Slide 1: Results for Full Year Ended 30 June 2008
For personal use only COVENTRY GROUP LTD ABN 37 008 670 102 Results for Full Year Ended 30 June 2008 Roger Flynn Tony Hockley Executive Chairman Chief Financial Officer 22 AUGUST 2008
Slide 2: Summary F08
SUMMARY F08 For personal use only • Business transitions continued at a cost • Sold non-performing assets • Minor acquisitions • Reduced debt substantially • Ground work for tougher economy • Selective organic growth • High staff turnover a hidden cost
Slide 3: Summary F09
For personal use only SUMMARY F09 • Continued focus on non-performing assets • Growth through - organic volume - operating efficiently • Continued emphasis on debt reduction • Improved working capital management • Re-shaping the Balance Sheet
Slide 4: Business Profile
COVENTRY GROUP BUSINESS PROFILE For personal use only June ’07 → June ’08 Industrial - Fasteners Aust & NZ Aust & NZ - Artia (Furn/H/W) Aust & NZ Aust & NZ - Fluids WA & Qld WA, Qld, SA & Vic Gaskets - To aftermarket Aust & NZ Aust & NZ Hotmix - Bitumen & Asphalt WA - Auto - Aftermarket Parts WA, SA
Slide 5: F08 Mix of Continuing Businesses
F08 MIX OF CONTINUING BUSINESSES For personal use only Businesses - Sales By Geography : 93% Australia 7% NZ By Business Group : 60% Industrial 37% Auto 3% Gaskets
Slide 6: Overview of F08: Industrial and Gaskets
OVERVIEW OF F08 For personal use only Industrial - Most areas to plan - Still significant areas for improvement - Demand held up well - Australian system transitions now mostly complete Gaskets - Well led - Benefited from competitive position - Market / product initiatives
Slide 7: Overview of F08: Auto
OVERVIEW OF F08 For personal use only Auto - Relocated WA business - Changed systems (x2) - High staff turnover (WA) - Reduced WA service → lower sales - SA improved - Q4 consumer confidence drop - Sold Qld - Sold NT - Initiatives to progress in F’09 - Reduce capital employed - Lift trading performa
Slide 8: Overview of F08: Financial
For personal use only OVERVIEW OF F08 Financial • Business & asset sales → Debt from $82m mid-June ’07 to $46m end June ’08 • Appraised value of properties held end June ’08 = $47m c.f. Balance Sheet value = $21m • Most of vehicle fleet sold & leased back • No dividends
Slide 9: Project Compass Update
For personal use only PROJECT COMPASS UPDATE • Coventry Auto WA – Live in late August ’07 • Infix live April/May ’08 • Coventry Fasteners Qld live August ’08 – Implementations now progressing smoothly • Systems now very stable • Costs brought under tight control • System enhancements now being imple
Slide 10: Results Summary
For personal use only RESULTS SUMMARY • Total sales down 8% to $483m • Sales from continuing operations down 4% to $449m • Normalised PBIT down 59% to $10m • Normalised profit after tax down 43% to $7.6m • No final dividend – therefore no dividend for the year • Individually material items net a los
Slide 11: Financial Overview - Continuing Operations
FINANCIAL OVERVIEW - CONTINUING OPERATIONS For personal use only $M FY08 FY07 % Change Sales 448.8 468.3 4 EBIT – normalised 10.1 24.3 59 Net profit after tax 6.9 (1.2) (after minority interest but including profit from discontinued operations) EPS – normalised (cents) 18.3 35.0 48 EPS (cents) 16.6
Slide 12: Financial Overview (Cont'd) - Continuing Operations
FINANCIAL OVERVIEW (Cont’d) - CONTINUING OPERATIONS For personal use only FY08 FY07 EBIT / Sales (%) 3.2 4.8 Return on capital employed (%) 6.6 10.0 (EBIT / equity + net debt) Return on equity (%) 4.4 8.0 (NPAT / equity) Above ratios are based on normalised earnings
Slide 13: Cash Flow & Gearing
For personal use only CASH FLOW & GEARING $M FY08 FY07 Operating cash flow 11.8 10.0 Closing net interest bearing debt 45.8 75.5 Closing equity 172.9 168.1 Net debt / equity (%) 26.5 44.9 Net debt / equity + net debt (%) 20.9 31.0 Interest cover (times) 2.5 4.9 Debt levels much reduced but further w
Slide 14: Dividends
For personal use only DIVIDENDS $M FY08 FY07 EPS – Normalised (cents) 18.3 35.0 Dividend per share (cents) - 17.0 Franking (%) N/A 100.0 Franking account balance 20.9 20.5 Group plans to return to paying dividends as soon as practicable
Slide 15: Capital Employed
For personal use only CAPITAL EMPLOYED $M FY08 FY07 Capital expenditure 8.3 18.6 Stock turns 2.8 2.9 Days sales in trade debtors 61.1 55.8 Capital expenditure demands much moderated with the relocation of WA site now completed and IT expenditure under control
Slide 16: Individually Material Items Impacting FY08 Results
INDIVIDUALLY MATERIAL ITEMS IMPACTING FY08 RESULTS For personal use only (PRE TAX) $M Net gain on sale of businesses 1.5 Net gain on sale of “bitumen” land and 7.0 buildings Relocation costs of principal WA site (3.4) Additional stock provisions (4.2) Costs of closure / exiting businesses (1.9) (1.0
Slide 17: Automotive
AUTOMOTIVE (excluding discontinued operations) For personal use only $M FY08 FY07 % Change Revenue 168.3 203.6 ↓ 17 EBIT (normalised) (8.6) 2.8 - EBIT margin (%) (5.1) 1.4 Capital employed 53.6 55.2 Return on capital employed (%) (9.5) 2.6 • Significant revenue decline in WA from -Implementation of
Slide 18: Industrial
For personal use only INDUSTRIAL $M FY08 FY07 % Change Revenue 272.7 258.6 ↑5 EBIT (normalised) 21.4 22.9 ↓7 EBIT margin (%) 7.8 8.9 Capital employed 110.7 107.8 Return on capital employed (%) 19.3 21.2 • Fasteners had mixed results but particularly strong in Qld/WA • Cooper Fluids strong growth – e
Slide 19: Gaskets
For personal use only GASKETS $M FY08 FY07 % Change Revenue 11.6 11.1 ↑ 5 EBIT 2.0 1.2 ↑ 64 EBIT margin (%) 16.9 10.7 Capital employed 8.9 9.0 Return on capital employed (%) 21.9 13.3 • Well led • Strong performance in a better competitive position
Slide 20: F09 Outlook
For personal use only F09 OUTLOOK • “Resource States” still strong but no longer “Hot” • Other States unpredictable • NZ softer economy but still opportunities • Auto performance a function of – Continued internal improvement – Consumer confidence • Challenges of higher inflation & currency volatili