JUNE 2023 QUARTERLY ACTIVITIES REPORT​

The business strategy to increase the number of owned and financed vehicles, which deliver higher contributions than asset-light vehicles, continues to deliver a proportionally higher share of revenue. Owned and financed vehicles comprised 66% of the fleet at June 2023,  compared to 56% at the end of March 2023. Carly continues to engage with asset-light vehicle providers with a view to the ongoing development and growth of the asset-light fleet. Recent additions to the asset-light fleet include the Ioniq 5 and Ioniq 6 electric vehicles provided by  Hyundai Australia. 

Utilisation of Asset Finance Facility of up to $10 million 

Carly is focused on developing a portfolio of owned, financed and asset-light vehicles in order to have a range of options to access vehicles during different market supply situations, as well as to achieve better control over vehicle availability and fleet size. As announced to ASX on  22 March 2023, Carly successfully closed its largest ever asset finance facility, with iPartners providing up to $10 million of vehicle financing, which if fully drawn down, would enable the purchase of up to 450 vehicles which would generate approximately $4.7 million in annual revenue @ 87% utilisation.  

At the end of the March 2023 Quarter, Carly activated the iPartners facility, initially drawing  $0.7 million to acquire pre-ordered vehicles in April. Several draw downs were made in the quarter resulting in a total of $1.5 million being received under the facility during the June 2023  Quarter, enabling Carly to add a total of 66 vehicles across the June 2023 Quarter. Despite the addition of these new vehicles, which take time to be subscribed out and therefore contribute towards revenues, Carly was able to achieve a vehicle utilisation rate of 84% across the June 2023 Quarter, just below its target rate of 85% (June 2023 monthly utilisation rate was 85%). Post 30 June 2023, Carly received a fourth draw down of $0.8 million taking the facility to $3m drawn down. Carly expects to receive delivery of a further 34 vehicles in  July/early August 2023 and forward orders are in place for additional vehicles. With access to the iPartners facility, Carly will continue to balance the growth of the fleet with the aim of maintaining a vehicle utilisation rate above 85%. This approach will ensure that the business optimises its marketing spend and maintains a low vehicle storage cost for under-utilised vehicles.

On completion of the Company’s capital raise in June 2023, the iPartners facility LVR  improved from 80% to 90%, further supporting the vehicle growth strategy in FY 2024 with reduced equity capital requirements. 

These latest results show that Carly is continuing to demonstrate success in three key  objectives: 

• Securing asset finance facilities that support growth in fleet size  
• Securing supply of vehicles in a timely fashion that are then highly utilised  
• Increasing overall Subscription Transaction Value and retaining a higher proportion as revenue. 
  
  

Cash flows during the quarter included payments for: 

• Research and development costs of $255,000 (YTD: $1,053,000) 
• Product manufacturing and operating costs of $594,000 (YTD: $2,266,000)
• Advertising and marketing costs of $58,000 (YTD $190,000) 
• Staff costs of $529,000 (YTD: $1,755,000) 
• Administration and corporate costs of $152,000 (YTD $432,000) 
• Leased vehicles comprising: 

          – Interest amount of $43,000 (YTD: $124,000) 

          – Principal amount of $152,000 (YTD: $457,000). 

Further details of the cash flows of the group are set out in the attached Appendix

Corporate 

Payments to related parties and their associates in the June 2023 Quarter of $106,000 related  to remuneration of the executive and non-executive directors for the period. 

Cash Balance at Quarter End and Funding
 

At the end of the June 2023 Quarter, the Company maintained a cash balance of $1,663,000,  an increase of $701,000 from the March 2023 Quarter.  

On 16 June 2023, the Company completed Tranche 1 of an oversubscribed $1.6 million placement to sophisticated and professional investors and existing shareholders . The  Company issued 50,000,000 fully paid ordinary shares at an issue price of $0.025 per share raising $1.25 million pursuant to Tranche 1 of the Placement. The Shares were issued utilising the Company’s existing capacity under Listing Rules 7.1 and 7.1A. Subscribers under the  Placement will receive free-attaching quoted options on a 1-for-2 basis, exercisable at $0.06  per option, with an expiry date of 31 October 2024 (CL8O Options). Shareholder approval will also be sought at an EGM on 26 July for the issue of 14,000,000 Shares under Tranche 2 of the Placement and a total of 32,000,000 CL8O Options under the Placement. Subject to all necessary regulatory and shareholder approvals, Carly directors Chris Noone and Stephen  Abolakian will participate in Tranche 2 of the Placement (total $0.08m).

During the month of July 2023, subject to Shareholder approval, the Company is expecting to complete the Tranche 2 Placement which will result in the issue of 14 million shares at an issue price of $0.025 per share, raising an additional $350,000.  

The Directors closely monitor cash flows and funding requirements and are assessing all funding alternatives to ensure that the Company can continue to pursue the growth opportunities of the businesses. The Directors are very conscious of the cash flow requirements of the Group but also seek to ensure that funding is accessed at appropriate valuations so as to preserve value and limit dilution for all shareholders. 

This announcement was authorised to be given to ASX by the Board of Directors of Carly  Holdings Limited.