Teaminvest Private Group Limited (ASX: TIP)
ACN 629 045 736
ANNUAL REPORT
Year ended 30 June 2024
ANNUAL REPORT
Year ended 30 June 2024
Contents
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Compounding knowledge and wealth
About TIP Group
Education
& Research
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Businesses
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info@tipgroup.com.au | www.tipgroup.com.au
We compound knowledge and wealth
We use proprietary, research driven, insights to create
better investors and better people
To build a portfolio of outstanding investments, run by
talented leaders, that materially improves the lives of
customers, staff and those who trust us with their money
Vision
Noble Purpose
Mission
6
Compounding knowledge and wealth
Group Structure
as of August 2024
GLT
CEO - Shay Chalmers
East Coast Traffic Control
CEO - Greg Jeckeln
Icon Metal
CEO - Stephen Pribula
Head of Equity
Dean Robinson
CEO
Andrew Coleman
Kitome
CEO - Carol Morley
Multimedia Technology
CEO - Johan Meyer
Automation Group
CEO - Graham Nisbet
Colour Capital
CEO - Matt Hope
BizGPT
CEO - David van Leeuween
CFO, COO & Company Secretary
Dean Robinson
Group Financial Controller
Shikhar Bansal
Head of Sales
Walter Reinhard
100%
100%
33%
100%
33%
30%
100%
100%
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info@tipgroup.com.au | www.tipgroup.com.au
Corporate Advice
Property Advice
Insurance Broking
Trustee & Custody
Capital Raising
Funds Management
Property Fund
Corinthian Balanced Fund
Teaminvest Access Fund
Conscious Investor Fund
Financial Services Fund
Head of Corporate Advice
Andrew Coleman
Head of Funds Management and Education
Sanjee Narendran
Education
Group Employees:
* wholly owned companies only
516*
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1 Market Capitalisation of $34.67m as of 30 June 2024
CEO’s Letter
Strong operating cashflow enables investment for growth
The year ended 30 June 2024 (FY24) delivered strong operating cashflow, enabling significant investments for
future growth.
During the year Teaminvest Private Group Limited (TIP) invested over 20% of our market capitalisation1 in growth
initiatives, returned a further 3% to shareholders via dividends and buybacks, and ended the year with net cash and
listed investments of $9.5m.
Operating highlights included Look-Through EBITDA, our preferred operating metric, rising 21% to $15.8m and the
declaration of fully-franked dividends of 3 cents per share (1.5c interim and 1.5c final dividend).
Andrew Coleman
MD & CEO
Compounding knowledge and wealth
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info@tipgroup.com.au | www.tipgroup.com.au
Use of shareholders’ funds
7.9
6.0
0.4
(0.6)
(3.3)
(3.1)
(0.9)
6.4
Opening Cash Balance
Operating cashflow
Sale of assets
Replacement capex
Growth Capex
New Investments
Dividends & Buy-back
Ending Cash Balance
During FY24 TIP generated $6.0m of operating cashflow and $0.4m from the sale of assets.
These receipts, plus $1.5m of cash retained at the end of FY23, was used to make $7.9m of investments during
the year, including
• $3.3m in growth capex for our existing portfolio, comprising:
• $1.9m to double production capacity at GLT;
• $0.9m to acquire new vehicles for further expansion at ECT; and
• $0.5m of growth capex at other equity portfolio companies.
• $3.1m of new investments comprising:
• $1.4m placement in Clime Investment Management (ASX:CIW);
• $1.1m of other listed securities and managed funds; and
• $0.6m of new private equity investments.
• $0.6m of replacement capex to renew fleets and equipment at our portfolio companies; and
• $0.9m of capital returned to shareholders via dividends and buy-backs.
This means that during the financial year we:
• Generated new cash equal to approximately 18% of our market capitalisation;
• Invested over 20% of our market capitalisation in assets that we expect will deliver future income or capital gains;
• Paid a record dividend and commenced our first on-market buy-back (which should increase per share
earnings); and
• Still ended the year with approximately 27% of our market capitalisation in cash (19%) and liquid investments (8%).
We expect these significant investments, like those made in prior periods, will deliver attractive compounding returns.
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Compounding knowledge and wealth
Why do we invest so much? Do we invest well?
Investment
GLT
ECT
Coastal
Energy
Kitome
Decoglaze
AG
Icon Metal
Colour
Capital
Vintage (Financial Year)
2013
2014
2014
2014
2014
2015
2017
2018
Ownership
100%
100%
100%
100%
100%
100%
100%
33%
Exited (Y/N)
N
N
Y
N
Y
N
N
N
Times Money (x)
6.7x
3.9x
0.4x
1.1x
1.0x
0.7x
2.1x
1.0x
Investment
MMT
Insurance
(loan)
Trustees
Teaminvest
CI Fund
BizGPT
Total
Vintage (Financial Year)
2019
2019
2019
2021
2022
2023
2024
Ownership
30%
50%
0%
100%
100%
50%
33%
Exited (Y/N)
N
N
Y
N
N
N
N
Times Money (x)
3.3x
2.0x
-
4.3x
1.6x
1.1x
-
2.7x
Investing returns come from two sources: payments made to the investor for the use of their capital over time
(dividends), and any final capital gain or loss.
Where do dividends come from?
Dividends are a proportion of profit paid out to investors. Dividends are thus represented by the formula:
Dividend = Payout Ratio x Earnings
What drives capital gains?
Value = Earnings x Valuation Multiple
which, on a proportional basis, is equivalent to:
Price = Earnings Per Share x P/E Ratio
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In other words, the price of an asset is equal to some objective factor (the cash earnings it generates) multiplied by
a ratio that captures market sentiment. If market sentiment is constant, then price changes reflect only changes in
earnings. If sentiment shifts (as it does regularly), then prices can move regardless of any change in earnings.
For a capital gain, the sale price must exceed the purchase price. This can only occur if the earnings rise, or if market
sentiment increases. We aim for both.
Some observations
For TIP to achieve our internal target returns (above 15% per annum over the long-run), we need to invest in assets
that deliver a combination of dividends and capital growth above 15% on average each year.
Very few assets offer us a sustainable dividend yield of 15%! This challenge is made harder when:
• Payout ratios in the long run are capped at 100%. An asset can’t keep paying out more in dividends than it
earns. Eventually the cash runs out; and
• In the long-run, sentiment is mean reverting: the market darling one year is unloved the next. P/E’s, like payout
ratios, can’t expand forever.
The only way we can be reasonably certain of generating our required return over the long-run is by investing
in assets whose earnings grow over time. And then acquire those assets when the market sentiment is below its
historic mean.
Doing so gives TIP, as it would give any investor, access to both a growing potential dividend pool and the maximum
chance of experiencing capital growth.
Cultural Value 1
“We believe being better investors makes us better
business people; and being better business people
makes us better investors.”
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Compounding knowledge and wealth
What this means for our shareholders
Accounting standards, and Look-Through Earnings, deal only with the dividend half of the equation. They represent
only the cash we (or any other listed company) earn from our investments in any given year. They don’t include capital
gains on our largest assets.
That would be like judging your stock portfolio by only looking at your dividends or valuing your investment property
solely on the basis of net rent. Sure, these are important, but miss the bigger picture: what is the asset worth today
compared to what you paid for it?
This is the trap we find ourselves in when we provide annual reports. Our report this year runs to over 120 pages and in
it you will find table after table, and note after note, dedicated to the earnings of our portfolio, climate disclosure,
remuneration, risk and governance.
But in all those 120 something pages, there is not a single time where we provide you – our owners – with a summary
of what we think our assets are worth.
Multimedia
Technology
Automation
Group
Colour Capital
Residential
Group
ECT
Icon
Metal
GLT
Teaminvest
Multimedia
Technology
Automation
Group
Colour Capital
Residential Group
ECT
Icon
Metal
GLT
Teaminvest
Revenue
2023
Revenue
2024
Funds Management
Funds Management
Advice
Advice
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As I covered in my 2022 annual letter, the only time we mention an assets value is when accounting standards require
us to reduce it!
In all those pages this year, and the next year, there won’t be a disclosure pointing the curious shareholder to what
today is worth more than we paid for it unless we sell it … at which point of course it will be called a ‘one-off’ or
‘abnormal’ gain as if capital growth is unusual or unexpected.
How to fix this
I am now including two sections in this letter that I hope goes some way to addressing this.
The first is where we invested capital during the year (to illustrate actions taken to increase shareholder value); and a
table of our “Money on Invested Capital” (MOIC).
MOIC is a term used in private equity to show investors the ‘cash on cash’ return achieved by an asset. It takes the sum
of earnings paid to the owner since it was acquired (i.e. periodic income plus any final realised sale value), and divides
that by the cash invested to achieve it. MOIC of greater than one means the asset has paid back more than its purchase
price through earnings (if still owned), or a combination of earnings and sale price if disposed.
TIP’s MOIC on our larger private equity investments is in the table that starts this section.
Our combined MOIC is now 2.7x and rising. Every dollar we have invested in our portfolio so far, has given us back $2.70.
We expect our MOIC will rise again next year because it comes predominantly from the cash earnings of those
wonderful businesses, we still own.
Until we sell them, they keep rewarding us for the initial risk we took. While speculators must paddle furiously in and out
of rapids to make a profit, investing is a pleasure cruise for those with patience.
You won’t see MOIC in our statutory accounts. However, for judging our ability to deploy capital, we consider it
more valuable.
Cultural Value 2
“We understand ‘noise’ contributes more to error than
‘bias’; and we seek to reduce both.”
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Compounding knowledge and wealth
The ECTC team at work
strengthening Gladstones
pathways and roads come rain,
hail or shine
A highly skilled technician
performing workshop testing
Teaminvest members
voting at a meeting in
Melbourne
The 14,000 sqm new GLT
facility in Carole Park QLD
aimed at expanding
sevices to meet the
dynamic needs of thier
customers
Form and function come
together for this amazing
staircase at Children’s
Hospital Westmead
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Look Through Results
Look Through Results is the proportion of revenue and EBITDA generated by our investments attributable to TIP Group.
They are calculated by multiplying the percentage we own of an investment by the revenue and EBITDA it generates.
They are a non-IFRS measure which we find more useful for understanding operating performance than Statutory
Comprehensive Income (SCI) reported in accordance with accounting standards.
In FY24 we report three divisions: TIP Equity, TIP Wealth and Education & Investments.
Revenue
($m)
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY24
“CAGR
FY17-24”
Equity
117.3
125.7
135.7
137.5
144.3
147.5
153.1
147.7
(4%)
3%
Wealth
0.3
0.3
4.3
6.0
37%
163%
Education & Investments
4.3
4.1
4.3
6%
0%
Pre-abnormal
117.3
125.7
135.7
137.5
144.6
152.1
161.5
158.0
(2%)
4%
Abnormal / discontinued operations
3.5
(0.1)
3.0
Total
117.3
125.7
135.7
141.0
144.5
152.1
164.5
158.0
(4%)
4%
EBITDA
($m)
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY23
%
“CAGR
FY17-23”
Equity
0.8
8.4
7.2
13.6
14.8
12.0
13.2
14.2
7%
51%
Wealth
(0.1)
(0.2)
0.7
1.8
168%
n.m.
Education & Investments
1.8
1.8
1.8
0%
(1%)
Pre-abnormal
0.8
8.4
7.2
13.6
14.7
13.6
15.7
17.8
13%
56%
Abnormal / discontinued operations
3.5
(2.2)
(4.6)
(2.7)
(2.0)
Total
0.8
8.4
7.2
17.1
12.5
9.0
13.0
15.8
21%
53%
*Note: Wealth include impact of Enva (which is not consolidated in statutory accounts)
Look Through EBITDA was up 21% to $15.8m. This performance was driven by gains across both our well-
established Equity division and our newer (but growing strongly) Wealth operations.
While we regard revenue as less important than profit (as the saying goes: “revenue is vanity while profit is sanity”),
Look Through Revenue declined 4%, primarily due to lower home building sales at Kitome and Colour Capital.
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Compounding knowledge and wealth
Equity
Equity is our private equity operations. Established in 2012, Equity forms the bulk of our operating business and is led by
Dean Robinson.
Look Through EBITDA grew by 7% to $14.2m, driven primarily by significant growth in East Coast Traffic Control (ECT)
and Icon Metal. Whilst earnings rose, Look Through Revenue declined slightly, predominantly due to lower home
building sales at Kitome and Colour Capital.
East Coast Traffic Control (100% owned) grew revenue by 15% and EBITDA by 44% in FY24. Led by Greg Jeckeln, ECT
continues to grow its reputation as the traffic controller of choice for regional Australia: with customers from the South
Western Slopes region in New South Wales to Cairns now benefitting from their best-in-class service. ECT has now
delivered an MOIC of 3.9x, a testament to the remarkable efforts of the outstanding leadership. ECT also invested
heavily in new equipment during FY24, with $0.9m of growth capex deployed into new vehicles which we expect will
add to our bottom line in coming years.
Icon Metal (100% owned) grew revenue by 7% and EBITDA by $1.6m in FY24, returning to material profitability after the
pain of the covid and construction lock-down affected FY21 through FY23. The team at Icon, led by Stephen Pribula and
Chris Farmer, have put in countless hours and huge effort to weather the storm and position Icon to be even stronger in
the future: and they deserve fulsome praise for their achievement. With this strong return to profitability, Icon has now
delivered an MOIC of 2.1x and we expect this will continue to grow as it had before the unfortunate disruptions.
Our other large engineering business, GLT (100% owned), saw EBITDA decline by 20% in FY24 due to the planned
investment and costs associated with expanding production capacity. During FY24 GLT secured a new 14,000 sqm facility,
added 22 staff and acquired material new equipment (for which we only paid $1.0m at a fire sale) to double production
Residential Group
Multimedia
Technology
Automation
Group
Colour Capital
ECT
Icon Metal
Funds
Management
GLT
Teaminvest
EBITDA
2023
Advice
Multimedia
Technology
Automation
Group
Colour Capital
ECT
Icon
Metal
Funds
Management
GLT
Teaminvest
EBITDA
2024
Advice
Residential Group
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capability. This impacted the P&L this year, but we believe has made the company significantly more valuable as it
positions us for significant expansion. Since moving, the team led by Shay Chalmers have already secured c.$20m of new
fleet sales, and have significantly expanded our repairs business. These should deliver higher profits in future years and
create the beginnings of a recurring income stream for what, until now, has been purely a capital goods business.
Wealth
Wealth is our advisory, funds management and investment banking business, focused on using the Group’s insights and
networks to deliver superior client outcomes. The wealth division was established in FY23 and provides a platform for
substantial growth. As of 30 June 2024, Wealth acts as manager or trustee for $244m in funds under management (FUM),
and as an advisor for a further $1.6b of funds under advice (FUA)*.
*Includes Enva (which is not consolidated in statutory accounts), but excludes Clime Investment Management
Wealth earns revenues in three ways:
• Advisory fees, usually comprising a small retainer and a much larger success fee;
• Operation fees, usually determined as a small proportion of funds under management (FUM), paid to cover the
provision of trustee, custodial and administrating functions; and
• Performance fees, usually linked to outperformance relative to a compounding high-water mark or industry
benchmark.
Operation fees tend to be small and regular (usually less than 150 basis points (bps) annually of FUM). Corporate advisory
and performance fees are irregular (in that they depend on success and are paid only upon achieving results at the end
of some pre-determined period) but can be significant (often 300 to 500 bps of total deal size in the case of advisory, and
1,500 to 2,000 bps of out performance in the case of performance fees).
Wealth delivered Look Through revenue of $6.0m (up 37%) and Look Through EBITDA of $1.8m (up 168 %) for FY24.
Of particular note, our flagship Conscious Investor (wholesale) and Corinthian Balanced (NFP/Charity) funds delivered
after-fee returns to investors of 15.14% and 8.93% respectively for the year: a testament to the continued power of
disciplined value investing using proven Teaminvest principles.
Cultural Value 3
“Complex decisions are hard; simple decisions are easy. We make
decisions easy for our staff, customers, executives and investors”
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Compounding knowledge and wealth
Education
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Education & Investments
Education & Investments is the division responsible for generating actionable intelligence that we can apply across
our broader portfolio. It primarily comprises Teaminvest (our high-net worth investor education business), and direct
stakes in listed securities and managed funds.
In FY24 Education & Investments delivered Look Through revenue of $4.3m and Look Through EBITDA of $1.8m.
This division is our smallest by revenue but potentially the most important for our long-run success. Starting with
education and research, this division continually iterates to drive performance improvement across our business. Our
continued investment in proprietary valuation software (now covering over 40 markets), and our ability to aggregate
intelligence from over 600 active market participants, means this division is the engine room that drives our ability to
identify future investment opportunities.
Whilst Education & Investments is unlikely to ever contribute as much to our P&L as Equity or Wealth, it is the special
sauce that allows us to drive compounding value growth year after year across all parts of our business.
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info@tipgroup.com.au | www.tipgroup.com.au
Keeping drivers, pedestrians
and road workers safe is always
top of mind
Another GLT trailer rolling
off the assembly line at the
brand new facility at Carole
Park QLD
A display of
architectural genius at
Liverpool Civic Place
Another happy customer
living in their beautiful
home from Kitome
20
Statutory Comprehensive Income (SCI)
Unlike Look Through results, which are compiled on a proportional ownership (i.e. operating) basis, SCI is calculated
in accordance with the Australian accounting standards in force at any time. It encompasses consolidation accounting
where we control a business, equity accounting where we own a substantial share and have significant influence
(typically between 20% and 50%), and investment accounting where we don’t have significant influence (typically less
than 20%).
While SCI is the official published result of the Group, shareholders should be aware of its limitations when using
it to understand operating performance. The table below sets out our SCI and a summary balance sheet.
($m)
P&L
FY19
FY20
FY21
FY22
FY23
FY24
Revenue
28.4
89.0
91.4
92.7
111.4
106.1
Operating expenses
(28.4)
(77.3)
(78.4)
(88.7)
(102.7)
(96.6)
EBITDA
(0.0)
11.7
13.1
4.0
8.7
9.5
D&A
(0.3)
(2.5)
(7.1)
(22.4)
(3.8)
(13.0)
EBIT
(0.3)
9.2
5.9
(18.4)
4.9
(3.5)
Interest income / (expense)
(2.3)
(0.3)
(0.1)
(0.3)
(0.2)
(0.5)
PBT (incl other comprehensive income]
(2.6)
8.9
5.8
(18.7)
4.7
(4.0)
Tax income / (expense)
0.2
(0.6)
(0.6)
1.0
(0.7)
1.8
Statutory NPAT
(2.4)
8.3
5.2
(17.7)
4.0
(2.2)
Add back Impact of discontinued operations
-
-
-
-
2.7
1.0
Add back Impact of abnormal items
-
(3.3)
1.7
21.9
-
7.5
Operating NPAT
(2.4)
5.0
6.9
4.2
6.7
6.3
($m)
Balance Sheet
FY19
FY20
FY21
FY22
FY23
FY24
Per share
Current assets
27.0
35.0
38.7
38.4
43.1
40.6
Non-current assets
68.2
72.9
93.8
77.7
80.6
93.4
Total assets
95.2
107.9
132.5
116.2
123.7
134.0
4.95
Current liabilities
21.6
23.3
24.8
27.0
30.6
28.4
Non-current liabilities
0.9
3.5
9.1
7.6
6.2
21.7
Total liabilities
22.5
26.8
33.9
34.6
36.8
50.1
Equity
72.7
81.1
98.6
81.5
86.9
83.9
3.10
Cash
6.7
10.8
12.3
6.4
7.9
6.4
0.24
Total debt (traditional)
5.2
1.5
2.2
0.6
0.5
0.4
Total debt (AASB 16)
5.2
5.6
6.0
4.2
2.4
21.5
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Abnormal items
During FY24 we recognised $10.6m of pre-tax abnormal expenses ($7.5m after tax), comprising:
• $1.4m of moving costs at GLT (a one-off real ‘cash’ expense); and
• $9.2m associated with Colour Capital. Of this, $0.6m was a one-off real ‘cash’ cost associated with the legal action,
and the remaining $8.6m was a one-off ‘non-cash’ expense required by accounting standards.
Colour Capital (33% owned) is a franchise manager. Their economic moats are based on their ability to develop and
grow franchise systems and networks. They are always on the look-out for new brands to manage, and have operations
in areas as diverse as cafés, gyms and home building.
Since we invested in 2018, they have done this exceptionally well. Colour Capital has already delivered an MOIC of 1.0x;
and they paid us $0.5m in cash dividends this year.
However, during FY24 their largest client (Netdeen Pty Ltd, the franchisor of GJ Gardner Homes) terminated an existing
master franchise agreement. This decision has seen Colour Capital take Netdeen to court, with a judgement expected
in due course. While the court case is uncertain (all court outcomes are), Colour Capital continues to operate its other
franchise brands and is seeking new opportunities to replace the lost contract. In accordance with accounting
standards, we have impaired the full value of Colour Capital as a ‘non-cash’ expense.
Cultural Value 4
“Small improvements make a big difference when
compounded. Doing nothing compounds nothings.”
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On market buy-back
In the FY23 update to our philosophy document, released as part of our annual report, we included the following:
“TIP predominantly owns and operates profitable and growing businesses. We also look to regularly expand our portfolio
when great businesses become available at good prices. We therefore consider capital allocation in three steps:
1.
What capital should be reinvested in our existing operations to deliver appropriately growing returns (Organic
Investment);
2.
What capital should be set aside for new acquisitions (Acquisitive Investment);
3.
Where excess capital exists, how much should be returned to shareholders as a reward for the use of their funds
(Distributions).
When a Distribution is appropriate, we intend to provide it to shareholders by:
• If our share price is lower than both the implied valuation using the CIP Formula and our equity per share,
conducting an on-market acquisition of shares;
• If our share price is higher than both the implied valuation using the CIP Formula and our equity per share,
distributing an appropriately franked dividend; and
• If the share price is neither higher nor lower than both valuation methods imply, at the discretion of the board.”
While we are disappointed that TIP is trading at a discount to our net assets of 59%, and a 82% discount to our peer
median P/E ratio2 of 19.6x, we remain mindful that in the words of Benjamin Graham “in the short-run the market is a
voting mechanism, while in the long-run it is a weighing one”. And while we continue to increase our weight, the best
way to take advantage of this situation for our shareholders is to buy our dollar bills back for less than a dollar in price.
As such we announced an on-market share buy-back for up to 10% of our issued capital in February 2024. As of August,
the buy-back remains ongoing.
Cultural Value 5
“In the long-run ‘factfulness’ beats running with the herd.
No matter how unpopular it makes us in the short-run.”
Compounding knowledge and wealth
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Year ahead
In my FY23 letter I wrote:
“Our goals for FY24 are simply to continue to focus on the three things that (to paraphrase Warren Buffett) “matter most”:
1.
Continually delighting customers;
2.
Eliminating unnecessary costs; and
3.
Innovating to do the first two better.”
Our fantastic leadership teams have put this into practice in FY24.
For FY25 they remain our operational focus alongside our permanent strategic desire to acquire fantastic assets at
reasonable prices out of the cash our wonderful businesses generate.
Final word
If you are excited by our noble purpose, and would like to participate in our unique organisation, please apply to
become a Selected Shareholder. The knowledge you bring, and the value you add, accelerates our growth.
As Warren and Charlie put it so succinctly: “We are better investors because we are business people; and better
business people because we are investors”.
I look forward to seeing you at future strategy days and our AGM.
Best wishes,
Andrew Coleman
CEO
Teaminvest Private Group Limited
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1. GUIDANCE FOR SHAREHOLDERS
1.1
Our Noble Purpose, Mission and Vision
Our noble purpose, mission and vision are core to who we are and what we do. They are:
Noble purpose: We compound knowledge and wealth
Mission: We use proprietary, research driven, insights to create better investors and business people
Vision: To build a portfolio of outstanding investments, run by talented leaders, that materially improves the lives of
customers, staff and those who trust us with their money
We consider all operating and investment decisions against these metrics. We are prepared to sacrifice short-term gain if
it helps achieve our mission and vision in the long-run.
1.2
Our Cultural Values
We will never take an action contrary to our values. We assess our staff against these values on a quarterly basis. Our
cultural values are:
• We believe being better investors makes us better business people; and being better business people makes us
better investors.
• We understand “noise” contributes more to error than “bias”; and we seek to reduce both.
• Complex decisions are hard; simple decisions are easy. We make decisions easy for our staff, customers,
executives and investors.
• Small improvements make a big difference when compounded. Doing nothing compounds nothing.
• In the long-run “factfullness” beats running with the herd. No matter how unpopular it makes us in the short-run.
1.3
Share Price vs Intrinsic Value
Share prices follow the formula “Price = Earnings * P/E ratio”. Internally, we refer to this identity as the Conscious Investor
Pricing Formula (CIP Formula).
P/E ratios (the multiple investors are prepared to pay for every dollar of profit generated) can fluctuate wildly for
days, weeks, months or even years. However, over an economic cycle they will (by definition) gravitate towards the
market average. In Australia this has usually been around 3x-6x for a private company and 15x-20x for a listed
company.
Our Philosophy
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Compounding knowledge and wealth
As P/E ratios are mean reverting, the only way to grow share price in the long-term is through increasing earnings. Any
business that grows earnings will, over time, see a corresponding increase in share price and value. Time is the enemy of
poor businesses, and the friend of good businesses. Many years of research by Dr John Price (and then Teaminvest) have
proven this truism over and over.
For this reason we measure, reward and focus our executives on growing earnings. We have no rewards based on share
price, P/E ratio or “market reputation”. We have no interest in incentivising behaviour that encourages short-termism.
This means we risk having our share price deviate from intrinsic value as we spend our focus on profits not media
exposure or ‘creating momentum’.
If we could have one wish about our share price it is this: that at any time it accurately reflects the intrinsic value of our
company as merited by the path of our long-term earnings, or the sum of the value of the great businesses we own.
1.4
Diversification
Diversification reduces risks and improves returns. We hold investments across a portfolio of companies in different
industries and geographies to create diversification. Whilst this means we are exposed to the risk of having individually
underperforming assets, or accounting impairments, in any specific period, over time we expect it will provide better
returns to shareholders at lower risk.
1.5
Accounting Impairments vs Economic Value
Economic goodwill is a value that flows over time. Every action that delights customers and increases their willingness to
pay, enhances economic goodwill: creating moats and increasing returns. Every action that disappoints customers
reduces their willingness to pay and ‘impairs’ economic goodwill, weakening moats and reducing returns.
In contrast, accounting goodwill is a static measure reflecting the intangible assets of a business at the time it is acquired.
Accounting goodwill cannot be increased. It is generated not by delighting customers, developing patents, training staff
or creating moats, but to balance a set of accounts at a specific point in time.
This means our economic goodwill almost certainly exceeds accounting goodwill. When we make a great acquisition,
we can never increase the amount at which it is held on our balance sheet. The moats may be stronger and the profits
larger but there can be no increase in the value assigned to it on our balance sheet.
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In contrast, if an investment ever fails an impairment test (even if only due to short-term uncertainty), we will immediately
reduce its carrying value by taking an accounting impairment.
Over time we expect this means our balance sheet will substantially understate the true economic value of our business.
1.6
How We Value TIP
TIP is a regular acquirer of profitable, growing, businesses across multiple industries and sectors. Over the long-term we
therefore expect that our shares will trade at a price that is:
a. In line with the market average P/E multiple applied in the CIP Formula, reflecting our diversified holdings; and
b. Higher than accounting “equity per share”, reflecting the disparity between economic and accounting goodwill.
Where we consider our earnings for the purpose of the CIP Formula, we use what Warren Buffett calls “Look Through”
earnings. Historically we have referred to this as our Segment or Proportional earnings. Look Through earnings differ from
accounting profits as they include the proportional income of associated entities and exclude one-off gains and losses. For
the ease of investors, we publish our Look Through earnings as part of the CEO report in each set of accounts.
Accounting equity per share is available on our balance sheet without adjustment.
1.7
Returning Capital to Shareholders
TIP predominantly owns and operates profitable and growing businesses. We also look to regularly expand our portfolio
when great businesses become available at good prices.
We therefore consider capital allocation in three steps:
1.
What capital should be reinvested in our existing operations to deliver appropriately growing returns (Organic
Investment);
2.
What capital should be set aside for new acquisitions (Acquisitive Investment);
3.
Where excess capital exists, how much should be returned to shareholders as a reward for the use of their funds
(Distributions).
When an increase in Distributions are appropriate, we intend to provide them to shareholders by:
1.
If our share price is lower than both the implied valuation using the CIP Formula and our equity per share,
conducting an on-market acquisition of shares;
2.
If our share price is higher than both the implied valuation using the CIP Formula and our equity per share,
distributing a special dividend; and
3.
If the share price is neither higher nor lower than both valuation methods imply, at the discretion of the board.
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Compounding knowledge and wealth
1.8
Becoming a Selected Shareholder
You can apply to have greater involvement in our company by being made a Selected Shareholder. Selected
Shareholders are able to participate in our investment process and are invited to our twice-yearly strategy days. Top
performing Selected Shareholders may also be asked to mentor an executive or join one of our committees.
Being a Selected Shareholder is intellectually stimulating and gives you greater insight into our business. It also lets you
participate in our noble purpose of transferring knowledge and wealth between generations.
You can apply to be a Selected Shareholder by filling out the form on our website.
2. GUIDANCE FOR PORTFOLIO BOARDS
2.1
Introduction
For most investments we make, we have board representation.
This section provides guidance for our portfolio boards. We make it public because we believe all shareholders should know
(and can benefit) from better understanding how we operate our investments.
Our approach draws on how Warren Buffett and Charlie Munger engage with Berkshire Hathaway’s private businesses to
grow profits organically and via bolt-on acquisitions.
Our portfolio company boards are selected by, and report to, the relevant head of division and Group CEO.
2.2
The Role of a Portfolio Board
Portfolio boards have five requisites for which they are appointed and against which their performance is judged. These are:
1.
Mentor executives;
2.
Allocate capital within the business;
3.
Strengthen moats and reduce risks;
4.
Ensure compliance with all laws, regulations and governance requirements; and
5.
Deliver regular dividends to TIP.
The best boards are those who regularly examine and improve upon these objectives.
Mentoring executives: Our portfolio boards are responsible for mentoring executives. Mentorship is distinct from
managing: it involves guiding, educating and encourage executives to think differently to enhance their skill set and grow
the business in a visionary manner. Executives are responsible for delivering monthly results and, if a board becomes
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concerned that executives are not delivering appropriately, they should immediately notify the relevant division head so
we can look to enhance or replace the executive team. Board members should never act as quasi-executives.
Allocating capital: Portfolio boards are responsible for capital allocation within amounts set out in our Limits of Authority
policy. Capital can be used in three main ways: funding organic growth; funding bolt-on acquisitions to increase profits;
and returning capital to TIP via dividends. We expect all investments to deliver both increased value and attractive
dividends over time.
Strengthening moats and reducing risks: One of the key responsibilities of a board is to continually seek ways to
strengthen moats and reduce risks. Strengthened moats allow the business to increase profitability and grow faster.
Reduced risks ensure that profits and dividends can continue to grow without undue stress. The simplest way to reduce
risk is to improve the Break-Even Safety Margin (BESM), and one of the key tasks of a board is to ensure that the BESM rises
over time.
Ensuring compliance: One of the biggest risks to any business is damage to reputation or adverse litigation. Ensuring a
culture of compliance to the highest possible standards helps to protect each portfolio company and the Group. As the
saying goes: “it takes a lifetime to make a reputation, and one oversight to ruin it”.
Delivering regular dividends to TIP: As an investor we expect to be rewarded for the use of our funds and the effort we
put in as mentors. The best proof of success of any portfolio company and its board is delivering on this expectation.
2.3
Preparation Before Becoming a Board Member
Application: If you have experience or wisdom to offer, please make your interest known to us. Following a formal
selection process we may appoint you to the board of one of our portfolio companies. When appointed, you serve at the
pleasure of the company and can be removed or replaced at any time.
Compliance obligations: Becoming a board member requires adherence to TIP’s investment philosophy, confidentiality
obligations and securities trading policy.
Desirable experience: Whilst there is no set formula for a great board member, candidates should have run a larger
business (in terms of staff, revenue and profits) than the business on which they serve. This enables them to better mentor
executives and grow the company. An understanding of accounting, corporate law and governance are valuable but not
a prerequisite.
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Compounding knowledge and wealth
Prior participation in SMaRT and Due Diligence processes: Potential board members should have previously
participated in our proprietary Strengths, Moats, Risks and Trustworthiness (SMaRT) and due diligence processes. This
enables you to better understand our philosophy and the ways you can add value. We consider it advantageous for board
members to have participated in the SMaRT and due diligence process for the business to which they are appointed.
Doing so provides greater understanding of the moats to enhance (to drive profits), the future risks to mitigate or avoid (to
avoid or minimise losses) and the personalities involved. If a potential board member has not participated in the specific
SMaRT and due diligence, we will usually require them to attend board meetings as an observer before their appointment.
SMaRT and Due Diligence Reports: All board members should be familiar with the SMaRT and due diligence reports.
These contain analysis of the rationale behind our investment, and the moats and risks identified. Knowledge of these is a
prerequisite to adding value.
Terms of Acquisition: Board members should ensure they understand the key acquisition terms. These differ by company
and may include performance hurdles, conditional payments, remuneration packages, debt funding arrangements,
vendor financing and succession plans. Boards should periodically review progress against the terms of acquisition and
keep TIP informed.
Conscious Investor, TIPBars and TIPTool: Board members must be familiar with our proprietary financial analysis
(Conscious Investor), board reporting (TIPBars), and financial modelling (TIPTool) software. Conscious Investor underpins
how we analyse and value investments. TIPBars provides standardised financial reporting utilising the Conscious Investor
methodology with built-in audit functionality. TIPTool facilitates the quick and easy modelling of alternative paths for
substantially increasing profits. If substantially increasing profits were easy, executives would already have done so. Our
three proprietary software tools allow for accurate and robust discussion about important decisions.
2.4
Common Learnings
Our boards have experienced the following common learnings:
1.
You can’t have valuable meetings without best-practice financial reporting: Many entrepreneurs are
wonderfully successful through inspiring and motivating their staff to work ‘miracles’ and their clients to pay highly
for their products. However, many see financial record-keeping and reporting as a distraction. Since starting in
2012, we have learned that it is impossible for boards to add value without the benefit of best-practice financial
reporting. Boards must address this concern as one of their highest priorities by either:
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a. Encouraging the portfolio company to hand financial reporting over to TIP head office: ideally as an interim
measure while the business enhances its systems and recruits a highly educated professional to lead the
function. This allows executives to focus on strategy without being distracted about the preparation, and
accuracy, of financial reporting and the six-monthly audit process. It is also likely to be financially beneficial
due to the costs saved by harnessing economies of scale. Portfolio companies who were not already audited
for a number of years, or who don’t already have the benefit of a highly-educated, multi-disciplinary, finance
team benefit most from this approach; or
b. Showing how best practice record keeping, reporting and discussions can increase profits and enhance
decision making: enhancing internal structures and creating an environment where the board can
encourage profitable action based on forward looking projections. This approach is best available to
companies who already have robust, audited, systems in place with a highly-educated CFO leading
discussions. Boards in this situation can immediately focus on TIPBars and TIPTool, confident that the analysis
is meaningful for strategic discussion.
2. Leadership rarely extends below one or two key executives: Medium-sized businesses rarely have top quality
executives below C-level. This is a function of size: it is tough to recruit supremely talented people in smaller
organisation. For the business to grow, or the founder to transition, a key requirement is attracting the right talent
into the right roles. In particular we have found that:
a. Existing employees rarely have the drive or skill to step up to C-level in SMEs. This is a function of self-selection:
ambitious and talented employees rarely stay if there aren’t opportunities for rapid advancement. In smaller
businesses this career path caps out by about the age of 30, so most supremely talented staff either move
on to bigger companies or remain only if their ambition declines. With ambition being a key requirement for
successful leadership (the other two being passion and intelligence), fishing in the existing pool is likely to be
unrewarding, and may well be why the founder was attracted to a partnership in the first place;
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Compounding knowledge and wealth
b. External hires usually fail because motivations are misunderstood. One of the great hiring fallacies is recruiting
people with demonstrated experience in a role of the same size, in the same industry, as the one for which
they are applying. This is a mistake: why would a high-achiever be motivated to join you if the role and
responsibility you offer is no better than what they already have? Instead, the best external hires tend to be
those who are motivated by either:
i. Joining a larger company from a smaller competitor at the same level, increasing their scope to
develop and lead;
ii. Getting a promotion, providing a career opportunity not otherwise available in the short-term;
iii. Changing industry to better align with their personal values, for which they may accept a similar or
lower role; or
iv. Moving geographically due to family or personal motivations which may entice them to accept a
similar or lower role.
c. As we get older we forget just how young we were when we first took a leadership role. Most successful
CEOs got their first leadership break in their 20’s, and by their 30’s were running large teams. Yet when we
look for leadership hires these same 20 and 30 year olds (as we once were) appear brash, uncultured and
inexperienced compared to our peers. This plays into two traps: it reduces the likelihood of hiring the best
talent (a supremely talented 30 year old passed over for a role today is probably running something far too
large by 40 for you to get them back); and it means missing out on the well-documented fact that ambition
and passion decline from middle-age onwards. Whilst a 50 year old is likely to know more than a 25 year
old, they are unlikely to be prepared to throw themselves in with the ambition and passion required to drive
transformational growth… particularly if they still report upwards to other executives!
3.
Distractions kill. A year may elapse between when a portfolio company first approaches a broker to market their
business, to when we finalise contracts and appoint a board. Sales and profits may become secondary to ‘doing
the deal’. Working with a board may also initially distract executives. Together this can cause revenue and profits
to disappoint. Disappointment will continue unless (and until) the board once again makes driving profits the core
focus of executives.
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4.
Vendor remorse is normal but must be addressed head-on. It is natural that after parting with part of their baby,
founders and executives will wonder if they made the right decision. If there is more than one senior executive,
one may feel regret more keenly, causing internal friction. Boards should address this head-on by discussing
the issue and immediately working on creating a companywide Noble Purpose, Mission, Vision and Big Hairy
Audacious Goal. By setting these as a team early, passion can be harnessed to drive results and overcome fear
about the new structure. A clear path to “growing our baby together” is the fastest and most effective way of
motivating executives and overcoming any misgivings.
5.
Focus board time on delivering the Noble Purpose, not working on the day to day. Executives working ‘in the
business’ rarely have time to think in a visionary way ‘outside the business’. Day-to-day issues keep them busy and
are most likely to be reported to the board. Boards should not involve themselves in day-to-day business and
instead should constantly work on focussing executives on the steps needed to achieve the company’s Noble
Purpose. Doing so will make meetings more productive and drive double digit growth. Discussions will focus on
major opportunities, new moats and mitigating risks, not the daily grind. A board which finds itself involved in
day-to-day decision making is doing a disservice.
2.5
Interacting with Executives
Learn what ‘makes them tick’: Before joining a board, directors should meet with the other board members and senior
executives to learn ‘what makes them tick’. It is easier to mentor and build profits with people we understand. Meeting in
an informal setting allows a prospective board member to see what interests and cultural values they have in common
with the executives (critical for mentoring and driving profit) and their prospective fellow directors (critical for defining
long term goals and maintaining passion). You should also use this opportunity to find out more about the business,
discuss moats and risks identified during the SMaRT and Due Diligence, and to find out what has already been done to
strengthen moats and eliminate, mitigate or manage risks. With a good starting point a board member will add more value
than coming in blind and learning on the job.
Understanding the business: It takes time to understand the Key Performance Indicators (KPIs) that drive profits.
Executives with a history of profitable leadership in the business should already know what is most important to measure:
even if they may not always communicate it clearly. The best way of getting to the crux of this is by asking lots of
“Why” questions. “Why did we do X?”, “Why do you consider Y worth measuring?”, “Why do you think this is a good
or bad idea?”. Asking lots of Why questions (instead of What or How questions) is the fastest way to build an intuitive
understanding of the key drivers of the business. Board members need intuitive understanding to better mentor the CEO
and make fast decisions.
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Compounding knowledge and wealth
Noble Purpose and long-term goals: It is the responsibility of executives to deliver a profitable business every month.
Providing they do so, the key responsibility of the board becomes mentoring and developing executives to achieve the
Noble Purpose and long-term goals. Boards should spend most of their time with executives focussed on exploring how
the company can strengthen moats, reduce risks and deliver the Noble Purpose.
Executive remuneration: Executive remuneration is set by TIP and follows our principles of handsomely rewarding
performance whilst penalising failure. Board members should be aware that executives are typically remunerated with
three components:
• A low base salary, of sufficient size to keep the lights on but small enough that a poor performing executive will
quickly look for a job elsewhere;
• A monthly bonus paid for every month that is profitable, to incentivise executives to design and operate the
business in such a way that it never loses money; and
• A share of the audited NPAT of the business, providing an out-sized reward for stellar performance.
Any changes in remuneration is therefore linked entirely to performance. Boards should take actions that encourage
executives to achieve their monthly bonus every month (e.g. focussing on BESM), whilst ensuring a path to meaningful
long term profit growth. In this way both the executive and TIP win together.
Succession planning: Risks associated with key management personnel are front-of-mind when the board interacts with
management. This risk scores highly in every SMaRT. Boards should ameliorate this risk by encouraging executives to
delegate and to develop an executive team. Within a few years of investment, the board and CEO should have identified
an appropriate successor for an emergency - or should the CEO retire.
Growth planning: Boards add value when they assist in developing a team of talented reports who enjoy doing what
the CEO enjoys least. This frees up the CEO for strategic thinking and growth, rather than being immersed in day-to-day
management.
Focus on BESM: A powerful way of reducing risks is by increasing the gap between sales revenue and the break-even
point. This increases the BESM (Break-Even Safety Margin). Replacing fixed costs with variable costs increases BESM and
reduces risk. Focussing on increasing BESM is a key hallmark of a successful business.
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Size of companies and expected volatility: Missteps by boards or management of SMEs can wipe out short-term profits,
while good decisions can hugely lift short-term profits. Even when long-term profits are excellent, short-term profits may
vary between disappointing and enthusing. Experience shows us that the most effective way to reduce volatility is by
increasing BESM.
Trustworthiness: It is a pre-requisite that the executives who manage the business are trustworthy. If a board member is
ever concerned about honesty, they should inform TIP immediately and in the strongest possible terms.
Frequency of board meetings: Board meetings should be held monthly. Meetings should be face-to-face with an option
to join by teleconference. If board meetings are taking full days, chances are the board is becoming involved in issues
best left to management. A week prior to the board meeting, each CEO should provide the monthly TIPBars financial
report plus a short explanation on any issues on which they seek input.
Helping our portfolio companies grow: Boards should inspire, mentor, and act as a sounding board for executives. They
should regularly ask themselves three questions: “What visionary ideas can we suggest to substantially grow profits?”
and “How can we help make the CEO’s role simpler?” and “How can we assist the CEO make faster and more profitable
decisions?”
Mindful they have sold ‘part of their baby’: When they join TIP, founders have just sold ‘part of their baby’. Nothing will
demotivate them faster, and destroy the value of our investment quicker, than giving the impression ‘the baby is ugly and
needs cosmetic surgery’.
Financial terminology: Executives of SMEs can appear unsophisticated in the use of financial terminology or reporting
procedures. Fortunately, financial terminology and detailed reporting are not pre-requisites for building a great niche
business. However, they do become more important as the business grows. This is why we developed TIPBars. Using a
common tool that focuses on the most important drivers of profit allows meetings to focus on “what can we do to build
free cash and profits”. Test your ideas in TIPTool.
Instructing management: The board as a whole may instruct executives. Individual board members should never do so.
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Compounding knowledge and wealth
2.6
Capital Management and Board Strategies
Dividends and cash buffers: The boards of our portfolio companies have a responsibility to return part of profits as free
cash to TIP via periodic dividends. This is covered in detail in the Group Distribution Policy and is usually set at 50% of net
profit after tax. Boards should be familiar with this policy, and in particular its focus on the mix between paying down debt,
reinvesting for growth and paying dividends.
Bolt-on acquisitions or disposals of divisions: Each board should continually monitor their markets for a substantial
increase of profitability via a bolt-on acquisition. Conversely, they may conclude that the business would be more
profitable after the disposal of an unwanted division. Major capital allocation decisions should be referred to TIP for
assistance.
More capital or debt: It is our philosophy that debt increases risk. Boards should avoid raising debt unless it is for highly
profitable organic growth or accretive acquisitions. If debt is needed, it must first be approved by TIP.
Focus on high margin revenue: Market share is vanity, profits are sanity and free cash flow is reality! We acquire niche
businesses that make higher profits and generate more cash from increasing margins, than from chasing market share. This
can be quickly tested using TIPTool. Good strategy often involves turning away low-margin business. If a business is short
of cash, the chances are the margins are too low. In niche businesses, it’s often easier to increase value through increasing
margins than increasing size.
Moats and outside circumstances: ‘Circumstances beyond our control’ are often blamed for a profit downturn. Boards
should look beyond this and seek ways the company can increase profits even in a downturn. If profits disappoint, and
board members can’t immediately find a way to fix this, raise it with TIP quickly so we can brainstorm ways of benefiting
from adversity – whether real or perceived. Outside influences can often be overcome by a concerted effort to
strengthen moats.
Deal with causes not symptoms: Niche businesses may experience cash-flow challenges from time to time. Boards
and executives must strengthen the businesses by dealing with the cause of cash-flow problems, rather than dealing
with symptoms. TIPTool can be useful for this. Eliminating causes of cash-flow challenges can add huge value to any
investment.
Leverage technology: Technology, data, online connectivity and AI are rapidly changing the world. Every business will be
affected. Those that remain stuck in the past find competitors able to offer similar outcomes cheaper or faster, or superior
products at the same prices. Those that embrace ‘modernisation’ benefit via higher margins. Boards should continually
seek to modernise everything our companies do to stay ahead, and to improve margins against the competition. The
outcomes of any costs and margin improvement can easily be checked in TIPTool.
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Use our tools: TIPBars and TIPTool allow the board to model alternative paths for substantially increasing profits. TIPReps
should frequently use TIPTool to strengthen the business by testing the likely increased profits from the choices of
increased sales, decreased fixed or variable costs, and increased prices. No path is likely to be easy, but choosing the best
path to profit is made easier using TIPTool.
2.7
Culture
Skills available: An incredible range of skills and experiences are available in the Group. Boards should regularly contact
TIP to seek advice about any challenges they face.
We are all in it together: Boards of profitable businesses work as a non-hierarchical team. To maximise profits, board
members should ensure a culture of open, frank and enjoyable cooperation between executives (who know the business
very well), non-executives (who know business principles well) and TIP.
Serving while you add value: Directors should stay on a board while they remain enthusiastic about the business and feel
they can help deliver excellent returns. When considering whether to serve another year on the same board, you should
assess how you have added value to date, and how you can add further value in the coming year.
Comfort with executives: Boards and executives must get along well professionally to be successful. If a director doesn’t
have a strong working relationship with the executive they should inform TIP and seek to be replaced. If a director
becomes uncomfortable with the conduct of an executive they should immediately inform TIP so that we can investigate.
Making improvements: Businesses are rarely able to implement more than one ‘improvement’ at a time. A board that
successfully implements one substantial profit improvement in any half-year has provided excellent value. Asking a CEO
to implement several ‘improvements’ simultaneously, risks overwhelming executives and almost certainly ensuring the
‘improvements’ won’t happen.
Cash flow is king: The value of a business is in the cash it generates. If the business is paying attractive dividends to TIP,
and earnings are growing, the board and executives are doing an excellent job. However, if this is not happening, then
board and management are letting us down. If the board can’t see a way to deliver attractive dividends, they should
request help or request to be replaced.
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Compounding knowledge and wealth
2.8
Reporting to TIP
Division head: Portfolio company boards report to the relevant head of division. This senior TIP executive will meet with
each board regularly to assess performance and provide advice.
Quarterly assessments: Each company is required to fill out a Quarterly Traction Report (focussed on performance
towards Noble Purpose and growth targets) and conduct a Quarterly Employee Assessment of staff (focussed on
adherence to culture, targets and providing opportunities to enhance capability).
Annual reports: Each company must prepare an annual report. Whilst annual reports are not widely distributed, they are
an important strategic tool that disciplines each company to regularly set and track results. They are also invaluable should
we one day decide to raise capital for, divest, or spin-out one of our portfolio companies.
Strategy days: Twice yearly, boards and executives are required to attend Strategy Days. Each company is expected to
develop their plans for one or more of the four ways for delivering shareholder value: 1. Maximising half-yearly dividends;
2. Organic Growth or a new division using the current assets of the business; 3. Bolt-on acquisitions or growth that may
require additional capital at attractive returns; 4. Working with another portfolio company to enhance the returns from
each.
3.
GUIDANCE FOR EXECUTIVES
3.1
The Role of Executives
Executives have four roles. These are:
1.
Deliver monthly profits;
2. Manage the cash;
3. Develop a great culture; and
4. Increase BESM.
Monthly profits: Good businesses make monthly profits. Great businesses are designed such that they never make a loss.
The primary role of an executive is to ensure that the business is designed and operated such that monthly profits are
expected and delivered without fail.
Managing cash: Cash flow is the lifeblood of a business. Great executives not only grow profits but enhance cash flow.
Building a healthy cash buffer ensures executives can sleep easy knowing that they are protected from unexpected
headwinds. It also allows for healthy dividends which is the fastest way for executives to gain promotion or receive a pay
rise. Executives that regularly “mine shareholders wallets” for cash will soon find themselves without a role.
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Culture and mentoring: Just as it’s the role of boards to mentor executives, it is the role of executives to mentor staff.
Good executives look to constantly improve and educate their team: either by enhancing existing skills, or hiring high
achievers. A focus on mentorship and the development of a high-performance culture is key to making the role of an
executive less stressful, and it is the simplest long-term path to higher earnings.
Increasing BESM: The most effective way for executives to increase profits whilst reducing risk is by increasing BESM.
Building a culture of understanding BESM allows younger managers to provide ideas to enhance the business. Those
executives who regularly increase BESM are likely to be offered larger roles within TIP.
3.2
Our cultural values
Cultural values are the qualities we want reflected in the behaviour of our organisation. While each operating division will
have cultural values unique to it, we expect all executives to also exhibit the values of the Group. Living our cultural values
is the strongest lead indicator of achieving our Noble Purpose of compounding knowledge and wealth, and delivering
enduring value for shareholders.
TIP’s cultural values are:
• We believe being better investors makes us better business people; and being better business people makes us
better investors.
• We understand “noise” contributes more to error than “bias”; and we seek to reduce both.
• Complex decisions are hard; simple decisions are easy. We make decisions easy for our staff, customers,
executives and investors.
• Small improvements make a big difference when compounded. Doing nothing compounds nothing.
• In the long-run “factfullness” beats running with the herd. No matter how unpopular it makes us in the short-run.
3.3
Economic Moats are the Path to Higher Profits
Economic moats: Businesses generate attractive returns when they build and maintain economic moats. During the SMaRT
and Due Diligence, we assessed and scored the promising economic moats of the business. This list won’t be complete
- some scores may not be accurate. Executives should discuss these moats with their board and make an accurate list at
least every six months. Then they can continually seek ways to maintain and strengthen moats – and find ways to develop
new ones.
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Compounding knowledge and wealth
Test for economic moats: Warren Buffett tells the CEOs of his many businesses to frequently ask themselves: “Would we
have to call a prayer meeting before increasing prices to our customers?” Ask yourself the same question. If the answer is
‘yes’ then you have not yet built strong economic moats. If the answer is ‘no’ then you can increase prices and be proud of
the strong moats you have built.
3.4
Capital Management
Capital allocation: A sure path to growing earnings is allocating capital to the most profitable parts of the business.
Minimise costs in those parts of the business that generate low profits or don’t directly generate income. For example,
a good extra salesperson should generate more profit than cost, while larger premises often eat more profit than they
generate. Property expense also adds risk since a mistake can be time consuming to undo. A mistake in hiring can be
quickly reversed.
Growth capital: TIP can provide additional capital when you find opportunities to grow profit. When an opportunity offers
outstanding returns (greater than 15% per annum), please inform us.
Dividends matter: To make cash available for the most profitable opportunities, TIP looks to receive funds from our
investments via dividends. These funds are then allocated to those who can use them best. If you have a profitable
opportunity that requires investment, you should write a succinct business case for us. In this way, opportunities can be
compared across the group and funds allocated to those offering the best returns.
Fast action: The primary responsibility of a CEO is to look after cash and keep the business running profitably every month.
Executives are expected to take immediate action should a portfolio company ever risk falling into a loss. Fast action to
bring the business back to profit is always better than delaying for discussion.
Capital for turnarounds: We have an aversion to providing capital to help a business out of difficulty. Getting into
financial distress is a symptom of executives failing to develop an appropriate BESM, being blindsided by changes in their
market, or a significant error in judgement. Only where executives can demonstrate a clear path to returning a business to
profitability, and agree to strict conditions around the use of cash, will funds be made available. Asking for cash to “save a
business” is the largest indicator of an executive team that has failed. Whilst we understand everyone makes mistakes, the
decision to invest Group money to save a once profitable business is perhaps the most serious decision we can make. It
is asking those who have performed well to slow down their growth (and therefore personal earnings) to help cover for
someone else’s mistake.
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3.5
Financial Reporting
Financial reporting and TIPBars: The best financial reports help executives make large improvements in profits with the
least effort. Before we invest, most executives use financial reports designed for accountants and the tax office. These
focus on the past, but rarely point the way to increasing profits. We have developed TIPBars to improve profits with
the least amount of work, while highlighting dangerous risks. TIPBars is produced every month and shows where each
business is working well financially, where hidden risks may be lurking, and where financial improvements should be
made.
Break-even safety margin: TIPBars highlights the trend in Break-even Safety Margin (‘BESM’): whether the business is
becoming safer or riskier. Should the trend show increasing risk, act immediately to reduce fixed expenses or increase
margins.
Easiest path to improve profits: TIPTool allows executives to quickly ascertain which levers can be pulled to most easily
improve profits. When joining TIP, each business is required to provide general ledger data for the previous 12 months.
This allows TIPBars and TIPTool to be implemented immediately. Used properly, TIPBars and TIPTool add considerably to
profit.
Audits: Each portfolio company is required to participate in TIP’s audits. Rather than seeing this as an imposition, executives
should see it as a way of learning how to better improve systems and processes to enhance future returns. What seems
like a frustration at first can add profound value if used to enhance systems.
3.6
Building a Stronger Executive Team
Stronger executive team: TIP can help executives develop a stronger team, producing bigger profits and dividends and
allowing executives to be more relaxed.
The ‘perfect’ chief executive: It is virtually impossible to be the ‘perfect’ CEO. A perfect CEO would have expertise in
leadership, production, general management, marketing, sales, finance, administration, accounting, people management
and business management. In real life this doesn’t exist. Instead surround the CEO with quality executives who can add
missing strengths.
Why an executive team: CEOs of SMEs live in a gruelling combination of being the Chief ‘Enthusiasm’ Officer and the
Chief ‘Operating’ Officer. As Enthusiasm Officer they must inspire their team to greatness and inspire their clients to
provide a good margin for their wonderful work. As Operating Officer, they must ensure work is efficient, of the highest
standard, and systems are scalable for doubling and tripling volume and profits. This is a gruelling task and limits the
growth of the organisation.
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Compounding knowledge and wealth
To grow further without burnout, the CEO must either have an outstanding Operating Officer to take off their shoulders
much of the thinking about day-to-day business or a quality ‘Enthusiasm’ Officer to reduce their role of thinking about
inspiring staff and customers to maximise profits. In choosing which to delegate first, choose the role they find less
enjoyable. Once the business becomes larger, the company may need one of each reporting to the CEO.
Functional executives: When a business grows at 20% per year, after 10 years it will be six times the size. To avoid working
impossibly harder, the business eventually needs an executive (not simply a manager) to take responsibility for each
functional area: production, marketing, sales, finance, administration and IT. Executives should act before they become
overwhelmed: instead promote or recruit top talent to relieve some of the load and facilitate further expansion. Our aim
should be to make the business more profitable and less stressful.
Develop or recruit: Businesses develop a superior culture when they develop internal candidates rather than recruiting
externally. If the business has not had previous success with developing talent, or hiring top external talent, do not despair.
TIP is available to help.
Replacing a successful CEO: If tempted to seek one person to take over from a successful CEO, including all the thinking
they do about the business, ask two questions: “How easily will we find someone who can handle both roles of Chief
Enthusiasm Officer and Chief Operating Officer?” and “If a candidate seems capable of handling everything superbly,
why aren’t they running their own business – one at least as big and profitable as ours?” It is likely that we will need
several outstanding executives to replace a successful CEO: one to provide enthusiasm; and one or more responsible
for operations. Provided the board does this while the successful CEO is still engaged, they will have time to mould their
thinking and ensure a smooth transition.
3.7
Continuing Roles and Responsibilities
Continuing roles: As an executive, the role of profitably running the business remains largely unchanged after joining TIP.
Executives gain access to our tools, balance sheet, people and network, but they are still responsible for results. We can
help mentor and guide: but executives are still responsible for profitable operation and will be judged accordingly.
Reporting to a Board: Reporting to a board can be daunting for those not used to it. Executives should ask three
questions before including anything in a report to their board: “Could input from the board be helpful?”, “Could this be
financially material?” and “Could this provide an opportunity to substantially increase profits?” If the answer is “yes” to any
one of the questions, include it in the agenda. If not, omit it.
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Continuous and immediate disclosure: A key principle of TIP, and the ASX, is continuous and immediate disclosure of all
material information. If an executive becomes aware of anything that could have a material impact on the business they
must immediately inform their board. If board agrees, they must immediately inform TIP who will determine if the item
requires ASX disclosure.
3.8
Gaining Most Benefit from a Board
Using a board effectively: Executives derive most benefit from their board when they share half-formed ideas, major
dilemmas and concerns, knowledge of their business and why they run it as they do. Well briefed board members can
arrange a host of free contacts with expertise the business could not otherwise access.
Briefing the board: A week prior to the meeting, executives should provide a report which includes a short explanation
of any issues on which they would like input, plus TIPBars and any other important items. If board meetings regularly take
longer than half a day, executives have either not properly briefed the board or are involving them in matters best left to
management.
Forward looking discussion: Boards add most value when executives use TIPBars to provide a helicopter view of the
past month and then discuss forward looking key indicators. These include activity indicators driving sales or revenue in
coming months; sales driving profits in coming months; and actions building moats to improve future margins. The board
adds most value when focused on factors that improve leading indicators.
Questions at board meetings: Boards will ask challenging questions to identify where and how the company can
generate higher cash profits. The better they understand the business, the more they can make valuable suggestions. If
questions get into minutiae, say so: boards are best focused on big picture items that increase capital value.
Thinking in a visionary way: Focusing discussion on questions like: “How could the business make larger profits without
doing more work?” or “How could this business expand into other business or geographic areas?” or “How could this
business combine with another TIP company to increase profits for both?” is most likely to deliver significant value.
Governance: Governance is a powerful way to enhance performance. Good governance grows sustainable profits. To
ensure good governance, work with TIP to develop a ‘governance checklist’. This should be discussed at the meeting
following each calendar quarter.
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Compounding knowledge and wealth
3.9
Gaining most value from TIP
Responsibility: Executives and board are responsible to TIP and our shareholders. When considering major decision, you
should ask: “Will this increase the regular dividends we pay TIP?” If the answer is ‘no’, ask: “Will this increase the capital
value of the business?” If the answer is still ‘no’, ask: “Will this strengthen an economic moat or reduce a risk?” If the answer
is still ‘no’ ask: “Why are we considering this?”
Quarterly reports: Each quarter, each portfolio company must conduct a Quarterly Traction Report and Quarterly
Employee Assessment with the relevant head of division. Use this opportunity to ask for contacts or assistance with any
challenges you are facing.
Strategy days: TIP holds half-yearly strategy days: one in February and the other after the conclusion of the financial year.
Executives must attend the Strategy Days. During the day we will cover macro themes that can be used to increase profits,
as well as ideas specific to your company.
Value from other portfolio companies: TIP invests in a wide variety of businesses – all of them run by talented people.
Portfolio companies should work together to generate increased profits. This can include being suppliers to each other,
quoting together where a wider range of skill sets is needed, sharing executive or staff expertise, pooling marketing ideas,
or combining to create a larger company with more depth of management.
Economies of scale: Through TIP, each business has access to considerable buying power. This can save money on
insurance, vehicle financing, accounting, legal costs and other services. If you are considering a merger, acquisition or
divestment, TIP can help save substantial legal, accounting, secretarial, compliance and distribution costs.
Education and personal development: TIP creates premium financial education content which we sell to external
participants via Teaminvest, our Round Table Series, and our Clime Direct joint venture. As important group members, TIP
executives are invited to participate in these programs. We expect participation will enhance your business knowledge,
improve your decision making, assist in personal development and provide networking opportunities.
3.10
Delivering value
Benchmark profitability: Portfolio companies should be among the most profitable businesses: they were founded by
talented executives and have a shareholder that can provide access to expertise and capital. Over time, our Portfolio
Companies should aim to achieve Net Profit Margins of 10% to 15% of revenue. Above 15% they should feel proud. Below
10% they are letting themselves down.
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Focus on building moats: Building economic moats enables businesses to earn more profits than competitors. To test
whether a business has developed economic moats the board should ask: “Can we increase prices faster than inflation
without having to call a prayer meeting?” If the answer is ‘yes’, then they have built at least one strong economic moat. If
the answer is ‘no’, think: “How can we build at least one economic moat to increase our profit percentage?”
Increasing margins or increasing sales: Niche businesses increase profits more via a small increase in margins than via a
large increase in sales. Executives can use TIPTool to see the relative uplift in profits from increases in margins, increases in
sales and reductions in costs. Test scenarios to find the fastest way to increase profits with the least additional work.
Fixed versus variable expenses: The best businesses should never record a loss. Reduce the risk of losses by building the
business around a higher proportion of variable expenses (which go up or down as sales revenue goes up or down) and
a lower proportion of fixed expenses. Fixed expenses increase the risk of losses while reducing flexibility for growth. For
fastest growth with lowest risk, minimise fixed costs by converting them to variable expenses.
The world is changing fast: Technology, data, online connectivity and AI are changing the world. All businesses will be
affected. Those stuck in the past will find competitors offering similar outcomes cheaper or faster, or superior products at
the same prices. Those embracing ‘modernisation’ will thrive via higher margins. Modernise the business to stay ahead of
the competition and improve margins. Use TIPTool to check the improved profit from higher margins after any planned
‘costs of modernisation’.
Profiting from inflation: Inflation is both an opportunity and threat. Business inflation is generally above CPI. A business
that doesn’t develop and maintain economic moats is hurt as input and labour costs rise before the business can increase
prices. Businesses without moats grow weaker still. Some go broke. Executives can ensure their business thrives by
strengthening existing moats and building new moats. This enables the business to dominate its industry by increasing
prices faster than inflation, building a war chest, and seizing opportunities to acquire competitors.
Profit growth matters: When profits are growing quickly, the best employees can see opportunities for advancement
and higher income. This motivates them to produce better quality work. When profits cease growing, the best staff seek
employment elsewhere, staff quality goes down and output suffers. This makes it imperative that executives continue
growing their profits.
Sales team: To grow profits substantially, it is almost certain the business will need a dedicated sales team. Hire only those
who are highly enthusiastic. Poor salespeople cost more than any profit they generate. The right salespeople generate far
more profit than they cost.
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Compounding knowledge and wealth
3.11
Succession
Succession planning: Whether or not executives plan to continue leading a business for many years, a major responsibility
of all senior executives is to develop a top-quality leadership team. A quality executive team helps a business grow faster
and ensures it is preserved should anything happen to senior executives. To reduce risk, the board should identify an
emergency successor and ensure that key staff are aware of the decision so they can act quickly and with reduced impact
if anything untoward occurs.
Expertise available: By the nature of our business, TIP has more experience recruiting senior executives and managing
succession than most. Utilise this expertise and experience by speaking to us and those who have been through the
journey multiple times before. Whilst each business is unique, the challenge of a successful succession is not.
3.12
Reporting to TIP and the company board
Reporting to the company board: Each month, the company board will want to know:
• sales revenue for the period (month, quarter, year to date);
• profitability for the period;
• how this translated to free cash;
• how executives are building, maintaining or strengthening moats to improve margins;
• any OH&S issues - and that they have been dealt with appropriately; and
• the view of executives on how the business is tracking.
Quarterly reporting: Your relevant division head will want to know each quarter what the board and executives have
done to:
• strengthen the profit-enabling moats of our business;
• reduce the likelihood or severity of any risks to the business;
• increase the net profit of our business;
• increase dividends; and
• make progress towards building a stronger executive team.
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Bad news and good news: Material good and bad news should be reported to the board immediately. Good news so
we can share the success, and bad news so that we can act quickly to solve the problem. When communicating bad
news, a good executive team will also provide potential ways of addressing the problem. This is so the board may act
quickly in advising the best path to mitigate damage and turn the bad news into a new opportunity.
Loss making quarter: Should the business report a loss for a calendar quarter, the company board must immediately
arrange a meeting with TIP. The purpose of the meeting is to seek assistance and discuss what changes are necessary
to get the business back to acceptable profit. We are happier with executives when they also inform us how they have
already ensured the loss will not be repeated. If acceptable changes are not made, expect that executives and directors
will be replaced.
Compliance and culture: Executives are expected to comply with all of TIP’s corporate governance policies, and to instill a
culture of acting entrepreneurially, ethically and responsibly.
48
Icon Metal
Directors
Malcolm Jones - Chair
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Company secretaries
Anand Sundaraj
Dean Robinson
Corporate Directory
Teaminvest Private Group Limited
ABN 74 629 045 736
Annual Report - 30 June 2024
Teaminvest Private Group Limited
Contents
30 June 2024
1
Corporate directory
2
Directors’ report
4
Auditor’s independence declaration
20
Consolidated statement of profit or loss and other comprehensive income
21
Consolidated statement of financial position
23
Consolidated statement of changes in equity
24
Consolidated statement of cash flows
25
Notes to the consolidated financial statements
26
Consolidated entity disclosure statement
73
Directors’ declaration
74
Independent auditor’s report to the members of Teaminvest Private Group Limited
75
Teaminvest Private Group Limited
Corporate directory
30 June 2024
2
Directors
Malcolm Jones - Chair
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Company secretary
Anand Sundaraj
Dean Robinson
Registered office
Ground Floor Suite 2
23 Ryde Road
Pymble NSW 2073
Tel: (02) 9955 9540
Share register
Computershare Investor Services Pty Ltd
452 Johnston Street
Abbotsford VIC 3067
Tel: 1300 850 505
Auditor
BDO Audit Pty Ltd
Level 11, 1 Margaret Street
Sydney NSW 2000
Solicitors
Sundaraj & Ker
Level 31, Australia Square
264 George Street
Sydney NSW 2000
Banker
Australia and New Zealand Banking Group Limited
Level 10
242 Pitt Street
Sydney NSW 2000
Commonwealth Bank of Australia
Level 8
108 Wakefield Street
Adeliade SA 5000
Stock exchange listing
Teaminvest Private Group Limited shares are listed on the Australian Securities
Exchange (ASX code: TIP)
Website
http://www.tipgroup.com.au
Teaminvest Private Group Limited
Corporate directory
30 June 2024
3
Corporate Governance Statement The directors and management are committed to conducting the business of
Teaminvest Private Group Limited in an ethical manner and in accordance with
the highest standards of corporate governance. Teaminvest Private Group
Limited has adopted and has substantially complied with the ASX Corporate
Governance Principles and Recommendations ('Recommendations') to the extent
appropriate to the size and nature of its operations.
The Group’s Corporate Governance Statement, which was approved by the
Board of Directors at the same time as the Annual Report, sets out the corporate
governance practices that were in operation during the financial period and
identifies and explains any Recommendations that have not been followed. The
Corporate Governance Statement for the year ended 30 June 2024 and the
Group’s corporate governance policies can be found on the Company’s website
at https://www.tipgroup.com.au/investor-centre.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
4
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group') consisting of Teaminvest Private Group Limited (referred to hereafter as the 'Company' or
'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2024.
Directors
The following persons were directors of Teaminvest Private Group Limited during the whole of the financial year and
up to the date of this report, unless otherwise stated:
Malcolm Jones - Chair
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Principal activities
During the financial period the principal continuing activities of the Group consisted of investing in Australian privately-
owned businesses.
Dividends
On 16 February 2024, the Company paid a dividend of 1.50 cents per share. On 22 August 2024, the Company
declared a dividend of 1.50 cents per share for payment on 03 October 2024.
Review of operations
The profit after tax excluding discontinued operations, impairment, and amortisation of intangible assets of the Group
for the year was $5,652,000 (30 June 2023: Profit of $7,522,000). The loss after tax from discontinued operations for
the year was $970,000 (30 June 2023: $2,705,000), the impairment charge after tax for the year was $6,026,000 (30
June 2023: Nil), and the amortisation of intangibles after tax was $854,000 (30 June 2023: $816,000). The loss for the
Group after providing for income tax amounted to $2,199,000 (30 June 2023: Profit of $4,001,000).
The strengthening of management teams throughout FY24 and the change in strategy for TIP Residential Group has
led to the overall strengthening of the Operating Segments of the Group. EBITDA in Equity increased by 21.4% and
Wealth increased by 121.7% with Education and Corporate Advisory remaining steady. The continual development in
leadership has seen further enhancement of second level management teams. Increased management focus on high
performing assets through expanded capacity and subsequent contracts at East Coast Traffic Controllers, GLT and Icon
Metal has been undertaken in this financial year to enhance the growth of the Group over the coming years.
TIP Group has an investment in associate (Colour Capital 33% holding). Colour Capital’s on-going dispute with Netdeen
Pty Ltd (GJ Gardner Homes) has not been resolved. The current position is Netdeen has cancelled the Master Franchise
Agreement of GJ Gardner Homes NSW/ACT and Western Australia as at 27 May 2024. This dispute is currently in
litigation and as such there is no future revenue from Colour Capital Master Franchisee Agreement. We have therefore
taken the approach to impair our carrying value of Colour Capital of $8.6m on the basis that the value is attributed to
the Master Franchise Agreement and the findings of the litigation are in deliberation.
The Wealth division has continued to deliver in the Funds Under Management space with our flagship fund being the
Conscious Investor Fund delivering after-fee returns to investors of 15.14% in the past year with a 5-year average of
12.61%. The continued development and growth in our Funds Under Management has contributed to the growth in the
Wealth division by 121.7%.
Net tangible assets
Reporting period
Cents
Previous period
Cents (Restated)*
Net tangible assets per ordinary security
161.55
179.72
Refer to the 'CEO report' for further details of operations and commentary on the results.
* The amount has been restated to reflect share consolidation. (Refer Note 21)
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
5
Significant changes in the state of affairs
From 1 July 2023, the Group has restructured the reporting divisions. The group now consists of the following
divisions:
TIP Equity, consists of operating companies which are not financial services in nature;
TIP Wealth, consists of entities which provide a range of financial services; and
Education & Corporate, consists of one wholly-owned subsidiary of the Group: TeamInvest Pty Ltd and other
investments made by the Group into listed and unlisted securities.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Loss of control over entities
During the year, a director at TIP Group UK Pty Ltd filed for winding up of the entity. Teaminvest Private Group
Limited being the largest creditor of the entity has appointed the liquidators for TIP Group UK Pty Ltd.
Name of entities (or group of entities)
TIP UK Pty Ltd
Date control lost
20 May 2024
$'000
Contribution of such entities to the reporting entity's profit/(loss) from ordinary
activities before income tax during the period (where material)
(1,386)
Profit/(loss) from ordinary activities before income tax of the controlled entity (or
group of entities) whilst controlled during the whole of the previous period
(where material)
(548)
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Refer to the 'CEO letter' for details of likely developments and expected results of operations.
Business Risks and Prospects
Key Risks
Key Highlights
Operational
Disruptions to administrative procedures or operational controls of the Group and/or
one of the Portfolio Companies and/or their respective service providers may
challenge the day to-day operations of the Group and/or one of the Portfolio
Companies. Adverse impacts may arise internally through human error, technology
or infrastructure changes, or through external events such as regulatory changes
and many more practical factors.
The Group’s business is reliant upon the provision of services by its Board, the
Company’s executives, and Portfolio Company executives. Any change in the
quality or quantity of these services, or an inability to attract and retain qualified and
motivated personnel to innovate or provide these services, could affect the Group’s
business activities and financial performance. Further, an inability to attract quality
sales and marketing personnel may adversely impact on the Group’s growth plans.
Brand and reputation damage
The TIP brand name is a vital asset to the business, and its reputation and value
could be negatively affected by several factors. These include failing to meet
customer expectations for service quality, disputes or litigation involving employees
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
6
or customers, or adverse media coverage. Significant erosion of the reputation of,
or value associated with, the TIP brand name could have an adverse effect on the
Group’s future financial performance and financial position. There is also a risk that
some incident beyond the control of the Group could occur which would have the
effect of reducing consumer confidence or preferences for the brands used by the
Group or brands utilised by the Portfolio Companies. The consequences of such
an incident could be very significant for the Group, including reduced revenues,
loss of consumer trust in the relevant brand or products, reduced desirability for the
brand and reduced prominence of the relevant brand.
Cybersecurity and privacy risks
Cybersecurity and privacy risks pose threats to the Group and its Portfolio
Companies. Unauthorised access to sensitive data, cyberattacks, data breaches,
or other security incidents could lead to the exposure of confidential information,
financial loss, and reputational damage. Such events may disrupt operations, lead
to regulatory fines, and result in legal liabilities.
The Group continuously invests in robust cybersecurity measures and privacy
protocols to protect against these risks. This includes regular security assessments,
employee training, implementing advanced security technologies, and establishing
comprehensive incident response plans.
Maintaining the integrity and confidentiality of data is critical to the Group’s
operations and trust with stakeholders. Any failure to effectively manage
cybersecurity and privacy risks could adversely affect the Group’s business
activities and financial performance.
Investment strategies
The Group may, in its discretion, adopt the investment, trading and risk
management strategies and methods it determines are most appropriate in the
market circumstances. However, there can be no assurance that these strategies
will be successful, and an investor may lose all or a substantial proportion of their
investment in the Group. The Group may employ additional strategies or change
investment strategies following an assessment of market and other conditions and
investment opportunities available to the Group. In addition, the Group may find
that it is not able to execute on its intended investment strategy due to lower than
expected availability of opportunities.
Labour and personnel
availability
The Group is reliant on its labour force and key management to drive the portfolio
businesses and achieve future financial performance. Risks include loss of key
personnel, retention of technical and qualified personnels, unavailability of suitable
labour and upward pressure of wages. The risk is mitigated by investing in
continuous training and development programs to equip employees with diverse
skills. This not only enhances their capabilities but also prepares them to take on
different roles within the organisation. Additionally creating systems for knowledge
sharing, such as mentoring programs, documentation, and collaborative platforms,
to ensure critical information is retained and accessible. The Group continuously
assesses, and forecasts labour requirements based on the project pipeline and
business growth projections. This proactive approach helps in identifying and
addressing potential labour shortages.
Key customers and suppliers
The loss or impairment of a Portfolio Company’s relationships with a key customer
or supplier, or an inability to renew existing contractual arrangements with such
parties or negotiate agreement with new parties on terms which are no less
favourable, is likely to result in a reduction in revenue and could have an adverse
effect on the relevant Portfolio Company’s future financial performance and, if that
adverse effect is sufficiently material, could have an adverse effect on the Group’s
future financial performance.
Unforeseen disruptions
impacting product supply from
offshore suppliers leading to
Effective management of the supply chain is crucial for the Group’s operations. The
Group’s reliance on suppliers for essential components and materials introduces
several risks that could impact production, costs, and overall business
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
7
Climate Risk and Opportunity
As a conscientious and forward-looking organisation, we are dedicated to navigating the challenges posed by climate
change. Acknowledging its role in amplifying the frequency and intensity of natural disasters, which profoundly impact
our customers and communities, we are committed to taking action to mitigate both physical and transitional risks.
We believe Australia holds great potential as a renewable energy exporter and a supplier of critical minerals. Realising
this potential requires substantial investments in new technologies, industries, and communities.
We commend the Australian Government's recent efforts to tackle climate change, particularly through the establishment
of legislated emissions reduction targets. These targets provide valuable guidance to industries, banks, and investors,
facilitating informed decisions on funding and investments.
However, we acknowledge that not all our businesses are presently equipped to adopt renewable energy solutions or
energy-efficient practices. Thus, we welcome additional government funding aimed at enhancing energy efficiency. We
advocate for sustained government incentives to bolster businesses in their endeavours towards climate action.
In our approach to managing climate-related risks, we are continuously refining our risk management tools and
processes to ensure comprehensive and effective mitigation strategies.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
reputational damage, lower
sales and loss of market share.
performance. The Group has long-term supply partnerships with multiple proven
onshore and offshore suppliers, many of whom have diverse capabilities and would
be able to assist in the event of any disruption.
Supply chain processes include dual-sourcing strategies and access to safety stock
to mitigate the risk of supplier disruption. While the global supply chain landscape
is stable, it continues to evolve because of changing market conditions and
government policies, armed conflict and extreme weather events.
Workplace health and safety
risks could potentially result in
physical injury to employees,
contractors or others, or
damage to the Group’s
reputation.
Aligned with its Cultural values, the Group remains committed to continuous
improvement in workplace health and safety performance.
The Group has implemented comprehensive safety systems and processes,
communications with and training of employees, and increased diligence in
identifying and removing safety risks.
Prospects
TIP’s forward order book across the entities for commercial projects remains solid
and is growing with several major projects secured.
In addition, TIP’s corporate strategy incorporates opportunities for TIP to expand
beyond current segments, categories and markets.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
8
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Malcolm Jones
Independent Chair
FCA
Malcolm has experience in managing large organisations. He has held
positions as a Member of the Group Management Board at Zurich Financial
Services in Switzerland, CEO Zurich Financial Services Asia Pacific, CEO
Zurich Financial Services Australia Ltd, CEO NRMA Ltd & NRMA Insurance
Ltd and CEO State Government Insurance commission of South Australia
Prior to these executive roles Malcolm was a Partner at Ernst & Young where
he had worked for 18 years.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
None
None
Member of the Strategy committee, Due Diligence committee, Risk &
Compliance committee and Audit committee
509,894
None
None
Name:
Title:
Qualifications:
Experience and expertise
Andrew Coleman
Managing Director and Chief Executive Officer ('CEO')
B.Ec (Hons)
Andrew is a Co-Founder of Teaminvest Private and is responsible for sourcing,
structuring and overseeing investments and general management. Prior to
joining Teaminvest Private, Andrew worked in Sydney as an investment
banker for Credit Suisse. Andrew advised and assisted clients on significant
corporate deals in Australia and internationally with a specific focus on mergers
and acquisitions and capital raising activity. He is also a co-author of 'Relative
Performance Incentives and Price Bubbles in Experimental Asset Markets'
published in the Southern Economic Journal.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
Clime Investment Management Limited (ASX: CIW)
None
Member of the Strategy committee and Due Diligence committee
1,373,893
None
None
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
9
Name:
Title:
Qualifications:
Experience and expertise:
Howard Coleman
Non-Executive Director
BSc in Physics
Howard has over 40 years’ experience as a founder and CEO in the areas of
sales, marketing, publishing, consumer finance, and language and
mathematics education in Australia, South Africa and the UK. Howard has held
Board positions in a number of private companies in several countries. His
background and experience are invaluable for assessing the strengths and
weaknesses of companies. This particularly applies to identifying their future
risks, and the ability and strategies of the board and senior management to
deal with them.
He is a graduate of the Harvard Business School Owner/President
Management Program and completed the Australian Institute of Company
Directors’ program for company directors. Howard has regularly appeared as
a guest commentator on Sky Business and Ausbiz.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
None
None
Member of the Strategy committee
4,316,264
None
None
Name:
Title:
Qualifications:
Experience and expertise:
Ian Kadish
Independent Non-Executive Director
MBBCH MBA
Ian has significant public company board and executive experience as CEO
and Managing Director of ASX listed Integral Diagnostics Limited; CEO and
Managing Director of ASX listed Pulse Health Group; CEO and Managing
Director of private equity owned Healthcare Australia Limited and Executive
Director of JSE listed Network Healthcare Holdings Limited. In addition to his
public company experience, he has served as a senior executive and board
member of large private businesses owned and operated by private equity and
listed equity, including CEO of Laverty Pathology, Chief Operating Officer of
Greencross Vets Limited, and Co-founder and Non-Executive Director of
Digital Healthcare Solutions.
Ian holds a Master's of Business Administration ('MBA') from the Wharton
Business School at the University of Pennsylvania, United States of America,
and a Bachelor of Medicine and Surgery from the University of Witwatersrand,
South Africa. In addition to his executive career in the United States, South
Africa and Australia, Ian has also worked as a consultant for McKinsey and as
an advisor to boards on executing and integrating mergers and acquisitions.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
Integral Diagnostics Limited (ASX: IDX)
None
Chairman of the Audit committee and Chairman of the Strategy committee
89,044
None
None
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
10
Name:
Title:
Qualifications:
Experience and expertise
Regan Passlow
Non-Executive Director
MA, Mgmt
Regan has worked as an executive director for nearly 40 years for both
national and multi-national companies. His focus has been primarily on
strategic business development, administration and back-office systems.
He has over 40 years’ experience in senior management and governance roles
in private organisations. He is the former co-founder of WebProfit.com.au, a
business established in the 1990’s to provide executives of small and medium-
sized enterprises ('SMEs') with strategic advice on the use of the Internet and
e-commerce. He is also the co-founder of retail lender EM Finance Corporation
and a founding director of Teaminvest, Teaminvest Private and EM
Commercial Finance. He has historically chaired the investment committee
and has held directorships on five portfolio companies.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
None
None
Chairman of the Risk and Compliance committee and member of the Strategy
committee, Due Diligence committee and Audit committee
938,827
None
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretaries
Anand Sundaraj is a corporate lawyer with over 20 years experience and is currently a principal at Sundaraj & Ker, a
Sydney-based law firm. Anand specialises in advising on mergers and acquisitions, and capital raisings for both
publicly listed and privately held entities. He also advises on funds management and general securities law matters
including listing rule compliance and corporate governance.
Dean Robinson is the CFO, COO, Company Secretary and Chair of Due Diligence Committee. He is responsible for
overseeing financial strategy and operations including sourcing, structuring and overseeing investments and general
management. Dean worked as a Director of Mergers and Acquisitions with KPMG. In this role, he led the growth and
development of the Greater Western Sydney team. Dean holds a Master’s in Applied Finance from Macquarie
University, Applied Finance Centre and a Senior Executive MBA from University of Melbourne.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
11
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during
the year ended 30 June 2024, and the number of meetings attended by each director were:
Full Board
Due Diligence Committee
Strategy Committee
Attended
Held
Attended
Held
Attended
Held
Malcolm Jones
11
11
-
-
-
-
Andrew
Coleman
11
11
2
2
-
-
Howard
Coleman
11
11
-
-
-
-
Ian Kadish
11
11
-
-
-
-
Regan Passlow
11
11
2
2
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Audit Committee
The Company has an Audit Committee which has three members, two of whom are independent (including an
independent Chair):
-
Dr Ian Kadish, independent chair of the committee;
-
Mr Malcolm Jones, independent member of the committee; and
-
Mr Regan Passlow, non-executive member of the committee.
Strategy Committee
The Company has a Strategy Committee which was dissolved during the year.
The number of meetings of the Audit Committee held during the year ended 30 June 2024, and the number of
meetings attended by each director were:
Audit Committee
Risk and Compliance Committee
Attended
Held
Attended
Held
Malcolm Jones
3
3
2
4
Ian Kadish
3
3
-
-
Regan Passlow
3
3
4
4
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
Risk and Compliance Committee
The Company has established a Risk and Compliance Committee which has eleven members comprising Mr Regan
Passlow, the chair of the committee, and ten selected members. The Risk and Compliance Committee’s function is to
continuously review the risk, compliance framework and corporate governance policies of the Group’s Portfolio
Companies to inculcate and improve operations.
Nomination and Remuneration Committee
The Company has not constituted a Nomination and Remuneration Committee given the nature and scale of the Group’s
operations. The Board as a whole fulfils the functions normally delegated to a Nomination and Remuneration Committee.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
12
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the Company, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance appropriate for the results
delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value
for shareholders. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria:
clarity and transparency;
performance linkage / alignment;
acceptability to shareholders; and
quantum.
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives.
The performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is
to attract, motivate and retain high performance and high-quality personnel. The Board determines its remuneration
policies having regard to the Company’s earnings and the consequences of the Company’s performance on shareholder
wealth.
The Board has structured an executive remuneration framework that it considers is complementary to the strategy of
the Group.
The reward framework is designed to align executive reward to long term shareholders' interest by:
having economic profit as the core component of plan design;
focusing on long term growth in shareholder wealth, and delivering constant or increasing return on assets as
well as focusing the executive on key non-financial drivers of value while decreasing risk; and
attracting and retaining highly motivated executives.
Additionally, the reward framework seeks to enhance executives' interests by:
rewarding capability and profit generation;
reflecting reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning attractive rewards for performance.
The structure of non-executive director and executive director remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Board. The chair's fees are determined independently to the
fees of other non-executive directors. The chair is not present at any discussions relating to the determination of their
own remuneration. Non-executive directors do not receive bonuses or other incentives.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
13
The annual non-executive directors' fees currently agreed to be paid by the Company are set out below:
Director Director's fees
Malcolm Jones $100,000 per annum (including superannuation).
Howard Coleman $70,000 per annum (including superannuation).
Ian Kadish $70,000 per annum (including superannuation).
Regan Passlow $70,000 per annum (including superannuation).
At the Company’s 2023 annual general meeting, each of the existing non-executive directors received approval from
the Company’s shareholders to be issued shares under the Company’s non-executive director equity plan (‘NED Plan’).
Under the NED Plan, a non-executive director may elect to take up to 50% of their director fees for a financial year in
share rights, being, rights which, upon vesting, can be converted into new fully paid ordinary shares in the Company
either by issue (subject to shareholder approval) or by on-market purchase. It is noted that, for the financial year ended
30 June 2023, 80,388 shares were purchased on market at an average price of $1.96 and transferred to the non-
executive directors to satisfy their accrued remuneration. In the event the Company appoints additional non-executive
directors, the ability of those non-executive directors to be issued ordinary shares under the NED Plan will be subject to
approval by the Company’s shareholders. Where a non-executive director has received shareholder approval to be
issued ordinary shares under the NED Plan, ordinary shares will not be issued to that director beyond a date that is 3
years after the date of the meeting in which the shareholder approval was granted unless a new shareholder approval
has been obtained prior to the issue.
Australian Securities Exchange ('ASX') listing rules require the aggregate non-executive directors' remuneration be
determined periodically by a general meeting. The maximum aggregate non-executive directors' remuneration was
approved in 2019 by the Constitution at $500,000. Any changes to this amount will be approved by shareholders in the
annual general meeting.
Executive remuneration
Fixed remuneration, consisting of base salary, superannuation non-monetary benefits and reward framework, are
reviewed annually by the Board based on individual and business unit performance and the overall performance of the
Group. The Fixed remuneration is set below comparable market remunerations. A greater percentage of total executive
remuneration is available through short-term and long-term incentives based on performance.
The executive remuneration and reward framework has four components:
base pay and non-monetary benefits;
short-term performance incentives;
share-based payments; and
other remuneration such as superannuation, annual leave and long service leave.
The combination of these comprises the executive's total remuneration.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the Group and provides additional value to the executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance
indicators ('KPI's') being achieved.
Consolidated entity performance and link to remuneration
The incentive to the executives is described below.
FY24: An annual bonus equal to 2.5 – 3.5% of the Company’s operating net profit after tax (before expensing
the cost of the bonus comprising 100% to be paid in cash (Cash Component)
FY23: An annual bonus equal to 3.5% of the Company’s audited total comprehensive income per annum
(before expensing the cost of the bonus) comprising 75% to be paid in cash (Cash Component) and 25% to
be issued as shares in the Company (Share Component)
The bonus is to be determined twice each financial year, after the reviewed Half Year Result and after the audited Full
Year Result.
Use of remuneration consultants
During the financial period ended 30 June 2024, the Group did not engage the use of remuneration consultants.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
14
Details of remuneration
The key management personnel of the Group consisted of the following directors of Teaminvest Private Group
Limited:
Malcolm Jones - Independent Chair
Howard Coleman - Non-Executive Director
Ian Kadish - Independent Non-Executive Director
Regan Passlow - Non-Executive Director
Andrew Coleman - Managing Director and Chief Executive Officer ('CEO')
And the following person
Dean Robinson - Chief Finance Officer ('CFO') and Chief Operating Officer (’COO’)
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
30 June 2024
Short-term Benefits
Post-
employment
benefits
Long-term
Benefits
Share-based payment*
Cash
Salary
and fees
Cash
bonus
Annual
Leave
Superannuation
Long
service
leave
Cash
settled
Bonus
Settled
Bonus
Unsettled
Total
$
$
$
$
$
$
$
$
$
Non-
Executive
Directors
Malcolm
Jones
45,045
-
-
9,910
-
45,045
-
-
100,000
Howard
Coleman
31,532
-
-
6,937
-
31,531
-
-
70,000
Ian Kadish
31,532
-
-
6,937
-
31,531
-
-
70,000
Regan
Passlow
31,532
-
-
6,937
-
31,531
-
-
70,000
Executive
Directors
Andrew
Coleman
264,051
212,252
37,797
52,977
18,642
-
-
-
585,719
Other Key
Management
Personnel:
Dean
Robinson
287,613
183,600
36,241
52,281
31,907
-
-
-
591,642
691,305
395,852
74,038
135,979
50,549
139,638
-
-
1,487,361
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
15
Short-term benefits
Post-
Employment
benefits
Long-term
benefits
Share-based payment*
Cash salary
and fees
Cash
bonus
Annual
leave
Superannuation
Long
service
leave
Cash
settled
Bonus
settled
Bonus
unsettled
Total
30 June 2023
$
$
$
$
$
$
$
$
$
Non-
Executive
Directors:
Malcolm
Jones
45,249
-
-
9,502
-
45,249
-
-
100,000
Howard
Coleman
31,674
-
-
6,652
-
31,674
-
-
70,000
Ian Kadish
31,674
-
-
6,652
-
31,674
-
-
70,000
Regan
Passlow
31,674
-
-
6,652
-
31,674
-
-
70,000
Executive
Directors:
Andrew
Coleman
226,244
130,665
11,651
38,129
8,188
48,346
-
-
463,223
Other Key
Management
Personnel:
Dean
Robinson
226,244
130,665
19,839
38,129
-
48,346
-
-
463,223
592,759
261,330
31,490
105,716
8,188
236,963
-
-
1,236,446
* share-based payments represent 50% of non-executive directors' remuneration and 25% of executive director and
other key management personnel's bonuses, that have been accrued and not paid during the financial year. These
payments are to be settled in shares subject to Board approval and shareholder vote at the AGM. If approval is not
granted, these will be paid in cash.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
16
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Malcolm Jones
Independent Chairperson
13 December 2019
Ongoing
$100,000 per annum (including superannuation)
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Howard Coleman
Non-Executive Director
1 March 2019
Ongoing
$70,000 per annum (including superannuation)
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Ian Kadish
Non-Executive Director
26 February 2019
Ongoing
$70,000 per annum (including superannuation)
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Regan Passlow
Non-Executive Director
1 March 2019
Ongoing
$70,000 per annum (including superannuation)
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Andrew Coleman
Managing Director and Chief Executive Officer
26 February 2019
Ongoing
$300,000 per annum (plus superannuation) and bonus of 2.5% - 3.5% based on
Company’s operating net profit after tax. Employment notice is 3 months.
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Dean Robinson
Chief Finance Officer & Chief Operating Officer
1 November 2018
Ongoing
$350,000 per annum (plus superannuation) and bonus of 2.5% - 3.5% based on
Company’s operating net profit after tax. Employment notice is 3 months
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Leave entitlements are accrued on top of the annual salary.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
17
Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2024 are set out below:
Issue Date
Number of Shares
Issue Price
Total Value
30 June 2024
Shares issued to KMP
23/11/2023
80,388
$1.745
140,271
30 June 2023
Shares issued to KMP
18/10/2022
273,944
$0.514*
140,909
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at the
start of the year
Received as
part of
remuneration
Additions
Other*
Disposal
Balance at
the end of
the year
Ordinary shares
Malcolm Jones
2,376,670
25,932
37,154
(1,929,862)
-
509,894
Howard Coleman
20,413,256
18,152
472,156
(16,587,300)
-
4,316,264
Ian Kadish
354,461
18,152
-
(283,569)
-
89,044
Regan Passlow
4,507,420
18,152
41,720
(3,627,845)
-
938,827
Andrew Coleman
6,871,465
-
-
(5,497,572)
-
1,373,893
Dean Robinson
1,395,616
- 14,271
(1,125,838)
-
284,049
35,918,888
80,388
565,301
(29,051,586)
-
7,512,991
*The movement relates to consolidation of issued share capital of the Company on the basis that every five shares be consolidated
into one share. Refer to note 21
This concludes the remuneration report, which has been audited.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
18
Shares under option
There were no unissued ordinary shares of Teaminvest Private Group Limited under option outstanding at the date of
this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to ensure the directors and executives
of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 25 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting
Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a
management or decision-making capacity for the Group, acting as advocate for the Group or jointly sharing
economic risks and rewards.
Officers of the Company who are former partners of BDO
There are no officers of the Company who are former partners of BDO, the auditor of the Group.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Teaminvest Private Group Limited
Directors’ report
For the year ended 30 June 2024
19
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors' report.
Auditor
BDO continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
Andrew Coleman
Managing Director and Chief Executive Officer
22 August 2024
Sydney
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
DECLARATION OF INDEPENDENCE BY RYAN POLLETT TO THE DIRECTORS OF TEAMINVEST PRIVATE
GROUP LIMITED
As lead auditor of Teaminvest Private Group Limited for the year ended 30 June 2024, I declare that,
to the best of my knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Teaminvest Private Group Limited and the entities it controlled during
the period.
Ryan Pollett
Director
BDO Audit Pty Ltd
Sydney
22 August 2024
20
Teaminvest Private Group Limited
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2024
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
21
Consolidated
Note
30 June 2024
$'000
30 June 2023
$'000
Revenue
Revenue from continuing operations
5
106,083
108,894
Share of profits of associates accounted for using the equity method
12
1,898
2,471
Interest revenue calculated using the effective interest method
117
7
Expenses
Raw materials and consumables used
(38,188)
(39,158)
Employee benefits expense
(49,846)
(49,549)
Depreciation/amortisation
6
(4,365)
(3,587)
Impairment of receivables
(7)
(1,345)
Impairment of investment
12
(8,609)
-
Net (loss)/gain on disposal of property, plant and equipment
(54)
414
Occupancy expense
(833)
(568)
Other expenses
(8,305)
(9,613)
Finance costs
6
(479)
(172)
(Loss)/profit before income tax expense from continuing
operations
(2,588)
7,794
Income tax benefit/(expense)
7
1,359
(1,088)
(Loss)/profit after income tax expense from continuing operations
(1,229)
6,706
(Loss)/profit after income tax expense from discontinued operations
29
(970)
(2,705)
(Loss)/profit after income tax expense for the year
(2,199)
4,001
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Unrealised gains on financial assets at fair value through other
comprehensive income, net of tax
13
141
-
Other comprehensive income for the year, net of tax
141
-
Total comprehensive income for the year
(2,058)
4,001
(Loss)/profit for the year is attributable to:
Owners of Teaminvest Private Group Limited
(2,213)
4,064
Non-controlling interest
14
(63)
(2,199)
4,001
Teaminvest Private Group Limited
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2024
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
22
Total comprehensive income for the year is attributable to:
Continuing operations
(1,243)
6,769
Discontinued operations
29
(970)
(2,705)
Owners of Teaminvest Private Limited
(2,213)
4,064
Continuing operations
14
14
Discontinued operations
-
(77)
Non-controlling interest
14
(63)
Cents
Cents
Note
30 June
2024
30 June
2023
(Restated)*
Earnings per share for (loss)/profit from continuing operations
attributable to the owners of Teaminvest Private Group Limited
Basic earnings per share
(4.59)
25.38
Diluted earnings per share
(4.59)
25.38
Earnings per share for (loss)/profit from discontinued operations
attributable to the owners of Teaminvest Private Group Limited
Basic earnings per share
(3.58)
(10.14)
Diluted earnings per share
(3.58)
(10.14)
Earnings per share for (loss)/profit attributable to the owners of
Teaminvest Private Group Limited
Basic earnings per share
32
(8.17)
15.24
Diluted earnings per share
32
(8.17)
15.24
*Refer Note 32 Earnings per share & Note 29 – Discontinued Operations
Teaminvest Private Group Limited
Consolidated statement of financial position
For the year ended 30 June 2024
The above statement of financial position should be read in conjunction with the accompanying notes
23
Consolidated
Note
30 June 2024
$'000
30 June 2023
$'000
Assets
Current assets
Cash and cash equivalents
8
6,400
7,867
Trade and other receivables
9
11,874
10,661
Contract assets
10
12,890
10,294
Inventories
11
8,514
11,980
Income tax
-
384
Prepayments and other deposits
880
916
Held for sale
-
980
Total current assets
40,558
43,082
Non-current assets
Investments accounted for using the equity method
12
19,266
28,394
Other financial assets
13
3,795
753
Property, plant and equipment
14
6,494
5,353
Right-of-use assets
15
21,003
2,134
Intangibles
16
42,864
43,955
Total non-current assets
93,422
80,589
Total assets
133,980
123,671
Liabilities
Current liabilities
Trade and other payables
17
13,588
13,560
Income Tax
7
87
-
Contract liabilities
18
9,620
12,375
Borrowings
410
529
Lease liabilities
19
2,417
1,438
Employee benefits
20
2,122
2,233
Provisions
145
495
Total current liabilities
28,389
30,630
Non-current liabilities
Lease liabilities
19
19,051
974
Deferred taxes
7
2,285
4,781
Employee benefits
20
391
465
Total non-current liabilities
21,727
6,220
Total liabilities
50,116
36,850
Net assets
83,864
86,821
Equity
Issued capital
21
90,287
90,372
(Accumulated losses)/retained profits
(6,655)
(3,769)
Capital contribution
229
229
Total equity attributable to the equity holders of the Parent
83,861
86,832
Non-controlling interest
3
(11)
Total equity
83,864
86,821
Teaminvest Private Group Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
The above statement of changes in equity should be read in conjunction with the accompanying notes
24
Consolidated
Issued capital
$'000
Accumulated
losses
$'000
Capital
Contribution
$'000
Total equity
$'000
Non-controlling
interests
$'000
Total equity
$'000
Balance at 1 July 2022
21
88,301
(7,069)
229
81,461
52
81,513
Profit/(loss) after income tax for the year
-
4,064
-
4,064
(63)
4,001
Total comprehensive income for the year
-
4,064
-
4,064
(63)
4,001
Issue of ordinary shares under Dividend Reinvestment Plan
102
-
-
102
-
102
Issue of ordinary shares related to acquisition
1,969
-
-
1,969
-
1,969
Dividends Paid
-
(764)
(764)
(764)
2,071
3,300
-
5,371
(63)
5,308
Balance at 30 June 2023
90,372
(3,769)
229
86,832
(11)
86,821
Consolidated
Issued capital
$'000
Accumulated
losses
$'000
Capital
Contribution
$'000
Total equity
$'000
Non-controlling
interests
$'000
Total equity
$'000
Balance at 1 July 2023
21
90,372
(3,769)
229
86,832
(11)
86,821
Loss after income tax for the year
-
(2,213)
-
(2,213)
14
(2,199)
Other comprehensive income for the year, net of tax
-
141
-
141
-
141
Total comprehensive income for the year
-
(2,072)
-
(2,072)
14
(2,058)
Buy Back of Shares
21
(85)
-
-
(85)
-
(85)
Dividends paid
-
(814)
-
(814)
-
(814)
(85)
(2,886)
-
(2,971)
14
(2,957)
Balance at 30 June 2024
90,287
(6,655)
229
83,861
3
83,864
Teaminvest Private Group Limited
Consolidated statement of cash flows
For the year ended 30 June 2024
The above statement of cash flows should be read in conjunction with the accompanying notes
25
Consolidated
Consolidated
Note
30 June 2024
$'000
30 June 2023
$'000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
113,128
125,222
Payments to suppliers and employees (inclusive of GST)
(108,424)
(117,979)
Dividends received
2,417
750
Interest received
117
7
Interest and other finance costs paid
(479)
(172)
Income taxes paid
(776)
(946)
Net cash from operating activities
31
5,983
6,882
Cash flows from investing activities
Payments for other financial assets
(2,450)
-
Payments for investment in associates
-
(1,782)
Payments for property, plant and equipment
14
(2,717)
(1,486)
Payments for intangibles
16
(129)
(104)
Proceeds from disposal of property, plant and equipment
402
575
Net cash used in investing activities
(4,894)
(2,797)
Cash flows from financing activities
Repayments from borrowings
(120)
(57)
Repayment of lease liabilities
(1,537)
(1,826)
Loans to related and other parties
-
(100)
Buy Back of Shares
(85)
-
Dividends paid
(814)
(661)
Net cash used in financing activities
(2,556)
(2,644)
Net (decrease)/increase in cash and cash equivalents
(1,467)
1,441
Cash and cash equivalents at the beginning of the financial year
7,867
6,426
Cash and cash equivalents at the end of the financial year
6,400
7,867
Represented by:
Cash and cash equivalents
8
6,400
7,867
6,400
7,867
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
26
Note 1. General information
The financial statements cover Teaminvest Private Group Limited as a Group consisting of Teaminvest Private Group
Limited ('Company' or 'parent entity') and the entities it controlled at the end of, or during, the period (referred to in these
financial statements as the 'Group'). The financial statements are presented in Australian dollars, which is Teaminvest
Private Group Limited's functional and presentation currency.
Teaminvest Private Group Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Ground Floor Suite 2, 23 Ryde Road
Pymble, NSW 2073
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which
is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 22 August 2024.
The directors have the power to amend and reissue the financial statements
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
27
Note 2. Material accounting policies information
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
(a) New or amended Accounting Standards and Interpretations adopted
The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
(b) New Accounting Standards and Interpretations not yet mandatory or early adopted
.
The Group also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
from 1 January 2023. Although the amendments did not result in any changes to the accounting policies themselves,
they impacted the accounting policy information disclosed in the financial statements.
The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments
also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide
useful, entity-specific accounting policy information that users need to understand other information in the financial
statements.
Management reviewed the accounting policies and made updates to the information disclosed in Note 2 Material
accounting policies (2023: Significant accounting policies) in certain instances in line with the amendments.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, unless otherwise stated.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 34.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
28
Note 2. Material accounting policies information (continued)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Teaminvest Private
Group Limited as at 30 June 2024 and the results of all subsidiaries for the period then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any
gain or loss in profit or loss.
Reportable and operating segments
Reportable and operating segments are presented using the 'management approach', where the information presented
is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
29
Note 2. Material accounting policies information (continued)
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to
the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or
service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events.
Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of
variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it
is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The
measurement constraint continues until the uncertainty associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the design, manufacture and installation of the products listed below is typically recognised at the point
in time when the customer obtains control of the goods, which is generally at the time of installation or delivery.
semi-trailers; and
automation and remote monitoring products.
Rendering of services
Revenue from a contract to provide logistic support and traffic management services at a fixed price is recognised at a
point in time when the services are rendered and items are delivered.
Revenue from the design, development and installation of electrical network extensions and upgrades work in exchange
for a fixed fee is recognised over time.
Revenue from the design, development and installation of architectural metal work in exchange for a fixed fee is
recognised over time. Due to the high degree of interdependence between the various elements of these projects, they
are accounted for as a single performance obligation. The performance obligation is based on the 'output method',
where progress is measured against internally predetermined project milestones, being the most faithful depiction of the
transfer of goods and services to each customer based on industry knowledge. As the performance obligation is
generally completed within 12 months, the Group has used the practical expedient not to adjust for the effects of
financing.
Revenue from subscription and education services is recognised over time when the services are delivered.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
30
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled, and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that
it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Teaminvest Private Group Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax
consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has
applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to
members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each
subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in
neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
31
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments 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 changes in value. For the statement of cash flows presentation
purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current
liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected
loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group
has yet to issue an invoice. Contract assets are treated as financial assets for impairment purposes.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in
first out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an
appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where
applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after
deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes
in the Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount
of the investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from
associates reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and
recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value
of the retained investment and proceeds from disposal is recognised in profit or loss.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
32
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Leasehold improvements
over the term of the lease
Plant and equipment
1-10 years
Plant and equipment under lease
2-5 years
Motor vehicles
4-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the
assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where
included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the
underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment
or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or
loss as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life
intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible
assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in
profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal
proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are
reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by
changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at
cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
Confidential information
This is proprietary information developed within an acquired business and consists of know-how, internal financial
information and equations supporting proprietary software. This is not amortised and is tested annually for impairment.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
33
Brand
Brand is acquired as part of business combination and is the collective customer and market sentiment towards a
business, as evidenced by the business’s market share, price position, customer base, ongoing customer revenues and
client loyalty. This is not amortised and is tested annually for impairment.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the
period of their expected benefit, being their finite useful life of 10 years.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 10 and 15 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite useful life of 5 years.
Technology based intangible assets
These consist of unpatented software, processes and accumulated data acquired in a business combination. They are
amortised over the period of their expected benefit, being a useful life of 15 years.
Networks and relationships
Networks and relationships acquired in a business combination are amortised on a straight-line basis over the period of
their expected benefit, being 6 years.
Impairment of non-financial assets
Goodwill is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes in
circumstances indicate that it might be impaired. Other non-financial assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is
the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the
asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped
together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when
a customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to
consideration (whichever is earlier) before the Group has transferred the goods or services to the customer.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise
of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate,
amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise
of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used;
residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
34
Lease liabilities (continued)
remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of
the right-of-use asset is fully written down.
Finance costs
Finance costs are expensed in the period in which they are incurred.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are measured at the present value of expected future payments to be made in respect of services provided by employees
up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting date
on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the
amount of cash is determined by reference to the share price.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and
a comparison, where applicable, with external sources of data.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
35
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Teaminvest Private Group
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial
year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less
costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal
group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the
asset or disposal group is available for immediate sale in its present condition. Actions required to complete the
sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell
will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be
completed within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held
for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of
financial position.
Discontinued operations are excluded from the results of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued operations in the statement of profit or loss.
Additional disclosures are provided in this regard. All other notes to the financial statements include amounts for
continuing operations, unless indicated otherwise.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
Note 2. Material accounting policy information (continued)
36
Comparative information
Comparatives have been restated, where appropriate, to conform to changes in presentation in the current year and to
enhance comparability. There was no net effect on the net asset position.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
37
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements,
estimates and assumptions on historical experience and on other various factors, including expectations of future
events, management believes to be reasonable under the circumstances. The resulting accounting judgements and
estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective
notes) within the next financial year are discussed below.
Revenue recognition over time
For performance obligations satisfied over time, management uses judgement to select a method for measuring its
progress towards complete satisfaction of that performance obligation. In exercising that judgement, management
selects a method that depicts its performance in transferring control of goods or services to the customer. For the
provision of architectural metal work, management has determined that progress should be measured by internally
predetermined project milestones (an output method). Specifically, this method involves estimating the progress towards
satisfying performance obligations within the contract and contract costs expected to be incurred to satisfy the
performance obligations.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience, historical collection rates and
forward-looking information that is available. The allowance for expected credit losses, as disclosed in note
9, is calculated based on the information available at the time of preparation. The actual credit losses in future years
may be higher or lower.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
Impairment of investments in associates
The Group assesses impairment of its investments in associates at each reporting date by evaluating conditions specific
to the Group and to the particular investment that may lead to impairment. If an impairment trigger exists, the recoverable
amount of the asset is determined. The recoverable amount is determined by a value-in-use calculation using a
discounted cash flow model, which incorporate a number of key estimates and assumptions.
Goodwill
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require
the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the
estimated future cash flows.
Indefinite useful lives of assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether the
asset has suffered any impairment, in accordance with the accounting policy stated in note 2. Management regularly
assesses the useful life of these assets based on an analysis of all of the relevant factors. The recoverable amounts of
cash-generating units have been determined based on value-in-use calculations. These calculations require the use of
assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated
future cash flows.
Control of Enva Group
During the last period (30 June 2023) the Group agreed to acquire 100% of the shares in Enva Group. The acquisition
of the shares is subject to the finalisation of a legal matter. The Group has exercised judgement that control has not
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
38
passed to the Group until the conclusion of the legal matter as well as the consideration of power, exposure to variable
returns and the ability to use power to affect returns in accordance with AASB 10 Consolidated Financial Statements.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated
tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome of these matters
is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period
in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date.
Such a rate is based on what the Group estimates it would have to pay a third party to borrow the funds necessary to
obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Note 4. Operating segments
Identification of reportable and operating segments
The Group is organised into two statutory operating segments. These operating segments are based on the internal
reports that are reviewed and used by the Board of Directors who are identified as the Chief Operating Decision Makers
('CODM') in assessing performance and in determining the allocation of resources. Further details are as follows:
From 1 July 2023, the Group has restructured its reporting divisions to better align operations within each division
under the responsibility of their respective Heads. The Group now comprises the following divisions:
TIP Equity, consists of operating companies which are not financial services in nature;
TIP Wealth, consists of entities which provide a range of advice, trustee, custodial, and administrative
functions; and
Education & Corporate, responsible for generating actionable intelligence that we can apply across our
broader portfolio.
Segment name
Description
Equity Segment
The Equity segment includes five wholly owned subsidiaries of the Group: Lusty TIP
Trailers Pty Ltd, Icon Metal Pty Ltd, East Coast Traffic Controllers Pty Ltd, Teaminvest
Private Residential Group Pty Ltd, and Automation Group Investments Pty Ltd.
Wealth segment
The Wealth segment includes four wholly owned subsidiaries of the Group: TIP Trustees,
TIP Wealth RE no1 Ltd, Teaminvest Private Financial Services Pty Ltd,
TIP Group Corporate Advisory Services Pty Ltd; one 70% owned subsidiary, Diversified
Growth Management Pty Ltd.
Education & Corporate
The Education & Corporate segment includes one wholly owned subsidiary: Teaminvest
Pty Ltd and other investments in listed and unlisted securities.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis and presents continuing and discounting operations
together.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
39
Intersegment transactions
There were no material intersegment transactions.
Intersegment receivables, payables and loans
There were no intersegment receivables, payables and loans.
Major customers
During the period ended 30 June 2024, the Group had sales to a construction customer that amounted to $5,530,105
(2023: $15,571,000).
Note 4. Operating segments (continued)
Consolidated - 30 June 2024
Equity
Wealth
Education &
Corporate
Total
$'000
$'000
$'000
$'000
Revenue
Sales to customers
97,771
3,035
4,233
105,039
Other revenue
1,044
-
-
1,044
Total
98,815
3,035
4,233
106,083
EBITDA
10,927
68
1,675
12,670
Depreciation and amortisation expense
(4,365)
Interest revenue
117
Other income
(54)
Finance costs
(479)
Impairment on investment
(8,609)
Corporate overheads
(2,838)
Loss before income tax
(3,558)
Income tax benefit
1,359
Loss after income tax
(2,199)
Assets
Segment assets
89,137
2,742
19,528
111,407
Unallocated assets:
Income tax receivable
-
Corporate assets
3,307
Investment in Associates
19,266
Total assets
133,980
Liabilities
Segment liabilities
40,510
469
2,391
43,370
Unallocated liabilities:
Deferred tax liability
2,285
Corporate liabilities
4,461
Total liabilities
50,116
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
40
Note 4. Operating segments (continued)
Consolidated - 30 June 2023
Equity
Wealth
Education &
Corporate
Total
$'000
$'000
$'000
$'000
Revenue
Sales to customers
104,758
1,752
4,067
110,577
Other revenue
756
22
778
Total
105,514
1,774
4,067
111,355
EBITDA
8,998
(312)
1,756
10,442
Depreciation and amortisation expense
(3,587)
Interest revenue
7
Other income
416
Finance costs
(172)
Corporate overheads
(2,398)
Profit before income tax
4,708
Income tax expense
(707)
Profit after income tax
4,001
Assets
Segment assets
72,454
3,356
17,001
92,811
Unallocated assets:
Deferred tax asset
-
Income tax receivable
384
Corporate assets
2,082
Investment in Associates
28,394
Total assets
123,671
Liabilities
Segment liabilities
27,936
651
1,540
30,127
Unallocated liabilities:
Provision for income tax
-
Deferred tax liability
4,781
Corporate liabilities
1,942
Total liabilities
36,850
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
41
Note 5. Revenue from contracts with customers
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Revenue from contracts with customers
Sale of goods
44,201
44,840
Rendering of services
60,838
63,276
105,039
108,116
Other revenue
Other sales revenue
1,044
778
Revenue
106,083
108,894
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated - 30 June 2024
Equity
Wealth
Education &
Corporate
Total
$'000
$'000
$'000
$'000
Geographical Regions
Australia
97,771
3,035
4,233
105,039
Timing of Revenue recognition
Goods transferred at a point in time
44,201
-
-
44,201
Services transferred at a point in time
3,339
2,002
-
5,341
Services transferred over time
50,231
1,033
4,233
55,497
97,771
3,035
4,233
105,039
Consolidated - 30 June 2023
Equity
Wealth
Education &
Corporate
Total
$'000
$'000
$'000
$'000
Geographical Regions
Australia
102,296
1,753
4,067
108,116
Timing of Revenue recognition
Goods transferred at a point in time
47,001
-
-
47,001
Services transferred at a point in time
12,848
193
-
13,041
Services transferred over time
42,447
1,560
4,067
48,074
102,296
1,753
4,067
108,116
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
42
Note 6. Expenses
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
35
46
Plant and equipment
961
698
Motor vehicles
424
449
Buildings right-of-use assets
1,725
1,228
Total depreciation
3,145
2,421
Amortisation
Patents and trademarks
47
47
Customer contracts
224
262
Technology based intangible assets
447
447
Network & relationships
361
361
Other intangible assets
141
49
Total amortisation
1,220
1,166
Total depreciation and amortisation
4,365
3,587
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Finance costs
Interest paid on borrowings
46
32
Interest paid on lease liabilities
433
140
Finance costs expensed
479
172
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
43
Note 7. Income tax
Consolidated
30 June
2024
$'000
30 June
2023
$'000
Income tax expense/(benefit)
Current tax
723
960
Deferred tax - origination and reversal of temporary differences
(2,498)
377
Adjustment recognised for prior periods
-
(630)
Aggregate income tax (benefit)/expense
(1,775)
707
Income tax (benefit)/expense is attributable to:
Profit from continuing operations
(1,359)
1,088
Loss from discontinued operations
(416)
(380)
Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate
Profit/(Loss) before income tax expense/(benefit)
(2,588)
7,795
(Loss)/Profit before income tax (benefit)/expense
(1,386)
(3,085)
Tax at statutory rate of 30%
(1,192)
1,413
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Other taxable income
-
313
Other non-taxable income
-
86
Other deductible expenses
(39)
(61)
Share of profits - associates
(582)
(765)
Non-deductible expenses
38
351
(1,775)
1,337
Adjustment recognised for prior periods
-
(630)
Income tax (benefit)/expense
(1,775)
707
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
44
Note 7. Income tax (continued)
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Deferred tax
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
109
343
Allowance for expected credit losses
36
206
Lease liabilities
6,440
724
Impairment on investment
2,583
-
Contract liabilities
1,773
-
Employee benefits
844
917
Provision for warranties and claims
27
86
Accrued expenses
136
346
Retention receivable
(827)
(571)
Prepayments
(192)
(118)
Rights-of-use assets
(6,301)
(640)
Contract assets
(2,099)
(990)
Inventories
(11)
(11)
Intangible assets
(4,674)
(4,997)
Property, plant, equipment
(129)
(120)
Other
-
44
Deferred tax asset/(liability) recognised in profit or loss
(2,285)
(4,781)
Movements:
Opening balance
(4,781)
(5,005)
Credited/(charged) to profit or loss
2,498
(377)
Additions through business combinations
-
-
Other adjustments
(2)
601
Closing balance
(2,285)
(4,781)
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
45
Note 8. Cash and cash equivalents
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Cash on hand
1
15
Cash at bank
6,399
7,651
Cash on deposit
-
201
6,400
7,867
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement
of cash flows as follows:
Balances above
6,400
7,867
Bank overdraft
-
-
Balance as per statement of cash flows
6,400
7,867
Note 9. Trade and other receivables
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Trade receivables
10,910
9,890
Allowance for expected credit losses
(121)
(157)
10,789
9,733
Receivable from related parties
261
1,292
Allowance for expected credit losses
-
(700)
261
592
Loan receivable
439
258
Other receivables
385
78
11,874
10,661
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
46
Note 9. Trade and other receivables (continued)
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected
credit loss
rate
Expected
credit loss
rate
Carrying Amount
Allowance for expected
credit losses
Consolidated
30 June
2024
30 June
2023
30 June
2024
30 June
2023
30 June
2024
30 June
2023
%
%
$'000
$'000
$'000
$'000
Not overdue (less than 1 month)
0.17%
-
8,201
8,203
14
-
Between 1 to 3 months
0.13%
3.14%
1,488
1,527
2
48
Between 3 to 6 months
3.44%
54.46%
1,135
112
39
61
Over 6 months
76.74%
100.00%
86
48
66
48
10,910
9,890
121
157
Movements in the allowance for expected credit losses are as follows:
30 June 2024
$'000
30 June 2023
$'000
Opening balance
157
93
Additional provisions recognised
1,393
1,345
Receivables written off during the year as uncollectable
(29)
(95)
Unused amounts reversed
(1,400)
(1,186)
Closing balance
121
157
The ageing of the receivable from related parties and allowance for expected credit losses provided for above are as
follows:
Expected
credit loss
rate
Expected
credit loss
rate
Carrying Amount
Allowance for expected
credit losses
Consolidated
30 June
2024
30 June
2023
30 June
2024
30 June
2023
30 June
2024
30 June
2023
%
%
$'000
$'000
$'000
$'000
Not overdue (less than 1 month)
-
-
-
-
-
-
Between 1 to 3 months
-
54.18%
261
1,292
-
700
Between 3 to 6 months
-
-
-
-
-
-
Over 6 months
-
-
-
-
-
-
261
1,292
-
700
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
47
Note 10. Contract assets
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Contract assets
12,890
10,294
Opening balance
10,294
10,545
Additions
23,945
23,089
Transfer to trade receivables
(21,349)
(23,340)
Closing balance
12,890
10,294
Note 11. Inventories
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Raw materials - at cost
4,349
5,815
Work in progress - at cost
1,852
2,538
Finished goods - at cost
2,313
3,627
8,514
11,980
Note 12. Investments accounted for using the equity method
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Investment in associates
19,266
28,394
Reconciliation
Reconciliation of the Group’s carrying amounts at the beginning and end of the current and previous financial year are
set out below:
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Opening carrying amount
28,394
23,804
Profit after income tax
1,898
2,471
Additions
-
3,850
Asset held for sale
-
(980)
Dividends received
(2,417)
(751)
Impairment of investment
(8,609)
-
Closing carrying amount
19,266
28,394
Colour Capital’s on-going dispute with Netdeen Pty Ltd (GJ Gardner Homes) has not been resolved. The current position
is Netdeen has cancelled the Master Franchise Agreement of GJ Gardner Homes NSW/ACT and Western Australia as
at 27 May 2024. This dispute is currently in litigation and as such there is no future revenue from Colour Capital Master
Franchisee Agreement. We have therefore taken the approach to impair our carrying value of Colour Capital of $8.6m
on the basis that the value is attributed to the Master Franchise Agreement and the findings of the litigation are in
deliberation.
The management have considered and assessed reasonable possible changes due to the loss of future revenue from
termination of the Master Franchise Agreement using the discounted cashflow model. It was ascertained that due to
this reasonably possible change in the key assumptions, it would trigger impairment. It was decided to write off the
investment in Colour Capital in full.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
48
Note 12. Investments accounted for using the equity method (continued)
Ownership interest
Name
Principal place of
business/Country
of incorporation
30 Jun 2024
30 Jun 2023
%
%
Colour Capital Pty Ltd
Australia
33%
33%
Multimedia Technology Pty Ltd
Australia
30%
30%
Teaminvest Private Insurance Services Pty Ltd
Australia
50%
50%
Wood & Lee Pty Ltd
Australia
-
50%
Enhanced Trading Solutions Pty Ltd
United Kingdom
-
16%
Conscious Capital Ltd
Australia
50%
50%
Decoglaze Pty Ltd
Australia
48%
48%
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
49
Note 12. Investments accounted for using the equity method (continued)
Detailed Reconciliation:
A detailed reconciliation of the Group’s carrying amounts at the beginning and end of the current and previous financial year are set out below:
Colour Capital
Multimedia
Technology
Teaminvest Private
Insurance
Conscious Capital
Decoglaze
Wood & Lee*
Enhanced Trading
Solutions*
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
Reconciliation of the Group's carrying amount
Beginning balance
9,074
8,542
14,506
14,196
87
86
4,705
-
22
-
-
216
-
764
Acquisition price
-
-
-
-
-
-
-
3,750
-
100
-
-
-
-
Share of profit/(loss) after income tax
35
832
770
761
44
1
1,071
955
(22)
(78)
-
-
-
-
Transferred to assets held for sale
-
-
-
-
-
-
-
-
-
-
-
(216)
-
(764)
Share of dividends received
(500)
(300)
(750)
(451)
(10)
-
(1,125)
-
-
-
-
-
-
-
Impairment of investment
(8,609)
-
-
-
-
-
-
-
-
-
-
-
-
-
Closing carrying amount
-
9,074
14,526
14,506
121
87
4,651
4,705
-
22
-
-
-
-
*The Group disposed of Wood & Lee at their carrying value. Additionally, TIP UK Pty Ltd went into liquidation, which had an investment in Enhanced Trading Solutions. As a result, the Group
lost control over this entity during the financial year.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
50
Note 12. Investments accounted for using the equity method (continued)
Summarised statement of financial position of the current and previous financial year are set out below:
Colour Capital
Multimedia
Technology
Teaminvest Private
Insurance
Conscious Capital
Decoglaze
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
Summarised statement of financial position
Current assets
3,618
4,860
39,455
41,978
310
60
2,853
3,016
401
327
Non-current assets
18,190
18,479
2,276
2,641
203
172
-
-
200
-
Total assets
21,808
23,339
41,731
44,619
513
232
2,853
3,016
601
327
Current liabilities
1,040
1,728
12,402
14,515
176
138
726
107
783
513
Non-current liabilities
292
-
1,767
2,217
148
-
-
-
118
-
Total liabilities
1,332
1,728
14,169
16,732
324
138
726
107
901
513
Net assets/(liabilities)
20,476
21,611
27,562
27,887
189
94
2,127
2,909
(300)
(186)
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
51
Note 12. Investments accounted for using the equity method (continued)
Summarised statement of profit or loss and other comprehensive income are set out below:
Colour Capital
Multimedia Technology
Teaminvest
Private
Insurance
Conscious
Capital
Decoglaze
30 June 2024
$'000
30 June
2023
$'000
30 June
2024
$'000
30 June
2023
$'000
30
June
2024
$'000
30
June
2023
$'000
30
June
2024
$'000
30
June
2023
$'000
30 June
2024
$'000
30
June
2023
$'000
Summarised statement of profit or loss and other comprehensive income
Revenue
15,577
21,519
145,242
137,634
167
86
3,464
3,144
2,148
373
Expenses
(15,043)
(18,260)
(142,312)
(134,006)
(109)
(83)
(403)
(407)
(2,408)
(608)
Profit/(loss) before income tax
534
3,259
2,930
3,628
58
3
3,061
2,737
(260)
(235)
Income tax (expense)/benefit
(430)
(764)
(512)
(1,088)
(14)
(1)
(918)
(821)
78
70
Profit/(loss) after income tax
104
2,495
2,418
2,540
44
2
2,142
1,916
(182)
(165)
Other comprehensive income/(loss)
-
-
-
-
-
-
-
-
-
-
Total comprehensive income/(loss)
104
2,495
2,418
2,540
44
2
2,142
1,916
(182)
(165)
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
52
Note 13. Other financial assets
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Other financial assets
3,795
753
Set out below are the carrying amounts of other financial assets at fair value and the movements during the period:
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Opening balance
753
411
Additions
2,901
342
Revaluation gain
141
-
Closing balance
3,795
753
Note 14. Property, plant and equipment
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Leasehold improvements - at cost
452
517
Less: Accumulated depreciation
(94)
(163)
358
354
Plant and equipment - at cost
6,982
5,611
Less: Accumulated depreciation
(2,338)
(1,816)
4,644
3,795
Motor vehicles - at cost
2,502
2,119
Less: Accumulated depreciation
(1,010)
(915)
1,492
1,204
6,494
5,353
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Leasehold
Improvements
Plant and
Equipment
Motor
Vehicles
Total
$'000
$'000
$'000
$'000
Balance at 30 June 2022
397
3,271
2,026
5,694
Additions
3
1,326
157
1,486
Disposals
-
(104)
(530)
(634)
Depreciation expense
(46)
(698)
(449)
(1,193)
Balance at 30 June 2023
354
3,795
1,204
5,353
Additions
39
2,202
1,069
3,310
Disposals
-
(392)
(357)
(749)
Depreciation expense
(35)
(961)
(424)
(1,420)
Balance at 30 June 2024
358
4,644
1,492
6,494
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
53
Note 15. Right-of-use assets
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Land & Buildings - right-of-use - at cost
22,887
5,689
Accumulated depreciation and impairment
(1,884)
(3,555)
21,003
2,134
GLT has entered into a new lease and relocated to new premises, commencing from 1 April 2024. Additions to the right-
of-use assets during the period related to this lease amounted to $20,560,000. The lease has an incremental borrowing
rate of 6.9% and a term of 11.5 years, with an option to extend for an additional five (5) years. Management has not
exercised this option as it is considered too early to make a decision.
The Group leases land and buildings for its offices, warehouses and retail outlets under agreements of between 1 to 12
years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the
leases are renegotiated.
Set out below are the carrying amounts of right-of-use assets and the movements during the period:
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Opening balance
2,134
2,956
New leases entered into during the year
20,594
664
Disposal
-
(54)
Depreciation for the period
(1,725)
(1,432)
Closing balance
21,003
2,134
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
54
Note 16. Intangibles
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Goodwill at cost less impairment
26,236
26,236
Patents and trademarks - at cost
561
561
less: accumulated amortisation
(236)
(189)
325
372
Customer Contracts - at cost
3,420
3,420
less: accumulated amortisation
(1,654)
(1,430)
1,766
1,990
Brand explicit period at cost
1,756
1,756
Confidential Information & Know How - at cost
5,926
5,926
Technology - Website - at cost
6,702
6,702
less: accumulated amortisation
(1,341)
(894)
5,361
5,808
Network & Relationships
2,166
2,166
less: accumulated amortisation
(1,083)
(722)
1,083
1,444
Other intangibles
723
592
less: accumulated amortisation
(312)
(169)
411
423
42,864
43,955
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
55
Note 16. Intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Goodwill
Patents and
Trademarks
Customer
Relationships
Confidential
Information
& Know
How
Technology
- Website
Network &
Relationships
Brand
Explicit
Period
Other
Intangibles
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Balance as at 1 July 2022
26,086
419
2,252
5,926
6,255
1,805
1,756
369
44,868
Additions
150
-
-
-
-
-
-
103
253
Amortisation expense
-
(47)
(262)
-
(447)
(361)
-
(49)
(1,166)
Balance as at 30 June 2023
26,236
372
1,990
5,926
5,808
1,444
1,756
423
43,955
Additions
-
-
-
-
-
-
-
129
129
Amortisation expense
-
(47)
(224)
-
(447)
(361)
-
(141)
(1,220)
Net book value as at 30 June 2024
26,236
325
1,766
5,926
5,361
1,083
1,756
411
42,864
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
56
Note 16. Intangibles (continued)
Impairment testing
Goodwill and indefinite useful life assets have been allocated to the cash-generating units ('CGUs') as follows:
30 June 2024
$'000
30 June 2023
$'000
Goodwill allocated to Equity segment:
Icon Metal
8,595
8,595
GLT
10,462
10,462
East Coast Traffic Controllers
3,207
3,207
Automation Group Investments
3,689
3,689
Equity segment
25,953
25,953
Goodwill allocated to Wealth segment:
Burman Investment Management Limited
119
119
Diversified Growth Management Pty Ltd
164
164
Wealth Segment
283
283
Indefinite useful life assets allocated to:
Brand
1,756
1,756
Confidential Information & Know How
5,926
5,926
Teaminvest Pty Ltd
7,682
7,682
The recoverable amount of each CGU’s goodwill and indefinite useful life assets has been determined by a value-in-
use calculation using a discounted cash flow model, based on subsidiary Board approved budget for the year ended 30
June 2024 and the application of a growth rate for a 5 year projection period, together with a terminal value. The discount
rate used in the value-in-use calculation is based on each CGU’s weighted average cost of capital. This post tax discount
rate is applied to post tax cash flows.
The key assumptions were used in the discounted cash flow models for the period subsequent to management's
approved budget:
2024
2024
2024
2023
2023
2023
Revenue
CAGR rate
Discount
rate (post-
tax)
Terminal
growth
rate
Revenue
CAGR
rate
Discount
rate (post-
tax)
Terminal
growth
rate
%
%
%
%
%
%
Icon Metal
7.60%
13.27%
2.75%
8.10%
13.87%
2.75%
GLT
4.00%
14.34%
2.75%
6.40%
14.30%
2.75%
Automation Group Investments
6.00%
12.63%
2.00%
6.20%
12.66%
2.00%
East Coast Traffic Control
10.00%
13.09%
2.75%
8.00%
13.25%
2.75%
Teaminvest
4.40%
11.27%
3.00%
6.00%
12.84%
3.00%
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
57
Key assumption
Approach used to determine values
Revenue growth rate
Revenue projections are extracted from the most recent
approved budget, strategic plans or forecasts that relate
to the CGU. For each CGU, the CAGR for revenue over
the forecast period has been determined based on
expectations of future performance in the markets that the
businesses operate in. These assumptions are based on
expectations of market growth, demand and operational
performance over the periods from FY25 – FY29.
Discount rate
The post-tax discount rate reflects management’s
estimate of the time value of money and the relevant
CGU’s weighted average cost of capital. A post-tax
discount rate is used which is applied to post-tax
cashflows.
Terminal growth rate
Management have estimated that the terminal growth
rate will be in line with the Reserve Bank of Australia
('RBA') expected gross domestic products ('GDP') growth
projection range.
Based on the above the recoverable amount exceeds the carrying amount and therefore, goodwill and indefinite
useful life assets is not considered to be impaired.
Sensitivity
Should these key assumptions, judgements and estimates noted above change, the recoverable amount may decrease.
Sensitivity analysis has been carried out on each of the below variable independently and the recoverable amount of
the CGU would equal its carrying amount if the key assumptions were to change as follows:
Sensitivity Analysis on revenue
2024
2023
Revenue CAGR
decreases to
%
Revenue CAGR
decreases to
%
Icon Metal
5.51%
7.54%
Automation Group Investments
3.18%
3.02%
Sensitivity Analysis on discount rate
2024
2023
Discount rate
increases to
%
Discount rate
increases to
%
Icon Metal
16.92%
15.91%
Automation Group Investments
16.82%
18.61%
Management has considered and assessed reasonable possible changes for key assumptions for GLT, East Coast
Traffic Controllers and Teaminvest Pty Ltd and have ascertained that no reasonably possible change in the key
assumptions would trigger impairment.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
58
Note 17. Trade and other payables
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Trade payables
8,780
8,162
Accrued expenses
1,326
1,433
GST payable
1,471
1,596
Other payables
2,011
2,369
13,588
13,560
Refer to note 23 for further information on financial instruments.
Note 18. Contract liabilities
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Contract Liabilities
9,620
12,375
Opening balance
12,375
7,660
Payments received in advance
10,629
15,963
Transfer to revenue - from advance payments received during the period
(13,384)
(11,248)
Closing balance
9,620
12,375
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end
of the reporting period was $9,620,000 as at 30 June 2024 (30 June 2023 $12,375,000) and is expected to be recognised
as revenue in future periods as follows:
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Within 6 months
9,570
5,820
6 to 12 months
50
6,555
Total
9,620
12,375
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
59
Note 19. Lease liabilities
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Current
Lease liabilities
2,417
1,438
2,417
1,438
Non-current
Lease liabilities
19,051
974
19,051
974
Total Lease Liabilities
21,468
2,412
Refer to note 23 for further information on financial instruments.
Note 20. Employee benefits
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Current
Annual leave
1,755
1,734
Long service leave
367
499
2,122
2,233
Non-current
Long service leave
391
465
391
465
Total employee benefits
2,513
2,698
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
60
Note 21. Equity - issued capital
30 June 2024
30 Jun 2023
30 June 2024
30 Jun 2023
Shares
Shares
(restated)*
$'000
$'000
Ordinary shares - fully paid
27,085,410
27,147,252
90,287
90,372
Movements in ordinary share capital
Details
Date
Shares
Issue Price
$'000
Balance
01-Jul-22
26,346,180
88,301
Issue of ordinary shares for 50% acquisition of a business
30-Jan-23
755,178
2.61
1,969
Issue of ordinary shares under Dividend Reinvestment Plan
10-Mar-23
45,894
2.23
102
Balance
30-Jun-23
27,147,252
90,372
Issue of ordinary shares under Dividend Reinvestment Plan
03-Oct-23
77
1.62
0
Share Buy-back
09-Apr-24
(6,666)
1.50
(10)
Share Buy-back
17-Apr-24
(6,758)
1.48
(10)
Share Buy-back
26-Apr-24
(6,819)
1.47
(10)
Share Buy-back
03-May-24
(6,921)
1.44
(10)
Share Buy-back
10-May-24
(7,326)
1.37
(10)
Share Buy-back
21-May-24
(7,575)
1.32
(10)
Share Buy-back
29-May-24
(12,250)
1.22
(15)
Share Buy-back
25-Jun-24
(7,604)
1.32
(10)
Balance
30-Jun-24
27,085,410
90,287
Ordinary Shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should the Group be wound up, in proportions that consider both the number of shares held and the extent to which
those shares are paid up. The fully paid ordinary shares have no par value and the Group does not have a limited
amount authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share Consolidation
In the AGM held on 27 October 2023, shareholders approved the consolidation of issued share capital of the Group on
the basis that every five shares be consolidated into one share (rounded to the nearest whole number of shares).
*The amount has been restated to reflect share consolidation.
Share buy-back
The Group announced on 19th February 2024 to conduct on market buy-back. During the year, Group has bought back
61,919 number shares for a total value of $84,973. Refer to ASX announcements for further details.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Group Company's share price at the time of the investment. The Group is actively looking for
accretive acquisitions to grow in alignment with the Groups investment mandate.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
61
Note 22. Equity – dividends
Dividends
On 16 February 2024, the company declared an interim dividend of 1.50 cents per share.
On 22 August 2024, the company declared a final dividend of 1.50 cents per share for payment on 03 October 2024.
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Franking credits available for subsequent financial years based on a tax
rate of 30%
4,309
3,333
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
● franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
● franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
● franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
62
Note 23. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and
liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different
methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case
of interest rate and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') in conjunction with the Risk and Compliance
committee ('RCC'). Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance
reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group is not exposed to any significant foreign currency risk.
Price risk
In the current year, the Group was exposed to price risk on the fixed price contracts within one of the operating
subsidiaries. In light of the current inflationary environment, contracts are negotiated to include provisions to vary prices.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
As at the reporting date, the Group had the following variable rate borrowings outstanding:
30 June 2024
30 June 2023
Consolidated
Weighted
average interest
rate
%
Balance
$'000
Weighted
average interest
rate
%
Balance
$'000
Bank overdraft and bank loans
0.00%
-
0.00%
-
An analysis by remaining contractual maturities in shown in 'liquidity risk' below.
For the Group, the bank overdraft and loans outstanding, totalling $Nil (2023: $Nil), are principal and interest payment
loans. An official increase/decrease in interest rates of 100 (2023:100) basis points would have an adverse/favourable
effect on profit before tax of $Nil (2023: $Nil) per annum. The percentage change is based on the expected volatility of
interest rates using market data and analysts' forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to recognised financial assets
is the carrying amount, net of any expected credit losses of those assets, as disclosed in the statement of financial
position and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and
forward-looking information that is available. Generally, trade receivables are written off when there is no reasonable
expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active
enforcement activity and a failure to make contractual payments for a period greater than one year.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
63
Note 23. Financial instruments (continued)
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
30 June 2024
$'000
30 June 2023
$'000
Bank overdraft
5,000
5,000
5,000
5,000
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to
the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
The cash flows in the maturity analysis below are not expected to occur significantly earlier than contractually disclosed
above.
Weighted
average
interest
rate %
Carrying
amount
1 year or
less
Between
1 and
2 years
Between
2 and
5 years
Over 5
years
Remaining
contractual
maturities
30 June 2024
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
8,780
8,780
-
-
-
8,870
Other payables
4,808
4,808
-
-
-
4,808
Interest-bearing - variable
Lease Liability (AASB16)
6.84%
2,417
2,417
2,429
4,430
12,192
21,468
Total non-derivatives
16,005
16,005
2,429
4,430
12,192
35,055
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
64
Note 23. Financial instruments (continued)
Carrying
amount
1 year or
less
Between
1 and
2 years
Between
2 and
5 years
Over 5
years
Remaining
contractual
maturities
30 June 2023
Weighted
average
interest
rate %
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
8,162
8,162
-
-
-
8,162
Other payables
5,398
5,398
-
-
-
5,398
Interest-bearing - variable
Lease liability (AASB 16)
4.60%
1,438
1,438
588
386
-
2,412
Total non-derivatives
14,998
14,998
588
386
-
15,972
Note 24. Fair value measurement
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their
fair values due to their short-term nature.
Note 25. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO, the auditor of the
Company:
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Audit Services - BDO
263,500
270,000
Audit or review of financial statements
263,500
270,000
Other services
Other audit services - BDO
40,000
45,000
40,000
45,000
303,500
315,000
Note 26. Contingent liabilities
The Group has provided bank guarantees totalling $5,545,309 as of 30 June 2024, allocated as follows: $1,851,124 for
office premises and $3,694,185 for various clients (2023: $3,320,517).
Of these guarantees, $3,981,663 is attributed to Icon Metal, $1,457,996 to GLT, and the remaining $105,649 to the
parent entity. The Group would be subject to these guarantees, provided the subsidiaries are unable to complete the
scope of work related to these bank guarantee items.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
65
Note 27. Related party transactions
Parent entity
Teaminvest Private Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Associates
Interests in associates are set out in note 12.
Key management personnel
Disclosures relating to key management personnel are set out in note 28 and the remuneration report included in the
directors' report.
Transactions with related parties
The company secretary, Sundaraj and Ker, where Anand Sundaraj is a partner, received payments from the company
to the total of $104,044 (30 June 2023: $156,307) for the services they performed.
During the year, Howard Coleman, Non-Executive Director for the Group, received reimbursement for the expenses in
relation for facilitating Teaminvest meetings outside Sydney to the total of $37,500 (30 June 2023: $38,500).
Payable to related parties
30 June 2024
$
30 June 2023
$
Current payables:
Payables to other related parties
409,453
529,408
Loans to/(from) related parties
260,575
1,291,679
The loan was made to associates on commercial terms with an interest rate of 12% per annum and for various periods
between one and five years.
Note 28. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set
out below:
Consolidated
30 June 2024
$
30 June 2023
$
Short-term employee benefits
1,161,194
885,579
Post employment benefits
135,979
105,716
Long-term benefits
50,549
8,188
Share based payments
139,638
236,963
1,487,360
1,236,446
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
66
Note 29. Discontinued operations
During the year, the Group lost control over TIP Group UK Pty Ltd following the filing for winding up by one of its
directors. TIP Group UK Pty Ltd has an investment and receivable from Enhanced Trading Solutions (ETS). This amount
has been written off during the year and presented as discontinued operations.
Financial performance information
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Sale of goods
-
2,461
Interest received
-
-
Total revenue
-
2,461
Changes in inventories
-
-
Raw materials and consumables used
-
(1,073)
Employee benefits expense
-
(2,970)
Depreciation and amortisation expense
-
(205)
Impairment of receivables
(1,386)
-
Other expenses
-
(1,377)
Total expenses
(1,386)
(5,625)
Loss before income tax
(1,386)
(3,164)
Income tax benefit
416
392
Loss after income tax
(970)
(2,772)
Gain on disposal before income tax
-
79
Income tax expense
-
(12)
Gain on disposal after income tax
-
67
Loss after income tax from discontinued operations
(970)
(2,705)
Cash flow information
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Net cash from operating activities
-
(2,959)
Net decrease in cash and cash equivalents from discontinued operations
-
(2,958)
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
67
Carrying amounts of assets and liabilities disposed
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Cash and cash equivalents
-
1
Trade and other receivables
-
255
Inventories
-
163
Other current assets
-
71
Property, plant and equipment
-
80
Total assets
-
570
Trade and other payables
-
335
Provisions
-
-
Total liabilities
-
335
Net assets
-
235
Details of the disposal
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Total sale consideration
-
450
Carrying amount of net assets disposed
-
(235)
Disposal costs
-
(136)
Gain on disposal before income tax
-
79
Gain on disposal after income tax
-
67
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
68
Note 30. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities, and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Ownership interest
Principal place of
business
30 June 2024
30 June 2023
Name
Country of
incorporation
%
%
Teaminvest Private Financial Services Pty Ltd
Australia
100%
100%
TIP Group Corporate Advisory Pty Ltd
Australia
100%
100%
Coastal Energy Pty Ltd
Australia
-
100%
East Coast Traffic Controllers Pty Ltd
Australia
100%
100%
Icon Metal Pty Ltd
Australia
100%
100%
Lusty TIP Trailers Pty Ltd
Australia
100%
100%
TIP Trustees Limited
Australia
100%
100%
Teaminvest Private Residential Group Pty Ltd
Australia
100%
100%
Automation Group
Australia
100%
100%
Automation Group Investments Pty Ltd
Australia
100%
100%
Automation Group Limited
New Zealand
100%
100%
Radtel Engineering Pty Ltd
Australia
100%
100%
Teaminvest Pty Ltd
Australia
100%
100%
Teaminvest Australia Pty Ltd
Australia
100%
100%
Diversified Growth Management Pty Ltd
Australia
70%
70%
Conscious Investor
Australia
100%
100%
Teaminvest Limited (NZ)
New Zealand
100%
100%
TIP Group (UK) Pty Ltd
United Kingdom
-
80%
Burman Investment Management Limited
Australia
100%
100%
TIP Wealth Investment Management Pty Ltd
Australia
100%
100%
TIP Infrastructure Pty Ltd
Australia
100%
-
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
69
Note 31. Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities
30 June 2024
$'000
30 June 2023
$'000
(Loss)/profit after income tax expense for the period
(2,199)
4,001
Adjustment for:
Depreciation & Amortisation
4,365
3,792
Impairment of investment
8,609
-
Net loss on disposal of property, plant and equipment
54
-
Share of profits from associates
(1,898)
(2,471)
Dividends received
2,417
750
Changes in operating assets & liabilities
Changes in trade and other receivables
(459)
(2,130)
Changes in contract assets
(2,596)
108
Changes in inventories
3,466
(1,292)
Changes in prepayments
36
903
Changes in trade and other payables
28
(960)
Changes in contract liabilities
(2,755)
4,715
Changes in tax liabilities
(54)
(15)
Changes in deferred taxes
(2,496)
(224)
Changes in employee benefits
(185)
(238)
Changes in provisions
(350)
(57)
Net cash used in operating activities
(5,983)
6,882
Non-cash investing and financing activities
30 June 2024
$'000
30 June 2023
$'000
Additions to the right-of-use assets
20,594
664
Leasehold improvements - lease make good
53
67
Shares issued for associates
-
1,969
20,647
2,700
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
70
Note 32. Earnings per share
Consolidated
30 June 2024
$'000
30 June 2023
$'000
$'000
$'000
Loss after income tax attributable to the owners of Teaminvest Private Group
Limited
(2,213)
4,064
Number
Number
(Restated)*
Weighted average number of ordinary shares used in calculating basic earnings
per share
27,085,410
26,672,679
Weighted average number of ordinary shares used in calculating diluted
earnings per share
27,139,322
26,672,679
Cents
Cents
Basic earnings per share (excluding one-off impairment)
14.08
15.24
Diluted earnings per share (excluding one-off impairment)
14.05
15.24
Basic earnings per share
(8.17)
15.24
Diluted earnings per share
(8.17)
15.24
*The number of shares for June-23 have been restated to reflect share consolidation for comparative purpose (Refer Note 21)
Note 33. Share-based payments
Details of shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2024 and 30 June 2023 are set out below:
Issue Date
Number of Shares
Price
Total Value
30 June 2024
Shares issued to KMP
23/11/2023
80,388
$1.745
140,271
30 June 2023
Shares issued to KMP
18/10/2022
273,944
$0.514*
140,909
*The movement relates to consolidation of issued share capital of the Company on the basis that every five shares be consolidated
into one share. Refer to note 21
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
71
Note 34. Parent entity information
Set out below is the supplementary information about the parent entity (Group Costs).
Statement of profit or loss and other comprehensive income
Consolidated
30 June 2024
$'000
30 June 2023
$'000
Loss after income tax
(7,144)
(2,767)
Total comprehensive loss
(7,144)
(2,767)
Statement of financial position
30 June 2024
$'000
30 June 2023
$'000
Total current assets
964
931
Total assets
60,277
67,028
Total current liabilities
4,398
3,768
Total liabilities
4,455
3,977
Net Assets
55,822
63,051
Equity
Issued Capital
90,287
90,372
Retained earnings
(34,465)
(27,321)
Total Equity
55,822
63,051
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had guarantees of $5,545,309 in relation to the debts of its subsidiaries as at 30 June 2024
($3,320,517 as at 30 June 2023).
Contingent liabilities
The parent entity had contingent liabilities of $105,649 as at 30 June 2024 ($105,649 as at 30 June 2023).
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June
2023.
Material accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for
the following:
Investments in subsidiaries are accounted for at cost, or fair value should a bargain purchase be acquired in
the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may
be an indicator of an impairment of the investment.
Teaminvest Private Group Limited
Notes to the consolidated financial statements
For the year ended 30 June 2024
72
Note 35. Events after the reporting period
Apart from the dividend declared as disclosed in note 22, no other matter or circumstance has arisen since 30 June
2024 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those
operations, or the consolidated entity's state of affairs in future financial years.
Teaminvest Private Group Limited
Consolidated entity disclosure statement
For the year ended 30 June 2024
73
Entity name
Entity type
Place formed
/ Country of
incorporation
Ownership
interest %
Tax
residency
Teaminvest Private Financial Services Pty Ltd
Body Corporate
Australia
100%
Australia*
TIP Group Corporate Advisory Pty Ltd
Body Corporate
Australia
100%
Australia*
East Coast Traffic Controllers Pty Ltd
Body Corporate
Australia
100%
Australia*
Icon Metal Pty Ltd
Body Corporate
Australia
100%
Australia*
Lusty TIP Trailers Pty Ltd
Body Corporate
Australia
100%
Australia*
TIP Trustees Limited
Body Corporate
Australia
100%
Australia
Teaminvest Private Residential Group Pty Ltd
Body Corporate
Australia
100%
Australia*
Automation Group
Body Corporate
Australia
100%
Australia*
Automation Group Investments Pty Ltd
Body Corporate
Australia
100%
Australia*
Automation Group Limited
Body Corporate
New Zealand
100%
New Zealand
Radtel Engineering Pty Ltd
Body Corporate
Australia
100%
Australia*
Teaminvest Pty Ltd
Body Corporate
Australia
100%
Australia*
Teaminvest Australia Pty Ltd
Body Corporate
Australia
100%
Australia
Diversified Growth Management Pty Ltd
Body Corporate
Australia
70%
Australia
Conscious Investor
Body Corporate
Australia
100%
Australia
Teaminvest Limited (NZ)
Body Corporate
New Zealand
100%
New Zealand
Burman Investment Management Limited
Body Corporate
Australia
100%
Australia*
TIP Wealth Investment Management Pty Ltd
Body Corporate
Australia
100%
Australia
TIP Infrastructure Pty Ltd
Body Corporate
Australia
100%
Australia
*Teaminvest Private Group Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime.
Teaminvest Private Group Limited
Directors’ declaration
For the year ended 30 June 2024
74
In the directors' opinion:
the attached consolidated financial statements and notes comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached consolidated financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 2 to the financial
statements;
the attached consolidated financial statements and notes give a true and fair view of the Group's financial
position as at 30 June 2024 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
the information disclosed in the attached consolidated entity disclosure statement is true and
correct.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Andrew Coleman
Managing Director and Chief Executive Officer
22 August 2024
Sydney
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR'S REPORT
To the members of Teaminvest Private Group Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Teaminvest Private Group Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial report, 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:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial
performance for the year ended on that date; and
(ii)
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 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
75
Revenue recognition
Key audit matter
How the matter was addressed in our audit
Refer to note 5 of the financial report.
Recognition of revenue is a key audit matter due
to:
•
The significance of revenue to the
financial report. For the year ended 30
June 2024 the Group recognised
$106.1m (2023: $108.9m) revenue from
continuing operations; and
•
The Group has a wide range of
contracts, across businesses operating in
different industries, providing a range of
products and services for a large number
of customers with various contractual
terms and numerous different
performance measurement events.
This results in Group management being required
to exercise a level of judgment to determine the
appropriate revenue recognition policy to be
applied, defining the performance obligations
and determining the stage of completion of and
period over which “over time” revenue is
recognised. Significant audit effort is therefore
required to assess the appropriateness of
revenue recognition and gather sufficient audit
evidence.
Our procedures included:
•
Understanding and documenting the processes and
controls used by the group for each material
revenue stream, and identifying the revenue
streams recognising revenue for rendering of
services (over time) and sale of goods (at point in
time);
•
Evaluating the Group’s revenue recognition
accounting policies for revenue recognition for
each significant revenue stream against the
requirements of AASB 15 Revenue from contracts
with customers and our understanding of the
business. In particular for those products and
services where revenue is recognised based on the
percentage of completion;
•
We tested, on a sample basis, over time revenue
transactions to progress claim certifications,
management’s assessment of progress against
project plans or the time elapsed for service
agreements. We obtained signed contracts and
checked the performance milestones met to date
against the service revenue recognised. We also
tested that related contract assets and liabilities
were appropriately recognised in accordance with
Australian Accounting Standards;
•
We tested, on a sample basis, transactions
recognising revenue at a point in time to purchase
orders, sale invoices and delivery dockets;
•
Performing cut-off procedures to ensure that
revenue transactions around the year end, or for
contracts spanning the year end, that revenue has
been recorded in the correct period; and
•
Assessment of the disclosures in the financial
report against the requirements of the accounting
standard and using the understanding obtained
from our testing.
76
Impairment of goodwill, indefinite useful-lived intangible assets
Key audit matter
How the matter was addressed in our audit
Refer to note 16 of the financial report.
Impairment of goodwill and indefinite useful-
lived intangible assets is a key audit matter due
to:
•
The significance of intangible assets to
the financial report. For the year ended
30 June 2024 the Group’s carrying value
of intangible assets is $42.9m (2023:
$44.0m); and
•
There have been a number of historic
business acquisitions which result in
goodwill being recognised, and multiple
trading CGUs require impairment
assessments annually under AASB
Impairment of Assets.
This results in Group management being required
to exercise a level of judgment to determine the
"Value in Use" of each cash generating unit (CGU)
and whether or not an impairment charge is
necessary. This involves critical judgement by
management about the future growth rates of
the business in each CGU, discount rates applied
to future cash flow forecasts for each CGU and
sensitivities of inputs and assumptions used in
the cash flow models.
Significant audit effort is therefore required to
assess the appropriateness of critical judgements
being made in relation to forecast future revenue
and costs, discount rates, and terminal growth,
and gather sufficient audit evidence.
Our procedures included:
•
Evaluating the Group's assessment of CGU’s and
consideration as to whether useful lives applied for
intangible assets remained appropriate, including
those determined to have an indefinite useful life
such as the Confidential Information & Know How;
•
Considering the appropriateness of the ‘Value in
Use’ models used by the Group and critically
evaluating management's methodologies and their
documented basis for key assumptions which are
described in Note 16 of the financial report;
•
Challenging key assumptions, including forecast
growth rates by comparing them to historical
results, business trends, economic and industry
forecasts;
•
Independently assessing the range of revenue
growth and discount rate assumptions that might
reasonably be expected to occur based on external
market data and recalculating the model using
these assumptions;
•
Using our valuation specialists to recalculate
management’s discount rates based on external
data where available;
•
Corroborating the assumptions for the key inputs in
the value in use model for the forecast revenue,
costs, discount rates and terminal growth rates by
comparing forecasts to historical actuals, market
indications and management’s plans for the
business;
•
Performing a sensitivity analysis on the key
financial assumptions in the models. These
included revenue forecasts, revenue multipliers
used in the terminal year of cash flows, and the
discount rates applied;
77
•
Testing actual impaired amounts to ensure the
approach taken and rationale is in accordance with
accounting standard requirements; and
•
Assessing the disclosures in the financial report
against the requirements of the accounting
standard and using our understanding obtained
from our testing.
Impairment of investment in associates
Key audit matter
How the matter was addressed in our audit
Refer to note 12 of the financial report.
Impairment of investment in associates is a key
audit matter due to:
•
The significance of investment in
associates to the financial report. For
the year ended 30 June 2024 the
Group’s carrying value of investment in
associates is $19.3m (2023: $28.4m);
and
•
There is an on-going dispute in Colour
Capital Pty Ltd which has resulted in no
future revenue from the Colour Capital
Master Franchisee Agreement. This has
resulted in a significant impairment in
the Investment in Colour Capital of
$8.6m (2023: $nil).
This results in Group management being required
to exercise a level of judgment to determine
whether or not an impairment charge is
necessary. This involves critical judgement by
management about the future cash flow
forecasts from investments where indicators of
impairment have been identified.
Significant audit effort is therefore required to
assess the appropriateness of critical judgements
being made in relation to forecast cash flows and
whether an impairment is required.
Our procedures included:
•
Review of board minutes, ASX announcements and
financial information to identify any indicators of
impairment;
•
Discussions with management on the future cash
flows of investments considered to have
impairment indicators, and obtaining supporting
documentation where available;
•
Testing actual impaired amounts to assess why
investments in associates have been impaired; and
•
Verifying that related disclosures are complete and
accurate in accordance with Australian Accounting
Standards.
78
Other information
The directors are responsible for the other information. The other information comprises the information in the
Group’s annual report for the year ended 30 June 2024, but does not include the financial report and the auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act
2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error; and
ii)
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
79
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 17 of the directors’ report for the year ended
30 June 2024.
In our opinion, the Remuneration Report of Teaminvest Private 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.
BDO Audit Pty Ltd
Ryan Pollett
Director
Sydney, 22 August 2024
80
81
The shareholder information below was applicable as at 16 August 2024.
Distribution of equitable securities
Analysis of equitable security holders by size of holding:
Number of
ordinary
shareholders
Number of
ordinary
shares
Percentage
1 to 1000
141
69,039
0.26
1,001 – 5,000
140
395,295
1.46
5,001 – 10,000
68
524,235
1.94
10,001 – 100,000
186
6,286,767
23.25
100,001 and over
51
19,762,992
73.09
586
27,038,328
100.00%
Holding less than a marketable parcel
Nil
Nil
Equity security holders
Ordinary Shares
Name
Number
Held
% of total
shares
issued
ELECTRONIC MARKETING PTY LTD
3,633,838
13.44
MR ANDREW COLEMAN
1,373,893
5.08
G & E PROPERTIES PTY LTD
1,354,942
5.01
TIP WEALTH RE NO 1 LTD
1,139,806
4.22
MR GREGORY NORMAN KOPP
1,134,069
4.19
CROOKS PTY LTD
872,610
3.23
PRICE VALUE PTY LIMITED
640,469
2.37
REGAN GEORGE PASSLOW
572,579
2.12
BNP PARIBAS NOMINEES PTY LTD
488,676
1.81
PASSLOW SUPER PTY LTD
365,214
1.35
LE GRAND PTY LTD
326,679
1.21
MR EDWARD WILLIAM OWEN
322,000
1.19
MRS ELIZABETH THOMPSON
317,749
1.18
BAXTERO PTY LIMITED
306,203
1.13
MR MALCOLM MURRAY JONES + MRS LYNNETTE ANNE JONES
294,238
1.09
SUTTON WOODS PTY LTD
291,498
1.08
NETWEALTH INVESTMENTS LIMITED
289,165
1.07
OCEAN FREE PTY LIMITED
287,426
1.06
DR ROBERT BREIT
276,126
1.02
PENMARK SUPER PTY LTD
263,709
0.98
14,550,889
53.82%
82
Substantial shareholders
Ordinary Shares
Number Held
% of total
shares issued
HOWARD COLEMAN
4,316,264
15.93%
GREGORY NORMAN KOPP
2,432,922
8.99%
ANDREW COLEMAN
1,373,893
5.07%
Securities subject to escrow
Type of escrow
Escrow period
Number of shares
Nil
Nil
Nil
Voting rights
The voting rights attached to equity securities are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Teaminvest Private Group Limited | ACN 629 045 736 | Phone 1300 160 803 | Email info@tipgroup.com.au | Web www.tipgroup.com.au