Slide 1: Schaffer Corporation Annual General Meeting Chairman's Address
18 November 2020 ASX Market Announcements ASX Limited 4th Floor, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, SCHAFFER CORPORATION LIMITED (ASX:SFC) ANNUAL GENERAL MEETING CHAIRMAN’S ADDRESS Please find attached the Chairman’s Address to the Annual General Meeting of SFC. The Chairman has author
Slide 2: Welcome to the 66th Annual General Meeting
Good Morning, Ladies and Gentlemen. My name is John Schaffer, the Chairman and Managing Director of Schaffer Corporation. It is with pleasure I welcome you all to the 66th Annual General Meeting of Schaffer Corporation Limited. Due to Covid-19 pandemic restrictions, it has become impractical for som
Slide 3: Introduction of executives, advisors and auditor
I would also like to introduce our Chief Financial Officer, Mr Ralph Leib, and our Company Secretary, Mr Jason Cantwell. Today we are also joined virtually by our General Manager of Automotive Leather, Mr Dan Birks from Melbourne. I also welcome Todd Schaffer of TJS Advisory, who manages our major p
Slide 4: Annual Report and Chairman's address
The Annual Report, including reports of the Directors and the Auditors for the year ended 30th June 2020 have been in members’ hands for the statutory period. I will now commence my Chairman’s address after which I will invite questions and comments from members. 3
Slide 5: The 2020 financial year was dramatic
The 2020 financial year was dramatic for Schaffer Corporation and many companies. The human impact of the Covid-19 pandemic has been, and continues to be, enormous. The economic impact of shutdowns, lockdowns and the like, have been significant on businesses and the millions of people they employ. F
Slide 6: Annual General Meeting 2020 results
Annual General Meeting 2020 As I noted, the Group achieved record profit for 2020. This remarkable result was underpinned by: • Revenue of $156 million. This was a 24% decrease, primarily from the impact on Automotive Leather from Covid-19. • Net profit after tax (NPAT*) of $23.6 million. This refle
Slide 7: Total Shareholder Return
Total Shareholder Return (TSR*) measures the combined returns to shareholders from share price movements, dividends and dividend imputation credits. Over the last five years, Schaffer Corporation’s annual TSR is 35 % per year. This outstanding outcome was primarily driven by the Board’s decision to
Slide 8: Net debt and use of cash
For the financial year, Net Debt increased by $22.0 million. We applied cash resources, including $22.9 million of operating cash flow, to: • Fund $20 million of shareholder payments, including, $17.2 million of shareholder dividends and $2.8 million of share buy-back. • Purchase $17.6 million of ne
Slide 9: Handover to Ralph Leib for Automotive Leather
I now handover to Ralph Leib, who is both Schaffer Corporation’s and Automotive Leather’s Chief Financial Officer. Ralph will review the financial performance of the Automotive Leather division. 8
Slide 10: Automotive Leather performance
Thank you Chairman, and good morning ladies and gentlemen. Automotive Leather’s revenue decreased by 26% compared to the previous financial year. The division was significantly impacted by Covid-19, particularly in the last quarter. As a result, full-year profit was 25% lower. The impact in the divi
Slide 11: Employee numbers and Covid-19 second wave risk
It also is pleasing to report that, as of today our employee numbers – specifically in Europe – have returned to pre-Covid-19 levels. As we move into the winter months in Europe, it is important to highlight the increasing risk of a Covid-19 second wave. We are already seeing the enforcement of furt
Slide 12: Group Investments objectives and contribution
Group Investments aims to maximise shareholder value over the medium and long-term by: • Continuing to grow our investment portfolio • Accessing unique investment opportunities for shareholders • Investing in businesses and people with proven track records • Remaining flexible and opportunistic. Dur
Slide 13: Group investment portfolio value
SFC’s underlying valuation continues to be underpinned by tangible assets. As at 30th June 2020, the Group’s investment portfolio (including SFC’s share of subsidiaries) had an estimated pre-tax net equity market value of $162.6 million. That is $11.94 per share and up from $134.4 million for the pr
Slide 14: Case study: Pier 5350, Jacksonville
I will now take you through a case study of an investment we made in Jacksonville, Florida in the US called Pier 5350. We invested USD 1 million via an experienced fund manager, with an excellent track record, called Atlas Real Estate. As part of our investment decision and due diligence, we took in
Slide 15: Jandakot property development
The Group has two properties currently undergoing development. Our Jandakot property is a strategic property asset. It is located between two freeways and 15 minutes south of the Perth CBD. The site has 38.8 hectares with allowable uses such as warehouses, showrooms, storage, masonry production and
Slide 16: Beachside, North Coogee development
Beachside, North Coogee was the site of our Gosh furniture leather factory. It is a 2.1-hectare high-density residential site that has been rezoned from industrial. In response to the economic impacts from the Covid-19 pandemic, the State and Federal Governments have introduced a number of stimulus
Slide 17: Delta precast and prestressed concrete
Delta produces precast and prestressed concrete products, predominantly for the Western Australian market. Delta’s financial performance reflects the challenging conditions across the construction industry for the past five years. To give some context: West Australian construction activity has decre
Slide 18: Group Outlook H1 FY21
Group Outlook H1 FY21 Automotive Leather For the first half of the 2021 financial year, Automotive Leather’s performance looks encouraging. Volumes are continuing to show a strong recovery, supported by the launch of new vehicle programs in Europe and China. We now expect the first half results to b
Slide 19: Group Investments outlook and risk factors
Group Investments We do not provide an outlook for Group investments. We do highlight that, other than directly held property, all investments are revalued each period in accordance with accounting standards. This could lead to volatility in our reported profits. Risk factors The Board remains consc
Slide 20: Operating cash flow and interim dividend
The Group’s operating cash flow is expected to be robust during the first half. Our balance sheet and financial position remain strong, providing us with flexibility to: • Manage our businesses through these uncertain times • Make further investments for our shareholders; and • Continue to pay divid
Slide 21: Concluding remarks
When concluding my 2019 address I stated, “The future always contains unknown challenges. We remain confident that we will make the right decisions and adapt appropriately”. In 2020, we were presented with many unforeseen challenges, specifically the advent of Covid-19 and its impact our businesses.
Slide 22: Thanks to shareholders
As always, I close with my and my fellow Directors’ thanks to you, our shareholders. Providing future value to you is, and will always remain, our top priority. I trust that I will see you all again at next year’s Annual General Meeting. 22
Slide 23: Questions on accounts and reports
That concludes my Chairman’s Address and I now return to the statutory business before us today as set out in the Notice of Meeting. I now invite questions or comments from members regarding the accounts and reports, and the management of the company. Members are also invited to ask our auditors que
Slide 24: Receipt of financial statements and reports
I now turn to the first item of ordinary business in the Notice of Meeting “To receive and consider the annual financial statements and reports of the directors and the auditors for the period ended 30 June 2020” The Corporations Act requires that the Annual Financial Report, including the Directors
Slide 25: Resolution 1: Re-election of Director
I would now like to move to Resolution 1, Re-election of Director “That Mr Michael Perrott AM, who retires in accordance with the Company’s constitution and, being eligible for re-election, be re- elected as a Director” A total of 8,775,048 proxies were received, which represents 64% of the Company’
Slide 26: Resolution 2: Remuneration Report
I would now like to move to Resolution 2, Remuneration Report “That the Remuneration Report for the period ended 30 June 2020 be adopted” Full details of the Company’s approach to remuneration for Directors and Senior Executives are included in our Remuneration Report contained within this year’s An
Slide 27: Meeting closed
As there is no further business to be transacted and the formal proceedings have been completed, I declare the meeting closed. Thank you once again for your support and for your attendance here today. 27