ANNUAL RESULTS 2017/18 OUR BUSINESS Member-based buying and - - PowerPoint PPT Presentation

ANNUAL
 RESULTS 2017/18

Member-based buying and marketing group that supplies its rural and peri-urban customers 
 with a range of rural merchandise and animal feeds via a network of 8 warehouses nationally 


• r on a direct basis (supplied direct from the supplier to customer).

Provides members access to thousands of products from more than 650 suppliers. AIRR’s focus on local services and having 8 strategically located warehouses 
 carrying approximately 6,000 products offering a one-stop shop to support independent retailers.

OUR BUSINESS

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OUR LOCATIONS

PERTH BRISBANE TAMWORTH SYDNEY SHEPPARTON WAGGA WAGGA ADELAIDE MELBOURNE

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DISTRIBUTION & SALES CENTRES


Each distribution centre has its own dedicated sales, 


• perations & customer service team.

OUR PEOPLE

BOARD OF DIRECTORS

CRAIG FARROW


Non Executive Chairman

PETER LAW


Managing Director / CEO

GLEN PEARSALL


Non Executive Director

LACHLAN COX


Non Executive Director

GRAEME JOLLY


Non Executive Director

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OUR PEOPLE

MANAGEMENT

PETER LAW


Managing Director / CEO

KRISTEN PICKERING


CFO / Company Secretary

DAVE SCHELLING


General Manager
 Supplier Relations

PETER LOUREY


General Manager
 Group Sales & Purchasing

KANE LAW


General Manager
 Group Marketing

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OUR MEMBERS & CUSTOMERS

NATIONAL RETAIL BRANDS:

Larger mixed rural 
 merchandise retailers Over 240 locations nationwide Pet, equine and small animal feed 
 + healthcare retailers Over 180 locations nationwide

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OUR BRANDS

Private label range of agricultural chemicals 147 product registrations and growing Over 230 SKUs currently in distribution & retail

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OUR BRANDS

Our General Merchandise, Feed & Animal Health 
 ‘Independents Own (iO)’ private label range Now exceeding 200 SKUs

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OPERATING PERFORMANCE

Continued growth in Revenue and Profitability, driving Balance Sheet, shareholder rewards and future opportunities

Statement of Profit & Other Comprehensive Income for year ended 30 June 2018

Consolidated Group Consolidated Group Parent Entity Parent Entity 30-Jun 30-Jun 30-Jun 30-Jun 2018 2017 2018 2017 $'000 $'000 $'000 $'000 Consolidated Revenue 366,714 359,446 11,636 10,469 Profit before income tax 19,752 17,580 11,592 10,448 Income tax expense 5,899 5,272 690 651 Profit for the year after income tax 13,853 12,308 10,902 9,797 Basic earnings per share 0.96 0.85 0.68 0.49

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CONSOLIDATED SALES REVENUE 2012 289,358,881 2013 269,755,416 2014 285,743,082 2015 290,568,144 2016 336,378,663 2017 351,354,932 2018 358,315,837

Revenue

200,000,000 250,000,000 300,000,000 350,000,000 400,000,000

2012 2013 2014 2015 2016 2017 2018

OPERATING PERFORMANCE

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CONSOLIDATED NPAT 2012 6,741,836 2013 4,661,905 2014 6,281,673 2015 7,281,699 2016 9,580,216 2017 12,307,507 2018 13,853,009

Consolidated NPAT

• 3,500,000

7,000,000 10,500,000 14,000,000

2012 2013 2014 2015 2016 2017 2018

OPERATING PERFORMANCE

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Warehouse Sales 2014 2015 2016 2017 2018 Shepparton 29,414,261 27,687,208 33,891,606 32,653,473 30,321,596 Brisbane 32,559,798 32,531,001 43,979,213 47,750,978 47,977,389 Tamworth 10,799,729 10,428,151 14,942,232 16,581,042 15,345,587 Port Adelaide 23,270,431 21,347,414 23,641,860 25,753,084 21,947,864 Perth 10,479,066 10,768,541 21,202,692 21,486,807 23,879,083 Wagga Wagga 9,547,929 10,668,745 13,082,833 15,126,060 14,333,845 Melbourne 21,895,582 24,570,684 28,135,488 27,890,751 30,419,044 Sydney 8,415,832 11,395,448 13,054,144 13,835,794 14,853,225 Feed Barn 2,347,120 5,717,356 4,070,192 4,075,358 4,138,039 Ararat Farm Supplies

• 639,517

2,271,134 Stawell Farm Supplies

• 1,409,341

4,167,050 Goondiwindi

• 319,723

148,729,748 155,114,548 196,000,260 207,202,205 209,973,579

OPERATING PERFORMANCE

• 12,500,000

25,000,000 37,500,000 50,000,000 2014 2015 2016 2017 2018

Shepparton Brisbane Tamworth Port Adelaide Perth Wagga Wagga Melbourne Sydney Feed Barn Ararat Farm Supplies Stawell Farm Supplies Goondiwindi

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OPERATING PERFORMANCE

State Sales 2014 2015 2016 2017 2018 VIC 88,836,545 90,890,171 93,820,338 95,850,896 100,335,558 NSW 85,848,693 92,296,181 116,953,317 121,087,206 120,432,705 QLD 59,694,250 57,254,181 64,949,702 69,137,994 71,558,053 SA 32,016,818 30,015,499 32,248,532 35,899,646 33,474,310 WA 13,161,048 14,135,298 24,437,374 25,454,203 27,629,199 TAS 8,118,720 8,421,773 6,742,997 7,089,660 8,293,144 287,676,074 293,013,103 339,152,260 354,519,605 361,722,970

• 35,000,000

70,000,000 105,000,000 140,000,000 2014 2015 2016 2017 2018

VIC NSW QLD SA WA TAS

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BALANCE
 SHEET

WORKING 
 CAPITAL

Strong Balance Sheet

• Solid Equity Position
• Disciplined Financial 


Management

• $3.40 Net Tangible 


Asset backing 
 per share

• 2.4x Current Ratio
• Strong Equity in 


Working Capital

Statement of Financial Position as at 30 June 2018 Consolidated Group Consolidated Group Parent Entity Parent Entity 30-Jun 30-Jun 30-Jun 30-Jun 2018 2017 2018 2017 $'000 $'000 $'000 $'000 ASSETS CURRENT ASSETS Cash and cash equivalents 345 6

• 1

Trade and other receivables 47,719 48,031

• Inventories

47,487 44,450

• Derivative financial instruments

133 178

• Other

533 183 36,540 32,440 TOTAL CURRENT ASSETS 96,217 92,848 36,540 32,441 NON-CURRENT ASSETS Receivables 684 866

• Property, plant and equipment

2,322 2,512

• Intangibles

2,458 2,439

• Deferred tax

947 658 2 2 Other

• 1,250

1,250 TOTAL NON-CURRENT ASSETS 6,411 6,475 1,252 1,252 TOTAL ASSETS 102,628 99,323 37,792 33,693 LIABILITIES CURRENT LIABILITIES Trade and other payables 34,337 35,375 8 8 Borrowings 294 14,525

• Income tax

1,300 1,814 224 502 Employee benefits 1,018 1,011

• Other

1,758 770

• TOTAL CURRENT LIABILITIES

38,707 53,495 232 510 NON-CURRENT LIABILITIES Borrowings 11,747 782

• Other non-current liability
• Deferred tax

160 55 1 1 Employee benefits 229 172

• TOTAL NON-CURRENT LIABILITIES

12,136 1,009 1 1 TOTAL LIABILITIES 50,843 54,504 233 511 NET ASSETS 51,785 44,819 37,559 33,182 EQUITY Issued capital 13,088 13,088 13,088 13,088 Hedge reserve

• 362
• Retained profits

38,697 31,369 24,471 20,094 TOTAL EQUITY 51,785 44,819 37,559 33,182

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CASHFLOW

Positive net cash flow from Operating Activities

Statement of Cash Flows for year ended 30 June 2018 Consolidated Group Consolidated Group Parent EnNty Parent EnNty 30-Jun 30-Jun 30-Jun 30-Jun 2018 2017 2018 2017 $'000 $'000 $'000 $'000 Cash flows from operaLng acLviLes 10,578 12,884

• 1,013 -

642 Cash flows from invesLng acLviLes

• 448 -

1,065

• Cash flows from financing acLviLes
• 6,599 -

6,438 1,012 642 Net increase in cash and cash equivalents held 3,531 5,381

• 1
• Cash and cash equivalents at the beginning of the

financial year

• 3,186 -

8,567 1 1 Cash and cash equivalents at the end of the 
 financial year 345 - 3,186

• 1

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BANK FACILITIES

COMMONWEALTH BANK OF AUSTRALIA

FACILITY BALANCE 
 30 JUNE 2018 Long term bank loan $11m $11m Bank overdraft facility $12m

• Trade finance facility

$10m

• Long term bank loan

$10m

• $43m

$11m Chattel mortgages re equipment 
 & vehicle finance As required $1m Usual foreign exchange facility arrangements to enter into importation contracts As required $3.3m

Appropriate debt facilities

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TOWARDS 400M

1.AIRR & Tuckers Growing member base Increasing loyalty Increase structure around driving sales 


• f member exclusive initiatives 


– conferences & catalogues

• 2. Warehousing: Creating sales and margin growth

Leverage our buying, marketing & selling strengths

• 3. Warehouse Footprint

Satellite warehouse: Expand AIRR warehouse footprints 
 by creating further satellite warehouses (eg Goondiwindi)

• 4. Private Labels

Increase sales through growing iO product range. Sustained increases in promotion and marketing activity. Create a structured promotion calendar supplied to all staff and members so our plan is set in stone and delivers sales growth

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TOWARDS 400M

• 5. Exclusive products, bulk buys and 


distribution agreements AIRR’s core rural business continues to 


• pen doors of opportunity given that AIRR 


is now the main Rural ‘buyer’ due to ability 
 to commit and its network is the perfect platform 
 to continue the quest to boost our amount of 
 exclusive products and bulk buys

• 6. Further alignment to top/key suppliers

New business opportunities: Through closer partnerships with key suppliers and their want to deal with a flexible, nimble and progressive group (AIRR and members) new business opportunities will arise – especially with new technology or ‘boom’ markets that arise and offer opportunities

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Consistent with prior years, the Board has received 
 the auditors valuation report, lifting indicative share price
 from $6.47 to $7.89.

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SHARE VALUATION

KEY DRIVERS APPLIED

Estimated Future Maintainable EBITDA $22.6m Net Debt $22.2m Multiplier Range 6.4 to 6.8 Minority Interest Discount 10%

This valuation is indicative only and the market will determine the price 
 at which shares trade.

HUNTER RIVER COMPANY
 ACQUISITION

Acquisition places AIRR in a leading competitive position in animal health in Australia and enhances AIRR’s strategy to provide its own range of animal health brands Forms the cornerstone of our Independents Own brand strategy that already boasts over 200 SKUs A significant private label strategy allows a greater and more balanced distribution of profits along the entire supply channel, drives innovation in the market segment and increases service levels to the industry The principals of The Hunter River Company, James Slack and 
 Steve Crothers, have agreed to develop further products for AIRR 


• n an exclusive basis

$10m acquisition with in excess of $2m (and growing) forecast full year contribution to group EBITDA

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QUESTIONS?


THANK YOU