Coventry Group Limited · ASX:CYG
Coventry — H1 FY2007 Earnings Presentation
20 slides from Coventry's earnings presentation, February 2007
Slide 1: Results for Half Year Ended 31 December 2006
ABN 37 008 670 102 Results for Half Year Ended 31 December 2006 Chris Glenn Managing Director Stephen Cooper Chief Financial Officer
Slide 2: Financial overview
Financial overview $M HY07 HY06 % Change Sales 263.1 243.4 8 EBIT (normalised) 12.0 11.6 3.8 Net profit after tax (before minority 0.8 7.3 89 interest) EPS - cents 1.8 20.1 91 EBIT includes Oracle ERP depreciation of $0.9M (HY06: $0.1M). Impairment writedowns for the automotive business of $6.1M gre
Slide 3: Financial overview (cont'd)
Financial overview (cont’d) HY07 HY06 EBIT/Sales 4.6% 4.8% Return on capital employed (EBIT/equity + net debt) 9.7% 10.1% Return on equity (NPAT/equity) 8.1% 8.6% Above ratios are based on normalised earnings. 3
Slide 4: Cash flow and gearing
Cash flow and gearing $M HY07 FY06 HY06 Operating cash flow 3.6 2.1 0.3 Closing net interest bearing debt 79.8 76.4 59.0 Closing equity 168..4 166.4 171.2 Net debt/equity 47.4% 45.9% 34.5% Net debt/equity + net debt 32.1% 31.5% 25.6% Interest cover (times) 5.0 7.1 10.8 Poor operating cash flow due t
Slide 5: Dividends
Dividends HY07 HY06 EPS – cents (normalised) 18.3 20.1 Dividend per share – cents 17.0 18.0 Franking 100% 100% Franking account balance - $M (after payment of interim dividend) 20.0 21.3 Policy is to distribute high proportion of profits, given the available franking credits. The dividend reinvestme
Slide 6: Capital employed
Capital employed HY07 HY06 Capital expenditure - $M 7.9 11.1 Stock turns 2.9 3.1 Days sales in trade debtors 54.3 49.3 Over the remainder of the calendar year, we have capital expenditure commitments of $8M for the new WA automotive distribution centre and head office, and $2.8M for the Oracle ERP s
Slide 7: Automotive
Automotive $M HY07 HY06 % Change Sales 121.7 128.1 5 EBIT (normalised) 1.3 0.6 107 EBIT/sales margin 1.1% 0.5% Capital employed 74.6 79.0 Return on capital employed 3.5% 1.6% Sales for NSW for 2 months prior to exit were $1.6M (HY06: $6.7M). Good profit improvement in WA. Oracle implementation issue
Slide 8: Industrial
Industrial $M HY07 HY06 % Change Sales 130.6 103.6 26 EBIT (normalised) 11.6 10.2 15 EBIT/sales margin 8.9% 9.8% Capital employed 103.3 96.5 Return on capital 22.5% 21.0% employed Good performance from fastener divisions. Hardware division profit was below expectations as Howard Silvers was affected
Slide 9: Bitumen
Bitumen $M HY07 HY06 % Change Sales 8.1 7.7 5 EBIT 0.3 0.7 55 EBIT/sales margin 3.7% 8.6% Capital employed 6.1 4.7 Return on capital employed 9.9% 28.2% Higher bitumen costs greatly reduced margins. 9
Slide 10: Gaskets
Gaskets $M HY07 HY06 % Change Sales 5.6 6.1 9 EBIT 0.6 0.8 23 EBIT/sales margin 10.7% 12.7% Capital employed 9.8 10.5 Return on capital employed 12.2% 14.8% Continued soft trading conditions affected sales. 10
Slide 11: Oracle rollout
Oracle rollout Issues in Auto SA impacted the business. System issues largely resolved. Rollout over the course of calendar 2007. Next ‘go live’ WA Auto – largest single region. 11
Slide 12: Business Unit Update: Industrial - Cabinet Hardware
Business Unit Update Industrial - Cabinet Hardware Complete the integration of Cornall and Howard Silvers Management structure is in place NSW complete Focus on sales growth Cabinet hardware Office chairs Café furniture 12
Slide 13: Business Unit Update: Industrial - Fasteners
Business Unit Update Industrial - Fasteners Organic growth – project opportunities. Inventory improvement. Qld, WA and NZ continuing to grow. SA and NSW improvement. Vic/Tas – steady. 13
Slide 14: Business Unit Update: Industrial - Cooper Fluid Systems
Business Unit Update Industrial - Cooper Fluid Systems Continue consolidation process. Capitalise on WA growth. Lift the Qld performance. 14
Slide 15: Business Unit Update: Automotive
Business Unit Update Automotive SA recovery processes sales Qld – rebranded to one brand sales focus NT – new manager sales focus WA – Oracle implementation warehouse move late 2007 15
Slide 16: Business Unit Update: Bitumen
Business Unit Update Bitumen Sales focus. Cost control. Bitumen price. 16
Slide 17: Business Unit Update: Gaskets
Business Unit Update Gaskets Sales focus. Cost containment. Product development. 17
Slide 18: Key areas of focus
Key areas of focus Oracle project. WA warehouse and head office move. Integration of hardware businesses. Recovery of Auto SA and sales growth in Auto Qld. Inventory reduction programme. 18
Slide 19: Outlook
Outlook 1st half was challenging. Excluding impairment, Group profit after tax expected to be slightly below last year. 19
Slide 20: Coventry Group Ltd
Coventry Group Ltd ABN 37 008 670 102