For personal use only - ASX · The Company registered strong growth in financial and operational...

LatAm Autos Limited ABN 12 169 063 414

Appendix 4D and

Half-year Financial Report - 30 June 2016

For

per

sona

l use

onl

y

LatAm Autos Limited Appendix 4D Half-year report

1. Company details

Name of entity: LatAm Autos Limited ABN: 12 169 063 414 Reporting period: For the half-year ended 30 June 2016 Previous period: For the half-year ended 30 June 2015

2. Results for announcement to the market

$'000

Revenues from ordinary activities up 44.7% to 3,911

Loss from ordinary activities after tax attributable to the owners of LatAm Autos Limited up 32.0% to (6,626)

Loss for the half-year attributable to the owners of LatAm Autos Limited up 32.0% to (6,626)

Dividends There were no dividends paid, recommended or declared during the current financial period.

Comments The loss for the Consolidated Entity after providing for income tax amounted to $6,626,000 (30 June 2015: $5,021,000).

For a brief explanation of any of the figures reported above, please refer to the financial report for the half-year ended 30 June 2016 released with this document.

3. Net tangible assets

Reporting period

Previous period

Cents Cents

Net tangible assets per ordinary security 4.46 3.67

4. Control gained over entities

Name of entities (or group of entities) Not Applicable

Date control gained

$'000

Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax during the period (where material) -

Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) for the whole of the previous period (where material) -

5. Loss of control over entities

Name of entities (or group of entities) Not Applicable

Date control lost

For

per

sona

l use

onl

y

LatAm Autos Limited Appendix 4D Half-year report

$'000

Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax during the period (where material) -

Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) whilst controlled during the whole of the previous period (where material) -

6. Dividends

Current period There were no dividends paid, recommended or declared during the current financial period.

Previous period There were no dividends paid, recommended or declared during the previous financial period.

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

Not applicable.

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements were subject to a review by the auditors and the review report is attached as part of the Half-year Financial Report.

11. Attachments

Details of attachments (if any):

The Half-year Financial Report of LatAm Autos Limited for the half-year ended 30 June 2016 is attached.

12. Signed

Signed Date: 23 August 2016

Tim Handley Executive Chairman

For

per

sona

l use

onl

y

LatAm Autos Limited

ABN 12 169 063 414

Half-year Financial Report - 30 June 2016

For

per

sona

l use

onl

y

LatAm Autos Limited Contents 30 June 2016

1

Corporate directory 2 Directors' report 3 Auditor's independence declaration 9 Statement of profit or loss and other comprehensive income 10 Statement of financial position 11 Statement of changes in equity 12 Statement of cash flows 14 Notes to the financial statements 15 Directors' declaration 23 Independent auditor's review report to the members of LatAm Autos Limited 24

For

per

sona

l use

onl

y

LatAm Autos Limited Corporate directory 30 June 2016

2

Directors Tim Handley (Executive Chairman) Jorge Mejía Ribadeneira (Executive Director & Chief Executive Officer) Simon Clausen (Non-executive Director) Michael Fitzpatrick (Non-executive Director) Colin Galbraith (Non-executive Director) Gareth Bannan (Alternate Director) Cameron Griffin (Alternate Director)

Company secretaries Melanie Leydin Gareth Bannan

Registered office Level 4, 100 Albert Road South Melbourne, VIC 3205 Tel: +61 3 9692 7222 Fax: +61 3 9077 9233

Principal place of business Latamautos Corporación Isla Pinzon y Tomas Berlanga Quito Ecuador Tel: +593 2 393 2200

Share register Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000

Auditor Grant Thornton The Rialto Level 30, 525 Collins Street Melbourne VIC 3000

Solicitors Minter Ellison Level 40 Governor Macquarie Tower 1 Farrer Place Sydney NSW 2000

Grillo Higgins Lawyers Level 20, 31 Queen Street Melbourne VIC 3000

Stock exchange listing LatAm Autos Limited shares are listed on the Australian Securities Exchange (ASX code: LAA)

Website www.latamautos.com

For

per

sona

l use

onl

y

LatAm Autos Limited Directors' report 30 June 2016

3

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Consolidated Entity') consisting of LatAm Autos Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 30 June 2016.

Directors The following persons were directors of LatAm Autos Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Tim Handley (Executive Chairman) Jorge Mejía Ribadeneira (Executive Director & Chief Executive Officer) Appointed as director 16 May 2016 Simon Clausen (Non-Executive Director) Michael Fitzpatrick (Non-Executive Director) Colin Galbraith (Non-Executive Director) Gareth Bannan (Alternate Director) Cameron Griffin (Alternate Director)

Principal activities The Consolidated Entity is a dedicated online auto classifieds business with operations in Argentina, Mexico, Ecuador, Peru, Panama and Bolivia. In these key Latin American markets ('LatAm Markets'), the Consolidated Entity provides a dedicated online auto classifieds platform to commercial sellers, private sellers and buyers of vehicles. The Consolidated Entity also offers premium automotive related content to automotive buyers and enthusiasts, as well as advertising services and solutions.

The Consolidated Entity also has an offline magazine in Argentina providing automotive related content, advertising services and automotive classifieds.

Dividends There were no dividends paid, recommended or declared during the current or previous financial half-year.

Review of operations The loss for the Consolidated Entity after providing for income tax amounted to $6,626,000 (30 June 2015: $5,021,000).

Financial Performance

The Company achieved sales of $3,911,000 for 1H 2016 (1H 2015: $2,702,000) and a loss after providing for income tax amounted to $6,626,000 (1H 2015: $5,021,000). This performance was the result of expanding operations and marketing efforts and continuing to provide innovative technology solutions to its customers in the six Latin American countries in which it operates and is despite a depreciation in the Mexican and Argentinian currencies compared to the Australian dollar.

For

per

sona

l use

onl

y


4

Group Overview The Company is pleased to announce strong operational and revenue growth in 1H 2016. This growth builds off the solid momentum experienced across the board in 2015. The Company registered strong growth in financial and operational metrics in 1H 2016, on the previous corresponding period (PCP) of 1H 2015, including:

• Australian dollar revenue of A$3,911,000, representing an increase of 45% on PCP • Local currency revenue growth between 24% - 70% for each country on PCP, being:

o Mexico: 70% in Mexican Pesos o Argentina: 60% in Argentinian Pesos o Ecuador: 67% in US Dollars o Peru: 24% in Peruvian Soles o Panama: 64% in US Dollars

• Listings of 186,000 vehicles, at the end of June 2016, representing an increase of 74% since 30 June 2015; • Traffic of 10.0 million sessions in June 2016, representing an increase of 33% since June 2015; and • Dealers using LatAm Autos’ sites in June 2016 were 3,028, up 93% in comparison to the same period in 2015.

Continued progress was made on the Company’s goal to become the dominant dedicated online auto classified and content company in Latin America (excluding Brazil). Important milestones were achieved across the areas of technology, operations, marketing and personnel. Below is an overview of these achievements. Technology Innovation continued to be at the core of LatAm Autos in 1H 2016, with the launch of the Company’s new technology and mobile platform, PTX Live, in in all countries. PTX Live builds off the foundation of having all our platforms on the same source code (as implemented in 2015) and is a proprietary native app developed completely in house. PTX Live is one of the first examples of real time chat technology being used by a vertical classified company in the world, and the first in Latin America. Latin America has the highest penetration of messaging apps in the world, and PTX Live is intended to leverage the high engagement in messaging technology. The main technological competitive advantages of PTX Live include

• Real time communication – via app, mobile or desktop, buyers and sellers can now communicate with each other in real time, with a user experience similar to that of WhatsApp;

• Speed of site – utilizing elastic search functionality the speed of both the desktop sites and the apps are considerably faster than the original PTX version;

• Online presence – car buyers can now see when car sellers are actually online, promoting real time communication;

• User experience – a more intuitive way for buyers to search for cars and dealers to upload and manage their inventory; and

• Detailed search capabilities – google style open search capabilities including predictive autocomplete and fuzzy search capabilities.

Benefits of PTX Live to LatAm Autos are expected include greater mobile focused strategy, increased organic traffic, higher value leads to advertisers and accelerated market share and monetization. In 1H 2016 the Company also launched two new dealer apps and a new consumer app in all countries. The two dealer apps allow dealers to effectively manage their inventory and manage the chat functionality between a team of sales people and numerous prospective clients. The consumer app has been completely overhauled and incorporates all of the benefits of PTX Live in addition to a more efficient listing upload process. All apps are available in both Android and iOS operating systems. In conjunction with the PTX Live roll out, LatAm Autos undertook major changes to its site design to transform its search engine optimisation. This was done with the consultation of a market leading SEO firm, and over 800 changes were made.

For

per

sona

l use

onl

y


5

Operations

LatAm Autos significantly increased its focus on regional expansion in Mexico and now has a physical presence in six Mexican cities, the only national car classifieds company in Mexico.

1H 2016 saw the start of the implementation of the company-wide ERP system (SAP) and electronic invoicing across six countries. These new systems will be integrated with the company-wide CRM (Salesforce) and business intelligence (Tableau) systems. The result of the implementation and integration of these systems will be material operational improvements and efficiencies starting 2H 2016.

Lead generation started to become a meaningful revenue stream in 1H 2016. Leads were provided to a number of types of customers including OEM car manufacturers, car dealers and ancillary companies such as insurance companies. Lead generation activity was strongest in Ecuador given the strength of the Company’s Ecuadorean site, but encouragingly was also present in Mexico, Argentina, Peru and Panama. Lead generation provides and exciting opportunity for LatAm Autos in 2H 2016 and into 2017 as the Company continues to increase its focus on the area. Lead generation is particularly valuable to both customers and the Company as it is pay-for-performance from customers’ perspective and a high margin product from LatAm Autos’ perspective.

LatAm Autos materially increased the headcount of its Quito, Ecuador based call centre in 1H 2016 with a dual focus on increasing monetization of listings and increasing brand awareness amongst the Company’s target market.

Marketing

Marketing expenses increased substantially in 1H 2016 compared to PCP. Marketing expenses were purposely lower in 1H 2015 as the Company was still in the process of integrating its various businesses and migrating the numerous different technologies to the proprietary PTX platform.

During the period the Company achieved greater efficiency with its online marketing efforts, as measured by metrics such as CPL and CPC. It is also achieved success with various viral campaigns and continued strong PR, offline and inbound campaigns.

The marketing team completed its relocation to Mexico City mainly due to the Mexican market being LatAm Autos’ largest market in terms of marketing spend and focus. Being located in Mexico also enables the Company to source employees from one of Latin America’s leading sources of technology and marketing talent pools.

Personnel

LatAm Autos continued to refine its headcount in key areas in 1H 2016 and continued to focus on head count, personnel costs and efficiency of employees. The Technology, Sales and Call Centre divisions all experienced moderate increases in the period. Headcount in non-customer facing or technology divisions were flat in the first half.

Back office functions continued to be centralised in head office. In addition to allowing the offices in other cities to have a greater focus on sales, centralising back office functions gives the Company better quality control and improves operational efficiencies.

For

per

sona

l use

onl

y


6

Operational report by country

Mexico

Seminuevos.com, LatAm Autos’ Mexican business capitalised on its strong growth in operating metrics of traffic (number of sessions), dealerships using the site and number of listings to achieve an outstanding local currency revenue growth of 70% on the PCP. This growth was largely driven by increased revenue from dealerships and advertising clients.

In 1H 2016 LatAm Autos increased its physical presence in Mexico to six cities. The Company now has a major focus on the largest cities of Mexico City and Guadalajara and an increased focused of the largest regional cities, noting that approximately 80% of Mexico’s population lives outside of the two largest cities of Mexico City and Guadalajara. In 2H 2016 and 2017 LatAm Autos will continue to increase its focus on regional cities while strengthening its position in the two main markets.

In 1H 2016 Mexico continued to be LatAm Autos’ biggest focus in terms of marketing effort and allocation of resources. In addition to the internal marketing team relocating to Mexico City, the Company released a free fortnightly magazine. Not only does the fortnightly magazine provide additional advertising revenue it increases the offline exposure of the seminuevos.com brand. Additionally, LatAm Autos expanded its brand presence in the country via offline advertising mediums of radio and billboards and extensive online marketing.

The Mexican economy continues to perform well, and new car sales in 1H 2016 were 18% higher than PCP.

The Company also welcomed a Country Manager, Enrique Orvananos, to continue to drive growth in seminuevos.com. Enrique has extensive experience in sales, operations, and financial management of a major multinational company in Mexico. The role of Mexican Country Manager was previously undertaken by the Company’s COO. The appointment of Enrique has enabled the COO to have a broader focus on LatAm Autos’ other jurisdictions, operational processes and efficiencies and development of new products.

Argentina

Autofoco.com, LatAm Autos’ Argentinian business, experienced strong local currency revenue growth with an outstanding 60% growth on PCP. Australian dollar revenue growth was lower due to the substantial Argentinian Peso depreciation in mid-December 2015 resulting from the policy changes of the newly elected president Mauricio Macri.

Autofoco.com’s revenue growth was mainly driven by increased advertising and dealership revenue. Importantly autofoco.com continued to experience a relatively increasing contribution from its online operations.

While the Argentinian economy was impacted in 1H 2016 resulting from new policies of president Macri, over the medium and long term it is expected that market-friendly Macri will be good for the economy. New car sales in Argentina grew by 25% in 1H 2016 on PCP and consumer confidence has rebounded strongly.

Ecuador

The Company’s Ecuadorean business, patiotuerca.com, also had an outstanding local currency revenue growth of 67% in 1H 2016 on PCP. Revenue growth was mainly driven by advertising, lead generation and dealership revenue streams. Patiotuerca.com was the first of LatAm Autos’ subsidiaries to achieve profitability and cash flow breakeven under the ownership of the Company as a listed entity.

Given its large amount of oil exports, the performance of the Ecuadorean economy is closely linked to the oil price. Accordingly, the Ecuadorian economy continued to be impacted by the depressed oil price, in addition to numerous earthquakes experienced in 1H 2016. Given patiotuerca.com’s dominant market position, the Company was still able to grow revenues as a result of being trusted and effective partner to its customers and strong brand recognition with the general public.

Management were particularly pleased by the strong uptake of patiotuerca.com’s performance based lead generation products for a variety of customers including OEM manufacturers, car dealers and financial services companies. These products started to be rolled out to the Company’s other markets in 1H 2016, where the uptake has also been encouraging.

New car sales in Ecuador were materially down in 1H 2016 on PCP, and the Company expects the Ecuadorean economy to continue to be difficult for the remainder of 2016.

For

per

sona

l use

onl

y


7

Peru Todoautos.pe, LatAm Autos’ Peruvian business, had local currency revenue growth of 24% growth in 1H 2016 on PCP. Peru had a four month long Presidential election process in 1H 2016 which affected advertising revenues, and new car sales decreased by 5% on PCP. Todoautos continued to perform strongly both in terms of traffic and listings and there was a continued focus on increasing revenue contribution from dealers and private listings. Peru remains an early stage and fast growing market, with a differentiated strategy that has a stronger focus on private listings. Panama & Bolivia LatAm Autos’ Panamanian business continued to perform well in 1H 2016 with local currency revenue growth of 67% on PCP. Revenue growth was achieved via dealers, advertisers and private listings and was the result of having the continuity of a permanent sales team in Panama City and increased marketing efforts. The Company’s Bolivian business continues to operate a freemium business model and by managed from the Ecuadorean head office. Significant changes in the state of affairs During the financial period the Consolidated Entity: - issued 6,935,485 ordinary fully paid shares by placement to directors of the Company, completing the share placement to sophisticated and institutional investors commenced in November 2015; - issued 2,034,161 ordinary fully paid shares to employees under the Company’s Equity Incentive Plan in recognition of the employees’ achievement of performance objectives during the 2015 financial year; - issued 1,600,000 Performance Rights to eligible employees under the Company’s Equity Incentive Plan as a long term incentive to align the interests of the employees with other owners of the Company; - appointed the Consolidated Entity's Chief Executive Officer, Mr Jorge Mejia, to the Board of the Company as an Executive Director. There were no other significant changes in the state of affairs of the Consolidated Entity during the financial half-year. Matters subsequent to the end of the financial half-year No matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial years. Rounding of amounts The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. F

or p

erso

nal u

se o

nly


8

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the directors

___________________________ Tim Handley Executive Chairman 23 August 2016

For

per

sona

l use

onl

y

The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 Correspondence to: GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Auditor’s Independence Declaration To The Directors of LatAm Autos Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of LatAm Autos Limited for the half-year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been:

a No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

b No contraventions of any applicable code of professional conduct in relation to the review.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

B.A. Mackenzie Partner - Audit & Assurance Melbourne, 23 August 2016

For

per

sona

l use

onl

y

LatAm Autos Limited Statement of profit or loss and other comprehensive income For the half-year ended 30 June 2016

Consolidated 30 June 2016 30 June 2015 $'000 $'000

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

10

Revenue 3,911 2,702 Other income (loss) (172) 518 Expenses Production costs (593) (467) Marketing expenses (3,698) (1,177) Employee benefits expense (3,554) (3,452) Depreciation and amortisation expense (752) (497) Operating lease expense (310) (314) Professional and consulting fees expense (599) (701) Travel expense (176) (211) Technology expenses (374) (253) Other expenses (642) (1,006)

Loss before income tax (expense)/benefit (6,959) (4,858) Income tax (expense)/benefit 333 (163)

Loss after income tax (expense)/benefit for the half-year attributable to the owners of LatAm Autos Limited

(6,626)

(5,021)

Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation (949) 1,029

Other comprehensive income for the half-year, net of tax (949) 1,029

Total comprehensive income for the half-year attributable to the owners of LatAm Autos Limited

(7,575)

(3,992)

Cents Cents Basic earnings per share (2.15) (2.09) Diluted earnings per share (2.15) (2.09) Refer to note 4 for detailed information on Restatement of comparatives.

For

per

sona

l use

onl

y

LatAm Autos Limited Statement of financial position As at 30 June 2016

Consolidated

Note 30 June 2016

31 December 2015

$'000 $'000

The above statement of financial position should be read in conjunction with the accompanying notes 11

Assets Current assets Cash and cash equivalents 12,706 18,361 Trade and other receivables 4,260 3,322 Other 240 175

Total current assets 17,206 21,858

Non-current assets Receivables 200 351 Property, plant and equipment 589 525 Intangibles 6 24,375 25,018 Deferred tax 446 313

Total non-current assets 25,610 26,207 Total assets 42,816 48,065

Liabilities Current liabilities Trade and other payables 2,369 2,251 Provisions 579 1,122 Other 386 372

Total current liabilities 3,334 3,745

Non-current liabilities Payables 137 - Deferred tax 1,124 1,248 Employee benefits 23 24

Total non-current liabilities 1,284 1,272

Total liabilities 4,618 5,017

Net assets 38,198 43,048

Equity Issued capital 7 59,635 56,992 Reserves 1,478 2,345 Accumulated losses (22,915) (16,289)

Total equity 38,198 43,048

For

per

sona

l use

onl

y

LatAm Autos Limited Statement of changes in equity For the half-year ended 30 June 2016

The above statement of changes in equity should be read in conjunction with the accompanying notes 12

Issued capital

Share based

payments reserve

Foreign currency

translation reserve

Retained profits /

(Accumulated losses)

Total equity

Consolidated $'000 $'000 $'000 $'000 $'000

Balance at 1 January 2015, as previously reported

38,834

-

4

(3,180)

35,658

Adjustment for fair value adjustments on finalisation of business combination accounting (note 4)

-

-

137

1,339

1,476

Balance at 1 January 2015 - restated 38,834 - 141 (1,841) 37,134

Loss after income tax expense for the half-year, as previously reported

-

-

-

(5,170)

(5,170)


-

-

-

149

149

Loss after income tax expense for the half-year - restated

-

-

-

(5,021)

(5,021)

Other comprehensive income for the half-year, net of tax, as previously reported

-

-

224

-

224


-

-

805

-

805

Other comprehensive income for the half-year, net of tax - restated

-

-

1,029

-

1,029

Total comprehensive income for the half-year - restated

-

-

1,029

(5,021)

(3,992)

Transactions with owners in their capacity as owners:

Share-based payments 556 - - - 556 Costs of issuing shares - adjustment (8) - - - (8)

Balance at 30 June 2015 39,382 - 1,170 (6,862) 33,690

For

per

sona

l use

onl

y

LatAm Autos Limited Statement of changes in equity For the half-year ended 30 June 2016

The above statement of changes in equity should be read in conjunction with the accompanying notes 13

Issued capital

Share based

payments reserve

Foreign currency translation

reserve

Retained profits/

(Accumulated losses)

Total equity

Consolidated $'000 $'000 $'000 $'000 $'000 Balance at 1 January 2016 56,992 64 2,281 (16,289) 43,048 Loss after income tax benefit for the half-year - - - (6,626) (6,626) Other comprehensive income for the half-year, net of tax

-

-

(949)

-

(949)

Total comprehensive income for the half-year - - (949) (6,626) (7,575) Transactions with owners in their capacity as owners:

Contributions of equity, net of transaction costs (note 7)

2,015

-

-

-

2,015

Share-based payments 628 82 - - 710

Balance at 30 June 2016 59,635 146 1,332 (22,915) 38,198

For

per

sona

l use

onl

y

LatAm Autos Limited Statement of cash flows For the half-year ended 30 June 2016

Consolidated 30 June 2016 30 June 2015 $'000 $'000

The above statement of cash flows should be read in conjunction with the accompanying notes 14

Cash flows from operating activities Receipts from customers (inclusive of GST and equivalents) 3,508 3,340 Payments to suppliers and employees (inclusive of GST and equivalents) (9,870) (7,155) Other cash inflows/(outflows) from operating activities (79) 49

Net cash used in operating activities (6,441) (3,766)

Cash flows from investing activities Payments for plant and equipment (234) (225) Payments for intangibles (849) (350) Payment of deferred consideration for past acquisition of business - (269)

Net cash used in investing activities (1,083) (844)

Cash flows from financing activities Proceeds from issue of shares 2,150 - Share issue transaction costs (135) -

Net cash from financing activities 2,015 -

Net decrease in cash and cash equivalents (5,509) (4,610) Cash and cash equivalents at the beginning of the financial half-year 18,361 12,760 Effects of exchange rate changes on cash and cash equivalents (146) 526

Cash and cash equivalents at the end of the financial half-year 12,706 8,676

For

per

sona

l use

onl

y

LatAm Autos Limited Notes to the financial statements 30 June 2016

15

Note 1. General information The financial statements cover LatAm Autos Limited as a consolidated entity consisting of LatAm Autos Limited ('the company') and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is LatAm Autos Limited's functional and presentation currency. LatAm Autos Limited is a company limited by shares, incorporated and domiciled in Australia. A description of the nature of the Consolidated Entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 23 August 2016. The directors have the power to amend and reissue the financial statements. Note 2. Significant accounting policies These general purpose financial statements for the interim half-year reporting period ended 30 June 2016 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The principal accounting policies adopted in the preparation of the financial statements are set out below. New, revised or amending Accounting Standards and Interpretations adopted The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Accounting policies There has been no change in any of the Group's accounting policies during the half year ended 30 June 2016. Users of this financial report are referred to the Group's Financial Report for the period ended 31 December 2015 for details of the Group's significant accounting policies. Comparative amounts Where expense items are reclassified on the face of the Statement of profit or loss and other comprehensive income, corresponding reclassifications are made to the prior period comparative items to ensure consistency. Rounding of amounts The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

For

per

sona

l use

onl

y


16

Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. In preparing the consolidated interim financial report, the significant judgements made by management in applying the Consolidated Entity's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report as at and for the period ended 31 December 2015. Goodwill and other indefinite life intangible assets The Consolidated Entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy referred to in note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the Consolidated Entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Note 4. Restatement of comparatives Retrospective fair value adjustments on finalisation of business combination accounting During the financial period ended 31 December 2014 the Consolidated Entity made a number of business acquisitions, details of which are set out in Note 35 of the Consolidated Entity's financial statements for the year ended 31 December 2015. In relation to some of the business acquisitions, the Consolidated Entity originally performed a provisional assessment of the fair value of the assets and liabilities as at the date of the acquisition and for the purposes of the balance sheet as at 31 December 2014, the assets and liabilities were originally recorded at provisional fair values. Under Australian Accounting Standards, the Consolidated Entity had up to 12 months from the date of acquisition to complete its initial acquisition accounting. The Consolidated Entity completed this exercise to consider the fair value of intangible assets acquired in the acquisitions during the year ended 31 December 2015 and, in accordance with Accounting Standards, retrospectively adjusted the values of the relevant identifiable intangible assets and transferred the differences between the provisional valuation and the finalised fair value to the respective Goodwill accounts. The adjustments to the fair values had an equal and opposite impact on the goodwill recorded on acquisition. Accordingly, such adjustments had no impact on the aggregate of the net assets or the Consolidated Entity's net profit after tax with the exception of any amortisation charges. Details of specific adjustments are set out in Note 35 of the Consolidated Entity's financial statements for the year ended 31 December 2015. A consequence of these adjustments is that the amortisation charges for the half year ended 30 June 2015, being the comparative period for these financial statements, have been restated. F

or p

erso

nal u

se o

nly


Note 4. Restatement of comparatives (continued)

17

Statement of profit or loss and other comprehensive income Consolidated 30 June 2015 30 June 2015 $'000 $'000 $'000 Extract Reported Adjustment Restated Expenses Depreciation and amortisation expense (646) 149 (497)

Loss before income tax expense (5,007) 149 (4,858) Income tax expense (163) - (163)

Loss after income tax (expense)/benefit for the half-year attributable to the owners of LatAm Autos Limited

(5,170)

149

(5,021)

Other comprehensive income Foreign currency translation 224 805 1,029

Other comprehensive income for the half-year, net of tax 224 805 1,029

Total comprehensive income for the half-year attributable to the owners of LatAm Autos Limited

(4,946)

954

(3,992)

Cents Cents Cents Reported Adjustment Restated Basic earnings per share (2.15) 0.06 (2.09) Diluted earnings per share (2.15) 0.06 (2.09) Statement of financial position at the beginning of the earliest comparative period When there is a restatement of comparatives, it is mandatory to provide a third statement of financial position at the beginning of the earliest comparative period, being 1 January 2015. However, the effects of the adjustments made as at 1 January 2015 were previously disclosed in Note 3 of the Consolidated Entity's financial statements for the year ended 31 December 2015, as the "Statement of financial position at the end of the earliest comparative period", showing the adjustments as at 31 December 2014, and therefore providing the same information as applicable as at the beginning of the earliest comparative period, being 1 January 2015. Therefore, the Consolidated Entity has elected not to show the 1 January 2015 statement of financial position in the current half-year financial report for the period ended 30 June 2016, as this information was sufficiently disclosed in the Consolidated Entity's financial statements for the year ended 31 December 2015. Note 5. Operating segments Identification of reportable operating segments The Consolidated Entity operates in one industry, being the provision of online auto classified services, and there are five operating business segments that are determined on the basis of geographic information. The operating segments are analysed by the Chief Executive Officer and the Board of Directors (collectively identified as the Chief Operating Decision Makers ('CODM')), based on the internal reports that are reviewed and used by the CODM in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments. The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements. The information reported to the CODM is on a monthly basis.

For

per

sona

l use

onl

y


Note 5. Operating segments (continued)

18

The reportable segments are:

Argentina Mexico

Ecuador (includes Bolivia) Peru

Panama

Business activities are also carried out in Bolivia, however these are not material and, for the purposes of reporting to the CODM, this financial information is included in the Ecuador reportable segment. Intersegment transactions There were no material intersegment transactions during the reporting period. The Consolidated Entity does not have a major customer that contributes more than 10% or more to the Consolidated Entity's revenue.

For

per

sona

l use

onl

y



19

Operating segment information, including reconciliation to Group totals

Consolidated - half year ended 30 June 2016 Argentina Ecuador Panama Mexico Peru

Total

reportable

segments

$'000 $'000 $'000 $'000 $'000 $'000

Revenue

Sales to external customers 1,249 1,266 72 973 220 3,780

Total sales revenue 1,249 1,266 72 973 220 3,780

Operating expenses (2,102) (818) (120) (3,970) (359) (7,369)

EBITDA (853) 448 (48) (2,997) (139) (3,589)

Consolidated - half year ended 30 June 2015 Argentina Ecuador Panama Mexico Peru

Total

reportable

segments

$'000 $'000 $'000 $'000 $'000 $'000

Revenue

Sales to external customers 1,079 701 41 626 178 2,625

Total sales revenue 1,079 701 41 626 178 2,625

Operating expenses (2,550) (630) (123) (1,065) (323) (4,691)

EBITDA (1,471) 71 (82) (439) (145) (2,066)

2016 2015

$'000 $'000

Revenue

Total reportable segment revenues 3,780 2,625

Other income 131 77

Group revenues 3,911 2,702

2016 2015

$'000 $'000

Profit or loss

Total reportable segment EBITDAs (3,589) (2,066)

Other income 131 77

Other income / (loss) - FX effect (172) 518

Financial expenses (65) (88)

Depreciation and amortisation

expenses (752) (497)

Share-based payments expense (710) (556)

Other non-segment expenses (1,802) (2,246)

Income tax (expense)/benefit 333 (163)

Group profit/(loss) after income tax

expense/benefit (6,626) (5,021)

The total Revenue and Loss after income tax presented in the Consolidated Entity's operating segments reconcile to the corresponding key financial figures as

presented in its Statement of profit or loss and other comprehensive income as follows:

For

per

sona

l use

onl

y



20

The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-employment benefits assets and rights under insurance contracts. Note 6. Non-current assets - intangibles Consolidated

30 June 2016

31 December 2015

$'000 $'000 Goodwill - at cost 18,518 19,247

Software - at cost 4,664 3,808 Less: Accumulated amortisation - software (1,329) (785) 3,335 3,023

Domain names and trademarks - at cost 2,723 2,844 Less: Accumulated amortisation - Domain names and trademarks (283) (194)

2,440 2,650

Content - at cost 137 136 Less: Accumulated amortisation - Content (55) (38)

82 98

24,375 25,018

Sales to

external

customers

Sales to

external

customers

Geographical

non-current

assets

Geographical

non-current

assets

2016 2015 30 June 2016

31 December

2015

$ $ $ $

Australia - - 1 2

Argentina 1,249 1,079 71 87

Ecuador 1,266 701 14,639 14,564

Panama 72 41 12 9

Mexico 973 626 8,275 8,933

Peru 220 178 1,966 1,948

3,780 2,625 24,964 25,543

For

per

sona

l use

onl

y


Note 6. Non-current assets - intangibles (continued)

21

Reconciliations Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

Domain

names

Content and

trademarks

Software

Goodwill

Total Consolidated $'000 $'000 $'000 $'000 $'000 Balance at 1 January 2016 98 2,650 3,023 19,247 25,018 Additions - - 849 - 849 Exchange differences 2 (116) 3 (730) (841) Adjustments - - 9 - 9 Amortisation expense (17) (94) (549) - (660)

Balance at 30 June 2016 83 2,440 3,335 18,517 24,375

Consolidated

30 June 2016

31 December 2015

$'000 $'000 Demotores.com.mx & Seminuevos.com (Mexico) 7,273 7,954 PatioTuerca.com (Ecuador, Panama, Bolivia) 9,597 9,672 Todoautos.pe (Peru) 1,647 1,621

Goodwill allocation at period end 18,517 19,247

Note 7. Equity - issued capital Consolidated

30 June 2016

31 December 2015

30 June 2016

31 December 2015

Shares Shares $'000 $'000 Ordinary shares - fully paid 310,258,777 301,289,131 59,635 56,992

Movements in ordinary share capital Details Date Shares Issue price $'000 Balance 1 January 2016 301,289,131 56,992 Issue of placement shares 20 January 2016 6,935,485 $0.310 2,150 Share issue to employees 18 March 2016 1,492,293 $0.310 463 Share issue to employee 18 & 21 March 2016 312,836 $0.300 94 Share issue to employee 16 May 2016 229,032 $0.310 71 Costs of issuing shares - (135)

Balance 30 June 2016 310,258,777 59,635

Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

For

per

sona

l use

onl

y


Note 7. Equity - issued capital (continued)

22

Share buy-back There is no current on-market share buy-back. Note 8. Events after the reporting period No matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial years.

For

per

sona

l use

onl

y

LatAm Autos Limited Directors' declaration 30 June 2016

23

In the directors' opinion: ● the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard

AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;

● the attached financial statements and notes give a true and fair view of the Consolidated Entity's financial position as

at 30 June 2016 and of its performance for the financial half-year ended on that date; and ● there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due

and payable. Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001. On behalf of the directors

___________________________ Tim Handley Executive Chairman 23 August 2016

For

per

sona

l use

onl

y

The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 Correspondence to: GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Independent Auditor’s Review Report To the Members of LatAm Autos Limited We have reviewed the accompanying half-year financial report of LatAm Autos Limited (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 30 June 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report The directors of LatAm Autos Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that the financial report is not presented fairly, in all material respects, in accordance with the Corporations Act 2001 including: giving a true and fair view of the LatAm Autos Limited consolidated entity’s financial position as at 30 June 2016 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of LatAm Autos Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

For

per

sona

l use

onl

y

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence In conducting our review, we complied with the independence requirements of the Corporations Act 2001.

Conclusion Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial report of LatAm Autos Limited is not in accordance with the Corporations Act 2001, including: a giving a true and fair view of the consolidated entity’s financial position as at

30 June 2016 and of its financial performance for the half-year ended on that date; and

b complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulation 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

B.A. Mackenzie Partner - Audit & Assurance Melbourne, 23 August 2016

For

per

sona

l use

onl

y

For personal use only - ASX · The Company registered strong growth in financial and operational...

Documents

Transcript of For personal use only - ASX · The Company registered strong growth in financial and operational...