Annual Report
2024
Free
Thinkers
United
ENERO ANNUAL REPORT 2024
| 2
+61 2 8213 3031
General – info@enero.com
Investor Relations – IR@enero.com
Level 2, 100 Harris Street
Pyrmont NSW 2009
Australia
Free Thinkers United
4
A letter from our Chair
6
A letter from our CEO
8
Board of Directors
10
Financial Highlights
12
Geographical Results
14
Client Analysis
16
Technology, Healthcare and
Consumer (THC) Practice
18
OBMedia
34
Environmental, Social and Governance
38
Financial Report
44
Directors’ Report
(including the Remuneration Report)
46
Consolidated Income Statement
64
Consolidated Statement
of Comprehensive Income
65
Consolidated Statement
of Changes in Equity
66
Consolidated Statement
of Financial Position
67
Consolidated Statement of Cash Flows
68
Notes to the Consolidated
Financial Statements
69
Consolidated Entity Disclosure Statement 112
Directors’ Declaration
113
Independent Auditor’s Report
114
Lead Auditor’s
Independence Declaration
119
ASX Additional Information
120
Corporate Directory
121
Contents
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ENERO ANNUAL REPORT 2024
ENERO ANNUAL REPORT 2024
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Free Thinkers
United
At Enero we’re different and we like it that way. We’re for
the ambitious, those who dare to challenge conventions.
We’re for those who like to be at the cutting edge,
shaping the future.
We are united by a structured framework, strong
business foundations and a progressive mindset.
This is how we believe unconventional ideas can
be effectively executed for growth.
We are a global group of marketing and technology
agencies. We operate in the high-growth industries
of Technology, Healthcare and Consumer Practice.
We utilise innovative and independent thinking to
deliver impactful, strategic business solutions for
our clients. We attract world-class specialists, each
with the capabilities and mindset to solve important
problems for high-growth clients around the world.
With 650+ employees operating from 16 cities across the
world’s most influential markets. This international footprint
and scale means we’re connected to global bands that have
a big impact on the world, but we also have the aptitude and
ability to leverage local knowledge and insights.
Our agility, mix of innovative capabilities and specialist
expertise is why we are always at the forefront of what’s next.
We have the heart of an indie and the head of an engineer.
Fusing world-beating, creative, strategic precision with wild
imagination. We have less grip and more flow. We are united
by free thinking.
WE ARE ENERO.
FREE THINKERS UNITED.
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ENERO ANNUAL REPORT 2024
A letter from
our Chair
Dear Shareholders
I am pleased to present Enero’s Annual Report for the
financial year ended 30 June 2024 (FY24).
As an international group of marketing and communications
companies, Enero continued to deliver industry-leading
brand marketing capabilities for blue-chip clients worldwide.
Operating in 16 cities worldwide, with 650+ employees, we
successfully delivered globally integrated solutions at scale
with deep local market expertise.
CONTRASTING PERFORMANCES ACROSS ENERO
BUSINESSES IN FY24
Global macroeconomic and technology sector headwinds
impacted Enero’s FY24 earnings. As a result, net revenue
was down 22% to $189.7 million, while EBITDA1 dropped
53% to $37.4 million. Net profit1 fell 58% to $10.3 million
with EPS1 of 11.3 cents.
A look at the Group’s broader results reveals that our
Australian-based businesses performed well, buoyed
by several new client wins for Orchard and BMF. We
grew net revenue in the Australia and Asia region, which
contributed to a significant increase in EBITDA when
compared with FY23.
Enero’s internationally-based agencies were significantly
impacted by slower market growth, longer sales cycles
and continued macroeconomic uncertainty, particularly
in the technology sector. We met these headwinds,
by focusing on factors we can influence, including a
disciplined approach to costs, headcount and operational
cash generation.
In FY24, Enero continued to expand our global tech
communications consultancy, the Hotwire Group,
by launching our first AI proprietary tool focused on
generative AI optimisation. This has accelerated the
transformation of Hotwire’s reputation, relationships and
revenue service offerings to clients globally.
STRATEGIC REVIEW OF OBMEDIA
The aim of the Board’s strategic review of our controlling
share of OBMedia is to maximise ongoing shareholder
value for both the short and long term. This process
currently remains on foot and we’ll share the outcomes
with shareholders on completion.
CAPITAL MANAGEMENT STRATEGY
The Board continues to believe that Enero is
undervalued by the market relative to its financial
performance and potential. Accordingly, in FY24 we
used our strong free cash flow for a share buyback. The
Company’s strong balance sheet and ongoing capital
management will remain a key Board focus.
Enero’s clear capital management strategy reflects the
Board’s ongoing commitment to delivering increasing
shareholder returns, and signifies our confidence in the
Group’s value and growth opportunities.
STRONG NET CASH POSITION
Alongside the Group’s capital management strategy,
Enero’s strong net cash position of $38.2 million at 30 June
2024 provides us with robust financial flexibility.
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1 Before significant items
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ENERO ANNUAL REPORT 2024
FY24 DIVIDEND OF 5 CENTS PER SHARE
FULLY FRANKED
The Board declared total dividends for FY24 of 5 cents per
share (cps), fully franked. This reflects Enero’s financial
performance, strong balance sheet and attractive growth
opportunities. This equals a 44% dividend payout ratio.
I would like to thank my fellow Board members for their
ongoing efforts and expertise. On behalf of the Board,
I would also like to thank our talented and tireless
Executive Leadership team for their continued dedication
and commitment to our business, as well as our many
accomplished employees for their resilience and
dedication to our clients throughout FY24.
Lastly, to our loyal shareholders, thank you for your
continued support and belief in our long-term vision
and strategy for the Group.
Yours sincerely
Ann Sherry AO
Chair
A letter from
our CEO
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Dear Shareholders
I am pleased to share Enero’s FY24 progress on behalf of the
entire Enero team.
The fiscal year was one of ongoing transition and portfolio
refinement, despite the challenging international technology
sector impacting Enero’s FY24 results.
Firstly, I want to express my deep appreciation to our amazing
team of 650+ people around the world. Your dedication
to continue to serve Enero’s clients and your ongoing
commitment, resilience and teamwork over the past year has
been truly remarkable.
Throughout FY24, our Australian businesses continued
to thrive, while internationally, we worked hard to position
Hotwire for long-term growth as the world’s preeminent
communications consultancy.
We continued the transformation and streamlining of our
business portfolio by divesting CPR, our government relations
and PR business in Melbourne, and launched a strategic
review of OBMedia.
A FOCUSED, UNIFIED AGENCY
Enero’s business success stems from our deep and enduring
client relationships, world-class talent and strategically
relevant market-leading capabilities.
Within this context, we updated our business segments to
better reflect our operational strategy and portfolio synergies.
To best represent our agency businesses worldwide we
launched our Technology, Healthcare and Consumer (THC)
Practice to deepen our focus on our three global verticals
and maximise synergy and growth opportunities. Our
standalone advertising technology business OBMedia has
been separated into its own segment.
We’ve also made significant progress in integrating GetIT
and ROI·DNA into the Hotwire Group. At the start of FY24,
GetIT was rebranded to Hotwire Asia, while ROI·DNA has
been embedded into the global Hotwire Group family. All of
our agencies continue to modernise, strengthen and diversify
their capabilities.
MARKET CONDITIONS REMAIN CHALLENGING
FY24 saw a continuation of FY23’s macroeconomic
headwinds, which have particularly impacted the global
technology industry. This has resulted in significant client
restructuring and the continuation of conservative decision
making, which has impacted project timelines and reduced
the scope of some of our projects.
Net revenue in the Technology, Healthcare and Consumer
Practice declined 6% to $143.5 million, and EBITDA1 dropped
9% to $22.8 million. Margins1 remained largely the same
at 16% and our agencies saw contrasting performances.
Enero’s Australian-based BMF and Orchard, delivered double
digit revenue growth and expanded its margins, while the
US-led Hotwire Group continued to be challenged by the
technology sector.
Expenses1 in the THC Practice dropped 5%, reflecting cost
reduction initiatives undertaken in FY23 H2 and FY24 H2,
predominately in the Hotwire Group. We anticipate the
FY24 H2 initiatives will improve margins into FY25 for
the Hotwire Group.
Despite FY24’s challenges our agencies continued to
invest in new products, capabilities and services, and to win
accolades for their leading work.
BMF’s world-class credentials for creative effectiveness
continued to be recognised with 16 Effie nominations – the
most of any agency in the country. The winners are expected
to be announced in October 2024.
Orchard continues to outperform in the healthcare sector,
expanding its success in the growing medical education
space, and winning a global PMEA award for pharmaceutical
marketing excellence.
Meanwhile Hotwire launched its first proprietary AI tool,
GAIO.tech.
1 Before significant items
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ENERO ANNUAL REPORT 2024
This tool is the first in a series of AI technology and
consulting solutions to help global brands integrate AI into
their marketing and communications strategies. Hotwire
continued to build on its reputation, relationships and
revenue offering, while its data and analytics team won ‘Gold’
at the prestigious AMEC Awards.
We continued to win new clients within our key Technology,
Healthcare and Consumer verticals such as Equinix,
eHarmony, Boehringer Ingelheim, Lilly and more recently
the Endeavour Group. We also continued to drive revenue
synergies across borders by expanding our relationships with
Palo Alto and Pure Storage.
FY24 saw OBMedia’s net revenue decline 8% to $46.2 million,
excluding traffic which was proactively halted in FY23 Q4,
while EBITDA1 was down 17% to $23.5 million on the same
basis. OBMedia was not immune from mid-FY24’s market-
wide softness, but saw some recoveries in the final quarter.
GROWING ENERO’S BASE OF SCALABLE
CLIENTS IN AN IMPROVING MARKET
In this tough environment, we’ve focussed on growing our
suite of market leading services, embedding Enero as a
trusted service provider with key clients. This approach
positions Enero well for the opportunities offered by a
recovering market. Our significant progress towards this in
FY24 includes:
- 66% of our THC Practice revenue now comes from clients
who work with more than one THC Practice brand or
country. This provides more opportunities to engage and
generate committed and recurring revenue streams.
- We grew the number of large clients and clients of scale,
with 34 THC Practice clients generating over $1 million in
revenue in FY24, up from 27 in FY23.
THANK YOU
Finally, I want to say thank you to the executive team for
your tireless dedication and the Enero Board for its ongoing
guidance and support towards achieving our ambitions for
global growth.
Most importantly, I’d like to thank our shareholders for their
ongoing support of our strategy and Enero’s talented global
team. Our long-term strategy to evolve and modernise
our business portfolio means Enero is better positioned
than ever to capitalise on improving market conditions as
macroeconomic pressures ease.
We continue to believe in the power of independent thinking
within a structured framework. Our unique approach simply
liberates ideas, allowing them to flourish and drive growth for
our clients. We are united by free thinking, and this will be our
key to keeping a step ahead in FY25’s rapidly evolving market.
Yours sincerely
Brent Scrimshaw
Chief Executive Officer
1 Before significant items
ANN SHERRY AO
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Ann was appointed as Chair and Non-
Executive Director on 1 January 2020
and is a member of the Remuneration
and Nomination Committee.
Ann is a Director of National Australia
Bank (ASX: NAB), Chair of its Customer
Committee and a member of its
Remuneration Committee. Ann is the
Chancellor of Queensland University of
Technology, Chair of UNICEF Australia,
Chair of Port of Townsville and Chair of
Queensland Airports Limited.
Ann is the former Chair and was Chief
Executive Officer (CEO) of Carnival
Australia for a decade. Prior to that,
Ann was at Westpac for 12 years, with
roles as CEO of Bank of Melbourne
and CEO of Westpac New Zealand and
Pacific Banking.
Ann was named the overall winner
of the AFR 100 Women of Influence
in 2015.
BRENT SCRIMSHAW
CHIEF EXECUTIVE OFFICER
EXECUTIVE DIRECTOR
Brent was appointed CEO and Executive
Director of the Enero Group (ASX: EGG)
on 1 July 2020.
Brent is a creative and global business
leader with specific expertise leading
consumer brands, marketing technology,
media and publishing, technology
enabled business, retail and global sports.
Brent built his career at Nike Inc including
his most recent roles as Vice President/
Chief Executive Western Europe, Vice
President and Chief Marketing Officer
EMEA, based in Amsterdam and GM
Regional USA, based in New York City.
He has also held other senior leadership
roles in Europe, the USA and Asia Pacific
in General Management and Marketing.
Brent was a part of Nike’s global
commercial operations leadership team
contributing to the development of the
Nike Inc worldwide commercial strategy in
Europe, the USA, China and Japan.
Brent is a Non-Executive Director of ASX-
Listed KMD Brands Limited (ASX: KMD)
(Kathmandu, Rip Curl and Oboz Footwear)
and was previously a Non-Executive
Director of Catapult Group International
Limited, Fox Head Inc in California, USA,
Rhinomed Limited and the Melbourne
International Arts Festival.
ANOUK DARLING
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Anouk was appointed as a Non-
Executive Director on 6 February 2017
and is a member of the Audit and Risk
Committee and the Remuneration
and Nomination Committee.
Anouk is recognised as one of
Australia’s leading brand builders,
with strategic digital, technology and
marketing capability.
Anouk is also a reputable business
leader with private equity and M&A
experience having worked with Allegro
Funds as an operating partner over
a four-year period. Anouk is currently
serving as Non-Executive Director
of South Australian-based Discovery
Holiday Parks, owned by the Australian
Retirement Trust.
Previous board roles held include ASX-
listed Macquarie Telecom (ASX: MAQ).
Anouk is currently CEO of Scape,
Australia’s largest developer, owner
and operator of Purpose-Built Student
Accommodation. Anouk’s commitment
to better living experiences is further
supported by her work as a board
member of the Property Council of
Australia and Chair of the Student
Accommodation Council.
Board of
Directors
ENERO ANNUAL REPORT 2024
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IAN ROWDEN
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Ian Rowden is an independent Non-
Executive Director who was appointed
on 21 November 2018. He serves as
the Chair of the Remuneration and
Nomination Committee.
Ian has a wealth of experience as a
CEO and senior executive, having
held various positions in commercial,
strategy, M&A, marketing and
operational leadership.
He has worked with notable companies
such as The Coca-Cola Company,
The Callaway Golf Company, Wendy’s
International, Saatchi & Saatchi and
The Virgin Group.
Currently, Ian is a Non-Executive
Director of Reliance Worldwide
Corporation (ASX: RWC), Guzman
Y Gomez (ASX: GYG), Dulux Group
International (UK), and formerly a
Director of QMS Media and Virgin
Galactic. Additionally, Ian chairs the
Murdoch Children’s Research Institute
Marketing Council, is a partner and
investment advisory board member for
Innovate Partners (a USA-based private
equity/venture capital firm) and is a
senior advisor to Bowery Capital. He is
based in the USA.
DAVID BRAIN
INDEPENDENT
NON-EXECUTIVE DIRECTOR
David was appointed as a Non-
Executive Director on 10 May 2018
and is a member of the Audit and
Risk Committee.
David has over 25 years’ experience
in public relations and integrated
communications. At Edelman (the
world’s largest public relations firm),
David was a Director of the Group
Supervisory Board and member of
its global management board.
During 13 years at Edelman, he
was CEO of the EMEA region and
latterly, CEO of APACMEA.
Prior to working at Edelman, David
was Co-CEO of Weber Shandwick UK
and Managing Director at Burson-
Marsteller UK. He has also worked in
Corporate Affairs at Visa International
and as a planner in advertising.
David is Chair of parking technology
company Parkable, Chair of child
poverty charity Share My Super,
Advisory board member of
The Spinoff, and Co-founder of
research start-up Stickybeak.
LOUISE HIGGINS
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Louise was appointed as a Non-
Executive Director on 10 September
2021 and is the Chair of the Audit and
Risk Committee.
Louise is the Executive General
Manager Strategy and Transformation
Australia Retail, Suncorp Integration
at ANZ Bank.
Louise began her executive career
in London with law firm Freshfields
Bruckhaus Deringer, followed by seven
years at the BBC. Louise has worked
at Australia’s Macquarie Bank as an
Associate Director, COO for NOVA
Entertainment with responsibility for
performance of the Nova and Smooth
radio networks and as Chief Financial
and Strategy Officer for the Australian
Broadcasting Corporation to oversee
significant technology transformation.
Louise has a diverse, non-executive
career from Commercial Radio
Australia, Visit Victoria, Qudos Bank
and Canteen Australia.
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ENERO ANNUAL REPORT 2024
Financial
Highlights
$189.7m
Net Revenue
down 22%
20%
EBITDA Margin1
down 13ppts
$37.4m
EBITDA1
down 53%
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1 Before significant items
11.3cps
5.0cps
$10.3m
Earnings Per
Share Before
Significant Items
down 57%
FY24 Dividends
Net Profit
After Tax Before
Significant Items
down 58%
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ENERO ANNUAL REPORT 2024
Geographical
Results
42%
18%
40%
47%
14%
39%
52%
16%
32%
73%
7%
20%
Net Revenue
FY24
Net Revenue
FY24
Net Revenue
FY24
Reflects 51% economic interest in OBMedia
EBITDA
FY24
EBITDA
FY24
EBITDA
FY24
Net Revenue
FY23
Net Revenue
FY23
Net Revenue
FY23
EBITDA
FY23
EBITDA
FY23
EBITDA
FY23
USA
UK and
Europe
Australia
and Asia
Enero has offices around
the world, with affiliates in
key markets where we have
client relationships.
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London
Madrid
Paris
Milan
Munich
Frankfurt
Amsterdam
Singapore
Tokyo
Hong Kong
Beijing
Shanghai
Seoul
Taipei
Jakarta
Bangalore
Kuala Lumpur
San Francisco
New York
Chicago
Houston
Minneapolis
Sydney
Melbourne
Sao Paulo
Dubai
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ENERO ANNUAL REPORT 2024
Client
Analysis
ENERO ANNUAL REPORT 2024
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GLOBAL PERSPECTIVES
DIRECT ACCESS
With offices in 16 cities across the most influential markets,
our global reach and scale give us a strategic perspective
and connects us to global brands with big global impact.
This provides us with direct access to clients wherever they
are, the ability to capitalise on local insights, and connects
us to bigger, global budgets.
REVENUE DIVERSIFICATION
We diversify our revenue across both industry and
geography. Technology and Telco (predominately B2B)
account for the largest share of revenue in FY24 at 44%.
Other key strategic focus areas included:
- digital media (14%)
- retail (13%)
- healthcare (10%).
As a global marketing services business, we derived over
60% of our total revenue from outside of Australia.
A softer tech market and the sale of the CPR business in
October saw Technology, Healthcare and Consumer (THC)
Practice revenue drop 6% compared to 2023. Meanwhile,
our proactive traffic quality management in FY23 Q4 saw
OBMedia revenue fall 48%.
In FY24, the Enero agency revenue model enjoyed a
healthy mix of projects (43%) and retainers (57%)
across our agencies.
With our emphasis on coordinated services across our
agency brands, 66% of our THC Practice revenue now
comes from clients working across more than one practice
brand or country. This is up from 47% in FY23.
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ENERO ANNUAL REPORT 2024
14%
Digital Media
44%
Technology and Telco
Reflects 51% economic interest in OBMedia
10%
Healthcare
13%
Retail
3%
Transportation,
Airlines and Auto
8%
Services
1%
Consumer Goods
3%
Finance
4%
Other
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Technology,
Healthcare and
Consumer Practice
$143.5m
FY23 $152.1m
FY24 Net Revenue
down 6%
16%
FY23 16%
FY24 EBITDA margin1
flat
$22.8m
FY23 $25.1m
FY24 EBITDA1
down 9%
1 Before significant items
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Enero’s strength lies in our
industry expertise. Each of
our agencies are specialists
with world-class experts
in each of our three high-
growth verticals – technology,
healthcare and consumer.
This focused expertise means
we have deep industry
knowledge and the ability to
provide tailored, innovative
solutions that are commercially
and creatively impactful.
Our industry expertise and
specialism delivers lasting
client relationships and ensures
ongoing success for both our
clients and our agencies.
TECHNOLOGY
HOTWIRE is a global specialist in technology PR,
communications and marketing. It partners with
top technology brands to scale and support their
businesses. With 350+ experts across 11 countries,
Hotwire excels at the intersection of technology and
humanity, delivering unparalleled success in reputation
management, relationship building and revenue generation.
For 25+ years, Hotwire has been transforming tech
innovators into world-changing businesses working with
brands such as Honeywell, Palo Alto, eBay, Sony, Meta
and Samsung. In addition. Hotwire won new clients
including Fujitsu, Telstra Global, HubSpot, Uber and
more. Hotwire has expanded its expertise into tech-
plus consulting services, with a strong focus on data,
analytics and AI. Hotwire’s data and analytics team won
the Gold Award at the AMEC Awards. Its innovative tools
for Discord and ABB have delivered faster and smarter
insights. Hotwire’s launch of GAIO.tech, a proprietary
AI tool, further cements its role at the forefront of tech
communications and as a leader in optimising a brands’
presence in AI chatbots.
ROI·DNA drives revenue growth for leading brands
worldwide, creating bespoke account-based marketing
(ABM) experiences and future-proofing websites for fast-
growing businesses. Strategic partnerships with 6sense,
Google and Drift have generated over $12 billion in revenue
for tech innovators like Elastic, Salesforce and AWS. With a
strong focus on AI integration, the agency’s ability to secure
major clients like Amazon Business, Cisco, Pure Storage
and Portworx underscores its ongoing success in driving
its clients’ digital presence and revenue.
HEALTHCARE
ORCHARD, a leading specialist in healthcare marketing,
recorded significant growth, securing 14 new clients.
Committed to its ‘Invent Better’ ethos, Orchard’s specialist
expertise spans medical education, digital strategy, data
and creative services – supported by Australia’s largest
in-house medical science team. This depth of specialist
knowledge makes Orchard a preferred partner for major
health and medication launches across the healthcare
spectrum – engaging everyone from GPs and specialists
to patient groups and professional bodies like the Royal
Australian College of General Practitioners (RACGP).
Focused expertise,
proven results
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ENERO ANNUAL REPORT 2024
Throughout FY24 Orchard won both a prestigious PMEA
Award for excellence in patient engagement and a PRIME
Award for marketing innovation, reinforcing its position as
the most awarded agency network in the healthcare sector.
Over the past three years, Orchard has been instrumental
in launching noteworthy medications onto Australia’s
Pharmaceutical Benefits Scheme (PBS) and it continues
to set new standards in healthcare marketing and patient
engagement. Orchard’s client roster includes Lifehealthcare,
Jazz Pharmaceuticals and Boehringer Ingelheim.
CONSUMER
BMF is renowned as one of Australia’s most effective
creative agencies. Driven by its philosophy of ‘The
Long Idea’, its world-class advertising and cut-through
ideas that impact culture. As a world-class specialist in
advertising, behaviour change, strategy, social content,
innovation and high-quality production, BMF works
with globally renowned consumer brands including
ALDI Australia, Tennis Australia, George Western
Foods, Tourism Tasmania and the Australian Federal
Government, to build strong, lasting connections between
celebrated brands and their customers.
In FY24 BMF won over 70 awards, including a Gold Effie for
Strategy and Insights and the title of ‘Most Awarded Social
Agency’ at the London International Awards.
BMF’s commitment to rigorous creativity and specialist
focus on consumer brands saw the agency win several
high-profile clients in FY24 including Alinta Energy,
Stan and the Department of Health. From encouraging
Australians to ‘Shop ALDI First’ to driving record
attendance at the Australian Open, BMF continues to
influence public behaviour. Its impactful ways of working
and effective outcomes led BMF to win B&T’s Culture
Award, Campaign Asia’s Culture Award and Mumbrella’s
TV Ad of the Year.
Tennis
Australia
CHALLENGE
Delivering an idea for Tennis Australia which
will maximise AO attendance and drive
long-term brand health
As a pinnacle of sport in Australia, a healthy Australian
Open (AO) is critical for the long-term health of tennis.
However, participation in the AO understandably struggled
during the Covid-19 pandemic. In 2022, the success of
Aussie players at the AO, like Ash Barty, drove greater
interest. Then in 2023 brand health reverted to 2019 levels.
To combat this, BMF’s challenge was to get Australians to
re-engage emotionally with tennis and grow the attendance
to one of Australia’s best sporting events, the AO.
STRATEGY
Create greater emotional attachment to tennis
by bringing it closer to our cultural identity
An audience segmentation analysis showed high value
audience segments were distinguished by a greater
emotional attachment to tennis. They really ‘felt’ tennis
either individually or as a lifestyle statement.
However, our target audience segments only had a
functional relationship with tennis, meaning that tennis
could easily be replaced.
We found that the common denominator among
our target audience segments was their identity as
Australians, which presented an opportunity to create
greater emotional engagement.
To align the AO with this cultural identity, we found
an overlap in the tension between playfulness
and competitiveness.
From this tension, our insight was born. Australians are
renowned for being relaxed, easy going and not taking
themselves too seriously, but collectively they take sport
very seriously.
Whether it’s a professional or a local sport event, we’re
all in. Australians love to win. This tension is reflected in
the nature of the AO. A brand with highs and lows of elite
competitive tennis at its heart, surrounded by a relaxed,
playful and inclusive social culture. The AO is a friendlier
tournament, but still a fiercely competitive ‘slam’. A hard-
fought, sweaty, intense, exciting battle for total supremacy.
EXECUTION
Hits Different
The AO isn’t like tennis anywhere else in the world, even
though the rules might be the same. Even the most
serious players lighten up, the fans can feel it, and this lifts
everyone into waves of breathless excitement. This feeling
vibrates around Melbourne Park as the sun shines, the
music pumps and the spritzes flow. The victories here are
harder fought and the rallies more punishing.
Call it fun or call it fire. Whatever that mix is, tennis ‘Down
Under’ creates a feeling not felt anywhere else because
Tennis in Australia Hits Different.
We launched a heavy-hitting film which created an
animated world of colourful characters, competitive
Case Study
ENERO ANNUAL REPORT 2024
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Delivering the most
successful AO on record
intensity and a distinctly modern Australian brand, made
for worldwide audiences.
The campaign also lived across OOH, social and digital
media – shaping the AO experience itself.
From a complete takeover of Melbourne International
Airport to spatial design across Melbourne Park,
in-stadium soundtracks, merchandise and partnership
activations, the ‘Hits Different’ campaign worked as
hard in the real world as on-screen.
Social stickers and TikTok games that rewarded audiences
with ticket discounts brought a fresh energy and a playful
pop-cultural stickiness to Australia’s summer of tennis and
helped drive engagement with individuals.
RESULTS
Delivering the most successful AO on record
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ENERO ANNUAL REPORT 2024
“The results are outstanding.
After two years of solid
growth we’ve continued to be
impressed by the numbers and
momentum we’re seeing.”
Kathleen Orlowski, Play Tennis
Marketing Manager, Tennis Australia
23.2%
Record-breaking two-week attendance record
with 1,020,763 fans through the gates over
15 days. 23.2% increase year-on-year (YOY).
+21%
More than 1.43 million people attended events
across the entire Australian Summer of Tennis.
ENERO ANNUAL REPORT 2024
| 24
Case Study
CHALLENGE
Around 638k Australians suffer from Chronic
Obstructive Pulmonary Disease (COPD), but many
go undiagnosed or are incorrectly diagnosed
Many GPs struggle with a specialised breathing test –
known as spirometry – which is vital to accurately
diagnosing the condition, as it is often complex and difficult
to interpret. Compounding this, spirometry use had also
dropped off dramatically during the Covid-19 pandemic
and not recovered. Additionally, GP access to spirometry
equipment varied between practices, so some cases were
likely going undiagnosed.
With this in mind, Orchard’s challenge was to improve both
the diagnosis process and ongoing management of chronic
COPD through medical education. We needed to show
Australian GPs how to better diagnose and manage COPD.
STRATEGY
Combine GP education on spirometry with an
innovative device loan program
Education improves GPs’ understanding of COPD and
their ability to interpret spirometry results, but limited
access to spirometry equipment was proving to be a
challenge. To combat this, we decided to combine our
educational approach with a strategy to provide better
access to COPD diagnosis equipment – ideally, something
simple and easy to use.
EXECUTION
Face-to-face education with a simpler, hand-held
device loan program
We created the ‘COPD Fairflow’ program which combined
face-to-face education with the first ever device loan
scheme to improve GP access to diagnostic tools.
Sponsored by Boehringer Ingelheim, the program involved
the use of COPD case-finding devices – simpler to use
than spirometers – which can quickly and easily assess
if a patient might have COPD. Patients assessed as
being at risk could then be sent to an external spirometry
service to confirm the diagnosis. Under the program,
GPs without direct access to spirometry equipment could
apply to borrow COPD case-finding devices for several
months at a time.
GPs who attended our COPD Fairflow program learned
about case-finding, spirometry interpretation and local
COPD management guidelines. We also created print and
online resources which GPs received for ongoing support.
The program resulted in COPD screenings for many
Australians who might otherwise have remained untested,
and potentially, undiagnosed.
Driving diagnosis
through medical
education
Boehringer
Ingelheim
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ENERO ANNUAL REPORT 2024
RESULTS
98%
~2500
98%
1350
96%
98% of GPs rated the education
meeting “excellent” or “very good”.
The program enabled
~2500 COPD screenings.
98% said they “learnt something new”.
120 meetings were held
with 1350 attendees.
96% of participating GPs said the
education program would impact how
they diagnosed and managed COPD.
CHALLENGE
Tailoring messages across channels
Digital is not just about amplifying a message; it’s about
fine-tuning it for every channel. As we entered our third
year working with eBay on their annual Recommerce
Report, we understood the changing dynamics needed to
effectively promote insights on the circular economy and
ultimately drive impact and reach.
While our core report promotion has mostly focused
on communications and media relations, this year we
broadened our reach with paid media, to find more people
who could benefit from the findings.
It was crucial to get the message just right, especially
when targeting the ever-changing preferences of Gen Z
and Millennials.
STRATEGY
A multi-channel targeted experimentation
We tailored our strategy across eBay’s corporate
touchpoints: earned and paid media, LinkedIn, eBay
Newsroom on X and TikTok. Our approach was meticulous
and ensured we targeted the audience segments which
best aligned with the Recommerce narrative.
We experimented with various ad formats and pitted static
images against video creatives on LinkedIn and X. After
exploring multiple publication partnerships, we partnered
with The New York Times (NYT) whose ad formats,
especially the Messaging Flex XL display unit, provided
the right canvas for the Recommerce story.
EXECUTION
Multi-platform engagement and education
We orchestrated multiple campaigns for LinkedIn and
X, tested different images and videos, gauged audience
engagement and drove web traffic. We aimed our TikTok
strategy at Gen Z for sustained engagement and brand
loyalty – instead of driving users to a landing page, we drew
in new followers by educating and engaging them. Our
NYT partnership leveraged the publishers Messaging Flex
XL display unit to tell a compelling Recommerce story and
drive traffic to eBay’s report for maximum impact.
Case Study
ENERO ANNUAL REPORT 2024
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US
Driving impact of
recommerce through
multiplatform
engagement
eBay
RESULTS
| 27
ENERO ANNUAL REPORT 2024
342k+
1.1m+
41.3%
LinkedIn delivered 342k+ impressions and a
0.75% engagement rate.
70%
0.9%
As a further testament to our
community building efforts, 70%
of new followers belonged to Gen Z.
Our NYT collaboration managed 680k
impressions and funnelled nearly 6k visitors
to the Recommerce Report landing page,
with a noteworthy click-through rate of
0.87% (0.3% above the NYT benchmark).
X’s audience delivered
1.1m+ impressions.
TikTok’s audience provided a staggering
41.3% engagement rate with 75%+ of
this from a Gen Z audience.
Helping Sony become the
“next big thing in tech”
Sony
Case Study
ENERO ANNUAL REPORT 2024
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UK/EUROPE
CHALLENGE
Driving awareness with key partnerships
Sony Semiconductor Solutions (Sony), needed help with
both launching and creating a narrative for its AITRIOS
software platform across the US and Europe. However,
AITRIOS only had Japanese customers and lacked
awareness in the US.
Hotwire needed to drive awareness and momentum by
aligning both the US and European launches with key
events and partnerships. The goals included:
- expanding reach to a broader audience within developer,
retail and smart cities’ audiences
- establishing relationships with key influencers
in key verticals
- building a positive perception following the launch
of AITRIOS at the NRF by highlighting cutting-edge
proofs of concept and their compatibility.
STRATEGY
Maximising strategic media engagement
and event integration
After a quick onboarding, Hotwire leveraged NRF 2023’s
(the retail industry’s big conference) newsworthiness to
schedule media interviews and booth demos. Leveraging
Sony’s Silicon Valley presence, Hotwire targeted
developers through key events, partnerships and awards
including TinyML and VentureBeat Transform. Hotwire
highlighted partnerships with the City of San Jose and The
TinyML Foundation to emphasise the impact visual AI has
on retail and smart cities.
For Europe, the team leveraged Sony’s investment in
British company Raspberry Pi, highlighting how Raspberry
Pi’s customers could use AITRIOS technology. Strategies
included targeted media outreach, onsite product demos
and event coordination for key stakeholders.
EXECUTION
Leveraging media engagement and partnerships
The launch at NRF played a key role in media engagement
and relationship-building. Briefings and exclusive product
demos were aimed at top influencers in retail and
developer media, while the TinyML Summit was identified
as a valuable media opportunity. In collaboration with the
City of San Jose, Sony launched a Hackathon focused
on using visual AI to address traffic safety. Held in the
Bay Area, this event positioned Sony as a leader in visual
AI applications. In addition, Hotwire connected Sony’s
executive team with the media by arranging interviews
with key influencers from The New Stack and Silicon Valley
Business Journal.
The team’s global announcement of Sony’s Raspberry Pi’s
partnership resulted in a media response that exceeded
initial expectations. Interviews were made with top-tier
media in the US for Sony and in the UK for Raspberry Pi.
This generated over 105 stories and was the top trending
news on Techmeme. This paved the way for Sony’s
attendance at key European events such as Hannover
Messe 2023.
All this opened the door for Sony’s win in the Fast Company
Next Big Things in Tech, particularly in the “Next Big Thing
in AI and Data” category.
RESULTS
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ENERO ANNUAL REPORT 2024
Effectiveness
Partner testimonials and industry expert feedback
further validated AITRIOS’s effectiveness. The strategic
integration of the platform launch with industry events
and partnerships highlighted Sony as a leader in retail
technology and smart cities.
120+
Hotwire’s work secured 120+ interviews across tier-one
business, developer and retail media, along with 20+
media briefings and relationship-building opportunities
with influential journalists. Wall Street Journal, Bloomberg
and CNBC covered Sony’s AITRIOS which increased brand
awareness and interest.
1000+
Sony’s prominent displaying of the Fast Company Next
Big Thing in AI and Data trophy at the NRF event helped
them pass the target of 1,000+ on-site leads and facilitate
introductions to 10+ new media contacts.
Turning cybersecurity
threats into a superhero
adjacent universe
Palo
Alto
Case Study
ENERO ANNUAL REPORT 2024
| 30
APAC
CHALLENGE
Global reach, personalised cybersecurity engagement
Cortex by Palo Alto is a cybersecurity platform offering
threat prevention, detection and response services
using AI and automation to provide comprehensive
security solutions.
In the world of Business-to-Business (B2B) security,
innovative content marketing ideas are few and far
between, and originality is rare.
Palo Alto Networks wanted to engage audiences with
important information about cybersecurity. The idea had
to resonate with multiple geographies, languages, cultures
and media consumption habits. It had to scale, at pace, and
yet personalise with care.
We needed to make security operations scintillating.
STRATEGY
Turning cybersecurity threats into
a superhero adjacent universe
We needed to create a content-led idea that would be
appropriate for multiple geographies and languages –
so we created an idea big enough to house the most
epic battle of our time: the fight for cybersecurity.
Set in a futuristic corporate ‘techiverse’ we created an
idea that would appeal to senior level decision makers
in Security Operations Centres (SOC).
After reading this epic adventure of good versus evil,
readers would then be invited to visit the Cortex site.
EXECUTION
Cybersecurity heroes defend Cortex City
Cortex City came to life both as a unique comic book and
an animated series, all of which highlighted the dangers of
poor cybersecurity and the juxtaposing safety the Cortex
Suite represented.
Utilising classic comic book visual and verbal language –
threats, prevention, detection and response capabilities
– we personified these attributes as a diverse cast of
characters – each fighting against the monstrous SOCzilla!
Inclusivity and diversity were paramount principles to
ensure our characters resonated with all backgrounds.
Comic book tropes kept the storyline moving and lifted
the epic tale into an action adventure. Each figure played
a pivotal role in the narrative and each member of the
FutureSOC team, represented a Cortex product and took
centre stage roles to save the SOC. Through this immersive
comic book story, readers learned the powers of the Cortex
product suite, became invested in the characters and were
keen to find out more.
We launched the product across multiple Asia-Pacific
markets, translated it into six languages, used omnichannel
debuts across billboards, in-app games, social media, email
marketing, taxi screens and animated videos. Characters
appeared at industry events such as the MNSEC
Conference 2023 (Ulaanbaatar, Mongolia), GovWare 2023
(Singapore), Security Days 2023 Tokyo (Japan) and Japan
Ignite and Taiwan Ignite. In Japan, we launched the product
with billboard ads in Omotesando and video ads in taxis.
In China, we created a custom in-app game on WeChat
that boosted social engagement and awareness, directing
interest to localised webinars.
Out of nowhere, a deep
fog blankets the cityscape
and masks attack surfaces.
It can only be the work of…
It’s a crisp, clear morning. Cortex
City is bustling with activity, as
citizens go about their daily lives.
1
Quickly, Nasira calls
the best team who can help
with the cyberattack...
FutureSOC,
we need
you!!!
Not missing a beat, XDR gets
to work and monitors the network
for any signs of intrusion, quickly
identifying the source of the attack.
At FutureSOC headquarters...
3
She absorbs all the information to
understand exposure to new attacks
and how attacks have unfolded. The
fog is almost eradicated!
XSOAR arrives
to help Xpanse
finish the job!
6
It’s SOCzilla! The arch
nemesis of SecOps teams!
That’s
too many
alerts!
What is it,
Nasira?
The team’s legacy endpoint protection system starts
to break down! data from different sources is not
being collected and correlated to help detect,
investigate and respond to threats.
2
In a flash, XSOAR pulls in alerts
from Nasira’s tools so He has access
to information about endpoints, users,
hosts, vulnerabilities, malware and
attacker intel to perform immediate
containment.
XSOAR takes down the
fog! The entire attack
surface is finally
reduced and cleared to
give Nasira and her team
a complete view!
7
Quickly, he analyses endpoints to detect attack points. Next, he
gives a simplified view of attack points across the cityscape. Finally,
he sends correlated endpoint telemetry, and event data to BigTech inc.
XDR has hit back hard with threat detection,
investigation, response, and threat hunting.
It’s
working!
But SOCzilla is not to
be underestimated!
Parts of the city are
still hidden under
creeping fog...
Argh!
Phew!
His super strength in detection, response,
and scaling to cloud environments
gave Nasira’s team the information
they needed to fend off the attacks.
4
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ENERO ANNUAL REPORT 2024
RESULTS
Cortex registered a 25% YOY increase in
customers and the main FutureSOC character
(the XSIAM product) recorded a pipeline of
US$600m+.
Firms like GigaOm and KuppingerCole have
since recognised Cortex solutions as ground
breaking and intuitive, and Mitre and Cortex
received requests for demos from three major
accounts in the semiconductor, technology
and telecommunications sectors.
25%↑
Case Study
ENERO ANNUAL REPORT 2024
| 32
CHALLENGE
Leveraging AI to scale and accelerate
revenue strategy
BeyondTrust, a global leader in Privileged Access
Management, sought a strategic partner to scale and
accelerate its revenue strategy. To do this BeyondTrust
partnered with ROI·DNA to transition from traditional sales
and marketing methods to a more targeted, AI-driven
approach. This approach would focus on account-based
engagement using digital advertising channels, ABM
gifting and field marketing events.
STRATEGY
Reimagining BeyondTrust’s demand generation
ROI·DNA identified critical issues hindering BeyondTrust’s
growth, including team silos and an outdated go-to-market
(GTM) strategy. To overcome these challenges, ROI·DNA
reimagined BeyondTrust’s demand generation approach,
delivering results without having to increase BeyondTrust’s
ad spend.
Services deployed:
- GTM strategy
- Channel audits
- SEO (search engine
optimisation) audit
- MarTech audit
- Competitive analysis
- Media mix
- Creative
- DAS (Digital Advertising
Services)
- SEM (Search
Engine Marketing)
- Programmatic via 6sense
- LinkedIn
- Publisher direct.
EXECUTION
Leveraging technology to democratise
data and report on meaningful metrics
To unify BeyondTrust’s team, ROI·DNA democratised
data usage across the organisation. By shifting away
from traditional Marketing Qualified Leads (MQLs) and
embracing revenue-oriented metrics such as pipeline
won and high-intent engagement, ROI·DNA ensured that
BeyondTrust was better aligned with its business goals.
Leveraging 6sense technology, ROI·DNA also unlocked
data transparency, enabling BeyondTrust to fully commit to
intent-based advertising. As a result, BeyondTrust achieved
the following:
- break down silos and dramatically reorganised the way
the team approached content and demand generation
- enhanced the revenue engine and gained confidence to
invest in predictable growth
- approached revenue generation as one unified team rather
than separate sales and marketing teams, with marketing
contributing more to pipeline-generation efforts
- reported on impactful metrics: pipeline and activities
proven to contribute to pipeline – contact requests,
trials and product demos.
Using AI to drive
revenue acceleration
BeyondTrust
32%
55%
62%
ROI·DNA’S PARTNERSHIP WITH
BEYONDTRUST PRODUCED REVENUE-
ACCELERATING RESULTS, INCLUDING:
increase in high-intent leads
increase in marketing-sourced pipeline
increase in marketing-sourced
Average Conversion Value
RESULTS
Driving revenue-accelerating results
Having access to a deep bench
of experts from ROI·DNA was a
game changer for BeyondTrust.
ROI·DNA’s team brought
extensive experience with
the same tools and platforms
BeyondTrust was using, allowing
them to identify efficiencies
and streamline processes.
This expertise empowered
the BeyondTrust team to
move quickly and confidently,
achieving roadmap milestones
ahead of schedule – without
risking mistakes.
| 33
ENERO ANNUAL REPORT 2024
ENERO ANNUAL REPORT 2024
| 34
OBMedia
OBMedia is a 51% owned AdTech business in
Enero Group’s global portfolio. In partnership
with the world’s largest search engines, OBMedia
acquires, qualifies and monetises high-intent
customers on behalf of advertisers. OBMedia
delivers this through broad and long-standing
relationships with digital publishers and media
buyers and proprietary technology powered by
AI, machine learning and data science.
OBMedia’s audience procurement and their
ongoing focus on traffic optimisation and
conversion allows them to deliver significant
ROI for online advertisers.
| 35
ENERO ANNUAL REPORT 2024
$46.2m
FY23 $89.5m
FY24 Net Revenue
down 48%
51%
FY23 73%
FY24 EBITDA margin1
down 22ppts
$23.5m
FY23 $65.4m
FY24 EBITDA1
down 64%
1 Before significant items
EXECUTION
OBMedia’s competitive advantage is its proprietary
technology, data science, automation and partnerships.
These combine to deliver outstanding value to both
advertisers and publishers. Its key differentiations are:
Leading media buying technology to provide the most
relevant ads for target audiences.
Powerful technology stack with real-time data, system
resiliency and rapid new product development.
Deep data science powering responsive campaign
analytics, real-time campaign optimisation and end-to-end
conversion tracking.
FY24 saw OBMedia continue to drive growth for its
partners. This was enabled by improving campaign
optimisation and platform development to acquire more
targeted traffic, expansion in traffic acquisition sources,
as well as the continued development of its AI-powered
media buying platform. Simultaneously, OBMedia has
further refined its fraud monitoring capabilities to maintain
its detection rates and the trust of its key partners.
ENERO ANNUAL REPORT 2024
| 36
Powering digital
advertising growth
with Adtech
Adtech
CHALLENGE
Search-based advertisers seek cost-effective, high-intent
audiences to drive business growth.
STRATEGY
OBMedia is a digital advertising technology platform that
delivers high-quality/high-intent internet traffic to search-
based advertisers using proprietary technology, exclusive
partnerships and deep data analytics expertise.
OBMedia is focused on:
- delivering engaging and relevant content to valuable
audiences via digital publishers, ad networks and social
media platforms
- using its proprietary, advanced data science techniques
to accurately understand consumer intent
- profitably connecting high-quality audiences with
advertiser’s sites.
Case Study
| 37
ENERO ANNUAL REPORT 2024
Environmental,
Social and
Governance
At Enero we recognise that investors, customers and
our community are looking for partners with responsible
business practices, both financial and non-financial.
Environmental, Social and Governance (ESG) issues and
opportunities impact the success of any organisation and
ours is no exception. At the core of our ethos is social good,
so pursuing ESG responsibility is a natural next step.
We understand our responsibilities as an influencer of
culture and behaviours and our key role in creating a more
sustainable world. We will continue making decisions that
drive positive impact and promote responsible outcomes.
WORKING WITH VALUES-ALIGNED CLIENTS
As a marketing services business, collaborating with
like-minded clients and partners allows us to harness our
innovation and creativity to tackle some of society’s most
pressing challenges. Our decision to partner with clients is
driven by our desire to make a positive impact on the world.
The work of our agencies in FY24 positively addressed
societal challenges, improved the lives of the marginalised
and under-represented communities and had a positive
impact on the social fabric of Australia.
BMF launched eight national behaviour change campaigns
including rallying a nation to stop elder abuse; helping
Australians give up smoking and vaping for good; launching
an Algorithm of Disrespect to help parents understand the
hidden trends of gender-based violence on social media;
and giving parents the tools to prevent child sexual abuse.
Meanwhile, Orchard created a digital tool to shorten the
time to it takes to diagnose endometriosis from six years to
six weeks by educating GPs on the visual metaphors women
use to describe endometriosis pain.
In 2024, we continued to assess our revenue by sector and
remain committed to guiding our agencies in making values-
driven decisions about clients and projects. To support
greater transparency, we will continue to monitor and report
our revenue by client sector.
ENVIRONMENTAL
Last year, we committed to measuring our global footprint
across carbon emissions, energy use, waste, and water
collectively for Enero corporate and our holdings. As we
navigated a challenging macroeconomic environment,
this work remains ongoing, and we recognise the need for
additional resources to drive meaningful progress.
With a globally dispersed workforce remote work has
become more common, particularly in the Hotwire Group.
This raises the issue of the environmental impact of office
relocations. The need to reconnect with clients and staff
worldwide saw business travel tick up slightly, but we
have been diligent in limiting travel to the most essential
journeys. Our Environment Policy outlines our environmental
commitments for both home and office work.
We remain dedicated to tracking our impact and are working
with advisors to prepare climate-related risk assessments
and financial disclosures in compliance with Australian
Sustainability Reporting Standards. Standards, which we will
report on next year.
ENERO ANNUAL REPORT 2024
| 38
On the following pages
you’ll find a summary of
other ESG highlights for
this past fiscal year
| 39
ENERO ANNUAL REPORT 2024
SOCIAL
Our success as a service company comes from our
diverse, global team working collaboratively with clients,
communities and industries. We are deeply committed
to supporting our people, fostering inclusion, celebrating
diversity and empowering everyone to succeed.
We’ve divided our FY24 social efforts into four areas:
1. Diversity, Equity, Inclusion and Belonging
2. Learning and Development
3. Health and Wellbeing
4. Community and Industry Impact.
DIVERSITY, EQUITY, INCLUSION
AND BELONGING (DEIB)
DEIB is integral to our recruitment, talent development,
employee programs and partnerships. In FY24, we
continued to advance these efforts globally.
Our hiring managers undergo interview training to ensure
fair candidate assessments and the elimination of bias.
They also learn about the importance of diverse and
inclusive hiring and the impact of unconscious bias.
Enero is deeply committed to reconciliation with Australia’s
Aboriginal and Torres Strait Islander (ATSI) people. As
highlighted by our ongoing partnership with Reconciliation
Australia for our INNOVATE Reconciliation Action Plan
(RAP). Our RAP nurtured, developed and encouraged
Group-wide inclusion of ATSI creative talent, partners
and advisors. Most importantly, our RAP aims to improve
inclusion across the entire marketing services industry.
Our internal RAP committee led our efforts to build on
existing strategies, like our CareerTrackers partnership
and National Aborigines and Islanders Day Observance
Committee (NAIDOC) Week and National Reconciliation
Week, deepening our understanding and recognition with
ATSI cultures. The ‘Yarning sessions’ we hosted with external
consultants and elders during NAIDOC Week, showed all
of us how we can best contribute to national reconciliation
individually and as a business. We will continue this work
into FY25 and beyond, supporting indigenous suppliers
through our ‘Supply Nation’ membership.
In Australia, we welcomed three interns into our agencies
and departments as part of our ongoing partnership
with CareerTrackers who provide First Nations’ university
students with work placement opportunities. In the
UK, Hotwire continued its partnership with the 10,000
Black Interns program by hosting four interns for
six-week placements.
Hotwire in the USA continued to focus on its employee
driven community groups, ‘Empowered Societies’,
to reinforce its DEIB mission and goals. The eight
Empowered Societies engaged USA team members to
steer the agenda and drive progress in each Empowered
Society’s goals.
Another FY24 highlight was the award-winning Hotwire
Ignite Possibility Program. Hotwire provided $1 million
USD in pro-bono brand marketing and public relations
services to tech and tech-enabled organisations led
by, or that are supporting, underserved communities.
Highlights this year included:
- SEO audit for the Children’s Creativity Museum
- free Google Ads workshops
- FOODe’s media strategy for the launch of its
food experience app
- a thought leadership framework for ReRent.
In Europe, Hotwire partnered with Fobbs to reshape how
leaders are portrayed in UK schools and helped Mentalis
with a Google Ads campaign and media relations.
Environmental,
Social and Governance
(continued)
ENERO ANNUAL REPORT 2024
| 40
LEARNING AND DEVELOPMENT (L&D)
We remained committed to developing our leaders and
their teams over FY24, significantly investing in capability
development at Enero and our businesses.
Enero had 2,813 training touchpoints in FY24 (4,735+
learning hours). Our global focus is reflected by the fact that
46% were for international businesses and 54% were for
Australian businesses.
Our ADVANCE Leadership Program highlighted inclusive
leadership and the importance of wellbeing in creating high
performance teams and played a pivotal role in enhancing
leadership capabilities. Over a nine-week program, we
equipped 82 Group leaders with human-centered skills and
confidence to lead high performing teams.
Our ‘The Leadership Circle’ helped build self-confidence
in leaders through inventory and executive coaching. 12
senior Group leaders cultivated strong, capable leadership
skills to empower and create high performing teams.
We expanded our Enero Academy program with new
offerings and inspiring content. We launched a new series
called ‘Leadership Unplugged’, which highlighted leaders
across the Group and offered a space for authentic
conversations and connections.
Finally, our ‘Academy’ channel focused heavily on DEIB,
hosting curated learning sessions for both NAIDOC Week
and an in-person Q&A panel to commemorate International
Women’s Day, featuring five female leaders across each of
our Australian businesses.
HEALTH AND WELLBEING
Enero prioritises our global team’s health and wellbeing,
using our expertise to promote wellness at work and in the
broader community.
Over FY24, our L&D team implemented programs on
resilience, on having a growth mindset and thriving at work.
We expanded our Mental Health Training by accrediting
40 global Mental Health First Aiders to provide colleagues
with immediate support. Leading mental health speaker
Mitch Wallis joined us for ‘R U OK Day’, in our Sydney office
to deliver a powerful keynote presentation on how to have
effective support conversations.
We also partnered with CU Health, enhancing overall
mental and physical wellbeing by offering Australia-based
employees’ access to virtual health services, including
psychologists, GPs, dietitians and health coaches.
Enero is committed to fostering a safe working environment
for all employees. All employees must complete annual
‘Respect at Work’ training, ensuring everyone understands
relevant legislation and can foster a workplace free from
bullying, discrimination and harassment.
| 41
ENERO ANNUAL REPORT 2024
In-person Q&A hosted by five female leaders
from across Enero’s Australian businesses
Additionally, we launched a Psychological Safety training
initiative, starting with leaders, to promote psychological
safety within teams. This will continue into FY25.
To support employees’ work-life balance, Enero supported
various benefits in FY24 including work-life balance.
Across the Group, Orchard implements ‘Summer Fridays’,
encouraging early logoffs during the summer. Hotwire
promotes ‘Wellbeing Afternoons’, making Fridays meeting
free year-round. BMF offers wellness app subscriptions
and rewards through its Bravo recognition platform.
COMMUNITY AND INDUSTRY IMPACT
Enero actively engages with under-represented
communities to promote social and environmental justice.
FY24 saw us continue our commitment to community
health and wellbeing by partnering with the Australian Red
Cross to champion its Lifeblood campaign through blood
donations at the Pyrmont Mobile Bus.
Our generous team raised awareness and funds for the
Cancer Council by dedicating their time and cooking skills
to successfully take part in Australia’s ‘Biggest Morning Tea’.
Our Kids Club program promoted a family-inclusive
workplace with a day of school holiday child-care and
activities to support our working parents.
At Orchard, the ‘No Guts, No Glory’ initiative continued
to unite team members to support health challenges,
charities, and causes and used their digital creativity
to create an endometriosis prototype.
Meanwhile, BMF continued to mentor and judge industry
work, reinforcing our dedication to nurturing new talent.
In addition, the BMF team made a concerted effort to
take part in D&AD Shift, an internship program aimed at
recruiting diverse talent.
Our annual Employee Opinion Survey gathered insights on
diversity, wellbeing and development. We also maintained
policies to protect employees in vulnerable situations,
ensuring their wellbeing and work-life balance.
ENERO ANNUAL REPORT 2024
| 42
Environmental,
Social and Governance
(continued)
GOVERNANCE
Enero is adapting to an evolving modern governance
landscape. Our governance framework integrates
leadership, Board practices, and operational management
to generate sustainable value. This approach leverages
advanced technology and data-driven insights to
enhance performance, maintain investor confidence,
foster stakeholder engagement and drive meaningful
outcomes. We’re bringing modern governance to life in
the following ways:
Digital Transformation and Integrated Technology
We’ve digitised our Board processes and partnered
with Automic Registry to implement a comprehensive,
cloud-native platform. This brings together secure
document sharing, registry services, employee share
plan management and Board management into a
single solution. It provides better access for auditors,
streamlines our processes, enhances security, and offers
a seamless experience for shareholders, employees and
Board members.
ESG Integration
We’ve woven ESG considerations into our planning and
risk assessment. It’s our way of committing to responsible
business practices.
Cyber Resilience
We’re strengthening our cyber resilience as a key
part of our governance strategy. This includes regular
risk assessments, advanced threat detection, and a
Board supervised cybersecurity committee. We’re also
implementing robust data protection measures and
employee training.
Continuous Learning
Our Board members are committed to ongoing education
with a special focus on emerging technologies such
as AI and cybersecurity. Regular training sessions cover
AI ethics, potential industry applications, emerging
cyber threats, and relevant regulatory developments.
This knowledge empowers our Board to make informed
decisions about AI integration, strengthen our cyber
defences and ensure compliance.
Transparency
We keep our stakeholders informed through our primary
digital channels including email, our website and the
Automic platform. Key announcement emails cover
Enero developments.
Our commitment to modern governance drives continuous
evolution of our practices. This approach equips us to
navigate changing business landscapes, foster sustainable
growth, and maximise long-term shareholders’ value, while
maintaining the highest corporate governance standards.
LOOKING AHEAD
This is the start of our journey to scale our impact.
We will continue delivering client growth while staying true
to our values. We’re excited about the journey ahead and
the promising opportunities.
| 43
ENERO ANNUAL REPORT 2024
On the following pages
you’ll find the financial
report for year ended
30 June 2024
ENERO ANNUAL REPORT 2024
| 44
Financial
Report
year ended 30 June 2024
| 45
ENERO ANNUAL REPORT 2024
ENERO ANNUAL REPORT 2024
| 46
Directors’ Report
The Directors present their report, together with the consolidated financial statements of Enero Group Limited (the
Company) and of the Group, being the Company and its controlled entities, for the year ended 30 June 2024; and the
independent auditor’s report thereon.
Directors
The Directors in office as at the date of this report are:
Name
Role
Independent
Appointed
Length of service
(at 30 June 2024)
Ann Sherry
Non-Executive Chair
Yes
1 January 2020
4 years and 6 months
Anouk Darling
Non-Executive Director
Yes
6 February 2017
7 years and 4 months
Ian Rowden
Non-Executive Director
Yes
21 November 2018
5 years and 7 months
David Brain
Non-Executive Director
Yes
10 May 2018
6 years and 1 month
Louise Higgins
Non-Executive Director
Yes
10 September 2021
2 year and 9 months
Brent Scrimshaw
Executive Director
No
1 July 2020
4 years
The biographical details of the current Directors included on pages 10 and 11 set out information about the Directors’
qualifications, experience, responsibilities and other directorships.
Company Secretary
Cathy Hoyle is the Group General Counsel and was appointed Company Secretary on 8 March 2021. Cathy is a practising
Solicitor in New South Wales Australia, a Graduate of the Australian Institute of Company Directors, and holds several
degrees including a Master of Laws from the Australian National University.
Committee Membership
At the date of this report, the Company has an Audit and Risk Committee and a Remuneration and Nomination Committee.
Members of these Committees were:
Audit and Risk Committee
Remuneration and Nomination Committee
Louise Higgins (Chair)
Ian Rowden (Chair)
Anouk Darling
Ann Sherry
David Brain
Anouk Darling
Board Matrix
In determining the composition of the Board, the Remuneration and Nomination Committee ensures that the Board has an optimal size and mix of
skills to facilitate efficient and appropriate decision-making. The Board reviewed its board skills matrix during FY2024. The objective of the review
was to clearly outline the skillset required at Board level to determine the Company’s ongoing strategy.
Skills & Experience
Collective Experience
Moderate Experienced
Expert
Governance
Knowledge and experience in establishing and overseeing governance
frameworks, policies, and processes.
Risk Management
Expertise in identifying, managing, and overseeing material risks, along
with the capability to monitor risk and ensure compliance.
Financial and Capital
Management Experience
Expertise in financial accounting and reporting, capital allocation, and
debt and equity capital management, including investor relations.
Industry Experience
Understanding of the market sectors relevant to the Group.
Leadership
Executive and business leadership experience at a senior level.
Strategic Vision
and Direction
Expertise in the development, establishment, and execution of strategic
vision and direction.
People and
Remuneration
Experience in managing people, including incentive arrangements, corporate
culture, leadership assessment and workforce and succession planning.
Technology
and Innovation
Expertise in technological strategies, innovation, and prioritising digital
technology, data, and analytics.
| 47
ENERO ANNUAL REPORT 2024
Principal activities
The principal activities of the Group during the course of
the financial year were integrated marketing and
communication services, including strategy, market
research and insights, advertising, public relations,
communications planning, design, events management,
direct marketing and programmatic media.
Corporate Governance
The Directors recognise the requirement for, and have
adhered to the principles of corporate governance.
A copy of the Company’s full 2024 Corporate Governance
Statement, which provides detailed information about
governance, and a copy of the Company’s Appendix 4G
which sets out the Company’s compliance with the
recommendations in the fourth edition of the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations (ASX Principles), are
available on the corporate governance section of the
Company’s website at http://www.enero.com/investor-
centre/governance.
Operating and Financial Review
Information relating to the operating and financial review of
the Company and its strategy is outlined on pages 50 to 55
and forms part of this Directors’ Report.
Directors’ meetings
The number of Directors’ meetings (including meetings of
committees of Directors) and the number of meetings
attended by each of the Directors of the Company during
the financial year were:
Board
meetings
Audit and
Risk
Committee
meetings
Remuneration
and
Nomination
Committee
meetings
A
B
A
B
A
B
Ann Sherry
6
6
–
–
2
2
Brent Scrimshaw
6
6
4
4
2
2
Anouk Darling
6
6
4
4
2
2
Ian Rowden
5
6
–
–
2
2
David Brain
6
6
4
4
–
–
Louise Higgins
6
6
4
4
–
–
A = Number of meetings attended.
B = Number of meetings held during the time the Director held office or
was a member of the Committee during the year
Directors’ interests
The relevant interests of each Director in the shares or
SARs issued by the Group, as notified by the Directors to
the Australian Securities Exchange in accordance with
section 205G(1) of the Corporations Act 2001, at the date
of this report, are as follows:
Director
Ordinary
shares
Share
Appreciation
Rights
Ann Sherry
50,000
Nil
Brent Scrimshaw
491,134
2,558,334
Anouk Darling
34,991
Nil
Ian Rowden
95,000
Nil
David Brain
120,500
Nil
Louise Higgins
12,699
Nil
Total
804,324
2,558,334
Events subsequent to balance date
Transactions or events subsequent to the balance date,
were:
•
the Directors have declared a final dividend, with
respect to ordinary shares, of 2.0 cents per share,
fully franked. The final dividend will have a record
date of 20 September 2024 and a payment date
of 3 October 2024.
Except for these events there has not arisen, in the interval
between the end of the financial year and the date of this
report, any item, transaction or event of a material and
unusual nature likely, in the opinion of the Directors of the
Company, to significantly affect the operations of the
Group, the results of those operations, or the state of
affairs of the Group in future financial years.
ENERO ANNUAL REPORT 2024
| 48
Directors’ Report
Likely developments
The Group will continue to focus on its strategy outlined in
the operating and financial review. The Group will
specifically focus on new business conversion and organic
revenue growth to increase Net Revenue. The Group will
also continue to assess acquisition, divestment and capital
deployment opportunities as they arise to complement the
key operating business brands.
Indemnification and insurance of officers and auditors
Indemnification
The Company has agreed to indemnify the following
current Directors of the Company: Ann Sherry, Brent
Scrimshaw, Anouk Darling, Ian Rowden, David Brain,
Louise Higgins and Company Secretary Cathy Hoyle
against liabilities to another person (other than the
Company or a related body corporate) that may arise from
their positions as Directors, Secretaries or Executives of
the Company and its controlled entities, subject to the
Corporations Act 2001, except where the liability arises out
of conduct involving a lack of good faith. The agreement
stipulates that the Company will meet the full amount of
any liabilities, including costs and expenses. The Company
has also agreed to indemnify the current Directors and
Secretaries of its controlled entities for all liabilities to
another person (other than the Company or a related body
corporate) that may arise from their position, except where
the liability arises out of conduct involving a lack of good
faith. The agreements stipulate that the Company will meet
the full amount of any such liabilities, including costs and
expenses.
To the extent permitted by law, the Company has agreed to
indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against
claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to
indemnify Ernst & Young Australia during or since the
financial year.
Insurance premiums
During the financial year, the Company has paid insurance
premiums in respect of Directors’ and Officers’ liabilities, for
current Directors and Officers, covering the following:
–
costs and expenses incurred by the relevant officers in
defending proceedings, whether civil or criminal; and
–
other liabilities that may arise from their position, with
the exception of conduct involving a willful breach of
duty or improper use of information or position to gain
a personal advantage.
The Directors have not included details of the amount of
the premium paid in respect of the Directors’ and Officers’
liability and legal expenses insurance contracts, as such
disclosure is prohibited under the terms of the contracts.
Issue of shares and Share Appreciation Rights (SARs)
Shares issued on exercise of SARs
On 14 September 2023, the Company issued 32,984
(2023: 820,120) ordinary shares to employees exercising
share appreciation rights under the Company’s Share
Appreciation Rights Plan (SARP), which was approved by
shareholders at the Company’s Annual General Meeting
(AGM). The issue price of these shares was $1.60 and
these shares rank equally with existing shareholders.
Share Appreciation Rights
Share Appreciation Rights issued
During the year ended 30 June 2024, a total of 4,550,000
Share Appreciation Rights (30 June 2023: 4,425,000) were
issued to senior employees of the Group under the existing
Share Appreciation Rights Plan.
Unissued shares under Share Appreciation Rights Plan
At the date of this report, unissued shares of the Company
under the Share Appreciation Rights Plan are:
Expiry date
Number of
SARs
Strike price VWAP
(for the 20 business
days prior to the
grant)
30 September 2024
1,275,004
$3.02
30 September 2024
1,266,667
$2,85
30 September 2025
1,266,666
$2.85
30 September 2024
1,443,667
$1.60
30 September 2025
1,443,667
$1.60
30 September 2026
1,442,666
$1.60
Total
8,138,337
These SARs in the table above do not entitle the holder
to participate in any share issue of the Company.
Dividends
Dividends declared and paid by the Company to members
since the end of the previous financial year were:
Cents
per
share
Total
amount
AUD ’000
Date of
payment
Fully franked:
2024 Interim dividend
3.0
2,741
12 April 2024
2023 Final dividend
4.5
4,139 3 October 2023
Subsequent to the balance sheet date, the Directors have
declared a final dividend, with respect to ordinary shares,
of 2.0 cents per share – fully franked with a payment date
of 3 October 2024. The financial effect of this dividend has
not been brought to account in the consolidated financial
statements for the year ended 30 June 2024 but will be
recognised in the subsequent financial period.
For further details refer to Note 18 Capital and reserves in
this annual report.
| 49
ENERO ANNUAL REPORT 2024
Environmental regulation and performance
The Board believes that the Group has adequate systems
in place for the management of its environmental
requirements and is not aware of any significant breach of
those requirements as they apply to the Group.
Non-audit services
During the year EY the Group’s auditor, has not performed
other services in addition to the audit and review of the
consolidated financial statements.
Details of the amounts paid to the auditor of the Company,
EY, and its related practices, for the statutory audit have
been disclosed in Note 32 Auditor’s remuneration of the
notes to the consolidated financial statements.
Auditor independence
The Lead Auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out
on page 119, and forms part of the Directors’ Report for the
year ended 30 June 2024.
Rounding off
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and, in accordance with
that Class Order, amounts in the consolidated financial
statements and Directors’ Report have been rounded off to
the nearest thousand dollars, unless otherwise stated.
Remuneration Report
The Remuneration Report on pages 56 to 63 forms part of
this Directors’ Report.
Signed on behalf of the Directors in accordance with a
resolution of the Directors:
Ann Sherry AO
Chair
Sydney, 13 September 2024
ENERO ANNUAL REPORT 2024
| 50
Directors’ Report
Operating and financial review
Strategy and operations of the Group
Enero Group is a global company of forward-thinking marketers, technologists and leaders navigating a world of constant
change and disruption. The Group achieves this through an international network of marketing, communications and
advertising technology companies with over 650 employees (at the date of this report) in 11 countries.
Enero’s vision is to leverage our specialist advantage and agility in marketing services and be famous for our progressive
capabilities. We achieve this through deep knowledge and experience in key industries, which delivers growth for our
clients, transforming their brands with creative, technology and data solutions. Our industries of focus are Technology,
Healthcare and Growth Consumer, all of which are supported by long-term positive macroeconomic growth trends. We
differentiate against our competitors through our integrated offering combined with our deep industry specialism, and our
agility to capitalise on new developments in our dynamic sector.
Enero Group remains optimistic about the growth potential of our business across all regions. We are also responding
rapidly to changes in our business, reducing cost to match revenues and maintain margins. We remain responsive to
changing macroeconomic conditions, and our long-term perspective will ensure that we capitalise on opportunities to
evolve and transform the Group as conditions improve.
Enero Group considers the following to be the most relevant risks to the business achieving its strategic, operational and
financial targets:
Potential risk
Risk description
Group’s mitigating actions
Evolving needs
of clients
Changing requirements of clients’
marketing needs may render our
services redundant or unsuitable.
Enero Group continues to invest in the evolution of our
capabilities, both through internal investment as well as
strategic acquisitions. The Enero Board and management
team monitor the evolution of the markets in which we
operate, dynamically adjusting the Group’s strategy as
required. We also work to limit customer concentration,
such that the loss of any single customer would not
significantly impact the Group’s financial performance.
Uncertain
economic
conditions
Global macroeconomic conditions
may impact demand for marketing
services and therefore reduce the
Group’s revenue performance.
Enero Group is a diversified portfolio of businesses, both
geographically and in terms of the types of marketing
services offered. This helps us to remain resilient to
economic volatility. The Group also owns businesses that
have relatively low fixed costs, allowing us to manage the
cost base of the business in accordance with our revenue
performance. We are constantly monitoring and managing
our business to key internal cost ratios to ensure we can
deliver strong shareholder returns even in the face of
volatile market conditions. We also continue to develop
capabilities that differentiate us versus our competitors,
ensuring we are preferred suppliers, and enabling us to
augment and enhance client teams that may have been
impacted by cost reduction initiatives. Certain businesses
in the Group, such as OBMedia, may also have
countercyclical elements, where decreasing revenues may
be mitigated by decreasing costs of sales.
Supply chain
Suppliers no longer provide critical
services/products to the Group, for
commercial, financial (bankruptcy
etc.) or geopolitical reasons.
Enero has a diversified portfolio of supplier relationships
with different contract maturity dates to mitigate the impact
of losing individual suppliers. Most of our suppliers are
service providers with commoditised offerings, which
ensures we are minimally exposed to market price
fluctuations and can find new suppliers with relative ease.
We can source suppliers globally (particularly in the
pandemic era of virtual working), limiting our geopolitical
risk. Our global scale makes us a valuable customer for
our suppliers, which also mitigates commercial risk to
| 51
ENERO ANNUAL REPORT 2024
Potential risk
Risk description
Group’s mitigating actions
these relationships. We regularly review our supplier
relationships to identify risks and ensure they remain
commercially attractive relationships.
OBMedia’s supply chain includes a diversified group of
publishers, agencies, social media platforms, ad networks,
media buyers and other traffic sources. We use processes
and technology to assess traffic quality from these sources.
We proactively manage our publisher traffic and
relationships to ensure quality traffic is sourced.
Employee
attraction and
retention
The Group finds it difficult to
attract and/or retain key talent. As
a talent-based business, a
significant loss of key talent over a
short period could impact the
Group’s financial performance.
As a talent-based business, Enero believes employee
attraction and retention is a key source of competitive
differentiation. As such, we actively invest in talent and
culture, both through Enero’s global People and Culture
Centre of Excellence, as well as within the individual
businesses of the Group. We empower each business in
the Group to develop a unique culture that suits the talent
market they operate in, ensuring each business is best
situated to achieve its People and Culture strategy and
goals. Enero invests heavily in in-house and external
recruitment capabilities, a global Learning and
Development platform, progressive and dynamic workplace
practices and a strong focus on Diversity, Equity and
Inclusion initiatives that are tailored to each market we
operate in. We conduct short-term and long-term
succession and organisational planning for key roles. We
also regularly measure the satisfaction of the Group’s
employees and seek feedback on areas of improvement.
The Nomination and Remuneration Committee of the
Board works closely with the CEO and Chief People and
Culture Officer on the development and execution of the
Group’s People and Culture strategy.
Business
continuity
The Group may be exposed to a
range of different risks that may
adversely affect the day-to-day
operations of the business.
Enero regularly reviews potential business continuity risks
such as Work, Health and Safety risks (WHS), IT and
Cybersecurity risks, and Regulatory and Governance risks.
We have developed plans to mitigate and minimise the
impact of all of these risks, as well as others. The Audit
and Risk Committee of the Board periodically reviews the
Group’s Business Continuity, Disaster Recovery and Crisis
Management plans.
Acquisition
success
Acquisitions may not deliver
expected value to shareholders,
either through commercial
underperformance, integration
difficulty or operational issues.
As a portfolio business, Enero has extensive experience
acquiring and integrating new businesses into the Group.
We conduct extensive due diligence to minimise
commercial and operational risk, as well as developing
integration plans prior to closing M&A transactions, to
ensure we capitalise on the benefits of our acquisitions.
Where appropriate, we may appoint dedicated project
managers to assist with integration efforts. Enero reports
on the performance of acquired businesses and integration
progress to the Board.
We support our acquired businesses on an ongoing basis
through the Enero Centres of Excellence, enabling them to
continually enhance their business and deliver results for
clients.
ENERO ANNUAL REPORT 2024
| 52
Directors’ Report
Potential risk
Risk description
Group’s mitigating actions
Regulatory risk
The Group may be exposed to
certain regulatory risks where
policy or legal developments
impact our success.
Enero Group operates in a relatively low regulation industry
(marketing services), noting that we do not own or sell
media assets (at the time of this report). We regularly
monitor for regulatory changes in our operating markets,
and we engage with relevant regulators and industry
bodies as necessary.
Governance
processes
Insufficient governance and
oversight of the Group’s systems
and processes could create an
environment where we act or
perform in a way that does not
meet shareholder expectations.
As a publicly listed company, Enero Group has dedicated
resources that regularly review our systems and processes
to ensure we operate at the standard expected by
shareholders. We regularly conduct compliance training for
employees to ensure adherence to Group policies.
Legal risk
The Group may be subjected to a
lawsuit that impacts business
operations or financial
performance.
Enero Group has experienced and dedicated internal Legal
resources to ensure that all our businesses are operating
within the correct legal framework for their respective
jurisdictions. The Group’s Legal Centre of Excellence
provides both leadership and support in legal issues,
including dispute management, contracting, employment
matters and M&A.
IT and
Cybersecurity
risk
The Group may be subject to
cybersecurity breaches, or may
not operate in the way required by
certain IT regulations or business
practices, leading to financial, data
or business continuity impacts.
Enero regularly reviews data and privacy regulations to
ensure our systems and processes are up to date with best
practice. We invest in modern cloud infrastructure and
backup systems to deliver consistently high levels of
service. Enero’s IT Centre of Excellence operates as a
central resource for the Group to provide thought
leadership, support and ensure best-practice operations.
The Group regularly conducts cybersecurity risk
assessments and training, and tracks progress against
outstanding issues until they are mitigated.
| 53
ENERO ANNUAL REPORT 2024
Financial performance for the year
The Group achieved Net Revenue of $189.7 million, a
decrease of 21.5% (2023: $241.6 million) compared to
the prior reporting period. Net Revenue declined in both
OBMedia and Technology, Healthcare and Consumer
Practice segments.
Advertising technology platform OBMedia Net Revenue
declines were due to market-wide weakness and
proactive reduction of traffic in FY23 Q4. Current
macroeconomic environment conditions impacting the
technology sector and the sale of the CPR business in
October 2023 impacted Net Revenue in the Technology,
Healthcare and Consumer Practice. This decline was
partially offset by organic Net Revenue growth in both
Healthcare and Consumer verticals. Geographically,
organic Net Revenue growth was achieved in Australia
& Asia whilst the USA and UK & Europe saw a decline.
The Group achieved EBITDA of $37.4 million, a
decrease of 52.6% (2023: $78.8 million) compared to
the prior reporting period. The EBITDA margin
decreased from 32.6% in 2023 to 19.7% in 2024. This
decrease in EBITDA and EBITDA margin was driven by
• Lower EBITDA and EBITDA margins in OBMedia
driven by revenue decline with cost savings
implemented in FY24 Q1 as part of the proactive
management of traffic and further savings in FY24
Q4 in response to continued market-wide
weakness;
• lower EBITDA with flat EBITDA margins in the
Technology, Healthcare and Consumer Practice
segment due to continued weak macroeconomic
conditions in the technology sector with additional
cost savings implemented in Q4;
• partly offset by a reduction in Corporate Costs
driven by FY23 cost initiatives and continued
management of costs throughout the year.
The net profit after tax before significant items
attributable to equity owners was $10.3 million,
compared to $24.4 million in the prior year, driven by
EBITDA decline; lower net finance costs due to debt
repayments; lower present value interest charge relating
to contingent consideration unwind and leases; and
higher effective tax rate due to higher US effective tax
rate and change in profit mix.
The statutory net loss after tax to equity owners was
($44.2) million, compared to a net profit of $56.5 million
in the prior year. In the current year, the Group incurred
an impairment loss of $70.8 million; restructuring costs
and other of $4.9 million and loss on sale of business of
$2.2 million partly offset by a fair value gain of $22.4
million relating to revaluation of future contingent
consideration (2023: the Group incurred a fair value gain
of $34.6 million relating to revaluation of future
contingent consideration partially offset by restructuring
costs and other of $3.4 million).
In the current year, the operating businesses generated
approximately 66% of their Net Revenue and 64% of
their EBITDA from international markets.
A summary of the Group’s results is below:
In thousands of AUD
2024
2023
Net Revenue1
189,712
241,643
EBITDA2
37,358
78,841
Depreciation and amortisation
(9,914)
(10,069)
EBIT
27,444
68,772
Net finance costs
(634)
(1,582)
Present value interest charge
(1,524)
(2,543)
Profit before tax
25,286
64,647
Income tax expense
(6,600)
(15,243)
Profit after tax
18,686
49,404
Non-controlling interests
(8,399)
(25,002)
Net profit after tax before significant
items
10,287
24,402
Significant items (net of tax and NCI)3
(54,474)
32,072
Net (loss)/profit after tax attributable to
equity owners
(44,187)
56,474
Cents per share
Earnings per share (basic) – pre
significant items
11.3
26.4
Earnings per share (basic)
(48.3)
61.1
1. Gross revenue recognised in accordance with AASB 15 less
directly attributable cost of sales.
2. EBITDA, as defined in the basis of preparation section on
page 54.
3. Significant items are explained on page 54 and Note 5.
Reconciliation of EBITDA to statutory profit after tax
In thousands of AUD
2024
2023
Net Revenue1
189,712
241,643
EBITDA2
37,358
78,841
Depreciation of right-of-use assets
(4,402)
(4,253)
Depreciation of plant and
equipment
(1,460)
(2,077)
Amortisation of intangibles
(4,052)
(3,739)
Net finance costs
(634)
(1,582)
Present value interest charge
(1,524)
(2,543)
Loss on sale of controlled entities3
(2,154)
–
Incidental acquisition costs3
(392)
(216)
Restructuring costs3
(4,539)
(3,135)
Impairment loss3
(70,827)
–
Contingent consideration fair
value gain/(loss)3
22,421
34,648
Statutory profit before tax
(30,205)
95,944
Income tax expense
(6,933)
(14,468)
Statutory profit after tax
(37,138)
81,476
1. Gross revenue recognised in accordance with AASB 15 less
directly attributable cost of sales.
2. EBITDA, as defined in the basis of preparation section on
page 54.
3. Significant items are explained on page 54 and Note 5.
ENERO ANNUAL REPORT 2024
| 54
Directors’ Report
Significant items
2024
•
The Group recognised an impairment loss of
$70,827,000 relating to ROI DNA and GetIT
intangibles and impairment of right of use asset
relating to the CPR disposal
•
The Group recognised a contingent consideration
fair value gain of $22,421,000 relating to a change
in the best estimate of future contingent
consideration payable to the vendors of ROI DNA
and GetIT.
•
The Group incurred $4,539,000 of restructuring
costs relating to a restructuring process to mitigate
costs across the Group. The majority of the costs
related to redundancy costs in OBMedia relating to
rebase of revenue and deployment of enhanced
software tools; and in the agencies across the
group, which continued to further streamline their
teams across multiple geographies.
•
The Group recognised a $2,154,000 loss on sale
of business relating to the CPR disposal on 31
October 2023
•
The Group incurred incidental costs of $392,000
relating to the CPR disposal and the OBMedia
strategic review
2023
•
The Group recognised a contingent consideration
fair value gain of $34,648,000 relating to a change
in the best estimate of future contingent
consideration payable to the vendors of McDonald
Butler Associates, ROI DNA and GetIT.
•
The Group incurred $3,135,000 of restructuring
costs relating to a restructuring process to mitigate
costs across the Group. The majority of the costs
related to redundancy costs in the agencies across
the group, which continued to further integrate its
communication and marketing services businesses
into a single account management team.
•
The Group incurred incidental costs of $216,000
relating to acquisition of ROI DNA Inc. and GetIT
Pte Ltd.
Geographical performance
In thousands of AUD
2024
2023
Net Revenue1
Australia and Asia
66,355
64,462
UK and Europe
30,652
31,265
USA
92,705
145,916
Total Operating units
189,712
241,643
EBITDA2
Australia and Asia
13,527
11,856
UK and Europe
4,918
4,145
USA
27,881
74,505
Total Operating units
46,326
90,506
Support office
(7,882)
(9,164)
Share-based payments
charge
(1,086)
(2,501)
Total Group
37,358
78,841
In thousands of AUD
2024
2023
EBITDA2 margin
Australia and Asia
20.4%
18.4%
UK and Europe
16.0%
13.3%
USA
30.1%
51.1%
Total Operating units
24.4%
37.5%
Total Group
19.7%
32.6%
1. Gross revenue recognised in accordance with AASB 15 less
directly attributable cost of sales.
2. EBITDA, as defined in the basis of preparation section on
page 54.
Acquisitions
2024
There were no additions by the Group for the year
ended 30 June 2024.
2023
The Group completed the acquisition of ROI DNA Inc.
and GetIT Pte Ltd on 1 July 2022. Refer to Note 23
Acquisitions for details.
Disposals
2024
The Group completed the disposal of Communications
and Public Relations (CPR) on the 31st October 2023.
Refer to Note 24 Disposals for details.
2023
There were no disposals by the Group for the year
ended 30 June 2023.
Basis of preparation
This Report includes Net Revenue and EBITDA, which
are measures used by the Directors and management in
assessing the ongoing performance of the Group.
EBITDA is a non-IFRS measure and has not been
audited or reviewed.
EBITDA is calculated as profit before interest, taxes,
depreciation, amortisation, and any significant items.
EBITDA is reconciled in the table on page 53.
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ENERO ANNUAL REPORT 2024
Cash and Debt
In thousands of AUD
2024
2023
Cash and cash equivalents
46,703
52,432
Interest bearing liabilities
(3,000)
(8,735)
Contingent consideration
liabilities
(5,499)
(30,740)
Net cash¹
38,204
12,957
1.
Net cash excludes lease liabilities recognised as a result of the
adoption of AASB16 Leases as they are considered operational
liabilities.
The Group had $38.2 million (2023: $13.0m) in net cash
as at 30 June 2024.
Capital management
The Group’s capital management strategy aims to
balance returns to shareholders through dividends,
funding acquisition and investment opportunities, as well
as maintaining adequate cash reserves for existing
businesses. The Group continues to seek acquisition
opportunities that are aligned with Group strategy from a
geographical or expansion of services perspective.
Cash flow – Operating activities
Cash inflows from operating activities was $27.0 million
(2023: $61.5 million). The decrease in inflows is
primarily attributable to EBITDA decline. The Group
converted 88% of EBITDA to cash for the year ended 30
June 2024 (2023: 102%).
Cash flow – Investing activities
Cash outflows from investing activities was $4.6 million
(2023: $35.7 million). The decrease in outflows was
primarily due to acquisitions completed during the prior
year.
Cash flow – Financing activities
Net cash outflows from financing activities was $28.1
million, primarily due to $6.9 million (2023: $12.1 million)
in dividends paid to Enero Group Limited shareholders
in addition to $8.3 million (2023: $26.3 million) in
dividends paid to minority shareholders of controlled
entities. Other movements included loan repayments of
$5.7 million (2023: $28.9m) and share buy-backs of
$2.6m performed during the year.
Contingent consideration liabilities
The Company entered into contingent consideration
arrangements in relation to its acquisition of McDonald
Butler Associates, ROI DNA and GetIT.
As at 30 June 2024, the Company’s estimated
contingent consideration liability is $5.5 million (2023:
$30.7 million).
Reconciliation of carrying amounts of contingent
consideration payable:
In thousands of AUD
30 June 2023
30,740
Payments made
(3,927)
Fair value gain recognised in relation to
McDonald Butler Associates, ROI DNA
and GetIT
(22,421)
Present value interest unwind and
foreign exchange movements
1,107
30 June 2024
5,499
Maturity profile (at present value):
FY2025
3,740
FY2026
1,759
Total
5,499
Refer to Note 23 Acquisitions for further information.
ENERO ANNUAL REPORT 2024
| 56
Directors’ Report
Remuneration Report – Audited
Contents
1 Introduction
2 Key Management Personnel (KMP) disclosed in this
report
3 Remuneration Governance
4 Executive Remuneration policy and framework
5 Executive service agreements
6 Non-Executive Directors
7 Directors’ and Executive Officers’ remuneration
8 Share-based payments
9 Directors’ and Executive Officers’ holdings of shares
10 Loans to Key Management Personnel
11 Remuneration and Group performance
1 Introduction
The Directors of Enero Group Limited present this
Remuneration Report for the Group for the year ended
30 June 2024. The information provided in the
Remuneration Report has been audited as required by
section 308(3C) of the Corporations Act 2001 and forms
part of the Directors’ Report.
The Remuneration Report outlines practices and
specific remuneration arrangements that apply to Key
Management Personnel (KMP) in accordance with the
requirements of the Corporations Act 2001 and explains
how the Company’s financial performance has driven
remuneration outcomes.
2 Key Management Personnel (KMP) disclosed in this
report
KMP comprise the Directors of the Company and
Executives. The KMP covered in this Remuneration
Report are those people having authority and
responsibility for planning, directing and controlling the
activities of the Group, directly or indirectly. The table
below outlines the KMP at any time during the financial
year; and unless otherwise indicated, they were KMP for
the entire year.
Name
Role
Non-Executive
Directors
Ann Sherry
Non-Executive Director (Chair)
Anouk Darling
Non-Executive Director
Ian Rowden
Non-Executive Director
David Brain
Non-Executive Director
Louise Higgins
Non-Executive Director
Executives
Brent Scrimshaw
Chief Executive Officer
Carla Webb-Sear
Chief Financial Officer
Fiona Chilcott
Chief People and Culture Officer
(Resigned 1 September 2023)
3 Remuneration Governance
The Board has established the Remuneration and
Nominations Committee (‘Committee’). It is responsible
for making recommendations on remuneration matters
to the Board on:
–
the over-arching executive remuneration framework;
–
operation of the incentive plans which apply to
Executives including key performance indicators and
performance hurdles;
–
remuneration levels of Company Executives;
–
appointment of the Chief Executive Officer, senior
Executives and Directors themselves; and
–
Non-Executive Director fees.
The Committee’s objective is to ensure that
remuneration policies and structures are fair,
competitive to attract suitably qualified candidates,
reward the achievement of strategic short-term and
long-term objectives and achieve long-term value
creation for shareholders.
The Corporate Governance Statement (available in the
Corporate Governance section of the Company’s
website) provides further information on the role of the
Committee.
The Remuneration and Nomination Committee operates
independently of the Enero Executive team and
engages directly with remuneration advisers.
4 Executive Remuneration policy and framework
The objective of the Group’s executive reward
framework is to attract, motivate and retain employees
with the required capabilities and experience to ensure
the delivery of business strategy aligning with the
interests of shareholders.
The framework aligns executive reward with the
achievement of strategic objectives resulting in
remuneration structures taking into account:
–
the responsibility, performance and experience of
key management personnel;
–
the Key Management Personnel’s ability to control
the relevant Company’s performance; and
–
the Group’s performance, including:
–
the Group’s earnings with profit a core
component of remuneration design;
–
the growth in share price and delivering constant
returns on shareholder wealth; and
–
the Group’s achievement of strategic objectives.
For Company Executives, the remuneration framework
currently has the following components:
–
fixed remuneration: comprising base pay, benefits
and superannuation;
–
short-term incentive: comprising an annual cash
bonus; and
–
long-term incentive: equity-based Share
Appreciation Rights Plan.
In structuring the remuneration mix for each role, the
Board aims to balance fixed and variable remuneration
to best achieve short-term and long-term performance
outcomes.
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ENERO ANNUAL REPORT 2024
4(a) Fixed remuneration
Fixed remuneration consists of base remuneration
(which is calculated on a total cost-to-Company basis
and includes fringe benefits tax charges related to
employee benefits), as well as employer contributions to
superannuation and pension funds.
Remuneration levels are reviewed annually by the
Remuneration and Nomination Committee through a
process that considers the responsibility, performance
and experience of the individual and the overall
performance of the Group and ensures competitive
market salaries are provided. An Executive’s
remuneration may also be reviewed on promotion.
There are no guaranteed fixed remuneration increases
included in any Executive contracts.
4(b) Performance-linked remuneration
Performance-linked remuneration includes both short-
term incentives (STI) and long-term incentives (LTI) and
is designed to reward KMPs, Executives and key
leadership for meeting or exceeding financial, strategic
and personal targets.
The official measures are EBITDA and EPS for STI as
outlined in the table
The STI for the CEO and Company Executives align
Executives with the creation of shareholder value
through driving EBITDA improvements and Earnings per
Share (EPS).
A component of the STI is also subject to the
achievement of pre-determined KPIs for the individual.
Short-term incentives (STI):
The purpose of STI is to motivate and reward Executives for contributing to the delivery of annual business performance
as assessed against financial and non-financial measures.
Participant
Performance measures and rationale
CEO
The STI is an annual maximum short-term incentive payment of 125% of the fixed
remuneration determined by the achievement of EBITDA hurdles and Earnings Per Share
pre significant items (EPS) growth hurdles set by the Remuneration and Nomination
Committee. The hurdles are set each financial year determined by reference to business
priorities. A component of the STI is also subject to the achievement of pre-determined
KPIs for the individual. Where the STI opportunity exceeds 80%, a portion of the STI
award may be deferred up to 25% in the form of restricted ordinary shares. Any restricted
shares will be held in trust for a period determined by the Board at the time of issue.
Company Executive
The STI is an annual cash-based maximum short-term incentive payment of 100% for the
CFO and 70% for all other Company Executives of the fixed remuneration determined by
the achievement of EBITDA hurdles and Earnings Per Share pre significant items (EPS)
growth hurdles set by the Remuneration and Nomination Committee. The hurdles are set
each financial year determined by reference to business priorities. A component of the STI
is also subject to the achievement of pre-determined KPIs for the individual.
The STIs are paid in cash following the end of the financial year and approval from the Remuneration and Nomination
Committee. The Company Executives are not contractually entitled to the STI in their respective employment agreements
and the Remuneration and Nomination Committee retains discretion to withdraw or amend the STI at any time.
The Remuneration and Nomination Committee has the discretion to take into account any significant items in determining
whether the financial KPIs have been achieved, where it is considered appropriate for linking remuneration reward to
Company performance.
ENERO ANNUAL REPORT 2024
| 58
Directors’ Report
Long-term incentives (LTI):
The purpose of the LTI is to align Executive remuneration with long-term shareholder value and the performance of the
Group. The LTI is provided as an equity-based incentive in the Company under the terms of the Share Appreciation Rights
Plan (SARP).
Description
The SAR Plan grants rights to shares in the Company on the achievement of appreciation
in the Company’s share price over the vesting period.
Enero’s Board may determine whether or not the grant of rights is conditional on the
achievement of performance hurdles (including service conditions), and if so the nature of
those hurdles.
No dividends or voting rights are attached to the SARs.
Eligibility
The plan allows for the Board to determine who is entitled to participate in the SARP and it
may grant rights accordingly.
Performance period
The performance period for the LTI is generally three years, with SAR vesting in equal
tranches of 1/3 each year over the performance period.
Rights
The exercise of each right will entitle the rights holder to receive a fraction of an ordinary
share based on a conversion formula of E = (A – B) / A, where:
–
E is the share right entitlement;
–
A is the volume weighted average price (VWAP) for the Company’s shares for the 20
business days prior to the vesting date of the rights; and
–
B is the VWAP for the Company’s shares for the 20 business days before the rights
were granted.
If A – B is less than or equal to zero, the share right will not vest and will immediately lapse
on the applicable vesting date.
The number of shares to be granted will equal the number of SARs awarded multiplied by
the above conversion formula.
Rights expire at 15 business days after the relevant vesting date or the termination of the
individual’s employment.
Other conditions
Cessation of employment will result in the lapsing of any unvested SARs.
One share right shall never convert into more than one share in the capital of the Company.
The Board may exercise discretion on early vesting of rights in the event of a change of
control of the Group.
Refer to the table below for a summary of SARs on issue.
Refer to Section 8 (Share-based payments) of the Remuneration Report for further information regarding the SARs.
Summary of Share Appreciation Rights on issue:
Issue date
21 October 2021
21 October 2022
30 October 2023
SARs issued
4,525,000
4,425,000
4,550,000
Participants
Senior Executives
Senior Executives
Senior Executives
VWAP for the 20 business days prior to
the grant (B)
$3.02
$2.85
$1.60
Vesting dates:
20 business days after the release of the
Group financial report for the year ended:
Tranche 1 (1/3)
Tranche 2 (1/3)
Tranche 3 (1/3)
30 June 2022
30 June 2023
30 June 2024
30 June 2023
30 June 2024
30 June 2025
30 June 2024
30 June 2025
30 June 2026
Last expiry date
30 September 2024
30 September 2025
30 September 2026
Outstanding SARs as at 30 June 2024
1,275,004
2,533,333
4,330,000
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ENERO ANNUAL REPORT 2024
5 Executive service agreements
It is the Group’s policy that service contracts for Key Management Personnel are in force either for a fixed period, with an
extension period negotiable after completion of the initial term, or on a rolling basis. The agreements are capable of
termination, acknowledging appropriate notice periods, and the Group retains the right to terminate the contract
immediately for contractual breach by the Executive or by making payment in lieu of notice.
The service agreements outline the components of remuneration paid to the Key Management Personnel. Remuneration
levels are reviewed annually by the Remuneration and Nomination Committee or in accordance with the terms of the
service agreements.
Summary terms for current service agreements for Key Management Personnel:
Key Management Personnel
Duration of contract
Notice period on
termination by
Group
Notice period
on resignation by
Key Management
Personnel
Termination payment
on termination by
Group
(i) (ii) (iii) (iv)
Termination payment on
resignation by Key
Management Personnel
(i) (ii) (iv)
Chief Executive
Officer
30 June 2026
6 months
6 months
6 months base salary 6 months base salary
Chief Financial
Officer
Rolling
6 months
6 months
6 months base salary 6 months base salary
(i)
In addition to termination payments, Key Management Personnel are also entitled to receive, on termination of their employment, their statutory
entitlements of accrued annual and long service leave, together with any superannuation benefits.
(ii) Includes any payment in lieu of notice.
(iii) No termination payment is due if termination is for serious misconduct.
(iv) Executives are entitled to a pro-rata STI payment on termination, except for termination for serious misconduct.
Remuneration details of Executives are set out in Section 7 Directors’ and Executive Officers’ remuneration.
6 Non-Executive Directors
The Company’s Constitution provides that the Non-Executive Directors are each entitled to be paid such remuneration
from the Company as the Directors decide for their services as Director, but the total amount provided to all Non-Executive
Directors for their services must not exceed in aggregate in any financial year the amount fixed by the Company in a
general meeting. This amount has been fixed by the Company at $750,000 for the financial year ended 30 June 2024.
Total remuneration paid to Non-Executive Directors for the year ending 30 June 2024 amounted to $590,000
(30 June 2023: $552,500), which is 78.7% (30 June 2023: 73.7%) of the annual aggregate cap.
The remuneration of Non-Executive Directors does not include any performance-based pay and they do not participate in
any equity-based incentive plans. Directors may be reimbursed for travelling and other expenses incurred in attending to
the Company’s affairs. Directors may be paid such additional or special remuneration as the Directors decide is
appropriate where a Director performs extra services or makes special exertions for the benefit of the Company.
The following Non-Executive Director fees (inclusive of superannuation) have been applied in the years ended
30 June 2024 and 30 June 2023:
2024
$
2023
$
Base fees – annual
Chair
150,000
150,000
Other Non-Executive Directors
100,000
100,000
Committee fees – annual
Audit and Risk Committee – Chair
20,000
20,000
Remuneration and Nomination Committee – Chair
20,000
20,000
Remuneration details of Non-Executive Directors are set out in Section 7 Directors’ and Executive Officers’ remuneration.
ENERO ANNUAL REPORT 2024
| 60
Directors’ Report
7 Directors’ and Executive Officers’ remuneration
7(a) Directors’ and Executive Officers’ short-term cash benefits, post-employment benefits, other long-term remuneration
and equity-based remuneration
Details of the nature and amount of each element of the remuneration of each Director of the Company, and each of the
Executives of the Company who are KMPs, are shown in the table below:
Short-term benefits
Post-
employment
Long-term
benefits
Share-based
payments
Salary
and fees
Cash
STI(i)
Annual
leave(ii) Superannuation
Long service
leave(ii)
Termination
benefit
Value of
Share
Appreciation
Rights (LTI)(iii)
Total
Proportion of
total
remuneration
performance
related(iv)
$
$
$
$
$
$
$
$
%
Non-Executive Directors
Ann Sherry
2024
150,000
–
–
–
–
–
–
150,000
–
2023
142,500
–
–
–
–
–
–
142,500
–
Anouk Darling
2024
100,000
–
–
-
–
–
–
100,000
–
2023
93,750
–
–
-
–
–
–
93,750
–
Ian Rowden
2024
120,000
–
–
–
–
–
–
120,000
–
2023
111,250
–
–
–
–
–
–
111,250
–
David Brain
2024
100,000
–
–
–
–
–
–
100,000
–
2023
93,750
–
–
–
–
–
–
93,750
–
Louise Higgins
2024
120,000
–
–
–
–
–
–
120,000
–
2023
111,250
–
–
–
–
–
–
111,250
–
Executive Director
Brent Scrimshaw
Director and CEO
2024
846,762
327,810
30,244
27,399
5,044
–
488,068
1,725,327
47.29
2023
823,408
424,350
5,931
25,292
4,648
–
719,365
2,002,994
57.10
Executives
Carla Webb-Sear
Chief Financial Officer
2024
445,101
141,750
5,870
27,399
2,541
–
235,709
858,370
43.97
2023
424,209
189,000
(11,464)
25,292
2,133
–
323,377
952,547
53.79
Fiona Chilcott A
Chief People and
Culture Officer
2024
65,902
–
1,307
6,850
22,516
126,354
(523,277)
(300,348)
174.22
2023
386,494
172,950
2,120
25,292
7,319
–
283,355
877,530
52.00
A Fiona Chilcott resigned effective 1 September 2023
(i)
The short-term incentive bonus is for performance during the 30 June 2024 and 30 June 2023 financial year using the criteria set out on page 57. The table
above includes the expense incurred during the financial year for the bonuses awarded. Refer to the table on page 61 for the bonuses awarded.
(ii) Amounts represent movements in employee leave entitlements, with a negative balance representing an overall reduction in the employee leave provision
compared with the prior year.
(iii) Share Appreciation Rights are calculated at the date of grant using the Monte Carlo simulation model. The fair value is allocated to each reporting period on
a straight-line basis over the period from the service commencement date to the vesting date.
(iv) Percentages are based on total remuneration, including equity, cash, post-employment benefits and other compensation.
(v) Executives receive salary continuance insurance cover. There are no other benefits offered by the Company.
7(b) Performance-related remuneration
Details of the Company’s policy in relation to the proportion of remuneration that is performance-based are discussed
on page 57.
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ENERO ANNUAL REPORT 2024
7(c) STI included in remuneration
Details of the vesting profile of the short-term incentive bonuses awarded as remuneration to each Executive of the
Company and the Group, who are classified Key Management Personnel, are discussed below.
Short-term incentive bonus(i)
Maximum
STI
$
Actual STI included in
remuneration
$(iii)
Actual STI as %
of maximum
STI
STI forfeited
as % of
maximum STI
Actual STI as a %
of fixed
remuneration(ii)
%
vested
in year
Company Executives
Brent Scrimshaw (125%)
1,092,701
327,810
30%
70%
38%
100%
Carla Webb-Sear (100%)
472,500
141,750
30%
70%
30%
100%
(i)
Amounts included in remuneration for the financial year represent the amount that vested in the financial year based on the achievement of
specified performance criteria as discussed in Section 4(b) Performance-linked remuneration and are approved following the completion of the
reporting period audit.
(ii) Fixed remuneration is salary plus superannuation.
(iii) Actual STI included in remuneration includes any superannuation contribution amounts.
Annual performance for the CEO is assessed against the following measures in determining the percentage of fixed
remuneration payable as STI:
Measure
Weighting
Target
Outcome
Outcome as % of
target
Financial (80% of STI)
EBITDA
40%
$62.5 million
$37.4 million
59.8%
EPS Growth
60%
10%
(179%)
(1790%)
Non-financial (20% of STI)
Strategy and Culture
Delivery of measure
Met
–
Annual performance for Company Executives is assessed against the following measures in determining the percentage of
fixed remuneration payable as STI:
Measure
Weighting
Target
Outcome
Outcome as % of
target
Financial (80% of STI)
EBITDA
60%
$62.5 million
$37.4 million
59.8%
EPS Growth
40%
10%
(179%)
(1790%)
Non-financial (20% of STI)
Strategy and Culture
Delivery of measure
Met
–
The Remuneration and Nomination Committee has reviewed the financial performance as well as the achievement of
strategic directives which took place during the financial year. The Remuneration and Nomination Committee exercised its
discretion on current financial year outcomes determined by the achievement of strategic directives such as the successful
delivery of growth in clients over a set target, diversification of revenue, cost saving targets achieved and progress made
on portfolio transformation.
8 Share-based payments
8(a) Share-based payment arrangements granted as remuneration
Details of SARs that were granted as compensation to each Key Management Personnel during the reporting period are
as follows:
Type of
rights
granted
during 2024
Number of
rights granted
during 2024
Grant date
Fair value per
right at grant date
$
VWAP (for the 20
business days prior
to the grant)
$
Expiry date (i)
Company Executives
Brent Scrimshaw
SAR
1,275,000
30 Oct 2023
0.19 – 0.34
1.60
30 Sept 2026
Carla Webb-Sear
SAR
625,000
30 Oct 2023
0.19 – 0.34
1.60
30 Sept 2026
(i)
The vesting date of the SARs is 20 business days after the release of the Group’s financial report for the relevant financial year which is
assumed to be 15 September. The last expiry date of the rights is 15 days after the relevant vesting date for the year. This is estimated to be
around, but no later than, 30 September each year.
ENERO ANNUAL REPORT 2024
| 62
Directors’ Report
b) Analysis of share-based payments granted as remuneration
Details of the vesting profiles of the rights granted as remuneration to a Director of the Company, and each of the KMPs,
are shown below:
Number of
rights
granted
Type of rights
granted
Grant date
%
vested
in year
%
lapsed
in year
%
exercised
in year
% remaining to
vest
Vesting date(i)
Company Executives
Brent Scrimshaw
1,250,000
SAR
21 Oct 2020
33
–
33
–
15 Sep 2021, 15
Sep 2022, 15 Sep
2023
1,300,000
SAR
21 Oct 2021
–
33
–
33
15 Sep 2022, 15
Sep 2023 and 15
Sep 2024
1,275,000
SAR
21 Oct 2022
–
33
–
66
15 Sep 2023, 15
Sep 2024 and 15
Sep 2025
1,275,000
SAR
30 Oct 2023
–
–
–
100
15 Sep 2024, 15
Sep 2025 and 15
Sep 2026
Carla Webb-
Sear
650,000
SAR
21 Oct 2021
–
33
–
33
15 Sep 2022, 15
Sep 2023 and 15
Sep 2024
624,999
SAR
21 Oct 2022
–
33
–
66
15 Sep 2023, 15
Sep 2024 and 15
Sep 2025
625,000
SAR
30 Oct 2023
–
–
–
100
15 Sep 2024, 15
Sep 2025 and 15
Sep 2026
(i)
The vesting date of the SARs is 20 business days after the release of the Group’s financial report for the relevant financial year which is
assumed to be 15 September.
8(c) Analysis of movements in rights and value of rights exercised
The movement during the reporting period in the number of rights over ordinary shares in Enero Group Limited held,
directly, indirectly or beneficially, by each KMP, including their related entities, and value of rights exercised during the
year, is as follows:
Granted
held at
1 Jul 2023
Granted as
remuneration
in year
Expired
Cancelled
Exercised
Granted
held at
30 Jun 2024
Vested
during
the year
Vested and
exercisable at
30 Jun 2024
Value of
rights
granted
during
the year
$
Value of
rights
exercised
during the
year
$
Director
Brent Scrimshaw
2,558,335
1,275,000
(858,333)
–
(416,668)
2,558,334 416,668
– 343,443
159,584
Executives
Carla Webb-Sear
1,058,333
625,000
(425,000)
–
–
1,258,333
–
– 168,354
–
Fiona Chilcott
925,001
–
–
(925,001)
–
–
–
–
–
–
No share-based payments held by KMP are vested but not exercisable at 30 June 2024.
No share-based payments were held by KMP related parties.
No terms of equity-settled share-based payment transactions (including rights granted as compensation to Key
Management Personnel) have been altered or modified by the issuing entity during the reporting period or the prior period.
| 63
ENERO ANNUAL REPORT 2024
9 Directors’ and Executive Officers’ holdings of shares
The movement during the reporting period in the number of ordinary shares in Enero Group Limited, held directly, indirectly
or beneficially, by each KMP, including their related parties, is as follows:
Held at
1 July 2023
Purchases
Issued as
remuneration
Received on
exercise of
rights
Sales
Held at
30 June 2024
Directors
Ann Sherry
50,000
–
–
–
–
50,000
Brent
Scrimshaw
474,804
–
–
16,330
–
491,134
Anouk Darling
34,991
–
–
–
–
34,991
Ian Rowden
80,000
15,000
–
–
–
95,000
David Brain
120,500
–
–
–
–
120,500
Louise Higgins
12,699
–
–
–
–
12,699
Executives
Carla Webb-
Sear
17,175
–
–
–
–
17,175
10 Loans to Key Management Personnel
No loans to Key Management Personnel and their related parties were made during the year or were outstanding at the
reporting date.
11 Remuneration and Group performance
The Remuneration and Nomination Committee has given consideration to the Group’s performance and consequences on
shareholder wealth in the current financial year and the four previous financial years. Financial performance from
operations of the current and last four financial years is indicated in the following table:
30 June
2024
30 June
2023
30 June
2022
30 June
2021
30 June
2020
Metric
Net Revenue ($’000)
189,712
241,643
193,426
160,634
135,825
EBITDA1 ($’000)
37,358
78,841
66,196
49,904
29,230
EBITDA2 margin (%)
19.7%
32.6%
34.2%
31.1%
21.5%
Net profit/(loss) to equity holders ($’000)
(44,187)
56,474
25,387
(402)
10,707
Net profit to equity holders pre significant
items ($’000)
10,287
24,402
27,112
22,835
12,881
Earnings Per Share pre significant items 3
11.3
20.3
30.9
26.4
15.0
Earnings Per Share pre significant items
growth (%)
(44.3%)
(34%)
17%
76%
6%
Earnings Per Share basic (cps)
(48.3)
61.1
28.9
(0.5)
12.5
Total Dividends Per Share (cps)
5.0
11.0
12.5
14.9
6.0
Opening share price (1 July) ($)
1.46
2.90
2.56
1.36
1.49
Closing share price (30 June) ($)
1.24
1.46
2.90
2.51
1.40
1.
EBITDA, as defined in the basis of preparation section on page 54.
2.
EBITDA margin is EBITDA divided by Net Revenue.
3.
Earnings per Share pre significant items is using earnings before significant items noted in Note 5.
The Remuneration and Nomination Committee has determined appropriate remuneration structures which correlate
remuneration of KMPs with future shareholder wealth.
The Remuneration and Nomination Committee considers the achievement of financial targets (EBITDA hurdles and EPS
growth hurdles) as well as non-financial measures (strategic objectives) in setting the short-term incentives. Short-term
incentives have been set by the Remuneration and Nomination Committee based on achievement of certain EBITDA and
EPS targets, which align remuneration with increases in profitability.
Longer-term profitability, changes in share price and return of capital are factors the Remuneration and Nomination
Committee takes into account in assessing the LTI. The SAR plan aligns remuneration with share price performance
because it only rewards KMPs for increases in the share price over the vesting period in addition to completing a service
period.
End of Remuneration Report.
ENERO ANNUAL REPORT 2024
| 64
Consolidated Income Statement
for the year ended 30 June 2024
The notes on pages 69 to 111 are an integral part of this consolidated financial statements.
In thousands of AUD
Note
2024
2023
Gross revenue
3
804,474
740,207
Directly attributable costs of sales
3
(614,762)
(498,564)
Net Revenue
189,712
241,643
Other income
142
106
Employee expenses
(133,442)
(141,647)
Occupancy costs
(1,409)
(1,568)
Travel expenses
(1,652)
(2,013)
Communication expenses
(2,026)
(2,364)
Compliance expenses
(2,329)
(3,348)
Depreciation and amortisation expenses
(9,914)
(10,069)
Administration expenses
(11,638)
(11,968)
Impairment loss
(70,827)
-
Loss on disposal of controlled entities
24
(2,154)
-
Incidental acquisition costs
(392)
(216)
Contingent consideration fair value gain/(loss)
14
22,421
34,648
Finance income
400
307
Finance costs
4
(2,558)
(4,432)
Restructuring costs
(4,539)
(3,135)
(Loss)/Profit before income tax
(30,205)
95,944
Income tax expense
6
(6,933)
(14,468)
(Loss)/Profit for the year
(37,138)
81,476
Attributable to:
Equity holders of the parent
(44,187)
56,474
Non-controlling interests
7,049
25,002
(37,138)
81,476
Basic earnings per share (AUD cents)
19
(48.3)
61.1
Diluted earnings per share (AUD cents)
19
(48.3)
60.7
| 65
ENERO ANNUAL REPORT 2024
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2024
The notes on pages 69 to 111 are an integral part of this consolidated financial statements.
In thousands of AUD
Note
2024
2023
(Loss)/Profit for the year
(37,138)
81,476
Other comprehensive income
Total items that will not be reclassified subsequently to profit or loss
–
–
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations
(1,879)
7,610
Total items that may be reclassified subsequently to profit or loss
(1,879)
7,610
Other comprehensive (loss)/income for the year, net of tax
(1,879)
7,610
Total comprehensive (loss)/income for the year
(39,017)
89,086
Attributable to:
Equity holders of the parent
(46,062)
63,792
Non-controlling interests
7,045
25,294
(39,017)
89,086
ENERO ANNUAL REPORT 2024
| 66
Consolidated Statement of Changes in Equity
for the year ended 30 June 2024
Opening balance at 1 July 2023
117,815
65,306
15,636
7,900
4,990 211,647
7,173 218,820
Loss for the year
–
(44,187)
–
–
– (44,187)
7,049 (37,138)
Other comprehensive income for
the year, net of tax
–
–
–
–
(1,875)
(1,875)
(4)
(1,879)
Total comprehensive loss for the
year
–
(44,187)
–
–
(1,875) (46,062)
7,045 (39,017)
Transactions with owners
recorded directly in equity:
Shares issued to employees on
exercise of Share Appreciation
Rights
18
52
–
–
(52)
–
–
–
–
Transfer to profit appropriation
reserve
–
(5,206)
5,206
–
–
–
–
–
Share buy-back
18
(2,605)
–
–
–
–
(2,605)
–
(2,605)
Dividends paid to equity holders
18
–
–
(6,880)
–
–
(6,880)
(8,324) (15,204)
Share-based payment expense
–
–
–
1,086
–
1,086
–
1,086
Closing balance at 30 June 2024
115,262
15,913
13,962
8,934
3,115 157,186
5,894 163,080
The notes on pages 69 to 111 are an integral part of this consolidated financial statements.
Attributable to owners of the Company
In thousands of AUD
Note
Share
capital
Retained
profits/
(Accumulated
losses)
Profit
appropriation
reserve
Share-
based
payment
reserve
Foreign
currency
translation
reserve
Total
Non-
controlling
interests
Total
equity
Opening balance at 1 July 2022
104,861
8,832
27,690
8,089
(2,328) 147,144
8,182 155,326
Profit for the year
–
56,474
–
–
–
56,474
25,002
81,476
Other comprehensive income for
the year, net of tax
–
–
–
–
7,318
7,318
292
7,610
Total comprehensive income for
the year
–
56,474
–
–
7,318
63,792
25,294
89,086
Transactions with owners
recorded directly in equity:
Shares issued to vendors of ROI
DNA and GetIT
18
10,857
–
–
–
–
10,857
–
10,857
Shares issued to employees on
exercise of Share Appreciation
Rights
18
2,690
–
–
(2,690)
–
–
–
–
Share buy-back
18
(593)
–
–
–
–
(593)
–
(593)
Dividends paid to equity holders
18
–
–
(12,054)
–
– (12,054)
(26,303) (38,357)
Share-based payment expense
–
–
–
2,501
–
2,501
–
2,501
Closing balance at 30 June 2023
117,815
65,306
15,636
7,900
4,990 211,647
7,173 218,820
| 67
ENERO ANNUAL REPORT 2024
Consolidated Statement of Financial Position
as at 30 June 2024
The notes on pages 69 to 111 are an integral part of this consolidated financial statements.
In thousands of AUD
Note
2024
2023
Assets
Cash and cash equivalents
7
46,703
52,432
Trade and other receivables
8
77,953
74,801
Other assets
9
7,534
7,744
Income tax receivable
6
-
3,298
Total current assets
132,190
138,275
Deferred tax assets
6
2,174
1,582
Plant and equipment
10
1,789
2,567
Right-of-use assets
11
14,611
12,980
Other assets
9
271
169
Intangible assets
12
149,852
227,683
Total non-current assets
168,697
244,981
Total assets
300,887
383,256
Liabilities
Trade and other payables
13
101,378
98,316
Contingent consideration payable
14
3,740
4,316
Lease liabilities
15
4,149
4,264
Employee benefits
16
5,577
5,857
Income tax payable
6
1,072
161
Interest bearing liabilities
17
3,000
–
Total current liabilities
118,916
112,914
Contingent consideration payable
14
1,759
26,424
Lease liabilities
15
11,598
9,878
Employee benefits
16
1,167
1,027
Deferred tax liabilities
6
4,367
5,458
Interest bearing liabilities
17
–
8,735
Total non-current liabilities
18,891
51,522
Total liabilities
137,807
164,436
Net assets
163,080
218,820
Equity
Share capital
18
115,262
117,815
Other reserves
12,049
12,890
Profit appropriation reserve
13,962
15,636
Retained earnings
15,913
65,306
Total equity attributable to equity holders of the parent
157,186
211,647
Non-controlling interests
5,894
7,173
Total equity
163,080
218,820
ENERO ANNUAL REPORT 2024
| 68
Consolidated Statement of Cash Flows
for the year ended 30 June 2024
The notes on pages 69 to 111 are an integral part of this consolidated financial statements.
In thousands of AUD
Note
2024
2023
Cash flows from operating activities
Cash receipts from customers
817,213
744,505
Cash paid to suppliers and employees
(784,212)
(663,778)
Cash generated from operations
33,001
80,727
Interest received
391
307
Income taxes paid
(4,822)
(17,704)
Interest paid
(1,606)
(1,850)
Net cash (used in)/from operating activities
7
26,964
61,480
Cash flows from investing activities
Proceeds from sale of plant and equipment
–
11
Acquisition of plant and equipment
10
(748)
(1,087)
Acquisition of a business, net of cash acquired
23
–
(32,000)
Sale of controlled entities, net of cash disposed
24
112
–
Contingent consideration paid
14
(3,927)
(2,671)
Net cash (used in)/from investing activities
(4,563)
(35,747)
Cash flows from financing activities
Payment of lease liabilities
15
(4,528)
(6,053)
Bank loan repayment
(5,749)
(28,915)
Dividends paid to equity holders of the parent
18
(6,880)
(12,054)
Dividends paid to non-controlling interests in controlled entities
(8,324)
(26,303)
Payments for share buy-back
18
(2,605)
(593)
Net cash (used in)/from financing activities
(28,086)
(73,918)
Net (decrease)/ increase in cash and cash equivalents
(5,685)
(48,185)
Effect of exchange rate fluctuations on cash held
(44)
1,875
Cash and cash equivalents at 1 July
52,432
98,742
Cash and cash equivalents at 30 June
46,703
52,432
| 69
ENERO ANNUAL REPORT 2024
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
Basis of preparation
Page
1. Basis of preparation
70
Key numbers
2. Operating segments
72
3. Revenue
75
4. Finance costs
77
5. Significant items
78
6. Income tax expense and deferred tax
78
7. Cash and cash equivalents
81
8. Trade and other receivables
82
9. Other assets
82
10. Plant and equipment
83
11. Right-of-use assets
84
12. Intangible assets
85
13. Trade and other payables
87
14. Contingent consideration payable
87
15. Lease liabilities
88
16. Employee benefits
89
Capital
17. Interest bearing liabilities
90
18. Capital and reserves
91
19. Earnings per share
92
Risk
20. Financial risk management/financial instruments
93
21. Impairment of non-financial assets
99
Group structure
22. Controlled entities
101
23. Acquisitions
103
24. Disposals
105
25. Parent entity disclosures
106
26. Deed of Cross Guarantee
107
Unrecognised items
27. Commitments
108
28. Contingencies
108
Other items
29. Subsequent events
108
30. Key Management Personnel and other related party disclosures
108
31. Share-based payments
109
32. Auditor’s remuneration
111
ENERO ANNUAL REPORT 2024
| 70
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
1. Basis of preparation
In preparing these consolidated financial statements, the
notes have been grouped into sections under certain key
headings. Each section sets out the accounting policies
applied together with any key judgements and estimates
used.
(a) Reporting entity
Enero Group Limited (the Company) is a for-profit
Company domiciled in Australia. The consolidated financial
statements of the Company as at and for the year ended
30 June 2024 comprise the Company and its subsidiaries
(together referred to as the ‘Group’). The consolidated
financial statements for the year ended 30 June 2024 were
authorised for issue in accordance with a resolution of the
Directors on 13 September 2024.
(b) Statement of compliance
The consolidated financial statements are a general
purpose financial report which has been prepared in
accordance with Australian Accounting Standards
(‘AASBs’) (including Australian Interpretations) adopted by
the Australian Accounting Standards Board (‘AASB’) and
the Corporations Act 2001. The consolidated financial
statements comply with International Financial Reporting
Standards (IFRS) and interpretations (IFRICs) adopted by
the International Accounting Standards Board (IASB).
(c) Basis of preparation
(i) Basis of measurement
The consolidated financial statements are prepared on the
historical cost basis except for the items as described in
Note 1(c)(iv).
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191 and, in accordance with that Class Order,
amounts in the consolidated financial statements and
Directors’ Report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
(ii) Going concern
The consolidated financial statements have been prepared
on a going concern basis which assumes the Group will
continue its operations and be able to meet its obligations
as and when they become due and payable. This
assumption is based on an analysis of the Group’s ability to
meet its future cash flow requirements using its projected
cash flows from operations and existing cash reserves held
as at 30 June 2024.
(iii) Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ
from these estimates. The estimates and associated
assumptions are based on historical experience and
various other factors that are believed to be reasonable
under the circumstances, the results of which form the
basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from
other sources.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised and in any future periods if affected.
Further information about critical accounting estimates and
judgements made is included in the following notes:
•
14. Contingent consideration payable
•
21. Impairment of non-financial assets
•
23. Acquisitions
(iv) Measurement of fair values
A number of the Group’s accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
When measuring the fair value of an asset or liability, the
Group uses market observable data as far as possible. Fair
values are categorised into different levels in a fair value
hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is
categorised in its entirety in the same level of the fair value
hierarchy as the lowest level of input that is significant to
the entire measurement.
The Group recognises transfers between levels of the fair
value hierarchy at the end of the reporting period during
which the change has occurred.
Further information about the assumptions made in
measuring fair values is included in the following notes:
•
20. Financial instruments
(Contingent consideration payable)
•
23. Acquisitions
•
31. Share-based payments
(d) Foreign currency
(i) Functional and presentation currency
The consolidated financial statements are presented in
Australian dollars, which is the Company’s functional
currency.
(ii) Foreign currency transactions
Transactions in foreign currencies are translated to the
respective functional currencies of Group at the foreign
exchange rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated to the
respective functional currencies of the Group at the foreign
exchange rate ruling at that date. Foreign exchange
differences arising on retranslation are recognised in the
consolidated income statement. Non-monetary assets and
liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at
| 71
ENERO ANNUAL REPORT 2024
1. Basis of preparation (continued)
the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currencies that are stated
at fair value are translated to the functional currency at
foreign exchange rates ruling at the dates the fair value
was determined.
(iii) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on
consolidation, are translated to Australian dollars at foreign
exchange rates prevailing at the reporting date. The
income and expenses of foreign operations are translated
to Australian dollars at rates approximating the foreign
exchange rates ruling at the dates of the transactions.
Foreign currency differences are recognised in other
comprehensive income and presented in the foreign
currency translation reserve (FCTR) in equity. When a
foreign operation is disposed of, in part or in full, the
relevant amount in the FCTR is transferred to the
consolidated income statement as part of the profit or loss
on disposal.
Foreign exchange gains and losses arising from a
monetary item receivable from or payable to a foreign
operation, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form
part of a net investment in a foreign operation and are
recognised in other comprehensive income, and are
presented within equity in the FCTR.
(e) Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the
amount of GST, unless GST incurred is not recoverable
from the taxation authority. In this case it is recognised as
part of the cost of acquisition of the asset or as part of the
expense.
Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from,
or payable to, the taxation authority, is included as a
current asset or liability in the consolidated 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 taxation authority, are presented as operating cash
flows.
(f) Changes in accounting policies
The accounting policies provided throughout Notes 1 to 31
of this report have been applied consistently to all periods
presented in the consolidated financial statements.
Several other amendments and interpretations apply for
the first time in FY24, but do not have an impact on the
financial report of the Group.
(g) New standards and interpretations not yet adopted
A number of new accounting standards (including
amendments and interpretations) have been issued but
were not effective as at 30 June 2024. The following are
the pronouncements that the Group has elected not to
early adopt in these financial statements:
•
Amendments to AASB 16: Lease liability in sale
and leaseback
•
Amendments to AASB 101: Classification of
Liabilities as Current or Non-current
•
Amendments to AASB 107 and AASB 7:
Disclosures of Supplier Finance Arrangement
•
AASB 18 Presentation and Disclosure in
Financial Statements
The impact of the above standards are yet to be assessed
by the Group.
(h) The notes to the consolidated financial statements
The notes include information which is required to
understand the consolidated financial statements and is
material and relevant to the operations, financial position
and performance of the Group. Information is considered
material and relevant if, for example:
•
the amount in question is significant because of its
size or nature;
•
it is important for understanding the results of the
Group;
•
it helps to explain the impact of significant changes
in the Group’s business – for example, acquisitions
and impairment write-downs; or
•
it relates to an aspect of the Group’s operations that
is important to its future performance.
The notes are organised into the following sections:
•
Key numbers: provides a breakdown of individual
line items in the consolidated financial statements
that the Directors consider most relevant and
summarises the accounting policies, judgements
and estimates relevant to understanding these line
items;
•
Capital: provides information about the capital
management practices of the Group and
shareholder returns for the year;
•
Risk: discusses the Group’s exposure to various
financial risks, explains how these affect the
Group’s financial position and performance and
outlines what the Group does to manage these
risks;
•
Group structure: explains aspects of the Group
structure and changes during the year;
•
Unrecognised items: provides information about
items that are not recognised in the consolidated
financial statements but could potentially have a
significant impact on the Group’s financial position
and performance; and
•
Other items: provides information on items which
require disclosure to comply with Australian
Accounting Standards and other regulatory
pronouncements; however are not considered
critical in understanding the financial performance
or position of the Group.
ENERO ANNUAL REPORT 2024
| 72
2. Operating segments
The Group defines its operating segments based on the
manner in which services are provided in the operational
geographies and on internal reporting regularly reviewed
by the Enero Executive team on a monthly basis, who are
the Group’s chief operating decision makers (CODM).
Revenues are all derived from services which are similar in
nature and outputs, operate in similar economic
environments and have a comparable customer mix. The
Group’s service offering includes integrated marketing and
communication services, including strategy, market
research and insights, advertising, public relations,
communications planning, design, events management,
direct marketing, and programmatic media.
Followings management’s review of the business portfolio
at the beginning of the current reporting period, it was
decided to separate OBMedia into its own segment.
The business portfolio is separated into the following two
segments to better assess its performance, make decisions
on resource allocation and report both to the CODM:
•
Technology, Healthcare and Consumer Practice:
This includes public relations and
communications consultancy Hotwire Group
(including strategic B2B sales and marketing
agencies ROI DNA and GetIT), creative agency
BMF and digital agency Orchard.
•
OBMedia: customer acquisition platform OB
Media.
Applicable comparative numbers have been restated due
to the change in segment.
The measure of reporting to the Enero Executive team is
on an EBITDA basis (defined below), which excludes
significant items which are separately presented because
of their nature, size and expected infrequent occurrence
and does not reflect the underlying trading of the
operations.
In relation to segment reporting, the following definitions
apply to operating segments:
EBITDA is calculated as profit before interest, taxes,
depreciation, amortisation and any significant items.
2024
In thousands of AUD
Technology,
Healthcare and
Consumer
Practice
OBMedia
Total
segments
Unallocated Eliminations
Consolidated
Gross revenue
192,110
612,364
804,474
–
–
804,474
Directly attributable costs of sales
(48,590)
(566,172)
(614,762)
–
–
(614,762)
Net Revenue
143,520
46,192
189,712
–
–
189,712
Other income
128
–
128
14
–
142
Operating expenses
(120,799)
(22,718)
(143,517)
(8,979)
–
(152,496)
EBITDA
22,849
23,474
46,323
(8,965)
–
37,358
Depreciation of right-of-use assets
(4,402)
Depreciation of plant and equipment and
amortisation of intangibles
(5,512)
Significant items 2
(53,511)
(1,980)
(55,491)
(55,491)
Net finance costs
(2,158)
Profit before income tax
(30,205)
Income tax expense
(6,933)
Profit for the year
(37,138)
Goodwill 3
115,874
15,222
131,096
–
–
131,096
Other intangibles
18,337
419
18,756
–
–
18,756
Assets excluding intangibles
104,081
66,599
170,680
33,906
(53,551)
151,035
Total assets
238,292
82,240
320,532
33,906
(53,551)
300,887
Total liabilities
91,892
55,094
146,986
44,372
(53,551)
137,807
Amortisation of intangibles
3,869
183
4,052
–
–
4,052
Depreciation
5,669
99
5,768
94
–
5,862
Capital expenditure
625
47
672
75
–
747
Impairment
(70,827)
–
(70,827)
–
–
(70,827)
Gain on contingent consideration
22,421
–
22,421
–
–
22,421
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
2. Operating segments (continued)
2023 – Restated 3
In thousands of AUD
Technology,
Healthcare and
Consumer
Practice
OBMedia
Total
segments Unallocated Eliminations Consolidated
Gross revenue
205,370
534,837
740,207
–
–
740,207
Directly attributable costs of sales
(53,261)
(445,303)
(498,564)
–
–
(498,564)
Net Revenue
152,109
89,534
241,643
–
–
241,643
Other income
106
–
106
–
–
106
Operating expenses
(127,151)
(24,092)
(151,243)
(11,665)
–
(162,908)
EBITDA
25,064
65,442
90,506
(11,665)
–
78,841
Depreciation of right-of-use assets
(4,253)
Depreciation of plant and equipment and
amortisation of intangibles
(5,816)
Significant items 1
31,297
–
31,297
–
–
31,297
Net finance costs
(4,125)
Profit before income tax
95,944
Income tax expense
(14,468)
Profit for the year
81,476
Goodwill 2
190,070
15,222
205,292
–
–
205,292
Other intangibles
22,020
371
22,391
–
–
22,391
Assets excluding intangibles
76,839
66,813
143,652
30,860
(18,939)
155,573
Total assets
288,929
82,406
371,335
30,860
(18,939)
383,256
Liabilities
69,540
53,628
123,168
60,207
(18,939)
164,436
Total liabilities
69,540
53,628
123,168
60,207
(18,939)
164,436
Amortisation of intangibles
3,694
45
3,739
–
–
3,739
Depreciation
5,870
77
5,947
383
–
6,330
Capital expenditure
894
103
997
90
–
1,087
Gain on contingent consideration
34,648
–
34,648
–
–
34,648
1. Significant items are explained on page 54 and in Note 5.
2. A reallocation of goodwill to OB Media has been performed using a relative value approach as a result of the change in segment.
3. Segments have changed from July 2023 and the comparatives have been restated accordingly.
Geographical segments
The operating segments are managed on a world-wide basis. However, there are three geographic areas of operation.
Geographical information
In thousands of AUD
Australia and
Asia
UK and
Europe
USA
Support
Office(i)
Unallocated
intangibles(ii)
Total
2024
Net Revenue
66,355
30,652
92,705
–
–
189,712
EBITDA
13,527
4,918
27,881
(8,968)
–
37,358
EBITDA margin
20.4%
16.0%
30.1%
–
–
19.7%
Non-current assets
8,128
7,062
3,655
–
149,852
168,697
In thousands of AUD
Australia and
Asia
UK and
Europe
USA
Support
Office(i)
Unallocated
intangibles(ii)
Total
2023
Net Revenue
64,462
31,265
145,916
–
–
241,643
EBITDA
11,856
4,145
74,505
(11,665)
–
78,841
EBITDA margin
18.4%
13.3%
51.1%
–
–
32.6%
Non-current assets
10,127
6,366
805
–
227,683
244,981
(i) Support office includes the share-based payment charge in the consolidated income statement.
(ii) Goodwill and other intangibles are allocated to the reportable segments. However, as the reportable segments are managed at a global
level they cannot be allocated across geographical areas.
ENERO ANNUAL REPORT 2024
| 74
2. Operating segments (continued)
Major Customer
Revenue from 1 customer (2023: 2 customer) represents more than 10% of Group’s total revenue, with a breakdown by
segment provided below:
Percentage of Group’s total revenue
2024
2023
Technology, Healthcare and Consumer Practice
–
–
OBMedia
23.4
37.2
23.4
37.2
Accounting policy
The Group determines and presents operating segments based on the information that is provided internally to the Enero
Executive team, who are the Group’s chief operating decision makers (CODM).
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. All operating segments’ results are regularly reviewed by the Group’s CODM to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information is
available.
Segment results that are reported to the CODM include items directly attributable to a segment, as well as those that can
be allocated on a reasonable basis.
Unallocated items comprise corporate overheads: costs associated with the centralised management and governance of
Enero Group Limited, such as share-based payments charge, interest-bearing loans, costs of borrowings and related
expenses, and corporate head office assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire assets that are expected to be used for
more than one period.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
3. Revenue
Nature of our services
The Group provides marketing and communication services to a broad range of customers across three key geographic
regions – Australia & Asia, UK & Europe, and USA. The Group is a fee-for-service business where each operating
business generates revenue from time spent on a particular project or delivering to agreed outcomes. The Group provides
a comprehensive range of services across its continuing businesses, with technology communications consultancy, brand
transformation consultancy and digital advertising and marketing services capabilities delivered through the Technology,
Healthcare and Consumer Practice segment and its advertising technology platform capabilities delivered through the
OBMedia segment.
The duration of the Group’s time or project-based customer contracts is typically from one up to five months, with stand-
ready (“retainer”) contracts typically lasting up to one year and which may be cancelled with notice periods in accordance
with respective contracts. In substantially all cases, the Group is the principal in the arrangements with its customers. In
some customer arrangements, we act as an agent and arrange, at the customer’s direction, for third parties to perform
certain services.
In thousands of AUD
2024
2023
Gross revenue from the rendering of services
804,474
740,207
Directly attributable costs of sales
(614,762)
(498,564)
Net Revenue
189,712
241,643
Disaggregation of revenue
Consulting revenue (excluding revenue from advertising technology
platform) by type of contract
2024
2023
Fixed Fee retainers
49%
47%
Variable retainers (% of total digital advertising spend)
8%
11%
Project based retainers (can be fixed fee or time and cost recovery)
43%
42%
Total
100%
100%
Revenue by timing of performance obligations
2024
2023
Point in time
76%
72%
Recognised over time
24%
28%
Total
100%
100%
Revenue is further disaggregated by primary geographical markets in the following table, which reconciles to the revenue
of the Group’s segments (see Note 2).
2024
2023
In thousands of AUD
Technology,
Healthcare and
Consumer
Practice
OBMedia
Technology,
Healthcare and
Consumer
Practice
OBMedia
Australia and Asia
102,865
–
102,941
–
UK and Europe
40,730
–
43,867
–
USA
48,515
612,364
58,562
534,837
Total
192,110
612,364
205,370
534,837
Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with
customers.
In thousands of AUD
Note
2024
2023
Trade receivables
8
77,642
72,423
Contract assets – Work in progress
9
3,273
3,506
Contract liabilities – Unearned revenue
13
(25,205)
(20,222)
55,710
55,707
ENERO ANNUAL REPORT 2024
| 76
3. Revenue (continued)
Contract assets:
The contract assets relate to the Group’s work in progress for accrued fees recognised upon satisfaction of performance
obligations and rechargeable disbursements at the period end which are not invoiced. The contract assets are transferred
to receivables upon invoicing to the customer. There were no significant impairment losses to contract assets recorded in
either the current or prior year.
Contract liabilities:
The contract liabilities relate to the Group’s unearned revenue for consideration received from advance billings to
customers prior to the satisfaction of performance obligations in accordance with the terms of the customer contracts.
Given the short-term nature of customer contracts in the Group, it is expected that both contract assets will be recovered
and contract liabilities will be settled within 12 months from reporting date. Revenue recognised in the current year that
was included in the contract liability balance as at 30 June 2023 amounted to $20,222,000. Revenue recognised in the
current year from performance obligations satisfied (or partially satisfied) as at prior year end was not material.
Accounting policy
Revenue is recognised when a customer obtains control of promised goods or services (the performance obligation) in an
amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price).
We measure revenue by estimating the transaction price based on the consideration specified in the customer
arrangement. Revenue is recognised as the performance obligations are satisfied. Our customer contracts are primarily
fees for service on either a project or a rate per hour basis. Revenue is recorded net of sales, use and value added taxes.
Performance obligations
In substantially all our service categories, the performance obligation is to provide advisory and consulting services at an
agreed-upon level of effort to accomplish the specified engagement. Our customer contracts are comprised of diverse
arrangements involving fees based on an agreed fee or rate per hour for the level of effort expended by our employees
and reimbursement for third-party costs that we are required to include in revenue when we control the vendor services
related to these costs and we act as principal.
The transaction price of a contract is allocated to each distinct performance obligation based on its relative stand-alone
selling price and is recognised as revenue when, or as, the customer receives the benefit of the performance obligation.
Customers typically receive and consume the benefit of our services as they are performed. Some of our customer
contracts provide that we are compensated for services performed to date and allow for cancellation by either party on
short notice, typically 1 to 3 months, without penalty.
Generally, our short-term contracts, which normally take 1 to 3 months to complete, are performed by a single agency and
consist of a single performance obligation. As a result, we do not consider the underlying services as separate or distinct
performance obligations because our services are highly interrelated, occur in close proximity, and the integration of the
various components of a marketing message is essential to overall service. In certain of our long-term customer contracts,
which have a term of up to one year, the performance obligation is a stand-ready obligation, because we provide a
constant level of similar services over the term of the contract.
Revenue recognition methods
Point in time
A substantial portion of our revenue is recognised at a point in time. This refers to the revenue recognised by OB Media.
Gross Revenue is calculated in near real time using API reports from Google, Bing and other automated feeds.
Over time
A portion of our revenue is recognised over time, as the services are performed, because the customer receives and
consumes the benefit of our performance throughout the contract period, or we create an asset with no alternative use and
are contractually entitled to payment for our performance to date in the event the customer terminates the contract for
convenience. For these customer contracts, other than when we have a stand-ready obligation to perform services,
revenue is recognised over time using input measures that correspond to the level of staff effort expended to satisfy the
performance obligation on a rate per hour or equivalent basis or output measures that correspond to the stage of
completion of the deliverables. For customer contracts when we have a stand-ready obligation to perform services on an
ongoing basis over the life of the contract, typically for periods up to one year, where the scope of these arrangements is
broad and there are no significant gaps in performing the services, we recognise revenue using a time-based measure
resulting in a straight-line revenue recognition. From time to time, there may be changes in the customer service
requirements during the term of a contract and the changes could be significant. These changes are typically negotiated as
new contracts covering the additional requirements and the associated costs, as well as additional fees for the incremental
work to be performed. As a result, the Group’s customer arrangements do not typically include variable consideration
provisions and therefore, variable consideration amounts do not need to be estimated when determining the transaction
price for its contracts.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
3.
Revenue (continued)
Principal vs agent
The Group incurs a number of third party out-of-pocket costs on behalf of customers, including direct costs and incidental,
or out-of-pocket costs. Third-party direct costs incurred in connection with the creation and delivery of advertising or
marketing communication services include, among others: purchased media, studio production services, specialised talent,
including artists and other freelance labour, event marketing supplies, materials and services, promotional items, market
research and third-party data and other related expenditures. Out-of-pocket costs include, among others: transportation,
hotel, meals and telecommunication charges incurred by us in the course of providing our services.
Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the
customer. However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a
principal or as an agent in the customer contract.
In substantially all of our customer arrangements, we act as principal when contracting for third-party services on behalf of
our customers because we control the specified goods or services before they are transferred to the customer and we are
responsible for providing the specified goods or services, or we are responsible for directing and integrating third-party
vendors to fulfill our performance obligation at the agreed upon contractual price. In such arrangements, we also take
pricing risk under the terms of the customer contract. When we act as principal, we include billable amounts related to
third-party costs in the transaction price and record revenue over time at the gross amount billed, including out-of-pocket
costs, consistent with the manner that we recognise revenue for the underlying services contract.
When we act as an agent and arrange, at the customer’s direction, for third parties to perform certain services, we do not
control the goods or services prior to the transfer to the customer. As a result, revenue is recorded net of these costs,
equal to the amount retained for our fee or commission.
4.
Finance costs
In thousands of AUD
2024
2023
Interest and finance costs
1,033
1,889
Contingent consideration present value interest
941
2,311
Lease present value interest
584
232
Finance costs
2,558
4,432
Foreign exchange loss of $293,000 (2023: loss of $199,000) has been recognised in the consolidated income statement
and has been included in administration expenses.
Accounting policy
(i) Interest income
Interest income is recognised as it accrues to the related financial asset using the effective interest method.
(ii) Interest and finance costs
Finance costs are recognised in the consolidated income statement using the effective interest method. They include
interest on financial guarantees, amortisation of ancillary costs incurred in connection with financing arrangements and
finance lease interest.
(iii) Contingent consideration present value interest
Present value interest is recognised in the consolidated income statement using the effective interest method and includes
the effective interest cost relating to contingent consideration liabilities recognised in business combinations.
(iv) Lease present value interest
Present value interest is recognised in the consolidated income statement using the effective interest method and includes
the effective interest cost relating to lease liabilities recognised for contracts that contain leases.
ENERO ANNUAL REPORT 2024
| 78
5.
Significant items
The net profit after tax includes the following significant items, which by size and nature or incidence are relevant in
explaining the financial performance of the Group:
In thousands of AUD
2024
2023
Contingent consideration fair value gain (i)
22,421
34,648
Impairment loss (ii)
(70,827)
–
Loss on disposal (iii)
(2,154)
–
Restructuring costs and other (iv)
(4,931)
(3,351)
Total significant items before tax
(55,491)
31,297
Income tax benefit on significant items
953
775
Prior year tax expense (v)
(1,286)
–
Total significant items after tax
(55,824)
32,072
(i) Fair value adjustments in FY24 relate to gains on contingent consideration true up due to lower earnings expectations relating to
ROI DNA, MBA GetIT
(ii) Impairment loss of $70,827,000 relating to ROI DNA and GetIT intangibles and impairment of right of use asset relating to the
CPR disposal. See Note 21.
(iii) $2.2m loss on sale of business relates to CPR disposal on 31 October 2023. See Note 24.
(iv) Restructuring costs related to a restructuring process to mitigate costs across the Group. The majority of the costs related to
redundancy costs in the agencies across the group, which continued to further integrate its communication and marketing services
businesses into a single account management team. Additionally, this included $392,000 relating to the CPR disposal and the
OBMedia strategic review.
(v) The net prior year tax expense amount of $1,286,000 is in relation to a risk-assessed adjustment for US taxes in prior years due
to the growth in our operations offset by an additional tax deduction in US.
6.
Income tax expense and deferred tax
Income tax expense
Recognised in the consolidated income statement
In thousands of AUD
2024
2023
Current tax expense
Current year
7,545
14,821
Adjustments for prior years
771
(194)
8,316
14,627
Deferred tax expense
Origination and reversal of temporary differences
(1,383)
(159)
(1,383)
(159)
Income tax expense in the consolidated income statement
6,933
14,468
Numerical reconciliation between tax expense and pre-tax accounting profit
(Loss)/Profit for the year
(37,138)
81,476
Income tax expense
6,933
14,468
(Loss)/Profit before income tax
(30,205)
95,944
Income tax expense using the Company’s domestic tax rate of 30% (2023: 30%)
(9,062)
28,783
Increase/(decrease) in income tax expense due to:
Share-based payment expense
310
–
Unwind of present value interest
282
682
Impairment
21,248
––
Contingent consideration fair value (gain)/loss
(6,726)
(10,399)
Incidental acquisition costs
189
65
Loss on disposal of controlled entities
646
–
Effect of lower tax rate on overseas incomes
(986)
(4,161)
Under/(over) provision for tax in previous years
771
(194)
Utilisation of tax losses previously unrecognised
(549)
–
Other non-deductible/(assessable) items
810
(308)
Income tax expense on pre-tax net profit
6,933
14,468
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
6. Income tax expense and deferred tax (continued)
Current taxes
The Group has a net current tax payable of $1,072,000 at 30 June 2024 (2023: net current tax receivable $3,137,000).
Deferred taxes
Recognised deferred tax assets and liabilities are attributable to the following:
In thousands of AUD
2024
2023
Deferred tax assets
Employee benefits
1,651
1,643
Accruals and income in advance
1,227
279
Leases
203
154
Plant and equipment
157
42
Others
72
519
Gross deferred tax assets before set-off
3,310
2,637
Set-off
(1,136)
(1,055)
Net deferred tax assets
2,174
1,582
In thousands of AUD
2024
2023
Deferred tax liabilities
Identifiable intangibles
(4,718)
(5,767)
Plant and equipment
(39)
(41)
Work in progress
(797)
(705)
Others
51
–
Gross deferred tax liabilities before set-off
(5,503)
(6,513)
Set-off
1,136
1,055
Net deferred tax liability
(4,367)
(5,458)
Movement in deferred tax balances
The movement in deferred tax balances during the year was all recognised in the consolidated income statement.
Deferred tax assets not recognised
Deferred tax assets have not been recognised in respect of the following items because it is not probable that future
taxable profit will be available against which the Group can utilise the benefits:
In thousands of AUD
2024
2023
Revenue losses
3,986
2,745
Capital losses
235,333
235,324
Gross tax losses carried forward
239,319
238,069
These tax losses do not have an expiry date.
Accounting policy
Income tax on the profit or loss for the year comprises current and deferred tax. Current and deferred tax is recognised in
the consolidated income statement except to the extent that it relates to a business combination, or items recognised
directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not
provided for: goodwill, the initial recognition of assets or liabilities that affect neither the accounting nor the taxable profit,
and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities,
ENERO ANNUAL REPORT 2024
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6. Income tax expense and deferred tax (continued)
but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available, against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
7. Cash and cash equivalents
In thousands of AUD
2024
2023
Cash at bank and on hand
45,946
51,667
Bank short-term deposits
757
765
Cash and cash equivalents in the consolidated statement of financial position
and the consolidated statement of cash flows
46,703
52,432
For cash flow presentation purposes, cash and cash equivalents include cash on hand, and short-term deposits with
original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of change in value. The Group has pledged short-term deposits amounting to $684,000 for indemnity
guarantee facilities (see Note 17 Interest bearing liabilities).
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 20 Financial risk management/financial instruments.
Reconciliation of cash flows from operating activities
(i) Reconciliation of cash
For the purpose of the consolidated statement of cash flows, cash includes cash on hand and at bank and short-term
deposits at call, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the Consolidated
statement of cash flows is reconciled to the related items in the consolidated statement of financial position as follows:
In thousands of AUD
2024
2023
Cash assets
45,946
52,432
(ii) Reconciliation of profit after income tax to net cash provided by
operating activities
(Loss)/Profit after income tax
(37,138)
81,476
Add/(less) non-cash items:
Loss on disposal of controlled entities
2,154
–
Impairment
70,827
–
Loss on sale of plant and equipment
54
16
Share-based payments expense
1,086
2,501
Depreciation of plant and equipment
1,460
2,077
Depreciation of right-of-use assets
4,402
4,253
Amortisation of identifiable intangibles
4,052
3,739
Contingent consideration fair value (gain)/loss
(22,421)
(34,648)
Contingent consideration present value interest
941
2,311
Lease present value interest
–
232
Accrued interest and fees on bank loan
11
37
Decrease/(increase) in income taxes payable (net)
4,210
(3,285)
(Increase)/decrease in deferred tax (net)
(1,683)
(172)
Net cash provided by operating activities before changes in
assets and liabilities
27,955
58,537
Changes in assets and liabilities:
Increase in trade and other receivables
(3,436)
(4,661)
Decrease/(Increase) in work in progress
234
(213)
Increase in prepayments
(131)
(948)
Decrease in other assets
5
233
(Decrease)/Increase in payables and accruals
(2,536)
14,177
Increase/(Decrease) in unearned income
4,982
(5,122)
Decrease in employee benefits
(109)
(523)
Net cash from operating activities
26,964
61,480
ENERO ANNUAL REPORT 2024
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8. Trade and other receivables
In thousands of AUD
Note
2024
2023
Current
Trade receivables
77,642
72,423
Less: provision for impairment loss
20
(221)
(617)
77,421
71,806
Other receivables
532
2,995
Total trade and other receivables
77,953
74,801
No interest is charged on trade receivables. The Group’s exposure to credit and currency risk and impairment losses
related to trade and other receivables is disclosed in Note 20 Financial risk management/financial instruments.
9. Other assets
In thousands of AUD
2024
2023
Current
Work in progress
3,273
3,506
Prepayments
3,892
3,760
Other current assets
369
478
7,534
7,744
Non-current
Deposits
271
169
271
169
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
10. Plant and equipment
In thousands of AUD
Computer
equipment
Office
furniture and
equipment
Plant and
equipment
Leasehold
improvements
Total
2024
Cost
4,954
1,980
174
4,622
11,730
Accumulated depreciation
(3,750)
(1,659)
(174)
(4,358)
(9,941)
Net carrying amount
1,204
321
–
264
1,789
Reconciliations of the carrying amounts of each class of plant and equipment:
Carrying amount at the beginning of the
year
1,552
423
–
592
2,567
Additions
600
82
–
66
748
Depreciation
(923)
(147)
–
(390)
(1,460)
Effect of movements in exchange rates
(3)
(6)
–
(4)
(13)
Disposals
(22)
(31)
–
–
(53)
Carrying amount at the end of the year
1,204
321
–
264
1,789
2023
Cost
5,243
2,136
174
4,672
12,225
Accumulated depreciation
(3,691)
(1,713)
(174)
(4,080)
(9,658)
Net carrying amount
1,552
423
–
592
2,567
Reconciliations of the carrying amounts of each class of plant and equipment:
Carrying amount at the beginning of the
year
1,575
266
7
1,352
3,200
Additions
690
301
–
96
1,087
Acquired through business combinations
(Note 23)
259
4
–
17
280
Depreciation
(1,038)
(163)
(1)
(875)
(2,077)
Effect of movements in exchange rates
66
17
–
21
104
Disposals
–
(2)
(6)
(19)
(27)
Carrying amount at the end of the year
1,552
423
–
592
2,567
Accounting policy
(i) Recognition and measurement
Plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 21
Impairment of non-financial assets). The cost of the asset also includes the cost of replacing parts on an item of plant and
equipment when it is probable that the future economic benefits embodied within the item will flow to the Group and the
cost of the item can be measured reliably. Additionally, the carrying amount of the replaced part is derecognised.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to
the functionality of the related equipment is capitalised as part of that equipment. All other costs are charged to the
consolidated income statement as incurred. Where parts of an item of plant and equipment have different useful lives, they
are accounted for as separate items of plant and equipment.
(ii) Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is
expected to bring no future economic benefits. Gains and losses on derecognition are determined by comparing the
proceeds with the carrying amount and recognised within ‘Administration expenses’ in the consolidated income statement.
(iii) Depreciation
Depreciation is charged to the consolidated income statement on a straight-line basis over the assets’ estimated useful
lives. The major categories of plant and equipment were depreciated in the current and, where applicable, comparative
period as follows:
Computer equipment
25% to 40%
Office furniture and equipment
10% to 25%
Plant and equipment
10% to 25%
Leasehold improvements
Life of lease
Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
ENERO ANNUAL REPORT 2024
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11. Right-of-use assets
In thousands of AUD
2024
2023
Property leases
Cost
27,807
24,196
Accumulated depreciation
(13,196)
(11,216)
Net carrying amount
14,611
12,980
Reconciliations of the carrying amounts of right-of-use assets:
Carrying amount at the beginning of the year
12,980
5,950
Additions
6,255
5,129
Acquisition through business combinations (Note 23)
–
239
Impairment
(104)
–
Re-measurement of lease liabilities
36
5,536
Depreciation
(4,402)
(4,253)
Effect of movements in exchange rates
(154)
379
Carrying amount at the end of the year
14,611
12,980
During the current year, the Group recognised $207,000 (2023: $61,000) occupancy costs in the consolidated income
statement in relation short-term leases that have a lease term of 12 months or less.
Accounting policy
The Group leases many assets, including properties and office equipment. At the inception of a contract, the Group
assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. The Group assesses if a contract conveys the right to
control the use of an identified asset if:
•
the contract involves the use of an identified asset;
•
the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the
period of use; and
•
the Group has the right to direct the use of the asset.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of cost to dismantle and remove the
underlying asset less any lease incentive received. The right-of-use asset is subsequently measured at cost less any
accumulated depreciation and impairment losses (see Note 21 Impairment of non-financial assets) and adjusted for certain
re-measurements of lease liability. The assets are depreciated over the term of the lease on a straight-line basis.
The lease liability is initially measured at the present value of the lease payments (fixed payments less any lease
incentives receivable and variable lease payments) that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate for the
same term as the underlying lease. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease
liability is re-measured when there is a change in future lease payments arising from a change in an index rate, changes in
the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised. When the lease liability is re-measured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in the consolidated income statement if the carrying
amount of the right-of-use asset has been reduced to zero.
The Group has elected to use the exemption not to recognise right-of-use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases of low-value assets. The payments associated with these leases
are recognised as occupancy costs on a straight-line basis over the lease term.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
12. Intangible assets
In thousands of AUD
Goodwill
Contracts and
customer
relationships
Website and
Software
Total
2024
Cost
131,952
29,911
2,021
163,884
Accumulated amortisation
(856)
(12,780)
(396)
(14,032)
Net carrying amount
131,096
17,131
1,625
149,852
Reconciliations of the carrying amounts of intangibles:
Carrying amount at the beginning of the year
205,292
20,917
1,474
227,683
Additions
–
–
503
503
Impairment
(70,693)
(29)
–
(70,722)
Disposals
(2,641)
–
–
(2,641)
Amortisation
–
(3,694)
(358)
(4,052)
Effect of movements in exchange rates
(862)
(63)
6
(919)
Carrying amount at the end of the year
131,096
17,131
1,625
149,852
2023
Cost
206,246
30,011
1,519
237,776
Accumulated amortisation
(954)
(9,094)
(45)
(10,093)
Net carrying amount
205,292
20,917
1,474
227,683
Reconciliations of the carrying amounts of intangibles:
Carrying amount at the beginning of the year
112,236
2,428
–
114,664
Acquired through business combinations
88,297
22,183
1,519
111,999
Amortisation
–
(3,694)
(45)
(3,739)
Effect of movements in exchange rates
4,759
–
–
4,759
Carrying amount at the end of the year
205,292
20,917
1,474
227,683
Amortisation charge
The amortisation charge of $4,052,000 (2023: $3,739,000) is recognised in the depreciation and amortisation expense in
the consolidated income statement.
Goodwill CGU group allocation
In thousands of AUD
2024
2023
Cash Generating Unit (CGU):
Technology, Healthcare and Consumer Practice (THC)1
98,738
101,074
OB Media2
15,222
–
Creative technology and Data2
–
15,921
ROI DNA
17,135
80,603
GetIT
–
7,694
Net carrying amount
131,095
205,292
1 This CGU has been re-named from prior year where it was ‘Brand Transformation’
2 The Group implemented a new segment structure resulting in change in composition of its CGU group. Accordingly
carrying value of goodwill (previously fully allocated to Creative Technology and Data CGU) was reallocated to OBMedia
CGU and Technology, Healthcare and Consumer Practice CGU using a relative value approach. Under this approach
relative value of goodwill is determined by reference to value-in-use of CGUs as at the date of re-organisation. The Group
completed an assessment for impairment before the reallocation of goodwill using the same assumptions as those applied
by the Group in its financial report for the year ended 30 June 2023 and concluded that the recoverable amount of CGUs
exceeded the carrying value.
OBMedia has been separated into its own CGU and the agencies have been grouped into Technology, Healthcare and
Consumer Practice CGU, ROI DNA CGU and GetIT CGU however, the re-organisation had no impact on ROI DNA and
GetIT CGUs. The decrease in the goodwill carrying value as compared to the prior reporting period is due to the
impairment booked in respect of the ROI DNA and GetIT GCUs and the relative value of goodwill relating to the disposal of
CPR.
ENERO ANNUAL REPORT 2024
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12. Intangible assets (continued)
Accounting policy
(i) Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the business
combination minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units expected to benefit from synergies created by the business combination.
Goodwill is not amortised, but instead is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
(ii) Other intangible assets
Other intangible assets acquired separately are measured on initial recognition at cost. The other intangible assets
acquired in business combinations are mainly customer relationships and customer contracts. The cost of these assets is
their fair value at date of acquisition based on valuation techniques generally using the excess earnings method. Following
initial recognition, intangible assets are carried at cost less amortisation and any impairment losses.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
(iii) Amortisation
Intangible assets other than goodwill are amortised on a straight-line basis over their estimated useful lives from the date
they are available for use. Customer contracts and relationships are amortised over a four to six-year period.
Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
(iv) Impairment
Refer to Note 21 Impairment of non-financial assets for further details on impairment.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
13. Trade and other payables
In thousands of AUD
2024
2023
Current
Trade payables
55,140
53,633
Other payables and accrued expenses
21,033
24,461
Unearned revenue
25,205
20,222
101,378
98,316
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 20 Financial
risk management/financial instruments.
14. Contingent consideration payable
In thousands of AUD
2024
2023
Current
Contingent consideration payable
3,740
4,316
Non-current
Contingent consideration payable
1,759
26,424
Total
5,499
30,740
Reconciliations of the carrying amounts of
contingent consideration payable:
Carrying amount at the beginning of the year
30,740
10,113
Recognised in business combinations (Note 23)
–
53,467
Re-assessment of contingent consideration
(22,421)
(34,648)
Unwind of present value interest
941
2,311
Effect of movements in exchange rates
166
2,168
Contingent consideration paid
(3,927)
(2,671)
Carrying amount at the end of the year
5,499
30,740
During the current year, the Group recognised a contingent consideration fair value gain of $22,421,000 (2023: gain of
$34,648,000) relating to a change in the best estimate of future contingent consideration payable to the vendors of ROI
DNA and GetIT.
Accounting policy
Contingent consideration payable is initially recognised at fair value in connection with a business combination. The liability
is discounted using a market interest rate for the liability and a present value interest charge is recognised in the
consolidated income statement as the discount unwinds. Any change in estimate of contingent consideration payable is
recognised in the consolidated income statement as a fair value gain or loss during the period when the estimate is
revised.
Key estimates
There is uncertainty around the actual payments that will be made as the payments are subject to the performance of ROI
DNA and GetIT subsequent to the reporting date. Factors which could vary the amount of contingent consideration
payable due include a net revenue, EBITDA and EBIT threshold for future payments, the basis of the average net revenue
over the contingent consideration period and purchase price cap . Actual future payments may differ from the estimated
liability. A sensitivity analysis for Contingent consideration payable is disclosed in Note 20 Financial risk
management/financial instruments.
Level 3 fair values
Refer to Note 20.
ENERO ANNUAL REPORT 2024
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15. Lease liabilities
This note provides information about the contractual terms of the Group’s leases. For more information about the Group’s
exposure to interest rate risk, liquidity risk and foreign currency risk, see Note 20 Financial risk management/financial
instruments.
In thousands of AUD
2024
2023
Current
Lease liabilities
4,149
4,264
Non-current
Lease liabilities
11,598
9,878
Total
15,747
14,142
Reconciliations of the carrying amounts of lease
liabilities:
Carrying amount at the beginning of the year
14,142
8,597
Additions
6,255
5,139
Acquired controlled entities
-
239
Re-measurement of lease liabilities
36
5,535
Repayments
(5,112)
(6,053)
Present value interest relating to lease liabilities
584
232
Effect of movements in exchange rates
(158)
453
Carrying amount at the end of the period
15,747
14,142
Accounting policy
Refer to Note 11.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
16. Employee benefits
In thousands of AUD
2024
2023
Aggregate liability for employee benefits, including on-costs
Current
Annual leave
4,555
4,677
Long service leave
1,022
1,180
5,577
5,857
Non-current
Long service leave
1,167
1,027
The Group has recognised $2,576,000 (2023: $2,532,000) as an expense in the consolidated income statement for
defined contribution plans during the reporting period.
Accounting policy
Provision is made for employee benefits including annual leave and long service leave for employees.
(i) Long-term employee benefits
The Group’s net obligation in respect of long-term service benefits, other than superannuation and pension plans, is the
amount of future benefit that employees have earned in return for their service provided up to the reporting date. The
obligation is calculated using expected future increases in wage and salary rates, including related on-costs and expected
settlement dates, and is discounted using the rates attached to the high quality corporate bonds which have maturity dates
approximating to the terms of the Group’s obligations.
(ii) Wages, salaries, annual leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries and annual leave, that are due to be settled within 12 months of the
reporting date, represent present obligations resulting from employees’ services provided to reporting date and are
calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at
reporting date, including related on-costs.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past services provided by the
employee and the obligation can be reliably estimated.
(iii) Termination benefits
Termination benefits are charged to the consolidated income statement when the Group is demonstrably committed,
without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are charged to the consolidated income statement if the Group has made
an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances
can be estimated reliably.
ENERO ANNUAL REPORT 2024
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17. Interest bearing liabilities
In thousands of AUD
2024
2023
Current
Unsecured bank loan
3,000
–
Non-current
Unsecured bank loan
–
8,735
Financing arrangements
The Group has access to the following lines of credit:
In thousands of AUD
2024
Total Credit
2024
Utilised
2023
Total Credit
2023
Utilised
Bank loan (cash advance)
50,000
3,000
50,000
8,735
Indemnity guarantee
3,151
1,678
3,351
2,031
Credit card
1,361
300
1,345
306
54,512
4,978
54,696
11,072
The Group was in compliance with all covenants as at 30 June 2024.
All finance facilities are negotiated by the Company on behalf of the Group. The carrying amount of amounts drawn on
facilities as at the reporting date equates to face value.
Cash advance facility
The cash advance facility is an unsecured revolving multi-currency general-purpose facility with Westpac Banking
Corporation (Westpac). The bank loan matures in June 2025 at a commercial interest rate. In the case of funds drawn in
AUD, the interest rate is Bank Bill Swap rate (BBSY) plus margin. In the case of funds drawn in USD, the interest rate is
Secured Overnight Funding Rate (SOFR) plus a credit adjustment spread.
Indemnity guarantee facility
The indemnity guarantee facility is in place to support financial guarantees for property rental and other obligations. The
indemnity guarantees issued by banks other than Westpac are secured by cash deposits held by the issuing bank. The
Group has pledged short-term deposits amounting to $684,000 for indemnity guarantee facilities at 30 June 2024.
Credit card facility
The credit card facility is subject to annual review and is subject to application approval and the bank or financial services
company’s standard terms and conditions.
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 20 Financial risk management/financial instruments.
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
18. Capital and reserves
In thousands of AUD
2024
2023
Share capital
Ordinary shares, fully paid
115,262
117,815
The Company does not have authorised capital or par value in respect of its shares.
Movement in ordinary shares
2024
Shares
2024
In thousands
of AUD
2023
Shares
2023
In thousands
of AUD
Balance at beginning of year
92,334,315
117,815
88,045,107
104,861
Shares issued to the employees of the Group on
exercise of Share Appreciation Rights(i)
32,984
52
820,120
2,690
Shares issued to vendors of ROI DNA and GetIT(ii)
-
-
3,855,147
10,857
Share buy-back
(1,632,178)
(2,605)
(386,059)
(593)
Balance at end of year
90,735,121
115,262
92,334,315
117,815
(i)
Share capital recognised during the year on the exercise of Share Appreciation Rights is based on the VWAP of the Company’s shares for the 20 business days prior to
the vesting date of the rights of $1.60 (2023: $3.28).
(ii)
Share capital recognised on shares issued to vendors of ROI DNA and GetIT.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholder meetings.
Share buy-back
When the Company re-acquires its own ordinary shares as the result of a share buy-back, those shares are deducted from
equity and the associated shares are cancelled. No gain or loss is recognised in the consolidated income statement and
the consideration paid including any directly attributable incremental costs is recognised directly in equity.
On 4 April 2023, the Company announced an on-market buy-back of shares with a maximum number of ordinary Enero
shares to be acquired of 8,804,510 which commenced on 1 May 2023. From 1 May 2023 to 30 June 2024 the Company
purchased and cancelled 2,018,237 ordinary shares at a total cost of $3,198,124 including brokerage costs at an average
of $1.60 excluding brokering costs.
Profit appropriation reserve
The profit appropriation reserve comprises profits appropriated by the parent entity in order to pay dividends.
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
Share-based payment reserve
The share-based payment reserve comprises the cumulative expense relating to the fair value of options, rights and equity
plans on issue to Key Management Personnel, senior Executives and employees of the Group less amounts transferred to
share capital on exercise of options, rights and equity plans.
Dividends
Dividend declared and/(or) paid by the Company to its members:
Cents per
share
Total amount
in thousands of
AUD
Date of payment
During the year ended 30 June 2024
Fully franked final dividend – 2023
4.5
4,139
28 September 2023
Fully franked interim dividend – 2024
3.0
2,741
12 April 2024
Subsequent to the balance sheet date, at the date of this report
Fully franked final dividend – 2024
2.0
1,815
3 October 2024
During the year ended 30 June 2023
Fully franked final dividend – 2022
6.5
6,027
4 October 2022
Fully franked interim dividend – 2023
6.5
6,027
15 March 2023
ENERO ANNUAL REPORT 2024
| 92
18. Capital and reserves (continued)
Dividend franking account
In thousands of AUD
2024
2023
Franking credits available for future years at 30% to shareholders of Enero Group Limited
996
5,273
The above amounts represent the balance of the franking account at the end of the financial year adjusted for:
•
franking credits that will arise from the payment of the current tax liability;
•
franking debits that will arise from the payment of dividends recognised as a liability at year end;
•
franking credits that will arise from the receipt of dividends recognised as receivables at year end; and
•
franking credits that may be prevented from being distributed in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends and
any restrictions to paying dividends.
Accounting policy
(i) Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of tax effects.
(ii) Dividends
Dividends are recognised as a liability in the period in which they are declared.
(iii) Transaction costs
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax
benefit.
19. Earnings per share
Profit attributable to equity holders of the parent
In thousands of AUD
2024
2023
(Loss)/Profit for the year
(37,138)
81,476
Non-controlling interests
(7,049)
(25,002)
(Loss)/Profit for the year attributable to equity holders of the parent
(44,187)
56,474
Weighted average number of ordinary shares
In thousands of shares
2024
2023
Weighted average number of ordinary shares – basic
91,422
92,485
Shares issuable under equity-based compensation plans 1
-
619
Weighted average number of ordinary shares – diluted
91,422
93,104
Earnings per share
In AUD cents
2024
2023
Basic
(48.3)
61.1
Diluted
(48.3)
60.7
Accounting policy
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares, which comprise share rights granted to employees.
1 In accordance with AASB133, Earnings per share, options that could potentially dilute basic earnings per share have not
been included in the calculation of diluted earnings per share shown below because they are anti dilutive for the periods
presented. The potential ordinary shares that may be dilutive is 50.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
20. Financial risk management/financial instruments
The Group’s exposure to financial risks, objectives, policies and processes for managing the risks including methods used
to measure the risks, and the management of capital, are presented below.
The Group’s activities expose it to the following financial risks:
•
credit risk;
•
liquidity risk; and
•
market risk.
The Group’s principal financial instruments comprise cash, receivables, payables, interest-bearing liabilities, contingent
consideration payable and other financial liabilities.
The Board has overall responsibility for the oversight of the risk management framework. Risk management policies are
established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits. Risk management policies and systems are reviewed regularly and modified as appropriate
to reflect changes in market conditions and the Group’s activities.
The Group considers that there are no changes to the objectives, policies and processes to managing risk and the
exposure to risks from the prior reporting period.
Credit risk
Exposure to credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligation, and arises principally from the Group’s receivables from customers.
Each subsidiary performs credit analysis of a new customer and standard payment terms are offered only to creditworthy
customers.
During the year ended 30 June 2024, the Group entered into transactions with approximately 390 unique customers. The
10 largest customers accounted for 49% of Net Revenue for the year ended 30 June 2024, with one customer accounting
for more than 20% of Net Revenue. There are no material credit exposures relating to a single receivable or groups of
receivables.
The maximum exposure to credit risk is net of any provisions for impairment of those assets, as disclosed in the
consolidated statement of financial position.
The carrying amount of financial assets and contract assets represents the maximum credit exposure. The maximum
credit exposure to credit risk at the reporting date was:
Carrying amount
In thousands of AUD
Note
2024
2023
Cash and cash
equivalents
7
46,703
52,432
Trade and other
receivables
8
77,953
74,801
Work in progress
9
3,273
3,506
Deposits
9
271
169
128,200
130,908
The Group’s maximum exposure to trade receivables credit risk at the reporting date was:
Carrying amount
In thousands of AUD
Note
2024
2023
Trade receivables
8
77,421
71,806
The Group’s credit risk exposure is consistent across the geographic and business segments in which the Group operates.
ENERO ANNUAL REPORT 2024
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20. Financial risk management/financial instruments (continued)
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
In thousands of AUD
2024
2023
Balance at 1 July
617
225
Reversal of prior year recognized
in income statement
(57)
255
Provision raised during year
–
137
Provision used during year
(339)
–
Balance at 30 June
221
617
Average credit loss for year(i)
–
–
Credit loss provision at balance
date(ii)
0.3%
0.9%
(i) Average credit loss for year is calculated by dividing impairment loss recognised for the year by the gross trade receivables balance.
(ii) Credit loss provision at balance date is calculated by dividing the provision by the gross trade receivable balance.
The average credit loss was assessed at 30 June 2024 and the Group continues to provide for expected credit losses
higher than the average credit loss for each financial year.
Impairment losses
The ageing of the Group’s trade receivables at the reporting date was:
In thousands of AUD
2024
2023
Not past due
72,538
63,872
Past due and less than 90 days
2,608
7,042
Past due and more than 90 days
2,278
892
Past due, more than 90 days
and impaired
218
617
Gross trade receivables
77,642
72,423
Less: Impairment(i)
(221)
(617)
Net trade receivables
77,421
71,806
(i) Impairment includes trade receivables specifically impaired of $61,000 (2023: $427,000) plus expected credit losses of $160,000 (2023: $190,000).
Foreign exchange risk
Foreign exchange risk arises from transactions and recognised assets and liabilities and net investments in foreign
operations. The Group’s general operating policy historically has been to conduct business in the currency of the local
area in which businesses of the Group are geographically located, thereby naturally hedging the consideration resulting
from client work. Businesses of the Group maintain bank accounts in the currency of these transactions solely for
working capital purposes.
The Group is exposed to movements in foreign currency exchange rates in respect of the translation of net assets and
income statement of foreign subsidiaries and equity accounted investments. The group does not hedge the translation
effect of exchange rate movements on the income statements or balance sheets of foreign subsidiaries, as it regards
these as long term investments.
Currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The source and nature of this risk arises from operations and translation risks.
In the current year, the operating businesses generated approximately 66% of their Net Revenue and 64% of their
EBITDA from international markets. The Group’s reporting currency is Australian dollars. However, the international
operations give rise to an exposure to changes in foreign exchange rates, as the majority of its revenues from outside
Australia are denominated in currencies other than Australian dollars, most significantly Great British pound (GBP) and
US dollar (USD).
The Group’s currency risk exposure is predominantly to consolidated Australian dollar translation risk as the majority of
transactions denominated in foreign currencies are transacted by entities within the Group with the same functional
currency as the relevant transaction. Additionally, as at 30 June 2024, the Group held AUD denominated bank loans of
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
20. Financial risk management/financial instruments (continued)
AUD 3,000,000 (2023: 8,735,000 (USD 5,800,000)) which were initially drawn in order to fund the acquisition of ROI DNA
Inc., a USA based agency. In future financial reporting periods, the Group intends to hedge its exposure to changes in the
value of its net investment in its US foreign operations through these borrowings as they are denominated in the same
currency as the foreign operation’s functional currency.
Market risk
Market risk is the risk relating to changes in market prices, such as foreign exchange rates, interest rates and equity
prices, which will affect the Group’s income or the value of its holding of financial instruments. The objective of market risk
management is to manage and control market risk exposure within acceptable parameters, while optimising the return.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due.
The Group manages liquidity risk by monitoring forecast operating cash flows and committed unutilised facilities (refer to
Note 17); and re-estimating the value of contingent consideration liabilities semi-annually. The following are the contractual
maturities of financial liabilities, including estimated interest payments.
Liquidity risk in relation to contingent consideration liabilities
There are critical accounting estimates and judgements in relation to contingent consideration liabilities. Refer to Note 14
Contingent consideration payable for further details.
There are no other significant uncertainties in the timing or amounts of contractual liabilities.
Interest rate risk
Interest rate risk refers to the risk that the fair value of the future cash flows of financial instruments will fluctuate because
of changes in market interest rates. The Group’s borrowings which have a variable interest rate attached give rise to cash
flow interest rate risk, as do the Group’s lease liabilities. Whilst there is no formal policy in place mandating hedging levels,
the Group may hedge the interest rate risk by taking out floating to fixed rate swaps on drawn debt. Such interest rate
swaps have the economic effect of converting borrowings from variable rates to fixed rates.
The following considerations are made to material interest rate transactions to ensure that the Group:
•
is afforded some protection from significant increases in interest rates, thereby adding some degree of certainty
to the financial budgeting process; and
•
maintains sufficient interest rate flexibility to participate in normal yield curve environments without unduly paying
up for term interest rate hedges; repay debt without significant swap (fixed rate) break costs; and undertake
interest rate maturity extension trades as appropriate.
As at 30 June 2024, the Group has not entered into any interest rate swaps to convert the borrowings from variable rate to
fixed rates. Accordingly, the Group’s interest-bearing liabilities of $3,000,000 at 30 June 2024 (30 June 2023: $8,735,000)
are variable rate financial instruments.
2024
In thousands of AUD
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to 5 years Over 5 years
Non-derivative financial liabilities
Lease liabilities
15,747
17,036
4,461
11,584
991
Trade and other payables
(excluding unearned revenue)
76,173
76,173
76,173
–
–
Contingent consideration payable
5,499
5,474
3,717
1,757
–
Interest bearing liabilities
3,000
3,179
3,179
–
–
100,419
101,862
87,530
13,341
991
2023
In thousands of AUD
Carrying
amount
Contractual
cash flows
Less than
1 year
1 to 5 years Over 5 years
Non-derivative financial liabilities
Lease liabilities
14,142
15,385
4,827
10,528
30
Trade and other payables
(excluding unearned revenue)
78,094
78,094
78,094
–
–
Contingent consideration payable
30,740
30,349
4,516
25,833
Interest bearing liabilities
8,735
9,149
547
8,602
–
131,711
132,977
87,984
44,963
30
ENERO ANNUAL REPORT 2024
| 96
20. Financial risk management/financial instruments (continued)
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting dates would have increased
(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in
particular foreign currency exchange rate, remain constant.
2024
In thousands of AUD
Profit or Loss
Equity
100 bp
increase
100 bp
decrease
100 bp
increase
100 bp
decrease
Interest-bearing liabilities
76
(76)
-
-
2023
In thousands of AUD
Profit or Loss
Equity
100 bp
increase
100 bp
decrease
100 bp
increase
100 bp
decrease
Interest-bearing liabilities
313
(313)
-
-
Capital management
The Group’s key sources of capital are available committed facilities and share capital. The Board seeks to maintain a
balance between higher returns that might be possible with higher levels of gearing and the advantages afforded by a
prudent capital position. The Group also has contingent consideration payable as described in Note 14 Contingent
consideration payable.
Fair value measurement:
Level 3 fair values
The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments measured
at fair value in the consolidated statement of financial position, as well as the significant unobservable inputs used. There is
uncertainty around the actual payments that will be made as the payments are subject to the performance of ROI DNA and
GetIT subsequent to the reporting date. Factors which could vary the amount of contingent consideration payable due
include a net revenue, EBITDA and EBIT threshold for future payments, the basis of the average net revenue over the
contingent consideration period and purchase price cap. Actual future payments may differ from the estimated liability.
Type
Valuation technique
Significant
unobservable inputs
Inter-relationship between
significant unobservable
inputs and fair value
measurement
Contingent
consideration
payable
Discounted cash flows: The valuation
model considers the present value of
expected capped payments (payable over
3 years), discounted using a risk-adjusted
discount rate. The expected payment is
determined by considering forecast
performance indicators, the amount to be
paid under each scenario and the
probability of each scenario.
–
Forecast
performance
indicator.
–
Risk-adjusted
discount rate: 5.05%
- 6.17% (30 June
2023: 4.28% -
5.52%)
The estimated fair value
would increase (decrease)
if:
–
the forecast
performance indicators
are higher (lower); or
–
the risk-adjusted
discount rates were
lower (higher).
Reconciliation of Level 3 fair values
Refer to Note 14 Contingent consideration payable for a reconciliation of the opening and closing carrying amounts of
contingent consideration payable.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
20. Financial risk management/financial instruments (continued)
Sensitivity analysis
Reasonably possible changes after 30 June 2024 to one of the significant unobservable inputs, holding other inputs
constant, would have the following effects on the fair values of contingent consideration:
In thousands of AUD
Increase
Decrease
Movement of 5% in forecast performance indicator
88
(84)
Movement of 10% in forecast performance indicator
176
(160)
Movement of 15% in forecast performance indicator
264
(229)
Other items
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, interest
bearing liabilities and lease liabilities approximates their fair value. The fair value which is determined for disclosure
purposes only is calculated as:
•
Trade receivables: is the present value of future cash flows, discounted at the market rate of interest at the reporting
date.
•
Trade and other payables: is the present value of future principal and interest cash flows, discounted at the market
rate of interest at the reporting date.
Accounting policy
Non-derivative financial assets
Non-derivative financial assets are recognised on the date that they are originated. All other financial assets (including
assets designated as fair value through the profit and loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
Non-derivative financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position
when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets:
(i) Trade and other receivables
Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Group provides money or services directly to a debtor with no intention of selling the
receivable.
Trade and other receivables are recognised initially at fair value, plus any directly attributable transaction costs.
Subsequent to initial recognition, trade and other receivables are measured at amortised cost using the effective interest
method, less a loss allowance equal to the expected credit loss determined under the expected credit loss assessment for
receivables.
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank
overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.
Non-derivative financial liabilities
The Group has the following non-derivative financial liabilities: lease liabilities, trade, other payables, contingent
consideration payable and borrowings
Non-derivative financial liabilities, other than contingent consideration payable, are recognised initially at fair value, plus
any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
amortised cost using the effective interest rate method.
Contingent consideration payable is classified as a financial liability and is measured at fair value through profit or loss.
Contingent consideration relating to acquisition of subsidiaries is recognised based on management’s best estimate of the
liability (up to any relevant cap) at the reporting date. The liability is discounted using a market interest rate for the liability
and a present value interest charge is recognised in the consolidated income statement as the discount unwinds. Any
change in estimate of contingent consideration payable is recognised in the consolidated income statement as a fair value
gain or loss during the period when the estimate is revised.
ENERO ANNUAL REPORT 2024
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20. Financial risk management/financial instruments (continued)
Impairment of Financial assets (including receivables)
A financial asset not carried at fair value through profit or loss is assessed on a monthly basis to determine whether there
is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates
that one or more events have had a negative effect on the estimated future cash flows of that asset that can be
estimated reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, and/or indications that a debtor or issuer
will enter bankruptcy.
Expected credit loss assessment for receivables and contract assets
In addition to identifying impairment for specific financial assets, at each reporting date the Group also predicts the
expected credit loss based on actual credit loss experience of the past three years. Expected credit losses are
recognised in the consolidated income statement and reflected in an allowance account against receivables. An
impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.
Key estimates
Trade receivables are carried at amortised cost less impairment. The impairment of these receivables is an estimate
based on:
•
evidence suggesting that an event has occurred leading to a negative effect on the estimated future cash inflow; and
•
prediction of expected credit loss based on actual credit loss experience of the past three years.
Events subsequent to the reporting date but prior to the signing of the consolidated financial statements which indicate a
negative effect are taken into account in the calculation of impairment. Future events may occur which change these
estimates of the future cash inflows related to impaired trade receivables.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
21. Impairment of non-financial assets
The process of impairment testing is to estimate the recoverable amount of the assets concerned and recognise an
impairment loss in the consolidated income statement whenever the carrying amount of those assets exceeds the
recoverable amount.
Impairment tests for cash-generating units (CGUs) goodwill
For impairment testing, goodwill is allocated to the Group’s operating business units that represent the lowest level within
the Group at which goodwill is monitored for internal management purposes and synergies obtained by the business unit.
The aggregation of assets in the CGU continues to be based upon the interdependency of the cash inflows generated from
the service offering and synergies obtained by the business unit. ROI DNA and GetIT were acquired on 1 July 2022.
Goodwill arising from the acquisition of these new businesses is required to be tested independently of other goodwill
amounts as this represents the lowest level at which the performance of the respective businesses is monitored due to the
terms of the earn-out agreements. The THC Practice represents a group of CGUs as this is the lowest level at which the
goodwill is monitored for internal management purposes.
The challenging macroeconomic environment in the technology sector has impacted near-term performance of ROI DNA
and GetIT. The recent performance and the uncertainty around timing of improved market conditions have resulted in an
impairment assessment for both CGUs in this reporting period.
The Group recognised an impairment loss of $63,058,000 relating to ROI DNA and $7,664,000 GetIT
The recoverable amount of the CGUs was based on value in use in both the current and prior year. The methodologies
and assumptions used for calculating value in use for all of the CGUs have remained materially consistent with those
applied in prior years.
Key assumptions
Key assumptions used in the value in use approach to test for impairment relate to projected five year cash flows, the
discount rates and the medium-term and long-term growth rates applied to projected cash flows.
Projected cash flows
The projected first year of cash flows is derived from next financial year’s risk adjusted budgets. This reflects the best
estimate of the CGU’s future cash flows at the reporting date. Projected cash flows can differ from future actual cash flows
and results of operations. Projected cash flows for year two onwards have then been built off Net Revenue and EBITDA
growth for each CGU.
Discount rates
Discount rates are based on the Group’s pre-tax weighted average cost of capital (WACC) adjusted if necessary to reflect
the specific characteristics of each CGU group and to obtain a post-tax discount rate. Discount rates used are appropriate
for the currency in which cash flows are generated and are adjusted to reflect the current view on the appropriate debt
equity ratio and risks inherent in assessing future cash flows.
Long-term growth rate into perpetuity
Long-term growth rate is used into perpetuity, based on the expected long-range growth rate for the industry.
Impairment testing key assumptions:
CGU Groups
2024
THC Practice
OBMedia
ROI DNA
GetIT
Post-tax discount rate %
10.6 – 12.2
18.1
15.0
13.0
Long-term perpetuity growth
rate %
2.5
2.5
2.5
2.5
CGU Groups
2023
Brand Transformation
Creative Technology and
Data
ROI DNA
GetIT
Post-tax discount rate %
10.5 – 11.8
11.0
10.5
10.2
Long-term perpetuity
growth rate %
2.5
2.5
2.5
2.5
OBMedia has been separated into its own CGU and the agencies have been grouped into Technology, Healthcare and
Consumer (THC) Practice CGU, ROI DNA CGU and GetIT CGU however, the re-organisation had no impact on ROI DNA
and GetIT CGUs.
ENERO ANNUAL REPORT 2024
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21. Impairment of non-financial assets (continued)
Sensitivity range for impairment testing assumptions
Whilst it is management’s view that the assumptions used for growth rates over the forecast period and the long-term and
discount rates are reasonable, a sensitivity analysis was performed for each CGU taking into consideration the possible
impacts of adverse economic conditions over the forecast period. Specifically, the impact that severe and sustained
inflation in key geographies, supply chain issues affecting the distribution of customers’ products, or a disruption in the
credit markets may have on the key assumptions used in determining each CGU’s recoverable amount, being:
•
lower projected cash inflows as result of reductions, deferrals or cancellations by customers in terms of their
spending on advertising, marketing and corporate communications projects;
•
increased operating costs, including those to attract and retain the talent needed to grow revenues at
forecast levels; or
•
higher discount rates.
The results of this sensitivity analysis were such that any reasonably possible change in these key assumptions upon
which each CGU’s recoverable amounts were based would not cause the corresponding CGU’s carrying amount to
exceed its recoverable amount except for ROI DNA and GetIT CGUs.
Management has identified that a reasonably possible change in three key assumptions could cause the carrying amount
to exceed the recoverable amount for ROI DNA and GetIT CGUs as shown below:
30-Jun-2024
ROI DNA
GetIT
In thousands of AUD
Key Assumption
Change %
Impact
Change %
Impact
Discount rate
+0.5%
(803)
+0.5%
(59)
Revenue growth rate
-5%
(1,783)
-5%
(189)
EBITDA margin rate
-5%
(7,172)
-5%
(1,125)
Accounting policy
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. Goodwill and 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.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated
future post-tax cash flows are discounted to their present value using a post-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
For the purpose of assessing impairment, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the
‘cash-generating unit’).
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of goodwill and then to
reduce the carrying amount of the other assets on a pro-rata basis.
At each reporting date, the Group reviews non-financial assets other than goodwill that have been previously impaired for
indications that the conditions that resulted in the impairment have reversed.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
22. Controlled entities
Particulars in relation to controlled entities:
Name
2024
%
2023
%
Country of
incorporation
Parent entity
Enero Group Limited
Controlled entities
Enero Group UK Holdings Pty Limited
100
100
Australia
– Enero Group UK Limited
100
100
UK
Enero Group (US) Pty Limited
100
100
Australia
– Enero Group (US) Inc.
100
100
USA
BMF Holdco Pty Limited
100
100
Australia
BMF Advertising Pty Limited (also as Trustee of The BMF Unit Trust)
100
100
Australia
The BMF Unit Trust
100
100
Australia
Hotwire Integrated Communications Pty Limited (Dormant)
100
100
Australia
Naked Communications Australia Pty Limited (Dormant)
100
100
Australia
Hotwire Australia Pty Limited
100
100
Australia
Orchard Marketing Pty Ltd
100
100
Australia
Alfie Agency Pty Ltd
100
100
Australia
CPR Communications and Public Relations Pty Limited (Disposed)
100
100
Australia
Enero Group Finance Pty Limited
100
100
Australia
Domain Active Holdings Pty Limited
100
100
Australia
– Domain Active Pty Limited
100
100
Australia
The Leading Edge Market Research Consultants Pty Limited (Dormant)
100
100
Australia
– Hotwire Global Communications Pte Ltd
100
100
Singapore
-
Hotwire Global Pte Ltd (formerly GetIT Pte Ltd)
100
100
Singapore
-
GetIT Japan G.K.
100
100
Japan
-
GetIT Comms Sdn Bhd
100
100
Malaysia
-
GetIT Communications Private Limited
100
100
India
The Digital Edge Online Consultants Pty Limited (Dormant)
100
100
Australia
Brigade Pty Limited (Dormant)
100
100
Australia
The Hotwire Public Relations Group Limited
100
100
UK
– Hotwire Public Relations GMBH
100
100
Germany
– Hotwire Public Relations SARL
100
100
France
– Hotwire Public Relations SL
100
100
Spain
– Hotwire Public Relations SRL
100
100
Italy
– Hotwire Public Relations Limited
100
100
UK
OBMedia LLC
51
51
USA
– OBMedia Network 1 L.T.D
51
51
Israel
IdealAds LLC
51
51
USA
SiteMath LLC
51
51
USA
– Clicksciences.com LLC
51
51
USA
Orchard Creative Technology Inc.
100
100
USA
Hotwire Public Relations Group LLC
100
100
USA
ROI DNA, Inc
100
100
USA
ENERO ANNUAL REPORT 2024
| 102
22. Controlled entities (continued)
Accounting policy
Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method. For every business combination, the Group
identifies the acquirer, which is the combining entity that obtains control of other combining entities or businesses. The
acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the
acquisition date and determining whether control is transferred from one party to another.
Goodwill arising from the business combination is measured at fair value of the consideration transferred including the
recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of
the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. Non-controlling interest is
measured at its proportionate interest in the identifiable net assets of the acquiree.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous
owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of
any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the
business combination.
A contingent liability of the acquiree assumed in a business combination is recognised only if such a liability represents a
present obligation and arises from a past event, and its fair value can be measured reliably.
Transaction costs incurred in connection with a business combination are expensed as incurred.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
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ENERO ANNUAL REPORT 2024
23. Acquisitions
2024
There were no acquisitions for the year ended 30 June 2024.
2023
On 1 July 2022, the Group acquired 100% of the issued capital of ROI DNA Inc. (“ROI DNA”), a USA based strategic B2B
sales and marketing agency. The purchase consideration was an upfront payment of $38,306,000 (US$26,400,000) in
cash and $9,014,000 (US$6,600,000) of Enero Group Limited shares. The Group agreed to pay the selling shareholders
over three years additional consideration up to $82,707,000 based on the acquiree’s EBITDA each year. The Group has
included $47,887,000 as contingent consideration related to the estimated additional earn-out payments, which represents
its fair value at the date of acquisition. At 30 June 2023, the contingent consideration had decreased to $21,556,000 due to
lower earnings expectations.
On 1 July 2022, the Group acquired 100% of the issued capital of GetIT Pte Ltd (“GetIT”), a Singapore based specialist
B2B technology marketing agency with presence in India, Malaysia and Japan. The purchase consideration was an upfront
payment of $2,816,000 (S$2,700,000) in cash and $1,843,000 (S$1,800,000) of Enero Group Limited shares. The Group
agreed to pay the selling shareholders over three years additional consideration up to $10,952,000 based on the
acquiree’s EBIT each year. The Group included $5,580,000 as contingent consideration related to the estimated additional
earn-out payments, which represents its fair value at the date of acquisition. At 30 June 2023, the contingent consideration
had decreased to $2,969,000 due to lower earnings expectations.
The acquisition of both ROI DNA and GetIT and introduction of revenue services to complement the reputation and
relationship services will enable the Group to strategically reposition the Hotwire agency and provide a unique marketplace
offering. The acquisitions will also expand its footprint into Asia Pacific and provide further opportunities to support global
technology clients.
For the 12 months ended 30 June 2023, ROI DNA contributed net revenue of $27,700,000 and EBITDA of $2,900,000 to
the Group’s results. GetIT Pte Ltd contributed net revenue of $2,200,000 and EBITDA of $200,000 to the Group’s results.
Fair value of the net identifiable assets and liabilities acquired at the date of acquisition for ROI DNA were:
In thousands of AUD
Fair value recognition
on acquisition
Cash and cash equivalents
12,108
Trade and other receivables
5,396
Current tax asset
1,415
Other assets
423
Property, plant and equipment
196
Other intangible assets
19,223
Trade and other payables
(2,274)
Unearned revenue
(7,510)
Deferred tax liability
(5,618)
Employee benefits
(810)
Net assets acquired
22,549
Value of goodwill
In thousands of AUD
Initial consideration
47,320
Estimate of contingent consideration payable
47,887
Total consideration
95,207
Less: Working capital adjustment
(17)
Less: fair value of net assets acquired
(22,549)
Effect of movement in exchange rate
7,962
Value of goodwill
80,603
ENERO ANNUAL REPORT 2024
| 104
23. Acquisitions (continued)
Fair value of the net identifiable assets and liabilities acquired at the date of acquisition for GetIT were:
In thousands of AUD
Fair value recognition
on acquisition
Cash and cash equivalents
866
Trade and other receivables
934
Other assets
86
Property, plant and equipment
83
Other intangible assets
2,960
Trade and other payables
(833)
Unearned revenue
(341)
Deferred tax liability
(468)
Bank loans
(315)
Net assets acquired
2,972
Value of goodwill
In thousands of AUD
Initial consideration
4,659
Estimate of contingent consideration payable
5,580
Total consideration
10,239
Less: Working capital adjustment
(352)
Less: fair value of net assets acquired
(2,972)
Effect of movement in exchange rate
779
Value of goodwill
7,694
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
| 105
ENERO ANNUAL REPORT 2024
24. Disposals
2024
On 31 October 2023, the Group entered into a sale agreement to sell the business assets of its public affairs agency, CPR
Communications and Public Relations (CPR) to The Civic Partnership (Civic), for consideration of $0.7m. The Group
recognised an accounting loss on sale of $2.2m in the consolidated income statement for the year ended 30 June 2024.
Assets and liabilities and cash flow of disposed entity
The major classes of assets and liabilities of the disposed businesses are as follows:
In thousands of AUD
Carrying amounts
Assets
Trade and other receivables
279
Other assets
16
Goodwill
2,640
Plant and equipment
10
Total assets disposed
2,945
Liabilities
Trade and other payables
15
Employee benefits
30
Total liabilities disposed
45
Net assets disposed
2,900
Loss on sale
In thousands of AUD
Consideration received
746
Less: net assets disposed
(2,900)
Less: incidental cost
–
Loss on sale in the consolidated income statement
(2,154)
Net cash received
In thousands of AUD
Total consideration
746
Less: working capital adjustment
(280)
Less: Deferred consideration
(354)
Reflected in the consolidated statement of cash flows
112
2023
There were no disposals in the year ended 30 June 2023.
ENERO ANNUAL REPORT 2024
| 106
25. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2024, the parent company of the Group was Enero Group Limited.
In thousands of AUD
2024
2023
Result of the parent entity
Profit/(Loss) for the year
5,206
(5,572)
Other comprehensive income
–
–
Total comprehensive profit/(loss) for the year
5,206
(5,572)
Financial position of the parent entity at year end
Current assets
18,984
17,164
Total assets
120,262
132,849
Current liabilities
24,399
28,183
Total liabilities
27,835
37,229
Net assets
92,427
95,620
Total equity of the parent entity comprising:
Share capital
115,262
117,815
Share-based payment reserve
8,934
7,900
Profit appropriation reserve
13,962
15,636
Accumulated losses
(45,731)
(45,731)
Total equity
92,427
95,620
For dividends declared and paid by the Company to members since the end of the previous financial year, refer to Note 18 Capital and
Reserves.
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in
respect of its subsidiaries.
Further details of the Deed of Cross Guarantee, and the subsidiaries subject to the deed, are disclosed in
Note 26 Deed of Cross Guarantee.
Contingent liabilities
Indemnities
Indemnities have been provided to Directors and certain Executive Officers of the Company in respect of third parties
arising from their positions, except where the liability arises out of conduct involving lack of good faith. No monetary limit
applied to these agreements and there are no known obligations outstanding at 30 June 2024.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
| 107
ENERO ANNUAL REPORT 2024
26. Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly owned
Companies) Instrument 2016/785, the wholly owned
subsidiaries listed below are relieved from the
Corporations Act 2001 requirements for the preparation,
audit and lodgment of financial statements and a
Directors’ Report.
It is a condition of the Instrument that the Company
and each of the subsidiaries enter into a Deed of Cross
Guarantee. The effect of the Deed is that the Company
guarantees to each creditor payment in full of any debt
in the event of winding up of any of the subsidiaries
under certain provisions of the Corporations Act 2001. If
a winding up occurs under other provisions of the Act,
the Company will only be liable in the event that after six
months any creditor has not been paid in full. The
subsidiaries have also given similar guarantees in
the event that the Company is wound up.
The subsidiaries subject to the Deed are:
–
BMF Advertising Pty Ltd
–
BMF Holdco Pty Limited.
A consolidated income statement and consolidated
statement of financial position, comprising the Company
and controlled entities which are party to the Deed, after
eliminating all transactions between parties to the Deed
of Cross Guarantee, at 30 June 2024, is set out as
follows:
Income statement
In thousands of AUD
2024
2023
Gross revenue
68,051
64,213
Directly attributable costs of
sales
(33,014)
(32,721)
Net Revenue
35,037
31,492
Other income
14
2
Employee expenses
(33,511)
(30,743)
Occupancy costs
(289)
(244)
Travel expenses
(482)
(572)
Communication expenses
(113)
(398)
Compliance expenses
1,176
(1,419)
Depreciation and amortisation
expenses
(1,774)
(2,084)
Administration expenses
(1,937)
(1,983)
Gain on disposal of business
(3,265)
–
Incidental acquisition costs
(449)
(50)
Restructuring costs
(638)
(374)
Impairment
(104)
–
Finance income
369
275
Finance costs
(501)
(389)
Management fees received
from subsidiaries
3,199
3,879
Dividends received from
subsidiaries
4,405
–
Profit/(Loss) before income tax
1,137
(2,608)
Income tax benefit
310
820
Profit/(Loss) for the year
1,447
(1,788)
Attributable to:
Equity holders of the Company
1,447
(1,788)
Statement of financial position
In thousands of AUD
2024
2023
Assets
Cash and cash equivalents
10,108
9,162
Trade and other receivables
10,944
12,209
Income tax receivable
1,340
2,950
Other assets
1,119
1,295
Total current assets
23,511
25,616
Receivables
40,815
45,330
Other financial assets
31,001
35,013
Deferred tax assets
2,111
5,378
Plant and equipment
480
921
Right-of-use assets
5,053
7,296
Intangible assets
16,365
16,333
Total non-current assets
95,825
110,271
Total assets
119,336
135,887
Liabilities
Trade and other payables
13,933
17,067
Lease liabilities
1,910
2,640
Employee benefits
2,502
2,447
Total current liabilities
18,346
22,154
Lease liabilities
3,260
5,557
Deferred tax liabilities
358
3,966
Employee benefits
665
550
Total non-current liabilities
4,283
10,073
Total liabilities
22,628
32,227
Net assets
96,708
103,660
Equity
Issued capital
115,262
117,815
Share-based payment reserve
8,934
7,900
Profit appropriation reserve
13,962
15,636
Accumulated losses
(41,450)
(37,691)
Total equity
96,708
103,660
ENERO ANNUAL REPORT 2024
| 108
27. Commitments
Leases
Leases as lessee
Commitments for minimum lease payments (undiscounted) in relation to non-cancellable low value leases are payable as
follows:
In thousands of AUD
2024
2023
Less than one year
169
68
Between one and five years
4
9
Over five years
–
–
173
77
The Group leases many assets, including properties and office equipment, under non-cancellable low value leases
generally expiring in two to 10 years. Amounts disclosed in the above table relate only to leases exempt from AASB 16
recognition.
28. Contingencies
Contingent liabilities
Indemnities
Indemnities have been provided to Directors and certain Executive Officers of the Company in respect of third parties
arising from their positions, except where the liability arises out of conduct involving lack of good faith. No monetary limit
has been applied to these agreements and there are no known obligations outstanding at 30 June 2024.
29. Subsequent events
Transactions or events subsequent to the balance date, were:
•
the Directors have declared a final dividend, with respect to ordinary shares, of 2.0 cents per share, fully franked.
The final dividend will have a record date of 20 September 2024 and a payment date of 3 October 2024.
Except for these events there has not arisen, in the interval between the end of the financial year and the date of this
report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company, to significantly affect the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial years.
30. Key Management Personnel and other related party disclosures
In addition to Executive and Non-Executive Directors, the following were Key Management Personnel of the Group at any
time during the reporting period:
Name
Position
Carla Webb-Sear Chief Financial Officer
Other transactions with the Company or its controlled entities
A number of the Key Management Personnel, or their related entities, hold positions in other entities that result in them
having control or significant influence over the financial or operating policies of those entities.
There were no transactions with the Company or its subsidiaries and Key Management Personnel in the current or prior
reporting period.
Director related party transactions
There were no related party transactions with any Director during the current or prior reporting period.
Key Management Personnel compensation (including all Directors) is as follows:
In AUD
2024
2023
Short-term employee benefits
2,454,747 2,969,498
Other long-term benefits
30,101
14,100
Post-employment benefits
61,647
75,876
Termination benefits
126,354
–
Share-based payments – Share
Appreciation Rights
200,500 1,326,097
Total Key Management
Personnel compensation
2,873,349 4,385,571
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
| 109
ENERO ANNUAL REPORT 2024
31. Share-based payments
Equity-based plans
Long-term incentives (LTI) were provided as equity-based incentives in the Company under the Share Appreciation Rights
Plan (SARP) in the current and prior financial years.
Share Appreciation Rights (SARs)
The Share Appreciation Rights Plan is designed to incentivise the Company’s Senior Executives and other senior
management of the Group.
The fair value of the SARs is measured using the Monte Carlo simulation model. Measurement inputs include share price
on measurement date, exercise price of the instruments, expected volatility (based on weighted average historical
volatility), weighted average expected life of the instruments (based on historical experience and general rights holder
behaviour), expected dividends, and the risk-free interest rate (based on Government bonds). Service conditions attached
to the transactions are not taken into account in determining fair value.
The plan allows for the Board to determine who is entitled to participate in the SAR Plan, and it may grant rights
accordingly. Enero’s Board may determine whether or not the grant of rights is conditional on the achievement of
performance hurdles; and if so, the nature of those hurdles.
The exercise of each right will entitle the rights holder to receive a fraction of an ordinary share based on a conversion
formula of E = (A – B) / A, where:
–
E is the share right entitlement;
–
A is the volume weighted average price (VWAP) for the Company’s shares for the 20 business days prior to the
vesting date of the rights; and
–
B is the VWAP for the Company’s shares for the 20 business days before the rights were granted.
If A – B is less than or equal to zero, the share right will not vest and will immediately lapse on the applicable vesting date.
The number of shares to be granted will equal the number of SARs awarded multiplied by the above conversion formula.
One share right shall never convert into more than one share in the capital of the Company. Rights expire at
15 business days after the relevant vesting date or the termination of the individual’s employment. The Board may exercise
discretion on early vesting of rights in the event of a change of control of the Group. Refer to the table below for a
summary of SARs on issue.
Summary of Share Appreciation Rights on issue:
Issue date
21 October 2021
21 October 2022
30 October 2023
SARs issued
4,525,000
4,425,000
4,550,000
Participants
Senior Executives
Senior Executives
Senior Executives
VWAP for the 20 business days prior to the
grant (B)
$3.02
$2.85
$1.60
Vesting dates:
20 business days after the release of the
Group financial report for the year ended:
Tranche 1 (1/3)
Tranche 2 (1/3)
Tranche 3 (1/3)
30 June 2022
30 June 2023
30 June 2024
30 June 2023
30 June 2024
30 June 2025
30 June 2024
30 June 2025
30 June 2026
Last expiry date
30 September 2024
30 September 2025
30 September 2026
Outstanding SARs as at 30 June 2024
1,275,004
2,533,333
4,330,000
ENERO ANNUAL REPORT 2024
| 110
31. Share-based payments (continued)
Share Appreciation Rights (SARs)
Summary of rights over unissued ordinary shares
Grant date
Expiry
date
Weighted
average
exercise
price
Number of
Rights
outstanding
at beginning
of year
Rights
granted
during
year
Rights
exercised
during year
Rights
forfeited
during year
Proceeds
received
Date
issued
Number of
shares
issued
Expected
life
(years)
VWAP (for the
20 business
days prior to
the grant)
Rights
expired
during year
Number of
Rights at
year end
outstanding
Number
of Rights
at year
end
vested
2024
21 Oct 2020
30 Sep
2023
$1.52
–
908,340
–
841,672
–
66,668
-
–
–
–
32,984
–
21 Oct 2021
30 Sept
2024
$3.02
–
3,016,670
–
–
1,324,999
416,667
1,275,004
–
–
–
–
–
21 Oct 2022
30 Sept
2025
$2.85
–
4,425,000
–
–
1,300,000
591,667
2,533,333
–
–
–
–
0.9–2.9
30 Oct 2023
30 Sep
2026
$1.60
–
– 4,550,000
–
–
220,000
4,330,000
–
–
–
–
0.9–2.9
8,350,010 4,550,000
841,672
2,624,999
1,295,002
8,138,337
–
–
32,984
Grant date
Expiry
date
Weighted
average
exercise
price
Number of
Rights
outstanding
at beginning
of year
Rights
granted
during
year
Rights
exercised
during year
Rights
forfeited
during year
Proceeds
received
Date
issued
Number of
shares
issued
Expected
life
(years)
VWAP (for the
20 business
days prior to
the grant)
Rights
expired
during year
Number of
Rights at
year end
outstanding
Number
of Rights
at year
end
vested
2023
24 Oct 2019
30 Sep
2022
$2.13
–
416,670
–
416,670
–
-
-
–
–
–
146,087
–
21 Oct 2020
30 Sept
2023
$1.52
–
2,066,670
–
1,033,330
–
125,000
908,340
–
–
–
554,472
–
21 Oct 2021
30 Sept
2024
$3.02
–
4,525,000
-
1,508,330
–
–
3,016,670
–
–
–
119,561
0.9–2.9
21 Oct 2022
30 Sep
2025
$2.85
–
– 4,425,000
-
-
-
4,425,000
–
–
–
–
0.9–2.9
7,008,340 4,425,000
2,958,330
–
125,000
8,350,010
–
–
820,120
The number and weighted average exercise price of share rights is as follows:
VWAP (for the
20 business
days prior to
the grant) 2024
$
Weighted
average
exercise
price 2024
Number of
rights
2024
VWAP (for the
20 business
days prior to
the grant) 2023
$
Weighted
average
exercise
price 2023
Number of
rights
2023
Outstanding at 1 July
2.77
–
8,350,010
2.52
–
7,008,340
Forfeited during the
period
2.62
–
(1,295,002)
1.52
–
(125,000)
Exercised during the
period
1.52
–
(841,672)
2.37
–
(2,958,330)
Expired during the
period
2.94
(2,624,999)
–
–
–
Granted during the
period
1.60
–
4,550,000
2.85
–
4,425,000
Outstanding at 30 June
–
–
8,138,337
–
–
8,350,010
Exercisable at 30 June
–
–
–
–
–
–
The SARs outstanding at 30 June 2024 have a VWAP (for the 20 business days prior to the grant) range of $1.60 to $2.21
(30 June 2023: $1.52 to $2.85).
The SARs outstanding at 30 June 2024 have a weighted average contractual life of 0.94 years (30 June 2023: 0.96 years).
The fair value of services received in return for SARs granted is based on the fair value of SARs, measured using the
Monte Carlo simulation model.
The total net expenses recognised by the Group for the year ended 30 June 2024 for share-based payment transactions
were $1,086,000 (2023: $2,501,000).
The VWAP for the 20 business days prior the date of exercise of SARs on 15 September 2023 was $1.60.
Notes to the Consolidated Financial Statements
for the year ended 30 June 2024
| 111
ENERO ANNUAL REPORT 2024
31. Share-based payments (continued)
Inputs for measurement of grant date fair value
The following factors and key assumptions were used in determining the fair value of the SARs on the grant date:
Grant date
Expiry date
Value per
SAR
$
VWAP (for the
20 business
days prior to
the grant)
$
Price of
shares
on grant
date
$
Expected
volatility
%
Risk-free
interest rate
%
Dividend
yield
%
Expected
life
(years)
21 Oct 2021(i)
30 Sept 2024 0.64 – 0.85
3.02
3.38
40-50
0.01-0.36
5.0
0.9–2.9
21 Oct 2022(ii)
30 Sept 2025 0.41 – 0.68
2.85
2.80
40-45
0.03-0.04
4.0
0.9–2.9
30 Oct 2023(iii)
30 Sept 2026 0.41 – 0.68
1.60
1.56
40-45
0.04-0.05
5.5
0.9–2.9
(i)
Grant is in relation to SARs provided to senior employees of the Group which were issued on 21 October 2021. The last expiry date of the rights
is 15 days after the relevant vesting date for the year ended 30 June 2024, which is estimated to be around
30 September 2024.
(ii) Grant is in relation to SARs provided to senior employees of the Group which were issued on 21 October 2022. The last expiry date of the rights
is 15 days after the relevant vesting date for the year ended 30 June 2025, which is estimated to be around 30 September 2025.
(iii) Grant is in relation to SARs provided to senior employees of the Group which were issued on 30 October 2023. The last expiry date of the rights
is 15 days after the relevant vesting date for the year ended 30 June 2026, which is estimated to be around
30 September 2026.
Accounting policy
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-
market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on
the number of awards that meet the related services and non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Fair value measurement and key estimates
The grant date fair value of employee share rights is measured using the Monte Carlo simulation model. This value is
determined by an appropriately qualified independent expert commissioned by the Directors. Inputs to the determination of
fair value are subjective and include the market value of the Company’s share price on the grant date, expected volatility
(based on weighted average historic volatility adjusted for changes expected due to publicly available information) of the
Company’s share price, the risk-free interest rate, the dividend yield, the expected life of the share rights, the probability of
occurrence of certain events and the exercise price. Service and non-market performance conditions attached to the
transactions are not taken into account in determining fair value. Certain of these inputs are estimates.
The Directors review the methodology used by the expert and make enquiries with management to satisfy themselves that
the factual information used by the expert is correct prior to relying on the expert’s opinion.
32. Auditor’s remuneration
In AUD
2024
2023
Audit services – auditors of the Company
EY Australia
643,000
–
KPMG Australia
–
565,000
Overseas KPMG firm
–
335,632
Overseas EY firm
191,500
–
834,500
900,632
Taxation compliance services:
Overseas KPMG firm
–
144,000
1,367,285
1,044,632
ENERO ANNUAL REPORT 2024
| 112
Name
Entity Type
Body
corporate
country of
incorporati
on
Body
corporate %
of share
capital held
Country of
tax residence
Parent entity
Australia
Australia
Enero Group Limited
Controlled entities
Enero Group UK Holdings Pty Limited
Body Corporate
Australia
100
Australia
– Enero Group UK Limited
Body Corporate
UK
100
UK
Enero Group (US) Pty Limited
Body Corporate
Australia
100
Australia
– Enero Group (US) Inc.
Body Corporate
USA
100
USA
BMF Holdco Pty Limited
Body Corporate
Australia
100
Australia
BMF Advertising Pty Limited (Trustee of The BMF Unit Trust)
Body Corporate
Australia
100
Australia
The BMF Unit Trust
Trust
Australia
100
Australia
Hotwire Integrated Communications Pty Limited (Dormant)
Body Corporate
Australia
100
Australia
Naked Communications Australia Pty Limited (Dormant)
Body Corporate
Australia
100
Australia
Hotwire Australia Pty Limited
Body Corporate
Australia
100
Australia
Orchard Marketing Pty Ltd
Body Corporate
Australia
100
Australia
Alfie Agency Pty Ltd
Body Corporate
Australia
100
Australia
Enero Group Finance Pty Limited
Body Corporate
Australia
100
Australia
Domain Active Holdco Pty Limited
Body Corporate
Australia
100
Australia
–Domain Active Pty Limited
Body Corporate
Australia
100
Australia
The Leading Edge Market Research Consultants Pty Limited
Body Corporate
Australia
100
Australia
– Hotwire Global Communications Pte Ltd
Body Corporate
Singapore
100
Singapore
-
Hotwire Global Pte Ltd (formerly GetIT Pte Ltd)
Body Corporate
Singapore
100
Singapore
-
GetIT Japan G.K.
Body Corporate
Japan
100
Japan
-
GetIT Comms Sdn Bhd
Body Corporate
Malaysia
100
Malaysia
-
GetIT Communications Private Limited
Body Corporate
India
100
India
The Digital Edge Online Consultants Pty Limited (Dormant)
Body Corporate
Australia
100
Australia
Brigade Pty Limited (Dormant)
Body Corporate
Australia
100
Australia
The Hotwire Public Relations Group Limited
Body Corporate
UK
100
UK
– Hotwire Public Relations GMBH
Body Corporate
Germany
100
Germany
– Hotwire Public Relations SARL
Body Corporate
France
100
France
– Hotwire Public Relations SL
Body Corporate
Spain
100
Spain
– Hotwire Public Relations SRL
Body Corporate
Italy
100
Italy
– Hotwire Public Relations Limited
Body Corporate
UK
100
UK
– McDonald Butler Associates Limited
Body Corporate
UK
100
UK
OBMedia LLC
Body Corporate
USA
51
USA
– OBMedia Network 1 L.T.D
Body Corporate
Israel
51
Israel
Domain Active LLC
Body Corporate
USA
51
USA
IdealAds LLC
Body Corporate
USA
51
USA
SiteMath LLC
Body Corporate
USA
51
USA
–Clicksciences.com LLC
Body Corporate
USA
51
USA
Orchard Creative Technology Inc.
Body Corporate
USA
100
USA
Hotwire Public Relations Group LLC
Body Corporate
USA
100
USA
ROI DNA, Inc
Body Corporate
USA
100
USA
Consolidated Entity Disclosure Statement
for the year ended 30 June 2024
| 113
ENERO ANNUAL REPORT 2024
1. In the opinion of the Directors of Enero Group Limited (the Company):
(a) the consolidated financial statements and notes that are set out on pages 69 to 111 and the Remuneration Report
set out on pages 56 to 63 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the
financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
(c) the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and
correct.
2. There are reasonable grounds to believe the Company and entities identified in Note 26 will be able to meet any
obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee between
the Company and those entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer for the
financial year ended 30 June 2024 pursuant to section 295A of the Corporations Act 2001.
4. The Directors draw attention to Note 1(b) to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Dated at Sydney this 13 day of September 2024.
Signed in accordance with a resolution of the Directors:
Ann Sherry AO
Chair
Directors’ Declaration
ENERO ANNUAL REPORT 2024
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Independent Auditor’s Report
to the members of Enero Group Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor’s report to the members of Enero Group Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Enero Group Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2024, the consolidated statement of comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year then ended, notes to the financial
statements, including material accounting policy information, the consolidated entity disclosure
statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024
and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 2
Impairment assessment of goodwill
Why significant
How our audit addressed the key audit matt er
At 30 June 2024, the Group’s consolidated statement
of financial position includes goodwill with a carrying
value $131.1 million, representing 44% of total
assets.
The directors have assessed goodwill for impairment,
recognising $70.8 million of impairment expense in
relation to the ROI DNA and GetIT cash generating
units (CGUs).
As disclosed within Note 21 to the financial
statements, the assessment of the impairment of the
Group’s goodwill incorporated significant judgments
and estimates, based upon conditions existing as at
30 June 2024, specifically concerning factors such as
forecast cashflows, discount rates and terminal
growth rates.
The estimates and assumptions which are inherently
subjective relate to the sustainability of future
performance, market and economic conditions.
Accordingly, we considered the impairment testing of
goodwill and the related disclosures in the financial
report to be a key audit matter.
Our audit procedures included the following:
►
Assessed the Group’s determination of the
CGUs used in the impairment model, based
on our understanding of the nature of the
Group’s business and the economic
environment in which the segments operate.
We also considered internal reporting of the
Group’s results to assess how earnings and
goodwill are monitored and reported.
►
Assessed the cash flow forecasts,
assumptions and estimates used by the
Group, as disclosed in Note 21 to the
financial statements, by evaluating the
reliability of the Group’s historical cash flow
forecasts, our knowledge of the business and
corroborating data with external information
where possible.
►
Evaluated the appropriateness of discount
and terminal growth rates applied with
involvement from our valuation specialists.
►
Tested the mathematical accuracy of the
impairment testing models including the
consistency of relevant data with latest
Board approved forecasts.
►
Performed sensitivity analysis on key
assumptions including growth rates
(including terminal growth rates) and
discount rates, for each of the Group’s CGUs.
►
Assessed the adequacy of the disclosures
included in Note 21 to the financial
statements.
Revenue Recognition
Why significant
How our audit addressed the key audit matt er
The Group generated $804.5 million in revenue from
customers across its global operations for the year
ending 30 June 2024. The Group derives the majority
of its revenue from marketing and communication
service fees from customers, which requires analysis
of recognition over the related contractual term.
As disclosed in Note 3 to the financial statements, the
Group’s revenue streams are either recognised over
time or at a point in time depending on the identified
performance obligations that the Group has to the
customer.
The Group’s policy is for consideration received from
advance billings to customers prior to the satisfaction
Our audit procedures included the following:
•
Obtained an understanding of the nature of the
various revenue streams and the related revenue
recording processes, systems and key controls.
•
Evaluated the Group’s revenue accounting
processes and assessed whether the Group’s
accounting policies complied with the
requirements of Australian Accounting
Standards.
•
Assessed the operating effectiveness of relevant
controls in place relating to the recognition and
measurement of revenue recognised over time.
•
For revenue recognised over time, used data
analytical procedures to corroborate expected
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Independent Auditor’s Report
to the members of Enero Group Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 3
Why significant
How our audit addressed the key audit matt er
of performance obligations to be recognised as a
contract liability and classified as unearned revenue
($25.2 million).
The importance of revenue to the users of the
financial statements, and the judgement involved in
determining the percentage of completion for
revenue recognised over time, this was considered to
be a key audit matter.
correlations between revenue, contract liabilities,
accounts receivable and cash.
•
Tested a sample of cash receipts related to
revenue transactions and agreed the cash receipt
to the underlying customer remittance
documentation and bank statement.
•
Tested a sample of revenue recognised during
the year relating to open projects at year end, by
agreeing to signed contracts, holding discussions
with the account managers, and obtaining
support for the percentage of completion, to
assess whether revenue was recognised correctly
and in the correct period, and the related accrued
or contact liability was correctly recognised.
•
Tested a sample of revenue recognised at a point
in time, by obtaining external reports from search
engines agreeing the calculation of revenue to
contractual agreement, and testing subsequent
receipt of payment
•
Assessed the adequacy of the disclosures
included in Notes to the financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 20X1 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
a.
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
and;
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ENERO ANNUAL REPORT 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 4
b.
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view and is free from material misstatement, whether due to fraud or error; and
ii.
The consolidated entity disclosure statement that is true and correct and is free of
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
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Independent Auditor’s Report
to the members of Enero Group Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 5
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
►
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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 audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 56 to 63 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of Enero Group Limited for the year ended 30 June 2024,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Jodie Inglis
Partner
Sydney
13 September 2024
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ENERO ANNUAL REPORT 2024
Lead Auditor’s Independence Declaration
under section 307 of the Corporations Act 2001
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s independence declaration to the directors of Enero Group Limited
As lead auditor for the audit of the financial report of Enero Group Limited for the financial year ended
30 June 2024, I declare to the best of my knowledge and belief, there have been:
a.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b.
No contraventions of any applicable code of professional conduct in relation to the audit; and
c.
No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Enero Group Limited and the entities it controlled during the financial
year.
Ernst & Young
Jodie Inglis
Partner
13 September 2024
ENERO ANNUAL REPORT 2024
| 120
ASX Additional Information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below. The shareholder information set out below was applicable as at 6 August 2024.
Substantial shareholders
The number of ordinary shares held by substantial shareholders and their associates is set out below:
Shareholder
Number
Regal Funds Management Pty Limited
16,793,169
Perpetual Limited
14,086,349
Perennial Value Management
11,985,597
Irish Global Equity
6,002,926
RG Capital Multimedia Limited
5,220,342
Unquoted equity securities
As at 19 August 2024 there were no options granted over unissued ordinary shares in the Company.
Voting rights
Ordinary shares – refer to Note 18 Capital and reserves.
Distribution of equity security holders:
Range
Number of equity
security holders
Ordinary shares
% of issued
capital
1 – 1,000
566
275,261
0.30
1,001 – 5,000
561
1,467,994
1.62
5,001 – 10,000
247
1,830,264
2.02
10,001 – 100,000
289
9,060,659
9.99
100,001 and over
44
78,100,943
86.08
1,707
90,735,121
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares is 251.
Twenty largest shareholders
Rank Name
Units
% of issued
capital
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
23,318,989
25.70
2
CITICORP NOMINEES PTY LIMITED
13,710,869
15.11
3
UBS NOMINEES PTY LTD
6,882,031
7.58
4
IRISH GLOBAL EQUITY LIMITED
4,335,901
4.78
5
RG CAPITAL MULTIMEDIA LIMITED
3,269,079
3.6
6
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSI EDA
2,739,289
3.02
7
CH GLOBAL PTY LTD
2,548,301
2.81
8
J P MORGAN NOMINEES AUSTRALIA PTY LTD
1,862,058
2.05
9
WARBONT NOMINEES PTY LTD
1,679,875
1.85
10
IRISH GLOBAL EQUITY LIMITED
1,667,025
1.84
11
NFT SUPER PTY LTD
1,630,102
1.80
12
ECAPITAL NOMINEES PTY LIMITED
1,583,006
1.74
13
CHARLES & CORNELIA GOODE FOUNDATION PTY LTD
1,500,000
1.65
14
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
1,198,753
1.32
15
RG CAPITAL MULTIMEDIA LIMITED
1,159,020
1.28
16
BASELINE VENTURES 2009 LLC
813,893
.90
17
BNP PARIBAS NOMS PTY LTD
1,154,915
0.83
18
BUTTONWOOD NOMINEES PTY LTD
681,172
0.75
19
MRS ANTONIA CAROLINE COLLOPY
588,637
0.65
20
BNP PARIBAS NOMINEES PTY LTD
564,649
0.62
Total
72,487,732
79.89
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ENERO ANNUAL REPORT 2024
Corporate Directory
Company Secretary
Catherine Hoyle
Principal Registered Office
Enero Group Limited
Level 2, 100 Harris Street
Pyrmont NSW 2009 Australia
Telephone: +61 2 8213 3031
Email: companysecretary@enero.com
Share Registry
Automic Group
Deutsche Bank, Tower Level 5
126 Phillip St
Sydney NSW 2000
Email: hello@automicgroup.com.au
Telephone: 1300 288 664
Outside Australia: +61 2 9698 5414
Securities Exchange
The Company is listed on the Australian Securities Exchange (ASX Code: EGG).
The home exchange is Sydney.
Other Information
Enero Group Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
Solicitors
Holding Redlich
Level 65/25 Martin Place
Sydney NSW 2000 Australia
Auditors
EY
200 George St
Sydney NSW 2000 Australia
ABN
97 091 524 515
+61 2 8213 3031
General – info@enero.com
Investor Relations – IR@enero.com
Level 2, 100 Harris Street
Pyrmont NSW 2009
Australia