any event,
within twelve months of the AGM. Rights will have a
six month exercise restriction commencing from the
grant date.
The objectives of this plan are to:
● Focus Executive KMP on key annual business
goals and reinforce the link between performance
and reward;
● Allow scope to recognise exceptional performance
through a sliding scale of reward;
● Encourage teamwork as well as individual
performance in meeting annual goals; and
● Align reward with the Group's values.
c) Long term incentive plan
Eligible executives will be granted options to acquire
ordinary shares in the Company, subject to performance
hurdles and some or all may vest at the end of the three
year period if the performance hurdles are met.
Each option is a right to acquire one ordinary share in
the Company (or an equivalent cash amount) subject
to payment of the exercise price. The exact number of
options to be granted will be the LTIP award divided
by the option valuation using a Binomial valuation
methodology prior to grant date. The option exercise
price is calculated based on the 5 day volume weighted
average price prior to the grant date. Options do
not carry any dividend or voting rights. Options will
be granted within twelve months of the Annual
General Meeting.
Options are subject to performance hurdles based
on three independent measures comprising absolute
earnings per share (“EPS”), return on capital employed
and key safety performance metrics, which are measured
at the end of the three year performance period.
The Board of Directors retains a discretion to adjust
the performance hurdles as required to ensure plan
participants are neither advantaged nor disadvantaged
by matters outside management’s control that
materially affect the performance hurdles (for example,
by excluding one-off non-recurrent items or the impact
of significant acquisitions or disposals).
The following table shows the potential annual remuneration packages for Executive KMP during the financial year.
Name
Title
Tony Spassopoulos
Chief Executive Officer & Managing Director
Tim Rogers
Malcolm Ross
Chief Financial Officer
General Counsel & Company Secretary
Fixed
Variable
FAR
600,000
339,433
283,467
STIP %
of FAR
40%
30%
20%
LTIP %
of FAR
50%
20%
20%
32
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020
Consequences of Performance on Shareholder Wealth
In considering the Group's performance and benefits for shareholder wealth, the Nomination and Remuneration Committee
have regard to the following indices in respect of the current and previous financial years.
Name
Net loss attributable to members of
Boom Logistics Limited
Dividends paid
Share price at financial year end
Earnings per share
Return on capital employed (Trading EBIT/
Capital Employed)
2020
$’000
2019
$’000
2018
$’000
2017
$’000
2016
$’000
$(16,959)
$(5,330)
$(1,547)
$(22,630)
$(30,219)
–
$0.11
$(0.04)
–
$0.15
$(0.01)
–
$0.24
$(0.00)
–
$0.09
$(0.05)
–
$0.08
$(0.06)
(1.4%)
1.5%
1.6%
(3.7%)
(3.4%)
Remuneration Review
The review of KMP and general staff remuneration is
conducted annually through a formal process.
KMP remuneration is reviewed by the Nomination and
Remuneration Committee of the Board of Directors with
input from the Chief Executive Officer (“CEO”). Market
survey data combined with individual performance
appraisals determine recommendations that go to the
Board of Directors for approval. This process has historically
occurred in June of each year. Due to the on-going market
uncertainty, the timing of this process has been changed
to September 2020 with any resulting remuneration
adjustments from this process to take effect from the
beginning of October 2020.
The Nomination and Remuneration Committee has direct
responsibility for reviewing CEO performance against
targets set by the Board of Directors and recommending
to the Board of Directors appropriate adjustments to his
remuneration package.
Staff reviews are similarly conducted by the relevant
Executives and General Managers, with overview from
the CEO.
CEO & Managing Director
Remuneration
Mr. Spassopoulos has an employment contract that has
no fixed term. Both the Company and Mr. Spassopoulos
are entitled to terminate the employment contract on
six month’s written notice, except in the case of serious
misconduct or neglect of duty. Contractual arrangements
relating to a redundancy event are set out below.
Mr. Spassopoulos’ remuneration package as at 30 June 2020
comprised the following components:
● FAR of $600,000 per annum, inclusive of allowances
and superannuation contributions in line with the
Superannuation Guarantee legislation. Mr. Spassopoulos’
FAR is reviewed annually effective 1 July each year taking
into account the Group's performance, industry and
economic conditions and personal performance.
● Mr. Spassopoulos has elected to salary sacrifice
20% of his FAR for rights to ordinary shares in the
Company equating to an annual value of $120,000;
● Mr. Spassopoulos nominated that a 10% reduction
in salary for the months of April, May and June 2020
should apply in light of the economic impact from
the COVID-19 pandemic;
● STIP equivalent to 40% of his FAR upon achievement of
performance conditions set by the Board of Directors on
an annual basis. 50% of the STIP outcome achieved for
the financial year will be delivered in cash and 50% will
be delivered in equity in the form of rights to ordinary
shares in the Company. The cash payment of any bonus
under the STIP will take place after the annual audit
of the Group’s financial report which typically occurs in
the first half of the following financial year. No STIP is
awarded if performance conditions are not met; and
● LTIP equivalent to 50% of his FAR is allocated in options
of the Company with performance hurdles based on
absolute EPS, return on capital employed and key safety
performance metrics measured at the end of the three
year performance period subject to shareholder approval
at the Company’s Annual General Meeting.
If his employment is terminated on the grounds of
redundancy or where a diminution in responsibility occurs,
Mr. Spassopoulos will be entitled to receive:
33
Boom Logistics Annual Report 2020 ● The lesser of the maximum amount permitted by
the Corporations Act and 12 months pay calculated in
accordance with his FAR at the date of redundancy
or diminution;
● Vested employee entitlements;
● STIP rights that have vested and if not exercised the
exercise restrictions will be lifted. Where employment
ceased prior to the STIP outcome being determined,
the Board of Directors may at its discretion determine
a pro-rated STIP based on the proportion of the
performance period that has elapsed at the time of
cessation. To the extent the relevant performance
conditions are satisfied, the STIP award will be paid in
cash and no rights will be allocated;
● LTIP options that have vested. Where employment
ceased before the options vest, unvested options will
continue “on-foot” and will be tested following the
end of the original vesting date, and vesting to the
extent that the relevant conditions have been satisfied
(ignoring any service related conditions);
● In the event a termination payment is made, no
payment in lieu of notice will be made.
The Board of Directors also have a broader discretion to
apply any other treatment that it deems appropriate in
the circumstances.
In the event that Mr. Spassopoulos was to be summarily
dismissed, he would be paid for the period served prior
to dismissal and any accrued leave entitlements. Mr.
Spassopoulos would not be entitled to the payment of any
bonus under the STIP or LTIP.
Mr. Spassopoulos is subject to restrictive covenants upon
cessation of his employment for a maximum period of
one year.
Other Executive KMP
(standard contracts)
All other Executive KMP have contracts with no fixed term.
Either the Company or the Executive KMP may terminate
the Executive KMP employment agreement by providing
three months written notice or providing payment in lieu of
the notice period (based upon the fixed component of the
Executive KMP remuneration). If employment is terminated
on the grounds of redundancy, in addition to the notice
period, all other Executive KMP will be entitled to receive up
to 12 months pay calculated in accordance with their FAR.
On termination by notice of the Company or the Executive
KMP, any STIP and LTIP that have vested will be awarded.
Where employment ceased prior to the STIP outcome being
determined or LTIP options vest, the treatment will be the
same as that disclosed in the CEO & Managing Director
Remuneration section above.
The Company may terminate the contract at any time
without notice if serious misconduct has occurred. Where
termination with cause occurs, the Executive KMP is only
entitled to that proportion of remuneration that is fixed,
and only up to the date of termination. On termination with
cause, any unvested STIP rights and LTIP shares or options
will lapse.
Similar to the CEO, all other Executive KMP agreed to
a 10% reduction in salary for the months of April, May
and June 2020 in light of the economic impact from the
COVID-19 pandemic.
34
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 l
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35
Boom Logistics Annual Report 2020
Non-executive Director Fees
Non-executive Director fees are determined by reference to external survey data, taking account of the Group’s relative size
and business complexity. No additional payments are made for serving on Board Committees. In addition, non-executive
Directors have no entitlement to STIP, no equity incentives are offered and no retirement benefits are payable. The
maximum aggregate sum for non-executive Director remuneration of $400,000 was approved by shareholders at the 2004
Annual General Meeting. There has been no increase to the NED fee pool since 2004.
The non-executive Directors agreed to a 20% reduction in fees for the months of April, May and June 2020 in light of the
economic impact from the COVID-19 pandemic.
Details of non-executive Directors’ remuneration for the year ended 30 June 2020 are as follows:
Short Term
Post
Employment
Share-based
Payments
Salary & Fees
Cash Bonus
Other
Super-
annuation
All
Long Term
Annual &
long service
leaved
Non-Executive Directors
Maxwell Findlay
2020
2019
Melanie Allibon
2020
2019
Jean-Pierre Buijtelsa
Terrence Francis
2020
2019
Terence Hebiton
2020
2019
123,500
128,750
61,780
2,137
61,750
64,375
61,750
64,375
Total Remuneration: Non-Executive Directors
2020
2019
308,780
259,637
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
11,733
12,231
5,869
203
5,866
6,116
5,866
6,116
29,334
24,666
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
135,233
140,981
67,649
2,340
67,616
70,491
67,616
70,491
338,114
284,303
Total Remuneration: Non-Executive Directors and Executives – Group
2020
2019
1,210,641
1,190,864
57,832
41,474
59,592
35,893
104,273
238,743
(11,322)
1,659,759
99,380
165,523
34,062
1,567,196
a
Jean-Pierre Buijtels is not paid a Director’s fee. Instead, the Company pays for his travel and accommodation costs whilst attending Board of
Director and committee meetings in Australia up to a maximum of $65,700 per financial year.
36
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Equity Instruments Held by KMP
Summary of equity instruments held by KMP at reporting date are as follows:
Name
Max Findlay
Tony Spassopoulos
Melanie Allibon
Jean-Pierre Buijtels
Terrence Francis
Terence Hebiton
Tim Rogers
Malcolm Ross
Shares
SSRP Rights
STIP Rights
LTIP Options
250,000
–
–
–
1,500,000
1,221,827
469,931
11,505,377
100,000
–
185,745
547,995
–
–
–
–
–
–
–
–
–
–
–
–
–
–
605,812
230,158
2,551,394
–
255,808
2,147,630
Shareholdings of Directors and Executive KMP
Ordinary shares held in Boom Logistics Limited (number)
30 June 2020
Non-executive & Executive Directors
Maxwell Findlay
Tony Spassopoulos
Melanie Allibon
Jean-Pierre Buijtelsa
Terrence Francis (ii)
Terence Hebiton
Executives
Tim Rogers
Malcolm Ross
Total
Balance at
Start of Year
Net Changes
Other (i)
Balance at
End of Year
250,000
1,500,000
–
–
185,745
547,995
–
–
–
–
250,000
1,500,000
100,000
100,000
–
–
–
–
–
–
185,745
547,995
–
–
2,483,740
100,000
2,583,740
(i) These amounts represent ordinary shares purchased or sold directly or indirectly by the directors and executives during the financial year. These
transactions have no connection with their roles and responsibilities as employees of the Group.
(ii) Includes shares held under a nominee or a related party.
a Mr. Buijtels is employed by Rorema Beheer B.V., the fund manager (the Fund Manager) of the fund Gran Fondo Capital (the Fund) which holds
35,380,342 shares in Boom Logistics Limited (the Company). Mr. Buijtels' remuneration is partly linked to the performance of the Fund, which
is influenced by the performance of the shares of the Company as long as the Fund holds shares in the Company. Mr. Buijtels holds a minority
economic interest of less than 5% of the units of the Fund and thereby indirectly an economic interest in the Company as long as the Fund holds
shares in the Company. The Fund is open-ended and Mr. Buijtels can redeem his units in the Fund against their net asset value minus redemption
fee at each transaction day of the Fund. Mr. Buijtels is not a director of the Fund Manager, and does not have the power to exercise votes, control
the exercise of votes, dispose of or control the disposal of the Fund's shares in the Company. However, he can influence the decision-making
process of the director of the Fund Manager in his capacity as its portfolio manager.
37
Boom Logistics Annual Report 2020 SSRP Outcomes of the Executive KMP
The following table shows the rights to ordinary shares granted to Executive KMP during the financial year under the salary
sacrifice rights plan.
Name
Year
Grant Date
Tony Spassopoulos
Tim Rogers
2020
2019
2020
2019
26 Feb 20
23 Aug 19
26 Feb 20
23 Aug 19
Grant
Number
415,134
379,531
114,933
102,242
Fair Value
per Right at
Grant Date
Exercise Date
Expiry Date
$0.1445
26 Feb 21
26 Feb 30
$0.1581
23 Aug 20
23 Aug 29
$0.1442
26 Feb 21
26 Feb 30
$0.1581
23 Aug 20
23 Aug 29
Value of
Rights
Granted
during the
Year
$60,000
$60,000
$16,568
$16,163
SSRP rights are granted twice per annum during the trading window following the release of the half-year and full year
results. Amounts are salary sacrificed monthly and are held until granting of rights during a trading window.
Rights to ordinary shares (number)
30 June 2020
Salary Sacrifice Rights
Balance at start of year
Granted during year:
Balance at end of year
Number of rights not yet granted
Grant Date
Tony
Spassopoulos
Tim Rogers
Total
26 Feb 20
23 Aug 19
427,162
415,134
379,531
388,637
114,933
102,242
815,799
530,067
481,773
1,221,827
605,812
1,827,639
410,575
116,136
526,711
Number of rights not yet granted shows the potential rights to ordinary shares equivalent to the amount of salary sacrificed
to 30 June 2020 since the most recent granting of rights under the salary sacrifice rights plan on 26 February 2020.
Determining the STIP Outcomes of the Executive KMP
For the FY2019 STIP, the following table shows the rights to ordinary shares granted to Executive KMP during the year.
Name
Year
Grant Date
Tony Spassopoulos
Tim Rogers
Malcolm Ross
2019
2019
2019
13 Sep 19
13 Sep 19
13 Sep 19
Grant
Number
153,873
41,449
70,576
Fair Value
per Right at
Grant Date
$0.1560
$0.1560
$0.1560
Exercise Date
Expiry Date
Value of
Rights
Granted
during the
Year
13 Mar 20
13 Sep 29
$24,000
13 Mar 20
13 Sep 29
13 Mar 20
13 Sep 29
$6,465
$11,008
For the FY2020 STIP, the Nomination and Remuneration Committee conducted a review of the Executive KMP performance
against their set targets which resulted in the following potential maximum STIP being awarded to the Executive KMP. The
STIP will be settled 50% in cash and 50% in rights to ordinary shares in the Company after the announcement of the full year
results and approval by the Board of Directors.
38
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Name
Title
Tony Spassopoulos
Chief Executive Officer &
Managing Director
Tim Rogers
Chief Financial Officer
Malcolm Ross
General Counsel &
Company Secretary
Maximum
STIP
$
Weightinga
%
Settled in
Cash
$
Settled in
Rights
$
Total Cost
$
240,000
20.8%
25,000
25,000
50,000
101,830
56,693
45.0%
35.0%
22,911
9,921
22,912
9,922
45,823
19,843
a Weighting represents the percentage of total STIP entitlement awarded to Executive KMPs based on their financial, safety and individual
performance targets.
Rights to ordinary shares (number)
30 June 2020
STIP Rights
Balance at start of year
Granted during year:
Balance at end of year
Grant Date
Tony
Spassopoulos
Tim Rogers
Malcolm Ross
Total
13 Sep 19
316,058
153,873
469,931
188,709
185,232
41,449
70,576
230,158
255,808
689,999
265,898
955,897
Determining the LTIP Outcomes of the Executive KMP
Set out below are options granted to the Executive KMP under the LTIP during the year including those granted in previous
years that have not yet vested.
Name
Year
Grant
Date
Grant
Number
Vesting
Date
Fair
Value per
Option
at Grant
Date
Exercise
Price
Exercise
Date
Vesting
Benchmark
Value of
Options
Granted
during
the Year
Tony Spassopoulos
2020 29 Nov 19 6,666,667 31 Aug 22
$0.0450
$0.145 30 Sep 22
(i)
$300,000
2019 28 Nov 18 4,838,710 31 Aug 21
$0.0620
$0.164 30 Sep 21 EPS > $0.03 $300,000
Tim Rogers
2020 29 Nov 19 1,508,591 31 Aug 22
$0.0450
$0.145 30 Sep 22
(i)
$67,887
2019 28 Nov 18 1,042,803 31 Aug 21
$0.0620
$0.164 30 Sep 21 EPS > $0.03
$64,654
Malcolm Ross
2020 29 Nov 19 1,259,853 31 Aug 22
$0.0450
$0.145 30 Sep 22
(i)
$56,693
2019 28 Nov 18
887,777 31 Aug 21
$0.0620
$0.164 30 Sep 21 EPS > $0.03
$55,042
(i) The 2020 LTIP vesting benchmark consists of three independent vesting hurdles, each of which is measured at the end of the three year
performance period being 30 June 2022. The three performance hurdles are Earnings per Share of $0.04 or more (50% of eligible options), Return
on Capital Employed of 10% (25% of eligible options), Safety Performance: LTIFR < 1 and SAOFR > 4,500 (25% of eligible options).
39
Boom Logistics Annual Report 2020 The FY2018 options allocated to the Executive KMP did not vest as their vesting conditions were not met. In accordance with
the LTIP rules, the FY2018 options were treated as lapsed at reporting date.
Options held in Boom Logistics Limited (number)
30 June 2020
Tony Spassopoulos
Grant Date
29 Nov 19
Balance at
Start of Year
Unvested
Granted
Lapsed
Balance at
End of Year
Unvested
–
6,666,667
28 Nov 18
4,838,710
30 Nov 17
1,979,421
–
–
–
–
6,666,667
4,838,710
(1,979,421)
–
Tim Rogers
Malcolm Ross
Total
6,818,131
6,666,667
(1,979,421)
11,505,377
29 Nov 19
–
1,508,591
28 Nov 18
1,042,803
30 Nov 17
871,346
–
–
–
–
1,508,591
1,042,803
(871,346)
–
1,914,149
1,508,591
(871,346)
2,551,394
29 Nov 19
28 Nov 18
30 Nov 17
–
1,259,853
887,777
763,414
–
–
–
–
1,259,853
887,777
(763,414)
–
1,651,191
1,259,853
(763,414)
2,147,630
10,383,471
9,435,111
(3,614,181)
16,204,401
Share Trading Policy
The Group Securities Trading Policy applies to all NEDs and Executive KMP. The policy prohibits KMP from dealing in the
Company securities while in possession of material non-public information relevant to the Group.
40
DIRECTORS’ REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Lead Auditor's Independence Declaration to
the Directors
The auditor's independence declaration is set out on page 42 and forms part of the directors' report for the financial year
ended 30 June 2020.
Non-audit Services
The following non-audit services were provided by KPMG Australia, the Company's auditor. The Directors are satisfied that
the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence
was not compromised.
KPMG Australia received or are due to receive the following amounts for the provision of non-audit services:
Non-audit Services
Taxation services
Other assurance services
Total remuneration for non-audit services
$50,848
$46,575
$97,423
Proceedings on the 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 Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
Rounding
The amounts contained in this report and in the financial report are presented in Australian dollars and have been rounded to
the nearest $1,000 (where rounding is applicable) under the option available under ASIC Corporations Instrument 2016/191.
The Group is of a kind to which the Corporations Instrument applies.
Signed in accordance with a resolution of the Directors.
Maxwell Findlay
Chairperson
Melbourne, 27 August 2020
Tony Spassopoulos
Managing Director
41
Boom Logistics Annual Report 2020
42
LEAD AUDITOR’S INDEPENDENCE DECLARATIONfor the year ended 30 June 2020Boom Logistics Annual Report 2020 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2020
Revenue
Other income
Salaries and employee benefits expense
Equipment service and supplies expense
Operating lease expense
Other expenses
Restructuring expense
Depreciation and amortisation expense
Depreciation expense – Right-of-use assets
Impairment expense
Loss before financing expense and income tax
Financing expense
Financing expense – Lease liabilities
Loss before income tax
Income tax expense
Net loss attributable to members of Boom Logistics Limited
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Cash flow hedges recognised in equity, net of tax
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year attributable to members of
Boom Logistics Limited
Basic losses per share (cents per share)
Diluted losses per share (cents per share)
Note
2
3(a)
2020
$’000
2019^
$’000
185,535
182,722
533
4,242
(98,013)
(96,579)
3(b)
(46,405)
(44,446)
3(b)
7
22
8,22
11(e)
22
4(a)
(1,033)
(14,134)
(718)
(16,515)
(15,392)
(1,902)
(8,044)
(2,835)
(1,633)
(12,512)
(4,447)
(16,959)
(11,972)
(15,159)
(1,117)
(17,340)
–
(1,975)
(1,624)
(3,706)
–
(5,330)
–
(5,330)
(86)
(86)
(17)
(17)
(17,045)
(5,347)
(3.9)
(3.9)
(1.2)
(1.2)
5
5
^ T he Group has initially applied AASB 16 Leases at 1 July 2019 using the modified retrospective (option 2) approach. Under this approach,
comparative information is not restated (refer to note 22).
The accompanying notes form an integral part of the Consolidated Statement of Comprehensive Income.
43
Boom Logistics Annual Report 2020 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2020
CURRENT ASSETS
Cash and cash equivalents
Trade receivables, contract assets and other receivables
Inventories, prepayments and other current assets
Assets classified as held for sale
Income tax receivable
Lease receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
Lease receivables
Deferred tax asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Employee provisions
Other provisions and liabilities
Derivative financial instruments
Income tax payable
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing loans and borrowings
Lease liabilities
Employee provisions
Other provisions and liabilities
Derivative financial instruments
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Retained losses
Reserves
TOTAL EQUITY
Note
2020
$’000
2019^
$’000
7
22
7
22
22
4(b)
11
22
10
4(c)
11
22
10
2,131
34,552
3,486
3,136
–
1,176
1,450
35,524
5,282
250
4,450
–
44,481
46,956
124,196
22,788
437
67
147,488
191,969
11,952
4,309
11,592
8,461
7,526
184
4,447
152,079
–
–
28
152,107
199,063
13,868
5,167
–
8,147
4,539
–
–
48,471
31,721
14,166
11,531
395
2,083
49
28,224
76,695
115,274
32,709
–
307
344
110
33,470
65,191
133,872
13(a)
310,327
312,057
(197,560)
(180,601)
2,507
2,416
115,274
133,872
^ The Group has initially applied AASB 16 Leases at 1 July 2019 using the modified retrospective (option 2) approach. Under this approach,
comparative information is not restated (refer to note 22).
The accompanying notes form an integral part of the Consolidated Statement of Financial Position.
44
Boom Logistics Annual Report 2020 CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest paid – Lease liabilities
Interest received
Interest received – Lease receivables
Income tax received
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from the sale of property, plant and equipment
Net cash provided by / (used in) investing activities
Cash flows from financing activities
Payments for shares bought back
Proceeds from borrowings
Repayment of borrowings
Repayment of borrowings – Lease liabilities
Receipts from finance leases as lessor
Payment of transaction costs related to share buy-back and borrowings
Net cash (used in) financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Note
2020
$’000
2019^
$’000
205,898
203,836
(177,385)
(187,269)
22
22
9
22
(2,692)
(1,633)
7
110
4,450
28,755
(2,190)
4,610
2,420
(1,726)
–
(15,923)
(13,817)
978
(6)
(3,333)
–
11
–
–
13,245
(10,765)
6,346
(4,419)
(5,978)
14,135
(16,959)
–
–
(244)
(30,494)
(9,046)
681
1,450
2,131
(220)
1,670
1,450
^ The Group has initially applied AASB 16 Leases at 1 July 2019 using the modified retrospective (option 2) approach. Under this approach,
comparative information is not restated (refer to note 22).
The accompanying notes form an integral part of the Consolidated Statement of Cash Flows.
45
Boom Logistics Annual Report 2020 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2020
Contributed
Equity
$’000
Retained
Losses
$’000
Note
Cash Flow
Hedge
Reserve
$’000
Employee
Equity
Benefits
Reserve
$’000
Total Equity
$’000
318,065
(174,871)
(60)
2,056
145,190
–
(400)
318,065
(175,271)
–
–
–
–
(6,008)
(5,330)
–
(5,330)
–
–
312,057
(180,601)
–
–
–
–
(16,959)
–
(16,959)
–
–
–
(60)
–
(17)
(17)
–
–
(77)
–
(86)
(86)
–
–
–
(400)
2,056
144,790
–
–
–
(5,330)
(17)
(5,347)
437
437
–
(6,008)
2,493
133,872
–
–
–
(16,959)
(86)
(17,045)
177
177
–
(1,730)
13(a)
(1,730)
310,327
(197,560)
(163)
2,670
115,274
At 1 July 2018 as originally
presented
Adjustment on initial application
of AASB 9
Adjusted balance at 1 July 2018
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners in their
capacity as owners:
Cost of share based payments
18(b)
Share buy-back including
transaction costs and net of tax
At 30 June 2019^
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners in their
capacity as owners:
Cost of share based payments
18(b)
Share buy-back including
transaction costs and net of tax
At 30 June 2020
^ T he Group has initially applied AASB 16 Leases at 1 July 2019 using the modified retrospective (option 2) approach. Under this approach,
comparative information is not restated (refer to note 22).
The accompanying notes form an integral part of the Consolidated Statement of Changes in Equity.
46
Boom Logistics Annual Report 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 30 June 2020
About This Report
The financial report of Boom Logistics Limited and its
subsidiaries (“the Group”) for the year ended 30 June 2020
was authorised for issue in accordance with a resolution of
the Board of Directors on 27 August 2020.
Boom Logistics Limited is a company domiciled in Australia
and limited by shares incorporated in Australia whose shares
are publicly traded on the Australian Stock Exchange.
The Group is a for-profit entity and the nature of its
operations and principal activities are described in note 1.
The financial report is a general purpose financial report
which has been prepared in accordance with Australian
Accounting Standards (AASBs) adopted by the Australian
Accounting Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial report complies with
International Financial Reporting Standards (IFRSs) and
interpretations adopted by the International Accounting
Standards Board (IASB).
The financial report has been prepared in accordance
with the historical cost convention rounded to the
nearest thousand dollars ($'000) in accordance with
ASIC Corporations Instrument 2016/191 unless otherwise
stated, except for derivative financial instruments
which are measured at fair value. The financial report is
presented in Australian dollars which is the Company's
functional currency.
Boom’s Directors have included information in this
report that they deem to be material and relevant to the
understanding of the financial report. Disclosure may be
considered material and relevant if the dollar amount is
significant due to size or nature, or the information is
important to understand the:
● Group’s current year results;
● impact of significant changes in Boom’s business; or
● aspects of the Group’s operations that are important to
future performance.
Disclosure of information that is not material may
undermine the usefulness of the financial report by
obscuring important information.
COVID-19 Impact on
the Group
The spread of the novel coronavirus (COVID-19) was declared
a public health emergency by the World Health Organisation
on 31 January 2020 and upgraded to a Global Pandemic on
11 March 2020. The Australian Federal Government enacted
its emergency plan on 29 February 2020 which saw the
closure of Australian borders from 20 March 2020.
The speed of development of the situation and the
unprecedented global reach of the emergency has created a
significant level of uncertainty. The Group noted in its Half
Year Report ASX Release dated 26 February 2020 that the
impact of recent events relating to the coronavirus remain
uncertain and that delays to projects and disruptions to
supply chains were a possibility. Since that date the Group
has continued to respond quickly to the emerging COVID-19
pandemic in line with advice from the Federal Government
and World Health Organisation.
The Group derives the majority of its revenue from the
following sectors: mining and resources; infrastructure and
construction; industrial maintenance; wind, energy and
utilities; and telecommunications which are designated
as essential services and have continued to operate. The
composition of Boom’s customer base and the geographical
spread of the Group’s operations has helped to minimise
the impact of the virus on Group revenues. The Group’s
Melbourne travel tower business is a supplier to essential
services, telecommunications and utility customers, and
is able to continue trading during the stage 4 restriction
imposed on businesses in the Melbourne metropolitan area
from 5 August 2020.
The Group has worked closely with customers to ensure that
all health requirements were met. Operating cash flow has
remained solid through the period.
The Group was quick to implement a number of initiatives
to safeguard the health of our employees, customers and
suppliers including introducing a travel ban for all staff in
March, introducing strict cleaning processes for office space
and equipment, established social distancing protocols
and introduced thermal scanning and temperature checks
at depots.
The Group was also proactive around measures to preserve
cash during the period of uncertainty:
● Additional cost controls were introduced across the
business to minimise discretionary expenditure;
● Major suppliers were approached to extend credit terms;
● Financiers were approached to defer some equipment
rental payments;
47
Boom Logistics Annual Report 2020 COVID-19 Impact on the Group (continued)
● State payroll tax payments in the both New South Wales
and Queensland were deferred in line with the support
package offered by the State Governments;
north-west of the State. The Group is on track to begin
execution on this expansion in the first quarter of FY21;
● Projects were delayed as a result of customer supply
● Job-keeper payments were accessed by the Group’s
labour hire business in May and June 2020, providing a
contribution of approximately $400k (and $200k cash)
in the period. This income has been presented net of the
relevant expense in the financial statements;
● Employees were required to take leave during the last
quarter; and
● The Executive and Board reduced their remuneration
during the last quarter.
The above measures contributed circa $1.6 million of
operating cash that was deferred in FY20 and is required
to be paid over the first seven months of FY21. A further
$0.6 million of equipment rental payments were deferred
with the rental contracts being extended for an additional
three month term.
The Group also elected to crystallise the historic franking
deficit that it has carried for a number of years. A payment
plan was negotiated with the ATO to progressively repay the
$4.5 million franking deficit tax liability over a period of twenty
four months. Historically this amount would be prepaid in June
and refunded on lodgement of the Group’s income tax return
around November each year. Consequently the cash flow at
30 June 2020 benefitted from an additional $4.5m being the
tax refund received in November 2019 that will now be repaid
in interest free instalments over a twenty four month period.
Boom also made the difficult decision to defer its 0.5 cent
dividend (cash cost of $2.1 million) that was to be paid in
April 2020 to 2 October 2020.
COVID-19 has had the following broad impacts to the
operations of the business in the period:
● Social distancing protocols required at customer sites
resulted in the cancellation, delay or reduction in scope
of several shutdown programs over the last quarter.
Staffing levels and activity at some customer sites was
reduced where social distancing could not be effectively
maintained with normal crew numbers e.g. Esso
offshore contract;
● Border closures restricted the use of fly in fly out
workers. This was particularly relevant for the operation
of the Group’s Olympic Dam contract in South Australia
that relies on a large inter-state work force. These
restriction limited the number of people available on site
over the last quarter;
● Travel restrictions within Western Australia delayed
the Group’s planned expansion of operations into the
chain concerns and economic uncertainty. In particular
a wind farm construction project and a number of civil
infrastructure projects that the Group expected to win
were delayed in the last quarter.
The uncertainty in outlook for projects persists. However
the Group has been successful in mitigating this by
securing work for one of its major project cranes with
supporting assets on a wind farm project over the first
half FY21 and has secured a contract to support work on
the Snowy 2.0 project commencing in August 2020.
Going concern considerations
The uncertain economic conditions have not materially
impacted the Group’s assessment of going concern. The
Group has diverse operations across all states providing
a recurring revenue base largely in industries that have
been designated as essential services and able to operate
throughout the government restrictions.
The Group is not critically exposed to operations to any one
location or any one customer or customer site. Furthermore
the Group operates mobile assets that are transferable for
project work across locations further mitigating geographical
impacts of future virus outbreaks.
At 30 June 2020 the Group has net debt of under $20 million,
low gearing at 17% (net debt to equity) and significant
undrawn and immediately available bank facilities. The
Group’s core debt facilities retain tenure, expiring in January
2022, and provide sufficient liquidity to fund the Group over
the next 12 months with significant headroom.
As noted above the Group has deferred circa $1.6 million of
operating cash payments from FY20 that will be paid over
the first seven months of FY21. These deferrals are fully
factored in to the cash flow projections and are offset by the
circa $3 million proceeds expected from asset sales over the
same period.
With the non-repeat of the loss making Cattle Hill project in
FY20, the Group is forecasting improved profitability in FY21
and continued surplus operating cash flow. Furthermore the
uncertainty created by COVID-19 to project timing has been
mitigated to a large part by the Group securing long term
contracted project work to supplement its recurring mining
maintenance revenues:
● Work secured on a Victorian wind farm on a schedule of
rates for the first half of FY21;
● Work commenced in August 2020 on the Snowy 2.0
project;
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020
● Work on the Parramatta Light Rail project secured to
commence in the first quarter of FY21;
● Work on a power transmission line project in WA
commenced in August 2020.
The Group has demonstrated its ability to generate solid
operating cash flows throughout the COVID-19 situation
and has been quick to act to changing conditions. The Group
has forecast cash flows and bank covenant compliance for
a period of 12 months from the date of this report which
show surplus liquidity and a continued ability to operate as a
going concern under a number of scenarios.
The directors believe that it remains appropriate to prepare
the financial statements on a going concern basis.
Section A: Financial Performance
This section provides the information that is most relevant to understanding the financial performance of the Group during
the financial year.
1. Segment Reporting
Description of operating segments
Management has determined the operating segments based on the reports reviewed by the Chief Operating Decision
Maker (“CODM”) to make decisions about resource allocation and to assess performance. The CODM who is responsible for
allocating resources and assessing performance of the operating segments is the Managing Director and CEO.
The business is considered from a product perspective and has two reportable segments:
● “Lifting Solutions”, which consists of all lifting activities including the provision of cranes, travel towers, access
equipment and all associated services; and
● “Labour Hire”, which includes the provision of skilled labour with a wide range of trades, such as, electricians, boiler
makers, mechanics, plus the traditional crane and travel tower operators, riggers, truck drivers.
The segment information provided to the CODM is measured in a manner consistent with that of the financial statements.
All inter-segment sales are carried out at arm’s length prices.
Segment information
Other*
$’000
Elimination
$’000
Consolidated
$’000
Year ended 30 June 2020
Note
3(a)
Segment revenue
Total external revenue
Inter-segment revenue
Total segment revenue
Other income
Total revenue and other income
Segment result
Operating result
Net profit on disposal of property,
plant and equipment
Depreciation and amortisation
Restructuring expense
Impairment of right-of-use assets
Impairment of assets classified as
held for sale
(Loss) / profit before net interest and tax
Lifting
Solutions
$’000
184,380
–
184,380
Labour
Services
$’000
1,155
23,585
24,740
–
–
–
30,259
1,281
(5,590)
416
(30,999)
(305)
(75)
(1,827)
(2,531)
–
(53)
(2)
–
–
–
(855)
(411)
–
–
1,226
(6,856)
–
185,535
(23,585)
(23,585)
–
–
–
–
–
–
–
–
185,535
533
186,068
25,950
416
(31,907)
(718)
(75)
(1,827)
(8,161)
49
Boom Logistics Annual Report 2020 Section A: Financial Performance (continued)
1. Segment Reporting (continued)
Year ended 30 June 2020
Note
Lifting
Solutions
$’000
Labour
Services
$’000
Other*
$’000
Elimination
$’000
Consolidated
$’000
(4,303)
(7)
(41)
–
Net interest
Income tax expense
Loss from continuing operations
Segment assets and liabilities
Segment assets
Segment liabilities
Additions to non-current assets
Year ended 30 June 2019
Note
3(a)
Segment revenue
Total external revenue
Inter-segment revenue
Total segment revenue
Other income
Total revenue and other income
Segment result
Operating result
Net loss on disposal of property,
plant and equipment
Depreciation and amortisation
Restructuring expense
Employee benefit expense –
retirement provision
Impairment of property, plant
and equipment
(Loss) / profit before net interest and tax
Net interest
Income tax expense
Loss from continuing operations
Segment assets and liabilities
Segment assets
Segment liabilities
Additions to non-current assets
187,737
71,389
1,390
Lifting
Solutions
$’000
180,516
–
180,516
2,157
1,003
90
Labour
Services
$’000
2,206
22,543
24,749
–
–
–
26,669
1,076
(6,263)
(2,010)
(16,771)
(1,117)
–
(1,975)
4,796
–
(8)
–
–
–
–
(561)
–
(675)
–
1,068
(7,499)
(4,351)
(4,447)
(16,959)
191,969
76,695
1,547
3,715
4,303
67
(1,640)
–
–
Other*
$’000
Elimination
$’000
Consolidated
$’000
–
182,722
(22,543)
(22,543)
–
–
–
–
–
–
–
–
182,722
4,242
186,964
21,482
(2,010)
(17,340)
(1,117)
(675)
(1,975)
(1,635)
(3,695)
–
(5,330)
191,159
58,492
12,461
1,949
928
–
7,704
5,771
464
(1,749)
199,063
–
–
65,191
12,925
* Other represents centralised costs including national office and shared services.
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 2. Revenue from Contracts with Customers
(a) Disaggregation of revenue from contracts with customers
Boom Logistics Limited is domiciled in Australia and all core revenue is derived from customers within Australia. The Group
derives revenue from the transfer of services over time in the following industry segments:
Industry segment
Year ended 30 June 2020
Mining & resources
Wind, energy, & utilities
Infrastructure & construction
Industrial maintenance
Telecommunications
Other
Note
(i)
Lifting
Solutions
$’000
86,466
48,368
17,928
18,732
11,817
1,069
Labour
Services
$’000
Consolidated
$’000
38
17
309
656
–
135
86,504
48,385
18,237
19,388
11,817
1,204
Total revenue from contracts with customers
184,380
1,155
185,535
Timing of revenue recognition
Services transferred over time
Year ended 30 June 2019
Mining & resources
Wind, energy, & utilities
Infrastructure & construction
Industrial maintenance
Telecommunications
Other
Note
184,380
1,155
185,535
Lifting
Solutions
$’000
87,333
34,161
23,822
20,896
13,176
1,128
Labour
Services
$’000
Consolidated
$’000
44
–
951
87,377
34,161
24,773
1,200
22,096
–
11
13,176
1,139
Total revenue from contracts with customers
180,516
2,206
182,722
Timing of revenue recognition
Services transferred over time
180,516
2,206
182,722
(i) Under AASB 15, the Group has assessed that the rendering of services under certain contracts contained embedded lease arrangements. As the
lessor, these arrangements are accounted for as operating leases and totalled $1.184 million for the year ended 30 June 2020.
(b) Contract balances
Trade and other receivables
Contract assets
Total trade receivables, contract assets and other receivables
Note
(ii)
2020
$’000
31,944
2,608
34,552
2019
$’000
29,382
6,142
35,524
(ii) Contract assets relate to the Group’s right to consideration for work completed but not billed at the reporting date. The contract assets are
transferred to trade receivables when the rights become unconditional. This usually occurs when the Group issues the invoices to the customers.
51
Boom Logistics Annual Report 2020 Section A: Financial Performance (continued)
2. Revenue from Contracts with Customers (continued)
Recognition and measurement
Revenue from the hire of lifting/access equipment, labour
and other services provided is recognised where the right to
be compensated for the services can be reliably measured.
This typically occurs when the job dockets or timecards
are approved by the customers. If the services under a
single arrangement are rendered in different reporting
periods, then the consideration is allocated on a relative fair
value basis.
Revenue from the installation of wind towers is recognised
by using either the equipment hire and labour rate
models (schedule of rates) or the stage of completion of
the contract, as specified in the contracts. The stage of
completion is measured by reference to work completed on
each stage of a wind tower unit calculated as a percentage
of the total wind towers included under the contract.
The total consideration in the services above is allocated
based on their standalone selling prices. The stand-alone
selling prices are determined based on the list prices at
which the Group sells the services in separate transactions.
The fair value and the stand-alone selling prices of both
types of services are considered broadly similar.
Key estimate and judgement
Determining the stage of completion requires an estimate
of the wind tower units completed to date as a percentage
of the total wind tower units under the contract.
Where variations and claims are made to the contract,
assumptions are made regarding the probability that
the customer will approve the variations and claims and
the amount of revenue that will arise. Changes in these
estimation methods could have a material impact on the
financial statements.
3. Other income and Expenses
(a) Other income
Profit on disposal of plant and equipment
Profit / (loss) on disposal of plant and equipment – Right-of-use assets
Insurance settlement
Interest income
Interest income – Lease receivables
Legal settlement
Total other income
(b) Expenses
External equipment hire
External labour hire
Maintenance
Fuel
External transport
Employee travel and housing
Other reimbursable costs (on-charged to customers)
Other equipment services and supplies
Total equipment services and supplies expense
52
Note
Note
2020
$’000
465
(49)
–
7
110
–
533
2020
$’000
10,235
5,194
8,906
3,791
6,797
1,760
2,202
7,520
2019
$’000
–
–
2,589
11
–
1,642
4,242
2019
$’000
10,249
3,895
9,957
3,459
8,199
2,275
1,517
4,895
46,405
44,446
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Employee related
Insurance and compliance
IT and communications
Occupancy
Other overheads
Loss on disposal of plant and equipment
Total other expense
4. Income Tax
(a)
Income tax expense
Note
2020
$’000
2,738
4,304
2,727
1,175
3,190
–
2019
$’000
3,397
3,839
2,633
1,322
1,958
2,010
14,134
15,159
Note
2020
$’000
2019
$’000
Current income tax
Current income tax expense / (benefit)
Adjustments in respect of current income tax of previous years
Deferred income tax
Relating to origination and reversal of temporary differences
A reconciliation between tax benefit and the accounting loss before income tax is as follows:
Accounting loss before tax from continuing operations
At the Group's statutory income tax rate of 30% (2019: 30%)
Expenditure not allowable for income tax purposes
Adjustments in respect of current income tax of previous years
Current year losses for which no deferred tax asset is recognised
Derecognition of tax losses recognised in previous years
Franking deficit tax payable
Income tax expense
Note
4(c)
4,449
–
(2)
4,447
2020
$’000
(12,512)
(3,754)
53
–
1,565
2,136
4,447
4,447
134
(120)
(14)
–
2019
$’000
(5,330)
(1,599)
35
(120)
569
1,115
–
–
53
Boom Logistics Annual Report 2020 Section A: Financial Performance (continued)
4.
Income Tax (continued)
(b) Deferred income tax
Year ended 30 June 2020
– Employee leave provisions
– Allowance for impairment on financial assets
– Liability accruals
– Restructuring provisions
– Tax losses
– Plant and equipment
– Derivative financial instruments
Net deferred tax asset / (liabilities)
Year ended 30 June 2019
– Employee leave provisions
– Allowance for impairment on financial assets
– Liability accruals
– Restructuring provisions
– Tax losses
– Plant and equipment
– Derivative financial instruments
Net deferred tax asset / (liabilities)
Opening
Balance
$’000
2,536
173
448
246
6,408
(9,816)
33
28
Opening
Balance
$’000
2,831
123
735
38
7,523
(11,269)
26
7
Recognised
in Income
Statement
$’000
Recognised
in Equity
$’000
121
161
1,158
(234)
(2,136)
932
–
2
–
–
–
–
–
–
37
37
Recognised
in Income
Statement
$’000
Recognised
in Equity
$’000
(295)
50
(287)
208
(1,115)
1,453
–
14
–
–
–
–
–
–
7
7
Closing
Balance
$’000
2,657
334
1,606
12
4,272
(8,884)
70
67
Closing
Balance
$’000
2,536
173
448
246
6,408
(9,816)
33
28
Income tax payable
(c)
Income tax payable represents franking deficit tax payable.
The franking deficit position at 30 June 2020 has been
agreed with the ATO post balance date and will be paid
in twenty four interest free equal monthly instalments
commencing from August 2020. The income tax payments
can be offset against future income tax liabilities.
Recognition and measurement
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the balance
sheet date.
(d) Tax losses
The Group has total tax losses of $31.101 million tax effected
(2019: $29.537 million). $4.272 million of these losses have
been recognised on balance sheet and $26.829 million
has not been recognised as a deferred tax asset based on
an assessment of the probability that sufficient taxable
profit will be available to allow the tax losses to be utilised
in the near future. The unused tax losses remain available
indefinitely and are in addition to the franking deficit tax
payments that can also be used to offset future tax payable.
Deferred tax is provided on all temporary differences at
the balance sheet date between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes. Deferred tax assets and liabilities are
recognised for all deductible / taxable temporary differences
except where they arise from the initial recognition of an
asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss. The
carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of
comprehensive income.
Tax consolidation legislation
Boom Logistics Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. The head entity, Boom Logistics Limited, and the controlled entities in the tax consolidated group have entered
into tax funding and sharing agreements such that each entity in the tax consolidated group recognises the assets,
liabilities, revenues and expenses in relation to its own transactions, events and balances only.
Key estimate and judgement
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable profits will be available to utilise those temporary differences and losses, and the losses continue to be
available having regard to their nature and timing of origination. Judgement is required to determine the amount of deferred
tax assets that can be recognised based upon the likely timing and the level of future taxable profits. Utilisation of tax losses
also depends on the ability of the Group to satisfy certain tests at the time the losses are recouped.
5. Earnings Per Share
Basic earnings per share amounts are calculated by dividing net profit or loss for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit or loss for the year attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.
The following reflects the income and share data used in the calculation of basic and diluted earnings per share:
Net loss after tax
Weighted average number of ordinary shares used in calculating basic
earnings per share
Effect of dilutive securities:
– employee share awards
Adjusted weighted average number of ordinary shares used in calculating
basic earnings per share
Number of ordinary shares at financial year end
Note
2020
$’000
2019
$’000
(16,959)
(5,330)
No. of shares
431,555,802
462,894,795
(i)
–
–
431,555,802 462,894,795
427,774,207
439,193,800
(i) The total number of granted rights and options at 30 June 2020 and 30 June 2019 were excluded from the diluted weighted average number of
ordinary shares calculation as their effect was anti-dilutive.
55
Boom Logistics Annual Report 2020
Section A: Financial Performance (continued)
6. Dividends
There were no dividends paid during the year.
Dividends proposed and not recognised as a liability
The Board resolved to pay an unfranked interim dividend of 0.5 cents per share on 26 February 2020 with a record date
of 31 March 2020. The dividend payment date, originally scheduled for 21 April 2020, was deferred to 2 October 2020 as a
prudent measure to preserve cash as a result of the uncertainty created by the COVID-19 situation at that time. The record
date for the deferred payment remains 31 March 2020 and the estimated liability based on the number of ordinary shares on
issue at that date is $2.1 million.
Section B: Operating Assets and Liabilities
This section provides information relating to the key operating assets used and liabilities incurred to support delivering the
financial performance of the Group.
7. Property, Plant and Equipment
Year ended 30 June 2020
Note
Opening carrying amount
Additions
Disposals
Transfers
Depreciation charge for the year
Closing carrying amount
At cost
Accumulated depreciation
Closing carrying amount
(i)
Year ended 30 June 2019
Note
Opening carrying amount
Additions
Disposals
Transfers
Impairment
Depreciation charge for the year
Closing carrying amount
At cost
Accumulated depreciation
Closing carrying amount
Rental
Equipment
$’000
145,000
1,100
(3,762)
(8,455)
(14,852)
119,031
282,670
(163,639)
119,031
Rental
Equipment
$’000
159,559
11,395
(8,642)
(676)
(975)
(15,661)
145,000
316,839
(171,839)
145,000
Motor
Vehicles
$’000
4,078
32
(686)
(34)
(742)
2,648
20,103
(17,455)
2,648
Motor
Vehicles
$’000
3,896
885
(76)
282
–
(909)
4,078
21,534
(17,456)
4,078
Machinery,
Furniture, Fittings
& Equipment
$’000
Freehold
Land &
Buildings
$’000
1,319
415
(16)
38
(801)
955
6,263
(5,308)
955
1,682
–
–
–
(120)
1,562
3,120
(1,558)
1,562
Machinery,
Furniture, Fittings
& Equipment
$’000
Freehold
Land &
Buildings
$’000
1,228
645
(68)
162
–
(648)
1,319
5,932
(4,613)
1,319
2,805
–
–
(1)
(1,000)
(122)
1,682
3,120
(1,438)
1,682
Total
$’000
152,079
1,547
(4,464)
(8,451)
(16,515)
124,196
312,156
(187,960)
124,196
Total
$’000
167,488
12,925
(8,786)
(233)
(1,975)
(17,340)
152,079
347,425
(195,346)
152,079
(i) Finance leased assets of $3.738 million at 30 June 2019 were reclassified to Right-of-use Assets in accordance with the new accounting standard
AASB 16 Leases. Refer to note 22 for further details. At 30 June 2020, the finance leased asset balance was $3.542 million. Transfers also
included $4.713 million of rental equipment assets transferred to Assets classified as held for sale pre-impairment.
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Property, plant and equipment with a carrying amount
of $124.196 million (2019: $148.341 million) is pledged as
securities for current and non-current interest bearing loans
and borrowings as disclosed in note 11.
Assets classified as held for sale
The balance in the Group’s assets classified as held for
sale account at 30 June 2020 is $3.136 million (2019:
$0.250 million). Assets classified as held for sale consists
of underutilised travel towers and access equipment
that are no longer required and are targeted for sale in
FY2021. Assets transferred to held for sale were subject
to an impairment of $1.827 million (refer to note 8) which
is reflective of the expected auction value given the
large number of similar assets being disposed in a short
time frame.
Recognition and measurement
Property, plant and equipment are measured at cost less
accumulated depreciation and any accumulated impairment
losses. Cost includes expenditure that is directly attributable
to the acquisition of the asset. Land is measured at cost.
When a major overhaul is performed on an asset, the cost
is recognised in the carrying amount of property, plant and
equipment only if the major overhaul extends the expected
useful life of the asset or if the continuing operation of
the asset is conditional upon incurring the expenditure.
Similarly, when each major inspection is performed, its
cost is recognised in the carrying amount of property, plant
and equipment as a replacement only if it is eligible for
capitalisation. The cost of the day-to-day servicing or the
replacement of consumable parts of property, plant and
equipment is recognised in profit or loss as incurred.
Depreciation is recognised in the statement of
comprehensive income on a straight line basis over the
estimated useful life of each part of an item of property,
plant and equipment as follows:
Buildings
Mobile Cranes
Travel Towers
Access and Ancillary Equipment
Vehicles
Office and Workshop Equipment
Leasehold Improvements
Computer Equipment
20 Years
10 to 15 Years
10 to 20 Years
10 Years
5 to 10 Years
3 to 10 Years
Lease term
3 to 5 Years
Depreciation methods, useful lives and residual values
are reviewed at each reporting date and at more regular
intervals when there is an indicator of impairment or when
deemed appropriate.
Gains or losses on sale of property, plant and equipment are
included in the statement of comprehensive income in the
year the asset is disposed of.
Key estimate and judgement
The Group determines the estimated useful lives of assets
and related depreciation charges for its property, plant and
equipment based on the accounting policy stated above.
These estimates are based on projected capital equipment
lifecycles for periods up to twenty years based on useful
life assumptions.
Residual values are determined based on the value the
Group would derive upon ultimate disposal of the individual
piece of property, plant and equipment at the end of its
useful life. The achievement of these residual values is
dependent upon the second hand equipment market at any
given point in the economic cycle.
Management will increase the depreciation charge where
useful lives are less than previously estimated lives or there
is indication that residual values can not be achieved.
8. Impairment Testing
of Assets
Recognition and measurement
The carrying amounts of the Group’s non-financial assets,
other than deferred tax assets and inventories, are reviewed
at each reporting date to determine whether there is any
indication of impairment. If any such indication exists then
the asset’s recoverable amount is estimated.
For the purpose of impairment testing, assets are
grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely
independent of the cash inflows from other assets or groups
of assets (the “cash-generating unit”).
The recoverable amount of an asset or cash-generating unit
or a group of cash-generating units is the greater of its value
in use and its fair value less costs of disposal. In assessing
value in use, the estimated future cash flows are discounted
to their present value using a post-tax discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of
an asset, cash-generating unit or a group of cash-generating
units exceeds its recoverable amount. Impairment losses
are recognised in the statement of comprehensive income.
Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of
any goodwill allocated to the units and then to reduce the
57
Boom Logistics Annual Report 2020 Section B: Operating Assets and Liabilities (continued)
8.
Impairment Testing of Assets (continued)
carrying amount of the other assets in the unit (group of
units) on a pro rata basis.
Key estimate and judgement
The carrying values of the CGU’s fixed assets were tested
at 30 June 2020 by reference to management’s assessment
of their fair value less costs of disposal. Fair value was
determined after considering information from a variety of
sources including a valuation of all cranes and travel tower
assets obtained from an independent valuer dated 5 June
2020. The Group did not make any allowance for costs to sell
as they were deemed immaterial given the Group’s in house
expertise and track record of successful asset sales. The
Group has classified the assessment as Level 2 in the fair
value hierarchy (as per AASB 13) where “inputs other than
quoted prices in active markets that are observable for the
asset either directly or indirectly”.
The independent valuation supported the carrying value
of the CGU’s crane and travel tower assets as stated in the
consolidated statement of financial position. The evaluation
is consistent with the Group’s assessment of the economic
environment, lengthening lead times for new equipment
and second hand asset values. Consequently, no impairment
adjustment to the carrying value of operating fleet was
considered necessary at 30 June 2020.
Assets Classified As Held For Sale
All assets classified as held for sale are measured at lower
of cost and fair value. Fair value was determined from
a valuation obtained from an independent valuer dated
5 June 2020, a sales price estimate obtained from an
independent auctioneer, together with the Group's sales
history of comparable assets. To provide an indication about
the reliability of the inputs when determining fair value, the
Group has classified its assets held for sale as Level 2 in the
fair value hierarchy (as per AASB 13) where “inputs other
than quoted prices in active markets that are observable for
the asset either directly or indirectly”.
All assets classified as assets held for sale have been
reviewed to ensure they are being carried at their
recoverable amount less any selling costs. An impairment
charge of $1.827 million (2019: $nil) was recognised against
assets classified as held for sale during the period.
9. Reconciliation of the Net Cash Flows from Operations with
Net Loss After Tax
Net loss after tax
Non cash items
Depreciation and amortisation of non-current assets
Impairment of non-current assets
Borrowing costs – amortisation
Net (profit)/loss on disposal of non-current assets
Share based payments
Changes in assets and liabilities
Decease in trade receivables, contract assets and other receivables
Decrease/(increase) in inventories, prepayments and other assets
Decrease/(increase) in current and deferred tax balances
(Decrease) in trade and other payables
Increase/(decrease) in provisions and other liabilities
Net cash flow from operating activities
58
Note
2020
$’000
2019
$’000
(16,959)
(5,330)
11(e)
3
18(b)
31,907
1,902
143
(416)
177
972
1,981
8,858
(1,208)
1,398
17,340
1,975
373
2,010
437
1,143
(2,181)
(21)
(948)
(1,553)
28,755
13,245
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 10. Other Provisions and Liabilities
Other provisions and liabilities include accruals for PAYG, GST, wages, superannuation and payroll tax. The balance also
includes provision for make good costs on leases of $2.824 million which principally relates to shipment costs of returning
leased equipment, including onshore transportation costs. The balance includes a provision for $1.157 million for the potential
non-recovery of amounts claimed for work performed on a major project during the year. The claim is subject to dispute.
Recognition and measurement
A provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises
and impairment losses on the assets associated with that contract.
Key estimate and judgement
Measurement of an onerous contract involves the use of significant estimates of future costs to be incurred in completing
the contract. These estimates can be impacted by unforeseen events such as adverse weather or project scope changes.
Section C: Funding Structures
This section provides information relating to the Group’s funding structure and its exposure to financial risk, how they affect
the Group’s financial position and performance and how the risks are managed.
11. Debt
Current
Other loans
Total current interest bearing liabilities
Non current
Other loans
Secured bank loans
Prepaid borrowing costs
Total non-current interest bearing liabilities
Total interest bearing liabilities
Note
2020
$’000
2019
$’000
4,309
4,309
9,238
5,000
(72)
14,166
18,475
5,167
5,167
21,923
11,000
(214)
32,709
37,876
(a) Debt facilities
At reporting date, the Group had the following debt facilities:
● $20 million, 3 year syndicated loan facility expiring on January 2022. The facility attracts a floating interest rate. The
facility limit amortises by between $nil and $2.5 million at each six month period on 1 January and 1 July dependant on the
earnings leverage ratio reported at the end of the preceding quarter. The Group does not expect any amortisation to apply
to the facility;
● $20 million, 3 year trade receivables loan facility expiring on January 2022. The facility incurs a fixed fee and floating
interest on funds drawn. There is no amortisation required over the life of this facility;
● $35 million asset finance facility, comprising finance and operating leases with varying expiry dates from August 2021 to
May 2024. The facility attracts fixed interest rates and drawn amounts amortise over a period of 1 to 5 years.
59
Boom Logistics Annual Report 2020 Section C: Funding Structures (continued)
11. Debt (continued)
(b) Covenant position
The Group was in compliance with all financial and non-financial banking covenants throughout the reporting period and as
at 30 June 2020.
(c) Assets pledged as security
Fixed and floating charges are held over all of the Group’s assets, including cash at bank, trade receivables, contract assets
and other receivables, and assets classified as held for sale.
(d) Terms and debt repayment schedule
Syndicated debt
Trade receivables loan
Finance leases
Finance arrangement
Prepaid borrowing costs
Weighted
Average
Interest Rate
Currency
Years of
Maturity
AUD
AUD
AUD
AUD
4.24% January 2022
8.48% January 2022
5.98% 2023 to 2024
5.98% August 2021
2020
$’000
5,000
4,147
(i)
9,400
(72)
2019
$’000
11,000
7,617
3,726
15,747
(214)
Total interest bearing liabilities
18,475
37,876
(i) Finance leases of $3.726 million at 30 June 2019 were reclassified to Lease Liabilities in accordance with the new accounting standard AASB 16
Leases. Refer to note 22 for further details. At 30 June 2020, the finance lease balance was $3.193 million.
(e) Financing expense
Interest expense
Borrowing costs – amortisation (non-cash)
Borrowing costs – other
Total financing expense
(ii)
2020
$’000
1,862
143
830
2,835
2019
$’000
2,521
373
812
3,706
(ii) Interest expense of $0.208 million on finance leases reclassified to Lease Liabilities were recognised under Financing expense – Lease liabilities
on the Statement of Comprehensive Income.
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 (f) Financing facilities available
At reporting date, the following financing facilities had been negotiated and were available:
Total facilities:
– bank overdraft
– bank loans and borrowings
Facilities drawn at reporting date:
– bank overdraft
– bank loans and borrowings
Facilities undrawn at reporting date:
– bank overdraft
– bank loans and borrowings
Note
2020
$’000
2019
$’000
1,000
75,000
76,000
–
21,740
21,740
1,000
44,792
45,792
1,000
75,000
76,000
–
38,090
38,090
1,000
28,619
29,619
(iii)
(iv)
(iii) Balance at 30 June 2020 includes finance leases of $3.193 million.
(iv) $13.9 million of the $35 million asset finance facility was undrawn at reporting date. $12.6 million was drawn as disclosed above with a further
$8.5 million utilised by operating leases.
In addition, the Group has an existing $10.5 million working capital facility for letters of credit, bank guarantees and credit
card facilities. As at 30 June 2020, $4.381 million (2019: $7.609 million) was utilised.
Recognition and measurement
All loans and borrowings are initially recognised at fair value of the consideration received less directly attributable
transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest method.
Gains and losses are recognised in the statement of comprehensive income when the liabilities are derecognised.
The fair value of all borrowings approximates their carrying amount at reporting date as the impact of any market
discounting is not significant.
12. Financial Risk Management
The Board of Directors has overall responsibility for the oversight of the Company’s risk management framework including
the identification and management of material business, financial and regulatory risks. Management reports regularly to the
Risk Committee and the Board of Directors on relevant activities.
Risk management guidelines have been further developed to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management guidelines are regularly
reviewed to reflect changes in market conditions and the Group’s activities.
The Group has exposure to the following risks from its use of financial instruments:
● Credit risk;
● Liquidity risk; and
● Market risk.
61
Boom Logistics Annual Report 2020 Section C: Funding Structures (continued)
12. Financial Risk Management (continued)
The Group established a provision matrix based on the
historical credit loss experience and adjusted for forward
looking factors specific to the debtors and the economic
environment. The Group considers trade receivables and
contract assets are at risk when contractual payments
are 120 days past invoice date, subject to other internal or
external information that indicate otherwise.
Collectability is reviewed on an ongoing basis. Debts which
are known to be uncollectible are written off by reducing
the carrying amount directly. An allowance for impairment
is used when there is objective evidence that the Group
will not be able to collect all amounts due according to the
original terms of the receivables.
(a) Credit risk
Credit risk arises from the financial assets of the
Group, which comprise cash and cash equivalents, trade
receivables, contract assets and other receivables, and
derivative instruments. The Group's exposure to credit risk
arises from potential default of the counter party, with a
maximum exposure equal to the carrying amount of these
instruments. Exposure at balance date is addressed in each
applicable note.
The Group's policy is to trade with recognised, creditworthy
third parties. It is the Group's practice that all customers
who wish to trade on credit terms are subject to credit
verification procedures. In addition, receivable balances
are monitored on an ongoing basis with the result that the
Group's exposure to bad debts is not significant.
Trade receivables and contract assets
The Group applies the simplified approach to measuring
expected credit losses (“ECL”) which uses a lifetime expected
loss allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables
and contract assets have been grouped based on shared
credit risk characteristics and the days past due. The
contract assets relate to unbilled work in progress and have
substantially the same risk characteristics as the trade
receivables for the same types of contracts. The Group has
therefore concluded that the expected loss rates for trade
receivables are a reasonable approximation of the loss rates
for the contract assets.
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 At reporting date, the credit risk exposure on the Group’s trade receivables and contract assets using a provision matrix is
as follows:
Year ended 30 June 2020
0 – 30 days
31 – 60 days
61 – 90 days
91 – 120 days
+120 days
Year ended 30 June 2019
0 – 30 days
31 – 60 days
61 – 90 days
91 – 120 days
+120 days
ECL Rate
0.20%
0.25%
0.75%
7.50%
20.00%
ECL Rate
0.20%
0.25%
0.75%
7.50%
20.00%
Trade
Receivables*
$’000
Contract
Assets*
$’000
Total
$’000
Loss
Allowance
$’000
17,771
5,976
5,798
1,285
1,408
2,608
20,379
–
–
–
–
5,976
5,798
1,285
1,408
32,238
2,608
34,846
Trade
Receivables*
$’000
Contract
Assets
$’000
16,055
6,142
6,861
4,151
739
1,082
–
–
–
–
Total
$’000
22,197
6,861
4,151
739
1,082
28,888
6,142
35,030
37
14
40
88
256
435
Loss
Allowance
$’000
41
16
28
50
197
332
* Trade receivables and contract assets are net of specific transactions totalling $0.539 million (2019: $0.245 million) that have been fully provided
and excluded from above general provision calculation. Refer to page 47 for the impact from COVID-19.
The movement in the allowance for impairment in respect of trade receivables and contract assets during the financial year
is as follows:
Balance at 1 July
Impairment loss recognised
Amounts written-off and/or written back
Balance at 30 June
Note
(i)
2020
$’000
577
802
(265)
1,114
2019
$’000
809
257
(489)
577
(i) The allowance for impairment of $1.114 million at 30 June 2020 includes an additional allowance of $0.140 million, circa 30% in excess of the
allowance calculated using the provision matrix above. The additional amount is to allow for a perceived temporary increase in the risk profile as
a result of the uncertain economic environment at 30 June 2020.
Recognition and measurement
Trade receivables and contract assets are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for impairment. Trade receivables are generally due for settlement
within 30 – 90 days.
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When
a trade receivable or contract asset for which an allowance for impairment had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off
are credited against other expenses in the statement of comprehensive income.
63
Boom Logistics Annual Report 2020 Section C: Funding Structures (continued)
12. Financial Risk Management (continued)
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its financial
obligations as they fall due under both normal and stressed conditions without incurring unacceptable losses or damage
to the Group's reputation. In order to meet these requirements management estimates the cash flows of the Group on a
weekly, monthly and three year rolling basis.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, bank loans, finance leases and trade receivables loan. At 30 June 2020, the Group’s balance sheet gearing ratio
was 17% (net debt / total equity) on a pre AASB 16, like for like basis (2019: 27%). Allowing for the additional lease liabilities
recognised in accordance with AASB 16, the Group’s balance sheet gearing ratio was 34%.
The table below represents the undiscounted contractual settlement terms for financial liabilities based on the remaining
period at the reporting date to the contractual maturity date.
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
6 mths
or less
$’000
6-12 mths
$’000
1-2 years
$’000
2-5 years
$’000
Year ended 30 June 2020
Trade and other payables
Derivatives
Income tax payable
Other loans
Secured bank loans
Lease liabilities
Year ended 30 June 2019
11,952
233
4,447
13,547
5,000
23,123
(11,952)
(11,952)
(233)
(4,447)
(14,892)
(5,383)
(26,337)
(123)
(4,447)
(2,571)
(121)
(7,545)
58,302
(63,244)
(26,759)
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
6 mths
or less
$’000
Trade and other payables
13,868
(13,868)
(13,868)
Derivatives
Other loans
Secured bank loans
110
27,090
11,000
(110)
(30,409)
(12,186)
(14)
(3,577)
(230)
52,068
(56,573)
(17,689)
–
(61)
–
(2,571)
(121)
(5,978)
(8,731)
–
(49)
–
(9,750)
(5,141)
(8,055)
(22,995)
–
–
–
–
–
(4,759)
(4,759)
6-12 mths
$’000
1-2 years
$’000
2-5 years
$’000
–
(28)
(3,577)
(230)
(3,835)
–
(46)
(7,153)
(459)
–
(23)
(16,103)
(11,268)
(7,658)
(27,394)
Recognition and measurement
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually payable within 60 days of recognition.
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 (c) Market risk
Market risk is the risk that changes in interest rates and foreign exchange rates will affect the Group’s income or the value of
its holdings of financial instruments.
Interest rate risk
At the reporting date, the interest rate profiles of the Group’s interest bearing financial instruments were:
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial assets – cash at bank and on hand
Financial liabilities
Carrying Amount
2020
$’000
2019
$’000
Note
(17,593)
(17,593)
(19,473)
(19,473)
2,131
(4,147)
(2,016)
1,450
(18,617)
(17,167)
The Group's main interest rate risk arises from short and
long-term borrowings. Borrowings issued at variable rates
expose the Group to cash flow interest rate risk. This risk
is managed by taking into consideration the current and
expected future debt profile, expectations regarding future
interest rate movements, the mix between variable and
fixed rate borrowings and the potential to hedge against
negative outcomes by entering into interest rate swaps.
Interest rate swap contracts – cash flow hedges
The Group has entered into an interest rate swap contract
under which it is obliged to receive interest at a variable rate
and to pay interest at a fixed rate.
The interest rate swap contract currently in place covers
100% of the variable loan principal outstanding. The fixed
interest rate is at 1.94%. The contract is settled on a net
basis and coincide with the dates on which interest is
payable on the underlying debt.
All swaps are matched directly against the hedged item
and as such are considered highly effective. The swaps are
measured at fair value and all gains and losses attributable
to the hedged risk are taken directly to equity and
re-classified into profit or loss when the interest expense
is recognised.
The Group will continue to monitor debt levels and assess
the need to enter into further interest rate swap contracts,
or other derivative instruments, based on forecast debt
levels and prevailing market conditions at that time.
Foreign exchange rate risk
Foreign exchange risk arises when future commercial
transactions and recognised liabilities are denominated
in a currency that is not the entity’s functional currency.
The Group has transactional currency exposures arising
from operating lease of plant and equipment denominated
in Euros.
In order to protect against exchange rate movements,
the Group has entered into forward exchange contracts to
purchase Euros. These contracts are hedging highly probable
forecasted transactions and are timed to mature when
payments are scheduled to be made. The forward exchange
contracts are considered to be fully effective cash flow
hedges and any gain or loss on the contracts is taken directly
to equity.
The Group's exposure to foreign exchange rate risk at
reporting date, expressed in Australian dollars, was
$0.499 million (2019: $0.299 million) and the forward
exchange contracts had a fair value of $0.104 million payable
(2019: $0.018 million payable).
Sensitivity
Movements in the Australian dollar against the Euro would
not result in a material difference to the balances stated
in the consolidated statements of changes in equity and
comprehensive income.
65
Boom Logistics Annual Report 2020
Section C: Funding Structures (continued)
12. Financial Risk Management (continued)
Recognition and measurement
Derivatives designated as hedging instruments are classified as cash flow hedges.
At the inception of each hedging transaction, the Group documents the relationship between the hedging instruments
and hedged items, its risk management objectives and its strategy for undertaking the hedge transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in
hedging transactions have been and will continue to be highly effective in offsetting changes in fair value or cash flows of
hedged items.
The effective portion of changes in the fair value of the derivatives that are designated and qualify as cash flow hedges
is recognised in other comprehensive income and accumulated in the cash flow hedge reserve in equity. The gain or loss
relating to the ineffective portion is recognised immediately in profit or loss.
The Group does not speculate in the trading of derivative instruments.
Derivatives are carried at fair value and categorised as level 2 in the fair value hierarchy under AASB 13 where “inputs other
than quoted prices in active markets that are observable for the asset either directly or indirectly”.
13. Contributed Equity
(a)
Issued and paid up capital
2020
2019
Note
No. of Shares
$’000
No. of Shares
$’000
Beginning of the financial year
439,193,800
312,057
474,868,764
318,065
Shares bought back on-market and cancelled
(i)
(11,419,593)
(1,726)
(35,674,964)
(5,978)
Buy-back transaction costs
Tax credits recognised directly in equity
End of the financial year
–
–
(6)
2
–
–
(44)
14
427,774,207
310,327
439,193,800
312,057
(i) During the financial year, Boom purchased and cancelled 11,419,593 ordinary shares (2019: 35,674,964) priced between $0.14 and $0.17 per share
as a result of the on market share buy-back scheme. The total cost, including transaction costs, was $1.732 million (2019: $6.022 million). These
costs were deducted from contributed equity. The share buy-back scheme has been completed.
All issued shares are fully paid. Fully paid ordinary shares
carry one vote per share and carry the right to dividends.
(b) Capital management
For the purposes of capital management, capital includes
issued capital and all other equity reserves attributable
to the equity holders of the parent. The primary objective
of the Group’s capital management policy is to maximise
shareholder value.
The Group manages its capital structure and makes
adjustments in light of changes in economic conditions and
the requirements of the financial covenants included in its
agreements with financiers. Adjustments to the Group’s
capital structure can be made subject to meeting the
restrictions included in the Group’s financing agreements.
These require the Group to maintain the ratio of gross debt
to trading EBITDA at less than 2.5 times with the aggregate
total of distributions not exceeding $15 million over the term
of the facilities (to January 2022). Further, the total value of
dividends paid in any financial year must not exceed 50%
of the net profit after tax earned in the prior financial year
without the prior approval of the financiers.
The Group monitors capital on the basis of the balance sheet
gearing ratio. This ratio is calculated as net debt divided by
total equity as disclosed in note 12(b).
The Group’s capital management, amongst other things,
aims to ensure that it meets its financial covenants.
The Group will also manage its capital structure through
returns to shareholders, as economic conditions and trading
results improve.
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Section D: Other Disclosures
This section provides additional financial information that is required by the Australian Accounting Standards and
management considers relevant for shareholders.
14. Subsidiaries
AKN Pty Ltd
Sherrin Hire Pty Ltd
Shutdown Staffing Pty Ltd
Boom Logistics (VIC) Pty Ltd
Boom Logistics Projects Pty Ltda
Boom Renewables Pty Ltda
Equity Interest
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
2020
%
100
100
100
100
100
100
2019
%
100
100
100
100
–
–
a Boom Logistics Projects Pty Ltd was incorporated on 25 May 2020 and Boom Renewables Pty Ltd was incorporated on 2 June 2020. Both
companies did not trade in the period from incorporation to 30 June 2020.
Boom Logistics Limited is the ultimate parent company.
Recognition and measurement
The consolidated financial statements comprise the
financial statements of Boom Logistics Limited and its
subsidiaries as at 30 June each year.
Subsidiaries are entities controlled by the Group. Control
exists when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and
has the ability to affect those returns through its power to
direct the activities of the entity. The financial statements
of subsidiaries are included in the consolidated financial
statements from the date that control commences until
the date that control ceases. The accounting policies of
subsidiaries have been changed when necessary to align
them with the policies adopted by the Group.
In the parent company financial statements, investments in
subsidiaries are carried at cost less impairments.
The acquisition method of accounting is used to account for
the acquisition of subsidiaries by the Group.
Intra-group balances, and any unrealised income
and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated
financial statements.
15. Deed of Cross Guarantee
Pursuant to ASIC Corporations Instrument 2016/785
(“Corporations Instrument”), the wholly owned subsidiaries
listed below are relieved from the Corporations Act 2001
requirements for preparation, audit and lodgement of
financial reports and Directors' report.
It is a condition of the Corporations Instrument that Boom
Logistics Limited and each of the subsidiaries enter into
a Deed of Cross Guarantee. The effect of the Deed is
that Boom Logistics Limited guarantees to each creditor
payment in full of any debt in the event of winding up
of any of the subsidiaries under certain provisions of the
Corporations Act 2001. The subsidiaries have also given
similar guarantees in the event that Boom Logistics Limited
is wound up.
The subsidiaries subject to the Deed are:
● Sherrin Hire Pty Ltd (party to the Deed on
6 December 2005);
● AKN Pty Ltd (party to the Deed on 3 November 2006 by
virtue of a Deed of Assumption);
● Shutdown Staffing Pty Ltd (party to the Deed on
23 November 2007 by virtue of a Deed of Assumption);
and together with Boom Logistics Limited,
represent a “Closed Group” for the purposes of the
Corporations Instrument.
67
Boom Logistics Annual Report 2020
Section D: Other Disclosures (continued)
15. Deed of Cross Guarantee (continued)
The consolidated statements of comprehensive income and financial position of the entities that are members of the
“Closed Group” are as follows:
Consolidated Statement of Comprehensive Income
Closed Group
2020
$’000
2019
$’000
176,038
170,980
295
(91,135)
(44,364)
(1,007)
(9,255)
(709)
(15,859)
(15,235)
(1,902)
(2,835)
(1,618)
(7,586)
(4,331)
4,242
(88,391)
(42,374)
(11,750)
(15,351)
(1,117)
(16,573)
–
(1,975)
(4,251)
–
(6,560)
164
(11,917)
(6,396)
(86)
(86)
(12,003)
(191,910)
–
(17)
(17)
(6,413)
(185,114)
(400)
(203,827)
(191,910)
Revenue
Other income
Salaries and employee benefits expense
Equipment service and supplies expense
Operating lease expense
Other expenses
Restructuring expense
Depreciation and amortisation expense
Depreciation expense – Right-of-use assets
Impairment expense
Financing expense
Financing expense – Lease liabilities
Loss before income tax
Income tax (expense) / benefit
Net loss for the year
Other comprehensive loss
Cash flow hedges recognised in equity
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Retained losses at the beginning of the year
Adjustment on initial application of AASB 9
Retained losses at the end of the year
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020
Consolidated Statement of Financial Position
Current assets
Cash and cash equivalents
Trade receivables, contract assets and other receivables
Inventories, prepayments and other current assets
Assets classified as held for sale
Income tax receivable
Lease receivables
Total current assets
Non-current assets
Investments
Deferred tax asset
Property, plant and equipment
Right-of-use assets
Lease receivables
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Employee provisions
Other provisions and liabilities
Derivative financial instruments
Income tax payable
Total current liabilities
Non-current liabilities
Payables
Interest bearing loans and borrowings
Lease liabilities
Employee provisions
Other provisions and liabilities
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Retained losses
Reserves
Total equity
Closed Group
2020
$’000
2019
$’000
2,115
33,029
3,443
3,136
–
1,176
42,899
599
552
118,682
22,587
438
142,858
185,757
11,323
4,309
11,592
7,704
7,387
184
4,447
46,946
1,808
14,165
11,336
383
2,064
49
29,805
76,751
109,006
310,326
(203,827)
2,507
109,006
1,435
34,111
5,282
250
4,450
–
45,528
599
5,350
145,585
–
–
151,534
197,062
13,515
5,167
–
7,214
4,404
–
–
30,300
10,736
32,709
–
300
344
110
44,199
74,499
122,563
312,057
(191,910)
2,416
122,563
69
Boom Logistics Annual Report 2020
Section D: Other Disclosures (continued)
16. Parent Entity
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Equity
Contributed equity
Reserves
Retained losses
Total equity
Net profit / (loss) after tax for the year
Total comprehensive profit / (loss) for the year
17. Key Management Personnel
Summary of key management personnel compensation in the following categories is as follows:
Short-term employee benefits
Post employment benefits
Other long term benefits
Share based payments
Total compensation
2020
$’000
43,138
231,990
48,606
108,205
2019
$’000
40,772
231,430
28,075
127,450
310,326
312,057
2,507
2,416
(189,048)
(210,493)
123,785
103,980
21,445
21,359
(10,815)
(10,832)
2020
$
2019
$
1,328,065
1,268,231
104,273
(11,322)
238,743
99,380
34,062
165,523
1,659,759
1,567,196
Refer to the Remuneration Report in the Directors' Report for detailed compensation disclosure on key
management personnel.
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 18. Share-based Payments
Three employee incentive schemes are in place to assist in attracting, retaining and motivating key employees as follows:
● Salary sacrifice rights plan;
● Short term incentive plan; and
● Long term incentive plan.
Information with respect to the number of rights and options allocated under the employee incentive schemes are
as follows:
Salary Sacrifice Rights Plan
Short Term Incentive Plan
Long Term Incentive Plan
Average Fair
Value per
Right
No. of Rights
Average Fair
Value per
Right
No. of Rights
Average Fair
Value per
Option
No. of
Options
At start of period
Granted during the period
Exercised during the period
Lapsed during the period
Forfeited during the period
$0.1358
$0.1509
$0.1600
–
–
872,222
$0.1776
2,424,425
$0.1869
18,830,493
1,011,840
(56,423)
$0.1560
$0.1414
493,156
$0.1450
16,454,403
(487,894)
–
–
–
–
–
–
$0.2120
(8,931,107)
$0.1400
(126,889)
$0.1643
(138,798)
At end of period
$0.1434
1,827,639
$0.1827
2,302,798
$0.1522
26,214,991
Salary sacrifice rights plan
Eligible executives will be permitted to salary sacrifice a
portion of their pre-tax fixed annual remuneration to acquire
equity in the form of rights to fully paid ordinary shares in
the Company.
Each right is a right to acquire one ordinary share in the
Company. The exact number of rights to be granted is based
on the amount of salary sacrificed and the 5 day volume
weighted average price prior each month. Rights do not
carry any dividend or voting rights. Rights will be granted
twice a year following the announcement of the half-year
and full-year results or in any event, within twelve months
of the Annual General Meeting (“AGM”). Rights will have
a twelve month exercise restriction commencing from
the relevant grant dates. The rights to ordinary shares
equivalent to the amount salary sacrificed in the period from
the most recent grant date will be granted following the
announcement of the full-year results.
Short term incentive plan
Eligible executives will have the opportunity to receive short
term incentives subject to meeting performance hurdles
over the financial year. 50% of the STIP outcome achieved
for the financial year will be delivered in cash and 50% will
be delivered in equity in the form of rights to ordinary shares
in the Company.
Each right is a right to acquire one ordinary share in the
Company. The exact number of rights to be granted is
based on 50% of the STIP outcome divided by the 5 day
volume weighted average price after the release of full year
results. Rights do not carry any dividend or voting rights.
Rights will be granted following the announcement of the
full-year results or in any event, within twelve months of
the AGM. Rights will have a six month exercise restriction
commencing from the grant date.
Long term incentive plan
Eligible executives will be granted options to acquire
ordinary shares in the Company, subject to performance
hurdles and some or all may vest at the end of the three
year period if the performance hurdles are met.
Each option is a right to acquire one ordinary share in
the Company (or an equivalent cash amount) subject to
payment of the exercise price. The exact number of options
to be granted will be the LTIP award divided by the option
valuation using a Binomial valuation methodology prior to
grant date. The option exercise price is calculated based on
the 5 day volume weighted average price prior to the grant
date. Options do not carry any dividend or voting rights.
Options will be granted within twelve months of the Annual
General Meeting.
Options are subject to performance hurdles based on three
independent measures comprising absolute earnings per
share (“EPS”), return on capital employed and key safety
performance metrics, which are measured at the end of
the three year performance period. The Board of Directors
retains a discretion to adjust the performance hurdles as
required to ensure plan participants are neither advantaged
71
Boom Logistics Annual Report 2020 Section D: Other Disclosures (continued)
18. Share-based Payments (continued)
nor disadvantaged by matters outside management’s control that materially affect the performance hurdles (for example, by
excluding one-off non-recurrent items or the impact of significant acquisitions or disposals).
Options granted have the following details and assumptions:
Grant date
Vesting date
Expiry date
Share price at grant date
Fair value at grant date
Exercise price
Expected life
Expected price volatility of Boom’s shares
Risk-free interest rate
Expected dividend yield
(a) Carrying values
Salary Sacrifice Rights Plan
Short Term Incentive Plan
Long Term Incentive Plan
2020
2019
2018
29 November 2019
28 November 2018
30 November 2017
31 August 2022
31 August 2021
31 August 2020
30 September 2022
30 September 2021 30 September 2020
$0.145
$0.045
$0.145
$0.165
$0.062
$0.164
$0.200
$0.070
$0.212
2.8 years
2.8 years
2.8 years
47%
0.65%
0%
55%
2.07%
0%
Note
2020
$’000
753
798
1,119
55%
1.87%
0%
2019
$’000
600
721
1,172
Total employee equity benefits reserve
2,670
2,493
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the financial year are as follows:
Rights issued under employee rights plans
Options issued under employee option plan
Note
9
2020
$’000
230
(53)
177
2019
$’000
700
(263)
437
(c) Legacy employee incentive schemes
Two existing legacy employee incentive schemes are still in place but have been discontinued with only the ordinary shares
vested in previous financial years remaining in the share plans.
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 (d) Employee share plan share holdings
Information with respect to the number of ordinary shares issued and allocated under the employee share plans is as follows:
At start of period
– issued for nil consideration (including unallocated shares in the employee share schemes
allocated during the year)
– sold / transferred during the year
– lapsed during the year
2020
Number of
Shares
2019
Number of
Shares
1,969,131
6,196,367
544,317
3,615,352
(1,033,359)
(3,186,957)
–
(4,655,631)
1,480,089
1,969,131
At 30 June 2020, the employee share plans also hold 7,654,098 ordinary shares (2019: 8,198,415) that are un-allocated
to employees.
Recognition and measurement
The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which
they are granted using an appropriate valuation model.
In valuing equity settled transactions, the performance conditions are all non-market measures and as such, are not taken
into account in determining the fair values of the options.
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the award (the vesting period).
No expense is recognised for awards that do not ultimately vest.
19. Contingencies
Contingent liabilities
Performance guarantees totalling $0.736 million (2019: $3.436 million) have been provided in relation to wind farm
construction projects which will expire by 1 May 2022. In addition, other bank guarantees totalling $3.529 million
(2019: $4.040 million) have been provided to landlords and work cover authority. There are no other contingent liabilities
identified at reporting date.
73
Boom Logistics Annual Report 2020 Section D: Other Disclosures (continued)
20. Auditor’s Remuneration
During the year the following fees were paid or payable for services provided by KPMG Australia:
Audit services
– audit and review of financial statements
Taxation, due diligence and other services
– taxation services
– other assurance services
Total taxation and other services
Total remuneration of KPMG Australia
2020
$
2019
$
234,099
287,546
50,848
46,575
97,423
82,778
–
82,778
331,522
370,324
21. Subsequent Events
The Board resolved to pay an unfranked interim dividend of 0.5 cents per share on 26 February 2020 with a record date
of 31 March 2020. The dividend payment date, originally scheduled for 21 April 2020, was deferred to 2 October 2020 as a
prudent measure to preserve cash as a result of the uncertainty created by the COVID-19 situation at that time. The record
date for the deferred payment remains 31 March 2020 and the estimated liability based on the number of ordinary shares on
issue at that date is $2.1 million. The dividend has not been provided for in the 30 June 2020 year end financial statements.
The Group has entered into a twenty four month, interest free payment plan with the ATO to settle the franking deficit tax
liability of $4.447 million that existed at balance date. The Group will make monthly instalments of $185,308 commencing on
24 August 2020 and completing on 25 July 2022.
On 2 August 2020, the Victorian government declared a state of disaster and announced stage 4 restrictions for Melbourne
and stage 3 restrictions for regional Victoria. Given the dynamic nature of these circumstances, the economic impact on
the Victorian economy is not known. However, as at the date of this report the impact on the Group is not expected to
be material.
The Group operates a travel tower business in Melbourne which is a supplier to essential services, telecommunications and
energy customers. This business has been able to continue trading during the stage 4 restrictions albeit at a reduced volume.
The Group operates a business in the Latrobe Valley that has not been materially impacted by the stage 3 restrictions to
date with major customers being designated as essential services allowing trading to continue at similar volumes to normal.
Project work in the state has also continued under stage 3 restrictions throughout the period.
The impact of these restrictions will be reflected in the Group’s 2021 interim and annual financial statements.
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 22. New Accounting Policies and Standards
(a) Changes in accounting policies
The principal accounting policies adopted in the preparation of the financial report are consistent with those of the previous
financial year, except for the adoption of the new accounting standards AASB 16 Leases. The nature and effect of the new
accounting standard is disclosed below.
Standards
AASB 16 Leases
Nature of change
The standard removes the classification of leases as either operating leases or finance leases
for the lessee, effectively treating all leases as finance leases. This will effectively move all
off-balance sheet operating leases onto the balance sheet.
Effective date
Mandatory for financial years commencing on or after 1 January 2019.
The Group has adopted the standard using the modified retrospective (option 2) approach which
means that the cumulative impact of the adoption will be recognised in retained earnings as of
1 July 2019 and that comparatives have not been restated.
Impact
Group as a lessee
The Group has commercial leases on certain plant and equipment, motor vehicles and property.
These lease contracts have typically fixed terms of 1 to 5 years but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of different terms
and conditions.
On adoption of AASB 16, leases are recognised as a right-of-use asset and a corresponding
lease liability at the date at which the leased asset is available for use. The right-of-use asset is
depreciated over the lease term on a straight-line basis. The lease payment is allocated between
the lease liability and interest expense. The interest expense is charged to profit or loss over the
lease term.
Right-of-use assets are measured at cost comprising the following:
● the amount of the initial measurement of lease liability;
● any initial direct costs; and
● restoration costs.
75
Boom Logistics Annual Report 2020 Section D: Other Disclosures (continued)
22. New Accounting Policies and Standards (continued)
Standards
AASB 16 Leases
Impact (continued)
Lease liabilities are measured at the present value of lease payments to be made over the lease
term discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the Group’s incremental borrowing rate is used, being the rate that the Group would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions. The present value of lease payments include:
● fixed payments;
● variable lease payments that are based on an index or a rate;
● amounts expected to be payable under residual value guarantees;
● the exercise price of a purchase option if reasonably certain to exercise the option; and
● payments of penalties for terminating the lease.
In determining the lease term, management considers all facts and circumstances that create
an economic incentive to exercise an extension option. Extension options are only included in the
lease term if the lease is reasonably certain to be extended.
The impact of AASB 16 adoption at 1 July 2019 is as follows:
● Right-of-use assets increased by $26.133 million;
● Property, plant and equipment decreased by $3.738 million;
● Lease receivables increased by $0.654 million;
● Lease liabilities increased by $26.763 million;
● Interest bearing loans and borrowings decreased by $3.726 million;
● Prepayments decreased by $0.556 million;
● Surplus lease space provision decreased by $0.544 million;
● No impact on opening retained earnings;
In applying AASB 16 for the first time, the Group has used the following practical expedients
permitted by the standard:
● the use of a single discount rate to a portfolio of leases with reasonably
similar characteristics;
● short term leases of 12 months or less and do not contain a purchase option were excluded;
● lease contracts for which the underlying asset is of low value (circa. $10,000) were excluded;
● applied only to leases that were previously identified as leases under the previous AASB 117
and IFRIC 4 standards at 1 July 2019; and
● reliance on previous assessments on whether leases are onerous.
76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 Standards
AASB 16 Leases
Impact (continued)
Payments associated with short-term leases and leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss.
The reconciliation of operating lease commitments disclosed at 30 June 2019 to opening lease
liability at 1 July 2019 is as follows:
Operating lease commitments disclosed at 30 June 2019
Adjustments:
– present value using applicable discount rates at date of initial application
– add: finance lease liabilities at 30 June 2019
– less: short-term leases recognised on a straight-line basis as expenses
– less: leases contracted at 30 June 2019 but commencing after 1 July 2019
Lease liability recognised at 1 July 2019
The impact of AASB 16 on the financial statements for the period is as follows:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Interest income on sublease of right-of-use assets
Gains or (losses) on termination of leases
Rent expense – short-term leases and leases of low value assets
Total amounts recognised in profit or loss
Net cash flows from operating activities
Net cash flows from financing activities
1 July 2019
$’000
27,885
(1,860)
3,726
(595)
(2,393)
26,763
2020
$’000
(15,392)
(1,633)
110
(49)
(1,033)
(17,997)
12,839
(12,839)
Right-of-use Assets
Rental
Equip-
ment
$’000
Motor
Vehicles
$’000
Other
Equip-
ment
$’000
Land &
Buil-
dings
$’000
Lease
Recei-
vables
$’000
Lease
Liabi-
lities
$’000
Total
$’000
10,982
7,469
–
(8,015)
–
–
4,961
3,360
(24)
(2,660)
–
–
122
4
–
(56)
–
–
10,068
1,317
(4)
26,133
12,150
(28)
(4,661) (15,392)
(75)
–
(75)
–
654
1,937
–
–
–
(978)
26,763
10,156
(24)
–
–
(13,772)
10,436
5,637
70
6,645
22,788
1,613
23,123
Note
(i)
Opening carrying
amount
Additions
Terminations
Depreciation expense
Impairment expense
Receipts / payments
Closing carrying
amount
(i) Right-of-use assets and Lease Liabilities include finance lease balances at 30 June 2019 reclassified from
Property, Plant and Equipment and Interest Bearing Loans and Borrowings totalling $3.738 million and
$3.726 million, respectively.
77
Boom Logistics Annual Report 2020 Standards
AASB 16 Leases
Impact (continued)
Group as a lessor
On adoption of AASB 16, several property, plant and equipment leases that were sub-let by the
Group were classified as finance leases and recognised as Lease receivables. The sub-leases have
terms of between 2 to 3 years.
The maturity analysis of lease receivables showing the undiscounted lease payments to be
received after the reporting date is a follows:
– within one year
– after one year but not more than five years
Total undiscounted lease receivable
– future finance income
Net lease receivable
2020
$’000
1,234
443
1,677
(64)
1,613
(b) New accounting standards and interpretations not yet adopted
There were no new standards, amendments to standards and interpretations not yet adopted that impacted the Group in
the period of initial application.
78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 30 June 2020Boom Logistics Annual Report 2020 DIRECTORS’ DECLARATION
for the year ended 30 June 2020
1.
In the opinion of the Directors of Boom Logistics Limited (“the Company”):
(a) the Consolidated Financial Statements and notes that are set out on pages 43 to 78, and the Remuneration Report in
the Directors' Report, set out on pages 30 to 40, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2020 and of its
performance for the financial year ended on that date; and
(ii) complying with Accounting Standards, (including the Australian Accounting Interpretations) and Corporations
Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
2. The Directors draw attention to page 47 to the Consolidated Financial Statements which includes a statement of
compliance with International Financial Reporting Standards.
3. There are reasonable grounds to believe that the Company and the group entities identified in note 14 will be able to
meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee
between the Company and those group entities pursuant to ASIC Corporations Instrument 2016/785.
4. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief
executive officer and chief financial officer for the financial year ended 30 June 2020.
Signed in accordance with a resolution of the Directors:
Maxwell Findlay
Chairperson
Melbourne, 27 August 2020
Tony Spassopoulos
Managing Director
79
Boom Logistics Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
for the year ended 30 June 2020
80
INDEPENDENT AUDITOR’S REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 81
Boom Logistics Annual Report 2020 82
INDEPENDENT AUDITOR’S REPORTfor the year ended 30 June 2020Boom Logistics Annual Report 2020 83
Boom Logistics Annual Report 2020 ASX ADDITIONAL INFORMATION
for the year ended 30 June 2020
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 27 July 2020.
(a) Distribution of Equity Securities
The number of shareholders, by size of holding, in each class of share are:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
The number of shareholders holding less than a marketable parcel of shares are:
Ordinary Shares
Number of
Holders
Number of
Shares
247
702
559
42,894
2,433,035
4,407,914
1,209
42,777,766
300
378,112,598
3,017 427,774,207
822
1,842,797
84
ASX ADDITIONAL INFORMATIONfor the year ended 30 June 2020Boom Logistics Annual Report 2020 (b) Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
1
2
3
4
5
6
7
8
9
10
11
12
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
GROVE INVESTMENT GROUP PTY LTD
BNP PARIBAS NOMINEES PTY LTD
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