Coventry Group H1 FY25
Investor Presentation
DRIVING GROWTH
in fragmented markets with significant organic opportunities
H1 FY25 financial performance snapshot
Financial performance - H1 results impacted by the distraction of the D365 ERP system implementation
SalesEBITDA 1EBIT 2Statutory net loss
$185.2m | $9.9m | $7.8m | -$0.7m |
$185.3m H1 FY24 | $9.8m H1 FY24 | $7.8m H1 FY24 | -$0.4m H1 FY24 |
Note 1: EBITDA is before significant items and excludes the impact of AASB 16 - Leases and significant items. EBITDA before significant items is a non-IFRS measure and reflects how management measures performance of the Group
Note 2: EBIT is before significant items
H1 FY25
Update
H1 FY25 financial performance
EBITDA 1Revenue
$9.9m | $185.2m |
+0.8% on H1 FY24 | 0.0% on H1 FY24 |
- Group EBITDA 1 growth of 0.8%
- Group EBITDA 1 % to sales of 5.3%
- Group sales in line with PCP, impacted by the distraction of D365 implementation activities. In total, the project saw over 800 users onboarded, requiring in excess of 10,000 upfront training hours, across 73 locations in Australia and New Zealand
- RBNZ now cutting rates which is expected to lead to improving conditions in NZ into calendar year 2025
- RBA expected to cut rates in 2025
- Our businesses have refined their operations during the downturn and enhanced gross margins so will have significant operating leverage as volumes return
Note 1: EBITDA is before significant items and excludes the impact of AASB 16 - Leases and significant items
Profit and loss
Summary profit and loss
$m | H1 FY25 | H1 FY24 | % change |
Revenue | 185.2 | 185.3 | 0.0% |
EBITDA 1 | 9.9 | 9.8 | +0.8% |
Depreciation and amortisation | (2.1) | (2.0) | |
EBIT 2 | 7.8 | 7.8 | 0.0% |
Significant items | (5.7) | (5.4) | |
Net financing expense | (1.9) | (1.7) | |
Impact of AASB16 | (1.0) | (0.7) | |
PBT (Loss) | (1.0) | (0.4) | |
Income tax expense | 0.3 | 0.0 | |
NPAT (Loss) | (0.7) | (0.4) | |
EBITDA % | 5.3% | 5.3% |
- EBITDA 1 of $9.9m up +$0.1m (+0.8%) on prior year
- EBIT 2 of $7.8m
- Profit before tax (PBT) and Net profit after tax (NPAT) down slightly on the previous year principally due to Significant Items
- Significant Items made up of ERP system upgrade ($5.2m) and other non-recurring costs ($0.5m)
Note 1: EBITDA is before significant items and excludes the impact of AASB 16 - Leases and significant items. EBITDA before significant items is a non-IFRS measure and reflects how management measures performance of the Group
Note 2: EBIT is before significant items
Balance sheet
Solid balance sheet position
$m | 31 December | 30 June |
2024 | 2024 | |
Total current assets | 149.2 | 157.0 |
Total non-current assets | 196.6 | 192.4 |
Total assets | 345.8 | 349.4 |
Total current liabilities | 117.7 | 120.6 |
Total non-current liabilities | 87.3 | 85.7 |
Total liabilities | 205.0 | 206.3 |
Net Assets | 140.8 | 143.1 |
Net Tangible Assets | 32.0 | 34.8 |
Current assets less current liabilities | 31.5 | 36.4 |
- At 31 December 2024, the Group had Net Tangible Assets of $32.0m, Current Assets exceeding Current Liabilities by $31.5m and Net Assets of $140.8m
- Net debt as at 31 December 2024 of $52.9m (30 June 2024 of $47.3m). With the ERP upgrade completed, debt reduction is now a key focus area
- NAB debt facilities of $80.0m undrawn by $27.1m at 31 December 2024
Cash flow
Cash conversion of 96.4% H1 FY25
$m | H 1 FY25 | H1 FY24 |
Gross operating cash flow | 12.6 | 11.1 |
Less Cash lease payments | (8.8) | (7.3) |
Add back Significant Items | 5.7 | 5.4 |
Adjusted gross operating cash flow | 9.5 | 9.2 |
EBITDA 1 | 9.9 | 9.8 |
Cash conversion % 2 | 96.4% | 94.1% |
- Positive cash conversion in H1 FY25
- Cash conversion of 96.4%
Note 1: EBITDA is before significant items and excludes the impact of AASB 16 - Leases and significant items
Note 2: Cash conversion = Gross operating cash flow less cash lease payments, addback significant items, divided by EBITDA1
H1 FY25 Segment performance
Fluid Systems
Sales | EBITDA1 | ||
$73.3m | $7.2m | ||
-5.4% on H1 FY24 | -23.0% on H1 FY24 | ||
Trade Distribution | |||
Sales | EBITDA1 | ||
$111.9m | $10.1m | ||
+3.9% on H1 FY24 | +19.0% on H1 FY24 | ||
- Fluid Systems EBITDA1 % to sales of 9.8%
- Fluid Systems were the most be impacted by the D365 ERP implementation as they were the first business to go-live
- With a strong pipeline of opportunities, management is expecting to return to top line growth in the second half
- Trade Distribution EBITDA1 % to sales of 9.1%
- 5 new branch openings planned for the second half
- Includes Steelmasters 6 months contribution
Note 1: EBITDA is before significant items and excludes the impact of AASB 16 - Leases and significant items
ERP upgrade project
ERP upgrade successfully completed
- The ERP upgrade has been completed broadly to plan, schedule and budget. We do not expect any further material costs in relation to the project in 2025
- Fluid Systems (FS), Konnect Australia (KA), Konnect New Zealand (KNZ) and Finance are all operating successfully on the system
- Our teams can focus their full attention on profitable sales growth in calendar year 2025
- The Microsoft D365 ERP system utilises the latest technology and will deliver significant customer service and productivity improvements
- Whilst customer service and productivity benefits are already evident, we expect to realise the full benefits during calendar year 2025
Net debt
Medium term Net Debt target below 1.5 times EBITDA
Achieved by:
- Generating profitable sales growth
- Sensible cost control
- D365 benefits including inventory optimisation, improves customer service and productivity gains
- Completion of the ERP project spend
- Utilisation of Australian tax losses - $59.0m available