Coventry Group LTD
Annual Report 2024

Plain-text annual report

ANNUAL REPORT 2024 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 VALUES AT COVENTRY GROUP, OUR VALUES ARE SAFETY FIRST We place the health, safety and wellbeing of our people first DO THE RIGHT THING - FAIRNESS, INTEGRITY & RESPECT We treat everyone equally, we operate with competence and we treat everyone with respect WORK AS A TEAM We work with strength and resilience together BE THE BEST AT EVERYTHING WE DO We strive to be better every day, finding new ways to grow our Company and each other OUR PEOPLE we trust and empower our people OUR CUSTOMERS we are dedicated to our customer’s needs OUR SUPPLIERS we work in partnership with our suppliers C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 3 CONTENTS Chairman's Report 4 Chief Executive Officer's Report 6 Consolidated statement of profit or loss 12 Consolidated statement of comprehensive income 13 Consolidated statement of financial position 14 Consolidated statement of changes in equity 16 Consolidated statement of cash flows 18 Notes to the consolidated financial statements: 19 1. Significant accounting policies 19 2. Segment information 26 3. Business Combinations 31 4. Auditor's remuneration 32 5. Employment costs 32 6. Finance income and finance expenses 32 7. Taxes 33 8. Earnings per share 34 9. Cash and cash equivalents 36 10. Trade and other receivables 36 11. Inventories 36 12. Parent entity disclosures 37 13. Property, plant and equipment 38 14. Right-of-use assets 39 15. Intangible assets 40 16. Impairment of non-financial assets 40 17. Trade and other payables 42 18. Interest-bearing loans and borrowings 42 19. Provisions 43 20. Share-based payments 43 21. Capital and reserves 44 22. Financial risk management 45 23. Leases 50 24. Controlled entities 51 25. Reconciliation of cash flows from operating activities 52 26. Related parties 52 27. Significant items 53 28. Events occurring after the reporting period 53 Consolidated entity disclosure statement 54 Directors' Report 56 Directors' Declaration 77 Lead Auditor's Independence Declaration under S307C of the Corporations Act 2001 78 Independent Auditor's Report 79 Shareholder Information 81 Corporate Directory 86 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 FY24 RESULTS Coventry achieved its seventh consecutive year of sales and Underlying EBITDA1 growth in 2024 with a strong contribution from our Fluid Systems segment and an improving contribution from our Trade Distribution segment. On 1 May 2024 we welcomed Steel Masters Auckland Limited (“Steelmasters Group”) into the Coventry Group and expect this acquisition will bring significant benefits for our shareholders, customers, suppliers and employees. Group sales revenue was up 3.4% to $370.8m, while Underlying EBITDA1 improved 22.4% to $20.8m. The businesses within each segment continue to successfully provide specialised industrial products, services and customised solutions to our wide network of customers throughout Australia and New Zealand. We expect the market softness currently being experienced on the east coast of Australia and in New Zealand will be short-lived. In the interim we will focus on what we can control in markets in which we generally only have a small share. Our emphasis on “specialisation” is key to this and is underpinned by our customer value proposition of quality products, stock availability, expertise, agility and a growing branch network. On 1 July 2024 the pilot branch for the Group’s new Microsoft D365 ERP solution successfully migrated from our legacy ERP system. At time of writing, 11 branches, and the Finance department have successfully migrated, with over 260 users online. The success to date of this project is a credit to all those involved, with there being too many to call out individually. We have all heard the “horror” stories of ERP implementation disasters with significant impacts on balance sheets and reputation. Our business leaders were determined not to repeat the mistakes of others and have been diligent in their adherence to project management governance excellence. The Group continues to have a strong working capital position with Current Assets exceeding Current Liabilities by $36.4m. We had a solid cash conversion outcome of 112.1% for FY24 (112.5% FY23). The Group has substantial Australian tax losses of $59.9m against which a Deferred Tax Asset of $9.4m has been recognised in its Statement of Financial Position. DIVIDENDS The Board has declared a final dividend of 3.75 cents per share, fully franked. The Company’s Dividend Reinvestment Plan remains active, enabling eligible shareholders to reinvest their dividend in additional shares in the Company. CHAIRMAN’S REPORT Note 1: All references to EBITDA are to Pre AASB16 before Significant Items C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 5 EXECUTIVE REMUNERATION The Company Executive and Director Incentive Plan provides for the granting or issuing of Performance Rights to eligible Executives in accordance with its terms and subject to the terms and performance hurdles set by the Board. The CEO and Managing Director’s total remuneration includes a Plan award and, as required by the ASX Listing Rules, the Company will seek shareholder approval to grant him Performance Rights for his participation in the Plan for 2025. Full particulars will be published in the Notice of Annual General Meeting for the meeting to be held on 25 October 2024. PASSING OF ANDREW NISBET On 1 May 2024, our admired and respected Board colleague, Andrew Nisbet sadly passed away after a short illness. Andrew’s commitment, professionalism and operational experience enabled him to make an invaluable contribution at Board level. At a personal level, I had the privilege of working with Andrew for over 40 years and will miss his wise counsel, his sense of humour and his friendship. I will remember fondly our conversations during his illness and his resilience and optimism even in the toughest times. PEOPLE I would like to thank my Board colleagues for their continuing contribution, support and guidance in 2024. On behalf of the Board, I would like to thank all our colleagues for their commitment to the business and its core values. To our shareholders, my continuing thanks for your ongoing and patient support. OUTLOOK Our primary end markets remain mostly resilient however given continuing macroeconomic volatility we will not be providing full year guidance but will continue to provide quarterly trading updates to the market. Neil G. Cathie Chairman of the Board of Directors 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 CHIEF EXECUTIVE OFFICER’S REPORT FY24 was another positive year for the Group. Trading performance improved with the Group delivering Sales and underlying EBITDA1 year on year growth for the seventh consecutive year. The acquisition of Steelmasters represents an exciting leap forward in the expansion of the Coventry Group and is fully aligned with our stated acquisition criteria. We continue to demonstrate our ability to expand the Trade Distribution and Fluid Systems network through both organic and acquisition growth. Our results are achieved though the delivery of our strategy by the outstanding performance of the people at the Coventry Group. With softer conditions in some markets during the financial year, our initiatives to grow EBITDA1 % to Sales to 10% in the medium term were the key to our strong profit growth compared to sales growth. These buy-side and sell- side initiatives were implemented during the financial year and will have a further positive effect on our results in FY25, particularly as market conditions improve. The Coventry Group’s strategy based on specialisation and service excellence is continuing to be resilient. The positive results were achieved against a backdrop of a double dip recession in New Zealand, wage inflation, labour and skills shortages and interest rates impacting discretionary spend. Demand remains positive in the mining and resources sector and Western Australia and Queensland. There is some short-term softening in the other Australian states. Economic conditions remain challenging in the short term in New Zealand. The Group operates in multi-billion-dollar fragmented markets and has very modest market shares. We are confident that we have the right strategy, the right people, and operate in the right markets to continue our journey of sustainable profitable growth. Our consistent delivery of sales growth and improved profit results are proof that our value proposition and commitment to our core values delivers results. Note 1: All references to EBIT and EBITDA are to Pre AASB16 before Significant Items. HEALTH, SAFETY AND WELLBEING The Group has a core value of Safety First. The Health, Safety and Wellbeing of our people along with our customers, suppliers and communities is a priority for the Group. We aspire to zero LTI’s and zero harm to our people. During FY24 we had 4 (FY23: 10) Lost Time Injuries (LTI’s). All incidents and serious near misses are reviewed by our safety team and the Coventry Leadership Team (CLT). This enables us to improve safety systems and as a result, safety outcomes. We also updated our health and safety framework, ran Safe Work month programs in October 2023, introduced a new on-line safety training program Safety Hub, and increased hazard identification and resolution. Our Mental Health First Aid program continued. PEOPLE Our values of Safety First, Doing the Right Thing (Fairness, Integrity, Respect), Working as a Team and Being the Best at Everything We Do, continue to guide us in our day to day operations. We have a culture focussed on doing the right thing in all our interactions with our people, customers, suppliers and communities. We ran an employee engagement survey during the year with pleasing results. We had high participation rates at 72% and 79% of employees who completed the survey are actively engaged. Both the participation and engagement scores are well above average. The recruitment market remains competitive so our reputation for having a values-based culture assists us in attracting and retaining people. During the year we: • Invested in equipment for hydraulics training in our Fluid Systems business. • Expanded our successful Graduate Program. • Rolled out comprehensive induction programs. • Commenced a Branch Manager acceleration training program. ENVIRONMENT, SOCIAL AND GOVERNANCE Throughout the year, our environmental initiatives helped divert 35% of our waste from landfill, including 97 tonnes of cardboard, 22 tonnes of comingle waste, 14 tonnes of timber, and 4 tonnes of plastic. We conducted a return to store’ trial for plastics and ran trials on plastic alternatives in one of our distribution centres. The Group will continue to look for ways to reduce our plastic use. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 7 In line with the Australian Packaging Covenant Organisation, we commenced work to obtain our baseline of packaging for all our own branded products and look forward to reducing our packaging requirements in the future. We were also pleased to upgrade three more sites to LED lighting. Our Workplace Giving and Matched Giving Programs saw us matching donations by our people to their favorite charities and we proudly sponsored many sporting and community initiatives throughout Australia and New Zealand. These included Nubco assisting over 35 candidates with personal protective and tooling equipment so that they could attend the Bridgewater bridge pre-employment training program and Cooper Fluid Systems sponsoring the ‘Skool 2 Skoolies’ bike ride with monies being raised for the Ipswich Hospice and St Vincent DePaul. From a governance perspective we continued ethical sourcing audits. These now cover over 77% of our total spend with locally based suppliers and we provided ‘fast fact sheets’ on Modern Slavery to some of our smaller suppliers which included suggested tasks, additional information and resources. We also extensively reviewed our Purchase Order Terms and Conditions Policy and the Supply and Services Policies for both Australia and New Zealand. BUSINESS PERFORMANCE Trading performance improved during FY24 with the Group delivering Sales and underlying EBITDA1 year on year growth. The Group achieved sales growth for FY24 of +3.4% to $370.8m ($358.5m FY23) and a +22.4% increase in underlying EBITDA1 to $20.8m ($17.0m FY23). Group underlying EBIT1 for FY24 was $17.0m ($13.4m FY23) and Net Profit after Tax for the year was $0.7m ($2.5m FY23). The reduction in Net Profit after Tax was due to costs relating to the ERP project ($9.1m) and costs relating to acquisitions ($0.8m). The Group has a solid balance sheet with Net Assets of $143.1m and Net Tangible Assets of $34.7m at 30 June 2024. At 30 June the Group had Net Debt of $47.3m ($33.5m FY23). The increase in Net Debt was predominately due to funds used to acquire Steelmasters ($13.4m), ERP project costs ($9.1m) and Capital expenditure ($4.4m). Cash Conversion3 for the year was 112.1% (112.5% FY23). Note 3: Cash conversion = Gross operating cash flow less cash lease payments, addback significant items, divided by EBITDA1 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 BUSINESS PERFORMANCE .FY24 GROUP SALES GROWTH 3.4% net debt $47.3m net assets $143.1m net tangible assets $34.7m FY24 GROUP SALES $370.8m FY23 GROUP SALES $358.5m Chief Executive Officer’s Report (continued) TRADING PERFORMANCE IMPROVED DURING FY24 WITH THE GROUP DELIVERING SALES AND UNDERLYING EBITDA1 YEAR ON YEAR GROWTH. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 9 Chief Executive Officer’s Report (continued) TRADE DISTRIBUTION With the acquisition of Steelmasters and new store openings, our Trade Distribution (TD) segment has expanded to a network of 79 branches across Australia and New Zealand supported by 4 Distribution Centres. It comprises Konnect and Artia Australia (KAA), Konnect and Artia New Zealand (KANZ), Steelmasters (SM) and Nubco in Tasmania. Combined, we now have the leading fastener specialist business across Australia and New Zealand. TD supplies a range of fastening systems, cabinet hardware systems, industrial and construction products to customers in the Industrial, Manufacturing, Infrastructure, Building and Construction, Roofing and Cladding, Mining and Mining Services, Resources/Oil and Gas and Agriculture and Aquaculture sectors. TD sales for the year of $212.1m up +1.0% on FY23. TD EBITDA1 of $16.7m down -2.0% on FY23. KAA delivered sales growth however KANZ declined in difficult market conditions and Nubco also declined due to price deflation on stell products and a decline in consumer spending. Konnect and Artia Australia (KAA) KAA is one of Australia’s leading fastener specialists and supplier of cabinet hardware. KAA delivered sales growth and profit growth on the prior year up +2.7% and +26.4% respectively. During the year, KAA continued to improve its value proposition, service levels and reputation. We opened new stores in Yatala and Karratha. In addition, store makeovers were completed in Laverton, Townsville, Kwinana, Shepparton and Wingfield, and branch relocations to larger facilities in better locations were completed in Wagga Wagga, Kalgoorlie, Wacol and Mildura. In FY25 we are planning 3 new branches and will continue store makeovers and branch relocations as required. Konnect and Artia New Zealand (KANZ) KANZ is New Zealand’s leading fastener specialist and supplier of cabinet hardware and temporary fencing. Market conditions were difficult in New Zealand where high interest rates resulted in a double dip recession. As a result, KANZ sales and profit declined during the year. Trading and gross margin improvements made during the year will ensure we achieve positive results as the economy improves. We have seen some positive signs in Q4 2024. During the year we relocated our East Tamaki and Penrose stores into new larger facilities and relocated our Napier branch. Store makeovers will continue in FY25. Nubco Nubco is a specialist supplier of steel, reinforcing, fasteners, construction products, power tools, hand tools, PPE and consumables in Tasmania. Nubco sales declined in FY24 due to price deflation on steel products and a decline in consumer discretionary spending. The Tasmanian building and construction, infrastructure and agriculture markets are expected to improve in FY25 so we are confident we can continue to grow in this market. Trading and gross margin % improvements occurred in Nubco which partly offset the sales decline and will set the business up for strong profit growth as markets recover. FLUID SYSTEMS Fluid Systems (FS) is an innovative specialist service provider to the mining, agriculture, defence, construction, manufacturing and allied industries. FS specialises in hydraulics, lubrication, fire suppression, refuelling and automation systems and products. FS has the capability to design, manufacture, install, maintain and supply full turn-key solutions and components and operates 15 branches across Australia. FS had another excellent year growing both Sales and EBITDA1, despite a continuing backdrop of labour and skills shortages and wage inflation. FS is well positioned for further growth in the coming years as we expect their core markets of mining and resources, defence, recycling and agriculture to perform well. We can increase market share through our value proposition, expansion of our product and service offering, expanding our hydraulics capabilities and through acquisitions. Diversification into sectors outside of the mining and resources sector continues. FS has demonstrated through various cycles, that it has the capability to scale according to prevailing market conditions. FS sales for the year of $159.2m up +7.5% on FY23. FS EBITDA1 of $19.0m up +23.5% on FY23. STEELMASTERS ACQUISITION COMPLETED 30 APRIL 2024 Founded in 1973, Steelmasters Group is a leading Australasian supplier and manufacturer of industrial and speciality fasteners through its network of 12 branches (four in New Zealand and eight in Australia) with its head office in Auckland, New Zealand. The Steelmasters Group operates under several brands, ‘Steelmasters’ and ‘Galvmasters’ in New Zealand and ‘Boltmasters’ and ‘Profast’ in Australia. The Steelmasters acquisition price of NZ$45.5m represented a multiple of 6.1x 2023 EBITDA1. The total consideration has been funded via a combination of proceeds from an Institutional Placement, Share Purchase Plan and a new NAB Revolving Cash Advance Facility. Steelmasters is operating separately within the Trade Distribution segment to minimise integration risk and will continue to be run by Steelmasters Group’s existing management team. 1 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 CENTRAL SERVICES Our financing facilities with the National Australia Bank were expanded with the establishment of a new NAB Revolving Cash Advance Facility of A$25.0 million to accommodate acquisitions. Key terms of the new facility are: • Maturity date 31/07/2027 • Minimum $5.0m repayable annually • Drawn Margin: BBSY + 2.2% • Any undrawn limit or repaid balance, can be redrawn for future Permitted Acquisitions. Corporate costs are currently running at 4.3% of sales (4.6% FY23). We expect productivity projects, the ERP upgrade and the full year impact of Steelmasters, will enable us to reduce corporate cost % to sales further in FY25. TECHNOLOGY The ERP upgrade has progressed well with 11 Fluid Systems branches and Finance now operating successfully on Microsoft D365. The next stages are the go-live for the final 4 Fluid Systems branches, Konnect and Artia New Zealand and Konnect and Artia Australian branches. We are on target to complete the project by the end of calendar year 2024. The system will integrate seamlessly with our existing Microsoft systems including Office, SharePoint, Teams, Power BI and CRM. We expect significant improvements in customer service and productivity post implementation of the system. Chief Executive Officer’s Report (continued SIGNIFICANT ITEMS The FY24 result was impacted by costs in relation to the: • ERP Upgrade ($9.1m). • Acquisition related costs ($0.8m). NET ASSETS/WORKING CAPITAL The Group has a solid balance sheet with Net Tangible Assets of $34.7m and Net Assets of $143.1m compared to $113.0m in FY23. Initiatives to reduce working capital and maximise cash conversion remain a key focus area for the Group. The Group has tax losses of $59.9m available for use in Australia and franking credits of $7.1m available at balance date. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 1 1 Chief Executive Officer’s Report (continued) NET DEBT POSITION Net debt at 30 June 2024 of $47.3m (Net debt at 30 June 2023 of $33.5m). Net debt was impacted by: • The Steelmasters acquisition ($13.4m) • ERP project costs ($9.1m) • Capital expenditure ($4.4m) Cash conversion of 112.1%3. In FY25 we will continue to take action to prudently manage inventory levels, collections and operating costs. Note 3: Cash conversion = Gross operating cash flow less cash lease payments, addback significant items, divided by EBITDA1 OUTLOOK The Group operates in multi-billion-dollar fragmented markets and has very modest market shares. There are clear plans in place to continue to increase market share via new branch openings, branch refurbishments, business development, product range expansion and an enhanced focus on sales and marketing. The Board and management are committed to leveraging the scale benefits of the platform established over recent years in all parts of our business. In particular, our goal is to achieve best in-class trade distribution margins over time and to that end we have identified and are implementing a range of improvement opportunities. Positive July 2024 trading performance with sales and underlying EBITDA1 ahead of pcp including acquisitions. Robert J. Bulluss Chief Executive Officer and Managing Director 1 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 NOTE 2024 2023 $’000 $’000 Revenue from sale of goods 2 370,805 358,543 Cost of sales (216,328) (215,454) Gross profit 154,477 143,089 Other income 5,524 4,156 Employment costs 5 (88,741) (81,592) Depreciation and amortisation expense 13, 14, 15 (18,552) (16,385) Occupancy costs (2,538) (2,388) Communication costs (4,482) (3,973) Freight (7,935) (8,292) Vehicle operating costs (3,222) (3,277) ERP implementation costs 27 (9,096) (5,492) Other expenses (16,398) (16,631) Profit before net financial expense and tax 9,037 9,215 Financial income 6 451 1,015 Financial expense 6 (8,417) (6,507) Net financial expense 6 (7,966) (5,492) Profit before income tax 1,071 3,723 Income tax expense 7 (412) (1,251) Profit for the year 659 2,472 Earnings per share: Basic earnings per share: 8 0.7 cents 2.7 cents Diluted earnings per share: 8 0.7 cents 2.7 cents The consolidated statement of profit or loss is to be read in conjunction with the accompanying notes to the consolidated financial statements. Coventry Group Ltd and its controlled entities CONSOLIDATED STATEMENT OF PROFIT OR LOSS For the year ended 30 June 2024 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 1 3 Coventry Group Ltd and its controlled entities CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2024 NOTE 2024 2023 $’000 $’000 Profit for the year 659 2,472 Other comprehensive income items that may be reclassified to profit or loss: Foreign currency translation differences (94) (213) Effective portion of changes in fair value of cash flow hedges (12) (284) Other comprehensive (loss) for the year, net of income tax (106) (497) Total comprehensive income for the year 553 1,975 The consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes to the consolidated financial statements. 1 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Employee benefits 665 535 Interest-bearing loans and borrowings 18 18,000 - Other payables 17 454 574 Provisions 19 2,813 2,383 Lease liability 63,720 54,505 Total non-current liabilities 85,652 57,997 Total liabilities 206,307 169,846 Net assets 143,073 112,951 Equity Issued capital 21 186,229 152,725 Reserves (5,815) (5,030) Profit reserve 6,014 8,611 Accumulated losses (43,355) (43,355) Total equity 143,073 112,951 The consolidated statement of financial position is to be read in conjunction with the accompanying notes to the consolidated financial statements. NOTE 2024 2023 $’000 $’000 Assets Cash and cash equivalents 9 7,727 3,859 Trade and other receivables 10 57,864 53,302 Inventories 11 83,232 72,402 Other financial assets 10 2,614 2,705 Prepayments 10 5,527 4,894 Income tax receivable 38 - Total current assets 157,002 137,162 Other receivables 10 988 1,313 Deferred tax assets 7 22,767 21,339 Property, plant and equipment 13 16,389 13,990 Right-of-use assets 14 66,669 54,132 Intangible assets 15 85,565 54,861 Total non-current assets 192,378 145,635 Total assets 349,380 282,797 Liabilities Trade and other payables 17 56,598 52,217 Employee benefits 9,835 8,158 Interest-bearing loans and borrowings 18 37,076 37,394 Lease liability 16,609 13,024 Provisions 19 537 603 Income tax payable - 453 Total current liabilities 120,655 111,849 Coventry Group Ltd and its controlled entities CONSOLIDATED STATEMENT OF FINANCIAL POSITION For the year ended 30 June 2024 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 1 5 1 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Coventry Group Ltd and its controlled entities CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2024 Hedge reserve Translation reserve Other reserve Total reserves Profit reserve Share capital Accumulated losses Total equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Balance at 1 July 2023 15 (2,831) (2,214) (5,030) 8,611 152,725 (43,355) 112,951 Total comprehensive income/(loss) for the year Profit for the year - - - - 659 - - 659 Other comprehensive income/(loss): Foreign currency translation differences - (94) - (94) - - - (94) Effective portion of changes in fair value of cash flow hedges (12) - - (12) - - - (12) Total other comprehensive income/(loss) (12) (94) - (106) - - - (106) Total comprehensive income/(loss) for the year (12) (94) - (106) 659 - - 553 Transactions with owners, recorded directly in equity Share issue - - - - - 34,332 - 34,332 Share issue costs - - - - - (828) - (828) Equity-settled share- based payments - - (679) (679) - - - (679) Dividends - - - - (3,256) - - (3,256) Balance at 30 June 2024 3 (2,925) (2,893) (5,815) 6,014 186,229 (43,355) 143,073 Amounts are stated net of tax The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes to the consolidated financial statements. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 1 7 Hedge reserve Translation reserve Other reserve Total reserves Profit reserve Share capital Accumulated losses Total equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Balance at 1 July 2022 299 (2,618) (1,719) (4,038) 9,366 151,618 (43,355) 113,591 Total comprehensive income/(loss) for the year Profit for the year - - - - 2,472 - - 2,472 Other comprehensive income/(loss): Foreign currency translation differences - (213) - (213) - - - (213) Effective portion of changes in fair value of cash flow hedges (284) - - (284) - - - (284) Total other comprehensive loss (284) (213) - (497) - - - (497) Total comprehensive income/(loss) for the year (284) (213) - (497) 2,472 - - 1,975 Transactions with owners, recorded directly in equity Share issue - - - - - 1,114 - 1,114 Share issue costs - - - - - (7) - (7) Equity-settled share- based payments - - (495) (495) - - - (495) Dividends - - - - (3,227) - - (3,227) Balance at 30 June 2023 15 (2,831) (2,214) (5,030) 8,611 152,725 (43,355) 112,951 Amounts are stated net of tax The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes to the consolidated financial statements. Coventry Group Ltd and its controlled entities - Consolidated statement of changes in equity (continued) 1 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Coventry Group Ltd and its controlled entities CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2024 NOTE 2024 2023 $’000 $’000 Cash flows from operating activities Cash receipts from customers 415,894 395,898 Cash paid to suppliers and employees (388,082) (370,038) Cash from operations 27,812 25,860 Interest paid (8,218) (6,315) Income taxes paid (1,042) (457) Net cash from operating activities 25 18,552 19,088 Cash flows from investing activities Proceeds from sale of property, plant and equipment 228 211 Payment for acquisitions of business, net of cash acquired 3 (41,028) - Interest received 277 525 Acquisition of property, plant and equipment 13 (4,370) (3,732) Acquisition of intangible assets 15 (1,231) (7) Net cash (used in) investing activities (46,124) (3,003) Cash flows from financing activities Proceeds from borrowings 809,504 940,570 Repayment of borrowings (792,004) (951,485) Repayment of lease liabilities (15,233) (13,131) Share issue costs (1,183) (7) Dividends paid 21 (816) (3,044) Proceeds from issue of shares 31,101 - Net cash from/(used in) financing activities 31,369 (27,097) Net increase/(decrease) in cash and cash equivalents 3,797 (11,012) Cash and cash equivalents at 1 July 3,859 15,319 Effect of movements in exchange rates on cash and cash equivalents 71 (448) Cash and cash equivalents at 30 June 9 7,727 3,859 The consolidated statement of cash flows is to be read in conjunction with the accompanying notes to the consolidated financial statements. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 1 9 Coventry Group Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024 1. SIGNIFICANT ACCOUNTING POLICIES Coventry Group Ltd (the “Company”) is a for profit company domiciled in Australia. The address of the Company’s registered office is 235 Settlement Road Thomastown VIC 3074 Australia. The consolidated financial statements (“financial report” or “consolidated financial report”) of the Company for the financial year ended 30 June 2024 comprises the Company and its controlled entities (together referred to as the “Group”). The Company is party to a deed of cross-guarantee with its subsidiary entities. Under the deed of cross- guarantee, each body has guaranteed that the debts to each creditor of each other body which is a party to the deed will be paid in full in accordance with the deed. The financial report was authorised for issue by the Directors on 20 August 2024. (a) Statement of compliance This financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the Group complies with the International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board (IASB). (b) Basis of preparation The financial report is presented in Australian dollars, which is the Company’s functional currency. The financial report is prepared on the historical cost basis except for certain financial assets and liabilities (including share-based payments and derivative financial instruments) which are stated at their fair value. The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016 and in accordance with that Instrument, amounts in the financial report have been rounded off to the nearest thousand dollars, unless otherwise stated. The Group has consistently applied the accounting policies (as set out in Note 1(d) – 1(u)) to all years presented in this consolidated financial report. Going Concern In preparing the financial report, the Directors have made an assessment of the ability of the Group to continue as a going concern, which includes consideration of ongoing compliance with financial debt covenants, the continuity of business operations, realisation of assets and settlement of liabilities in the ordinary course of business and at the amounts stated in the financial report. The Directors have a reasonable expectation that the Group will have adequate resources to continue to meet its obligations as they fall due. (c) New and amended standards adopted by the Group The following new and amended standards are not expected to have a significant impact on the Group’s consolidated financial statements. • IFRS 17 Insurance Contracts • Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 • Definition of Accounting Estimates - Amendments to IAS 8 • Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12 • International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12 There are no significant new standards or interpretations not yet adopted. AASB 2023-2 Amendments to Australian Accounting Standards - International Tax Reform - Pillar Two Model Rules The Group has adopted AASB 2023-2 upon its release in May 2023. The amendments to AASB 112 require entities to disclose separately their current tax expense (income) related to Pillar Two income taxes, as published by the Organisation for economic Co-operation and Development (OECD). Further, there is a mandatory temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules. At 30 June 2024 the relevant tax legislation is not substantively enacted in the tax jurisdictions the Group operates in, namely Australia and New Zealand. Accordingly, additional disclosures are not required and there is no material impact of Pillar Two. When the tax legislation is substantively enacted, mandatory financial statement disclosures will be required and the quantitative impact of Pillar Two legislation is not expected to be material based on the Group’s assessment to date. The actual impacts are subject to the finalisation of tax laws and guidance relating to the application of Pillar Two rules which continue to be developed and established. 2 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Standards issued but not yet effective The Group has not early adopted the following new or amended standards issued but not yet effective. The standards are not expected to have a significant impact on the Group’s consolidated financial statements. • Non-current Liabilities with Covenants - Amendments to IAS 1 • Classification of Liabilities as Current or Non-current – Amendments to IAS 1 • Lease Liability in a Sale and Leaseback - Amednments to IFRS 16 • Supplier Finance Arrangements – Amendments to IAS 7 • Lack of Exchangeability – Amendments to IAS 21 • Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amednments to IFRS 10 and IAS 28 (d) Basis of consolidation Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The Group measures goodwill at the acquisition date as: • the fair value of the consideration transferred; plus • the recognised amount of any non-controlling interests in the acquiree; plus • if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less • the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in the consolidated statement of profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Controlled entities Controlled entities are entities controlled by the Company. Control exists when the Company 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 over the entity. Investments in controlled entities are carried at their cost of acquisition in the Company’s financial statements, net of impairment write downs. Intra- group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in the consolidated statement of profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. 1. Significant accounting policies (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 2 1 (e) Foreign currency Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Foreign currency differences arising on translation are recognised in the consolidated statement of profit or loss. Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Australian dollars at exchange rates at the reporting date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating the foreign exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income and presented in the translation reserve in equity. However, if the operation is a non- wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. (f) Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term deposits with a maturity of three months or less at inception date. (g) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on weighted average cost. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads. An impairment allowance is made for obsolete, damaged and slow-moving inventories. (h) Trade and other receivables Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost less loss allowance. (i) Property, plant and equipment All classes of property, plant and equipment are stated at cost less depreciation and any accumulated impairment loss. Depreciation Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives from the date that they are installed and are ready for use. The estimated useful lives for each class of asset are: (j) Intangibles Goodwill Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at initial recognition, see Note 1(d). Goodwill is not amortised, but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Computer software Computer software comprises licence costs and direct costs incurred in preparing for the operation of that software, including associated process re-engineering costs. Computer software is measured at cost less accumulated amortisation and impairment losses. Computer software costs that have been categorised as a Software-as-a-Service (SaaS) arrangement are recognised as an expense in the consolidated statement of profit or loss. 1. Significant accounting policies (continued) Class of Fixed Asset Depreciation Rate Plant and Equipment 5% - 40% 2 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Other intangible assets Brand names and customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Brand names have an indefinite useful life and are measured at cost less accumulated impairment losses. Customer relationships have a finite useful life and are measured at cost less accumulated amortisation and any accumulated impairment losses. Amortisation Except for goodwill and brand names, intangible assets are amortised on a straight-line basis in the consolidated statement of profit or loss over their estimated useful lives, from the date that they are available for use. In current and comparative periods, customer relationships was estimated to have a useful life of 10 years. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (k) Financial Instruments Investments and other financial assets The Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“FVPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in the consolidated statement of profit or loss. Impairment of financial assets The Group assesses on a forward-looking basis the expected credit losses associated with its instruments carried at amortised cost and fair value through other comprehensive income (“OCI”). The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same type of contract. The Group has concluded that the expected loss rates of trade receivables are a reasonable approximation to the loss rates for the contract assets. (l) Impairment of assets (financial and non-financial) Non-financial Goodwill and intangible assets that have an indefinite useful life are not amortised but are tested annually for impairment in accordance with AASB 136. Other assets are tested for impairment whenever events or circumstances arise that indicate that the carrying amount of the asset may be impaired. An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is defined as the higher of its fair value less costs of disposal and value in use. Financial Financial assets are tested for impairment at each financial year end. (m) Employee benefits A provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. These benefits include wages and salaries, annual leave and long service leave. Sick leave is non-vesting and has not been provided for. (n) Provisions A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Make good Provision for make good in respect of leased properties is recognised where appropriate based on the estimated cost to be incurred to restore premises to the required condition under the relevant lease agreements. (o) Trade and other payables Trade and other payables are stated at amortised cost. 1. Significant accounting policies (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 2 3 (p) Revenue and other income Revenue is recognised when control of a good or service transfers to a customer. Determining the timing of the transfer of control – at a point in time or over time - requires judgement. Sale of goods – revenue recognised at a point in time Revenue from the sale of goods that are not subject to contract manufacturing arrangements is measured at the fair value of the consideration received or receivable, net of returns, rebates and goods and services tax payable to the taxation authority. Revenue is recognised when a customer obtains control of the promised goods and the Group has satisfied its performance obligation in relation to the promised goods. In determining when control of promised goods passes to the customer, the Group considers a variety of factors including a present right to payment, physical possession, legal title, the transfer of significant risk and rewards of ownership of the goods and customer acceptance of the asset. The timing of the transfer of control to the customers for the sale of goods occurs either: • When the goods are despatched or delivered in line with the Incoterms as detailed in the relevant contract of sale or purchase order for the goods. The Group sells a significant proportion of its products on Free- In-Store/ Delivered at Place Incoterms. This means the Groups control of the goods passes when the product is delivered to the agreed destination; • When they are made available to the customer and ownership transfers prior to despatch as detailed in the relevant contract of sale or purchase order for the goods; or • On notification (following stocktake) that the product has been used when the goods are consignment products located at customers’ premises. Where cash consideration has been received but the revenue recognition criteria has not been met, such amounts have been recorded on the consolidated statement of financial position as a contract liability. Sale of goods – contract manufacturing and supply revenue recognised over time The Group has determined that for bundled contract manufacturing comprising design, build, install and service elements, the customer controls the goods once the goods are finished and installed on premises in accordance with the relevant contract. This is because under the contract, goods are manufactured to a customer’s specification, and if a firm order that is placed by the customer in accordance with the agreement is terminated, the Group is entitled to a reimbursement of the costs incurred in manufacturing the goods, including a reasonable margin. Therefore, revenue for the agreements and the associated costs are recognised over time. That is, before the goods are delivered to the customer’ premises. Invoices issued according to contractual terms and amounts not yet invoiced are presented as contract assets. (q) Leases Leases in which the Group is a lessee The Group recognises all lease liabilities and corresponding right-of-use assets, with the exception of short-term (12 months or fewer) and low value leases, on the balance sheet. Lease liabilities are initially measured at the net present value of future lease payments and extension options expected to be exercised. Variable lease payments not dependent on an index or rate are excluded from the calculation of lease liabilities. Payments are discounted at the incremental borrowing rate of the lessee. Non-lease components are excluded from the projection of future lease payments and recorded separately within operating costs on a straight-line basis. The right-of-use asset, resulting from a lease arrangement, at initial recognition reflects the lease liability, initial direct costs and any lease payments made before the commencement date of the lease less any lease incentives plus, where applicable, provision for dismantling and restoration. 1. Significant accounting policies (continued) 2 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 The Group recognises depreciation of right-of- use assets and interest on lease liabilities in the consolidated statement of profit or loss over the lease term. Repayments of lease liabilities are separated into a principal portion (presented within financing activities) and interest portion (which the Group presents in operating activities) in the cash flow statement. Leases in which the Group is a lessor The Group sub-leases some of its properties. The Group has applied the guidance set out in AASB 16 to classify these as either a finance lease or operating lease. Operating leases Rental income is recognised in the statement of profit or loss as other income. Finance leases The Group recognises an investment in sub-lease in the statement of financial position. Rental income is recognised in the consolidated statement of profit or loss as interest income. Finance sub-leases are classified with reference to the right-of-use asset arising from the head lease. (r) Finance income and finance costs Finance income comprises interest income on funds invested and on finance leases where the Group is a lessor. Interest income is recognised as it accrues in the consolidated statement of profit or loss, using the effective interest method. Finance costs comprise interest expense on borrowings and leases. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in the consolidated statement of profit or loss using the effective interest method. Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position. (s) Income tax Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences only to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for the Group. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend. 1. Significant accounting policies (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 2 5 Tax consolidation The Company and its wholly owned Australian resident entities have formed a tax consolidated group with effect from 1 November 2002 and are therefore taxed as a single entity from that date. The head entity within the tax consolidated group is Coventry Group Ltd. Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts of assets and liabilities in the separate financial statements of each entity and the tax values applying under tax consolidation. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the controlled entities is assumed by the head entity in the tax consolidated group and recognised by the Company as an equity contribution or distribution. The Company recognises deferred tax assets arising from unused tax losses of the tax consolidated group to the extent that it is probable that future taxable profits of the tax consolidated group will be available against which the asset can be utilised. Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only. (t) Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position are stated with the amount of GST included. Cash flows are included in the statement of cash flows on a gross basis. (u) Accounting estimates and judgements In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expense. The estimates and associated assumptions are based on historical experience and on other factors it believes to be reasonable under the circumstances, the results of which form the basis of the reported amounts that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are: • estimation of current tax payable, current tax expense and recovery of deferred tax assets based on forecasted taxable profit – note 1(s) and note 7 • estimated impairment of non- financial assets and measurement of the recoverable amount of cash generating units – note 16 • valuation of inventories – note 1(g) • estimation of fair value of assets acquired and liabilities assumed in business combinations, and fair value of consideration transferred (including contingent consideration) – note 3 1. Significant accounting policies (continued) 2 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 2. SEGMENT INFORMATION (a) Description of segments The Group has reportable segments as described below. For each of the strategic reportable segments, the CEO reviews internal management accounts on a monthly basis. The following summary describes the operations of each of the Group’s reportable segments: Trade Distribution Includes the importation, distribution and marketing of industrial fasteners, industrial hardware supplies and associated products, temporary fencing and cabinet making hardware. Fluid Systems Includes the design, manufacture, distribution, installation and maintenance of lubrication and hydraulic fluid systems and hoses. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 2 7 Information about reportable segments Trade Distribution Fluid Systems Other business units and consolidation adjustments Total reportable segments 30 June 2024 $’000 $’000 $’000 $’000 Segment revenue 212,129 159,203 - 371,332 Inter-segment revenue - - - - Revenue from external customers 212,129 159,203 - 371,332 Timing of revenue recognition at point in time 209,357 153,872 - 363,229 over time 2,772 5,331 - 8,103 Total 212,129 159,203 - 371,332 Underlying EBITDA1 16,682 18,953 (14,826) 20,809 Depreciation and amortisation 1,539 1,101 1,155 3,795 Underlying EBIT1 15,143 17,852 (15,981) 17,014 Note 1: Underlying EBITDA and Underlying EBIT are non-IFRS measures and reflect how management measures performance of the Group. Underlying EBITDA is earnings before interest, tax, depreciation, amortisation and has been adjusted as a result of AASB16 to exclude leases and significant items. Underlying EBIT is earnings before interest and tax and has been adjusted to exclude leases and significant items. (b) Segment information Information regarding the results of each reportable segment is included below. 2. Segment Information (continued) 2 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Information about reportable segments Trade Distribution Fluid Systems Other business units and consolidation adjustments Total reportable segments 30 June 2023 $’000 $’000 $’000 $’000 Segment revenue 210,106 148,096 - 358,202 Inter-segment revenue - - - - Revenue from external customers 210,106 148,096 - 358,202 Timing of revenue recognition at point in time 206,881 143,119 - 350,000 over time 3,225 4,977 - 8,202 Total 210,106 148,096 - 358,202 Underlying EBITDA1 17,019 15,348 (15,362) 17,005 Depreciation and amortisation 1,626 944 1,058 3,628 Underlying EBIT1 15,393 14,404 (16,420) 13,377 Note 1: Underlying EBITDA and Underlying EBIT are non-IFRS measures and reflect how management measures performance of the Group. Underlying EBITDA is earnings before interest, tax, depreciation, amortisation and has been adjusted as a result of AASB16 to exclude leases and significant items. Underlying EBIT is earnings before interest and tax and has been adjusted to exclude leases and significant items. 2. Segment Information (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 2 9 3 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 (c) Other segment information i. Segment Revenue A reconciliation of segment revenue to total revenue from the sale of goods in the consolidated statement of profit or loss is provided as follows: 2. Segment Information (continued) 2024 2023 $’000 $’000 Total segment revenue 371,332 358,202 Foreign exchange translation variance (527) 341 Total revenue 370,805 358,543 NOTE 2024 2023 $’000 $’000 Total segment Underlying EBIT1 17,014 13,377 Foreign exchange translation variance (46) 15 Significant items (10,584) (6,394) Net financing expense, excluding interest on lease liabilities (AASB16) (3,370) (1,473) Income tax benefit/(expense) 7 (942) (1,791) Other adjustments (176) - Impact of AASB16 Depreciation of right-of-use assets (14,530) (12,739) Net Interest on lease liabilities and sub-lease investment (4,414) (4,015) Reversal of net rent and lease payments and receivables 17,177 14,952 Income tax benefit 7 530 540 Profit for the year 659 2,472 (d) Geographic information Revenue based on the geographic location of customers were Australia $319,639,000 (2023: $306,457,000) and New Zealand $51,166,000 (2023: $52,086,000). ii. Segment Operating Profit The performance of the Group’s reportable segments is based on Underlying EBIT1. Reconciliation of Underlying EBIT1 to operating profit in the consolidated statement of profit or loss is provided as follows: C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 3 1 3. BUSINESS COMBINATIONS Purchase consideration Total $’000 Cash paid 45,632 Total 45,632 Provisional fair value of net assets acquired Cash and cash equivalents 4,604 Trade and other receiveables 3,502 Inventories 9,633 Other curent assets 443 Property, plant and equipment (note 13) 1,216 Deferred tax assets 3,334 Right-of-use assets (note 14) 9,305 Trade and other payables (2,661) Employee benefits (968) Income tax payable (50) Deferred tax liabilities (2,451) Provisions (note 19) (385) Lease liabilities (note 22b) (10,125) Total identifiable net assets acquired 15,397 Goodwill on consolidation (note 15) 30,235 Total 45,632 (a) Current period business combinations Acquisition of Steel Masters Auckland Limited (“Steelmasters Group”) On 30 April 2024, the Group acquired 100% of the issued share capital of Steelmasters Group, an Australasian supplier and manufacturer of industrial and speciality fasteners. The Group incurred acquisition-related costs of $598,000 on legal fees and due diligence costs. $195,000 of these costs have been expensed in the consolidated statement of profit or loss in the current financial year, with the balance in previous financial years. The goodwill is attributable to Steelmasters Group’s strong historic profit performance and potential for further growth and expansion. The acquisition offers tangible synergies that will benefit the Group’s Trade Distribution business including joint customer opportunities, group buying benefits and knowledge sharing. As the acquisition has recently occurred the fair value of assets and liabilities are presented as provisional amounts. If new information obtained within one year of the date of the acquisition about facts and circumstances that existed at the date of acquisition and which identify differences in fair value, then the accounting for the acquisition will be revised. Summary of business combinations during the period Details of the purchase consideration, the net assets acquired and goodwill are as follows: Revenue and profit contribution The acquisition of Steelmasters contributed revenue of $6,094,000 and net profit of $733,000 to the Group for the period from 30 April 2024 to 30 June 2024 (two months trading). If the acquisition had occurred on 1 July 2023, the Group’s estimated consolidated revenue and estimated consolidated profit after tax for the year ended 30 June 2024 would have been $400,543,000 and $3,700,000 respectively. 3 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 4. AUDITOR’S REMUNERATION 2024 2023 $ $ Audit services Auditors of the Group - KPMG Audit and review of financial statements 378,371 347,084 Other auditors Audit of financial statements - controlled entities 56,892 - Non-audit services Amounts paid and payable to KPMG: Transaction services 52,250 - Taxation services 7,375 16,792 Hosting of AGM - 604 Total non-audit services 59,625 17,396 5. EMPLOYMENT COSTS 2024 2023 $’000 $’000 Wages and salaries 67,154 62,144 Liability for annual leave and long service leave 7,226 6,473 Contributions to superannuation funds 7,263 6,424 Payroll taxes 4,088 3,745 Other associated personnel expenses 3,010 2,806 Total 88,741 81,592 6. FINANCE INCOME AND FINANCE EXPENSES 2024 2023 $’000 $’000 Interest income 277 294 Net foreign exchange gain 174 721 Financial income 451 1,015 Interest expense (3,907) (2,489) Interest expense on lease liabilities (4,510) (4,018) Financial expenses (8,417) (6,507) Net financial expense (7,966) (5,492) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 3 3 7. TAXES 2024 2023 $’000 $’000 Current tax expense Current year 5,337 865 Tax recognised in the profit or loss 5,337 865 Deferred tax expense/(benefit) Origination and reversal of temporary differences (4,925) 386 Total deferred tax expense/(benefit) (4,925) 386 Total income tax expense 412 1,251 Reconciliation of effective tax rate Profit from operations for the period 659 2,472 Total income tax expense 412 1,251 Profit before income tax 1,071 3,723 Income tax using the Company’s domestic tax rate of 30% 322 1,117 Non-deductible expenditure 139 180 Effect of lower tax rate applicable to foreign controlled entity (49) (46) Total income tax expense 412 1,251 3 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Assets Liabilities Net 2024 2023 2024 2023 2024 2023 $’000 $’000 $’000 $’000 $’000 $’000 Trade and other receivables 287 189 (2) - 285 189 Inventories 1,407 1,255 - - 1,407 1,255 Property, plant and equipment 1,888 2,124 - - 1,888 2,124 Right-of-use assets - - (19,470) (16,082) (19,470) (16,082) Intangible assets 4,845 - (4,421) (4,605) 424 (4,605) Employee benefits 3,098 2,596 - - 3,098 2,596 Trade and other payables 884 748 (1) (7) 883 741 Provisions 44 88 - - 44 88 Lease liability 24,470 20,900 - - 24,470 20,900 Other items 308 33 (2) - 306 33 Tax losses carried forward 9,432 14,100 - - 9,432 14,100 Tax assets/(liabilities) 46,663 42,033 (23,896) (20,694) 22,767 21,339 Set off of deferred tax liability (23,896) (20,694) 23,896 20,694 - - Net deferred tax asset 22,767 21,339 - - 22,767 21,339 Within the Group Australian operations there are unutilised carried forward tax losses of $59,882,013 (2023: $66,821,502). The Group has determined it is probable that future taxable profits would be available for use against tax losses. The Australian Group has $16,797,993 in unused tax losses for which no deferred tax asset has been recognised in the statement of financial position. 8. EARNINGS PER SHARE 2024 2023 Weighted average of shares in year used in basic earnings per share (number) 97,042,646 92,111,671 Weighted average of dilutive rights outstanding (number) 190,808 856,448 Weighted average of shares in year used in calculating dilutive earnings per share (number) 97,233,454 92,968,119 Earnings used in basic and diluted earnings per share calculation ($) 659,427 2,471,577 Earnings per share (cents) 0.7 cents 2.7 cents Diluted earnings per share (cents) 0.7 cents 2.7 cents 7. Taxes (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 3 5 3 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 9. CASH AND CASH EQUIVALENTS 2024 2023 $’000 $’000 Cash and cash equivalents 7,727 3,859 11. INVENTORIES 2024 2023 $’000 $’000 Work in progress 5,756 5,540 Finished goods 83,445 71,081 Provision for obsolescence (5,969) (4,219) Net Inventory balance 83,232 72,402 10. TRADE AND OTHER RECEIVABLES 2024 2023 $’000 $’000 Current Trade receivables 58,510 53,626 Loss allowance (note 22(a)) (970) (598) 57,540 53,028 Net investment in sub-lease 324 274 Total 57,864 53,302 Other financial assets 2,614 2,705 Prepayments 5,527 4,894 8,141 7,599 Non-current Net investment in sub-lease 988 1,313 Total trade and other receivables 66,993 62,214 During the year the Group recognised interest income of $140,000 on sub-lease receivables. Information about the Group’s exposure to credit risk, foreign currency risk and interest rate risk is disclosed in note 22. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 3 7 12. PARENT ENTITY DISCLOSURES As at, and throughout the financial year ending 30 June 2024 the parent company of the Group was Coventry Group Ltd. 2024 2023 Results of the parent entity $’000 $’000 Profit for the year 5,320 5,989 Other comprehensive income/(loss) (14) (143) Total comprehensive income for the year after tax 5,306 5,846 Financial position of parent entity at year end Current assets 98,514 94,064 Total assets 301,933 246,924 Current liabilities 95,729 93,567 Total liabilities 149,659 129,525 Net assets 152,274 117,399 Total equity of the parent entity comprising: Issued capital 186,229 152,725 Reserves 680 1,373 Profit reserve 7,781 5,716 Accumulated losses (42,415) (42,415) Total equity 152,274 117,399 3 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 13. PROPERTY, PLANT AND EQUIPMENT $’000 Cost at 1 July 2023 56,361 Accumulated Depreciation at 1 July 2023 (42,371) Carrying amounts at 1 July 2023 13,990 Additions 4,370 Additions through business combinations (note 3) 1,216 Depreciation charge for the year (3,041) Disposals (140) Effect of movements in foreign exchange (6) Carrying amounts at 30 June 2024 16,389 Cost at 1 July 2022 53,340 Accumulated Depreciation at 1 July 2022 (40,150) Carrying amounts at 1 July 2022 13,190 Additions 3,732 Depreciation charge for the year (2,775) Disposals (211) Effect of movements in foreign exchange 54 Carrying amounts at 30 June 2023 13,990 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 3 9 14. RIGHT-OF-USE ASSETS Property Vehicles Total $’000 $’000 $’000 Carrying amounts at 1 July 2023 44,429 9,703 54,132 Additions 5,522 5,726 11,248 Additions through business combinations (note 3) 9,228 77 9,305 Terminations (7) - (7) Lease reassessments 6,219 521 6,740 Depreciation for the period (10,152) (4,614) (14,766) Effect of movements in foreign exchange 18 (1) 17 Carrying amount at 30 June 2024 55,257 11,412 66,669 Carrying amounts at 1 July 2022 37,227 4,941 42,168 Additions 9,007 7,594 16,601 Terminations (391) - (391) Lease reassessments 7,376 1,006 8,382 Depreciation for the period (8,894) (3,857) (12,751) Effect of movements in foreign exchange 104 19 123 Carrying amount at 30 June 2023 44,429 9,703 54,132 4 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 15. INTANGIBLE ASSETS Goodwill Brand name Customer relationships Computer software Development costs Total $’000 $’000 $’000 $’000 $’000 $’000 Carrying amounts at 1 July 2023 37,022 11,929 3,459 2,451 - 54,861 Additions - - - 1,074 157 1,231 Additions through busienss combinations (note 3) 30,235 - - - - 30,235 Amortisation for the year - - (610) (135) - (745) Effect of movements in foreign exchange (15) (2) - - - (17) Carrying amounts at 30 June 2024 67,242 11,927 2,849 3,390 157 85,565 Carrying amounts at 1 July 2022 36,949 11,919 4,069 2,693 - 55,630 Additions - - - 7 - 7 Amortisation for the year - - (610) (249) - (859) Effect of movements in foreign exchange 73 10 - - - 83 Carrying amounts at 30 June 2023 37,022 11,929 3,459 2,451 - 54,861 2024 2023 Goodwill Brand Name Total Goodwill Brand Name Total $’000 $’000 $’000 $’000 $’000 $’000 Fluid Systems 15,682 - 15,682 15,682 - 15,682 Trade Distribution 51,560 11,927 63,487 21,340 11,929 33,269 Total 67,242 11,927 79,169 37,022 11,929 48,951 The key assumptions used in the value in use calculations include projected sales growth, projected gross margins, terminal growth rate, improvements in working capital and the discount rate. These assumptions are based on historical experience and projected performance. Budget and forecast calculations cover a period of five years. A long-term growth rate is determined and applied to project future cash flows after the fifth year. For the year ended 30 June 2024, the Group’s value in use model showed the recoverable amount exceeded the carrying amount of both the Trade Distribution and Fluid Systems CGUs. The values assigned to the key assumptions were: Fluid Systems • Sales growth at 3.87% for FY25, 8.00% for FY26 to FY29. • Terminal growth 2.5% • Post-tax WACC of 12.25% Trade Distribution • Sales growth at 20.67% for FY25, 8.00% for FY26 - FY29. • Terminal growth 2.5% • Post-tax WACC of 11.5% 16. IMPAIRMENT OF NON-FINANCIAL ASSETS For the purpose of impairment testing, goodwill and indefinite life intangible assets are allocated to the Group’s reportable segments. The aggregate carrying amounts of goodwill and indefinite life intangible assets allocated to each CGU are as follows. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 4 1 4 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 17. TRADE AND OTHER PAYABLES The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 22. 2024 2023 $’000 $’000 Trade payables 44,516 43,276 Other trade payables and accrued expenses 12,536 9,515 Total trade and other payables 57,052 52,791 Current 56,598 52,217 Non-current 454 574 Total trade and other payables 57,052 52,791 18. INTEREST-BEARING LOANS AND BORROWINGS 2024 2023 $’000 $’000 Current Borrowing base facility 37,076 37,394 Non-current Revolving cash advance facility 18,000 - Total interest-bearing loans and borrowings 55,076 37,394 Non-cash investing and financing activities There were no non-cash investing and financing activities. Borrowing base facility The Group has a $55.0 million Borrowing base facility against eligible inventory and debtors with a current expiry of July 2026 (2023: $55.0 million). The overall facility is secured by General Security Deeds with Australian and New Zealand entities as well as Rights of Entry to eligible inventory locations. The facility is subject to a floating interest on funds drawn. The facility limit is scalable for future growth. Revolving cash advance facility The Group has a $25.0 million Revolving cash advance facility with a current expiry of July 2027 to accommodate future acquisitions (2023: nil). The facility is subject to a floating interest on funds drawn. A minimum of $5.0m is repayable annually. Any undrawn limit or repaid balance can be redrawn for future permitted acquisitions. Guarantee facility In addition to the borrowing facilities above, the Group has a $5.0 million Standby Letter of Credit to provide security for Transactional Banking, Bank Guarantees, FX and other transactional facilities up to the limit specified in each individual guarantee. ANZ facilities The Group maintains a small residual intraday facility with ANZ which will be closed upon full transition of transactional banking to the NAB. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 4 3 20. SHARE-BASED PAYMENTS Executive and Director Incentive Plan An Executive and Director Incentive Plan was re-approved by shareholders in 2021. The Plan governs the future granting of performance rights and issue of shares based on annual Company performance. Vesting of performance rights may vary subject to the extent performance hurdles have been met and the exercise of Board discretion. On vesting, the performance rights entitle the recipient to receive fully paid shares in the Company. The following share-based payments existed at 30 June 2024: 19. PROVISIONS Make good Warranties Total $’000 $’000 $’000 Balance at 1 July 2023 2,702 284 2,986 Assumed in business combinations (note 3) 385 - 385 Provisions increased/(decreased) 197 387 584 Provisions used (71) (534) (605) Balance at 30 June 2024 3,213 137 3,350 30 June 2024 30 June 2023 Number of performance rights Weighted average fair value Number of performance rights Weighted average fair value Outstanding at the beginning of the year 856,448 $1.3243 1,628,068 $1.2681 Granted 891,416 $1.1800 718,742 $1.2400 Forfeited (891,416) $1.1800 (718,742) $1.2400 Exercised (665,640) $1.1908 (771,620) $1.2058 Lapsed - - - - Outstanding at the end of the year 190,808 $1.79 856,448 $1.3243 Total expenses arising from share-based payment transactions recognised in employment costs during the year were $113,837 (2023: $434,960). 4 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 21. CAPITAL AND RESERVES Ordinary shares Ordinary shares 2024 2023 Share capital ‘000 ‘000 On issue at 1 July 92,356 91,430 Conversion of performance rights 666 772 Dividend reinvestment plan 2,321 154 Issued for cash 21,448 - On issue at 30 June 116,791 92,356 Company 2024 2023 ‘000 ‘000 Dividend franking account 30 per cent franking credits available to shareholders of the Company for subsequent financial years 7,125 8,520 Ordinary shares The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. During the financial year 21,448,296 new ordinary shares were issued for cash at a price of $1.45 per share. Nature and purpose of reserves Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the functional currency of the reporting entity, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary. Share based payments reserve The share-based payment reserve comprises the fair value of shares and options that are yet to vest under share-based payment arrangements. Hedge reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in the consolidated statement of profit or loss as the hedged cash flows affect profit or loss. Profit reserve The profit reserve comprises retained profits since the reserve was first established in the 2021 financial year. Dividends The Board has declared a final dividend of 3.75 cents per share, fully franked, in relation to the year ended 30 June 2024. The Company’s Dividend Reinvestment Plan enables eligible shareholders to reinvest their dividend in additional shares in the Company. A final dividend of $3.3 million (3.5 cents per share, fully franked) in relation to the financial year ended 30 June 2023 was declared and paid by the Group in the financial year ended 30 June 2024 (2023: 3.2 million). Final dividend paid includes dividend reinvested of $2.4 million. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 4 5 Note Carrying amount 2024 2023 ‘000 ‘000 Cash and cash equivalents 9 7,727 3,859 Trade receivables 10 58,852 54,615 Total 66,579 58,473 22. FINANCIAL RISK MANAGEMENT The Group has exposure to the following risks from their use of financial instruments: • Credit risk • Liquidity risk • Market risk The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Fair value disclosures All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities • Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) • Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs). (a) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s cash and cash equivalents and receivables from customers. Exposure to credit risk The carrying amount of the Group’s financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: Trade and other receivables The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk. The Group has no significant concentration of customer base. Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. Goods are sold subject to retention of title clauses, so that in the event of non-payment the Group may have a secured claim. The Group’s terms and conditions of trade have been amended to incorporate the Personal Property Security legislation. The Group does not normally require collateral in respect of trade and other receivables. The Group’s maximum exposure to credit risk for trade receivables at the reporting date by geographic region was Australia $52,665,000 (2023: $48,594,000) and New Zealand $6,188,000 (2023: $6,020,000). Cash at bank and short-term or long-term deposits are held with Australian and New Zealand banks with acceptable credit ratings. 4 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Current More than 30 days past due More than 60 days past due More than 120 days past due Total 30 June 2024 Australia Expected loss rate (%) 0.0% 0.1% 1.4% 55.1% Gross carrying amount ($’000) / balance outstanding as reporting date 44,421 4,872 1,309 1,224 51,826 Loss allowance ($’000) - 4 18 675 697 New Zealand Expected loss rate (%) 1.2% 1.5% 3.9% 91.3% Gross carrying amount ($’000) / balance outstanding at reporting date 5,677 360 96 213 6,346 Loss allowance ($’000) 69 5 4 195 273 30 June 2023 Australia Expected loss rate (%) 0.0% 0.1% 1.3% 52.3% Gross carrying amount ($’000) / balance outstanding as reporting date 44,301 1,430 822 980 47,533 Loss allowance ($’000) - 1 11 513 525 New Zealand Expected loss rate (%) 0.0% 0.1% 2.2% 87.5% Gross carrying amount ($’000) / balance outstanding at reporting date 5,755 136 122 80 6,093 Loss allowance ($’000) - - 3 70 73 Impairment of Trade Receivables The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. 22. Financial Risk Management (continued) To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics, days past due and historic credit loss data. The loss allowance as at 30 June 2024 was determined as follows for trade receivables: C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 4 7 4 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 (b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group maintains a $55 million Borrowing Base facility and $25 million Revolving Cash Advance facility on which interest is payable at prevailing market rates. Maturities of financial liabilities The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: 2024 Non derivative financial liabilities Carrying amount Contractual cash flow 6 mths or less 6-12 mths 1-2 years More than 2 years $’000 $’000 $’000 $’000 $’000 $’000 Trade and other payables 57,052 (57,052) (56,532) (65) (435) (20) Borrowing facility 55,076 (58,234) (37,075) (985) (4,145) (16,029) Lease liability 80,329 (99,745) (10,626) (9,852) (17,351) (61,916) Total 192,457 (215,031) (104,233) (10,902) (21,931) (77,965) 2023 Non derivative financial liabilities Carrying amount Contractual cash flow 6 mths or less 6-12 mths 1-2 years More than 2 years $’000 $’000 $’000 $’000 $’000 $’000 Trade and other payables 52,791 (52,791) (51,798) (419) (437) (137) Borrowing facility 37,394 (37,394) (37,394) (985)- - - Lease liability 67,530 (84,074) (8,685) (7,997) (14,520) (52,872) Total 157,715 (174,259) (97,877) (8,416) (14,957) (53,009) The outflows associated with forward contracts used for hedging are US$11.3 million (A$17.1 million), 2023: US$11.0 million (A$16.6 million) and will have been made within 11 months or less 22. Financial Risk Management (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 4 9 Borrowings Lease liabilities Total liabilities from financing activities $’000 $’000 $’000 30 June 20241 Opening balance at the beginning of the financial year 37,394 67,529 104,923 Proceeds 809,504 - 809,504 Repayments (792,004) (15,233) (807,237) New leases, reassessments and disposals - 17,932 17,932 Assumed in business combinations (note 3) - 10,125 10,125 Effects of movement in foreign exchange 182 (24) 158 Closing balance 55,076 80,329 135,405 30 June 20231 Opening balance at the beginning of the financial year 48,411 56,067 104,478 Proceeds 940,570 - 940,570 Repayments (951,485) (13,131) (964,616) New leases, reassessments and disposals - 24,466 24,466 Effects of movement in foreign exchange (102) 127 25 Closing balance 37,394 67,529 104,923 1 Repayments are presented net of interest expense Changes in liabilities arising from financing activities 22. Financial Risk Management (continued) 5 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 (c) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Currency risk The Group is exposed to foreign currency risk on purchases that are denominated in a currency other than the Australian dollar. The currencies giving rise to this risk are primarily US dollars and Euros. The Group adopts a policy of obtaining, foreign currency forward contracts to hedge its exposure to USD foreign currency risks. 23. LEASES Leases as lessee The Group leases various premises, plant and equipment and motor vehicles under short-term or low value leases. The leases run for 12 months or less or are of low value. Lease payments are reviewed periodically to reflect market rentals. None of the leases include contingent rentals. During the financial year ended 30 June 2024 the Group recognised $176,000 (2023: $409,000) as an expense in the consolidated statement of profit or loss in respect of short-term or low value leases. Carrying amount 2024 2023 $’000 $’000 Variable rate financial assets 7,727 3,859 Borrowing facility (55,076) (37,394) Total (47,349) (33,535) Capital management The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group defines capital as cash, banking facilities and equity. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. Interest rate risk The Group’s interest rate risk arises primarily from interest- bearing liabilities with variable interest rates where interest rate movements can impact the Group’s cash flow exposures. At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was: 22. Financial Risk Management (continued) Fair value sensitivity analysis for fixed rate instruments The Group does not account for any material fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the reporting date would not affect profit or loss. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 5 1 Leases as lessor At the end of the reporting period, the future minimum lease payments under non-cancellable leases are receivable as follows: 2024 2023 $’000 $’000 Less than one year 1,386 1,278 Between one and five years 2,336 2,336 More than five years - - Total 3,722 3,614 Deed of Cross Guarantee The Company is party to a deed of cross-guarantee with its subsidiary entities. All entities listed in the table above, with the exception of Steel Masters Auckland Limited and Galvmasters Limited are parties to the deed under which each company guarantees the debts of the others. Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, Nubco Proprietary Limited, Boltmasters Pty Ltd and Profast Pty Ltd are relieved from the Corporations Act requirements to prepare a financial report and Directors’ report. 24. CONTROLLED ENTITIES Country of Incorporation Ownership interest 2024 2023 % % % COV Holdings (Aust) Pty Ltd Australia 100 100 Coventry Group (NZ) Limited New Zealand 100 100 COV Holdings (NZ) Pty Limited (i) New Zealand 100 100 Nubco Proprietary Limited Australia 100 100 Steel Masters Auckland Limited New Zealand 100 - Galvmasters Limited New Zealand 100 - Boltmasters Pty Ltd Australia 100 - Profast Pty Ltd Australia 100 - The ultimate parent entity is Coventry Group Ltd. (i) The company is a 100% controlled entity of COV Holdings (Aust) Pty Ltd and operates in New Zealand. 23. Leases (continued) During the financial year ended 30 June 2024, the Group recognised $1,354,000 (2023: 1,066,000) as income in the consolidated statement of profit or loss. 5 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 25. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Note 2024 2023 Cash flows from operating activities $’000 $’000 Profit for the period 659 2,472 Adjustments for: Equity-settled share-based payments 114 435 Depreciation and amortisation 18,552 16,385 Other non-cash or non-operating exceptional items (344) (67) Interest income from other entities (277) (294) Interest expense 6 8,417 6,507 Net gain on disposal of property, plant and equipment (88) - Income tax expense 7 412 1,251 Operating profit before changes in working capital and provisions 27,445 26,689 Change in trade and other receivables (855) (5,962) Change in inventories (1,196) 1,364 Change in trade and other payables 1,600 3,182 Change in provisions and employee benefits 818 587 Operating profit after changes in working capital and provisions 27,812 25,860 Interest paid (8,218) (6,315) Income taxes paid (1,042) (457) Net cash from operating activities 18,552 19,088 26. RELATED PARTIES Transactions with key management personnel 2024 2023 Key management personnel compensation comprised the following: $ $ Short-term employee benefits 1,462,954 1,433,579 Post-employment benefits 94,807 92,749 Other long-term benefits 24,148 163,674 Share-based payments 51,954 197,632 Total 1,633,863 1,887,634 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 5 3 Apart from the details disclosed in this note, no Director has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year-end. Key management personnel transactions From time to time, key management personnel may purchase goods from companies within the Group on the same terms as apply to other employees of the Group. The value of these transactions is insignificant. Transactions with other related parties The Group has a related party relationship with its controlled entities (see Note 24). Transactions between the parent entity and its controlled entities are eliminated on consolidation and are not disclosed. 28. EVENTS OCCURRING AFTER THE REPORTING PERIOD The Board has declared a final dividend of 3.75 cents per share, fully franked, in relation to the year ended 30 June 2024. Other than the matters outlined elsewhere in the Group’s financial statements, no other matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods. On 12 August 2024 the Company announced an on-market buy-back of a maximum of 11,679,081 ordinary fully paid shares (up to 10% of issued capital) in the Company from the period 4 September 2024 to 3 September 2025. 2024 2023 Significant items $’000 $’000 ERP implementation costs 9,096 5,492 Restructuring costs 108 68 Acquisition costs on completed transactions 775 601 Other 774 238 Total 10,753 6,399 27. SIGNIFICANT ITEMS The following significant costs were incurred in the year ended 30 June 2024. 26. Related Parties (continued) 5 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Entity Name Type of entity Place incorporated % of share capital held Australian or foreign tax resident Jurisdiction of foreign tax resident Coventry Group Limited Body corporate Australia N/A Australian N/A COV Holdings (Aust) Pty Ltd Body corporate Australia 100% Australian N/A Coventry Group (NZ) Limited Body corporate New Zealand 100% Foreign New Zealand COV Holdings (NZ) Limited Body corporate New Zealand 100% Foreign New Zealand Nubco Proprietary Limited Body corporate Australia 100% Australian N/A Steel Masters Auckland Limited Body corporate New Zealand 100% Foreign New Zealand Galvmasters Limited Body corporate New Zealand 100% Foreign New Zealand Boltmasters Pty Ltd Body corporate Australia 100% Australian N/A Profast Pty Ltd Body corporate Australia 100% Australian N/A Determination of Tax Residency Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the Consolidated Entity Disclosure Statement (CEDS) be disclosed. In the context of an entity which was an Australian resident, “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as the determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: • Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5. • Foreign tax residency The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign tax residency. Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with. Coventry Group Ltd and its controlled entities CONSOLIDATED ENTITY DISCLOSURE STATEMENT For the year ended 30 June 2024 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 5 5 5 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Coventry Group Ltd and its controlled entities DIRECTORS’ REPORT For the year ended 30 June 2024 The Directors present their report together with the consolidated financial report of the Group comprising Coventry Group Ltd (the “Company”) and its controlled entities for the year ended 30 June 2024. CONTENTS OF DIRECTORS’ REPORT 1. Directors 58 2. Principal activities 62 3. Consolidated results 62 4. Dividends 62 5. Review of operations and results 63 6. Earnings per share 65 7. Significant change in the company’s affairs 65 8. Events subsequent to reporting date 65 9. Likely developments 65 10. Remuneration Report - audited 10.1 Key Management Personnel (KMPs) 65 10.2 Principles used to determine the nature and amount of compensation 66 10.3 Details of compensation 72 10.4 Service contracts 73 10.5 Director share movement 73 11. Environmental regulation 74 12. Insurance of officers 74 13. Corporate governance 74 14. Non-audit services 75 15. Lead auditor’s independence declaration 75 16. Company secretary 75 17. Rounding off 76 Directors’ Declaration 77 Lead Auditor’s Declaration under S307C of the Corporations Act 2001 78 Independent Auditor’s Report 79 Shareholder Information 83 Corporate Directory 86 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 5 7 5 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 1. DIRECTORS Information on Directors The Directors of the Company at any time during or since the end of the financial year and up to the date of this report are: INDEPENDENT NON-EXECUTIVE CHAIRMAN Chairman of Remuneration Committee Member of Audit and Risk Committee INDEPENDENT NON-EXECUTIVE DIRECTOR Member of Audit and Risk Committee Member of Remuneration Committee INDEPENDENT NON-EXECUTIVE DIRECTOR Chairman of Audit and Risk Committee Member of Remuneration Committee NEIL GEORGE CATHIE FCPA, GAICD, FCIS ANDREW WILLIAM NISBET GAICD JAMES SCOTT CHARLES TODD B.Comm, LLB, FFin, MAICD Mr Cathie was appointed as a Director of the Company in September 2014 and as Chairman in January 2015. He has extensive experience in very relevant areas including having a 27 year career at Australia’s largest and most successful plumbing and bathroom distributor, ASX listed Reece Limited, during which time he served as its Chief Financial Officer, Company Secretary and General Manager, Finance and IT. Mr Cathie is a Non-Executive Director of Experience Co. Limited (since 2019) and was a Non-Executive Director of Millennium Services Group Limited from 16 October 2018 to 7 March 2019. He is also an independent advisor and Chair at Middendorp Electric and Non- Executive Director at Bowens Timber & Hardware. Other than those listed above, he held no other listed company directorships during the past three financial years. Mr Nisbet was appointed as a Director of the Company in October 2017. During his extensive career at ASX listed Reece Limited he held a variety of senior leadership roles, from Marketing to Merchandising, IT, Supply Chain Transformation, Innovation and the management of a number of Strategic Business Units, including the Reece expansion into New Zealand. Mr Nisbet was a graduate of the Australian Institute of Company Directors. He held no other listed company directorships during the past four financial years. Mr Nisbet sadly passed away on 1 May 2024. We are very grateful for his seven years of dedicated directorship. Mr Todd was appointed as a Director of the Company on 3 September 2018. Mr Todd is an experienced company director, corporate adviser and investor. He commenced his career in investment banking, and has taken active roles with, and invested in, a range of public and private companies. He was until recently Managing Director of Wolseley Private Equity, an independent private equity firm which he co-founded in 1999. He is also the Chair of IVE Group Limited since June 2024 (Director since June 2015), a Non-Executive Director of Bapcor Limited (since September 2020) and was a Non-Executive Director of HRL Holdings Limited between March 2018 and August 2022. Other than those listed above, he held no other listed company directorships during the past three financial years. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 5 9 CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR Mr Bulluss was appointed Chief NON-EXECUTIVE DIRECTOR Member of Audit and Risk Committee Member of Remuneration Committee NON-EXECUTIVE DIRECTOR Member of Audit and Risk Committee Member of Remuneration Committee ROBERT JAMES BULLUSS FCPA, GAICD, B Bus (Acc) TONY HOWARTH AO FAICD (Life), SF FIN (Life) ALEX WHITE B.Bus (EconFin) Executive Officer on 3 May 2017 and Managing Director and Chief Executive Officer on 29 August 2017. He was previously Chief Financial Officer (CFO) of the Company from October 2016 to April 2017. Prior to joining the Company he was CFO for over 15 years for the Australasian division of Bunzl plc. He held no other listed company directorships during the past three financial years. Mr Howarth was appointed as a Director of the Company on 4 May 2020. Mr Howarth has a strong background in the banking and finance industry having held executive positions in government, regional and major banks as well as building societies and stockbroking companies. He has broad based industry experience from his time as President of the Australian Chamber of Commerce and Industry and Australian International Chamber of Commerce, as well as Chair of Catholic Health Australia. He has had a long involvement with the University of Western Australia and is an Adjunct Professor at the UWA Business School. He is also the Chairman of Alinta Energy, BWP Management Ltd and St John of God Foundation Inc, as well as a Non-Executive Director at Viburnum Funds. Mr Howarth was a Non-Executive Director of Wesfarmers Ltd from 2007 to 2019 and Chairman of MMA Offshore Ltd from 2006 to 2017. Previously he had been Chairman of Home Building Society and Deputy Chairman of Bank of Queensland Ltd. He has held no other listed company directorships during the past three financial years. Mr White was appointed as a Director of the Company on 1 March 2022. Mr White is a Director of Richmond Hill Capital (“RH Capital”) and is jointly responsible for managing its RH High Conviction Fund. Mr White has over fifteen years of corporate and investment management experience and prior to co-founding RH Capital, he was jointly responsible for the portfolio management of the VF High Conviction Fund at Viburnum Funds for six years. Mr White joined Viburnum following over three years with Cooper Investors, a privately owned specialist investment manager, where he focused on investment research for CI Australian Equities Fund and CI Brunswick Fund. He previously gained industry experience working for Fletcher Building as a Strategy Analyst and as a Credit Analyst for ratings agency Standard and Poor’s. Mr White was previously a Director of the following ASX listed companies: • MOQ Digital Limited (from June 2019 to November 2022) • HRL Holdings (from March 2021 to August 2022) 6 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 DIRECTORS’ INTERESTS As at the date of this report particulars of the relevant interest of each Director in the securities of the Company are as follows: # Mr Howarth and Mr White have declared their indirect interests in the shares of the Company as being shareholders of Viburnum Funds Pty Ltd, Richmond Hill Capital Pty Ltd and Rat Pack Adventures Pty Ltd respectively, who are major shareholders of the Company. During the 2023/24 financial year and as at the date of this report no Director has declared any interest in a contract or proposed contract with the Company, the nature of which would be required to be reported in accordance with subsection 300(11)(d) of the Corporations Act 2001. N.G. Cathie 1,180,657 R.J. Bulluss 1,132,616 J.S.C. Todd 147,238 A. White # 31,241 T. Howarth # - Number of Ordinary Shares C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 6 1 DIRECTORS’ MEETINGS The following table sets out the number of meetings of the Company’s Board of Directors and each Board Committee, held during the year ended 30 June 2024, and the number of meetings attended by each Director. NG Cathie RJ Bulluss AW Nisbet1 JSC Todd T Howarth A White2 Board of Directors Held 12 12 12 12 12 12 Eligible to attend 12 12 6 12 12 12 Attended 12 12 3 12 12 12 Audit & Risk Committee Held 3 3 3 3 3 3 Eligible to attend 3 0 2 3 3 2 Attended 3 3 1 3 3 3 Remuneration Committee Held 2 2 2 2 2 2 Eligible to attend 2 0 1 2 2 2 Attended 2 0 1 2 2 2 Note: Directors may pass resolutions in writing without a formal meeting being convened. Such resolutions are deemed by the Company’s Constitution to be meetings. The above table does not include such meetings. 1. Leave of absence granted by the Board to Andrew Nisbet effective 1 January 2024. 2. Attended Board meetings by way of Director’s Alternate Director - Edmon Odza attended the September & October 2023 Board meetings as Alternate Director for Alex White. 6 2 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 2024 2023 $‘000 $‘000 Revenue from sale of goods 370,805 358,543 Profit before income tax 1,071 3,723 Income tax expense (412) (1,251) Profit after tax for the year 659 2,472 2. PRINCIPAL ACTIVITIES The principal activities of the Group during the financial year were: Trade Distribution • The importation, distribution and marketing of industrial fasteners, stainless steel fasteners, construction fasteners, specialised fastener products and systems, industrial hardware and associated industrial tools and consumables • Importation, distribution and marketing of hardware, components and finished products to the commercial cabinet making, joinery and shop fitting industries • Temporary fencing sales and hire and scaffolding plank hire. Fluid Systems • Design and installation of lubrication systems • Distribution of hose, connectors, fittings and hydraulic hose assemblies • Design and supply of service truck components • Installation of fire suppression systems • Design and distribution of fluid handling systems, pneumatic component sales and sale of hydraulic associated products and consumables • Rock hammer service and repair. 3. CONSOLIDATED RESULTS Results of the Group were as follows: 4. DIVIDENDS The Board has declared a final dividend of 3.75 cents per share, fully franked, in relation to the year ended 30 June 2024. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 6 3 FY24 FY23 % change $M $M Revenue from sale of goods 370.8 358.5 +3.4 Underlying EBIT2 17.0 13.4 +26.9 Underlying EBITDA2 20.8 17.0 +22.4 Net profit after tax 0.7 2.5 -72.0 Net debt 47.3 33.5 +41.2 Net tangible assets 34.7 36.8 -5.7 Note 1: Underlying EBITDA and Underlying EBIT are non-IFRS measures and reflect how management measure performance of the Group. Non-IFRS measures have not been subjected to audit. Note 2: Underlying EBITDA is earnings before interest, tax, depreciation, amortisation and has been adjusted to exclude leases and significant items. Underlying EBIT is earnings before interest and tax and has been adjusted to exclude leases and significant items. Note 3: Cash conversion = Gross operating cash flow less cash lease payments, addback significant items, divided by EBITDA1. 5. REVIEW OF OPERATIONS AND RESULTS People The Group prioritises the Health, Safety and Well-being of our people along with our customers, suppliers and communities. We aspire to zero LTI’s and zero harm to our people. During FY24 we had 4 Lost Time Injuries (LTI’s) across all of our business units. All incidents and serious near misses are reviewed by our safety team and the Coventry Leadership Team (CLT) to ensure we share lessons and improve safety systems. Our values of Safety First, Doing the Right Thing (Fairness, Integrity, Respect), Working as a Team and Being the Best at Everything we do, continue to guide us in our day to day operations. We have a culture focussed on doing the right thing in all our interactions with our people, customers, suppliers and communities. Financial performance The Group achieved sales growth for FY24 of +3.4% to $370.8m ($358.5m FY23) and a +22.4% increase in underlying EBITDA1 to $20.8m ($17.0m FY23). Group underlying EBIT2 for FY24 was $17.0m ($13.4m FY23) and Net Profit after Tax for the year was $0.7m ($2.5m FY23). The reduction in Net Profit after Tax was due to costs relating to the ERP project ($9.1m) and costs relating to acquisitions ($0.8m). The Group has a solid balance sheet with Net Assets of $143.1m and Net Tangible Assets of $34.7m at 30 June 2024. At 30 June the Group had Net Debt of $47.3m ($33.5m FY23). The increase in Net Debt was predominately due to funds used to acquire Steelmasters ($13.4m), ERP project costs ($9.1m) and Capital expenditure ($4.4m). Cash Conversion3 for the year was 112.1% (112.5% FY23). Review of businesses Trade Distribution (TD) With the acquisition of Steelmasters and new store openings, our Trade Distribution (TD) segment has expanded to a network of 79 branches across Australia and New Zealand supported by 4 Distribution Centres. It comprises Konnect and Artia Australia (KAA), Konnect and Artia New Zealand (KANZ), Steelmasters (SM) and Nubco in Tasmania. Combined, we now have the leading fastener specialist business across Australia and New Zealand. TD supplies a range of fastening systems, cabinet hardware systems, industrial and construction products to customers in the Industrial, Manufacturing, Infrastructure, Building and Construction, Roofing and Cladding, Mining and Mining Services, Resources/Oil and Gas and Agriculture and Aquaculture sectors. TD sales for the year of $212.1m up +1.0% on FY23. TD EBITDA1 of $16.7m down -2.0% on FY23. KAA delivered sales growth however KANZ declined in difficult market conditions and Nubco also declined due to price deflation on steel products and a decline in consumer spending. Konnect and Artia Australia (KAA) KAA is one of Australia’s leading fastener specialists and supplier of cabinet hardware. KAA delivered sales growth and profit growth on the prior year up +2.7% and +26.4% respectively. During the year, KAA continued to improve its value proposition, service levels and reputation. We opened new stores in Yatala and Karratha. In addition, store makeovers were completed in Laverton, Townsville, Kwinana, Shepparton and Wingfield, and branch relocations to larger facilities in better locations were completed in Wagga Wagga, Kalgoorlie, Wacol and Mildura. In FY25 we are planning 3 new branches and will continue store makeovers and branch relocations as required. Konnect and Artia New Zealand (KANZ) KANZ is New Zealand’s leading fastener specialist and supplier of cabinet hardware and temporary fencing. Market conditions were difficult in New Zealand where high interest rates resulted in a double dip recession. As a result, KANZ sales and profit declined during the year. Trading and gross margin improvements made during the year will ensure we achieve positive results as the economy improves. We have seen some positive signs in Q4 2024. During the year we relocated our East Tamaki and Penrose stores into new larger facilities and relocated our Napier branch. Store makeovers will continue in FY25. Nubco Nubco is a specialist supplier of steel, reinforcing, fasteners, construction products, power tools, hand tools, PPE and consumables in Tasmania. Nubco sales declined in FY24 due to price deflation on steel products and a decline in consumer discretionary spending. The Tasmanian building and construction, infrastructure and agriculture markets are expected to improve in FY25 so we are confident we can continue to grow in this market. Trading and gross margin % improvements occurred in Nubco which partly offset the sales decline and will set the business up for strong profit growth as markets recover. 6 4 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Fluid Systems (FS) Fluid Systems (FS) is an innovative specialist service provider to the mining, agriculture, defence, construction, manufacturing and allied industries. FS specialises in hydraulics, lubrication, fire suppression, refuelling and automation systems and products. FS has the capability to design, manufacture, install, maintain and supply full turn-key solutions and components and operates 15 branches across Australia. FS had another excellent year growing both Sales and EBITDA1, despite a continuing backdrop of labour and skills shortages and wage inflation. FS is well positioned for further growth in the coming years as we expect their core markets of mining and resources, defence, recycling and agriculture to perform well. We can increase market share through our value proposition, expansion of our product and service offering, expanding our hydraulics capabilities and through acquisitions. Diversification into sectors outside of the mining and resources sector continues. FS has demonstrated through various cycles, that it has the capability to scale according to prevailing market conditions. FS sales for the year of $159.2m up +7.5% on FY23. FS EBITDA1 of $19.0m up +23.5% on FY23. Steelmasters acquisition completed 30 April 2024 Founded in 1973, Steelmasters Group is a leading Australasian supplier and manufacturer of industrial and speciality fasteners through its network of 12 branches (four in New Zealand and eight in Australia) with its head office in Auckland, New Zealand. The Steelmasters Group operates under several brands, ‘Steelmasters’ and ‘Galvmasters’ in New Zealand and ‘Boltmasters’ and ‘Profast’ in Australia. The Steelmasters acquisition price of NZ$45.5m represented a multiple of 6.1x 2023 EBITDA1. The total consideration has been funded via a combination of proceeds from an Institutional Placement, Share Purchase Plan and a new NAB Revolving Cash Advance Facility. Steelmasters is operating separately within the Trade Distribution segment to minimise integration risk and will continue to be run by Steelmasters Group’s existing management team. 5. Review of Operations and Results (continued) C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 6 5 6. EARNINGS PER SHARE Basic earnings per share and diluted earnings per share for the year ended 30 June 2024 was 0.7 cents and 0.7 cents respectively. This compares to a basic earnings per share and diluted earnings per share for the previous year of 2.7 cents and 2.7 cents respectively. 7. SIGNIFICANT CHANGE IN THE COMPANY’S AFFAIRS 8. EVENTS SUBSEQUENT TO REPORTING DATE The Board has declared a final dividend of 3.75 cents per share, fully franked, in relation to the year ended 30 June 2024. On 12 August 2024 the Company announced an on-market buy-back of a maximum of 11,679,081 ordinary fully paid shares (up to 10% of issued capital) in the Company from the period 4 September 2024 to 3 September 2025. Other than the matters outlined elsewhere in the Groups financial statements, no other matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods. 9. LIKELY DEVELOPMENTS The Group will continue to implement its five-year strategy and continue to operate in the markets in which it currently participates. 10. REMUNERATION REPORT - AUDITED Remuneration is referred to as compensation throughout this Remuneration Report. 10.1 Key Management Personnel (KMPs) KMPs are the persons who have authority and responsibility for planning, directing and controlling the activities of the Company and the Group. The following were KMPs of the Group at any time during the reporting period and unless otherwise indicated were KMPs for the entire period: Directors Other Key Management Personnel NG Cathie RJ Jackson RJ Bulluss (CEO and Managing Director) AW Nisbet* JSC Todd T Howarth A White In the opinion of the Directors, there have been no other significant changes in the Group’s state of affairs during the financial year. * Leave of absence granted by the Board to Andrew Nisbet effective from 1 January 2024. 6 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 10.2 Principles used to determine the nature and amount of compensation Non-Executive Directors Non-Executive Directors receive cash fees for their Board and Committee work. They are eligible to participate in the Executive and Director Incentive Plan which was re-approved by shareholders at the Annual General Meeting of the Company in October 2023. Non-Executive Directors’ cash fees are determined within an aggregate Directors’ fees pool limit, which is periodically recommended for approval by shareholders. The total pool currently stands at $550,000 (2023: $550,000) per annum, and was last approved by shareholders in November 2004 with effect from 1 July 2004. The Board determines the allocation of the maximum amount approved by shareholders amongst the respective Directors, having regard to their duties and responsibilities. Directors’ fees are not directly linked to Company performance. Non-Executive Directors do not receive termination benefits. There is no provision for retirement allowances to be paid to Non-Executive Directors. As at 30 June 2024 the Non-Executive Directors’ fees were allocated as follows (includes statutory superannuation contributions): 2024 2023 $ $ Chairman (inclusive of Board and Committee work) 130,000 130,000 Chair of Audit and Risk Committee (inclusive of Board and Committee work) 85,000 85,000 Non-Executive Directors (inclusive of Board and Committee work) 80,000 80,000 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 6 7 2024 2023 2022 2021 2020 $’000 $’000 $’000 $’000 $’000 Sales revenue 370,805 358,543 322,324 288,522 247,567 Underlying EBITDA1 20,809 17,005 15,505 13,357 6,637 Underlying EBIT 17,014 13,377 12,355 10.561 4,026 NPAT 659 2,472 4,841 7,246 (455) Dividends paid 3,256 3,227 2,721 - - Share price at year end ($) 1.41 1.15 1.33 1.45 0.57 Note 1: Underlying EBITDA is the key financial performance target considered in setting the Short-Term Incentive (STI). Where applicable, comparative information has been restated for the effects of the application of new accounting standards. Executive Pay Remuneration policies Remuneration of Directors and senior executives is the responsibility of the Remuneration Committee. The Committee has resolved to set remuneration packages which are appropriate in the context of the company’s size, complexity and performance but which will attract the calibre of executive required to drive necessary change in order to enhance performance. The Committee seeks external advice in relation to these matters where necessary. Remuneration for the CEO and senior executives currently comprises three elements: 1. Fixed, cash-based remuneration which includes salary, superannuation and benefits 2. Eligibility to participate in the Company’s short-term incentive plan (STI Plan) 3. Eligibility to participate in the Company’s long-term share based Executive and Director Incentive Plan (LTI Plan) The CEO and senior executives have employment contracts with notice periods executable by either party. There are no arrangements in place to provide the CEO or any senior executive with a retirement benefit other than those which accrue by law. Superannuation contributions are paid at the superannuation guarantee rate. Cash incentives under the STI Plan of up to 65% of fixed annual compensation are payable to the CEO and senior executives based on financial and non-financial measures framed around the Company’s trading performance and each individual’s performance. The LTI Plan was re-approved by shareholders at the 2023 annual general meeting. This share-based plan provides for the granting or issuing of performance rights in accordance with its terms and subject to the terms and performance hurdles set by the Board. Business Performance In considering the Group’s performance and benefits for shareholder wealth, the Remuneration Committee have regard to the following financial performance metrics in respect of the current financial year and the previous four financial years. 10.2 Principles used to determine the nature and amount of compensation (continued) 6 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 6 9 FY21 Performance Period FY22 Performance Period FY23 Performance Period FY24 Performance Period Measurement date 10-day VWAP (iii) $0.6021 $1.4210 $1.2165 $1.0286 No. of PR’s granted 1,424,504 (iv) 572,424 718,742 891,416 Grant date 29.10.2020 22.10.2021 21.10.2022 20.10.2023 Share price at Grant Date $0.95 $1.79 $1.24 $1.18 Vesting date (1) (i) 01.09.2021 01.09.2022 01.9.2023 01.09.2024 Vesting date (2) (i) 01.09.2022 01.09.2023 01.9.2024 01.09.2025 Vesting date (3) (i) 01.09.2023 01.09.2024 (ii) 01.9.2025 01.09.2026 % of PR’s vested - Vesting date (1) 33.3% 33.3% 0.0% 0.0% % of PR’s vested – Vesting date (2) 33.3% 33.3% 0.0% 0.0% % of PR’s vested – Vesting date (3) 33.3% N/A 0.0% 0.0% No. of eligible PR’s vested - Vesting date (1) 474,835 190,809 - - No. of eligible PR’s vested – Vesting date (2) 474,836 190,807 - - No. of eligible PR’s vested – Vesting date (3) 474,833 N/A - - No. of PR’s lapsed & forfeited - - 718,742 891,416 No. of eligible PR’s exercised up to 30 June 2024 1,424,504 381,616 - - No. of PR’s remaining to be vested and/or exercised subject to service conditions - 190,808 - - FY21 FY22 FY23 FY24 No. of performance rights issued 1,424,504 572,424 718,742 891,416 No. of eligible performance Rights vested (iv) 1,424,504 381,616 - - Share price at Grant Date $0.95 $1.79 $1.24 $1.18 Share-based payments expense (v) $826,989 $1,002,052 $434,960 $113,837 10.2 Principles used to determine the nature and amount of compensation (continued) Performance Rights (PR’s) PR’s Key Inputs Share-based payments recognised as an expense in the financial statements of the Company. (i) Subject to service conditions. (ii) Vesting determination not yet made. (iii) Used to calculate grant of Performance Rights. (iv) Performance rights granted in relation to FY22 will vest in accordance with performance and employment conditions and in three separate annual vesting events. Consequently, the share- based payments expense for FY21 and FY22 is recognised based on graded vesting and the probability that 100% of participants will receive 100% of their grant over a three-year period. (v) Share-based payment expense ‘true up’ in FY21 ($618,921) presented as a one-off non-cash significant item in that period. 7 0 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 10.2 Principles used to determine the nature and amount of compensation (continued) Performance Rights Commentary In FY24, one third of the performance rights that were vested to the CEO and Managing Director (R Bulluss) in relation to the FY21 performance period and one third in relation to the FY22 performance period were exercised. One third of the performance rights that were vested to six other Company senior executives in relation to the FY21 performance period and one third in relation to the FY22 performance period were also exercised in FY24. In relation to FY24, the CEO and Managing Director (R Bulluss) was granted 252,771 performance rights under the terms of the LTI Plan following the successful passing of a resolution at the 2023 Annual General Meeting of the Company. These performance rights had a performance period that ended on 30 June 2024 with performance and employment conditions set by the Board. The Board has determined that the FY24 performance rights will be forfeited. In relation to FY24, an offer to participate in the LTI Plan was made to a number of other Company senior executives. The total performance rights granted was 638,645. These Performance Rights had a performance period that ended on 30 June 2024 with performance and employment conditions set by the Board. The Board has determined that the FY24 performance rights will be forfeited. It is intended that the CEO and Managing Director will participate in the LTI Plan in relation to FY25. The maximum face value of the CEO’s FY25 grant is based on an LTI opportunity of 50% of his fixed annual remuneration. The number of performance rights to be granted is determined by dividing the maximum face value by the 10-day volume weighted average price (VWAP) of the Company’s shares preceding the start of the performance period, being the 10 trading days up to and including 30 June 2024. The performance rights will vest at the Board’s discretion, taking into consideration Underlying EBITDA year on year growth. An appropriate resolution will be put to the 2024 Annual General Meeting of the Company. It is intended that a number of senior executives will participate in the LTI Plan in relation to FY25. The maximum face value of each senior executive’s FY25 grant is based on an LTI opportunity of 25% to 40% of his or her fixed annual remuneration. The number of performance rights to be granted is determined by dividing the maximum face value by the 10-day volume weighted average price (VWAP) of the Company’s shares preceding the start of the performance period, being the 10 trading days up to and including 30 June 2024. The performance rights will vest in the same manner as outlined for the CEO and Managing Director. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 7 1 10.3 Details of compensation The following table provides the details, nature and amount of elements of compensation for the key management personnel of the Company and Short-term Cash salary, leave entitlement and fees STI cash bonus Short term total $ $ $ Directors NG Cathie - Chairman 2024 117,117 - 117,117 2023 117,647 117,647 RJ Bulluss 2024 492,257 146,375 638,632 2023 474,196 124,560 598,756 AW Nisbet (Paid up to 31/12/2023) 2024 36,036 - 36,036 2023 72,398 - 72,398 JSC Todd 2024 76,577 - 76,577 2023 76,923 - 76,923 T Howarth 2024 72,072 - 72,072 2023 72,398 - 72,398 A White 2024 61,916 61,916 2023 62,196 - 62,196 Total Directors' remuneration 2024 855,975 146,375 1,002,350 2023 875,758 124,560 1,000,318 Other Key Management Personnel RJ Jackson 2024 351,116 109,488 460,604 2023 338,643 94,618 433,261 Total other key management personnel remuneration 2024 351,116 109,488 460,604 2023 338,643 94,618 433,261 Total Directors' and other key management personnel remuneration 2024 1,207,091 255,863 1,462,954 2023 1,214,401 219,178 1,433,579 Premiums in respect of the Directors’ and Officers’ insurance policy are not included above, as the policy does not specify the premium paid in respect of individual Directors and officers. In the FY23 Remuneration Report, this table had a column titled “Long-service & annual leave provision accrual” and included the total long-service leave and annual leave accrual amounts owing at 30 Jun to reflect the annual movement in the provision, consistent with the approach adopted in preparing the FY24 information. This has reduced the FY23 total remuneration amount for RJ Bulluss and RJ Jacks (i) Includes statutory superannuation contributions and additional voluntary contributions. the Group for the year ended 30 June 2024. Post-employment Proportion of remuneration performance related Super- annuation (i) Long-service & annual leave provision movement Share-based payment Total $ $ $ $ 12,883 - - 130,000 - 12,353 - 130,000 - 27,399 16,921 32,538 715,490 25.01% 25,292 (3,741) 125,525 745,832 33.53% 3,964 - - 40,000 - 7,602 - - 80,000 - 8,423 - - 85,000 - 8,077 - - 85,000 - 7,928 - - 80,000 - 7,602 - - 80,000 - 6,811 68,727 - 6,531 - - 68,727 - 67,408 16,921 32,538 1,119,217 - 67,457 (3,741) 125,525 1,189,559 - 27,399 7,227 19,416 514,646 25.05% 25,292 5,531 72,107 535,991 31.11% 27,399 7,227 19,416 514,646 - 25,292 5,331 72,107 535,991 - 94,807 24,148 51,954 1,633,863 - 92,749 1,590 197,632 1,725,550 - ne 2023. These amounts were $85,562 for RJ Bulluss and $78,112 for RJ Jackson respectively. In the FY24 Remuneration Report, the FY23 amounts have been restated on by $89,303 and $72,781 respectively. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 7 2 10.4 Service contracts Compensation and other terms of employment for the CEO and Managing Director and other key management personnel are formalised in employment contracts. Major provisions of the contracts relating to compensation are set out below: Robert Bulluss, CEO and Managing Director • The contract has no fixed term. • Fixed annual compensation to be reviewed annually by the Remuneration Committee. Shares held by Key Management Personnel Held at 30 June 2023 Purchases (includes DRP allotments) Conversion of Performance Rights Sales / Cancelled Held at 30 June 2024 Directors NG Cathie 983,000 197,657 - - 1,180,657 AW Nisbet 139,144 - - - N/A RJ Bulluss 901,918 36,648 194,050 - 1,132,616 JSC Todd 122,470 24,768 - - 147,238 T Howarth# - - - - - A White# 31,241 - - - 31,241 Other Key Management Personnel RJ Jackson 379,557 12,639 106,961 - 499,157 • Long service leave is payable by the Company in accordance with relevant state legislation. • The contract provides for participation in short-term and long-term incentive plans. • Other than for an act that may have a serious detrimental effect on the Company, such as wilful disobedience, fraud or misconduct, termination of employment requires six months’ notice by the Company. Rodney Jackson, Chief Financial Officer • The contract has no fixed term. • Fixed annual compensation to be reviewed annually by the Remuneration Committee. • Long service leave is payable by the Company in accordance with relevant state legislation. • The contract provides for participation in short-term and long-term incentive plans. • Other than for an act that may have a serious detrimental effect on the Company, such as wilful disobedience, fraud or misconduct, termination of employment requires eighteen weeks’ notice by the Company. # Mr Howarth and Mr White have declared their indirect interests in the shares of the Company as being shareholders of Viburnum Funds Pty Ltd, Richmond Hill Capital Pty Ltd and Rat Pack Adventures Pty Ltd respectively, who are major shareholders of the Company. End of Remuneration Report. 7 3 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 10.5 Director share movement The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows: 11. ENVIRONMENTAL REGULATION The Group is not subject to any specific environmental regulation. The Group mainly operates from warehousing and distribution facilities throughout Australia and New Zealand which have general obligations under environmental legislation of the respective statutory authorities in relation to pollution prevention. The Company has reviewed its obligations under the National Greenhouse & Energy Reporting Act 2007 (the Act). As the Group is under the minimum greenhouse and energy thresholds stipulated in the Act, there are no registration and reporting requirements that have to be complied with as at the date of this report. For the financial year ended 30 June 2024 and as at the date of this report, the Group has not been prosecuted nor incurred any infringement penalty for environmental incidents. 12. INSURANCE OF OFFICERS During the financial year the Company has paid premiums in respect of contracts insuring the Directors and officers of the Company against certain liabilities incurred in those capacities. The contracts prohibit further disclosure of the nature of the liabilities and the amounts of the premiums. 13. CORPORATE GOVERNANCE The Statement of Corporate Governance Practices is disclosed on the Company’s website. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 7 4 7 6 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 14. NON-AUDIT SERVICES During the year KPMG, the Company’s auditor, has performed certain other services in addition to their statutory duties. The Board has considered the non-audit services provided during the year by the auditor and is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001, for the following reasons: • all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Company’s Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; and • the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards. Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and non-audit services provided during the year are set out in Note 4 to the full financial report. 15. LEAD AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration made in accordance with Section 307C of the Corporations Act 2001 forms part of this Directors’ report. 16. COMPANY SECRETARY Mr Mark Licciardo of Acclime Australia is the Company Secretary. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 7 7 17. ROUNDING OFF The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in accordance with that Instrument, amounts in the financial report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the Directors. N.G. CATHIE Chairman Melbourne 20 August 2024 R.J. BULLUSS Chief Executive Officer and Managing Director Melbourne 20 August 2024 Coventry Group Ltd and its controlled entities DIRECTORS’ DECLARATION 1. In the opinion of the Directors of Coventry Group Ltd (“the Group”): a) the consolidated financial statements and notes that are set out on pages 12 to 54 and the Remuneration report on pages 65 to 73 in the Directors’ report, are in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the financial year ended on that date; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; b) the consolidated entity disclosure statement as at 30 June 2024 set out on pages 54 is true and correct; and ; c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. 2. There are reasonable grounds to believe that the Company and the group entities identified in Note 24 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those group entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785. 3. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2024. 4. The Directors draw attention to Note 1 to the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards. Signed in accordance with a resolution of the Directors: N.G. CATHIE Chairman Melbourne 20 August 2024 R.J. BULLUSS Chief Executive Officer and Managing Director Melbourne 20 August 2024 7 7 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 KPMG LEAD AUDITOR’S INDEPENDENCE DECLARATION C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 7 8 KPMG INDEPENDENT AUDITOR’S REPORT 7 9 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 KPMG Independent Auditor’s Report C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 8 0 KPMG Independent Auditor’s Report 8 1 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 KPMG Independent Auditor’s Report C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 8 2 Coventry Group Ltd SHAREHOLDER INFORMATION As at 19 August 2024 Ordinary Shares Number % of Total 1 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 36,500,527 31.25 2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 18,908,711 16.19 3 CITICORP NOMINEES PTY LIMITED 12,787,966 10.95 4 PALM BEACH NOMINEES PTY LIMITED 12,273,135 10.51 5 BNP PARIBAS NOMS PTY LTD 3,779,212 3.24 6 H&G HIGH CONVICTION LIMITED 2,224,095 1.90 7 DIXSON TRUST PTY LIMITED 1,543,905 1.32 8 DORSETT INVESTMENTS PTY LTD 1,403,276 1.20 9 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 1,369,462 1.17 10 MR ROBERT BULLUSS 1,132,616 0.97 11 BNP PARIBAS NOMINEES PTY LTD 1,107,163 0.95 12 HGL INVESTMENTS PTY LTD 933,186 0.80 13 ROMNEY LODGE PTY LTD 815,385 0.70 14 DIXSON TRUST PTY LIMITED 727,761 0.62 15 MRS ANNE KYLE 582,793 0.50 16 MR RODNEY JAMES JACKSON 499,157 0.43 17 UBS NOMINEES PTY LTD 496,487 0.43 18 WARBONT NOMINEES PTY LTD 465,133 0.40 19 ABTOURK (SYD NO 415) PTY LTD 305,733 0.26 20 MR GEOFFREY KYLE 300,000 0.26 Total 98,155,703 84.04 8 3 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 DISTRIBUTION OF SHAREHOLDING Number of holders Number of shares % Size of holding 1 – 1,000 416 231,598 0.20 1,001 - 5,000 610 1,559,304 1.34 5,001 - 10,000 195 1,462,003 1.25 10,001 - 100,000 288 9,362,161 8.02 100,001 Over 56 104,175,746 89.20 Rounding -0.01 Total 1,565 116,790,812 100.00 Holders Units Unmarketable parcels field information 87 7,206 Name of Substantial Shareholder Extent of Interest (Number of Shares) Date of last notification Viburnum Funds Pty Ltd 30,403,284 20 May 2024 Richmond Hill Capital Pty Ltd 18,950,331 17 Jun 2024 Sandon Capital Pty Ltd 9,874,432 10 Aug 2023 DUMAC Inc. 4,498,152 23 Dec 2019 SUBSTANTIAL SHAREHOLDERS The Company’s register of substantial shareholders showed the following particulars as at 19 August 2024. C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 8 4 UNQUOTED EQUITY SECURITIES Nil. SECURITIES SUBJECT TO VOLUNTARY ESCROW There are no securities on issue subject to voluntary escrow. VOTING RIGHTS Each member present at a general meeting of the Company in person or by proxy, attorney or official representative is entitled: • on a show of hands - to one vote • on a poll - to one vote for each share held There are no other classes of equity securities. ON-MARKET BUY-BACK On 12 August 2024 the Company announced an on-market buy-back of a maximum of 11,679,081 ordinary fully paid shares (up to 10% of issued capital) in the Company from the period 4 September 2024 to 3 September 2025. 8 5 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 Coventry Group ABN 37 008 670 102 Registered and Principal Administrative Office 235 Settlement Road, Thomastown, Victoria 3074 Postal Address P O Box 526 Thomastown, Victoria 3074 Website www.cgl.com.au Secretary Mark Licciardo Bankers National Australia Bank Limited Australian and New Zealand Banking Group Limited Bank of New Zealand Auckland Savings Bank Limited Westpac Banking Corporation Commonwealth Bank of Australia Auditors KPMG Tower Two Collins Square 727 Collins Street Melbourne, Victoria 3008 Share Registry Computershare Limited Yarra Falls 452 Johnston Street, Abbotsford Melbourne Victoria 3067 or GPO Box 2975 Melbourne, Victoria 3000 Telephone from within Australia: 1300 763 414 Telephone from outside Australia: (+61) 3 9415 5000 Facsimile: +(61) 3 9473 2500 Email: web.queries@computershare.com.au Website: www.investorcentre.com Securities Exchange Listing The Company’s shares are listed on the ASX Limited and trade under the code CYG. The home exchange is Melbourne. Shareholder Enquiries/Change of Address Shareholders wishing to enquire about their shareholdings, dividend payments, or change their address should contact the Company’s share registry. Coventry Group Ltd CORPORATE DIRECTORY C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4 | 8 6 8 8 | C O V E N T R Y G R O U P LT D A N N U A L R E P O R T 2 0 2 4

Continue reading text version or see original annual report in PDF format above