THE GO2 PEOPLE LIMITED ASX ANNOUNCEMENT 31 January 2022
For personal use only
Appendix 4C: Operations Update & Quarterly Cashflow Report
Quarter Ended 31 December 2021
The Go2 People Ltd (ASX:GO2) ("GO2" or the "Company") is pleased to release its quarterly 4C Cashflow Report and Operations Update for Q2 FY2022.
Operations Update
During Q2 Management has been firmly focused on moving past legacy issues and building foundations to enable future growth.
The Company has completed a significant restructure of the Executive Leadership Team with the appointment of a Chief Operating Officer and three new General Managers to lead our Training, JobReady Services and Recruitment businesses. We are excited by the addition of these experienced Executives to deliver our strategic plans and expedite our future growth.
The business has also attained ISO 27001 accreditation and achieved Level 3 (final) Accreditation of the Government's Right Fit for Risk Requirements. Not only does this increase efficiencies and reduce I.T. risk for the business, but we believe this to be a strategic commercial advantage for winning Government tenders.
A large body of work has also been completed to finalise the integration of the GO2 People, Skill Hire and Hunter Executive businesses. The benefits of rationalised overheads and business efficiencies are starting to be realised during Q2, with the full benefits expected to become evident during the rest of this financial year.
Total revenues for the Company increased from $17.8 million in Q1 to $18.2 million in Q2, with growth occurring in overall recruitment revenues and government funded training initiatives. Gross margins remained relatively stable in comparison with the prior quarter despite the impact of the public holidays and customer operation shutdowns in Q2.
The GO2 People Ltd
Level 2, 182 St Georges Terrace
Perth WA 6000
ASX: GO2
ACN: 616 199 896
www.thego2people.com.au
For personal use only
The business is currently delivering 4 contracts for the Department of Education, Skills and Employment (DESE) to provide training and employment services. We have submitted tender bids seeking renewal of our current footprint, as well as growth into new territories and new contracts across Qld, SA, NT and Tasmania. Tender decisions and commencement of contract delivery is expected in Q3 and Q4 respectively.
Cashflow Update
Net operating cash inflows of $1.18m were generated for Q2FY22, compared to net operating outflows of $260k for the prior quarter. The increase is a combination of improved credit collection processes during the quarter, as well as operating cost synergies achieved from the recent Skill Hire and GO2 merger, reducing administration and overhead savings by approximately $0.5 million for Q2.
The improvement in net operating cashflow was achieved despite an additional cash outflow of $745k in Q2 for employee superannuation payments. The payment was a one off cashflow resulting from a change in the superannuation payment cycle from quarterly to monthly commencing October 2021.
Total net available cash decreased by $687k during Q2 FY22 due to the Company utilising available cash to repay borrowings totaling $1.6 million, comprising:
- Repayments to the ScotPac debtor financing facility of $1.1 million; and
- Payment of approximately $530k owed to the ATO for PAYG.
The financing facility repayments offset any additional cash generated from operating activities, as the Company aims to reduce its loan drawdowns over time.
At 31 December 2021 the Company had available cash of $4.78 million. The Company also has access to a $1.025 million bank overdraft facility for general working capital, and a debt factoring facility which can be utilised to fund labour hire activities.
The Appendix 4C accompanies this announcement.
The GO2 People Ltd
Level 2, 182 St Georges Terrace
Perth WA 6000
ASX: GO2
ACN: 616 199 896
www.thego2people.com.au
For personal use only
Superannuation Guarantee Liability
As Announced to ASX on 17 January 2022, the Company has lodged further superannuation guarantee statements with the ATO for the period 1 July 2018 to 30 June 2021, disclosing a potential further liability of $2.66 million. As the potential liability is self-reported, GO2 intends to make submissions seeking remission of any additional penalties or charges. The Company has fully provided for the SGC liability and subject to approvals, intends to work with the ATO to make the repayments out of excess working capital over a period of time as circumstances permit.
People
Shawn Murphy was appointed as the Chief Executive Officer of the GO2 Group effective 1 October 2021. Shawn has been the CEO of Skill Hire since August 2020 and has worked in successful start-ups,scale-ups and turnarounds across the health, medical and human resources sectors.
Following an extensive search and selection process, the Company appointed three highly experienced and credentialled independent Non-Executive Directors to its Board: Susan Hansen, Sophie Ray and John Manning. The appointments will provide the Company with the relevant skill set around risk, compliance and financial reporting required for the newly merged GO2 group as it pursues its strategy of organic business growth, preparing for success in the forthcoming significant Federal Government tender awards, and for further M&A activity.
Refer to the GO2 ASX Announcement dated 8 November 2021 for further information on each director.
Suzie Foreman was appointed as Company Secretary following the resignation of Peter Torre during the quarter.
The GO2 People Ltd
Level 2, 182 St Georges Terrace
Perth WA 6000
ASX: GO2
ACN: 616 199 896
www.thego2people.com.au
For personal use only
Corporate
During the quarter 1.75 million GO2 unquoted options expired unexercised. The Company has no further unquoted securities on issue.
The Company has 406,638,254 fully paid ordinary shares on issue at 31 December 2021, of which 207,345,626 are held in voluntary escrow.
Related Parties Payments During the Quarter
For the purposes of ASX Listing Rule 4.7C.3, payments of $126k to related parties as disclosed at Item 6 of the Appendix 4C relate to payments to Directors for agreed Directors' salaries, fees and superannuation.
Commentary
GO2 Board Chair Darren Cooper said, "Investors will be aware that the GO2 Group has been through significant changes over the past 6 months following the merger with Skill Hire. We believe that the current quarter's operating results are a sign of things to come, with the best quarter of operating cashflow in the Company's history under-pinned by our diversified service offering, improved client relationships and significant streamlining of the costs of the business.
We have been frustrated over the past quarter through being required to work through previous GO2 legacy issues, and investors will note that we have now completed our superannuation reconciliation and self-reporting to the ATO.
We remain hopeful of a positive result relating to the award of Federal Government tenders through the Department of Education, Skills and Employment (DESE). The Company stands ready to respond, with many of the recent changes and appointments we've made at both Board and Executive level having been in preparation for potential growth.
The GO2 People Ltd
Level 2, 182 St Georges Terrace
Perth WA 6000
ASX: GO2
ACN: 616 199 896
www.thego2people.com.au
For personal use only
For more information, please contact:
Darren Cooper Board Chair investor@thego2people.com.au
Issued by: The GO2 People Ltd
Approved by: The Board of The GO2 People Ltd
About The GO2 People Ltd
The GO2 People Ltd (ASX:GO2) is a leading provider of recruitment and training services to industry throughout Australia.
The day-to-day operations of the company are underpinned by strong core values and an ethical approach to business principles which drive innovation, collaboration and an ongoing commitment to continuous improvement.
To learn more please visit: www.thego2people.com.au
The GO2 People Ltd
Level 2, 182 St Georges Terrace
Perth WA 6000
ASX: GO2
ACN: 616 199 896
www.thego2people.com.au
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GO2 People Ltd. published this content on 30 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 January 2022 21:30:05 UTC.
