Sovereign Cloud : Quarterly Activities/Appendix 4C Cash Flow Report
SOV.AX
For personal use only
ASX Announcement (SOV)
19 January 2022
Appendix 4C Release - Quarter to 31 December 2021
Sovereign Cloud Holdings Limited ("SOV", the "Company"), trading as AUCloud, is pleased to provide its activity update for the quarter ended 31 December 2021 ("Q2FY22").
SOV also released its Appendix 4C today.
Key Highlights - Q2FY22
Revenues
AUCloud generated $1.07 million in IaaS revenue during Q2, a slight increase on the Q1 result. The impact of the lengthy Covid-19 lockdown period continued to be felt in Q2, with project designs taking time to regain momentum and convert into revenues.
Total Contract Value
TCV Closed during Q2 was up $1.04 million (119%) on Q1 to $2.52 million, which largely related to nine (9) contract extensions. AUCloud also secured two (2) new direct contracts with government agencies and one
(1) new contract via a partner. A summary of the key TCV metrics are as follows:
Summary of TCV Metrics
Q1FY22
Q2FY22
$'m
$'m
Opening Total Contract Value (TCV)
5.96
5.77
Add:
Closed TCV
0.87
2.52
Reduce: Terminated Contracts
(0.61)
Less:
Revenue recognised
(1.06)
(1.07)
Closing TCV Outstanding
5.77
6.61
Late in Q2 the Company was advised of a decision by its long-term customer ANU, to revert to pre-COVID operational practices, which would result in winding down of the virtual desktop program. This impact has been included in the TCV Outstanding at the end of Q2FY22.
AUSTRALIAN ● ASSURED ● ACCOUNTABLE ● AMPLIFIED ● AGILE ● ALIGNED
__________________________________________________________________________________________
Sovereign Cloud Holdings Ltd
Level 38, Central Plaza One
ACN: 622 728 189
345 Queen Street
W: australiacloud.com.au
Brisbane, QLD 4000
For personal use only
Cash Flow
Cash receipts from customers were $1.12million in Q2FY22. Net cash outflow from operations in the period was $2.48million, largely reflecting employment costs.
Capital expenditure payments during Q2FY22 totalled $0.54million. In line with the strategic partnership and investment from NEXTDC, SOV expects to continue to strategically invest in the expansion of its national AUCloud footprint, which it expects will drive future growth.
CEO Commentary
The team was very pleased to be able to return to face-to-face meetings with customers and partners after the extended lockdown and is looking forward to continuing to build on that momentum in Q3. We are cognisant that with a Federal Election taking place in the first half of 2022, our sales focus during this period will need to intensify on state government, critical national industry and enterprise. We are excited about the opportunities emerging in these areas via our new strategic relationship with NEXTDC.
Strategically, the quarter was underlined by the investment by NEXTDC and the related successful entitlement offer to raise $35m. The investment will not only underpin development of operational platforms in Queensland, Victoria, and South Australia to complement our existing footprints in ACT and NSW but also trigger more rapid expansion into the wider industry sectors. The technical team have work underway on the first of the platforms which will be deployed in the Brisbane NEXTDC environment and is targeted for completion in the first half of calendar year 2022.
Most notably, the Company looks forward to the anticipated opportunities arising from the new Federal government legislation passed during Q2 around protecting "Critical Infrastructure and Systems of National Significance reforms", which extended the formal number of industry sectors designated under critical infrastructure legislation from four to eleven including: communications; financial services and markets; data storage or processing; defence industry; higher education and research; energy; food and grocery; health care and medical; space technology; transport; and water and sewerage. These sectors, along with a growing range of security conscious enterprise organisations with increased awareness of cyber security risks, will likely begin to transition their security practices to align with that of Federal Government; an area where AUCloud remains one of the leading sovereign cloud practitioners.
The Company today announced a strategic partnership with Arqit to support the development of Sovereign QuantumCloud™, with AUCloud providing underlying infrastructure and accredited environments to Government, Defence, Space and Enterprise deployments in Australia.
_______________________
Philip Dawson Managing Director
AUSTRALIAN ● ASSURED ● ACCOUNTABLE ● AMPLIFIED ● AGILE ● ALIGNED
__________________________________________________________________________________________
Sovereign Cloud Holdings Ltd
Level 38, Central Plaza One
ACN: 622 728 189
345 Queen Street
W: australiacloud.com.au
Brisbane, QLD 4000
For personal use only
Appendix A
Operating Metrics Defined
Summarised below are new operating metrics adopted by management for measuring the progress of business:
AUSTRALIAN ● ASSURED ● ACCOUNTABLE ● AMPLIFIED ● AGILE ● ALIGNED
__________________________________________________________________________________________
Sovereign Cloud Holdings Ltd
Level 38, Central Plaza One
ACN: 622 728 189
345 Queen Street
W: australiacloud.com.au
Brisbane, QLD 4000
For personal use only
Appendix B
Use of Funds - ASX Rule 4.7B
The Company is required to provide analysis of its expenditure since the date of its ASX listing (14 December 2020) and a comparison of actual expenditure against the estimated amounts set out in the "Use of Funds" section included in the Prospectus (Section 7.3). Actual cash expenditure post ASX Listing is shown below, together with a comparison of total estimated amounts included in the "Use of Funds" section in the Prospectus.
Estimated
Actual Incurred
Use of funds
Total per
$ million
Prospectus
Total FY21
YTD FY22
$ million
Customer growth capex
9.3
0.5
0.9
3.1
1.8
2.0
Lease Liabilities
Increase in headcount
2.7
0.6
0.3
Working capital
9.7
4.6
3.7
Offer costs
1.7
1.6
-
Total uses
26.5
9.1
6.9
Cash expenditure post ASX Listing is intended to be used to fund the following:
AUSTRALIAN ● ASSURED ● ACCOUNTABLE ● AMPLIFIED ● AGILE ● ALIGNED
__________________________________________________________________________________________
Sovereign Cloud Holdings Ltd
Level 38, Central Plaza One
ACN: 622 728 189
345 Queen Street
W: australiacloud.com.au
Brisbane, QLD 4000
For personal use only
Rule 4.7B
Appendix 4C
Quarterly cash flow report for entities subject to Listing Rule 4.7B
Name of entity
Sovereign Cloud Holdings Limited
ABN
Quarter ended ("current quarter")
80 622 728 189
December 2021
Consolidated statement of cash flows
Current quarter
Year to date (6
$A'000
months) *
$A'000
1. Cash flows from operating activities
1.1
Receipts from customers
1,116
2,210
1.2
Payments for
(a)
research and development
-
-
(b)
product manufacturing and operating
(944)
(1,492)
costs
(c)
advertising and marketing
(122)
(182)
(d)
leased assets
-
-
(e)
staff costs
(2,048)
(3,843)
(f)
administration and corporate costs
(402)
(904)
1.3
Dividends received (see note 3)
-
-
1.4
Interest received
2
6
1.5
Interest and other costs of finance paid
(83)
(171)
1.6
Income taxes paid
-
-
1.7
Government grants and tax incentives
-
376
1.8
Other (IPO costs expensed)
-
-
1.9
Net cash from / (used in) operating
(2,481)
(4,000)
activities
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(b)
businesses
(c)
property, plant and equipment
(542)
(925)
(f) other non-current assets
ASX Listing Rules Appendix 4C (17/07/20)
Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.
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Sovereign Cloud Holdings Ltd. published this content on 18 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 January 2022 21:41:02 UTC.