A N N U A L R E P O RT _2022
Drive Endless Possibilities
02 Highlights: FY22
03 Highlights: Financial
04 Chairman’s Letter
06 CEO’s Letter
08 Group Portfolio and Dearlership
10 Our Purpose and Values
12 Directors’ Report
36 Auditor ’s independence declaration
37 Financial statements
41 Notes to the consolidated financial statements
76 Directors’ declaration
77
Independent auditor ’s report
81 Shareholder information
83 Corporate directory
ii
AUTOSPORTS GROUP _AN NUAL RE P O RT 2 0 22
T A B L E O F _ C O N T E N T S
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
1
H I G H L I G H T S _ F Y 2 2
Jul 2021
Nov 2021
Dec 2021
Jan 2022
Jun 2022
Jun 2022
Jul 2022
Purchased
Alexandria
Mazda business
(formerly John
Newell Mazda)
Purchased
Bundoora BMW
property at
62 Enterprise
Drive, Bundoora
Victoria
Appointed
James Evans as
Chairman
Purchased
98 O’Riordan
Street,
Alexandria
property
Purchased
Suttons
Subaru and Kia
(Rosebery)
Opened
Ducati Sydney
greenfield
Entered into
agreement
to purchase
Auckland City
BMW Limited
2
AUTOSPORTS GROUP _AN NUAL RE P O RT 2 0 22
H I G H L I G H T S _ FiN A N CiA L *
*compared to FY21 unless specified
Statutory NPAT
$54.6 million
Normalised1 NPBT
$92.8 million
Gross Margin
19.9%
up 29%
up 23%
up 16%
Revenue
$1,876m
down 5.2%
Customer
new vehicle orders
exceed deliveries in 2022FY
FY dividend
16 cents (fully franked)
(9 cents H2 2022FY)
by 25%
up 78%
1. Normalised NPBT excludes AASB16 adjustments, acquisition and restructure costs and acquisition amortisation.
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
3
C H A I R M A N ’ S _ L E T T E R
Dear Shareholders,
I am pleased to present my first
As supply chain pressures ease, the
seamlessly. Our inaugural Chairman,
letter as Chairman of Autosports
Group. It is a privilege to serve
as Chairman of your Company
and deliver a pleasing financial
result for FY2022.
Reflecting on the events that have
transpired in the past year, Autosports
Group showed resilience and remained
disciplined in the execution of its strategy.
customer new vehicle orders built over
Tom Pockett, retired at our 2021 Annual
the course of FY2022 will produce profit
General Meeting to concentrate on his other
in subsequent periods.
leadership roles. I am honoured to have
Domestically, our State Governments
responded differently to new waves of
the pandemic as lockdown restrictions
varied from state to state. Having
learned from the earlier lockdowns, our
been elected as Chairman of your Company.
In doing so, I would like to acknowledge the
significant contribution Tom Pockett made
during Autosports Group’s formative years
as a listed company.
business was well equipped to handle
Tom’s leadership and guidance helped
the challenges the lockdowns presented.
Autosports Group deliver on its growth
The geographic diversification of our
strategy by acquiring several businesses
dealerships helped offset the impacts
and has contributed to building and
The COVID-19 pandemic persisted with
being experienced. Autosports Group
enhancing a foundation of good corporate
workforces and supply chains affected
supported the vaccination roll-out and we
governance and a company we can trust.
on a global scale. Meanwhile, many
were grateful our workforce could return
I am confident that our Board, together
pharmaceutical companies delivered
to business as usual in the second half.
with our management team will lead the
several vaccines to market in record
time. Fortunately, in Australia there was
a positive uptake of vaccinations that
facilitated the reopening of our State and
international borders.
The ripple effect of the war in Ukraine
has permeated global supply chains
increasing the cost of necessities and
causing food shortages.
This year was not immune to severe
weather events. Queensland and New
company to continue to deliver on its
strategic objectives.
South Wales experienced flood events
In achieving our objectives, we are
and excessive rain that persisted through
committed to ensuring we operate
the second half.
Within this external environment
Autosports Group handled the matters
within its control diligently and
persevered with the execution of its
within a framework of sound corporate
governance. This is achieved through our
commitment to continually review and
improve our governance frameworks which
are supported by the valuable contribution
of our People & Remuneration Committee
and Audit & Risk Committee.
These macroeconomic events have
strategy. Opportunities that presented
impacted the automotive industry. There
themselves were seized and internal
is a shortage of components in vehicle
discipline was constant. As a result,
We continue to invest in our most
production including semi-conductor
chips and wiring harnesses which has
Autosports Group grew underlying
normalised1 Net Profit Before Tax by
important asset – our people. We are
developing leadership skills in our talent
led to an undersupply of new vehicles.
23.4% on pcp to $92.8 million.
pool of high potential people to build a
These supply constraints were tempered
by an increase in new vehicle orders
and improved gross margins which has
supported profitability in the period.
Corporate Governance
Alongside managing the change presented
by our external environment we have also
handled internal changes within the business
pathway for our future leaders. We are
doing this through our Emerging Leader
Development Programs and state and
national talent reviews.
1. Normalised NPBT excludes AASB16 adjustments, acquisition and restructure costs and acquisition amortisation.
4
4
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
“ REFLECTING ON THE EVENTS
THAT HAVE TRANSPIRED IN THE
PAST YEAR, AUTOSPORTS GROUP
SHOWED RESILIENCE AND REMAINED
DISCIPLINED IN THE EXECUTION OF
ITS STRATEGY.”
Strategy
These two properties bring Autosports
The future
Through its history the Company has
demonstrated success in acquiring
Group’s property portfolio to $98.8
million.
The diversity of our business model
through new and used car sales and
businesses and integrating them into the
After the year end, we achieved an
service and parts provides resilience
wider group. This year was no different
important milestone in our growth
in a market which continues to be
as we furthered our growth trajectory
strategy with our entry into the New
impacted by a number of external events.
through inorganic and organic growth.
Zealand market and expansion of our
We will keep progressing our growth
At the start of the year on 1 July 2021,
we acquired an 80% interest in John
Newell Mazda (now Alexandria Mazda).
We broadened our brand representation
with the addition of the Subaru and Kia
brands to our portfolio. We purchased the
Kia and Subaru businesses from Suttons
Motor Group in June 2022 and relocated
them to our recently purchased property
of these are conveniently located in our
growing automotive hub in Alexandria, in
the southern fringe of Sydney’s CBD.
relationship with BMW Group. We
strategy as we partner with new brands
announced the acquisition of 100% of
and enter new markets to build scale
the shares in Auckland City BMW Limited
and diversification to our portfolio of
which operates two BMW, two MINI and
businesses.
a Rolls-Royce dealership in Auckland,
New Zealand. The transaction settled on
1 August 2022 enhancing our geographic
diversity and providing an immediate
scale entry into the New Zealand market.
I would like to thank our management
team, employees and customers for their
support and contribution to our financial
results in FY22.
I also want to acknowledge and thank
my fellow directors for their leadership
Statutory net profit after tax grew 29%
and guidance throughout the year. To
to $54.6 million (2021: $42.4 million).
our shareholders, we look forward to
Accordingly, the Board has declared a
continuing to deliver on our strategy and
at 98 O’Riordan Street Alexandria. All
Financial Results
Our property strategy is premised
fully franked final dividend of 9 cents
position the business for future growth.
on acquiring properties where our
per ordinary share, bringing the full year
dealerships are located to expand our
dividend to 16 cents per share fully
tangible asset base, reduce occupancy
franked, up from 9 cents for FY21. This
costs and, in time, benefit from capital
continued growth in the payout ratio
accretion. Property ownership also
reflects the Company’s resilience despite
delivers security and tenure over the
a challenging external environment
Yours faithfully
site. In addition to our purchase of 98
and commitment to adding value for
James Evans
O’Riordan Street Alexandria mentioned
shareholders.
Chairman
earlier, during the year we purchased 62
Enterprise Drive Bundoora where our
Bundoora BMW dealership is located.
Further information about the Group’s
financial results is also contained within
the CEO’s Letter.
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
5
C E O ’ S _ L E T T E R
Dear Shareholders,
I am pleased to report that
Autosports Group has delivered
Strong cashflows allowed the business
to continue to expand by acquisition.
In FY22 we added John Newell Mazda
a strong performance in FY2022.
(now Alexandria Mazda) and Suttons
Financially the business delivered a
normalised1 NPBT of $92.8m (up 23.4%
on FY21). This profit drove strong
operating cashflows of $135m and
enabled the business to continue to
invest in acquisitive growth and provide a
dividend to shareholders of 16c per share
(final dividend 9c per share).
Within this framework the core business
was able to grow profits despite a
worldwide structural undersupply of new
vehicles. This undersupply was driven by
shortages in the supply of semi conductors
and wiring looms and exacerbated by
ongoing logistics delays relating primarily to
Subaru Rosebery and Suttons City Kia
to our portfolio. These businesses have
been integrated into our automotive hub
in Alexandria and are trading well. More
recently, we announced our acquisition
of New Zealand’s prominent BMW, MINI
and Rolls-Royce business, Auckland City
BMW Group. This acquisition was settled
post FY22 on 1 August 2022.
The Group’s balance sheet continued
to strengthen with the addition of two
key property acquisitions underlying
our Bundoora BMW and Subaru/Kia
Alexandria businesses. This brought the
Group’s underlying property portfolio
to $98.8m.
COVID-19 across the world.
As we enter FY23 Autosports Group
New vehicle demand exceeded supply,
remains well positioned for future growth.
especially in luxury and super-luxury
Organically, demand is strong and
brands. This demand saw Autosports
customer new vehicle orders are high.
Group grow its customer new vehicle
Service and parts have further demand
orders another 66% in the period January
and capacity growth. Underlying
2022 to July 2022 . These customer
vehicle supply whilst still structurally
new vehicle orders combined with
undersupplied will improve gradually
strong underlying demand will support
through the period.
FY22 Results
Revenue declined by 5.2% on the prior
year to $1,876m, reflecting the supply
constraints experienced across the
automotive industry globally.
New vehicle sales revenue decreased by
10.5%, used vehicles increased by 2.6%
while revenue in service and parts was
up 8.9% to $247 million.
Despite the decline in revenue, we
reported a strong increase in gross profit
(up 10.5%) to $373.8m with an uplift in
gross margin to 19.9%.
We experienced gross margin increase as
customer new vehicle orders continue to
grow and higher margin back-end revenue
recovered during the course of the year.
The Company remains disciplined on
operational expenditure and continues
to leverage the scale of its operations to
deliver further efficiencies.
Normalised EBITDA was $112.4 million,
representing an increase of 20.7% on the
new vehicle revenue growth as supply
normalises.
The business is also positioned well for
further growth by acquisition. Strong
prior year.
FY22 demonstrated the resilience of
cashflows, a broader acquisition runway,
our business model underscored by
supportive financiers and OEMs, as
the rebound in our backend service and
well as a fragmented market all provide
parts business. While service and parts
Autosports Group opportunity for well-
revenue was impacted by COVID-19
priced acquisition led growth.
lockdowns in FY21 and in Q1 FY22, post
lockdown customers have returned to
the roads, and backend service and parts
revenue has similarly recovered.
Autosports Group delivered a record
normalised1 Net Profit Before Tax of
$92.8 million for FY22 which was an
increase of 23.4% on FY21.
Statutory Net Profit After Tax was
$54.6m compared to $42.4m for the prior
year.
1. Normalised NPBT excludes AASB16 adjustments, acquisition and restructure costs and acquisition amortisation.
6
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
“AS W E E NT E R F Y 2 3
AU TO S P O RT S G R O U P
R E M A I N S W E L L P O S I T I O N E D
F O R F U T U R E G R OW T H ”
Financial Position
We acquired the Subaru and Kia
Outlook
Autosports Group remains in a strong
financial position.
Cash at hand as at 30 June was $90.8m
with corporate debt of $112m including
property debt of $80.4m which is backed
by our property portfolio of $98.8m.
Strategic focus
Autosports Group continues to leverage
its organic and acquisition growth
strategy.
We continue to target organic growth
through improving the revenue mix of our
business towards higher margin products
and expanding our net margins through
enhanced operating leverage.
We opened a new Ducati dealership in
Sydney, and have commenced greenfield
developments for BMW in Ringwood
Victoria, which includes a new BMW and
Motorrad Showrooms and a state-of-the-art
service workshop. We also remain on track
to open our new showroom development
for BMW in Kings Way Melbourne. These
sites will deliver further scale and synergies
to our business.
Our acquisition strategy remains focused
on acquiring strategically aligned brands
in geographic locations where Autosports
Group can unlock margin improvements.
We made significant progress in this area
during the year.
businesses from Suttons Motor Group
which are strongly complementary to our
Group.
For FY23 Autosports Group’s front
end margins will be supported by the
continued structural undersupply and
These businesses were subsequently
increased customer new vehicle orders,
relocated to our newly acquired property
while back end margins are expected to
at 98 O’Riordan Street, Alexandria, NSW,
increase as we hopefully return to a year
which is adjacent to our Mazda Alexandria
without lockdowns.
business and opposite our super-luxury
and Jaguar Land Rover dealerships.
While OEM partners are working hard to
increase vehicle supply to the Australian/
In July we announced an agreement
NZ market and unwind the international
to acquire Auckland City BMW Limited
impact of semi-conductor supply
in New Zealand. This transaction
constraints, new vehicle underlying
provides immediate scale as we enter
demand is expected to continue to
the NZ luxury auto brands market and
exceed supply in FY23.
enhances the geographic diversity and
reach of our business beyond Australia.
With its market leading share in luxury
brands, Auckland City BMW will be
a strong complement to our existing
We expect demand for used vehicles to
remain high and we remain well placed to
service this demand.
Service and parts revenues should
business whilst continuing our growth
continue to grow which supports further
strategy in the luxury market.
Our property strategy is focused on
improvements in Autosports Group’s
revenue mix and gross profit margin.
controlling strategically important retail
In closing I would like to thank the Board,
sites and improving our capacity to
actively manage our retail locations. This
management and all the team across
Autosports Group for their collective
also further strengthens the Company’s
efforts in delivering another strong
balance sheet.
financial result in FY22.
During the year we acquired the Bundoora
We have much to look forward to in FY23
BMW site in Victoria and also 98
and we are very well placed to continue
O’Riordan Street, Alexandria in Sydney.
our growth trajectory.
These acquisitions were funded through
Thank you to our shareholders for your
the Company’s debt and existing cash
reserves and are highly complementary
to our existing operations.
continued support of the Company.
Nick Pagent
Chief Executive Officer
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
7
G R O U P _ P O R T F O LiO
8
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
8AUTOSPORTS GROUP | ANNUAL REPORT 2021THE GROUP’S PORTFOLIO OF DEALERSHIPS INCLUDE: G R O U P _ D E A L E R S HiP S
AU D I 6
VO LVO 3
B M W 6
VO L K S WAG E N 4
B M W M OTO R R A D 2
L A M B O R G H I N I 2
M AS E R AT I 2
B E NT L EY 3
D U C AT I 1
P R E ST I G E
AU TO T R A D E R S 3
M I N I 5
M E R C E D E S - B E N Z 3
ASTO N M A RT I N 1
L A N D R OV E R 2
JAG U A R 2
A L P I N A 1
S U B A R U 1
K I A 1
M A Z DA 2
M C L A R E N 1
R O L L S - R OYC E 2
This reflects our dealerships as at the date of this report and includes dealerships acquired after 30 June 2022.
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
9
8AUTOSPORTS GROUP | ANNUAL REPORT 2021THE GROUP’S PORTFOLIO OF DEALERSHIPS INCLUDE: O U R _ P U R P O S E
Drive Endless
Possibilities
10
AUTOSPORTS GROUP _AN NUAL RE P O RT 2 0 22
O U R _ VA L U E S
1
2
3
4
Strive for
excellence
We set goals with clear
Village
Care
Leading change
We are united in purpose
We demonstrate care
We leverage our scale and
through people
towards our customers and
collective intelligence to drive
direction and defined
–
their experience
We coach and mentor our
–
change
–
We hold ourselves to account
–
training and development
required for growth
people to be their best
We invest in our people for
We deliver the changes
We are visible,
–
–
approachable and connected
We recognise the role you
We embrace the use of
across the Group
play – everyone is important
technology to deliver the
outcomes
–
–
We are proactive in
our approach
–
–
We exceed expectations in
everything we do
We embrace diversity
and inclusion
–
–
We make decisions with
consideration of our key
stakeholders – employees,
customers, shareholders,
community & manufacturers
We are part of a large Group
retaining a family feel
to our success
–
optimum experience for our
customers and stakeholders
We do what is right by our
–
people, customers and
We move with the times –
communities
taking into account tomorrow,
–
We are eager to help each
today
–
other and create a safe
We are resilient and
environment for our people
embrace change
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
11
Autosports Group Limited
Directors' report
30 June 2022
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as 'Autosports
Group', 'ASG' or the 'Group') consisting of Autosports Group Limited (referred to hereafter as the 'Company' or 'parent entity') and the
entities it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were directors of Autosports Group Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
James Evans
Nicholas Pagent
Ian Pagent
Robert Quant
Marina Go
Thomas Pockett
Chairman (from 1 December 2021) and Independent Director (appointed on 5 August 2021)
Executive Director and Chief Executive Officer
Executive Director
Independent Director
Independent Director
Chairman and Independent Director (retired on 30 November 2021)
Principal activities
During the financial year, our principal activities included the sale of new and used motor vehicles, distribution of finance and insurance
products on behalf of retail financiers and automotive insurers, sale of aftermarket products and spare parts, motor vehicle servicing and
collision repair services. There have been no significant changes in the nature of principal activities.
Our operations comprise of:
●
●
●
●
47 franchised dealerships selling new and used prestige and luxury motor vehicles (as at 1 August 2022);
3 used motor vehicle outlets, focused primarily on the sale of used prestige and luxury motor vehicles;
3 franchised motorcycle dealerships selling new and used motorcycles; and
7 specialist prestige motor vehicle collision repair facilities.
Dividends
Dividends paid during the financial year were as follows:
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Final dividend for the year ended 30 June 2021 of 7.0 cents (2020: Nil cents) per ordinary share
14,070
-
Interim dividend for the year ended 30 June 2022 of 7.0 cents (2021: 2.0 cents) per ordinary share
14,070
4,020
28,140
4,020
On 24 August 2022, the directors declared a fully franked final dividend for the year ended 30 June 2022 of 9.0 cents per ordinary share,
to be paid on 15 November 2022 to eligible shareholders on the register as at 1 November 2022. This equates to a total estimated
distribution of $18,090,000, based on the number of ordinary shares on issue as at 30 June 2022. The financial effect of the dividends
declared after the reporting date are not reflected in the 30 June 2022 financial statements and will be recognised in the subsequent
financial period.
Operating and financial review
Autosports Group generates income from:
●
●
●
●
●
the sale of new and used motor vehicles;
the sale or distribution of ancillary products and services, such as finance, insurance and aftermarket products;
the sale of motor vehicle spare parts;
the provision of motor vehicle servicing; and
the provision of collision repair services.
12
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
1
DIRECTORS’_REPORT30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
The following tables demonstrate the Group’s statutory financial performance normalised to exclude the impact of acquisition,
impairment and restructure expenses ('other items').
Profit after providing for income tax and non-controlling interest amounted to $53,376,000 (2021: $41,932,000).
The profit for the financial year was impacted by other items as follows:
Revenue
Statutory profit after tax attributable to the owners of Autosports Group Limited
Add: Non-controlling interest¹
Add: Income tax expense
Profit before income tax expense
Add: Intangible amortisation²
Add: Acquisition expense³
Add: Restructure and relocation expenses⁴
Add: Closure of franchise⁵
Profit before tax excluding other items
Consolidated
30 June 2022 30 June 2021
$'000
$'000
1,875,954
1,978,406
53,376
1,204
25,780
80,360
3,968
463
1,954
-
41,932
480
19,241
61,653
5,416
746
1,308
917
86,745
70,040
1
2
3
4
5
Represents the 20% non-controlling interest in New Centenary Mazda Pty Ltd held by the dealer principal and 20% non-
controlling interest in John Newell Holdings Pty Ltd held by the dealer principal.
Intangible amortisation relating to non-cash amortisation of customer contracts arising on acquisitions made by the Group.
Relates to expenses incurred on the acquisition of John Newell Holdings Pty Ltd, Suttons Subaru Rosebery and Suttons City Kia
businesses, along with property acquisition costs incurred during the financial year. Previous year relates to the Trivett Alexandria
business and Brighton Jaguar Land Rover acquisitions.
Restructure and relocation expenses relate to the relocation of Lamborghini Brisbane and Audi Indooroopilly dealerships during
the year along with redundancies and other non-trading expenses.
Reflects the closure of Volvo Cars Mt Gravatt and Volvo Cars Brighton both of which ceased trading in the previous financial year.
Profit before tax excluding other items noted above is a financial measure which is not prescribed by Australian Accounting Standards
(‘AAS’) and represents the statutory result under AAS adjusted for certain items. The directors consider profit before tax excluding other
items (being the impact of acquisition, impairment and restructure expenses) to reflect the core earnings of the Group.
Operational overview
Market conditions
While consumer demand remained strong during the financial year, new vehicle supply remains constrained by a global undersupply of
new vehicles impacted by shortages in the supply of semi-conductors and wiring looms and is exacerbated by ongoing logistics delays
relating to COVID-19. This supply shortage has resulted in the Group’s order write exceeding deliveries by 25% throughout Financial
Year 2022 ('FY22'). Supply of new vehicles is expected to improve throughout Financial Year 2023 ('FY23') which will allow us to deliver
our customer new vehicle orders.
Year on year the Vfacts data showed new car registrations decreased by 5.2% for the calendar year to June 2022. The overall new
vehicle sales market was down 2.1% for FY22. The prestige segment was down 15.8% and similarly, the luxury segment was down
8.9% in the FY22.
The prestige and luxury market performance against total market is a result of constrained supply of vehicles as opposed to declining
demand with the Group’s customer new vehicle orders remaining at high levels as noted above.
The total used car retail market in Australia remains approximately three times larger than the franchised new car market.
Strategic acquisitions
Acquisition-led growth continues to support our growth strategy with two new brands and three new businesses added to the portfolio.
2
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
13
Autosports Group Limited
Directors' report
30 June 2022
In the past two years we established an automotive hub in Alexandria, NSW. Alexandria is an inner-city suburb approximately four
kilometres south of Sydney’s CBD catering to customers in Sydney’s inner-city fringe and Eastern Suburbs. Starting with the Group
acquiring six luxury and super-luxury brand dealerships in early 2020, including Rolls-Royce, Aston Martin, McLaren, Bentley, Jaguar
and Land Rover, Autosports Group recently added Alexandria Mazda, Subaru, Kia and Ducati to this automotive precinct in Alexandria.
The proximity between these dealerships allows synergies between the businesses from parts distribution, service and logistics to
administration support.
On 1 July 2021, we purchased 80% of the shares in John Newell Holdings Pty Ltd which operates the Group’s Mazda Alexandria
dealership (formerly John Newell Mazda). Alexandria Mazda is our second Mazda dealership, along with Toowong Mazda in
Queensland.
On 1 June 2022, we purchased the Suttons Subaru Rosebery and Suttons City Kia retail dealerships from Suttons Motor Group
welcoming the Subaru and Kia brands to the portfolio. As Suttons sold its site at Rosebery, we relocated the dealerships to 98 O’Riordan
Street, Alexandria next to Mazda Alexandria.
Executing on our property strategy to control strategically important sites and reduce occupancy costs, we purchased 98 O’Riordan
Street on 7 April 2022 for $23,617,000 funding approximately 90% through existing financiers and the balance through cash
reserves. The property is 1,729 sqm with a gross lettable area of 3,032 sqm.
On 15 November 2021, we purchased the land and building at 62 Enterprise Drive, Bundoora in Victoria where our Bundoora BMW
dealership operates. The acquisition saved approximately $1.6 million per annum in rent. The purchase price of $19,523,000 was 90%
debt funded through existing financier and the balance through cash reserves.
At the end of FY22, Autosports Group’s property portfolio had a carrying value of $98.8 million.
Growth through carefully selected greenfield dealerships complements our acquisition-led growth. In June 2022, we officially opened our
first Ducati dealership and service facility in Alexandria alongside our super-luxury brands.
Our strong BMW presence in Victoria will be further expanded with the construction of a new BMW greenfield dealership in Ringwood,
Victoria which is planned to open in 2023.
Investing in new facilities is necessary for our businesses to provide a premium experience for our customers. Autosports Group is
excited to reveal the new Melbourne BMW Kings Way facility in August 2022 which is the first BMW dealership in Australia with the latest
BMW corporate identity. This exciting development will see the consolidation of the Melbourne BMW dealership from two sites (Kings
Way and Southbank) into one state-of-the-art facility along the prominent Kings Way in Melbourne.
Other facility upgrades include a new showroom at Audi Indooroopilly and the development of the Group’s property holding in Macgregor
Queensland for an upgraded Mercedes-Benz Macgregor and Volkswagen dealerships.
Environment, social and governance
Environment
As the global economy is shifting towards a more sustainable way of living and doing business, we recognise we have an important role
to play both in working with vehicle manufacturers and in our own operations. The brands that Autosports Group represents are
predominantly based in Europe where there is a strong impetus towards producing clean vehicles and lowering emissions. Autosports
Group is proud to be delivering a range of new electric vehicles to market as consumer interest in these vehicles is rapidly
increasing. The other part of our journey to a more sustainable future is a focus on developing a framework to incorporate a strategy
around sustainability, measuring emissions, and implementing improved processes to minimise our impact on the environment. A key
initiative of this includes several dealerships in the Group that have commenced MTA Green Stamp accreditation.
As part of our journey toward sustainable energy, we have taken steps to reduce our reliance on non-renewable grid energy sources.
Several dealerships have engaged with a renewable energy company to install a combined of 515 kW of solar photovoltaic panels in
FY23. This should generate over 754 MW of clean renewable energy per year and offset approximately 618 tonnes of carbon annually.
Our proactive approach to an environment-positive energy source will accelerate our transition to a more sustainable way of doing
business and help reduce the cost of electricity across the dealerships whilst minimising our carbon footprint.
Social
Health and well-being
Autosports Group prioritises the health and safety of its employees, customers and the community. During FY22, the safety agenda was
led by leveraging the existing safety culture across the business and included conducting our own internal safety inspections of each site
to ensure that we met and complied with our high safety standards. New Safe Work Procedures were implemented across the Group
which show directions on how work and hazardous tasks are to be carried out safely.
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DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
There has been an increased effort on mental health and well-being with COVID-19 identifying some areas of interest that our people
would benefit from. This has been led by introducing an Employee Assistance Program (EAP) offering Health and Well-being webinars
to our people.
Operationally, the business has continued to keep abreast of all State-based Government advice on COVID-19 directives and
restrictions. The Group’s businesses remained adaptable despite the evolving restrictions and continued to maintain customer
satisfaction and interaction during these challenging conditions. Each site has met the Government requirements with check-ins,
vaccination requirements and maintaining site COVID-19 safe work plans.
COVID-19 Safe Protocols were in place alongside the COVID Safety Plans which reinforced messages of risk assessment, enhanced
cleaning methods, mental well-being, remote working, incident response and government travel restrictions, which have been a critical
control through the period.
We continue to support the Government roll-out of the vaccination program and mandated vaccinations as required by each state
government. The Group introduced resources to help flexible working arrangements and continued to provide support for employees
working from home who were able to do so and sent regular emails to all staff with government updates.
People and Diversity
This year we took time to review our purpose statement and values. We held several workshops with a cross-section of employees
across all locations and thought carefully about who we are and what Autosports Group stands for. Our new purpose statement ‘Drive
Endless Possibilities’ links to our growth path and is meaningful to our employees, customers, business partners and shareholders. We
also refined Autosports Group's values which acknowledge our past but also represent our future aspirations. Our values include Care,
Village, Leading Change and Strive for Excellence which will be embedded in all of our communications, performance discussions and
the way we do business.
Since June 2021, we have committed to offering up skilling of qualifications for both new and existing employees at no cost to staff
members. These courses are delivered by registered training organisations and are predominantly delivered online. We received a
positive uptake of this opportunity. We have continued to embed our communications platform ‘Workplace’ by Facebook. This has
become the centralised communications platform for Group announcements. This also gives each site the ability to form site-based and
department-based groups, to share site-specific details and information amongst team members. All new and existing employees have
access to a comprehensive knowledge library, where our company policies, procedures and forms are stored for internal use.
During the financial year, the senior leadership team invested time in reviewing our talent and succession plans. This process was
extremely valuable to identify our top and emerging talent and a process we will continue with.
We continue to recognise the importance of diversity and have implemented initiatives to help the business work towards set diversity
targets. During the financial year, we initiated a Group Diversity and Inclusion Council which has a diverse mix of members from all
areas. This group has set a targeted Diversity and Inclusion strategy to look at how we can create a more diverse and inclusive
workforce. This has involved celebrating numerous days including International Women's Day, NAIDOC Week and International Day
Against Homophobia, Biphobia and Transphobia (IDAHOBIT) and most recently introducing paid parental leave for both primary and
secondary carers in our workforce.
We completed our first Emerging Leaders Development Program which comprised of 23% female participants.
Modern slavery
On an annual basis Autosports Group adopts a modern slavery plan to investigate a supplier category according to risk and value. In
FY22, the business conducted due diligence enquiries in relation to telecommunications and information technology suppliers. This area
complemented the work being progressed in relation to cybersecurity maturity and resilience. Each year our Modern Slavery Plan is
considered by the Audit and Risk Committee and adopted by the Board. A key part of Autosports Group’s modern slavery plan is
supplier on-boarding which helps the Group assess new suppliers and asks new suppliers to adhere to our Supplier Code of Conduct.
Our FY22 Modern Slavery Statement is published on our company website.
Whistle-blower
Our whistle-blower program supports employees, suppliers and their families to come forward with their concerns anonymously and
confidentially. We utilise an external whistleblowing service to provide a safe platform for eligible whistle-blowers to raise concerns whilst
maintaining a whistleblowing policy in accordance with statutory requirements.
Governance
Autosports Group sees its governance framework as a continually evolving one which is regularly reviewed and improved. At the core of
our governance framework is our People & Remuneration Committee, Audit & Risk Committee and General Board which oversee our
Compliance and Risk Management Framework, whistle-blower framework, modern slavery plan, privacy and cybersecurity
framework. Our risk framework is also supported with an internal audit program designed to review and test the Group’s internal controls
and compliance in key risk areas.
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
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Autosports Group Limited
Directors' report
30 June 2022
We take the privacy of our customers and the security of our systems very seriously. Accordingly, we have engaged a specialist security
organisation to review and refine our Security Framework, Policies and Procedures. Key security infrastructure components have been
reviewed and identified improvements and capabilities that are now in progress. We have invested in maturing our cybersecurity
resilience and IT infrastructure to support a more efficient delivery of IT services across the Group.
Operational excellence and community engagements
Throughout the 2022 financial year, the Group celebrated both individual and team achievements across the business.
Our dealerships were celebrated with Aston Martin and Rolls Royce winning APAC Dealer of the Year 2021; Audi Centre Mosman
winning Metropolitan Audi Dealer of the Year, Finance Controller Award 2021, and Financial Services Award 2021; Audi Sutherland
placed third in the Metropolitan Audi Dealer of the Year 2021 and was recognised with an Audi 15-year Partnership Award 2021; Audi
Centre Brisbane was also recognised as Audi Foundation Dealer of the Year 2021; Audi Centre Parramatta won the Major Metropolitan
Audi Financial Controller Award 2021 and Audi Five Dock was awarded the Major Metropolitan Audi Financial Services Award 2021.
Our people were recognised in the 2021 BMW Dixi Club & MINI Academy awards; Jaguar Land Rover Business Manager of the Year
2021-2022; Maserati Middle Weight Sales Executive and Middle Weight Marketing Manager of the Year; Mercedes-Benz Retailer of the
Year – Star Guild Winner in New Vehicle Sales, Shining Star - Joint Service Manager of the Year, and Part Manager Top Achiever;
Mercedes-Benz Vans Master Technician and the 2021 Mazda Master Guild winners in Master Service Manager, Parts Manager, Sales,
Sales Manager, Sales Consultants and Advisors.
We also engaged in a variety of community engagement initiatives by sponsoring sporting clubs to support programs and the
development of talent in the local communities; participated in school fundraising efforts to assist in securing new facilities and the
development of children in our local areas; provided auction items for local charities and participated in fundraising efforts such as
supporting the Audi Foundation, Movember, Berry Motorfair, The Smith Family Toy & Book Appeal, Ronald McDonald House Charity,
Tour de Cure and CEO Dare to Cure; and provided a Volkswagen Passat to the Castle Hill Police, amongst many other initiatives across
Queensland, New South Wales and Victoria.
Marketing and technology
The Group has continued to invest in the Salesforce Customer Relationship Management (CRM) platform to improve customer data
management and has worked closely over the past 12 months with our OEMs to ensure that both entities have the right data at the right
time to deliver outstanding outcomes for consumers. At the latter end of 2021, a team of key stakeholders across the Group designed
the Autosports Group Digital Transformation Roadmap and implemented a Digital Transformation Steering Committee to ensure that
projects are delivered according to key business priorities on time and on budget. One of the key projects progressed during the period
is the Ducati online store. During FY22, the marketing team has continued to utilise the Salesforce Datorama platform to monitor
marketing performance and optimise marketing spends realising significant cost efficiencies for the business and steady quality
customer enquiry.
Likely developments in operations in future years
The Group’s diverse revenue model supports both resilience and growth through the Financial Year 2023 ('FY23') as:
●
●
●
●
●
●
●
underlying vehicle supply, whilst structurally under supplied, should improve gradually during the period;
service and parts revenue should maintain underlying growth rates between 6-9% in FY23;
we intend to continue real estate acquisitions of key trading locations to maximise flexibility, security and balance sheet;
we allocate capital to greenfield dealership opportunities and increase service and panel capacity;
our strong balance sheet position supports further acquisition led growth in FY23;
we intend to deliver shareholder returns with dividends in the range of 55-70% NPAT; and
we continue to focus on the development and growth of our staff.
Risk and governance
The Group identified its key risk areas as:
Supply chain
COVID-19
Structural under supply exacerbated by the pandemic has caused shortage of supply of new vehicles
across the automotive industry with demand continuing to exceed supply in FY22. This risk is
mitigated through high consumer demand improving margins and careful inventory management.
The pandemic continued in FY22 affecting the first half-year in particular. The Group is equipped to
quickly adapt to changing public health regulations and has developed better ways to continue
operating in a COVID-19 safe manner including sales through click and collect and contactless
service operations. With appropriate cost reduction measures and support from other States that were
not in lock-down, the Group managed the impact of the Victorian lock-downs efficiently.
16
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
5
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Macroeconomic risks
As the products sold by the Group are discretionary for many customers, the Group’s financial
performance can be impacted by current and future economic conditions which it cannot control.
Increasing interest rates and inflationary pressure can put pressure on consumer spending and
reduce purchasing power.
Privacy and Data Breach
The Group handles personal and sensitive information. Our Data Breach Response Plan is designed
so we are ready to take prompt action to contain and address data security incidents. Our privacy
management framework is built around awareness, governance and continuous improvement whilst
also being inherently connected with our cybersecurity framework. The Group is dedicated to keeping
its workforce appropriately trained and updated with privacy and data breach training and initiatives.
Autosports Group conducted an internal audit on Data Privacy during the year and is a supporter of
the OAIC’s annual Privacy Awareness Week.
Work, Health and Safety (‘WHS’)
The Group has a zero-risk tolerance for serious safety incidents. During the financial year, the Group
continued to improve its WHS practices by using the existing safety culture across the business to
continue to develop and train its workforce on WHS matters.
Reliance on key personnel
The Group engaged in activities during the financial year to develop the skills and experience of
potential successors as part of its succession planning initiatives.
Original equipment manufacturer
(‘OEM’) risk
The automotive industry is also experiencing a change in OEM business models including some
manufacturers adopting an agency model. The Group’s supportive and collaborative approach to its
relationships with OEMs have cultivated the Group’s excellent reputation amongst OEMs and we will
continue to work with our business partners in this way.
Regulatory compliance
The Group is subject to a number of Australian laws and regulations such as consumer protection
laws, consumer finance laws, laws relating to the sale of insurance products, importation laws, privacy
laws and those relating to workplace health and safety. The Group monitors the regulatory landscape
for regulatory change.
Changes to market trends
As consumer preferences trend towards electric vehicles, Autosports Group is well positioned to take
advantage of the trend as we partner with many OEMs that are delivering new ranges of electric
vehicles. The Group regularly monitors market trends to prepare for changes to consumer preferences
and new technologies.
Cybersecurity and Information
technology (‘IT’) infrastructure
FY22 saw a continuation of the Group’s Cybersecurity Maturity Uplift Program as cybersecurity risks
remain a key risk for businesses globally. During the year, cybersecurity training was issued and IT
governance structures implemented.
Environmental regulation
The Group is committed to continually improving its operations to deliver better environmental outcomes. The Group is subject to
environmental regulation and is required to maintain licences and applies minimum environmental standards at its dealerships and
service and collision facilities.
Significant changes in the state of affairs
On 1 July 2021, the Group acquired 80% of the shares in John Newell Holdings Pty Ltd for $10,808,000 (net of cash). On 1 June 2022,
the Group acquired certain assets and liabilities of Subaru Sydney City and Sydney City Kia from Suttons Motors Group for $9,403,000.
On 16 November 2021, the Group acquired the land and building from which its Bundoora BMW dealership operates for $19,523,000.
On 7 April 2022, the Group acquired the land and buildings at 98 O’Riordan Street, Alexandria, from which the Subaru Sydney City and
Sydney City Kia dealerships operate for $23,617,000.
Refer to note 11 and note 28 to the financial statements for further details relating to the acquisitions.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 1 August 2022, the Group completed the acquisition of a 100% interest in Auckland City BMW Limited through its wholly-owned New
Zealand-based subsidiary. The acquisition is subject to final completion adjustments. The final consideration is estimated at $63.2 million
(NZ$70 million), funded by existing cash reserves and $12.2 million (NZ$13.5 million) debt facility.
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
17
Autosports Group Limited
Directors' report
30 June 2022
Auckland City BMW Limited is a well-established business that comprises three dealerships representing approximately 37% of BMW’s
market share, 50% of MINI’s market share and 100% of Rolls-Royce’s market share in New Zealand. It operates with a net profit before
tax and EBITDA margins in excess of the Group’s FY2021 margins. Management accounts of the Auckland City BMW business
recorded revenue of approximately $141.7 million (NZ$157 million) for the year ended December 2021.
Executing this international acquisition marks an important milestone in the Group’s growth strategy and reinforces the Group’s positive
business relationship with BMW Group over the last five years. It aligns strongly with the Group’s strategy to enhance geographic
diversity and business reach beyond Australia.
Regulatory change
The Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 introduced new product
design and distribution obligations to help consumers obtain the appropriate financial product. Since 5 October 2021, businesses were
required to meet the new design of financial products to meet consumers’ needs and distribute their products in a more targeted manner.
This includes an obligation on the issuer to notify ASIC or the distributor to inform the issuer of a significant dealing in a financial product
if inconsistent with the product’s target market determination.
ASIC’s Regulatory Guide 271 on Internal Dispute Resolution updates credit licensees’ reporting requirements for complaints received
from 5 October 2021. It broadens the definition of ‘complaint’ to include an expression of dissatisfaction about an organisation and its
staff. Complaints do not need to be made in writing or contain the words ‘complaint’ or ‘dispute’ to trigger an internal dispute resolution
process application. There is also an obligation on credit licence holders to monitor their social media channels to manage complaints.
Notably, the regulation reduced the time frame for responding to complaints from 30 calendar days to 21.
Since 5 October 2021, financial firms have been required to record all complaints received and have an effective system in place for
recording information about complaints. ASIC released the final mandatory requirements for the internal dispute resolution (IDR) data
reporting framework on 30 March 2022 to require all financial firms to report the IDR data to ASIC by 31 August 2023.
The Australian Government introduced new safety and information standards for button batteries and consumer goods that contain
button batteries. Manufacturers and distributors of such products must ensure safety warning tags are attached to applicable products
and conduct mandatory testing.
Changes to the Autonomous Sanctions Amendment Regulations establish the thematic sanctions regime concerning serious violations
or abuses of human rights, serious corruption and significant cyber incidents. It allows the Australian Government to impose sanctions
on individuals rather than geographic locations and extend to persons of Australian Citizens or residents.
Amendments under the Corporations Act 2001 allow temporary COVID-19 relief measures and now enable electronic execution of
company documents, distribution of meeting-related materials and use of technology in meetings.
The NSW Government agreed to extend the Motor Dealers and Repairers Amendment Bill to cover the entire online vehicle purchase
process for both new and used cars.
Changes to Victoria’s workplace safety legislation commenced on 1 July 2022. These changes aim to prevent and better respond to
workplace safety incidents, improve outcomes for injured workers and increase Victoria’s workers’ compensation scheme operations.
Victoria’s Occupational Health and Safety updates saw additional rights and protections for labour-hire workers, prohibitions on
insurance schemes to pay monetary penalties for offences under WorkSafe laws and other authorities for WorkSafe inspectors. A
WorkSafe inspector can now issue prohibition notices, give directions to prevent foreseeable serious health and safety risks and prohibit
activities with inadequate risk management.
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AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
7
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Current directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
James Evans
Independent Director and Chairman
Bachelor of Economics, a member of the Chartered Accountants Australia and New Zealand, a
Fellow of the Financial Services Institute of Australasia and a Fellow of the Australian Institute of
Company Directors
James has over 40 years' executive experience in retailing, and banking and financial services.
Recently, James served as the Chair of Global Fund Manager Pendal Group Limited and the
Chair of ME Bank, until its sale to the Bank of Queensland and was a Non-Executive Director of
Investa Group, including Investa Wholesale Funds Management Limited and ICPF Holdings
Limited. He was also the former Chair of Suncorp Portfolio Services Limited and a Non-Executive
Director of Australian Infrastructure Fund Limited and Hastings Funds Management Limited.
None
Independent Director of Pendal Group Limited (ASX: PDL) from 2010-2022. Chairman from 2013
- 2022
Member of Audit and Risk Committee and People and Remuneration Committee
None
None
None
8
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
19
Autosports Group Limited
Directors' report
30 June 2022
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Nicholas ('Nick') Pagent
Managing Director and Chief Executive Officer
Nick has over 26 years' experience in the motor vehicle industry across Australia and the United
Kingdom. Prior to founding Autosports Group, Nick worked in the United Kingdom in senior roles
including Director of Sales and Dealer Principal with Mercedes-Benz London and Executive Audi,
St Albans. Together with Ian Pagent, he is a Co-Founder of Autosports Group.
None
None
None
39,615,703 ordinary shares held indirectly
None
887,351 LTI performance rights and 157,779 STI performance rights convertible into ordinary
shares
James (‘Ian’) Pagent
Executive Director
Ian has over 53 years' experience in the motor vehicle industry across Australia, Asia and the
United States of America. Between 1988 and 2002, Ian was co-owner and Managing Director of
Trivett Classic Group. During this period, he was the dealer principal for BMW, Audi, Volvo,
Jaguar, Land Rover, Aston Martin, Porsche, Lamborghini, Lotus, Mazda, Honda, Peugeot,
Toyota and MG Rover. Together with Nick Pagent, he is a Co-Founder of Autosports Group.
Non-Executive Director – Friends of Mater Foundation and Audit Foundation
None
None
65,644,224 ordinary shares held indirectly
None
516,307 LTI performance rights and 68,619 STI performance rights convertible into ordinary
shares
Robert Quant
Independent Director
Bachelor of Business from the University of Technology, Sydney
Robert has over 39 years' experience in professional accounting in advisory and leadership roles
having developed sector expertise in retail automotive and professional services. His most recent
executive roles include Global Leader - Asia Pacific for Grant Thornton International Limited and
Chief Executive Officer of Grant Thornton Australia Limited. As well as sitting on and chairing a
number of private boards, he advises in the areas of strategy development and organisational
change.
None
None
Chair of Audit and Risk Committee and Member of People and Remuneration Committee
62,499 ordinary shares held indirectly
None
None
20
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
9
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Marina Go
Independent Director
Master of Business Administration from the Australian Graduate School of Management
(‘AGSM’) and a Bachelor of Arts from Macquarie University
Marina is Chair of Adore Beauty and Netball Australia and a Non-Executive Director of
EnergyAustralia, 7-Eleven and Transurban Group. She is also a member of the UNSW Business
Advisory Council, and author of the business book for women, 'Break Through: 20 Success
Strategies for Female Leaders'. Marina has over 25 years of leadership experience in the media
industry, having started her career as a journalist. She is the former Chair of Ovarian Cancer
Australia and Super Netball Limited as well as the former Non-Executive Director of Booktopia
Group and Pro-Pac Packaging. She is also a member of the Australian Institute of Company
Directors.
Chair of Adore Beauty Group Ltd (ASX: ABY) - since 2 November 2021 and Non-Executive
Director - since 6 October 2020 and Non-Executive Director of Transurban Group (ASX: TCL) -
since 1 December 2021.
Non-Executive Director of Booktopia Group Limited (ASX: BKG) - resigned on 31 March 2022,
Non-Executive Director of Pro-Pac Packaging (Aust) Pty Ltd (ASX: PPG) - resigned on 23
November 2021.
Chair of People and Remuneration Committee and Member of Audit and Risk Committee
40,833 ordinary shares held directly
None
None
'Other current directorships' quoted above are current directorships for listed entities only.
'Former directorships (last 3 years)' quoted above are directorships held in the last three years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Other key management and company secretary
Name:
Title:
Experience and expertise:
Interests in shares:
Interests in options:
Interests in rights:
Aaron Murray
Chief Financial Officer
Aaron has over 25 years' experience in accounting and the motor vehicle industry. He has held
the role of Autosports Group Chief Financial Officer since 2009, after joining the business in
2007. Prior to joining Autosports Group, he held accounting and finance roles with Trivett
Classic, McMillan Volkswagen and Audi Centre Parramatta.
1,747,095 ordinary shares held directly and indirectly
None
330,262 LTI performance rights and 59,661 STI performance rights convertible into ordinary
shares
10
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
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Autosports Group Limited
Directors' report
30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Caroline Raw
Company Secretary and General Counsel
Fellow of the Governance Institute, Bachelor of Laws and Bachelor of Commerce, Graduate
Diploma of Applied Corporate Governance from Governance Institute.
Caroline has over 17 years' experience as a corporate lawyer advising listed companies and
funds on initial public offerings, capital raising, funds management and mergers and
acquisitions. Prior to joining Autosports Group, she held a senior role at a national law firm in
the equity capital markets and merger and acquisitions practice group. Caroline sat on the
Capital Markets Committee of the Property Council of Australia and has previously acted as
group company secretary and legal counsel for an ASX-listed property funds management
company and an Australian real estate investment trust.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the year ended 30
June 2022, and the number of meetings attended by each director were:
James Evans
Nick Pagent*
Ian Pagent*
Robert Quant
Marina Go**
Thomas Pockett
Full Board
People and Remuneration
Committee
Attended
Held
Attended
Held
Audit and Risk Committee
Attended
Held
10
11
11
11
10
5
10
11
11
11
11
5
7
7
7
7
7
4
7
7
7
7
7
4
10
10
10
10
10
5
10
10
10
10
10
5
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
*
**
Whilst Nick Pagent and Ian Pagent are not members of the People and Remuneration Committee or Audit and Risk Committee, they
attended each meeting.
This meeting was a non-scheduled meeting held on short notice and Marina’s comments were received in advance.
Shares under option
There were no unissued ordinary shares of Autosports Group Limited under option outstanding at the date of this report.
Shares under performance rights
There were 1,652,731 unissued ordinary shares of Autosports Group Limited under performance rights at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of Autosports Group Limited issued on the exercise of options during the year ended 30 June 2022 and
up to the date of this report.
Shares issued on the exercise of performance rights
No shares were issued on the exercise of performance rights during or since the end of the financial year. Instead, the Company
arranged to purchase shares on-market through a facility offered by its Share Registry, Link Market Services, which satisfied vested
performance rights during the financial year. There were no other ordinary shares issued during or since the end of the financial year.
Indemnity and insurance of officers
The Company has entered into Deeds of Indemnity, Insurance and Access with each of the directors as well as the Company Secretary
and Chief Financial Officer of the Company to indemnify them for costs incurred, in their capacity as a director or executive, for which
they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company
against liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or
any related entity against a liability incurred by the auditor.
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AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
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DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any
related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined
in note 25 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm
on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor;
and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting
as advocate for the Company or jointly sharing economic risks and rewards.
●
Officers of the Company who are former partners of Deloitte Touche Tohmatsu
There are no officers of the Company who are former partners of Deloitte Touche Tohmatsu.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to
the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately
after this directors' report.
Remuneration report (audited)
Sections
The remuneration report is set out under the following main headings:
1
2
3
4
5
Remuneration essentials
Senior Executive remuneration in detail
Independent Director remuneration
Statutory remuneration disclosures
Transactions with key management personnel
(1) Remuneration essentials
What does this report cover?
The directors of Autosports Group Limited are pleased to introduce to shareholders the Company’s remuneration report for the
performance period 1 July 2021 to 30 June 2022 (‘financial year’ or ‘FY22’).
Who does this report cover?
This report sets out the remuneration arrangements for the Company’s key management personnel (‘KMP’). The term KMP refers to
those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
including any director (whether executive or otherwise). Throughout the remuneration report, KMP are referred to as either Senior
Executives (who are members of KMP performing an executive role) or Independent Directors.
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
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Autosports Group Limited
Directors' report
30 June 2022
The following table sets out the Company’s KMP for the financial year. All KMP held their positions for the whole of the financial year,
unless otherwise indicated.
Name
Position
Independent Directors
James Evans
Tom Pockett
Marina Go
Robert Quant
Senior Executives
Nick Pagent
Ian Pagent
Aaron Murray
Chairman (from 1 December 2021) and Independent Director (from 5 August 2021)
Chairman and Independent Director (until 30 November 2021)
Independent Director
Independent Director
Managing Director and Chief Executive Officer (‘CEO’)
Executive Director
Chief Financial Officer (‘CFO’)
Remuneration governance and framework
Role of the Board and People and Remuneration Committee
The Board of Directors (the ‘Board’) is responsible for establishing, and overseeing the implementation of, the Company’s remuneration
policies and frameworks and ensuring that they are aligned with the long-term interests of the Company and its shareholders.
The People and Remuneration Committee assists the Board with these responsibilities. The role of the People and Remuneration
Committee is to review key aspects of the KMP remuneration structure and arrangements and make recommendations to the Board. In
particular, the People and Remuneration Committee reviews and recommends to the Board:
●
●
●
●
●
arrangements for the Senior Executives (including annual remuneration and participation in short-term and long-term incentive plans);
key performance indicator (‘KPI’) targets for Senior Executives that align with short and long-term goals and cultural expectations;
remuneration arrangements for Independent Directors;
major changes and developments to the Company’s equity incentive plans; and
whether offers are to be made under the Company’s employee equity incentive plans in respect of a financial year and the terms of
any offers. Recommendations are made based on annual reviews of Senior Executives' performance against KPIs.
Use of remuneration consultants and other advisors
In FY22, no remuneration consultants were used.
Voting and comments made at the Company's 2021 Annual General Meeting ('AGM')
At the 2021 AGM, 99.14% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2021. The
Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Remuneration policy and guiding principles
In accordance with best practice corporate governance, the structure of Senior Executive and Independent Director remuneration is
separate.
Senior Executive remuneration
Our remuneration framework is designed to be competitive and encourage Senior Executives to execute the Group’s strategy and
achieve business objectives to increase shareholder value.
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13
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
The Board and the People and Remuneration Committee are guided by the following objectives when making decisions regarding Senior
Executive remuneration:
Independent Director remuneration
In remunerating Independent Directors, we aim to ensure that we can attract and retain qualified and experienced directors having
regard to:
●
●
●
the specific responsibilities and requirements for the Board;
fees paid to Independent Directors of other comparable Australian companies; and
the size and complexity of the Group’s operations.
Remuneration mix and components
Our executive remuneration framework is summarised below and includes components of remuneration which are structured to motivate
executives to deliver sustained returns through a mix of short-term and long-term incentives.
Executive remuneration framework
Fixed remuneration (‘Fixed REM’) – Cash
Short-term incentive (‘STI’) (at risk) – Equity Long-term incentive (‘LTI’) (at risk) – Equity
Base salary plus superannuation and other
benefits
STI is subject to financial and non-financial
performance hurdles
Granted in performance rights at the start of
the performance period
Influenced by individual skills, qualifications,
experience and performance
Subject to a culture and values gateway
hurdle
Vesting subject to an earnings per share
('EPS') performance condition
Reviewed annually
Performance measured over 12 months
Performance measured over three years
Granted in performance rights which will
vest following a 12-month deferral period
subject to the Senior Executive’s continuous
service
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
25
Autosports Group Limited
Directors' report
30 June 2022
Market competitive base reward encourages sustainable performance in the medium to longer term and provides a retention element
The tables below illustrate the remuneration mix for the Senior Executives at target performance.
The tables below illustrate the remuneration mix for Senior Executives at maximum award.
Company performance
In FY22, gross profit grew 10.5% to $373.8 million as under supply of new vehicles resulted in higher gross margins. Statutory net profit
after tax was $54.6 million compared to $42.4 million for the prior year.
While there was a 5.2% decline in revenue (2022: $1.88 billion, 2021: $1.98 billion) reflecting the global shortage of new vehicle supply,
the cycling out of lock-downs in the second half of the financial year resulted in a recovery in service and parts revenue (2022: $247
million, 2021: $227 million).
We acquired several businesses during the year including Alexandria Mazda, Sydney City Kia and Subaru Sydney City. Ducati Sydney,
a new greenfield dealership and service facility at Alexandria, opened in June 2022. Our business acquisitions were complemented by
an investment in the properties underlying our Bundoora BMW dealership at 82 Enterprise Drive Bundoora VIC and Kia and Subaru
dealerships at 98 O’Riordan Street, Alexandria NSW.
At year end our cash at bank was $90.8 million (2021: $96.8 million) and corporate debt was $112.5 million. Of the corporate debt, $80.4
million is property debt supported by a property portfolio with a carrying value of $98.8 million.
26
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
15
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Our remuneration structure was established to reward both short-term and long-term growth with gateway hurdles of upholding cultural
and value expectations for continual improvement in corporate governance, compliance, risk management and stakeholder relationships.
It is also intended to retain skilled executives in the long-term interests of the business.
The table below shows our financial performance for the last five years.
Share performance
Earnings performance
Liquidity
Financial year
ended
30 June
Closing
share price
($)
Dividend per
share
(cents)*
Basis
earnings per
share
('EPS')
(cents)
Earnings
Before
Interest
and tax
('EBIT')
$M
Net profit
after tax
('NPAT')
$M
Return on
Equity
('ROE')
%
Cash flow
from
operations
$M
Interest
coverage
(Earnings
before
interest and
tax
('EBITDA'))
2022
2021
2020
2019
2018
1.52
2.55
1.17
1.26
1.70
16.0
9.0
-
3.0
9.0
26.56
20.86
(50.97)
5.57
12.99
96.8
79.8
(76.1)
41.5
50.7
54.6
42.4
(102.3)
11.4
26.4
10.8
10.2
(27.1)
2.3
5.3
135.0
125.8
83.8
45.3
46.1
9.10
7.13
3.54
3.29
4.51
*
100% franked at 30% corporate income tax.
(2) Senior Executive remuneration in detail
Fixed remuneration
The remuneration of Senior Executives includes a fixed component comprised of base salary, employer superannuation contributions
and other benefits associated with the provision and use of motor vehicles.
Fixed remuneration is regularly reviewed by the People and Remuneration Committee with reference to each Senior Executive’s
individual performance and, as appropriate, relevant comparative compensation in the market.
Fixed remuneration for Senior Executives is market-aligned to similar roles in companies of a comparable size, complexity and scale to
Autosports Group.
Short-term incentive
Set out below is an explanation of the terms and conditions applying to the STI awards for Senior Executives during the performance
period.
Overview of the STI plan
The STI plan is an ‘at-risk’ component of executive remuneration whereby, if the applicable
performance conditions are met, STI awards will be delivered in the form of performance rights
which will vest after a further deferral of one year subject to the executive’s continued service.
Participation
Executive directors and other members of senior management are eligible to participate in the
STI plan.
Performance period
1 July 2021 to 30 June 2022
STI opportunity
The STI opportunities of the Senior Executives are set out below:
Name
Nick Pagent
Ian Pagent
Aaron Murray
Level of performance
At target
Level of performance
At maximum
50% of base salary
20% of base salary
50% of base salary
75% of base salary
45% of base salary
75% of base salary
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
27
Autosports Group Limited
Directors' report
30 June 2022
Each Senior Executive’s STI opportunity is assessed against individually weighted financial and
non-financial performance hurdles.
In relation each financial key performance indicator comprising revenue, liquidity, EBITDA and
EPS, the STI opportunity is awarded as follows:
(i) < 90% - no award
(ii) > 90% and < 100% - 30% of ‘target’ amount awarded
(iii) 100% (at target) - 100% of ‘target’ amount awarded
(iv) > 100% and < 110% - straight line pro rata between ‘target’ and ‘maximum’ amount
awarded
(v) 110% or greater - ‘maximum’ amount awarded.
Additionally, all performance matrices were assessed exclusive of new or unbudgeted
acquisitions. Non-financial KPIs were assessed based on the achievement of individual
strategic objectives and performance against set criteria. The Board retained its discretion to
determine each Senior Executive’s award including having regard to performance.
Performance conditions
Performance conditions for the initial grant include:
(i) a “gateway hurdle” of upholding our culture and values. If the gateway hurdle is not met, no
STI is awarded; and
(ii) in addition, each Senior Executive has a balanced scorecard that determines their STI
awards. These scorecards incorporate individually weighted financial and non- financial
performance hurdles determined by the Board annually. The financial hurdles relate to the
financial objectives of the Group and include targets measured against Revenue, Liquidity,
EBITDA and EPS. EPS is calculated having regard to underlying profit, which measures profit
from the Group’s ongoing operations adjusted, where the Board considers it appropriate. The
non-financial performance hurdles are aligned to each Senior Executive’s role and include
items such as reporting, safety, business and property acquisitions, culture and employee
engagement, diversity, cybersecurity and internal audit.
The Board has determined that the combination of financial and non-financial conditions
provides the appropriate balance between short-term financial measures and the more
strategic non-financial measures which in the medium to long-term will ultimately drive further
growth and returns for shareholders.
Following the end of the financial year, the People and Remuneration Committee assesses the
performance of Senior Executives against the performance conditions set by the Board and
determines the actual level of award for the Senior Executives for the initial grant and,
therefore, the number of performance rights to be granted. The Board believes this method is
most efficient and results in the most accurate outcomes.
Following measurement against performance conditions, STI awards are delivered in the form
of performance rights which vest following a deferral period of 12 months subject to a
continuous service condition.
Upon vesting, each performance right entitles the Senior Executive to one ordinary share in the
Company. The Board has the discretion to settle performance rights with a cash equivalent
payment.
Performance rights are granted for nil consideration and no amount is payable on vesting.
Measurement of performance
conditions
Delivery of STI awards
Performance rights
Number of performance rights to be
granted
The number of performance rights to be granted to Senior Executives is determined by dividing
any STI award that the executive becomes entitled to receive by the volume weighted average
price (‘VWAP’) of shares traded on the ASX during the 10 trading days following the release of
the Group’s FY22 audited results.
Dividend and voting rights
Performance rights do not carry dividend or voting rights prior to vesting. Shares allocated on
vesting carry the same dividend and voting rights as other shares.
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AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
17
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Treatment on cessation of
employment
If a Senior Executive ceases to be employed during the 12 month deferral period, the following
treatment will apply, unless the Board determines otherwise:
(i) if they resign or are summarily terminated, all of their rights will lapse; or
(ii) if they cease employment in any other circumstance, a pro rata portion (for the portion of the
performance period elapsed) of unvested rights will remain on foot and will vest in the ordinary
course.
Change of control
The Board may determine that all or a specified number of a Senior Executive’s performance
rights will vest or cease to be subject to restrictions where there is a change of control event.
Clawback and preventing
inappropriate benefits
The Board has broad clawback powers if, for example, the Senior Executive has acted
fraudulently or dishonestly or there is a material financial misstatement.
Percentage of STI awarded and forfeited for Senior Executives during the financial year
Details of the STI outcomes received by Senior Executives during the financial year are outlined in the table below.
Senior Executives
Year
Nick Pagent
Ian Pagent
Aaron Murray
2022
2021
2022
2021
2022
2021
Maximum
potential STI
bonus
($)*
Percentage of
target STI
award
granted
Percentage of
maximum STI
award
granted
Percentage of
maximum STI
award
forfeited
STI award
($)
525,000
450,000
180,000
180,000
318,750
168,750
408,800
356,400
141,000
155,000
255,000
134,766
88%
100%
91%
100%
91%
100%
78%
79%
78%
86%
80%
80%
22%
21%
22%
14%
20%
20%
*
The maximum potential bonus is determined by reference to the maximum STI opportunity available to each Senior Executive as a
percentage of their base salary.
Long-term incentive
Set out below is an explanation of the terms and conditions applying to the LTI awards for Senior Executives during the performance
period.
Overview of the LTI plan
The LTI plan is an ‘at-risk’ equity component of executive remuneration which is subject to the
satisfaction of a long-term performance condition.
Participation
Executive directors and other members of senior management are eligible to participate in the
LTI plan.
LTI opportunity
The LTI opportunity of the Senior Executives is set out below:
Nick Pagent
Ian Pagent
Aaron Murray
75% of base salary
45% of base salary
45% of base salary
Instrument
Upon vesting, each performance right entitles the Senior Executive to one ordinary share in the
Company. The Board has the discretion to settle performance rights with a cash equivalent
payment.
Performance rights are granted for nil consideration and no amount is payable on vesting.
Number of performance rights to be
granted
The number of performance rights granted to each Senior Executive will be determined by
dividing the LTI award opportunity (calculated as a percentage of the Senior Executive’s base
salary) by the VWAP of shares traded on the ASX during the 10 trading days following the
release of the Group’s full year results for that financial year.
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
29
Autosports Group Limited
Directors' report
30 June 2022
Performance period
LTI grants have a three-year performance period, which commences on 1 July of the year they
are granted.
Performance conditions
Performance rights will be tested against the compound annual growth rate (‘CAGR’) of the
Group’s underlying EPS.
The percentage of performance rights that vest, if any, will be determined by reference to the
following vesting schedule, subject to any adjustments for abnormal or unusual profit items that
the Board, in its absolute discretion, considers appropriate:
CAGR of the Company’s underlying EPS
over the performance period
Percentage of performance rights that vest
Less than 7%
7% (threshold performance)
Between 7% and 15%
15% or above (maximum performance)
Nil
50%
Straight-line pro rata vesting between 50% and
100%
100%
The Board will arrange for the performance condition to be tested following the release of the
Company’s full year results. Any rights that remain unvested at the end of the performance
period will lapse immediately.
A continuous service condition also applies to the performance rights, subject to the cessation
of employment provisions described below.
The EPS performance condition has been chosen as it provides evidence of the Company’s
growth in earnings and is directly linked to shareholder returns.
Measurement and testing of
performance conditions
To measure the EPS performance condition, financial results are extracted by reference to the
Company’s audited financial statements. The use of financial statements ensures the integrity
of the measure and alignment with the financial performance of the Company.
EPS is calculated having regard to underlying profit, which measures profit from the Group’s
ongoing operations adjusted, where the Board considers it appropriate.
Dividend and voting rights
The performance rights do not carry dividend or voting rights prior to vesting. Shares allocated
on vesting carry the same dividend and voting rights as other shares.
Treatment on cessation of
employment
If an executive ceases to be employed before the executive’s performance rights vest, the
following treatment will apply, unless the Board determines otherwise:
(i) if the executive resigns or is summarily terminated, all their performance rights will lapse; or
(ii) if the executive ceases employment in any other circumstances including retirement, a pro
rata portion (for the portion of the performance period elapsed) of their rights will remain on foot
and will be tested after the end of the performance period against the performance condition.
Change of control
The Board may determine that all or a specified number of a Senior Executive’s performance
rights will vest or cease to be subject to restrictions where there is a change of control event.
Clawback and preventing
inappropriate benefits
The Board has broad clawback powers if, for example, the Senior Executive has acted
fraudulently or dishonestly or there is a material financial misstatement.
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19
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Executive service agreements
Each Senior Executive is party to a written executive service agreement with the Company. The key terms are set out below.
Base salary
Periods of notice required to
terminate and
termination payments
Nick Pagent – $700,000 per annum base salary plus other benefits valued at $93,385.
Ian Pagent – $400,000 per annum base salary plus other benefits valued at $85,285.
Aaron Murray – $425,000 per annum base salary plus other benefits valued at $84,885.
Nick Pagent – either party may terminate the contract by giving 12 months’ notice.
Ian Pagent – either party may terminate the contract by giving 12 months’ notice.
Aaron Murray – either party may terminate the contract by giving 3 months’ notice.
The Company may terminate immediately in certain circumstances, including where the
relevant senior executive engages in serious or wilful misconduct.
FY23 Senior Executive remuneration
There are no proposed changes to the remuneration structure of Senior Executives for FY23.
(3) Independent Director remuneration
Principles of Independent Director remuneration
As outlined in section 2, in remunerating Independent Directors, we aim to attract and retain qualified and experienced directors having
regard to:
●
●
●
the specific responsibilities and requirements for the Board;
fees paid to Independent Directors of other comparable Australian companies; and
the size and complexity of the Group’s operations.
Independent Director remuneration for the financial year
Board fees
The current Independent Director fee pool is set at $800,000 per annum. The Independent Directors’ fees are $200,000 for the Chairman
and $100,000 for other Independent Directors (including superannuation) per annum.
Directors may be remunerated for reasonable travel and other expenses incurred in attending to the Group’s affairs and any additional
services outside the scope of Board and Committee duties they provide.
In order to maintain their independence, Independent Directors do not have any ‘at risk’ remuneration component. We do not pay
benefits (other than statutory entitlements) on retirement to Independent Directors.
Committee fees
Independent Directors are paid Committee fees of $20,000 (including superannuation) per annum for the Chair of each Board
Committee. Directors do not receive additional fees for being a member of a Board Committee.
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
31
Autosports Group Limited
Directors' report
30 June 2022
(4) Statutory remuneration disclosures
KMP remuneration
The following table sets out the statutory disclosures in accordance with the Accounting Standards for the financial year.
Short-term employee
benefits
Cash paid
salary/fees
$
Non-
monetary¹
$
Post-
employment
benefits
Super-
annuation
$
Share-based
payments
Long service
leave
$
Rights²
$
Total
$
132,855
-
90,000
190,411
109,091
106,639
109,091
106,639
594,231
538,154
300,000
300,000
395,192
362,135
-
-
-
-
-
-
-
-
69,817
69,803
61,717
61,703
61,317
62,769
13,285
-
-
4,204
10,909
10,131
10,909
10,131
23,568
21,694
23,568
21,694
23,568
21,694
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
146,140
-
90,000
194,615
120,000
116,770
120,000
116,770
21,399
10,965
6,447
1,521
12,065
6,623
933,800
806,400
321,000
335,000
446,250
303,514
1,642,815
1,447,016
712,732
719,918
938,392
756,735
Independent Directors
James Evans
Tom Pockett
Marina Go
Robert Quant
Senior Executives
Nick Pagent
Ian Pagent
Aaron Murray
20223
2021
20224
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
1
2
3
4
5
The amounts disclosed as non-monetary benefits includes things such as motor vehicle, motor vehicle insurance, fringe benefit
tax on motor vehicle and fuel allowance.
The value of rights granted to the Senior Executives is based on the fair value estimate on grant date.
Represents remuneration from 5 August 2021.
Represents remuneration until 30 November 2021.
Senior Executives forfeited salary of $235,577 during the year (2021: $174,711).
There were no termination benefits provided in the financial year.
Movements in performance rights held by KMPs
The following table shows the changes in performance rights granted to KMPs during the financial year including the performance rights
on issue and subject to exercise at a later date.
The Independent Directors do not hold performance rights.
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21
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Performance rights awarded, vested and lapsed/forfeited during the year and available for exercise in future years are detailed below.
Grant date
Performance
period
Rights held
at the start of
the financial
year
Fair value on
grant date
Rights
granted
Rights
exercised
Rights held
at the end of
the financial
year
Rights lapsed
or forfeited
Nick Pagent
LTI - FY19
13 Dec 2018
LTI - FY20
11 Dec 2019
LTI - FY21
9 Dec 2020
LTI - FY22
15 Dec 2021
STI - FY21
17 Dec 2021
Ian Pagent
LTI - FY19
13 Dec 2018
LTI - FY20 1
11 Dec2019
LTI - FY21
9 Dec 2020
LTI - FY22
15 Dec 2021
STI - FY21
17 Dec 2021
Aaron Murray
LTI - FY19
13 Dec 2018
LTI - FY20
11 Dec 2019
LTI - FY21
9 Dec 2020
LTI - FY22
15 Dec 2021
STI - FY21
17 Dec 2021
1 July 2018 -
30 June 2021
1 July 2019 -
30 June 2022
1 July 2020 -
30 June 2023
1 July 2021 -
30 June 2024
1 July 2021 -
30 June 2022
1 July 2018 -
30 June 2021
1 July 2019 -
30 June 2022
1 July 2020 -
30 June 2023
1 July 2021 -
30 June 2024
1 July 2021 -
30 June 2022
1 July 2018 -
30 June 2021
1 July 2019 -
30 June 2022
1 July 2020 -
30 June 2023
1 July 2021 -
30 June 2024
1 July 2021 -
30 June 2022
$1.20
283,554
$1.44
304,465
$1.40
350,467
-
-
-
-
232,419
(283,554)
-
-
-
-
-
-
-
-
304,465
350,467
232,419
-
938,486
157,779
390,198
-
(283,554)
-
-
157,779
1,045,130
$2.18
$2.18
$2.18
$2.18
$2.18
$2.18
$1.20
113,421
$1.44
202,977
$1.40
233,644
-
-
-
-
79,686
(113,421)
-
-
-
-
550,042
68,619
148,305
-
(113,421)
$1.20
106,332
$1.44
114,175
$1.40
131,425
-
-
-
-
84,662
(106,332)
-
-
-
-
351,932
59,661
144,323
-
(106,332)
-
-
-
-
-
-
-
-
-
-
-
-
-
202,977
233,644
79,686
68,619
584,926
-
114,175
131,425
84,662
59,661
389,923
1 Number of performance rights overstated due to administrative error corrected post balance date to 121,788.
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AUTOS PORT S GROU P_A NNUAL R EPORT 2022
33
Autosports Group Limited
Directors' report
30 June 2022
KMP shareholdings
The following table outlines the movements in KMP ordinary shareholdings in the Company (including their related parties) for the
financial year.
Shares held at
the start of the
financial year
Received as
part of
remuneration
Additions¹
Disposals/
others
Shares held at
the end of
financial year
-
166,667
40,833
62,499
-
-
-
-
-
-
-
-
-
-
-
-
-
166,667
40,833
62,499
39,332,149
65,466,803
1,697,763
283,554
113,421
106,332
-
64,000
-
-
-
(57,000)
39,615,703
65,644,224
1,747,095
106,766,714
503,307
64,000
(57,000)
107,277,021
Independent Directors
James Evans
Thomas Pockett
Marina Go
Robert Quant
Senior Executives
Nick Pagent
Ian Pagent
Aaron Murray
1
On market purchase of shares.
(5) Transactions with KMP
Management fees
The Group received administration service fees in relation to shared administration staff managing properties outside of the Group that
are owned by Ian and Nick Pagent.
Related party management fee
Fee type
GFB Properties Pty Ltd
Autohaus Prestige Five Dock Pty Ltd
Audi Parramatta Property Holdings Pty Ltd
Audi Parramatta Properties 2 Pty Ltd
Autosports Properties Leichhardt Pty Ltd
New Centenary Properties Pty Ltd
NDI Properties Pty Ltd
Property management service
Property management service
Property management service
Property management service
Property management service
Property management service
Property management service
The Group received
management fees
$
12,600
25,200
12,600
12,600
25,200
12,600
12,600
113,400
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AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
23
DIRECTORS’_REPORT continued30 June 2022
Autosports Group Limited
Directors' report
30 June 2022
Related party leases
During the financial year, the Group had operating lease agreements on normal commercial terms with various entities owned by Ian and
Nick Pagent.
Related party operating leases
Property location
The Group paid
rental fees
$
GFB Properties Pty Ltd
Autohaus Prestige Five Dock Pty Ltd
Audi Parramatta Property Holdings Pty Ltd
Audi Parramatta Properties 2 Pty Ltd
Autosports Properties Leichhardt Pty Ltd
New Centenary Properties Pty Ltd
3-7 Parramatta Rd, Five Dock NSW
34-36 Spencer St, Five Dock NSW, Unit C 2 Packard Ave,
Castle Hill NSW, and 26-28 Chard Road, Brookvale NSW
49-51 Church St, Parramatta NSW
13 Church St, Parramatta NSW
531-571 Parramatta Rd, Leichhardt NSW
135 Moggill Rd, Toowong QLD and 45 Dickson Street,
Artarmon NSW
957,275
828,714
750,398
560,724
1,341,919
3,008,359
7,447,389
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
James Evans
Chairman
24 August 2022
Sydney
___________________________
Nicholas Pagent
Chief Executive Officer
24
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
35
36
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
AUDITOR’S_INDEPENDENCE_ DECLARATIONLiability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 Australia Phone +61 2 9322 7000 www.deloitte.com.au The Board of Directors Autosports Group Limited 565 Parramatta Road Leichhardt NSW 2040 Australia 24 August 2022 Dear Directors AAuuttoossppoorrttss GGrroouupp LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Autosports Group Limited. As lead audit partner for the audit of the financial report of Autosports Group Limited for the year ended 30 June 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i)the auditor independence requirements of the Corporations Act 2001 in relation to theaudit; and(ii)any applicable code of professional conduct in relation to the audit .Yours sincerely DELOITTE TOUCHE TOHMATSU DDaavviidd HHaayynneess Partner Chartered Accountants Autosports Group Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Revenue
Interest revenue
Expenses
Changes in inventories
Raw materials and consumables purchased
Employee benefits expense
Depreciation and amortisation expense
Occupancy costs
Acquisition and restructure expenses
Other expenses
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Non-controlling interest
Owners of Autosports Group Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of Autosports Group Limited
Basic earnings per share
Diluted earnings per share
Consolidated
Note 30 June 2022 30 June 2021
$'000
$'000
5
1,875,954
1,978,406
8
9
(42,143)
(1,460,060)
(146,721)
(52,339)
(6,334)
(2,417)
(69,157)
(16,431)
(92,907)
(1,547,181)
(129,008)
(49,582)
(5,624)
(2,971)
(71,340)
(18,149)
80,360
61,653
(25,780)
(19,241)
54,580
42,412
-
-
54,580
42,412
1,204
53,376
480
41,932
54,580
42,412
1,204
53,376
480
41,932
54,580
42,412
Cents
Cents
26.56
26.29
20.86
20.67
6
6
6
7
20
20
31
31
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes
26
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
37
CONSOLIDATED_STATEMENT_OF_ PROFIT_OR LOSS_AND_OTHER_COMPREHENSIVE_INCOMEFOR THE YEAR ENDED 30 JUNE 2022
Autosports Group Limited
Consolidated statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Right-of-use assets
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Employee benefits
Borrowings
Lease liabilities
Income tax payable
Total current liabilities
Non-current liabilities
Employee benefits
Borrowings
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Equity attributable to the owners of Autosports Group Limited
Non-controlling interest
Total equity
Consolidated
Note 30 June 2022 30 June 2021
$'000
$'000
8
9
10
11
12
13
7
14
15
16
17
7
15
16
17
18
19
20
90,817
58,731
217,454
14,617
381,619
172,298
445,784
203,147
21,721
842,950
96,844
72,919
250,799
9,612
430,174
115,482
427,448
215,784
18,948
777,662
1,224,569
1,207,836
152,762
1,610
20,887
249,826
36,653
17,331
479,069
3,339
93,936
198,732
296,007
140,313
827
16,748
290,461
29,745
14,116
492,210
3,684
75,620
214,217
293,521
775,076
785,731
449,493
422,105
475,637
4,506
(35,978)
444,165
5,328
475,637
3,306
(61,214)
417,729
4,376
449,493
422,105
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
27
38
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
CONSOLIDATED_STATEMENT_OF_ FINANCIAL_POSITIONAS AT 30 JUNE 2022
Autosports Group Limited
Consolidated statement of changes in equity
For the year ended 30 June 2022
Consolidated
Balance at 1 July 2020
Issued
capital
$'000
Share-based
payments
reserve
$'000
Accumulated
losses
$'000
Non-
controlling
interest
$'000
Total equity
$'000
475,637
874
(99,126)
3,896
381,281
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 33)
Dividends paid (note 21)
-
-
-
-
-
-
-
-
41,932
-
41,932
480
-
480
42,412
-
42,412
2,432
-
-
(4,020)
-
-
2,432
(4,020)
Balance at 30 June 2021
475,637
3,306
(61,214)
4,376
422,105
Consolidated
Balance at 1 July 2021
Issued
capital
$'000
Share-based
payments
reserve
$'000
Accumulated
losses
$'000
Non-
controlling
interest
$'000
Total equity
$'000
475,637
3,306
(61,214)
4,376
422,105
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 33)
Dividends paid (note 21)
-
-
-
-
-
-
-
-
53,376
-
1,204
-
54,580
-
53,376
1,204
54,580
1,200
-
-
(28,140)
-
(252)
1,200
(28,392)
Balance at 30 June 2022
475,637
4,506
(35,978)
5,328
449,493
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
28
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
39
CONSOLIDATED_STATEMENT_OF_ CHANGES_IN_EQUITY FOR THE YEAR ENDED 30 JUNE 2022
Autosports Group Limited
Consolidated statement of cash flows
For the year ended 30 June 2022
Cash flows from operating activities
Profit before income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net loss on disposal of property, plant and equipment
Share-based payments
Interest received
Interest and other finance costs
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease in inventories
Increase in other operating assets
Increase in trade and other payables
Increase/(decrease) in contract liabilities
Increase in employee benefits
Decrease in bailment finance
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from release of security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Repayment of related party payables
Dividends paid
Dividends paid to non-controlling interest
On market share purchase to settle share-based payments
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Consolidated
Note 30 June 2022 30 June 2021
$'000
$'000
6
6
6
28
11
32
32
32
32
21
20
33
80,360
61,653
52,339
1,555
2,811
(8)
16,431
49,582
2,610
2,432
(9)
18,149
153,488
134,417
16,718
42,143
(4,782)
8,541
783
1,680
(41,897)
176,674
8
(16,431)
(25,217)
19,834
92,907
(1,352)
15,508
(720)
3,092
(107,677)
156,009
9
(18,149)
(12,035)
135,034
125,834
(20,211)
(69,127)
1,165
-
(3,162)
(33,634)
485
162
(88,173)
(36,149)
40,709
(29,174)
(34,420)
-
(28,140)
(252)
(1,611)
29,368
(22,725)
(31,851)
(2,430)
(4,020)
-
-
(52,888)
(31,658)
(6,027)
96,844
58,027
38,817
90,817
96,844
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
29
40
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
CONSOLIDATED_STATEMENT_OF_ CASH_FLOWS FOR THE YEAR ENDED 30 JUNE 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 1. General information
The financial statements cover Autosports Group Limited as a consolidated entity consisting of Autosports Group Limited (the 'Company'
or 'parent entity') and the entities it controlled at the end of, or during, the financial year (collectively referred to as the 'Group'). The
financial statements are presented in Australian dollars, which is Autosports Group Limited's functional and presentation currency.
Autosports Group Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
565 Parramatta Road
Leichhardt NSW 2040
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of
the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 24 August 2022. The directors have
the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the financial performance or position of the Group during the financial year ended
30 June 2022.
Net current asset deficiency
The directors have prepared the financial statements on the going concern basis, which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business. The statement of financial position
reflects an excess of current liabilities over current assets of $97,450,000 as at 30 June 2022 (2021: $62,036,000).
During the financial year ended 30 June 2022, the Group made a profit of $54,580,000 (2021: profit of $42,412,000).
The directors have reviewed the cash flow forecast for the Group at least through to 30 August 2023. The forecast indicates that the
Group will generate net positive operating cash inflows and operate within its overall finance facilities and that the Group will, therefore,
be able to pay its debts as and when they fall due after considering the following factors:
●
●
●
●
●
●
during the financial year the Group generated $135,034,000 (2021: $125,834,000) of cash flow from operating activities;
during the financial year the Group used $20,211,000 of available cash to fund business acquisitions and $69,127,000 to fund
additions to property, plant and equipment;
as at 30 June 2022, the Group has undrawn capital finance facilities of $15,199,000 (2021: $15,201,000) out of which $11,200,000
is earmarked for specific purposes and undrawn bailment finance facilities of $281,715,000 (2021: $300,553,000);
as at 30 June 2022, the Group has cash and cash equivalents amounting to $90,817,000 (2021: $96,844,000);
as at 30 June 2022, the Group has deferred statutory tax obligations of $14,558,000 (2021: $34,099,000) out of which $14,558,000
is repayable within 12 months;
the Group has the continuing support of its financiers.
The directors have concluded that it is appropriate to prepare the financial statements on the going concern basis, as they believe that
the Group will comply with its future financial covenants and be able to pay its debts as and when they become due and payable from
cash flows from operations and available finance facilities for at least 12 months from the date of approval of these financial statements.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-
profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
30
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
41
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 34.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Autosports Group Limited as at 30 June
2022 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the
loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value
of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses incurred by the Group
are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in
the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to
operating segments and assessing their performance.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer;
identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The
measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are initially recognised as deferred revenue in the form of a separate refund
liability.
New, demonstrator and used vehicles
Revenue from the sale of vehicles is recognised at the point in time when the buyer obtains control of the goods, which is generally at
the time of delivery of the vehicle.
42
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
31
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Parts and service
Revenue from the sale of parts is recognised at the point in time when the buyer obtains control of the goods, which is generally at the
time of delivery of the goods.
Service work on customers' vehicles is carried out under instructions from the customer. Service revenue is recognised over time based
on either a fixed price or an hourly rate. Revenue arising from the sale of parts fitted to customers’ vehicles during service is recognised
at the point in time upon delivery of the fitted parts to the customer upon completion of the service.
Other revenue
i) Aftermarket accessories and other revenue
Aftermarket accessories and other revenue are recognised at the point in time when they are delivered to the customer. Aftermarket
accessories relate to items fitted at the dealership and include products such as window tinting, mud flaps and paint protection.
ii) Finance and insurance revenue
Finance and insurance commissions are recognised at the point in time, usually in the period in which the related sale or rendering of
service is provided. Finance and insurance commissions are received from finance companies and insurance companies as commission
payments on products sold to customers.
iii) Agency commission
Agency commission represents fees from third parties where the Group acts as an agent by arranging a third party to provide goods and
services to a customer. In such cases, the Group is not primarily responsible for providing the underlying good or service to the
customer. Agency commission is recognised on an accrual basis on completion of the referral or when the commission is received.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost
of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial
asset.
Commercial income and rebates
Volume related and vehicle specific bonuses and rebates are credited to the carrying value of inventory to which they relate. Once the
inventory is sold, the amount is then recognised in cost of goods sold in profit or loss. Bonuses and rebates are recognised when the
right to receive payment is established.
Government grants
Grants from the government are recognised at their fair value when there is reasonable assurance that the grant will be received and the
Group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in profit or loss over the
periods necessary to match them with the costs that they are intended to compensate.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax
rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax
losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the
reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be
recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable
profits available to recover the asset.
32
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
43
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable
entity or different taxable entities which intend to settle simultaneously.
Trade and other receivables
Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method,
less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To
measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or
the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
Inventories
New and demonstrator vehicles
New and demonstrator vehicles are stated at the lower of cost and net realisable value. Costs are assigned on the basis of specific
identification. Cost comprises of purchase and delivery costs, net of rebates and discounts received or receivable.
Used vehicles
Used vehicles are stated at the lower of cost and net realisable value on a unit-by-unit basis. Cost comprises of purchase and delivery
costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. The age of the car is considered in determining the selling price of used cars.
Spare parts and accessories
Spare parts and accessories are stated at the lower of cost and net realisable value. Costs are assigned to individual items on the basis
of weighted average cost. Cost comprises of purchase and delivery costs, net of rebates and discounts received or receivable.
Other inventory
Other inventory includes work in progress held at the lower of cost and net realisable value. Costs are assigned to individual customers
on the basis of specific identification. Cost includes labour incurred to date and consumables utilised during the service.
44
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
33
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the
financial period in which they are incurred.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land)
over their expected useful lives as follows:
Buildings
Leasehold improvements
Plant and equipment
Furniture, fixtures and fittings
Motor vehicles
40 years
over the estimated useful life
3 - 10 years
2 - 10 years
4 - 8 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains
and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of
the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised
and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are
measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives
of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected
benefit, being their finite useful life of five years. Customer assets are made up of complementary customer relationships and databases
in the servicing and parts business.
Impairment of non-financial assets
Goodwill is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes in circumstances
indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount.
34
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
45
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value
of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which
the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a customer
pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration (whichever is earlier)
before the Group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are derecognised from the statement of financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount and any consideration paid is recognised in profit or loss.
Vehicles secured under bailment plans are provided to the Group under bailment agreements with floor plan loan providers. The Group
obtains title to the vehicles immediately prior to sale. Vehicles financed under bailment plans are recognised as inventory with the
corresponding floor plan liability owing to the finance providers. Floor plan finance facilities are available for drawdown by specified
dealerships on a vehicle by vehicle basis, with repayment as it relates to an individual vehicle required immediately after the vehicle is
sold.
Finance costs are expensed in the period in which they are incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the
lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of
use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the
Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using
a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance
cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly
within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
46
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
35
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at
the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of
services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using the Black-
Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of
the option, together with non-vesting conditions that do not determine whether the Group receives the services that entitle the employees
to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period.
The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of
awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional
expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation.
If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense
for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if
they were a modification.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other
assets are acquired.
The acquisition method of accounting is used to account for business combinations when the acquired set of activities and assets meets
the definition of a business and control is transferred to the Group. To determine whether a set of activities and assets constitutes a
business, the Group has the choice to apply a `concentration test', which is met if substantially all of the fair value of the gross assets
acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Alternatively, to determine if a business has
been acquired, the Group assesses whether (as a minimum) an input and substantive process has been acquired and whether there is
an ability to produce outputs from these.
36
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
47
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For
each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of
the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic conditions, the Group's operating or accounting policies and other
pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the acquiree at the
acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair
value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified
as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets
acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the
acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling
interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about
the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from
the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Autosports Group Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of
additional ordinary shares that would have been outstanding assuming conversion of all dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to
the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the Group for the annual reporting period ended 30 June 2022. The adoption of these Accounting Standards and
Interpretations is not expected to have any significant impact on the Group’s financial statements.
48
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
37
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
(refer to the respective notes) within the next financial year are discussed below. Judgement has been exercised in considering the
impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the Group based on known information. This
consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in
which the Group operates.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime
expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each
group. These assumptions include recent sales experience, historical collection rates, the impact of the Coronavirus (COVID-19)
pandemic and forward-looking information that is available. The allowance for expected credit losses, as disclosed in note 8, is
calculated based on the information available at the time of preparation. The actual credit losses in future years may be higher or lower.
Goodwill
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill has suffered
any impairment, in accordance with the accounting policy stated in note 2. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates
based on the current cost of capital and growth rates of the estimated future cash flows. Refer to note 12 for further information.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and losses only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised
in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be
exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In
determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to
exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of the
asset to the Group's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties;
existence of significant leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is
reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant
change in circumstances.
Note 4. Operating segments
The Group's operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are
identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
The directors have determined that there is only one operating segment identified and located in Australia, being motor vehicle retailing.
The information reported to the CODM is the consolidated results of the Group. The segment results are therefore shown throughout
these financial statements and not duplicated here.
Refer to note 5 for information on revenue from the Group's products and services.
Major customers
There are no major customers for the Group representing more than 10% of the Group’s revenue.
38
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
49
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 5. Revenue
Revenue for contracts with customers
New and demonstrator vehicles
Used vehicles
Parts
Service
Other revenue
Revenue
Consolidated
30 June 2022 30 June 2021
$'000
$'000
1,139,845
444,082
126,300
120,866
44,861
1,273,285
432,936
116,382
110,675
45,128
1,875,954
1,978,406
Disaggregation of revenue
All revenue is generated in Australia and revenue is recognised at a point in time, except for service revenue which is recognised over
time.
50
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
39
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 6. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Buildings
Leasehold improvements
Plant and equipment
Furniture, fixtures and fittings
Motor vehicles
Right-of-use assets
Total depreciation
Amortisation
Customer relationships
Total depreciation and amortisation
Share-based payments expense
Share-based payment expenses in relation to directors, executives and employees
Finance costs
Floor plan interest
Interest charges on lease liabilities
Corporate interest
Total finance costs expensed
Leases
Variable lease payments/(credits)
Short-term lease payments
Rental outgoings
Superannuation expense
Defined contribution superannuation expense
Other provisions
Inventory provision expenses/(credits)
Consolidated
30 June 2022 30 June 2021
$'000
$'000
1,020
3,796
3,181
1,033
1,191
38,150
401
3,926
2,031
1,320
799
35,689
48,371
44,166
3,968
5,416
52,339
49,582
2,811
2,432
4,990
7,101
4,340
5,429
8,796
3,924
16,431
18,149
401
589
5,344
6,334
(408)
798
5,234
5,624
12,277
11,186
708
(4,677)
The Group was eligible for JobKeeper support from the government on the condition that employee benefits continue to be paid. During
the financial year, the Group received JobKeeper support payments amounting to $Nil (2021: $10,660,000) from the Australian
Government. These have been recognised as government grants in the financial statements and recorded as a deduction in the
employee benefits expenses.
Included in 'raw materials and consumables' in profit or loss is $20,864,000 (2021: $20,106,000) of salaries and wages relating to direct
service labour costs.
40
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
51
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 7. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Permanent tax differences
Share-based payments
Current year tax losses not recognised
Prior year temporary differences now recognised
Income tax expense
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised other than in equity:
Right-of-use assets
Employee benefits
Tax losses
Property, plant and equipment
Contract liabilities
Provision for warranties
Allowance for expected credit losses
Accrued expenses
Provision for inventories
Customer relationships
Work in progress
Other items
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss
Additions through business combinations (note 28)
Closing balance
52
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
41
Consolidated
30 June 2022 30 June 2021
$'000
$'000
27,828
(2,048)
20,846
(1,605)
25,780
19,241
(2,048)
(1,605)
80,360
61,653
24,108
18,496
119
843
25,070
-
710
93
765
19,354
17
(130)
25,780
19,241
Consolidated
30 June 2022 30 June 2021
$'000
$'000
9,599
8,270
995
1,907
630
1,023
437
236
743
(2,049)
(149)
79
8,390
6,682
2,084
1,572
856
640
388
201
148
(1,957)
(122)
66
21,721
18,948
18,948
2,048
725
17,544
1,605
(201)
21,721
18,948
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 7. Income tax (continued)
Provision for income tax
Provision for income tax
Note 8. Trade and other receivables
Current assets
Trade receivables
Other receivables
Less: Allowance for expected credit losses
Consolidated
30 June 2022 30 June 2021
$'000
$'000
17,331
14,116
Consolidated
30 June 2022 30 June 2021
$'000
$'000
54,653
5,185
(1,107)
65,761
8,101
(943)
58,731
72,919
Allowance for expected credit losses
The Group has recognised a loss of $248,000 in profit or loss in respect of the expected credit losses for the year ended 30 June 2022
(2021: gain/credit of $505,000).
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
30 June 2022 30 June 2021 30 June 2022 30 June 2021 30 June 2022 30 June 2021
Allowance for expected credit
losses
Consolidated
%
%
$'000
$'000
$'000
$'000
Not overdue
0 to 2 months overdue
2 to 3 months overdue
3 to 4 months overdue
Over 4 months overdue
0.09%
13.50%
1.80%
8.60%
65.50%
0.10%
4.80%
5.70%
10.50%
26.60%
48,110
2,491
544
2,777
731
57,451
4,306
161
2,190
1,653
43
336
10
239
479
54,653
65,761
1,107
57
207
9
230
440
943
Movements in the allowance for expected credit losses are as follows:
Opening balance
Provisions recognised
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Consolidated
30 June 2022 30 June 2021
$'000
$'000
943
543
(84)
(295)
1,107
1,588
259
(140)
(764)
943
42
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
53
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 9. Inventories
Current assets
New and demonstrator vehicles - at cost
Less: Write-down to net realisable value
Used vehicles - at cost
Less: Write-down to net realisable value
Spare parts and accessories - at cost
Less: Write-down to net realisable value
Other inventory - at cost
Note 10. Other assets
Current assets
Prepayments
Other cash deposits
Consolidated
30 June 2022 30 June 2021
$'000
$'000
136,999
(4,442)
132,557
64,274
(1,629)
62,645
21,233
(1,270)
19,963
188,575
(4,466)
184,109
48,940
(421)
48,519
17,702
(1,746)
15,956
2,289
2,215
217,454
250,799
Consolidated
30 June 2022 30 June 2021
$'000
$'000
5,134
9,483
14,617
4,256
5,356
9,612
54
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
43
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 11. Property, plant and equipment
Non-current assets
Land and buildings - at cost*
Less: Accumulated depreciation
Leasehold improvements
Less: Accumulated depreciation
Plant and equipment
Less: Accumulated depreciation
Furniture, fixtures and fittings
Less: Accumulated depreciation
Motor vehicles
Less: Accumulated depreciation
Capital work in progress - at cost
Consolidated
30 June 2022 30 June 2021
$'000
$'000
100,183
(1,421)
98,762
48,592
(14,539)
34,053
28,504
(14,757)
13,747
8,992
(4,321)
4,671
8,344
(2,178)
6,166
56,901
(401)
56,500
43,195
(13,016)
30,179
21,477
(7,711)
13,766
10,697
(4,939)
5,758
4,626
(1,903)
2,723
14,899
6,556
172,298
115,482
* Land and buildings represents owner-occupied premises at:
●
601 Mains Road, Macgregor, Queensland and the adjoining land 581, Mains Road, Macgregor, Queensland, from which Macgregor
Mercedes-Benz trades;
120 - 124 Pacific Highway, Waitara, NSW, from which Mercedes-Benz Hornsby trades;
363 Nepean Highway, Brighton, Victoria, from which Brighton Jaguar Land Rover trades;
62 Enterprise Drive, Bundoora, Victoria 3083 from which Bundoora BMW dealership operates; and
98 O'Riordan Street, Alexandria from which Alexandria Mazda operates.
●
●
●
●
Property acquisition:
On 16 November 2021, the Group acquired the land and buildings from which its Bundoora BMW dealership operates. The total
consideration transferred amounted to $19,523,000.
On 7 April 2022, the Group acquired the land and buildings at 98 O’Riordan Street, Alexandria, from which the Suttons Subaru Rosebery
and Suttons City Kia dealerships now trade. The total consideration transferred amounted to $23,617,000.
44
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
55
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 11. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Additions
Additions through business
combinations (note 28)
Disposals
Transfers in/(out)
Depreciation expense
Balance at 30 June 2021
Additions
Additions through business
combinations (note 28)
Disposals
Transfers in/(out)
Depreciation expense
Land and
buildings
$'000
Leasehold
improve-
ments
$'000
Plant and
equipment
$'000
Furniture,
fixtures and
fittings
$'000
Motor
vehicles
$'000
Capital work
in
progress
$'000
Total
$'000
32,006
24,895
-
-
-
(401)
56,500
43,282
-
-
-
(1,020)
32,767
1,196
61
(644)
725
(3,926)
30,179
955
219
(1,093)
7,589
(3,796)
12,655
1,549
250
(310)
1,653
(2,031)
13,766
2,407
410
(163)
508
(3,181)
6,596
800
279
(751)
154
(1,320)
5,758
965
1
(44)
(976)
(1,033)
3,090
1,173
-
(741)
-
(799)
2,723
6,179
-
(1,282)
(263)
(1,191)
5,705
4,021
11
(649)
(2,532)
-
92,819
33,634
601
(3,095)
-
(8,477)
6,556
15,339
115,482
69,127
-
(138)
(6,858)
-
630
(2,720)
-
(10,221)
Balance at 30 June 2022
98,762
34,053
13,747
4,671
6,166
14,899
172,298
56
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
45
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 12. Intangibles
Non-current assets
Goodwill - at cost
Less: Impairment
Customer relationships - at cost
Less: Accumulated amortisation
Consolidated
30 June 2022 30 June 2021
$'000
$'000
548,126
(109,174)
438,952
32,157
(25,325)
6,832
530,100
(109,174)
420,926
27,879
(21,357)
6,522
445,784
427,448
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Additions through business combinations (note 28)
Amortisation expense
Balance at 30 June 2021
Additions through business combinations (note 28)
Amortisation expense
Balance at 30 June 2022
Goodwill
$'000
Customer
relationships
$'000
Total
$'000
418,563
2,363
-
420,926
18,026
-
10,677
1,261
(5,416)
6,522
4,278
(3,968)
429,240
3,624
(5,416)
427,448
22,304
(3,968)
438,952
6,832
445,784
Goodwill acquired through business combinations is allocated to one group of cash-generating unit ('CGU') according to the business
segment, being motor vehicle retailing which is the lowest level at which management monitors goodwill.
The recoverable amount of the Group’s goodwill has been determined by value-in-use calculations ('VIU'). The calculations use cash
flow projections based on the business plan, prior to any future restructuring to which the Group is not yet committed, approved by
management covering a five year period and a terminal growth rate.
Key assumptions
Key assumptions are those to which the recoverable amount of an asset or cash-generating unit is most sensitive.
The following key assumptions were used in the VIU model:
(a) Earnings before interest, depreciation and amortisation ('EBITDA');
(b) Terminal growth rate of 2.0% beyond four year period (2021: 2.0%); and
(c)
(d) New vehicle motor growth (including rebates, aftermarket and finance and insurance) of 18.8% in FY23 (2021: 6.8%) due to full-year
cycling of FY22 acquisition and organic growth and an average of 1.0% in FY24 to FY27 (30 June 2021: 4.0% in FY23 to FY25).
New vehicle revenue is a key driver to the growth of other revenue streams.
Pre-tax discount rate 15.61% (2021: 13.7%);
As a result of the impairment testing, management has concluded that the recoverable amount of the CGU is higher than the carrying
value of the assets, and therefore goodwill is not considered to be impaired.
Sensitivity analysis
The Group has conducted an analysis of the sensitivity of the impairment test to changes in key assumptions used to determine the
recoverable amount of goodwill. The recoverable amount exceeds the carrying amount by $87,229,000.
The directors believe that any reasonably possible change in any of the key assumptions below on which the recoverable amount is
based will cause the carrying amount to equal the recoverable amount of the CGU.
46
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
57
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 12. Intangibles (continued)
Sensitivity
VIU assumptions
VIU model equals
carrying amount
EBITDA %
Post tax discount rate
Pre-tax discount rate
Terminal growth rate
New vehicle motor growth (including rebates, aftermarket
and finance and insurance) between FY2023 to FY2027
4.9% - 5.3%%
11.10%
15.61%
2%
(0.7%) - 18.8%
4.4.% - 4.8%
12.45%
17.54%
(0.15%)
(4.8%) - 14.8%
Change
0.50%
1.35%
1.93%
2.15%
4.00%
Notwithstanding the above, should market conditions deteriorate further than forecast, it may cause the carrying amount of the CGU to
be lower than recoverable amount at a future date, which may result in an impairment.
Remaining amortisation period
The remaining amortisation period for customer relationships is 1-4 years (2021: 1-5 years).
Note 13. Right-of-use assets
Non-current assets
Right-of-use asset
Less: Accumulated depreciation
Consolidated
30 June 2022 30 June 2021
$'000
$'000
371,781
(168,634)
346,267
(130,483)
203,147
215,784
The Group leases dealership operating premises under agreements of between 1 to 15 years with, in some cases, options to extend.
The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Property
lease
$'000
165,731
85,742
(35,689)
215,784
14,060
11,453
(38,150)
203,147
Consolidated
Balance at 1 July 2020
Additions
Depreciation expense
Balance at 30 June 2021
Additions*
Additions through business combinations (note 28)
Depreciation expense
Balance at 30 June 2022
*
Additions represents lease renewals, exercise of option and rent reviews.
For other AASB 16 lease-related disclosures refer to the following:
●
●
●
●
note 6 for details of interest on lease liabilities and other lease expenses;
note 17 and note 32 for details of lease liabilities at the beginning and end of the reporting period;
note 22 for the maturity analysis of lease liabilities; and
consolidated statement of cash flows for repayment of lease liabilities.
58
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
47
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 14. Trade and other payables
Current liabilities
Trade and other payables
GST payable
Accrued expenses
Refer to note 22 for further information on financial instruments.
Note 15. Employee benefits
Current liabilities
Employee benefits
Non-current liabilities
Employee benefits
Note 16. Borrowings
Current liabilities
Bailment finance
Capital loans
Non-current liabilities
Capital loans
Refer to note 22 for further information on financial instruments.
Consolidated
30 June 2022 30 June 2021
$'000
$'000
92,304
29,108
31,350
68,301
42,308
29,704
152,762
140,313
Consolidated
30 June 2022 30 June 2021
$'000
$'000
20,887
16,748
3,339
3,684
24,226
20,432
Consolidated
30 June 2022 30 June 2021
$'000
$'000
231,460
18,366
271,247
19,214
249,826
290,461
93,936
75,620
343,762
366,081
48
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
59
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 16. Borrowings (continued)
Total secured liabilities
The total secured liabilities are as follows:
Bailment finance
Capital loans
Consolidated
30 June 2022 30 June 2021
$'000
$'000
231,460
112,302
271,247
94,834
343,762
366,081
Bailment finance
Bailment is provided largely by the Original Equipment Manufacturer finance companies on a vehicle by vehicle basis and secured over
the underlying vehicle. The current weighted average interest rate is 3.07% (2021: 2.50%).
Capital loans
Capital loans are secured by a fixed and floating charge over the assets of the Group, except for certain entities within the Group
whereby security interest is held by a charge over the inventory and the proceeds from the sale of that inventory. The current weighted
average interest rate is 3.40% (2021: 2.90%).
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bailment finance
Capital loans
Used at the reporting date
Bailment finance
Capital loans
Unused at the reporting date
Bailment finance
Capital loans
Note 17. Lease liabilities
Current liabilities
Lease liability
Non-current liabilities
Lease liability
Refer to note 22 for information on the maturity analysis of lease liabilities.
60
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
49
Consolidated
30 June 2022 30 June 2021
$'000
$'000
513,175
127,501
640,676
231,460
112,302
343,762
281,715
15,199
296,914
571,800
110,035
681,835
271,247
94,834
366,081
300,553
15,201
315,754
Consolidated
30 June 2022 30 June 2021
$'000
$'000
36,653
29,745
198,732
214,217
235,385
243,962
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 18. Issued capital
Consolidated
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
201,000,000
201,000,000
475,637
475,637
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders should the
Company be wound up, in proportions that consider both the number of shares held and the extent to which those shares are paid up.
The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for
shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the
current Company's share price at the time of the investment. The Group is pursuing additional investments in the short term and
continues to integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain covenants on its financing arrangements and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
Note 19. Share-based payments reserve
Share-based payments reserve
Consolidated
30 June 2022 30 June 2021
$'000
$'000
4,506
3,306
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and
other parties as part of their compensation for services.
50
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
61
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 19. Share-based payments reserve (continued)
Movements in reserves
Movements in the reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Share-based payments
Balance at 30 June 2021
Share-based payments
On market purchase shares in the company to settle vested long term incentives
Balance at 30 June 2022
Note 20. Non-controlling interest
Share-based
payments
$'000
874
2,432
3,306
2,811
(1,611)
4,506
The non-controlling interest represents the 20% non-controlling interest in New Centenary Mazda Pty Ltd held by the dealer principal
and 20% non-controlling interest in John Newell Holdings Pty Ltd held by the dealer principal.
Movements in the non-controlling interest are as follows:
Opening balance
Profit after income tax expense for the year
Dividend declared to non-controlling interest
Closing balance
Note 21. Dividends
Dividends
Consolidated
30 June 2022 30 June 2021
$'000
$'000
4,376
1,204
(252)
5,328
3,896
480
-
4,376
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Final dividend for the year ended 30 June 2021 of 7.0 cents (2020: Nil cents) per ordinary share
14,070
-
Interim dividend for the year ended 30 June 2022 of 7.0 cents (2021: 2.0 cents) per ordinary share
14,070
4,020
28,140
4,020
On 24 August 2022, the directors declared a fully franked final dividend for the year ended 30 June 2022 of 9.0 cents per ordinary share,
to be paid on 15 November 2022 to eligible shareholders on the register as at 1 November 2022. This equates to a total estimated
distribution of $18,090,000, based on the number of ordinary shares on issue as at 30 June 2022. The financial effect of the dividends
declared after the reporting date are not reflected in the 30 June 2022 financial statements and will be recognised in the subsequent
financial period.
62
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
51
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 21. Dividends (continued)
Franking credits
Consolidated
30 June 2022 30 June 2021
$'000
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
67,121
50,601
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
●
●
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Note 22. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
financial performance of the Group. The Group uses different methods to measure different types of risk to which it is exposed. These
methods include sensitivity analysis in the case of interest rate risk and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board').
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance reports to the Board on a regular
basis.
Market risk
Foreign currency risk
The Group is not exposed to any significant foreign currency risk. Vehicles are purchased in Australian Dollars.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from its borrowings and cash at bank. Borrowings obtained at variable rates expose the Group
to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value risk.
As at the reporting date, the Group had the following variable rate borrowings:
Consolidated
Bailment finance
Capital loans
Cash at bank
Net exposure to cash flow interest rate risk
30 June 2022 30 June 2021
Balance
$'000
Balance
$'000
231,460
112,302
(90,817)
271,247
94,834
(96,844)
252,945
269,237
An official increase/decrease in interest rates of 50 (2021: 50) basis points per annum applied to borrowing at the reporting date would
have an adverse/favourable effect on the profit before tax of $1,265,000 (2021: $1,346,000) and equity of $885,000 (2021: $942,000)
(assuming 30% tax). The percentage change is based on the expected volatility of interest rates using market data and analyst's
forecasts.
52
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
63
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 22. Financial instruments (continued)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit
limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date
to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement
of financial position and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a
provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the
Group based on recent sales experience, historical collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a
debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater
than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring
actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bailment finance
Capital loans
Consolidated
30 June 2022 30 June 2021
$'000
$'000
281,715
15,199
296,914
300,553
15,201
315,754
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn
up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to
be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals
may differ from their carrying amount in the statement of financial position.
Consolidated - 30 June 2022
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - variable
Bailment finance
Capital loans
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
1 year or less
$'000
Between 1 and
2 years
$'000
Between 2 and
5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
92,304
-
-
-
92,304
231,460
22,141
-
51,653
-
28,772
-
20,372
231,460
122,938
42,878
388,783
40,240
91,893
98,630
127,402
82,610
102,982
264,358
711,060
64
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
53
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 22. Financial instruments (continued)
Consolidated - 30 June 2021
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - variable
Bailment finance
Capital loans
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
1 year or less
$'000
Between 1 and
2 years
$'000
Between 2 and
5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
68,301
-
-
-
68,301
271,247
21,775
-
16,235
-
44,026
-
22,391
271,247
104,427
38,127
399,450
39,787
56,022
109,885
153,911
98,826
121,217
286,625
730,600
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Note 23. Fair value measurement
The carrying amounts of trade and other receivables and trade and other payables approximate their fair values due to their short-term
nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest
rate that is available for similar financial liabilities.
Note 24. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
30 June 2022 30 June 2021
$
$
1,923,311
105,807
39,911
1,701,050
1,798,253
89,548
19,109
1,444,914
3,770,079
3,351,824
54
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
65
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 25. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu, the auditor of the
Company, and its network firms:
Audit services - Deloitte Touche Tohmatsu
Audit or review of the financial statements
Other services - Deloitte Touche Tohmatsu
Tax review and compliance
Training - leadership development program
Other services - network firms
Deloitte New Zealand - due diligence
Note 26. Contingent liabilities
Consolidated
30 June 2022 30 June 2021
$
$
546,500
472,000
254,908
120,000
99,462
-
374,908
99,462
921,408
571,462
110,000
-
All bank guarantees are provided to cover landlord deposits on leased property. Liabilities relating to landlord deposits are included in
the total lease liabilities as disclosed in note 17.
66
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
55
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 27. Related party transactions
Parent entity
Autosports Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
30 June 2022 30 June 2021
$
$
Other income:
Management fees received from entities owned by the directors Ian Pagent and Nicholas Pagent
113,400
113,400
Payment for other expenses:
Lease payments on properties to entities owned by the directors Ian Pagent and Nicholas Pagent
7,447,389
7,184,323
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
56
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
67
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 28. Business combinations
2022 acquisitions
John Newell Holdings Pty Ltd ('John Newell')
On 1 July 2021, the Group acquired 80% of the shares in John Newell Holdings Pty Ltd. The total consideration transferred amounted to
$12,050,000. The goodwill of $8,763,000 represents the future potential profits of the acquired business and the synergistic opportunities
it offers and cross-selling opportunities that will arise from the acquisition.
From the date of acquisition, John Newell contributed revenues of $63,582,000 and profit after tax of $3,060,000.
Suttons Subaru Rosebery and Suttons City Kia ('Suttons')
On 1 June 2022, the Group acquired certain assets and liabilities of Subaru Sydney City and Sydney City Kia from Suttons Motors
Group. The total consideration transferred amounted to $9,403,000. The goodwill of $9,263,000 represents the future potential profits of
the acquired business and the synergistic opportunities it offers and cross-selling opportunities that will arise from the acquisition.
Due to timing of the acquisition, the results of the business did not materially impact the Group's 30 June 2022 financial year results.
Details of the acquisitions are as follows:
Cash and cash equivalents
Trade receivables
Inventories
Prepayments
Property, plant and equipment
Right-of-use assets
Customer relationships
Deferred tax asset
Trade payables
Provision for income tax
Employee benefits
Bailment finance
Lease liability
Net assets acquired
Goodwill
John
Newell
Fair value
$'000
Suttons
Fair value
$'000
Total
$'000
1,242
2,530
6,587
223
617
11,453
3,225
884
(3,482)
(604)
(1,590)
(6,015)
(11,783)
3,287
8,763
-
-
2,211
-
13
-
1,053
(159)
(426)
-
(524)
(2,028)
-
140
9,263
1,242
2,530
8,798
223
630
11,453
4,278
725
(3,908)
(604)
(2,114)
(8,043)
(11,783)
3,427
18,026
Acquisition-date fair value of the total consideration transferred
12,050
9,403
21,453
Representing:
Cash paid or payable to vendor
Less: cash and cash equivalents acquired
Net cash used
12,050
(1,242)
9,403
-
21,453
(1,242)
10,808
9,403
20,211
Acquisition costs expensed to profit or loss
22
-
22
The purchase price allocation of the 2022 acquisitions are final as at 30 June 2022.
2021 acquisitions
Brighton Jaguar Land Rover
On 15 February 2021, the Group acquired certain assets and liabilities of Brighton Jaguar Land Rover from SMG Prestige Cars Pty Ltd.
The total consideration transferred amounted to $3,162,000. The goodwill of $2,363,000 represents the future potential profits of the
acquired business and the synergistic opportunities it offers and cross selling opportunities that will arise from the acquisition.
68
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
57
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 28. Business combinations (continued)
From the date of acquisition, Brighton Jaguar Land Rover contributed revenues of $17,966,000 and profit after tax of $425,000. If the
acquisition had occurred at the start of the reporting period, management estimates that consolidated revenue and consolidated
earnings before interest and tax would not have been materially different to what has been reported.
In addition to the business acquisition, the Group acquired the underlying property at 363 Nepean Highway, Brighton, Victoria for
$24,727,000.
Details of the acquisition are as follows:
Inventories
Prepayments
Property, plant and equipment
Customer relationships
Trade payables
Deferred tax liability
Employee benefits
Other provisions
Bailment finance
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
The purchase price allocation of the 2021 acquisition is final as at 30 June 2021.
Note 29. Interests in subsidiaries
Fair value
$'000
4,074
17
601
1,261
(964)
(201)
(448)
(5)
(3,536)
799
2,363
3,162
3,162
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries:
Name
Autosports Brisbane Pty Ltd
Autosports Castle Hill Pty Ltd
Autosports Five Dock Pty Ltd
Autosports Leichhardt Pty Ltd
Autosports Prestige Pty Ltd
Autosports Sutherland Pty Ltd
Betar Prestige Cars Pty Ltd
Birchgrove Finance Pty Ltd
Modena Trading Pty Ltd
Mosman Prestige Cars Pty Ltd
New Centenary Mercedes-Benz Pty Ltd
Prestige Auto Traders Australia Pty Ltd
Prestige Group Holdings Pty Ltd
Prestige Repair Works Pty Ltd
ASG Brisbane Pty Ltd
ASG Melbourne Pty Ltd
Principal place of business /
Country of incorporation
Ownership interest
30 June 2022 30 June 2021
%
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
58
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
69
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 29. Interests in subsidiaries (continued)
The consolidated financial statements also incorporates the assets, liabilities and results of the following subsidiaries with non-controlling
interests:
Principal place of
business /
Country of
incorporation
Name
Parent
Non-controlling interest
Ownership
Ownership
Ownership
Ownership
interest
interest
interest
interest
30 June 2022 30 June 2021 30 June 2022 30 June 2021
Principal activities
%
%
%
%
New Centenary
Mazda Pty Ltd
Australia
Motor vehicle
dealership
80%
80%
20%
20%
A.C.N 633 925 050
Pty Ltd *
Australia
Finance broker
100%
76%
-
24%
John Newell Holdings
Pty Ltd **
Australia
Motor vehicle
dealership
80%
-
20%
-
*
**
The Group acquired the remaining 24% interest in A.C.N 633 925 050 Pty Ltd during the current financial year.
On 1 July 2021, the Group acquired 80% of the shares in John Newell Holdings Pty Ltd.
Summarised financial information of the subsidiary with non-controlling interests has not been included as it is not material to the Group.
Note 30. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Autosports Group Limited
Autosports Brisbane Pty Ltd
Autosports Castle Hill Pty Ltd
Autosports Five Dock Pty Ltd
Autosports Leichhardt Pty Ltd
Autosports Prestige Pty Ltd
Autosports Sutherland Pty Ltd
Betar Prestige Cars Pty Ltd
Modena Trading Pty Ltd
Mosman Prestige Cars Pty Ltd
New Centenary Mercedes-Benz Pty Ltd
Prestige Auto Traders Australia Pty Ltd
Prestige Group Holdings Pty Ltd
Prestige Repair Works Pty Ltd
ASG Brisbane Pty Ltd
ASG Melbourne Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements and
directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties to
the deed of cross guarantee that are controlled by Autosports Group Limited, they also represent the 'Extended Closed Group'.
Entities controlled by the Group not party to the deed of cross guarantee are New Centenary Mazda Pty Ltd, Birchgrove Pty Ltd, A.C.N
633 925 050 Pty Ltd and John Newell Holdings Pty Ltd.
70
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
59
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 30. Deed of cross guarantee (continued)
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position of the
'Closed Group'.
Statement of profit or loss and other comprehensive income
Revenue
Changes in inventories
Raw materials and consumables purchased
Employee benefits expense
Depreciation and amortisation expense
Occupancy costs
Acquisition and restructure expenses
Other expenses
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Profit after income tax expense
Dividends paid
Accumulated losses at the end of the financial year
30 June 2022 30 June 2021
$'000
$'000
1,750,308
(36,180)
(1,367,547)
(135,741)
(48,776)
(5,920)
(2,417)
(64,283)
(15,411)
1,910,331
(93,355)
(1,490,878)
(124,873)
(48,345)
(5,619)
(2,971)
(68,183)
(17,632)
74,033
(22,937)
58,475
(18,285)
51,096
40,190
-
-
51,096
40,190
30 June 2022 30 June 2021
$'000
$'000
(66,243)
51,096
(28,140)
(102,413)
40,190
(4,020)
(43,287)
(66,243)
60
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
71
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 30. Deed of cross guarantee (continued)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Non-current assets
Other financial assets
Property, plant and equipment
Intangibles
Right-of-use assets
Deferred tax
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Employee benefits
Borrowings
Lease liabilities
Income tax payable
Non-current liabilities
Employee benefits
Borrowings
Lease liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
72
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
61
30 June 2022 30 June 2021
$'000
$'000
84,684
56,668
209,862
13,892
365,106
30,392
170,441
406,514
184,694
20,359
812,400
93,086
71,631
246,042
9,569
420,328
18,342
114,103
399,521
206,589
18,660
757,215
1,177,506
1,177,543
151,864
486
18,998
240,483
34,336
16,274
462,441
3,012
93,936
181,261
278,209
137,950
676
16,393
282,942
28,754
13,552
480,267
3,553
75,620
205,403
284,576
740,650
764,843
436,856
412,700
475,637
4,506
(43,287)
475,637
3,306
(66,243)
436,856
412,700
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 31. Earnings per share
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of Autosports Group Limited
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Performance rights over ordinary shares
Consolidated
30 June 2022 30 June 2021
$'000
$'000
54,580
(1,204)
42,412
(480)
53,376
41,932
Number
Number
201,000,000
201,000,000
2,019,979
1,840,460
Weighted average number of ordinary shares used in calculating diluted earnings per share
203,019,979
202,840,460
Basic earnings per share
Diluted earnings per share
Note 32. Cash flow information
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2020
Net cash from/(used in) financing activities
Acquisition of leases
Balance at 30 June 2021
Net cash from/(used in) financing activities
Acquisition of leases
Changes through business combinations (note 28)
Cents
Cents
26.56
26.29
20.86
20.67
Capital
loans
$'000
Lease
liabilities
$'000
Related party
payables
$'000
Total
$'000
88,191
6,643
-
94,834
17,468
-
-
190,071
(31,851)
85,742
243,962
(34,420)
14,060
11,783
2,430
(2,430)
-
-
-
-
-
-
280,692
(27,638)
85,742
338,796
(16,952)
14,060
11,783
347,687
Balance at 30 June 2022
112,302
235,385
Note 33. Share-based payments
The Group has established an Equity Incentive Plan ('EIP') to assist in the motivation, reward and retention of senior management and
other employees.
The share-based payment expense for the year was $2,811,000 (2021: $2,432,000). The number of performance rights to be granted is
determined by dividing any STI or LTI award that they become entitled to receive by the volume-weighted average price ('VWAP') of
shares traded on the ASX during the 10 trading days following the release of the Group’s 30 June 2022 audited full-year results.
EIP is delivered in the form of performance rights which will vest after a further deferral of one year subject to the executive’s continued
service.
The rights are measured over a 12 month period.
62
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
73
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 33. Share-based payments (continued)
Performance conditions for the initial grant include:
●
●
a 'gateway hurdle' of upholding the Group’s culture and values of individualised attention. Operating with honesty, integrity and
accountability at all times and in accordance with the Group’s Code of Conduct. If the gateway hurdle is not met, no STI or LTI is
awarded.
in addition, each senior executive has an individualised balanced scorecard that determines their awards. These scorecards primarily
focus on the financial objectives of the Group and include targets measured against total revenue, earnings before interest and
taxation, EBITDA, net profit before taxation and net profit after taxation. The scorecards also include operational key performance
indicators ('KPIs') such as sales and margin related matrices, as well as non-financial KPIs predominantly in the areas of risk and
corporate governance to ensure the business continues to be well managed.
The Board has determined that the combination of financial and non-financial conditions provides the appropriate balance between
short-term financial measures and the more strategic non-financial measures which in the medium to long-term will ultimately drive
further growth and returns for shareholders.
LTI performance is measured against the compound annual growth rate ('CAGR') of the Group's underlying EPS.
Upon vesting, each performance right entitles the senior executive to one ordinary share in the Company. The Board has the discretion
to settle performance rights with a cash equivalent payment. Performance rights are granted for nil consideration and no amount is
payable on vesting.
If a senior executive ceases to be employed during the 12 month deferral period, the following treatment will apply, unless the Board
determines otherwise:
●
●
if they resign or are summarily terminated, all of their rights will lapse; or
if they cease employment in any other circumstances, a pro rata portion (for the portion of the performance period elapsed) of
unvested rights will remain on foot and will vest in the ordinary course.
Movements in performance rights during the year
Balance at the beginning of the year
Granted during the year
Exercised during the year
Balance at the end of the year
Performance rights vested and exercisable as at 30 June 2022 was nil (2021: nil).
Note 34. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
2022
Number
2021
Number
1,840,460
701,641
(522,122)
1,039,440
820,760
(19,740)
2,019,979
1,840,460
Parent
30 June 2022 30 June 2021
$'000
$'000
16,413
16,413
8,579
8,579
74
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
63
NOTES_TO_THE_CONSOLIDATED_ FINANCIAL_STATEMENTS continued30 June 2022
Autosports Group Limited
Notes to the consolidated financial statements
30 June 2022
Note 34. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
30 June 2022 30 June 2021
$'000
$'000
118,055
141,099
371,495
382,226
-
-
204
204
477,495
4,506
(110,506)
477,495
3,306
(98,779)
371,495
382,022
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 and 30 June 2021.
The parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company guarantees the debts
of the others. Refer to note 30 for further details.
Contingent liabilities
The parent entity had no material contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an
impairment of the investment.
Note 35. Events after the reporting period
On 1 August 2022, the Group completed the acquisition of a 100% interest in Auckland City BMW Limited through its wholly-owned New
Zealand-based subsidiary. The acquisition is subject to final completion adjustments. The final consideration is estimated at $63.2 million
(NZ$70 million), funded by existing cash reserves and $12.2 million (NZ$13.5 million) debt facility.
Apart from the dividend declared as disclosed in note 21 and the matters mentioned above, no other matter or circumstance has arisen
since 30 June 2022 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or
the Group's state of affairs in future financial years.
64
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
75
Autosports Group Limited
Directors' declaration
30 June 2022
In the directors' opinion:
●
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2022 and of its
performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be able
to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in
note 30 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
James Evans
Chairman
24 August 2022
Sydney
___________________________
Nicholas Pagent
Chief Executive Officer
76
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
65
DIRECTORS’_DECLARATION30 June 2022
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
77
INDEPENDENT_AUDITOR’S_REPORT_TO_THE MEMBERS_OF_AUTOSPORTS_GROUP_LIMITED Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney, NSW, 2000 Australia Phone: +61 2 9322 7000 www.deloitte.com.au Independent Auditor’s Report to the members of Autosports Group Limited RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt Opinion We have audited the financial report of Autosports Group Limited (the “Company”) and its subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: • Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year then ended; and • Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. KKeeyy AAuuddiitt MMaatttteerr
RReeccoovveerraabbiilliittyy ooff GGooooddwwiillll
As disclosed in Notes 2,3 and 12, the Group has
recognised Goodwill with a carrying value of $439.0
million as at 30 June 2022.
The assessment of the recoverable amount of
goodwill and other intangible assets allocated to
the group of CGUs requires management to
exercise significant judgement, including:
•
•
identification of and allocation of
the
goodwill to the group of CGUs; and
the determination of the following key
assumptions used in the calculation of the
recoverable amount of the group of CGUs:
the cash flow forecasts
future growth rates
terminal growth factors; and
o
o
o
o discount rates.
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
In conjunction with our valuation specialists, our
procedures included, but were not limited to:
• Obtained an understanding of management’s
process of evaluating the recoverable amount of
goodwill and other intangible assets and approval
by the board of directors;
•
•
•
•
•
•
Evaluated the Group’s identification of CGUs and
the allocation of goodwill to the carrying value of
the group of CGUs based on our understanding of
the Group’s business and the requirements of the
relevant accounting standard. This evaluation
includes an analysis of the Group’s internal
reporting process;
approved
Compared the Group’s forecast cash flows to the
board
the
consideration of relevant factors such as the
impact of supply chain constraints on current and
future vehicle availability;
including
budget,
Evaluated management’s historical forecasting
accuracy by comparing actual results to budget;
Compared growth
rates with 3rd party
independent data for the Australian motor
industry;
Challenged key inputs to the discount rate utilised
by management to external data sources;
Performed sensitivity analysis on the growth and
discount rates; and
• Assessed the appropriateness of the disclosures
in Note 12 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report ,
Corporate Directory and Shareholder Information, which we obtained prior to the date of this auditor’s report,
and also includes the following information which will be included in the Group’s annual report (but does not
include the financial report and our auditor’s report thereon): the FY22 Year in Review, Financial Highlights and
the Letter from the Chairman and CEO, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
78
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
INDEPENDENT_AUDITOR’S_REPORT_TO_THE MEMBERS_OF_AUTOSPORTS_GROUP_LIMITED continued
have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
When we read the FY22 Year in Review, Financial Highlights and the Letter from the Chairman and CEO ,if we
conclude that there is a material misstatement therein, we are required to communicate the matter to the
directors and use our professional judgement to determine the appropriate action.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
AUTOS PORT S GROU P_A NNUAL R EPORT 2022
79
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 23 to 35 of the Directors’ Report for the year ended
30 June 2022..
In our opinion, the Remuneration Report of Autosports Group Limited, for the year ended 30 June 2022, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
David Haynes
Partner
Chartered Accountants
Sydney, 24 August 2022
80
AUTOSPORTS GROUP_ AN NUAL RE P O RT 2 0 22
INDEPENDENT_AUDITOR’S_REPORT_TO_THE MEMBERS_OF_AUTOSPORTS_GROUP_LIMITED continued Autosports Group Limited
Shareholder information
30 June 2022
The shareholder information set out below was applicable as at 2 August 2022.
Distribution of equity securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
JIP Parramatta Pty Ltd
Sastempo Pty Ltd
Livist Pty Ltd
National Nominees Limited
Citicorp Nominees Pty Limited
Audi Parramatta Holdings Pty Ltd
J P Morgan Nominees Australia Pty Limited
NIP Parramatta Pty Ltd
Lambhill Pty Ltd
Pagent Family Investments Pty Ltd
Five Dock DJC Pty Ltd
HSBC Custody Nominees (Australia) Limited
Ogle Investments Pty Ltd
Aalhuizen Nominees Pty Ltd
Ricgaz Pty Ltd
Lambhill Pty Ltd
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
Liverpool Street Investments
Daniaron Pty Ltd
Ordinary shares
% of total
Number
of holders
shares
issued
337
311
133
189
59
0.08
0.45
0.51
2.41
96.55
1,029
100.00
111
-
Ordinary shares
% of total
Number held
shares
issued
23,657,626
21,994,131
15,455,897
15,449,484
15,351,085
15,310,969
11,525,924
10,401,678
7,548,311
7,193,635
6,436,189
6,076,278
5,147,053
4,722,374
2,866,808
2,792,647
2,446,766
2,124,304
2,078,757
1,674,863
180,254,779
11.77
10.94
7.69
7.69
7.64
7.62
5.73
5.17
3.76
3.58
3.20
3.02
2.56
2.35
1.43
1.39
1.22
1.06
1.03
0.83
89.68
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SHAREHOLDER_INFORMATION30 June 2022
Autosports Group Limited
Shareholder information
30 June 2022
Substantial holders
Substantial holders in the Company are set out below:
Ian and Nicholas Pagent
- Ian Pagent
- Nick Pagent
Mr Gregory I Willims
Celeste Funds Management Limited *
OC Funds Mgt
Ordinary shares
% of total
Number held
shares
issued
105,486,325
65,712,843
39,773,482
11,728,095
14,362,714
11,136,760
52.48
32.69
19.79
5.83
7.15
5.54
*
Based on substantial holder notice lodged on 22 June 2022.
Voting rights
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Performance rights
The number of performance rights on issue as at the reporting date are:
Name
Nick Pagent
Ian Pagent
Aaron Murray
There are no other unquoted equity securities on issue.
Buy-back
There is no current on-market buy-back.
Number held
887,351
516,307
330,262
1,733,920
82
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SHAREHOLDER_INFORMATION continued30 June 2022
Autosports Group Limited
Corporate directory
30 June 2022
Directors
James Evans
Nicholas ('Nick') Pagent
James ('Ian') Pagent
Robert Quant
Marina Go
Company secretary
Caroline Raw
Registered office
Share register
Auditor
565 Parramatta Road
Leichhardt NSW 2040
Tel: +61 2 8753 2873
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Tel: 1300 554 474
Deloitte Touche Tohmatsu
Grosvenor Place, 225 George Street
Sydney NSW 2000
Stock exchange listing
Autosports Group Limited shares are listed on the Australian Securities Exchange
(ASX code: ASG)
Website
http://autosportsgroup.com.au/
Corporate Governance Statement
The directors and management are committed to conducting the business of Autosports Group
Limited in an ethical manner and in accordance with the highest standards of corporate
governance. Autosports Group Limited has adopted and has complied with the ASX Corporate
Governance Principles and Recommendations (Fourth Edition) ('Recommendations') to the
extent appropriate to the size and nature of its operations.
The Group’s Corporate Governance Statement, which sets out the corporate governance
practices that were in operation during the financial year and ASX Appendix 4G are released to
the ASX on the same day the Annual Report is released. The Corporate Governance
Statement can be found on the company’s website at
https://investors.autosportsgroup.com.au/investors/?page=corporate-governance.
Annual General Meeting ('AGM')
The Company’s 2022 AGM is scheduled for Friday, 25 November 2022. For the purposes of
ASX Listing Rule 3.13.1 the Company gives notice that the last day to receive director
nominations is 6 October 2022.
ideate
Co.
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CORPORATE_DIRECTORY