Coventry Group Limited · ASX:CYG
Coventry — FY2006 Earnings Presentation
24 slides from Coventry's earnings presentation, 2006
Slide 1: Results for Full Year Ended 30 June 2006
ABN 37 008 670 102 Results for Full Year Ended 30 June 2006 Chris Glenn Managing Director Stephen Cooper Chief Financial Officer
Slide 2: Results Summary
2006 Results Summary Sales up 7% to $502M. Normalised profit before interest and tax steady at $22.8M. Normalised profit after tax down 8% to $13.5M. Final dividend of 17 cents fully franked. 2
Slide 3: Financial overview
2006 Financial overview $M FY06 FY05 % Change Sales 502.0 470.8 7 EBIT (normalised) 22.8 22.7 0.4 Net profit after tax (before minority interest) 9.6 17.7 46 EPS - cents 26.1 48.9 47 3
Slide 4: Financial overview (cont’d)
2006 Financial overview (cont’d) $M FY06 FY05 EBIT/Sales 4.5% 4.8% Return on capital employed (EBIT/equity + net debt) 9.4% 12.4% Return on equity (NPAT/equity) 8.1% 8.7% Above ratios are based on normalised earnings. 4
Slide 5: Cash flow and gearing
2006 Cash flow and gearing $M FY06 FY05 Operating cash flow 2.1 12.5 Closing net interest bearing debt 76.4 14.0 Closing equity 166.4 168.5 Net debt/equity 45.9% 8.3% Net debt/equity + net debt 31.5% 7.7% Interest cover (times) 7.1 14.2 reduction in operating cash flow due to initial working capital
Slide 6: Dividends
2006 Dividends $M FY06 FY05 EPS – cents (normalised) 36.7 40.3 Dividend per share – cents (excluding 2005 special dividend) 35.0 36.0 Franking 100% 100% Franking account balance (after payment of final dividend) 20.5 18.7 current policy is to distribute high proportion of profits, given the availabl
Slide 7: Capital employed
2006 Capital employed $M FY06 FY05 Capital expenditure 20.0 9.2 Stock turns 3.1 3.3 Days sales in trade debtors 56.6 53.1 increase in capital expenditure due to computer system replacement costs of $12.1M. 7
Slide 8: Automotive
2006 Automotive $M FY06 FY05 % Change Sales 277.8 272.1 2 EBIT (normalised) 4.2 5.0 16 EBIT/sales margin 1.5% 1.8% Capital employed 84.1 82.6 Return on capital employed 5.0% 6.0% sales negatively impacted by high fuel prices and higher interest rates. review of inventory by new management resulted i
Slide 9: Industrial
2006 Industrial $M FY06 FY05 % Change Sales 201.9 178.3 13 EBIT (normalised) 18.8 18.4 2 EBIT/sales margin 9.3% 10.3% Capital employed 100.0 79.6 Return on capital employed 18.8% 23.1% weaker performance from fastener division due to more competitive market conditions in NSW, VIC and SA, and a weake
Slide 10: Bitumen
2006 Bitumen $M FY06 FY05 % Change Sales 16.9 15.0 13 EBIT 1.2 1.2 - EBIT/sales margin 7.1% 8.0% Capital employed 5.7 5.0 Return on capital employed 21.1% 24.0% net margins impacted by lower demand for emulsion due to high bitumen prices. increased volumes for asphalt operation, but higher raw mater
Slide 11: Gaskets
2006 Gaskets $M FY06 FY05 % Change Sales 11.4 12.4 8 EBIT 1.5 1.9 21 EBIT/sales margin 13.2% 15.3% Capital employed 9.4 8.4 Return on capital employed 16.0% 22.6% soft trading conditions in automotive parts market negatively affected sales. 11
Slide 12: Occupational Health & Safety Performance – LTIIR
2006 Occupational Health & Safety Performance – LTIIR * 5.0 100 80 4.0 60 40 3.0 20 0 2.0 2002/2003 2003/2004 2004/2005 2005/2006 1.0 2003/2004 2004/2005 2005/2006 * LTIIR – Lost Time Injury Incident Rate: percentage of employees incurring a lost time injury 12
Slide 13: Project Compass Oracle Implementation
2006 Project Compass Oracle Implementation Finance, Fasteners WA, SA, NSW, Automotive SA and Howard Silvers implemented. Automotive WA in 2006. Project schedule to be completed by July 2007. Implementation issues - early technical problems - revenue slow down for approx 3 months - not able to roll o
Slide 14: WA New Warehouse & Group Head Office
2006 WA New Warehouse & Group Head Office Major project for Automotive business. Project is on schedule for relocation in April 2007. Construction well advanced. New warehouse – high level of automation. Capital cost of $9M. 14
Slide 15: Coventry Group Strategy
2006 Coventry Group Strategy Return on Capital Objective Improve performance Expand existing businesses via organic Market focussed New business of existing businesses business units opportunities sales and acquisition 15
Slide 16: Coventry Group Business Cycle
2006 Coventry Group Business Cycle Market KPI Setting & Segmentation Measurement Sales & Marketing Return on Capital Business Objective Planning Business Systems & Processes High Performance Supply Chain Team 16
Slide 17: Business Unit Strategy Industrial
2006 Business Unit Strategy Industrial Fasteners nuts, bolts, screws and tools. Cabinet Hardware hinges, draws, kitchen fittings, office chairs and café furniture. Fluid Systems lubrication systems, hydraulic hose and fittings, and service trucks. 17
Slide 18: Fasteners
2006 Fasteners Organic growth focus. Supply chain initiatives. Warehousing & distribution. Bolt on acquisitions. 18
Slide 19: Cabinet Hardware
2006 Cabinet Hardware Complete integration of Cornall and Howard Silvers. Supply chain. Warehousing new Sydney DC Customer segmentation and product expansion. 19
Slide 20: Fluid Systems
2006 Fluid Systems 1 brand – Cooper Fluid Systems. Consolidate WA and Qld businesses. Leverage strong mining sector. Focus on expanding into non-mining applications. 20
Slide 21: Automotive
2006 Automotive Improve underperforming business areas. Merchandising and marketing. Warehouse and distribution - WA warehouse. - scanning in other facilities. Inventory management. Build trade base. Leverage retail opportunities. 21
Slide 22: Bitumen
2006 Bitumen Operational improvement. Targeting non-council business. Continue to focus on recycled product. Build on polymer modified emulsion products. 22
Slide 23: Gaskets
2006 Gaskets Operational efficiency – 15% staff reduction in factory. Market share growth. New non-automotive markets. 23
Slide 24: Outlook
2006 Outlook Economy similar to 05/06. Improved EBITA in 2006/07. Stronger growth in Industrial. Further automotive recovery. Focus on Oracle roll-out and WA warehouse and office move. 24