2024 Annual Report
2024 Annual Report
ii
From the Board
2
Board of Directors
4
Regional Summary
6
Consolidated Financial Statements
9
Notes to the Consolidated Financial Statements
15
Independent Auditor’s Report
45
Remuneration Report
49
Statutory Information
53
Company Directory
60
CONTENTS
Contents
1
This Annual Report is dated 28 May 2024 and is signed on behalf of
the Board by the Directors
SHAWN BECK
Metro Performance Glass
Chair
SIMON BENNETT
Metro Performance Glass
Executive Director
2024 Annual Report
2
The 23/24 financial year
saw challenging trading
conditions, particularly in the
second half of the year, as
action to reduce the impact
of persistent inflation
resulted in higher interest
rates which brought about
a softness throughout
the construction sector,
particularly in New Zealand.
These conditions are
expected to continue
to constrain demand
for some time.
Activity in the residential sector softened
through the second half of 2023, impacting
demand for glass. The beginning of the
calendar year was particularly weak as
the sector restarted more slowly than
expected after the Christmas holiday
period. In late February 2024, we stopped
processing glass at the Wellington factory
and we closed a regional branch in Auckland.
During the year, we reduced headcount in
New Zealand by 11%.
In spite of lower demand, gross profit
margins recovered as an easing in supply
chain disruptions resulted in stabilised
input costs. The growing demand for
higher value double-glazing products
in New Zealand and Australia also
partially offset the lower construction
sector activity.
Australian Glass Group (AGG) continues to
deliver improved financial and operational
performance at a time of residential
sector softness, partially offset by the
penetration of double glazing in new
residential buildings. The capital programme
is on track which will expand capacity and
improve plant reliability.
Financial performance
Group revenue for the year to 31 March
2024 of $239.3 million was 9% lower than
the prior year, supported by 4% growth in
Australia offset by 15% softer revenue in
New Zealand.
Solid profitability in Australia was not
enough to offset the New Zealand
performance. Group EBIT before significant
items reduced to $7.2 million. This result
was 39% below the prior year and in line
with guidance provided in March 2024.
Net debt decreased by 12%, or $7.0 million,
to $53.0 million in the 12 months to March
2024, which was better than the March
2024 guidance. The net debt reduction was
driven by efforts to reduce working capital
in the form of inventory as supply chain
reliability improved. Debtor and creditor
profiles also reduced as a direct result of
the softer trading conditions.
Our people
We are fortunate to have a talented and
resilient team at Metroglass and the Board
would like to thank them for their efforts in
a tough economic climate.
We are particularly proud of the growth in
our safety culture, resulting in downward
numbers of injuries and no significant harm.
FROM
THE
BOARD
From the Board
...Metroglass’ strategy is to be
the leader in glass solutions,
and this is underpinned by
significant depth in expertise,
proven and world-class
technology, and a dedication to
delivering to our customers.
3
Positioning New Zealand for
a changing market
The financial benefits of the cost-out
programme initiated last year continue
to flow through. In addition, further shift
structure changes and reduced overhead
cost initiatives were completed during the
year. The New Zealand business now has
11% lower headcount from one year ago.
The reduction in size of the management
team reflects the ongoing search for
opportunities to take costs out of
the business.
The very tough trading conditions and
uncertain short-term outlook (particularly
in NZ) requires the company to do
everything it can to improve profitability, as
quickly as possible. The NZ business needs
an exceptionally clear focus and immediate
step-change in performance.
The company has implemented cost
reduction programmes in NZ, which has
unfortunately impacted many staff. This
performance improvement must be
accelerated and expanded in scope.
Although there may be future impact on
our team, that is not the core focus. Our
people continue to be the company’s single
most important strength, so our focus will
be more on creating the environment and
conditions to enable staff to perform at
their best.
The Board reduced its numbers from six
to four and at the same time agreed to
suspend sub-committee fees until the
business performance improves markedly.
Investments in furnacing capacity and
capability in Auckland and Christchurch
in the last financial year have delivered
processing efficiencies and enabled the
launch of a new distribution route through
the central North Island that will leverage
the Group’s scale to efficiently serve
customers in those areas.
Australia Glass Group
performing to plan
Australian Glass Group (AGG) continued its
momentum and delivered solid operating and
financial performance in a period of cost
inflation. Revenue growth of 4% to $79.7
million is underpinned by the high-performing
double-glazing market which appears to be
holding firmer than the emerging general
market softness. In February, the Victorian
operations were affected by a 3-day power
outage which took the gloss off what was an
excellent year.
During the year, the business installed a
series of equipment upgrades in New South
Wales and increased double glazing capacity
in Victoria by repurposing equipment from
the Mount Maunganui plant in New Zealand.
The positive result reflects excellent
leadership, consistent operational and
financial stability, and a solid customer
base. In the near term AGG remain
focused on maintaining its profitability and
optimising working capital.
Capital management
Metroglass’ net debt decreased by
$7.0 million to $53.0 million compared with
31 March 2023, enabled by significant
reductions in working capital in the
12 months since 31 March 2023.
As previously communicated to shareholders,
cash flows from operations alone,
particularly in a downturn, cannot reduce
debt rapidly enough and other alternatives
need to be considered.
In February 2O23, Metroglass announced
the start of an asset sale process for our
AGG operation. This process took longer,
and was more costly than anticipated and
did not result in a satisfactory offer to
bring to shareholders. While the new Board
favours a capital raise to better position our
balance sheet, rather than selling a growing
and valuable asset at what may be near the
bottom of the economic cycle, other options
are also being pursued.
Market outlook
Economic forecasts suggest a tough 2024
with stubbornly high inflation and interest
rates continuing downward pressure on the
sector, offset by underlying housing demand
from immigration.
Metroglass expects demand constraints,
in the next 12 months, to be aligned with
the economic outlook in the construction
sector in New Zealand. The business has
resized to meet expected demand while
ensuring customer service and quality are
not compromised.
In Australia, demand for AGG’s products
and services remains solid but subdued,
supported by national construction code
changes increasing double-glazing usage in
residential buildings. AGG’s niche positioning
provides some protection from wider
sector softening.
Metroglass’ strategy is to be the leader in
glass solutions, and this is underpinned by
significant depth in expertise, proven and
world-class technology, and a dedication to
delivering to our customers.
While these broad goals have not changed,
the new governance and management
leadership of the business will herald a shift
in focus. We must acutely manage cost
to serve, quality of product and delivery
on time. With our current capable team,
we must embark on a turnaround of the
New Zealand business, in a similar way we
have turned the Australian business around.
We will be utilising this experience and
the capability of AGG in carrying out this
critical task.
We’d like to take this opportunity, on behalf
of the board and management team, to
thank our employees again, customers,
suppliers and shareholders for their
continued commitment and support.
SIMON BENNETT
Non-independent Executive Director
Appointed: December 2023
Simon is an experienced CEO, entrepreneur,
and company director. Simon was previously
the CEO of Accordant Group which
encompassed numerous recruitment
businesses. He had previously worked in
retail and manufacturing.
Simon’s current directorships include
The Icehouse, Chair of Accordant, and
trustee of the International Centre for
Entrepreneurship Foundation. Simon will
scale back his board commitments in order
to lead the Metro team.
Simon was appointed as an independent
non-executive director on 11 December
2023. He was appointed as Executive
Director on 6 May 2024 and was
determined by the Board to be a non-
independent director while in that role.
SHAWN BECK
Independent, Non-Executive Chair
Appointed: November 2023
Shawn has a varied background,
including serving as an equities analyst
and institutional dealer, investment
banker, private equity general
partner, company director, company
founder, and owner operator.
Specific experience includes: nearly
20 years as a co-founding director of
Pencarrow Private Equity, director and/
or chair of approximately 15 companies
in a wide range of industries including
three publicly listed NZX companies, and
execution or direct oversight of around
70 corporate finance transactions
including IPO’s, debt and equity
raisings, M&A and listed takeovers.
BOARD OF
DIRECTORS
2024 Annual Report
4
JULIA MAYNE
Independent, Non-Executive Director
Appointed: September 2021
Julia has more than 30 years experience
in financial and operational improvement
roles, focused in particular on the
Australasian building materials sector.
Julia is currently the Head of Commercial
at Scottish Pacific Business Finance. Prior
to this, she completed several consulting,
programme management or Acting CEO
roles focused on business improvement.
From 2001 to 2015, Julia held senior
financial leadership positions across the
Fletcher Building Group, including the roles
of General Manager Finance – Building
Products division, the CFO of the Crane
Division, and Divisional Finance Manager –
Stramit Building Products.
Julia is a qualified CPA, has a CPA MBA from
Deakin University, a Bachelor of Commerce
(Hons) from the University of NSW and a
Bachelor of Commerce from the University
of Wollongong.
Board of Directors
PRAMOD KHATRI
Independent, Non-Executive Director
Appointed: December 2023
Pramod has over 35 years of experience
in the Finance, Dairy, Construction and
Manufacturing industries. In 2001 Pramod
joined McKechnie Metals and in 2004
led a management buyout. As both the
Managing Director and major shareholder
of McKechnie, Pramod transformed the
company to a more value adding diversified
aluminium business. In 2012, McKechnie
entered the window and doors segment
through the acquisition of the Omega
business. In 2022, Pramod stepped down
when the business was sold.
Pramod has a B.Com and an MBA and has
been the Chairman and Shareholder of
Christchurch based AW Fraser Limited
since 2006. Pramod is also a trustee in
a New Plymouth based charitable trust
providing financial support to students
entering tertiary studies.
5
North Island
Metroglass North Island
supplies and installs glass
products for customers
from Wellington in the south
to Kaitāia in the north, from
Taranaki in the west to
Gisborne in the east.
Our manufacturing site is based in Highbrook,
Auckland. This site is fully automated for DGU
production and can produce the largest and
most complex glass products made anywhere
in NZ. H1 Legislative changes for increased
insulation levels in new residential builds has
had a significant impact, shifting the
production of high value Low E from 25% to
over 50% of total production.
We have eight sites across the North Island
which have installation capability, with
glazing teams installing into a range of
different applications including large
Commercial projects, frameless showers
and balustrades, and Retrofit double glazing
for consumers’ homes.
One of the things we are most proud of at
Metro is our great people, with customer
feedback always rating people as one of our
greatest strengths. Last year we celebrated
10 people with long-service anniversaries who
together had 190 years tenure at Metro
which is such fabulous experience to have in
the business. We have recently celebrated
one year free from Lost-Time Injuries in the
Highbrook plant, which is a great safety
achievement for our team.
REGIONAL
SUMMARY
ROBYN GIBBARD
General Manager North Island
One of the
things we are
most proud of
at Metro is our
great people,
with customer
feedback
always rating
people as one
of our greatest
strengths.
2024 Annual Report
6
Australian Glass Group (AGG)
Australian Glass Group is a
leading supplier of insulated
glass units (IGUs) in Australia
and is known for its high
performance products,
quality, and customer service.
AGG has industry-leading brands, products,
technical and specification support,
and customer service. Its main brand is
Insulglass® which can be double-glazed or
triple-glazed units.
AGG mainly services cooler climates
of south-eastern Australia (60% of
the Australian population) from three
processing facilities in Melbourne, Sydney,
and Hobart, where insulated glassing units
are most frequently required for ‘energy
efficiency’. AGG sells predominantly to
window fabricators in the medium-high end
housing market.
The future for AGG is looking favourable
with new government building regulations
driving demand in insulated glass units.
AGG is well positioned to capitalise on this
expected IGU growth given its specialised
manufacturing expertise, product range,
brand, technical and specification support,
and geographical positioning.
Regional Summary
South Island
The South Island team
consists of 230 people
spread over 5 branches with
the manufacturing plant
based in Christchurch.
The South Island financial performance
has increased over the prior year. This
has been achieved through operational
efficiency, with factory costs reduced by
13% compared to the previous year and due
to our experienced sales team, successfully
capturing required market share gains
across the South Island. This stability
and focus have been crucial in navigating
market dynamics and driving business
growth.
Our people are our greatest asset and
their safety and wellbeing continue to be
a top priority for our business. So it is
with great pride that our manufacturing
plant celebrated one year without a Lost
Time Injury, while our branches and glazing
entities have impressively reached 900 days
LTI free.
Operational stability and reliability
across the plant have been enhanced
significantly. We have instituted reliability
programmes covering plant, capacity
planning, and people aspects, contributing
to a consistent 4-day lead time on double
glazing products.
NICK HARDY-JONES
General Manager South Island
STEVE HAMER
CEO Australia Glass Group
This stability
and focus have
been crucial
in navigating
market dynamics
and driving
business growth.
The future for
AGG is looking
favourable with
new government
building regulations
driving demand
in insulated
glass units.
7
Non-GAAP Financial Information
NON-GAAP FINANCIAL INFORMATION
Metroglass’ standard profit measure prepared under New Zealand Generally Accepted Accounting Practice (GAAP) is profit for the
period, or net profit after tax. Metroglass has used non-GAAP measures which are not prepared in accordance with New Zealand
International Financial Reporting Standards (NZ IFRS) when discussing financial performance in this document. The Directors and
management believe that these non-GAAP financial measures provide useful information to readers to assist in the understanding
of the Group’s financial performance, financial position or returns, and used internally to evaluate the performance of business units
and to establish operational goals. These measures should not be viewed in isolation, nor considered as a substitute for measures
reported in accordance with NZ IFRS. Non-GAAP financial measures may not be comparable to similarly titled amounts reported by
other companies.
Definitions of non-GAAP financial measures used in this report:
* EBITDA: Earnings before interest, tax, depreciation and amortisation.
GAAP TO NON-GAAP RECONCILIATION
Full year to 31 March
FY24
($M)
FY23
($M)
(Loss)/profit for the period before significant items
(2.0)
1.5
Less: Impairment of intangible assets
(20.9)
(10.0)
Less: NZ restructuring, and Australian divestment
(4.6)
(2.0)
Loss for the period (GAAP)
(27.5)
(10.5)
Add: taxation expense
(1.9)
–
Add: net finance expense
11.1
10.3
Earnings before interest and tax (EBIT) (GAAP)
(18.3)
(0.2)
Add: depreciation & amortisation
17.9
19.0
EBITDA
(0.4)
18.7
EBIT (GAAP)
(18.3)
(0.2)
Add: Impairment of intangible assets
20.9
10.0
Add: NZ restructuring, and Australian divestment
4.6
2.0
EBIT before significant items
7.2
11.8
EBITDA
(0.4)
18.7
Add: Impairment of intangible assets
20.9
10.0
Add: NZ restructuring, and Australian divestment
4.6
2.0
EBITDA before significant items
25.1
30.7
2024 Annual Report
8
Consolidated Statement of Comprehensive Income
10
Consolidated Statement of Financial Position
11
Consolidated Statement of Changes in Equity
12
Consolidated Statement of Cash Flows
13
Notes to the Consolidated Financial Statements
15
1. Basis of Preparation
15
2. Financial Performance
17
3. Working Capital
21
4. Long-Term Assets
30
5. Debt and Equity
37
6. Other
40
CONTENTS
OUR
RESULTS
9
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2024
NOTES
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Revenue
2.1
239,280
263,520
Cost of sales
2.3
(140,649)
(158,453)
Gross profit
2.1
98,631
105,067
Distribution and glazing-related expenses
2.3
(45,733)
(47,269)
Selling and marketing expenses
2.3
(12,584)
(12,796)
Administration expenses
2.3
(33,791)
(33,935)
Share of profits of associate
4.4
415
414
Other income and gains and losses
2.6
246
303
Profit before significant items, interest and tax
7,184
11,784
Significant items
2.4
(25,437)
(12,032)
Loss before interest and tax
(18,253)
(248)
Finance expenses
2.7
(11,194)
(10,870)
Finance income
58
537
Loss before income taxation
(29,389)
(10,581)
Income tax benefit
6.1
1,877
33
Loss for the year
(27,512)
(10,548)
Other comprehensive income
Items that may be reclassified to profit or loss in the future:
Exchange differences on translation of foreign operations
919
(424)
Change in fair value of hedging instruments (net of tax)
3.5
(224)
536
Total comprehensive loss for the year attributable to shareholders
(26,817)
(10,436)
Earnings per share
Basic and diluted earnings per share (cents per share)
2.5
(14.8)
(5.7)
The Board of Directors authorised these financial statements for issue on 28 May 2024.
For and on behalf of the Board:
Shawn Beck
Julia Mayne
Chair
Director
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
10
2024 Annual Report
Consolidated Statement of Financial Position
at 31 March 2024
NOTES
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
ASSETS
Current assets
Cash and cash equivalents
6,634
7,300
Trade receivables
3.1
33,335
38,083
Inventories
3.2
25,639
31,826
Derivative financial instruments
3.5
175
251
Current income tax asset
1
1
Other current assets
3.7
3,317
3,237
Total current assets
69,101
80,698
Non-current assets
Property, plant and equipment
4.1
46,137
50,674
Right-of-use assets
4.2
64,459
65,335
Deferred tax assets
6.2
12,443
10,398
Investment in associate
4.4
2,027
2,512
Intangible assets
4.3
23,764
44,336
Other non-current assets
3.7
990
650
Total non-current assets
149,820
173,905
Total assets
218,921
254,603
LIABILITIES
Current liabilities
Trade and other payables
3.3
25,486
27,208
Deferred income
3.4
1,709
2,054
Derivative financial instruments
3.5
6
107
Lease liabilities
5.2
7,307
7,452
Interest-bearing liabilities
5.1
57,802
–
Provisions
3.6
830
633
Total current liabilities
93,140
37,454
Non-current liabilities
Interest-bearing liabilities
5.1
1,861
67,370
Lease liabilities
5.2
71,086
70,432
Provisions
3.6
3,843
3,880
Total non-current liabilities
76,790
141,682
Total liabilities
169,930
179,136
Net assets
48,991
75,467
Equity
Contributed equity
5.3
307,198
307,198
Accumulated losses
(88,776)
(61,901)
Group reorganisation reserve
6.3
(170,665)
(170,665)
Share-based payments reserve
6.3
1,062
1,358
Foreign currency translation reserve
536
(383)
Hedge reserve
(364)
(140)
Total equity
48,991
75,467
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
11
Consolidated Statement of Changes in Equity
for the year ended 31 March 2024
CONSOLIDATED 2024
Notes
Contributed
equity
$'000
Reserves
$'000
Accumulated
losses
$'000
Total
$'000
Opening balance at 1 April 2023
307,198
(169,830)
(61,901)
75,467
Loss for the year
–
–
(27,512)
(27,512)
Movement in foreign currency translation reserve
–
919
–
919
Other comprehensive income for the year
–
(224)
–
(224)
Total comprehensive income/(loss) for the year
–
695
(27,512)
(26,817)
Expiry of share-based payments
–
(637)
637
–
Movement in share-based payments reserve
–
341
–
341
Total transactions with owners, recognised directly in equity
–
(296)
637
341
Balance at 31 March 2024
307,198
(169,431)
(88,776)
48,991
CONSOLIDATED 2023
Notes
Contributed
equity
$'000
Reserves
$'000
Accumulated
losses
$'000
Total
$'000
Opening balance at 1 April 2022
307,198
(169,934)
(51,735)
85,529
Loss for the year
–
–
(10,548)
(10,548)
Movement in foreign currency translation reserve
–
(424)
–
(424)
Other comprehensive income for the year
–
536
–
536
Total comprehensive income/(loss) for the year
–
112
(10,548)
(10,436)
Expiry of share-based payments
–
(382)
382
–
Movement in share-based payments reserve
–
374
–
374
Total transactions with owners, recognised directly in equity
–
(8)
382
374
Balance at 31 March 2023
307,198
(169,830)
(61,901)
75,467
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
12
2024 Annual Report
Consolidated Statement of Cash Flows
for the year ended 31 March 2024
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Cash flows from operating activities
Receipts from customers
242,972
259,338
Payments to suppliers and employees
(214,207)
(244,547)
Government wage subsidy and grants received
283
157
Repayment of balance due from associate
350
850
Interest received
107
41
Interest paid
(5,889)
(5,749)
Interest paid on leases
(4,691)
(4,847)
Income taxes paid
(9)
(113)
Net cash inflow from operating activities
18,916
5,130
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
92
528
Payments for property, plant and equipment
(3,984)
(6,734)
Payments for intangible assets
–
(76)
Net cash outflow from investing activities
(3,892)
(6,282)
Cash flows from financing activities
Lease liability principal payments
(7,561)
(6,873)
Repayment of borrowings
(14,000)
(10,500)
Drawdown of borrowings
6,000
13,500
Repayment of other financing
(507)
(794)
Net cash outflow from financing activities
(16,068)
(4,667)
Net decrease
(1,044)
(5,819)
Cash and cash equivalents at the beginning of the year
7,300
13,064
Effects of exchange rate changes on cash and cash equivalents
378
55
Cash and cash equivalents at the end of the year
6,634
7,300
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
The table below sets out the annual movement in net debt:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Opening balance of interest-bearing liabilities at 1 April
67,370
65,319
(Repayment) /Drawdown of borrowings (net)
(8,000)
3,000
Other financing movement (net)
(507)
(794)
Foreign exchange and other adjustments
800
(155)
Closing balance of interest-bearing liabilities at 31 March
59,663
67,370
Less: cash and cash equivalents
(6,634)
(7,300)
Net debt at 31 March
53,029
60,070
13
Consolidated Statement of Cash Flows (continued)
for the year ended 31 March 2024
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Reconciliation of loss after income tax to net cash inflow from operating activities
Loss for the year
(27,512)
(10,548)
Adjustments for:
Depreciation and amortisation
17,920
18,960
Impairment of intangible assets
20,879
10,000
Share-based payments expense
341
374
Loss/(gain) on disposal of assets
101
(146)
Lease modification
–
(1)
Share of profit from associate
(415)
(414)
Other
–
160
38,826
28,933
Impact of changes in working capital items
Trade and other receivables
5,503
(2,942)
Inventory
6,316
(4,477)
Related party receivables
350
353
Other current assets
96
(623)
Trade accounts payable and employee entitlements
(1,972)
(3,277)
Deferred income
(345)
(1,396)
Interest accruals
16
(51)
Provisions
15
(1,197)
Movement in deferred tax
(1,925)
341
Movement in credit loss provision
(490)
559
Income tax liability
38
(545)
7,602
(13,255)
Net cash inflow from operating activities
18,916
5,130
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
14
2024 Annual Report
Notes to the Consolidated Financial Statements
1 BASIS OF PREPARATION
Reporting entity
These financial statements are for Metro Performance Glass Limited (‘the Company’ or ‘the parent entity’) and its subsidiaries
(together, ‘the Group’). The Group supplies processed flat glass and related products primarily to the residential and commercial
building sectors.
Statutory base
The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is
5 Lady Fisher Place, East Tamaki, Auckland.
1.1 Basis of preparation
These consolidated financial statements have been approved for issue by the Board of Directors on 28 May 2024.
The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice
in New Zealand (NZ GAAP). The Group is a for-profit entity for the purposes of complying with NZ GAAP and has operations and sales
in New Zealand and Australia. The consolidated financial statements comply with New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS), other New Zealand accounting standards and authoritative notices that are applicable to entities
that apply NZ IFRS. The consolidated financial statements also comply with International Financial Reporting Standards Accounting
Standards (IFRS Accounting Standards).
Metro Performance Glass Limited is registered under the New Zealand Companies Act 1993 and is a Financial Market Conduct
reporting entity under Part 7 of the Financial Markets Conduct Act 2013. The financial statements of the Group have been prepared in
accordance with the requirements of the New Zealand Stock Exchange (NZX) Main Board Listing Rules.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial
assets and financial liabilities at fair value.
Australian business sale process
On 23 February 2023 the Group announced plans to explore divestment options of the Group’s Australian business, Australian Glass
Group (AGG). During the year ended 31 March 2024 a number of costs were incurred and expensed in relation to this divestment
process, these are presented as significant items in the statement of comprehensive income (note 2.4).
At 31 March 2024 the divestment process had not reached a point that the Australian business could be considered an ‘asset held for
sale’ as a sale was not highly probable at that time. Accordingly the Australian business continued to be consolidated as a continuing
operation within the Group’s financial statements.
On 6 May 2024 the Group announced an offer had been received for the purchase of AGG. However, following evaluation of that
offer, the Board reached the view that progressing an offer on those terms would not be in the best interests of the Company or
its shareholders.
The impairment test of the Australian cash generating unit at 31 March 2024 has been performed using a value-in-use approach,
rather than a ‘fair value’ using the offer price that was not accepted (note 4.3).
Principles of consolidation
The financial statements incorporate the assets and liabilities of all subsidiaries of Metro Performance Glass Limited as at
31 March 2024 and the results of all subsidiaries for the year then ended.
Subsidiaries are all entities over which the Group has control. It is a controlled entity of the Group if the Group is exposed and has
a right to variable returns from the entity and is able to use its power over the entity to affect those returns. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated unless the transaction provided evidence of the impairment of the asset transferred.
Goods and Services Tax (GST)
The statement of comprehensive income has been prepared so that all components are stated exclusive of GST. All items in the
statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed in each accounting note as appropriate.
The critical accounting estimates and judgements at 31 March 2024 include:
• going concern (refer: going concern disclosure below)
• economic lives of intangible assets and property, plant and equipment (refer: note 4.1 Property, Plant and equipment)
• goodwill (refer: note 4.3 Intangible Assets)
Notes to the Consolidated Financial Statements
15
Notes to the Consolidated Financial Statements (continued)
Going concern
In preparing these financial statements, the Directors have considered various uncertainties facing the Group and its ability to continue
as a going concern. These uncertainties are outlined below.
At the year ended 31 March 2024, the Group has reduced its net debt to $53.0m, from $60.1m at 31 March 2023, achieved via lower
working capital investment and capital expenditure. At 31 March 2024, the Group’s banking facility stands at $75m, of which $57.8m
has been drawn down and presented as current liabilities in the Consolidated Statement of Financial Position with a maturity date of
October 2024. As a result, total current liabilities exceeded total current assets at 31 March 2024 by $24.0m.
The Group has a history of working with the existing bank syndicate and continues to work with the bank syndicate to extend or renew
its debt facility.
The Directors’ continue to focus on debt reduction and have considered a range of initiatives, including a capital raise and the sale of
Australian Glass Group (AGG). On 6 May 2024, the Group announced that following an extensive process and detailed discussions with a
preferred party, a revised offer for AGG had been received but following evaluation of that offer, the Board has reached the view that
progressing an offer on those revised terms would not be in the best interests of the Company or its shareholders.
While the Board will continue to keep all options open, including in relation to AGG, its intention is to retain its investment in AGG and
progress a capital raise to further reduce its debt level, create the conditions for AGG to grow and improve the New Zealand business.
In the Directors’ view there are tangible benefits to retaining AGG. AGG generates strong cash flows and provides diversification
benefits for the Group. It is also well positioned to benefit from investments in new equipment made last year and, with further
investment, from the adoption of new building regulations which are expected to drive the uptake of double-glazed glass.
While the Board has chosen to progress a capital raise as a means of reducing bank debt, until the terms of the raise are finalised, it
will continue to investigate all options that deliver a satisfactory outcome for the Company and maximise value for MPG shareholders,
including a sale of AGG if a satisfactory offer is received.
The Directors have received a letter from the bank syndicate indicating a willingness to work with the Group to renew the loan facilities,
subject to debt reduction through a capital raise or the sale of AGG (both with minimum required amounts). The Directors have also
been working with equity capital market advisors regarding the prospects of a capital raise. The Directors have approved a budget
for the year ending 31 March 2025 and are working on actions to improve the profitability of the Group. Based on these factors, the
Directors concluded the Group’s financial statements should be prepared on a going concern basis, though there are uncertainties
about the successful execution of a sufficient capital raise and the ability to reach an agreement with the bank syndicate for renewed
loan facilities on mutually acceptable terms including setting financial covenants that the Group can achieve.
The Directors consider that these uncertainties, which are future events not fully within their control, represent material uncertainties
affecting the going concern position of the Group that may cast significant doubt on the Group’s ability to continue as a going concern
and therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial statements do not include any adjustments that may be required if the Group is unable to continue as a going concern.
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in New Zealand dollars which is the Company’s functional and the Group’s
presentation currency, rounded where necessary to the nearest thousand dollars.
Transactions and balances
Foreign currency transactions are translated using the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. They are deferred in equity if they
relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a
foreign operation.
The results and financial position of foreign operations that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions);
• all resulting exchange differences are recognised in ‘Other comprehensive income;
• on consolidation, exchange differences arising from the translation of any net investment in foreign entities, and the borrowings
and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a
foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are
reclassified to profit or loss, as part of the gain or loss on sale.
16
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
Changes in accounting policy and disclosures
New and amended standards adopted by the Group
The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2023, and as
described in those annual financial statements.
2 FINANCIAL PERFORMANCE
2.1 Segment information
Operating segments of the Group at 31 March 2024 have been determined based on financial information that is regularly reviewed
by the Board in conjunction with the Chief Executive Officer and Chief Financial Officer, collectively known as the Chief Operating
Decision-maker for the purpose of allocating resources, assessing performance and making strategic decisions.
Substantially all of the Group’s revenue is derived from the sale of glass and related products and services. This revenue is split by
channel only at the revenue level into Commercial Glazing, Residential and Retrofit. Commercial glazing revenue reflects sales through
four specific commercial glazing operations in New Zealand. Retrofit revenue reflects sales through four specific retrofit operations in
New Zealand and the retrofit channel sales from all (Metro Direct) branches across New Zealand. Residential revenue reflects all other
sales channels. The allocation of sales between residential and commercial can be difficult as the Group does not always know the
end-use application. Following the acquisition of Australian Glass Group Pty Ltd (AGG) on 1 September 2016 the Group operates in two
geographic segments, New Zealand and Australia.
In the tables below:
• Group costs consist of insurance, professional services, Directors’ fees and expenses, listed company fees and share incentive
scheme costs.
• Refer to note 2.4 for details of significant items.
17
Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED 2024
New Zealand
$'000
Australia
$'000
Eliminations
and Other
$'000
Group
$'000
Commercial glazing
34,808
–
–
34,808
Residential
99,579
79,706
–
179,285
Retrofit
25,187
–
–
25,187
Total revenue
159,574
79,706
–
239,280
Gross profit
69,846
28,785
–
98,631
Segmental EBITDA before significant items
14,458
11,503
–
25,961
Group costs
–
–
(857)
(857)
Group EBITDA before significant items
25,104
Depreciation and amortisation
(13,174)
(4,746)
–
(17,920)
EBIT before significant items
1,284
6,757
(857)
7,184
Significant items
(22,725)
(2,712)
–
(25,437)
EBIT
(21,441)
4,045
(857)
(18,253)
Segment assets
276,592
79,028
(136,699)
218,921
Segment non-current assets (excluding deferred tax assets)
84,147
53,230
–
137,377
Segment liabilities
81,702
33,549
54,679
169,930
CONSOLIDATED 2023
New Zealand
$'000
Australia
$'000
Eliminations
and Other
$'000
Group
$'000
Commercial glazing
36,945
–
–
36,945
Residential
122,191
76,774
–
198,965
Retrofit
27,610
–
–
27,610
Total revenue
186,746
76,774
–
263,520
Gross profit
78,787
26,280
–
105,067
Segmental EBITDA before significant items
20,080
11,603
–
31,683
Group costs
–
–
(939)
(939)
Group EBITDA before significant items
30,744
Depreciation and amortisation
(13,725)
(5,235)
–
(18,960)
EBIT before significant items
6,355
6,368
(939)
11,784
Significant items
(11,878)
(154)
–
(12,032)
EBIT
(5,523)
6,214
(939)
(248)
Segment assets
307,901
70,501
(123,799)
254,603
Segment non–current assets (excluding deferred tax assets)
117,023
46,484
–
163,507
Segment liabilities
88,745
25,975
64,416
179,136
2.2 Revenue
Accounting policy
Revenue comprises the value of the consideration received for the sale of goods and services, net of GST, rebates and discounts and
after eliminating sales within the Group.
The Group derives revenue from the sale of customised glass products. Revenue is recognised at a point in time when a Group entity
has transferred control, which is when it has delivered the glass products to the customer, the customer has accepted the products
and collectability of the related receivables is highly probable.
The Group also provides glazing services along with the sale of its glass products. Revenue is recognised for the glazing and associated
glass products when the glazing services have been completed, the customer has approved the installation services and collectability
of the related receivables is highly probable.
18
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
2.3 Operating expenditure
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Raw materials and consumables used
74,497
86,643
Employee benefit expenses
95,596
99,750
Depreciation and amortisation
17,920
18,960
Other expenses
44,744
47,100
Total cost of sales, distribution and glazing-related expenses,
selling and marketing expenses, and administration expenses
232,757
252,453
Amortisation of intangible assets is included within administration expenses as reported in the consolidated statement of comprehensive income.
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Audit and review of financial statements
Audit of financial statements - PwC - current year
795
699
Audit of financial statements - PwC - prior year
–
18
Other services performed by PwC
Advice comparing the Group’s long-term incentive plan to market practice
15
–
Agreed upon procedures relating to the Group's covenant compliance certificate
8
6
Agreed upon procedures relating to financial information attached to a visa application
–
4
818
727
2.4 Significant items
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Impairment of New Zealand intangible assets
20,879
10,000
Restructure of the New Zealand operations
2,971
1,878
Australian divestment, capital raise, and takeover related expenses
1,587
154
Total significant items before taxation
25,437
12,032
Tax benefit on above items
(1,331)
(570)
Total significant items after taxation
24,106
11,462
Accounting policy
Significant items are a non-GAAP measure and are based on the Group’s internal policy as follows. Transactions considered for
classification as significant items are material restructuring costs, acquisition and disposal costs, impairment or reversal of impairment
of assets, business integration, and transactions or events outside of the Group’s ongoing operations that have a significant impact on
reported profit.
Impairment of New Zealand intangible assets
Additional detail on impairment charges can be seen in note 4.3 Intangible Assets.
19
Notes to the Consolidated Financial Statements (continued)
Restructure of the NZ operations
On 18 November 2022 the Group announced the initiation of a cost out programme to ensure that the business capacity and resources
are appropriate to service demand as the contruction sector cycle changes, including a comprehensive review of its organisational
structure and manufacturing footprint. This review culminated in the closure of the manufacturing facility in Bay of Plenty in December
2022, closure of the hardware procurement function in February 2023, the mothballing of the Wellington manufacturing facility in
February 2024, and other staff restructuring costs. The costs of this programme are included in the ‘Restructure of NZ operations’
significant item. The nature of the costs incurred include redundancy payments, loss on disposal of inventory, and costs incurred
transporting and re-commissioning assets.
Australian divestment, capital raise, and takeover related expenses
The Australian divestment costs include those professional service costs incurred for the investigation of the sale process.
On 6 May 2024 the Group announced that it will progress a capital raise to further reduce its debt level. The capital raise costs include
legal and professional fees incurred in the exploration of this activity.
During May and June 2023 the Group had received confidential enquiries from Masfen Securities Limited and affiliates about the
possibility of acquiring all the shares in the Company. On 17 July 2023, the Group received an unsolicited, non-binding, indicative proposal
from a consortium led by Takutai Limited and supported by Masfen Securities Limited. Takeover related expenses relate to professional
and legal expenses incurred related to this activity.
2.5 Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit or loss after tax of the Group by the weighted average number of ordinary
shares outstanding during the period. Due to the losses, the diluted earnings per share are the same as the basic earnings per share.
CONSOLIDATED
CONSOLIDATED
2024
2023
Loss after tax ($'000)
(27,512)
(10,548)
Weighted average number of ordinary shares outstanding ('000s)
185,378
185,378
Basic earnings per share (cents per share)
(14.8)
(5.7)
Net tangible assets
Net tangible assets per share is a non-GAAP measure that is required to be disclosed by the NZX Listing Rules.
The calculation of the Group’s net tangible assets per share and its reconciliation to the consolidated balance sheet is presented below:
CONSOLIDATED
CONSOLIDATED
2024
2023
Total assets ($’000)
218,921
254,603
Less: intangible assets
(23,764)
(44,336)
Less: total liabilities
(169,930)
(179,136)
Net tangible assets ($’000)
25,227
31,131
Shares on issue at the end of the period (‘000s)
185,378
185,378
Net tangible assets per share (cents per share)
13.61
16.79
2.6 Other income and gains and losses
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
NZ Government Wage Subsidy and Grants
283
157
(Loss)/gain on disposal of asset
(101)
146
Other
64
–
Total Other income and gains and losses
246
303
20
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
NZ Government Wage Subsidy and Grants
Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be received and
when the Group will comply with the attached conditions. Government grants relating to income are deferred and recognised in profit
or loss over the period necessary to match them with the conditions that they are intended to compensate.
2.7 Finance expenses
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Interest on borrowings and derivatives
6,194
5,706
Interest on lease liabilities
4,831
4,960
Interest on finance lease
169
204
Total finance expenses
11,194
10,870
3 WORKING CAPITAL
3.1 Trade receivables
The following table summarises the impact of the credit loss provision on the trade receivables balance:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Trade receivables
34,087
39,321
Credit loss provision
(752)
(1,238)
Total trade receivables
33,335
38,083
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Movements in the credit loss provision are as follows:
Opening balance
1,238
679
Provision increased during the year
436
1,055
Receivables written off during the year as uncollectable
(922)
(496)
Balance at the end of the year
752
1,238
Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, and credit exposures to wholesale and
retail customers, including outstanding receivables and committed transactions, and is managed at Group level.
The table below sets out information about the credit quality of trade receivables net of the expected credit loss provision:
CURRENT
0–59 DAYS
60–89 DAYS
90 DAYS
AND LATER
TOTAL
31 March 2024
$'000
$'000
$'000
$'000
$'000
Gross carrying amount
24,598
5,750
1,173
2,566
34,087
Baseline
38
8
25
147
218
Specific
-
-
48
486
534
Total expected credit loss rate
0.15%
0.14%
6.22%
24.67%
2.21%
Credit loss provision
38
8
73
633
752
21
Notes to the Consolidated Financial Statements (continued)
CURRENT
0–59 DAYS
60–89 DAYS
90 DAYS
AND LATER
TOTAL
31 March 2023
$'000
$'000
$'000
$'000
$'000
Gross carrying amount
31,055
5,561
758
1,947
39,321
Baseline
51
22
13
10
96
Specific
–
21
37
1,084
1,142
Total expected credit loss rate
0.16%
0.77%
6.60%
56.19%
3.15%
Credit loss provision
51
43
50
1,094
1,238
The Group extends credit to its customers based on an assessment of creditworthiness. Terms differ by customer and may extend to
60 days past invoice date. Ageing is based on agreed credit terms and at balance date, a portion of the Group’s receivables are also
subject to contractual retentions which can last up to and exceed 12 months.
As of 31 March 2024, allowing for retention balances of $1.0 million (2023: $1.2 million), trade receivables of $7.8 million (2023: $5.9 million)
were past due but not impaired.
Estimates and judgements
Credit loss provision
To measure expected credit losses, trade receivables have been grouped and reviewed on the basis of the number of days past due.
The credit loss provision has been calculated by considering the impact of the following characteristics:
• The baseline loss rate takes into account the write-off history of the Group over a five-year period as a predictor of future
conditions and applies an increasing expected credit loss estimate by trade receivables ageing profiles.
• Specific credit loss provisions are made based on any specific customer collection issues that are identified. Collections and
payments from the Group’s customers are continuously monitored and a credit loss provision is maintained to cover any specific
customer credit losses anticipated.
Accounting policy - trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for estimated
uncollectable amounts and expected credit losses. The carrying amount of the asset is reduced through the use of provision accounts,
and the amount of the loss is recognised in the statement of comprehensive income within ‘Administration expenses’. Individual
debtor accounts are reviewed for impairment and a provision is raised based on management’s best estimate of recoverability. Trade
receivables are also assessed for credit risk on a forward-looking basis with a provision raised where a credit loss is considered likely.
When a trade receivable is uncollectable, it is written off against the provision account for trade receivables. Subsequent recoveries of
amounts previously written off are credited to the income statement against the impairment losses on receivables.
3.2 Inventories
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Raw materials, primarily flat glass stock-sheets
18,138
23,890
Spare parts
5,471
5,083
Work in progress
2,030
2,853
25,639
31,826
The cost of inventories recognised as an expense and included in ‘Cost of sales’ amounted to $74.5 million (2023: $86.5 million).
Accounting policy - inventories
Raw materials, spare parts, and work in progress are stated at the lower of cost and net realisable value. Cost comprises direct
materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on
the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. Inventories also comprise spare parts, which are used to maintain service to, and repair,
the Group’s plant assets. Spare parts are stated at the lower of weighted average cost and net realisable value.
22
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
3.3 Trade and other payables
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Trade accounts payable
16,468
17,756
Employee entitlements
7,316
7,545
GST payable
326
1,124
Other interest accruals
257
241
Management incentive accrual
1,119
542
Total trade and other payables
25,486
27,208
Trade accounts payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period which are
unpaid. The carrying amount represents fair value due to their short-term nature.
Employee entitlements
Liabilities for wages and salaries, including non-monetary benefits, annual leave and leave in lieu, are recognised in respect of employees’
services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Management incentive accrual
The Group recognises a liability and an expense for bonuses on a formula that takes into consideration the loss attributable to the
Group’s shareholders. The Group recognises a provision where contractually obliged or where there is a past practice that has created
a constructive obligation.
3.4 Deferred income
The Group recognises a contract liability when a deposit is received before the product or service is transferred to the customer.
Deposits are required from Retrofit and Retail customers in advance. Deposits are typically held for approximately 3-4 months.
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Customer contract liabilities
1,709
2,054
Deferred income
1,709
2,054
$2.1 million of the deferred income at the 31 March 2023 balance date has been recognised as revenue in the year ended 31 March 2024.
3.5 Financial instruments
Financial instruments
Management determines the classification of the Group’s financial assets and liabilities at initial recognition. The Group’s financial
liabilities for the periods covered by these consolidated financial statements consist of overdrafts, loans, trade and other payables,
interest rate swaps and forward exchange contracts. The Group’s financial assets for the periods covered by these consolidated
financial statements include cash, accounts receivable, and those that are classified at fair value through profit or loss (“FVTPL”, rather
than cost).
The Group measures all financial liabilities, with the exception of interest rate swaps and forward exchange contracts, at amortised
cost. Interest rate swaps and forward exchange contracts are measured at fair value with changes in fair value recognised in ‘Other
comprehensive income’.
Financial liabilities measured at amortised cost are non-derivative financial liabilities with fixed or determinable payments that are
not quoted in an active market. Trade and other payables, bank overdrafts and loans are classified as financial liabilities measured at
amortised cost.
23
Notes to the Consolidated Financial Statements (continued)
Fair value measurement of financial assets and liabilities
The Group’s financial assets and liabilities by category are summarised as follows:
Cash and cash equivalents
These are short term in nature and their carrying value is equivalent to their fair value.
Trade and other receivables
These assets are short term in nature and are reviewed for impairment; their carrying value approximates their fair value.
Trade payables and borrowings
The fair value of trade and other payables approximates carrying value due to their short-term nature. The carrying value of the
Group’s bank borrowings also represents the fair value of the borrowings due to management’s assessment that the interest rates
approximate the market interest rate for a commercial loan of a comparable lending period.
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow
interest rate risk), credit risk and liquidity risk. The Group’s overall financial risk management is carried out by a central finance function
(the head office finance team) under policies approved by the Board of Directors, including the Treasury policy. The head office finance
team focuses on the unpredictability of financial markets and identifies, evaluates and seeks to hedge financial risks in close co-
operation with the Group’s operating units to minimise potential adverse effects on the financial performance of the Group.
The Board approves policies covering foreign exchange risk, interest rate risk and credit risk. The Group uses derivative financial
instruments such as foreign exchange contracts and interest rate swaps to hedge certain risk exposures. The Group uses different
methods including sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit
risk to measure risk.
Leases
The Group has leases for property, vehicles, and equipment. Contracts are usually for fixed periods, but there may be options to extend.
Right-of-use assets and lease liabilities arising from a lease are initially measured on a present value basis of remaining lease payments,
discounted using a discount rate derived from the incremental borrowing rate. Right-of-use assets are depreciated using the straight-
line method from the commencement date to the end of the lease term.
Derivatives and hedging activity
The Group holds hedging instruments to hedge its foreign currency exposure and interest costs. The Group has designated forward
exchange contracts, interest rate swaps, and derivatives as cash flow hedges. In October 2021 the Group designated its AUD bank
borrowings, which are in a New Zealand entity, as a hedge of the net investment in the Australia business (net investment hedge).
Cash flow hedge instruments hedge the exposure to variability in cash flows that (i) is attributable to a particular risk associated with a
recognised asset or liability or a highly probable forecast transaction and (ii) could affect profit or loss.
At 31 March 2024 and 31 March 2023, all derivatives measured at fair value (interest rate swaps and forward exchange contracts) were
valued using valuation techniques where all significant inputs were based on observable market data. Accordingly they are categorised
as level 2.
Specific valuation techniques used to value the Group’s derivatives are as follows:
• The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with
the resulting value discounted back to present value.
• The fair value of interest rate swap contracts is determined using forward interest rates at the balance sheet date, with the
resulting value discounted back to present value.
These fair values are based on valuations provided by the Westpac Banking Corporation and ASB Bank Limited as at 31 March 2024 and
31 March 2023.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
instrument (the portion of the AUD bank borrowings designated as the hedging instrument) relating to the effective portion of the
hedge is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective
portion is recognised immediately in profit or loss with finance expenses. Gains and losses accumulated in equity are reclassified to
profit or loss when the foreign operation is partially disposed of or sold.
The gains and losses from the AUD bank borrowings arise from the translation of these foreign currency borrowings to NZD at the
period end spot exchange rates.
24
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
The Group's hedging reserves relate to the following hedging instruments:
CONSOLIDATED 2024
Spot component
of currency
forwards
$'000
Interest rate
swaps
$'000
Net investment
hedge
$'000
Total hedge
reserve
$'000
Opening balance 1 April 2023
14
(115)
241
140
Change in fair value of hedging instrument recognised
in ‘Other comprehensive income’ (OCI)
(188)
162
340
314
Deferred tax
52
(47)
(95)
(90)
Balance at 31 March 2024
(122)
–
486
364
CONSOLIDATED 2023
Spot component
of currency
forwards
$'000
Interest rate
swaps
$'000
Net investment
hedge
$'000
Total hedge
reserve
$'000
Opening balance 1 April 2022
147
194
335
676
Change in fair value of hedging instrument recognised
in ‘Other comprehensive income’ (OCI)
(188)
(436)
(131)
(755)
Deferred tax
55
127
37
219
Balance at 31 March 2023
14
(115)
241
140
The effects of the foreign-currency-related hedging instruments on the Group’s financial position and performance are as follows:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Foreign currency forwards
Carrying amount of asset/(liability)
169
(18)
Notional amount
11,462
12,188
Maturity date
Apr 24-Mar 25
Apr 23-Mar 24
Hedge ratio1
1:1
1:1
Change in discounted spot value of outstanding hedging instruments since 1 April
(188)
(188)
Change in value of hedged item used to determine hedge effectiveness
188
188
Weighted average hedged EUR/NZD rate for the year (including forward points)
0.5547
0.5792
Weighted average hedged USD/NZD rate for the year (including forward points)
0.6096
0.6214
Weighted average hedged EUR/AUD rate for the year (including forward points)
–
–
Weighted average hedged USD/AUD rate for the year (including forward points)
0.6760
0.7435
1. The foreign currency forwards are denominated in the same currency as the highly probably future inventory purchases (USD and EUR); therefore, the hedge is 1:1.
25
Notes to the Consolidated Financial Statements (continued)
The effects of the interest rate swaps on the Group’s financial position and performance are as follows:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Interest rate swaps
Carrying amount of asset
–
162
Notional amount
–
23,196
Maturity date
–
Aug 23
Hedge ratio
–
1:1
Change in fair value of outstanding hedging instruments since 1 April
162
(436)
Change in value of hedged item used to determine hedge effectiveness
(162)
436
Average proportion of debt hedged during the year
–
35.03%
The effects of the net investment hedge on the Group’s financial position and performance are as follows:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Net investment hedge
NZD carrying amount of non-current interest-bearing liabilities
(16,384)
(16,044)
AUD carrying amount of non-current interest-bearing liabilities
(15,000)
(15,000)
Hedge ratio
1:1
1:1
Change in fair value of hedging instrument recognised in OCI for the year
340
(131)
Change in value of hedged item used to determine hedge effectiveness
(340)
131
Financial instruments by category
CONSOLIDATED 2024
Assets at
amortised
cost
$'000
Derivatives used
for hedging
$'000
Total
$'000
Assets as per statement of financial position
Cash and cash equivalents
6,634
–
6,634
Derivatives – foreign exchange contracts
–
175
175
Other assets
1,416
–
1,416
Trade receivables
33,335
–
33,335
Balance at 31 March 2024
41,385
175
41,560
26
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED 2023
Assets at
amortised
cost
$'000
Derivatives
used for
hedging
$'000
Total
$'000
Assets as per statement of financial position
Cash and cash equivalents
7,300
–
7,300
Derivatives – foreign exchange contracts
–
89
89
Derivatives - interest rate swaps
–
162
162
Other assets
915
–
915
Trade receivables
38,083
–
38,083
Balance at 31 March 2023
46,298
251
46,549
CONSOLIDATED 2024
Liabilities at
amortised cost
$'000
Derivatives used
for hedging
$'000
Total
$'000
Liabilities as per statement of financial position
Trade and other payables excluding non-financial liabilities
24,074
–
24,074
Derivatives – foreign exchange contracts (current liabilities)
–
6
6
Interest-bearing liabilities
59,663
–
59,663
Lease liabilities
78,393
–
78,393
Balance at 31 March 2024
162,130
6
162,136
CONSOLIDATED 2023
Liabilities at
amortised cost
$'000
Derivatives used
for hedging
$'000
Total
$'000
Liabilities as per statement of financial position
Trade and other payables excluding non-financial liabilities
24,569
–
24,569
Derivatives – foreign exchange contracts (current liabilities)
–
107
107
Interest-bearing liabilities
67,370
–
67,370
Lease liabilities
77,884
–
77,884
Balance at 31 March 2023
169,823
107
169,930
Accounting policy - hedging
On initial designation of a derivative as a cash flow hedging instrument or a foreign currency borrowing as a net investment hedging
instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk
management objectives and strategy in undertaking the hedge transaction. Documentation includes the nature of the risk being
hedged, together with the methods that will be used to assess the hedging instrument’s effectiveness. The Group also documents its
assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are
expected to be highly effective in offsetting the changes in cash flows or net investment of the respective hedged items.
The effective portion of the changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in ‘Other comprehensive income’ and presented in the hedging reserve in equity. The gain or loss relating to the ineffective portion is
recognised immediately in the profit or loss section of the statement of comprehensive income.
27
Notes to the Consolidated Financial Statements (continued)
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and purchases of recognised assets are denominated in a currency
that is not NZD which is the Company’s functional currency. Approximately 95% of annual flat-sheet glass raw materials are purchased
in foreign currencies, being United States Dollar (USD), Euro (EUR) and Australian Dollar (AUD). In accordance with the Company ’s
Treasury policy, foreign exchange risk is managed prospectively over a period to a maximum period of 12 months with allowable limits of
coverage up to 100% over the 6-month term, reducing to 50% up to the 12-month term. Where deemed acceptable by the Directors,
coverage can be extended over a longer period.
Exposure to foreign exchange risk
CONSOLIDATED 2024
AUD
$'000
USD
$'000
EUR
$'000
31 March 2024
Cash and cash equivalents
478
803
1,124
Trade receivables
13,289
–
–
Trade accounts payable
(5,867)
(2,950)
(345)
Balance at 31 March 2024
7,900
(2,147)
779
CONSOLIDATED 2023
AUD
$'000
USD
$'000
EUR
$'000
31 March 2023
Cash and cash equivalents
1,271
734
965
Trade receivables
11,862
–
–
Trade accounts payable
(5,334)
(2,358)
(237)
Balance at 31 March 2023
7,799
(1,624)
728
Cash flow hedge reserve movement shown in the statement of comprehensive income reflects the tax-affected change in fair value of
forward foreign exchange currency contracts during the reporting period.
Sensitivity analysis
The following table details the Group’s sensitivity to a 10% strengthening/weakening of the New Zealand Dollar (NZD) against the
following currencies at the reporting date. The table shows the (decrease)/increase in profit or loss and equity as a result of the 10%
movements. The analysis assumes that all other variables, in particular interest rates, remain constant. The same basis has been
applied for all periods presented.
CONSOLIDATED
CONSOLIDATED
2024
$’000
2023
$’000
Profit or loss
10% strengthening of the NZD against:
AUD
(718)
(709)
USD
195
148
EUR
(71)
(66)
10% weakening of the NZD against:
AUD
878
867
USD
(239)
(180)
EUR
87
81
28
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED
CONSOLIDATED
2024
$’000
2023
$’000
Equity
10% strengthening of the NZD against:
USD
(1,030)
(1,062)
EUR
36
50
10% weakening of the NZD against:
USD
1,258
1,298
EUR
36
50
Profit or loss movements are mainly attributable to the exposure outstanding on AUD trade receivables at the end of the reporting
period. Equity movements are the result of changes in fair value of derivative instruments designated as hedging instruments in cash
flow hedges.
Commodity cost risk
The primary raw material used by the Group is flat-sheet glass which is imported from suppliers around the world. While there are
numerous manufacturers of flat-sheet glass, the Group is exposed to commodity price risk and therefore manages access to supply
through close relationships with suppliers. Cost is an important variable in the determination of supply, and the Group is clearly exposed
to changes in the cost of glass.
3.6 Provisions (current and non-current)
CONSOLIDATED 2024
Warranty
provision
$’000
Employee
expenses
$’000
Lease
make-good
$’000
Total
$’000
Carrying amount at the beginning of the year
168
465
3,880
4,513
Increase in balance
2
144
17
163
Settled or utilised
-
(3)
–
(3)
Carrying amount at the end of the year
170
606
3,897
4,673
CONSOLIDATED 2023
Warranty
provision
$’000
Employee
expenses
$’000
Lease
make-good
$’000
Total
$’000
Carrying amount at the beginning of the year
115
1,795
3,800
5,710
Increase in balance
53
0
102
155
Settled or utilised
-
(1,330)
(22)
(1,352)
Carrying amount at the end of the year
168
465
3,880
4,513
CONSOLIDATED
CONSOLIDATED
2024
$’000
2023
$’000
Current portion
830
633
Non-current portion
3,843
3,880
Carrying amount at the end of the year
4,673
4,513
29
Notes to the Consolidated Financial Statements (continued)
Accounting policy - provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, where it is probable that a cost will be
incurred to settle the obligation and a reliable estimate of that obligation is able to be made. It also includes confirmed employee costs
related to the restructuring of the New Zealand operations that will be paid in April 2024.
Warranty provisions represent an estimate of potential liability for defective products that are shipped out and the defect is identified
within the short term, and products that fail over a long time, but within their product life cycle.
The employee expenses provision recognises the remediation payments to settle historical Holidays Act compliance matters.
Make good provisions represent the estimated cost to return a leased property to its original condition at the end of the lease.
3.7 Other current assets and other non-current assets
CONSOLIDATED
CONSOLIDATED
2024
$’000
2023
$’000
Prepaid expenses
2,429
1,972
Related party receivable (5R Solutions Ltd)
426
265
Other receivables
462
1,000
Total other current assets
3,317
3,237
Related party receivable (5R Solutions Ltd)
990
650
Total other non-current assets
990
650
4 LONG-TERM ASSETS
4.1 Property, plant and equipment
CONSOLIDATED 2024
Plant and
equipment
$'000
Furniture,
fittings and
equipment
$'000
Motor vehicles
$'000
Total
$'000
Opening balance
Cost
98,720
5,904
13,095
117,719
Accumulated depreciation
(54,473)
(4,857)
(7,715)
(67,045)
Net book value at 1 April 2023
44,247
1,047
5,380
50,674
Additions
3,124
548
386
4,058
Disposals
(111)
(3)
(88)
(202)
Depreciation expense
(7,015)
(515)
(1,091)
(8,621)
Foreign exchange impact
211
3
14
228
Closing net book value at 31 March 2024
40,456
1,080
4,601
46,137
Represented by:
Cost
101,856
6,400
13,380
121,636
Accumulated depreciation
(61,400)
(5,320)
(8,779)
(75,499)
Net book value at 31 March 2024
40,456
1,080
4,601
46,137
30
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED 2023
Plant and
equipment
$'000
Furniture,
fittings and
equipment
$'000
Motor vehicles
$'000
Total
$'000
Opening balance
Cost
96,074
4,911
12,718
113,703
Accumulated depreciation
(48,567)
(3,997)
(6,391)
(58,955)
Net book value at 1 April 2022
47,507
914
6,327
54,748
Reclassificaton
Cost
(2,524)
680
57
(1,787)
Accumulated depreciation
2,108
(263)
(58)
1,787
Net book value at 1 April 2022
(416)
417
(1)
–
Additions
5,516
316
603
6,435
Disposals
(265)
(50)
(284)
(599)
Depreciation expense
(8,013)
(598)
(1,267)
(9,878)
Foreign exchange impact
(82)
48
2
(32)
Closing net book value at 31 March 2023
44,247
1,047
5,380
50,674
Represented by:
Cost
98,720
5,904
13,095
117,719
Accumulated depreciation
(54,473)
(4,857)
(7,715)
(67,045)
Net book value at 31 March 2023
44,247
1,047
5,380
50,674
Critical estimates and judgements
Economic lives of intangible assets and property, plant and equipment
Property, plant and equipment are long-lived assets that are amortised/depreciated over their estimated useful lives. The estimated
useful lives are reviewed annually and may change if necessary. The actual useful life of an asset may be shorter or longer than what
had been estimated, which will affect amortisation, depreciation and the carrying values of these assets.
Accounting policy
All property, plant and equipment is stated at historical cost less depreciation and impairment. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Depreciation of property, plant and equipment is calculated using the straight-line value method to allocate the cost of assets over
their expected useful lives. The rates are as follows:
Depreciation
rate
Depreciation
basis
Plant and equipment
7 – 15%
Straight line
Motor vehicles
12 – 20%
Straight line
Furniture, fixtures and fittings
20 – 25%
Straight line
31
Notes to the Consolidated Financial Statements (continued)
4.2 Right-of-use assets
CONSOLIDATED 2024
Property
$'000
Motor vehicles
$'000
Equipment
$'000
Total
$'000
Opening balance
Cost
100,827
11,419
358
112,604
Accumulated depreciation
(43,742)
(3,355)
(172)
(47,269)
Net book value at 1 April 2023
57,085
8,064
186
65,335
Additions
1,075
1,710
193
2,978
Modifications
5,643
32
–
5,675
Disposals
(825)
(58)
–
(883)
Other
282
16
(33)
265
Depreciation expense
(6,989)
(2,018)
(108)
(9,115)
Foreign exchange impact
180
24
–
204
Closing net book value at 31 March 2024
56,451
7,770
238
64,459
Represented by:
Cost
107,399
13,163
518
121,080
Accumulated depreciation
(50,948)
(5,393)
(280)
(56,621)
Net book value at 31 March 2024
56,451
7,770
238
64,459
CONSOLIDATED 2023
Property
$'000
Motor vehicles
$'000
Equipment
$'000
Total
$'000
Opening balance
Cost
101,013
7,894
358
109,265
Accumulated depreciation
(37,076)
(1,598)
(86)
(38,760)
Net book value at 1 April 2022
63,937
6,296
272
70,505
Additions
486
3,594
–
4,080
Modifications
163
–
–
163
Disposals
(490)
(66)
–
(556)
Depreciation expense
(6,972)
(1,763)
(86)
(8,821)
Foreign exchange impact
(39)
3
–
(36)
Closing net book value at 31 March 2023
57,085
8,064
186
65,335
Represented by:
Cost
100,827
11,419
358
112,604
Accumulated depreciation
(43,742)
(3,355)
(172)
(47,269)
Net book value at 31 March 2023
57,085
8,064
186
65,335
In determining the lease term , the Group includes any periods covered by options to the extent where the Group is reasonably certain
to exercise that option.
Accounting policy
The Group leases mainly relate to buildings which are typically made for fixed periods of 1 to 16 years but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. The lease agreements do not
impose any covenants, but leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present-value basis. Lease liabilities include the net present value
of the following lease payments:
• fixed payments, less any lease incentives receivable; and
• variable lease payments that are based on an index or a rate.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability and any restoration
costs. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
32
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in
the profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and
small items of office furniture with a purchase cost below $1,000.
4.3 Intangible assets
CONSOLIDATED 2024
Goodwill on
acquisitions
$'000
Computer
software
$'000
Total
$'000
Opening balance
Cost
149,103
9,606
158,709
Accumulated amortisation and impairment
(105,057)
(9,316)
(114,373)
Net book value at 1 April 2023
44,046
290
44,336
Amortisation expense
–
(184)
(184)
Impairment
(20,879)
–
(20,879)
Foreign exchange impact
491
–
491
Closing net book value at 31 March 2024
23,658
106
23,764
Represented by:
Cost
149,776
9,669
159,445
Accumulated amortisation and impairment
(126,118)
(9,563)
(135,681)
Net book value at 31 March 2024
23,658
106
23,764
CONSOLIDATED 2023
Goodwill on
acquisitions
$'000
Computer
software
$'000
Total
$'000
Opening balance
Cost
149,364
6,588
155,952
Accumulated amortisation and impairment
(95,128)
(6,114)
(101,242)
Net book value at 1 April 2022
54,236
474
54,710
Additions
–
77
77
Amortisation expense
–
(261)
(261)
Impairment
(10,000)
–
(10,000)
Foreign exchange impact
(190)
–
(190)
Closing net book value at 31 March 2023
44,046
290
44,336
Represented by:
Cost
149,103
9,606
158,709
Accumulated amortisation and impairment
(105,057)
(9,316)
(114,373)
Net book value at 31 March 2023
44,046
290
44,336
Critical estimates and judgements: Goodwill
The Group tests intangible assets for impairment to ensure they are not carried at above their recoverable amounts:
• at least annually for goodwill with indefinite lives; and
• where there is an indication that the assets may be impaired (which is assessed at least at each reporting date).
Impairment tests are performed by assessing the recoverable amount of each individual asset or cash-generating units (CGU). The
recoverable amount is determined as the higher amount calculated under a value-in-use (VIU) or a fair value less costs of disposal
(FVLCD) calculation. Both methods utilise pre-tax cash flow projections based on financial projections approved by the Directors.
33
Notes to the Consolidated Financial Statements (continued)
Impairment tests for goodwill
The Group’s segments and cash generating units (CGU’s) have been classified as New Zealand and Australia aligning with the way the
business is reviewed. The New Zealand goodwill balance arose prior to the Group’s Initial Public Offering (IPO) in July 2014.The Australian
goodwill arose in August 2016 with the acquisition of AGG. Goodwill balances are as follows:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
New Zealand
–
20,879
Australia
23,658
23,167
Total goodwill balances
23,658
44,046
Impairment testing for the Australian CGU was completed using the VIU method, while the New Zealand CGU was completed using both
the VIU and the FVLCD methods.
Key assumptions in the 31 March 2024 impairment assessment (VIU) calculations (and the equivalent assumptions in the 31 March 2023
calculations) are as follows:
CONSOLIDATED
CONSOLIDATED
2024
2023
New Zealand
Australia
New Zealand
Australia
Compound annual revenue growth – 3 years
1.6%
9.7%
(4.9%)
5.7%
Long-term growth rate
2.0%
1.3%
2.0%
1.3%
Discount rate (pre tax, post IFRS 16)
14.9%
13.4%
14.6%
12.9%
Discount rate (post tax, post IFRS 16)
10.7%
9.4%
10.5%
9.0%
The FVLCD method for the New Zealand CGU has used a discounted cash flow approach, which is based on the same assumptions
as the VIU calculations, primarily adjusted for actions that may be taken by a market participant related to operating expenses and
deducting an estimated cost of disposal.
Cash flow projections
The impairment testing used pre-tax cash flow projections for both CGUs based on financial projections approved by the directors
covering a three-year period. In forming these projections, the directors considered the views of several economic forecasters,
observable market data points (including building consents), feedback from customers, analysis of existing forward books of work,
anticipated customer wins and/or losses and other competitive dynamics.
The Directors have referenced longer-term independent forecast estimates in a consistent way compared to previous years.
New Zealand
The number of new homes consented has declined from the historically elevated levels and the expectation is that consenting levels
will continue to decline in the short term. Adjusted for rising building costs, non-residential building consents softened again but the
expectation is for stabilisation in the short term. The changes to the building code (H1 Standards) effective progressively on new
consents from November 2022 require an increase in the thermal properties of window units as part of a suite of changes designed
to improve the thermal performance of New Zealand homes. The New Zealand CGU base forecast short-term cash flows for the next
two-year period are based on volumes consistent with current levels, but Management has also considered a second scenario where
volumes decline in line with the forecast decline in residential building consents during this period. The impairment test is a weighted
average of these two scenarios, with a higher weighting to the second scenario.
The impairment test of the New Zealand goodwill balance has resulted in an impairment of $20.9 million in the year ended
31 March 2024, which is presented in the consolidated statement of comprehensive income as a significant item (note 2.4) and in
the New Zealand segment (note 2.1). The recoverable amount of the New Zealand CGU was determined to be $52.5m.
Impairment testing for the New Zealand CGU was completed using both the VIU and FVLCD methods, with the FVLCD method
resulting in a comparatively higher recoverable amount compared to the carrying amount of the CGU. The FVLCD calculation has been
determined using level three in terms of the fair value hierarchies in NZ IFRS 13.
Australia
As announced in February 2023, the Board of the Company at the time initiated a process to investigate the potential sale of the
Australian Glass Group (AGG) in order to reduce its bank debt. Following an extensive process and detailed discussions with a preferred
party, a revised offer had been received. On evaluation of that offer, the Board has reached the view that progressing an offer on those
revised terms would not be in the best interests of the Company or its shareholders. The impairment test of the Australia CGU has
been performed using the VIU method.
34
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
Long-term growth rate
Cash flows beyond the three-year period are extrapolated using an estimated long-term growth rate. The long-term growth rate
assumptions have typically been supported by long-term population growth rates in New Zealand and Australia and the increased use
and prevalence of glass products in the Group’s markets. The long-term growth rate for the NZ CGU reflects the long-term inflation
expectation at 2%, being the mid-point of the RBNZ target range and based on historical inflation rates. The long-term growth rates
have been left unchanged in the 2024 testing for the Australian CGU (1.3%).
Discount rate
The discount rate (post tax) represents the current market assessment of the risks specific to the CGU, taking into account the time
value of money and 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 CGU and its operating segments and is derived from its weighted
average costs of capital (WACC).
The discount rates used are supported by independent third-party expert advice. The discount rates at 31 March 2024 were higher
than the prior year on account of market increases in interest rates (risk-free rates) and the consideration of market-specific risks.
Market capitalisation comparison
The Group compares the carrying amount of net assets with the market capitalisation value at each balance date. The share price at
31 March 2024 was $0.104 equating to a market capitalisation of $19.3 million. This market value excludes any control premium and may
not reflect the value of all of the Group’s net assets. The carrying amount of the Group’s net assets at 31 March 2024 was $49.0 million
($0.26 per share). Management and the Directors have considered the reasons for this difference and concluded all relevant factors
had been allowed for in their VIU and FVLCD models.
Sensitivity to changes in key assumptions
IMPAIRMENT
VARIANCE
TO BASE
ASSUMPTION
$'000
$'000
New Zealand CGU impairment test
Base assumption
(20,879)
+0.5% Discount rate
(23,679)
(2,800)
-0.5% Discount rate
(17,279)
3,600
+0.5% Change to forecast revenue in each year (with associated changes to cost of materials)
(13,379)
7,500
-0.5% Change to forecast revenue in each year (with associated changes to cost of materials)
(27,879)
(7,000)
+0.25% Long-term growth rate
(19,279)
1,600
-0.25% Long-term growth rate
(21,879)
(1,000)
The results of the assessment of impairment testing calculations for the New Zealand CGU are most sensitive to assumed compound
revenue contraction over the forecast period, the discount rate and the terminal growth rate. The implied position of the construction
cycle following year three (FY27) is also important as this supports the cashflow element of the terminal value calculation, which could
also impact the applicable terminal growth rate.
While acknowledging the uncertainties around forecasting, it is the considered view of the Directors that the forecast revenue
assumptions and resulting outcome are reasonable. This is based on their understanding of the market, supplemented by third-party
forecasts, and a consensus of the range of expected market trajectories considered. Therefore, an impairment to the goodwill balance
of $20.879 million has been recognised at 31 March 2024.
The impairment assessments confirmed that, for the Australian business unit, the recoverable amount exceeds its carrying value as
at 31 March 2024.There are no reasonably possible changes in key assumptions used in the determination of the recoverable value of
Australian CGU that would result in a material impairment to the Group.
Accounting policy
Goodwill
Goodwill represents the excess of the consideration paid for an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Any goodwill arising on acquisitions of subsidiaries is included
in intangible assets. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
35
Notes to the Consolidated Financial Statements (continued)
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of
disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.
For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each group of the CGUs that is
expected to benefit from the synergies of the combination. Each unit to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal management purposes.
Computer software
Acquired computer software licences that are not defined as a ‘software as a service’ arrangement are capitalised on the basis of the
costs incurred to acquire and bring to use the specific software. Costs that are directly associated with the production of identifiable
and unique software products controlled by the Group are recognised as intangible assets when management intends to use the
software and anticipate it will generate probable future economic benefits.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs and
an appropriate portion of relevant overheads.
Amortisation of computer software is calculated on a straight-line basis over a useful life of four years.
4.4 Investment in associates
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
5R Solutions Limited
2,027
2,512
Total investments in associates
2,027
2,512
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Carrying amount at the beginning of the year
2,512
–
Additions
–
2,098
Share of profits of associate
415
414
Dividends declared
(900)
–
Carrying amount at the end of the year
2,027
2,512
Accounting policy - associates
Associates are those entities in which the Group has significant influence, but not control, over financial and operating policies.
Associates are accounted for under the equity method of accounting.
In the year ended 31 March 2022 the Group’s interest in 5R Solutions Limited was recognised at fair value through the profit or loss.
On 1 April 2022 an option was exercised with the Group becoming a 50% owner of 5R Solutions Limited. The Group has 33.3% voting
rights for 5R Solutions Limited. There were dividends declared of $0.9 million from 5R Solutions Limited to the Group in the year ended
31 March 2024. The dividend will be paid during the next several years as 5R Solutions Limited’s cash flows allow.
Cash flows for repayments of balances due from associates are included in operating activities within the consolidated statement
of cash flows, while the share of profits from associates is equity accounted and disclosed in the consolidated statement of
comprehensive income.
Management is comfortable that there are no inidicators requiring an impairment of the asset.
36
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
5 DEBT AND EQUITY
5.1 Interest-bearing liabilities
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Bank borrowings
57,802
65,172
Other asset financing
1,861
2,198
Total interest-bearing liabilities
59,663
67,370
Refer to the going concern section in the basis of preparation for further information on the Group’s intentions with bank borrowings.
Bank borrowings are secured by a first-ranking composite general security deed. The Group’s bank borrowing facilities as amended on
18 November 2022 currently comprise a syndicated revolving loan facility of $75 .0 million for a three-year term expiring in October 2024,
as well as overdraft and bank guarantees totalling $8.5 million. The Group received temporary covenant amendments during the year.
The Group complied with all covenants throughout the year.
Other asset financing comprises outstanding balances of third -party financing for the purchase of motor vehicles and software
as a service application. In the year ended 31 March 2020, the Group concluded two sale and leaseback agreements relating to
the New Zealand vehicle fleet, but retained control of the heavy truck bodies, therefore these transactions were treated as
financing arrangements.
Assets pledged as security
The bank loans are secured under both a General Security Deed and Specific Security Deed which results in registered charges over
assets of the Group. In addition, there are positive and negative pledge undertakings through shares held of various subsidiaries.
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is expensed in the statement of
comprehensive income over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the statement of financial position date.
Other asset financing is treated as a financing arrangement, with assets remaining in the Group’s asset register and remaining useful
life adjusted to mirror the lease term. A finance liability is recognised equal to the sale proceeds. Interest expense is recognised over
the term of the lease where applicable.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities and the ability to close-out market positions.
As at 31 March 2024 the Group had cash of $6.6 million (2023: $7.3 million). Information in respect of negotiated credit facilities is
shown below.
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Committed credit facilities pursuant to syndicated facility
83,515
91,869
Drawdown at balance date
(62,215)
(69,995)
Available credit facilities
21,300
21,874
The table below analyses both the Group’s non-derivative financial liabilities and derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are
included in the analysis if their contractual maturities are essential for an understanding of cash flows. Where relevant, cashflows
include both interest and principal payments.
37
Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED 2024
Less than
1 year
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
> 5 years
$'000
Total
$'000
Carrying
amount
$’000
Interest-bearing liabilities and interest owing
61,130
296
830
441
62,697
59,663
Foreign exchange contracts
6
–
–
–
6
6
Lease liabilities
11,946
10,801
29,629
58,043
110,419
78,393
Trade accounts payable
16,468
–
–
–
16,468
16,468
Total at 31 March 2024
89,550
11,097
30,459
58,484
189,590
154,530
CONSOLIDATED 2023
Less than 1
year
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
> 5 years
$'000
Total
$'000
Carrying
amount
$’000
Interest-bearing liabilities and interest owing
5,436
68,314
840
727
75,317
67,370
Interest rate swap
(162)
–
–
–
(162)
(162)
Foreign exchange contracts
107
–
–
–
107
107
Lease liabilities
11,840
11,656
27,959
58,887
110,342
77,884
Trade accounts payable
17,756
–
–
–
17,756
17,756
Total at 31 March 2023
34,977
79,970
28,799
59,614
203,360
162,955
Interest rate risk
The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest
rate risk. During the period, the Group’s borrowings at variable rates were denominated in both New Zealand and Australian dollars. If
interest rates in New Zealand and Australia increased by 10% the impact would be an additional cost of $0.45 million and a subsequent
decrease of $0.45 million if rates decreased by 10%. (In 2023 an interest rate increase of 10% would have resulted in additional costs of
$0.49 million and a subsequent decrease of $0.49 million if rates decreased by 10%.)
The Group adopts a policy of ensuring that its exposure to changes in interest rates on borrowings is on a fixed-rate basis by entering
into interest rate swaps.
5.2 Lease liabilities
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Opening lease liabilities recognised at 1 April
77,884
81,280
Additions
2,978
4,088
Modifications
5,458
163
Termination
(887)
(674)
Interest for the period
4,708
4,819
Other
315
–
Lease payments made
(12,313)
(11,699)
Foreign exchange impact
250
(93)
Lease liabilities at 31 March
78,393
77,884
Current lease liabilities
7,307
7,452
Non-current lease liabilities
71,086
70,432
Total lease liabilities
78,393
77,884
38
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
Lease liabilities maturity analysis
Minimum lease
payments
$'000
Interest
$'000
Present value
$'000
Within one year
11,946
(4,639)
7,307
One to five years
40,431
(14,458)
25,973
Beyond five years
58,042
(12,929)
45,113
Lease liabilities at 31 March 2024
110,419
(32,026)
78,393
Minimum lease
payments
$'000
Interest
$'000
Present value
$'000
Within one year
11,840
(4,388)
7,452
One to five years
39,616
(13,772)
25,844
Beyond five years
58,887
(14,299)
44,588
Lease liabilities at 31 March 2023
110,343
(32,459)
77,884
Estimates and judgements: Incremental borrowing rates and lease terms
Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s incremental
borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar
value in a similar economic environment with similar terms and conditions.
5.3 Contributed equity
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Opening balance
307,198
307,198
Closing balance
307,198
307,198
At 31 March 2024 the Company had issued 185,378,086 fully paid ordinary shares (2023: 185,378,086 fully paid ordinary shares). No
shares were issued or cancelled during the year (2023: nil). Ordinary shares entitle the holder to participate in dividends, and to share
in the proceeds of winding up the Company in proportion to the number of shares held. Every holder of ordinary shares present at a
meeting , in person or by proxy, is entitled to one vote, and on a poll each share in entitled to one vote. The Company does not have a
limited amount of authorised capital.
Accounting policy
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or acquiring its own shares are shown in equity as a deduction, net
of tax, from the proceeds.
Dividends
Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance date.
Dividend distribution to Group shareholders is recognised as a liability in the Group’s financial statements in the period in which the
dividends are declared by the Board.
Metro Performance Glass paid no dividends in 2023 and 2024.
39
Notes to the Consolidated Financial Statements (continued)
Capital management
The Group’s syndicated revolving loan facility agreement restricts the Group from making a distribution to shareholders unless the
leverage ratio before and after the distribution is below 2.0.
The Group and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so
that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Group’s financial covenants includes interest cover and leverage ratios. The Group was in compliance with it’s financial covenants
during the year and at balance date.
The Group’s leverage ratio at 31 March 2024 was as follows:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Interest-bearing liabilities
59,663
67,370
Add: Prepaid financing costs
82
372
Less: Cash and cash equivalents
(6,634)
(7,300)
Adjusted net debt
53,111
60,442
Adjusted profit before interest, tax, depreciation and amortisation1
11,429
18,720
Leverage ratio
4.65 : 1
3.23 : 1
1. Calculated on a pre-IFRS 16 basis, excluding significant items as per bank covenant definitions.
6 OTHER
6.1 Income taxation
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Loss before income taxation
(29,389)
(10,581)
Income taxation benefit at the Group's effective tax rate
8,163
2,849
Tax effect of (non-deductible) and non-assessable items
(6,196)
(2,826)
Prior year adjustment
(90)
10
Income tax benefit
1,877
33
Represented by:
Current taxation
–
405
Deferred taxation
1,877
(372)
1,877
33
Imputation credit account
The amount of imputation credits at balance date available for future distributions is $28.8 million at 31 March 2024 ($28.4 million at
31 March 2023).
40
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
6.2 Deferred taxation
Consolidated deferred tax assets and liabilities are attributable to the following:
CONSOLIDATED 2024
Assets
$'000
Liabilities
$'000
Net
$'000
Property, plant and equipment
156
(1,012)
(856)
Right-of-use assets
–
(18,922)
(18,922)
Inventory and receivables
61
–
61
Cash flow hedge
148
(7)
141
Intangibles
49
–
49
Lease liabilities
23,760
–
23,760
Provisions and accruals
2,690
–
2,690
Tax losses
5,520
–
5,520
32,384
(19,941)
12,443
CONSOLIDATED 2023
Assets
$'000
Liabilities
$'000
Net
$'000
Property, plant and equipment
–
(1,350)
(1,350)
Right-of-use assets
–
(18,154)
(18,154)
Inventory and receivables
108
–
108
Cash flow hedge
85
(34)
51
Intangibles
73
–
73
Lease liabilities
21,674
–
21,674
Provisions and accruals
3,478
–
3,478
Tax losses
4,518
–
4,518
29,936
(19,538)
10,398
Movement in temporary differences during the year:
CONSOLIDATED 2024
Opening balance
1 Apr 2023
$'000
Opening
Retained
Earnings
$'000
Recognised in
profit or loss
$'000
Recognised in
OCI
$'000
Balance
31 Mar 2024
$'000
Property, plant and equipment
(1,350)
-
521
(27)
(856)
Right-of-use assets
(18,154)
-
(698)
(70)
(18,922)
Inventory and receivables
108
-
(47)
–
61
Cash flow hedge
51
-
28
62
141
Intangibles
73
-
(24)
–
49
Lease liabilities
21,674
-
2,013
73
23,760
Provisions and accruals
3,478
-
(833)
45
2,690
Tax losses
4,518
17
917
68
5,520
10,398
17
1,877
151
12,443
41
Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED 2023
Opening balance
1 Apr 2022
$'000
Recognised in
profit or loss
$'000
Recognised in
OCI
$'000
Balance
31 Mar 2023
$'000
Property, plant and equipment
(1,731)
324
57
(1,350)
Right-of-use assets
(19,393)
1,211
28
(18,154)
Inventory and receivables
29
79
–
108
Cash flow hedge
269
–
(218)
51
Intangibles
146
(73)
–
73
Lease liabilities
22,526
(850)
(2)
21,674
Provisions and accruals
3,693
(200)
(15)
3,478
Tax losses
5,426
(863)
(45)
4,518
10,965
(372)
(195)
10,398
Accounting policy
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it
relates to items recognised in ‘Other comprehensive income’ or directly in equity. In this case, the tax is also recognised in ‘Other
comprehensive income’ or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. No deferred tax liability was recognised on initial recognition of goodwill. Deferred income
tax is determined using tax rates (and laws) that have been enacted, or substantively enacted, by the statement of financial position
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised for unused tax losses and deductible temporary differences to the extent that it is
probable that future taxable profit will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and liabilities relate to income tax levied by the same taxation authority
on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
6.3 Group reserves
Group reorganisation reserve
Upon acquisition of Metroglass Holdings Limited in July 2014, the assets and liabilities acquired were measured at their pre-combination
carrying amounts without fair value uplift. The difference between the consideration transferred and the carrying value of the assets
and liabilities acquired of $170.7 million (2023: $170.7 million) was recorded in the Group’s reorganisation reserve.
Accounting policy
Where an acquisition occurs through Group reorganisation, the identifiable assets and liabilities acquired are measured at their
pre-combination carrying amounts without fair value uplift. No new goodwill is recorded. Any difference between the consideration
transferred and the carrying value of the assets and liabilities acquired is recorded in equity.
Share-based payments reserve
The Group currently has a long-term incentive plan for selected employees. The plan’s participants are members of the Senior
Leadership Team and other selected senior managers. The reserve is used to record the accumulated value of the plan which has been
recognised in the statement of comprehensive income.
The plan is designed to secure those employees’ retention in Metro Performance Glass and to reward performance that underpins the
achievement of Metro Performance Glass’ business strategy and long-term shareholder wealth creation. Participants are offered an
annual award of a specified number of both performance rights and share options in Metro Performance Glass (in accordance with the
plan rules).
42
2024 Annual Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements (continued)
The performance rights enable participants to acquire shares in Metro Performance Glass with no consideration payable, subject to
Metro Performance Glass achieving set performance hurdles and meeting certain vesting conditions.
The share options enable participants to acquire shares in Metro Performance Glass at a market-based exercise price, subject to
Metro Glass achieving set performance hurdles and meeting certain vesting conditions.
In the event that the respective performance hurdles are not met on the vesting date, retesting will be permitted after a further six
and twelve months from the measurement date.
The following share options and performance share rights (PSR) have been issued and had not lapsed or been exercised at
31 March 2024.
Plan name
Date issued
Number of
options
Number of
PSR
Options
exercise price
Vesting date
2021 LTI plan
19-Jun-20
2,704,717
1,442,516
$0.20
3-Jul-23
2022 LTI plan
21-May-21
1,563,033
808,464
$0.42
4-Jun-24
2023 LTI plan
27-May-22
3,480,717
1,740,361
$0.25
10-Jun-25
2024 LTI plan
29-May-23
5,498,495
3,655,664
$0.15
12-Jun-26
Accounting policy
The long-term incentive plan is an equity-settled share-based payment which provides eligible employees with the opportunity to
acquire shares in the Group, accounted for under NZ IFRS 2. The fair value of shares granted is recognised as an employee benefit
expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the vesting period. The
fair value of the plan has been assessed by an independent valuer.
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Share-based payments reserve
Opening balance
1,358
1,366
Transfer to equity on vesting of employee share purchase scheme
(637)
(382)
Movement in share-based payments reserve
341
374
Closing balance
1,062
1,358
6.4 Related party transactions
5R Solutions Limited
5R Solutions Limited (an associate, note 4.4) provides glass waste removal and recycling services to the Group. This arrangement has
not changed following 5R Solutions Limited becoming an associate of the Group during the year ended 31 March 2023. 5R Solutions
Limited charged the Group $0.9 million for services in the year ended 31 March 2024 (2023: $1.3 million).
The payables balance in relation to services from 5R Solutions Limited was $0.04 million at 31 March 2024 (2023: $0.05 million).
In addition, the Group has a receivable from 5R Solutions Limited in relation to two dividends declared but not yet paid in full. The
first dividend was in the year ended 31 March 2022 and the second dividend in the year ended 31 March 2024. During the year ended
31 March 2024, 5R Solutions paid the Group $0.35 million in relation to the declared dividend in the year 31 March 2022 and there was a
balance remaining to be paid of $1.4 million at 31 March 2024 (note 3.7) for both dividends.
Subsidiaries
The Group’s principal subsidiaries at 31 March 2024 and 31 March 2023 are set out below. Unless otherwise stated, they have share
capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interest held equals the
voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
Name of entity
Country of
incorporation
2024 Interest
2023 Interest
Metropolitan Glass & Glazing Limited
New Zealand
100%
100%
Metroglass Finance Limited
New Zealand
100%
100%
Australian Glass Group Holding Pty Ltd
Australia
100%
100%
Australian Glass Group Finance Pty Ltd
Australia
100%
100%
43
Notes to the Consolidated Financial Statements (continued)
Directors
The names of persons who were directors of the Company at any time during the financial period are as follows: Peter Griffiths,
Rhys Jones, Graham Stuart, Mark Eglinton, Jenn Bestwick, Julia Mayne, Shawn Beck, Simon Bennett and Pramod Khatri.
Rhys Jones retired on 24 July 2023. Graham Stuart retired on 1 August 2023. Mark Eglinton retired on 10 November 2023.
Peter Griffiths and Jenn Bestwick retired on 6 March 2024. Shawn Beck joined the Board on 1 November 2023. Simon Bennett and
Pramod Khatri joined the Board with effect from 11 December 2023.
Key management and Board of Directors’ compensation
Key management are members of the Executive Team, being direct reports of the CEO. The compensation paid and provided to key
management for employee service is shown below:
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Salaries and other short-term employee benefits
1,897
2,428
Management incentive1
472
–
Share-based payments
281
333
2,650
2,761
1. Relates to amounts paid and provided pursuant to prior year financial and operating performance.
Board of Directors’ compensation
CONSOLIDATED
CONSOLIDATED
2024
$'000
2023
$'000
Directors' fees
544
602
544
602
6.5 Contingencies
At 31 March 2024 the Group had no contingent liabilities or assets (2023: nil).
6.6 Commitments
At 31 March 2024 the Group had no commitments (2023: nil).
44
2024 Annual Report
Independent auditor’s report
To the shareholders of Metro Performance Glass Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Metro Performance Glass
Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects,
the financial position of the Group as at 31 March 2024, its financial performance and its cash flows for
the year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards Accounting Standards (IFRS
Accounting Standards).
What we have audited
The Group's consolidated financial statements comprise:
●
the consolidated statement of financial position as at 31 March 2024;
●
the consolidated statement of comprehensive income for the year then ended;
●
the consolidated statement of changes in equity for the year then ended;
●
the consolidated statement of cash flows for the year then ended; and
●
the notes to the consolidated financial statements, comprising material accounting policy
information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of agreed upon procedures relating to
the Group’s covenant compliance certificate and a comparison of the Group's long-term incentive plan
to market practice. In addition, certain partners and employees of our firm may deal with the Group on
normal terms within the ordinary course of trading activities of the Group. The provision of these other
services and relationships have not impaired our independence as auditor of the Group.
Material uncertainty related to going concern
We draw attention to note 1.1 in the consolidated financial statements which indicates that the Group
has a net current liability balance of $24.0 million at 31 March 2024. This includes an outstanding bank
borrowings balance of $58.4 million at 31 March 2024 with a maturity date of 31 October 2024. The
Group is considering its options, including planning a capital raise, to reduce bank debt in order to put
it in a position to negotiate an agreement with the banking syndicate for renewed loan facilities on
mutually acceptable terms with financial covenants that the Group can achieve. As stated in note 1.1,
these events and conditions, along with other matters as set forth in this note, indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
PricewaterhouseCoopers, 15 Customs Street West, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
45
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we have determined the matter
described below to be the key audit matter to be communicated in our report.
Description of the key audit matter
How our audit addressed the key audit matter
New Zealand cash generating unit
goodwill impairment test
During the year ended 31 March 2024 an
impairment of $20.9 million (year ended
31 March 2023: $10.0 million) was
recognised in relation to the goodwill
balance to reduce the carrying amount of
the Group’s New Zealand cash generating
unit (NZ CGU). Following the impairment,
as at 31 March 2024, the remaining
amount of the NZ CGU’s goodwill balance
amounted to nil (note 4.3).
This impairment was calculated using a
recoverable amount determined by
management on a ‘fair value less cost of
disposal’ basis. The fair value less cost of
disposal model was based on discounted
future cash flows.
The key assumptions in the impairment
assessment were the compound annual
revenue growth rate over the next three
years, the discount rate, and the
long-term growth rate.
As part of the impairment assessment
process, management performed a
comparison of the Group’s net assets to
the market capitalisation of the Group and
prepared an analysis and explanation of
the difference. Management considered
the reasons for this difference in finalising
their assessment of the recoverable
amounts of the Group’s CGUs.
The impairment testing of the NZ CGU’s
goodwill is considered a key audit matter
due to the materiality of the goodwill
balance and impairment recognised
during the year, the presence of
impairment indicators, and the significant
level of management estimation and
judgement applied in determining key
assumptions used in the impairment
assessment.
Our audit focused on assessing and challenging the
key assumptions used by management in their
impairment assessment. Our procedures included:
●
evaluating the appropriateness of the identification
of the Group’s CGUs;
●
considering whether the valuation methodology
applied was appropriate;
●
agreeing the cash flows included in management’s
impairment model to the board approved plans;
●
assessing the Group’s forecasting accuracy by
comparing historical forecasts to actual results
and considering the impact on the current
impairment test’s cash flow forecasts;
●
discussing with management the basis for the
cash flow forecasts and the key drivers of change
in the forecasts, including internal and external
factors;
●
engaging our valuation expert to assist us with:
-
assessing whether the discount rates and
long-term growth rates used by management
are reasonable in the context of the forecasts;
and
-
considering management’s paper comparing
the net assets and the market capitalisation of
the Group, in the context of our overall
assessment of the impairment test;
●
testing the accuracy of the calculations in
management’s impairment model, and checking
that the carrying amount for the CGU’s net assets
was correctly included in the impairment
assessment;
●
evaluating the reasonableness of management’s
forecast cash flows by comparison to external
sources and trends in the Group's financial
performance;
●
performing sensitivity analyses for the effect of
reasonably possible changes in key assumptions
on the impairment assessment;
●
evaluating the effect of the trading results up to
the date of our report; and
●
considering the appropriateness of disclosures in
the consolidated financial statements.
PwC
46
2024 Annual Report
Independent Auditor’s Report
Our audit approach
Overview
Overall group materiality: $1,800,000, which represents approximately 0.75%
of revenue.
We chose revenue as the benchmark because, in our view, it is a key financial
statement metric used in assessing the performance of the Group and is a
generally accepted benchmark.
Following our assessment of the risk of material misstatement, we performed:
●full scope audits on the Group’s two trading entities
●substantive audit procedures on selected significant balances in the
remaining non-trading entities and on consolidation entries, and
●analytical review procedures on all the remaining non-trading entities.
As reported above, we have one key audit matter, being:
●New Zealand cash generating unit goodwill impairment test
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group,
the accounting processes and controls, and the industry in which the Group operates.
We performed audit procedures over components considered financially significant in the context of
the Group (full scope audit) or in the context of individual primary statement account balances (audit of
specific account balances). The materiality levels used for the audits of the full scope audits were
calculated by reference to a portion of Group materiality appropriate to the relative scale of these
entities. We visited a selection of locations in New Zealand and Australia for stocktake procedures,
management interviews and performing other audit procedures.
PwC
47
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the consolidated financial statements
and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS Accounting Standards,
and for such internal control as the Directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are 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 ISAs (NZ) and ISAs 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Troy Florence.
For and on behalf of:
Chartered Accountants
28 May 2024
Auckland
PwC
48
2024 Annual Report
Independent Auditor’s Report
DIRECTOR REMUNERATION
The company distinguishes the structure of non-executive directors’ remuneration from that of executive directors. Non-executive
directors are paid a fixed fee in accordance with the determination of the Board. The total amount of remuneration and other
benefits received by each director during the year ended 31 March 2024 is set out below.
Director
2024 Directors’ Fees
Standing Directors at 31 March 2024
Shawn Beck
42,204
Pramod Khatri
27,688
Simon Bennett
25,998
Julia Mayne
96,667
Directors who resigned during the financial year ended 31 March 2024
Peter Griffiths
149,128
Mark Eglinton
58,262
Rhys Jones
28,333
Graham Stuart
33,333
Jenn Bestwick
82,557
Total
$544,172
The Chair of the Board receives $160,000 per annum (with no additional committee fees paid) and the non-executive directors receive
$80,000 per annum. The Chair of the Audit and Risk Committee receives an additional $20,000 per annum and other members of the
Audit and Risk Committee receive an additional $10,000 per annum. The Chair and members of the People and Culture Committee
receive an additional $5,000 per annum. Directors may also seek the Board’s approval for special remuneration should the specific
circumstances justify this (2024: $Nil). At 1 April 2024 the Board elected to suspend all subcommittee fees until the company’s
performance improves markedly.
The Board reviews its fees on a periodic basis. The maximum aggregate amount of remuneration payable by Metroglass to the non-
executive directors (in their capacity as directors) is set at $614,000. This fee pool was last changed in May 2017.
Directors’ fees exclude GST, where appropriate. No retirement or termination benefits are paid to non-executive directors. Directors
are entitled to be refunded for reasonable travel and other expenses incurred by them in connection with their attendance at Board
or shareholder meetings, or otherwise in connection with the Metroglass business. The company does not offer an equity-based
remuneration scheme for directors. The Board considers that director and executive remuneration is appropriate and is not excessive.
Directors and officers also have the benefit of Directors and Officers’ Liability insurance. This covers risks normally included in such
policies arising out of acts or omissions of directors and employees in their capacity as such. The insurance cover is supplemented by
the provision of director and officer indemnities from the company but this does not extend to criminal acts.
Executive remuneration
The remuneration of members of senior management (CEO, SLT and certain direct reports) is designed to promote a higher-
performance culture, to secure the participant’s retention in Metroglass and to reward performance that underpins the achievement
of Metroglass’ business strategy and long-term shareholder wealth creation. The Board is assisted in delivering its responsibilities
and objectives for executive remuneration by the People and Culture Committee.
The CEO’s performance is reviewed annually by the Board. The CEO reviews the performance of the SLT and makes recommendations
to the Board for approval in relation to the team’s remuneration and achievement of key performance indicators (KPIs).
The compensation structures of the CEO and senior management are made up of three elements:
• a fixed base salary
• a discretionary short-term incentive (STI)
• a long-term incentive (LTI).
REMUNERATION
REPORT
49
Remuneration Report
Short-term incentives
Short-term incentives (STI) are at-risk payments designed to motivate and reward for performance, typically within that particular
financial year. The target value of an STI payment is set annually, usually as a percentage of the participant’s base salary. For the
2024 financial year, the relevant percentages varied from 10% to 50%.
The STI plans relate to achievement of annual performance metrics which aim to align executives to a shared set of KPIs based on
business priorities for the next 12 months.
In the 2024 financial year, the metrics driving the STI plans for both New Zealand and Australia were:
Target
Weighting
FY24 result: NZ
FY24 result: Australia
Earnings before interest and tax (EBIT)
performance
80%
Not Achieved
Not Achieved
Working Capital
20%
Achieved
Achieved
The payable rewards for each STI KPI target are determined by the level of performance achieved and are calculated on a
linear scale increasing from the ‘Minimum performance target’ and receiving 25% of the specified reward, up to the ‘Maximum
performance target’ and receiving 100% of the specified reward.
The Board retains final discretion on the payment of STI awards.
Long-term incentives (LTI)
The company’s LTI plan for the 2024 financial year was announced on 4 July 2023. The LTI plan is made up of both performance share
rights and share options. The LTI is designed to secure those employees’ retention in Metroglass and to reward performance that
underpins the achievement of Metroglass’ business strategy and long-term shareholder wealth creation. The key features of the
2024 LTI plan are as follows:
• Participants were offered an annual award of a specified number of both performance rights and share options in Metroglass (in
accordance with the LTI rules).
• The performance rights will enable participants to acquire shares in Metroglass with no consideration payable, subject to
Metroglass achieving set performance hurdles and meeting certain vesting conditions.
• The share options enable participants to acquire shares in Metroglass at a specified exercise price, subject to Metroglass
achieving set performance hurdles and meeting certain vesting conditions.
A total of 5,498,495 share options and 3,655,664 performance share rights were awarded pursuant to the 2024 LTI plan.
Chief Executive Officer’s remuneration
Metroglass’ CEO Simon Mander joined the company on 19 November 2018 and left on 10 May 2024.
Fixed CEO remuneration for the past five financial years (12 months to 31 March):
Fixed remuneration
Financial year
CEO
Salary
Other
benefits*
Total fixed
remuneration
FY24
Simon Mander
$650,000
$28,760
$678,760
FY23
Simon Mander
$650,000
$28,194
$678,194
FY22
Simon Mander
$650,000
$29,203
$679,203
FY21
Simon Mander
$650,000
$26,132
$676,132
FY20
Simon Mander
$650,000
$25,682
$675,682
* Other benefits include medical insurance and KiwiSaver.
50
2024 Annual Report
Description of CEO’s remuneration for performance for the year ended 31 March 2024:
Plan
Description
Performance measures
Percentage
of maximum
awarded
STI
Set at 50% of fixed remuneration for FY24.
80% EBIT performance
Nil
20% Working Capital
LTI
Issued 29 May 2023. The first vesting date
is 12 June 2026 and no instruments have
yet had the chance to vest.
50% share options require Metro Glass’
Total Shareholder Return (TSR) to exceed a
compound annual pre-tax rate that is 1%
above the company’s cost of equity
n/a
50% performance share rights measured
against NZX 50 Group TSR hurdle
n/a
Pay for performance – short-term incentives
Financial year of STI payment
CEO
Relevant
performance
period
% STI awarded
against
maximum
STI paid
FY25
Simon Mander
FY24
0%
$0
FY24
Simon Mander
FY23
0%
$0
FY23
Simon Mander
FY22
0%
$0
FY22
Simon Mander
FY21
99.5%
$323,276
FY21
Simon Mander
FY20
0%
$0
* A further incentive to the CEO was agreed upon by the Board on 25 May 2023 and was paid out on 16 April 2024 ($325,000).
Pay for performance – long-term incentives
CEO
LTI
(initial grant
values)*
% LTI
vested against
maximum
Span of LTI
performance periods
FY24
Simon Mander
$162,500
n/a
13/06/23 – 12/06/26
FY23
Simon Mander
$162,500
n/a
11/06/22 – 10/06/25
FY22
Simon Mander
$162,500
n/a
05/06/21 – 04/06/24
FY21
Simon Mander
$162,500
nil
04/07/20 – 03/07/23
FY20
Simon Mander
$162,500
nil
07/06/19 – 06/06/22
* These are LTI grant values (not payments), which require relevant hurdles to be met over specific performance periods.
Executive Director remuneration
Simon Bennett was appointed as Executive Director on 6 May 2024 following the resignation of Simon Mander as CEO. Under his
contract for personal services, Simon Bennett will be paid $30,000 per month (plus GST). There is no provision for any short term
or long term incentive. He will be entitled to reimbursement for general expenses such as travel in accordance with Company
policy. The independent directors (Shawn Beck, Julia Mayne and Pramod Khatri) are satisfied that the contractual terms of
Simon Bennett’s appointment have been set on an arm’s length, commercial basis and as such have been approved by them.
51
Remuneration Report
Employees’ remuneration
The number of employees or former employees (including employees holding office as Directors of subsidiaries) who received
remuneration and other benefits in their capacity as employees, the value of which was at or in excess of $100,000 and was paid
to those employees during the financial year ended 31 March 2024, is specified in the table below.
The remuneration figures shown in the “Remuneration” column include all monetary payments actually paid during the course of
the 2024 financial year. This includes salary, STI payments that were paid during the year, and the value of performance share rights
and share options (LTI) expensed during the financial year. Remuneration shown below includes settlement payments and payments
in lieu of notice with respect to certain employees upon their departure from the company but does not include any amounts paid
post 31 March 2024 that relate to the year ended 31 March 2024.
Remuneration
Number of employees
$100,000-110,000
43
$110,000-120,000
38
$120,000-130,000
26
$130,000-140,000
17
$140,000-150,000
14
$150,000-160,000
12
$160,000-170,000
4
$170,000-180,000
5
$180,000-190,000
9
$210,000-220,000
2
$220,000-230,000
3
Remuneration
Number of employees
$230,000-240,000
3
$250,000-260,000
1
$260,000-270,000
1
$270,000-280,000
4
$280,000-290,000
1
$290,000-300,000
1
$320,000-330,000
1
$330,000-340,000
1
$370,000-380,000
1
$800,000-810,000
1
52
2024 Annual Report
STATUTORY
INFORMATION
CORPORATE GOVERNANCE INFORMATION
This section of the Annual Report provides information required under the Companies Act 1993 and under the NZX listing rules. The
Company’s governance framework is guided by the principles and recommendations described in the NZX Corporate Governance
Code (Code). Metro Performance Glass has reported in detail against the Code in its separately published Corporate Governance
Statement which, together with other detailed information, can be viewed on the Company’s website (https://metroglass.co.nz/
investor-centre/governance). Metro Performance Glass considers it has followed these recommendations during FY24 and as at
28 May 2024 other than to the extent set out in the table below.
Variance to NZX Corporate Governance Code
We believe that the Company’s corporate governance practices for the financial year ended 31 March 2024 are materially in line
with the Code. Those areas of variance from the Code are set out in the table below:
NZX Code principle
NZX Code Recommendation
Key difference
Status
Board composition
and performance
2.5. The Board should set
measurable objectives for
achieving diversity.
The Company has adopted a
Diversity and Inclusion Policy, a
copy of which is available on the
Company’s website. However, the
Board has not set measurable
objectives under the Policy for
achieving diversity.
The Board considers authentic
diversity outcomes can be
achieved without measurable
objectives. Although no
alternative governance practices
have been adopted at Board
level in lieu of recommendation
2.5, the Board has overseen a
number of operational practices
aimed at raising awareness of
the importance of diversity in
the business.
Reporting and
disclosure
4.4. An issuer should provide non-
financial disclosure at least
annually, including considering
environmental, social
sustainability and governance
factors and practices.
It should explain how
operational or non-financial
targets are measured. Non-
financial reporting should be
informative, include forward
looking assessments, and
align with key strategies
and metrics monitored by
the Board.
The Company has not yet
reported on non financial factors
to the extent recommended in
NZX Code Recommendation 4.4.
The Company has commenced a
programme of work to ensure
that the process and systems to
incorporate climate change are
appropriate for the business and
align to the External Reporting
Board standards. In the last
12 months Metroglass has
also focused on developing an
understanding of the potential
risks and opportunities of
climate change.
The Company has not made as
much progress with respect to
its non financial reporting as was
previously expected. Both the
executive leadership and makeup
of the Board have undergone
significant change in the last
year, and the Company has been
focused on debt reduction and
business stabilisation initiatives.
While no alternative governance
practices have been adopted,
improving progess on non financial
disclosure will be a focus for the
newly-formed Board in FY25.
Remuneration
5.1. An issuer should have a
remuneration policy for the
remuneration of directors.
The Company does not have a
director remuneration policy.
Details of director remuneration
is made in each Annual Report,
and is subject to a shareholder-
approved cap. In terms of
alternative governance practices,
the Board reviews director
remuneration from time to time,
including with effect from 1 April
2024 making the decision to cease
paying director fees in respect of
committee work.
53
Statutory Information
NZX Code principle
NZX Code Recommendation
Key difference
Status
Remuneration
5.2. The Board should have a
remuneration policy for
remuneration of exectives
which outlines the relative
weightings of remuneration
components and relevant
performance criteria.
The Company does not have a
policy for executive remuneration.
While there is no formal policy, the
Board adopts practices to ensure
that executive remuneration is
fair and reasonable, and that
any incentives are appropriately
aligned with the interests
of shareholders.
Risk manangement
6.1. An issuer should report the
material risks facing the
business and how these are
being managed.
The Company has not reported
what its material risk are or how
they are being managed.
With the significant change
in the makeup of the Board
and the executive, and the
challenging trading environment,
the Board has been focused on
on debt reduction and business
stabilisation initiatives. The
Board will be undertaking a
review of the risk management
framework during the FY25 year
and reporting against what
the new leadership considers
to be the material risks facing
the company. In terms of
alternative governance settings,
the Board will work closely with
management in undertaking
this review and mitigation plans
as part of the work to improve
business performance.
Securities exchange listing
Metroglass’ shares are listed on the New Zealand Securities Exchange (NZX) and Australian Securities Exchange (ASX).
Shares on issue as at 31 March 2024:
Register
Security
Holders
Units
New Zealand
MPG (NZX)
2,492
183,331,523
Australia
MPP (ASX)
105
2,046,563
Total
MPG (Dual)
2,597
185,378,086
Securities issued, and still outstanding, under the 2018-2023 long-term incentive plans as at 31 March 2024:
Long-Term Incentive Scheme
Security
Holders
Units
2021 Perfomance Share Rights
MPG (NZX)
8
1,228,548
2021 Share Options
MPG (NZX)
8
2,303,527
2022 Performance Share Rights
MPG (NZX)
8
590,230
2022 Share Options
MPG (NZX)
8
1,141,112
2023 Performance Share Rights
MPG (NZX)
11
1,344,809
2023 Share Options
MPG (NZX)
11
2,689,616
2024 Performance Share Rights
MPG (NZX)
11
3,655,664
2024 Share Options
MPG (NZX)
11
5,498,495
54
2024 Annual Report
Gender composition of directors and officers
As at 31 March 2024 (and 31 March 2023 for the prior comparative period), the mix of gender among the Company’s Board and
SLT was:
31 March 2024
Female
Male
Total
% Female
Board
1
3
4
25%
Senior Leadership Team
3
5
8
38%
31 March 2023
Female
Male
Total
% Female
Board
2
4
6
33%
Senior Leadership Team
3
5
8
37%
For the purposes of this analysis the Senior Leadership Team comprises ‘Officers’ of the Company, being employees who are
concerned or take part in the management of the Company’s business and who report directly to: (a) the Board; or (b) a person who
reports to the Board.
While no specific diversity objectives have been set by the Board, the Board is satisfied with its performance in relation to its
Diversity and Inclusion Policy, in particular the work that has gone in to raising awareness about the importance of diversity in
the workforce.
Top 20 Shareholders
Metroglass’ top 20 registered shareholders as at 31 March 2024 were as follows:
Rank
Investor name
Total Units
%
Issued Capital
1
Masfen Securities Limited
25,401,929
13.70
2
HSBC Nominees (New Zealand) Limited1
21,799,705
11.76
3
Takutai Limited
20,289,230
10.94
4
Accident Compensation Corporation1
7,453,478
4.02
5
New Zealand Depository Nominee
5,206,992
2.81
6
Daniel Charles Skinner
2,354,322
1.27
7
Custodial Services Limited
2,129,898
1.15
8
Amy Amelia Orr
1,900,000
1.02
9
Hui Wen Yang
1,768,999
0.95
10
Da Wei Chu Su
1,600,000
0.86
11
ASB Nominees Limited
1,552,267
0.84
12
Trevor John Logan
1,400,000
0.76
13
Eric Francis Barratt & Hyun Ju Barratt
1,385,333
0.75
14
Leveraged Equities Finance Limited
1,224,219
0.66
15
FNZ Custodians Limited
1,215,412
0.66
16
Kevin John Summersby
1,126,169
0.61
17
Jianghang Lei Guirong Lu
1,117,271
0.60
18
Quant Advisory Limited
1,100,000
0.59
19
Bowenvale Investments Limited
1,000,000
0.54
19
Weijun Zhang & Yuhua Yang
1,000,000
0.54
19
Gmh 38 Investments Limited
1,000,000
0.54
Totals: Top 20 registered holders of ordinary shares
103,025,224
55.57
Totals: Remaining holders’ balance
82,352,862
44.43
1 Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial depository service which allows electronic trading of securities by its
members and does not have a beneficial interest in these shares. As at 31 March 2024, a total of 31,249,195 Metroglass shares (or 16.86% of the ordinary shares on issue) were
held through NZCSD.
55
Statutory Information
Substantial shareholders
According to the records kept by the company under the Financial Markets Conduct Act 2013 the following were substantial
product holders in the company as at 31 March 2024. Shareholders are required to disclose their holdings to Metroglass and to its
share registrar by giving a ‘Substantial Shareholder Notice’ when:
• they begin to have a substantial shareholding (relevant interest in 5% or more of Metroglass’ shares);
• there is a subsequent movement of 1% or more in a substantial holding, or if they cease to have a substantial holding;
• there is any change in the nature or interest in a substantial holding.
Investor name
Number of shares
%
Date of most
recent notice
Masfen Securities Limited
46,566,659
25.12%
18/07/23
Takutai Limited
46,566,659
25.12%
18/07/23
BCC SSA I, LLC
12,522,769
6.75%
25/06/21
Note: Accident Compensation Corporation ceased to be a substantial shareholder on 27 June 2023.
As at 31 March 2024 the total number of voting shares on issue was 185,378,086.
Distribution of shareholders
As at 31 March 2024:
Range
Number of
holders
%
Number of
shares
%
1-1,000
226
8.70
146,640
0.08
1,001-5,000
822
31.65
2,349,482
1.27
5,001-10,000
443
17.06
3,607,144
1.95
10,001-50,000
772
29.73
19,179,870
10.34
50,001-100,000
151
5.81
11,224,482
6.05
Greater than 100,000
183
7.05
148,870,468
80.31
Total
2,597
100.00%
185,378,086
100.00%
Voting rights
Section 15 of the company’s constitution states that a shareholder may vote at any meeting of shareholders in person or through
a representative. Metroglass conducts voting by way of polls; using this method every shareholder present (or through their
representative) has one vote per fully-paid-up share they hold. Unless the Board determines otherwise, shareholders may not
exercise the right to vote at a meeting by casting postal votes. More detail on voting can be found in Metroglass’ constitution
available on the company’s website at: www.metroglass.co.nz/investor-centre/governance/.
Trading statistics
Metroglass is listed on both the NZX and ASX. The trading ranges for the period 1 April 2023 to 31 March 2024 are as follows:
NZX (NZD)
ASX (AUD)
Minimum:
$0.098 (12/03/24)
$0.096 (31/08/23)
Maximum:
$0.19 (19/07/23)
$0.175 (21/04/23)
Range:
$0.098 - $0.19
$0.096 – $0.175
Total shares traded
12,709,618
370,265
1 Trading in Metroglass shares on the ASX is less liquid than it is on the NZX. The final date on which shares were traded on the ASX during the 12 months to 31 March 2024 was
28 March 2024.
56
2024 Annual Report
Dividend Policy
Dividends and other distributions with respect to the shares are only made at the discretion of the Board of Metroglass.
Any dividend can only be declared by the Board if the requirements of the Companies Act 1993 are also satisfied. The Board’s
decision to declare a dividend (and to determine the quantum of the dividend) for shareholders in any financial year will depend on,
among other things:
• all statutory or regulatory requirements
• the financial performance of Metro Performance Glass
• one-off or non-recurring events
• Metroglass’ capital expenditure requirements
• the availability of imputation credits
• prevailing business and economic conditions
• the outlook for all of the above
• any other factors deemed relevant by the Board.
Over the past six financial years, the company has prioritised debt reduction and worked towards achieving a leverage ratio
for the Group (as measured by net debt to rolling 12-month EBITDA) of approximately 1.5x. At 31 March 2024, this ratio was
4.65x (on a pre-IFRS 16 basis).
No dividends have been declared in respect of the 2024 financial year.
NZX and ASX waivers
Metroglass does not have any waivers from the requirements of the NZX Main Board Listing Rules and has waivers in place with the
ASX that are standard for a New Zealand company listed on the ASX.
Metroglass has an ASX Foreign Exempt Listing on the ASX. This category is based on a principle of substituted compliance,
recognising that for secondary listings, the primary regulatory role and oversight rest with the home exchange. Metroglass
continues to have a full listing on the NZX Main Board.
Disclosure of directors’ interests
During the financial year ended 31 March 2024, under section 140(2) of the New Zealand Companies Act 1993, the following interests
were disclosed by Directors and entered in the Company’s interests register:
Director and company
Position
Lisa Julia Mayne
5R Solutions Pty Limited
Director
Shawn Beck
Sweet Mango Limited (trading as South Central Advisory)
Director/Shareholder
Skinny Fizz Company Limited
Director/Shareholder
Simon Bennett
Accordant Group Limited
Director/Shareholder
Hobson Leavy Limited
Director
Peak Partners Limited
Director/Shareholder
The Icehouse Limited
Director
The International Centre for Entrepreneurship Foundation
Trustee
Pramod Khatri
PSW Nominees Limited
Director/Trustee
AW Fraser Holdings Limited
Director/Shareholder
AW Fraser Limited
Director/Shareholder
PWJ Limited
Director/Shareholder
Jenn Bestwick
Accredited Employers Working Visa Scheme
Assurance Review
The Directors also disclosed an interest in the Company’s Directors’ and Officers’ insurance policy and such interest was entered in
the Company’s interests register.
57
Statutory Information
Directors and director independence
As at the balance date of 31 March 2024 the Company had four directors - Shawn Beck, Simon Bennett, Julia Mayne and Pramod
Khatri. Each such Director was determined by the Board to be an independent director when appointed. Subsequently, the Board
determined on 6 May 2024 that Simon Bennett was a non-independent director as a consequence of being appointed to the role of
Executive Director.
When assessing independence, the Board holistically considers the interests and relationships of a Director that could affect the
determination, including having regard to (but not limited to) the factors set out in recommendation 2.4 of the NZX Corporate
Governance Code.
Directors ceasing to hold office during the financial year
During the financial year ended 31 March 2024 the following people ceased to hold office as Directors of the Company:
Peter Griffiths, Mark Eglinton, Rhys Jones, Graham Stuart and Jenn Bestwick.
In the year to 31 March 2024, the Board had two standing committees, being the Audit and Risk Committee and People and
Culture Committee.
Board and committee attendance in the 12 months to 31 March 2024
Meetings held
Board meetings
attended
Audit Committee
meetings attended
People and Culture
Committee meetings
attended
Appointed / Resigned
Directors
Shawn Beck
3
2
–
Appointed November 2023
Simon Bennett
4
–
–
Appointed December 2023
Julia Mayne
12
5
–
Appointed September 2021
Pramod Khatri
4
–
–
Appointed December 2023
Peter Griffiths
11
1
2
Appointed February 2016 –
Resigned March 2024
Mark Eglinton
4
–
2
Appointed April 2020 –
Resigned November 2023
Rhys Jones
4
–
2
Appointed April 2018 –
Resigned August 2023
Graham Stuart
4
2
–
Appointed December2019 –
Resigned August 2023
Jenn Bestwick
9
4
1
Appointed May 2022 –
Resigned March 2024
The Board’s committees and their members as at 28 May 2024 were:
• Audit and Risk Committee: Julia Mayne (Chair), Pramod Khatri and Shawn Beck
• People and Culture Committee: Pramod Khatri (Chair) and Shawn Beck.
Simon Bennett resigned from both of these Committes with effect from being appointed as Executive Director on 6 May 2024.
58
2024 Annual Report
Subsidiaries and subsidiary directors
Section 211(2) of the Companies Act 1993 requires the company to disclose, in relation to its subsidiaries, the total remuneration
and value of other benefits received by the directors and former directors, together with particulars of entries in the interests
registers made, during the year ended 31 March 2024.
No Group employee appointed as a director of Metro Performance Glass Limited or its subsidiaries receives or retains any
remuneration or other benefits in their capacity as a director, and each is a full-time Group employee. The remuneration and other
benefits of such employees and former employees (received as employees) totalling NZD 100,000 or more during the year ended
31 March 2024 is included in the remuneration bandings disclosed on page 54 of this Annual Report.
As at 31 March 2024, Metroglass’ subsidiary companies and subsidiary directors were:
Company
Directors
Australian Glass Group (Holdings) Pty Limited
Simon Mander, Anthony Candy, Jason McGrath
Australian Glass Group Finance Company Pty Limited
Simon Mander, Anthony Candy, Jason McGrath
Australian Glass Group Investment Company Pty Limited
Simon Mander, Anthony Candy, Jason McGrath
Canterbury Glass & Glazing Limited
Simon Mander, Anthony Candy
Christchurch Glass & Glazing Limited
Simon Mander, Anthony Candy
Hawkes Bay Glass & Glazing Limited
Simon Mander, Anthony Candy
I G M Software Limited
Simon Mander, Anthony Candy
Metroglass Finance Limited
Simon Mander, Anthony Candy
Metroglass Holdings Limited
Simon Mander, Anthony Candy
Metropolitan Glass & Glazing Limited
Simon Mander, Anthony Candy
Taranaki Glass & Glazing Limited
Simon Mander, Anthony Candy
Directors’ shareholding in Metroglass
The directors’ respective interests in Metroglass shares as at 31 March 2024 are as follows:
Number of shares in which a
relevant interest is held
Acquisition date
Disposal date
Julia Mayne
25,000
23/02/22
n/a
Donations
For the year ended 31 March 2024, Metroglass, including its subsidiaries, made donations of $10,734 (2023: $6,965.22).
Net tangible assets per security
Net tangible assets per security at 31 March 2024: 13.62 cents (31 March 2023: 16.79cents).
Currency
Within this Annual Report, all amounts are in NZD unless otherwise specified.
Credit rating
Metroglass has not requested a credit rating.
Auditors fees
PwC acted as auditor of the Company for the financial year ended 31 March 2024. During the financial year PwC received $795,000
as fees for audit services and $23,000 as fees for non audit services provided to the Company.
59
Statutory Information
Registered Office
5 Lady Fisher Place
East Tamaki
Auckland 2013
New Zealand
Email: glass@metroglass.co.nz
Phone: +64 927 3000
Board of Directors
Peter Griffiths – Chair and Member of the People and
Culture Committee
Rhys Jones – Non-Executive Director and Member of the
People and Culture Committee
Graham Stuart – Non-Executive Director
and Chair of the Audit and Risk Committee
Mark Eglinton – Non-Executive Director
and Chair of the People and Culture Committee
Julia Mayne - Non-Executive Director
and Member of the Audit and Risk Committee
Jenn Bestwick - Non-Executive Director
and Member of the Audit and Risk Committee
Senior Leadership Team
Simon Mander – Chief Executive Officer
Brent Mealings – Chief Financial Officer
Ruben Fergusson – GM Market Strategy
Robyn Gibbard – GM Upper North Island
Nick Hardy-Jones – GM South Island
Amandeep Kaur – Group Safety and Wellbeing Manager
Andreas Paxie – GM Lower North Island
Dayna Roberts – Human Resources Director
Auditor
PricewaterhouseCoopers
15 Customs Street West
Auckland 1010
New Zealand
Lawyers
Bell Gully
Vero Centre
48 Shortland Street
Auckland 1140
New Zealand
Bankers
ASB Bank Limited
Westpac New Zealand Limited
Westpac Banking Corporation
Share registrar
Link Market Services
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
PO Box 91976, Auckland 1142
New Zealand
Further information online
This Annual Report, all our core governance documents
(our constitution, some of our key policies and charters), our
Investor relations policies and all our announcements can be
viewed on our website:
www.metroglass.co.nz/investor-centre/
Investor calendar
2023 Annual Shareholders’ Meeting
1 August 2023
2024 Half Year balance date
30 September 2023
2024 Half Year results announcement
November 2023
2024 Full Year balance date
31 March 2024
2024 Full Year results announcement
May 2024
COMPANY
DIRECTORY
insightcreative.co.nz MPG027
60
2024 Annual Report
Company Directory
Registered Office
5 Lady Fisher Place
East Tamaki
Auckland 2013
New Zealand
Email: glass@metroglass.co.nz
Phone: +64 927 3000
Board of Directors
Shawn Beck – Chair and Non-Executive
Independent Director
Simon Bennett – Executive Non-Independent Director
Julia Mayne – Non-Executive Independent Director
Pramod Khatri – Non-Executive Independent Director
Senior Leadership Team
Simon Mander – Chief Executive Office
(left 10 May 2024)
Anthony Candy – Chief Financial Officer
Robyn Gibbard – GM North Island
Nick Hardy-Jones – GM South Island
Dayna Roberts – Human Resources Director
Steve Hamer – CEO Australia Glass Group
Auditor
PricewaterhouseCoopers
15 Customs Street West
Auckland 1010
New Zealand
Lawyers
Bell Gully
Vero Centre
48 Shortland Street
Auckland 1140
New Zealand
Bankers
ASB Bank Limited
Westpac New Zealand Limited
Westpac Banking Corporation
Share registrar
Link Market Services
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
PO Box 91976, Auckland 1142
New Zealand
Further information online
This Annual Report, all our core governance documents
(our constitution, some of our key policies and charters),
our investor relations policies and all our announcements
can be viewed on our website:
www.metroglass.co.nz/investor-centre/
Investor calendar
2024 Annual Shareholders’ Meeting
August 2024
2025 Half Year balance date
30 September 2024
2025 Half Year results announcement
November 2024
2025 Full Year balance date
31 March 2025
2025 Full Year results announcement
May 2025
COMPANY
DIRECTORY
61
metroglass.co.nz
insightcreative.co.nz MPG031