Gale Pacific Limited · ASX:GAP
Gale Pacific — FY2005 Earnings Presentation
21 slides from Gale Pacific's earnings presentation, 2005
Slide 1: Performance First
PERFORMANCE FIRST FI va-Tec
Slide 2: Gale Pacific Limited
Gale Pacific Limited • Manufacturing a unique range of advanced polymer fabrics and value added products in China 690 emp, Australia 122 and NZ 97 • Products are both porous and waterproof and are sold into the Consumer market as well as Industrial and Agricultural markets • Customers in the retail
Slide 3: Strategic Achievements FY05
Strategic Achievements FY05 • Completion of Chinese Facility • Management team in China in place • Well planned plant closure (ongoing) from Braeside to China facility • Acquisition of Donaghys with effective integration of commercial ranges under the “Synthesis” brand (industrial / agric) • Gale Eu
Slide 4: Impact of Achievements
Impact of Achievements • Low cost Chinese manufacturing base with increased capacity and shorter lead times to service Northern Hemisphere clients • The addition of Donaghys and the start up of Gale Europe progresses Gale’s planned global geographic expansion adding NZ & Europe • Chairman providing
Slide 5: Challenges and Actions taken in FY2005
Challenges and Actions taken in FY2005 • Rapidly rising raw • Prices increased to material costs cover rises with a significant lag effect • Australian DIY • Reduced fixed slowdown and operating expenses inventory tightening in Australian operations • International • Reduced corporate operations now
Slide 6: Revenue from Regions
Revenue from Regions 05 04 % • Asia/Pacific 103m 83m 24 • Europe/ME/Africa 64m 30m 133 • Americas 15m 16m (6)
Slide 7: Financial Performance
Financial Performance 05 04 % • Sales 147m 105m 40 • EBIT 10.8m 12.3m (12) • NPAT 4.7m 7.0m (33) • Shares on Issue 51.9 50.4 3 • EPS (fully diluted) 9.14 15.05 (39) • Dividend 5.0c 7.5c (33)
Slide 8: Major Cost Impacts FY05
Major Cost Impacts FY05 • Jung 1st Time First Half impact • Raw material increase impact • Australian DIY volume loss • Increased borrowing costs • Europe start up costs
Slide 9: Balance Sheet
Balance Sheet 05 04 % • Fixed Assets 58m 32m 81 • Inventory 51m 34m 50 • Intangibles 12m 10m 20 • Other Assets/Liabilities 12m 9m 33 • Net Operating Assets 54m 53m 2 • Net Debt 79m 32m 147 • Shareholder funds 54m 53m 2 • Debt to Equity Ratio 1.45:1 0.60:1 • ROE (%) 8.6% 13.2%
Slide 10: Cash Flow
Cash Flow 05 04 • Operating EBITDA 16.8m 16.8m • Capital expenditure 25m 5m • Tax Paid 1.6m 2.2m • Operating Cash Flow (5.6m) 2.9m • Interest Paid 4.9m 2.6m • Dividends 2.9m 2.6m • Acquisition 11.7m 6.4m • Net Cash (2.3m) 5.4m
Slide 11: Asia Pacific
Asia Pacific • Australian DIY inventory tightening softening sales • Raw material price increases Aust/China/NZ • Increase in China sales outside economic entity • Higher inventories within Australia
Slide 12: Europe, Middle East and Africa
Europe, Middle East and Africa • Gale Europe start up expenses • Jung 1st half for the first time • Middle East rapid growth • Higher inventories due to start up
Slide 13: Americas
Americas • Marginal revenue increase in local currency • Late in year expansion in window furnishing ranging • Consolidation of warehousing • Expansion into Central & South America
Slide 14: Research & Development
Research & Development • Increased R&D facility in China, more for less • Bioclip Nylon nets • Mining ventilation • Horizontal awnings • Aluminium extrusion • Powder coating
Slide 15: Management Team
Management Team • Chairman Harry Boon • Joined 2005 • Group MD Gary Gale • 1997 • COO and MD USA Peter McDonald • 1988 • CFO Andrew London • 2002 - Visy • MD China Emma Xu • 2002 • MD Aust Steve Carroll • 2002 • MD NZ Craig McCallum • 2002 - Donaghys • MD Europe (TBA) • 2005 • MD MEast Zaf Fakroddin
Slide 16: Challenges & mitigating plans
Challenges & mitigating plans • Raw material inputs • Pass on increases proactively • Weather • Diversity of dependence distribution locations and addition of waterproof fabrics • Cautious and well • Foreign exchange advised coverage
Slide 17: Seasonality of Earnings
Seasonality of Earnings • Our revenue mix will remain biased to the second half over the ensuing years as our Northern Hemisphere revenue accelerates. • This year the second half will be biased further as the one off costs of equipment transfer to China will be absorbed in the first half.
Slide 18: Outlook
Outlook • With the establishment of our European and China operations nearly complete we will be free to reap the benefit of these investments while focusing on extending our ranging with existing accounts and expanding our customer base, while driving down costs in our Production Facilities. • We w
Slide 19: Long Term Trends Driving the Business
Long Term Trends Driving the Business • Organic Agricultural Products – Passive barriers to birds, insects & severe weather • “Cocooning” – The backyard is a major area of home improvement spend
Slide 20: Long Term Trends Driving the Business (Cont'd)
Long Term Trends Driving the Business (Cont’d) • Global Warming – UV damage to people & plants • Water Conservation – Evaporation & water quality
Slide 21: Question Time
Question Time