p. (02) 9018 5525
w. readytech.io
a. Level 2, 77 King Street, Sydney NSW 2000
MARKET RELEASE (ASX: RDY)
2024 Annual Report – typeset version
21 October 2024 – ReadyTech Holdings Limited (ASX: RDY) (ReadyTech) (ABN 25 632 137 216)
attaches a typeset version of the ReadyTech 2024 Annual Report. This version includes a letter
from the Chair and Chief Executive Officer. No other changes have been made to the version
lodged with ASX on 27 August 2024, other than typesetting.
– ENDS –
This announcement has been authorised for release by the Chief Executive Officer of
ReadyTech Holdings Limited.
For more information, please contact:
Nimesh Shah
Chief Financial Officer
e. nimesh.shah@readytech.io
p. +61 437 980 296
About ReadyTech
ReadyTech is a leading provider of mission-critical SaaS for the education, employment services,
workforce management, government and justice sectors. Bringing together the best in people
management systems from students and apprentices to payroll, employment services, and
community engagement, ReadyTech creates awesome technology that helps their customers
navigate complexity, while also delivering meaningful outcomes. To learn more about
ReadyTech’s people-centric approach to technology, please visit www.readytech.io.
ReadyTech Holdings Limited
ABN 25 632 137 216
30 JUNE 2024
ANNUAL
REPORT
NEXT
GENERATION,
PEOPLE-
CENTRIC
SOFTWARE
CONTENTS
Chair's letter
Chief Executive Officer’s report
Corporate directory
Directors’ report
Auditor’s independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Shareholder information
Independent auditor’s report to the members of
ReadyTech Holdings Limited
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CHAIR’S LETTER
TONY FAURE
Workforce Solutions is set to benefit from
increased focus on payroll compliance, remote
and mobile working arrangements and growing
need for efficiency and automation. In addition,
growth for cloud-based payroll and all-in-one
workforce management software is expected in
coming years.
Momentum is building across all our target
markets, and ReadyTech is in stronger position
than ever to leverage the opportunity created
by rapid digitisation and transition to cloud.
With significant tailwinds on our side, ReadyTech
is on track to deliver its medium-term targets
– improving margin profile and $170 million in
revenue by FY27.
I would like to recognise the entire ReadyTech
team and our partners for their continued
dedication and energy in delivering innovative
solutions and high-quality service to our
customers.
I also want to thank my fellow Board members
for their valuable support and guidance over the
year, and our shareholders for their continued
support. As we enter a new financial year, I am
as confident as ever in ReadyTech’s ability to
deliver strong performance and continued value
to all its stakeholders in FY25 and beyond.
Tony Faure
Chair
ReadyTech succeeds because our products
deliver results for our customers, and we remain
committed to investment in R&D and innovation.
This includes deeper investment in AI to unlock
new value. AI represents a rapidly evolving
opportunity with several initiatives already
introduced in FY24, including the use of AI in
customer support, and more in the pipeline for
both product development and ways of working
at ReadyTech.
We believe the future of enterprise software
is open, connected and people centric.
ReadyTech’s strong point of difference from
incumbent players is our ability to connect
our platform directly with other best-of-breed
systems, providing the customer choice and
flexibility. As organisations replace their legacy
systems, this continues to position us well for
their transitions.
Following our success in the TAFE market,
ReadyTech is now taking steps to become a
major and trusted player in higher education.
This is another market with a clear and
established need for cloud platforms, as well as
a modernised and elevated student experience.
Along with TAFEs, we believe higher education
providers are ripe and ready for change.
Pleasingly, our recent multi-year contract win
with Avondale University is proof of our ability to
deliver on this opportunity.
Local government, where we already have a
strong foothold, represents another material
opportunity with over $345 million serviceable
market. The transition of IT Vision customers to
Ready Community is also gaining momentum,
with significant value already unlocked
for customers transitioning to cloud and
subscription model. We have had some sizeable
wins within Justice, solidifying our position as a
prominent provider of cloud software in
this vertical.
Dear Shareholder,
On behalf of the Board, I am pleased to present you
ReadyTech’s Annual Report for 2024. During the year,
ReadyTech made significant progress on our mission of
delivering innovation in our markets and superior experience
to our customers with our next generation, mission-critical
software. The Company gained significant traction within the
enterprise space, delivering high-value contract wins and
improved profitability through scale.
ReadyTech’s sustained success across all three verticals
shows that the our strategic focus on higher value enterprise
customers continues to pay off. ReadyTech’s reputation
as a trusted enterprise player was further strengthened
with another 22 landmark customer wins which totalled
$12.5 million in contract value. In addition, we were pleased
to demonstrate our ability with breakthrough enterprise
customers, which is now opening new large serviceable
markets – most recently in higher education, with our first full
university student management system win in July 2024.
These high-value enterprise wins, coupled with focus on
operating leverage delivered a strong financial result in
FY24. Subscription and license revenue grew 13% on the prior
year and now makes up 84% of total revenue. Importantly,
continued growth in recurring revenue at a 3-year CAGR of
23% has created a solid and sustainable base for
ongoing growth.
ReadyTech’s long-term strategy is delivering – we have
successfully targeted large enterprise customers within
large serviceable markets that are undergoing major digital
transformation. These prospective customers represent the
greatest opportunity for us in terms of lifetime value and
margin accretion potential.
2
3
ReadyTech
Annual Report 2024
CHIEF EXECUTIVE
OFFICER’S REPORT
MARC WASHBOURNE
Notable wins in FY24 included our largest
Workforce Solutions customer to date, Seeka.
We also enjoyed significant wins in Justice with
our modern, cloud-based courts management
platform – the Department of Justice in WA
and a major contract upgrade with HM Courts
& Tribunals Service in the UK. We deepened
our footprint across enterprise in Education by
winning a contract with University of Adelaide
Professional and Continuing Education (PACE)
as well as securing contract upgrades with
Chisholm Institute and Melbourne Polytechnic.
We also demonstrated our ability to grow
market share in local government with several
ERP wins.
The key to ReadyTech’s success in the enterprise
space is our unique value proposition of an open
ecosystem approach. Our platform enables
a streamlined transition from legacy systems,
lowering the barrier for change. We also
provide open connections and interoperability,
giving customers choice and flexibility which is
resonating well. This truly differentiates us from
other software companies and provides us a
competitive advantage.
ReadyTech is now better positioned than ever
to leverage the market opportunity and grow its
share. Our enterprise pipeline sits at $31.8 million
and our confidence in conversion remains high
for the year ahead.
More recently, we have been experiencing
growing momentum in our enterprise pipeline,
and I am increasingly confident many of these
opportunities will convert in the short to medium
term. Indeed, I am delighted to report that we
successfully closed one of the opportunities
in early FY25, delivering our first full university
student management system customer win.
This marked our entry to the $240 million higher
education market which we believe is poised for
a major wave of digital transformation.
As cloud transition and digital transformation
gains momentum across our target markets, we
continue to invest in our key growth engines –
Research & Development and Sales & Marketing
– to support further pipeline expansion and
sustained long-term revenue growth, backed
by strong cash flow generation and a solid
balance sheet.
Continued success in converting
enterprise opportunities
Over the year, we strengthened our position as a
leading provider of cloud-based next generation
software by signing a further 22 enterprise
contracts. Average revenue per new customer
increased to over $119k, representing a 25%
increase on prior year, and reflecting the focus
and success of our enterprise strategy. Further
breakthrough wins and landmark contracts
demonstrate that ReadyTech’s cloud software,
growing reputation and open ecosystem
approach is truly resonating with large
enterprises across our key markets. High-quality
enterprise customers drive our recurring revenue
base up, and we are confident they will act as
strong references to pipeline opportunities still in
the process of upgrading their legacy systems,
paving the way for more contract wins in
future years.
Dear Shareholder,
It is my pleasure to report on another successful year for
ReadyTech as we continue to execute on our enterprise
strategy and demonstrate our ability to win major software
contracts across our chosen human-led verticals –
Education & Work Pathways, Workforce Solutions and
Government & Justice. Over the year, we made further
progress on our mission to be a trusted partner to our
customers, while delivering a superior user experience for
students, jobseekers, employees and citizens.
ReadyTech delivered a solid financial result in FY24 with
continued sales growth across all verticals. Total revenue
grew 10.2% on the prior year to $113.8 million, driven by new
customer wins, as well as successful cloud upgrades, new
product modules and value across our existing
customer base.
We achieved further improvement in profitability through
our vertical SaaS revenue model and by leveraging our
increasing scale. ReadyTech is increasingly benefiting from
operational efficiencies as well as AI-driven productivity
improvements in software development and other key
disciplines. In FY24, Underlying EBITDA increased 11.5% to $38.8
million, representing a margin of 34.1%. Our Underlying cash
EBITDA margin increased by 150 bps to 17.8%.
4
5
ReadyTech
Annual Report 2024
Major cloud enterprise
opportunity in Local Government
Another market we are truly excited about is
Local Government. With a serviceable market
of over $345 million and increasing traction
via notable enterprise wins, this represents
another major opportunity for ReadyTech. We
now enjoy relationships with 51% of councils
across Australia, and an opportunity remains
to grow our share further and expand adoption
across our product set. ReadyTech’s citizen-
centric Ready Community platform is resonating
strongly with existing customers, providing us
great case studies as we present our platform to
prospective customers.
ReadyTech acquired IT Vision two years ago
to boost our position in the local government
market. We saw a significant opportunity
to increase share of wallet with IT Vision’s
approximately 170 customers through transition
to Ready Community. This transition to cloud is
progressing well, already contributing to revenue
growth and margin improvement in FY24, and
we expect the transition to really ramp up
from FY25.
To optimise our success with local governments,
we invested in our capability across core
disciplines in FY24. Further accelerating growth
in this space, we also continue to leverage
partnerships with leading ERP and technology
providers as well as key implementers with
specialised expertise in the field.
growth, with low to mid double-digit growth
expected in FY25. To drive further improvement
in profitability, we are actively pursuing
improved net revenue retention and increased
share of wallet through cloud upgrades and
module upsell. In FY25, we expect to deliver an
EBITDA margin of 34-35% and a further 100bps
improvement in cash margin.
Significant momentum in the enterprise space
and a solid pipeline are expected to be key
drivers of continued growth in the medium
term. We are targeting $170 million in revenue in
FY27, underpinned by the depth and timing of
our sales opportunity pipeline. Through strong
retention and further gains in share of wallet, we
expect NRR to exceed 106% in the medium term,
delivering cash EBITDA margin of greater
than 20%.
I would like to take the opportunity to thank
our talented team for their hard work and
commitment. I am immensely proud of what we
have delivered to date, and I am confident that
together we can continue to develop innovative
solutions to our customers and grow the
Company to meet its potential.
Finally, I want to thank our shareholders for
believing in ReadyTech – I look forward to
updating you on our progress as we continue to
deliver on our growth strategy.
Marc Washbourne
Co-Founder & Chief Executive Officer
ReadyTech capitalising on
the digital transformation
within Education
In recent years, ReadyTech has built a strong
reputation amongst TAFE institutions – we are
proud to offer a market leading platform with
a proven track record and strong credibility.
Significant opportunity for further growth
remains as many TAFEs are yet to replace their
legacy student management systems with a
modern, cloud and student-centric platform.
We believe many TAFEs have the readiness
to upgrade their software, and with a proven
product and delivery capability through our
reference customers, we are very well placed to
deliver additional wins over the next few years.
Our success with TAFEs has enabled ReadyTech
to now expand into higher education which
represents another huge opportunity for the
Company. Like TAFEs, universities and private
higher education institutions are facing a major
upgrade from their legacy systems to improve
student experience. In July 2024, we announced
our breakthrough win in higher education with
our first university-wide student management
system agreement with Avondale University. We
are really excited about this opportunity, and we
have been investing in our capability to further
bolster our offering in this market to underpin
further wins.
AI unlocking new revenue
opportunities and delivering
efficiency gains
The AI revolution is accelerating rapidly and
changing the way businesses across various
industries operate. As a company with
innovation at the heart of everything we do,
ReadyTech is poised to benefit from
this revolution.
Internally, we are already leveraging several
AI-driven initiatives that support our operations
and efficiency, driving cost savings and margin
expansion. One of these initiatives is our AI
support agent which is improving response
times and enhancing efficiency while allowing
our human staff to focus on more complex
tasks. We have also started using AI in software
development and testing. In some areas, coding
efficiency has improved by over 30%, resulting in
a significantly faster delivery of improvements
and new features to our customers.
Continued investment in R&D coupled with
culture of innovation means ReadyTech is
well placed to leverage the advancements
in generative AI. To further crystallise this
opportunity, ReadyTech has established
an emerging technology team focused on
identifying and unlocking AI opportunities for
customers across every platform in FY25
and beyond.
Looking ahead
I am confident our innovative product offerings
will continue to resonate with enterprise
customers, and with growing breakthrough wins
and customer advocates, we are now better
positioned than ever to leverage this expanding
market opportunity.
Looking ahead, we remain confident in pipeline
execution in FY25, including the early wins within
education. Further enterprise wins and solid NRR
are expected to drive acceleration in revenue
6
7
ReadyTech
Annual Report 2024
ReadyTech Holdings Limited
Corporate directory
30 June 2024
Directors
Tony Faure - Chair and Independent Non-Executive Director
Helen Lea - Independent Non-Executive Director
Marc Washbourne - Chief Executive Officer
Timothy Ebbeck - Independent Non-Executive Director
Tom Matthews - Non-Executive Director
Mark Summerhayes - Alternate Non-Executive Director to Tom Matthews
Company secretaries
Nimesh Shah
Melissa Jones
Registered office and
Level 2, 77 King Street
Principal place of business
Sydney
NSW 2000
Australia
Ph: +61 2 9018 5525
Share register
Link Market Services Limited
Level 12, 680 George Street
Sydney, NSW 2000
Australia
Ph: 1300 554 474
Auditor
Deloitte Touche Tohmatsu
Quay Quarter Tower
50 Bridge Street
Sydney, NSW 2000, Australia
Ph: +61 2 9322 7000
Stock exchange listing
ReadyTech Holdings Limited shares are listed on the Australian Securities Exchange
(ASX code: RDY)
Website
www.readytech.io
Corporate Governance Statement
The Directors and management are committed to conducting the business of
ReadyTech Holdings Limited in an ethical manner and in accordance with the highest
standards of corporate governance. ReadyTech Holdings Limited has adopted and
has complied with the ASX Corporate Governance Council's Corporate Governance
Principles and Recommendations (Fourth Edition) (‘Recommendations’) to the extent
appropriate to the size and nature of its operations.
The Corporate Governance Statement, which sets out the corporate governance
Recommendations that were followed during the reporting period and identifies and
explains any Recommendations that were not followed was approved by the Board of
Directors at the same time as the Annual Report and can be found at
https://investors.readytech.com.au
ReadyTech Holdings Limited
Directors' report
30 June 2024
The Directors present their report, together with the financial statements, on the consolidated entity ('Group' or 'ReadyTech')
consisting of ReadyTech Holdings Limited ('Company' or 'parent entity') and the entities it controlled at the end of, or during,
the year ended 30 June 2024.
Directors
The following persons were Directors of ReadyTech Holdings Limited during the whole of the financial year and up to the date
of this report, unless otherwise stated:
Tony Faure - Chair and Independent Non-Executive Director
Marc Washbourne - Chief Executive Officer
Timothy Ebbeck - Independent Non-Executive Director
Mark Summerhayes - Alternate Non-Executive Director to Tom Matthews (appointed as a Non-Executive Director on 30 July
2024)
Helen Lea - Independent Non-Executive Director (appointed on 21 May 2024)
Elizabeth Crouch AM - Independent Non-Executive Director (resigned on 21 May 2024)
Tom Matthews - Non-Executive Director (resigned on 30 July 2024)
Principal activities
During the financial year, the principal continuing activities of the Group consisted of:
●
Education and Work Pathways - provider of education, apprenticeship and employment services technology powering
better outcomes for students, learners and job seekers;
●
Workforce Solutions - provider of integrated payroll, rostering, HR and recruitment for the workforce; and
●
Government and Justice - provider of technology solutions for local and state government and justice agencies.
Dividends
There were no dividends paid, recommended or declared during the current financial year or previous financial period.
Review of operations
The profit for the Group after providing for income tax amounted to $5,464,000 (30 June 2023: $4,975,000).
Commenting on the FY24 result, ReadyTech Co-Founder and CEO, Marc Washbourne said:
“ReadyTech made significant progress with executing its enterprise strategy and delivered a solid financial result in FY24,
despite some expected enterprise contracts shifting close dates in FY24, as flagged in February. Total revenue growth of
10.2% was driven by new customer wins across all of our verticals – Government & Justice, Education & Work Pathways and
Workforce Solutions – as well as successful cloud upgrades and upsell of product modules to our existing customer base.
Notably, we continued to improve profitability through our vertical SaaS revenue model and by leveraging our growing scale
advantage.”
“Over the year, ReadyTech signed another 22 enterprise contracts with a total deal value of $12.5 million, further solidifying
our position as a leading provider of cloud-based next generation software in human-led sectors. These wins demonstrate
that ReadyTech’s cloud software and open ecosystem approach is resonating with large enterprises in our key focus markets.
Our platform enables a streamlined transition from legacy systems and provides flexibility and interoperability with other
systems, giving us a major point of competitive difference and the ability to effectively meet customer demand.”
Continued growth in recurring revenue coupled with scale benefits deliver improved margins
ReadyTech’s total revenue increased 10.2% to $113.8 million in FY24 (FY23: $103.3 million) underpinned by 13.1% growth
in subscription and license revenue. Implementation, training and other revenue declined 3.1% following a timing delay with
several high conviction enterprise deals from 2H FY24 to FY25 and increased focus on streamlined out-of-the-box
implementations. Subscription-based revenue represents 83.8% of total revenue.
In FY24, ReadyTech signed 22 new landmark enterprise contracts with the annualised deal value totalling $12.5 million,
increasing average revenue per new customer increasing by 25% to a record $119.1k. Net revenue retention of 104% reflects
strong customer retention and low churn, increased share of wallet and progress with upgrading IT Vision customers to cloud.
Expenses increased 9.6%, below the rate of revenue growth, to $75.0 million with the Company benefiting from operational
efficiency as well as initial AI-driven productivity improvements in software development and other key disciplines. ReadyTech
is committed to ongoing investment in the key growth drivers of Research & Development (30.0% of revenue in FY24) and
Sales & Marketing (7.1% of revenue in FY24) to support expanding pipeline and sustained long-term revenue growth.
8
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
Adjusted EBITDA* grew 11.5% to $38.8 million, with margin within guidance at 34.1% (FY24: 33.7%). Adjusted cash
EBITDA** margin increased by 150 bps to 17.8%, and it is expected to improve further in coming years towards a medium-
term target of over 20%.
New customer wins and strong net revenue retention across segments
Education & Work Pathways continued to perform strongly in FY24 with revenue growing at 12.5% on pcp and EBITDA margin
improving by 160 bps to 45.6%. Revenue growth was driven by cloud platform upgrade of AVAXA TAFE customers, successful
upsell to existing customers and new customer wins. ReadyTech signed new agreements with several notable enterprise
customers, including University of Adelaide Professional and Continuing Education (PACE) and English Language Centre
(ELC), Chisholm Institute and Melbourne Polytechnic, underlining the traction in the enterprise strategy in this segment. As a
market-leading TAFE platform and having recently won its first university-wide student management system customer
contract, ReadyTech is well positioned to capitalise on the major opportunity within the broader education market as legacy
student management systems within TAFEs and higher education are being displaced by a modern cloud alternative.
Workforce Solutions delivered 7.6% revenue growth in FY24 driven by new customer wins and existing platform upgrades
(software +9.7% vs pcp). The segment’s EBITDA margin declined by 360 bps to 36.4% due to planned investment in
onboarding and R&D staff over FY24. Increased focus on payroll compliance, remote and mobile working arrangements and
growing need for efficiency and automation are expected to drive continued growth for ReadyTech’s cloud-based payroll
and all-in-one workforce management software in the coming years.
The Government & Justice segment delivered another strong year with 9.9% growth in revenue driven by wins in Ready
Community and Ready Contracts, contract renewal with the HM Courts & Tribunals Service in the UK, and progress with the
transition of IT Vision customers to the cloud offering. Transition of the approximately 170 IT Vision customers to Ready
Community supported increase in average contract value and drove higher margins, with the segment EBITDA margin
increasing by 150 bps to 29.4% in FY24. Leveraging its existing 51% market penetration within councils, Local Government
represents a large ongoing opportunity for ReadyTech with an estimated $345 million addressable market.
Strong balance sheet and cash flows support growth initiatives
ReadyTech is in a strong financial position with $29.9 million of available funds for use at 30 June 2024 (consists of cash and
cash equivalents and unused loans of $8.0m) and net leverage ratio of 0.5x. The strength of the Company’s balance sheet
supports strategic growth initiatives.
The Company’s cash flows continue to grow, underpinned by continued growth in recurring revenue. Cash flow from operating
activities totalled $40.3 million in FY24, up $7.1 million on pcp, and representing cash flow conversion of 103.7%.
Material business risks
The following is a summary of material business risks that could adversely affect our financial performance and growth
potential in future years.
Disruption to, or failure of, technology systems and software, including security breaches
The Group and its customers are dependent on the effective performance, reliability and availability of the Group’s technology
platforms, communications systems, servers, the internet, hosting services and the on-premise and cloud-based environments
in which it provides such software solutions.
There is a risk that the Group’s systems and software may be adversely affected by damaged or faulty equipment misuse by
staff or contractors, disruption, failure, service outages or data corruption that could occur as a result of computer viruses,
“worms”, malware, ransomware, internal or external misuse by websites, hacking or cyber-attacks, and other disruptions
including natural disasters, power surges or outages, terrorist attacks, or other similar events.
There is also a risk that security and technical precaution measures taken by the Group and its third-party operators will not
be sufficient to prevent unauthorised access to the Group’s networks, systems and databases.
Operational or business delays, and damage to reputation, may result from any disruption or failure of the Group’s information
systems and product delivery platforms, which may be caused by events outside the Group’s control. This could lead to claims
against the Group by its customers, reduce the attractiveness of the Group’s software and services to its clients, subject the
Group to legal action and/or regulatory scrutiny and the potential termination of customer contracts.
*
Adjusted
EBITDA
excludes long term incentive costs of $1.0m and non-recurring costs of $5.2m (accounting impact of
contingent consideration of $2.4m, acquisition-related transaction costs of $1.3m and restructuring and integration costs of $1.5m).
**
Cash EBITDA includes actual lease payments, labour capitalisation and excludes the impact of LTIP.
ReadyTech Holdings Limited
Directors' report
30 June 2024
Business growth and client retention
ReadyTech’s business is dependent on its ability to retain a portion of its existing clients and attract new business. ReadyTech
sells its products under various subscription and licence models, all of which are exposed to the risk of expiry, non-renewal,
and pricing risks. ReadyTech may fail to retain sufficient existing customers or attract sufficient new business for a number of
reasons, such as the failure to meet customer expectations, poor customer service, technology disruptions, pricing or
competition.
ReadyTech may also be unable to, or experience delays in, converting pipeline customers into new customers, especially
larger customers who generally have longer sales cycles and procurement and tender processes.
Talent retention and acquisition
The Group’s success depends to some extent on its ability to attract and retain key personnel; specifically technology talent,
implementation and customer success roles, payroll specialists and senior management with extensive experience in, and
knowledge of, the education, government, justice and employment industries in which the Group operates.
The loss of key personnel may adversely affect the Group’s ability to develop its products, or implement its business strategies
and may adversely affect its future financial performance. This continues to be an elevated risk due to a tight labour market,
wage inflation driven by an increased demand for this talent by acceleration of digital strategies, lack of migration and skills
shortages.
Technology and software
Long term development of software can lead to dependency on dated technology that restricts maintainability, speed of
development, security and The Group's competitiveness in the market. Rapid growth can incur technical debt in service of
speed to market. As with all information technology and software products, there is a risk of technology obsolescence. New
technology may be perceived by customers to have advantages over the Group’s current products.
Adoption of regulatory changes
The Group’s products are significantly influenced and affected by government policy and regulations which apply to the
education, employment and government related entities industries in which the Group operates. There is a risk that the Group
may fail to keep abreast of such policy and regulations and potential changes to the same, which may have an adverse impact
on its business, operations and financial performance.
Any material new or altered law, regulation or policy which impacts the Group’s products could require the Group to increase
spending and employee resources on regulatory compliance and/or change its business practices, which would adversely
affect the Group’s operations and profitability. Further, there is a risk that customers may reduce their usage of the Group’s
products, or that the Group may fail to attract new customers, if the Group fails to offer solutions with appropriate coverage of
compliance or regulatory requirements as sought by its customers.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
The Group will continue to pursue growth in revenue in the next financial year. Refer to the "Review of operations " section
above for further details.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
Information on Directors
Name:
Tony Faure
Title:
Chair and Independent Non-Executive Director
Qualifications:
Tony holds a Bachelor of Economics (hons) from the University of Sussex.
Experience and expertise:
Tony Faure is a seasoned Chair and Non-Executive Director with deep expertise in
technology, data, digital media and marketing.
Tony has advised some of Australia’s leading technology, data and digital media
companies. He previously served as CEO of ninemsn and HomeScreen Entertainment,
and he was the launch Managing Director, Australia & NZ and later Regional Vice
President, South Asia for Yahoo! from 1997 to 2001. Tony's board roles have included
positions at SEEK, iSelect, Independent Business Media (publisher of Business
Spectator/Eureka Report), Junkee Media, and the Starlight Children’s Foundation
Australia’s NSW Advisory Board. He is also the former Chair of Pollenizer and former
Non-Executive Director/Interim Chair of Uno Homeloans.
Other current directorships:
Chair of oOh!media Ltd (ASX:OML), PredictHQ Limited, Chair of LawPath and serves
as Non-Executive Director at Common Interest, and is Vice Chair at Tidal VC
Former directorships (last 3 years):
Stackla, Medical Media, Uno Homeloans
Special responsibilities:
Member of the Audit and Risk Committee and Nomination and Remuneration
Committee
Interests in shares:
378,819 ordinary shares
Name:
Marc Washbourne
Title:
Chief Executive Officer
Qualifications:
First-class degree (History), University of Leeds, UK. Company Directors Course, AICD
Experience and expertise:
Marc Washbourne is a founder of the ReadyTech business and was appointed CEO in
2006. A former software developer and original architect of the JobReady software,
Marc brings to ReadyTech over 20 years of experience in technology for the education,
employment and government sectors. Marc now heads up a global team committed to
innovation and better technology. Marc couples his strong technical background with a
strategic vision for ReadyTech’s Software-as-a-Service ('SaaS') products, underpinning
best practice approaches shared across the platforms.
Other current directorships:
Year13, Future Skills Organisation
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
4,293,308 ordinary shares
ReadyTech Holdings Limited
Directors' report
30 June 2024
Name:
Timothy Ebbeck
Title:
Independent Non-Executive Director
Qualifications:
Timothy holds a Bachelor of Economics, is a Fellow of CPA Australia, a Fellow of the
Australian Institute of Management, a Graduate Member of the Australian Institute of
Company Directors, and a Member of the Australian Computer Society.
Experience and expertise:
Tim Ebbeck has over 30 years of board, executive, and advisory experience across a
breadth of industries including software and technology, AI, blockchain, media, sport,
consulting, energy and finance.
Tim’s executive experience includes roles as Chief Executive Officer at SAP (ANZ),
Chief Executive of Oracle (ANZ), Chief Commercial Officer of SAP (APJ), and Chief
Commercial Officer of NBN Co. His board roles have included being Non-Executive
Director for Bigtincan Limited (RDY.BTH), Indara Digital Infrastructure (JV Australian
Super and Singtel), CPA Australia, Central Coast Local Health District, The Yield
Technology Solutions, Nextgen Distribution, Museum of Applied Arts & Sciences NSW,
and Insite Organisation.
Tim is a professional company director and advisor to a range of companies in the
technology and emerging industries and a former CEO member of the Business Council
of Australia.
Other current directorships:
Indara Digital Infrastructure Limited, BigtinCan Holdings Ltd (ASX.BTH), and Central
Coast Local Health District
Former directorships (last 3 years):
Xpon Technologies Ltd (ASX.XPN), The Yield Technology Solutions Pty Ltd, Envirosuite
Ltd (ASX.EVS), Tymlez Group Ltd (ASX.TYM)
Special responsibilities:
Chair of the Audit and Risk Committee and a member of the Nomination and
Remuneration Committee
Interests in shares:
31,068 ordinary shares
Name:
Tom Matthews
Title:
Non-Executive Director (resigned on 30 July 2024)
Qualifications:
Tom is a CFA charter holder, a member of the Sydney CFA Society and also has a
Masters of Applied Finance and Investment from the Financial Services Institute of
Australasia. In 2001, Tom was awarded a Bachelor of Sciences honours degree in
Management Sciences from the London School of Economics.
Experience and expertise:
Tom has over 20 years of experience in private equity, principal investment, investment
banking and middle market advisory and valuations in both Australia and the UK.
As a Managing Director at leading private equity manager Pemba, Tom has led a
number of transactions across Pemba’s areas of focus since 2015, including
investments into ReadyTech, Marque Group, Open Office, ONCALL, RxPx, Vets
Central, Acis, Aurizn, Lumia Care and Rennie Advisory. Tom has held a variety of senior
roles prior to joining Pemba, including at private equity firm Sovereign Capital Partners
in the UK, the Investment Banking Group of Macquarie Bank, and Deloitte Corporate
Finance in both Sydney and London.
Other current directorships:
Vets Central, Acis, Aurizn, ONCALL, Lumia Care and Rennie Advisory
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
36,644,933 ordinary shares*
*
Tom Matthews is a representative of Pemba entities. The number of shares includes Pemba interests.
12
13
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
Name:
Mark Summerhayes
Title:
Alternate Non-Executive Director to Tom Matthews and appointed as a Non-Executive
Director on 30 July 2024
Qualifications:
Mark holds a Master’s Degree in Economics from the University of Cambridge.
Experience and expertise:
After graduating from Cambridge University in 1987, Mark spent seven years at Bain &
Company advising corporates on a mix of strategy, Mergers and Acquisitions ('M&A'),
and operational improvement projects. Mark was based in London, Munich and Sydney.
Mark led assignments for leading European players in the Fast-Moving Consumer
Goods ('FMCG'), financial services, telecoms, healthcare and industrial sectors. In 1996
Mark co-founded SB Capital Partners, a private equity partnership, which was backed
by Bain Capital, one of the leading US private equity firms. On the back of the success
of this venture, Bain Capital subsequently launched its first dedicated European buy-out
fund. In parallel to this activity, Mark assisted a wealthy Norwegian family build its own
portfolio of private equity investments in both early and late stage situations and private
equity funds. In 2001 Mark joined Smedvig Capital full time and as a Managing Director
was one of the senior executives responsible for investing, managing and reporting on
a diversified A$350 million private equity portfolio. Mark moved to Sydney in 2005 to join
Pemba Capital Partners and co-led the spin out of the captive fund from Pemba in 2009.
More recently has co-led a $650 million and a $400 million fundraising (backed by some
of the largest global and local LPs) which has established the firm as one of the leaders
in its segment in Australia and NZ.
Other current directorships:
Currently Chairman of the Board at Coverforce and a Director of Ausreo, Instant Access,
InteriorC
Former directorships (last 3 years):
SB Capital Partners, Managing Director at Smedvig Capital and a board member of
Device Technologies
Special responsibilities:
None
Interests in shares:
555,036 ordinary shares
Name:
Helen Lea
Title:
Independent Non-Executive Director (appointed on 21 May 2024)
Experience and expertise:
Helen has held various executive, directorship and committee advisory roles for ASX
listed and private companies. Helen is an expert in transformation, talent and
performance, human resources and holds a Master of Arts: Industrial Psychology
(University of the Witwatersrand). Helen is a member of the Australian Institute of
Company Directors and a Fellow member of the Australian Human Resources Institute.
Helen is also a registered organisational psychologist and a member of the Australian
Psychological Society.
Helen’s previous executive experience included roles as Chief Employee Experience
Officer & Government Policy Lead at MYOB, Executive director at Telstra and Interim
executive roles at Seven Group Holdings and Uniting.
Other current directorships:
MiQ Private Wealth
Former directorships (last 3 years):
Butn
Special responsibilities:
Chair of the Nomination and Remuneration Committee, member of the Audit and Risk
Committee
Interests in shares:
Nil
ReadyTech Holdings Limited
Directors' report
30 June 2024
Name:
Elizabeth Crouch AM FAICD
Title:
Former Independent Non-Executive Director (resigned on 21 May 2024)
Qualifications:
Elizabeth holds a Bachelor of Economics and a Master of Cyber Security. She is a
Fellow of the Australian Institute of Company Directors.
Experience and expertise:
Elizabeth is a seasoned non-executive Director with a career that includes experience
in both the public and private sectors in Australia. Elizabeth is the Emeritus Deputy
Chancellor of Macquarie University and held previous non-executive Director roles with
Chandler Macleod Group, McGrath Estate Agents and Macquarie University Hospital.
She chairs the Boards of the Sydney Children’s Hospital Network, the Customer Owned
Banking Association Hearing Australia and Catholic Schools Parramatta Diocese Ltd.
She is also on the Boards of the NSW Government’s Health Infrastructure and the NSW
Institute of Sport.
Other current directorships:
None
Former directorships (last 3 years):
Bingo Industries Pty Ltd
Special responsibilities:
Former Chair of the Audit and Risk Committee and a member of the Nomination and
Remuneration Committee
Interests in shares:
41,899 ordinary shares
Company secretaries
Nimesh Shah and Melissa Jones are joint company secretaries.
Nimesh Shah has been the Chief Financial Officer of ReadyTech since August 2017 and was appointed Company Secretary
on 28 March 2019. Nimesh has over 20 years’ experience as an executive in technology and online digital industries, utilising
experience gained working across Australia and many parts of Asia. Nimesh was Global CFO for pioneering social networking
site, Friendster, Inc. Nimesh was also Finance Director at Fairfax Digital Australia & New Zealand Pty Limited for seven years,
playing an instrumental role in navigating the company into the world of online publishing and transaction businesses. Nimesh
was also the Chief Financial Officer and Company Secretary of ASX-listed Isentia Group Limited, a position which he held
until July 2017, where he played an instrumental role in transitioning Isentia to become a leading media intelligence
organisation in Asia Pacific. Nimesh holds an MBA from the Australian Graduate School of Management and a Bachelor of
Commerce with Merit from the University of New South Wales. Nimesh is also a member of Chartered Accountants Australia
and New Zealand and Australian Institute of Company Directors.
Melissa Jones is the General Manager of Company Matters, a part of MUFG Corporate Markets, a division of MUFG Pension
& Market Services. Melissa has over 20 years’ experience as a lawyer, company secretary and governance
professional. Melissa is admitted as a Solicitor of the Supreme Court of New South Wales and holds a Bachelor of Laws
(Honours) and is a Fellow of the Governance Institute of Australia.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the period ended 30 June 2024, and
the number of meetings attended by each Director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Tony Faure
12
12
4
4
4
4
Marc Washbourne*
12
12
4
4
4
4
Timothy Ebbeck
12
12
4
4
4
4
Tom Matthews**
10
12
3
4
-
-
Mark Summerhayes**
5
12
-
-
-
-
Helen Lea***
2
2
1
1
1
1
Elizabeth Crouch AM****
11
11
3
3
3
3
Held: represents the number of meetings held during the time the Director held office.
*
Marc Washbourne attended 4 Audit and Risk Committee meetings and 4 Nomination and Remuneration Committee meetings as an observer.
**
In FY2024, Mark Summerhayes was an Alternative Non-Executive Director for Tom Matthews and attended a number of meetings either as an
alternate or in an observer capacity.
***
Helen Lea was appointed to the Board of ReadyTech on 21 May 2024.
****
Elizabeth Crouch ceased to be a director on 21 May 2024.
14
15
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
Remuneration report (audited)
Commenting on the FY24 remuneration report, ReadyTech Chair of the Nomination and Remuneration Committee, Helen Lea
said:
"The primary objective of the Nomination and Remuneration Committee is to ensure that we align Executive Key Management
Personnel (KMP) rewards with shareholder interests and achievement of our business strategy, whilst ensuring that we attract
and retain exceptional Executives, Directors and Employees who are collectively responsible for delivering long-term profitable
growth and sustainable shareholder returns.
Our remuneration framework provides a tight relationship between performance and remuneration and has driven strong
growth for the Company. On a regular basis, we undertake independent benchmarking for KMP remuneration to ensure we
remain competitive and can attract and retain talented executives with the specialised skills and expertise required. This report
describes the linkage between our strategic initiatives, remuneration principles and remuneration framework, and how these,
in turn, drive shareholder returns".
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel ('KMP') are those people who have authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all Directors.
The remuneration report is set out under the following main headings:
●
Principles used to determine the nature and amount of remuneration
●
Details of remuneration
●
Service agreements
●
Share-based compensation
●
Additional information
●
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and appropriate
for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation
of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of
Directors ('the Board') ensures that executive reward satisfies the following key criteria for good governance practices:
●
competitiveness and reasonableness
●
acceptability to shareholders;
●
performance linkage / alignment of executive compensation; and
●
transparency.
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for
its Directors and executives. The performance of the Group depends on the quality of its Directors and executives. The
remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
The Nomination and Remuneration Committee has structured an executive remuneration framework that is market competitive
and aligned to the strategy of the Group.
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it
should seek to enhance shareholders' interests by:
●
having economic profit as a core component of plan design;
●
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
●
attracting and retaining high calibre executives.
Additionally, the reward framework seeks to enhance executives' interests by:
●
rewarding capability and experience;
●
reflecting competitive reward for contribution to growth in shareholder wealth; and
●
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive Director and executive Director
remuneration is separate.
ReadyTech Holdings Limited
Directors' report
30 June 2024
Non-executive Directors' remuneration
Fees and payments to non-executive Directors reflect the demands and responsibilities of their role. Non-executive Directors'
fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-
executive Directors' fees and payments are appropriate and in line with the market. The Chair's fees are determined
independently to the fees of other non-executive Directors and all non-executive Director remuneration is based on
comparative roles in the external market. Non-executive Directors are not entitled to participate in any employee incentive
scheme established by the Company.
ASX listing rules require the aggregate non-executive Directors' remuneration be determined periodically by a general
meeting. The most recent determination was performed by AON Advisory Pty Ltd, remuneration consultants, in FY2022, where
the maximum annual aggregate remuneration is $750,000. For the financial year ended 30 June 2024, the fees payable to
the current non- executive Directors will not exceed $600,000 in aggregate.
Any non-executive Director who devotes special attention to the business of the Group or who performs services which, in the
opinion of the Remuneration Committee, are outside the scope of ordinary duties of a Director, may be remunerated for the
services (as determined by the Board) out of the funds of the Company. There are no retirement benefit schemes for Directors,
other than statutory superannuation contributions.
The annual non-executive Directors’ fees currently agreed to be paid by the Company are inclusive of superannuation and
are $187,000 to the Chair and $97,500 (inclusive of superannuation) to each of the other Independent non-executive Directors.
For the financial year ending 30 June 2025, it was approved to increase the annual non-executive Directors’ fees inclusive of
superannuation to be $196,875 to the Chair and $102,375 to each of the other non-executive Directors, inclusive of fees for
chairing the board sub-committees.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has three components:
(i)
fixed remuneration consisting of base pay, non-monetary benefits and other remuneration such as superannuation;
(ii)
short-term incentives; and
(iii)
long-term incentives.
The combination of these comprises the executive's total remuneration.
(i) Fixed remuneration
Fixed remuneration, consisting of fixed salary, superannuation and non-monetary benefits, is reviewed annually by the
Nomination and Remuneration Committee based on individual and business unit performance, the overall performance of the
Group and comparable market remuneration.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits)
where it does not create any additional costs to the Group and provides additional value to the executive.
(ii) Short-term incentives
The Group currently provides certain members of its senior management team with annual short-term incentives ('STI') which
become payable upon satisfaction of specified performance criteria. These incentives are set out in each KMP service
agreement. Payment of STI's in any given year will be determined by the Company and will be conditional upon achievement
of:
●
performance criteria tailored to each respective role (if any); and
●
the Group’s financial performance against criteria set by the Nomination and Remuneration Committee.
No STI will be payable if the performance criteria are not met by the relevant KMP with respect to his or her STI award.
The STI program is designed to align the targets of the business units with the performance hurdles of executives. STI
payments are granted to executives based on specific financial targets and key performance indicators ('KPI's') being
achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and product management.
16
17
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
From time to time the Nomination and Remuneration Committee may, at its discretion, recommend to award bonuses which
are not linked to any specified performance criteria to certain executives in recognition of work performed.
For KMP, the STI is a maximum 60% of fixed salary with 70% based on Financial KPI and 30% on Personal KPI's for the year
ended 30 June 2024.
The Financials KPIs are based on achieving Group revenue and Group adjusted net profit after tax, excluding acquired
amortisation expenses ('NPATA') targets.
(iii) Long-term incentives
The long-term incentives include long service leave and share-based payments. The Group implemented a long-term
incentives ('LTI') plan during the financial year ended 30 June 2024 where performance rights are awarded to executives over
a period of three years based on long-term incentive measures. These include earnings per share ('EPS') targets and recurring
revenue per share targets.
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group. Bonus and incentive payments are
dependent on financial measures such as earnings and recurring revenues per share, total revenues, EBITDA, Net Profit after
tax adjusted with amortisation expense from acquired assets (“NPATA”) and personal KPIs targets being met.
The Nomination and Remuneration Committee is of the opinion that the continued improved results can be attributed in part
to the adoption of performance based compensation and is satisfied that this improvement will continue to increase
shareholder wealth if maintained over the coming years.
Refer to the section 'Additional information' below for details of the earnings and total shareholders return for the last 4 years.
Use of remuneration consultants
The Group did not engage any remuneration consultants during the year ended 30 June 2024.
Voting and comments made at the Company's 2023 Annual General Meeting ('AGM')
At the 2023 AGM, 99.86% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2023. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following Directors of ReadyTech Holdings Limited:
●
Tony Faure - Chair and Independent Non-Executive Director
●
Marc Washbourne - Chief Executive Officer
●
Timothy Ebbeck - Independent Non-Executive Director
●
Tom Matthews* - Non-Executive Director (resigned on 30 July 2024)
●
Mark Summerhayes*- Alternate Non-Executive Director to Tom Matthews and appointed as a Non-Executive Director on
30 July 2024
●
Helen Lea - Independent Non-Executive Director (appointed on 21 May 2024)
●
Elizabeth Crouch AM - Independent Non-Executive Director (resigned on 21 May 2024)
*
Tom Matthews and Mark Summerhayes are representatives of Pemba entities and elected not to receive director fees
during the financial year ended 30 June 2024. From the financial year ending 30 June 2025, Mark Summerhayes will
receive director's fees as a non-executive director.
And the following person:
●
Nimesh Shah - Chief Financial Officer
ReadyTech Holdings Limited
Directors' report
30 June 2024
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Annual
Super-
Long
service
Equity-
and fees
bonus
leave
annuation
leave
settled
Total
2024
$
$
$
$
$
$
$
Non-Executive Directors:
Tony Faure
187,000
-
-
-
-
-
187,000
Timothy Ebbeck
97,500
-
-
-
-
-
97,500
Helen Lea**
10,156
-
-
-
-
-
10,156
Elizabeth Crouch AM***
81,250
-
-
-
-
-
81,250
Executive Directors:
Marc Washbourne*
449,650
-
8,128
27,399
21,921
162,152
669,250
Other Key Management
Personnel:
Nimesh Shah*
396,750
-
(11,938)
27,399
22,291
132,942
567,444
1,222,306
-
(3,810)
54,798
44,212
295,094
1,612,600
*
No cash bonuses approved by the Nomination and Remuneration Committee to Marc Washbourne and Nimesh Shah
based on FY2024 financial and personal KPIs. These cash bonuses represent cash accrued related to FY2024.
**
Helen Lea’s fees reflect a portion of director’s fees since the day she joined.
***
Elizabeth Crouch AM’s fees reflect a portion of director’s fees up to the day she resigned.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Annual
Super-
Long
service
Equity-
and fees
bonus
leave
annuation
leave
settled
Total
2023
$
$
$
$
$
$
$
Non-Executive Directors:
Tony Faure
170,000
-
-
-
-
-
170,000
Elizabeth Crouch AM
90,000
-
-
-
-
-
90,000
Timothy Ebbeck
90,000
-
-
-
-
-
90,000
Executive Directors:
Marc Washbourne*
425,000
102,000
(24,862)
25,292
23,541
444,525
995,496
Other Key Management
Personnel:
Nimesh Shah*
375,000
60,000
5,062
25,292
936
324,501
790,791
1,150,000
162,000
(19,800)
50,584
24,477
769,026
2,136,287
*
Marc Washbourne and Nimesh Shah received cash bonuses approved by the Nomination and Remuneration Committee
based on financial and personal KPIs. These cash bonuses represent cash accrued related to FY2023.
18
19
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk – STI
At risk – LTI
Name
2024
2023
2024
2023
2024
2023
Non-Executive Directors:
Tony Faure
100%
100%
-
-
-
-
Elizabeth Crouch AM
100%
100%
-
-
-
-
Timothy Ebbeck
100%
100%
-
-
-
-
Helen Lea
100%
-
-
-
-
-
Executive Directors:
Marc Washbourne
76%
45%
-
10%
24%
45%
Other Key Management
Personnel:
Nimesh Shah
77%
51%
-
8%
23%
41%
The proportion of the cash bonus paid/payable or forfeited is as follows:
Cash bonus related to
financial year
Cash bonus forfeited related
to financial year
Name
2024
2023
2024
2023
Executive Directors:
Marc Washbourne
-
100%
100%
-
Other Key Management Personnel:
Nimesh Shah
-
100%
100%
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Marc Washbourne
Title:
Chief Executive Officer
Agreement commenced:
13 December 2016
Term of agreement:
No fixed term
Details:
Fixed salary of $475,000 plus superannuation for financial year ending 30 June
2025 and 6 month notice period. Mr Washbourne’s employment contract provides for
short term incentives. Upon the termination of Mr Washbourne’s employment contract,
Mr Washbourne will be subject to post employment restraints for up to 12 months.
Name:
Nimesh Shah
Title:
Chief Financial Officer
Agreement commenced:
7 August 2017
Term of agreement:
No fixed term
Details:
Fixed salary of $416,588 plus superannuation for financial year ending 30 June
2025 and 6 month notice period. Mr Shah’s employment contract provides for short term
incentives. Upon the termination of Mr Shah's employment contract, Mr Shah will be
subject to post employment restraints for up to 12 months.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
ReadyTech Holdings Limited
Directors' report
30 June 2024
Share-based compensation
Issue of shares
Details of shares issued to Directors and other key management personnel as part of compensation during the year ended
30 June 2024 are set out below:
Name
Date
Number of
Performance
rights
Value of
options at the
exercise date
Number of
Shares
Issue price
$
Marc Washbourne
13/09/2023
147,079
396,720
147,079
$0.00
Nimesh Shah
13/09/2023
140,260
323,338
140,260
$0.00
Options
There were no options over ordinary shares issued to Directors and other key management personnel as part of compensation
that were outstanding as at 30 June 2024.
There were no options over ordinary shares granted to or vested by Directors and other key management personnel as part
of compensation during the year ended 30 June 2024.
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and
other key management personnel in this financial year or future reporting years are as follows:
Number of
Fair value
rights
Vesting date and
per right
Name
granted
Grant date
exercisable date
Expiry date
at grant date
Marc Washbourne
60,264 17/11/2021
30/06/2024
30/06/2024
$3.99
47,380 15/11/2022
30/06/2024
30/06/2024
$3.97
47,380 15/11/2022
30/06/2025
30/06/2025
$3.97
100,334 05/12/2023
30/06/2026
30/06/2026
$3.53
Nimesh Shah
56,246 13/09/2021
30/06/2024
30/06/2024
$3.06
41,806 11/10/2022
30/06/2024
30/06/2024
$2.92
41,806 11/10/2022
30/06/2025
30/06/2025
$2.92
88,461 22/09/2023
30/06/2026
30/06/2026
$3.70
Performance rights granted in the financial year ended 30 June 2022
Performance rights are subject to an earnings per share ('EPS') hurdle (50% of grant value) and a recurring revenue per share
hurdle (50% of grant value).
Performance rights will be evaluated in two tranches. The first tranche, equivalent to 50% of the total grant value, is subject
to be evaluated two years from 1 July 2021 ('the beginning of the performance period'). The second tranche, also equivalent
to 50% of the total grant value, will be evaluated three years from the beginning of the performance period.
Details of the performance hurdles are as follows:
●
EPS - if the compound annual growth rate of EPS is less than the target of 13%, no vesting will occur. If the target is met,
50% of rights will vest. In the event that the compound annual growth rate is between 13-17%, vesting will be pro-rated
between 50-100%.
●
Recurring revenue per share - if the compound annual growth rate of recurring revenue per share is less than the target
of 13%, no vesting will occur. If the target is met, 50% of rights will vest. In the event that the compound annual growth
rate is between 13-17%, vesting will be pro-rated between 50-100%.
Performance rights granted in the financial year ended 30 June 2023
Performance rights are subject to an earnings per share ('EPS') hurdle (50% of grant value) and a recurring revenue per share
hurdle (50% of grant value).
20
21
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
Performance rights will be evaluated in two tranches. The first tranche, equivalent to 50% of the total grant value, will be
evaluated two years from 1 July 2022 ('the beginning of the performance period'). The second tranche, also equivalent to 50%
of the total grant value, will be evaluated three years from the beginning of the performance period.
Details of the performance hurdles are as follows:
●
EPS - if the compound annual growth rate of EPS is less than the target of 13%, no vesting will occur. If the target is met,
50% of rights will vest. In the event that the compound annual growth rate is between 13-17%, vesting will be pro-rated
between 50-100%.
●
Recurring revenue per share - if the compound annual growth rate of recurring revenue per share is less than the target
of 13%, no vesting will occur. If the target is met, 50% of rights will vest. In the event that the compound annual growth
rate is between 13-17%, vesting will be pro-rated between 50-100%.
Performance rights granted in the financial year ended 30 June 2024
Performance rights are subject to an earnings per share ('EPS') hurdle (50% of grant value) and a recurring revenue per share
hurdle (50% of grant value).
Performance rights will be evaluated three years from 1 July 2023 ('the beginning of the performance period').
Details of the performance hurdles are as follows:
●
EPS - if the compound annual growth rate of EPS is less than the target of 13%, no vesting will occur. If the target is met,
50% of rights will vest. In the event that the compound annual growth rate is between 13-17%, vesting will be pro-rated
between 50-100%.
●
Recurring revenue per share - if the compound annual growth rate of recurring revenue per share is less than the target
of 13%, no vesting will occur. If the target is met, 50% of rights will vest. In the event that the compound annual growth
rate is between 13-17%, vesting will be pro-rated between 50-100%.
The performance rights are not subject to an exercise price.
Performance rights granted carry no dividend or voting rights.
Performance rights vested on 30 June 2024
In evaluating the % vesting in relation to:
(a)
the second tranche of performance rights granted in the financial year ended 30 June 2022, and
(b)
the first tranche of performance rights granted in the financial year ended 30 June 2023,
Adjustments were made for the impact of the IT Vision acquisition and the significant and purposeful additional investment in
the enterprise strategy in the FY21-FY24 period.
Additional information
The earnings of the Group for the five years to 30 June 2024 are summarised below:
2024
2023
2022
2021
2020
$'000
$'000
$'000
$'000
$'000
Sales revenue
113,802
103,306
78,284
50,027
39,254
Adjusted EBITDA*
37,766
33,039
27,472
18,884
14,954
Profit after income tax
5,464
4,975
8,794
2,155
3,943
*
Earnings before interest, tax, depreciation, amortisation and other non-operating items.
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2024
2023
2022
2021
2020
Share price at financial year end ($)
3.25
3.30
3.10
2.40
1.40
Basic earnings per share (cents per share)
4.66
4.38
8.28
2.37
4.93
ReadyTech Holdings Limited
Directors' report
30 June 2024
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at
Received
Balance at
the start of
as part of
Disposals/
the end of
the year
remuneration
Additions
other
the year
Ordinary shares
Tony Faure
378,819
-
-
-
378,819
Marc Washbourne
4,146,229
147,079
-
-
4,293,308
Timothy Ebbeck
17,273
-
13,795
-
31,068
Tom Matthews
36,644,933
-
-
-
36,644,933
Mark Summerhayes
555,036
-
-
-
555,036
Nimesh Shah
1,462,351
140,260
-
(306,039)
1,296,572
Helen Lea
-
-
-
-
-
Elizabeth Crouch AM
41,899
-
-
-
41,899
43,246,540
287,339
13,795
(306,039)
43,241,635
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each Director and
other members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
the year
Granted
Exercised
other
the year
Performance rights over ordinary shares
Marc Washbourne
302,103
100,334
(147,079)
-
255,358
Nimesh Shah
280,118
88,461
(140,260)
-
228,319
582,221
188,795
(287,339)
-
483,677
Balance
vested
Vested and
Vested and
at the end of
exercisable
unexercisable
the year
Performance rights over ordinary shares
Marc Washbourne
76,421
31,223
107,644
Nimesh Shah
70,118
27,934
98,052
146,539
59,157
205,696
*
100,334 performance rights issued under ASX Listing Rule 10.14 with approval from shareholders received at the 2023
Annual General Meeting.
Other transactions with key management personnel and their related parties
There was no transaction with key management personnel and their related parties during the financial year ended 30 June
2024 (2023: none).
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of ReadyTech Holdings Limited under option outstanding at the date of this report.
22
23
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' report
30 June 2024
Shares under performance rights
Unissued ordinary shares of ReadyTech Holdings Limited under performance rights at the date of this report are as follows:
Number
Grant date
Expiry date
under rights
13/09/2021
30/06/2024
190,217
17/11/2021
30/06/2024
52,731
11/10/2022
30/06/2024
104,393
11/10/2022
30/06/2025
208,775
15/11/2022
30/06/2024
23,690
15/11/2022
30/06/2025
47,380
05/12/2023
30/06/2026
100,334
22/09/2023
30/06/2026
729,546
1,457,066
The performance rights are not subject to an exercise price.
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in
any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of ReadyTech Holdings Limited issued on the exercise of options during the year ended 30
June 2024 and up to the date of this report.
Shares issued on the exercise of performance rights
There were no other ordinary shares of ReadyTech Holdings Limited issued on the exercise of performance rights during the
year ended 30 June 2024 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the 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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 29 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
ReadyTech Holdings Limited
Directors' report
30 June 2024
The Directors are of the opinion that the services as disclosed in note 29 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
●
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-
making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of Deloitte Touche Tohmatsu
There are no officers of the Company who are former partners of Deloitte Touche Tohmatsu.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Tony Faure
Chair
27 August 2024
Sydney
24
25
ReadyTech
Annual Report 2023
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Quay Quarter Tower
50 Bridge Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
27 August 2024
Dear Directors
Auditor’s Independence Declaration to ReadyTech Holdings Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of ReadyTech Holdings Limited.
As lead audit partner for the audit of the financial report of ReadyTech Holdings Limited for the year
ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Sandeep Chadha
Partner
Chartered Accountants
The Directors
ReadyTech Holdings Limited
Level 2
77 King Street
Sydney NSW 2000
ReadyTech Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$'000
$'000
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
21
Revenue from contracts with customers
5
113,802
103,306
Interest revenue calculated using the effective interest method
31
15
Expenses
Hosting and other direct costs
(8,566)
(7,637)
Employee benefits expense
(61,289)
(59,121)
Third party SaaS variable costs
(2,028)
(965)
Depreciation and amortisation expense
(22,859)
(17,272)
Advertising and marketing expenses
(1,286)
(1,095)
Consultancy and professional expenses
(2,085)
(2,909)
Administration expenses
(919)
(970)
Communication and IT expenses
(2,381)
(2,031)
Occupancy costs
(818)
(723)
Revaluation of contingent consideration
(615)
-
Other expenses
(1,268)
(1,238)
Finance costs
6
(3,309)
(2,563)
Profit before income tax expense
6,410
6,797
Income tax expense
7
(946)
(1,822)
Profit after income tax expense for the year attributable to the owners of
ReadyTech Holdings Limited
5,464
4,975
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
(77)
137
Other comprehensive income for the year, net of tax
(77)
137
Total comprehensive income for the year attributable to the owners of
ReadyTech Holdings Limited
5,387
5,112
Cents
Cents
Basic earnings per share
42
4.66
4.38
Diluted earnings per share
42
4.66
4.38
26
27
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Consolidated statement of financial position
As at 30 June 2024
Consolidated
Note
2024
2023
$'000
$'000
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
Assets
Current assets
Cash and cash equivalents
8
21,867
20,616
Trade and other receivables
9
12,567
10,434
Contract assets
10
2,588
1,489
Derivative financial assets
11
-
76
Income tax refund receivable
7
1,840
2,150
Prepayments
2,244
2,969
Total current assets
41,106
37,734
Non-current assets
Property, plant and equipment
12
1,964
2,229
Intangibles
13
210,804
212,511
Right-of-use assets
14
4,590
4,783
Contract costs
15
1,797
2,025
Deferred tax assets
7
1,168
-
Total non-current assets
220,323
221,548
Total assets
261,429
259,282
Liabilities
Current liabilities
Trade and other payables
16
11,936
11,767
Contract liabilities
17
23,635
19,527
Lease liabilities
18
1,509
1,229
Income tax payable
7
954
-
Employee benefits
7,102
7,246
Contingent consideration
19
17,408
10,181
Total current liabilities
62,544
49,950
Non-current liabilities
Contract liabilities
20
722
888
Borrowings
21
41,897
46,949
Provisions
548
307
Lease liabilities
23
3,656
3,932
Deferred tax liabilities
7
-
2,718
Employee benefits
493
375
Contingent consideration
22
360
25,911
Total non-current liabilities
47,676
81,080
Total liabilities
110,220
131,030
Net assets
151,209
128,252
Equity
Issued capital
24
211,831
194,292
Reserves
25
(78,526)
(78,480)
Retained profits
17,904
12,440
Total equity
151,209
128,252
ReadyTech Holdings Limited
Consolidated statement of changes in equity
For the year ended 30 June 2024
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
Issued
Retained
capital
Reserves
profits
Total equity
Consolidated
$'000
$'000
$'000
$'000
Balance at 1 July 2022
171,916
(81,208)
7,465
98,173
Profit after income tax expense for the year
-
-
4,975
4,975
Other comprehensive income for the year, net of tax
-
137
-
137
Total comprehensive income for the year
-
137
4,975
5,112
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 24)
21,747
-
-
21,747
Share-based payments (note 39)
-
3,220
-
3,220
Exercise of performance rights (note 25)
629
(629)
-
-
Balance at 30 June 2023
194,292
(78,480)
12,440
128,252
Issued
Retained
capital
Reserves
profits
Total equity
Consolidated
$'000
$'000
$'000
$'000
Balance at 1 July 2023
194,292
(78,480)
12,440
128,252
Profit after income tax expense for the year
-
-
5,464
5,464
Other comprehensive income for the year, net of tax
-
(77)
-
(77)
Total comprehensive income for the year
-
(77)
5,464
5,387
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 24)
16,001
(764)
-
15,237
Share-based payments (note 39)
-
2,333
-
2,333
Exercise of performance rights (note 25)
1,538
(1,538)
-
-
Balance at 30 June 2024
211,831
(78,526)
17,904
151,209
28
29
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Consolidated statement of cash flows
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$'000
$'000
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
Cash flows from operating activities
Receipts from customers (inclusive of GST)
125,667
113,266
Payments to suppliers and employees (inclusive of GST)
(87,367)
(80,151)
38,300
33,115
Interest received
27
15
Interest and other finance costs paid
(3,013)
(2,429)
Payment of acquisition costs
-
(521)
Income taxes paid
(3,720)
(2,374)
Net cash from operating activities
38
31,594
27,806
Cash flows from investing activities
Payment for purchase of subsidiaries, net of cash acquired
(72)
(6,424)
Payments for contract costs
(464)
(578)
Payments for property, plant and equipment
(420)
(1,463)
Payments for intangibles
13
(17,454)
(18,239)
Payment of contingent consideration
19
(5,263)
(1,074)
Net cash used in investing activities
(23,673)
(27,778)
Cash flows from financing activities
Proceeds from borrowings
-
13,000
Repayment of borrowings
21
(5,000)
-
Repayment of lease liabilities
(1,670)
(1,613)
Net cash (used)/from financing activities
(6,670)
11,387
Net increase in cash and cash equivalents
1,251
11,415
Cash and cash equivalents at the beginning of the financial year
20,616
9,201
Cash and cash equivalents at the end of the financial year
8
21,867
20,616
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 1. General information
The financial statements cover ReadyTech Holdings Limited as a Group consisting of ReadyTech Holdings Limited ('Company
or 'parent entity') and the entities it controlled at the end of, or during, the period (collectively referred to in these financial
statements as the 'Group'). The financial statements are presented in Australian dollars, which is ReadyTech Holdings
Limited's functional and presentation currency.
ReadyTech Holdings Limited is a listed public Company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Level 2, 77 King Street
Sydney
NSW 2000
Australia
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 27 August 2024. The
Directors have the power to amend and reissue the financial statements.
Note 2. Material accounting policy information
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of
Accounting Estimates
AASB 2021-2 was issued in March 2021 and is applicable to annual periods beginning on or after 1 January 2023.
This standard amends AASB Standards to improve accounting policy disclosures so that they provide more useful information
to investors and users of the financial statements and clarifies the distinction between accounting policies and accounting
estimates.
Deficiency of net current assets
The statement of financial position has a deficiency of net current assets of $21,438,000 (2023: $12,216,000) at the reporting
date. The deficiency is mainly attributable to (i) contract liabilities of $23,635,000 (2023: $19,527,000) disclosed in current
liabilities, which represents upfront payments received from customers on signed sales contracts which will not result in an
outflow of cash within the next twelve months; (ii) an amount of $7,102,000 for employee benefits (2023: $7,246,000) is
included in current liabilities, for which the majority of this liability is not expected to be settled in cash within the next twelve
months.
The Directors are satisfied that the Group will be able to meet its working capital requirements through the normal cyclical
nature of receipts and payments and budgeted cash flows generated from operations.
Basis of preparation
Statement of compliance
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
30
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for derivatives and contingent
consideration at fair value through profit or loss.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 34.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of ReadyTech Holdings Limited
as at 30 June 2024 and the results of all subsidiaries for the period then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group has the
power over the investee, 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. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is ReadyTech Holdings Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into the entity's functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
The principal activities of the Group are to provide technology-based solutions to its customers that are organized into three
reportable operating segments: Education and Work Pathways, Workforce Solutions and Government and Justice.
Main products of the Group:
Segment
Main Product
Description
Education and Work
Pathways
JR Plus and AVAXA
Ready LMS
JR Plus, AVAXA and Ready LMS are ReadyTech’s student management
system empowering enterprise tertiary educators to create digital student
experiences and to adhere to strict compliance standards.
VeTtrak, including
VETtrak Cloud
VETtrak is a student management system for Registered Training
Organisations (RTOs).
Ready Skills
Ready Skills provides vocational skills tracking, recognition, planning and
assessment technology.
Job Ready, Ready
Recruit and Job
Apprentice
Job Ready, Ready Recruit and Job Apprentice exists to help employment
services providers, Group Training Organisations (GTOs) and Australian
Apprenticeship Support Network (AASN) provides to support the
completion of apprenticeship lifecycle and deliver work opportunities for
jobseekers and customers.
Esher House
Esher House delivers behavioural assessment technology and
intervention programs for Back to Work, apprentices and more.
Workforce Solutions
Ready Workforce
Ready Workforce is an all-in-one cloud payroll, HR, rostering, time &
attendance and leave management software platform.
Ready Employ
Ready Employ by Phoenix is a cloud-based talent management system
with everything entities need to manage their leases' processes online,
easily.
Ready Pay
Ready Pay provides people management software, combined with an
end-to-end payroll outsourcing service, with local payroll experts providing
customers with payroll, HR administration and workplace health & safety
software and services.
Government and
Justice
Ready Community
(powered by Open
Office)
Ready Community (powered by Open Office) is provider of high function,
integrated, statutory and compliance management systems for local
government.
Ready Case
Ready Case (formerly case HQ, part of McGirr Technologies) is the
market leader in case management systems for courts, tribunals and
related justice sector agencies.
Ready Contracts and
Ready Buy
Ready Contracts and Ready Buy are designed as procurement software
suite to support distributed procurement and commercial operations to
procure goods and services efficiently, cost effectively, and at reduced
risk, while reducing workload on centralised procurement.
Altus (powered by IT
Vision)
Altus is a comprehensive enterprise resource planning (ERP) platform
designed specifically for local governments who need to automate and
optimise their systems, enhance cross department collaboration and
provide a customer experience to both community members and staff.
Synergysoft (powered
by IT Vision)
SynergySoft is a legacy product suite used by local governments, which
can be fully integrated with Altus solutions.
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
The accounting policies below apply to the Group’s products as summarised in the above table.
Revenue is recognised upon transfer of control of promised products and services to customers at an amount that reflects the
consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For
each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the
contract; determines the transaction price which takes into account estimates of variable consideration and the time value of
money; allocates the transaction price to the separate performance obligations on the basis of the relative stand- alone selling
price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Contracts with customers can include various combinations of subscription fees and services, which are in certain
circumstances bundled and in other circumstances are capable of being distinct and accounted for as separate performance
obligations. Where a contract with multiple performance obligations that is not bundled, the revenue associated with each
obligation is calculated based on its relative stand-alone selling price.
Revenue is recognised over time if:
●
the customer simultaneously receives and consumes the benefits as the Group performs;
●
the customer controls the asset as the Group creates or enhances it; or
●
the Group’s performance does not create an asset for which the Group has an alternative use and
●
there is a right to payment for performance to date.
Where the above criteria is not met, revenue is recognised at a point in time when control transfers.
The Group earns its revenues from two main sources:
a.
Subscription, licences, support and hosting fees
b.
Training, consultancy and other services
Subscription, licence and support and hosting fees
Subscription revenues represent revenues earned from customers accessing the cloud-based products hosted by the Group.
Customers gain access to use the Group’s cloud-based products without taking possession of the software. Customers pay
a fixed subscription fee over the contract term. Subscription contracts are sold along with configuration and/or customisation,
support and hosting services.
For some large enterprise contracts, the contract may include customisation of the software for the customer’s specific use.
Product customisation covers services to create new functions or features and special customisation of the standard reports
to meet the customer’s need. Customisation service is critical to the functioning of the software for the customer’s specific
use. A customer is not able to fully benefit from the software without the required software customisation. Knowledge on how
to modify the software code or writing additional code is proprietary of the Group and only the Group can perform this service.
Therefore, there are no other readily available resources for the customer to obtain the benefit from the software customisation
prior to accessing the product.
Support revenues represent revenues earned from providing post-sale technical support to respond to customers’ service
requests.
Hosting revenues represent revenues earned from providing the cloud-based hosting service for the service components,
storage infrastructure, operating and database software.
The Group has assessed and concluded that the sale of subscription, hosting and support services together are not distinct
as they represent a bundled service to use the Group’s cloud-based product over the contract term. Hence, the Group
considers the sale of subscription fees, customisation, hosting and technical support services as a single performance
obligation. Revenues are recognised over time on a straight-line basis over the term of the subscription period, as the
customers simultaneously receive and consume the benefits of accessing the product and services. The Group’s subscription
revenues do not contain refund-type provisions.
Costs incurred and payments received from the customer for customisation services prior to the commencement of the
subscription period are deferred on the balance sheet and recognised in the profit or loss on a straight-line basis over the term
of the subscription period.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Licences, support and hosting fees
Licence revenues represent revenues from the sales of on-premise products. These products are hosted in the customer’s
infrastructure environment. These products are not tailored for customer use throughout the duration of the contact and no
maintenance/ training services are included.
When a licence is purchased by a customer, there is an optionality for the customers to also purchase post-sale technical
support or hosting services for an agreed term. Where a licence is sold with these support and hosting services, each good
or service is considered to be a distinct performance obligation because the customer can benefit from the use of the software
without the provision of the support or hosting services.
Revenue is recognised at the point in time when the customer has purchased the licence as control of the software has
transferred at that point. Revenue is recognised for the provision of support and hosting services over time on a straight line
basis over the agreed term. This is because the customer is deemed to simultaneously receive and consume the benefits
provided by the Group’s performance of the support and hosting services as it is performed during the contract term.
Training, consultancy and other services
Training revenues represent revenues earned from providing in-depth training on the product, refresher courses or induction
for new users of the product.
Consultancy and other services revenue represent revenues earned from providing consultation services such as business
process mapping, project management of change projects, best practice of business process.
The Group has assessed and concluded that revenues from training, consultancy and other services are able to be provided
by a third party supplier or can be consumed by the customer on its own or with readily available resources. Therefore, training,
consultancy and other services are considered to be distinct performance obligations.
Training, consultancy and other services revenue is charged to the customer either on a time and materials basis or as a fixed
price. Revenue is recognised as the services are rendered over time on a proportional basis using an input method, being
time or cost, depending on the terms and conditions of the customer contract.
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Summary of revenue recognition:
Revenue categories
Performance obligation
Timing of revenue recognition
Subscription fees
Provide access to the Group’s
intellectual property over the agreed
period
Over time on a straight-line basis across
the customer's subscription term.
Customisation services
Services to customise the product to
meet the customers' requirements or
specifications; bundled with subscription
fees
Over time on a straight-line basis across
the customer's subscription term.
Support services - subscription
Provision of post-sale support services
over the agreed period bundled with
subscription fees
Over time on a straight-line basis across
the customer's subscription term.
Hosting fees - subscription
Provision of cloud-based hosting
services over the agreed period bundled
with subscription fees
Over time on a straight-line basis across
the customer's subscription term.
Licence fees
Sale of a software licence
At the point of sale.
Support services - licence
Provision of post-sale support services
over the agreed period
Over time as the services are rendered.
Hosting fees - licence
Provision of cloud-based hosting
services over the agreed period
Over time as the services are rendered.
Training services
Services to provide training to the users
Over time as the services are rendered.
Consultancy services
Service includes services for software
and project services
Over time as the services are rendered.
Principal vs agent
For selected products, the Group collaborates with third parties software providers or consultants in completing the
performance obligations as per customer contracts. The Group is acting as a principal when it controls the provision of the
third party product or implementation service before the product or service is transferred to the customer. In the contract with
a customer, the Group has control over the establishment of pricing, including determining pricing for the third party products
and services. The Group is also primarily responsible for fulfilling the promise to provide the third party products to the
customer and assumes fulfilment risk such as addressing customer support requests and rectifying any service issues.
Contract assets/ liabilities
Timing of revenue recognition may differ from the timing of invoicing to customers. Contract liabilities represent the Group’s
obligation to transfer goods or services to a customer and are recognized when customer pays the consideration in advance,
or when the Group recognizes a receivable to reflect its unconditional right to consideration (whichever earlier) before the
Group has transferred the goods or services to the customer.
Contract liabilities comprise mainly of unearned revenue related to subscription licences fees that are not refundable. Contract
liabilities are generally invoiced at the beginning of each contract period.
Contract assets represent unbilled revenue for goods and services that have been provided to customers but not yet billed.
When corresponding payment milestones are met, contract assets are released to trade receivables. Contract assets are
treated as financial assets for impairment purposes.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Contract costs
Incremental costs incurred in obtaining a contract
Costs incurred in obtaining the customer contract are expensed, unless they are incremental to obtaining the contract and the
Group expects to recover those costs. Costs that meet the criteria for capitalisation will be amortised over the life of the
contract that they relate to. The Group has identified certain sales commission costs as meeting the criteria of directly related
contract costs. These costs are capitalised in the month in which they are incurred and amortised over the contract term.
Costs to fulfil a contract
Employee costs related to a contract of which product customisation is performed for a specific customer and the
corresponding revenues are recognized over the contract terms, are capitalised in the month in which they are incurred and
amortised over the contract term.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
●
when the taxable temporary difference is associated with interests in subsidiaries and the timing of the reversal can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
ReadyTech Holdings Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated
group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional
right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as
non-current.
Deferred tax assets and liabilities are always classified as non-current.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Receivables from related parties and other receivables are recognised at amortised cost, less any provision for impairment.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line or diminishing value basis to write off the net cost of each item of property, plant
and equipment (excluding land) over their expected useful lives as follows:
Leasehold improvements
3-5 years
Fixtures and fittings
3-10 years
Computer equipment
3-5 years
Office equipment
3-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets
are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently
measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of
the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected
pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Research costs are expensed in the period in which they are incurred.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Patents and trademarks
Significant costs associated with patents and trademarks are capitalised as an asset. These costs are not subsequently
amortised. Instead, patents and trademarks are tested annually for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. They are carried at cost less accumulated impairment losses.
Management consider patents and trademarks to have indefinite useful lives because the potential to generate cash flows is
unlimited.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite useful life between 9 and 14 years.
Software
An intangible asset arising from software development expenditure on an internal project is recognised only when the Group
can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its
intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability
of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible
asset during its development. Following the initial recognition, the cost model is applied requiring the asset to be carried at
cost less any accumulated amortisation and accumulated impairment losses. Significant costs associated with the acquisition
of software or software internally developed is amortised on a straight-line basis over the period of its expected benefit, being
a finite useful life of between 5 and 10 years. Amortisation commences when the asset is available for use, i.e. when it is in
the location and condition necessary for it to be capable of operating in the manner intended by management.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Contract liabilities
Contract liabilities are recognised when a customer pays consideration, or when the Group recognises a receivable to reflect
its unconditional right to consideration (whichever is earlier), before the Group has transferred the goods or provided the
services to the customer. The liability is the Group's obligation to transfer goods or provide services to a customer from which
it has received consideration.
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid
under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written
down.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material,
provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the
passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled
wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether
the Group receives the services that entitle the employees to receive payment. No account is taken of any other vesting
conditions.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
●
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date; and assumes that the transaction will take place either: in the principal market;
or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best
use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable,
with external sources of data.
Issued capital
Ordinary shares are classified as equity.
40
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued
or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the
acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the
proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes
in the fair value of the contingent consideration classified as a liability is recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of
the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
Business combinations under common control
Common control transactions are specifically scoped out of AASB 3 'Business Combinations'. Common control transactions
are accounted for in the consolidated financial statements prospectively from the date of obtaining the ownership interest. The
Directors have elected to use existing book values of assets and liabilities of the entities subject to the business combination
and record the difference between the purchase price paid by the Company and the existing book value of the entity acquired
immediately prior to the business combination as a reserve. Where equity instruments are issued as part of the consideration,
the value of the instruments is their market price as at the acquisition date. Transaction costs arising on the issue of equity
instruments are recognised directly in equity.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of ReadyTech Holdings Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of additional ordinary shares that would have been outstanding assuming conversion of all dilutive potential
ordinary shares.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2024. The Group's assessment of
the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group, are set out below.
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-Current and
AASB 2022-6 Amendments to Australian Accounting Standards - Non-current Liabilities with Covenants
AASB 2020-1 was issued in March 2020 and is applicable to annual periods beginning on or after 1 January 2024, as extended
by AASB 2020-6. Early adoption is permitted. AASB 2022-6 was issued in December 2022 and is applicable to annual periods
beginning on or after 1 January 2024. Early adoption is permitted where AASB 2020-1 is also early adopted.
These standards amend AASB 101 ‘Presentation of Financial Statements’ to clarify requirements for the presentation of
liabilities in the statement of financial position as current or non-current. The amendments clarify that a liability is classified as
non-current if an entity has the right at the end of the reporting period to defer settlement of the liability for at least 12 months
after the reporting period. If the deferral right is subject to the entity complying with covenants in the loan arrangement based
on information up to and including reporting date, the deferral right will exist where the entity is able to comply with the covenant
on or before the end of the reporting date even if compliance is assessed after the reporting date. The deferral right will be
deemed to exist at reporting date if the entity is required to comply with the covenant only after the reporting date based on
post-reporting date information. Additional disclosure is required about loan arrangements classified as non-current liabilities
in such circumstances which enables users of financial statements to understand the risk that the liabilities could become
repayable within twelve months after the reporting period. Classification of a liability as non-current is unaffected by the
likelihood that the entity will exercise its right to defer settlement of the liability for at least 12 months after the reporting date
or even if the entity settles the liability prior to issue of the financial statements. The meaning of settlement of a liability is also
clarified.
The Group does not expect these amendments to have a material impact.
42
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
AASB 18 Presentation and Disclosure in Financial Statements
This standard is applicable to annual reporting periods beginning on or after 1 January 2027, with early adoption permitted.
The standard replaces AASB 101 ‘Presentation of Financial Statements’, although many of the requirements have been
carried forward unchanged and is accompanied by limited amendments to the requirements in AASB 107 ‘Statement of Cash
Flows’. The standard requires income and expenses to be classified into five categories: ‘Operating’ (residual category if
income and expenses are not classified into another category), ‘Investing’, ‘Financing’, ‘Income taxes’ and ‘Discontinued
operations’. The standard introduces two mandatory sub-totals: ‘Operating profit’ and ‘Profit before finance and income taxes’.
There are also new disclosure requirements for ‘management-defined performance measures’, such as earnings before
interest, taxes, depreciation and amortisation (‘EBITDA’) or ‘adjusted profit’. The standard provides enhanced guidance on
how to organise and group information (aggregation and disaggregation) in the financial statements and whether to provide it
in the primary financial statements or in the notes.
The Group will adopt this standard from 1 July 2027 and it is expected that there will be a significant change to the layout of
the statement of profit or loss and other comprehensive income.
AASB 2014-10 Sale or contribution of assets between investor and its associate or joint venture
AASB 2014-10 was issued in December 2014 and is applicable for annual reporting periods beginning on or after 1 January
2025 (as extended by AASB 2021-7). Early adoption is permitted.
This standard makes amendments to AASB 10 ‘Consolidated Financial Statements’ and AASB 128 ‘Investments in Associates
and Joint Ventures’ to clarify the extent to which gains or losses are recognised when accounting for sales or contributions of
assets between an investor and its associate or joint venture. The standard requires that a full gain or loss is recognised when
the transaction involves a business whilst a partial gain or loss is recognised when the transaction involves assets that do not
constitute a business.
The Group does not expect these amendments to have a material impact.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed
below.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in
note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth
rates of the estimated future cash flows. Refer to note 13 for further information.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or
value-in-use calculations, which incorporate a number of key estimates and assumptions.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Contingent consideration
The contingent consideration liability is the difference between the total purchase consideration, usually on an acquisition of
a business combination, and the amounts paid or settled up to the reporting date, discounted to net present value. The Group
applies provisional accounting for any business combination. Any reassessment of the liability during the earlier of the
finalisation of the provisional accounting or 12 months from acquisition-date is adjusted for retrospectively as part of the
provisional accounting rules in accordance with AASB 3 'Business Combinations'. Thereafter, at each reporting date, the
deferred consideration liability is reassessed against revised estimates and any increase or decrease in the net present value
of the liability will result in a corresponding gain or loss to profit or loss. The increase in the liability resulting from the passage
of time is recognised as a finance cost. Refer to note 28, 36 and 39 for further information.
Capitalised software development expenditure
Software development expenditure have been capitalised only when the Group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available for use or sale. Key judgements are applied in considering costs to
be capitalised which includes determining expenditures directly related to these activities and allocating overheads between
those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through
successful development or sale of the relevant software. To the extent that capitalised costs are determined not to be
recoverable in the future, they will be written off in the period in which this determination is made.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and
equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or
some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down.
Revenue recognition
For some large enterprise contracts, product customisation service is typically bundled with the implementation, training,
consulting and other services into a single performance obligation. Management uses judgements and estimates in allocating
the transaction price to different revenue streams which have more than one performance obligation. Allocation of the
transaction price is determined based on the estimated costs of satisfying the performance obligation and then adds an
appropriate margin.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into three reportable operating segments: Education and Work Pathways, Workforce Solutions and
Government and Justice. These operating segments are based on the internal reports that are reviewed and used by the
Board of Directors and Key Management Personnel (who are identified as the Chief Operating Decision Makers ('CODM')) in
assessing performance and in determining the allocation of resources.
The CODM reviews adjusted EBITDA (earnings before interest, tax, depreciation and amortisation adjusted for non-cash and
significant items). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in
the financial statements.
The information reported to the CODM is on a monthly basis.
44
45
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 4. Operating segments (continued)
Types of products and services
The principal products and services of each of these operating segments are as follows:
Education and Work
Pathways
mainly provides products and services to tertiary education providers. Core products are its
cloud-based student management systems (SMS) and learning management systems (LMS)
for education and training providers to manage the student lifecycle from student enrolment to
course completion. ReadyTech also provides platforms to help state governments manage
vocational education and training (VET) programs, software platforms for the pathways and
back-to-work sector to manage apprentices and job seekers, and a competency assessment
and skills profiling tools to track on-the-job training through a qualification.
Workforce Solutions
provides products and services to mid-sized company across various industries with payroll
software, outsourced payroll services, human resource management (HRM) and recruitment
software solutions to employers to assist them with payroll and the management of their
employees. HRM consists of human resource (HR) administration and talent management.
HR administration involves employee records, workplace health and safety (WHS) and
organisational structure.
Government and Justice
provides government and justice case management software as a service solutions to local
governments, state governments and justice departments. Core products in asset
management, property, licensing and compliance, finance, HR and payroll, customer
management and courts and justice.
Refer to note 5 for disclosure of revenues from external customers for these principal products and services.
Intersegment transactions
No intersegment transactions were made during the year ended 30 June 2024 (30 June 2023: $nil).
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable
that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are
eliminated on consolidation.
Major customers
During the years ended 30 June 2024 and 30 June 2023, no single customer contributed 10% or more to the Group's external
revenue.
Operating segment information
Workforce
Solutions
Education and
Work
Pathways
Government
and Justice
Corporate
Total
Consolidated - 2024
$'000
$'000
$'000
$'000
$'000
Revenue
Sales to external customers
30,742
40,550
42,510
-
113,802
Total revenue
30,742
40,550
42,510
-
113,802
Adjusted EBITDA
11,062
18,117
12,324
(3,737)
37,766
Contingent consideration charged as employee
expenses and fair value adjustments
(2,409)
Integration, restructuring and acquisition related
transaction cost
(2,583)
Employee share gifts
(227)
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 4. Operating segments (continued)
EBITDA
32,547
Depreciation and amortisation
(22,859)
Interest revenue
31
Finance costs
(3,309)
Profit before income tax expense
6,410
Income tax expense
(946)
Profit after income tax expense
5,464
Workforce
Solutions
Education and
Work
Pathways
Government
and Justice
Corporate
Total
Consolidated - 2023
$'000
$'000
$'000
$'000
$'000
Revenue
Sales to external customers
28,573
36,051
38,682
-
103,306
Total revenue
28,573
36,051
38,682
-
103,306
Adjusted EBITDA
11,120
15,269
10,764
(4,114)
33,039
Transaction, including takeover defense and
acquisition related costs
(3,141)
Contingent consideration charged as employee
expenses
(2,912)
Employee share gifts
(369)
EBITDA
26,617
Depreciation and amortisation
(17,272)
Interest revenue
15
Finance costs
(2,563)
Profit before income tax expense
6,797
Income tax expense
(1,822)
Profit after income tax expense
4,975
All assets and liabilities, including taxes are not allocated to the operating segments as CODM reviews and manages on an
overall group basis.
The Group operates predominantly in Australia and New Zealand regions.
Note 5. Revenue from contracts with customers
Consolidated
2024
2023
$'000
$'000
Revenue from contracts with customers
113,802
103,306
46
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 5. Revenue from contracts with customers (continued)
42
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Workforce
Solutions
Education
and Work
Pathways
Government
and Justice
Total
Consolidated - 2024
$'000
$'000
$'000
$'000
Major product lines
Subscription, licence, support and hosting
27,422
34,150
33,836
95,408
Training, consultancy and other
3,320
6,400
8,674
18,394
30,742
40,550
42,510
113,802
Workforce
Solutions
Education
and Work
Pathways
Government
and Justice
Total
Consolidated - 2023
$'000
$'000
$'000
$'000
Major product lines
Subscription, licence, support and hosting
24,500
29,714
30,119
84,333
Training, consultancy and other
4,073
6,337
8,563
18,973
28,573
36,051
38,682
103,306
Note 6. Expenses
Consolidated
2024
2023
$'000
$'000
Profit before income tax includes the following specific expenses:
Finance costs
Interest and finance charges paid/payable on borrowings
3,037
2,337
Interest charges on lease liability
272
226
Finance costs expensed
3,309
2,563
Superannuation expense
Defined contribution superannuation expense
5,728
4,993
Share-based payments expense
Share-based payments expense
2,333
3,220
Loss allowance for expected credit losses
Loss allowance for expected credit losses
247
195
Consolidated
2024
2023
$'000
$'000
7,258
1,611
(5,264)
1,216
(1,048)
(1,005)
946
1,822
(5,264)
1,216
6,410
6,797
1,923
2,039
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 7. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
(Increase)/decrease in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30% (2023 - 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Research and development ('R&D') expenses
2,106
2,508
Research and development tax offset
(3,068)
(3,342)
Other non-deductible expenditure
1,033
1,622
1,994
2,827
Adjustment recognised for prior periods
(1,048)
(1,005)
Income tax expense
946
1,822
During the year ended 30 June 2024, the adjustment recognised for prior period is related to application of R&D tax offset in
the 2023 lodged tax return.
48
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 7. Income tax (continued)
Consolidated
2024
2023
$'000
$'000
Deferred tax (liability)/asset
Deferred tax (liability)/asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Allowance for expected credit losses
222
172
Labour capitalisation
(3,841)
(3,821)
Contract liabilities
7,489
6,001
Employee benefits
2,221
2,087
Accrued expenses
1,021
1,185
Software
3,636
2,587
Customer relationships
(7,865)
(8,968)
Brand names
(139)
(498)
Property, plant and equipment
(757)
(1,138)
IPO and other acquisition related costs
255
314
Right-of-use assets
(1,377)
(1,435)
Lease liabilities
1,563
1,544
Contract costs
(1,299)
(768)
Other
39
20
Deferred tax asset/(liability)
1,168
(2,718)
Movements:
Opening balance
(2,718)
5,704
Credited/(charged) to profit or loss
5,264
(1,216)
Additions through business combinations
(153)
(2,946)
Adjustment recognised for prior periods
(62)
(618)
Adjustment related to prior period TFE application
-
(2,991)
Adjustment related to prior period R&D tax offset lodgement
(1,163)
-
Tax impact on the finalisation of provisional accounting of business combinations
-
(651)
Closing balance
1,168
(2,718)
Consolidated
2024
2023
$'000
$'000
Income tax refund due
Income tax refund due – Australia entities
1,840
2,150
Consolidated
2024
2023
$'000
$'000
Income tax payable
Income tax payable – New Zealand entities
954
-
As at 30 June 2024, the Group has capital losses totalling $2,996,000 (2023: $2,996,000) which have not been recognised in
the statement of financial position as the recovery of this benefit is uncertain.
Subsequent to 30 June 2024, the Group received the 2023 and 2021 income tax refunds from the Australian Tax Office
amounting to $1,294,000.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 8. Current assets - cash and cash equivalents
Consolidated
2024
2023
$'000
$'000
Cash at bank
21,671
20,417
Cash on deposit
196
199
21,867
20,616
Note 9. Current assets - trade and other receivables
Consolidated
2024
2023
$'000
$'000
Trade receivables
13,059
10,557
Less: Allowance for expected credit losses
(739)
(574)
12,320
9,983
Other receivables
247
451
12,567
10,434
Trade receivables are non-interest bearing and are on 30 day credit term.
Allowance for expected credit losses
The Group has recognised a loss of $247,000 in profit or loss in respect of impairment of receivables for the year ended 30
June 2024 (2023: $195,000).
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
2024
2023
2024
2023
2024
2023
Consolidated
%
%
$'000
$'000
$'000
$'000
Not overdue
2.14%
2.26%
7,653
4,647
164
105
0 to 3 months overdue
3.00%
2.87%
4,113
4,563
123
131
3 to 6 months overdue
18.93%
10.16%
752
738
142
75
Over 6 months overdue
57.30%
43.19%
541
609
310
263
13,059
10,557
739
574
Movements in the allowance for expected credit losses are as follows:
Consolidated
2024
2023
$'000
$'000
Opening balance
574
570
Additional provisions recognised/ (reversal of unused amount)
247
(192)
Additions through business combinations
13
274
Receivables written off during the year as uncollectable
(95)
(78)
Closing balance
739
574
50
51
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 9. Current assets - trade and other receivables (continued)
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to
the customer base being large and unrelated.
Note 10. Current assets - contract assets
Consolidated
2024
2023
$'000
$'000
Contract assets
2,588
1,489
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Opening balance
1,489
1,383
Additions
5,706
5,465
Transfer to trade receivables
(4,607)
(5,359)
Closing balance
2,588
1,489
Allowance for expected credit losses
The allowance for expected credit losses on contract assets for the year ended 30 June 2024 is $nil (2023: $nil).
Note 11. Current assets - derivative financial assets
Consolidated
2024
2023
$'000
$'000
Interest rate swap
-
76
The Group entered into an interest rate swap arrangement to hedge the variable rate of $20,000,000 loan (2023: $20,000,000)
with a fixed rate of 3.795% (2023: 3.795%) that is settled on a quarterly basis. The contract expired on 1 February 2024.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 12. Non-current assets - property, plant and equipment
Consolidated
2024
2023
$'000
$'000
Leasehold improvements - at cost
1,979
1,598
Less: Accumulated depreciation
(662)
(277)
1,317
1,321
Fixtures and fittings - at cost
354
356
Less: Accumulated depreciation
(288)
(235)
66
121
Computer equipment - at cost
1,987
1,740
Less: Accumulated depreciation
(1,416)
(973)
571
767
Office equipment - at cost
225
262
Less: Accumulated depreciation
(215)
(242)
10
20
1,964
2,229
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Leasehold
improve-
ments
Fixtures and
fittings
Motor
vehicles
Computer
equipment
Office
equipment
Total
Consolidated
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
227
180
7
563
65
1,042
Additions
1,097
70
-
504
2
1,673
Additions through business
combinations (note 36)
125
-
-
96
-
221
Depreciation expense
(128)
(129)
(7)
(396)
(47)
(707)
Balance at 30 June 2023
1,321
121
-
767
20
2,229
Additions
381
2
-
263
-
646
Exchange differences
-
-
-
-
(1)
(1)
Depreciation expense
(385)
(57)
-
(459)
(9)
(910)
Balance at 30 June 2024
1,317
66
-
571
10
1,964
52
53
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 13. Non-current assets - intangibles
Consolidated
2024
2023
$'000
$'000
Goodwill - at cost
125,329
125,360
Patents and trademarks - at cost
464
1,660
Customer relationships - at cost
45,108
44,506
Less: Accumulated amortisation
(18,912)
(14,612)
26,196
29,894
Software - at cost
116,116
98,798
Less: Accumulated amortisation
(57,301)
(43,201)
58,815
55,597
210,804
212,511
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Goodwill
Patents and
trademarks
Customer
relationships
Software
Total
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
88,785
474
24,284
37,096
150,639
Additions*
-
-
-
18,239
18,239
Additions through business combinations (note
36)
36,447
1,194
8,773
10,800
57,214
Adjustments to the provisional values
27
-
624
-
651
Exchange differences
101
(8)
6
-
99
Amortisation expense
-
-
(3,793)
(10,538)
(14,331)
Balance at 30 June 2023
125,360
1,660
29,894
55,597
212,511
Additions
-
-
-
17,454
17,454
Additions through business combinations
-
-
602
-
602
Exchange differences
(31)
(2)
-
(34)
(67)
Amortisation expense
-
(1,194)
(4,300)
(14,202)
(19,696)
Balance at 30 June 2024
125,329
464
26,196
58,815
210,804
*
Additions of software during the financial year ended 30 June 2024 include internally generated assets of $17,033,000
(2023: $16,344,000) and assets externally acquired amounting to $421,000 (2023: $1,895,000).
Review of intangible asset carrying values in relation to the Government and Justice Segment.
As part of business integration within the Government and Justice segment, management has performed a review of the
certain assets and has resulted in the following:
●
Derecognition of an acquired brand name of $1.2 million from the previous acquisition.
●
Accelerate depreciation of certain acquired software with a net carrying value of $9.27 million due to a change in the
assessed useful life to 3 years.
A total balance of $2.2 million has been recognised as an expense within the depreciation and amortisation expenses in the
consolidated profit or loss.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 13. Non-current assets - intangibles (continued)
Impairment testing
Goodwill acquired through business combinations has been allocated to the following groups of cash generating units ('CGU'):
Consolidated
2024
2023
$'000
$'000
Education and Work Pathways
19,286
19,286
Workforce Solutions
15,496
15,527
Government and Justice
90,547
90,547
125,329
125,360
Goodwill and the group of CGUs to which it belongs is tested annually for impairment or at the end of each reporting date
where an indicator of impairment exists. As at 30 June 2024, management performed the annual assessment and considered
whether impairment indicators existed for all CGUs and concluded that there were none.
The recoverable amount of the group of CGUs is the greater of its value in use and its fair value less costs of disposal.
Government and Justice segment
Impairment testing of Government and Justice segment was carried out based on fair value less costs of disposal (FVLCD)
calculations which uses cash flow forecasts from the most recent financial budgets and expectation of future projections driven
by the business strategy, past experience and available market information. Cash flow forecasts are modelled over a ten year
forecast period with a terminal growth rate at the end of year ten discounted to present value using a pre-tax discount rate of
13.25%, calculated using weighted average cost of capital. A terminal growth rate of 3% is applied.
Further, revenue and EBITDA ten-year compound annual growth rate (CAGR) was forecasted at 10% and 12%, respectively.
These estimates were made based on the past experience and adjusted with the business strategy to integrate a number of
products and operation within the Government and Justice segment. The fair value measurement is categorised as level 3 of
the fair value hierarchy.
Based on the above methodology and assumptions stated above, the carrying value amount of the Government and Justice
CGU as at balance date does not exceed its recoverable amount. Thus, no impairment existed at 30 June 2024.
Previously, the impairment testing was carried out using Value in Use which uses a five year forecast period and a terminal
growth rate at 3% and pre-tax discount rate of 13%. Other assumptions used in the 2023 financial year model were 5 year
Revenue CAGR of 13% and 5 year EBITDA CAGR of 16%. The change in the valuation method from value in use to fair value
less costs of disposal is to reflect the long term nature of the business model, the technology and underlying growth.
Impact of possible changes in assumptions
In respect of impairment testing of goodwill, judgements and estimates were made. The goodwill balance would need to be
impaired, should these judgements and estimates change as per below:
●
Increase in the discount rate by more than 1.2% with all other assumptions remaining constant.
●
Decreased in the 10 year cash margin compound annual growth rate (“CAGR”) by more than 2% with all other
assumptions remaining constant.
●
Decrease in the terminal growth rate by more than 2.5% with all other assumptions remaining constant.
Education and Work Pathways
Impairment testing of Education and Work Pathways segment was carried out based on Value in Use calculation which uses
cash flow forecasts from the most recent financial budgets and expectation of future projections driven by the business
strategy, past experience and available market information. Cash flow forecasts are modelled over a five year forecast period
with a terminal growth rate at the end of year ten discounted to present value using a pre-tax discount rate of 13.25% (2023:
13%), calculated using weighted average cost of capital. A terminal growth rate of 3% (2023: 3%) is applied.
Further, revenue and EBITDA five-year compound annual growth rate (CAGR) is estimated at 12% and 12%, respectively
(2023:13% and 13%). These estimates were made based on the past experience and adjusted with the recent business
strategy and plan.
54
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 13. Non-current assets - intangibles (continued)
Based on the above methodology and assumptions stated above, the carrying value amount of the Education and Work
Pathways CGU as at balance date does not exceed its recoverable amount. Thus, no impairment existed at 30 June 2024.
Workforce Solution
Impairment testing of Workforce Solution segment was carried out based on Value in Use calculations which uses cash flow
forecasts from the most recent financial budgets and expectation of future projections driven by the business strategy, past
experience and available market information. Cash flow forecasts are modelled over a five year forecast period with a terminal
growth rate at the end of year ten discounted to present value using a pre-tax discount rate of 13.25% (2023: 13%), calculated
using weighted average cost of capital. A terminal growth rate of 3% (2023: 3%) is applied.
Further, revenue and EBITDA five-year compound annual growth rate (CAGR) of year is estimated at 13% and 18%,
respectively (2023: 11% and 14%). These estimates were made based on the past experience and adjusted with the recent
business strategy and plan.
Based on the above methodology and assumptions stated above, the carrying value amount of the Workforce Solution CGU
as at balance date does not exceed its recoverable amount. Thus, no impairment existed at 30 June 2024.
Impairment testing results
No impairment existed at 30 June 2024. Based on the valuation methodology and assumptions stated above, the carrying
amount of each group of CGUs at balance date does not exceed its recoverable amount. The Group has conducted sensitivity
analysis in relation to the above CGUs which indicated that no reasonable possible change in key assumptions would result
in impairment loss.
Note 14. Non-current assets - right-of-use assets
Consolidated
2024
2023
$'000
$'000
Right-of-use assets - at cost
9,842
8,611
Less: Accumulated depreciation
(5,252)
(3,828)
4,590
4,783
The Group leases land and buildings for its offices under agreements of 5 to 7 years (2023: 4 to 5 years). At the inception of
a lease, management determines the non-cancellable period of a lease, including options to extend the lease if it is reasonably
certain to exercise that option.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Right-of-use
assets
Consolidated
$'000
Balance at 1 July 2022
3,149
Additions
1,438
Additions through business combinations (note 36)
1,720
Depreciation expense
(1,524)
Balance at 30 June 2023
4,783
Additions
1,402
Exchange differences
(1)
Depreciation expense
(1,594)
Balance at 30 June 2024
4,590
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 14. Non-current assets - right-of-use assets (continued)
For other lease related disclosures refer to the following, refer:
●
note 6 for details of interest on lease liabilities and other lease expenses;
●
note 18 and note 23 for details of lease liabilities at the beginning and end of the reporting period; and
●
consolidated statement of cash flows for repayment of lease liabilities.
For impairment testing, the right-of-use assets have been allocated to all cash-generating units. Refer to note 13 for further
information on the impairment testing key assumptions and sensitivity analysis.
Note 15. Non-current assets - contract costs
Consolidated
2024
2023
$'000
$'000
Costs to obtain contracts
679
518
Contract fulfilment costs
1,118
1,507
1,797
2,025
Certain commission costs that meet the criteria as costs to obtain contracts are capitalised. Contract fulfilment costs represent
costs incurred by the Group that are related to future performance or delivery of services. These costs are capitalised and
amortised over the contract terms.
Note 16. Current liabilities - trade and other payables
Consolidated
2024
2023
$'000
$'000
Trade payables
2,540
3,560
Accrued expenses
4,594
4,811
GST payable
4,802
3,396
11,936
11,767
Trade payables are non-interest bearing and are on 30 day credit term.
Refer to note 27 for further information on financial instruments.
Note 17. Current liabilities - contract liabilities
Consolidated
2024
2023
$'000
$'000
Contract liabilities
23,635
19,527
Note 18. Current liabilities - lease liabilities
Consolidated
2024
2023
$'000
$'000
Lease liability
1,509
1,229
Refer to note 27 for maturity analysis of lease liabilities.
56
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 19. Current liabilities - contingent consideration
Consolidated
2024
2023
$'000
$'000
Contingent consideration
17,408
10,181
During the period, a number of contingent considerations were settled. The final balance of $770,000 was paid by cash to the
vendor of PhoenixATS Australia Pty Ltd. In relation to the acquisition of Open Windows Software Pty Ltd, a combination of
$1,668,000 by cash and $2,502,000 by shares were paid to the respective vendors. With IT Vision acquisition, a combination
of $2,825,000 by cash and $13,152,000 by shares were paid to the respective vendors.
Subsequent to 30 June 2024, a balance of $8,255,000 was paid by cash to IT Vision vendors.
Refer to note 22 for non-current portion of contingent consideration.
Refer to note 24 for further details of the shares issued.
Refer to note 28 for further details on fair value measurement of the contingent consideration.
Note 20. Non-current liabilities - contract liabilities
Consolidated
2024
2023
$'000
$'000
Contract liabilities
722
888
Note 21. Non-current liabilities - borrowings
Consolidated
2024
2023
$'000
$'000
Borrowings
42,000
47,000
Less: establishment fees
(103)
(51)
41,897
46,949
Refer to note 27 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Consolidated
2024
2023
$'000
$'000
Borrowings
42,000
47,000
Assets pledged as security
Borrowings are secured over the assets of the Group.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 21. Non-current liabilities - borrowings (continued)
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
2024
2023
$'000
$'000
Total facilities
Borrowings (Facility A and A1)
35,000
35,000
Borrowings (Facility B)
15,000
15,000
50,000
50,000
Used at the reporting date
Borrowings (Facility A and A1)
35,000
35,000
Borrowings (Facility B)
7,000
12,000
42,000
47,000
Unused at the reporting date
Borrowings (Facility A and A1)
-
-
Borrowings (Facility B)
8,000
3,000
8,000
3,000
The Group has established two facilities, Facility A and Facility B:
●
Facility A and A1 - $35,000,000 (2023: $35,000,000) as a non-revolving cash advance loan term expiring on 30 June
2026 with an interest rate set at BBSY plus a margin of 2.05-2.75% (2023: 2.05-2.75%) depending on the Net Leverage
Ratio of the Group. As at 30 June 2024, $35,000,000 (2023: $35,000,000) of the total facility has been drawn down.
●
Facility B - $15,000,000 (2023: $15,000,000) as a revolving cash advance facility expiring on 30 June 2026 with an
interest rate set at BBSY plus a margin of 2.05-2.75% (2023: 2.05-2.75%) depending on the Net Leverage Ratio of the
Group. As at 30 June 2024, $7,000,000 (2023: $12,000,000) of the total facility has been drawn down.
In addition, the Group has a bank guarantee facility of $1,328,000 (2023: $1,328,000) (refer to note 31).
Note 22. Non-current liabilities - Contingent consideration
Consolidated
2024
2023
$'000
$'000
Contingent consideration
360
25,911
The amount as at 30 June 2024 represents contingent consideration that is not expected to be settled within 12 months.
Refer to note 28 for further details on fair value measurement of the contingent consideration.
Note 23. Non-current liabilities - lease liabilities
Consolidated
2024
2023
$'000
$'000
Lease liability
3,656
3,932
Refer to note 27 for further information on financial instruments.
58
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 23. Non-current liabilities - lease liabilities (continued)
Consolidated
2024
2023
$'000
$'000
Current (note 18)
1,509
1,229
Non-current
3,656
3,932
5,165
5,161
Reconciliation
Reconciliation of lease liabilities (current and non-current) at the beginning and end of financial year are set out below:
Consolidated
2024
2023
$'000
$'000
Balance at start of the year
5,161
3,390
Additions
1,402
1,438
Additions through business combinations (note 36)
-
1,720
Interest
272
226
Repayment of lease liabilities
(1,670)
(1,613)
Balance at end of the year
5,165
5,161
Note 24. Equity - issued capital
Consolidated
2024
2023
2024
2023
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
119,835,909
114,321,851
211,831
194,292
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
1 July 2022
106,977,894
171,916
Shares issued on acquisition of IT Vision
25 July 2022
3,960,792
$3.05
12,080
Shares issued to Pentagon HoldCo Pty Ltd
17 August 2022
2,905,537
$3.20
9,298
Shares issued under long term incentive plan
17 August 2022
351,462
$1.79
629
Shares issued under employee share gift
14 October 2022
126,166
$2.92
369
Balance
30 June 2023
114,321,851
194,292
Shares issued to Open Windows Pty Ltd on earn-out
targets
18 July 2023
829,412
$3.21
2,665
Shares issued to IT Vision on earn-out targets
19 July 2023
994,471
$3.33
3,312
Shares issued under long term incentive plan
12 September 2023
629,118
$2.45
1,538
Employee share gift
26 October 2023
63,240
$3.59
227
Shares issued to IT Vision on earn-out targets
27 March 2024
2,098,383
$3.28
6,883
Shares issued to IT Vision on earn-out targets
27 June 2024
899,434
$3.24
2,914
Balance
30 June 2024
119,835,909
211,831
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 24. Equity - issued capital (continued)
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should the Company be wound up in proportions that consider both the number of shares held and the extent to which those
shares are paid up. The fully paid ordinary shares have no par value and the Company does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
Note 25. Equity - reserves
Consolidated
2024
2023
$'000
$'000
Foreign currency reserve
(131)
(54)
Share-based payments reserve
4,711
4,680
Common control reserve
(10,058)
(10,058)
Reorganisation reserve
(73,048)
(73,048)
(78,526)
(78,480)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration,
and other parties as part of their compensation for services.
Common control reserve
Common control reserve is used to recognise the difference between the consideration paid and the historical values of assets
and liabilities acquired, between entities under common control.
60
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 25. Equity - reserves (continued)
Reorganisation reserve
Reorganisation reserve is used to recognise the difference between the consideration paid and the historical values of assets
and liabilities acquired, between ReadyTech Holdings Limited and the subsidiaries it acquired.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
currency
Share-based
payments
Common
control
Reorgan-
isation
Total
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
(191)
2,089
(10,058)
(73,048)
(81,208)
Foreign currency translation
137
-
-
-
137
Share-based payments
-
3,220
-
-
3,220
Exercise of performance rights (note 39)
-
(629)
-
-
(629)
Balance at 30 June 2023
(54)
4,680
(10,058)
(73,048)
(78,480)
Foreign currency translation
(77)
-
-
-
(77)
Share-based payments
-
2,333
-
-
2,333
Exercise of performance rights (note 39)
-
(1,538)
-
-
(1,538)
Issuance of shares to Open Windows Pty Ltd
on earn-out targets (note 19)
-
(764)
-
-
(764)
Balance at 30 June 2024
(131)
4,711
(10,058)
(73,048)
(78,526)
Note 26. Equity - dividends
There were no dividends paid, recommended or declared during the current financial year or previous financial period.
Note 27. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest
rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group may use
derivative financial instruments such as forward foreign exchange contracts to hedge certain risk exposures. The Group uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate procedures,
controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance
reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through
foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
The Group's foreign exchange risk is managed to ensure sufficient funds are available to meet foreign denominated financial
commitments in a timely and cost-effective manner. The Group will continually monitor this risk and consider entering into
forward foreign exchange, foreign currency swap and foreign currency option contracts if appropriate.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 27. Financial instruments (continued)
Creditors and debtors as at 30 June 2024 and 30 June 2023 were reviewed to assess currency risk at year end. The value of
transactions denominated in a currency other than the functional currency of the respective subsidiary was insignificant and
therefore the risk was determined as not being significant.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the Group
to interest rate risk.
As at the reporting date, the Group had the following variable rate borrowings outstanding:
2024
2023
Weighted
average
interest rate
Balance
Weighted
average
interest rate
Balance
Consolidated
%
$'000
%
$'000
Borrowings
6.46%
42,000
4.78%
47,000
Net exposure to cash flow interest rate risk
42,000
47,000
An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below.
For the Group the borrowings outstanding totalling $42,000,000 (2023: $47,000,000), are principal and interest payment loans.
An increase/decrease in interest rates of 100 (2023: 100) basis points would have an adverse/favourable effect on loss before
tax of $330,000 (2023: $500,000) per annum. The percentage change is based on the expected volatility of interest rates
using market data and analysts forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has a strict code of credit, including obtaining agency credit information, confirming references and setting
appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to
credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of
those assets, as disclosed in the statement of financial position and notes to the financial statements. The Group does not
hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through
the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative
across all customers of the Group based on recent sales experience, historical collection rates and forward-looking information
that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments
for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
62
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 27. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2024
%
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
-
2,540
-
-
-
2,540
Other payables
-
4,802
-
-
-
4,802
Contingent consideration
-
17,408
360
-
-
17,768
Interest-bearing - variable
Bank loans
6.46%
-
42,000
-
-
42,000
Lease liability
4.60%
1,631
1,459
2,416
262
5,768
Total non-derivatives
26,381
43,819
2,416
262
72,878
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2023
%
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
-
3,560
-
-
-
3,560
Other payables
-
3,396
-
-
-
3,396
Contingent consideration
-
10,181
25,911
-
-
36,092
Interest-bearing - variable
Bank loans
4.78%
-
-
47,000
-
47,000
Lease liability
4.81%
1,270
1,192
2,747
-
5,209
Total non-derivatives
18,407
27,103
49,747
-
95,257
Derivatives
Interest rate swaps receivable
-
76
-
-
-
76
Total derivatives
76
-
-
-
76
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 28. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
Level 1
Level 2
Level 3
Total
Consolidated - 2024
$'000
$'000
$'000
$'000
Liabilities
Contingent consideration
-
17,768
-
17,768
Total liabilities
-
17,768
-
17,768
Level 1
Level 2
Level 3
Total
Consolidated - 2023
$'000
$'000
$'000
$'000
Assets
Interest rate swap
-
76
-
76
Total assets
-
76
-
76
Liabilities
Contingent consideration
-
36,092
-
36,092
Total liabilities
-
36,092
-
36,092
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Contingent consideration has been valued using a combination of discounted cash flow and Black Scholes models.
Refer to note 19 and note 22 for further details of the contingent consideration.
Interest rate swap has been valued using the present value of the estimated future cash flows based on observable yield
curves.
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ReadyTech
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ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 29. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu, the
auditor of the Company:
Consolidated
2024
2023
$
$
Deloitte and related network firms
Audit or review of the financial statements
425,700
425,000
Other services
Tax compliance
22,000
32,000
Research and development tax services
90,000
80,000
Other services
-
18,540
112,000
130,540
537,700
555,540
Note 30. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Consolidated
2024
2023
$
$
Short-term employee benefits
1,218,496
1,292,200
Post-employment benefits
54,798
50,584
Long-term employment benefits
44,212
24,477
Share-based payments
295,094
769,026
1,612,600
2,136,287
Note 31. Contingent liabilities
The Group has given bank guarantees as at 30 June 2024 of $1,328,000 (2023: $1,328,000). The bank guarantees are for
various office leases. No cash outflows are expected from the bank guarantees given by the Group.
Note 32. Commitments
The Group had no commitments as at 30 June 2024 and 30 June 2023.
Note 33. Related party transactions
Parent entity
ReadyTech Holdings Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 35.
Key management personnel
Disclosures relating to key management personnel are set out in note 30 and the remuneration report included in the Directors'
report.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 33. Related party transactions (continued)
Transactions with related parties
Pentagon Holdco Pty Ltd and its controlled entities was majority owned by Pemba Capital, a related party, prior to its
acquisition by the Group. The impact of the acquisition is presented in the Business Combinations note (note 36).
The following transactions occurred with related parties:
Consolidated
2024
2023
$
$
Other transactions:
Shares issued to related party on earn-out tranche 2 of Pentagon HoldCo Pty Ltd acquisition
-
9,297,718
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 34. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2024
2023
$'000
$'000
Loss after income tax
(59)
(337)
Total comprehensive income
(59)
(337)
Statement of financial position
Parent
2024
2023
$'000
$'000
Total current assets
810
2,150
Total assets
124,117
106,607
Total current liabilities
-
-
Total liabilities
-
-
Equity
Issued capital
212,458
194,919
Share-based payments reserve
4,549
4,519
Reorganisation reserve
(89,471)
(89,471)
Accumulated losses
(3,419)
(3,360)
Total equity
124,117
106,607
66
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ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 34. Parent entity information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2024 and 30 June 2023.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 35. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
ReadyTech HoldCo Pty Ltd
Australia
100%
100%
ReadyTech Pty Ltd
Australia
100%
100%
ReadyTech EWP Pty Ltd
Australia
100%
100%
Esher House Pty Ltd
Australia
100%
100%
VETtrak Pty Ltd
Australia
100%
100%
Lirac HoldCo Pty Ltd
Australia
100%
100%
Lirac BidCo Pty Ltd
Australia
100%
100%
Ready Pay Services Pty Ltd
Australia
100%
100%
Readytech Workforce Solutions Pty Ltd
Australia
100%
100%
eLearning Australia Pty Ltd
Australia
100%
100%
WageLink Australia Pty Ltd
Australia
100%
100%
ReadyTech Limited
New Zealand
100%
100%
Escrow Software International Limited
New Zealand
100%
100%
Zambion Pty Ltd
Australia
100%
100%
Pentagon HoldCo Pty Ltd
Australia
100%
100%
Pentagon BidCo Pty Ltd
Australia
100%
100%
Open Office Holdings Pty Ltd
Australia
100%
100%
McGirr Holdings Pty Ltd
Australia
100%
100%
McGirr Information Technology Pty Ltd
Australia
100%
100%
McGirr Technologies, Inc.
USA
100%
100%
McGirr Information Technology UK Limited
UK
100%
100%
Open Windows Software Pty Ltd
Australia
100%
100%
Avaxa Pty Ltd
Australia
100%
100%
Capital Software Limited
New Zealand
100%
100%
PhoenixATS Australia Pty Ltd
Australia
100%
100%
IT Vision Australia Pty Ltd as trustee for the IT Vision
Unit Trust
Australia
100%
100%
IT Vision Software Pty Ltd
Australia
100%
100%
IT Vision Unit Trust
Australia
100%
100%
Ready Payroll Pty Ltd*
Australia
100%
-
* Ready Payroll Pty Ltd was acquired in April 2024.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 36. Business combinations
Acquisitions during the year ended 30 June 2023
Acquisition of IT Vision Software Pty Ltd and its controlled entities (IT Vision)
On 25 July 2022, the Group acquired 100% of the ordinary shares of IT Vision, for the total consideration transferred of
$53,102,000. IT Vision develops and implements ERP technology software in local government segment. With this acquisition,
the Group expects to broaden its market presence as the local government software services provider. This acquisition is to
bolster ReadyTech’s government and justice segment with a broad geographic footprint across all Australian states and
territories, ultimately strengthening ReadyTech’s position as a leading local government software provider.
The values identified in relation to the acquisition of IT Vision were final as at 30 June 2023. The goodwill of $36,447,000
represents future growth.
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
3,950
Trade and other receivables, net
7,158
Other current assets
863
Right-of-use assets
1,720
Property, plant and equipment
221
Customer relationships
8,773
Trademarks
1,194
Software
10,800
Trade and other payables
(2,909)
Contract liabilities
(9,469)
Deferred tax liability
(2,946)
Employee benefits
(980)
Lease liability
(1,720)
Net assets acquired
16,655
Goodwill
36,447
Acquisition-date fair value of the total consideration transferred
53,102
Representing:
Cash paid or payable to vendor
10,374
ReadyTech Holdings Limited shares issued to vendor
12,080
Contingent consideration
30,648
53,102
Acquisition costs expensed to profit or loss
521
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
53,102
Less: cash and cash equivalents
(3,950)
Less: contingent consideration
(30,648)
Less: shares issued by Company as part of consideration
(12,080)
Net cash used
6,424
As part of the acquisition of IT Vision, an amount of contingent consideration has been agreed. The contingent consideration
is payable depending on total revenue, recurring revenue and EBITDA targets.
68
69
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 36. Business combinations (continued)
The amount of contingent consideration recognised represents the fair value as at the date of acquisition if the relevant targets
are met. If these targets are not met, then no amount is payable (refer to note 19).
Note 37. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each Company guarantees the debts of the others:
ReadyTech HoldCo Pty Ltd
ReadyTech Pty Ltd (previously ReadyTech BidCo Pty Ltd)
ReadyTech EWP (previously JobReady Tech Pty Ltd)
Esher House Pty Ltd
VETtrak Pty Ltd
Lirac HoldCo Pty Ltd
Lirac BidCo Pty Ltd
Ready Pay Services Pty Ltd (previously Australian Payroll Professionals Holdings Pty Ltd)
Readytech Workforce Solutions Pty Ltd (previously HR3 Pty Ltd)
eLearning Australia Pty Ltd
WageLink Australia Pty Ltd
Zambion Pty Ltd
Pentagon HoldCo Pty Ltd
Pentagon BidCo Pty Ltd
Open Office Holdings Pty Ltd
McGirr Holdings Pty Ltd
McGirr Information Technology Pty Ltd
Open Windows Software Pty Ltd
Avaxa Pty Ltd
PhoenixATS Pty Ltd
IT Vision Australia Pty Ltd as trustee for the IT Vision Unit Trust
IT Vision Software Pty Ltd
IT Vision Unit Trust
Ready Payroll Pty Ltd (acquired in April 2024)
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements
and Directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other
parties to the deed of cross guarantee that are controlled by ReadyTech Holdings Limited, they also represent the 'Extended
Closed Group'.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 37. Deed of cross guarantee (continued)
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position
of the 'Closed Group'.
2024
2023
Statement of profit or loss and other comprehensive income
$'000
$'000
Revenue
107,480
97,746
Revaluation of contingent consideration
(615)
-
Hosting and other direct costs
(7,979)
(5,683)
Employee benefits expense
(58,921)
(58,341)
Third party SaaS variable costs
(2,028)
(965)
Depreciation and amortisation expense
(21,629)
(16,314)
Impairment of assets
-
-
Advertising and marketing expenses
(1,246)
(1,048)
Consultancy and professional expenses
(2,060)
(2,849)
Administration expenses
(903)
(944)
Communication and IT expenses
(2,296)
(1,950)
Occupancy costs
(784)
(695)
Other expenses
(1,222)
(1,207)
Finance costs
(3,300)
(2,544)
Profit before income tax expense
4,497
5,206
Income tax expense
(127)
(1,273)
Profit after income tax expense
4,370
3,933
Other comprehensive income
Foreign currency translation
-
-
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year
4,370
3,933
2024
2023
Equity - retained profits
$'000
$'000
Retained profits at the beginning of the financial year
9,716
5,783
Profit after income tax expense
4,370
3,933
Retained profits at the end of the financial year
14,086
9,716
70
71
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 37. Deed of cross guarantee (continued)
2024
2023
Statement of financial position
$'000
$'000
Current assets
Cash and cash equivalents
20,582
19,941
Trade and other receivables
11,536
9,589
Contract assets
2,483
1,353
Derivative financial assets
-
76
Income tax refund receivable
1,840
1,815
Prepayments
2,224
2,876
38,665
35,650
Non-current assets
Investments
12,804
13,583
Property, plant and equipment
1,906
2,151
Intangibles
200,822
202,609
Right-of-use assets
4,481
4,615
Contract costs
1,712
2,025
Deferred tax assets
1,573
-
223,298
224,983
Total assets
261,963
260,633
Current liabilities
Trade and other payables
13,954
14,049
Contract liabilities
23,827
19,344
Lease liabilities
1,443
1,167
Employee benefits
6,935
7,100
Contingent consideration
17,408
10,181
63,567
51,841
Non-current liabilities
Contract liabilities
706
872
Borrowings
41,897
46,949
Provisions
548
307
Lease liabilities
3,598
3,808
Deferred tax liabilities
-
1,706
Employee benefits
494
375
Contingent consideration
360
25,911
47,603
79,928
Total liabilities
111,170
131,769
Net assets
150,793
128,864
Equity
Issued capital
215,097
197,558
Reserves
(78,390)
(78,410)
Retained profits
14,086
9,716
Total equity
150,793
128,864
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 38. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
2024
2023
$'000
$'000
Profit after income tax expense for the year
5,464
4,975
Adjustments for:
Depreciation and amortisation
22,859
17,272
Revaluation of contingent consideration
615
-
Share-based payments
2,333
3,220
Foreign exchange differences
41
(178)
Contingent consideration treated as remuneration expense
858
1,442
Other expenses - non-cash
444
730
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(2,111)
7,996
(Increase)/decrease in deferred tax assets
(4,039)
4,825
Decrease/(increase) in prepayments
725
(752)
Increase in other operating assets
(819)
(93)
Increase in trade and other payables
126
2,063
Increase/(decrease) in contract liabilities
3,942
(8,395)
Increase/(decrease) in provision for income tax
1,264
(5,377)
(Decrease)/increase in employee benefits
(108)
78
Net cash from operating activities
31,594
27,806
Note 39. Share-based payments
FY2022 Plan
The LTI performance rights are subject to an EPS hurdle (50% of grant value) and a recurring revenue hurdle (50% of grant
value).
These LTI performance rights will be evaluated in two tranches. The first of which, equivalent to 50% of the total grant value,
will be evaluated two years from the beginning of the performance period. The second or which, equivalent to 50% of the total
grant value, will be evaluated three years from the beginning of the period.
If the compound annual growth rate of EPS is less than the target of 13%, no vesting will occur. If the target is met, 50% of
rights will vest. In the event that performance is up to 4% above the target, vesting will be pro-rated between 50-100%.
If the compound annual growth rate of recurring revenue is less than the target of 13%, no vesting will occur. If the target is
met, 50% of rights will vest. In the event that performance is up to 4% above the target, vesting will be pro-rated between 50-
100%.
FY2023 Plan
The LTI performance rights are subject to an EPS hurdle (50% of grant value) and a recurring revenue hurdle (50% of grant
value).
These LTI performance rights will be evaluated in two tranches. The first of which, equivalent to 50% of the total grant value,
will be evaluated two years from the beginning of the performance period. The second or which, equivalent to 50% of the total
grant value, will be evaluated three years from the beginning of the period.
If the compound annual growth rate of EPS is less than the target of 13%, no vesting will occur. If the target is met, 50% of
rights will vest. In the event that performance is up to 4% above the target, vesting will be pro-rated between 50-100%.
If the compound annual growth rate of recurring revenue is less than the target of 13%, no vesting will occur. If the target is
met, 50% of rights will vest. In the event that performance is up to 4% above the target, vesting will be pro-rated between 50-
100%.
72
73
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 39. Share-based payments (continued)
FY2024 Plan
The LTI performance rights are subject to an EPS hurdle (50% of grant value) and a recurring revenue hurdle (50% of grant
value).
These LTI performance rights will be evaluated three years from the beginning of the performance period.
If the compound annual growth rate of EPS is less than the target of 13%, no vesting will occur. if the target is met, 50% of
rights will vest. In the event that performance is up to 4% above the target, vesting will be pro-rated between 50-100%.
If the compound annual growth rate of recurring revenue is less than the target of 13%, no vesting will occur. If the target is
met, 50% of rights will vest. In the event that performance is up to 4% above the target, vesting will be pro-rated between 50-
100%.
Set out below are summaries of performance rights granted under the plan:
2024
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
Grant date
Expiry date
the year
Granted
Exercised
other
the year
11/12/2020
30/06/2023
351,460
-
(351,460)
-
-
13/09/2021
30/06/2023
217,394
-
(217,394)
-
-
13/09/2021
30/06/2024
217,390
-
-
-
217,390
17/11/2021
30/06/2023
60,264
-
(60,264)
-
-
17/11/2021
30/06/2024
60,264
-
-
-
60,264
11/10/2022
30/06/2024
244,319
-
-
(35,536)
208,783
11/10/2022
30/06/2025
244,309
-
-
(35,534)
208,775
15/11/2022
30/06/2024
47,380
-
-
-
47,380
15/11/2022
30/06/2025
47,380
-
-
-
47,380
22/09/2023
30/06/2026
-
808,403
-
(78,857)
729,546
05/12/2023
30/06/2026
-
100,334
-
-
100,334
1,490,160
908,737
(629,118)
(149,927)
1,619,852
2023
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
Grant date
Expiry date
the year
Granted
Exercised
other
the year
11/12/2020
30/06/2022
351,462
-
(351,462)
-
-
11/12/2020
30/06/2023
351,460
-
-
-
351,460
13/09/2021
30/06/2023
217,394
-
-
-
217,394
13/09/2021
30/06/2024
217,390
-
-
-
217,390
17/11/2021
30/06/2023
60,264
-
-
-
60,264
17/11/2021
30/06/2024
60,264
-
-
-
60,264
11/10/2022
30/06/2024
-
244,319
-
-
244,319
11/10/2022
30/06/2025
-
244,309
-
-
244,309
15/11/2022
30/06/2024
-
47,380
-
-
47,380
15/11/2022
30/06/2025
-
47,380
-
-
47,380
1,258,234
583,388
(351,462)
-
1,490,160
The weighted average share price during the financial year was $3.40 (2023: $3.30).
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.18
years (2023: 0.78 years).
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair
value are using the share price as at 22 September 2023 and 5 December 2023, which were $3.70 and $3.53 respectively.
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 39. Share-based payments (continued)
Set out below are the performance rights exercisable at the end of the financial year:
2024
2023
Grant date
Expiry date
Number
Number
11/12/2020
30/06/2023
-
351,460
17/11/2021
30/06/2024
52,731
-
13/09/2021
30/06/2024
190,217
-
11/10/2022
30/06/2024
104,393
-
15/11/2022
30/06/2024
23,690
-
13/09/2021
30/06/2023
-
217,394
371,031
568,854
Deferred consideration in shares
As part of the acquisition of Open Windows Software Pty Ltd, an amount of contingent consideration has been agreed. A
portion of the consideration is treated as a remuneration to the ex-founders who continue to work in the business. As per the
sale agreement, a maximum of 40% could be settled in cash whilst the remaining is in shares. During the financial year ended
30 June 2024, an amount of $1,338,000 (2023: $1,470,000) which represented an equity settlement, was charged as a share
based payment.
Note 40. Non-cash investing and financing activities
Consolidated
2024
2023
$'000
$'000
Additions to the right-of-use assets, including lease modification
1,402
1,438
Additions to lease make good assets
226
215
Shares issued in relation to exercise of vested performance rights
1,538
629
Shares issued in relation to business combinations
-
12,080
Shares issued in relation to settlement of contingent consideration
15,774
9,298
Additional contingent consideration charged as employee expenses
1,338
1,470
20,278
25,130
Note 41. Changes in liabilities arising from financing activities
Borrowings
Lease liability
Total
Consolidated
$'000
$'000
$'000
Balance at 1 July 2022
34,000
3,390
37,390
Net cash from/(used in) financing activities
13,000
(1,613)
11,387
Acquisition of leases
-
1,438
1,438
Changes through business combinations (note 36)
-
1,720
1,720
Interest expense
-
226
226
Balance at 30 June 2023
47,000
5,161
52,161
Net cash used in financing activities
(5,000)
(1,670)
(6,670)
Acquisition of leases
-
1,402
1,402
Interest expense
-
272
272
Balance at 30 June 2024
42,000
5,165
47,165
74
75
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 42. Earnings per share
Consolidated
2024
2023
$'000
$'000
Profit after income tax attributable to the owners of ReadyTech Holdings Limited
5,464
4,975
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
117,165,188
113,605,727
Weighted average number of ordinary shares used in calculating diluted earnings per share
117,165,188
113,605,727
Cents
Cents
Basic earnings per share
4.66
4.38
Diluted earnings per share
4.66
4.38
1,457,066 unissued ordinary shares under performance rights (2023: 1,490,160) were not included in the calculation of diluted
earnings per share as they are contingently issuable and the conditions were not met as at the periods presented.
Note 43. Events after the reporting period
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
ReadyTech Holdings Limited
Consolidated entity disclosure statement
As at 30 June 2024
Place formed /
Ownership
interest
Entity name
Entity type
Country of incorporation %
Tax residency
ReadyTech Holdings
Limited
Body Corporate
Australia
Australian
ReadyTech HoldCo Pty
Ltd
Body Corporate
Australia
100%
Australian
ReadyTech Pty Ltd
Body Corporate
Australia
100%
Australian
ReadyTech EWP Pty Ltd
Body Corporate
Australia
100%
Australian
Esher House Pty Ltd
Body Corporate
Australia
100%
Australian
VETtrak Pty Ltd
Body Corporate
Australia
100%
Australian
Lirac HoldCo Pty Ltd
Body Corporate
Australia
100%
Australian
Lirac BidCo Pty Ltd
Body Corporate
Australia
100%
Australian
Ready Pay Services Pty
Ltd
Body Corporate
Australia
100%
Australian
Readytech Workforce
Solutions Pty Ltd
Body Corporate
Australia
100%
Australian
eLearning Australia Pty
Ltd
Body Corporate
Australia
100%
Australian
WageLink Australia Pty
Ltd
Body Corporate
Australia
100%
Australian
ReadyTech Limited
Body Corporate
New Zealand
100%
New Zealand
Escrow Software
International Limited
Body Corporate
New Zealand
100%
New Zealand
Zambion Pty Ltd
Body Corporate
Australia
100%
Australian
Pentagon HoldCo Pty Ltd
Body Corporate
Australia
100%
Australian
Pentagon BidCo Pty Ltd
Body Corporate
Australia
100%
Australian
Open Office Holdings Pty
Ltd
Body Corporate
Australia
100%
Australian
McGirr Holdings Pty Ltd
Body Corporate
Australia
100%
Australian
McGirr Information
Technology Pty Ltd
Body Corporate
Australia
100%
Australian
McGirr Technologies, Inc. Body Corporate
USA
100%
Australian
McGirr Information
Technology UK Limited
Body Corporate
UK
100%
Australian
Open Windows Software
Pty Ltd
Body Corporate
Australia
100%
Australian
Avaxa Pty Ltd
Body Corporate
Australia
100%
Australian
Capital Software Limited
Body Corporate
New Zealand
100%
New Zealand
PhoenixATS Australia Pty
Ltd
Body Corporate
Australia
100%
Australian
IT Vision Software Pty Ltd Body Corporate
Australia
100%
Australian
IT Vision Australia Pty Ltd
as trustee for the IT Vision
Unit Trust
Body Corporate
Australia
100%
Australian
IT Vision Unit Trust
Trust
Australia
100%
Australian
Ready Payroll Pty Ltd
Body Corporate
Australia
100%
Australian
76
77
ReadyTech
Annual Report 2023
ReadyTech Holdings Limited
Directors' declaration
30 June 2024
In the Directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
●
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2024
and of its performance for the financial year ended on that date;
●
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable;
●
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group
will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note 37 to the financial statements; and
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Tony Faure
Chair
27 August 2024
Sydney
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Quay Quarter Tower
50 Bridge Street
Sydney NSW 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Independent Auditor’s Report to the members of
ReadyTech Holdings Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of ReadyTech Holdings Limited (the “Company”) and its subsidiaries
(the “Group”) which comprises the consolidated statement of financial position as at 30 June 2024, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including material accounting policy information and other explanatory information, the directors’
declaration and the Consolidated Entity Disclosure Statement.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of their financial
performance for the year then ended; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
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Key Audit Matter
How the scope of our audit responded to the Key Audit
Matter
Capitalisation of software development costs
During the year, the Group capitalised internal
software development project costs of $17.45
million (total software capitalised during the year
$17.03 million including external costs) as disclosed
in Note 13. These projects were predominantly in
relation to the development of the Group’s key
software platforms. The costs mainly comprised of
payroll and related costs for software developers
and engineers.
Significant management judgement is required in
respect of the rate of capitalisation of payroll and
related costs for software developers and
engineers.
Our procedures included, but were not limited to:
Through inquiries with management obtaining an
understanding of the Group’s capitalisation policy,
including the rationale for the percentage of payroll and
related costs capitalised for software developers and
engineers;
Understanding the relevant controls over the
capitalisation of software development costs;
Performing analytical review of capitalised software
development as a percentage of payroll costs and year on
year movement analysis;
On a sample basis, testing capitalised software
development costs during the year through the following:
a.
Assessing management’s movement schedule of
software development costs by agreeing the
underlying salaries to the respective payroll records;
b.
Understanding the significant development projects
and activities undertaken during the year;
c.
Assessing whether eligible employees are included,
and ineligible employees are excluded in the
calculations, where appropriate;
d.
Challenging management’s key assumptions on
employee level software capitalisation rates;
e.
Performing direct interviews and confirming with
respective software developers and engineers to
corroborate the roles and responsibilities, key
development projects and software capitalisation
rates;
f.
Tracing to underlying supporting records and other
information;
g.
Assessing whether the costs incurred qualify for
capitalisation in accordance with Group’s accounting
policy and AASB 138 Intangible Assets.
We also assessed the appropriateness of the disclosures in Note
2 and Note 13.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2024, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible:
For the preparation of the financial report in accordance with the Corporations Act 2001, including giving
a true and fair view of the financial position and performance of the Group in accordance with Australian
Accounting Standards; and
For such internal control as the directors determine is necessary to enable the preparation of the
financial report in accordance with the Corporations Act 2001, including giving a true and fair view of the
financial position and performance of the Group, and is free from material misstatement, whether due
to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
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Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 17 of the Directors’ Report for the year ended
30 June 2024.
In our opinion, the Remuneration Report of ReadyTech Holdings Limited, for the year ended 30 June 2024,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Sandeep Chadha
Partner
Chartered Accountants
Sydney, 27 August 2024
ReadyTech Holdings Limited
Shareholder information
30 June 2024
Voting Rights
Ordinary shares: On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon
a poll, each share shall have one vote.
Earn Out Share: There are currently 3 Earn Out Shares on issue. As set out in the Notice of Meeting and accompanying
documents dated 14 October 2022 (Notice), prior to Redemption (as outlined in the Notice), the holders will not be entitled to
vote at any general meeting or class meeting of the Company except where a vote is required by law.
Performance Rights: There are currently 1,619,852 Performance Rights on issue. Holders of performance rights have no
voting rights.
The below information is current as at 22 July 2024
Distribution of equity securities
Analysis of number of equity security holders (fully paid ordinary shares) by size of holding:
Ordinary shares
Range
Number
%
Number
%
of holders
of holders
of securities
of securities
1 to 1,000
985
42.59
480,927
0.40
1,001 to 5,000
776
33.55
2,008,356
1.68
5,001 to 10,000
243
10.51
1,884,579
1.57
10,001 to 100,000
248
10.72
6,891,380
5.75
100,001 and over
61
2.64
108,570,667
90.60
Total number of security holders
2,313
100.01
119,835,909
100.00
Holders holding less than a marketable parcel of shares
124
5.36
9,128
0.01
The marketable parcel of shares was calculated based on the closing market price on 22 July 2024 of $3.30.
Restricted Securities
There are currently 2,997,817 restricted securities on issue. The restricted securities will be subject to escrow until the date
that is 5 Trading Days after the date on which the half-year reviewed accounts of ReadyTech for the period to 31 December
2024 are released to ASX.
On-Market Buy Back
There is no current on-market buy back.
Unquoted Securities
Type of Security
Number of holders
Number of securities
Earn Out Shares
6
3
Performance Rights
26
1,619,852
Earn Out Shares
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ReadyTech Holdings Limited
Shareholder information
30 June 2024
Range
Number of
holders
% of holders
Number of
securities
% of
securities
1 to 1,000
6
100.00%
3
100.00%
1,001 to 5,000
-
-
-
-
5,001 to 10,000
-
-
-
-
10,001 to 100,000
-
-
-
-
100,001 and over
-
-
-
-
Total number of security holders
6
3
Performance Rights
Range
Number of
holders
% of holders
Number of
securities
% of holders
1 to 1,000
-
-
-
-
1,001 to 5,000
-
-
-
-
5,001 to 10,000
4
15.38
36,630
2.26
10,001 to 100,000
18
69.24
550,062
33.96
100,001 and over
4
15.38
1,033,160
63.78
-
-
-
-
Total number of security holders
26
100.00
1,619,852
100.00
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
PEMBA CAPITAL PARTNERS FUND I GP PTY LTD
30,157,762
25.17
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
23,924,122
19.96
CITICORP NOMINEES PTY LIMITED
13,376,200
11.16
OPEN OFFICE PTY LTD
5,374,721
4.49
PEMBA CAPITAL PARTNERS FUND 1 PARTNERSHIP LP
5,161,468
4.31
MARC RAYMOND WASHBOURNE
2,861,363
2.39
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
2,632,092
2.20
SYNERGYSOFT PTY LTD
2,170,041
1.81
UBS NOMINEES PTY LTD
1,779,250
1.48
NANAYAKKARA HOLDINGS PTY LTD
1,697,619
1.42
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,509,175
1.26
MICROEQUITIES ASSET MANAGEMENT PTY LTD
1,353,708
1.13
SYNERGYSOFT PTY LTD
1,288,168
1.07
WASHBOURNE GROUP PTY LTD
1,147,051
0.96
SYCAMORE MANAGEMENT PTY LTD
1,051,991
0.88
MALVERN AVENUE MANAGEMENT PTY LTD
942,509
0.79
MARISH PTY LTD
878,646
0.73
PEMBA TRUSCO 1 PTY LTD
841,731
0.70
SYNERGYSOFT PTY LTD
742,027
0.62
ANKSH PTY LTD
554,249
0.46
99,443,893
82.99
ReadyTech Holdings Limited
Shareholder information
30 June 2024
Top 20 holders of shares
99,443,893
82.99
Balance of shares
20,392,016
17.02
Total shares on issue
119,835,909
100.01
Substantial Holders
Shareholder
Date of notice
Number of shares
% of issued equity(1)
Microequities Asset Management Pty Ltd
20 December 2022
17,415,318
15.23%
The Pemba Entities(2)
22 December 2021
34,539,611
32.35%
(1)
Percentage of issued equity held as disclosed in the substantial holding notices provided to the Company.
(2)
Pemba Capital Partners Fund I Partnership LP, Pemba Capital Partners Pty Limited ACN 121 906 045 as trustee of The Pemba Capital Co-Investment Trust and Pemba Capital Partners
Pty Ltd ACN 121 906 045 as trustee of The Lirac Trust (together, the Pemba Entities).
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