For the fiscal year 30 June 2024
VivoPower is an award-winning global sustainable energy solutions B Corporation company focused on electric solutions for customised and ruggedised fleet applications, battery and microgrids, solar and critical power technology and services. The Company's core purpose is to provide its customers with turnkey decarbonisation solutions that enable them to move toward net-zero carbon status. VivoPower has operations and personnel in Australia, Canada, the Netherlands, the United Kingdom, the United States, the Philippines, and the United Arab Emirates.
Nasdaq: VVPR
ANNUAL REPORT
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Contents | Page |
The Reports |
|
Highlights | 3 |
Chairman and Chief Executive's Review | 5 |
Strategic Report | 7 |
Directors' Report | 27 |
Corporate Governance | 34 |
Remuneration Report | 37 |
Independent Auditor's Report to the Members of VivoPower International PLC | 44 |
|
|
Financial Statements and Notes |
|
Consolidated Statement of Comprehensive Income | 50 |
Consolidated Statement of Financial Position | 51 |
Consolidated Statement of Cash Flow | 52 |
Consolidated Statement of Changes in Equity | 54 |
Notes to the Financial Statements | 55 |
|
|
Parent Company Financial Statements and Notes |
|
Company Statement of Financial Position | 110 |
Company Statement of Cash Flow | 111 |
Company Statement of Changes in Equity | 112 |
Notes to the Company Financial Statements | 113 |
|
|
Other Information |
|
Company Information | 119 |
Highlights
VivoPower International PLC for the year ended 30 June 2024
Highlights
Results for the Year ended 30 June 2024
Total Revenues" declined to $11.8 million primarily due to the disposal of the Kenshaw Electrical business. Continuing Operations revenue has declined to $0.0 on a year-on-year constant AUD/USD FX basis.
Gross profit" increased to a $1.6 million reflecting higher gross profits on projects. The Group continued to focus its efforts on those projects that yield significant Gross Profit and with a lower risk profile.
Adjusted EBITDA" improved by $3 million due to loss on discontinued operations recognised in FY23, elimination of nonrecurring, severe one-off weather events and reductions of General and Administrative expenses. Adjusted EBITDA for continuing operations was ($7.4) million, compared to ($6.4) million in the prior fiscal year.
✓ | Statutory net after-tax loss" of ($46.7) million for FY24 and loss per share (“EPS”) of ($15.17) per share, as compared to a ($24.4) million loss and ($9.87) per share in FY23. |
|
|
| Cash balance decreased from $0.6 million as of June 30, 2023 to $0.2 million as of June 30, 2024. Post balance date the Company received an aggregate of $0.8 million of cash from sale proceeds from the Kenshaw Electrical asset sale, plus $9.0 million from ATM capital raises. |
|
|
✓ | Tembo increased order and commitment book for its EUV24 kits by 15% from 13,000 kits to 15,000 kits (excluding MOUs) during FY2024. Additionally, Tembo released it Tusker battery electric pickup truck during FY24 and has commenced taking orders for these for sale initially in Australia. |
|
|
✓ | Post balance date, Tembo has entered into a definitive Partnership agreement with Sarao Motors to electrify the iconic jeepneys of the Philippines. Sarao is the largest Jeepney manufacturer in the Philippines where over 200,000 Jeepneys are used as transport vehicles for the local population. Tembo will provide the drive train and Sarao will provide the bodies |
*All references to $ are references to USD unless otherwise noted.
ᶺ Amounts include discontinued operations
Highlights
VivoPower International PLC for the year ended 30 June 2024
| Year Ended 30 June | |||
(US dollars in thousands, except per share data) | 2024 | 2023 | 2022 | |
Revenue ᶺ | 11,827 | 15,060 | 37,616 | |
Gross (loss)/profit ᶺ | 1,586 | (2,262) | 1,585 | |
Operating loss ᶺ | (8,540) | (15,521) | (15,125) | |
Adjusted EBITDA ᶺ (1) | (6,971) | (9,942) | (8,956) | |
Basic loss per share (dollars) ᶺ | (15.17) | (9.87) | (10.64) | |
Adjusted loss per share (dollars)(2) | (2.26) | (4.03) | (4.32) |
1. Adjusted EBITDA is a non-IFRS financial measure. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortisation, impairment of assets, impairment of goodwill, one-off non-recurring costs including restructuring expenses and non-cash equity remuneration. We believe that Adjusted EBITDA and Adjusted earnings per share provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with our peer companies, many of which use similar non-IFRS or generally accepted accounting principles in the United States (“GAAP”) financial measure to supplement their IFRS or GAAP results, as applicable.
2. Adjusted earnings per share (EPS) is a non-IFRS financial measure. We define Adjusted EPS as net earnings less restructuring and nonrecurring costs, divided by the weighted average number of shares on issue during the period.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Chairman and Chief Executive's Statement and Review
The financial year ended June 30, 2024 (“FY24”) continued to be challenging. We delivered considerable progress on Tembo operationally and commercially but at a group level we were adversely impacted by the negative consequences of unexpected and prolonged adverse weather conditions and skills shortages in Australia, where the majority of our revenue, gross profit and earnings are currently generated. Both have now abated and we are looking at a much more promising Fiscal Year 2025 (“FY25”) with a resumption of growth expected across all of our business units.
Key achievements during the financial year included:
• | Tembo's has now sourced its new generation conversion kits from Asia. With a significant cost reduction Tembo is now offering a price point for its conversion kits that create a Return on Investment that is extremely attractive to our customers. |
|
|
• | Tembo increased order and commitment book by 2,000 kits from 13,000 kits to 15,000 kits (excluding MOUs) during FY24, and |
|
|
• | In September 2023 Tembo signed a landmark Agreement with Francisco Motors in the Philippines to electrify the ubiquitous Jeepney, which is the cultural mode of transport for millions of Philippino's |
|
|
• | In October 2023 Tembo was awarded the prestigious Electrical Vehicle Innovation of the Year Award in the UAE |
|
|
• | In January 2024 Tembo achieved a number of milestones that qualified it for an additional $5 million investment at the pre-money valuation of $120 million from the Emerati Investment office |
|
|
• | In February 2024 Tembo announced that deliveries of its latest version of its conversion kits (EUV23) had commenced to its customer, Acces in Canada |
|
|
• | Also, in February 2024 Tembo announced that it had signed a binding Heads of Agreement with Cactus Acquisition Corp 1 Limited (CCTS) to merge Tembo into CCTS |
|
|
• | In April 2024, Tembo achieved further milestones to secure a further $2.5 million investment from the Emerati Investment office, at the pre-money valuation of $120 million. This brings the total investment commitment to $10 million |
|
|
• | In May 2024, Tembo announced the launch of its all electric Light Pick-up truck (Tusker) in Australia & New Zealand. As part of this announcement Tembo announced that it had established an Asian Supply Chain that would significantly reduce the cost of its EUV24 conversion kits as well as its Jeepney electrification kits |
|
|
• | June 2024 it was announced that the first 50 committed orders for its Tusker pick-up truck had been received |
|
|
• | Also, in June 2024 Tembo announced that it had secured supply of 200 Tusker pick-up trucks with a value of $10 million |
|
|
• | An MOU was signed with Al Taif, the UAE's leading provider of maintenance, repair, and overhaul (MRO) services for military equipment and a subsidiary of EDGE Group, with the agreement spanning distribution of conversion kits, R&D, training in electric mobility and high voltage, local assembly in the UAE. |
|
|
• | Tembo upscaled its engineering team in the Netherlands, UK and Australia, doubling cumulative direct EV experience to over 100 years |
. |
|
• | Strategic direct investment into Tembo was secured reflecting a $120m pre-money valuation. |
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
• | Kenshaw's focus on higher quality revenue through contracted maintenance services delivered good results with multiyear contracts entered into with key data centre, mining and mining services clients. |
|
|
• | Newly acquired AS/NZS3800 (Electrical equipment for explosive atmospheres) certification opened new line of business for Kenshaw with strong pipeline of work expected to materially impact FY24 results. |
Post balance date, we were able to execute on the following:
• | Tembo announced in July the extension of its binding Head of Agreement with CCTS |
|
|
• | Additionally, Tembo announced the signing of the definitive Business Combination Agreement with CCTS |
|
|
• | The Kenshaw Electrical business in Australia was sold in July so that the group can focus on its fast-growing business, Tembo |
As mentioned before and notwithstanding the above achievements, VivoPower's revenue and profits declined versus the prior financial year. Key financial results and metrics for the fiscal year ended 30 June 2024 were as follows:
• | Annual group revenue from continuing operations declined 100% year-on-year ("y-o-y") to $0.0 million, primarily due to sale of Kenshaw and delays in ramp up of operations of Tembo. |
|
|
• | Annual group gross profit from continuing operations increased y-o-y to $0.04 million from ($4.1 million) gross loss in Fiscal Year 2023 ("FY23") primarily due to unseasonal wet weather conditions in Australia (as a result of the La Nina weather phenomenon) which delayed works in the previous year. The loss recognised during the FY23 for the Edenvale solar farm in Aevitas Solar amounted to $3.9 million. Excluding this one-off loss, group gross loss was ($0.2) million. |
|
|
• | Annual net after-tax loss from continuing operations of ($45.8) million and earnings per share ("EPS") of ($14.88) per share, as compared from the ($20.1) million loss and ($8.13) per share for FY23. |
|
|
| Annual underlying group adjusted EBITDA loss from continuing operations was ($7.4) million, representing a decline versus ($6.4) million EBITDA loss from continuing operations for FY23, reflecting increase in operating expenses. |
Notwithstanding the above, given the strong pipeline of contracted opportunities we have for both our Electric Vehicle and Critical Power Services business units, we are confident of the medium to long term outlook.
For the financial year ending 30 June 2025, we have set the following company objectives:
• | Deliver Tembo EV kits commitments on schedule and budget. |
|
|
• | Continue R&D programme for Tembo and secure funding. |
|
|
• | Expand Tembo addressable market & partnership base. |
|
|
• | Grow SES business with new capabilities and partnerships. |
|
|
• | Execute on corporate initiatives to enable sustainable growth. |
On behalf of the rest of the Board, I would like to take this opportunity to thank all of our stakeholders for their continued support and engagement. I would also like to thank colleagues at VivoPower for their relentless commitment to execution excellence. As a company, the VivoPower team remains focused on achieving its medium to long term strategic, financial and impact goals.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Kevin Chin
Chairman and Chief Executive Officer
4 February 2025
Strategic Report
Principal Activities
VivoPower is an award-winning global sustainable energy solutions B Corporation company focused on electric solutions for customised and ruggedised fleet applications, battery and microgrids, solar and critical power technology and services. The Company's core purpose is to provide its customers with turnkey decarbonisation solutions that enable them to move toward net-zero carbon status. VivoPower has operations and personnel in Australia, Canada, the Netherlands, the United Kingdom, the United States, the Philippines, and the United Arab Emirates.
Management analyses our business in five reportable segments: Critical Power Services, Electric Vehicles, Sustainable Energy Solutions, Solar Development and Corporate Office. Critical Power Services is represented by VivoPower's wholly owned-subsidiary Aevitas. In turn, Aevitas wholly owns Kenshaw Electrical Pty Limited (“Kenshaw”) and Kenshaw Solar Pty Ltd (previously J.A. Martin) (“Aevitas Solar”), both of which operate in Australia with a focus on the design, supply, installation and maintenance of critical power, control and distribution systems, including for solar farms. J.A. Martin and NDT Services were sold in July 2022 and Kenshaw Electrical was sold in July 2024. Electric Vehicles is represented by Tembo e-LV B.V. (“Tembo Netherlands”) and Tembo EV Australia Pty Ltd (“Tembo Australia”), (in combination “Tembo”) a specialist battery-electric and off-road vehicle company delivering electric vehicles (“EV”) for mining and other industrial customers globally. Sustainable Energy Solutions (“SES”) is the design, evaluation, sale and implementation of renewable energy infrastructure to customers, both on a standalone basis and in support of Tembo EVs. Solar Development is represented by Caret and comprises seven active utility-scale solar projects under development in the United States. Corporate Office is the Company's corporate functions, including costs to maintain the Nasdaq public company listing, comply with applicable SEC reporting requirements, and related investor relations and is located in the U.K.
See Note 4.2 to our consolidated financial statements included herein for a breakdown of our financial results by reportable segment while our key performance indicators are reported within the highlights at the start of this report.
Electric Vehicles
Tembo e-LV B.V. (“Tembo”) is the electric vehicle business unit and brand of VivoPower. It has operating subsidiaries in the Netherlands, Australia, and Asia. Founded in the Netherlands in 1969, Tembo's genesis was as a specialist off-road vehicle ruggedisation and modification company. This led to the design and development of electric battery conversion kits to replace internal combustion engines (“ICE”) in light utility vehicle fleets, particularly for the mining sector. VivoPower first acquired a shareholding in Tembo in October 2020 before securing full control in February 2021. Since then, the Tembo business has been transformed into a global business and brand with partners and customers globally.
Today, Tembo has three product lines being the Electric Utility Vehicle (“EUV”) conversion kits for mining and other off-road and ruggedised or customised on-road applications, the Public Utility Vehicle (“PUV”) electric powertrain conversion kits for the jeepneys in the Philippines and the recently established full Tembo OEM light utility pick-up truck range called the Tembo Tuskers.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Tembo's customers and partners are located across the globe and span a broad spectrum of sectors including mining, infrastructure, construction, government services, humanitarian aid, tourism and agriculture.
Tembo's EUV conversion architecture is designed to allow a ‘plug and play' approach that allows our global partner community to install and maintain thousands of kits, whether in left-hand drive or right-hand drive, 2 door or 4 door vehicles in the harshest of environments. Tembo's “plug and play' architecture allows us to replace components as technologies change therefore ensuring that the maximum benefit can be obtained from the customers investment.
In September 2023, Tembo signed a definitive joint venture agreement with Francisco Motors, the pioneering manufacturer of jeepneys in the Philippines, which marked the launch of its PUV jeepney division. Under the agreement, Tembo will develop and supply EUV electrification kits for a new generation of electric jeepneys. One of the country's cultural icons, jeepneys are the most common utility vehicle in the Philippines and the main mode of public transportation, accounting for just over 40% of public transportation in the country. There are more than 200,000 jeepneys on the road in the Philippines, of which more than 90% are at least 15 years old and running on second-hand diesel engines. Under the Public Utility Vehicle Modernization Program, the Philippine Government requires that all jeepneys and other public utility vehicles with at least 15 years of service be replaced with Euro 4-compliant or electric-powered vehicles. There is a US$10bn+ addressable market for the replacement of the old jeepneys.
In January 2024, VivoPower announced that its subsidiary, Tembo, has met all milestones to obtain a further follow-on strategic direct equity investment of $5.0 million from a UAE-based private investment office backed by a member of the Al Maktoum family, for an aggregate total investment of US$7.5 million. The company expects to receive payment in the first half of 2025.
In April 2024, VivoPower signed a heads of agreement for a business combination between Tembo and Nasdaq-listed Cactus Acquisition Corp. 1 Limited (“CCTS”) at a pre-money equity value of US$838 million (such transaction, the “Tembo Business Combination”). Should the Tembo Business Combination be consummated, it would result in Tembo becoming a separate listed company on Nasdaq. However, it is expected that VivoPower will continue to be the major shareholder in the post-Tembo Business Combination company and, on that basis, Tembo would continue to be a controlled subsidiary of VivoPower and consolidated in its financial statements. The business combination is targeted to be completed by the first quarter of calendar year 2025.
In April 2024, VivoPower announced that its subsidiary Tembo met all milestones to secure the final $2.5 million of a $10 million investment from a UAE-based private investment office backed by a member of the Al Maktoum family. This brings the total investment to $10 million at a pre-money valuation of $120 million. VivoPower will retain its majority stake in Tembo. The company expects to receive the payment in the first half of the calendar year 2025.
In May 2024, VivoPower announced that its subsidiary, Tembo, has launched a fully electric OEM pickup utility vehicle. This strategic development allows Tembo to bypass the capex-intensive assembly process and accelerate revenue generation. The new vehicle features a range from 330 km on a single charge, 1- tonne payload capacity, and unbraked towing capacity of 750 kg. Initial orders have been secured, with full homologation expected by late 2024. This initiative significantly expands Tembo's B2B market and complements its existing EUV conversion kit program, while reducing direct costs for both EUV and jeepney programs.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
In June 2024, VivoPower announced the Australian launch of Tembo's range of 100% electric utes, the Tembo Tusker, marking a significant milestone Tembo's mission to electrify off-road vehicles is showcased by the Tusker's sector-leading price, reflecting its advanced design and global partnerships. The Tembo Tusker, a fully electric single and dual cab ute, combines innovation with a sector-leading price from $74,000 + GST and ORC. With 65Kwh and 77Kwh options, it offers ranges of 330km to 400km on a single charge.
In June 2024, VivoPower announced that its subsidiary, Tembo, has secured a minimum of 200 committed orders for its fully electric pick-up utility vehicle, Tembo Tusker, for delivery to customers and partners in Australia and New Zealand by February 2026. The Tembo Tusker range will augment the Tembo conversion programs, increasing choices for Tembo's B2B customer base and target market.
On July 2 and 29, 2024, VivoPower announced that Tembo and CCTS agreed to a one-month extension of their exclusive heads of agreement to July 31, 2024 and August 31, 2024, respectively. These extensions provide additional time to finalise the definitive business combination agreement and the independent fairness opinion related to the proposed transaction.
On August 29, 2024, VivoPower announced that Tembo executed a definitive Business Combination Agreement at a combined enterprise value of US$904m with CCTS. An independent third-party fairness opinion was satisfactorily completed, and the BCA was signed after a four-month period of due diligence.
Revenue earned within the Electric Vehicles segment is comprised of the following activities:
| Year Ended 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Vehicle spec conversion | - | - | 789 |
Conversion kits | 16 | 1,394 | 301 |
Accessories | - | 70 | 400 |
Total revenue | 16 | 1,464 | 1,490 |
During the fiscal year, we focused on executing two major strategic pivots in relation to the Tembo business: (a) we expanded the range of product and solutions beyond EUV conversion kits, to encompass PUV conversions as well as the introduction of a new range of full electric utility vehicles, the Tembo Tuskers and (b) transitioning our strategic supply chain to Asia, in order to de-risk and reduce bill of material costs across our range of products and solutions. As a consequence, we had minimal revenues during the fiscal year, given our transition away from more expensive legacy products and solutions.
Over the next twelve months, Tembo anticipates an increase in both revenue and costs associated with scaling the Electric Vehicle business, as operations move forward with production of EUV conversion kits, alongside the anticipated sale of Tembo Tusker Electric Utility trucks and electric Jeepneys in response to demand from existing partnerships. The company's transition to a capital-light business model, leveraging a strategic supply chain network across Asia, has removed the need to invest in assembly and manufacturing facilities.
Critical Power Services
VivoPower's Critical Power Services business was known as Aevitas. Aevitas was a key player in the manufacture, distribution, installation and servicing of critical energy infrastructure solutions. Its portfolio spans the design, procurement, installation, and upkeep of power and control systems, including those catering to utility and industrial scale solar farms. Under Aevitas, there were three operating companies, J.A. Martin Electrical, NDT Services and Kenshaw Electrical. The assets of J.A. Martin and NDT Services were sold in July 2022 and the assets of Kenshaw Electrical were sold in July 2024. VivoPower is completing a restructure of Aevitas given it is now a discontinued operation.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Sustainable Energy Solutions (“SES”)
VivoPower's Sustainable Energy Solutions (“SES”) segment designs, evaluates, sells, and implements renewable energy infrastructure. This segment complements our electric vehicle offerings, enabling clients to adopt comprehensive decarbonisation measures through on-site renewable generation, batteries and microgrids, EV charging stations, emergency backup power solutions and digital twin technology.
Augmenting its Electric Vehicle business, which deploys EUV conversion products and services to fleet owners, VivoPower is also focused on an SES strategy with its core mission being to help corporate customers achieve their decarbonisation goals. The SES business delivers full-suite, holistic SES to industrial customers and other large energy users and is comprised of five key elements:
• | Critical power “electric-retrofit” of customer's sites to enable optimised EV battery charging, encompassing charging stations, renewables, battery storage and microgrids; |
|
|
• | Digital twin technology; |
|
|
• | EV and battery leasing; |
|
|
• | EV battery reuse and recycling; and |
|
|
• | Change management services |
Since its establishment in FY2021, the SES business has signed several key agreements to complete its offering.
In December 2021, VivoPower executed a Memorandum of Understanding signed with Relectrify, a leading supplier of battery energy storage systems utilising second-life EV batteries, with the collaboration extended to explore future redeployment of Tembo batteries.
In August 2022 the Company invested in Green Gravity Energy Pty Ltd, an Australian company specialising in energy storage solutions in former mining locations.
In May 2023, VivoPower signed a definitive partnership agreement for VivoPower to market and distribute Vital EV Solutions (“Vital EV”) fleet charging solutions globally. Vital EV is a specialist U.K-headquartered company, offering a comprehensive range of electric vehicle charging solutions for fleet owners and is the official re-seller of Kempower charging stations and service solutions in the U.K and across Africa. Kempower, headquartered in Finland, has high-speed EV fleet charging solutions including for off-highway working environment applications. Under the Agreement, VivoPower will be able to offer to its customers and partners a wide range of EV fleet charging products and services from Vital EV and Kempower for an initial term of 3 years. These products include multi-voltage lightweight movable rapid chargers, hub-and-spoke rapid and ultra-rapid charging systems, satellite dispensers as well as conventional station chargers.
In October 2023, VivoPower signed a definitive joint venture agreement with Geminum, a digital twin technology company. This partnership aims to design, test, and implement digital twins for Tembo electric utility vehicles and VivoPower's sustainable energy solutions. The joint venture will enhance VivoPower's capabilities in fleet electrification and decarbonisation solutions, providing clients with near real-time analytics and carbon abatement data. This technology will be relevant for the mining sector in particular, to assist in optimising the total cost of ownership and operational efficiency.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Solar Development
VivoPower's portfolio of U.S. solar projects is held in its wholly owned subsidiary, Caret, LLC (“Caret”).
This segment has historically been characterised as the Solar Development segment and encompassed the Company's solar development activities in the U.S. and Australia. The Company no longer has solar development activities in Australia following the sale of its interests in solar farm projects in FY21.
VivoPower's historic strategy in relation to solar development has been to minimise capital intensity and maximise return on invested capital by pursuing a business model predicated on developing and selling projects prior to construction and continually recycling capital rather than owning assets. The stages of solar development can be broadly characterised as: (i) early stage; (ii) mid-stage; (iii) advanced stage; (iv) construction; and (v) operation. Our business model has been to work through the development process from early stage through to advanced stage, and then sell those projects that have completed the advanced stage of development, also known as “shovel-ready” projects, to investors who will finance construction and ultimately own and operate the project.
In July 2021, VivoPower announced the formation of Caret.
In October 2023, VivoPower announced that its board approved a plan to spin off the majority of its Caret business unit's portfolio, initially comprising up to ten solar projects totaling 586 MW-DC. This plan excluded two projects that were committed to a potential collaboration under a term sheet. VivoPower shareholders had approved this spin-off during the November 2022 Annual General Meeting (AGM), marking a pivotal step in realigning the company's renewable energy strategy.
During FY24, Caret strategically optimised its portfolio to focus on two high-priority projects—TX75 and TX341—totaling 89.6 MW-DC of renewable energy capacity. This led to the impairment of the remaining sites, which had previously been considered part of the portfolio. The decision to impair these sites reflects a targeted approach to resource allocation, ensuring maximum value creation from the most strategically aligned and operationally feasible projects. Caret will continue to reassess its portfolio in the coming year, with the potential to reactivate certain impaired sites or add new sites based on market conditions and strategic priorities.
In January 2025. Caret Digital, a subsidiary of Caret LLC, secured an asset backed financing facility for up to 1,000 Antminer L9s to accelerate DOGE coin mining revenues and cash flows
Finally in January 2025, Caret Digital, a subsidiary of Caret LLC, secured a CAD$140 million Definitive Binding Investment Commitment from Global Alternative Investment Group, GEM Global Yield LLC SCS o accelerate data centre infrastructure for DOGE coin mining.
Interest in the Caret portfolio continues to be strong despite the challenges posed by the current geopolitical and economic landscape, which have made potential partners and investors more cautious, extending the timeline for finalising agreements. However, as global demand for renewable power grows, the inherent value of the portfolio is expected to increase, positioning VivoPower and Caret to capitalise on these favorable market dynamics.
JOBS Act
In previous reporting periods, the Company met the requirements under the JOBS Act as an “emerging growth company” to (i) not provide an auditor's attestation report on its system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act (“SOX”), (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), or (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of our chief executive officer's compensation to median employee compensation. Although the Company no longer qualifies as an “emerging growth company,” it still qualifies as a non-accelerated filer and, therefore, is exempt from the requirement to provide an auditor's attestation report on its system of internal controls over financial reporting pursuant to Section 404(b) of SOX.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Financial Results
|
|
| Year Ended 30 June |
|
| |
|
| 2024 |
|
| 2023 |
|
(US dollars in thousands) | Continuing | Discontinued | Total | Continuing | Discontinued | Total |
Revenue from contracts with customers | 16 | 11,811 | 11,827 | 4,055 | 11,005 | 15,060 |
Costs of sales | 27 | (10,268) | (10,241) | (4,294) | (9,178) | (13,472) |
Cost of sales - non-recurring events | - | - | - | (3,850) | - | (3,850) |
Gross profit | 43 | 1,543 | 1,586 | (4,089) | 1,827 | (2,262) |
General and administrative expenses | (7,521) | (1,228) | (8,749) | (6,425) | (1,195) | (7,620) |
Other Gains/(losses) | 89 | 4 | 93 | 31 | (4,208) | (4,177) |
Other income | - | 99 | 99 | 82 | 37 | 119 |
Depreciation of property and equipment | (307) | (439) | (746) | (508) | (242) | (750) |
Amortisation of intangible assets | (823) | - | (823) | (831) | - | (831) |
Operating loss | (8,519) | (21) | (8,540) | (11,740) | (3,781) | (15,521) |
Restructuring and other non-recurring costs | (1,392) | 2 | (1,390) | (1,662) | 1 | (1,663) |
Impairment losses | (29,686) | (552) | (30,238) | (421) | - | (421) |
Finance income | 1,396 | 17 | 1,413 | 1,156 | - | 1,156 |
Finance expense | (6,015) | (327) | (6,342) | (6,839) | (527) | (7,366) |
Loss before income tax | (44,216) | (881) | (45,097) | (19,506) | (4,309) | (23,815) |
Income tax | (1,603) | - | (1,603) | (559) | 19 | (540) |
Loss for the year Adjusted EBITDA | (45,819) (7,389) | (881) 418 | (46,700) (6,971) | (20,065) (6,403) | (4,290) (3,539) | (24,355) (9,942) |
Management analyses our business in five reportable segments: Critical Power Services, Electric Vehicles, Sustainable Energy Solutions, Solar Development, and Corporate Office.
During the year ended June 30, 2024, the Group (including discontinued operations) generated total revenue of $11.8 million, gross profit of $1.6 million, operating loss of $8.5 million and a net loss of $46.7 million. Of these amounts, continuing operations of the Group generated revenue of $0.02 million, gross profit of $0.04 million, operating loss of $8.5 million and a net loss of $45.8 million. For the year ended June 30, 2023, the Group (including discontinued operations) generated total revenue of $15.1 million, gross loss of $2.3 million, operating loss of $15.5 million and a net loss of $24.4 million. Of these amounts, continuing operations of the Group generated revenue of $4.1 million, gross loss of $4.1 million, operating loss of $11.7 million and a net loss of $20.1 million.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Adjusted EBITDA (including discontinued operations) for the year ended June 30, 2024 was a loss of $7.0 million, compared to a loss of $9.9 million for the previous year. Adjusted EBITDA for continuing operations was a loss of $7.4 million, compared to a loss of $6.4 million for the previous year. Adjusted EBITDA is a nonIFRS financial measure. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortisation, impairment of assets, impairment of goodwill, other finance income and expenses, one-off non-recurring costs including restructuring expenses and non-cash equity remuneration.
The results for the year ended June 30, 2024, including discontinued operations, reflect a strategic shift towards prioritising profitable revenue streams, particularly within the Critical Power Services business unit, as well as the impact of adverse foreign exchange movements involving the Australian dollar relative to the USD, and increased efforts to scale up the Electric Vehicle business unit as the company remains focused on research and development and the launch of new products.
Revenue in Critical Power Services (including discontinued operations) declined by $3.2 million to $11.8 million in the year, reflecting a strategic shift towards prioritising more profitable revenue streams and phasing out less profitable ones within the Critical Power Services business unit, and adverse foreign exchange movements related to the Australian dollar relative to the USD. In July 2024, we completed the sale of Kenshaw Electrical (part of Critical Power Services), to ARA Group Limited for a consideration of approximately AU$1.2 million, Kenshaw is now classified as a discontinued operation This divestment aligns with VivoPower's strategy to reinvest in its high-growth businesses, particularly its Electric Vehicle business unit. On a continuing operations basis, revenue in Critical Power Services declined $2.6 million to nil. Electric Vehicles contributed $16 thousand revenue in the year, (year ended June 30, 2023: $1.5 million) predominantly from non-EV ruggedisation conversions, whilst EV activity is focused entirely on product development. There was no revenue contribution from Solar Development or Sustainable Energy Solutions in the year ended June 30, 2024 (year ended June 30, 2023: nil).
Gross profit (including discontinued operations) increased by $3.8 million to a gross profit of $1.6 million, although on a continuing basis excluding Kenshaw Electrical operations, gross profit increased by $4.1 million to a gross profit of $0.04 million. In percentage terms, gross margin from continuing operations rose from -5.9% to 264% (13.4% including discontinued operations). The higher gross profit (including discontinued operations) during FY24 reflects a focus on higher margin revenue streams and operational efficiencies, as well as cessation of any weather-related losses from solar projects in Australia that impacted the company in the previous financial year.
The results for the year ended June 30, 2024 also reflect a $1.1 million increase in general and administrative costs related to continuing operations bringing the total to $7.5 million. The increase includes a $0.1 million decrease in marketing expenses, a $0.2 million decrease in other overheads, $0.6 million increase IT licensing and support expenses, and a $0.8 million increase in salaries and benefits.
The results of continuing operations for the year ended June 30, 2024 include $31.1 million restructuring and other non-recurring costs primarily due to impairment of goodwill and write offs of assets.
Net finance costs from continuing operations of $4.6 million for the year ended June 30, 2024 include $4.6 million interest on related party loans, $0.9 million net foreign exchange gains and $0.9 million combined from dividends from Aevitas Preference Shares, interest on leases and interest on other debt.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
As at June 30, 2024, the Group's current assets were $17.7 million (as at June 30, 2023: $10.3 million; June 30, 2022: $21.7 million) representing an increase from June 30, 2023, mostly due to Kenshaw's assets held for sale amounting to $5.5 million (as at June 30, 2023: nil) and an increase in Trade and Other Receivables. Current assets also comprised of $0.2 million of cash and cash equivalents (as at June 30, 2023: $0.6 million; June 30, 2022: $1.3 million), $0.3 million of restricted cash (as at June 30, 2023: $0.6 million; June 30, 2022: $1.2 million), $10.0 million of trade and other receivables (as at June 30, 2023: $7.0 million; June 30, 2022: $9.5 million), and $1.6 million of inventory (as at June 30, 2023: $1.5m of inventory; June 30, 2022: $1.4 million). 30 June 2022 current assets were restated for a $0.5 million reclassification from Intangible Assets to Deposits.
Current liabilities were $54.1 million as of June 30, 2024 (as at June 30, 2023: $18.9 million; June 30, 2022, $23.3 million restated). The increase from prior year reflects an increase in both Trade and other Payables and Loans and Borrowing. At June 30, 2024, current liabilities included, Kenshaw's Liabilities held for sale worth $5.5 million (as at June 30, 2023, nil), Loans and Borrowing amounting to $8.2 million (as at June 30, 2023, $2.4 million) and Trade and Other Payables of $37.9 million (as at June 30, 2023, $14.6 million). 30 June 2022 current liabilities were restated for an accrual of $0.5 million expenses relating to 2022 but incurred in 2023.
Current asset-to-liability ratio as at June 30, 2024 was 0.33:1 (as at June 30, 2024: 0.54:1; June 30, 2022 restated: 0.93:1)
As at June 30, 2024, the Company had net liabilities of $40.5 million (as at June 30, 2023: $3.7 million; June 30, 2022, $21.6 million), including intangible assets of $15.2 million (as at June 30, 2023: $42.3 million June 30, 2022: $39.6 million). Property, plant and equipment decreased to $0.4 million as at June 30, 2024 (as at June 30, 2023, $3.7 million).
Cash outflow for the year ended June 30, 2024, was $0.4 million, arising from cash generated from operating activities of $1.5 million, cash outflow from investing activities of $4.6 million and cash inflow from financing activities of $2.7 million. On June 30, 2024, the Company had cash reserves of $0.2 million (June 30, 2023: $0.6 million) and debt of $29.1 million (June 30, 2023: $32.4 million), giving a net debt position of $28.9 million (June 30, 2023: $31.8 million).
Net cash outflow from investing activities of $4.6 million in the year ended June 30, 2024 comprised of $0.6 million cash outflow from the purchase of property, plant and equipment, a $4.0 million net cash outflow attributable to additional investment in capital projects in Tembo.
Cash generated from financing activities for the year ended June 30, 2024, was $2.7 million. This comprised $0.8 million inflow from AWN loans, $1.0 million proceeds from investors, $2.5 million capital raises net of capital raise costs, and $0.3 million transfer from restricted cash. This is partly offset by $1.6 million repayments of other financing and borrowing, and $0.2 million lease repayments.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Year Ended 30 June 2024 Compared to Year Ended 30 June 2023:
|
|
| Continuing operations |
|
| Discontinued operations |
| |
Year Ended 30 June 2024 (US dollars in thousands) | Critical Power Services | Solar Development | Electric Vehicles | Sustainable Energy Solutions | Corporate Office | Total Continuing | Critical Power Services | Total |
Revenue from contracts with customers | - | - | 16 | - | - | 16 | 11,811 | 11,827 |
Costs of sales - other | (52) | - | 102 | (23) | - | 27 | (10,268) | (10,241) |
Cost of sales - non-recurring events | - | - | - | - | - | - | - | - |
Gross profit | (52) | - | 118 | (23) | - | 43 | 1,543 | 1,586 |
General and administrative expenses | (53) | (344) | (1,794) | (324) | (5,006) | (7,521) | (1,228) | (8,749) |
Other gains/(losses) | 47 | - | 10 | 32 | - | 89 | 4 | 93 |
Other income | - | - | - | - | - | - | 99 | 99 |
Depreciation and amortisation | (448) | - | (671) | (3) | (8) | (1,130) | (439) | (1,569) |
Operating profit/(loss) | (506) | (344) | (2,337) | (318) | (5,014) | (8,519) | (21) | (8,540) |
Restructuring and other non-recurring costs | - | - | - | - | (1,392) | (1,392) | 2 | (1,390) |
Impairment losses | (48,315) | (11,187) | (366) | 10,787 | (77,325) | (29,686) | (552) | (30,238) |
Finance expense - net | (3,741) | (2) | (2,726) | (68) | 1,918 | (4,619) | (310) | (4,929) |
Profit/(loss) before income tax | 44,068 | (11,533) | (5,429) | 10,491 | (81,813) | (44,216) | (881) | (45,097) |
Income tax | (797) | - | 277 | (1,083) | - | (1,603) | - | (1,603) |
Loss for the year | 43,271 | (11,533) | (5,152) | 9,408 | (81,813) | (45,819) | (881) | (46,700) |
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
|
|
| Continuing operations |
|
| Discontinued operations |
| |
Year Ended 30 June 2023 (US dollars in thousands) | Critical Power Services | Solar Development | Electric Vehicles | Sustainable Energy Solutions | Corporate Office | Total Continuing | Critical Power Services | Total |
Revenue from contracts with customers | 2,591 | - | 1,464 | - | - | 4,055 | 11,005 | 15,060 |
Costs of sales - other | (2,722) | - | (1,572) | - | - | (4,294) | (9,178) | (13,472) |
Cost of sales - COVID-19 disruption | (3,850) | - | - | - | - | (3,850) | - | (3,850) |
Gross profit | (3,981) | - | (108) | - | - | (4,089) | 1,827 | (2,262) |
General and administrative expenses | (195) | (297) | (1,005) | (367) | (4,561) | (6,425) | (1,195) | (7,620) |
Other gains/(losses) | 1 | - | - | 30 | - | 31 | (4,208) | (4,177) |
Other income | 13 | 69 | - | - | - | 82 | 37 | 119 |
Depreciation and amortisation | (653) | - | (673) | (3) | (10) | (1,339) | (242) | (1,581) |
Operating profit/(loss) | (4,815) | (228) | (1,786) | (340) | (4,571) | (11,740) | (3,781) | (15,521) |
Restructuring and other non-recurring |
|
|
|
|
|
|
|
|
costs | - | - | 200 | - | (1,862) | (1,662) | (1) | (1,663) |
Impairment losses |
|
| (414) |
| (7) | (421) | - | (421) |
Finance expense - net | (6,314) | (34) | 936 | (50) | (221) | (5,683) | (527) | (6,210) |
Profit/(loss) before income tax | (11,129) | (262) | (1,064) | (390) | (6,661) | (19,506) | (4,309) | (23,815) |
Income tax | (638) | - | (40) | 119 | - | (559) | 19 | (540) |
Loss for the year | (11,767) | (262) | (1,104) | (271) | (6,661) | (20,065) | (4,290) | (24,355) |
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Principal Risks and Uncertainties
VivoPower is exposed to a number of risks and uncertainties which could have a material impact on the Group's long-term performance and could cause actual results to differ materially from historical and expected results.
Market demand for our products and services
Our business and revenues depend on the demand for our products and services. The market demand for electric vehicles, sustainable energy solutions and solar development projects is heavily influenced by a range of factors that include the governmental economic, fiscal, and political polices at both the national and state levels in the U.S., Australia, Europe, the United Kingdom and the rest of the world, as well as global economic and political factors affecting the cost, availability, and desirability of renewable energy, other energy sources. Other external factors such as the COVID-19 pandemic and geopolitical tension in Ukraine and the Gaza strip, may also affect demand for our products and services.
Competitiveness of our products and services
Our products and services need to be competitive in terms of price and quality with competition in each of our markets. Tembo in particular operates in a market that is relatively new, rapidly evolving, characterised by rapidly changing technologies, new competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviours. In order to stay competitive and relevant, it needs to continuously innovate and invest in product development and new technologies.
Operational scale up of electric vehicle assembly and delivery capabilities
Tembo faces operational risks as a maker of battery-electric ruggedised and offroad vehicles conversion kits embarking on an exponential scale up of its assembly and delivery capabilities. During FY24 Tembo completed a full review of its Supply Chain from sourcing through to delivery to customers. As a result of this strategic review Tembo is now sourcing its conversion kits out of Asia. This new arrangement now eliminates the requirement for assembly facilities as well as associated staff.
Delivering electric vehicle products and services to customers requirements and regulatory standards
Following the acquisition of Tembo, we signed distribution agreements with a number of partners globally, to sell Tembo EUV conversion kits. Meeting the technical specifications, quality and safety standards of our customers and partners is a key driver of ensuring Tembo's brand, reputation, revenue and future prospects. Product failures in service could leave us exposed to future warranty claims. Failure to meet the required regulations and standards in the markets we serve could require product recalls and fines and penalties.
Development and scale up of the SES solutions business
Whilst we have experience in developing, financing, building and operating solar power systems and distributed generation solar systems, we have limited experience and track record in combining this experience to then develop and offer a complete SES solution with microgrids, battery recycling and reuse and are still in the process of building the capabilities in the team. Developing and/or acquiring these capabilities is a key factor in expanding our SES solutions business.
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Supply chain execution
During FY24 our Supply Chain issued were reduced. Global supply has improved and lead times have been reduced. Whilst we expect to see a continued improvement in lead time reduction we must be aware that any additional international tension etc. could once again negatively impact Global Supply.
Inflation
Since its peak in late calendar year 2023, inflation has slowly fallen. Whilst prices have not returned to the pre-inflationary levels the company has been able to manage its costs and sell prices through ensuring our various contracts allow for inflation-based cost increases.
Ability to secure capital at attractive rates and terms
Our businesses are capital intensive requiring significant investment in operational expenditure to realise the growth potential of our electric vehicle, sustainable energy solutions and solar development businesses. In addition, we are subject to significant and ongoing administrative and related expenses required to operate and grow a public company. Together these items impose substantial legal and financial compliance costs. As a result, we expect to require some combination of additional financing options in order to execute our strategy and meet the operating cash flow requirements necessary to operate and grow our business.
Currency fluctuations
We conduct business in the U.S., Australia, United Arab Emirates, the Netherlands and the U.K. As a result, we are exposed to risks associated with fluctuations in currency exchange rates, particularly between the U.S. dollar, the British Pound, the Euro and the Australian dollar.
Ability to attract and retain talent
We are looking to rapidly hyperscale our business in the face of fierce competition for talent and short timeframes. To achieve our operational goals, we need to attract high calibre talent quickly.
Employees
People are central to our business and the contribution of talented and motivated employees is vital to the continued success of the Group. The Group has a policy of keeping employees informed of, and engaged in, its business strategy through regular briefings and team meetings. Employee involvement at all levels is encouraged.
It is a policy of the Group to recruit, develop and promote people on merit and to treat everyone equally regardless of their race, ethnic origin or nationality, age, gender, sexual orientation, disability, religion or belief.
The Group gives every consideration to applications for employment from disabled persons where the requirements of the position may be adequately covered by the abilities of the applicant concerned. In the event of members of staff becoming disabled, ways are examined to ensure that their employment with the Group continues and that the appropriate training is arranged. It is the policy of the Group to ensure that the training, career development and promotion of disabled employees should, as far as possible, be the same as that of other employees.
The table shows the number of staff of each gender employed at the Company and their level of seniority.
| Female | Male | Total |
Directors | - | 4 | 4 |
Senior Manager | 3 | 10 | 13 |
Employees | 11 | 65 | 76 |
Total | 14 | 79 | 93 |
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Health and Safety
The health and safety of the Group's employees, customers, and visitors is of primary importance. The Group is committed to creating and maintaining a safe and healthy working environment. Health and safety audits and risk assessments, including fire risk assessments, are carried out regularly.
The Environment
The Group recognises the importance of environmental responsibility and believes that its direct activities have a positive impact on the environment as the Company facilitates greater use of renewable energy. In addition, lightly damaged solar panels, that would have otherwise been bound for landfill, are donated to charity.
Communities
VivoPower has maintained an active program of community involvement in the locations we operate, including support for local children's sport teams and engagement with other worthwhile causes supported by our employees. In addition, as noted above, the Company donates lightly damaged solar panels to a charity that provides aid to the impoverished, supports local education initiatives, and assists with charitable renewable energy projects.
B Corporation Certification
VivoPower became certified as a B Corporation in April 2018. VivoPower recertified as a B Corporation in 2022 and was recognised in the Best For The World program as being in the top 5% amongst B Corporations for Governance. Consistent with this certification, the shareholders approved changes to the Articles of Association of the Company at the annual general meeting on August 20, 2018, to include:
(i) | the purposes of the Company are to promote the success of the Company for the benefit of its members as a whole and, through its business and operations, to have a material positive impact on society and the environment, taken as a whole; |
|
|
(ii) | in exercising the powers of the Company, a Director shall have regard to, among other matters, stakeholder interests such as: |
a. | the likely consequences of any decision in the long term; |
|
|
b. | the interests of the Company's employees; |
|
|
c. | the need to foster the Company's business relationships with suppliers, customers and others; |
|
|
d. | the impact of the Company's operations on the community and the environment; |
|
|
e. | the desirability of the Company maintaining a reputation for high standards of business conduct; and |
|
|
f. | the need to act fairly as between members of the Company. |
As a B Corporation, the Company is committed to continuously improve its B Corporation score and deliver on the B Corporation triple bottom line of Planet, People and Profit.
The Directors consider the Company's ongoing commitment to B Corporation certification and continual improvement thereunder as the primary means by which the Directors have had regard to the matters set out in section 172(1) of the Companies Act 2006 when performing their duty to act in the way most likely to promote the success of the Company for the benefit of its members as a whole.
The Strategic Report comprising pages 7 to 24 was approved by the Board and signed on its behalf by:
Strategic Report
VivoPower International PLC for the year ended 30 June 2024
Kevin Chin
Executive Chairman
4 February 2025
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Directors' Report
The Directors are pleased to present their report and the audited financial statements of VivoPower International PLC (“the Company”) and its subsidiary undertakings (together “the Group”) for the year ended 30 June 2024. Subsidiary and associated undertakings are listed in Note 14 to the financial statements.
Directors
The following table sets forth the names, ages and positions of our directors and executive officers. Unless otherwise indicated, the business address for all of our directors and executive officers is The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF, United Kingdom.
Name | Age | Position | Appointed | |
Directors: |
|
|
| |
51 | Chairman | |||
59 | Non-Executive Director | |||
63 | Non-Executive Director | |||
44 | Non-Executive Director | |||
Executive Officers: |
|
|
| |
Kevin Chin (1)(4) | 51 | Chief Executive Officer | 25 March 2020 | |
Gary Challinor | 71 | Chief Financial & Operating Officer | November 04, 2020 | |
Jacqui Johnson | 58 | Global HR Director | July 01, 2021 | |
Chris Mallios | 53 | Chief Commercial Officer | January 29, 2024 | |
(1) | Member (or in the case of Mr. Chin, non-voting observer) of the Audit and Risk Committee. | |||
(2) | Member of the Remuneration Committee. | |||
(3) | Member of the Nomination Committee. | |||
(4) | Member of the Sustainability Committee |
The following sets forth biographical information regarding our directors and executive officers. There are no family relationships between any director or executive officer and any other director or executive officer. There are no other arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or member of senior management, except that: Kevin Chin, our Chairman, beneficially owns 26.0% of VVPR at June 30, 2024, through his holdings as the Chairman of AWN, which is a beneficial owner of 20.1% of VivoPower as of June 30, 2024 for which Mr. Chin has shared voting power. and individually is the beneficial owner of 5.9% of VivoPower as of June 30, 2024.
Recent Changes to the Board of Directors and Senior Management
On June 4, 2024, Ms. Gemma Godfrey, Independent Director of VivoPower International PLC, announced her resignation as a member of the Board of Directors of VivoPower, effective June 13, 2024. Ms. Godfrey remains involved in the Company as a member of VivoPower's Advisory Council, where she continues to provide her input to the Company's leadership team.
Chris Mallios, previously a member of the VivoPower Advisory Board, was recently appointed as Chief Commercial Officer in January 2024. Reference is made to his biography below.
Directors
Kevin Chin
Kevin Chin is the founder of Arowana, a B Corporation certified investment group with operating companies across the U.K., U.S., Europe, Asia and Australia, as well as owning other unlisted companies and investments. One of those operating companies is AWN, and AWN is the largest shareholder in VivoPower, as well as owning other unlisted companies and investments.
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Over his 25-plus year career, Mr. Chin has accumulated extensive experience in “hands on” strategic and operational management having served as CEO, CFO and COO of various public and private companies across a range of industries, including solar energy, software, traffic management, education, funds management and vocational education. He is the author of the business book, HyperTurnaround! which chronicles the privatisation, rapid turnaround and subsequent global scale up of a software company called RuleBurst Haley culminating in a sale to Oracle. Mr. Chin regularly writes for Inc.com on topics such as turnarounds and growing pains challenges. He also has significant international experience in private equity, buyouts of public companies, mergers and acquisitions and capital raisings as well as funds management, accounting, litigation support and valuations with prior roles at LFG, J.P. Morgan, PWC and Deloitte.
Mr. Chin holds a Bachelor of Commerce degree from the University of New South Wales where he was one of the inaugural University Co-Op Scholars with the School of Banking and Finance. He is also a qualified Chartered Accountant and a Fellow of FINSIA, where he was a curriculum writer and lecturer in the Master of Applied Finance program. Mr. Chin resides primarily in London, United Kingdom.
William Langdon
William Langdon has had a 25-plus year career in the software, technology and enterprise data sectors after starting his career at Disney in finance and marketing. He served as CFO of venture-backed OmniTicket Network and after served in a series of senior management roles at digital mapping leader NAVTEQ (acquired by Nokia). After starting in European Sales, he became General Manager of the global Distribution division and President of NAVTEQ's first acquisition, a digital mapping company based in Seoul, South Korea. Since that time, he has served in a series of senior management roles with venture-backed French technology startups including Goldman Sachs backed Nuxeo and Intersec, backed by Highland Europe.
Mr. Langdon received his MBA from Yale University and is a member of the Board of Directors of Tech2Deal, a private French company, and Singula Institute, a New York City based mental health non-profit organisation. He resides in Long Island outside of New York City, United States.
Mr. Langdon serves as Chairman of the Audit and Risk Committee and the Nomination Committee of the Company.
Peter Jeavons
Peter Jeavons has over 30 years' experience working in a number of executive-level international roles predominantly focused on leading technology and enterprise software solutions across many industry sectors. His career has been spent working for small start-ups, medium-sized and large corporate businesses, helping to drive strong growth, turnarounds and with involvement from both sides in successful merger and acquisition activities. He specialises in policy, regulatory and legislative compliance-based solutions and has a strong interest in how technology can help to drive sustainability and save the planet.
Mr. Jeavons was part of the global leadership team of RuleBurst Haley, which was acquired by Oracle and then successfully relaunched their regulatory compliance solution as a native SaaS platform internationally. During his career he has also worked for companies including Infor, who are another large enterprise software company and was responsible for the European business at Nuxeo, a Goldman Sachs backed, open source, enterprise content management software provider. He recently completed an interim CEO role for a next generation events management SaaS business.
He currently works as an advisor to several SaaS businesses and start-ups, specialising in innovative technologies that make the world better, less complex, and more sustainable. Mr. Jeavons completed his Non-Executive Director's diploma with Pearson in 2013. He resides in the Cotswolds, United Kingdom.
Mr. Jeavons is the Senior Independent Director at Vivopower and Chairman of the Remuneration and Sustainability Committees of the Company.
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Michael Hui
Michael Hui brings a unique background to the Board given his dual Information Technology and Law degrees and experiences. During his career, he has built significant expertise across a diverse range of sectors in both an investment as well as an operational capacity.
Mr. Hui serves as Managing Director (Australasia) for VivoPower's largest shareholder, AWN, and also the broader Arowana group. In 2011, he joined Arowana as an Investment Director, and since then he has worked across a range of Arowana's operating businesses including education and asset management. Mr. Hui led the formation and structuring of the Arowana Australasian Special Situations Fund (AASSF) and most recently, the building of Arowana's education business, EdventureCo. His primary focus at present is driving corporate development (including mergers and acquisitions and technology-based transformation), working alongside the leadership teams of Aevitas and EdventureCo. Previously, Michael was Co-founder and CEO of an online-payments business, and spent more than 10 years as a lawyer practicing corporate and commercial law. He resides in Brisbane, Australia.
Executive Officers
Kevin Chin
Kevin Chin has served as our Chief Executive Officer since March 2020. Reference is made to his biography above.
Gary Challinor
Gary is currently VivoPower's Chief Financial & Operating Officer and has been with the Company since November 2020. Gary has over 30 years of experience across a range of senior executive roles in the technology industry, both in Australia and around the world. He has worked with Fortune 1000, FTSE and ASX companies and various government organisations across finance, human resources, customer experience, manufacturing, distribution, digital workspace, cloud solutions and more, and been a part of a number of successful start-ups and hyper-turnarounds.
Jacqui Johnson
Jacqui is VivoPower's Global HR Director. Jacqui is a qualified member of the Chartered Institute of Personnel and Development (CIPD), with over 20 years' experience in Human Resources and Change Management, in a variety of industries, most recently, EV Automotive, Engineering and Construction with experience in both unionised and non-unionised environments.
Jacqui has held many leadership roles, and her area of expertise is in Human Resources, Employment Law, Recruitment, Organisational Planning, Employee Engagement, Strategic Staffing Plan, developing company culture and Wellbeing.
Chris Mallios
Chris is a seasoned executive with nearly 30 years of experience in the automotive, technology, resources, utilities and infrastructure industries, and is the current Chief Commercial Officer. He has held several leadership positions at Nissan Motor Corporation, including as director of global business operations for Infiniti, managing director of Infiniti's Asia and Oceania regions and director of business development in China. In the latter role, he oversaw the joint venture of Nissan and the Dongfeng Motor Corporation to produce Infiniti vehicles for the world's biggest automotive market.
His background also includes nearly 5 years as the CEO of CFC Group - an investment and development group that provides distribution, logistics and transport services - and nearly a decade as Asia Pacific CFO for TE Connectivity, a global technology company whose solutions power, among other things, electric vehicles.
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Statement of Directors' Responsibilities
The directors are responsible for preparing the Annual Report and Accounts for the Group and parent company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent company financial statements for the financial period. Under that law they have elected to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable law and have elected to prepare the financial statements for Company under the same methodology.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent company and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the directors are required to:
|
|
• | select suitable accounting policies and then apply them consistently; |
|
|
• | make judgements and estimates that are reasonable and prudent; |
|
|
• | state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and, |
|
|
• | prepare the financial on the going concern basis unless it is inappropriate to presume that the Group and parent company will continue in business. |
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and parent company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and parent company and to prevent and detect fraud and other irregularities.
This annual report and financial statements together with the Notice of Annual General Meeting and other information regarding the Group may be viewed on the Company's website at www.vivopower.com.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of the financial statements may differ from the legislation in other jurisdictions in which the Company operates, including the U.S. and Australia.
The Directors consider the Company's ongoing commitment to B Corp certification and continual improvement thereunder, as discussed on page 21 of the Strategic Report, as the primary means by which the Directors have had regard to the matters set out in section 172(1) of the Companies Act 2006 when performing their duty to act in the way most likely to promote the success of the Company for the benefit of its members as a whole.
Directors' Insurance and Indemnities
The Directors have the benefit of the indemnity provisions contained in the Company's Articles of Association and the Company has maintained throughout the year directors' and officers' liability insurance for the benefit of the Company, the Directors and its officers.
The Company has entered into qualifying third-party indemnity arrangements for the benefit of all its Directors in a form and scope which comply with the requirements of the Companies Act 2006 and which were in force throughout the year and remain in force.
Future Developments
A detailed description of the Group's business operations, results for the year ended 30 June 2024, and likely future developments are presented in detail in the Strategic Report.
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Financial Instruments
The Group's principal financial instruments are bank balances, cash and medium-term loans. The main purpose of these financial instruments is to manage the Group's funding and liquidity requirements. The Group also has other financial instruments such as trade receivables and trade payables which arise directly from its operations. The Board has overall responsibility for the establishment and oversight of the Group's risk management framework. Policy for managing risks is set by the Chief Executive Officer and is implemented by the Group's finance department. All risks are managed centrally with a tight control of all financial matters. For additional information on the composition of financial instruments, management objectives and policies, risk exposure and mitigation refer to Note 30 of the financial statements.
Going Concern
Management has, in the preparation of the audited financial statements of the Group for the year ended June 2024, fully considered and evaluated going concern. Following a comprehensive assessment of the Group's financial position and projections over the going concern assessment period of 12 months from the expected date of signing the audited financial statements, the assessment of management is that the Group remains a going concern.
Accordingly, management recommends to the Board of Directors that, based on the above assessment, consider the Group remains a going concern as at the date of this report.
The financial statements have been prepared on a going concern basis, as the directors believe the Company will be able to meet its liabilities as they fall due.
The going concern assessment has been considered with reference to:
(a) the scenario that the Tembo spin off reverse merger IPO is consummated (current expectation is by the end of the first quarter of calendar 2025). Following the completion of this Tembo spin off reverse merger the following probable outcomes arise for VivoPower:
• | VivoPower will continue to retain approximately 55% of the separately listed Tembo Group and consolidate Tembo in its accounts; |
|
|
• | VivoPower's cash burn rate will reduce to a budgeted $154K per month; |
|
|
• | Subject to the funds raised by Tembo as part of its reverse merger IPO, VivoPower will be paid back up to the full amount of what is owed to it by Tembo within 6 months of Tembo becoming a separate listed company |
|
|
• | VivoPower's share price is likely to be re-rated following completion of the separate listing of Tembo, to reflect a valuation closer to the trading price of Tembo |
|
|
• | VivoPower, subject to fulfilling terms and conditions of the proposed reverse merger with hydrogen technology company, F.A.S.T, will itself be subject to a reverse merger at a significant valuation uplift to current share price; and |
|
|
• | VivoPower will itself be able to raise additional capital via the equity capital markets, as it has done over the past 12 months despite very challenging market conditions and a number of unexpected obstacles. Since November 2023, VivoPower has been able to raise approximately $10 million of capital despite volatile market conditions |
|
|
(b) | the scenario where the Tembo spin off reverse merger IPO does not materialise In this probable scenario, the following outcomes would arise for VivoPower. |
|
|
|
|
• | VivoPower would continue to retain 100% ownership of the Tembo Group; |
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
• | The combined cash burn rate of VivoPower, including Tembo's operations, would be expected be approximately $357K per month; |
|
|
• | With the reduced cash burn rate, the combined entity (VivoPower and Tembo) is projected to generate net cash inflows from operating activities by June 2025. This positive cash generation is expected to provide significant support for the Group's liquidity and overall financial health: and |
|
|
• | VivoPower would have the ability to raise additional capital to support Tembo's growth, enabling further investment in scaling Tembo's operations and capturing new opportunities. |
As part of the going concern assessment, we also reviewed the net current liabilities outstanding (payable in the next 12 months) as of 30 September 2024, which amounted to $9.3 million. After accounting for adjustments such as excluding payables to related and friendly parties, liabilities settled post-30 September, and reclassifying accrued interest to non-current liabilities, the adjusted net current liabilities has been reduced to $5.4 million.
Additionally, our analysis indicates that the budgeted combined average monthly cash burn (not accounting for sales, deposits and other cash inflows) for VivoPower and Tembo over the next 12 months is approximately $357 thousand per month, or equivalent to $4.3 million per annum.
Considering both the adjusted net liabilities and cash burn, the projected cash outlay for the next 12 months is estimated to be $9.7 million. As of the date of this report the company has finalized a $12 million facility.
As at June 30, 2024, the Company had unrestricted cash totalling $0.2 million, compared to $0.6 million as at June 30, 2023 and $1.3 million as at June 30, 2022. However, post balance date, the Company raised $7m from the issuance of ordinary shares pursuant to an F3 registration statement and an F1 registration statement.
As at June 30, 2024, the Company had outstanding debt and borrowing totalling $29.1 million, compared to $32.4 million as at June 30, 2023 and $28.6 million as at June 30, 2022. Most of these borrowings do not fall due for repayment in the next 12 months and are thus classified under long-term liabilities.
Management believes that it will be able to (a) raise sufficient capital over the next 12 months and/or (b) further reduce its cash burn rate and/or (c) negotiate payment plans with its key creditors and lenders and/or (d) generate sufficient revenues and cashflows from its expanded range of products and solutions to ensure that the Company has the requisite liquidity to fund its net current assets/liabilities and cash burn.
Over the next twelve months, with the strategic rationalisation of the Company's business units and the expansion of the Electric Vehicles and ancillary SES products and solutions range, together with the strategic pivot to a cost-effective Asian supply chain, the Company expects to grow revenues in a profitable manner. Furthermore, with the Asian supply chain in place, the Company no longer needs to invest in assembly and production facilities, reducing capital expenditure requirements.
To ensure the going concern status of the business, the directors have prepared and reviewed additional plans to mitigate any liquidity risk that may arise during the next twelve months. These include:
• | Delaying any capital expenditures; |
• | Reduce or delay operational expenditure scaleup plans; |
• | Considered management of supplier and lender payments; |
• | Continuous improvement in efficiency and cost management through the use of artificial intelligence tools; and |
• | Delaying any capital expenditures; |
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Based on the foregoing, the Directors believe these actions provide sufficient cash to support business operations and meet funding requirements as they become due through the next 12 months. The Directors therefore have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they have continued to adopt the going concern basis in preparing the financial statements. However, if we continue to experience losses and we are not able to raise additional financing to provide the funding to grow the revenue streams of the Company to become profit making, or generate cash through sale of assets, we may not have sufficient liquidity to sustain our operations and to continue as a going concern, accordingly there is a material uncertainty that may cause significant doubt about the going concern nature of the Group. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Significant effort has been undertaken to review and rationalise our expenses and creditors, resulting in an expected spend of approximately $9.7 million over the next 12 months.
With access to the $12 million facility, in addition to the $8.7 million owed to us by TAG, we believe there are, and will continue to be, sufficient resources to support operations for at least the next 12 months. This assessment excludes any potential additional funds from Tembo's de-SPAC process, anticipated sales revenues, or the joint venture related to our Caret operations.
Legal Proceedings
On May 31, 2022 the Estate of the Late William Q. Richards (the “Plaintiff” or the “Estate”) filed a complaint against VivoPower USA LLC, Caret, LLC (“Caret”), formerly Innovative Solar Ventures I, LLC (“ISV”), and related entities (the “VivoPower Defendants”) alleging the VivoPower Defendants improperly included land owned by the Estate in the reinvestment zone of the tax abatement agreements executed on March 14, 2022 between Cottle County, Texas and the Company's subsidiaries Innovative Solar 144, LLC and Innovative Solar 145, LLC. The complaint sought to nullify and/or declare the tax abatement agreements void. The Estate filed an amended complaint on August 18, 2022, further detailing their claims and requesting unspecified damages. On September 16, 2022, the VivoPower Defendants filed a motion to dismiss Plaintiff's Amended Complaint, which the Court subsequently granted on January 23, 2023, stating that the Plaintiff had failed “to establish that the amount in controversy had been met.” On February 20, 2023, the Estate filed a second amended complaint to argue that the amount in controversy was met. Regina, widow of the late William Q. Richards, was added as a plaintiff in the second amended complaint. On March 6, 2023, the VivoPower Defendants filed a new motion to dismiss the Plaintiffs' second amended complaint. On May 5, 2023, the Plaintiffs filed an instant opposition to the VivoPower Defendants' motions to dismiss. On May 19, 2023, the VivoPower Defendants submitted a reply supporting their motion to dismiss requesting the dismissal of the Plaintiffs' claim and therefore the Company does not expect the Plaintiff to be successful in its complaint.
The suit was settled without prejudice for $225k, with a payment of $50,000 in October 2024 to be followed by 12 equal monthly payments of $14,583.33. A litigation provision of $0.2 million has been made in the accounts at the end of FY24.
Donations
During the year ended 30 June 2024, the Group made no political donations nor other political expenditures.
Greenhouse Gas Emissions
Due to the difficulty of calculation, it is not currently practical for the Company to obtain information on greenhouse gas emissions resulting from our activities or operations or from use of purchased energy. Accordingly, no disclosure is made in this regard.
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
With the sale of the assets of Kenshaw Electrical Pty Ltd the company will have minimal greenhouse gas emissions going forward as most staff work remotely.
Share Capital
As at 30 June 2024, there were 4,439,733 Ordinary Shares in issue. No shares were repurchased during the year. Please refer to Note 24 to the consolidated financial statements for a reconciliation of movement during the financial year.
There are no specific restrictions on the transfer of shares in the Company, which is governed by the Articles of Association and prevailing legislation, nor is the Company aware of any agreements between holders of securities that may result in restrictions on the transfer of shares or that may result in restrictions on voting rights.
There are no persons holding securities carrying special rights regarding control of the Company, no special rights attaching to shares under employee share schemes, no restrictions on voting rights, nor any significant agreements that take effect, alter or terminate on change of control of the Company following a takeover.
Substantial Interests
The following table sets forth information with respect to beneficial ownership of our Ordinary Shares as of June 30, 2024 by each person known to us to beneficially own 5% and more of our Ordinary Shares.
The beneficial ownership of VivoPower's Ordinary Shares is determined based on 4,439,733 Ordinary Shares issued and outstanding on June 30, 2024. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days.
| Number of Shares | Percentage of Issued Capital |
|
|
|
AWN Holdings Limited (1) | 891,618 | 20.1% |
Kevin Chin(2) | 261,645 | 5.9% |
(1) | Represents shares held by AWN and its subsidiaries including Arowana Australasian Special Situations Fund 1 Pty Limited (“Arowana Fund Co”), Arowana Australasian VCMP 2, LP (“Arowana Fund GP”), Arowana Australasian Special Situations Partnership 1, LP (“Arowana Fund”), Arowana Energy Holdings Pty Ltd. (“Arowana Energy”), AWN, as the controlling shareholder of each entity is deemed to beneficially own 891,618 Ordinary Shares. The business address of these entities is c/o AWN Holdings Limited, at Level 11, 153 Walker Street, North Sydney, New South Wales 2060, Australia |
(2) | As of 30 June 2024, Kevin Chin, through various entities, held a total of 261,645 shares of VVPR. The holdings are distributed as follows: The Panaga Group Trust holds 103,921 shares, Arowana Global Impact Pty Ltd holds 126,881 shares, the Chin Family Super Fund holds 28,275 shares, and the KTFC Super Fund holds 2,568 shares. This excludes VVPR shares held by charitable foundations which Mr. Chin has no beneficial ownership in but gifted or transferred VVPR shares to. |
Dividends
The Company has never declared or paid any dividends on our Ordinary Shares, and we currently do not plan to declare dividends on our Ordinary Shares in the foreseeable future. Any determination to pay dividends to holders of our Ordinary Shares will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, restrictions in our debt arrangements and other factors that our board of directors deem relevant.
Articles of Association
The Company's Articles of Association may only be amended by special resolution at a general meeting of shareholders.
Directors' Report
VivoPower International PLC for the year ended 30 June 2024
Auditors
PKF Littlejohn LLP has indicated its willingness to continue as auditor. In accordance with s489 of the Companies Act 2006, a resolution to re-appoint them as auditors for the ensuing year will be put to the members at the forthcoming Annual General Meeting.
The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditors are unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
The Directors' Report comprising pages 21 to 29 was approved by the Board and signed on its behalf by:
Kevin Chin
Chairman
4 February 2025
Corporate Governance
VivoPower International PLC for the year ended 30 June 2024
Corporate Governance
The Company's shares have been listed on NASDAQ since 29 December 2016. The Board is accountable to the Company's shareholders for good governance and this statement describes principles of corporate governance that have been applied by the Company.
The Directors believe that good corporate governance, involving risk appraisal and management, prudent decision-making, open communication and business efficiency, is important for the long-term benefit of the stakeholders in the Group.
Board of Directors
The Board is collectively responsible for providing leadership of the Group within a framework of prudent and effective controls and constructively challenges and helps to develop and communicate the Group's strategic aims.
The Board is comprised of the Chief Executive Officer and Chairman, and three non-executive directors. The Board has determined that Peter Jeavons, and William Langdon are independent in accordance with the listing rules of Nasdaq. All directors are given regular access to the Company's operations and personnel as and when required. Their biographies on pages 26 to 27 illustrate their relevant corporate and industry experience to bring judgement on issues of strategy, performance, resources and standards of conduct which are vital to the success of the Group.
The Board considers the overall strategic direction, development and control of the Group and reviews trading performance, investment opportunities and other matters of significance to the Group. Various decisions require Board approval, including but not limited to the approval of the annual budget, larger capital expenditure proposals, acquisitions and disposals. Board papers, which are distributed to all directors in advance of each meeting, follow a set agenda although further subjects are added for discussion as the need arises.
The Board is scheduled to meet normally to enable the Board to discharge its duties effectively and to consider those matters which specifically require Board review and decision. In addition, meetings are also convened on an ad hoc basis when there is urgent or delegated business which cannot wait until the next scheduled meeting.
The following table sets out the number of meetings of the Board, excluding ad hoc meetings, and its committees during the year ended 30 June 2024 and the attendance of the members at those meetings (attended/eligible to attend):
|
| Audit and Risk | Remuneration | Sustainability | Nominations |
| Board | Committee | Committee | Committee | Committee |
Kevin Chin | 4/ 4 | - / - | 3/ 3* | -/- | -/- |
Michael Hui | 4/ 4 | -/ - | - / - | -/- | -/- |
Peter Jeavons | 4/ 4 | 4/ 4 | 3/ 3 | 1/ 1 | - / - |
William Langdon | 4/ 4 | 4/ 4 | 3/ 3 | 1/ 1 | -/- |
* attended as an observer
Corporate Governance
VivoPower International PLC for the year ended 30 June 2024
Audit and Risk Committee
The Audit and Risk Committee is comprised of William Langdon (who is Chair of the Audit and Risk Committee) and Peter Jeavons, each of whom the Board has determined to be independent under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the committee on 16 June 2020.
The Audit and Risk Committee is required to be composed exclusively of “independent directors,” as defined under the Nasdaq listing standards and the rules and regulations of the SEC, and each of whom must be, among other requirements, “financially literate,” as defined under the Nasdaq listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement. In addition, VivoPower is required to certify to Nasdaq that the committee has at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual's financial sophistication.
The Board has determined that William Langdon satisfies Nasdaq's definition of financial sophistication and also qualified as an “audit committee financial expert” as defined under rules and regulations of the SEC.
Remuneration Committee
The Remuneration Committee is comprised of Peter Jeavons (Chair of the Remuneration Committee), William Langdon, each of whom the Board has determined is independent under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the committee on 16 June 2020.
Nominations Committee
The Nomination Committee of the board of directors is comprised of William Langdon (who is Chair of the Nomination Committee), and Peter Jeavons, each of whom the Board has determined is independent under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the committee on 16 June 2020. Gemma Godfrey served on the committee from 17 March 2022 until her resignation on 4 June 2024.
Sustainability Committee
The Sustainability Committee was formed on 18 December 2020 and is comprised of Peter Jeavons (Chair of the Sustainability Committee) and Kevin Chin. The Sustainability Committee's duties include, but are not limited, to overseeing and monitoring of the Company's Safety and Health policies, B Corp certification, environmental policies, community and staff engagement, and corporate social responsibility policies.
Internal Control
The Board oversees management's activities in relation to the systems of internal control. Management has responsibility for maintaining the Group's system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve the Group's strategic business objectives and can only provide reasonable assurance against material misstatement or loss.
The key elements of the system of internal control are:
Control environment
There is sufficient segregation of duties and authorisation controls on approval of customer and supplier contracts, recruitment of staff, approval of purchases and payment of suppliers.
Corporate Governance
VivoPower International PLC for the year ended 30 June 2024
Financial reporting
The senior management team has regular meetings to discuss all aspects of the business and review financial performance against budget and provides a monthly summary report to the Board. The Group has a sustainable system of financial reporting and forecasting covering profits, assets, liabilities, cash flow and capital expenditure. The systems include regular monitoring of cash, monthly reporting of financial results. Budgets and business plans are prepared annually and reviewed by the Board.
Capital investment
For any significant investment, a detailed proposal is first approved by the Company's Investment Committee, then by the board of directors of VivoPower International Services Limited (“Services Board”). Any major investment is always approved by the Board or the Services Board. The Company's Investment Committee process contains five stages to ensure the Company has an explicit understanding of a portfolio's purpose, objective and a clear definition of success in determining whether the portfolio achieves that purpose and meets that objective. The five stages include:
(i) | Completion of a Lead Qualification Form to provide a project overview, indicative returns, capital required, risks, timeline and areas to consider in future diligence; |
|
|
(ii) | First Investment Committee Meeting (‘IC1') to provide a comprehensive summary of the project including detailed legal, technical, financial information and risks; |
|
|
(iii) | Second Investment Committee Meeting (‘IC2') which includes everything in IC1 plus summary of transaction documentation and update on diligence; |
|
|
(iv) | Board approval to fund the project, and formally recommend that project executes transaction documentation; and |
|
|
(v) | Board approval to execute the transaction documentation. |
Communications with Shareholders
The Company encourages two-way communications with shareholders. The Board endeavours to maintain good relationships with its institutional shareholders by holding regular meetings after results are published with further dialogue as requested.
The Company's Annual General Meeting was be held on 30 December 2024.
This annual report and financial statements together with the Notice of Annual General Meeting and other information regarding the Group may be viewed on the Company's website at www.vivopower.com.
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
Remuneration Report
This report has been prepared in accordance with the provisions of the UK Companies Act 2006 and Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended in 2013).
Statement by the Chairman of the Remuneration Committee
On behalf of the Remuneration Committee (the “Committee”), I am pleased to present the Remuneration Report for the year ended 30 June 2024.
The Remuneration Committee is comprised of Peter Jeavons (Chair of the Remuneration and Nomination Committee), and William Langdon, each of whom the Board has determined is independent under the applicable Nasdaq listing standards. Peter Jeavons and William Langdon joined the committee on 16 June 2020.
The Remuneration Committee has a written charter, a form of which is available free of charge on VivoPower's website at www.vivopower.com. The Remuneration Committee's duties, which are specified in our Remuneration Committee Charter, include, but are not limited to:
• | setting the remuneration policy for all executive directors and executive officers, including pension rights and any compensation payments. |
|
|
• | reviewing the appropriateness and relevance of the remuneration policy. |
|
|
• | determining total individual compensation packages. |
|
|
• | reviewing and designing share incentive and share option plans, determining awards thereunder and administering such plans. |
|
|
• | approving design of and targets for performance-related pay schemes. |
|
|
• | determining pension arrangements. |
|
|
• | appointing compensation consultants. |
|
|
• | approving contractual appointment terms for directors and senior executives; and |
|
|
• | related duties. |
The Company's objective with respect to remuneration of directors is to attract and retain high-calibre individuals who are able to bring an appropriately senior level of experience and judgement to bear on issues of strategy, performance, resources and standard of conduct.
No changes are proposed to the Directors Remuneration Policy for Executive and Non-Executive Directors as approved by shareholders on 5 September 2017.
The Company's Annual Report on Remuneration, disclosing the compensation paid to directors in respect of the year ended 30 June 2024 is provided below.
Annual Report on Remuneration (audited)
Executive Directors
Kevin Chin was appointed as Executive Chairman and Chief Executive Officer of the Company with effect from 25 March 2020. Prior to Mr Chin's appointment, the Company had no Executive Directors since Carl Weatherley-White, former Chief Executive Officer, resigned as a Director on 28 December 2017.
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
Directors and Executive Management Compensation
The amount earned by each Director for the years ended 30 June 2024, 2023 and 2022 is set out in the table below:
| Salary | Bonus | Pension | Long |
|
|
|
| and | and | and other | Term | 2024 | 2023 | 2022 |
Directors | fees | LTIP | Benefits | Incentive | Total | Total | Total |
|
|
|
|
|
|
|
|
Kevin Chin (Chairman) | £68,000 | - | - | - | £68,000 | £68,000 | £68,000 |
Peter Jeavons | £57,924 | - | - | - | £57,924 | £60,456 | £52,127 |
William Langdon | £51,973 | - | - | - | £51,973 | £54,245 | £46,461 |
Michael Hui | £45,514 | - | - | £5,841 | £51,355 | £47,504 | £44,360 |
Gemma Godfrey | £55,147 | - | - | - | £55,147 | £57,558 | £43,817 |
Matthew Cahir | - | - | - | - | - | - | £28,962 |
Mr. Chin is paid a salary of £68,000 ($81,819) per annum as Chairman during the year, payable to Arowana Partners Group Pty Ltd.
Mr. Jeavons is paid fees of $50,000 per annum during the year. Mr. Jeavons also received an annual fee of $7,500 as chair of the sustainability committee, $7,500 annual fee as chair of the remuneration committee, $4,000 annual fee as member of the audit and risk committee and $4,000 annual fee as member of the nomination committee. Mr. Jeavons elected to receive 100% of his fees for the year in cash.
Mr. Langdon is paid fees of $50,000 per annum during the year. Mr. Langdon also received an annual fee of $7,500 as chair of the audit and risk committee, $4,000 annual fee as member of the remuneration committee and $4,000 annual fee as member of the nomination committee. Mr. Langdon elected to receive 100% of his fees in cash.
Mr. Hui is paid fees of $57,361 per annum during the year. Mr. Hui elected to receive 100% of his fees in cash. Mr. Hui also received equity-based remuneration in relation to his involvement in his project management of the divestment of the Critical Power Services segment. He also received remuneration in the form of LTIP shares worth $7,361.
Ms. Godfrey is paid fees of $69,500 per annum before she resigned from the Board in June 2024. Ms. Godfrey also received an annual fee of $4,000 annual fee as member of the audit and risk committee, $4,000 as member of the remuneration committee and $4,000 annual fee as member of the nomination committee. Ms. Godfrey elected to receive 100% of her fees in cash.
There are no pension benefits available to Directors nor any additional benefit if a Director were to retire early.
No discretion was exercised in the award of Directors' remuneration.
No payments were made to any past Director during the period nor in connection with a Director's loss of office during the period.
There are no agreements with the Company and its Directors or employees for compensation for loss of office or employment that occurs because of a takeover bid.
Directors' Interests
The Directors' beneficial interest in the 4,439,733 issued Ordinary Shares of the Company as at 30 June 2024 are detailed below.
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
|
| Unvested | Vested but |
|
|
|
| scheme | unexercised |
|
|
| Number of | interests (not | scheme | Total of all |
|
| Shares | subject to | interests | share |
|
| Beneficially | performance |
| interests and |
|
| Owned | measures) |
| outstanding |
|
|
|
|
| scheme |
|
|
|
|
| interests, at |
|
|
|
|
| 30 June 2024 |
|
Kevin Chin (2) | 261,645(3) | 3,078 | - | 264,723 | 5.96% |
Michael Hui | 11,282 | 1,684 | - | 12,966 | <1% |
William Langdon | 7,020 | 1,334 | - | 8,354 | <1% |
Peter Jeavons | 6,426 | 1,334 | - | 7,760 | <1% |
All directors and executive officers as a group (5 persons) | 11,282 | 3,078 | - | 264,723 | 5.96% |
|
|
|
|
|
|
(1) | Unless otherwise indicated, the business address of each of the individuals is c/o VivoPower International PLC, 35 New Broad Street, London EC2M 1NH United Kingdom |
(2) | The business address is c/o AWN Holdings Limited, at Level 11, 110 Mary Street, Brisbane, QLD 4000, Australia. |
(3) | Represents shares held by Arowana Partners Group Pty Ltd, Borneo Capital Pty Limited, The Panaga Group Trust and KTFC Superannuation Fund, of which Mr. Chin is a beneficiary and one of the directors of the corporate trustee of such fund, and AWN Holdings Limited for which Mr. Chin has shared voting power. |
Minimum shareholding requirements
The Company currently does not have any applicable shareholding guidelines. The Remuneration Committee reserves the right to implement shareholding guidelines. If shareholding guidelines are implemented, these will be disclosed in the relevant Annual Report on Remuneration.
Comparison to Company Performance
Performance graph and table and comparison to Chief Executive Officer pay
The following graph shows total shareholder return (“TSR”) for the Company for the period from its listing on 29 December 2016 to 30 June 2024, relative to the Nasdaq Composite Index. The Nasdaq Composite Index is considered an appropriate comparator for VivoPower:
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
The following table shows details of the compensation paid to the individual(s) in the role of Chief Executive Officer:
| Single figure of remuneration | Bonus as % of maximum | LTIP | ||||||
| Year ended 30 June | Year ended 30 June | Year ended 30June | ||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 |
Kevin Chin | £390,010 | £378,938 | £367,428 | 0% | 0% | 0% | £59,400 | £259,353 | £206,273 |
As CEO, Mr. Chin is paid £325,000 base fees and £38,000 annual professional development allowance. A further $0.5 million incurred by Arowana International UK Limited were recharged to the Company in the year. Of the base salary in FY23, 4 months were paid in cash, whilst for 8 months, Mr. Chin agreed to receive payment in the form of 541,666 cashless warrants in VivoPower shares, exercisable in the period June 3, 2024 to June 3, 2029 at an exercise price of $0.60. Shares issued following exercising of warrants will remain restricted for 12 months. Mr. Chin has allocated these warrants to a benevolent cause, the ASEAN Foundation. At June 30, 2024, the Company had an account payable of $1.2 million in respect of these services and recharges.
Mr. Chin receives equity-based remuneration in relation to his involvement in leading the hyperturnaround and hyperscaling program. Of the 87,200 ($65,400) annual retention RSUs granted on April 1, 2020, vesting annually from June 2021 to June 2026, 17,440 RSUs ($13,080) vested in the current year. Of the 261,600 ($196,200) performance RSUs vesting quarterly from September 2020 to June 2023, dependent on meeting quarterly performance goals, 31,456 RSUs ($23,592) vested in the current year. In December 2021, the Remuneration Committee approved an equity award of RSUs in relation to short term incentives for the year ended June 30, 2022, vesting in June 2023 deferred from June 2022. The award vested 94,291 RSUs ($275,330), based on Mr. Chin's base salary £325,000 x 1.3237 exchange rate x 64% performance measurement / $2.92 VWAP share price. A further 20,000 annual retention RSUs ($5,200) were granted to Mr. Chin on January 11, 2023, vesting annually from December 2023 to December 2025.
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
Relative importance of pay
The table below shows the total pay for all of the Group's employees compared to other key financial indicators.
| Year Ended | Year Ended | Year Ended |
(US dollars) | 30 June 2024 | 30 June 2023 | 30 June 2022 |
|
|
|
|
Employee remuneration | 2,621,000 | 6,630,000 | 18,223,000 |
Distributions to shareholders | NIL | NIL | NIL |
Implementation of Remuneration Policy
Executive Directors
The Company has had no Executive Directors since Carl Weatherley-White, former Chief Executive Officer, resigned as a Director on 28 December 2017, until the appointment of Kevin Chin as Executive Chairman and Chief Executive Officer on 25 March 2020.
Cash and Equity Compensation
Mr. Chin is employed by a related company, Arowana Partners Group Pty Ltd, which charges fees for Mr. Chin's services to VivoPower International Services Limited. Pursuant to a deed of variation dated 29 June 2020, Mr. Chin's original non-executive directorship appointment, dated 1 August 2016, was varied to reflect Mr. Chin assuming the positions of Executive Chairman and Chief Executive Officer of VivoPower International PLC, effective from 25 March 2020. The cost of Mr. Chin's executive service agreement is paid by VivoPower International Services Limited and incorporates the cost of any support resources required by Mr. Chin to fulfil the role.
Following a review by Pearl Meyer of Mr. Chin's compensation plan as Chief Executive Officer, to align to the new strategy and additional responsibilities, the remuneration committee approved an increase to Mr. Chin's remuneration to £325,000 base salary and £38,000 annual professional development allowance, effective 1 July 2020.
Mr. Chin has also been granted 87,200 RSUs and 261,600 PSUs in the Company, issued pursuant to the Company's Omnibus Incentive Plan adopted on 5 September 2017, at an issue price of $0.75 per share, based on the Company share price on 25 March 2020. The RSUs vest annually over 5 years. The PSUs vest quarterly over 3.25 years and are subject to achieving performance goals. This was approved by the Remuneration and Nomination Committee of the Board on 16 June 2020.
In December 2021, the Remuneration Committee approved an equity award of RSUs in relation to short term incentives for the year ended June 30, 2022, vesting in June 2023 deferred from June 2022. The award vested 94,291 RSUs ($275,330), based on Mr. Chin's base salary £325,000 x 1.3237 exchange rate x 64% performance measurement / $2.92 VWAP share price. A further 20,000 annual retention RSUs ($5,200) were granted to Mr. Chin on January 11, 2023, vesting annually from December 2023 to December 2025
Amounts vesting in the year ended 30 June 2023 are detailed above.
Non-Executive Directors
Cash and Equity Compensation
The Company will pay annual retainers to non-executive directors in line with the remuneration policy approved by shareholders on 5 September 2017. The Company intends to keep the value of annual retainers under review and will consider from time to time whether the amount and terms on which retainers are payable are appropriate given the Company's economic position and wider market conditions. Any changes to retainers will be compliant with the remuneration policy and will be disclosed in the Remuneration Report for the relevant financial year.
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
The fee levels are reviewed on an annual basis and may be increased by the Company, taking into account factors such as the time commitment of the role and market levels in companies of comparable size and complexity. Fees may be amended before any annual review to reflect any changes to the Director's role or Board committee memberships which occur during the period or when making a new appointment.
An independent review and market benchmarking exercise by Pearl Meyer was conducted in the year ended 30 June 2021, following which the Remuneration Committee approved the increases to Board remuneration detailed below. No further changes to Directors remuneration have occurred in the current year.
Directors receive an annual retainer for service on the Board, payable monthly in arrears, with supplementary retainers payable for additional Board responsibilities, including membership of committees, as follows:
Annual retainer for Board membership | $50,000 |
(increased from $48,000 effective 1 January 2021); |
|
Annual retainer for the Chairman of the Board | £68,000 |
(effective 1 July 2020). |
|
Directors are also entitled to an additional fee for each committee they are a member or chairman of, except for unpaid committee membership for the Nomination and Sustainability Committees, as follows:
Annual retainer for Committee Chairmanship $7,500 |
|
Annual retainer for the Committee membership | $4,000 |
(Membership fee only applicable from 1 July 2021 onwards); |
|
Directors can individually elect to receive their retainer remuneration as an RSU, or in cash, or a combination of RSUs and cash.
In addition to the retainer paid monthly noted above, on 14 December 2020, each director was granted 7,788 ($50,000) RSUs (“Restricted Stock Units”) vesting in December 2020, to bring compensation in line with market levels as benchmarked by Pearl Meyer. A further 20,000 annual retention RSUs were granted to each director on January 11, 2023, vesting annually from December 2023 to December 2025. The directors were also granted points in a Long Term Incentive Plan (LTIP) at each of Tembo e-LV BV and VivoPower USA LLC. These LTIPs allow participants to benefit from any potential future trade sale, IPO, recapitalisation or merger of Tembo e-LV BV and VivoPower USA LLC. In the event of such a corporate event, participants will earn Long Term Incentive ("LTI") points according to an allocation decided by the Remuneration Committee of a profit share of 20% of the net gain made by the Company from the corporate action, less previously invested amounts.
Mr. Hui has also been granted 17,500 RSUs and 52,500 PSUs in the Company, in relation to his involvement in management of Critical Power Services segment, and the hyper-turnaround programme. The Award was issued pursuant to the Company's Omnibus Incentive Plan adopted on 5 September 2017, at an issue price of $0.75 per share, based on the Company share price on 25 March 2020. The RSUs vest annually over 5 years. The PSUs vest quarterly over 3.25 years and are subject to achieving performance goals. Amounts vesting in the year ended 30 June 2022 are detailed above.
Benefits
The Company will provide benefits to Non-Executive directors in line with the remuneration policy approved by shareholders on 5 September 2017. The Company intends to keep the value of benefits under review and will consider whether the amount and terms on which benefits are provided are appropriate given the Company's economic position and wider market conditions. Any changes to benefits will be compliant with the remuneration policy outlined above and will be disclosed in the Remuneration Report for the relevant financial year.
Directors' Remuneration Report
VivoPower International PLC for the year ended 30 June 2024
Consideration of Matters Relating to Directors' Remuneration
Remuneration Committee
The members of the Committee during the year ended 30 June 2024 and their attendance at meetings of the committee, are set out below:
| Attendance |
|
|
William Langdon | 3/ 3 |
Peter Jeavons | 3/ 3 |
No Non-Executive Directors are involved in deciding their own remuneration.
The Committee retained Pearl Meyer to advise the Committee on various matters, including the Equity Incentive Plan and changes to remuneration levels for the Board of Directors and Chief Executive. Pearl Meyer is a signatory to the Remuneration Consultants' Code of Conduct. The Committee has reviewed the operating processes in place at Pearl Meyer and is satisfied that the advice it receives is independent and objective.
Shoosmiths LLP and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. provide the Company with legal advice. Advice from Shoosmiths LLP and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is made available to the Remuneration Committee, where it relates to matters within its remit.
Statement of voting at general meeting
The Annual Report on Remuneration for the year ended 30 June 2024 was approved by shareholders at the Annual General Meeting held on 30 December 2024. The resolution to approve the report was approved by 98.38% of voting shareholders.
The Annual Report on Remuneration for the year ended 30 June 2023 was approved by shareholders at the Annual General Meeting held on 28 December 2023. The resolution to approve the report was approved by 99.37% of voting shareholders.
The Remuneration Report was approved by the Board and signed on its behalf by:
Peter Jeavons
Chair of the Remuneration Committee
04 February 2025
Independent Auditor's Report to the Members of VivoPower International PLC
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF VIVOPOWER INTERNATIONAL PLC
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of VivoPower International PLC and its subsidiaries (the Company) as of 30 June 2024, 2023, and 2022, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended 30 June 2024, 2023, and 2022 and the related notes and schedules (collectively referred to as the consolidated financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of 30 June 2024, 2023, and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended 30 June 2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Substantial doubt about the Company's ability to continue as a Going Concern
We draw attention to note 2.1 in the financial statements, which indicates that the group and company are reliant on raising finance and capital within the 12 months, further reduce its cash burn rate, negotiate payment plans with its key creditors and lenders and generate sufficient revenues and cashflows from its expanded range of products and solutions, following the date of approval of these financial statements in order to meet its working capital requirements and continue to fund operations over this period. As stated in note 2.1, these events or conditions, indicate that substantial doubt exists about the group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the group's ability to continue to adopt the going concern basis of accounting included a review of the group and budgets and cash flow forecasts for the period of at least twelve months from the date of approval of the financial statements, including checking the mathematical accuracy of the budgets and discussion of significant assumptions used by the management.
Independent Auditor's Report to the Members of VivoPower International PLC
We reviewed the net current liabilities outstanding and payable in the next 12 months as of 30 September 2024 and reviewed the plans of the group regarding settling these liabilities post 30 September, including payment plans with certain creditors and lenders. We have also reviewed the latest available bank statements, regulatory announcements and board minutes and assessed subsequent events impacting going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Critical Audit Matter | How we addressed the matter in our audit |
Going concern basis of preparation The financial statements have been prepared on a going concern basis which assumes that the Company and Group will be able to discharge its liabilities as they fall due, despite the net current liability position of $36 million as at June 30, 2024. | Our work in this area included: • Obtaining the Groups cash flow forecast for a period of twelve months from the date of the financial statements; • Obtaining the latest current net liability position, evidence of certain third party and related party's agreement to defer current liabilities over a period of one year; • Verifying, the post year end receipt of cash in respect of share issues subsequent to the year end and the proceeds on the disposal of Vivo PTY Limited, along with the settlement of liabilities post year end; • Obtaining the signed loan facility providing for the future draw down of $12m, which the Directors consider to be satisfactory to enable them to meet the net liability position and to provide further working capital for the business; • Assessing the appropriateness of the disclosure of the going concern basis of preparation, including the substantial doubt about the Company's ability to continue as a going concern. |
Recoverability of intangible assets and testing for impairment As at June 30, 2024 the carrying value of goodwill and intangible assets was $2 million. Details of these assets and the related critical judgements and estimates are disclosed in notes 3.2 and 14. | Our work in this area included: • Reviewing and challenging management's value in use calculations and/or their fair value less costs |
Independent Auditor's Report to the Members of VivoPower International PLC
Critical Audit Matter | How we addressed the matter in our audit |
The carrying value of goodwill and other intangible assets is significant and at risk of non-recoverability. The estimated recoverable amount of these balances is subjective due to the inherent uncertainty involved in forecasting and discounting cash flows. | to sell calculations, including the rationale behind the key assumptions and cash flow forecasts; • Checking the mathematical accuracy of the value in use calculations; • Performing sensitivity analysis on reasonably possible changes in key assumptions and the impact on the headroom; • Assessing the accuracy of budgets and forecasts used in prior periods to actual results; • Performing an independent assessment to identify any indicators of impairment; and • Assessing the appropriateness of the group's disclosure in respect of the judgements and estimates on whether an impairment exists, the sensitivity analysis on the headroom and the disclosure of the impairment charges amounting to $29.5m (refer to Note 13). |
Capitalisation of development costs in accordance with IAS 38 As at June 30, 2024 the carrying value of capitalised intangible assets was $11.6 million. There is a risk that the capitalised costs are ineligible in accordance with the requirements of IAS 38. Details of these assets and the related critical judgements and estimates are disclosed in notes 3.5 and 13. Given the significance of the development costs on the Group's statement of financial position and the significant management judgement involved in the determination and the assessment of the carrying values of these assets, there is a risk these costs are not fully recoverable and should be impaired. | Our work in this area included: • Testing an appropriate sample of additions during the year to supporting documentation; • Testing and evaluating that all the eligibility criteria for capitalisation within IAS 38 have been met; • Considering whether there are indicators of impairment, in conjunction with revenues achieved and contracted; and • Checking the presentation and disclosure requirements are appropriate. |
We have served as the Company's auditors since 2017.
/s/
|
|
|
|
|
|
|
|
15 Westferry Circus | |
| |
December 19, 2024 | London E14 4HD |
Consolidated Statement of Comprehensive Income
VivoPower International PLC for the year ended 30 June 2024
Consolidated Statement of Comprehensive Income
(US dollars in thousands, except per share |
| Year Ended 30 June | ||
amounts) | Note | 2024 | 2023 | 2022 |
Revenue from contracts with customers | 4 | 10,160 | ||
Cost of sales |
| ( | (9,489) | |
Cost of sales - non-recurring |
| - | ( | (1,881) |
Gross (loss)/profit |
| ( | (1,210) | |
General and administrative expenses |
| ( | ( | (12,397) |
Other gains/(losses) | 5 | (54) | ||
Other income | 6 | - | 78 | |
Depreciation of property, plant and equipment | 13 | ( | ( | (471) |
Amortisation of intangible assets | 14 | ( | ( | (850) |
Operating loss | 7 | ( | ( | (14,904) |
Restructuring and other non-recurring costs | 8 | ( | ( | (448) |
Impairment losses |
| ( | ( | - |
Finance income | 10 | 173 | ||
Finance expense | 10 | ( | ( | (8,481) |
Loss before income tax |
| ( | ( | (23,660) |
Income tax | 11 | ( | ( | 1,142 |
Loss for the continuing operations |
| ( | ( | (22,518) |
(Loss)/profit from discontinued operations |
| ( | ( | 464 |
Loss for the period |
| ( | ( | (22,054) |
Losses attributed to: |
|
|
|
|
Equity owners of VivoPower International Plc |
| ( | ( | (22,054) |
Non-controlling interests |
| - | - | - |
|
| ( | ( | (22,054) |
Other comprehensive income/(expense) |
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
Currency translation differences recognised directly in equity |
| 1,043 | ||
Total comprehensive loss for the period attributable to owners of the company |
| ( | ( | (21,011) |
Earnings per share attributable to the owners of the company (dollars) |
|
|
|
|
Continuing Operations |
|
|
|
|
Basic | 28 | (14.88) | (8.13) | (10.86) |
Discontinued Operations |
|
|
|
|
Basic | 28 | (0.29) | (1.74) | 0.22 |
Consolidated Statement of Financial Position
VivoPower International PLC for the year ended
Consolidated Statement of Financial Position
|
| Year Ended 30 June | ||
(US dollars in thousands) | Note | 2024 | 2023 | 2022 |
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment | 13 | |||
Intangible assets | 14 | |||
Deferred tax assets | 11 | |||
Investments accounted for using the equity method | 16 | - | - | |
Total non-current assets |
| |||
Current assets |
|
|
|
|
Cash and cash equivalents | 17 | |||
Restricted cash | 18 | |||
Trade and other receivables | 19 | |||
Inventory | 20 | |||
Assets classified as held for sale | 21 | - | ||
Total current assets |
| |||
TOTAL ASSETS |
| |||
EQUITY AND LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables | 23 | |||
Income tax liability |
| |||
Provisions | 24 | |||
Loans and borrowings | 25 | |||
Liabilities classified as held for sale | 22 | - | ||
Total current liabilities |
| |||
Non-current liabilities |
|
|
|
|
Other payables | 23 | - | - | |
Loans and borrowings | 25 | 57 | ||
Provisions | 24 | |||
Deferred tax liabilities | 11 | |||
Total non-current liabilities |
| |||
TOTAL LIABILITIES |
| |||
EQUITY |
|
|
|
|
Share capital | 26 | |||
Share premium | 26 | |||
Cumulative translation reserve |
| ( | ||
Other reserves | 27 | ( | ( | ( |
Accumulated deficit |
| (142,991) | ( | ( |
Equity and reserves attributable to owners |
| ( | ||
Non-Controlling interest |
| - | - | - |
TOTAL EQUITY |
| ( | ||
TOTAL EQUITY AND LIABILITIES |
|
These financial statements were approved by
Kevin Chin, Chairman
Consolidated Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
Consolidated Statement of Cash Flow
|
| Year Ended 30 June | ||
(US dollars in thousands) | Note | 2024 | 2023 | 2022 |
Cash flows from operating activities |
|
|
|
|
Loss from continuing operations |
| ( | ( | (22,518) |
(Loss)/profit from discontinued operations | 22 | ( | ( | 464 |
Income tax |
| (1,926) | ||
Finance expense |
| 5,334 | ||
Finance income |
| ( | - | - |
Depreciation of property, plant and equipment | 13 | 770 | ||
Loss on disposal of property, plant and equipment |
| 1,172 | ||
Amortisation of intangible assets | 14 | - | - | |
Other gains/(losses) |
| ( | ( | 13 |
Impairment of goodwill and intangible assets | 14 | - | - | |
Shared based payments |
| 2,010 | ||
Decrease in trade and other receivables |
| 3,438 | ||
(Increase)/decrease in inventory |
| ( | ( | 102 |
Increase in trade and other payables |
| 6,583 | ||
Increase/(decrease) in provisions |
| (572) | ||
Net cash used in operating activities |
| ( | (5,130) | |
Cash flows from investing activities |
|
|
|
|
Proceeds on sale of property plant and equipment | 7 | 57 | ||
Purchase of property, plant and equipment | 13 | ( | ( | (1,165) |
Investment in capital projects | 14 | ( | ( | (4,254) |
Proceeds on disposal of J.A. Martin ex-solar business | 22 | - | - | |
Proceeds on sale of capital projects | 7 | - | 19 | |
Acquisitions-- consideration |
| - | ( | - |
Net cash used in investing activities |
| ( | ( | (5,343) |
Consolidated Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
|
| Year Ended June 30 | ||
(US dollars in thousands) | Note | 2024 | 2023 | 2022 |
Cash flows from financing activities |
|
|
|
|
Other (repayments)/borrowings | 25 | - | ( | (85) |
Lease repayments | 25 | ( | ( | - |
Proceeds from investor |
| - | ||
Capital raise proceeds | 26 | 243 | ||
Equity instruments and capital raise costs | 27 | - | ( | (47) |
Debtor finance borrowings/(repayments) | 25 | ( | (4) | |
Loans from related parties | 25 | 4,231 | ||
Repayment of loans from related parties | 25 | ( | ( | - |
Bank loan borrowings | 25 | ( | ( | (166) |
Chattel mortgage borrowings | 25 | ( | ( | 74 |
Finance expense | 10 | - | ( | (636) |
Transfer from/(to) restricted cash | 18 | (55) | ||
Net cash from financing activities |
| 3,555 | ||
Net (decrease)/increase in cash and cash equivalents |
| ( | ( | (6,918) |
Cash and cash equivalents at the beginning of the | 17 | 8,604 | ||
period |
|
|
|
|
Effect of exchange rate movements on cash held |
| - | ( | (401) |
Cash and cash equivalents at the end of the period | 17 | 1,285 |
Consolidated Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
Consolidated Statement of Changes in Equity
|
|
| Cumulative |
|
| Non- |
|
(US dollars in | Share | Share | translation | Other | Accumulated | controlling |
|
thousands) | capital | premium | reserve | reserves | deficit | interest | Total |
At 30 June 2021 | 222 | 76,229 | (1,465) | 15,314 | (49,882) | - | 40,418 |
Loss for the year | - | - | - | - | (22,054) | - | (22,054) |
Other comprehensive income/(expense) | - | - | 1,326 | (283) | - | - | 1,043 |
| 222 | 76,229 | (139) | 15,031 | (71,936) | - | 19,407 |
Transactions with owners in their capacity as owners |
|
|
|
| |||
Capital raises | 1 | 243 | - | (122) | - | - | 122 |
Other share issuances | 1 | 217 | - | (144) | - | - | 74 |
Employee share awards | 8 | 2,287 | - | (283) | - | - | 2,012 |
Conversion of Aevitas equity instruments | 24 | 20,442 | - | (20,466) | - | - | - |
| 34 | 23,189 | - | (21,149) | - | - | 2,208 |
At 30 June 2022 | ( | ( | ( | - | |||
Loss for the year | - | - | - | - | ( | - | ( |
Other comprehensive income/(expense) | - | - | ( | - | - | ||
| 256 | 99,418 | 1,203 | (6,090) | (96,291) | - | (1,504) |
Transactions with owners in their capacity as owners |
|
|
|
| |||
Equity instruments | - | - | - | - | - | ||
Capital raises | - | ( | - | - | |||
Employee share awards | - | ( | - | - | |||
| - | ( | - | - | |||
At | ( | ( | - | ||||
Loss for the year | - | - | - | - | ( | - | ( |
Other comprehensive income/(expense) | - | - | ( | - | - | ( | |
| 308 | 105,018 | 2 | (6,485) | (142.991) | - | (44,148) |
Transactions with owners in their capacity as owners |
|
|
|
| |||
Equity instruments | - | - | - | - | - | ||
Capital raises | - | ( | - | - | |||
Employee share awards | - | - | - | ||||
| - | - | - | ||||
At 30 June 2024 | ( | ( | - | ( |
For further information on Other Reserves please see Note 27.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
1. Reporting entity
VivoPower International PLC (“VivoPower” or the “Company”) is a public company limited by shares and incorporated under the laws of
2. Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated. In October 2024, the company implemented a 10-to-1 reverse stock split, this was applied retrospectively to shares.
2.1. Basis of preparation
The preparation of financial statements with adopted UK IAS requires the use of critical accounting estimates. It also requires the management to exercise judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where the assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.
Management has, in the preparation of the audited financial statements of the Group for the year ended June 2024, fully considered and evaluated going concern. Following a comprehensive assessment of the Group's financial position and projections over the going concern assessment period of 12 months from the expected date of signing the audited financial statements, the assessment of management is that the Group remains a going concern.
Accordingly, management recommends to the Board of Directors that, based on the above assessment, consider the Group remains a going concern as at the date of this report.
The financial statements have been prepared on a going concern basis, as the directors believe the Company will be able to meet its liabilities as they fall due.
The going concern assessment has been considered with reference to:
(a) | the scenario that the Tembo spin off reverse merger IPO is consummated (current expectation is by the end of the first quarter of calendar 2025). Following the completion of this Tembo spin off reverse merger the following probable outcomes arise for VivoPower: |
• | VivoPower will continue to retain approximately 55% of the separately listed Tembo Group and consolidate Tembo in its accounts; |
|
|
• | VivoPower's cash burn rate will reduce to a budgeted $154K per month; |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
• | Subject to the funds raised by Tembo as part of its reverse merger IPO, VivoPower will be paid back up to the full amount of what is owed to it by Tembo within 6 months of Tembo becoming a separate listed company |
|
|
• | VivoPower's share price is likely to be re-rated following completion of the separate listing of Tembo, to reflect a valuation closer to the trading price of Tembo |
|
|
• | VivoPower, subject to fulfilling terms and conditions of the proposed reverse merger with hydrogen technology company, F.A.S.T, will itself be subject to a reverse merger at a significant valuation uplift to current share price; and |
|
|
• | VivoPower will itself be able to raise additional capital via the equity capital markets, as it has done over the past 12 months despite very challenging market conditions and a number of unexpected obstacles. Since November 2023, VivoPower has been able to raise approximately $10 million of capital despite volatile market conditions |
(b) | the scenario where the Tembo spin off reverse merger IPO does not materialise. In this probable scenario, the following outcomes would arise for VivoPower: |
• | VivoPower would continue to retain 100% ownership of the Tembo Group; |
|
|
• | The combined cash burn rate of VivoPower, including Tembo's operations, would be expected be approximately $357K per month; |
|
|
• | Despite the increased cash burn rate, the combined entity (VivoPower and Tembo) is projected to generate net cash inflows from operating activities by June 2025. This positive cash generation is expected to provide significant support for the Group's liquidity and overall financial health: and |
|
|
• | VivoPower would have the ability to raise additional capital to support Tembo's growth, enabling further investment in scaling Tembo's operations and capturing new opportunities. |
As part of the going concern assessment, we also reviewed the net current liabilities outstanding (payable in the next 12 months) as of 30 September 2024, which amounted to $9.3 million. After accounting for adjustments such as excluding payables to related and friendly parties, liabilities settled post-30 September, and reclassifying accrued interest to non-current liabilities, the adjusted net current liabilities has been reduced to $5.4 million.
Additionally, our analysis indicates that the budgeted combined average monthly cash burn (not accounting for sales, deposits and other cash inflows) for VivoPower and Tembo over the next 12 months is approximately $357 thousand per month, or equivalent to $4.3 million per annum.
Considering both the adjusted net liabilities and cash burn, the projected cash outlay for the next 12 months is estimated to be $9.7 million. As of the date of this report the company has finalized a $12 million facility.
As at June 30, 2024, the Company had unrestricted cash totalling $0.2 million, compared to $0.6 million as at June 30, 2023 and $1.3 million as at June 30, 2022. However, post balance date, the Company raised $7m from the issuance of ordinary shares pursuant to an F3 registration statement and an F1 registration statement.
As at June 30, 2024, the Company had outstanding debt and borrowing totalling $29.1 million, compared to $32.4 million as at June 30, 2023 and $28.6 million as at June 30, 2022. Most of these borrowings do not fall due for repayment in the next 12 months and are thus classified under long-term liabilities.
Management believes that it will be able to (a) raise sufficient capital over the next 12 months and/or (b) further reduce its cash burn rate and/or (c) negotiate payment plans with its key creditors and lenders and/or
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
(d) | generate sufficient revenues and cashflows from its expanded range of products and solutions to ensure that the Company has the requisite liquidity to fund its net current assets/liabilities and cash burn. |
Over the next twelve months, with the strategic rationalisation of the Company's business units and the expansion of the Electric Vehicles and ancillary SES products and solutions range, together with the strategic pivot to a cost-effective Asian supply chain, the Company expects to grow revenues in a profitable manner. Furthermore, with the Asian supply chain in place, the Company no longer needs to invest in assembly and production facilities, reducing capital expenditure requirements.
To ensure the going concern status of the business, the directors have prepared and reviewed additional plans to mitigate any liquidity risk that may arise during the next twelve months. These include:
• | Delaying any capital expenditures; |
• | Reduce or delay operational expenditure scaleup plans; |
• | Considered management of supplier and lender payments; |
• | Continuous improvement in efficiency and cost management through the use of artificial intelligence tools; and |
• | Ensuring the Company is always able to raise debt or equity capital. |
Based on the foregoing, the Directors believe these actions provide sufficient cash to support business operations and meet funding requirements as they become due through the next 12 months. The Directors therefore have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they have continued to adopt the going concern basis in preparing the financial statements. However, if we continue to experience losses and we are not able to raise additional financing to provide the funding to grow the revenue streams of the Company to become profit making, or generate cash through sale of assets, we may not have sufficient liquidity to sustain our operations and to continue as a going concern, accordingly there is a material uncertainty that may cause significant doubt about the going concern nature of the Group. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Significant effort has been undertaken to review and rationalise our expenses and creditors, resulting in an expected spend of approximately $9.7 million over the next 12 months.
With access to the $12 million facility, in addition to the $8.7 million owed to us by TAG, we believe there are, and will continue to be, sufficient resources to support operations for at least the next 12 months. This assessment excludes any potential additional funds from Tembo's de-SPAC process, anticipated sales revenues, or the joint venture related to our Caret operations.
All financial information presented in US dollars has been rounded to the nearest thousand.
2.2. Basis of consolidation
The consolidated financial statements include those of VivoPower International PLC and all of its subsidiary undertakings.
Subsidiary undertakings are those entities controlled directly or indirectly by the Company. The Company controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The results of the subsidiaries acquired are included in the Consolidated Statement of Comprehensive Income from the date of acquisition using the same accounting policies of those of the Group. All business combinations are accounted for using the purchase method. The consideration transferred in a business combination is the fair value at the acquisition date of the assets transferred and the liabilities incurred by the Group and includes the fair value of any contingent consideration arrangement. Acquisition-related costs are
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
recognised in the income statement as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group.
All intra-group balances and transactions, including any unrealised income and expense arising from intragroup transactions, are eliminated in full in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
2.3. Business combination
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
• | fair values of the assets transferred |
|
|
• | liabilities incurred to the former owners of the acquired businesses |
|
|
• | equity interests issued by the Company |
|
|
• | fair value of any asset or liability resulting from a contingent consideration arrangement, and |
|
|
• | fair value of any pre-existing equity interest in the subsidiary. |
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets. Acquisition-related costs are expenses as incurred.
The excess of the:
• | consideration transferred |
|
|
• | amount of any non-controlling interest in the acquired entity, and |
|
|
• | acquisition-date fair value of any previous equity interest in the acquired entity |
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
2.4. Intangible assets
All intangible assets, except goodwill, are stated at fair value less accumulated amortisation and any accumulated impairment losses. Goodwill is not amortised and is stated at cost less any accumulated impairment losses. Any gain on a bargain purchase is recognised in profit or loss immediately.
Goodwill
Goodwill arose on the effective acquisition of VivoPower Pty Ltd, Aevitas O Holdings Limited (“Aevitas”) and Tembo e-LV B.V. Goodwill is reviewed annually to test for impairment.
Other intangible assets
Intangible assets acquired through a business combination are initially measured at fair value and then amortised over their useful economic lives. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.
Development expenditure includes the product development project for ruggedised electric vehicles in Tembo, pre-series-production expenditure on developing vehicle specifications and production processes. Capitalised costs include primarily internal payroll costs, external consultants and computer software.
Development expenditure on U.S. solar projects includes securing land rights, completing feasibility studies, negotiating power purchase agreements, and other costs incurred to prepare project sales for Notice to Proceed with construction and hence sale to a partner as a shovel ready project.
For both electric vehicles product development project, and U.S. solar development projects, it is the Company's intention to complete the projects. It expects to obtain adequate technical, financial and other resources to complete the projects, and management consider that it is probable for the future economic benefits attributable to the development expenditure to flow to the entity; and that the cost of the asset can be measured reliably. Accordingly, the development expenditure is recognised under IAS 38 - Intangible Assets as an intangible asset.
All other expenditure, including expenditure on internally generated goodwill and brands, and research costs, are recognised in profit or loss as incurred.
Amortisation is calculated on a straight-line basis to write down the assets over their useful economic lives at the following rates:
• | Development expenditure - |
• | Customer relationships - |
• | Trade names - |
• | Favourable supply contracts - |
• | Other - |
2.5. Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and the costs directly attributable to bringing the asset into use.
When parts of an item of property, plant and equipment have different useful lives, they are accounted as separate items (major components) of property, plant and equipment.
Depreciation is calculated on a straight-line basis so as to write down the assets to their estimated residual value over their useful economic lives at the following rates:
• | Computer equipment- |
• | Fixtures and fittings- |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
• | Motor vehicles- |
• | Plant and equipment - |
• | Right-of-use assets - remaining term of lease |
2.6. Assets classified as held for sale and discontinued operations
Assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying value and fair value less costs to sell. An impairment loss is recognised for any subsequent write-down of the asset to fair value less costs to sell.
A discontinued operation is a component of the Company that has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations. The results of discontinued operations are presented separately in the Statement of Comprehensive Income.
2.7. Inventory
2.8. Leases
The Group leases offices, and workshops, for fixed periods of 2 months to 8 years but may have extension options. Extension options are not recognised by the Group in the determination of lease liabilities unless renewals are reasonably certain.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis, with lease payments discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Group's incremental borrowing rate is used. The Group presents lease liabilities in loans and borrowings in the Statement of Financial Position.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the Statement of Comprehensive Income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are presented in property, plant and equipment and depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
2.9. Impairment of non-financial assets
Goodwill is allocated to cash-generating units for the purposes of impairment testing. The recoverable amount of the cash-generating unit (‘CGU') to which the goodwill relates is tested annually for impairment or when events or changes to circumstances indicate that it might be impaired.
The carrying values of property, plant and equipment, investments and intangible assets other than goodwill are reviewed for impairment only when events indicate the carrying value may be impaired.
In an impairment test the recoverable amount of the cash-generating unit or asset is estimated in order to determine the existence or extent of any impairment loss. The recoverable amount is the higher of fair value less costs to sell and the value in use to the Group. An impairment loss is recognised to the extent that the carrying value exceeds the recoverable amount. In determining a cash-generating unit's or asset's value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time-value of money and risks specific to the cash-generating unit or asset that have not already been included in the estimate of future cash flows. All impairment losses are recognised in the Statement of Comprehensive Income.
An impairment loss in respect of goodwill is not reversed. In the case of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. These impairment losses are reversed if there has been any change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent so that the asset's carrying amount does not exceed the carrying value that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
2.10. Financial Instruments
Financial assets and liabilities are recognised in the Group's Statement of Financial Position when the Group becomes a party to the contracted provision of the instrument. The following policies for financial instruments have been applied in the preparation of the consolidated financial statements.
The Company classifies its financial assets in the following measurement categories:
• | those to be measured subsequently at fair value through profit or loss; and, |
• | those to be measured at amortised cost. |
The classification depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:
• | the asset is held within a business model whose objective is to collect contractual cash flows; and, |
• | the contractual terms give rise to cash flows that are solely payments of principal and interest. |
Fair value is 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
• | in the principal market for the asset or liability; or, |
• | in the absence of a principal market, in the most advantageous market for the asset or liability. |
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
• | Level 1-- quoted (unadjusted) market prices in active markets for identical assets or liabilities; |
• | Level 2-- valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and |
• | Level 3-- valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. |
Cash and cash equivalents
For the purpose of preparation of the Statement of Cash Flow, cash and cash equivalents includes cash at bank and in hand.
Restricted cash
Restricted cash are cash and cash equivalents whose availability for use within the Group is subject to certain restrictions by third parties.
Bank borrowings
Interest-bearing bank loans are recorded at the proceeds received. Direct issue costs paid on the establishment of loan facilities are recognised over the term of the loan on a straight-line basis. The initial payment is taken to the Statement of Financial Position and then amortised over the full-length of the facility.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for the expected future issue of credit notes and for non-recoverability due to credit risk. The Group applies the IFRS 9 - Financial Instruments simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure expected credit losses, trade receivables and contract assets have been grouped based on shared risk characteristics.
Trade and other payables
Trade and other payables are non-interest bearing and are stated at amortised cost using the effective interest method.
Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of Ordinary Shares are recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital (treasury shares)
When share capital recognised as equity is repurchased as equity by the Company the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity, and excluded from the number of shares in issue when calculating earnings per share.
2.11. Taxation
Income tax expense comprises current and deferred tax.
Current tax is recognised based on the amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided on temporary timing differences that arise between the carrying amounts of assets and liabilities for financial reporting purposes and their corresponding tax values. Liabilities are recorded on all temporary differences except in respect of initial recognition of goodwill and in respect of investments in subsidiaries where the timing of the reversal of the temporary difference is controlled by the Group and it is
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
probable that it will not reverse in the foreseeable future. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the asset can be offset. Deferred tax is measured on an undiscounted basis using the tax rates and laws that have been enacted or substantively enacted by the end of the accounting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, they relate to income taxes levied by the same tax authority and the Group intends to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Current and deferred tax are recognised in the Statement of Comprehensive Income, except when the tax relates to items charged or credited directly to equity, in which case it is dealt with directly in equity.
2.12. Provisions
Provisions are recognised when the Group has a present obligation because of a past event, it is probable that the Group will be required to settle that obligation, and it can be measured reliably.
Provisions are measured at the directors' best estimate of the expenditure required to settle the obligation at the date of Statement of Financial Position.
Where the time value of money is material, provisions are measured at the present value of expenditures expected to be paid in settlement.
2.13.
The Group presents basic (“EPS”) data for Ordinary Shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of Ordinary Shares, excluding the shares held as treasury shares Currently there are no diluting effects on EPS for Ordinary Shares, therefore, diluted EPS is the same as basic EPS.
2.14. Foreign currencies
The Company's functional and presentational currency is the US dollar. Items included in the separate financial statements of each Group entity are measured in the functional currency of that entity. Transactions denominated in foreign currencies are translated into the functional currency of the entity at the rates of exchange prevailing at the dates of the individual transactions. Foreign currency monetary assets and liabilities are translated at the rates of exchange prevailing at the end of the reporting period.
Exchange gains and losses arising are charged to the Statement of Comprehensive Income within finance income or expenses. The Statement of Comprehensive Income and Statement of Financial Position of foreign entities are translated into US dollars on consolidation at the average rates for the period and the rates prevailing at the end of the reporting period respectively. Exchange gains and losses arising on the translation of the Group's net investment foreign entities are recognised as a separate component of shareholders' equity.
Foreign currency denominated share capital and related share premium and reserve accounts are recorded at the historical exchange rate at the time the shares were issued, or the equity created.
2.15. Revenue from contracts with customers
Revenue comprises the fair value of the consideration received or receivable for the sale of services in the ordinary course of the Group's activities. Revenue is shown net of discounts, value-added tax, other sales related taxes, and after the elimination of sales within the Group.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Revenue comprises development revenues, electrical installations, electrical servicing and maintenance, generator sales, vehicle spec conversion and conversion kits. Revenue is recognised upon satisfaction of contractual performance obligations.
The Group has a number of different revenue streams and the key components in determining the correct recognition are as follows:
Development revenue, which is revenue generated from development services relating to the building and construction of solar projects, is recognised on a percentage completion basis as the value is accrued by the end user over the life of the contract. The periodic recognition is calculated through weekly project progress reports.
On longer-term power services projects such as large-scale equipment provision and installation, the performance obligation of completing the installation is satisfied over time, and revenue is recognised on a percentage completion basis using an input method. Revenue for stand-alone equipment sales is recognised at the point of passing control of the asset to the customer. Other revenue for small jobs and those completed in a limited timeframe are recognised when the job is complete and accepted by the customer.
Revenue for sale of electric vehicles, kits for electric vehicles and related products is recognised upon delivery to the customer. Where distribution agreements are agreed with external parties to participate in the assembly of vehicles, revenue recognition will be assessed under IFRS 15 - Revenue from Contracts with Customers, to establish the principal and agent in the relationship between the parties and with the end customer.
Warranties are of short duration and only cover defective workmanship and defective materials. No additional services are committed to which generate a performance obligation.
No adjustment is made for the effects of financing, as the Company expects, at contract inception, that the period between when the goods and services are transferred to the customer and when the customer pays, will be one year or less.
If the revenue recognised for goods and services rendered by the Company exceeds amounts that the Company is entitled to bill the customer, a contract asset is recognised. If amounts billed exceed the revenue recognised for goods and services rendered, a contract liability is recognised.
Incremental costs of obtaining a contract are expensed as incurred.
2.16. Other income
Other income in relation to government grants, is recognised in the period that the related costs, for which the grants are intended to compensate, are expensed.
2.17. Employee Benefits
Pension
The employer pension contributions are associated with defined contribution schemes. The costs are therefore recognised in the month in which the contribution is incurred, which is consistent with recognition of payroll expenses.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount because of past service provided by the employee and the obligation can be reliably measured.
Short-term compensated absences
A liability for short-term compensated absences, such as holidays, is recognised for the amount the Group may be required to pay because of the unused entitlement that has accumulated at the end of the reporting period.
Share-based payments
Shares issued to employees and other participants under the Omnibus Incentive Plan 2017 are recognised over the expected vesting period, using the grant date share price, in accordance with IFRS 2 Share-based Payments.
2.18.
Restructuring and other non-recurring costs are by nature one-time incurrences and do not represent the normal trading activities of the business and accordingly are disclosed separately on the Consolidated Statement of Comprehensive Income in accordance with IAS 1 - Presentation of Financial Statements in order to draw them to the attention of the reader of the financial statements. Restructuring costs are defined in accordance with IAS 37 - Provisions, Contingent Liabilities and Contingent Assets as being related to sale or termination of a line of business, closure of business locations, changes in management structure, or fundamental reorganisations.
Other non-recurring costs include litigation expenses for former employees, including fees for legal services and provisions under IAS 37 for legal fee dispute resolutions that are probable to result in a quantifiable financial outflow by the Company.
Other non-recurring costs also include provisions created for the recoverability of UK input taxes claimed in prior years.
2.19. New standards, amendments and interpretations
At the date of authorisation of these financial statements the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:
International Accounting Standards (amendments) | Effective date* |
Amendment to IAS 1 - Non-current liabilities with covenants | 1 January 2024 |
IFRS 16 - Amendments regarding lease liability in a sale and leaseback | 1 January 2024 |
Amendment to IAS 7 and IFRS 7 - Supplier finance | 1 January 2024 |
Amendments to IAS 21 - Lack of Exchangeability | 1 January 2025 |
Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments | 1 January 2026 |
IFRS 18 Presentation and Disclosure in Financial Statements | 1 January 2027 |
IFRS 19 Subsidiaries without Public Accountability: Disclosures | 1 January 2024 |
IFRS S1, ‘General requirements for disclosure of sustainability-related financial information | 1 January 2024 |
IFRS S2, ‘Climate-related disclosures' | 1 January 2024 |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
*Years beginning on or after
* Years beginning on or after
The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group or Company in future periods.
3. Significant accounting judgements and estimates
In preparing the consolidated financial statements, the directors are required to make judgements in applying the Group's accounting policies and in making estimates and making assumptions about the future. These estimates could have a significant risk of causing a material adjustment to the carrying value of assets and liabilities in the future financial periods. The critical judgements that have been made in arriving at the amounts recognised in the consolidated financial statements are discussed below.
3.1. Revenue from contracts with customers - determining the timing of satisfaction of services
As disclosed in Note 2.15 to the Financial Statements the Group concluded that Solar Development revenue and revenue from other long-term projects is recognised over time as the customer simultaneously receives and consumes the benefits provided. The Group determined that the percentage completion basis is the best method in measuring progress because there is a direct relationship between the Group's effort and the transfer of services to the customer. The judgement used in applying the percentage completion basis affects the amount and timing of revenue from contracts.
3.2. Impairment of non-financial assets
The carrying values of property, plant and equipment, investments and intangible assets other than goodwill are reviewed for impairment only when events indicate the carrying value may be impaired. Goodwill is tested annually for impairment or when events or changes to circumstances indicate that it might be impaired.
Impairment assessments require the use of estimates and assumptions. To assess impairment, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time-value of money and risks specific to the related cash-generating unit. Judgement was applied in making estimates and assumptions about the future cash flows, including the appropriateness of discounts rates applied, as further disclosed in Note 13. These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and/or CGUs.
3.3.
In preparing the consolidated financial statements of the Group, judgement was applied with respect to those items which are presented in the Consolidated Statement of Comprehensive Income as included within operating profit/(loss). Those revenues and expenses which are determined to be specifically related to the on-going operating activities of the business are included within operating profit/(loss). Expenses or charges to earnings which are not related to operating activities, are one-time costs determined to be not representative of the normal trading activities of the business, or that arise from revaluation of assets, are reported below operating profit/(loss).
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
3.4. Litigation provision
A litigation provision of $0.2 million has been made in the accounts as settlement of the lawsuit with the Estate of the Late W.Q. Richards over Caret leases TX144 and TX145. The suit was settled with a payment of $0.05 million made in September 2024 to be followed by 12 equal monthly payments of $14,583.33.
3.5. Capitalisation of product development costs
The Group capitalises costs for product development projects in the EV segment. The capitalisation of costs is based on management's judgement that technological and economic feasibility is confirmed, and all other recognition criteria within IAS 38 can be demonstrated. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation, discount rates to be applied and the expected period of benefits. As of June 30, 2024, the carrying amount of capitalised development costs were $ 11.6 million (2023: $7.8 million).
3.6. Income taxes
In recognising income tax assets and liabilities, management makes estimates of the likely outcome of decisions by tax authorities on transactions and events whose treatment for tax purposes is uncertain. Where the outcome of such matters is different, or expected to be different, from previous assessments made by management, a change to the carrying value of the income tax assets and liabilities will be recorded in the period in which such determination is made. The carrying values of income tax assets and liabilities are disclosed separately in the Consolidated Statement of Financial Position.
3.7. Deferred tax assets
Deferred tax assets for unused tax losses amounting to $4.1 million at June 30, 2024 (June 30, 2023: $4.3 million; June 30, 2022: $4.7 million) are recognised to the extent that it is probable that sufficient taxable profit will be available against which the losses can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realise the deferred tax assets recorded at the reporting date could be impacted.
3.8. Fair value measurement
The fair values of financial assets and liabilities recorded in the statement of financial position are measured using valuation techniques including discounted cash flow (DCF) models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Changes in assumptions about these factors could affect the reported fair value. When the fair values of non-financial assets/CGUs need to be determined, for example in business combinations and for impairment testing purposes, they are measured using valuation techniques including the DCF model.
4. Revenue and segmental information
The Group determines and presents operating segments based on the information that is provided internally to the board of directors of the Company (the "Board"), which is the Group's chief operating decision maker. Management analyses our business in five reportable segments: Critical Power Services, Electric Vehicles, Sustainable Energy Solutions, Solar Development and Corporate Office. Critical Power Services is represented by VivoPower's wholly owned subsidiary Aevitas. In turn, Aevitas wholly owns Kenshaw Solar Pty Ltd (previously J.A. Martin) (“Aevitas Solar”) and Kenshaw Electrical Pty Limited (“Kenshaw”), both of
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
which operate in Australia with a focus on the design, supply, installation and maintenance of critical power, control and distribution systems, including for solar farms.
Electric Vehicles is represented by Tembo e-LV B.V. (“Tembo”), a Netherlands-based specialist batteryelectric and off-road vehicle company delivering electric vehicles (“EV”) for mining and other rugged industrial customers globally; Tembo also includes Tembo EV Pty Ltd based in Australia that recently launched the Tembo Tusker electric pickup truck in Australia and New Zealand and Tembo Technologies Pty Ltd. That is developing an all-electric Jeepney for the Philippines transport market. For FY24, there was no revenue recognised from either Tembo EV Pty Ltd or Tembo Technologies Pty Ltd.
Sustainable Energy Solutions (“SES”) is the design, evaluation, sale and implementation of renewable energy infrastructure to customers, both on a standalone basis and in support of Tembo EVs.
Solar Development is represented by Caret and comprises 12 solar projects in the United States. Corporate Office is the Company's corporate functions, including costs to maintain the Nasdaq public company listing, comply with applicable SEC reporting requirements, and related investor relations and is located in the U.K. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including any revenues and expenses that relate to the transactions with any of the Group's other components. Operating segments results are reviewed regularly by the Board to assess its performance and make decisions about resources to be allocated to the segment, and for which discrete financial information is available.
Segment results that are reported to the Board include items directly attributable to a segment as well as those that can be allocated to a segment on a reasonable basis.
4.1. Revenue
Revenue from continuing operations by geographic location is as follows:
(US dollars in thousands) | Year ended 30 June | ||
| 2024 | 2023 | 2022 |
Australia | - | 2,591 | 8,670 |
Netherlands | 16 | 1,464 | 1,490 |
Total revenue | 10,160 |
Revenue from continuing operations by product and service is as follows:
(US dollars in thousands) | Year ended 30 June | ||
| 2024 | 2023 | 2022 |
Electrical products and related services | - | 8,670 | |
Vehicle spec conversion | - | - | 789 |
Conversion kits | 301 | ||
Accessories | - | 400 | |
Total revenue | 10,160 |
The Group had one customer representing more than 10% of revenue for the year ended 30 June 2024 (year ended 30 June 2023: 1; year ended 30 June 2022: none).
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
4.2. Operating segments
a) Segment results of operations
Results of operations by reportable segment are as follows:
|
|
|
|
|
|
| Discontinued |
|
| Continuing operations | operations |
| |||||
| Critical |
|
| Sustainable |
|
| Critical |
|
Year Ended 30 June 2024 | Power | Solar | Electric | Energy | Corporate | Total | Power |
|
(US dollars in thousands) | Services | Development | Vehicles | Solutions | Office | Continuing | Services | Total |
Revenue from contracts with customers | - | - | 16 | - | - | 16 | 11,811 | 11,827 |
Costs of sales - other | (52) | - | 102 | (23) | - | 27 | (10,268) | (10,241) |
Cost of sales - non-recurring events | - | - | - | - | - | - | - | - |
Gross profit/(loss) | (52) | - | 118 | (23) | - | 43 | 1,543 | 1,586 |
General and administrative expenses | (53) | (344) | (1,794) | (324) | (5,006) | (7,521) | (1,228) | (8,749) |
Other gains/(losses) | 47 | - | 10 | 32 | - | 89 | 4 | 93 |
Other income | - | - | - | - | - | - | 99 | 99 |
Depreciation and amortisation | (448) | - | (671) | (3) | (8) | (1,130) | (439) | (1,569) |
Operating loss | (506) | (344) | (2,337) | (318) | (5,014) | (8,519) | (21) | (8,540) |
Restructuring and other non-recurring costs | - | - | - | - | (1,392) | (1,392) | 2 | (1,390) |
Impairment losses | (48,315) | (11,187) | (366) | 10,787 | (77,325) | (29,686) | (552) | (30,238) |
Finance expense - net | (3,741) | (2) | (2,726) | (68) | 1,918 | (4,619) | (310) | (4,929) |
Profit/(loss) before income tax | 44,068 | (11,533) | (5,429) | 10,491 | (81,813) | (44,216) | (881) | (45,097) |
Income tax | (797) | - | 277 | (1,083) | - | (1,603) | - | (1,603) |
Loss for the year | 43,271 | (11,533) | (5,152) | 9,408 | (81,813) | (45,819) | (881) | (46,700) |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
|
|
|
|
|
|
| Discontinued |
|
|
|
| Continuing operations |
|
| operations |
| |
| Critical |
|
| Sustainable |
|
| Critical |
|
Year Ended 30 June 2023 | Power | Solar | Electric | Energy | Corporate | Total | Power |
|
(US dollars in thousands) | Services | Development | Vehicles | Solutions | Office | Continuing | Services | Total |
Revenue from contracts with customers | 2,591 | - | 1,464 | - | - | 4,055 | 11,005 | 15,060 |
Costs of sales - other | (2,722) | - | (1,572) | - | - | (4,294) | (9,178) | (13,472) |
Cost of sales - COVID-19 disruption | (3,850) | - | - | - | - | (3,850) | - | (3,850) |
Gross profit/(loss) | (3,981) | - | (108) | - | - | (4,089) | 1,827 | (2,262) |
General and administrative expenses | (195) | (297) | (1,005) | (367) | (4,561) | (6,425) | (1,195) | (7,620) |
Other gains/(losses) | 1 | - | - | 30 | - | 31 | (4,208) | (4,177) |
Other income | 13 | 69 | - | - | - | 82 | 37 | 119 |
Depreciation and amortisation | (653) | - | (673) | (3) | (10) | (1,339) | (242) | (1,581) |
Operating loss | (4,815) | (228) | (1,786) | (340) | (4,571) | (11,740) | (3,781) | (15,521) |
Restructuring and other non-recurring costs | - | - | 200 | - | (1,862) | (1,662) | (1) | (1,663) |
Impairment losses | - | - | (414) | - | (7) | (421) | - | (421) |
Finance expense - net | (6,314) | (34) | 936 | (50) | (221) | (5,683) | (527) | (6,210) |
Loss before income tax | (11,129) | (262) | (1,064) | (390) | (6,661) | (19,506) | (4,309) | (23,815) |
Income tax | (638) | - | (40) | 119 | - | (559) | 19 | (540) |
Loss for the year | (11,767) | (262) | (1,104) | (271) | (6,661) | (20,065) | (4,290) | (24,355) |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
|
|
|
|
|
|
| Discontinued |
|
|
|
| Continuing operations |
|
| operations |
| |
| Critical |
|
| Sustainable |
|
| Critical |
|
Year Ended 30 June 2022 | Power | Solar | Electric | Energy | Corporate | Total | Power |
|
(US dollars in thousands) | Services | Development | Vehicles | Solutions | Office | Continuing | Services | Total |
Revenue from contracts with customers | 8,670 | - | 1,490 | - | - | 10,160 | 27,456 | 37,616 |
Costs of sales - other | (7,985) | - | (1,504) | - | - | (9,489) | (24,661) | (34,150) |
Cost of sales - COVID-19 disruption | (1,881) | - | - | - | - | (1,881) | - | (1,881) |
Gross profit/(loss) | (1,196) | - | (14) | - | - | (1,210) | 2,795 | 1,585 |
General and administrative expenses | (154) | (80) | (2,901) | (1,660) | (7,602) | (12,397) | (2,899) | (15,296) |
Other gains/(losses) | 62 | (139) | - | 23 | - | (54) | 41 | (13) |
Other income | 78 | - | - | - | - | 78 | 908 | 986 |
Depreciation and amortisation | (866) | - | (443) | (3) | (9) | (1,321) | (1,066) | (2,387) |
Operating loss | (2,076) | (219) | (3,358) | (1,640) | (7,611) | (14,904) | (221) | (15,125) |
Restructuring & other non-recurring costs | 40 | - | (429) | - | (59) | (448) | 5 | (443) |
Finance expense - net | (7,347) | - | (974) | 23 | (10) | (8,308) | (295) | (8,603) |
Loss) before income tax | (9,383) | (219) | (4,761) | (1,617) | (7,680) | (23,660) | (511) | (24,171) |
Income tax | 523 | - | 575 | 192 | (148) | 1,142 | 975 | 2,117 |
Profit/(loss) for the year | (8,860) | (219) | (4,186) | (1,425) | (7,828) | (22,518) | 464 | (22,054) |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
b) Segment net assets
Net assets by reportable segment are as follows:
| Critical |
|
| Sustainable |
|
|
As at 30 June 2024 | Power | Solar | Electric | Energy | Corporate |
|
(US dollars in thousands) | Services | Development | Vehicles | Solutions | Office | Total |
Assets | 5,958 | 1,549 | 20,674 | 72 | 9,180 | 37,433 |
Liabilities | (8,596) | (284) | (17,550) | (1,026) | (50,514) | (77,970) |
Net assets/(liabilities) | (2,638) | 1,265 | 3,124 | (954) | (41,334) | (40,537) |
|
|
|
|
|
|
|
| Critical | Solar | Electric | Sustainable | Corporate | Total |
As at 30 June 2023 | Power | Development | Vehicles | Energy | Office |
|
(US dollars in thousands) | Services |
|
| Solutions |
|
|
Assets | 18,034 | 12,726 | 17,483 | 10,343 | 2,819 | 61,416 |
Liabilities | (15,539) | - | (7,564) | (645) | (33,921) | (57,670) |
Net assets/(liabilities) | 2,495 | 12,726 | 9,929 | 9,698 | (31,102) | 3,746 |
| Critical |
|
| Sustainable |
|
|
As at 30 June 2022 | Power | Solar | Electric | Energy | Corporate |
|
(US dollars in thousands) | Services | Development | Vehicles | Solutions | Office | Total |
Assets | 30,878 | 22,505 | 14,202 | 1,170 | 903 | 69,657 |
Liabilities | (13,452) | (377) | (4,528) | (485) | (29,200) | (48,042) |
Net assets/(liabilities) | 17,426 | 22,128 | 9,673 | 685 | (28,297) | 21,615 |
5. Other gains/(losses)
| Year Ended 30 June | ||
(US dollars in thousands) | 2023 | 2022 | 2021 |
Australia solar projects | 23 | ||
)Other (losses)/gains | - | (77) | |
Total other gains/(losses) | (54) |
6. Other income
The Australian government's Jobkeeper allowance helped keep Australian citizens in jobs and supported businesses affected by the significant economic impact of the COVID-19 pandemic. The allowance is included in other income and recognised in the period that the related costs, for which it is intended to compensate, are expensed. There are no unfulfilled conditions or other contingencies attaching to these
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
grants. The Group did not benefit directly from any other forms of government assistance. This also includes a previous year deposit which was refunded in March 2023. There is no other income recognised in the year ended June 30, 2024.
7. Operating profit/(loss)
Operating profit/(loss) from continuing operations is stated after charging/(crediting):
(US dollars in thousands) | Year Ended June 30 | ||
| 2024 | 2023 | 2022 |
Amortisation of intangible assets | 850 | ||
Depreciation of property, plant and equipment | 750 | 770 | |
Auditors' remuneration - audit fees | 177 | ||
Auditors' remuneration - tax services | - | 12 | |
Directors' emoluments | 693 | ||
(Gain)/loss on disposal of assets | ( | ( | 13 |
8. Restructuring and other non-recurring costs
| Year Ended June 30 | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Corporate restructuring - professional fees | - | 200 | 194 |
Corporate restructuring - litigation provision | - | - | (128) |
Fiscal refunds provision | 1,389 | 1,768 | - |
Remediation | - | (361) | 382 |
Acquisition related and other costs | 3 | 55 | - |
Total | 448 |
In the year ended June 30, 2024, the Company also incurred non-recurring costs of $1.4 million (June 30, 2023: $1.8 million) relating to the provision for VAT liability that is assessed by HMRC.
In our FY23 accounts, a provision of $1 million was made for the potential failure to convince HMRC that the VAT claims made by VivoPower International PLC (PLC) were correct and should be refunded to the company. During FY24, HMRC cancelled the VAT Registration for PLC on the basis that the claim had no merit. Post year-end, PLC has lodged a formal appeal with HMRC and is currently considering further options, which may include seeking a Tribunal hearing if necessary.
Also, in FY24 HMRC cancelled the VAT registration of VivoPower International Services Ltd (VISL) due to outstanding payments. Post year end VISL has lodged a formal appeal with HMRC. Should this appeal fail we then plan to insist on a Tribunal hearing.
Additionally, post year end both PLC and VISL have engaged a UK based legal firm specializing in solving VAT issues with HMRC.
Restructuring and other non-recurring costs by nature are one-time incurrences, and therefore, do not represent normal trading activities of the business. These costs are disclosed separately in order to draw them to the attention of the reader of the financial information and enable comparability in future periods.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
9. Staff numbers and costs
The average number of employees (including directors) during the period was:
| Year Ended June 30 | ||
| 2024 | 2023 | 2022 |
Sales and Business Development | 13 | ||
Central Services and Management | 29 | ||
Production | 212 | ||
Total | 254 |
Their aggregate remuneration costs comprised:
| Year Ended 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Salaries, wages and incentives | 15,237 | ||
Social security costs | 730 | ||
Pension contributions | 844 | ||
Short-term compensated absences | 1,277 | ||
Total | 18,088 |
Directors' emoluments for the year ended June 30, 2024 were $358,292 (year ended June 30, 2023: $347,179; year ended June 30, 2022: $376,043) of which the highest paid director received $85,571 (year ended June 30, 2023: $81,819; year ended June 30, 2022: $91,029). Our Executive Chairman, Kevin Chin, also received an additional $325,000 for his role as the CEO during the year ended June 30, 2024 (year ended June 30, 2023: $325,000). Director emoluments include employer social security costs.
Key Management Personnel:
| Year Ended 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Salaries, wages and incentives | 957 | 1,120 | 1,578 |
Social security costs | 6 | 38 | 151 |
Pension contributions | 35 | 60 | 114 |
Equity incentives | - | - | 392 |
Total | 998 | 1,218 | 2,235 |
Key management personnel are those below the Board level that have a significant impact on the operations of the business. The number of key management personnel, including directors for the year ended 30 June 2024 was 8 (year ended 30 June 2023: 10; year ended 30 June 2022: 10).
10. Finance income and expense
| Year Ended 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Finance income |
|
|
|
Foreign exchange gain | 173 | ||
Interest income | - | ||
Total finance income | 173 |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
| Year Ended 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Finance expense |
|
|
|
Related party loan interest payable | 3,351 | ||
Convertible loan notes and preference shares interest payable | 217 | ||
Lease liabilities interest payable | 4 | ||
Bank interest payable | (4) | ||
Foreign exchange losses | 4,757 | ||
Other finance costs | 156 | ||
Total finance expense | 8,481 |
11. Taxation
a) Tax (charge)/credit
| Year Ended 30 June | Year Ended 30 June | Year Ended 30 June | ||||||
(US dollars in | 2024 | 2023 | 2022 | ||||||
thousands) |
| Dis- |
|
| Dis- |
|
| Dis- |
|
| Continuing | continued | Total | Continuing | continued | Total | Continuing | continued | Total |
Current tax |
|
|
|
|
|
|
|
|
|
UK tax | - | - | - | - | - | - | (52) | - | (52) |
Foreign tax | - | - | - | ( | - | ( | 818 | - | 818 |
Total current tax | - | - | - | ( | - | ( | 766 | - | 766 |
|
|
|
|
|
|
|
|
|
|
Deferred tax |
|
|
|
|
|
|
|
|
|
Current year |
|
|
|
|
|
|
|
|
|
UK tax | - | - | - | - | - | - | (96) | - | (96) |
Foreign tax | ( | - | ( | 471 | 975 | 1,446 | |||
Total deferred tax | ( | - | ( | 375 | 975 | 1,350 | |||
|
|
|
|
|
|
|
|
|
|
Total income tax | ( | - | ( | ( | (540) | 1,141 | 975 | 2,116 |
The difference between the total tax charge and the amount calculated by applying the weighted average corporation tax rates applicable to each of the tax jurisdictions in which the Group operates to the profit before tax is shown below.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
| Year Ended 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Loss before income tax from continuing |
|
|
|
operations | ( | ( | (23,660) |
Group weighted average corporation tax rate | 22.20% | ||
Tax at standard rate | 5,253 | ||
Effects of: |
|
|
|
Expenses that are not deductible for tax |
|
|
|
purposes | - | - | (833) |
Adjustment to prior year tax provisions | - | - | 137 |
Deferred tax assets not recognised on tax losses | ( | ( | (3,415) |
Total income tax from continuing |
|
|
|
operations for the period recognised in the |
|
|
|
Consolidated Statement of Comprehensive |
|
|
|
Income | ( | ( | 1,142 |
b) Deferred tax
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Deferred tax assets | 4,668 | ||
Deferred tax liabilities | ( | ( | (1,234) |
Net deferred tax asset | 3,434 |
The deferred tax assets are analysed as follows:
|
| Other timing |
|
Deferred tax assets | Tax losses | differences | Total |
30 June 2021 | 1,853 | 642 | 2,495 |
Credit/(charged) to comprehensive income | 2,227 | (54) | 2,173 |
30 June 2022 | 4,080 | 588 | 4,668 |
Credit to comprehensive income | 468 | ||
30 June 2023 | 4,276 | 5,136 | |
Charge to comprehensive income | ( | ( | (1,037) |
30 June 2024 | - | 4,099 |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
The deferred tax liabilities are analysed as follows:
| Accelerated | Other timing |
|
Deferred tax liabilities | allowances | differences | Total |
30 June 2021 | - | (411) | (411) |
Credit to comprehensive income | - | (823) | (823) |
30 June 2022 | - | ( | ( |
Charged to comprehensive income | - | ( | ( |
30 June 2023 | - | ( | ( |
Charged to comprehensive income | - | ( | ( |
30 June 2024 | - | ( | ( |
Deferred tax has been recognised in the current period using the tax rates applicable to each of the tax jurisdictions in which the Group operates. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities.
12. Property, plant and equipment
| Computer | Motor | Plant and | Fittings and | Right-of- |
|
(US dollars in thousands) | Equipment | Vehicles | Equipment | Equipment | Use Assets | Total |
Cost |
|
|
|
|
|
|
At 30 June 2021 | 562 | 1,568 | 1,611 | 122 | 2,691 | 6,554 |
Foreign exchange | (41) | (154) | (146) | (10) | (214) | (565) |
Additions | 28 | 184 | 343 | 209 | 2,470 | 3,234 |
Disposals | 0 | (150) | (48) | - | (53) | (251) |
Reclass to assets held for sale | (231) | (1,015) | (320) | (74) | (1,295) | (2,935) |
At 30 June 2022 | ||||||
Reclassifications/corrections | - | - | - | - | ( | ( |
Foreign exchange | ( | ( | ( | ( | ( | ( |
Additions | ||||||
Disposals | ( | ( | ( | - | ( | ( |
At 30 June 2023 | ||||||
Reclass to assets held for sale | ( | ( | ( | ( | ( | ( |
Foreign exchange | - | - | ( | ( | ||
Additions | ||||||
Disposals | ( | ( | ( | - | ( | ( |
At 30 June 2024 | - |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
| Computer | Motor | Plant and | Fittings and | Right-of- |
|
(US dollars in thousands) | Equipment | Vehicles | Equipment | Equipment | Use Assets | Total |
Depreciation |
|
|
|
|
|
|
At 30 June 2021 | 399 | 970 | 872 | 56 | 1,682 | 3,979 |
Foreign exchange | (33) | (95) | (93) | (6) | (167) | (394) |
Charge for the period (including discontinued operations) | 69 | 186 | 179 | 22 | 752 | 1,208 |
Disposals | - | (131) | (9) | - | (53) | (193) |
Reclass to assets held for sale | (197) | (719) | (232) | (43) | (1,115) | (2,306) |
At 30 June 2022 | ||||||
Reclassifications/corrections | - | - | - | - | ( | ( |
Foreign exchange | ( | ( | ( | ( | ( | ( |
Charge for the period | ||||||
Disposals | ( | ( | ( | - | ( | ( |
At 30 June 2023 | ||||||
Reclass to assets held for sale (1) | ( | ( | ( | ( | ( | ( |
Foreign exchange | ( | - | ( | ( | ||
Charge for the period | ||||||
Disposals | ( | ( | ( | - | ( | ( |
At 30 June 2024 | - |
| Computer | Motor | Plant & | Fittings & | Right-of- |
|
(US dollars in thousands) | Equipment | Vehicles | Equipment | Equipment | Use Assets | Total |
Net book value |
|
|
|
|
|
|
At 30 June 2022 | ||||||
At 30 June 2023 | ||||||
At 30 June 2024 | - | - |
1. Reclassification to Held for Sale at June 30, 2024 on account of the sale of Kenshaw Electrical, refer to Note 20 Discontinued Operations
13. Intangible assets
|
| As at 30 June |
|
(US dollars in thousands) | 2024 | 2023 | 2022 |
Goodwill | |||
Other intangible assets | |||
Total |
a) Goodwill
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
As at 1 July | 25,794 | ||
Reclassification to held for sale assets | - | - | (5,289) |
Impairment losses | ( | - | - |
Foreign exchange | ( | (2,236) | |
Carrying value |
The carrying amounts of goodwill by Cash Generating Unit (“CGU”) are as follows:
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Aevitas O Holdings Pty Ltd (allocated to the Critical Power Services segment) | - | 6,946 | 7,222 |
VivoPower Pty Ltd (allocated to the Solar Development segment) | - | 9,091 | 9,451 |
Tembo (allocated to the Electric Vehicle segment) | 1,635 | 1,660 | 1,595 |
Total | 1,635 | 17,697 | 18,269 |
The Group conducts impairment tests on the carrying value of goodwill and intangibles annually, or more frequently if there are any indications that goodwill might be impaired. The recoverable amount of the Cash Generating Unit (“CGU”) to which goodwill has been allocated is determined from value in use calculations. The key assumptions in the calculations are the discount rates applied, expected operating margin levels and long-term growth rates. Management estimates discount rates that reflect the current market assessments while margins and growth rates are based upon approved budgets and related projections.
The Group prepares cash flow forecasts using the approved budgets for the coming fiscal year and management projections for the following two years. Cash flows are also projected for subsequent years as management believe that the investment is held for the long term. These budgets and projections reflect management's view of the expected market conditions and the position of the CGU's products and services within those markets.
Following the sale of Kenshaw Electric on July 2nd 2024, the CGU represented by Aevitas (being Critical Power Services) was written off as no longer being capable of being recovered from ongoing operations.
With the sale of Kenshaw and the writing off of all goodwill and intangibles, it was then required to affect a similar write-off of the goodwill and intangibles held by VivoPower Pty Ltd (PTY) as also no longer capable of being recovered. On July 5, 2024 following a detailed internal review of PTY it was decided to place it into Voluntary Administration, hence requiring the final write off of all PTY's goodwill and intangibles held in other subsidiaries.
The intangibles represented by Tembo e-LV and its subsidiaries was assessed to have a value in excess of its carrying value. Key assumptions used in the assessment of impairment were discount rate based on the weighted average cost of capital of 13.7% (June 30, 2023: 12%, June 30, 2022: 12%) and an EBITDA compound average annual growth rate (CAGR) of 283% over the next 5 years. We have conducted a discounted cashflow for the impairment testing model; we have not included the terminal value in our analysis. Growth rates reflect the commencement of planned series production at volume during the 5 year period, as the product development project is completed for the current variant, to meet customer demand per sales agreements of over 15,000 units with major international distribution partners, including Access Industriel, Bodiz Automotive LLC., GHH Mining Machines, Fource Maline, Cheetah EV etc.
We conducted a sensitivity analysis to assess the impact of changes in key assumptions on the impairment testing outcome for Tembo. In this analysis, we considered a 5% increase in the discount rate (WACC) and a 50% reduction in the compound annual growth rate (CAGR). The results indicate that, even with these adjusted assumptions, no impairment would need to be recognised. The analysis further revealed that an impairment would only be triggered if the CAGR falls below 71% at a WACC of 18.2%.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
In reviewing past performance and lack of Revenues we have analysed the following;
• | Supply Chain issues relating to limited cash flows to procure components |
• | Staffing issues relating to the changing nature of our R&D activities |
• | Moving from Design to Test and potential rework |
• | Customer appetite to place orders and commit |
• | Customer acceptance of our revised Terms of Trade |
• | Now aligned with what other EV Conversion Kits suppliers are requiring |
• | Suppliers capability to deliver the volumes we believe we can sell |
The CGU represented by Caret active solar projects (TX75 and TX341) was assessed to have a value in excess of its carrying value and hence no further adjustments to capitalised development costs were considered necessary. Other sites were discontinued during the year and their carrying value is impaired.
b) Other intangible assets
|
|
| Favourable |
|
| Other | Total |
(US dollars in | Customer | Trade | Supply | Solar | Product | Intangible | Intangible |
thousands) | Relationships | Names | Contracts | Projects | Development | Assets | Assets |
Cost |
|
|
|
|
|
|
|
At 30 June 2021 | 5,781 | 3,028 | 4,484 | 11,744 | 513 | 169 | 25,719 |
Foreign exchange | (542) | (271) | (376) | - | (63) | (13) | (1,265) |
Additions | - | - | - | 878 | 3,355 | 19 | 4,252 |
Disposals Reclass to Assets | - | (9) | - | - | - | - | (9) |
held for sale | (2,687) | (1,385) | - |
|
| - | (4,072) |
At 30 June 2022 | |||||||
Foreign exchange | ( | ( | - | ( | |||
Additions | - | - | - | ||||
Disposals | - | - | - | ( | - | - | ( |
At 30 June 2023 | |||||||
Foreign exchange | ( | - | ( | - | ( | ||
Additions | - | - | - | - | |||
At 30 June 2024 | |||||||
|
|
|
|
|
|
|
|
|
|
| Favourable |
|
| Other | Total |
(US dollars in | Customer | Trade | Supply | Solar | Product | Intangible | Intangible |
thousands) | Relationships | Names | Contracts | Projects | Development | Assets | Assets |
Amortisation and Impairment |
|
|
|
|
|
|
|
At 30 June 2021 | 2,158 | 855 | 1,368 | - | 18 | 169 | 4,568 |
Foreign exchange | (208) | (79) | (115) | - | (2) | (13) | (417) |
Amortisation | 405 | 181 | 274 | - | - | - | 860 |
Disposals | - | - | - | - | - | - | - |
Reclass to Assets held for sale | (1,232) | (462) | - | - | - | - | (1,694) |
At 30 June 2022 | - | ||||||
Foreign exchange | ( | ( | ( | - | - | ( | |
Amortisation | - | - |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Disposals | - | - | - | - | - | - | - |
At 30 June 2023 | - | ||||||
Foreign exchange | ( | ( | - | ( | - | ||
Amortisation and |
|
|
|
|
|
|
|
impairment | - | ||||||
At 30 June 2024 |
|
|
| Favourable |
|
| Other | Total |
(US dollars in | Customer | Trade | Supply | Solar | Product | Intangible | Intangible |
thousands) | Relationships | Names | Contracts | Projects | Development | Assets | Assets |
Net book value |
|
|
|
|
|
|
|
At 30 June 2022 | |||||||
At 30 June 2023 | |||||||
At 30 June 2024 | - |
Customer relationships, trade names and favourable supply contracts have an average remaining period of amortisation of 7 years, 10 years and 10 years respectively. Solar projects and electric vehicle product development costs are incomplete and not generating revenue and therefore are not amortised in FY2024.
Additions for the year comprise $4.0 million electric vehicle product development costs in Tembo and $0.01 million of solar project development costs in Caret.
14. Investment in subsidiaries
The principal operating undertakings in which the Group's interest at 30 June 2023 is 20% or more are as follows:
| Percentage of |
| |
Subsidiary undertakings | Ordinary Shares held | Registered address | |
% | 28 Esplanade, St Helier, Jersey, JE2 3QA | ||
% |
| ||
% |
| ||
% | 252 Little Falls Drive, Wilmington, DE, | ||
% | USA 19808 | ||
% |
| ||
% |
| ||
% |
| ||
% |
| ||
% |
| ||
% | Level 11, 153 Walker St, North Sydney | ||
% | NSW, Australia 2060 | ||
% |
| ||
% |
| ||
% |
| ||
|
| Level 11, 153 Walker Street, North | |
% | Sydney NSW, 2060 Australia |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
| Percentage of |
|
Subsidiary undertakings | Ordinary Shares held | Registered address |
| ||
Unit 10A, Net Lima Building, 5th Avenue | ||
cor. 26th Street, E-Square Zone, | ||
Crescent Park West, Bonifacio Global City, Taguig, Metro Manila | ||
| ||
Marinus van Meelweg 20, 5657 EN5 De Donge, Best, Eindhoven, Netherlands | ||
|
*V.V.P. Holdings Inc. is controlled of VivoPower Pty Ltd notwithstanding only owning 40% of the ordinary share capital.
15. Cash and cash equivalents
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Cash at bank and in hand |
The credit ratings of the counterparties with which cash was held are detailed in the table below.
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
A+ | 11 | (8) | 171 |
A | - | - | - |
A- | - | 2 | 2 |
AA- | 188 | 559 | 1,112 |
Total | 199 | 553 | 1,285 |
16. Restricted cash
|
| As at 30 June |
|
(US dollars in thousands) | 2024 | 2023 | 2022 |
Bank guarantee security deposit | 292 | 608 | 1,195 |
Total |
At 30 June 2024, there is a total of $0.3 million (30 June 2023, $0.6 million; 30 June 2022, $1.2 million) of cash which is subject to restriction as security for bank guarantees provided to customers in support of performance obligations under power services contracts.
17. Trade and other receivables
| As at June 30 | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Current receivables |
|
|
|
Trade receivables | - | ||
Contract assets |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Other current assets | - | ||
Prepayments | |||
Other receivables | |||
Deposits | - | - | |
Current tax receivable | - | ||
Total |
Other receivables at June 30, 2024 includes receivable from investor amounting to $10.0 million representing their subscription investment into Tembo, of which $8.7 million is not yet paid. The corresponding shares related to this have not yet been issued and as such classified in “Shares to be issued” under Trade and other payables in the Consolidated Statement of Financial Position. Other receivables also include a receivable from our transfer agent Chardan Capital Markets for ATM issuance proceeds which were only credited to the Group's account on July 1, 2024
In accordance with IFRS 15, contract assets are presented as a separate line item. The Company has not recognised any loss allowance for contract assets.Analysis of trade receivables:
| As at June 30 | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Trade and other receivables | - | 1,649 | 3,866 |
Less: credit note provision | - | - | - |
Total | - | 1,649 | 3,866 |
The maximum exposure to credit risk for trade receivables by geographic region was:
| As at June 30 | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Australia | - | 1,451 | 2,684 |
Netherlands | - | 198 | 1,182 |
Total | - | 1,649 | 3,866 |
The aging of the trade receivables, net of provisions is:
| As at June 30 | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
0-90 days | - | 1,410 | 3,306 |
Greater than 90 days | - | 239 | 560 |
Total | - | 1,649 | 3,866 |
18. Inventory
| As at June 30 | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Raw materials | |||
Total |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
19. Assets classified as held for sale
| % | As at 30 June | ||
(US dollars in thousands) | Owned | 2024 | 2023 | 2022 |
Kenshaw Solar Pty Ltd (formerly J.A. Martin Electrical Pty Limited) - ex solar | 100% | - | - | 8,214 |
KESW EL Pty Ltd (formerly Kenshaw Electrical Pty Ltd) | 100% | 5,479 | - | - |
Total |
| 5,479 | - | 8,214 |
The ex power and critical supply operations of Kenshaw Electrical Pty Ltd were sold on July 2, 2024. As disclosed in note 20, the assets and liabilities of the disposed operation met the definition of discontinued operation under IFRS 5 at June 30, 2024. Accordingly, assets and liabilities of the discontinued operation were reclassified to assets and liabilities held for sale as at June 30, 2024. As detailed in note 20, assets held for sale of $5.5 million as at June 30, 2024 comprised goodwill of $0.2 million, inventories of $0.7 million, property, plant and equipment of $2.1 million and trade and other receivables of $2.4 million
20. Discontinued operations
On July 2, 2024, Kenshaw Electrical Pty Ltd was sold for a consideration of $0.8 million (AU$1.2 million).
Financial information relating to the discontinued operation for the period to the date of disposal is set out below:
Financial performance and cash flow information
The financial performance and cash flow information presented are for the years ended 30 June 2024, 2023 and 2022:
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Revenues | 11,909 | 11,005 | 27,456 |
Cost of sales | (10,268) | (9,178) | (24,661) |
Expenses | (2,522) | (6,136) | (3,306) |
Loss before income tax | (881) | (4,309) | (511) |
Income tax expense | - | 19 | 975 |
(Loss)/profit from discontinued operations | (881) | (4,290) | 464 |
Net cash (outflow)/inflow from operating activities | (881) | (4,290) | 464 |
Net cash inflow/(outflow) from investing activities |
|
|
|
Net cash inflow/(outflow) from financing activities |
|
|
|
Net (reduction)/increase in cash generated by subsidiary | (881) | (4,290) | 464 |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operations as at June 30, 2024 and 2022; the assets and liabilities held for sale as of June 30, 2022 were subsequently disposed of in the year ended June 30, 2023:
(US dollars in thousands) | 2024 | 2022 |
Assets classified as held for sale |
|
|
Trade and other receivables | 2,366 | 239 |
Inventories | 657 |
|
Property, plant and equipment | 2,040 | 629 |
Goodwill | 210 | 5,289 |
Intangible assets | - | 2,057 |
Deferred tax assets | 206 |
|
Total assets of disposal group classified as held for sale | 5,479 | 8,214 |
Liabilities directly associated with assets classified as held for sale |
|
|
Trade and other payables | 2,722 | 91 |
Current debt | 1,267 | 1,126 |
Non-current debt | 77 | 74 |
Lease liabilities - current | 263 | 157 |
Lease liabilities - non-current | 1,186 | 49 |
Total liabilities of disposal group classified as held for sale | 5,515 | 1,497 |
Net assets/(liabilities) identified as held for sale | (36) | 6,717 |
|
|
|
Estimated gain on sale - Kenshaw Electrical Pty Ltd | USD 000 | AUD 000 |
Consideration received or receivable |
|
|
Cash |
|
|
Purchase price | 2,668 | 4,000 |
Working capital adjustment | (1,860) | (2,789) |
Cash | 808 | 1,211 |
Fair value of contingent consideration | - | - |
Less costs to sell | - | - |
Total disposal consideration | 808 | 1,211 |
Estimated carrying amount of net liabilities sold | (36) | (54) |
Estimated gain on sale as at June 30, 2024 | 844 | 1,265 |
Disposal consideration for the sale of Kenshaw Electrical Pty Ltd on July 2, 2024 comprised of cash purchase price including completion working capital adjustments of $2.7 million (AU$4.0 million). Net book value of net liabilities sold was $0.03 million (AU$0.1 million), resulting in a gain on disposal of $0.8 million (AU$1.3 million).
Disposal consideration for the sale of Kenshaw Solar Pty Ltd on July 1, 2022, comprised cash purchase price including completion working capital adjustments of $2.9 million (AU$4.3 million). Initial estimate of fair value of deferred contingent consideration of $4.5 million, as recorded in July 2022, payable 12 months after completion, applied a contracted 4.5x multiple to year 1 forecast EBITDA of AU$2.7 million, discounted at 10% to net present value, less purchase price paid. The final deferred consideration of $0.6 million (AU$ 0.9 million) was received in August 2023. Costs to sell comprised advisory fees of $0.4 million (AU$0.5 million).
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Net book value of net assets sold was $7.0 million (AU$10.1 million), resulting in a loss on disposal of $3.9 million (AU$5.4 million).
Reconciliation of adjusted loss on sale - Kenshaw Solar Pty Ltd | USD 000 | AUD 000 |
Gain on sale - as estimated at June 30, 2022 | 34 | 50 |
Cash consideration adjustment | 378 | 529 |
Fair value of contingent consideration adjustment | (3,965) | (5,548) |
Cost to sell adjustment | (18) | (25) |
Carrying amount of net assets sold adjustment | (283) | (397) |
Loss on sale reported in year ended June 30, 2023 | (3,854) | (5,391) |
21. Trade and other payables
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Trade payables | |||
Shares to be issued | - | ||
Accruals | |||
Related party payable | - | - | |
Payroll liabilities | |||
Sales tax payable | - | ||
Deferred income | |||
Other creditors | |||
Total current trade and other payables |
| As at 30 June | ||
Non-current other payables | 2024 | 2023 | 2022 |
Non-current accrued interest | - | - | |
Non-current accrued loan and other fees | - | - | |
Total | - | - |
In accordance with IFRS 15 - Revenue from Contracts with Customers, deferred income is presented as a separate line item. Deferred income relates to the Company's obligation to transfer goods or services to customers for which the Company has received consideration (or the amount is due) from customers. Deferred income is recorded as revenue when the Company fulfils its performance obligations under the contract.
Non-current accrued interest relates to interest on AWN related party loans, where pursuant to amendments to loan terms agreed on June 30, 2023, obligations to pay accrued interest on all loans except bridging loans issued after December 31, 2022 are deferred until April 30, 2025. The liabilities are then classified as current in “Accruals” line item under Current trade and other payables given that they are due within a year from FY24.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
22. Provisions
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Current provisions |
|
|
|
Employee entitlements | |||
Fiscal | - | ||
Litigation | - | - | |
Warranty | - | ||
Remediation | - | - | |
Total current provisions | |||
|
|
|
|
Non-current provisions |
|
|
|
Employee entitlements | |||
Litigation | - | - | |
Total non-current provisions | |||
|
|
|
|
Total provisions |
In the year ended June 30, 2024, the Company also incurred non-recurring costs of $1.4 million (June 30, 2023: $1.8 million) relating to the provision for VAT liability that is assessed by HMRC.
In our FY23 accounts, a provision of $1 million was made for the potential failure to convince HMRC that the VAT claims made by VivoPower International PLC (PLC) were correct and should be refunded to the company. During FY24, HMRC cancelled the VAT Registration for PLC on the basis that the claim had no merit. Post year-end, PLC has lodged a formal appeal with HMRC and is currently considering further options, which may include seeking a Tribunal hearing if necessary.
Also, in FY24 HMRC cancelled the VAT registration of VivoPower International Services Ltd (VISL) due to outstanding payments. Post year end VISL has lodged a formal appeal with HMRC. Should this appeal fail we then plan to insist on a Tribunal hearing.
Additionally, post year end both PLC and VISL have engaged a UK based legal firm specialising in solving VAT issues with HMRC.
Warranty provisions in Australia relate to the servicing of generators and is based on a percentage of revenue generated. For FY24, this provision is no longer required as the acquirer of Kenshaw has taken responsibility for this.
Employee entitlements in Australia is attributable to Kenshaw Electrical Pty Ltd which forms part of the liabilities held for sale for FY24.
A litigation provision of $0.2 million has been made in the accounts as settlement of the lawsuit with the Estate of the Late W.Q. Richards over Caret leases TX144 and TX145. The suit was subsequently settled with a payment of $50k made in October 2024 to be followed by 12 equal monthly payments of $14,583.33.
(US dollars in thousands) | Employee Entitlements | Fiscal | Remediation | Litigation | Warranty | Total |
At 30 June 2022 | - | - | ||||
Foreign exchange | ( | - | - | ( | ( | |
Additional provisions | - |
|
|
|
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
Reverse unused provisions | ( | - | ( | - | ( | ( |
Provisions utilised | ( | - | - | - | - | ( |
At 30 June 2023 | - | - | ||||
Foreign exchange | - | - | - | |||
Additional provisions |
| - | ||||
Disposals and transfers to AHFS | ( | - | - | - | ( | ( |
At 30 June 2024 | - | - |
23. Loans and borrowings
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Current liabilities |
|
|
|
Debtor invoice financing | - | ||
Lease liabilities | - | ||
Shareholder loans | |||
Chattel mortgage | - | ||
Bank loan | - | ||
Other borrowings | - | - | |
Total current liabilities | |||
Non-current liabilities |
|
|
|
Lease liabilities | - | ||
Shareholder loan | |||
Chattel mortgage | - | ||
Financing agreement | - | - | |
Bank loan | - | - | - |
Total non-current liabilities | |||
Total liabilities |
Debtor invoice financing
In FY23, a new facility with a limit of AU$2.5 million was established by Kenshaw. As of June 30, 2024, this facility amounting to AU$1.8 million is reclassified to “Assets held for sale” as a result of Kenshaw Electrical Pty Ltd sale.
Shareholder loans
On June 30, 2021, the Company agreed a refinancing of its existing $21.1 million shareholder loan with AWN, with repayment of principal from January 1, 2023 in sixty monthly instalments of $0.35 million to loan maturity on December 31, 2027. The interest rate and line fee was agreed at 8% and 0.8% respectively, but no interest or line fee settlements were required until after a corporate liquidity event had occurred. In addition, the Company agreed to a refinancing fee of $0.34 million in two tranches on June 30, 2022 and December 31, 2022. Security granted to AWN comprised of the Specific Security Deed and the General Security.
On June 30, 2022 further amendments to the loan were agreed with AWN:
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
(i) to defer repayment of principal to commence on October 1, 2023, with repayments over 60 months to September 30, 2028,
(ii) to defer interest payments from October 1, 2021, becoming due and payable on the earlier of a) completion by VivoPower of a debt or equity raise of at least $25 million, and b) October 1, 2023.
(iii) to increase the interest rate and line fee to 10.00% and 2.00% per annum respectively during the period from October 1, 2021 to the earlier of a) September 30, 2023 or b) the date a minimum prepayment of $1,000,000 is made.
(iv) the initial refinancing fee of $0.34 million is to be amended to accrue incrementally at 1.6% per annum from July 1, 2021 and become payable at the earlier of a) $1.0 million prepayment being made or b) October 1, 2023.
(v) a new fixed facility extension fee of $0.355 million is payable in return for this amendment, to accrue immediately but becoming payable on October 1, 2023.
On January 11, 2023, further amendments to the loan were agreed with AWN:
(i) to defer repayment of principal to commence on April 1, 2025, with repayments over 60 months to March 31, 2030.
(ii) to defer interest payments from October 1, 2023, becoming due and payable on the earlier of a) completion by VivoPower of a debt or equity raise of at least $25 million, and b) October 1, 2024.
(iii) to extend the increased interest rate and line fee of 10.00% and 2.00% per annum respectively commenced on October 1, 2021 to the earlier of a) March 31, 2025 or b) the date a minimum Prepayment of $1,000,000 is made.
(iv) to extend the initial refinancing fee accruing incrementally at 1.6% per annum from July 1, 2021 and become payable at the earlier of a) $1.0 million prepayment being made or b) April 1, 2025.
(v) to defer the repayment date of the previous fixed facility extension fee of $0.355 million, becoming payable on April 1, 2025.
(vi) In addition to previously agreed refinancing fees, an additional $0.855 million fixed refinancing fee will accrue immediately and become payable on April 1, 2025.
On June 30, 2023, further amendments to the loan were agreed with AWN:
(i) to defer interest payments from October 1, 2024 to April 1, 2025, and to replace the conditional requirement to repay accrued interest upon completion by VivoPower of a debt or equity raise of at least $25 million, with the conditional requirement to make repayments of interest and/or principal to meet the mandatory repayment schedule described in sections (ii) and (iii) below following a qualifying liquidity event.
(ii) upon completion by VivoPower International PLC of a qualifying liquidity event of at least $5.0 million, Aevitas is required to make mandatory prepayment of principal and interest to AWN in accordance with the following schedule:
a) proceeds $5 million to $7.5 million - pay 25% of amounts raised;
b) proceeds $7.5 million to $12.5 million - pay $1.875 million plus 45% of amounts raised;
c) proceeds $12.5 million and above - pay $4.125 million plus 50% of amounts raised.
(iii) for the purposes of the mandatory prepayment requirement, a ‘qualifying liquidity event' excludes direct investments into VivoPower's subsidiary, Tembo, and debt raised in respect of working capital finance facilities, but includes:
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
a) equity or debt raise;
b) trade sale of underlying subsidiary or business unit (including, for example, Aevitas and Caret); and
c) loan repayment from Tembo to VivoPower..
(iv) as consideration for the concessions agreed with AWN, VivoPower International PLC committed to issue AWN with 500,000 warrants, with a duration of 12 months, at an exercise price of $0.67 per share.
On June 30, 2024, VivoPower amended its shareholder loan financing agreement with AWN. The loan includes a facility limit of $34 million, of which a drawdown of $8.1 million principal is due to be repaid in the current period, and $20.9 million principal is non-current. The agreement consolidated all shareholder loans into a single tranche. AWN also received an option to acquire 1,150,000 Tembo shares post-business combination with Cactus Acquisition Corp 1 Limited at $1.35 per share.
We also conducted an assessment in accordance with IFRS 9 to evaluate the novation of the loan. We concluded that there was no substantial modification in the net present value of the loan.
Short-term loans
In December 2021, a short term loan of $1.1 million (AU$1.5 million) was provided from AWN to Aevitas O Holdings Pty Limited at an interest rate of 10.0%, increasing to 12.5% from January 1, 2022. The loan is set to expire on April 1, 2025 (initially set as April 30, 2022, then extended on June 30, 2022, to October 1, 2023, then extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower International PLC of a debt or equity raise of at least $25 million was dropped on June 30, 2023. Facility extension fees of $29,000 (AU$40,000) and $43,500 (AU$60,000) are payable upon maturity, relating to the two extensions respectively.
On February 22, 2022, a short term $3.0 million loan was provided from AWN to Aevitas, with interest rate of 10.00% per annum payable on the principal sum upon maturity. The loan is set to expire on April 1, 2025 (initially set as May 13, 2022, then extended on June 30, 2022, to October 1, 2023, then extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower of a debt or equity raise of at least $25 million was dropped on June 30, 2023. Facility extension fees of $85,000 and $110,000 are payable upon maturity, relating to the two extensions respectively.
On December 22, 2022, a short term $3.0 million loan was provided from AWN to Aevitas, with interest rate of BBSY bid floating rate (on average 3.60% for the period from inception to June 30, 2023) plus fixed margin of 15.0% per annum payable on the principal sum upon maturity. A 1% facility establishment fee of $30,000 was deducted upon initial loan drawdown, and a further 3% exit fee of $90,000 is payable on expiry. The loan is set to expire on April 1, 2025 (initially set as October 1, 2023, then extended on January 11, 2023 to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower of a debt or equity raise of at least $25 million was agreed on January 11, 2023, then dropped on June 30, 2023. A facility extension fee of $115,000 is payable upon maturity.
In February and March 2023, further short-term loans of AU$0.5 million and AU$0.25 million were established between AWN and VivoPower, drawn down between February and May 2023. On June 30, 2023, the expiry of the loans was amended to August 31, 2023.
On June 30, 2024, VivoPower amended its shareholder loan financing agreement with AWN. The loan includes a facility limit of $34 million, of which a drawdown of $8.1 million principal is due to be repaid in the
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
current period, and $20.9 million principal is non-current. The agreement consolidated all shareholder loans into a single tranche. AWN also received an option to acquire 1,150,000 Tembo shares post-business combination with Cactus Acquisition Corp 1 Limited at $1.35 per share.
Lease liabilities
Lease liabilities have decreased during the year by $2.3 million to nil due to sale of Kenshaw. Depreciation expense on right-of-use assets and interest expense on associated lease liabilities for the year ended June 30, 2024 amounting to $0.5 million and $0.2 million respectively, are recognised in the Consolidated Statement of Comprehensive Income. Total lease payments for the year ended June 30, 2024 amounted to $0.2 million (June 30, 2023: $0.04 million).
The obligations under lease liabilities are as follows:
|
|
|
| Present value of minimum lease | ||
| Minimum lease Payments | payments | ||||
| As at 30 June | As at 30 June | ||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 |
Amounts payable under lease liabilities: |
|
|
|
|
|
|
Less than one year | - | - | 462 | 444 | ||
Later than one year but not more than five | - | - | 1,843 | 2,020 | ||
| - | - | 2,305 | 2,464 | ||
Future finance charges | - | (494) | (627) | - | - | - |
Total lease obligations | - | 2,305 | 2,464 | - | 2,305 | 2,464 |
24. Called up share capital
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Allotted, called up and fully paid |
|
|
|
$533,298 | $307,815 | $255,819 | |
Number allotted | 4,439,733 | 25,651,140 | 21,318,118 |
Ordinary Shares of $0.12 each | $533,298 | $307,815 | $255,819 |
At the Company's last Annual General Meeting on December 28, 2023, the Directors were given a new authority to allot shares up to an aggregate nominal amount of $3,600,000.
Movements in Ordinary Shares: |
|
|
|
|
| Shares | Par value | Share premium | Total |
| No. | USD 000 | USD 000 | USD 000 |
At 30 June 2022 | 21,318,118 | 256 | 99,418 | 99,674 |
Capital raises1 | 4,230,770 | 51 | 5,449 | 5,500 |
Employee share scheme issues2 | 102,252 | 1 | 151 | 152 |
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
At 30 June 2023 | 25,651,140 | 308 | 105,018 | 105,326 |
Capital raises 1 | 1,715,191 | 206 | 2,862 | 3,068 |
Employee share scheme issues 2 | 282,836 | 19 | 340 | 359 |
Reverse stock split3 | (23,209,434) | - | - | - |
At 30 June 2024 | 4,439,733 | 533 | 108,220 | 108,753 |
1. During the year ended June 30, 2024, the company issued 1,715,191 million shares to capital market investors through At the Market issuances and registered direct offerings, raising $3.1 million in gross proceeds.
On July 29, 2022, the Company entered into a Securities Purchase Agreement to issue and sell, in a registered direct offering directly to an investor, (i) an aggregate of 2,300,000 Ordinary Shares (the “Shares”), nominal value $0.012 per share, at an offering price of $1.30 per share and (ii) an aggregate of 1,930,770 pre-funded warrants exercisable for Ordinary Shares at an offering price of $1.2999 per pre-funded warrant, for gross proceeds of approximately $5.5 million before deducting the placement agent fee and related offering expenses. The pre-funded warrants were sold to the Investor whose purchase of Ordinary Shares in the Registered Offering would otherwise result in the Investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company's outstanding Ordinary Shares immediately following the consummation of the Registered Offering, in lieu of Ordinary Shares. Each pre-funded warrant represents the right to purchase one Ordinary Share at an exercise price of $0.0001 per share. The pre-funded warrants were exercised on November 22, 2022.
In a concurrent private placement, the Company agreed to issue to the investor, Series A Warrants exercisable for an aggregate of 4,230,770 Ordinary Shares at an exercise price of $1.30 per share. Each Series A Warrant will be exercisable on February 2, 2023 and will expire on February 2, 2028. The Series A Warrants and the Ordinary Shares issuable upon the exercise of the Series A Warrants were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) promulgated thereunder.
Each share has the same right to receive dividends and repayment of capital and represents one vote at shareholders' meetings. Proceeds received in addition to the nominal value of the shares issued during the year have been included in share premium. The costs associated with the issuance of new shares are included within other reserves (see Note 27). Share premium has also been recorded in respect of the share capital related to employee share awards.
Notes to the Financial Statements
VivoPower International PLC for the year ended 30 June 2024
25. Other reserves
|
| Shares | Capital | Equity | Share |
|
|
| Preference | pending | raising | incentive | awards | Foreign |
|
| shares1 | issue2 | costs3 | costs4 | issuance4 | exchange | Total |
At 30 June 2021 | 3,270 | 20,466 | (8,828) | 1,422 | (971) | (45) | 15,314 |
Issuance of shares | - | (20,466) | - | - | - | - | (20,466) |
Share issuance costs | - | - | (122) | 1,452 | (1,879) | - | (549) |
Other movements | - | - | - | - | - | (283) | (283) |
At 30 June 2022 | 3,270 | - | (8,950) | 2,874 | (2,850) | (328) | ( |
Interest on equity instruments | 198 | - | - | - | - | - | |
Equity instruments payments | (149) | - | - | - | - | - | ( |
Capital raising costs | - | - | (446) |
| - | - | ( |
Equity incentives cost less shares issued | - | - | - | 147 | (154) | - | ( |
Other movements | - | - | - | - | - | (104) | ( |
At 30 June 2023 | 3,319 | - | (9,396) | 3,021 | (3,004) | (432) | ( |
Interest on equity instruments | 150 | - | - | - | - | - | |
Capital raising costs | - | - | (207) | - | - | - | ( |
Equity incentives cost less shares issued | - | - | - | 333 | (92) | - | |
Other movements | - | - | - | - | - | 7 | |
At 30 June 2024 | 3,469 | - | (9,603) | 3,354 | (3,096) | (425) | ( |
1. | During the year, the Company accrued $0.15 million dividends on Aevitas preference shares. |
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
2 | The $0.2 million of transaction costs incurred in the year ended June 30, 2024 (year ended June 30, 2023: $0.4 million; year ended June 2 30, 2022: $0.1 million) relate primarily to capital raises on Nasdaq. |
|
|
3 | During the year ended June 30, 2024, $0.3 million was expensed towards share incentive awards to employees, directors, and consultants of the Company under the 2017 Omnibus Incentive Plan (year ended June 30, 2023: $0.1 million). Amounts are expensed at 3 the award grant price over the vesting period, adjusted for actual quantities upon vesting. Of the expenses recorded, $0.3 million of shares were delivered to participants (year ended June 30, 2023: $0.1 million). |
During the years ended 30 June 2024 and 30 June 2023, the following awards under the Incentive Plan have been granted, and have vested or forfeit:
| Number of | $'000 |
| RSUs, PSUs | Weighted |
| and BSAs | average grant |
| (thousands) | date fair value |
Outstanding at 30 June 2022 | 279 | 471 |
Granted | 912 | 303 |
Vested | (356) | (123) |
Forfeit | (178) | (320) |
Outstanding at 30 June 2023 | 657 | 331 |
Granted | 128 | 234 |
Vested | (150) | (248) |
Reverse stock split impact | (591) | (298) |
Forfeit | (11) | (3) |
Outstanding at 30 June 2024 | 33 | 16 |
In October 2024, the company implemented a 10-to-1 reverse stock split, which impacted the outstanding number of RSUs, PSUs, and BSAs. The reverse stock split proportionally reduced the number of outstanding awards, including their weighted average grant date fair value. As a result, employees holding these grants experienced a corresponding adjustment in the value of their awards to align with the revised share structure. This adjustment ensures that the economic value and equity proportion represented by the awards remain consistent post-split.
26. Loss per share
The loss and weighted average numbers of Ordinary Shares used in the calculation of loss per share are as follows:
|
| As at 30 June |
|
(US dollars in thousands) | 2024 | 2023 | 2022 |
Loss for the year/period attributable to equity owners | (46,700) | (24,355) | (22,054) |
Weighted average number of shares in issue (‘000s) | 3,079 | 2,467 | 2,074 |
Basic loss per share (dollars) | (15.17) | (9.87) | (10.64) |
Diluted loss per share (dollars) | (15.17) | (9.87) | (10.64) |
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
On October 4, 2023, the Company announced a one-for-ten (1-10) reverse stock split and par value change of its Ordinary Shares which began trading on a post-split basis on October 6, 2023. The reverse stock split has been applied retrospectively to the prior years' share figures for the purpose of calculating EPS.
27. Pensions
The Company's principal pension plan comprises the compulsory superannuation scheme in Australia, where the Company contributed 11% during the year, and for FY2025, the Company will contribute 11.5%. A pension scheme is also in place for U.K. employees, where the Company contributes 7% (year ended June 30, 2023: 7%; year ended June 30, 2022: 7%). A pension scheme is also in place for Netherlands employees where the Company contributes 10.3%. The pension charge for the year represents contributions payable by the Group which amounted to $0.1 million (year ended June 30, 2023: $0.4 million; year ended June 30, 2022: $0.9 million).
28. Financial instruments
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Financial assets at amortised cost |
|
|
|
Trade and other receivables | 9,644 | 5,676 | 6,921 |
Cash and cash equivalents | 199 | 553 | 1,285 |
Restricted cash | 292 | 608 | 1,195 |
Total | |||
|
|
|
|
Financial liabilities at amortised cost |
|
|
|
Loans and borrowings | 29,086 | 32,388 | 28,561 |
Trade and other payables | 24,345 | 9,586 | 10,847 |
Total |
The amounts disclosed in the above table for trade and other receivables and payables do not agree to the amount reported in the Consolidated Statement of Financial Position as they exclude prepaid expenses, payroll liabilities and sales tax payable, current tax receivables and contract assets and liabilities which do not meet the definition of financial assets or liabilities.
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
(a) Financial risk management
The Group's principal financial instruments are bank balances, cash and medium-term loans. The main purpose of these financial instruments is to manage the Group's funding and liquidity requirements. The Group also has other financial instruments such as trade receivables and trade payables which arise directly from its operations.
The Group is exposed through its operations to the following financial risks:
• | Liquidity risk |
• | Credit risk |
• | Foreign currency risk |
• | Interest rate risk |
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. Policy for managing risks is set by the Chief Executive Officer and is implemented by the Group's finance department. All risks are managed centrally with a tight control of all financial matters.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group considers that liquidity risk is effectively managed and mitigated. The Group held unrestricted cash resources of $0.2 million at June 30, 2024 (June 30, 2023: $0.6m; June 30, 2022: $1.3m). The ratio of current assets to current liabilities at June 30, 2024 is 0.33 (June 30, 2023: 0.54; June 30, 2022: 0.93).
Following sale of ex-solar J.A. Martin operations on July 1, 2022, the AU$2.1 million J.A. Martin debtor finance facility (drawn down at June 30, 2022: nil; June 30, 2021: nil) was cancelled and a new facility with a limit of AU$2.5 million and variable interest rate that is currently 7.75% was established by Kenshaw, as well as a trade finance facility of $0.5 million. As of June 30, 2024, this facility amounting to AU$1.8 million is reclassified to “Assets held for sale” as a result of Kenshaw Electrical Pty Ltd sale.
The Group maintains near-term cash flow forecasts that enable it to identify its borrowings requirement so that remedial action can be taken if necessary.
As part of the going concern assessment (explained earlier), we also reviewed the net current liabilities outstanding (payable in the next 12 months) as of 30 September 2024, which amounted to $9.3 million. After accounting for adjustments such as excluding payables to related and friendly parties, liabilities settled post-30 September, and reclassifying accrued interest to non-current liabilities (AWN has provided confirmation to defer the interest accrued to them by more than 12 months), the adjusted net current liabilities has been reduced to approximately $5.4 million. Additionally, our analysis indicates that the budgeted combined average monthly cash burn (not accounting for sales, deposits and other cash inflows) for VivoPower and Tembo over the next 12 months is approximately $357 thousand per month, or equivalent to approximately $4.3 million per annum. Considering both the adjusted net liabilities and cash burn, the projected cash outlay for the next 12 months is estimated to be approximately $9.7 million. As of the date of this report the company has finalised a $12 million facility.
With the upcoming cash requirements, the Company recently also embarked on a ‘Sum of the Parts' exercise to identify under-valued assets and determine ways to monetise them separately. These efforts include, but are not limited to: Spinning Tembo off independently via a SPAC which has been valued at $838 million USD A reverse merger with FAST at a potential valuation of $522 million USD Bring forward the sale of the Caret portfolio with a potential value of $7.2 million USD
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
Further approaches to the market for the sale of VivoPower shares
Working with potential investors, currently under NDA's, to invest both in Tembo and VivoPower directly to take advantage of our current stock price.
Contractual maturities of financial liabilities, including interest payments, are as follows:
Year ended 30 June 2024 |
| Less than | 1-3 | 3-5 | More than 5 |
(US dollars in thousands) | Total | 1 year | years | years | years |
Contractual maturity of financial liabilities |
|
|
|
|
|
Trade and other payables (financial liabilities) | 24,345 | 24,345 | - | - | - |
Borrowings | 29,086 | 8,171 | 853 | 20,062 | - |
Lease liabilities | - | - | - | - | - |
Total | 53,431 | 32,516 | 853 | 20,062 | - |
|
|
|
|
|
|
Year ended 30 June 2024 |
| Less than | 1-3 | 3-5 | More than 5 |
(US dollars in thousands) | Total | 1 year | years | years | years |
Contractual maturity of financial liabilities |
|
|
|
|
|
Trade and other payables (financial liabilities) | 24,345 | 24,345 | - | - | - |
Borrowings | 29,086 | 8,171 | 853 | 20,062 | - |
Lease liabilities | - | - | - | - | - |
Total | 53,431 | 32,516 | 853 | 20,062 | - |
|
|
|
|
|
|
Year ended 30 June 2023 |
| Less than | 1-3 | 3-5 | More than |
(US dollars in thousands) | Total | 1 year | years | years | 5 years |
Contractual maturity of financial liabilities |
|
|
|
|
|
Trade and other payables (financial liabilities) | 9,586 | 9,586 | - | - | - |
Borrowings | 30,083 | 1,922 | 12,323 | 8,447 | 7,391 |
Lease liabilities | 2,305 | 462 | 1,375 | 415 | 53 |
Total | 41,974 | 11,970 | 13,698 | 8,862 | 7,444 |
(c) Credit risk
The primary risk arises from the Group's receivables from customers and contract assets. The majority of the Group's customers are long standing and have been a customer of the Group for many years. Losses have occurred infrequently. The Group is mainly exposed to credit risks from credit sales, but the Group has no significant concentrations of credit risk and keeps the credit status of customers under review. Credit risks of customers of new customers are reviewed before entering into contracts. The debtor exposure is monitored by Group finance and the local entities review and report their exposure on a monthly basis.
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
The Group does not consider the exposure to the above risks to be significant and has therefore not presented a sensitivity analysis on the identified risks.
(d) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk on sales and purchases that are denominated in currencies other than the respective functional currencies of the Group entities to which they relate, primarily between USD, AUD, EUR and GBP.
The Group's investments in overseas subsidiaries are not hedged as those currency positions are either USD denominated and/or considered to be long-term in nature.
The Group is exposed to foreign exchange risk on the following balances at 30 June 2024:
• | Cash and cash equivalents $0.2 million denominated in AUD. |
• | Restricted cash $0.3 million denominated in AUD. |
• | Trade and other receivables $0.4 million denominated in AUD, $0.8 million denominated in EUR and $2.1 million denominated in GBP. |
• | Trade and other payables $6.2 million denominated in AUD, $2.2 million in EUR and $5.5 million in GBP. |
Of the total shareholder loan of $29.1 million, $27.1 million is denominated in USD and $1.9 million is denominated in AUD.
(f) Interest rate risk
As a result of the related party loan agreement the Group is exposed to interest rate volatility. However, the interest rate is fixed for the medium term, therefore, the risk is largely mitigated for the near future. The Group will continue to monitor the movements in the wider global economy.
29. Related party transactions
AWN is not the ultimate controlling party of VivoPower, but retains a significant influence. As at June 30, 2024, AWN held a 20.1% equity interest in the Company. The Board of Directors of VivoPower operates at arms- length from that of AWN. To the extent there are matters between the two companies of a confidential or commercial nature Mr. Chin recuses himself from these matters. AWN does not participate in the day-to-day operations of VivoPower.
Kevin Chin, Chairman and Chief Executive Officer of VivoPower, is also Chief Executive of AWN. During the period, a number of services were provided to the Company from AWN and its subsidiaries; the extent of the transactions between the two groups is listed below. Mr. Chin recused himself from these activities to ensure there was no conflict of interest.
On January 11, 2023, amendments to the related party loan were agreed with AWN:
(i) to defer repayment of principal to commence on April 1, 2025, with repayments over 60 months to March 31, 2030.
(ii) to defer interest payments from October 1, 2023, becoming due and payable on the earlier of a) completion by VivoPower of a debt or equity raise of at least US$25 million, and b) October 1, 2024.
(iii) to extend the increased interest rate and line fee of 10.00% and 2.00% per annum respectively commenced on October 1, 2021 to the earlier of a) March 31, 2025 or b) the date a minimum Prepayment of US$1,000,000 is made.
(iv) to extend the initial refinancing fee accruing incrementally at 1.6% per annum from July 1, 2021 and become payable at the earlier of a) US$1.0 million prepayment being made or b) April 1, 2025.
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
(v) to defer the repayment date of the previous fixed facility extension fee of $0.355 million, becoming payable on April 1, 2025.
(vi) In addition to previously agreed refinancing fees, an additional $0.855 million fixed refinancing fee will accrue immediately and become payable on April 1, 2025.
On June 30, 2023, further amendments to the loan were agreed with AWN:
(i) to defer interest payments from October 1, 2024 to April 1, 2025, and to replace the conditional requirement to repay accrued interest upon completion by VivoPower of a debt or equity raise of at least US$25 million, with the conditional requirement to make repayments of interest and/or principal to meet the mandatory repayment schedule described in sections (ii) and (iii) below following a qualifying liquidity event.
(ii) upon completion by VivoPower International PLC of a qualifying liquidity event of at least $5.0 million, Aevitas O Holdings Pty Limited is required to make mandatory prepayment of principal and interest to AWN Holdings in accordance with the following schedule:
a) proceeds $5 million to $7.5 million - pay 25% of amounts raised;
b) proceeds $7.5 million to $12.5 million - pay $1.875 million plus 45% of amounts raised;
c) proceeds $12.5 million and above - pay $4.125 million plus 25% of amounts raised.
(iii) for the purposes of the mandatory prepayment requirement, a ‘qualifying liquidity event' excludes direct investments into VivoPower's subsidiary, Tembo, and debt raised in respect of working capital finance facilities, but includes:
a) equity or debt raise;
b) trade sale of underlying subsidiary or business unit (including, for example, Aevitas and Caret); and
c) loan repayment from Tembo to VivoPower.
(iv) as consideration for the concessions agreed with AWN, VivoPower International PLC committed to issue AWN with 500,000 warrants, with a duration of 12 months, at an exercise price of $0.67 per share.
On June 30, 2024, VivoPower amended its shareholder loan financing agreement with AWN. The loan includes a facility limit of $34 million, of which a drawdown of $8.1 million principal is due to be repaid in the current period, and $20.9 million principal is non-current. In addition, there is $12 million in interest and fees on the AWN loan due to be repaid in the current period. The agreement consolidated all shareholder loans into a single tranche. AWN also received an option to acquire 1,150,000 Tembo shares post-business combination with Cactus Acquisition Corp 1 Limited at $1.35 per share. Post balance date, AWN agreed to a 9-month grace period for the repayment of $11 million accrued interest, and a deferral of $8.9 million of principal for repayment from April 1, 2025, to January 1, 2026. This renders all but $1 million of interest noncurrent in nature, and all of the loan principal non-current.
In December 2021, a short-term loan of $1.1 million (A$1.5 million) was provided from AWN to Aevitas O Holdings Pty Limited at an interest rate of 10.0%, increasing to 12.5% from January 1, 2022. The loan is set to expire on April 1, 2025 (initially set as April 30, 2022, then extended to the earlier of October 01, 2023, then extended on January 11, 2023, to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower International PLC of a debt or equity raise of at least S$25 million was dropped on June 30, 2023. Facility extension fees of A$29,000 (A$40,000) and $43,500 (A$60,000) are payable upon maturity, relating to the two extensions respectively.
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
On February 22, 2022, a short-term $3.0 million loan was provided from AWN Holdings to Aevitas O Holdings Pty Limited, with an interest rate of 10.00% per annum payable on the principal sum upon maturity. The loan is set to expire on April 1, 2025 (initially set as May 13, 2022, then extended to the earlier of October 1, 2023, then extended on January 11, 2023, to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower International PLC of a debt or equity raise of at least S$25 million was dropped on June 30, 2023. Facility extension fees of $85,000 and $110,000 are payable upon maturity, relating to the two extensions respectively.
On December 22, 2022, a short-term $3.0 million loan was provided from AWN to Aevitas, with an interest rate of BBSY bid floating rate (on average 3.60% for the period from inception to June 30, 2023) plus fixed margin of 15.0% per annum payable on the principal sum upon maturity. A 1% facility establishment fee of $30,000 was deducted upon initial loan drawdown, and a further 3% exit fee of $90,000 is payable on expiry. The loan is set to expire on April 1, 2025 (initially set as October 1, 2023, then extended on January 11, 2023, to April 1, 2025). The requirement for the loan to expire upon completion by VivoPower International PLC of a debt or equity raise of at least S$25 million was agreed on January 11, 2023, then dropped on June 30, 2023. A facility extension fee of $115,000 is payable upon maturity.
In February and March 2023, further short-term loans of A$0.5 million and A$0.25 million were established between AWN Holdings and Aevitas O Holdings Pty Limited, drawn down between February and May 2023. On June 30, 2023, the expiry or the loans was amended to August 31, 2023.
On June 30, 2024, VivoPower amended its shareholder loan financing agreement with AWN. The loan includes a facility limit of $34 million, of which a drawdown of $8.1 million principal is due to be repaid in the current period, and $20.9 million principal is non-current. In addition, there is $12 million in interest and fees on the AWN loan due to be repaid in the current period. The agreement consolidated all shareholder loans into a single tranche.
Mr. Hui is paid fees of $50,000 per annum during the year. Mr. Hui elected to receive 100% of his fees in cash. $50,000 remaining accrued and payable as at June 30, 2024. Mr. Hui also receives equity-based remuneration in relation to his involvement in management of Critical Power Services segment, and the hyper-turnaround and hyperscaling program. Of the 17,500 ($13,125) annual retention RSUs granted on April 1, 2020, vesting annually from June 2021 to June 2026, 3,500 RSUs ($2,625) vested in the current year. Of the 52,500 ($39,375) performance RSUs vesting quarterly from September 2020 to June 2023, dependent on meeting quarterly performance goals, 6,314 RSUs ($4,736) vested in the current year. A further 20,000 annual retention RSU's ($5,200) were granted to Mr. Hui on January 11, 2023, vesting annually from December 2023 to December 2025.
From time to time, costs incurred by AWN on behalf of VivoPower are recharged to the Company. During the year ended June 30, 2024, $617,334 was recharged to the Company (year ended June 30, 2023, $1,138,346, year ended June 30, 2022: $343,806). At June 30, 2024, the Company has a payable to AWN in respect of recharges of $886,676 (June 30, 2022: $1,392,203, June 30, 2022: $313,688).
Aevitas is indebted to The Panaga Group Trust, of which Mr. Kevin Chin is a beneficiary and one of the directors of the corporate trustee of such trust, with 4,697 Aevitas Preference Shares, of face value A$46,970. The Panaga Group Trust earned A$3,302 ($2,188) dividends on the Aevitas Preference Shares during the year ended June 30, 2023.
Chairman's fees for Kevin Chin in the amount of £68,000 ($85,570) were charged to the Company by Arowana Partners Group Pty Ltd (“APG”) in the current year. A further $0.4 million costs (as of June 30, 2023: $0.1 million) incurred by APG on behalf of the Company were recharged to the Company in the year. At June 30, 2024, the Company had an account payable of $0.7 million (as of June 30, 2023: $0.2 million) in respect of these services. Mr. Chin is a shareholder and director of Arowana Partners Group Pty Ltd during the year ended June 30, 2024.
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
As CEO, Mr Chin is paid £325,000 base fees, £38,000 annual professional development allowance. A further $0.5 million incurred by Arowana International UK Limited were recharged to the Company in the year. Of the base salary in FY23, 4 months were paid in cash, whilst for 8 months, Mr. Chin agreed to receive payment in the form of 541,666 cashless warrants in VivoPower shares, exercisable in the period June 3, 2024, to June 3, 2029, at an exercise price of $0.60. Shares issued following exercising of warrants will remain restricted for 12 months. Mr. Chin has allocated these warrants to a benevolent cause, the ASEAN Foundation. At June 30, 2024, the Company had an account payable of $1.2 million in respect of these services and recharges.
Mr. Chin receives equity-based remuneration in relation to his involvement in leading the hyper-turnaround and hyperscaling program. Of the 87,200 ($65,400) annual retention RSUs granted on April 1, 2020, vesting annually from June 2021 to June 2026, 17,440 RSUs ($13,080) vested in the current year. Of the 261,600 ($196,200) performance RSUs vesting quarterly from September 2020 to June 2023, dependent on meeting quarterly performance goals, 31,456 RSUs ($23,592) vested in the current year. In December 2021, the Remuneration Committee approved an equity award of RSUs in relation to short-term incentives for the year ended June 30, 2022, vesting in June 2023 deferred from June 2022. The award vested 94,291 RSUs ($275,330), based on Mr. Chin's base salary £325,000 x 1.3237 exchange rate x 64% performance measurement / $2.92 VWAP (Volume weighted average price). A further 20,000 annual retention RSUs ($5,200) were granted to Mr. Chin on January 11, 2023, vesting annually from December 2023 to December 2025.
On November 26, 2021, APG provided a loan of $0.37 million to Caret to provide working capital assistance. The loan incurred interest during the year of $22,895 at 8% plus a 2% facility fee, plus a one-off establishment fee of $7,400. The loan plus interest were repaid in August 2022.
In August 2023, the Company received short-term funding from Arowana International UK Limited amounting to £25,000 for working capital purposes which was repaid in September 2023. In addition, the Company also received an interest only basis loan amounting to $48,000 from Arowana United Enterprises Pte Ltd on October 6, 2023, stipulating a nominal rate of 8% per annum.
30. Subsequent events
Post the balance sheet date Tembo executed a definitive Business Combination Agreement with CCTS on August 29, 2024; the business combination is expected to by completed by the first quarter of the calendar year 2025, with Tembo being listed as a separate entity on the Nasdaq.
On July 2, 2024, as part of the Company's previously announced strategic focus on its fast-growing business units being Electric Vehicles and Sustainable Energy Solutions, the Company announced the sale of its non-core business unit, Kenshaw Electrical Pty Ltd, for gross consideration of approximately AU$1.2 million. By divesting non-core assets, VivoPower believes it can concentrate on advancing its core sustainable energy solutions and electric vehicle businesses.
On July 5, 2024, Tembo EV Australia Pty Ltd and Tembo Technology Pty Ltd shares were sold from VivoPower Pty Ltd, to Tembo e-LV B.V. in order to facilitate the Business Combination Agreement with Tembo e-LV B.V. with Cactus Acquisition Corp 1 Ltd.
On July 11, 2024, VivoPower Pty Ltd was placed into Voluntary Administration. This follows the transfer of the Australian Tembo entities to Tembo e-LV B.V. in preparation for the signing of the Business Combination Agreement for the SPAC between Tembo e-LV B.V. and Cactus Acquisition Corp 1 Ltd.
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
On September 16, 2024, Kenshaw Electrical Pty Ltd was placed into Voluntary Administration. This follows the sale of its assets to ARA Australia on July 2, 2024.
On September 17, 2024, the Company entered into a placement agency agreement with Chardan Capital Markets LLC for an offering of up to 10,000,000 Ordinary Shares at $1.25 per share, under the Company's Registration Statement on Form F-1 (No. 333-281065), effective August 29, 2024. The offering closed early on September 27, 2024, resulting in the issuance of 3,200,000 Ordinary Shares to institutional investors, generating approximately $4 million in gross proceeds.
On November 23, 2024, AWN agreed to a 9 month grace period for the repayment of $11 million accrued interest, and a deferral of $8.9 million of principal for repayment from April 1, 2025 to January 1, 2026. This renders all but $1 million of interest non-current in nature, and all of the loan principal noncurrent.
31. Key management personnel compensation
Key management personnel, which are those roles that have a Group management aspect to them are included in Note 9 to the consolidated financial statements.
32. Ultimate controlling party
As at June 30, 2024, AWN held a 20.1% equity interest in the Company. Since June 30, 2021, the Company no longer has an ultimate controlling party.
In prior periods, the ultimate controlling party and the results into which these financials were consolidated was AWN, a company registered in Australia.
33. Prior year adjustments
No prior year adjustments were required to be booked in the FY24 Accounts
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
Company Statement of Financial Position
|
| 30 June | ||
(US dollars in thousands) | Note | 2024 | 2023 | 2022 |
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Deferred tax assets |
| - | - | - |
Investments | 38 | |||
Intercompany loan receivable |
| - | - | - |
Total non-current assets |
| |||
Current assets |
|
|
|
|
Cash and cash equivalents |
| ( | ( | |
Other receivables | 39 | |||
Total current assets |
| |||
TOTAL ASSETS |
| |||
EQUITY AND LIABILITIES |
|
|
|
|
Noncurrent liabilities |
|
|
|
|
Loans and borrowings - NC |
| - | - | |
Total non-current liabilities |
| - | - | |
Current liabilities |
|
|
|
|
Trade and other payables | 40 | |||
Loans and borrowings |
| - | - | |
Provisions | 41 | - | ||
Total current liabilities |
| |||
Equity |
|
|
|
|
Share capital | 42 | |||
Share premium | 42 | |||
Other reserves | 43 | ( | ( | ( |
Retained deficit |
| ( | ( | ( |
Total Equity |
| |||
TOTAL EQUITY AND LIABILITIES |
|
Registered number 09978410
These financials were approved by
Kevin Chin
Chairman
Company Statement of Cash Flow
VivoPower International PLC for the year ended 30 June 2024
Company Statement of Cash Flow
(US dollars in thousands, except per share |
| Year ended 30 June | ||
amounts) | Note | 2024 | 2023 | 2022 |
Cash flows from operating activities |
|
|
|
|
Loss for the period |
| ( | ( | (4,355) |
Income tax |
| - | - | - |
Foreign exchange loss |
| 30 | ||
Finance income |
| - | - | |
Finance expense |
| 13 | ||
Impairment losses |
| - | - | |
Increase/(decrease) in provisions |
| (485) | ||
(Increase)/decrease in trade and other receivables |
| ( | ( | 815 |
(Decrease)/increase in trade and other payables |
| ( | 449 | |
Net cash used in operating activities |
| ( | (3,533) | |
Cash flows from investing activities |
|
|
|
|
Acquisition of subsidiary |
| - | ( | - |
Intercompany loan repayments |
| ( | ( | (3,909) |
Net cash used in investing activities |
| ( | ( | (3,909) |
Cash flows from financing activities |
|
|
|
|
Capital raise - net |
| 2,208 | ||
Finance expense |
| ( | ( | (13) |
Net cash from financing activities |
| 2,195 | ||
Net increase/(decrease) in cash and cash equivalents |
| ( | ( | (5,247) |
Cash and cash equivalents at the beginning of the period |
| ( | 5,256 | |
Cash and cash equivalents at the end of the period |
| ( | ( | 9 |
Company Statement of Changes in Equity
VivoPower International PLC for the year ended 30 June 2024
Company Statement of Changes in Equity
| Share | Share | Other | Retained |
|
(US dollars in thousands) | Capital | Premium | Reserves | Deficit | Total |
At 30 June 2021 | 222 | 76,229 | 12,087 | (19,532) | 69,006 |
Total comprehensive loss for the period | - | - | - | (4,116) | (4,116) |
Prior year adjustments | - | - | - | (239) | (239) |
Restated loss for the year | - | - | - | (4,355) | (4,355) |
Capital raises | 1 | 243 | (121) | - | 123 |
Equity instruments | 24 | 20,442 | (20,466) | - | - |
Other share issuances | 1 | 217 | (10) | - | 208 |
Employee share awards | 8 | 2,287 | (417) | - | 1,878 |
| 34 | 23,189 | (21,148) | (4,355) | (2,280) |
At 30 June 2022 | ( | ( | |||
Total comprehensive income for the period | - | - | - | ( | ( |
Capital raises | ( | - | |||
Other share issuances | - | - | ( | - | ( |
Employee share awards | - | ||||
| ( | ( | |||
At | ( | ( | |||
Total comprehensive income for the period | - | - | - | ( | ( |
Capital raises | ( | - | |||
Employee share awards | - | ||||
| ( | ( | |||
At 30 June 2024 | ( | (25,660) |
For further information on “Other Reserves” please see Note 43 within the consolidated financial statements.
Company Information
VivoPower International PLC for the year ended 30 June 2024
Notes to the Company Financial Statements
36. Reporting entity
VivoPower International PLC company financial statements were prepared in accordance with with UK adopted International Accounting Standards (UK IAS), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.
37. Basis of preparation
(a) Foreign exchange -
(b) Taxation -
(c)
(d) Related party transactions - Details of the related party transactions can be found in Note 31 within the consolidated financial statements.
38. Investment
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Shares in group undertakings |
|
|
|
Investment in Tembo e-LV | 7,125 | 7,125 | 7,125 |
Investment in VivoPower International Services Limited | - | 7,388 | 7,388 |
Investment in Vivopower International IMEA DMCC | 29 | - | - |
Total |
39. Other receivables
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Amounts owed by group undertakings | |||
Other receivables |
Company Information
VivoPower International PLC for the year ended 30 June 2024
Prepaid expenses | |||
Total |
40. Trade and other payables
| As at 30 June | ||
(US dollars in thousands) | 2024 | 2023 | 2022 |
Trade payables | |||
Accrued expenses | |||
Payroll tax liabilities | |||
Other borrowings | - | ||
Total |
41. Provisions
(US dollars in thousands) | Fiscal | Litigation | Total |
At 30 June 2022 | - | - | - |
Charged/(credited) to profit or loss: | - | ||
Additional provisions | - | - | - |
Provisions utilised | - | - | - |
At 30 June 2023 | - | ||
Charged/(credited) to profit or loss: | - | ||
Additional provisions | - | - | - |
Provisions utilised | - | - | - |
At 30 June 2024 | - |
42. Share capital
|
| As at 30 June |
|
(US dollars in thousands) | 2024 | 2023 | 2022 |
Allotted, called up and fully paid: |
|
|
|
$533,298 | $307,815 | $255,819 | |
Number allotted: |
|
|
|
Ordinary Shares of $0.012 each | $4,439,733 | 25,651,140 | 21,318,118 |
|
| Par |
|
|
|
| value | Share |
|
| Shares | USD | premium | Total |
| No. | 000 | USD 000 | USD 000 |
At 30 June 2021 | 18,506,064 | 222 | 76,229 | 76,451 |
Conversion of equity instruments5 | 2,005,190 | 24 | 20,442 | 20,466 |
Company Information
VivoPower International PLC for the year ended 30 June 2024
Capital raises1 | 82,644 | 1 | 243 | 244 |
Other issuances6 | 42,000 | 1 | 217 | 218 |
Employee share scheme issues3 | 682,220 | 8 | 2,287 | 2,295 |
At 30 June 2022 | 21,318,118 | 256 | 99,418 | 99,674 |
Capital raises1 | 4,230,770 | 51 | 5,449 | 5,500 |
Employee share scheme issues | 102,252 | 1 | 151 | 152 |
At 30 June 2023 | 25,651,140 | 308 | 105,018 | 105,326 |
Capital raises1 | 1,715,191 | 206 | 2,862 | 3,068 |
Employee share scheme issues | 282,836 | 19 | 340 | 359 |
Reverse stock-split | (23,209,434) | - | - | - |
At 30 June 2024 | 4,439,733 | 533 | 108,220 | 108,753 |
1 | During the year ended June 30, 2024, the company issued 1,715,191 million shares to capital market investors through At the Market issuances and registered direct offerings, raising $3.1 million in gross proceeds. |
|
|
On July 29, 2022, the Company entered into a Securities Purchase Agreement to issue and sell, in a registered direct offering directly to an investor, (i) an aggregate of 2,300,000 Ordinary Shares (the “Shares”), nominal value $0.012 per share, at an offering price of $1.30 per share and (ii) an aggregate of 1,930,770 pre-funded warrants exercisable for Ordinary Shares at an offering price of $1.2999 per prefunded warrant, for gross proceeds of approximately $5.5 million before deducting the placement agent fee and related offering expenses. The pre-funded warrants were sold to the Investor whose purchase of Ordinary Shares in the Registered Offering would otherwise result in the Investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company's outstanding Ordinary Shares immediately following the consummation of the Registered Offering, in lieu of Ordinary Shares. Each pre-funded warrant represents the right to purchase one Ordinary Share at an exercise price of $0.0001 per share. The pre-funded warrants were exercised on November 22, 2022. | |
|
|
In a concurrent private placement, the Company agreed to issue to the investor, Series A Warrants exercisable for an aggregate of 4,230,770 Ordinary Shares at an exercise price of $1.30 per share. Each Series A Warrant will be exercisable on February 2, 2023 and will expire on February 2, 2028. The Series A Warrants and the Ordinary Shares issuable upon the exercise of the Series A Warrants were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) promulgated thereunder. |
Each share has the same right to receive dividends and repayment of capital and represents one vote at shareholders' meetings. Proceeds received in addition to the nominal value of the shares issued during the year have been included in share premium. The costs associated with the issuance of new shares are included within other reserves (see note 43). Share premium has also been recorded in respect of the share capital related to employee share awards.
Company Information
VivoPower International PLC for the year ended 30 June 2024
43. Other reserves
(US dollars in thousands) | Equity instruments | Shares pending issue | Capital raising costs | Equity incentive costs | Share awards issuance | Foreign exchange | Total |
|
|
|
|
|
|
|
|
At 30 June 2021 | - | 20,466 | (8,830) | 1,428 | (971) | (6) | 12,087 |
Equity instruments - conversion | - | (20,466) | - | - | - | - | (20,466) |
Share issuance costs | - | - | - | - | (1,879) | - | (1,879) |
Capital raising costs | - | - | (121) | - | - | - | (121) |
Equity incentives (restated) | - | - | - | 1,452 | - | - | 1,452 |
Other movements | - | - | - | (6) | - | 6 | - |
| - | (20,466) | (121) | 1,446 | (1,879) | 6 | (21,014) |
At 30 June 2022 | - | - | (8,951) | 2,874 | (2,850) | - | ( |
Capital raising costs | - | - | (445) | - | - | - | (445) |
Equity incentives | - | - | - | 147 | (154) | - | (7) |
| - | - | (445) | 147 | (154) | - | (452) |
At 30 June 2023 | - | - | (9,396) | 3,021 | (3,004) | - | ( |
Capital raising costs | - | - | (207) | - | - | - | (207) |
Equity incentives | - | - | - | 333 | (92) | - | 241 |
| - | - | (207) | 333 | (92) | - | 34 |
At 30 June 2024 | - | - | (9,603) | 3,354 | (3,096) | - | ( |
44. Employee and directors
The company did not employ any members of staff during the course of the year. Contractual agreements are in place for four directors to serve on the board of VivoPower International PLC.
See the Directors' Report in the consolidated financial statements for full details of the directors.
Company Information
VivoPower International PLC for the year ended 30 June 2024
Company Information
Advisors
Company Registrars | Legal Advisers |
250 Royall Street | 1 Now Churchyard |
Canton, MA, USA 02021 | London, UK, EC4M 9DQ |
| Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 44 Montgomery Street, San Francisco, CA 94104 |
|
|
Correspondence address: | Principal Bankers |
Computershare Inc., | |
P.O. Box 505000, | 7 Westferry Circus, |
Louisville, KY, USA 40233 | Canary Wharf, |
| London, UK E14 4HD |
|
|
Independent Auditors | Company Secretary |
15 Westferry Circus, | 35 New Broad Street |
Canary Wharf, | London, UK EC2M 1NH |
London, UK E14 4HD |
|
Shareholder Information
Country of Incorporation and Main Number of Securities in Issue
Countries of Operation
As of 31 December 2024, the Company's issued share capital consists of 9,001,128 Ordinary Shares with a nominal value of $0.12 each.
VivoPower International PLC is incorporated in England & Wales. The Company operates in the United Kingdom, United States, Australia, Canada, United Arab Emirates and Netherlands.
Company Registration
Registered office:
The Scalpel, 18th Floor
52 Lime Street
London, EC3M 7AF, UK
Registered in England & Wales
Company number:
Financial Calendar
Annual General Meeting (“AGM”)
The Company's AGM was be held on 30 December 2024.