Coventry Group Limited · ASX:CYG
Coventry — FY2004 Earnings Presentation
19 slides from Coventry's earnings presentation, August 2004
Slide 1: Results for Full Year Ended 30 June 2004
Results for Full Year Ended 30 June 2004 Chris Glenn Stephen Cooper Managing Director Chief Financial Officer 1
Slide 2: Result Highlights
Result Highlights Net profit before tax up 30% to $21.9M. Earnings before interest and tax up 23% to $23.1M. Final dividend of 18 cents fully franked, up from 16 cents, fully franked. 2
Slide 3: Financial Overview
Financial Overview FY03 FY04 $M H1 H2 TOTAL H1 H2 TOTAL Sales 211.3 204.2 415.5 217.0 216.9 433.9 EBITA (before significant 10.3 10.3 20.6 12.2 12.5 24.7 items – nil in 2004) Tax 3.3 2.7 6.0 3.2 3.6 6.8* Net Profit After Tax (before 5.0 5.9 10.9 7.5 7.7 15.2 outside equity interest) EPS – cents 14.7
Slide 4: Financial Overview (continued)
Financial Overview (continued) FY03 FY04 H1* H2* TOTAL H1* H2* TOTAL % % % % % % EBITA/sales 4.9 5.0 4.9 5.6 5.8 5.7 Return on Capital Employed 10.6 11.1 11.0 13.0 13.7 13.6 (EBITA/equity + net debt) Return on Equity 6.2 7.2 6.7 9.0 9.0 9.0 (NPAT/equity) * Ratios are annualised where appropriate. 4
Slide 5: Cash Flow and Gearing
Cash Flow and Gearing FY03 FY04 $M $M Operating Cash Flow 22.4 20.2 Closing Net Interest Bearing Debt 23.3 12.5 Closing Equity 162.8 169.9 Net Debt/Equity 14.3% 7.3% Interest Cover 11.1 21.0 (EBITA/net interest) Debt reduction from property sale proceeds and operating cash flow. 5
Slide 6: Dividends
Dividends FY02 FY03 FY04 EPS – cents 13.4 31.5 42.5 Dividend per share - cents 20.0 30.0 34.0 Franking 100% 100% 100% Current policy is to distribute high proportion of profits. Dividend reinvestment plan in place (2.5% discount). Franking account balance of $27.9M. 6
Slide 7: Capital Employed
Capital Employed CAPITAL EMPLOYED - 30 JUNE 2004 RETURN ON Corporate* CAPITAL EMPLOYED $23.7M Automotive 30 Gaskets (2003: $63.5M $8.0M $18.5M) (2003: 25 (2003: $60.2M) $8.6M) 20 Bitumen % 15 $5.1M (2003: 10 $5.0M) 5 Industrial $69.6M 0 Automotive Industrial Bitumen Gaskets (2003: 2003 2004 $70.5M)
Slide 8: Capital Employed (continued)
Capital Employed (continued) FY03 FY04 Capital expenditure $8.6M $7.2M Annual stock turns 3.1 turns 3.2 turns Days sales in trade debtors 54 days 56 days 8
Slide 9: Automotive
Automotive FY03 FY04 $M H1 H2 TOTAL H1 H2 TOTAL Sales 113.9 113.7 227.6 118.2 122.2 240.4 EBIT * - Parent (WA/SA) 4.2 5.2 9.4 5.8 5.4 11.2 - CAP (NSW/QLD) (3.2) (2.6) (5.8) (2.4) (1.7) (4.1) 1.0 2.6 3.6 3.4 3.7 7.1 EBIT/Sales Margin 0.9% 2.3% 1.6% 2.9% 3.0% 2.9% * Before significant items (nil in 20
Slide 10: Automotive
Automotive Continued improvement in WA, partly assisted by resources sector and growth in the overall trade market. Stronger second half in SA, but full year margins negatively impacted by competition and sales mix. 29% reduction in CAP loss. QLD achieved breakeven in 2 of the last 4 months, but onl
Slide 11: Industrial
Industrial FY03 FY04 $M H1 H2 TOTAL H1 H2 TOTAL Sales 85.5 79.8 165.3 88.4 83.3 171.7 EBIT 7.5 6.2 13.7 8.1 7.8 15.9 EBIT/Sales Margin 8.7% 7.7% 8.3% 9.1% 9.3% 9.2% 11
Slide 12: Industrial
Industrial Most project sales occurred in first half. Resource sector strength reflected in contributions from WA and QLD. Construction fastener specialist, Infix, continued to grow, with high demand from the housing sector. NZ achieved strong sales and margin growth, assisted by construction sector
Slide 13: Bitumen
Bitumen FY03 FY04 $M H1 H2 TOTAL H1 H2 TOTAL Sales 6.9 6.7 13.6 5.9 7.1 13.0 EBIT 0.7 0.7 1.4 0.4 0.9 1.3 EBIT/Sales Margin 10.7% 10.7% 10.7% 6.2% 13.3% 10.1% Much stronger second half with some recovery in volumes. Exceptional performance from emulsion spraying business Asphalt business expecting c
Slide 14: Gaskets
Gaskets FY03 FY04 $M H1 H2 TOTAL H1 H2 TOTAL Sales 6.7 5.8 12.5 6.4 6.0 12.4 EBIT 0.6 0.6 1.2 0.9 0.9 1.8 EBIT/Sales Margin 9.6% 10.1% 9.9% 13.3% 16.1% 14.6% Improved margins due to lower cost of imported raw materials, and impact of prior year restructuring. Positive impact of restructuring on prod
Slide 15: Strategy: Operations
Strategy Operations Information and Communications Technology: Information and Communication Technology strategy in place Disaster Recovery – improvements being implemented Telecommunications – currently changing carriers Selection of ERP system expected in February 2005 15
Slide 16: Strategy: Operations cont'd
Strategy Operations cont’d Distribution Centre Review Seeking expressions of interest in Morley site and considering new sites. Centralised Purchasing complete for Industrial to be completed in 2004/05 for Automotive supplier rationalisation 16
Slide 17: Strategy: Operations cont'd
Strategy Operations cont’d Human Resources core HR & OH & S systems in place staff survey conducted training and development Business process improvement initiatives stock accuracy stock mix and location supply chain 17
Slide 18: Strategy: Growth
Strategy Growth Organic sales growth is number one focus Bolt-on acquisition growth eg Thompson’s Spare Parts/Rod Smith Parts and Bearings Larger acquisition opportunities in existing businesses Acquisition opportunities which leverage the company’s core competencies 18
Slide 19: Strategy: Outlook
Strategy Outlook Trading conditions to remain satisfactory Strong levels of competition continuing especially in Industrial and Bitumen Lower growth rate in earnings per share in 2004/05 Ongoing focus on underperforming business units 19