More annual reports from Fleetwood Limited:
2023 ReportANNUAL REPORT
2023
Annual Report for the year ended 30 June 2023
Fleetwood Limited ABN 69 009 205 261
Contents
Group Structure
Vision and Values
Highlights FY2023
Board of Directors
Executive Team
Chairman’s Letter
Managing Director and CEO’s Review
Financial Report
Directors’ Report
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
ASX Additional Information
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91
Corporate Directory
Directors
John Klepec
Bruce Nicholson
Jeff Dowling
Adrienne Parker
Mark Southey
Martin Monro
Company Secretaries
Elizabeth Maynard
Andrew Wackett
Auditor
EY Australia
Banker
Westpac Banking Corporation
Registered Office &
Principal Place Of Business
Level 2, 464 Hay St
Subiaco WA 6008
T: (08) 9323 3300
E: info@fleetwood.com.au
W: www.fleetwood.com.au
Share Registry
Computershare
Level 11
172 St Georges Terrace
Perth WA 6000
T: (08) 9323 2000
E: www.investorcentre.com/contact
Annual Report | FY2023
Group Structure
2
Building
Solutions
Design, manufacture
and supply of
accommodation for the
education, corrections,
affordable housing and
mining industries.
RV
Solutions
Import, manufacture
and distribution of
leading products to
the recreational vehicle
industry and servicing
of the caravan and
motorhome industry.
Community
Solutions
Operation of
accommodation
villages - Searipple in
Karratha and Osprey in
South Hedland.
Fleetwood Australia A D E R
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TO B E T H
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Vision
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B I L I T
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Values
Annual Report | FY2023
Highlights FY23
4
EBITA of $4.2m
(vs $12.3m loss in FY22).
Group safety performance
59% reduction in LTIFR.
Dividend reinstated
2.1 cps fully franked.
Net cash of
$46.6m up $6.7m
from December 2022.
Fleetwood Australia Medium term demand
for Searipple contracted
out to 2027.
Building Solutions losses
excluding major projects
reduced to $0.9m in
H2 FY23.
5
Building Solutions order
book up to $127m from
$87m at the half year.
Community Solutions
EBITA of $10.2m on strong
shutdown performance
in Q4 and ahead of major
project demand.
Executive management
team rebuilt and driving
operational improvement.
RV Solutions impacted
by reduced consumer
discretionary demand in Q4.
EBITA of $6.9m.
Annual Report | FY2023 Board
of Directors
The Board is currently comprised of five Non-Executive
Directors and one executive Director. The Directors who are in
office at the date of this Report are:
6
JOHN KLEPEC
BCOMM
JEFF DOWLING
BCOMM, FCA, FFIN, FAICD
ADRIENNE PARKER
LLB, MAICD
NON-EXECUTIVE DIRECTOR, BOARD
CHAIR
NON-EXECUTIVE DIRECTOR, CHAIR OF
AUDIT COMMITTEE
John Klepec was appointed as
a Non-Executive Director on 19
November 2020, and as Chair of
the Board from 26 February 2021.
Jeff Dowling was appointed as a
Non-Executive Director on 1 July
2017, and thereafter as Chair of the
Audit Committee.
John has over thirty years of
experience across a range of industry
groups including construction,
resources, media, health care, building
products, construction materials,
agriculture, logistics, livestock trading
and shipping.
John is currently the Executive
Chairman of Wellard Limited a role
he has held from 2018 and previously
was a non-executive director of Ten
Network Holdings Limited.
John was previously the Chief
Development Officer for Hancock
Prospecting, and prior to that, held
senior management positions with
major Australian publicly listed
companies BHP Billiton Limited, Mayne
Group Limited and with the private
BGC Group.
From his prior successful executive
and board roles John brings extensive
financial expertise, corporate
development, operational leadership
and strategic thinking to any
commercial position.
John holds a Bachelor of Commerce.
John has held the following
directorships of listed companies
in the three years immediately
before the end of the financial year:
Executive Chairman of Wellard Limited
(appointed November 2016).
Jeff is a highly experienced corporate
leader with over 40 years of experience
in professional services with Ernst &
Young. Jeff held numerous leadership
roles within Ernst & Young which
focused on mining, oil and gas and
other industries. Jeff’s expertise is
centred around audit, risk and financial
acumen derived from acting as lead
partner on numerous large public
company audits, capital raisings and
corporate transactions. As a non-
executive director of a number of ASX
listed companies Jeff has been involved
with various corporate acquisitions and
takeovers, debt restructures and equity
raisings.
Jeff holds a Bachelor of Commerce and
is a Fellow of the Australian Institute
of Company Directors, a Fellow of the
Institute of Chartered Accountants,
and a Fellow of the Financial Services
Institute of Australasia.
Jeff has held the following
directorships of listed companies in the
three years immediately before the end
of the financial year: Non- Executive
Director of S2 Resources Limited
(appointed May 2015), Non- Executive
Director of NRW Holdings Limited
(appointed August 2013) and Non-
Executive Director of Battery Minerals
Limited (appointed January 2018).
NON-EXECUTIVE DIRECTOR, CHAIR
OF NOMINATIONS & DIVERSITY
COMMITTEE
Adrienne Parker was appointed
as a Non-Executive Director on
23 August 2017, and thereafter
as Chair of the Nominations &
Diversity Committee.
Adrienne is a partner and head of
global law firm Pinsent Masons’
Perth office, where she focuses on
construction law. Adrienne’s experience
spans over 25 years working with
participants in the infrastructure,
energy and resources sectors where
she specialises in major construction,
engineering and resources projects.
Adrienne advises on the procurement,
management and delivery of
infrastructure projects across Australia
via traditional project delivery models
and relationship contracting, including
public sector projects across Australia,
managing large commercial and legal
teams to achieve successful outcomes
for clients. Adrienne has also acted in
many large scale complex disputes in
many jurisdictions involving mining and
energy projects, processing plants, oil
and gas facilities, and major building
and infrastructure projects.
Adrienne holds a Bachelor of Laws
from the University of Western
Australia. She is the Chair of the
Joint Law Council of Australia and
Law Society of Western Australia’s
Construction and Infrastructure Law
Committee and a past president
of the WA Chapter of The National
Association of Women in Construction.
She is also a member of the Society
of Construction Law Australia and a
Member of the Australian Institute of
Company Directors.
Adrienne has held the following
directorships of listed companies in the
three years immediately before the end
of the financial year: Non-Executive
Director of Liontown Resources
Limited since 1 October 2022.
Fleetwood Australia B O A R D O F D I R E C T O R S ( C O N T ’ D )
MARK SOUTHEY
BSC (HONS), MBA, GAICD
MARTIN MONRO
BA (PSYCH), FAICD, FAIB
BRUCE NICHOLSON
B. ENG, MBA, MAICD
NON-EXECUTIVE DIRECTOR, CHAIR OF
REMUNERATION COMMITTEE
NON-EXECUTIVE DIRECTOR, CHAIR OF
RISK COMMITTEE
MANAGING DIRECTOR AND CHIEF
EXECUTIVE OFFICER
7
Mark Southey was appointed
as a Non-Executive Director on
10 October 2018, and thereafter
as Chair of the Remuneration
Committee.
Mark is an experienced senior executive
with extensive global experience in
industrial technology and services and
project development in the natural
resources sectors. Mark has previously
held senior executive positions with
Honeywell and ABB in Australia and
internationally, and was a member
of the global executive leadership
team within WorleyParsons where he
held the position of Group Managing
Director for the Minerals, Metals and
Chemicals Sector.
Mark holds a Bachelor of Science
(Hons) in Engineering with Business
Studies, has an MBA from the
University of Sydney Business School,
is a Graduate of the Australian Institute
of Company Directors and is a member
of Engineers Australia.
Mark is an advisory board member
for Gas Cleaning Technologies LLC
(Dallas) and has held the following
directorships of listed companies in the
three years immediately before the end
of the financial year: Non- Executive
Chairman of Arafura Resources Limited
(appointed January 2018).
Martin Monro was appointed as a
Non-Executive Director on 1 June
2020, and thereafter as Chair of
the Risk Committee.
Bruce Nicholson commenced as
Chief Executive Officer on 1 July
2021 and was appointed Managing
Director on 1 August 2022.
A highly credentialled building and
construction materials executive, Bruce
has demonstrated expertise delivering
results within challenging environments
and projects in Australia, New Zealand,
North America and Europe.
Prior to joining Fleetwood, Bruce
served as Chief Executive Officer and
Managing Director of Waco Kwikform
Group, Australia and New Zealand’s
leading supplier of scaffolding and
false work to commercial and civil
construction, residential and industrial
markets.
Bruce was credited with leading
the turnaround of a complex
manufacturing operation in the
concrete piping and products business,
as head of Fletcher Building Group’s
ROCLA business.
Deep experience in heavy
manufacturing is complemented by
Bruce’s logistics and commercial skills
honed from extensive roles within the
Holcim Group, where he progressed
to the position of Executive General
Manager for Australian and New
Zealand aggregate operations.
Bruce’s substantial industry experience
is underpinned by a Bachelor in Civil
Engineering from the University of
Technology Sydney and an MBA from
James Cook University.
Bruce did not hold any other
directorships with listed companies in
the last three years.
Martin was formerly the Chief
Executive Officer and Managing
Director of Watpac Limited from
August 2012 until his retirement in an
executive capacity in June 2019. Martin
has more than 30 years’ experience
in the Australian and international
construction sectors, with a proven
track record in prudent financial
management, safety leadership and
successful expansion into new markets.
Martin remains a Non-Executive
Director of Watpac Limited.
Martin was appointed a Non-Executive
Director of Big River Industries Limited
in September 2021 and a Non-
Executive Director of Service Stream
Limited in October 2022.
In addition to his ASX-listed roles,
Martin also Chairs the Pannell Enoteca
Advisory Board and is a Specialist
Workplace Relations Advisor to the
Board of the Australian Constructors
Association.
Martin is a past National Vice President
of the Australian Industry Group and
was a Government-appointed member
to the Royal Melbourne Showgrounds
Unincorporated Joint Venture Board
from 2019 to 2022.
Martin has a Bachelor of Arts Degree
(Psychology) and post graduate
qualifications in Human Resources
Management, is a graduate of the
Accelerated Development Program at
the London Business School, a Fellow
of the Australian Institute of Company
Directors and a Fellow of the Australian
Institute of Building.
Martin has held the following
directorships of a listed company in the
three years immediately before the end
of the financial year: Non-Executive
Director of Big River Industries Limited
in September 2021 and Non-Executive
Director of Service Stream Limited in
October 2022.
Annual Report | FY2023 Executive Team
8
ANDREW WACKETT
BCOMM, FCPA, FFIN, GAICD
CHIEF FINANCIAL OFFICER & COMPANY
SECRETARY
Andrew Wackett commenced as Chief
Financial Officer on 12 June 2017 and was
appointed as Company Secretary on 5
July 2018.
Prior to joining Fleetwood, Andrew was a
Division Director of Macquarie Securities
Group for 20 years. During that time, Andrew
gained significant commercial experience
with large Australian and international listed
ELIZABETH MAYNARD
LLB (HONS), BCOMM, GAICD
GENERAL COUNSEL &
COMPANY SECRETARY
Elizabeth Maynard commenced as
General Counsel & Company Secretary in
September 2018.
Prior to her appointment, Elizabeth spent
a number of years in private practice as
a Corporate / M&A lawyer with a top-tier
Australian law firm advising clients in a
variety of sectors on domestic and cross-
ANDREW MCCORMACK
MA (ENG), BENG (HONS),
DHRM, CPHR
GENERAL MANAGER – WHSE & HR
Andrew McCormack was appointed
as General Manager for WHSE and
Human Resources in July 2014, after
commencing with Fleetwood in July 2011.
Prior to joining Fleetwood, Andrew held a
variety of Operations Management, Industrial
Engineering and Human Resources roles in
Australian and international manufacturing
DAVID BOLTON
MBA, BENG, GAICD
EXECUTIVE GENERAL MANAGER, BUILDING
SOLUTIONS
David Bolton was appointed as Executive
General Manager, Building Solutions in
September 2022.
David brings more than 25 years’ experience
in general management and project
management roles across manufacturing,
mining, and logistics businesses. His career
includes more than 11 years at Boral, two years
at Adelaide Brighton and 12 years at Hanson
Australia leading large teams to deliver
significant improvements in safety, culture,
entities, developed an in depth knowledge of
corporate governance, and statutory financial
requirements, and has proven financial
and leadership skills in guiding business,
departments and teams in the formulation
and execution of financial strategies. Prior to
Macquarie, Andrew worked at Wesfarmers for
over six years.
Andrew holds a Bachelor of Commerce,
is a Fellow of CPA Australia, a Fellow of
Financial Services Institute of Australasia
and a Graduate of the Australian Institute of
Company Directors.
border transactional and commercial matters.
Elizabeth also has significant international
experience, having spent over 3 years working
in Singapore and the Asia-Pacific region at a
top-tier UK law firm.
Elizabeth holds a Bachelor of Laws (Hons)
and Bachelor of Commerce (Accounting) and
is a Graduate of the Australian Institute of
Company Directors. She is a member of the
Law Society of Western Australia’s In-House
and Government Lawyers Committee and a
member of the Royal Perth Hospital Human
Research Ethics Committee.
firms. Andrew has significant experience in
risk management and employee relations
legislation and a genuine passion for the
wellbeing and development of our people.
Andrew holds a Master of Engineering
(Industrial), a Bachelor of Engineering
(Hons) and a Diploma of Human Resources
Management and is an AHRI certified Human
Resources Practitioner.
customer experience and EBIT growth across
multi-site operations.
David offers a wealth of commercial expertise
and key strength of business transformation
through strategy development, revenue
growth, operational excellence, team
performance and engagement, and supply
chain management.
David holds a Master of Business
Administration from La Trobe University, a
Bachelor of Engineering in Civil Engineering
from The University of Technology Sydney
and is a Graduate of the Australian Institute of
Company Directors.
Fleetwood Australia E X E C U T I V E T E A M ( C O N T ’ D )
GILES EVEREST
MBA MAICD
EXECUTIVE GENERAL MANAGER, WA
Giles Everest was appointed as Executive
General Manager WA, in August 2022.
With a history in the company, Giles has
previously held positions at Fleetwood
between 2007 and 2017 that include
Executive General Manager Manufactured
Accommodation West, General Manager WA
and Project Services Manager.
Bringing extensive experience, Giles has
held executive positions in private and listed
mining services and supply chain and logistics
TARA GOLDSWORTHY
BENG, FAIM, GAICD
EXECUTIVE GENERAL MANAGER,
MANUFACTURING
Tara Goldsworthy was appointed
as Executive General Manager,
Manufacturing in October 2021.
Prior to joining Fleetwood, Tara held a
variety of senior transformational, process,
manufacturing, supply chain, and business
development roles spanning mining,
manufacturing, and industrial sectors.
With more than 20 years’ experience,
Tara’s career includes 16 years delivering
ANDREW ARAPAKIS
BENG
EXECUTIVE GENERAL MANAGER, RV
SOLUTIONS
Andrew Arapakis was appointed as
Executive General Manager, Recreational
Vehicle Solutions in March 2023.
Before joining Fleetwood, Andrew held a
variety of senior leadership positions in
the automotive, manufacturing, industrial
and waste management industries, gaining
extensive experience delivering strategy
and developing culture to positively impact
organisational performance.
businesses and has had significant experience
in project management across construction
and industrial services. He has successfully led
businesses through turnarounds, accelerated
growth, acquisition and economic downturn.
He has an unwavering commitment to safety
and is passionate about leadership, culture
and continuous improvement.
Giles holds a Master of Business
Administration from the University of Western
Australia and is a member of the Australian
Institute of Company Directors.
9
process improvement, manufacturing and
business improvement solutions within Rio
Tinto and broader heavy industry.
Passionate about driving manufacturing and
supply chain improvements, Tara brings a
wealth of expertise in diagnosing and realising
operational improvements using process,
systems and technology changes that unlock
substantial increases in business value.
Tara holds a Bachelor of Metallurgical
Engineering, is a Fellow of the Australian
Institute of Management and is a Graduate
Member of the Australian Institute of
Company Directors.
Andrew’s career over the past 25 years
includes senior sales leadership positions at
Cleanaway, a CEO role at Krueger Transport
and a GM, Sales and Marketing position
at Denso International. He also completed
13 years at Delphi Australia, progressing
from Sales and Engineering Manager to
Managing Director and a further eight years in
production and technical sales management
roles at Robert Bosch Australia.
Andrew holds a Bachelor of Engineering from
Swinburne Institute of Technology.
Annual Report | FY2023 Chairman’s
Letter
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Fleetwood Australia
C H A I R M A N ’ S L E T T E R
Significant opportunities remain for all Fleetwood
businesses in FY24, and we look forward to delivering
on these for the benefit of all shareholders.
John Klepec
Non-Executive Chairman
11
Dear Shareholders,
The past 12 months have seen a
return to profitability and positive
momentum in the Building
Solutions business towards the
end of FY23 despite a historically
very difficult construction market
in Australia.
The Board, management and staff
remain absolutely focused on the need
to generate an acceptable level of
returns on assets for our shareholders.
So, whilst we are heading in the right
direction there remains work to be
done to capture the opportunity
that exists particularly in the market
where the Building Solutions
business competes.
This report marks the second
anniversary of the appointment of
Bruce Nicholson as CEO. He took the
reins of Fleetwood during a time of
uncertainty, with the backdrop of a
global pandemic. His leadership has
been critical to Fleetwood successfully
navigating the pandemic, recruiting
key management to a new leadership
team and re-building parts of our
flagship business for a return to
profitability in FY24.
The Board and Executive
team remained focused on the
implementation of the strategic
plan, which remains appropriate and
must continue to be progressed and
refined despite the ongoing attention
Building Solutions operational issues
have demanded of the Executive. The
Build, Transform and Grow strategy
has been central to the management
of operations and decision making
during the year, despite the variety of
challenges that impacted operations.
Significant opportunities remain for all
Fleetwood businesses in FY24, and we
look forward to delivering on these for
the benefit of all shareholders.
Building Solutions is a leader in
modular construction for the
education, custodial, mining, and
affordable housing market segments
across Australia. The acceptance of
modular construction and modular
products continues to grow, and we are
positioning to be a major participant in
this segment of the Australian market.
State Governments are actively looking
at affordable housing solutions which
are emerging as an ideal market for
modular buildings.
The new senior management team
of the Building Solutions business is
now in place and beginning to build
solid momentum. Work on all major
FY22 projects was completed during
the year and the commercial close of
all of these is now completed.
With the hard lessons learnt and
change in process implemented
we have declined participation in
similar projects during the year.
The future for Community Solutions
is positive underpinned by the further
$100m plus contract signed with Rio
Tinto in late June 2023. Upcoming
major projects in the Northwest of
Western Australia also present an
opportunity to expand this business.
While RV Solutions saw a mixed
result with a decline in demand in the
fourth quarter of the year offsetting
the positive start. The large fleet of
imported and domestic caravans in
service across Australia will continue
to fuel aftermarket demand for the
services and the products of RV
Solutions.
I would like to place on record my
thanks to the Fleetwood Family of
over 600 people for their hard work,
dedication, and efforts over the past
twelve months.
Finally, I would like to thank our
shareholders for their ongoing support
and acknowledge my fellow Board
members for their commitment during
the past challenging year. Our priority
is to continue to improve returns and
get to an acceptable level of return as
soon as practicable.
I remain personally excited about the
Fleetwood future and am committed to
the entire group achieving the business
transformation and performance we
expect and know is possible in FY24
and beyond.
John Klepec
Non-Executive Chairman
Annual Report | FY2023 Review of
Operations
12
Fleetwood Australia Managing Director
and CEO’s Review
13
+ EBITA of $4.2 million, statutory NPAT of $2.1 million
+ Order book of $127m in Building Solutions,
up from $87m in December 2022
+ Net cash of $46.6 million, up by $6.7m from
December 2022 Resumption of dividend payments
Fleetwood returned to
profitability during FY23
with improved momentum
demonstrated in the
second half of the year.
RV Solutions saw reduced consumer
discretionary demand emerge in the
fourth quarter changing the trend of
the past two years as well as several
aftermarket clients reducing their
stock holdings leading into the end of
financial year.
Building Solutions’ losses were
substantially reduced as FY22 major
projects were closed out and the
implementation of the Build, Transform
& Grow strategy gained momentum.
The business has continued to target
projects aligned with its current
capability and this focus saw the order
book grow from $87m in December
2022 to $127m in June 2023.
Community Solutions’ results improved
reflecting planned shutdowns and
increased activity in the Karratha
market. A highlight of the year was the
June 2023 announcement of additional
rooms booked by Rio Tinto under its
accommodation agreement which is
expected to generate a further $100m
to $120m in revenue until the end of
the contract term in April 2027.
The Company recorded earnings
before interest, tax, and amortisation
(EBITA) of $4.2m (30 June 2022:
$12.3m loss) and statutory net
profit after tax (NPAT) of $2.1m
(30 June 2022: $47.5m loss) for
FY23. Revenue for the period fell
8% to $410.6m (30 June 2022:
$446.1m) reflecting the completion
of FY22 major projects.
Fleetwood finished the year in a strong
financial position with net cash of
$46.6m (December 2022: $39.9m)
reflecting commercial settlement of
several major projects and improved
operational performance.
Reflecting the balance sheet position
and improved earnings momentum,
the Company has resumed dividend
payments with a fully franked final
dividend of 2.1 cents per share.
The Company’s dividend policy
remains to pay out 100% of net profit
after tax (NPATA basis).
The business has made excellent
progress in ESG with a significant
improvement in our safety
performance, excellent progress
delivering on our diversity and
reconciliation plans and a reduction
in our waste and energy and water
consumption in FY23.
We have embedded the Build,
Transform & Grow strategy in the
business with the aim to focus
on quality of revenue through
diversification, generating sustainable
margins, increasing utilisation, and
reducing overheads to improve
earnings. This is underpinned by
new leadership capability across the
business to successfully execute our
strategy.
Based on the improved Building
Solutions order book and forward
bookings at Searipple, Fleetwood
anticipates continued improvement in
earnings momentum in FY24.
Annual Report | FY2023 R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Results Summary
14
RESULTS SUMMARY
$ MILLION
Revenue
EBITDA
Depreciation
EBITA
Amortisation of contract intangible
Finance costs
Pre-tax profit (loss)
Tax (expense) benefit
Underlying NPAT
Significant items
Continuing operations NPAT (Loss)
Loss from discontinued operations
Statutory NPAT (Loss)
NPATA1 (Loss)
1 NPATA = Underlying NPAT plus after-tax amortisation of contract intangible.
BUSINESS UNIT RESULT SUMMARY
$ MILLION
Revenue
Building Solutions
Community Solutions
RV Solutions
Unallocated
Total revenue
EBITA
Building Solutions1
Community Solutions
RV Solutions
Unallocated
Total EBITA
1 FY22 EBITA adjusted for significant items of $39.8m.
FY23
410.6
21.0
16.8
4.2
0.0
1.6
2.6
(0.6)
2.0
0.0
2.0
0.0
2.0
2.0
FY22
446.1
4.3
16.6
(12.3)
1.1
1.5
(14.9)
(4.5)
(10.4)
(36.5)
(46.9)
(0.6)
(47.5)
(9.6)
FY23
FY22
295.9
33.7
80.6
0.5
410.6
(5.5)
10.2
6.9
(7.3)
4.2
333.1
31.7
81.2
0.1
446.1
(24.3)
8.3
9.8
(6.1)
(12.3)
Fleetwood Australia R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Cashflow, Debt and Dividends
15
The Company maintained
a stable net cash position
after allowing for payment
of the $14.1m onerous
contract provision taken
late in FY22. While net
cash fell from $55.3m in
June 2022 to $46.6m
in June 2023, net cash
increased from the
December 2022 position
of $39.9m reflecting
commercial settlement
of several major projects
and improved operational
performance.
Project bonding outstanding fell from
$27.0m in June 2022 to $18.7m in June
2023 reflecting reduced exposure to
major projects.
The group retains total debt and
bonding facilities of $81m (FY22:
$85m). During the year, the Company’s
banking facility was extended for a
further two years.
The movement in net cash is detailed
below.
DIVIDENDS
Reflecting the balance sheet position
and improved earnings momentum,
the company has resumed dividend
payments with a fully franked final
dividend of 2.1 cents per share.
The Company’s dividend policy
remains to pay out 100% of net profit
after tax (NPATA basis).
The Company presently has 20 cents
per share in franking credits available
to support up to 46 cents per share in
fully franked dividends.
CASHFLOW AND DEBT
$ MILLION
EBITDA
Interest paid (net)
Tax
Working capital (and other)
Operating cashflow
Net capex
Free cashflow
Project finance (advance) repayment
Lease repayments and other
Dividends paid
Financing cashflows
Opening net cash (debt)
Closing net cash (debt)
Y23 EBITA adjusted for significant items of $39.8m.
FY23
FY22
21.0
(1.1)
(0.5)
(14.0)
5.5
(6.7)
(1.3)
0.0
(7.4)
0.0
(7.4)
55.3
46.6
4.3
(1.4)
(6.7)
19.0
15.3
(7.0)
8.2
8.7
(7.5)
(11.8)
(10.6)
57.6
55.3
Annual Report | FY2023 R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Building Solutions
16
Building Solutions losses
were substantially reduced
as FY22 major projects
were closed out and
the implementation of
the Build, Transform &
Grow strategy gained
momentum. Major project
close out costs (net of
provisions) during the year
totalled $3.3m ($0.9m in
H1 and $2.3m in H2). This
compared to FY22 where
approximately 80% of the
$24.3m losses were as
a result of major project
underperformance.
Revenue for the year declined by 11%
as expected due to lower major project
revenues. Second half revenue of
$127.7m was impacted by low project
win rates across the second and third
quarters as the business reset. Win
rates and revenue improved markedly
towards the end of the year setting the
business up for a strong start to FY24.
The Queensland business continued
its excellent performance where
population growth is creating
education and social housing demand.
Activity levels in Victoria and NSW
also improved in the fourth quarter as
renewed management teams drove
performance. Western Australia made
significant gains over the second
half and is seeing the early signs of a
buoyant market.
Gross margins improved throughout
the year as the benefit of our focus on
repeatable modular works took effect
across the business and pleasingly,
achieved targeted levels in the fourth
quarter.
Overheads increased 3% for the year
with labour shortages continuing
to impact into the first half as
competition for key staff in the broader
construction industry remained intense.
This was reflected in wage pressure
which saw costs rise despite lower staff
numbers. Materials shortages eased
further in the fourth quarter.
Overall, the business achieved its goal
of underlying profitability on a monthly
run-rate by the end of the year.
Completion and commercial close out
of FY22 major projects was a major
focus during the year. Work on all
major projects was completed early
in the second half and I am pleased to
confirm that we have now closed out
commercial negotiations on all major
projects.
During the year we appointed David
Bolton as the new head of the Building
Solutions business and now have a full
leadership team in place. In building
on the key leadership appointments
last year, we are confident we have the
right team in place to deliver our Build,
Transform & Grow strategy moving
forward.
OUTLOOK AND FORWARD
STRATEGY
Building Solutions anticipates an
improvement in earnings in FY24.
This is expected to come from a
combination of a solid order book,
better quality margins, procurement
savings, no impact from major project
cost overruns and careful overhead
management.
The business has continued to target
projects aligned with its current
capability. This focus saw the order
book grow from $87m in December
2022 to $127m in June 2023.
It is important to note that in addition
to this order book, Building Solutions
generates approximately 50% its
of annual revenue from long term
contracts or panel agreements in the
education and housing sectors. This
gives Fleetwood the ability to plan
and manage utilisation in many of its
States and provides a solid foundation
for the business. Customers include
State education departments, lifestyle
village developers and State housing
authorities.
Opportunities with government
including housing, education, and
defence are expected to increase as
adoption of modular building gathers
momentum. The WA Department of
Housing is now using modular solutions
after engagement with Fleetwood
and proprietary housing designs were
launched to the broader market in
H2 FY23. During the year, a number
of States announced the move to
make kindergarten compulsory which
extends our offering in the education
sector, and the business has already
seen an uptick in demand. Fleetwood’s
defence strategy has been defined and
is underway.
Unlike previous periods the current
forward order book does not have any
material new major one-off projects
of high complexity. During FY23 these
included the Ti Tree Project, three
Centres for National Resilience and
several other bespoke projects.
We have also implemented the lessons
learned from our projects and have a
far more robust project review process
in place which has seen Fleetwood
decline to participate in several
projects that do not fit our revised
criteria.
Building Solutions continued to
experience labour shortages and high
raw material costs in the first half of the
year, with positive signs easing in the
second half.
Staff numbers are down 7% since June
2022 as we centralise key functions
and adopt greater standardisation. A
major focus on safety saw an over 50%
improvement in LTIFR (Safety) in FY23.
Our Build, Transform & Grow strategy
provides the roadmap for the medium
to long- term improvement in the
quality and consistency of earnings.
Fleetwood Australia R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
17
FY22
FY23
Over the medium term this is
expected to see a stable and growing
business able to effectively leverage
the advantages of modular building
including:
+ Reduced building time and
increasing speed
+ Lower cost, especially when design
variations are considered
+ Improved quality when compared to
in situ builds
+ Better ESG credentials, especially
around waste, sustainability, and
the ability to recycle, repurpose and
reuse buildings
350
300
250
200
150
100
50
0
The build phase involves improving
capability, systems and processes and
brand awareness to underpin long
term, sustainable growth.
The business is consolidating its
national functional leadership
model to improve co-ordination and
effectiveness of important functions
such as sales, estimating, design,
procurement, manufacturing, HSEQ,
HR, commercial and finance. During the
year centralisation of the design and
estimating and procurement functions
was completed.
The transform component of
our strategy includes revenue
diversification and moving from being
a bespoke builder to repeatable
manufacturer. This involves qualifying
work coming into our pipeline against
key measures including buildability
for modular, the right margin, a
deeper understanding of risks and
opportunities, and the right customer
to partner with.
Major workstreams include:
0
FY22
+ Aligning national workflows and
developing common processes and
procedures to deliver consistency.
FY23
-5
+ Introducing Sales & Operation
-10
Planning (S&OP) to improve the
capability to push and pull orders
to optimise our factories. Factory
capacity and utilisation is now being
monitored which is driving sales,
and operational planning.
-15
+ Balancing build complexity
-20
with standardisation of modular
components to open pathways to
standardisation.
-25
+ Focusing on national procurement
to reduce costs by consolidating
purchasing and leveraging the
purchasing power of the national
business. Procurement savings
have been identified and captured
in major spend categories. Whilst
the benefits were immaterial in
FY23 (net of implementation costs),
material savings are forecast in
FY24.
Building Solutions
REVENUE
EBITA1
$295.8M
$333.1M
350
300
250
200
150
100
50
0
0
-5
-10
-15
-20
-25
FY23
FY22
$(5.5)M
$(24.3)M
FY23
FY22
1 FY22 EBITA adjusted for significant items of $39.8m.
Annual Report | FY2023 R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Community
Solutions
18
Community Solutions had
a solid year with EBITA up
23% on FY22. The timing
of major client shutdowns
at Searipple Village saw an
excellent performance in
the fourth quarter with the
highest occupancy and
average rooms rates so far
this cycle.
The five-year agreement with Rio
Tinto, executed early in July 2022,
underpinned base utilisation and
profitability during the year. It also
created a strong negotiating position
for ongoing discussions with additional
clients to support planned shutdowns
and major projects over coming
periods.
A highlight of the year was the June
2023 announcement of additional
rooms booked by Rio Tinto under its
accommodation contract which is
expected to generate a further $100m
to $120m in revenue until the end of
the contract term in April 2027.
During the year, contracts were secured
with Woodside and Yara Fertilisers,
further underpinning future demand.
Opportunities remain for securing
long-term demand at Searipple Village
to support future earnings. This was
a major focus for the business in
FY23 along with planning for village
upgrades to support future occupancy.
Osprey Village remains fully occupied,
and a waiting list of potential tenants
reflects the strength of the Port
Hedland market.
Fleetwood Australia R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Community Solutions had a solid year with EBITA up 23%
on FY22. The timing of major client shutdowns at Searipple
Village saw an excellent performance in the fourth quarter.
12
Commercialisation of a keyless lock
and energy management system,
FY22
using the Fleetwood developed Glyde
technology is underway. Fleetwood’s
development of the technology and
its availability to deliver through our
Building Solutions business positions
the Company as a digital market leader.
FY23
10
8
19
FY22
FY23
6
4
In addition, Community Solutions
is well placed to pursue Build Own
Operate/Transfer (BOOT) or Build to
Rent (BTR) opportunities in several
sectors, leveraging the ability to source
new villages at a competitive cost
supported by the Building Solutions
business and Fleetwood’s balance
sheet.
0
2
35
30
25
20
15
10
5
0
OUTLOOK AND FORWARD
STRATEGY
The outlook for Community Solutions
is buoyant with the strong prospect
that Western Australia’s North-West
will see significant future development
of new projects in the oil and gas,
fertiliser, and green energy sectors.
Securing of existing demand from
current customers places Fleetwood in
a strong position for the medium term.
The most significant new project
during the year was the $A6.0b
Perdaman Urea Project which achieved
financial close in April 2023 and will see
the creation of approximately 2,000
construction and 200 permanent jobs
in the Karratha region.
A growing number of low-carbon
economy projects are currently under
consideration in the North-West of
Western Australia. The requirement for
communities to house and facilitate
these projects is a significant medium-
term opportunity for Community
Solutions.
Community Solutions
REVENUE
EBITA
$33.7M
$31.7M
35
30
25
20
15
10
5
0
$10.2M
$8.3M
12
10
8
6
4
2
0
FY23
FY22
FY23
FY22
Annual Report | FY2023 R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
RV Solutions
20
RV Solutions saw reduced
consumer discretionary
demand in the fourth
quarter on rising interest
rates. This resulted in
lower revenue and EBITA
in the second half of the
year. The first half of the
year saw the business
continue its positive
revenue performance
driven by the ongoing
strength in domestic
tourism, albeit with
ongoing global supply
challenges.
The original equipment manufacturer
(OEM) segment experienced solid
trading conditions during the year
as many manufacturers worked
through historic customer orders.
The aftermarket segment softened
noticeably in the fourth quarter of
the year. Whilst underlying consumer
demand fell, the business also saw
aftermarket customers de-stocking
into year end.
Strong management of increased raw
material costs allowed gross margins
to be largely maintained. The business
was also able to pass through price
increases to key customers during the
period.
Wage inflation and significant
increases in property costs saw
operating costs increase by 14%
compared to FY22 which translated to
lower EBITA margins.
Fleetwood Australia R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
OUTLOOK AND FORWARD
STRATEGY
The medium-term outlook for
RV Solutions remains solid. While
international travel has resumed, the
forward order book for manufacturers
has resettled at historic levels.
100
80
60
The early part of FY24 has also
seen some signs of re-stocking by
aftermarket customers.
40
20
0
The business will remain in a strong
position through exposure to the
locally built RV market via the parts
and accessories business Camec,
and to overseas imports through the
services business Northern RV. The
boom in caravan sales during the past
two years will likely continue to deliver
demand for our aftermarket service
and renovation offering.
Continued tight management of price
and input costs is expected to support
margins.
RV Solutions
REVENUE
$80.6M
$81.2M
100
80
60
40
20
0
21
FY22
FY23
100
New product development is a major
focus of the business. The new invictus
premium door has been launched in
the market while aluminium wall frames
FY22
and new sandwich panel wall, roof
and floor products are currently under
trial with multiple customers. Several
exciting new imported products and
range upgrades are also coming to
market this year.
FY23
60
80
The increase in second-hand van sales
provides opportunities for combining
our products and the promotion
of renovations through our service
offering.
40
20
0
Challenges remain, primarily around
raw material supply and price, freight
costs as well as access to and the
price of skilled labour. The potential
impact of recent interest rate rises,
fuel increases and the impact on
discretionary spending is being closely
monitored.
EBITA
10
8
6
4
2
0
$9.8M
$6.9M
FY23
FY22
FY23
FY22
Annual Report | FY2023 R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Sustainability
22
The Company has
committed to adopting
a reporting framework
under the guidance
provided by the Taskforce
on Climate-Related
Financial Disclosure
(TCFD). The TCFD
guidelines establish a set
of recommendations for
climate related disclosure
that Fleetwood will
report on in its initial
Sustainability Report.
The Sustainability Report will address
the alignment of Fleetwood’s values
and operations with the seventeen (17)
United Nations Sustainable evelopment
Goals (SDGs) and be guided by the
relevant GRI Sustainability Reporting
Standards (GRI Standards) to report on
performance.
Prior to the release of the Sustainability
Report, Fleetwood is already taking
steps to create a positive shift in
the sustainability of the Company’s
operations. The steps already taken or
underway are summarised in the table
on the following page.
Jimmy’s Pavilion
Fleetwood was contracted to deliver
a state of the art wellbeing sanctuary
to accommodate marginalised,
disengaged and disadvantaged
young people on the Mornington
Peninsula (Victoria) by providing
a safe place for clients to connect
with trained, qualified staff and
volunteers, as well as peers.
Designed by CO-OP studios and
constructed by Fleetwood, Jimmy’s
Wellbeing Sanctuary was procured
through a local charity known as
Jimmy’s Foundation with help of the
YMCA Southern Peninsula.
The building accommodates all
physical abilities and has been
designed to achieve maximum
energy efficiency and environmental
sustainability.
Fleetwood Australia R E V I E W O F O P E R A T I O N S ( C O N T ’ D )
Sustainability
ENVIRONMENTAL
Reduction in waste to landfill from Building Solutions factories over FY23
Reduction in Energy consumption from Building Solutions factories over FY23
Environmental Breaches or Fines
Development of internal compliance requirements to report under the Taskforce
for Climate-Related Financial Disclosure (TCFD)
Proportion of property, infrastructure, or other assets in an area subject to extreme
weather, heat stress, or water stress
Proportion of buildings delivered certified to a third party, multi-attribute green building standard
23
6.9%
13%
Nil
Underway
Underway
TBD
SOCIAL
Company Vision & Values
Gender diversity targets for management and blue-collar workforce
Reflect Reconciliation Action Plan finalised
Company-wide Harmony Day, National Reconciliation Week, International Women’s Day celebrations
Active Diversity and Inclusion committee
Active Women at Fleetwood Forum
Annual Fleetwood Connect Conference (top 50 Leaders)
Community engagement initiatives
Fleetwood Challenge Cup
Fundraising and community support activities
Psychological Safety Strategy
Mental health initiatives – EAP access, R U Ok Day participation
Total Recordable Injury Frequency Rate (per million hours - group)
FY 23 Total Recordable Injury Frequency Rate reduction
Lost Time Injury Frequency Rate (per million hours - group)
FY23 Lost Time Injury Frequency Rate reduction
Safety Prosecutions or Fines
Fatalities
Average Total Workforce FY23
Direct Employees - Female Participation
Number of Female Managers
Number of Apprentices
Employees Who Returned to Work Post Parental Leave
Company Paid Parental Leave Policy
Company Domestic Violence Policy
GOVERNANCE
Board Members – Female Participation
Announcements Made to the ASX and no Breaches of Continuous Disclosure
Board Member Attendance at Board Meetings
Modern Slavery Statement
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
29.73
33%
2.67
59%
Nil
Nil
642
19%
27%
32
99%
✔
✔
20%
23
99%
✔
Annual Report | FY2023 Financial Report
FY23
For the year ended 30 June 2023
24
Fleetwood Australia Contents
Directors’ Report
Risk Management
The Remuneration Committee Chairman’s Letter Regarding The Remuneration Report
Remuneration Report
Directors’ Declaration
Auditor’s Independence Declaration
Consolidated Statement Of Profit Or Loss And Other Comprehensive Income
Consolidated Statement Of Financial Position
Consolidated Statement Of Changes In Equity
Consolidated Statement Of Cash Flows
Notes To The Consolidated Financial Statements
Independent Auditor’s Report
ASX Additional Information
25
26
27
31
32
41
42
43
44
45
46
47
85
91
Annual Report | FY2023
D I R E C T O R S ’ R E P O R T
DIRECTORS’ REPORT
The information appearing on pages 2 to 23 forms part of the Directors’ report for the financial year ended 30 June 2023
and is to be read in conjunction with the following information:
DIRECTORS AND OFFICERS
The Board is currently comprised of five Non-Executive Directors and one Managing Director. The Directors who are in
office at the date of this Report are:
John Klepec Non-Executive Director, Board Chair
Bruce Nicholson Managing Director, Chief Executive Officer
Jeff Dowling Non-Executive Director, Chair of Audit Committee
26
Adrienne Parker Non-Executive Director, Chair of Nominations and Diversity Committee
Mark Southey
Non-Executive Director, Chair of Remuneration Committee
Martin Monro
Non-Executive Director, Chair of Risk Committee
BOARD OF DIRECTORS, AUDIT AND RISK COMMITTEE, REMUNERATION AND NOMINATION AND
DIVERSITY COMMITTEE MEETINGS
During the financial year, 12 Board meetings, 2 Audit Committee, 4 Risk Committee meetings, 2 Remuneration Committee
meetings and 2 Nomination and Diversity Committee meetings were held. The number of meetings attended by each
Director of the Company during the financial year are as follows:
Board
Audit Committee
Risk Committee
Remuneration
Committee
Nominations
and Diversity
Committee
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
John Klepec
Bruce Nicholson
Jeff Dowling
Adrienne Parker
Mark Southey
Martin Monro
12
12
12
12
12
12
12
12
12
11
12
12
2
0
2
2
2
2
2
0
2
2
2
2
4
4
4
4
4
4
4
4
4
3
4
4
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
DIRECTORS’ SHAREHOLDINGS
The relevant interest of each Director in Company shares and options at the date of this Report, as notified by the
Directors to the ASX in accordance with s205G(1) of the Corporations Act (Cth) 2001 are as follows:
John Klepec
Bruce Nicholson
Jeff Dowling
Adrienne Parker
Mark Southey
Martin Monro
NO. OF SHARES
40,000
95,000
50,000
14,990
15,000
10,000
INDEMNIFICATION OF DIRECTORS, OFFICERS AND AUDITORS
The Company has executed agreements with current and former Directors and Officers in respect of indemnity, access to
documents and insurance.
Subject to the Corporations Act 2001 (Cth) and Fleetwood’s Constitution, Directors and Officers are indemnified against
all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as
Director or Officer of the Company, except where the liability arises out of conduct involving a lack of good faith.
The Company provides D&O insurance cover to current and former Directors and Officers. The contract of insurance
prohibits disclosure of the nature of the cover, however insurance premiums paid during the financial year were $312,133
(2022: $312,880).
The access deed provides, among other things, current and former Directors and Officers with access to certain Company
information, during their tenure and for a period of seven years after they cease to be a Director or Officer.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an auditor of the Company or any related body corporate against liability incurred as
an auditor.
Fleetwood Australia
D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
PRINCIPAL ACTIVITIES
The principal activities of the Company during the financial year were:
+ design, construction, manufacture, and sale of manufactured accommodation;
+ construction and operation of accommodation villages; and
+ manufacture, installation, repair and distribution of recreational vehicle parts and accessories.
REVIEW OF OPERATIONS
A review of operations for the year is contained in the Chief Executive Officer’s Review on page 13 of this report.
FINANCIAL POSITION
A summary of the financial position of the Company is disclosed on page 44 and in the Chief Executive Officer’s Review.
27
SHARE OPTIONS, UNITS AND PERFORMANCE RIGHTS
No share units or options were issued or granted during the 2023 fiscal year or subsequent to year end.
As at 30 June 2023 there are Performance Rights outstanding 2,112,918 (2022: 2,392,073).
Details of performance rights granted to Key Management Personnel during the year are set out in the Remuneration
Report.
EVENT SUBSEQUENT TO BALANCE DATE
On 30 August 2023, the Directors declared a final dividend of 2.1 cents per share with respect to the year ended
30 June 2023.
No adjusting or significant non-adjusting events occurred between the reporting date and the date of authorisation of this
report.
FUTURE DEVELOPMENTS
The Company will continue to pursue increasing both profitability and market share in its major business sectors.
Further information as to likely developments and expected future results are disclosed in the Review of Operations.
DIVIDENDS
A total dividend of 2.1 cents per share was declared with respect to the year ended 30 June 2023.
CORPORATE GOVERNANCE AND RISK MANAGEMENT
Corporate governance and risk management are fundamental to all aspects of Fleetwood’s activities. Set out below is the
Company’s response to the corporate governance principles, followed by a review of the key risks.
Corporate Governance Principles and Recommendations
The Australian Securities Exchange (ASX) Corporate Governance Council sets out best practice recommendations,
including corporate governance practices and suggested disclosures, through the ASX Corporate Governance Principles
and Recommendations (the ASX Recommendations). ASX Listing Rule 4.10.3 requires companies to disclose the extent to
which they have complied with the ASX Recommendations and to give reasons for not following them.
The Fleetwood Board endorses the ASX Recommendations which have been adopted by the Company for the year
ended 30 June 2023, unless otherwise indicated. Please see the Company’s Appendix 4G and accompanying Corporate
Governance Statement which is released on the ASX platform annually for further information. The Company also has
a Corporate Governance section on its website: www.fleetwood.com.au which includes the relevant documentation
suggested for disclosure by the ASX Recommendations.
Risk Management
Risk is an inherent part of Fleetwood’s business and management of those risks is therefore critical to the Company’s
performance and financial strength. There are a number of risk factors both specific to the Company and of a general
nature which may impact the future operating and financial performance of the Group. The performance of the Company
is also influenced by a variety of different general economic and business conditions, including interest rates, exchange
rates, access to debt and capital markets, and government policies.
Material risks that could adversely affect the Company have been identified below along with commentary on the risk and
mitigating actions. The risks are not listed in order of significance nor are they all encompassing, rather they reflect the
most significant risks identified at an enterprise-wide or consolidated level.
Workplace Health and Safety
Fleetwood recognises its moral and legal responsibilities to provide a safe and healthy work environment for all
employees, contractors and the public. External to our production facilities, there is a risk of transport incidents from the
movement of modular buildings to sites and in meeting compliance to Chain of Responsibility requirements.
Any failure to adequately address these responsibilities could result in serious injury and/or death and negatively impact
the Company’s reputation and profitability including via the imposition of significant fines, the temporary shutdown of
operations/sites, or the inability to win new work due to reputational damage.
Annual Report | FY2023 D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
Mitigation actions include an ongoing work program to embed a safety culture across the business through training and
leadership. The Group maintains a high standard of safety systems, policies and procedures for all businesses which are
overseen by health and safety specialists at all levels of the organisation.
Market Risk
Fleetwood’s financial performance is influenced by the level of activity in the building, government, education, housing
and resources industries which is impacted by a number of factors outside the control of the company.
These factors include:
+ Demand from government customers for infrastructure spend, in particular education related spending from state
government customers.
+ Demand for affordable housing from both government and non-government customers.
28
+ Demand from mining customers, which may be influenced by factors including (but not limited to) prices of commodities,
exchange rates, the competitiveness of Australian mining operations, macro-economic cycles (in particular capital
expenditure or delays in natural resources projects).
+ The company’s RV Solutions business is exposed to the risk of a downturn in discretionary spending across the economy.
Further, Fleetwood operates in a competitive market, and it is difficult to predict whether new contracts will be awarded
due to multiple factors influencing how clients evaluate potential service providers.
Mitigation actions include the development of a diversified customer base across the building sector and development of
new products in the Recreational Vehicle (RV) sector.
Loss of Contracts / Reduction in Contract Scope
Fleetwood’s revenues are subject to underlying contracts with varying terms. There is a risk that contracts may be
cancelled (whether for convenience or with cause) or may not be renewed if clients decide to reduce their levels of
spending, potentially reducing revenue.
Contract operations are also vulnerable to the risk of interruption as a result of a variety of factors, which may be beyond
the company’s control, including prolonged heavy rainfall, industrial relations issues and scarcity of materials.
Interruptions to existing operations or delays in commencing contracts may result in lost revenue and, in some
circumstances, additional costs, which may have a material adverse effect on Fleetwood’s business, results of operations
and financial condition.
If a client fails to obtain sufficient funding to successfully develop its project or otherwise fails to meet its working capital
or debt covenant requirements, the client may seek to scale back or cancel its contract, which may have a material
adverse impact on financial performance.
Mitigation actions include working closely with our clients to ensure we understand the issues faced by them and to
identify opportunities where we can assist in ensuring the impact of the types of issues identified above are minimised.
Delivery Performance
Fleetwood’s execution and delivery of projects involves judgement regarding the planning, development and management
of operating facilities, resources and equipment. As a result, operations, cash flows and liquidity could be affected if
the resources or time needed to complete a project are miscalculated, if it fails to meet contractual obligations, or if it
encounters delays or unspecified conditions.
The majority of Building Solutions contracts are ‘lump sum’ in nature and to the extent costs exceed the contracted price,
there is a risk these amounts may not be recovered. From time-to-time variations to the planned scope occurs or issues
arise during the construction phase of a project not anticipated at the time of bid. This may give rise to claims under the
contract with the clients in the ordinary course of business. Where such claims are not resolved in the ordinary course of
business, they may enter formal dispute and the outcome upon resolution of these claims may be materially different to
the position taken by the company.
Fleetwood is also exposed to input costs through its operations, such as the cost of steel and building materials and
personnel. To the extent that these costs cannot be passed on to customers in a timely manner, or at all, financial
performance could be adversely affected. If Fleetwood materially underestimates the cost of providing services,
equipment or plant, there is a risk of a negative impact on financial performance.
Mitigation actions include the development of robust tender and contract review processes which have been structured
to identify risk and develop specific mitigation plans to address issues as they arise. A number of longer-term agreements
include a rise and fall clause which mitigates changes in input costs.
Access to Resources
Growth and profitability may be limited by loss of key management or operational personnel or due to being unable
to recruit and retain skilled and experienced staff. Recent measures, imposed at a State and Federal level due to the
COVID-19 pandemic, have restricted the available labour pool. In addition, Fleetwood is operating in an environment
where competition for people has increased significantly, driven by both high construction activity and strong commodity
demand. This restriction on available labour combined with the competitive labour market may lead to higher staff
turnover, increased labour costs and lower productivity.
Further, the company is reliant on third party materials to perform contract obligations which may not be available or
may be subject to pricing premiums in order to secure. Fleetwood’s supply chain is reliant on overseas sourcing and
normal logistical support timeframes, without which, it could experience delays to project timeframes which lead to
increased costs.
Fleetwood Australia D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
Mitigation actions include rise and fall provisions in contracts, the maintenance of a sub-contracting base to manage
demand variability and pricing of contracts includes estimates of the likely costs required to attract the right resources
to perform the contract. Fleetwood has also commenced the process to centralise procurement to improve certainty of
timely supply of critical materials.
Design Risk
Fleetwood performs several ‘design and construct’ contracts annually in the building sector. Such projects and contracts
place an obligation on the company to design ‘fit for purpose’ buildings and to give warranties to such effect. Any failure
in design may see Fleetwood exposed to contractual claims for breach of ‘fit for purpose’ or design obligations and, from
time-to-time, to performance and liquidated damages.
The potential for building rectification is always present. Fleetwood may have exposure to rectification of any failures
which may result in a call on performance guarantees provided to clients, or in some cases, may exceed the quantum of
any such performance guarantees.
Mitigation actions include maintaining professional indemnity insurance and also engaging appropriate third party design
consultants for complex or specialist design expertise.
29
Environmental, Social and Governance (ESG) Responsibility
Stakeholders have expectations for the company on a range of important environmental, social and governance matters.
A failure to acknowledge and adequately address these expectations could negatively impact Fleetwood’s reputation and
profitability. There is also a risk that investing in ESG programs and strategies to meet stakeholder expectations increases
Fleetwood’s cost structure.
Fleetwood is committed to approaching all aspects of our business operations in a sustainable and responsible manner to
deliver lasting value to our stakeholders. We will do this by reducing our environmental footprint, making a positive social
impact, and applying ethical business and governance practices to everything we do.
Climate Related Risks
Responding to the challenges presented by climate risk is critical to our ability to operate sustainably.
Community Solutions has operations in recognised cyclone regions and is exposed to material damage from wind,
rain and flood.
Mitigation actions include financial and practical measures ensuring climate related risks and opportunities form part of
our strategic decision-making process and updating our risk management process to include climate related risks and
opportunities.
Regulatory Compliance
Fleetwood must meet regulatory requirements that are subject to continual review, including inspection by regulatory
authorities. Failure to continuously comply with regulatory requirements or failure to take satisfactory corrective action in
response to adverse inspection, could result in enforcement actions.
The company operates in a regulated environment with the potential for significant penalties for non-compliance with
applicable laws and regulations. Future growth prospects are reliant on the ability to market services and any regulatory
change, event or enforcement action which would restrict those activities, could have a material impact on growth
and future financial performance. Amendments to current law and regulations governing operations or more stringent
implementation of laws and regulations could have an adverse impact on Fleetwood, including increases in expenses,
capital expenditure and costs. The impact of future regulatory and legislative change upon the business cannot be
predicted.
Fleetwood is also dependent on various technical and financial accreditations to operate the business. These include
safety accreditations, quality assurance standards, technical accreditations, licencing and various financial accreditations.
Any failure to maintain or comply with accreditation can impact the eligibility of Fleetwood to participate in certain
projects and sectors.
Mitigation actions include the monitoring of regulatory and legislative changes that impact the organisation and ensuring
the company is up to date with its compliance obligations.
Global Pandemic
The Group is exposed both directly and indirectly to the risks associated with pandemics, such as COVID-19, which has
impacted certain underlying markets, labour availability, supply chain, and negatively impacted macroeconomic conditions
and commodity prices. Key operational risks to the Group include the potential closure of locations such as sites, factories
and offices, disruption to the supply chain, inability to access appropriately skilled labour and government mandated
lockdowns. These risks may impact client demand and the ability to schedule and complete the work required to deliver
our contracted works on a timely basis. This could result in additional costs being incurred by the company.
Mitigation actions include ensuring our businesses have up to date Business Continuity Plans, flexible work structures
which include IT infrastructure to support remote work arrangements, the maintenance of a sub-contracting base to
manage demand variability and pricing of contracts includes estimates of the likely costs required to attract the right
resources to perform the contract. Fleetwood has also commenced the process to centralise procurement to improve
certainty of timely supply of critical materials.
There is a risk that a material outbreak related to the COVID-19 virus may impact operations through both reductions in
revenue and increases in costs, which could result in the carrying values of certain assets being overstated.
Annual Report | FY2023 D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
Cyber Attack
Fleetwood’s information technology infrastructure is exposed to the potential for various forms of cyber-attack. This risk
has increased with the need to create flexible work structures which include IT infrastructure to support remote work
arrangements.
Mitigation actions include managing our information technology assets to the Australian Cyber Security Centre cyber
security principles. This is a comprehensive set of guidelines set around four key activities, govern, protect, detect and
respond.
RESOLUTION OF DIRECTORS
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
30
On behalf of the directors
J Klepec
Non-Executive Chairman
30 August 2023
Perth
Fleetwood Australia
D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
REMUNERATION COMMITTEE CHAIRMAN’S LETTER
REGARDING THE REMUNERATION REPORT
Dear Shareholders and readers of this report,
We are pleased to present Fleetwood’s Remuneration report for the year ended 30 June 2023.
Fleetwood’s remuneration framework is designed to align management remuneration with shareholder returns, the
principles of which are outlined in the remuneration principles section of this report.
I am pleased to be able to report that considerable progress has been made on the restructuring and future positioning
of your Company. This transformation of the Company has been the result of significant commitment and hard work by
Fleetwood employees across the business.
Details of the remuneration framework applying to the leadership team are transparently and comprehensively disclosed
in this report.
31
Our objective is to implement remuneration policies that reward value creation and deliver sustainable value for Fleetwood
shareholders. We believe that if investors and their advisers carefully review our forward plans they will endorse the
effectiveness of the plans implemented thus far and those which we are proposing.
With respect to the key remuneration issues and outcomes in the 2023 financial year:
+ The STI structure has not changed in the current year.
+ The financial and non-financial component of the STI were not met in FY23. There have been no changes to the annual
incentive policy other than to develop challenging and focused objectives for the management team to deliver through
the past 12 months (FY23).
+ LTI Performance Right awards were made to key management personnel as approved by shareholders at the 2018 Annual
General Meeting.
+ No Performance Rights vested during the year.
With respect to renumeration going forward:
+ Remuneration increases will continue to be constrained but must be entertained in order to compete for talent in what is
a highly competitive building and infrastructure market.
+ New equity awards are being considered on the same terms as approved by shareholders at the 2018 AGM:
+ Awards with performance periods of three years;
+ 50% weighted to relative shareholder return, and
+ The balance equally weighted to earnings per share growth and return on capital employed.
+ The Company has taken on feedback around vesting criteria and has changed vesting conditions from absolute to
relative TSR and removed cliff faced vesting and replaced it with vesting on a graduated basis.
The mandate of the Remuneration Committee remains unchanged. We ask shareholders to support us as we continue to
develop and implement schemes which we consider to be in their best interest whilst recognising the particular challenges
of the markets in which we work and the core objectives which have been set for those people appointed to manage our
businesses.
M Southey
Non-Executive Director
Remuneration Committee Chair
Annual Report | FY2023
D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
REMUNERATION REPORT (AUDITED)
The Directors of Fleetwood Ltd (Fleetwood and the Company) present the Remuneration Report for Non-Executive
Directors, Executive Director and other Key Management Personnel (KMP), prepared in accordance with the Corporations
Act 2001 (Cth) and the Corporations Regulations 2001 (Cth).
The Remuneration Report is set out under the following main headings:
1. Principles used to determine the nature and amount of remuneration
2. Details of remuneration
3. Service agreements
4. Short term incentive included in remuneration
32
5. Share-based remuneration
6. Other information
1. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
The principles of the Group’s executive remuneration strategy and supporting incentive programs and frameworks are:
+ to align rewards to business outcomes that deliver value to shareholders;
+ to drive a high performance culture by setting challenging objectives and rewarding high performing individuals; and
+ to ensure remuneration is competitive in the relevant employment marketplace to support the attraction, motivation and
retention of executive talent.
Fleetwood has structured a remuneration framework that is market competitive and aligned to the strategy of the Group.
The Board has established a Remuneration Committee, chaired by Independent Non-Executive Director Mark Southey,
which operates in accordance with its charter as approved by the Board. The Committee is responsible for recommending
and reviewing compensation arrangements for the Directors and the Executive Team.
The Committee has engaged independent remuneration consultants to provide necessary information to assist in the
discharge of its responsibilities (refer to the disclosures below in section 1.4).
The remuneration structure adopted by the Group consists of the following components:
+ fixed remuneration, being annual salary;
+ short term incentives, being cash bonuses; and
+ long term incentives, being share schemes.
The Remuneration Committee assess the appropriateness of the nature and amount of remuneration on a periodic basis
by reference to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit
from the retention of a high quality Board and Executive Team.
The payment of bonuses, share rights and other incentives are reviewed by the Remuneration Committee annually as part
of the review of executive remuneration and a recommendation is put to the Board for approval. All bonuses, shares and
incentives must be linked to pre-determined performance criteria and hurdles.
During the financial year the Remuneration Committee reviewed:
+ conditions of service and remuneration of the Directors and Executives;
+ remuneration policies of the Group;
+ proposals for new issues under, or changes to, the Company’s long and short term incentive plans;
+ succession plans for senior management; and
+ other related matters.
The remuneration components for each Executive are detailed below.
1.1 Total Fixed Remuneration (TFR)
TFR comprises salary and superannuation capped at the concessional contribution limit. Fixed remuneration is set with
reference to role, market and relevant experience and is reviewed annually or on promotion.
Executive TFR is set out in table 4.
1.2 Short Term Incentive (STI)
Each year Fleetwood undertakes a strategic planning process which results in a detailed 3 to 5 year strategy leading to
1-year Key Performance Indicators. Fleetwood’s performance measures include the use of annual performance objectives,
metrics, and continuing emphasis on Company values.
The performance measures are set annually after consultation with the Directors and Executives and are specifically
tailored to the areas where each Executive has a level of control. The measures target areas the Board believes hold the
greatest potential for expansion and profit and cover financial and non-financial measures.
Fleetwood Australia D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
The performance measures for the STI comprise a combination of individual and company specific performance targets.
The weighting is 50% non-financial and 50% financial. The STI Plan contains the following qualifying gates:
1. The Group has been profitable for the year; and
2. Budget EBITA (relevant to the Executive) has been achieved for the financial year.
In setting the performance measures for the STI, the Remuneration Committee is conscious to ensure that all targets are
measurable and provide a challenging but meaningful incentive to participants.
Non-financial metrics are based on performance against specific individual key performance targets and include
satisfactory lead and lag safety performance in all cases. Individual performance targets are derived from position
descriptions, key responsibilities, key competencies and period specific objectives which are aligned with key business
strategies identified annually during the business planning process and following the Board’s approval of budgets.
Financial performance targets begin from Board approved budgeted EBITA levels and are for parts of the business
relevant to each Executive.
33
The maximum amount of these awards is based on a percentage of the Executive’s TFR (which is set out in table 4). The
actual STI outcomes for the year are detailed in tables 3 and 5 below.
1.3 Long Term Incentive (LTI)
Long-term incentives in the form of performance rights received by Executives are determined in accordance with the
provisions of the Executive Long Term Incentive Plan (LTI Plan), which was approved by shareholders at the 2018 Annual
General Meeting (AGM). The objective of this plan is to retain and reward executives and to align their long-term interests
with those of shareholders.
50% of the performance rights grant are performance tested against total shareholder return (TSR), 25% of the grant are
tested against earnings per share (EPS) performance and the remaining 25% of the grant are tested against Return on
Capital Employed (ROCE) performance over a 3-year period from a start date (Start Date) to a test date (End Date).
The FY22 and FY23 issue TSR tranche (50% of the grant) will vest to 50% at the TSR equal to the ASX small industrials
index and to 100% at the 75th percentile of that index. Performance will be tested each year and averaged over the three
testing years.
The FY22 and FY23 issue EPS issue (25% of the grant) vests to 50% at a 7.5% compound annual growth and to 100% at a
15% annual growth rate. Performance will be tested each year and averaged over the three testing years. Given EPS was
negative in FY22, the Board have set a base EPS for the FY23 issue at 12.0cps from which compound growth must occur
for this tranche to vest.
The FY22 and FY23 ROCE performance condition (25% of the grant) will be met if the Company’s ROCE is at or above
15% in the financial year. Performance will be tested each year and averaged over the three testing years.
The maximum amount of LTI awards is based on a percentage of the Executive’s TFR (which is set out in table 4).
Up until the implementation of the LTI Plan at the 2018 AGM, Executives participated in the Executive Share Unit Plan.
The share units granted pursuant to the plan are noted and discussed in the 2018 Remuneration Report. These units vest
based on a minimum 15% CAGR in TSR. The plan will remain in effect until all granted units have been exercised, forfeited
or expired. No share units have been granted or issued since the introduction of the LTI Plan in 2018. Further details on the
plan are contained in section 5.
1.4 Use of remuneration consultants
Fleetwood’s Remuneration Committee took advice from external consultants regarding appropriate benchmarks Executive
TFR.
Mercer Consulting provided industry wide banding ranges for Executive remuneration and was paid $9,009 (excluding
GST) for these services.
Mercer Consulting has confirmed that the above ranges have been provided free from undue influence by members of the
Group’s KMP.
The consultant was engaged by way of subscription to the Resources Construction and Engineering Remuneration Review
2023.
1.5 Voting and comments made at the Company’s last Annual General Meeting
Fleetwood received 85.6% of ‘yes’ votes on its Remuneration Report for the financial year ended 30 June 2022. The
Company received no specific feedback on its Remuneration Report at the 2022 AGM.
Annual Report | FY2023 D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
1.6 Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following
indices in respect of the current financial year and the previous four financial years:
Table 1: Five-year Snapshot of Continuing Operations
34
Share price at start of year ($)
Share price at end of year ($)
Dividend per share (cents)
Diluted earnings (loss) per share
(cents, NPATA basis)
$ Million
Revenue and other income
Underlying profit before interest,
tax and amortisation (EBITA)
2019
2020
2.27
1.70
-
17.8
1.70
1.60
12.0
15.8
2021
1.60
2.36
16.5
18.1
2022
2.36
1.30
2.0
(48.9)
2023
1.30
2.25
-
2.2
315.3
25.3
329.9
22.3
360.1
26.3
446.1
(12.3)
410.6
4.2
2. DETAILS OF REMUNERATION
Details of the nature and amount of each element of the remuneration of each Director and Executive of Fleetwood are
shown in the table below:
Table 2: Non-Executive Directors Remuneration Summary
NON-
EXECUTIVE
DIRECTORS
Short-term employee benefits
Post
employ-
ment
Other long term
benefits
Share based
payments
Total
Salary & fees
Bonus
Non-
monetary
Super-
annuation
Annual
Leave
Long
service
Leave
Shares
units
Performance
rights
$
$
$
$
$
$
$
$
$
John Klepec
Chairman
Non-Executive Director, Board Chair
2023
2022
162,896
163,636
Jeff Dowling
Non-Executive Director
2023
2022
105,000
100,227
Adrienne Parker
Non-Executive Director
2023
2022
95,023
95,454
Mark Southey
Non-Executive Director
2023
2022
95,023
95,454
Martin Monro
Non-Executive Director
2023
2022
2023 Total
2022 Total
Table 2 Notes:
95,023
95,454
552,965
550,225
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,104
16,364
-
4,773
9,977
9,546
9,977
9,546
9,977
9,546
47,035
49,775
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
180,000
180,000
105,000
105,000
105,000
105,000
105,000
105,000
105,000
105,000
600,000
600,000
The current maximum aggregate fee pool for Non-Executive Directors is $600,000 per rule 15.15 of the Constitution of Fleetwood Limited. All Non-Executive
Director fees were $105,000 per annum except for the Chair, whose fees are $180,000. Non-Executive Directors receive a fixed fee for Board and Committee duties
and are not entitled to any performance related remuneration.
Fleetwood Australia Post
employ-
ment
Super-
ann-
uation
$
Other long term
benefits
Share based payments
Total
Annual
leave
Long
service
leave
Shares
Share
units
Perform-
ance
rights
$
$
$
$
$
$
D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
Table 3: Executive Director and Executives Remuneration Summary
EXECUTIVE
DIRECTORS
AND
OFFICERS
Short-term employee
benefits
Salary &
fees
Bonus
Non-
monetary
$
$
$
Bruce Nicholson1
Chief Executive Officer (Appointed 01/07/2021)
Managing Director (Appointed 01/08/2022)
2023
2022
622,520
600,000
-
-
Andrew Wackett2
Chief Financial Officer, Company Secretary
2023
2022
424,708
411,432
Elizabeth Maynard3
General Counsel, Company Secretary
2023
2022
341,902
273,682
Andrew McCormack4
General Manager – WHSE & HR
2023
2022
297,208
237,690
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,480
25,000
14,366
23,077
25,292
23,568
73,507
61,715
25,292
23,568
6,618
11,884
-
-
-
-
-
-
25,292
23,568
11,082
9,828
59,109
43,540
Jason Kunkler
Chief Operating Officer - Building Solutions (Resigned 10/05/2022)
2023
2022
-
476,809
-
-
-
-
-
23,567
Manuel Larre5
Chief Operating Officer - RV Solutions (Resigned 01/09/2022)
-
-
-
-
-
-
2023
2022
166,119
289,682
-
-
-
-
7,083
28,333
37,441
6,742
Dominic Letts6
Chief Operating Officer - Accommodation Solutions (Resigned 31/08/2022)
2023
2022
257,013
-
285,879
124,500
Tara Goldsworthy
Executive General Manager – Manufacturing
2023
2022
389,171
245,238
-
-
-
-
-
-
18,021
-
-
27,500
19,597
65,371
25,292
16,165
7,396
15,895
Tom Gleeson
Executive General Manager – Sales (Resigned 28/02/2023)
2023
2022
345,308
127,570
-
-
-
-
23,185
10,159
-
9,813
Giles Everest
Executive General Manager – WA (Appointed 01/08/2022)
2023
2022
286,374
-
-
-
-
-
25,292
11,215
-
-
David Bolton
Executive General Manager – Building Solutions (Appointed 18/07/2022)
2023
2022
355,714
-
-
-
-
-
25,292
18,373
-
-
Andrew Arapakis
Executive General Manager – RV Solutions (Appointed 01/03/2023)
2023
2022
108,371
50,000
-
-
2023 Total
3,594,408
50,000
2022 Total
2,947,982
124,500
-
-
-
-
16,629
8,702
-
-
244,150
151,259
201,428
189,250
59,109
115,653
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
101,545
765,911
221,209
869,286
35
(44,658)
478,849
42,851
539,566
(41,941)
331,871
32,897
342,031
(36,172)
356,519
28,359
342,985
-
-
-
500,376
(68,528)
104,674
36,073
398,272
(65,942)
209,092
34,712
557,559
8,261
430,120
-
-
-
277,298
368,493
147,542
6,752
329,633
-
-
7,943
407,322
-
-
-
-
183,702
-
(132,740)
3,966,186
396,101
3,974,914
Annual Report | FY2023 D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
Table 3 Notes:
1 Bruce Nicholson was appointed Managing Director effective from 1 August 2022. Bruce Nicholson was issued 85,837 performance rights on 1 July 2021 as a CEO
commencement incentive with a value of $192,275. The performance rights vested on 1 July 2022 and were converted to fully paid ordinary shares during the
period.
2 The performance rights issued for the 2020 & 2021 Plans lapsed unvested during the period. There was a net reversal of performance rights remuneration of
$44,658 for Andrew Wackett.
3 The performance rights issued for the 2020 & 2021 Plans lapsed unvested during the period. There was a net reversal of performance rights remuneration of
$41,941 for Elizabeth Maynard. Following a review and comparison of industry wide banding ranges for executive remuneration provided by Mercer Consulting and
strong executive performance, KMP Elizabeth Maynard received a TFR increase in the FY23. Refer to the Executive Service Agreement details in Table 4 below.
4 The performance rights issued for the 2020 & 2021 Plans lapsed unvested during the period. There was a net reversal of performance rights remuneration of
$36,172 for Andrew McCormack. Following a review and comparison of industry wide banding ranges for executive remuneration provided by Mercer Consulting
and strong executive performance, KMP Andrew McCormack received a TFR increase in the FY23. Refer to the Executive Service Agreement details in Table 4
below.
36
5 Manny Larre resigned during the period and the performance rights issued for the 2020, 2021 and 2022 Plans lapsed unvested during the period upon resignation.
There was a net reversal of performance rights remuneration of $68,528 for Manny Larre.
6 Dominic Letts resigned during the period and the performance rights issued for the 2020, 2021 and 2022 Plans lapsed unvested during the period upon
resignation. There was a net reversal of performance rights remuneration of $65,942 for Dominic Letts.
Included in salary and fees are amounts paid and payable during the reporting period. There are no post-employment
benefits other than superannuation. Executive contracts do not provide for any termination payments, other than the
payment of accrued leave entitlements. Other long-term benefits comprise annual leave entitlements and long service
leave entitlements payable to the Executive in the event of their termination.
STI outcomes are explained in detail in Table 5.
The amount included in remuneration as share-based payments are not related to or indicative of the benefits (if any) that
individual executives may ultimately realise should the equity instruments vest, which are subject to performance criteria.
3. SERVICE AGREEMENTS
The remuneration and other terms of employment for the Managing Director & CEO and other Executive KMP are covered
under individual employment contracts. All employment contracts are for unlimited duration and carry no termination
payments other than statutory entitlements. The Executive’s TFR is subject to annual review with no obligation on the
Company to make changes.
Each Executive KMP employment contract includes provisions requiring the Executive to maintain the confidentiality
of Company information, provides for leave entitlements, as a minimum, in accordance with respective legislation and
restraint of trade provisions for a period after termination of employment.
Specific details relating to each Executive KMP are as follows:
Table 4: Executive Service Agreements
KEY MANAGEMENT PERSONNEL
Bruce Nicholson (Appointed 01/07/2021)
Andrew Wackett
Elizabeth Maynard
Andrew McCormack
Manuel Larre (Resigned 01/09/2022)
Dominic Letts (Resigned 31/08/2022)
Tara Goldsworthy
Tom Gleeson (Resigned 28/02/2023)
Giles Everest (Appointed 01/08/2022)
David Bolton (Appointed 18/07/2022)
Andrew Arapakis (Appointed 01/03/2023)
TFR
STIP %
LTIP %
NOTICE PERIOD
650,000
450,000
375,000
322,500
318,000
315,180
416,000
388,511
340,000
420,000
375,000
50%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
50%
50%
40%
40%
40%
40%
40%
40%
40%
40%
40%
6 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
The Remuneration Committee determines remuneration for all KMP listed under the guidelines contained in section 1 of
this Remuneration Report.
Fleetwood Australia D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
4. SHORT TERM INCENTIVE INCLUDED IN REMUNERATION
Details of the STI cash bonuses awarded as remuneration to each KMP, the percentage of the available bonus that
was paid in the financial year, and the percentage that was forfeited because the person did not meet the service and
performance criteria is set out below. No part of the bonus is payable in future years.
Table 5: STI summary
KEY MANAGEMENT PERSONNEL
Bruce Nicholson (Appointed 01/07/2021)
Andrew Wackett
Elizabeth Maynard
Andrew McCormack
Jason Kunkler (Resigned 10/05/2022)
Manuel Larre
Dominic Letts
Tara Goldsworthy
Tom Gleeson (Resigned 28/02/2023)
Giles Everest (Appointed 01/08/2022)
David Bolton (Appointed 18/07/2022)
INCLUDED IN
REMUNERATION
TOTAL
AVAILABLE
STI %
EARNED
%
FORFEITED %
-
-
-
-
-
-
-
-
-
-
-
50%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
37
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Andrew Arapakis (Appointed 01/03/2023)
$50,0001
Table 5 Notes
1 During the period Andrew Arapakis received a contractual commencement bonus of $50,000, which was not related to the STI criteria. The bonus is required to
be repaid if Mr Arapakis terminates his employment within 12 months of receiving the bonus.
A description of the STI criteria is detailed in section 1.2 of this report.
There were no other STI’s awarded to KMP in relation to the FY23 period.
5. SHARE-BASED REMUNERATION
Fleetwood currently has two share based long term incentive plans, one of which is no longer in use. These are
summarised below:
+ FY22-FY23: LTI Performance Rights Plan. Key terms discussed in section 1.3 of this report. A net reversal adjustment
of $132,739 was recorded in the FY23 accounts for this plan, due to the grants under the performance rights plan for
previous years, FY20 & FY21, which lapsed without vesting during the period. KMP holdings of share rights under this plan
are detailed in table 6.1.
+ FY15-FY18: Share Units Plan. No longer in use. The final grant date in relation to this plan was made on 20 December 2017
with a 5-year vesting period. An accounting expense of $18,052 was recorded in the FY21 accounts for this plan. KMP
holdings of share units under this plan are detailed in table 9.
Details of performance rights over ordinary shares in the Company that were granted as remuneration to each KMP are set
out in the table below. Non-Executive Directors are not entitled to participate in the LTI Share Rights Plan.
Annual Report | FY2023 D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
Table 6: FY22-FY23 LTI Performance Rights Plan summary
START
DATE
NO. AT
GRANT
DATE
VALUE AT
GRANT
DATE
NO. UNITS
VESTED
DURING THE
YEAR
KEY
MANAGEMENT
PERSONNEL
Bruce Nicholson
38
Andrew Wackett
Elizabeth Maynard
Andrew McCormack
Tara Goldsworthy
Giles Everest
David Bolton
Total
PLAN
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
01/07/21
134,120
01/07/22
222,603
01/07/21
01/07/22
01/07/21
74,678
154,110
49,785
01/07/22
102,740
01/07/21
01/07/22
01/07/21
42,918
88,356
-
196,754
340,182
109,553
146,959
73,035
97,973
62,961
84,256
-
01/07/22
113,973
108,685
01/07/21
01/07/22
01/07/21
-
-
93,151
88,829
-
-
01/07/22
109,289
104,504
01/07/21
301,501
442,303
FY23
01/07/22
884,522
971,388
VALUE OF
PERFOR-
MANCE
RIGHTS
INCLUDED
IN REMUN-
ERATION
34,721
66,823
19,333
11,170
12,888
7,447
11,111
6,404
-
8,261
-
6,752
-
7,943
78,053
VESTING
DATE
30/06/24
30/06/25
30/06/24
30/06/25
30/06/24
30/06/25
30/06/24
30/06/25
30/06/24
30/06/25
30/06/24
30/06/25
30/06/24
30/06/25
30/06/24
30/06/25
114,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5.1 Valuation assumptions for the FY22-FY23 LTI (Performance Rights Plan)
The estimation of the fair value of share-based payment awards requires judgement concerning the appropriate valuation
methodology. The choice of valuation methodology is determined by the structure of the awards, particularly the vesting
conditions.
A Monte-Carlo simulation valuation methodology was used to determine the value relative to TSR growth. The valuation
methodology used was chosen from those available to incorporate an appropriate amount of flexibility with respect to the
particular performance and vesting conditions of the award.
The value recognised in the period for each KMP has been recognised straight-line over the vesting term in line with
accounting standards. For those portions of the granted rights with non-market vesting conditions, values have been
estimated based on the number of units expected to vest.
Key inputs to the model are detailed below.
Table 7: Key inputs to FY22-FY23 LTI Valuation
PLAN
GRANT
DATE
START
DATE
EXPIRY
DATE
VESTING
TRANCHE
VOLA-
TILITY
DIVIDEND
YIELD
RISK FREE
INTEREST
RATE
SHARE
PRICE AT
GRANT
DATE
FAIR
VALUE AT
GRANT
DATE
2022
23/08/21
01/07/21
30/06/24
2023 – 1
22/10/22
01/07/22
30/06/25
2023 - 2
30/03/23
01/07/22
30/06/25
%
40.00
45.00
40.00
1
1
1
%
5.00
0.00
0.00
%
0.10
3.34
2.99
$
2.74
1.71
1.21
$
1.47
1.35
0.70
Fleetwood Australia
D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
6. OTHER INFORMATION
6.1 Performance rights held by KMP (FY22-23 LTI)
The number of performance rights to acquire shares in the Company held during the 2023 reporting period by each of the
KMP of the Group; including their related parties are set out below. No performance rights were held by the Non-Executive
Directors.
Table 8: Details of performance right holdings of KMP
PERFORMANCE RIGHTS
RIGHTS AT
BEGINNING
OF YEAR
GRANTED
AS
REMUNER-
ATION
VESTED
DURING
THE YEAR
FORFEITED
RIGHTS AT
END OF
YEAR
NO.
NO.
NO.
NO.
NO.
39
Bruce Nicholson
Chief Executive Officer (Appointed 01/07/2021)
Managing Director (Appointed 01/08/2022)
2023
2022
Andrew Wackett
2023
2022
Elizabeth Maynard
2023
2022
Andrew McCormack
2023
2022
Jason Kunkler (Resigned 10/06/2022)
2023
2022
Manuel Larre (Resigned 01/09/2022)
2023
2022
Dominic Letts (Resigned 31/08/2022)
2023
2022
Tara Goldsworthy
2023
2022
Giles Everest (Appointed 01/08/2022)
2023
2022
David Bolton (Appointed 18/07/2022)
2023
2022
2023 Total
2022 Total
134,120
222,603
-
134,120
161,098
164,275
154,110
74,678
121,390
136,113
102,740
49,785
104,646
117,339
88,356
42,918
-
-
109,877
76,395
133,111
-
149,256
54,592
128,088
143,624
-
-
-
-
-
-
-
52,532
113,973
-
93,151
-
109,589
-
782,453
884,522
820,484
485,020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
356,723
134,120
(86,420)
228,788
(77,855)
161,098
(71,605)
(64,508)
152,525
121,390
(61,728)
131,274
(55,611)
104,646
-
(186,272)
(133,111)
(70,737)
-
-
-
133,111
(128,088)
-
(68,068)
128,088
-
-
-
-
-
-
113,973
-
93,151
-
109,589
-
(480,952)
1,186,023
(523,051)
782,453
Annual Report | FY2023
D I R E C T O R S ’ R E P O R T ( C O N T ’ D )
R E M U N E R A T I O N R E P O R T ( A U D I T E D ) ( C O N T ’ D )
6.2 Share units held by KMP (FY15-FY18 LTI)
The number of share units to acquire shares in the Company held during the 2023 reporting period by each of the KMP of
the Group; including their related parties are set out below. No share units are held by the Directors.
Table 9: Details of share unit holdings of KMP
SHARE UNITS
UNITS AT
BEGIN-
NING OF
YEAR
GRANTED
AS REM.
FORF-
EITED
EXER-
CISED
UNITS AT
END OF
YEAR
VESTED
DURING
THE YEAR
VESTED
AT END
OF YEAR
NET
PROCEEDS
RECEIVED
ON
EXERCISE
EXECUTIVES
No.
No.
No.
No.
No.
No.
No.
40
Andrew Wackett
$
-
-
-
-
-
-
2023
2022
Andrew McCormack
2023
2022
110,000
110,000
20,000
20,000
Manuel Larre (resigned 01/09/2022)
2023
2022
155,000
155,000
Dominic Letts (resigned 31/08/2022)
2023
2022
2023 Total
2022 Total
73,200
73,200
358,200
358,200
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(155,000)
-
-
-
-
-
-
-
110,000
110,000
20,000
20,000
-
155,000
(40,000)
(33,200)
-
-
-
73,200
(195,000)
(33,200)
130,000
-
-
358,200
-
-
-
-
-
-
-
-
-
-
-
-
3,400
3,400
-
71,900
-
2,8991
46,800
3,400
122,100
-
2,899
-
1 Gross proceeds of $44,721 were received on exercise and sale of the shares associated with the share plan units. $41,822 was repaid to the Company in relation to
the loan balance associated with the plan and $2,899 was received by the KMP.
6.3 Loans to KMP (FY15-FY18 LTI)
Loans to KMP in connection with the FY15-FY18 LTI totalling $321,279 (2022: $1,010,633) were outstanding at the end
of the reporting period. The loan balance reduced during the period due to forfeitures and exercise of the share units
resulting in funds received of $41,822.
The value of shares in the Company held by the Share Trust exceeded the balance of loans outstanding at the end of the
reporting period. The loans are non-recourse, there is no fixed term, and no allowance for doubtful debts or impairment
loss has been recognised against them. The number of KMP included in the aggregate of loans is two.
6.4 Other transactions with KMP
Bruce Nicholson was appointed Chief Executive Officer effective from 1 July 2021. Bruce Nicholson was issued 85,837
performance rights on 1 July 2021 as a CEO commencement incentive with a value of $192,275. The Company’s share price
was $2.24 at the date of grant. The performance rights vested and converted to shares on 1 July 2022 on the condition
that the CEO was still employed by Fleetwood. Bruce Nicholson was subsequently appointed Managing Director effective
from 1 August 2022.
There were no other transactions with KMP during the period.
END OF AUDITED REMUNERATION REPORT
Fleetwood Australia
DIRECTORS’ DECLARATION
In the opinion of the directors of Fleetwood Limited:
a) The financial statements and notes set out on pages 43 to 84, are in accordance with the Corporations Act (Cth) 2001,
including:
i. Complying with Australian Accounting Standards and the Corporations Regulations 2001 (Cth); and
ii. Giving a true and fair view of the Company’s financial position as at 30 June 2023 and of its performance for the
financial year ended on that date; and
b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable; and
c) There are reasonable grounds to believe that the Company and the companies to which the ASIC Corporations (Wholly-
owned Companies) Instrument 2016/785 applies, as detailed in note 20 to the financial statements will, as a Group,
be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee.
41
The Directors’ draw attention to note 1 to the financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
The Directors have been given the declarations required by s.295A of the Corporations Act (Cth) 2001 from the Chief
Executive Officer and Chief Financial Officer.
Signed in accordance with a resolution of the Directors.
On behalf of the Directors
J Klepec
Non-Executive Chairman
30 August 2023
Perth
Annual Report | FY2023
AUDITOR’S INDEPENDENCE DECLARATION
For the year ended 30 June 2023
42
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Fleetwood Limited
As lead auditor for the audit of the financial report of Fleetwood Limited for the financial year ended
30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Fleetwood Limited and the entities it controlled during the financial
year.
Ernst & Young
R J Curtin
Partner
30 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Fleetwood Australia
Consolidated Statement of Profit or Loss
And other comprehensive income
For the year ended 30 June 2023
Continuing operations
Sales revenue
Other income
Materials used
Sub-contract costs
Employee benefits
Rent expense
Impairment of assets
Warranty and defects expense
Onerous contracts
Other expenses
Profit / (Loss) before interest, tax, depreciation and amortisation (EBITDA)
Depreciation
Profit / (Loss) before interest, tax and amortisation (EBITA)
Amortisation of contract intangible
Profit / (Loss) before interest and tax (EBIT)
Finance costs
Profit / (Loss) before income tax expense
Income tax benefit / (expense)
Profit / (Loss) from continuing operations
Loss from discontinued operation
Profit / (Loss) for the year
43
CONSOLIDATED
2023
$ '000
2022
$ '000
NOTE
2
409,335
445,143
1,231
(139,519)
(142,201)
(75,660)
(1,125)
-
(550)
-
(30,472)
21,039
(16,834)
4,205
-
4,205
(1,585)
2,620
(574)
2,046
-
961
(154,156)
(167,795)
(75,027)
(731)
(35,943)
(3,896)
(14,127)
(29,986)
(35,557)
(16,584)
(52,141)
(1,137)
(53,278)
(1,494)
(54,772)
7,887
(46,885)
(579)
3
17
15
15
3
13
3
4
7, 18
2,046
(47,464)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Net exchange difference - foreign controlled entities (net of tax)
8
-
(163)
Total comprehensive profit (loss) for the year
2,046
(47,627)
Earnings (loss) per share
Basic earnings (loss) per share
Continuing operations
Discontinued operations
Total
Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Total
To be read in conjunction with the accompanying notes
NOTE
CENTS
CENTS
2.2
-
2.2
2.2
-
2.2
(49.8)
(0.6)
(50.4)
(49.8)
(0.6)
(50.4)
7
7
Annual Report | FY2023
Consolidated Statement of Financial Position
As at 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
44
Other financial assets
Tax assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Tax liabilities
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
To be read in conjunction with the accompanying notes
NOTE
8
9
9
10
21
4
9
11
17
12
13
4
14
14
17
15
21
17
15
18
18
18
CONSOLIDATED
2023
$ ‘000
46,578
43,442
31,724
32,554
21
7,522
2022
$ ‘000
55,266
54,698
43,939
29,433
-
577
161,841
183,913
1,198
32,560
24,235
43,522
3,871
8,960
114,346
276,187
37,216
38,308
5,970
199
9,348
-
91,041
19,375
137
19,512
110,553
165,634
253,361
(1,499)
(86,228)
165,634
1,697
35,346
26,329
43,522
3,323
16,065
126,282
310,195
62,224
30,794
5,027
199
25,892
19
124,155
22,154
366
22,520
146,675
163,520
253,170
(1,192)
(88,458)
163,520
Fleetwood Australia
Consolidated Statement of Changes In Equity
For the year ended 30 June 2023
ISSUED
CAPITAL
SHARE
BASED
PAYMENT
RESERVE
SHARE
PLAN
RESERVE
FOREIGN
CURRENCY
TRANS-
LATION
RESERVE
RETAINED
EARNINGS
TOTAL
Consolidated
NOTE
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
(2,126)
260
(29,395)
222,465
Balance at 30 June 2021
253,726
Loss for the year
Share plan settlements
Exchange differences arising
on translation of foreign
operations
Total comprehensive profit
(loss) for the year
Dividends paid to shareholders
Share-based payments
Transfer from Issued Capital to
Share Based Payment Reserve
-
-
-
-
-
-
(556)
-
-
-
-
-
-
281
556
-
-
-
-
-
-
-
Balance at 30 June 2022
253,170
837
(2,126)
Profit for the year
Share plan settlements
Exchange differences arising
on translation of foreign
operations
Total comprehensive profit
(loss) for the year
Share-based payments
Issue of share capital
Other
18
18
18
-
-
-
-
191
-
-
-
-
-
(158)
(191)
-
-
42
-
42
-
-
-
-
-
(163)
(47,464)
(47,464)
-
-
-
(163)
(163)
(47,464)
(47,627)
45
-
-
-
97
-
-
-
-
-
-
-
(11,775)
(11,775)
176
-
457
-
(88,458)
163,520
2,046
2,046
-
-
42
-
2,046
2,088
191
-
(7)
33
-
(7)
Balance at 30 June 2023
253,361
488
(2,084)
97
(86,228)
165,634
To be read in conjunction with the accompanying notes
Annual Report | FY2023
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to customers and suppilers
Interest received
Income taxes paid
Finance costs paid
46
Net cash provided by operating activities
8
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from sale of non-current assets
Payment for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Project finance advance
Dividends paid
Share plan loan repayment
Repayment of lease liabilities
Net cash (used in) / provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on cash held in foreign currencies
CONSOLIDATED
2023
$ ‘000
2022
$ ‘000
NOTE
461,586
487,357
(454,497)
(464,094)
442
(462)
(1,585)
5,484
(6,126)
1,084
(1,692)
(6,734)
-
-
42
(7,480)
(7,438)
(8,688)
55,266
-
144
(6,661)
(1,494)
15,252
(9,027)
2,950
(926)
(7,003)
8,698
(11,775)
-
(7,473)
(10,550)
(2,301)
57,567
-
Cash and cash equivalents at the end of the financial year
8
46,578
55,266
To be read in conjunction with the accompanying notes
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
SUMMARY OF NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BUSINESS
PERFORMANCE
FINANCIAL
POSITION
FINANCING
CAPITAL
GROUP STRUCTURE
OTHER
2. SALES
REVENUE
8. CASH AND
CASH
EQUIVALENTS
16. FINANCING
ARRANGE-
MENTS
3. EXPENSES
9. TRADE
17. RIGHT-OF-
AND OTHER
RECEIVABLES
AND
CONTRACT
ASSETS
USE ASSETS
AND LEASE
LIABILITIES
4. TAX EXPENSE
10 INVENTORIES
5. SEGMENT
INFORMATION
11. PROPERTY,
PLANT AND
EQUIPMENT
7. EARNINGS PER
12. GOODWILL
SHARE
6. DIVIDEND
INFORMATION
18. EQUITY AND
RESERVES
20. DEED OF
CROSS
GUARANTEE
19. AUDITORS
REMUNER-
ATION
23. CONTROLLED
21. FINANCIAL
ENTITIES
RISK
MANAGE-
MENT
25. PARENT
ENTITY
DISCLOSURES
22. CONTINGENT
LIABILITIES
47
24. RELATED
PARTIES
26. SUBSE-
QUENT
EVENTS
13. INTANGIBLE
ASSETS
14. TRADE
AND OTHER
PAYABLES
AND
CONTRACT
LIABILITIES
15. PROVISIONS
1. ABOUT THIS REPORT
Fleetwood Limited (Fleetwood or the Company) is a for profit entity limited by shares, incorporated in Australia, whose
shares are publicly traded on the Australian Securities Exchange.
The consolidated financial statements for the year ended 30 June 2023 comprises the consolidated financial statements
of Fleetwood and its controlled entities (the Group).
The significant general policies which have been adopted in the preparation of this financial report are:
1.1 STATEMENT OF COMPLIANCE
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations
Act 2001 (Cth), Accounting Standards and Interpretations, and complies with other requirements of the law. Compliance
with Australian Accounting Standards ensures the consolidated financial statements and notes of the consolidated entity
comply with International Financial Reporting Standards.
The financial statements were authorised for issue by the Directors on 30 August 2023.
New and revised Standards and Interpretations adopted during the reporting period
The Company has adopted all new or amended Accounting Standards and Interpretations issued by the AASB that are
mandatory for the current reporting year. The adoption has not resulted in any material changes to the measurement
or disclosure of the balances and transactions reported in these financial statements. Any new or amended Accounting
Standards or Interpretations that are not yet mandatory have not been early adopted.
AASB 2022-1 Amendments to Australian Accounting Standards – Initial Application of AASB 17 and AASB 9 –
Comparative Information
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other
Amendments
AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
Impact of standards issued but not yet applied
There have been a number of standard amendments and interpretation that have recently been issued by the AASB but
are not yet effective for periods ended 30 June 2023. The Group has reviewed these standards and interpretations and
determined that none of these will materially affect the Group’s accounting policies or balances and transactions currently
reported in these financial statements.
Annual Report | FY2023
48
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
1. ABOUT THIS REPORT (CONT’D)
1.2 BASIS OF PREPARATION
The financial report has been prepared on the basis of historical costs, except for certain non-current assets and financial
instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Cost
is generally based on the fair values of the consideration given in exchange for assets. Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.
In estimating the fair value of an asset or a liability, the Company considers the characteristics of the asset or liability
market participants would take into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except
for share-based payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope
of AASB 16, and measurements that have some similarities to fair value but are not fair value, such as net realisable value
in AASB 102 or value in use in AASB 136. Accounting policies have been consistently applied and except where there are
changes in accounting policy, are consistent with those of the previous year. All amounts are presented in Australian
Dollars unless otherwise noted.
The Company has applied the relief available to it under ASIC Corporations (Rounding in Financial / Directors’ Reports)
Instrument 2016 / 191 and accordingly, amounts in the financial statements and directors’ report have been rounded to the
nearest $1,000, or in certain cases, the nearest dollar.
1.3 BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved when the Company has power over the investee, is exposed, or has rights,
to variable returns from its involvement with the investee, and has the ability to use its power to affect its returns. The
Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. All subsidiaries have a reporting date of 30 June.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the
voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The
Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an
investee are sufficient to give it power, including the size of the Company’s holding of voting rights relative to the size and
dispersion of holdings of the other vote holders, potential voting rights held by the Company, other vote holders or other
parties, rights arising from other contractual arrangements, and any additional facts and circumstances that indicate that
the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to
be made, including voting patterns at previous shareholders’ meetings. Income and expense of subsidiaries acquired or
disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income
from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income
of subsidiaries is attributed to the owners of the Company even if this results in the non-controlling interests having a
deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in
line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
When the Company loses control of a subsidiary, a gain or loss is recognised in the profit or loss and is calculated as the
difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related
cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts
previously recognised in other comprehensive income and accumulated in equity are accounted for as if the Company
had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as
specified by applicable Standards).
The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair
value on initial recognition for subsequent accounting under AASB 9 ‘Financial Instruments’ or, when applicable, the cost
on initial recognition of an investment in an associate.
1.4 TAX CONSOLIDATION
The Company and its wholly-owned Australian resident entities elected from 1 July 2003 to be taxed as a single entity.
Fleetwood Limited, as the head entity, and the subsidiaries in the tax consolidated group continue to account for their
own current and deferred tax amounts. The amounts are measured as if each entity continues to be a stand-alone
taxpayer in its own right. The current tax balances are then transferred to the head entity via intercompany balances. The
entities within the Company have entered a tax funding arrangement whereby each subsidiary will compensate the head
entity for the amount of tax payable that would be calculated as if the subsidiary was a tax paying entity.
The method used to calculate current and deferred tax amounts is summarised in note 4.
1.5 FOREIGN CURRENCY
Functional currency
The individual financial statements of each group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). The results and financial position of each group entity
are expressed in Australian Dollars (‘$’), which is the functional currency of the Company and the presentation currency
for the consolidated financial statements.
Fleetwood Australia 49
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
1. ABOUT THIS REPORT (CONT’D)
Transactions
Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the
transactions. Amounts receivable and payable in foreign currencies at balance date are translated at the rate of exchange
ruling on that date. Exchange differences relating to amounts payable and receivable in foreign currencies are brought to
account as exchange gains or losses in the statement of profit or loss in the financial year in which they arise.
Translation of controlled foreign operations
The assets and liabilities of foreign operations, including subsidiaries, are translated at the rates of exchange ruling at
balance date. Equity items are translated at historical rates. Exchange differences arising from translation are taken
directly to the foreign currency reserve until disposal or partial disposal of the operations. Income and expense items are
translated at the average exchange rates for the period. Exchange differences are recognised in other comprehensive
income and accumulated in equity.
1.6 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of accounting policies, management is required to make judgments, estimates and assumptions. The
estimates and associated assumptions are based on experience and other factors that are considered relevant. Actual
results may differ from these estimates.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end
of the reporting period, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
+ Accounting for construction contracts involves the continuous use of assessed estimates based on assumptions
consistent with project scope and schedule, contract and risk management processes. Contracts may span over more
than one accounting period. Estimates of forecast costs are regularly updated in accordance with the agreed work
scope and schedule under the contract. Forecasts are based on the cost expected to apply when the related activity
is undertaken. Contingencies are included in order to cover the risks in those forecasts. Forecasted costs are used to
determine revenue recognition over time as described in note 2. Revenues reflect the price agreed in the contract and
variations where they have been approved or if it is highly probable they will be approved and a significant revenue
reversal will not occur in the future. Claims are included in contract revenue only where negotiations have reached an
advanced stage such that it is probable that the client will accept the claim and recovery of the amount involved is
probable.
+ Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in use of the
cash-generating units to which these assets have been allocated except for where fair value less cost to sell has been
applied. The value in use and fair value less cost to dispose calculation requires the directors to estimate the future cash
flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value.
Details of goodwill and the subsequent testing for impairment are set out in note 12. Details of other intangible assets are
set out in note 13. Where the actual future cash flows are less than expected, a material impairment loss may arise.
+ The Company uses valuation techniques that include inputs that are not based on observable market data to estimate the
fair value of share rights and share units issued during the year. Refer to note 3.
+ Management estimates the net realisable values of inventories, taking into account the most reliable evidence available
at each reporting date. The future realisation of these inventories may be affected by future technology or other market-
driven changes that may reduce future selling price. The Company is generally pro-active in identifying and stopping
orders on slow moving or discontinued items such that these items are not carried at material amounts.
1.7 GENERAL INFORMATION
Fleetwood Limited is a public company listed on the Australian Securities Exchange (trading under the symbol ‘FWD’),
incorporated in Australia and operating in Australia and New Zealand.
The registered and business address of the Company is Level 2, 464 Hay Street, Subiaco, Western Australia. The
telephone number of the Company is (08) 9323 3300.
Annual Report | FY2023 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
2. SALES REVENUE
Continuing operations
Sales revenue
Recognised at a point in time:
RV Solutions
Total revenue recognised at a point in time
50
Recognised over time:
RV Solutions
Building Solutions
Community Solutions
Total revenue recognised over time
Total Sales Revenue
CONSOLIDATED
2023
$ ‘000
2022
$ ‘000
72,619
72,619
74,988
74,988
7,706
295,357
33,653
336,716
6,218
332,241
31,696
370,155
409,335
445,143
RECOGNITION AND MEASUREMENT
SALES REVENUE
Revenue from contracts with customers primarily arises from the following streams:
RV Solutions segment:
+ The sale of recreational vehicle parts and accessories;
+ The installation of vehicle parts and accessories; and
+ Repairs and maintenance services of customers’ vehicles.
Building Solutions segment:
+ The construction of modular accommodation units sold to customers; and
+ The hiring of modular accommodation units on short-term contracts.
Community Solutions segment:
+ Hiring of Company-owned accommodation units; and
+ Management fees for a village.
To determine whether to recognise revenue, the Company follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied
The transaction price is the fair value of consideration received or receivable net of goods and services tax (GST).
RV Solutions
Revenue from the sale of parts and services is for a fixed fee and recognised at a point in time. Recognition occurs when
the Company transfers control of the asset to the customer.
For parts and services, transfer of control of the asset to the customer is the date of receipt by the customer for the good
or where the Company is providing a service such as installation, repairs or maintenance, recognition is the date in which
the customer drives away with the installed or repaired product.
The sale of parts and services are accompanied by standard manufacturer’s warranty arrangements, of which are not
separately or incrementally paid for by the customer. Under these conditions, customers can return product for repair or
replacement if it fails to perform in accordance with published specifications. These warranties are accounted for under
AASB 137 Provisions, Contingent Liabilities and Contingent Assets. Refer to note 15.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
2. SALES REVENUE (CONT’D)
Building Solutions
The Company enters into contracts for the construction of modular accommodation units in exchange for a fixed fee
and recognises the related revenue over time. Many of the Company’s contracts comprise the construction of several
accommodation units each representing performance obligations under the contract. The Company evaluates the
separability of each good or services based on whether they are ‘distinct’. A promised good or service is ‘distinct’ if both:
+ the customer benefits from the item either on its own or together with other readily available resources; and
+ it is ‘separately identifiable’ (i.e. the Company does not provide a significant service integrating, modifying or
customising it).
The transaction price for a contract excludes any amounts collected on behalf of third parties.
To depict the progress by which the Company transfers control of a build to the customer, and to establish when and
to what extent revenue can be recognised, the Company measures its progress towards complete satisfaction of the
performance obligation by comparing actual costs spent to date with the total estimated costs required to construct each
unit. This cost-to-cost basis provides the most faithful depiction of the transfer of goods and services to each customer
due to the Company’s ability to make reliable estimates of the total costs required to perform, arising from its significant
historical experience constructing similar units.
51
In addition to the fixed fee, some contracts include bonus payments which the Company can earn by completing a project
in advance of a targeted delivery date. At inception of each contract, the Company begins by estimating the amount
of the bonus to be received using the “most likely amount” approach. This amount is then included in the Company’s
estimate of the transaction price only if it is highly probable that a significant reversal of revenue will not occur once any
uncertainty surrounding the bonus is resolved. In making this assessment, the Company considers its historical record of
performance on similar contracts, whether the Company has access to the labour and materials resources needed to meet
the agreed-upon completion date, and the potential impact of other reasonably foreseen constraints.
Most such arrangements include detailed customer payment schedules. When payments received from customers
exceed revenue recognised to date on a particular contract, any excess (a contract liability) is reported in the statement
of financial position. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the
Company recognises a contract asset in its statement of financial position.
The construction of accommodation units typically takes between 6–12 months from commencement of design through
to completion and delivery. In some situations, customer payments will be received over a period of one year or more. In
these circumstances, the Company adjusts the transaction price used in determining revenue recognition by the effects of
financing.
In obtaining some of these contracts, the Company incurs a number of incremental costs, such as commissions paid to
sales staff. The Company recognises such incremental costs as a contract asset if it expects to recover those costs from
the customer. The contract asset is then amortised on a systematic basis consistent with the transfer to the customer the
good or service to which the contract asset relates.
However, as noted above, in some contracts the amortisation period of these costs, if capitalised, would be less than one
year, and thus the Company makes use of the practical expedient in AASB 15.94 and expenses them when incurred.
Community Solutions
The Company rents its owned accommodation units to customers and recognises revenue over time based on either
fixed or variable daily rental rates depending on whether formal arrangements with customers exist. Revenue for these
transactions is therefore recognised over time based on monthly billing in arrears for daily accommodation services
provided. In this respect, the Company has a right to the consideration and the amount billed corresponds directly with
the value to the customer for the Company’s performance completed to date.
For Osprey which the Company manages on behalf of its customer, revenue is recognised over time based on a fixed
management fee billed to the customer as per the management contract. Revenue is therefore recognised upon billing as
that timing corresponds directly with the value to the customer for the Company’s performance completed to date.
Annual Report | FY2023 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
3. EXPENSES
Expenses from continuing operations contain the following:
CONSOLIDATED
Continuing operations
Cost of sales
Employee benefits
Salaries and wages1
52
Equity settled share-based payments
Superannuation
Total
1 Employee benefits expense included in Cost of Sales is $35.2m (FY22: $24.9m)
Depreciation and amortisation of:
Buildings
Leasehold improvements
Plant and equipment
Product development
ERP Software
Right-of-use assets
Total
Finance costs:
Financing arrangements
Lease liabilities
Total
NOTE
11
11
11
13
13
17
2023
$ ‘000
324,790
71,979
33
3,648
75,660
34
1,034
7,001
301
707
7,757
16,834
778
807
1,585
2022
$ ‘000
377,612
68,980
457
5,590
75,027
34
748
6,960
456
718
7,668
16,584
685
809
1,494
EQUITY SETTLED SHARE-BASED PAYMENTS
Employee Plan
A scheme under which rights to acquire ordinary shares may be issued by the Company to employees for no
consideration was approved by shareholders at the 2014 annual general meeting. Employees who have been continuously
employed by the Company for at least one year are eligible to participate in the scheme. Employees will be issued
shares in Fleetwood Limited upon the exercise of rights. One third of the rights are exercisable one year from the date of
issue and a further one third of the rights are exercisable in each of the next two years. One share right represents one
Fleetwood Limited share. There are no voting rights or dividend entitlements attaching to the rights. No amount is payable
upon exercise of the rights and shares issued upon exercise rank equally with existing shares on the ASX.
Executive Plans
Long Term Incentive (LTI)
Long-term incentives in the form of performance rights received by Executives are determined in accordance with the
provisions of the Executive Long Term Incentive Plan (LTI Plan), which was approved by shareholders at the 2018 Annual
General Meeting (AGM). The objective of this plan is to retain and reward executives and to align their long-term interests
with those of shareholders.
50% of the performance rights grant are performance tested against total shareholder return (TSR), 25% of the grant are
tested against earnings per share (EPS) performance and the remaining 25% of the grant are tested against Return on
Capital Employed (ROCE) performance over a 3-year period from a start date (Start Date) to a test date (End Date).
The FY22 and FY23 issue TSR tranche (50% of the grant) will vest up to 50% at the TSR equal to the ASX small industrials
index and to 100% at the 75th percentile of that index. Performance will be tested each year and averaged over the three
testing years.
The FY22 and FY23 issue EPS tranche (25% of the grant) vests to 50% at a 7.5% compound annual growth and to 100% at
a 15% annual growth rate. Performance will be tested each year and averaged over the three testing years. Given EPS was
negative in FY22, the Board have set a base EPS for the FY23 issue at 12.0cps from which compound growth must occur
for this tranche to vest.
The FY22 and FY23 ROCE performance condition (25% of the grant) will be met if the Company’s ROCE is at or above
15% in the financial year. Performance will be tested each year and averaged over the three testing years.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
3. EXPENSES (CONT’D)
The maximum amount of LTI awards is based on a percentage of the Executive’s Total Fixed Remuneration (TFR).
Up until the implementation of the LTI Plan at the 2018 AGM, Executives participated in the Executive Share Unit Plan. The
share units granted pursuant to the plan are noted and discussed in the 2018 Remuneration Report. The plan will remain
in effect until all granted units have been exercised, forfeited or expired. No share units have been granted or issued since
the introduction of the LTI Plan in 2018.
Valuation assumptions for the FY20-FY23 LTI (Performance Rights Plan)
The estimation of the fair value of share-based payment awards requires judgement concerning the appropriate valuation
methodology. The choice of valuation methodology is determined by the structure of the awards, particularly the vesting
conditions.
A Monte-Carlo simulation valuation methodology was used to determine the value relative to TSR growth. The valuation
methodology used was chosen from those available to incorporate an appropriate amount of flexibility with respect to the
particular performance and vesting conditions of the award.
53
The value recognised in the period for each KMP has been recognised straight-line over the vesting term as in line with
accounting standards. For those portions of the granted rights with non-market vesting conditions, values have been
estimated based on management’s judgments as to the number of units expected to vest.
The following principal assumptions were used in the valuation:
PLAN
GRANT
DATE
EXPIRY
DATE
VESTING
TRANCHE
VOLA-
TILITY
DIVIDEND
YIELD
RISK FREE
INTEREST
RATE
SHARE
PRICE AT
GRANT
DATE
FAIR VALUE
AT GRANT
DATE
2020
2021
2022
2023–1
2023-2
12/11/19
30/06/22
29/01/21
30/06/23
23/08/21
30/06/24
22/10/22
30/06/25
30/03/23
30/06/25
%
54.11
50.82
40.00
45.00
40.00
1
1
1
1
1
%
0.00
0.00
5.00
0.00
0.00
%
1.97
1.58
0.10
3.34
2.99
$
2.18
2.16
2.74
1.71
1.21
$
0.82
0.72
1.47
1.35
0.70
Grant date
Start date
Expiry date
PERFORMANCE RIGHTS PLAN
2023-1
2023-2
2022
2021
22/10/22
30/03/23
23/08/21
29/01/21
2020
12/11/19
01/07/22
01/07/22
01/07/21
01/07/20
01/07/19
30/06/25
30/06/25
30/06/24
30/06/23
30/06/22
Share Price at Grant date ($)
Fair Value at Grant date ($)
Balance at the start of the year (no.)
1.71
1.35
-
Granted (no.)
Exercised (no.)
Forfeited (no.)
222,603
1,219,879
-
-
-
-
1.21
0.70
2.74
1.47
2.16
0.72
2.18
0.82
912,787
806,922
586,527
-
-
-
-
-
-
(242,352)
(806,922)
(586,527)
Balance at the end of the year (no.)
222,603
1,219,879
670,435
-
-
Valuation assumptions for the FY15-FY18 LTI (Share Units Plan)
The fair value at grant date for share units, is determined under option pricing methodology using a Monte-Carlo
simulation model. The expected volatility is based on historical share price volatility over the past five years, and the risk-
free interest rate and dividend yield have been assessed based on prevailing market conditions.
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
3. EXPENSES (CONT’D)
Key inputs to the model are as follows:
PLAN
GRANT
DATE
EXPIRY
DATE
VESTING
TRANCHE
VOLA-
TILITY
DIVIDEND
YIELD
RISK FREE
INTEREST
RATE
FAIR
VALUE AT
GRANT
DATE
EXERCISE
PRICE
WEIGHTED
AVER-AGE
SHARE
PRICE AT
GRANT
DATE
54
18/12/14
18/12/19
18/12/15
18/12/20
20/12/16
18/12/21
12/06/17
12/06/22
20/12/17
20/12/22
2015
2016
2017–1
2017–2
2018
%
47.57
47.57
47.57
50.21
50.21
50.21
49.48
49.48
49.48
49.48
49.48
49.48
51.84
51.84
51.84
1
2
3
1
2
3
1
2
3
1
2
3
1
2
3
%
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
1.90
1.90
1.90
1.80
1.80
1.80
%
2.40
2.40
2.40
1.73
1.73
1.73
2.33
2.33
2.33
2.53
2.53
2.53
2.43
2.43
2.43
$
0.43
0.42
0.39
0.46
0.42
0.37
0.82
0.74
0.68
0.91
0.83
0.72
1.21
1.12
1.01
$
1.35
1.35
1.35
1.22
1.22
1.22
1.94
1.94
1.94
2.19
2.19
2.19
2.84
2.84
2.84
$
1.35
1.35
1.35
1.22
1.22
1.22
1.94
1.94
1.94
2.19
2.19
2.19
2.84
2.84
2.84
Set out below are summaries of rights and units granted under each plan:
Grant date
Expiry date
Share Price at Grant date ($)
Fair Value at Grant date ($)
2018
2017-2
20/12/17
20/12/22
2.84
1.01
12/06/17
12/06/22
2.19
0.72
SHARE UNITS
2017-1
20/12/16
18/12/21
1.94
0.68
2016
18/12/15
18/12/20
1.20
0.37
2015
18/12/14
18/12/19
1.35
0.39
Balance at the start of the year (no.)
175,000
60,000
56,100
50,000
43,200
Granted (no.)
Exercised (no.)
Forfeited (no.)
-
-
(80,000)
-
-
-
-
-
-
-
20,000
13,200
(46,100)
(30,000)
(30,000)
Balance at the end of the year (no.)
95,000
60,000
10,000
-
-
RECOGNITION AND MEASUREMENT
Defined contribution superannuation
Contributions to employee superannuation funds are expensed when the employees have rendered service entitling them
to the contributions.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
4. TAX EXPENSE
CURRENT TAX EXPENSE
Current tax expense (benefit) from continuing and discontinued operations
Current tax expense relating to prior period
Deferred tax expense (benefit) relating to origination and reversal of temporary
differences
Deferred tax expense relating to recoupment of prior year tax losses
Under provision of income tax in prior year
Continuing and discontinued operations
2023
$ ‘000
(6,747)
214
7,107
-
-
574
2022
$ ‘000
215
-
(8,350)
-
-
(8,135)
55
Reconciliation of income tax expense to the accounting profit:
Profit (loss) before tax from continuing and discontinued operations
2,620
(55,598)
The tax rate used for 2022 and 2021 is the corporate tax rate of 30% payable
by Australian corporate entities on taxable profits under Australian tax law.
Income tax expense (benefit) calculated at 30% (2022: 30%)
Amortisation of leasehold improvements
Effect of lower tax rates on overseas income
Non-assessable income (Camec NZ dividend)
Non-deductible expenses
Sundry items
Adjustments relating to income tax in prior year
Continuing and discontinued operations
Income tax expense (benefit) from:
Continuing operations
Discontinued operations
Continuing and discontinued operations
DEFERRED TAX ASSETS
786
8
(16)
(600)
10
172
214
574
574
-
574
(16,679)
8
(23)
-
8,563
(4)
-
(8,135)
(7,887)
(248)
(8,135)
Deferred tax relating to:
Property, plant and equipment
Contract intangible
Employee provisions
Provision for inventory
obsolescence
Provision for onerous contracts
Provision for warranty costs
Other provisions
Accruals
AASB16 leases
Total
BALANCE
2021
CHARGED
TO INCOME
BALANCE
2022
CHARGED
TO INCOME
BALANCE
2023
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
5,122
(1,154)
2,158
574
-
492
637
36
(148)
7,717
1,863
1,154
265
477
4,238
573
(102)
(10)
(108)
8,350
6,984
-
2,422
1,051
4,238
1,065
535
26
(256)
16,065
(2,075)
-
19
239
(4,238)
(880)
(136)
42
(78)
(7,107)
4,909
-
2,441
1,290
-
186
399
68
(333)
8,960
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
4. TAX EXPENSE (CONT’D)
The Company anticipates future profits will be earned to utilise deferred tax assets.
The current tax asset recognised on the balance sheet represents a refund due within 12 months.
RECOGNITION AND MEASUREMENT
CURRENT TAX
Current tax is calculated by reference to the amount of income tax payable or recoverable in respect of the taxable profit
or loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the
reporting date. Current tax for current and prior periods is recognised as a liability or asset to the extent that it is unpaid
or refundable.
56
Taxable profit differs from profit before tax as reported in the consolidated statement of profit or loss and other
comprehensive income because of items of income or expense that are taxable or deductible in other years and items that
are never taxable or deductible.
DEFERRED TAX
Deferred tax is accounted for using the comprehensive statement of financial position liability method in respect
of temporary differences between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised
to the extent that it is probable that a sufficient taxable amount will be available against which deductible temporary
differences or unused tax losses and tax offsets can be utilised. Deferred tax assets and liabilities are not recognised if
the temporary differences arise from the initial recognition of assets and liabilities (other than as a result of a business
combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not
recognised in relation to taxable differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with such investments and interests are only recognised to the
extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets
and the liabilities giving rise to them are realised or settled, based on tax rates and tax laws that have been enacted
or substantively enacted by the reporting date. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and
the Company/Consolidated Entity intends to settle its current tax assets and liabilities on a net basis.
CURRENT AND DEFERRED TAX FOR THE PERIOD
Current and deferred tax is recognised as an expense or income in the statement of profit or loss, except when it relates to
items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it
arises from the initial accounting for a business combination, in which case it is taken into account in the determination of
goodwill.
GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the taxation authority. In these circumstances, GST is recognised as part of the cost of
acquisition of the asset or as part of an item of expense.
Receivables and payables are stated with the amount of GST included. The net GST recoverable from, or payable to, the
taxation authority is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from
investing and financing activities, which are recoverable from, or payable to, the taxation authority are classified as
operating cash flows.
UNCERTAIN INCOME TAX TREATMENTS
The Company determines whether to consider each uncertain tax treatment separately or together with one or more
other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.
The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company
has an overseas subsidiary, it assessed whether the Interpretation had an impact on its consolidated financial statements.
Upon adoption of the Interpretation, the Company applied a risk weighted measurement to the tax treatments used in the
Company and has determined that there is no change required under AASB Interpretation 23 Uncertainty over Income Tax
Treatments.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
5. SEGMENT INFORMATION
Operating segments are based on the internal reports that are reviewed and used by the Board of Directors (chief
operating decision makers) in assessing performance and determining the allocation of resources.
Business segments
RV Solutions
Building Solutions
Community Solutions
Products / Services
Manufacture, installation, repair and distribution of recreational vehicle
parts and accessories
Design, construction, manufacture and sale of accommodation units
Construction and operation of accommodation villages
Revenue and results by reportable operating segment:
57
SEGMENT REVENUE
AND
OTHER INCOME
2023
$ ‘000
80,603
2022
$ ‘000
81,209
RV Solutions
Building Solutions 1
295,857
333,090
Community Solutions
Operating segment total
Unallocated
Total
33,653
410,113
453
31,696
445,995
109
410,566
446,104
Amortisation of contract intangible (Building Solutions)
Profit before interest and tax (EBIT)
Finance costs
Profit before income tax expense
Income tax expense
Profit (loss) from continuing operations
Loss from discontinued operations
DEPRECIATION AND
AMORTISATION
SEGMENT RESULT
(EBITA) 2
2023
$ ‘000
3,782
9,206
3,060
16,048
786
16,834
2022
$ ‘000
3,605
8,958
3,203
15,766
818
16,584
2023
$ ‘000
6,858
2022
$ ‘000
9,808
(5,510)1
(64,151)1
10,198
11,546
(7,341)
4,205
-
4,205
(1,585)
2,620
(574)
2,046
-
8,277
(46,066)
(6,075)
(52,141)
(1,137)
(53,278)
(1,494)
(54,772)
7,887
(46,885)
(579)
Profit (loss) attributable to members of the parent entity
2,046
(47,464)
1 Underlying EBITA for Building Solutions for the period was a $5.5m loss (30 June 2022: $24.3m loss).
2 Earnings before interest, tax and amortisation (EBITA) is considered a non-IFRS measure.
The unallocated line represents the results of the corporate function of the Company.
The accounting policies of the reportable segments are the same as the Company’s accounting policies described in the
notes to the Financial Statements. Segment results represents earnings before interest and tax and amortisation without
the allocation of corporate overheads.
Company assets and liabilities by reportable operating segment:
RV Solutions
Building Solutions
Community Solutions
Operating segment total
Unallocated
Total
SEGMENT ASSETS
SEGMENT LIABILITIES
2023
$ ‘000
53,411
139,770
21,419
214,600
61,587
276,187
2022
$ ‘000
50,705
172,762
23,072
246,539
63,656
310,195
2023
$ ‘000
14,155
85,802
4,791
104,748
5,805
110,553
2022
$ ‘000
14,036
122,029
5,381
141,446
5,229
146,675
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
5. SEGMENT INFORMATION (CONT’D)
For the purposes of monitoring segment performance and allocating resources all assets and liabilities are allocated to
the reportable segments other than current and deferred tax amounts and assets and liabilities directly utilised by the
Corporate entity.
The Company operates in two principal geographical areas - Australia (country of domicile) and New Zealand. Company
non-current assets and revenues by geographical segment:
GEOGRAPHICAL AREA
Australia
58
New Zealand
Total
SEGMENT
NON-CURRENT ASSETS
REVENUE AND
OTHER INCOME
2023
$ ‘000
112,754
1,592
2022
$ ‘000
126,239
43
114,346
126,282
2023
$ ‘000
402,913
7,653
410,566
2022
$ ‘000
437,325
8,779
446,104
6. DIVIDEND INFORMATION
During the period the following dividends were declared by the Directors and paid to shareholders of the Company.
Recognised amounts
Final 2021 – paid 10.5 cents per share fully franked
Interim 2022 – paid 2 cents per share fully franked
Total
Declared and not recognised as liabilities
Final 2023 – declared 2.1 cents per share fully franked
Total
Dividend franking account
CONSOLIDATED
2023
$ ‘000
-
-
-
1,978
1,978
2022
$ ‘000
9,891
1,884
11,775
-
-
30% franking credits available to shareholders of Fleetwood Limited
for subsequent years
18,778
18,645
7. EARNINGS PER SHARE
Earnings used in the calculation of basic and diluted earnings per share from
continuing and discontinued operations
Adjustment to exclude loss from discontinued operation
Earnings used in the calculation of basic and diluted earnings per share from
continuing operations
2023
$ ‘000
2,046
2022
$ ‘000
(47,464)
-
579
2,046
(46,885)
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
7. EARNINGS PER SHARE (CONT’D)
The weighted average number of ordinary shares used in the calculation of diluted earnings per share reconciles to the
weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary shares used in the calculation of basic EPS
94,284,579
94,198,742
Number of shares deemed to be issued for no consideration in respect of
performance rights
-
-
Weighted average number of ordinary shares used in the calculation of diluted EPS
94,284,579
94,198,742
WEIGHTED AVERAGE
NUMBER
OF SHARES USED
2023
2022
Earnings (loss) per share
Basic earnings (loss) per share
Continuing operations
Discontinued operations
Total
Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Total
Cents
Cents
59
2.2
-
2.2
2.2
-
2.2
(49.8)
(0.6)
(50.4)
(49.8)
(0.6)
(50.4)
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
8. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
46,578
55,266
Reconciliation of operating profit after income tax to net cash provided by operating
activities:
60
Operating profit (loss) after income tax
2,046
(47,464)
2023
$ ‘000
2022
$ ‘000
Items classified as investing activities:
Loss on sale of non-current assets
Non-cash items:
Equity settled share-based payments
Depreciation and amortisation expense
Amortisation of contract intangible
Impairment of goodwill
Impairment of current assets
Impairment reversal of plant and equipment
Other
Exchange differences arising on translation of foreign operations
Changes in assets and liabilities during the year:
(Increase) decrease in trade and other receivables
(Increase) decrease in contract assets
(Increase) decrease in inventories
(Increase) in other financial assets
Increase (decrease) in trade and other payables
Increase (decrease) in contract liabilities
Increase (decrease) in provisions
Increase (decrease) in other financial liabilities
Increase (decrease) in income taxes payable
(Increase) decrease in deferred taxes receivable
Net cash provided by operating activities
(588)
(278)
33
16,834
-
-
1,902
(754)
(691)
-
11,755
12,215
(3,121)
(21)
(25,008)
7,514
(16,773)
(19)
(6,945)
7,105
5,484
457
16,584
1,137
28,544
7,399
-
(88)
163
(2,221)
(16,590)
(1,336)
2
7,320
17,847
17,409
19
(5,304)
(8,348)
15,252
RECOGNITION AND MEASUREMENT
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in fair value and have a
maturity of three months or less at the date of acquisition.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
9. TRADE AND OTHER RECEIVABLES AND CONTRACT ASSETS
Trade and other receivables
Current
Trade receivables
Less: allowance for expected credit losses
NOTE
15
Finance lease receivable
Other debtors
Other current assets
Total
Non-Current
Finance lease receivable
Total
Contract assets1
Current
Non-Current
2023
$ ‘000
2022
$ ‘000
36,680
(608)
499
6,704
167
50,855
(1,701)
1,295
4,249
-
43,442
54,698
1,198
1,198
1,697
1,697
31,724
43,939
-
-
61
1 As of 30 June 2023, approximately $113.6 million of revenue is expected to be recognised from the remaining performance obligations. Fleetwood expects to
recognise 100% of these remaining performance obligations as revenue over the next 12 months.
Trade and other debtors are non-interest bearing and are generally on terms ranging between 7 and 60 days. The average
credit period on sales of goods is 30 to 60 days. All trade and other debtors are expected to be settled within 60 days of
year end.
The allowance for expected credit losses is allocated within the Company’s segments as shown below:
Current
RV Solutions
Building Solutions
Discontinued
Total
NOTE
EXPECTED CREDIT LOSSES
2023
$ ‘000
(584)
(24)
-
(608)
2022
$ ‘000
(553)
(578)
(570)
(1,701)
Refer to Note 15 – Provisions for movements of the expected credit losses provision during the period.
The Company records finance lease receivables at the net present value of lease payments over the lease period as shown
below.
Finance Lease Receivable
Current
Non-current
Total
RECOGNITION AND MEASUREMENT
LEASE
PAYMENTS
FINANCE
CHARGES
NET PRESENT
VALUE
$’000
$’000
$’000
540
1,215
1,755
(41)
(17)
(58)
499
1,198
1,697
CONTRACT ASSETS
The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the
reporting date on made-to-order buildings. Contract assets are assessed for impairment as part of the Company’s
expected credit losses assessment under AASB 9.
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
9. TRADE AND OTHER RECEIVABLES AND CONTRACT ASSETS (CONT’D)
ALLOWANCE FOR EXPECTED CREDIT LOSSES
The Company makes use of a simplified approach in accounting for trade and other receivables and records the loss
allowance at the amount equal to the expected lifetime credit losses. Note 21 includes disclosures relating to the credit risk
analysis relating to the allowance for expected credit losses.
FINANCE LEASES
The Company applies judgment in considering the substance of a lease agreement and whether it transfers substantially
all the risks and rewards incidental to ownership of the leased asset. Key factors considered include the length of the
lease term in relation to the economic life of the asset, the present value of the minimum lease payments in relation to the
asset’s fair value, and whether the Company retains ownership of the asset at the end of the lease term. The rate applied
in discounting lease payments is equivalent to the rate implicit in the lease. Refer to note 17 for the accounting policy
applicable to finance leases.
62
10. INVENTORIES
Current
Raw materials & stores
Work in progress
Finished goods
Stock obsolescence provision
Total
NOTE
15
2023
$ ‘000
9,119
5,181
22,558
(4,304)
32,554
2022
$ ‘000
15,433
1,5751
15,932
(3,507)
29,433
1 For comparative purposes, $1.575 million of Property Plant & Equipment – Assets Under Construction has been reclassified to work in progress inventory for the
prior financial year ended 30 June 2022.
The cost of inventories recognised as an expense during the year in respect of continuing operations was $139.5 million
(2022: $154.2 million).
The stock obsolescence provision is allocated within the Company’s segments as shown below:
Current
RV Solutions
Building Solutions
Total
NOTE
2023
$ ‘000
(350)
(3,954)
(4,304)
2022
$ ‘000
(548)
(2,959)
(3,507)
Refer to Note 15 – Provisions for movements of the stock obsolescence provision during the period.
RECOGNITION AND MEASUREMENT
INVENTORIES
Inventories are carried at the lower of cost and net realisable value. Cost includes all expenses directly attributable to the
manufacturing process as well as suitable portions of related production overheads, based on normal capacity. Costs of
ordinarily interchangeable items are assigned using standard cost. Net realisable value represents the estimated selling
prices for the inventories less all estimated costs of completion and costs necessary to make the sale.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
11. PROPERTY, PLANT AND EQUIPMENT
Freehold land
Cost
Buildings
Cost
Accumulated depreciation
Leasehold property and improvements
Cost
Accumulated amortisation
Plant and equipment
Cost
Accumulated depreciation
Assets under construction
Cost
Total
63
2023
$ ‘000
1,408
1,408
1,343
(574)
769
53,162
(44,287)
8,875
98,186
(76,821)
21,365
143
32,560
2022
$ ‘000
1,408
1,408
1,343
(540)
803
51,854
(43,417)
8,437
97,126
(73,124)
24,002
696
35,346
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
FREEHOLD
LAND
BUILDINGS
LEASEHOLD
PROPERTY
PLANT AND
EQUIPMENT
TOTAL
ASSETS
UNDER
CONS-
TRUCTION
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
2023 Financial Year
Balance at 1 July 2022
1,408
803
64
Additions
Reclassified to inventory
Disposals
Depreciation and
amortisation
Impairment reversal on
disposal
-
-
-
-
-
8,437
1,472
-
-
-
-
-
(34)
(1,034)
24,002
4,679
-
(1,069)
(7,001)
-
-
754
696
-
(553)
-
-
-
35,346
6,151
(553)
(1,069)
(8,069)
754
Balance at 30 June 2023
1,408
769
8,875
21,365
143
32,560
2022 Financial Year
Balance at 1 July 2021
1,408
837
Additions
Transferred to product
development
Transferred to plant and
equipment
Reclassified to inventory
Transferred to project
Disposals
Depreciation and
amortisation
-
-
-
-
-
-
-
-
-
-
-
-
-
(34)
8,395
790
-
-
-
-
-
(748)
27,192
5,697
(392)
2,011
1,459
-
39,843
7,946
(392)
1,199
(1,199)
-
-
129
(2,863)
(6,960)
(1,575)1
-
-
-
(1,575)
129
(2,863)
(7,742)
Balance at 30 June 2022
1,408
803
8,437
24,002
696
35,346
1 For comparative purposes, $1.575 million of Property Plant & Equipment – Assets Under Construction has been reclassified to work in progress inventory for the
prior financial year ended 30 June 2022.
Each class of property, plant and equipment is stated at historical cost less, where applicable, any accumulated
depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.
Property in the course of construction for production, supply or administrative purposes, or for purposes not yet
determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying
assets, borrowing costs capitalised in accordance with the Company’s accounting policy. Depreciation of these assets, on
the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognised so as to write off the cost or fair value of assets (other than freehold land and properties under
construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis. Freehold land is not depreciated.
The cost of self-constructed assets includes the cost of materials and direct labour and any other costs attributable to
bringing an asset to a working condition ready for its intended use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in profit or loss.
ACQUISITION OF ASSETS
All assets including property, plant and equipment and intangibles are initially recorded at their cost at the date of
acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.
The costs of assets constructed or internally generated by the consolidated entity, include the cost of materials, direct
labour, directly attributable overheads and other incidental costs.
Expenditure, including that on internally generated assets other than development costs, is only recognised as an
asset when it is probable that future economic benefits will eventuate and the costs can be measured reliably. Costs
attributable to feasibility and alternative approach assessments are expensed as incurred.
Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable future economic benefits will
flow to the consolidated entity. Costs that do not meet the criteria for capitalisation are expensed as incurred.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
DEPRECIATION AND AMORTISATION
All non-financial assets of the entity (except land) have limited useful lives and are depreciated/amortised using the
straight-line method over their estimated useful lives to their estimated residual values. Assets are depreciated or
amortised from the time an asset is ready for use.
Depreciation and amortisation rates and methods and residual values are reviewed annually for appropriateness. When
changes are made adjustments are reflected in current and future periods only. Depreciation and amortisation are
expensed, except to the extent they are included in the carrying amount of another asset as an allocation of production
overheads.
Depreciation/amortisation rates used for each class of asset are as follows:
Buildings
Leasehold property and improvements
Plant and equipment
2023
2.5%
2022
2.5%
1% - 25%
2% - 25%
2.5% - 50%
2.5% - 50%
65
IMPAIRMENT OF ASSETS OTHER THAN GOODWILL
At each reporting date, the carrying amounts of tangible and intangible assets are reviewed to determine whether there is
any indication those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of any impairment loss. Where the asset does not generate cash flows
that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Intangible assets with indefinite useful lives and intangible assets not yet available for use
are tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised in profit or loss immediately, unless the relevant asset is carried at fair value through equity, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased
to the revised estimate of its recoverable amount, but only to the extent the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the
relevant asset is carried at fair value through equity, in which case the reversal of the impairment loss is treated as a
revaluation increase.
Annual Report | FY2023 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
12. GOODWILL
Goodwill
Reconciliation of the carrying amount of Goodwill:
Gross carrying amount
Opening balance
66
Accumulated impairment
Opening balance
Impairment loss in respect of Building Solutions
RV Solutions
Community Solutions
Building Solutions
Total
2023
$ ‘000
43,522
2022
$ ‘000
43,522
104,046
104,046
104,046
104,046
(60,524)
-
(31,980)
(28,544)
(60,524)
(60,524)
9,110
2,196
32,216
43,522
9,110
2,196
32,216
43,522
Goodwill is allocated to the Company’s three cash-generating units: RV Solutions, Community Solutions and Building
Solutions. Testing for impairment is carried out on an annual basis or whenever there is an indicator of impairment. A cash-
generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is
an indication that the unit may be impaired.
If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based
on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss.
An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
IMPAIRMENT OF GOODWILL
Testing for impairment is carried out on an annual basis or whenever there is an indicator of impairment. Goodwill is
allocated to the Company’s three cash-generating units: RV Solutions, Community Solutions and Building Solutions. The
recoverable amount of the cash generating units has been determined based on value in use or fair value less cost to
dispose. The value in use has been calculated using cashflow projections based on financial budgets approved by the
board with key assumptions based on past experience and where applicable external sources of information. Projections
are extrapolated over a 5-year period with the inclusion of a terminal value.
Community Solutions’ recoverable amount was determined using fair value less cost to dispose. Management reviewed
the carrying value at 31 May 2023. The fair value less cost to dispose used in impairment testing was based on external
valuations. The outcome of the review was that no impairment charge to goodwill (30 June 2022: nil) was recognised for
Community Solutions. There are no reasonably possible changes in key assumptions which would result in the carrying
amount exceeding the recoverable amount.
The assumptions used to calculate the recoverable amount of each cash-generating unit and the scenario analysis
performed in relation to RV Solutions and Building Solutions are detailed below:
RV Solutions - Cash-Generating Unit
RV Solutions’ recoverable amount was determined using value in use. Management reviewed the carrying value at
31 May 2023. The five-year cash flow estimates used in impairment testing were based on Board approved budgets.
The outcome of the review was that no impairment charge to goodwill (30 June 2022: nil) was recognised for
RV Solutions. There are no reasonably possible changes in key assumptions which would result in the carrying amount
exceeding the recoverable amount.
Fleetwood Australia
67
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
12. GOODWILL (CONT’D)
Assumptions
Pre-tax discount rate
Revenue growth rate
Terminal growth rate
EBITDA margin
Sensitivity analysis:
Assumption
2023
Rate
13.6% - 17.1%
2.5%
2.5%
10.24%
Increase /
(decrease)
2023
Effect
2022
Rate
13.6% - 17.1%
2.3%
2.3%
12.82%
2022
Effect
Pre-tax discount rate
1.0%
Revenue
(0.5%)
EBITDA margin
(0.25%)
Valuation reduction of
approximately $4.3 million
Valuation reduction of
approximately $6.5 million
Valuation reduction of
approximately $2.1 million
Valuation reduction of
approximately $2.1 million
Valuation reduction of
approximately $3.5 million
Valuation reduction of
approximately $2.6 million
Building Solutions Cash - Generating Unit
Building Solutions’ recoverable amount was determined using Fair value less cost to dispose. Management reviewed
the carrying value at 31 May 2023. The five-year cash flow estimates used in impairment testing were based on Board
approved budgets and external valuations of land. The outcome of the review was that no impairment charge to goodwill
(30 June 2022: 28.5 million) was recognised for building Solutions. There are no reasonably possible changes in key
assumptions which would result in the carrying amount exceeding the recoverable amount.
The calculation of faire value less cost of disposal for the Building Solutions cash-generating unit is most sensitive to the
following assumptions summarised below:
Assumptions
Pre-tax discount rate
Revenue growth rate
Terminal growth rate
EBITDA margin
Value of land
Cost of disposal
2023
Rate
13.6% - 17.1%
2.5%
2.5%
3.2% - 5.0%
$23.5 million
$0.4 million
2022
Rate
13.6% - 17.1%
3.5% - 2.5%
2.5%
4.2% – 5.0%
-
-
Discount rate - The mid-point discount rate of 15.4% (30 June 2022: 15.4%) represents the current market assessment of
the risks specific to the cash-generating unit, taking into consideration the time value of money and any individual risks of
the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based
on the specific circumstances of the Group and its operating segments and is derived from its weighted average cost
of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected
return on investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings the Group
is obliged to service. Segment-specific risk is incorporated by applying individual beta factors. The beta factors are
evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the
specific amount and timing of the future tax flows to reflect a pre-tax discount rate.
Growth rate – A growth rate of 2.5% (30 June 2022: 3.5% - 2.5%) has been estimated based on Management’s historical
ability to grow the cash-generating unit’s revenues.
Average EBITDA margin – an EBITDA margin of 4.08% (30 June 2022: 4.75%) has been determined based on the FY24
Budget.
The following table describes the effect of changes to the above estimates on the impairment loss recorded in the
Building Solutions cash-generating unit:
Sensitivity analysis:
Assumption
Increase /
(decrease)
2023
Effect
2022
Effect
Pre-tax discount rate
1.0%
Revenue
(0.5%)
EBITDA margin
(0.25%)
Valuation reduction of
approximately $5.4 million.
Valuation reduction of
approximately $4.9 million.
Valuation reduction of
approximately $7.9 million.
Valuation reduction of
approximately $4.5 million.
Valuation reduction of
approximately $6.4 million.
Valuation reduction of
approximately $10.2 million.
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
13. INTANGIBLE ASSETS
Product development
At cost
Accumulated amortisation
68
Product development WIP
At cost
Contract intangible
Acquired
Accumulated amortisation
ERP Software
At cost
Accumulated amortisation
ERP Software WIP
At cost
Total
2023
$ ‘000
3,408
(2,047)
1,361
2022
$ ‘000
4,377
(3,678)
699
-
-
-
-
14,924
(14,924)
-
4,291
(2,825)
1,466
14,924
(14,924)
-
3,890
(2,006)
1,884
1,044
3,871
740
3,323
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
13. INTANGIBLE ASSETS (CONT’D)
PRODUCT
DEVELOP-
MENT
PRODUCT
DEVELOP-
MENT WIP
CONTRACT
INTANGIBLE
ERP
SOFTWARE
ERP
SOFTWARE
WIP
TOTAL
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
2023 Financial Year
Balance at 1 July 2022
Additions
Transferred from ERP
Software WIP
Transferred to ERP
Disposals
Depreciation and
amortisation
699
963
-
-
-
(301)
Balance at 30 June 2023
1,361
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,884
37
364
-
(112)
(707)
740
674
-
(364)
(6)
-
3,323
1,674
364
(364)
(118)
(1,008)
1,466
1,044
3,871
69
2022 Financial Year
Balance at 1 July 2021
Additions
Transferred from ERP
Software WIP
Transferred from plant
and equipment
Transferred to product
development
Disposals
Depreciation and
amortisation
Impairment
Other
Balance at 30 June 2022
1,949
3,845
894
1,954
-
392
-
-
-
-
(1,949)
(136)
(456)
(1,949)
-
699
-
-
-
-
-
-
-
-
-
-
(2,708)
-
-
1,298
87
1,217
-
-
-
-
-
(1,137)
(718)
1,514
798
-
-
9,500
2,839
1,217
392
(1,572)
(3,521)
-
-
-
-
(136)
(2,311)
(4,657)
-
3,323
1,884
740
Intangible assets have a useful life of 2 to 5 years.
RECOGNITION AND MEASUREMENT
PRODUCT DEVELOPMENT
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An intangible asset arising from product development (or from the development phase of an internal project) is
recognised if the following are demonstrated:
+ the technical feasibility of completing the intangible asset so that it will be available for use or sale;
+ the intention to complete the intangible asset and use or sell it;
+ the ability to use or sell the intangible asset;
+ how the intangible asset will generate probable future economic benefits;
+ the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
+ the expenditure attributable to the intangible asset during its development can be measured reliably.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from
the date when the asset first meets the recognition criteria. Where no internally generated asset can be recognised,
development expenditure is recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation
and accumulated impairment losses and are amortised on a straight-line basis over their useful lives of 2 to 5 years.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
CONTRACT INTANGIBLE
Contract intangible assets are initially recognised at fair value and amortised over the useful life of the asset. The fair value
for the contract intangible asset had arisen from the acquisition of Modular Building Systems Pty Ltd and was estimated
using the estimated future cash flows. The future cash flows were based on contracts at acquisition, supply contracts and
synergies with the Company’s existing businesses.
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
13. INTANGIBLE ASSETS (CONT’D)
DEPRECIATION AND AMORTISATION
All intangible assets of the entity have limited useful lives and are amortised using the straight-line method over their
estimated useful lives to their estimated residual values. Assets are amortised from the time an asset is ready for use.
Amortisation rates and methods and residual values are reviewed annually for appropriateness. When changes are made,
adjustments are reflected in current and future periods only. Amortisation is expensed, except to the extent it is included
in the carrying amount of another asset as an allocation of production overheads.
Amortisation rates used for each class of asset are as follows:
Software
70
Product development
Contract intangible assets
2023
20% - 50%
20% - 50%
20% - 50%
2022
20% - 50%
20% - 50%
20% - 50%
IMPAIRMENT OF ASSETS OTHER THAN GOODWILL
At each reporting date, the carrying amounts of tangible and intangible assets are reviewed to determine whether there is
any indication those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of any impairment loss. Where the asset does not generate cash flows
that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Intangible assets with indefinite useful lives and intangible assets not yet available for use
are tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised in profit or loss immediately, unless the relevant asset is carried at fair value through equity, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased
to the revised estimate of its recoverable amount, but only to the extent the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the
relevant asset is carried at fair value through equity, in which case the reversal of the impairment loss is treated as a
revaluation increase.
14. TRADE AND OTHER PAYABLES AND CONTRACT LIABILITIES
Current
Trade creditors
Payments in advance
Other creditors and accruals
Total
2023
$ ‘000
24,083
971
12,162
37,216
2022
$ ‘000
42,944
130
19,150
62,224
Contract liabilities1
38,308
30,794
1 As of 30 June 2023, approximately $113.6million of revenue is expected to be recognised from the remaining performance obligations. Fleetwood expects to
recognise 100% of these remaining performance obligations as revenue over the next 12 months.
Trade and other payables are non-interest bearing. The average credit period on purchases is 45 days.
RECOGNITION AND MEASUREMENT
TRADE CREDITORS, OTHER CREDITORS AND ACCRUALS
Liabilities are recognised for amounts to be paid in the future for goods or services received regardless of whether they
have been billed to the Company. They are carried at amortised cost.
CONTRACT LIABILITIES
The contract liabilities primarily relate to the advance consideration received from customers for construction of buildings,
for which revenue is recognised over time. Changes in contract liabilities are due to the stage of projects in progress and
the timing of customer invoicing.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
14. TRADE AND OTHER PAYABLES AND CONTRACT LIABILITIES (CONT’D)
15. PROVISIONS
Current
Employee benefits
Onerous contracts
Warranty & defects
Other provisions
Total
Non-current
Employee benefits
Total
2023
$ ‘000
8,003
-
623
722
2022
$ ‘000
7,711
14,127
3,969
85
9,348
25,892
71
137
137
366
366
Aggregate employee benefits
8,140
8,077
Accruals for employee benefits represent accrued annual leave and long service leave entitlements. Based on past
experience, the consolidated entity does not expect the full amount of annual leave and long service leave balances
classified as current liabilities to be settled within the next 12 months.
The warranty, defects and onerous contracts is allocated within the Company’s segments as shown below:
Current
Building Solutions
Unallocated
Total
NOTE
WARRANTY & DEFECTS
ONEROUS CONTRACTS
2023
$ ‘000
623
-
623
2022
$ ‘000
3,896
73
3,969
2023
$ ‘000
-
-
-
2022
$ ‘000
14,127
-
14,127
The estimation technique for accounting for warranties and defects in the Building Solutions business has been reassessed
following growth in the size and complexity of projects undertaken.
An onerous contracts provision is made for the difference between the expected cost of fulfilling a contract and the
expected unearned portion of the transaction price where the forecast costs are greater than the forecast revenue. The
provision is recognised in full in the period in which the loss-making contracts are identified under AASB 137.
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Expected credit losses
Stock obsolescence
Onerous contracts
Warranty & defects
Other
Total
NOTE
9
10
2022
$’000
1,701
3,507
14,127
3,969
85
ARISING
DURING THE
YEAR
UTILISED
$’000
30
1,322
-
550
675
$’000
(1,123)
(525)
(14,127)
(2,280)
(38)
UNUSED
AMOUNTS
REVERSED
$’000
-
-
-
(1,616)
-
2023
$’000
608
4,304
-
623
722
23,389
2,577
(18,093)
(1,616)
6,257
RECOGNITION AND MEASUREMENT
PROVISIONS
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it
is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount
of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows (where the effect of the time value of money is material).
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
15. PROVISIONS (CONT’D)
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,
a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
EMPLOYEE BENEFITS
Annual and long service leave
Provision is made for benefits accruing to employees in respect of annual leave and long service leave when it is probable
that settlement will be required and they are capable of being measured reliably. Provisions expected to be settled within
12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions which are not expected to be settled within 12 months are measured as the present value of the estimated
future cash flows to be made in respect of services provided by employees up to the reporting date. The expected future
payments incorporate anticipated future wage and salary levels, experience of employee departures and periods of
service, and are discounted at rates determined by reference to market yields at the end of the reporting period on high
quality corporate bonds that have maturity dates that approximate the timing of the estimated future cash flows. Any
re-measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the
periods in which the changes occur.
72
16. FINANCING ARRANGEMENTS
Facilities available
Multi-option
Surety Bonds
Total Facilities available
Facilities utilised
Multi-option
Surety Bonds
Total Facilities utilised
Facilities not utilised
Multi-option
Surety Bonds
Total Facilities not utilised
Multi-option facility utilisation
Bank Loans
Bank Guarantees
Multi-option facility utilised
Multi-option facility
2023
$ ‘000
46,000
35,000
81,000
10,354
8,364
18,718
35,646
26,636
62,282
-
10,354
10,354
2022
$ ‘000
50,000
35,000
85,000
8,957
18,091
27,048
41,043
16,909
57,952
-
8,957
8,957
The multi-option facility allows Fleetwood to utilise the facility available at its discretion for bank loans and bank
guarantees. Bank loans are secured by a mortgage debenture over the assets of the consolidated entity and bear interest
at a BBSY rate plus 2.60% (2022: 0.90%) cash advance fee at the date of drawdown. A facility line fee of 1.1% (2022:
0.85%) is payable quarterly on the facility limit. Bank guarantees are utilised for construction contracts. No liability has
been recognised in the consolidated statement of financial position in respect of bank guarantees.
Surety Bonds
Surety bonds are utilised for construction contracts. No liability has been recognised in the statement of financial position
in respect of surety bonds.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
17. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
RIGHT-OF-USE ASSETS
The statement of financial position movements in right-of-use assets is shown below:
Cost
Opening balance
Right-of-use additions
Right-of-use modifications
Disposals
Accumulated depreciation
Opening balance
Depreciation charged this year (continuing operations)
Disposals
Total
73
2023
$ ‘000
45,259
5,646
-
(4,265)
46,640
18,930
7,757
(4,282)
22,405
24,235
2022
$ ‘000
43,278
3,274
-
(1,293)
45,259
12,392
7,668
(1,130)
18,930
26,329
The Company has leases for offices, production facilities and related warehouses, and some IT equipment. With the
exception of short-term leases and leases of low-value assets, each lease is reflected on the statement of financial position
as a right-of-use asset and a lease liability. Variable lease payments which do not depend of an index or a rate (such as
lease payments based on a percentage of Company sales) are excluded from the initial measurement of the lease liability
and asset.
Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset
to another party, the right-of-use assets can only be used by the Company. Leases are either non-cancellable or may
only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a
further term. The Company is prohibited from selling or pledging the underlying leased assets as security. For leases over
office buildings and factory premises the Company must keep those properties in a good state of repair and return the
properties in their original condition at the end of the lease. Further, the Company must insure items of property, plant and
equipment and incur maintenance fees on such items in accordance with the lease contracts.
The table below describes the nature of the Company’s leasing activities by type of right-of-use asset recognised on the
statement of financial position:
NO. OF RIGHT-
OF-USE ASSETS
LEASED
RANGE OF
REMAINING
TERM
AVERAGE
REMAINING
LEASE TERM
NO. OF LEASES
WITH OPTIONS
TO PURCHASE
NO. OF
LEASES WITH
VARIABLE
PAYMENTS
LINKED TO AN
INDEX OR RATE
NO. OF
LEASES WITH
TERMINATION
OPTIONS
30 June 2023
Office
buildings/
spaces
Production
facilities and
warehouses
30 June 2022
Office
buildings/
spaces
Production
facilities and
warehouses
4
18
1-4 years
4 years
1-7 years
4 years
4
1-5 years
3 years
23
1-8 years
2 years
-
-
-
-
4
18
3
15
-
-
-
-
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
17. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)
LEASE LIABILITIES
Lease liabilities are presented in the statement of financial position as follows:
Lease liabilities (current)
Lease liabilities (non-current)
Total lease liabilities
2023
$ ‘000
5,970
19,375
25,345
2022
$ ‘000
5,027
22,154
27,181
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 30 June 2023 were as
follows:
74
LESS THAN
1 YEAR
1-2
YEARS
2-3
YEARS
3-4
YEARS
4-5
YEARS
AFTER 5
YEARS
TOTAL
MINIMUM LEASE PAYMENTS DUE
30 June 2023
Lease payments
Finance charges
Net present values
30 June 2022
Lease payments
Finance charges
Net present values
8,489
(798)
7,691
7,339
(672)
6,667
7,019
(566)
6,453
6,485
(498)
5,987
4,099
(348)
3,751
5,271
(345)
4,926
3,617
(215)
3,402
3,322
(230)
3,092
2,882
(110)
2,772
3,138
(145)
2,993
1,313
(37)
27,419
(2,074)
1,276
25,345
3,595
(79)
3,516
29,150
(1,969)
27,181
Lease payments not recognised as a liability
The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12
months or less) or for low value assets. Payments made under such leases are expensed on a straight-line basis. In
addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as
incurred.
The expense relating to payments not included in the measurement of a lease liability is as follows:
Short term and low value leases
Total
The Company as a lessee
2023
$ ‘000
1,125
1,125
2022
$ ‘000
731
731
For any new contracts entered into, the Company considers whether a contract is, or contains a lease. A lease is defined
as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time
in exchange for consideration’. To apply this definition the Company assesses whether the contract meets three key
evaluations which are whether:
+ the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Company
+ the Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout
the period of use, considering its rights within the defined scope of the contract
+ the Company has the right to direct the use of the identified asset throughout the period of use. The Company assesses
whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
The Company as a lessor
The Company’s accounting policy under AASB 16 has not changed from the comparative period. As a lessor the Company
classified its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially
all the risks and rewards incidental to ownership of the underlying asset and classified as an operating lease if it does not.
RECOGNITION AND MEASUREMENT
The Company as a lessee
At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the statement of
financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at
the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentive
received).
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
17. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)
The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the
right-of-use asset for impairment when such indicators exist.
At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid
at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s
incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee
and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is
remeasured to reflect any reassessment or modification, of if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, of statement of
profit or loss and other comprehensive income if the right-of-use asset is already reduced to zero.
75
The Company has elected to account for short term leases and leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an
expense in profit or loss on a straight-line basis over the lease term.
18. EQUITY AND RESERVES
ISSUED CAPITAL
Issued and paid-up capital
2023
$ ‘000
2022
$ ‘000
94,284,579 (2022: 94,198,742) ordinary shares, fully paid
253,361
253,170
Holders of ordinary shares are entitled to receive dividends as declared and to one vote per share held.
2023
2022
# SHARES
$ ‘000
# SHARES
$ ‘000
Movements in ordinary share capital
Balance at beginning of year
94,198,742
253,170
94,198,742
253,726
Equity settled share-based payments
Issue of shares on conversion of
performance rights
Transfer to Share based payment reserve
-
85,837
-
-
191
-
-
-
-
-
-
(556)
Balance at the end of year
94,284,579
253,361
94,198,742
253,170
RESERVES
Foreign currency translation reserve
Balance at beginning of year
Translation of foreign operations
Share Plan reserve
Balance at beginning of year
Share plan settlements
Share Based Payment reserve
Balance at beginning of year
Equity settled share-based payments
Issue of shares on conversion of performance rights
Transfer share-based payments from ordinary share capital
Forfeiture of equity settled share-based payments
2023
$ ‘000
97
-
97
(2,126)
42
(2,084)
837
33
(191)
-
(191)
488
2022
$ ‘000
260
(163)
97
(2,126)
-
(2,126)
-
457
-
556
(176)
837
Balance at end of year
(1,499)
(1,192)
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
18. EQUITY AND RESERVES (CONTINUED)
Foreign currency translation reserve relates to exchange difference on the translation of self-sustaining foreign operations.
Share Plan reserve relates to funds advanced to the Company’s Executive Share Trust in respect of grants the Directors
have elected to satisfy by advancing money to the trust to purchase shares on market for the executive long-term
incentive plans.
Share Based Payment reserve refers to performance rights received by employees determined in accordance with the
provisions of Executive Long Term Incentive Plan which was approved by the shareholders.
RETAINED EARNINGS
76
Balance at beginning of year
Profit attributable to members of the parent entity
Forfeiture of equity settled share-based payments
Dividends paid to shareholders
Other
Balance at end of year
19. AUDITORS REMUNERATION
Fleetwood Limited’s auditor in FY23 is Ernst & Young.
Audit and review services
Other Services - Tax services
2023
$ ‘000
(88,458)
2,046
191
-
(7)
2022
$ ‘000
(29,395)
(47,464)
176
(11,775)
-
(86,228)
(88,458)
2023
$
333,000
62,620
395,620
2022
$
254,000
29,250
283,250
20. DEED OF CROSS GUARANTEE
Fleetwood Limited and certain wholly-owned subsidiaries are parties to a Deed of Cross Guarantee under which each
company guarantees the debts of the other. By entering into the Deed, the wholly-owned entities have been relieved from
the requirement to prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785 issued by the Australian Securities and Investments Commission.
The companies below represent a ‘closed group’ for the purposes of the class order:
+ Fleetwood Limited
+ Camec Pty Ltd
+ Northern RV Pty Ltd
+ Recreational Vehicle Concepts Pty Ltd
+ Fleetwood WA & SA Pty Ltd (formerly Fleetwood Pty Ltd)
+ Glyde Digital Pty Ltd (formerly ACN 050 031 993 Pty Ltd)
+ Fleetwood VIC & QLD Pty Ltd (formerly BRB Modular Pty Ltd)
+ Fleetwood NSW Pty Ltd (formerly Modular Building Systems Pty Ltd)
+ Fleetwood Finance (WA) Pty Ltd
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
20. DEED OF CROSS GUARANTEE (CONTINUED)
Set out below is a consolidated statement of comprehensive income and statement of financial position of the ‘closed
group’.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Deed of cross guarantee (continuing operations)
Sales revenue
Other income
Materials used
Sub-contract costs
Employee benefits expense
Rent expense
Impairment of assets
Warranty and defects expense
Onerous contracts
Other expenses
Profit (loss) before interest, tax, depreciation and amortisation (EBITDA)
Depreciation and amortisation expense
Profit (loss) before interest, tax and amortisation (EBITA)
Amortisation of contract intangible
Profit (loss) before interest and tax (EBIT)
Finance costs
Profit (loss) before income tax expense
Income tax expense
Profit (loss) from continuing operations
Loss from discontinued operation
Total profit (loss) for the year
77
CONSOLIDATED
2023
$’000
2022
$’000
403,495
438,446
1,223
(135,929)
(142,201)
(80,173)
(1,123)
(2,742)
(550)
-
(22,165)
19,835
(16,463)
3,372
-
3,372
(1,523)
1,849
(379)
1,470
-
1,470
961
(149,692)
(167,795)
(74,590)
(730)
(35,943)
(3,896)
(14,127)
(29,653)
(37,019)
(16,240)
(53,259)
(1,137)
(54,396)
(1,487)
(55,883)
8,205
(47,678)
(579)
(48,257)
Annual Report | FY2023 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
20. DEED OF CROSS GUARANTEE (CONTINUED)
STATEMENT OF FINANCIAL POSITION
Deed of cross guarantee
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
78
Other financial assets
Tax assets
Total current assets
Non-current assets
Trade and other receivables
Investments
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
CONSOLIDATED
2023
$’000
2022
$’000
46,402
42,319
31,724
29,511
21
8,215
52,445
54,429
43,939
27,297
-
1,119
158,192
179,229
1,198
77
32,548
22,642
43,522
3,871
8,861
112,719
270,911
36,770
38,308
5,630
9,555
-
1,697
83
35,327
26,235
43,522
3,323
16,025
126,212
305,441
62,312
30,794
4,963
25,967
19
90,263
124,055
122
18,077
137
18,336
108,599
162,312
253,356
(1,429)
(89,615)
162,312
122
22,118
366
22,606
146,661
158,780
253,166
(1,042)
(93,344)
158,780
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
21. FINANCIAL RISK MANAGEMENT
CAPITAL MANAGEMENT
The Company manages capital to ensure it will be able to continue as a going concern, while maximising returns to
shareholders through optimisation of debt and equity balances. The categories of financial instruments of the entity are
apparent from the statement of financial position.
The capital structure of the Company includes borrowings and related repayment terms (as detailed in note 16), cash and
cash equivalents (as detailed in note 8) and equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings (as detailed in note 18).
Operating cash flows are used to maintain and expand the Company’s operating assets, make payments of tax and
dividends and to repay debt. Company policy is to borrow centrally to meet funding requirements. The Company does
not have a target gearing ratio.
79
The Company has covenants imposed under its facility agreement with its financier.
FINANCIAL RISK MANAGEMENT OBJECTIVES
Financial instruments comprise cash, receivables, payables, hire purchase creditors, and bank loans. All financial
instruments except forward foreign exchange contracts are carried at amortised cost. The Company manages its
exposure to key financial risks, including interest rate and currency risk in accordance with the Company financial risk
management framework. The objective of the framework is to support delivery of financial targets whilst providing
financial security.
The main financial instrument risks are interest rate, foreign currency, credit and liquidity risk. Different methods are used
to measure and manage risks including monitoring exposure to interest and foreign exchange rates and assessments of
market forecasts for interest and foreign exchange rates. Ageing analysis and monitoring of specific credit allowances are
undertaken to manage credit risk. Liquidity risk is monitored through the development of rolling cash flow forecasts.
FOREIGN CURRENCY RISK MANAGEMENT
The Company undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward exchange
contracts. The Company is mainly exposed to United States Dollars and the Euro.
- 10%
+ 10%
USD
$ ‘000
(1)
(1,233)
(1)
(1,233)
EURO
$ ‘000
(132)
(1,055)
(132)
(1,055)
TOTAL
$ ‘000
(133)
(2,288)
(133)
(2,288)
USD
$ ‘000
1
1,233
1
1,233
EURO
$ ‘000
132
1,055
132
1,055
TOTAL
$ ‘000
133
2,288
133
2,288
2023 Profit
2022 Profit
2023 Equity
2022 Equity
FORWARD FOREIGN EXCHANGE CONTRACTS
Company policy is to enter into forward foreign exchange contracts to manage the risk associated with anticipated
purchases denominated in foreign currency. Anticipated purchases are assessed out to twelve months from the date the
contract is entered into, with 0-100% of the anticipated exposure covered. Basis adjustments are made to the carrying
amounts of non-financial items when the anticipated purchase transaction takes place.
OUTSTANDING
CONTRACTS
AVERAGE
EXCHANGE RATE
FOREIGN
CURRENCY
NOTIONAL
VALUE
FAIR VALUE
2023
2022
2023
2022
2023
2022
2023
2022
$
$
FC’000
FC’000
$’000
$’000
$’000
$’000
Buy USD
Less than 3 months
0.67
0.72
503
615
751
855
3 to 6 months
6 to 12 months
Buy Euro
-
-
-
-
Less than 3 months
0.62
3 to 6 months
6 to 12 months
-
-
0.62
0.63
-
-
-
557
-
-
-
-
450
300
-
-
-
899
-
-
-
721
480
-
15
-
-
6
-
-
21
36
-
-
(35)
(20)
-
(19)
During 2023 a gain of $21,130, was recognised in profit and loss pertaining to forward exchange contracts (2022: $20,555
loss)
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
21. FINANCIAL RISK MANAGEMENT (CONTINUED)
INTEREST RATE RISK MANAGEMENT
Interest rate risk arises from borrowings. Company policy is to manage finance costs by using a mix of fixed and variable
rate debt after considering market forecasts.
CARRYING
AMOUNT
- 75 BPS
+ 75 BPS
PROFIT
EQUITY
PROFIT
EQUITY
$ ‘000
$ ‘000
$ ‘000
$ ‘000
$ ‘000
Financial assets
2023 - Cash and cash equivalents
2022 - Cash and cash equivalents
46,578
55,266
80
Financial liabilities
2023 - Borrowings
2022 - Borrowings
2023
2022
-
-
(349)
(414)
-
-
(349)
(414)
(349)
(414)
-
-
(349)
(414)
349
414
-
-
349
414
349
414
-
-
349
414
CREDIT RISK MANAGEMENT
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. Company policy is to deal with creditworthy counterparties and obtain sufficient collateral where
appropriate as a means of mitigating the risk of financial loss from default. Reviews of customer creditworthiness are
undertaken before payment and delivery terms are offered. The review assesses credit quality of the customer, taking
into account its financial position, past experience, industry reputation and other factors. Purchase limits are established
for each customer, and compliance with credit limits is regularly monitored. Customers that fail to meet benchmark
creditworthiness may transact with the Company only on a prepayment basis. Sales to retail customers are required to be
settled in cash or by using major credit cards, mitigating credit risk.
With respect to credit risk arising from other financial assets of the Company, which comprise cash and cash equivalents,
the Company’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the
carrying amount of these instruments.
The Company’s maximum exposure to credit risk at the report date was:
Cash and cash equivalents
Trade receivables
Contract assets
NOTE
8
9
9
2023
$ ‘000
46,578
36,680
31,724
114,982
2022
$ ‘000
55,266
50,855
43,939
150,060
The Company applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables
and contract assets. In measuring the expected credit losses, the trade receivables have been assessed on an individual
customer basis. They have been grouped based on the days past due.
Trade receivables are written off (derecognised) when there is no reasonable expectation of recovery. Cessation of
customer operations or failure to engage with the Company on alternative payment arrangement amongst others are
considered indicators of no reasonable expectation of recovery.
Fleetwood Australia
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
21. FINANCIAL RISK MANAGEMENT (CONTINUED)
The aging of the Company’s non-impaired trade receivables past due at reporting date was:
CURRENT
GREATER
THAN 30 DAYS
GREATER
THAN 60 DAYS
TOTAL
30 June 2023
Gross carrying amount ($’000s)
24,071
9,649
Expected credit loss rate ($’000s)
Lifetime expected credit loss
30 June 2022
-
0%
8
0%
Gross carrying amount ($’000s)
22,742
15,646
Expected credit loss rate ($’000s)
Lifetime expected credit loss
-
0%
-
0%
2,960
600
20%
12,467
1,701
14%
36,680
608
2%
50,855
1,701
3%
81
The carrying amount of financial assets recorded in the financial statements represents the Company’s maximum exposure
to credit risk.
LIQUIDITY RISK MANAGEMENT
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate
liquidity risk framework for the management of short, medium and long-term funding. Liquidity risk is managed by
maintaining adequate reserves and banking facilities, by monitoring forecast and actual cash flows and by matching the
maturity profiles of financial assets and liabilities. Note 16 lists unused facilities that the Company has at its disposal to
reduce liquidity risk. The remaining contractual maturities of the Company are:
+ 3 months or less: Trade and other payables as disclosed at note 14. Trade and other payables do not attract an interest
charge and are expected to be settled within 60 days of year end.
+ 12 months or more: Lease Liabilities as disclosed at note 17.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The fair value of financial assets and liabilities recognised in the statement of financial position is based on cash flows
due from customers or payable to suppliers. The cash flows have not been discounted to their present value, except as
disclosed in the table below. The carrying values approximate fair value. The fair values of financial instruments are derived
from quoted prices (unadjusted) in active markets for identical assets or liabilities. There are clearly observable quoted
prices all financial instruments held by the Company. Some of the Company’s financial assets and liabilities are measured
at fair value and the end of each reporting period. Information about how the fair values of these financial liabilities are
determined (in particular, the valuation techniques and inputs used).
FAIR VALUE AS AT
2023
$’000
2022
$’000
FAIR VALUE
HIERARCHY
VALUATION
TECHNIQUE AND KEY
INPUTS
Financial assets
Foreign currency
forward contracts
Financial liabilities
Foreign currency
forward contracts
21
Nil
Nil
19
Level 2 Discounted cash flow.
Future cash flows are
estimated based on
forward exchange
rates and contract
forward rates,
discounted to their
present value.
Level 2 Discounted cash flow.
Future cash flows are
estimated based on
forward exchange
rates and contract
forward rates,
discounted to their
present value.
Annual Report | FY2023
21. FINANCIAL RISK MANAGEMENT (continued)
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
21. FINANCIAL RISK MANAGEMENT (CONTINUED)
RECOGNITION AND MEASUREMENT
FOREIGN CURRENCY FORWARD CONTRACTS
The Company enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risk.
The Company’s foreign currency forward contracts are initially recognised at fair value at the date the contract is entered
into and are subsequently remeasured to their fair value at the end of each reporting period. These contracts are fair
valued using observable forward exchange rates and interest rates corresponding to the maturity of the contract. The
resulting gain or loss is recognised in Statement of Profit or Loss and Other Comprehensive Income immediately.
22. CONTINGENT LIABILITIES
Under the terms of the Deed of Cross Guarantee, the Company has guaranteed the repayment of all current and non-
current liabilities totalling $108,599,000 (2022: $146,661,000) in the event any of the entities which are party to the Deed
are wound up.
82
The Directors are not aware of any circumstances or information that would lead them to believe these liabilities will
crystallise and consequently no provisions are included in the financial statements in respect of these matters.
Certain claims arising out of construction and insurance contracts have been made by or against controlled entities in the
ordinary course of business, some of which involved litigation or adjudication. The Directors do not consider the outcome
of any of these claims will have a material adverse impact on the financial position of the consolidated entity.
23. CONTROLLED ENTITIES
Fleetwood Limited (Ultimate parent entity)
Continuing Operations
CONTROLLED ENTITIES
PLACE OF
INCORPORATION
PRINCIPAL ACTIVITIES
Northern RV Pty Ltd
ACN 008 763 193
Camec Pty Ltd
ACN 004 846 584
Camec (NZ) Limited
NZBN 9429038762321
Australia
Australia
New Zealand
Fleetwood VIC & QLD Pty Ltd
Australia
(Formerly BRB Modular Pty Ltd)
ACN 114 678 349
Fleetwood WA & SA Pty Ltd
Australia
(Formerly Fleetwood Building Solutions Pty
Ltd)
ACN 009 306 950
Caravan plumbing and electrical
services and parts supplier.
Manufacturer and distributor of parts
and accessories to the recreational
vehicles industry.
Manufacturer and distributor of parts
and accessories to the recreational
vehicles industry.
Accommodation solutions provider to
the resources, education and affordable
housing sectors.
INTEREST
HELD (%)
2023
2022
100
100
100
100
100
100
100
100
Accommodation solutions provider to
the resources, education and affordable
housing sectors.
100
100
Fleetwood NSW Pty Ltd
Australia
(Formerly Modular Building Systems Pty Ltd)
Accommodation solutions provider to
the resources, education, affordable
housing and corrections sectors.
100
100
ACN 127 380 330
Glyde Digital Pty Ltd
(Formerly ACN 050 031 993 Pty Ltd)
Australia
Fleetwood Share Plans Pty Ltd
Australia
ACN 603 368 903
Development and commercialisation of
a keyless lock and energy management
system.
100
100
Administration of Employee Long Term
Incentive Plan
100
100
Fleetwood Australia
21. FINANCIAL RISK MANAGEMENT (continued)
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
23. CONTROLLED ENTITIES (CONTINUED)
Discontinued and Dormant operations
CONTROLLED ENTITIES
PLACE OF
INCORPORATION
PRINCIPAL ACTIVITIES
Fleetwood Finance (WA) Pty Ltd
Australia
Dormant
INTEREST
HELD (%)
2023
2022
100
100
ACN 008 740 743
Recreational Vehicle Concepts Pty Ltd
Australia
ACN 008 682 513
ACN 625 111 328 Pty Ltd
ACN 625 109 702 Pty Ltd
ACN 625 109 793 Pty Ltd
Fleetwood Limited
NZBN 9429038426193
Discontinued caravan manufacturing
operation
100
100
Australia
Australia
Australia
Discontinued retail of caravans, parts
and accessories operation
Dormant
Dormant
New Zealand
Dormant
100
100
100
100
100
100
100
100
83
Fleetwood Limited is the head entity within the tax consolidated group. All companies incorporated in Australia are
members of the tax consolidated group.
24. RELATED PARTIES
DIRECTORS
The names of each person holding the position of Director of Fleetwood Limited during the financial year were John
Klepec, Bruce Nicholson, Adrienne Parker, Jeff Dowling, Mark Southey, and Martin Monro.
No Director has entered into a material contract with the Company or the consolidated entity during and since the end of
the financial year and there were no material contracts involving directors’ interests existing at year-end.
Directors of the Company or its controlled entities may purchase goods from the consolidated entity. These purchases are
on the same terms and conditions as those entered into by other consolidated entity employees.
Further information on remuneration of directors and key management personnel can be found in the Remuneration
Report.
KEY MANAGEMENT PERSONNEL
Aggregate compensation of the key management personnel of the consolidated entity and the Company for the year:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total
CONSOLIDATED
2023
$
2022
$
4,197,373
3,622,709
291,185
210,368
(132,740)
251,201
304,903
396,101
4,566,186
4,574,914
Transactions between Fleetwood Limited and its related parties
During the financial year subsidiaries of the parent company paid $2,000,000 (2022: $5,000,000) dividends to the
parent entity. Non-current loans totaling $123,271,481 (2022: $138,239,317) repayable to the parent are outstanding at
reporting date.
Transactions and balances between the Company and its subsidiaries were eliminated in the preparation of the
consolidated financial statements of the Company.
Annual Report | FY2023
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )
For the year ended 30 June 2023
25. PARENT ENTITY DISCLOSURES
84
28.1 Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Retained earnings
Total equity
28.2 Financial performance
(Loss) / profit for the year
Other comprehensive income
Total comprehensive loss
PARENT
2023
$’000
2022
$’000
NOTE
51,320
164,469
215,789
2,702
3,142
5,844
253,361
(1,597)
(41,819)
209,945
(241)
-
(241)
53,514
165,561
219,075
2,408
3,538
5,946
253,170
(1,288)
(38,752)
213,130
415
-
415
28.3 Guarantees entered into by the parent entity
Guarantee provided under the deed of cross guarantee
20
108,599
146,661
The accounting policies of the parent entity, which have been applied in determining the financial information above are
the same as those applied in the consolidated financial statements.
Under the terms of the Deed of Cross Guarantee, the Company has guaranteed the repayment of all current and non-
current liabilities totaling $108,599,000 (2022: $146,661,000) in the event any of the entities which are party to the Deed
are wound up.
The parent entity had no other contingent liabilities as at 30 June 2023 (2022: nil).
26. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
On 30 August 2023, the Directors declared a final dividend of 2.1 cents per share with respect to the year ended
30 June 2023.
No adjusting or significant non-adjusting events occurred between the reporting date and the date of authorisation of this
report.
The report is provided separately
Fleetwood Australia
I N D E P E N D E N T A U D I T O R ’ S R E P O R T
For the year ended 30 June 2023
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
85
Independent auditor’s report to the members of Fleetwood Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Fleetwood Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2023, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report | FY2023
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T ’ D )
For the year ended 30 June 2023
86
2
Revenue Recognition on Construction Contracts
Why significant
How our audit addressed the key audit matter
The Group recognises revenue from
construction contracts in accordance with the
requirements of AASB 15 Revenues from
Contracts with Customers, by measuring the
percentage of completion with reference to
costs incurred relative to the total expected
costs to be incurred on each contract. Total
revenue recognised in connection with
construction contracts for the year ended 30
June 2023 was $296 million.
This is a key audit matter due to the degree of
complexity, estimation and judgement required
with regard to:
• Determining the transaction price under the
customer contract
• Assessing the total contract costs
• Measuring the Group’s progress towards the
complete satisfaction of the performance
obligations under the customer contract
The Group’s accounting policies and disclosures
for revenue are detailed in Note 1.6 Critical
Accounting Judgement and Sources of
Estimation Uncertainty and Note 2 Sales
Revenue of the financial report.
In our testing of the revenue recognition for the
reporting period, we selected construction
contracts on a sample basis and:
► Held discussions with applicable Group
executives to understand the specific terms and
risks of those contracts to assess the revenue
recognition policies adopted by the Group;
► Understood the performance and status of
the major contracts through enquiries with
Group executives with oversight over the
various contract portfolios;
► Assessed the contract status through the
examination of external evidence, such as
signed contracts, approved variations and
customer correspondence
► Analysed the Group’s estimates of total
contract costs and forecast costs to complete
► Tested costs incurred during the year to
supporting documentation such as supplier
invoices or approved timesheets and cost
allocations to projects
► Recalculated the percentage of completion
based on the forecast costs and the total actual
costs incurred; and
► Recalculated the revenue recognised based
on the percentage of completion.
We assessed the adequacy of the related
disclosures in the financial report.
Goodwill – Building Solutions
Why significant
How our audit addressed the key audit matter
As at 30 June 2023, the Group carries $32
million in Goodwill in the Building Solutions cash
generating unit (CGU). In accordance with the
requirements of Australian Accounting
Standards, the Group is required to test all CGUs
annually for impairment where goodwill is
present. The Group assesses the recoverable
amount of the Building Solutions CGU using a
fair value less cost of disposal methodology.
Our audit procedures included the following:
► Assessed whether the methodology applied
by the Group in testing the recoverable amount
of Building Solutions CGU met the requirements
of Australian Accounting Standards.
► Assessed the basis for the determination of
the Group’s CGUs based on our understanding of
the nature of the Group’s business, the
interdependence of cash flows, and the
economic environment in which it operates.
As disclosed in Note 12 to the financial
statements, no impairment of goodwill was
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Fleetwood Australia
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T ’ D )
For the year ended 30 June 2023
3
87
Why significant
How our audit addressed the key audit matter
recognised during the year (2022: $28.5m
impairment of goodwill).
Assumptions used in the forecasting of cash
flows are highly judgmental and inherently
subjective. As disclosed in Note 12, the fair
value less cost of disposal calculations are
sensitive to a number of key assumptions
requiring management judgement.
As a result, we considered the recoverability of
the carrying value of the Building Solutions cash
generating unit (CGU), inclusive of goodwill and
the related disclosures in the financial report to
be a key audit matter.
► Tested the mathematical accuracy of the
discounted cash flow model and cost of disposal
calculation.
► Assessed the cash flow forecasts with
reference to historical budgeting accuracy and
current trading performance, historical growth
rates, historical operating results, market data
and forecasts, ratio analysis, and discussions
with management and senior executives.
► Involved our valuation specialists to:
o Assess the discount rates and terminal
growth rates with reference to publicly
available information on comparable
companies in the industry and markets
in which the Group operates;
o Review the appropriateness of the
methodology and assumptions used in
valuing the land property of the Building
Solutions CGU;
o Perform sensitivity analyses and
evaluate the impact of reasonably
possible changes in certain assumptions
on the recoverable amount.
We also assessed the adequacy of the
disclosures concerning impairment of the CGU
as described in Note 12 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report | FY2023
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T ’ D )
For the year ended 30 June 2023
88
4
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Fleetwood Australia
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T ’ D )
For the year ended 30 June 2023
5
89
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report | FY2023
I N D E P E N D E N T A U D I T O R ’ S R E P O R T ( C O N T ’ D )
For the year ended 30 June 2023
90
6
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of Fleetwood Limited for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
R J Curtin
Partner
Perth
30 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Fleetwood Australia
A S X A D D I T I O N A L I N F O R M A T I O N
As at 22 August 2023
Additional Information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below:
FULLY PAID ORDINARY SHARES
Twenty largest shareholdersw
NAME
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
PALM BEACH NOMINEES PTY LIMITED
KARRAD PTY LTD
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SANDHURST TRUSTEES LTD
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