Slide 1: Results for Full Year Ended 30 June 2007
For personal use only COVENTRY GROUP LTD ACN 008 670 102 Results for Full Year Ended 30 June 2007 Roger Flynn Tony Hockley Executive Chairman Chief Financial Officer 24 AUGUST 2007
Slide 2: Summary
SUMMARY F’07 For personal use only • Some great (& some ordinary) operating results • Negated by facing balance sheet reality • Major Q4 re-assessments & changes • Review of business units completed F’08 • From project gestation to implementation • Transformation & consolidation • Target business ba
Slide 3: Overview of 2007
For personal use only OVERVIEW OF 2007 • Results unsatisfactory • A year of turmoil / re-assessment • Change process implemented • Paving the way for transition • Getting control back into the business / processes • Driving accountability • High employee turnover, especially in WA
Slide 4: Summary of Key Changes / Issue Resolution
SUMMARY OF KEY CHANGES / ISSUE RESOLUTION For personal use only • Key personnel changes - CEO, CFO, CIO, GM Auto - State Managers Auto, WA, Qld SA Industrial SA, Vic, NZ • Compass IT implementation (see separate slide) • Building issues resolved re Redcliffe site – new state of the art Auto Warehous
Slide 5: Project Compass Implementation
PROJECT COMPASS IMPLEMENTATION For personal use only Previously implemented – Finance – Fasteners WA, SA, NSW – Automotive SA – Howard Silvers Recently – Fasteners Vic – Hardware (H.S. + Cornall) remainder of Australia
Slide 6: Project Compass Implementation (Cont'd.)
PROJECT COMPASS For personal use only IMPLEMENTATION (Cont’d.) To complete in F’08 – Auto WA, Qld, NT - Coopers Fluids - Fasteners Qld & Infix - NZ operations – Original Budget $13.7m – Expenditure on project to 30.6.07 $18.0m – Additional expenditure to complete $5.0m – Likely enhancements thereaft
Slide 7: Results Summary
For personal use only RESULTS SUMMARY • Total sales up 4% to $523m • Sales from continuing operations up 4% to $506m • Normalised PBIT up by 7% to $24.3m • Normalised profit after tax steady at $13.4m • No final dividend • Significant impairment and restructuring costs of 17.6m • Individually materi
Slide 8: Financial Overview - Continuing Operations
FINANCIAL OVERVIEW CONTINUING OPERATIONS For personal use only $M FY07 FY06 % Change Sales 506.4 485.4 ↑4 EBIT - normalised 24.3 22.8 ↑7 Net profit after tax (1.2) 9.6 - (after minority interest but including profit from discontinued operations) EPS - normalised (cents) 35.0 36.7 ↓5 EPS (cents) (3.8
Slide 9: Financial Overview (Cont'd) - Continuing Operations
FINANCIAL OVERVIEW (Cont’d) – CONTINUING OPERATIONS For personal use only FY07 FY06 EBIT / Sales (%) 4.8 4.7 Return on capital employed (%) 10.0 9.4 (EBIT / equity + net debt) Return on equity (%) 8.0 8.1 (NPAT / equity) Above ratios are based on normalised earnings
Slide 10: Cash Flow & Gearing
For personal use only CASH FLOW & GEARING $M FY07 FY06 Operating cash flow 10.0 2.1 Closing net interest bearing debt 75.5 76.4 Closing equity 168.1 166.4 Net debt / equity (%) 44.9 45.9 Net debt / equity + net debt (%) 31.0 31.5 Interest cover (times) 4.9 7.1 Debt levels stabilised but further work
Slide 11: Dividends
For personal use only DIVIDENDS $M FY07 FY06 EPS – normalised (cents) 35.0 36.7 Dividend per share (cents) 17.0 35.0 Franking (%) 100 100 Franking account balance 20.5 23.1 (after payment of final dividend for FY06) Hard decision to omit final dividend but signals the need to preserve funds for futu
Slide 12: Capital Employed
For personal use only CAPITAL EMPLOYED $M FY07 FY06 Capital expenditure 18.6 20.0 Stock turns 2.9 3.0 Days sales in trade debtors 55.8 57.3 Capital expenditure remains high due to computer system replacement and relocating principal site in WA
Slide 13: Significant Items Impacting Results (Pre Tax)
SIGNIFICANT ITEMS IMPACTING 07 RESULTS (PRE TAX) For personal use only $M • Capital gain on sale of Bitumen business 3.0 • Impairment losses on goodwill of acquired Auto businesses (Qld/NT) (8.8) • Losses from exiting NSW Auto business (0.7) • Write down of Company-wide IT system including expenditu
Slide 14: Automotive
For personal use only AUTOMOTIVE $M FY07 FY06 % Change Revenue 242.0 261.6 ↓ 7 EBIT - normalised 1.3 1.5 ↓ 10 EBIT margin (%) 0.1 0.6 Capital employed 69.2 84.1 Return on capital employed (%) 1.9 1.8 Cooper Fluids excluded from automotive as transferred to Industrial (F06 restated) Revenue decline d
Slide 15: Industrial
For personal use only INDUSTRIAL $M FY07 FY06 % Change Revenue 258.6 218.1 ↑ 19 EBIT - normalised 22.9 20.1 ↑ 14 EBIT margin (%) 8.9 9.2 Capital employed 107.8 100.0 Return on capital employed (%) 21.2 20.1 Coopers Fluid included for both years Strong growth in F07 (19%) Hardware business consolidat
Slide 16: Gaskets
For personal use only GASKETS $M FY07 FY06 % Change Revenue 11.1 11.4 ↓ 2 EBIT 1.2 1.5 ↓ 20 EBIT margin (%) 10.7 13.2 Capital employed 9.0 9.4 Return on capital employed (%) 13.3 15.9 Soft trading conditions in automotive parts market negatively affected sales Additional provisioning in respect of i
Slide 17: Bitumen – Sold June 2007
BITUMEN – SOLD 29 JUNE 2007 For personal use only $M FY07 FY06 % Change Revenue 17.3 17.0 ↑ 2 EBIT 1.4 1.2 ↑15 EBIT margin (%) 7.8 7.1 Capital employed *5.8 5.7 Return on capital employed (%) *23.4 21.1 * By reference to average capital employed for year ended 31 May 07 Successful year with increase
Slide 18: "Stock Take" of Group
For personal use only “STOCK TAKE” OF GROUP • Solid businesses - over $0.5bn in revenue • Well positioned in strongest economies - WA/Qld • Businesses have a high degree of resistance to economic downturns • Well established / recognised brands with strong geographic distribution • Most continuing b
Slide 19: Path Forward
For personal use only PATH FORWARD • As a matter of urgency get every business in a position to contribute to the Group • In the short term progress process improvements – better buying, improved customer service, reduced cost structures • Change to “ownership” mindset • In F08 concentrate more on o