Coventry Group Limited · ASX:CYG
Coventry — H1 FY2010 Earnings Presentation
22 slides from Coventry's earnings presentation, Mar 29, 2010
Slide 1: Results for Half Year Ended 31 December 2009
COVENTRY GROUP LTD ABN 37 008 670 102 For personal use only Results for Half Year Ended 31 December 2009 Roger Flynn Tony Hockley Executive Chairman Chief Financial Officer MARCH 2010
Slide 2: Key Messages
Key Messages For personal use only • Company in best operational shape for years, but • F10/H1 market conditions still tough – expect H2 improvement and well placed to benefit • Despite this – Net profit rose 243% to $2.4m – EPS rose 315% to 5.4¢ per share compared to H1 F09 • Great improvement from
Slide 3: Key Messages (Cont)
Key Messages (Cont) For personal use only • Interim dividend of 6¢ (nil in pcp) • NTA >60% above share price with property carried at cost, significant carry forward tax losses and franking credits
Slide 4: Key Points of H1 F10 Performance
Key Points of H1 F10 Performance For personal use only • IT system fully “rolled out” and now giving business support • Reductions in cost base providing profit support • Market conditions “soft” but signs of improvement in H2 F10 • Key business assets particularly Auto DC operating at high levels o
Slide 5: Key Points of H1 F10 Performance (Cont)
Key Points of H1 F10 Performance (Cont) For personal use only • Continuing working capital improvements leading to very low net debt levels. • Continuing property sales although at lower levels than F09 • Increasing importing although much improvement still possible
Slide 6: Business Profile
Business Profile For personal use only LEADING DISTRIBUTOR OF: • Automotive aftermarket parts (including manufactured gaskets) • Fasteners • Fluid system products • Cabinet & furniture hardware CHARACTERISED BY: • Large range (>100,000 SKU’s) • Large number of world leading suppliers • Large number
Slide 7: Group Network
Group Network For personal use only Northern Territory Western Australia 1 Queensland 9 9 8 4 13 12 7 4 5 5 5 Number of South Australia New South Wales 4 Metropolitan Branches 4 Number of 1 45 Industrial Regional Branches Victoria 9 4 1 21 Automotive 26 49 Industrial 4 Tasmania New Zealand 2 Gaskets
Slide 8: Revenue H1 F10
Revenue H1 F10 For personal use only Automotive $82.9M Industrial $107.5M Gaskets $6.4M Total $196.8M
Slide 9: EBIT (Pre individually significant items)
EBIT (Pre individually significant items (“NRI’s”)) For personal use only F’09 F’10 $M H1 H2 Year H1 Industrial 9.9 1.2 11.1 3.0 Automotive (3.3) 0.5 (2.8) 2.0 Gaskets 0.9 1.2 2.1 1.3 Corporate (1.2) (1.2) (2.4) (1.2) 6.3 1.7 8.0 5.1
Slide 10: NPAT H1
NPAT H1 For personal use only $M Q1 Q2 H1 F’10 EBIT pre NRI’s Industrial 1.2 1.8 3.0 Auto 1.1 0.9 2.0 Gaskets 0.6 0.7 1.3 Corporate (0.6) (0.6) (1.2) 2.3 2.8 5.1 NRI’s Profit Sale of Property 1.1 - 1.1 Redundancies/Restructure (0.2) (0.2) (0.4) Provisions - (1.5) (1.5) Interest (Net) (0.6) (0.2) (0.
Slide 11: Continuing Net Debt Reduction
Continuing Net Debt Reduction For personal use only Net debt reduced from peak of $83m to $6m by: Net Debt • Halting dividends (recommenced September 09) 100.0 • Minimising CAPEX • Sale of businesses 80.0 without potential 60.0 • Sale of freehold properties / $M motor vehicle fleet 40.0 • Working ca
Slide 12: F'10 – Continuing to Make Assets Work
F’10 – Continuing to Make Assets Work For personal use only • Net Debt Dec ‘09 = $6m • Real Estate Owned Dec ‘09 = $11m at Book Value = $24m at March‘08 appraisal - One sale during H1, one small sale since Dec ‘09 - Willing buyers but unwilling property lenders slowing sales - Rental yield expectati
Slide 13: F'10 – Continuing Operational Improvements
F’10 – Continuing Operational Improvements For personal use only • Service Levels → Market Share • Better Sourcing – COGS our dominant cost (>60% of Sales $) • Rationalise Costs - People (59% of expenses) (Our No. 2 Cost) - Sites (8% of expenses) • Optimise Pricing Structure ANNUAL EBIT SENSITIVITIE
Slide 14: F'10 – Even More Outward Looking
F’10- Even More Outward Looking For personal use only • Facing our customers & suppliers for mutual benefit • Reviewing each of our locations to align network to real customer needs • Looking for growth opportunities – organic – acquisitions
Slide 15: F'10 – Recovering From Economic Slowdown
F’10 – Recovering From Economic Slowdown For personal use only • Sales are customer “need” driven • Infrastructure projects starting to commence • Prospects for WA and Qld improving • Business confidence returning • will return to historic profitabilities: EBIT : Revenue Auto 5% by F’11 Industrial 9
Slide 16: F'10 – Growth Path
F’10 - Growth Path For personal use only • Organic - Customers - Products - Locations • Complementary acquisitions matched to our: - Knowledge/skills - Capacity to fund • Leverage growth from major WA projects • Active capital management • Current Bank facilities next due for renewal January 2011 (T
Slide 17: Trading Outlook: Auto & Gaskets
Trading Outlook For personal use only Auto & Gaskets SNAKES & LADDERS External Internal External Internal •Depressed •Inability to •New car bubble •Lower cost resource sector recover lost sales of early 2000’s base re mining supply requiring service •Recovering •Vehicle service •Economic lost sales
Slide 18: Trading Outlook: Fasteners
Trading Outlook For personal use only Fasteners SNAKES & LADDERS External Internal External Internal •FX drop of A$ •Debtor exposure •Government •Lower cost •Economic •Depressed announced base recovery stalls margins support for •Project “double dip” infrastructure opportunity possibility •Large •In
Slide 19: Future Trading Outlook: Fluids
FUTURE - Trading Outlook For personal use only Fluids SNAKES & LADDERS External Internal External Internal •Economic •Lower sales •Large market •Complementary recovery stalls drives need to share growth product ranges “double dip” restructure potential •Project possibility opportunities
Slide 20: Future Trading Outlook: Cabinet & Furniture Hardware
FUTURE - Trading Outlook For personal use only Cabinet & Furniture Hardware (Artia) SNAKES & LADDERS External Internal External Internal •GFC adversely •Debtor exposure •Great market •Restructured impacting •Slower than share potential cost base discretionary desired inventory •Improved spend reduct
Slide 21: Future Trading Outlook: New Zealand
FUTURE - Trading Outlook For personal use only New Zealand SNAKES & LADDERS External Internal External Internal •Declining •Closer economic •Standardised manufacturing ties with Australia systems with segments •Economic Australia improvement •Oracle will bring control benefits
Slide 22: Disclaimer
Disclaimer For personal use only Statements contained in this presentation, particularly those regarding possible or assumed future performance, estimated company earnings, potential growth of the company, industry growth or other trend projections are or may be forward looking statements. Such stat